As filed with the U.S. Securities and Exchange Commission on November 26, 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)

Cayman Islands	7819	Not Applicable
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)

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.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

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, as amended, or until the registration statement shall become effective on such date as the U.S. Securities and Exchange Commission, acting pursuant to such Section 8(a), 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.

PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION DATED NOVEMBER 26, 2025

K Wave Media Ltd.

Up to 12,451,200 Ordinary Shares

The selling shareholders identified in this prospectus (each, a “Selling Shareholder,” and, collectively, the “Selling Shareholders”) or any of their pledgees, assignees and successors-in-interest are offering for sale up to 12,451,200 (collectively, the “Offered Shares”) ordinary shares, par value $0.0001 (“Ordinary Shares”), of K Wave Media Ltd., a Cayman Islands exempted company (“we,” “us,” “our,” “K Wave,” “Pubco,” or the “Company”), consisting of (i) 893,200 Ordinary Shares issuable upon the conversion of Convertible Senior Unsecured Promissory Notes in the aggregate principal amount of $4,400,000 (the “PIPE Notes”), issued by the Company to certain of the Company’s shareholders (collectively, the “PIPE Investors”) on May 13, 2025 pursuant to the Securities Purchase Agreement, dated January 31, 2025, by and among the Company and the PIPE Investors (the “PIPE Securities Purchase Agreement”); (ii) 5,000,000 Ordinary Shares issuable by the Company to Bitcoin Strategic Reserve KWM LLC (“Bitcoin Strategic”) pursuant to the Standby Equity Purchase Agreement, dated June 3, 2025, by and between the Company and Bitcoin Strategic (the “SEPA”), pursuant to which the Company has the right to sell to Bitcoin Strategic Ordinary Shares having an aggregate purchase price of up to $500 million; (iii) 5,808,000 Ordinary Shares issuable by the Company to certain individuals (collectively, the “Rabbit Walk Sellers”) pursuant to the Share Purchase Agreement, dated August 27, 2025, by and among the Company and the Rabbit Walk Sellers; (iv) 600,000 Ordinary Shares issued and issuable by the Company to Galaxy Digital LP pursuant to the Securities Purchase Agreement, dated September 26, 2025, by and between the Company and Galaxy Digital LP (the “Galaxy Securities Purchase Agreement”), pursuant to which the Company issued to Galaxy Digital 400,000 Ordinary Shares and warrants to purchase an aggregate of 200,000 Ordinary Shares (the “Galaxy Warrants”); and (v) 150,000 Ordinary Shares which the Company will issue to Global Fund LLC as reimbursement for an equal number of Ordinary Shares which Global Fund LLC transferred to the Company’s legal counsel as payment for legal services provided to the Company in connection with the Business Combination (as defined below).

We are not selling any securities under this prospectus and will not receive any of the proceeds from the sale of the Offered Shares by the Selling Shareholders. We will, however, receive the proceeds of any (i) sales of our Ordinary Shares to Bitcoin Strategic under the SEPA, and (ii) cash exercise of the Galaxy Warrant by Galaxy LP.

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 section titled “Plan of Distribution” beginning on page 198 of this prospectus for more information about how the Selling Shareholders may sell or otherwise dispose of the Offered Shares pursuant to this prospectus.

We will pay certain expenses associated with the registration of the securities covered by this prospectus, as described in the section entitled “Plan of Distribution” beginning on page 198 of this prospectus.

To the extent the Selling Shareholders decide to sell their Offered 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 and our Warrants on the Nasdaq Capital Market on November 24, 2025, were $0.90 per share and $0.06 per Warrant, respectively. We urge prospective purchasers of our Ordinary Shares to obtain current information about the market prices of our Ordinary Shares.

We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (or the “JOBS Act”), and both a “smaller reporting company” and a “foreign private issuer” as defined under the U.S. federal securities laws. Accordingly, we are subject to reduced public company reporting requirements. See “Prospectus Summary - Implications of Being an Emerging Growth Company,” “Prospectus Summary - Implications of Being a Smaller Reporting Company,” and “Prospectus Summary - Implications of Being a Foreign Private Issuer” for additional information.

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 21 of this prospectus and in our filings with the U.S. Securities and Exchange Commission.

Neither the U.S. 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.

No dealer, salesperson or any other person is authorized to give any information to make any representations in connection with this offering other than those contained in this prospectus and, if given or made, the information or representations must not be relied upon as having been authorized by us.

The date of this prospectus is _________, 2025

TABLE OF CONTENTS

ABOUT THIS PROSPECTUS	ii
FREQUENTLY USED TERMS	iii
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS	vii
MARKET AND INDUSTRY DATA	viii
PROSPECTUS SUMMARY	1
THE OFFERING	20
RISK FACTORS	21
THE STANDBY EQUITY PURCHASE AGREEMENT	75
USE OF PROCEEDS	82
MARKET INFORMATION FOR ORDINARY SHARES AND DIVIDEND POLICY	83
UNAUDITED PRO FORMA COMBINED CONSOLIDATED FINANCIAL INFORMATION	84
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF K WAVE, K ENTER, AND SUBSIDIARIES	99
DESCRIPTION OF K WAVE’S BUSINESS	147
DESCRIPTION OF K ENTER’S BUSINESS	149
DIRECTORS AND EXECUTIVE OFFICERS	164
EXECUTIVE COMPENSATION	173
PRINCIPAL STOCKHOLDERS	175
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS	177
DESCRIPTION OF K WAVE’S SECURITIES	180
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES	191
SELLING SECURITYHOLDERS	196
PLAN OF DISTRIBUTION	198
EXPERTS	200
LEGAL MATTERS	201
WHERE YOU CAN FIND MORE INFORMATION	201
INDEX TO FINANCIAL STATEMENTS	F-1

i

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 12,451,200 Ordinary Shares (collectively, the “Offered 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 the Offered Shares by the Selling Shareholders. We will, however, receive the proceeds of any (i) sales of our Ordinary Shares to Bitcoin Strategic under the SEPA, and (ii) cash exercise of the Galaxy Warrant by Galaxy LP.

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 Offered 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 Offered 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.

ii

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:

● “Acquisition Merger” refer to the merger, described in the Merger Agreement, between K Enter and Merger Sub, whereby K Enter is the surviving corporation;

● “bitcoin” or “BTC” refers to the native cryptocurrency on the Bitcoin network;

● “Blockchain” refers to a distributed ledger of transactions created by software (the blockchain protocol) that relies on advanced cryptography and a consensus mechanism to verify and record information;

● “Blockchain network” refers to the network of computers that have downloaded and are running the publicly available source code, or protocol, for a given blockchain. A blockchain network is the collection of all miners, nodes or validators, wallets, and other network participants that use computing power to send transactions, maintain the ledger, and add new blocks to the blockchain. Blockchain networks are designed for different purposes. For example, Bitcoin was designed to serve as a peer-to-peer electronic cash system and then evolved into a store of value, whereas Ethereum was designed to be a smart contract and decentralized application platform;

● “Business Combination” refer to the closing on the Closing Date of the transactions under the Merger Agreement, including the Reincorporation Merger and the Acquisition Merger;

● “Closing Date” refers to the date on which the Business Combination was consummated, which was May 13, 2025;

● “Daily Traded Amount” shall mean the daily trading volume of the Company’s Ordinary Shares on the Principal Market during regular trading hours as reported by Bloomberg L.P.;

● “Crypto rails” refers to the underlying infrastructure and technology that facilitate the transfer, storage, and exchange of digital assets. This includes blockchain networks and other systems that enable seamless and secure transactions within the digital asset ecosystem;

● “Custodial wallet” refers to a type of digital asset wallet where a third party holds a user’s private keys and crypto assets. With a custodial wallet, a user must trust a third party to secure their funds and return them upon request. The most common custodial wallets are web-based exchange wallets;

● ​“Custodian” refers to a person responsible for securely storing digital assets for another institution or individual. Typically, custodial services are targeted at institutional investors who hold large amounts of cryptocurrency. Custodians are often exchanges that host digital asset wallets for their users. A digital asset custodian must manage private cryptographic keys or material, backup and recovery of such material, and secure means of transaction construction and production of cryptographic signatures;

● ​“Custody” refers to the storing and safekeeping of a user’s private keys and digital assets by a third party, often to protect against theft or loss. Custody solutions may include managing private keys and ensuring secure access to funds. For example, digital asset exchanges often custody their users’ private keys and cryptocurrency holdings;

● “Digital asset” refers to a bearer asset that exists on a public blockchain network. As used in this prospectus, it is synonymous with crypto asset and cryptocurrency. These terms encompass a wide variety of assets, including cryptocurrencies, tokens, digital stocks, and non-fungible tokens;

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● “Ethereum” refers to a blockchain protocol that helped spawn innovations like smart contracts, stablecoins, and dApps and DeFi applications;

● “Exchange Act” refer to the Securities Exchange Act of 1934, as amended;

● “First Amendment” refer to the First Amendment to Merger Agreement, dated March 11, 2024, by and among Global Star, K Enter, K Wave and Merger Sub;

● “Founder Shares” means the outstanding shares of GLST Class B Ordinary shares held by the Sponsor, Global Star’s directors and affiliates of Global Star’s management team in the total amount of 2,140,000 shares.

● “Fourth Amendment” means the Fourth Amendment to Merger Agreement, dated December 11, 2024, by and among Global Star, K Enter, K Wave and Merger Sub;

● “Global Star” or “GLST” or the “Company” refer to Global Star Acquisition Inc., a Delaware corporation;

● “IFRS” refers to International Financial Reporting Standards issued by the IFRS Foundation and the International Accounting Standards Board;

● “Initial Stockholders” are the initial stockholders of Global Star, including Anthony Ang, Nicholas Khoo, Shan Cui, Stephen Drew, Argon Lam Chun Win, Yang Kan Chong, Hai Chwee Chew and Jukka Rannila and excluding the Sponsor;

● “IPO” refers to the initial public offering of 8,000,000 units of Global Star consummated on September 22, 2022;

● “Joinder Agreement” refer to as the Joinder Agreement, dated July 13, 2023, entered into among K Wave, Merger Sub, Global Star and K Enter;

● “K Enter” refers to K Enter Holdings Inc., a Delaware corporation;

● “K Enter Charter” refers to K Enter’s Second Amended and Restated Certificate of Incorporation, filed with the Delaware Secretary of State on May 31, 2023;

● “K Enter Ordinary shares” refer to the shares of K Enter’s ordinary shares, $0.0001 par value per share;

● “K Wave” refers to K Enter after the closing of the six (6) equity purchase agreements with (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.

● “K Wave Charter” refers to K Wave’s Amended and Restated Memorandum and Articles of Association, in effect as of the consummation of the Business Combination.

● “K Wave Rights” refer to K Wave’s rights which entitle the holder to receive 1/10 of one K Wave Ordinary Share upon the consummation of the Acquisition Merger;

● “Merger Agreement” refer to the Merger Agreement, dated June 15, 2023, by and between Global Star and K Enter, as modified by the Joinder Agreement, dated July 13, 2023, the First Amendment to Merger Agreement, dated March 11, 2024, the Second Amendment to Merger Agreement, dated June 28, 2024, the Third Amendment to Merger Agreement to Merger Agreement, dated July 25, 2024 and the Fourth Amendment to Merger Agreement dated December 11, 2024;

iv

● “Merger Sub” refer to GLST Merger Sub, Inc., a Delaware corporation;

● “Plan of Merger” refers to the statutory plan of merger to be filed with the Registrar of Companies in the Cayman Islands to effect the Reincorporation Merger;

● “Preferred Stock” refers to the Series A Preferred Stock and the Series A-1 Preferred Stock combined;

● “Principal Market” shall mean the Nasdaq Stock Market (including the Capital Market, Global Market and/or the Global Select Market) (the “Nasdaq”); provided however, that in the event the Ordinary Shares are ever listed or traded on the New York Stock Exchange, or the NYSE American, then the “Principal Market” shall mean such other market or exchange on which the Ordinary Shares are then listed or traded to the extent such other market or exchange is the principal trading market or exchange for the Ordinary Shares;

● “Protocol” refers to software establishing how computers within a given network communicate with one another. In the cryptoeconomy, the term is often used as a shorthand for blockchain protocol, such as the Bitcoin or Ethereum protocols;

● “Private key” refers to a string of alphanumeric characters that allows a person to access and manage their digital assets in a digital wallet or other custodial solution, similar to a password. All private keys have a unique corresponding public key;

● ​“Public key” refers to a cryptographic code that corresponds with a private key and allows for derivation of a blockchain address. Public keys bind control of blockchain addresses to secret private keys. This binding allows for transparent sending of assets to a public address while also ensuring exclusive control by the holder of the private key;

● “Reincorporation Merger” refer to the merger, described in the Merger Agreement, between Global Star and K Wave, whereby K Wave is the surviving corporation;

● “Second Amendment” refer to the Second Amendment to Merger Agreement, dated June 28, 2024, by an among Global Star, K Enter, K Wave and Merger Sub;

● “Series A Preferred Stock” refer to the shares of K Enter’s Series A Convertible Preferred Stock, $0.0001 par value per share;

● “Series A-1 Preferred Stock” refer to the shares of K Enter’s Series A-1 Convertible Preferred Stock, $0.0001 par value per share;

● “Sponsor” refers to Global Star Acquisition 1 LLC;

● “Six Korean Entities” refers to (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., collectively;

● “Stablecoin” refers to a digital asset that is expected to have a stable price relative to another asset such as fiat currency or a commodity (such as precious metals or industrial metals);

● “Third Amendment” refer to the Third Amendment to Merger Agreement, dated July 25, 2024, by an among Global Star, K Enter, K Wave and Merger Sub;

● “US Dollars,” “$,” or “US$” refer to the legal currency of the United States;

v

● “User” refers to an individual or institution that has registered on our platform. As used in this prospectus, it is synonymous with customer;

● “U.S. GAAP” refer to accounting principles generally accepted in the United States;

● “Warrants” or “K Wave Warrants” refer to our redeemable warrants which entitle the holder to purchase one Ordinary Share for $11.50; and

● Unless specified otherwise, “$,” “USD,” “US$” and “U.S. dollar” each refers to the United States dollar.

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

vi

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.

vii

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.

viii

PROSPECTUS SUMMARY

This summary highlights certain information appearing elsewhere in this prospectus. Because it is only a summary, it does not contain all of the information that you should consider before investing in our securities and it is qualified in its entirety by, and should be read in conjunction with, the more detailed information appearing elsewhere in this prospectus. Before you decide to invest in our securities, you should read the entire prospectus carefully, including “Risk Factors” and the financial statements of K Wave and related notes thereto included elsewhere in this prospectus.

OUR BUSINESS OVERVIEW

K WAVE’S BUSINESS

Overview

Formation. K Wave Media Ltd. (“K Wave” or “PubCo”), was a wholly owned subsidiary of Global Star Acquisition Inc. (“Global Star”), and was incorporated on June 22, 2023 as a Cayman Islands exempted company. K Wave was formed for the purpose of becoming the ultimate parent company following the transactions contemplated in the Merger Agreement. K Wave 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 Merger Agreement. As of the date of the prospectus, Merger Sub has been merged with and into K Enter in connection with the Business Combination (as described immediately below).

Business Combination Activities. On May 13, 2025 (the “Closing Date”), K Wave Media Ltd., a Cayman Islands exempted company (“PubCo” or the “Company”), consummated the previously announced business combination pursuant to the merger agreement, dated as of June 15, 2023, as modified by the joinder agreement, dated July 13, 2023, the First Amendment, dated March 11, 2024, the Second Amendment, dated June 28, 2024, the Third Amendment to Merger Agreement, dated July 25, 2024 and the Fourth Amendment to Merger Agreement, dated December 11, 2024 (the “Merger Agreement”), by and among the Company, Global Star Acquisition Inc., a Delaware corporation (“Global Star”), K Enter Holdings Inc., a Delaware corporation (“K Enter”) and GLST Merger Sub, Inc., a Delaware corporation (“Merger Sub”).

The following transactions occurred pursuant to the terms of the Merger Agreement (collectively, the “Business Combination”):

● On May 13, 2025, Global Star was reincorporated to Cayman Islands by merging with and into PubCo, with PubCo remaining as the surviving publicly traded entity (the “Reincorporation Merger”). In connection with the closing of the Reincorporation Merger, (i) each issued and outstanding share of ordinary shares of Global Star, other than Global Star ordinary shares owned by Global Star as treasury shares or any Global Star ordinary shares owned by any direct or indirect wholly owned subsidiary of Global Star, was converted into one Ordinary Share of K Wave, (ii) each issued and outstanding warrant of Global Star was converted automatically into a warrant to purchase one Ordinary Share at a price of $11.50 per whole share (the “Warrant”), (iii) each issued and outstanding right of Global Star was converted automatically into a right to receive one-tenth (1/10) of one Ordinary Share at the closing of a business combination (the “K Wave Right”), and (iv) each issued and outstanding unit of Global Star was separated and converted automatically into one Ordinary Share, one Warrant, and one K Wave Right. At the closing of the Reincorporation Merger, all common stock, warrants, rights, units and other securities of Global Star ceased to be outstanding and were automatically cancelled and retired and ceased to exist.

1

● On May 13, 2025, Merger Sub merged with and into K Enter, resulting in K Enter being a wholly owned subsidiary of PubCo (the “Acquisition Merger”). In connection with the closing of the Acquisition Merger, (i) each share of K Enter capital stock that was owned by Global Star, Merger Sub and K Enter (as treasury stock or otherwise), was automatically cancelled and retired without any conversion, (ii) each share of K Enter preferred stock issued and outstanding was deemed converted into shares of K Enter common stock, (iii) each share of K Enter ordinary shares issued and outstanding, including shares of K Enter ordinary shares deemed outstanding as a result of the mandatory conversion of K Enter preferred stock, was converted into the right to receive a number of Ordinary Shares equal to the conversion ratio of 312.1:1 (the “Conversion Ratio”), and (iv) each share of Merger Sub ordinary shares issued and outstanding was converted into and become one newly issued, fully paid and nonassessable share of K Enter common stock.

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 Ordinary Shares valued at $10.00 per share.

Issuance of Ordinary Shares to Global Fund LLC

In connection with the Business Combination, on May 14, 2025, Global Fund LLC transferred 150,000 Ordinary Shares (the “Reimbursement Shares”) to the law firm, Loeb & Loeb LLP, as payment for legal services which it provided to the Company in connection with the Business Combination. The Company will reimburse Global Fund for this transfer of the Reimbursement Shares by issuing to 150,000 Ordinary Shares to Global Fund LLC upon the effectiveness of the Registration Statement on Form F-1 of which this prospectus forms a part.

Ted Kim, the Company’s Co-Founder, Chief Executive Officer and a member of the Company’s Board, and Stephen Drew, an Initial Stockholder of the Company and a member of the Company’s Advisory Board, are the Managing Partners of Global Fund LLC. Stephen Drew is also the Managing Member of Bitcoin Strategic and served as a director of Global Star.

Of the 12,451,200 Ordinary Shares being registered pursuant to the Registration Statement on Form F-1 of which this prospectus forms a part, 150,000 Ordinary Shares represent the Reimbursement Shares are being so registered for resale by Global Fund LLC.

Business Operations. K Wave is be engaged in the “IP content business,” which refers to a business that focuses on creating, investing in, managing, licensing, and monetizing intellectual property (“IP”) content such as TV shows, movies, dramas and music. At the heart of K Wave’s IP 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 Play Company Co., Ltd., which is in the content merchandising business (the “Merchandising Company”), it involves the merchandise sales of IP content based on a popular musicians, TV shows and movies. K Wave regards its IP content, including copyrights, registered trademark and pending trademarks, service marks, domain names, trade secrets, proprietary technologies and similar intellectual property as critical to its success. K Wave will relies on trademark law, trade secret protection and confidentiality and license agreements with employees and others to protect K Wave’s proprietary rights.

Acquisition of the 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.

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On January 2nd, 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 Play Company 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.

Accounting Acquirer

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

PIPE Securities Purchase Agreement

On January 31, 2025, the Company entered into a Securities Purchase Agreement (the “PIPE Securities Purchase Agreement”), with Nikhil Nanda, Gan Cher Siong, Joshua Guok and Goldstar Global Capital VCC-Alpha Opportunities Fund (collectively, the “PIPE Investors”) and another institutional, accredited investor (the “Other PIPE Investor”), pursuant to which the PIPE Investors and the Other PIPE Investor agreed to subscribe for and purchase, and the Company agreed to issue and sell to the PIPE Investors and the Other PIPE Investor, at the closing of the transactions contemplated by the Merger Agreement, Convertible Senior Unsecured Promissory Notes (the “PIPE Notes”) convertible into shares Ordinary Shares (the financing under the PIPE Securities Purchase Agreement hereinafter referred to as the “PIPE Financing”) with an aggregate original principal amount of $4.5 million.

On May 13, 2025, upon the closing of the Business Combination, the Company issued and sold an original aggregate principal amount of $4.4 million of the PIPE Notes (the “Aggregate Closing PIPE Proceeds”) to the PIPE Investors in accordance with the terms and conditions of the PIPE Securities Purchase Agreement. In connection with the closing of the PIPE Financing, the Other PIPE Investor failed to pay for $100,000 for the PIPE Note for which the Other PIPE Investor had committed to purchase pursuant to the PIPE Securities Purchase Agreement.

The PIPE Notes are convertible into Ordinary Shares at a price of $5.00 per Ordinary Share, provided, that, under the terms of the PIPE Notes, a PIPE Investor may not convert its PIPE Notes to the extent (but only to the extent) such PIPE Investor or any of its affiliates would beneficially own a number of Ordinary Shares which would exceed 4.99% of the outstanding Ordinary Shares of the Company. The PIPE Notes bear interest at a rate of 3.00% per annum, which interest is payable semi-annually. The PIPE Notes mature and all principal and unpaid accrued interest will be payable on the date that is thirty-sixth (36) months following the issuance date of the PIPE Notes.

The Aggregate Closing PIPE Proceeds were released to the Company in connection with the transactions contemplated by the Business Combination Agreement.

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Pursuant to the PIPE Securities Purchase Agreement, the Company and the PIPE Investors entered into a Registration Rights Agreement (the “PIPE Registration Rights Agreement”), pursuant to which the Company agreed to file with the SEC a registration statement covering the Ordinary Shares into which the PIPE Notes are convertible.

As of the date of the Registration Statement on Form F-1 of which this prospectus forms a part, each of the PIPE Investors has provided to the Company written notice that such PIPE Investors desire to convert in full all of their respective PIPE Notes into Ordinary Shares. Accordingly, upon the effectiveness of the Registration Statement on Form F-1 of which this prospectus forms a part, the Company intends to issue an amount of Ordinary Shares equal to the aggregate amount of principal and unpaid interest under the PIPE Notes, divided by $5.00 (which is the per Ordinary Share conversion price under the PIPE Notes). Because interest under the PIPE Notes accrues at 3.0% per annum and is paid semi-annually, the Company is registering for resale by the PIPE Investors an aggregate of 893,200 Ordinary Shares under the Registration Statement on Form F-1 of which this prospectus forms a part, which number of Ordinary Shares represents the maximum amount of Ordinary Shares which may be payable under the PIPE Notes at any given time (and assumes six months of interest is accrued and payable under the PIPE Notes at the applicable time of conversion).

The PIPE Securities Purchase Agreement, the form of PIPE Note and the PIPE Registration Rights Agreement are attached as Exhibits 10.1, 10.2 and 10.3, respectively, to the Current Report on Form 8-K filed by Global Star with the SEC on February 7, 2025.

Of the 12,451,200 Ordinary Shares being registered pursuant to the Registration Statement on Form F-1 of which this prospectus forms a part, 893,200 are being so registered for resale by the PIPE Investors in connection with Ordinary Shares the PIPE Investors may acquire upon conversion of the PIPE Notes.

See “PIPE Securities Purchase Agreement” beginning on page 73 below for additional information regarding the PIPE Securities Purchase Agreement and the transactions contemplated thereby.

The Standby Equity Purchase Agreement (the “SEPA”)

On June 3, 2025, the Company entered into a Standby Equity Purchase Agreement (the “SEPA”) with the Bitcoin Strategic Reserve KWM LLC (“Bitcoin Strategic”), pursuant to which the Company has the right to sell to Bitcoin Strategic up to $500 million of its Ordinary Shares (the “Bitcoin Strategic Commitment Amount”), subject to certain limitations and conditions set forth in the SEPA, from time to time during the term of the SEPA. Sales of Ordinary Shares to Bitcoin Strategic under the SEPA, and the timing of any such sales, are at the Company’s option, and the Company is under no obligation to sell any Ordinary Shares to Bitcoin Strategic under the SEPA.

Upon the satisfaction of the conditions to Bitcoin Strategic’s purchase obligation set forth in the SEPA, including having a registration statement registering the resale of the Ordinary Shares issuable under the SEPA declared effective by the SEC, the Company will have the right, but not the obligation, from time to time at its discretion until the SEPA is terminated to direct Bitcoin Strategic to purchase a specified number of Ordinary Shares (each, a “Bitcoin Strategic Advance”) by delivering written notice to Bitcoin Strategic. While there is no mandatory minimum amount for any Bitcoin Strategic Advance, no Bitcoin Strategic Advance may be for the sale of an amount of shares greater than the average of the daily traded amount of Ordinary Shares during the five consecutive trading days immediately preceding a notice of a Bitcoin Strategic Advance. Additionally, subject to certain exceptions set forth in the SEPA, the Company may not effect any sales under the SEPA the extent that after giving effect to sales the aggregate number of Ordinary Shares issued under the SEPA would exceed 19.99% of the aggregate amount of Ordinary Shares issued in the capital of the Company immediately prior to the date of the SEPA.

The Company will control the timing and amount of any sales of Ordinary Shares to Bitcoin Strategic. Actual sales of Ordinary Shares to Bitcoin Strategic under the SEPA will depend on a variety of factors to be determined by the Company from time to time, which may include, among other things, market conditions, the trading price of the shares and determinations by the Company as to the appropriate sources of funding for our business and operations.

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The SEPA will automatically terminate on the earlier of (i) the 36-month anniversary of the date of the SEPA or (ii) the date on which Bitcoin Strategic shall have made payment of Bitcoin Strategic Advances pursuant to the SEPA for Ordinary Shares equal to the Bitcoin Strategic Commitment Amount. The Company has the right to terminate the SEPA at no cost or penalty upon three (3) business day’s prior written notice to Bitcoin Strategic, provided that (i) there are no outstanding Bitcoin Strategic sale notices for which Ordinary Shares need to be issued and (ii) the Company has paid all amounts owed to Bitcoin Strategic pursuant to the SEPA. The Company and Bitcoin Strategic may also agree to terminate the SEPA by mutual written consent.

Neither the Company nor Bitcoin Strategic may assign or transfer respective rights and obligations under the SEPA, and no provision of the SEPA may be modified or waived other than by an instrument in writing signed by both parties.

The net proceeds under the SEPA to the Company will depend on the frequency and prices at which the Company sells Ordinary Shares to Bitcoin Strategic. The Company expects that any proceeds received from such sales to Bitcoin Strategic will be used primarily for working capital and general corporate purposes and for purposes of implementing its treasury strategy (described in greater detail below).

Stephen Drew is the Managing Member of Bitcoin Strategic. Mr. Drew is an Initial Stockholder of the Company and a member of the Company’s Advisory Board. In addition, Mr. Drew served as a director of Global Star and is a Managing Partner of Global Fund LLC, along with Ted Kim, the Company’s Co-Founder, Chief Executive Officer and a member of the Company’s Board. The transactions consummated in connection with the SEPA and all negotiations relating thereto were conducted on an “arm’s length” basis.

The SEPA is attached as Exhibit 99.2 to the Report on 6-K filed by the Company with the SEC on June 4, 2025.

Of the 12,451,200 Ordinary Shares being registered pursuant to the Registration Statement on Form F-1 of which this prospectus forms a part, 5,000,000 are being so registered for resale by Bitcoin Strategic in connection with Ordinary Shares it may acquire under the SEPA.

See “Standby Equity Purchase Agreement” beginning on page 75 below for additional information regarding the SEPA and the transactions contemplated thereby.

The Anson Funds 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 Anson Funds (the “SPA”).

Pursuant to and subject to the terms and conditions of the SPA, the Company agreed to issue and sell to the Anson Funds, and the Anson Funds 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 $15,789,474 (the “Initial Notes”) and warrants (the “Initial Warrants”) to purchase an aggregate of 4,312,180 of Ordinary Shares. The 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). This prospectus relates to the offer and resale of an aggregate of 8,761,941 Ordinary Shares (which are collectively referred to herein as the “Offered Shares”), which consists of (i) the 4,449,761 Ordinary Shares into which the Initial Warrants are exercisable, and (ii) the 4,312,180 Ordinary Shares into which the Initial Notes are convertible.

Pursuant to and subject to the terms and conditions of the SPA, the Company also agreed to issue and sell to the Anson Funds, and the Anson Funds agreed to purchase from the Company, severally and not jointly, at (i) 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 $10,526,316 (the “Second Notes”) and warrants (the “Second Warrants”) to purchase an aggregate of 2,874,786 Ordinary Shares; and (ii) at the Additional Closing (as described below), if any, 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.

All of the Senior Secured Convertible Notes issued and issuable under the SPA (collectively, the “SPA Notes”) are convertible into Ordinary Shares at any time by the Anson Funds at a conversion price of $4.40 per Ordinary Share (subject to customary adjustment provisions in the SPA Notes). 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 Anson Funds at an exercise price of conversion price of $3.6616 per Ordinary Share (subject to customary adjustment provisions in the SPA Warrants).

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

Pursuant to the SPA, the consummation of the “Second Closing” requires, in addition to customary conditions to closing, that (i) no event of default under the SPA Notes shall have occurred or be continuing; (ii) the closing price of the Company’s Ordinary Shares on the markets or exchanges on which the Ordinary Shares are listed or quoted for trading (the “Trading Market”) equals or exceeds $3.00 per share on each trading day during the ten consecutive trading days immediately prior to the date of the Second Closing (the “Second Closing Date”); (iii) the daily dollar trading volume for the Ordinary Shares on the Trading Market equals or exceeds $2,000,000 per trading day on each trading day during the ten consecutive trading days immediately prior to the Second Closing Date; and (iv) in accordance with the SPA Registration Rights Agreement (described below), the Registration Statement on Form F-1 of which this prospectus forms a part with respect to the Initial Closing and the Second Closing shall have been declared effective.

Pursuant to the SPA, the consummation of any Additional Closing requires, in addition to customary conditions to closing, that no event of default under the SPA Notes shall have occurred or be continuing.

In addition, as a condition to the consummation of the Second Closing and any Additional Closing, the SPA requires that, from the date of the SPA to the date of the applicable closing, trading in the Company’s Ordinary Shares shall not have been suspended by the SEC or the Trading Market or limited or minimum prices established by Bloomberg L.P., nor shall a banking moratorium have been declared either by the United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of the Anson Funds, makes it impracticable or inadvisable to purchase the applicable SPA Notes and SPA Warrants at such closing.

The SPA contains customary representations, warranties, conditions and indemnification obligations of the parties. The representations, warranties and covenants contained in such agreement 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).

The SPA Notes

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).

All of the SPA Notes are convertible into Ordinary Shares at any time by the Anson Funds at a conversion price of $4.40 per Ordinary Share (subject to customary adjustment provisions in the SPA Notes, including adjustments upon dividends by the Company of Ordinary Shares and upon any stock splits effectuated by the Company). Each SPA Note also provides that, at any time after the issuance date of such SPA Note, the holder may, at its option, convert (each, an “Alternate Conversion”) all, or any part of, the outstanding principal and accrued and unpaid interest under such SPA Note into Ordinary Shares at a conversion price equal to 92% of the lowest daily volume weighted average price of the Ordinary Shares for such date (or the nearest preceding date) on the Trading Market on which the Ordinary Shares are then listed or quoted in the ten trading days prior to the applicable Alternate Conversion date.

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Notwithstanding the foregoing, pursuant to the SPA Notes, the Company may not effect the conversion of any SPA Note, and a Anson Fund 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 Anson Fund 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.

No fractional shares will be issued upon any conversion of an SPA Note. If, upon conversion of an SPA Note, the applicable Anson Fund 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.

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 (i) rank pari passu with all other SPA Notes and (ii) be senior to all other Indebtedness (as defined in the SPA) of the Company and its Subsidiaries.

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.

The SPA Notes contain certain redemption rights of the Anson Funds upon certain financing and change of control events involving the Company.

The SPA Warrants

The SPA Warrants are substantially identical. The SPA Warrants provide the Anson Funds the right to purchase, assuming all SPA Warrants are issued by the Company to the Anson Funds, an aggregate of 143,739,293 Ordinary Shares at an exercise price of $3.6616 (subject to customary adjustment provisions in the SPA Warrants, including adjustments upon dividends by the Company of Ordinary Shares and upon any stock splits effectuated by the Company). Subject to certain exempted issuances, each SPA Warrant also provides that, if the Company, at any time while such SPA Warrant is outstanding, sells, enters into an agreement to sell, or grants any option to purchase, or sells or grants any right to reprice, or otherwise disposes of or issues any Ordinary Shares or any securities of the Company or its subsidiaries which would entitle the holder thereof to acquire at any time Ordinary Shares, at an effective price per share less than the exercise price of such SPA Warrant then in effect (such lower price, the “Base Share Price”), then simultaneously with the consummation (or, if earlier, the announcement) of each such issuance, the exercise price of such SPA Warrant will be reduced to equal the Base Share Price. Additionally, each SPA Warrant provides that the Company may at any time during the term of such SPA Warrant reduce the then current exercise price to any amount and for any period of time deemed appropriate by the board of directors of the Company.

Notwithstanding the foregoing, pursuant to the SPA Warrants, the Company may not exercise any SPA Warrant, and a Anson Fund 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 Anson Fund 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.

Each SPA Warrant 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.

The SPA Warrants may be exercised by a Anson Fund 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.

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The SPA Registration Rights Agreement

Pursuant to the SPA, on July 3, 2025, the Company and the Anson Funds 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 deposit accounts and digital asset accounts (including all assets therein and proceeds therefrom, whenever held by the Company) which are jointly managed by the Company and the Anson Funds (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 $2,679,875.84 in cash and 88 Bitcoin (BTC). Following the time at which this Registration Statement on Form F-1 is declared effective by the SEC, the cash in the Company’s deposit account will be released as Collateral under the Security Agreement, and the Company will thereafter no longer be obligated to deposit any cash received from the sale of SPA Notes and SPA Warrants under the SPA into such account and will be free to use such cash for working capital and other general corporate purposes.

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.

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Rabbit Walk Share Purchase Agreement

On August 27, 2025, the Company entered into a Share Purchase Agreement (the “Rabbit Walk Share Purchase Agreement”), by and among the Company, Joong-Jae Lee, Myung-jong Kim, Yoon-wook Eo and Phillip Kim, and the other sellers signatories to the SPA (collectively, the “Rabbit Walk Sellers”).

Pursuant to the Rabbit Walk Share Purchase Agreement, the Rabbit Walk Sellers agreed to sell to the Company, and the Company agreed to purchase from the Rabbit Walk Sellers, an aggregate of 110,000 of the common shares (the “Rabbit Walk Shares”) of Rabbit Walk Inc., a company duly incorporated and existing under the laws of the Republic of Korea and engaged in the business of video and content media production (“Rabbit Walk”), which Rabbit Walk Shares represented 55% of the issued and outstanding common stock of Rabbit Walk as of the date of the Rabbit Walk Share Purchase Agreement.

In consideration of the Company’s purchase from the Rabbit Walk Sellers of the Rabbit Walk Shares, the Company agreed to, at the closing of the transactions contemplated by the Rabbit Walk Share Purchase Agreement (the “Rabbit Walk Closing”), issue to the Rabbit Walk Sellers Ordinary Shares (collectively, the “Rabbit Walk Consideration Shares”) having an aggregate value of South Korean Won (“KRW”) 9,075,000,000, calculated based on the average closing prices of the Ordinary Shares for the five consecutive business days ending on the day immediately preceding August 21, 2025 (or, USD $2.50 per Ordinary Share). The number of Rabbit Walk Consideration Shares to be issued by the Company to the Rabbit Walk Sellers will be dependent on the exchange rate of KRW to U.S. Dollars as of the Rabbit Walk Closing. The Rabbit Walk Closing will occur as promptly as practicable following the time at which the Registration Statement on Form F-1 of which this prospectus forms a part is declared effective by the SEC.

The Rabbit Walk Share Purchase Agreement provides that, in the event that Rabbit Walk’s Performance Based Consolidated Operating Profit (as defined below) for Rabbit Walk’s 2025 or 2026 fiscal year is equal to or exceeds KRW 1,200,000,000, then the Company will issue to the Rabbit Walk Sellers an additional number of Ordinary Shares (collectively, the “Rabbit Walk Earnout Shares”) having an aggregate value of KRW 9,075,000,000, calculated based on a per Ordinary Share value of USD $2.50. The number of Rabbit Walk Earnout Shares to be issued by the Company, if any, to the Rabbit Walk Sellers will be dependent on the exchange rate of KRW to U.S. Dollars as of the time of such issuance.

Pursuant to the Rabbit Walk Share Purchase Agreement, the term “Performance Based Consolidated Operating Profit” is defined as the consolidated operating profit of Rabbit Walk as determined in accordance with the Korean International Financial Reporting Standards (K-IFRS), provided that the following items of income and expenses are excluded from such calculation: (i) non-recurring income or expenses of Rabbit Walk not directly related to its operations, (ii) income or expenses of Rabbit Walk arising from the acquisition or disposal of other companies made by Rabbit Walk following the Closing, and (iii) nonrecurring expenses of Rabbit Walk (such as costs relating to the transactions contemplated by the Rabbit Walk Share Purchase Agreement and any management advisory fees charged by the Company to Rabbit Walk).

The Rabbit Walk Closing is subject to customary closing conditions, including the parties’ obtaining any necessary governmental approvals and third party consents to consummate such purchase and sale.

The Rabbit Walk Share Purchase Agreement provides that the Rabbit Walk Sellers are subject to certain lock-up provisions, pursuant to which each of the Rabbit Walk Sellers has agreed to not sell, transfer, pledge or otherwise dispose of (i) 50% of the Rabbit Walk Consideration Shares received by such Seller until the earlier of the date that is three months following the Closing and November 15, 2025; and (ii) 50% of the Rabbit Walk Consideration Shares received by such Rabbit Walk Seller until the date that is six months following the Rabbit Walk Closing.

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The Rabbit Walk Share Purchase Agreement may be terminated prior to the Rabbit Walk Closing by mutual agreement of the Company and the Rabbit Walk Sellers, or by either the Company, on one hand, or the Rabbit Walk Sellers, on the other hand, if (i) the other party materially breaches its representations, warranties covenants or obligations under the Rabbit Walk Share Purchase Agreement and such breach is not cured as provided in the Rabbit Walk Share Purchase Agreement, provided that the Company may only so terminate the Rabbit Walk Share Purchase Agreement if the Rabbit Walk Sellers’ breach results in a material adverse effect (as such term is defined in the Rabbit Walk Share Purchase Agreement) to Rabbit Walk, (ii) if a governmental authority issues a final, non-appealable order permanently restraining or prohibiting the Rabbit Walk Closing, (iii) if the other party fails to perform its obligations to consummate the Rabbit Walk Closing after all closing conditions have been met, (iv) if dissolution, liquidation, bankruptcy or rehabilitation proceedings are initiated against Rabbit Walk, or (v) if the performance of the Rabbit Walk Share Purchase Agreement becomes substantially impossible due to a force majeure event.

The Rabbit Walk Share Purchase Agreement is attached as Exhibit 99.2 to the Report on 6-K filed by the Company with the SEC on September 2, 2025.

Of the 12,451,200 Ordinary Shares being registered pursuant to the Registration Statement on Form F-1 of which this prospectus forms a part, 5,808,000 Ordinary Shares are being so registered for resale by the Rabbit Walk Sellers, which consists of 2,904,000 Rabbit Walk Consideration Shares and 2,904,000 Rabbit Walk Earnout Shares Ordinary Shares which Rabbit Walk may acquire pursuant to the Rabbit Walk Share Purchase Agreement. The amounts of Rabbit Walk Consideration Shares and Rabbit Walk Earnout Shares being registered for resale pursuant to the Registration Statement on Form F-1 of which this prospectus forms a part have been calculated based on an estimated conversion rate of 1.00 KRW:0.00080 U.S. Dollars.

See “Rabbit Walk Share Purchase Agreement” beginning on page 78 below for additional information regarding the Rabbit Walk Share Purchase Agreement and the transactions contemplated thereby.

Galaxy Digital Securities Purchase Agreement

On September 26, 2025, the Company entered into a Securities Purchase Agreement with Galaxy Digital LP (the “Galaxy Securities Purchase Agreement”). Galaxy Digital LP is an affiliate of Galaxy Digital Capital Management LP (“Galaxy Digital Capital Management”), which serves as an asset manager and strategic advisor of the Company.

Pursuant to the Galaxy Securities Purchase Agreement, on September 30, 2025, the Company issued and sold to Galaxy Digital LP (i) 400,000 Ordinary Shares for an aggregate purchase price of $1,000,000, and (ii) warrants to purchase 200,000 Ordinary Shares (the “Galaxy Warrants”).

The Galaxy Warrants provide Galaxy Digital LP the right to purchase an aggregate of 200,000 Ordinary Shares at an exercise price of $2.75 per Ordinary Share (subject to customary adjustment provisions in the Warrants, including adjustments upon dividends by the Company of Ordinary Shares and upon any stock splits effectuated by the Company) and are immediately exercisable. The Galaxy Warrants expire on the fifth anniversary of the date of the Galaxy Digital Securities Purchase Agreement.

Pursuant to the Galaxy Warrants, Galaxy Digital LP will not have the right to exercise the Galaxy Warrants, to the extent that after giving effect to the exercise, Galaxy Digital LP and certain of 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 Galaxy Warrants may be exercised by Galaxy Digital LP by paying the exercise price in cash or on a cashless basis. No fractional shares will be issued upon any exercise of the Galaxy Warrants. If, upon exercise of the Warrants, a holder would be entitled to receive a fractional interest in an Ordinary Share, the Company will round up to the nearest whole share. 

Pursuant to the Galaxy Securities Purchase Agreement, on September 26, 2025, the Company and Galaxy Digital LP entered into a Registration Rights Agreement with Galaxy Digital LP (the “Galaxy Registration Rights Agreement”). The Galaxy Registration Rights Agreement requires the Company to, within 30 days following the September 30, 2025, file a registration statement with the SEC under the Securities Act providing for the resale of all 400,000 Ordinary Shares to be issued and sold to Galaxy Digital LP under the Galaxy Securities Purchase Agreement and all 200,000 Ordinary Shares into which the Galaxy Warrants are exercisable.

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The Galaxy Securities Purchase Agreement is attached as Exhibit 99.2 to the Report on 6-K filed by the Company with the SEC on September 30, 2025. The Galaxy Warrant and the Galaxy Registration Rights Agreement are attached as Exhibits B and C, respectively, to the Galaxy Securities Purchase Agreement.

Of the 12,451,200 Ordinary Shares being registered pursuant to the Registration Statement on Form F-1 of which this prospectus forms a part, 600,000 are being so registered for resale by Galaxy Digital LP in connection with Ordinary Shares it acquired under the Galaxy Securities Purchase Agreement and may acquire upon its exercise of the Galaxy Warrant.

See “Galaxy Securities Purchase Agreement” beginning on page 80 below for additional information regarding the Galaxy Securities Purchase Agreement and the transactions contemplated thereby.

Summary of Risk Factors. Our business is subject to a number of risks, including risks that may prevent us from achieving our business objectives or may materially and adversely affect our business, financial condition, results of operations, cash flows and prospects that you should consider before making a decision to invest in our Ordinary Shares. These risks are discussed more fully in “Risk Factors.” These risks include, but are not limited to, the following:

Risks Relating to K Wave Status as a Foreign Private Issuer and Emerging Growth Company

● K Wave may lose its foreign private issuer status in the future, which could result in significant additional costs and expenses.

● Because K Wave is a foreign private issuer, investors will have less protection than if K Wave were a domestic issuer.

● K Wave status as a foreign private issuer may limit information available to its stockholders.

● Once K Wave’s status as an emerging growth company ends, it will incur significant additional costs.

Risks Relating to the SEPA and SPA

● It is not possible to predict the securities that K Wave will sell under the SPA to the Anson Funds or the proceeds K Wave will receive in connection with the SPA.

● Our obligations under the SPA could have important consequences to you.

● The redemption obligations under the notes issued under the SPA may discourage certain transactions.

● K Wave may not be able to generate sufficient cash to service the notes issued under the SPA.

● Additional issuances of our Ordinary Shares as a result of the securities issued under the SPA could result in significant dilution to K Wave’s stockholders.

● It is not possible to predict the actual number of shares K Wave will sell under the SEPA or the gross proceeds resulting from those sales.

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

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

Risks Relating to the Rabbit Walk Share Purchase Agreement

● Issuances of Ordinary Shares to the Rabbit Walk Sellers could result in significant dilution to our shareholders.

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Risks Relating to K Wave’s Business

● If K Wave cannot continue to satisfy the Nasdaq rules, its securities may be delisted.

● K Wave may not be able to maintain effective internal controls over financial reporting and may be unable to accurately report its financial results.

● Because K Wave is incorporated under Cayman Islands law, investors may face difficulties in protecting their interests and their ability to protect their rights through U.S. courts may be limited.

● K Wave’s Bitcoin-centric treasury strategy exposes it to risks.

● K Wave directors and officers own 52.01% of K Wave’s Ordinary Shares.

● Changes in tax laws or regulations may have a material adverse effect on K Wave’s business.

● K Wave’s business is subject to complex and evolving U.S. and foreign laws and regulations.

● K Wave expects that it may experience substantial fluctuations in its operating results and growth rate.

● K Wave may be subject to risks related to online payment methods.

● K Wave may not realize the anticipated benefits of acquisitions or investments in IP content.

● K Wave will face intense competition.

● K Wave’s expansion into new IP content offerings, services, technologies, and regions subjects it to risks.

● Misalignment with public tastes/preferences for offerings may impact demand for K Wave’s IP content.

● Inflation may cause K Wave’s expenses to grow more rapidly than net sales.

● Weakness in the economy, market trends and other conditions may negatively impact sales growth.

● K Wave’s expansions may place a strain on its management, operational, financial, and other resources.

● Consumer interests change rapidly.

● K Wave may fail to successfully operate its information systems and implement new technology effectively.

● K Wave’s electronic data could be compromised.

● K Wave may fail to raise additional capital or generate cash flows.

● K Wave may face risks related to health epidemics and other widespread outbreaks of contagious disease.

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● Economic downturns and political and market conditions may adversely affect K Wave’s business.

● Reductions in discretionary consumer spending may may adversely affect K Wave’s business.

● Changes in foreign currency exchange rates may adversely affect K Wave’s business.

● K Wave plans to have a significant level of operations outside of the United States.

● K Wave expects, from time to time, to be subject to various legal proceedings.

● The Internet and other technology-based service providers may experience service interruptions.

● K Wave’s growth may depend on its ability to attract and retain customers.

● K Wave may be unable to successfully integrate acquired businesses into K Wave.

● K Wave’s success may depend on the performance of its current and future employees.

● Post-acquisition K Wave’s insurance may not provide adequate levels of coverage against claims.

● Failure to comply with the U.S. Foreign Corrupt Practices Act could result in fines and criminal penalties.

● Tensions with North Korea could have an adverse effect on K Wave’s business.

● There are special risks involved with investments in companies with significant Korean operations.

● K Wave’s financial statements involve the use of good faith estimates, judgments and assumptions, which may be inaccurate.

● K Wave prepares financial statements in accordance with IFRS.

● Provisions in the K Wave’s governance documents may inhibit a takeover of K Wave.

● K Enter’s management has identified material weaknesses in K Enter’s internal control over financial reporting.

● Play Company’s management has identified material weaknesses in Play Company’s internal control over financial reporting.

● K Wave may face litigation and risks due to the material weakness in its internal control over financial reporting.

Risks Associated with being Incorporated in Cayman Islands

● Courts of the Cayman Islands to have exclusive jurisdiction over certain matters relating to K Wave.

● It may be difficult to enforce a U.S. judgment against K Wave or its directors and officers outside the U.S.

● K Wave may adopt certain Cayman Islands practices in relation to corporate governance matters that differ significantly from Nasdaq corporate governance listing standards.

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Risks Associated with Operating in Korea

● K Wave’s transactions with the Six Korean Entities may be restricted under Korean fair trade regulations.

● K Enter’s Korean operations, the Six Korean Entities and a group of companies affiliated with them may be designated an affiliated group under Korean law.

● K Enter’s Korean operations and the Six Korean Entities are subject to Korean law.

● K Enter’s Korean operations and the Six Korean Entities are subject to scrutiny by the Korean tax authorities.

● K Wave may be deemed to have a “place of effective management” in Korea.

● K Wave may be deemed to have a “permanent establishment” in Korea.

● Focus on copyright and patent infringement by the Korean government subjects K Wave to extra scrutiny.

● New Korean legislative proposals may expose K Wave’s business to additional risks.

● K Wave subsidiaries incorporated in Korea may make it difficult to enforce judgments by courts outside Korea.

Risks Relating to the Six Korean Entities

● K Enter is a recently formed company with limited business operations and will depend primarily on the revenue generated by the Six Korean Entities.

● K Wave faces concentration risk within Play Company Co. Ltd.

● K Wave may be unable to pay amounts owed to the current owner of Play Company.

● Competition within K Wave’s industry may be intense and the Six Korean Entities’ offerings may not be popular.

● The Six Korean Entities international operations expose K Wave to a number of risks.

● The Six Korean Entities’ technology, content and brands are subject to intellectual property (“IP”) infringement.

● K Wave may not be able to prevent others from unauthorized use of the Six Korean Entities’ IP.

● K Wave may experience fluctuations in the Six Korean Entities’ operating results.

● K Wave may be unable to maintain/acquire licenses or approvals to incorporate IP owned by others in the Six Korean Entities’ IP content offerings.

● The Six Korean Entities’ IP content and brand names may be subject to intellectual property infringement.

● The Six Korean Entities may face liability and expenses for legal claims.

● The Six Korean Entities depend on third-party relationships with IP content producers and distribution channels.

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● The Six Korean Entities may fail to respond to or capitalize on rapid technological development.

● The Six Korean Entities may fail to enforce their IP rights.

● The Six Korean Entities’ products and IT systems could contain errors, bugs and vulnerabilities.

● The Six Korean Entities’ business involves risks of liability claims for media content.

● Failures, errors, defects or disruptions in the Six Korean Entities’ information technology and other systems may adversely affect their businesses.

● The Six Korean Entities’ security measures may not prevent breaches in their IT infrastructure.

● The Six Korean Entities rely on third-party service providers.

● The Six Korean Entities’ growth may depend on the success of third parties.

● Digital piracy may adversely impact the Six Korean Entities’ business.

Risks Relating to an Investment in K Wave Ordinary Shares

● K Wave is engaged in multiple transactions and offerings of our securities which may dilute its stockholders.

● The sale or availability for sale of substantial amounts of Ordinary Shares could adversely affect market prices.

● Certain judgments obtained against K Wave by its stockholders may not be enforceable.

● There can be no assurance that an active trading market in the Ordinary Shares will develop or be sustained.

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

● Analysts may not publish research or publish inaccurate or unfavorable research about K Wave.

● K Wave’s organizational documents contain anti-takeover provisions.

Risks Related to our Bitcoin Strategy

● Our bitcoin acquisition strategy may expose us to various risks associated with bitcoin.

● We will be subject to counterparty risks, including in particular risks relating to our custodians.

● The broader digital assets industry is subject to counterparty risks, which could adversely impact the adoption rate, price, and use of bitcoin

● We may use the net proceeds from our offerings to purchase bitcoin, the price of which has been, and will likely continue to be, highly volatile.

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● Bitcoin and other digital assets are novel assets, and are subject to significant legal, commercial, regulatory and technical uncertainty.

● Regulatory change reclassifying bitcoin as a security could lead to our classification as an “investment company” under the Investment Company Act of 1940, as amended, or the 1940 Act, and could adversely affect the market price of bitcoin and the market price of our Ordinary Shares.

● We may be subject to regulatory developments related to crypto assets and crypto asset markets, which could adversely affect our business, financial condition, and results of operations.

● Our intended bitcoin holdings may be less liquid than our existing cash and cash equivalents and may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents.

● Due to the unregulated nature and lack of transparency surrounding the operations of many bitcoin trading venues, bitcoin trading venues may experience greater fraud, security failures or regulatory or operational problems than trading venues for more established asset classes, which may result in a loss of confidence in bitcoin trading venues and adversely affect the value of our bitcoin.

● If we or our third-party service providers experience a security breach or cyberattack and unauthorized parties obtain access to our bitcoin, or if our private keys are lost or destroyed, or other similar circumstances or events occur, we may lose some or all of our bitcoin and our financial condition and results of operations could be materially adversely affected.

● Staking activities involve significant risks, including the risks of borrower default and operational failures, which could materially and adversely affect the Company’s financial performance and the value of its crypto assets.

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

OWNERSHIP STRUCTURE OF K WAVE FOLLOWING THE BUSINESS COMBINATION

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CHART DEPICTING THE STRUCTURE OF K WAVE FOLLOWING THE BUSINESS COMBINATION

The Warrants became exercisable 30 days after the completion of the Business Combination and will expire five years after the completion of the Business Combination or earlier upon redemption or liquidation.

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Implications of Being a Smaller Reporting Company

We are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of any fiscal year for so long as either (1) the market value of our shares of Ordinary shares held by non-affiliates does not equal or exceed $250 million as of the prior June 30th, or (2) our annual revenues did not equal or exceed $100 million during such completed fiscal year and the market value of our shares of Ordinary shares held by non-affiliates did not equal or exceed $700 million as of the prior June 30th. To the extent we take advantage of any reduced disclosure obligations, it may make comparison of our financial statements with other public companies difficult or impossible.

Implications of Being an Emerging Growth Company

We are an “emerging growth company” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As an emerging growth company, we may benefit from specified reduced disclosure and other requirements that are otherwise applicable generally to public companies. These provisions include:

● presentation of only two years of audited financial statements and only two years of related management’s discussion and analysis of financial condition and results of operations in this prospectus;

● reduced disclosure about our executive compensation arrangements;

● no non-binding stockholder advisory votes on executive compensation or golden parachute arrangements;

● exemption from any requirement of 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 (i.e., an auditor discussion and analysis); and

● exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting.

We will cease to be an emerging growth company upon the earliest of: (1) December 31, 2028; (2) the first fiscal year after our annual gross revenues are $1.235 billion or more; (3) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt securities; or (4) the date on which we are deemed to be a “large accelerated filer” under the Exchange Act. We may choose to benefit from some but not all of these reduced disclosure obligations in future filings. If we do, the information that we provide shareholders may be different than you might get from other public companies in which you hold stock.

Implications of Being a Foreign Private Issuer

We are a “foreign private issuer,” within the meaning of the rules under the Exchange Act. As such, we are exempt from certain provisions applicable to United States domestic public companies. For example:

● we are not required to provide as many Exchange Act reports, or as frequently, as a domestic public company;

● for interim reporting, we are permitted to comply solely with our home country requirements, which are less rigorous than the rules that apply to domestic public companies;

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● we are not required to provide the same level of disclosure on certain issues, such as executive compensation;

● we are exempt from provisions of Regulation FD aimed at preventing issuers from making selective disclosures of material information;

● we are not required to comply with the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; and

● we are not required to comply with Section 16 of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and establishing insider liability for profits realized from any “short-swing” trading transaction.

Furthermore, Nasdaq Rule 5615(a)(3) provides that a foreign private issuer, such as us, may rely on our home country corporate governance practices in lieu of certain of the rules in the Nasdaq Rule 5600 Series and Rule 5250(d), provided that we nevertheless comply with Nasdaq’s Notification of Noncompliance requirement (Rule 5625), the Voting Rights requirement (Rule 5640) and that we have an audit committee that satisfies Rule 5605(c)(3), consisting of committee members that meet the independence requirements of Rule 5605(c)(2)(A)(ii). If we rely on our home country corporate governance practices in lieu of certain of the rules of Nasdaq, our shareholders may not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of Nasdaq. If we choose to do so, we may utilize these exemptions for as long as we continue to qualify as a foreign private issuer.

Corporate Information

K Wave’s principal executive offices are located at 121 South Church Street, George Town, Grand Cayman, KY1-1104, Cayman Islands, and K Wave’s telephone number is 703-790-0717.

Our registered office in the Cayman Islands is located at the office of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104 Cayman Islands.

Our agent for service of process in the United States is Cogency Global Inc., located at 122 East 42nd Street, 18th Floor, New York, New York 10168, United States of America.

Our website is located at www.kwavecompany.com. Information contained on, or that can be accessed through, our website is not a part of, and shall not be incorporated by reference into, this prospectus.

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THE OFFERING

This prospectus relates to the resale or other disposition from time to time by the Selling Shareholders identified in this prospectus of up to 12,451,200 Ordinary Shares. None of the shares registered hereby are being offered for sale by us.

Securities offered by the Selling Shareholders	This prospectus covers the resale of a total of up to 12,451,200 Ordinary Shares.
Ordinary Shares outstanding prior to this offering	63,198,074 Ordinary Shares as of November 26, 2025
Ordinary Shares to be outstanding after this offering	75,499,274 Ordinary Shares
Terms of this offering	The Selling Shareholders and any of its pledgees, assignees and successors-in-interest will determine when and how they sell the Ordinary Shares offered in this prospectus and may, from time to time, sell any or all of their shares covered hereby on The Nasdaq Capital Market or any other stock exchange, market or trading facility on which the shares are traded or in privately negotiated transactions. These sales may be at fixed or negotiated prices. See the section titled “Plan of Distribution.”
Use of Proceeds	The Selling Shareholders will receive all of the proceeds from the sale of the Ordinary Shares offered for sale by it under this prospectus. We will not receive any proceeds from the resale of Ordinary Shares included in this prospectus by the Selling Shareholders. We will, however, receive the proceeds of any (i) sales of our Ordinary Shares to Bitcoin Strategic under the SEPA, and (ii) cash exercise of the Galaxy Warrant by Galaxy LP.
Risk Factors	Investment in our securities involves a high degree of risk and could result in a loss of your entire investment. See “Risk Factors” beginning on page 21 and the similarly entitled sections in the documents incorporated by reference into this prospectus.
Nasdaq Capital Market Symbol	Our Ordinary Shares and our Warrants are traded on The Nasdaq Stock Market LLC (“Nasdaq”) under the symbols “KWM” and “KWMWW”, respectively.

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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 K Wave Status as a Foreign Private Issuer and Emerging Growth Company

K Wave may lose its foreign private issuer status in the future, which could result in significant additional costs and expenses.

As a foreign private issuer, K Wave is 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 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 follows 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.

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.

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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.

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.

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.

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Risks Relating to the SEPA and SPA

It is not possible to predict the Securities we will sell under the SPA to the Anson Funds, whether the Anson Funds will exercise 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 Anson Funds, and Anson Investments Master Fund L.P., as collateral agent for the Anson Funds (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 Anson Funds 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 Anson Funds under the SPA, if any, or the actual aggregate gross proceeds that we will receive under the SPA.

Our obligations under the SPA could have important consequences to you.

Pursuant to the Security Agreement entered into in connection with the SPA, the Company granted to Anson Investments Master Fund, LP (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) to secure all payment and other 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 (the “SPA Obligations”). If we were to default on our SPA Obligations, the Secured Party would have the right to foreclose on our assets held these deposit and digital asset accounts (including the 88 bitcoin held in these accounts as of the date of this prospectus). Additionally, if we are unable to raise additional capital or generate sufficient cash from operating activities, we may not have sufficient cash on hand or available liquidity that can be utilized to meet our SPA Obligations when they become due. Any such foreclosure on the part of the Secured Party or our inability to meet our SPA Obligations could have a materially adverse impact on our business, financial condition and results of operations.

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.

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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.

Each SPA Note provides that, at any time after the issuance date of such SPA Note, the holder may convert all the outstanding principal and accrued and unpaid interest under such SPA Note into Ordinary Shares at a conversion price equal to 92% of the lowest daily volume weighted average price of the Ordinary Shares for such date (or the nearest preceding date) on the Trading Market on which the Ordinary Shares are then listed or quoted in the ten trading days prior to the applicable Alternate Conversion date. Such a conversion may result in a downward adjustment in the exercise price of the SPA Notes.

Additionally, each SPA Warrant provides that, if the Company, at any time while such SPA Warrant is outstanding, issues or sells any Ordinary Shares or any securities of the Company or its subsidiaries which would entitle the holder thereof to acquire at any time Ordinary Shares, at an effective price per share less than the exercise price of such SPA Warrant then in effect (such lower price, the “Base Share Price”), then the exercise price of such SPA Warrant will be reduced to equal the Base Share Price. Further, the SPA Warrants provide that the Company may at any time during the term of such SPA Warrant reduce the then current exercise price to any amount and for any period of time deemed appropriate by the board of directors of the Company.

If the exercise price of the SPA Notes or the exercise price of the SPA Warrants are reduced as provided therein, then the SPA Notes and SPA Warrants will be convertible or exercisable (as applicable) into a larger number of our Ordinary Shares.

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 and depending on the exercise and conversion price then in effect. Further, sales by the Anson Funds 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 Anson Funds 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.

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 $500 million 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.

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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 $500 million 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.

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Risks Relating to the Rabbit Walk Share Purchase Agreement

Issuances of Ordinary Shares to the Rabbit Walk Sellers could result in significant dilution to our shareholders.

On August 27, 2025, the Company entered into a Share Purchase Agreement (the “Rabbit Walk Share Purchase Agreement”), by and among the Company, Joong-Jae Lee, Myung-jong Kim, Yoon-wook Eo and Phillip Kim, and the other sellers signatories to the SPA (collectively, the “Rabbit Walk Sellers”).

Pursuant to the Rabbit Walk Share Purchase Agreement, in exchange for the Company’s purchase of the Rabbit Walk Shares, the Company agreed to, at the Rabbit Walk Closing, issue to the Rabbit Walk Sellers Ordinary Shares (collectively, the “Rabbit Walk Consideration Shares”) having an aggregate value of South Korean Won (“KRW”) 9,075,000,000, calculated based on the average closing prices of the Ordinary Shares for the five consecutive business days ending on the day immediately preceding August 21, 2025 (or, USD $2.50 per Ordinary Share). The Rabbit Walk Closing will occur as promptly as practicable following the time at which the Registration Statement on Form F-1 of which this prospectus forms a part is declared effective by the SEC.

Additionally, the Rabbit Walk Share Purchase Agreement provides that, in the event that Rabbit Walk’s Performance Based Consolidated Operating Profit for Rabbit Walk’s 2025 or 2026 fiscal year is equal to or exceeds KRW 1,200,000,000, then the Company will issue to the Rabbit Walk Sellers an additional number of Ordinary Shares (collectively, the “Rabbit Walk Earnout Shares”) having an aggregate value of KRW 9,075,000,000, calculated based on a per Ordinary Share value of USD $2.50. The number of Rabbit Walk Earnout Shares to be issued by the Company, if any, to the Rabbit Walk Sellers will be dependent on the exchange rate of KRW to U.S. Dollars as of the time of such issuance.

Because the number of Rabbit Walk Consideration Shares to be issued and the Rabbit Walk Earnout Shares to be issued, if any, by the Company to the Rabbit Walk Sellers will be dependent on the exchange rate of KRW to U.S. Dollars as of time of issuance, the number of these Ordinary Shares is not known. Of the 12,451,200 Ordinary Shares being registered pursuant to the Registration Statement on Form F-1 of which this prospectus forms a part, 5,808,000 Ordinary Shares are being so registered for resale by the Rabbit Walk Sellers, which consists of 2,904,000 Rabbit Walk Consideration Shares and 2,904,000 Rabbit Walk Earnout Shares Ordinary Shares which Rabbit Walk may acquire pursuant to the Rabbit Walk Share Purchase Agreement, calculated based on an estimated conversion rate of 1.00 KRW:0.00080 U.S. Dollars.

Issuances of our Ordinary Shares under the Rabbit Walk Share Purchase Agreement will result in dilution to existing shareholders and, because the number of the shares will be dependent on the exchange rate of KRW to U.S. Dollars as of time of issuance, the number of these Ordinary Shares and the amount of such dilution is unknown. The amount of dilution could be substantial depending upon the size of the issuances of Ordinary Shares to the Rabbit Walk Sellers. Further, sales by the Rabbit Walk Sellers 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 potential issuances of Ordinary Shares to the Rabbit Walk Sellers 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 Rabbit Walk Sellers 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.

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Risks Relating to K Wave’s Business

If K Wave cannot satisfy or continue to satisfy the listing requirements and other rules of Nasdaq, K Wave’s securities 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 limited availability for market quotations for its securities;

● reduced liquidity with respect to K Wave’s securities;

● a determination that its Ordinary Shares is a “penny stock,” which will require brokers trading in K Wave’s Ordinary Shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for K Wave’s Ordinary Shares;

● limited amount of news and analyst coverage; and

● a decreased ability to issue additional securities or obtain additional financing in the future.

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 is 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.

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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.

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.

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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.

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, if directors and officers of K Wave vote together with respect to any matters submitted to a vote of K Wave shareholders, such vote will be assured provided such vote requires a simple majority for approval.

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)

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.

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.

K Wave’s business is 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)

K Wave is 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.

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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.

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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.

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.

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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 expected ability to retain and increase sales to existing customers, attract new customers, and satisfy K Wave’s customers’ demands;

● the Six Korean Entities expected ability to retain and expand K Wave’s network of customers;

● the Six Korean Entities expected ability to offer content on favorable terms, manage inventory, and fulfill orders;

● the Six Korean Entities expected introduction of competitive stores, websites, content, services, price decreases, or improvements;

● the Six Korean Entities expected changes in usage or adoption rates of the Internet, e-commerce, electronic devices, and web services, inside or outside the U.S.;

● the Six Korean Entities expected timing, effectiveness, and costs of expansion and upgrades of post-acquisition K Wave’s systems and infrastructure;

● the expected success of K Wave’s geographic, service, and content line expansions;

● the expected extent to which K Wave raise capital, and the terms of any such financing for, K Wave’s current operations and future growth;

● the expected outcomes of legal proceedings and claims, which may include significant monetary damages or injunctive relief and may have a material adverse impact on post-acquisition K Wave’s operating results;

● variations in the mix of content and services the Six Korean Entities sell;

● expected variations in post-acquisition K Wave’s level of merchandise and vendor returns;

● the expected extent to which we offer free shipping, continue to reduce prices worldwide, and provide additional benefits to post-acquisition K Wave’s customers;

● expected factors affecting post-acquisition K Wave’s reputation or brand image;

● the extent to which we invest in technology and content, fulfillment, and other expense categories;

● increases in the prices of fuel and gasoline, as well as increases in the prices of other energy products and commodities like paper and packing supplies;

● the expected extent to which post-acquisition K Wave’s equity-method investees record significant operating and non-operating items;

● the expected extent to which operators of the networks between post-acquisition K Wave’s customers and its successfully charge fees to grant its customers unimpaired and unconstrained access to its online services;

● our expected ability to collect amounts owed to us when they become due;

● the expected extent to which use of post-acquisition K Wave’s services may be affected by spyware, viruses, phishing and other spam emails, denial of service attacks, data theft, computer intrusions, outages, and similar events;

● terrorist attacks and armed hostilities;

● supply chain issues either in chip shortages; and

● potential long lead time in the developments, investments, productions and distributions of IP content.

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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.

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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.

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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.

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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.

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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:

● make the post closing payments to the owner of Play Company as called for the Play Company stock purchase agreement;

● invest in K Wave’s business and continue to grow K Wave’s brand and expand K Wave’s fan base;

● hire and retain employees, including celebrities, influences, and content creators as well as other employees and staff, including engineers, operations personnel, financial and accounting staff, and sales and marketing staff;

● respond to competitive pressures or unanticipated working capital requirements; or

● pursue opportunities for acquisitions of, investments in, or strategic alliances and joint ventures with complementary businesses.

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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.

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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 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 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.

K Wave has 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:

● challenges caused by distance as well as language and cultural differences;

● general economic conditions in each country or region;

● regulatory changes;

● political unrest, terrorism and the potential for other hostilities;

● public health risks, particularly in areas in which K Wave has significant operations;

● longer payment cycles and difficulties in collecting accounts receivable;

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● overlapping or changes in tax regimes;

● difficulties in transferring funds from certain countries;

● laws such as the U.S. Foreign Corrupt Practices Act, and local laws which also prohibit corrupt payments to governmental officials; and

● reduced protection for intellectual property rights in some countries.

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.

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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:

● the ability to profitably manage acquired businesses or successfully integrate the acquired businesses’ operations, personnel, financial reporting, accounting and internal controls, technologies and content into K Wave’s business;

● incurrence of indebtedness and the expense of integrating acquired businesses, including significant administrative, operational, economic, geographic or cultural challenges in managing and integrating the expanded or combined operations;

● entry into jurisdictions or acquisition of content or technologies with which K Wave has limited or no prior experience, and the potential of increased competition with new or existing competitors as a result of such acquisitions;

● diversion of management’s attention and the over-extension of K Wave’s operating infrastructure and K Wave’s management systems, information technology systems, and internal controls and procedures, which may be inadequate to support growth;

● the ability to fund K Wave’s capital needs and any cash flow shortages that may occur if anticipated revenue is not realized or is delayed, whether by general economic or market conditions, or unforeseen internal difficulties; and

● the ability to retain or hire qualified personnel required for expanded operations.

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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.

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.

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.

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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.

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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.

Because K Wave prepares 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 prepares 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.

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 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.

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.

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.

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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.

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.

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.

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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.

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.

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.

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Risks Associated with being Incorporated in the Cayman Islands

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.

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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.

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Risks Associated with Operating in Korea

K Wave’s 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.

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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 Korean 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.

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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.

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Risks Relating to the Six Korean Entities

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:

● their earnings;

● covenants contained in any debt agreements to which K Enter may then be subject, including any debt agreements of K Enter’s planned subsidiaries;

● covenants contained in other agreements to which K Enter or K Enter’s planned subsidiaries are or may become subject;

● business and tax considerations; and

● applicable law, including any restrictions under South Korean law that may be imposed on K Enter’s planned subsidiaries and their affiliates, that would restrict its ability to make payments to K Enter.

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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.

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 Concentration of HYBE										Unit: %
	2021			2022			2023			2024
HYBE share of Total Play Revenues		86	%		80	%		52	%		18	%
BTS share of Total Play Revenues		72	%		67	%		24	%		2	%

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.

1. Video Publication Production and Distribution for SM Entertainment
SM Entertainment is a leading K-pop agency. Play Company has secured exclusive rights to produce and distribute video publications for all SM artists. The two companies have been in ongoing discussions about new product releases, and Play launched three initial products in 2024. These early releases were smaller in scale and did not feature SM’s top artists. However, Play expects that future product launches will potentially lead to higher sales per release. In early 2025, Play released its first video publication for AESPA, one of SM’s flagship artists, which generated over USD 1 million in revenue. Additional product releases are currently being discussed.

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2. Expansion of Product Line-Up Including Concert Merchandise
In 2024, Play Company secured the rights to sell merchandise during ATEEZ’s World Tour. This arrangement ATEEZ is an artist managed by KQ Entertainment. Play prepared new products, including ATEEZ light sticks sweatshirts, hoodies, sling bags, etc. Sales of ATEEZ World Tour-related merchandise in 2024 generated approximately USD 4.5 million in revenue. This arrangement will continue in 2025. As a continuation of this work with ATEEZ, in 2025, Play Company sold merchandise directly at ATEEZ’s European and North American tour locations. Leveraging this experience, Play Company is negotiating with other entertainment companies to secure similar rights for the sale of official World Tour merchandise.

3. New Artist Partnerships and Business Expansion Beyond K-pop
Similar to its exclusive agreement with SM Entertainment, Play Company is actively pursuing comparable agreements with other K-pop agencies. At the same time, the company is expanding beyond K-pop. In 2024, as part of this diversification effort, Play Company signed an agreement with actor Byun Woo-seok to produce and distribute merchandise and video content for his fan meetings. This project generated approximately USD 2.5 million in revenue. The company is also working to capture additional opportunities tied to KWM’s movie and drama actors, particularly by marketing merchandise during fan events.

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’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.

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.

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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.

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:

● local economic and political conditions;

● government regulation and compliance requirements (such as regulation of K Wave’s IP content and service offerings and of competition), restrictive governmental actions (such as trade protection measures, including export duties and quotas and custom duties and tariffs), nationalization, and restrictions on foreign ownership;

● restrictions on sales or distribution of certain content or services and uncertainty regarding liability for certain IP content, including uncertainty as a result of less Internet-friendly legal systems, local laws, lack of legal precedent, and varying rules, regulations, and practices regarding the physical and digital distribution of media content and enforcement of intellectual property rights;

● business licensing or certification requirements, such as for imports, exports, web services, and electronic devices;

● limitations on the repatriation and investment of funds and foreign currency exchange restrictions;

● limited technology infrastructure;

● shorter payable and longer receivable cycles and the resultant negative impact on cash flow;

● laws and regulations regarding consumer and data protection, privacy, network security, encryption, payments, and restrictions on pricing or discounts;

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● lower levels of consumer spending and fewer opportunities for growth compared to the U.S.;

● lower levels of credit card usage and increased payment risk;

● difficulty in staffing, developing, and managing foreign operations as a result of distance, language, and cultural differences;

● different employee/employer relationships and the existence of works councils and labor unions;

● compliance with the U.S. Foreign Corrupt Practices Act and other applicable U.S. and foreign laws prohibiting corrupt payments to government officials and other third parties;

● laws and policies of the U.S. and other jurisdictions affecting trade, foreign investment, loans, and taxes; and

● geopolitical events, including war and terrorism.

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.

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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.

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)

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.

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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.

Additionally, 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.

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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.

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.

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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.

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.

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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.

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.

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.

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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.

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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.

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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.

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.

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Risks Relating to an Investment in K Wave 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 the Selling Shareholders, the Anson Funds 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 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 November 26, 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 $500 million of Ordinary Shares – could also affect the market price of 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.”

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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.

Prior to the Business Combination, K Wave 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:

● actual or anticipated variations in the financial results and prospects of K Wave or other companies in the entertainment business;

● changes in financial estimates by research analysts;

● changes in the market valuations of other entertainment content companies;

● announcements by K Wave or its competitors of new education services, expansions, investments, acquisitions, strategic partnerships or joint ventures;

● mergers or other business combinations involving K Wave;

● additions and departures of key personnel and senior management;

● changes in accounting principles;

● the passage of legislation or other developments affecting K Wave or its industry;

● the trading volume of K Wave’s Ordinary Shares in the public market;

● the release of lockup, escrow or other transfer restrictions on K Wave’s outstanding equity securities or sales of additional equity securities;

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● potential litigation or regulatory investigations;

● changes in economic conditions, including fluctuations in global and the Republic of Korea’s economies;

● financial market conditions;

● natural disasters, terrorist acts, acts of war or periods of civil unrest; and

● the realization of some or all of the risks described in this section.

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.

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.

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Risks Related to our Bitcoin Strategy

Our bitcoin acquisition strategy may expose us to various risks associated with bitcoin.

Our bitcoin acquisition strategy may expose us to various risks associated with bitcoin, including the following:

Bitcoin is a highly volatile asset. Bitcoin is a highly volatile asset that has traded below $53,000 per bitcoin and above $109,000 per bitcoin on Coinbase in the 12 months preceding the date of this prospectus. The trading price of bitcoin was significantly lower during prior periods, and such decline may occur again in the future.

Bitcoin does not pay interest or dividends. Bitcoin does not pay interest or other returns and we can only generate cash from our bitcoin holdings if we sell our bitcoin or implement strategies to create income streams or otherwise generate cash by using our bitcoin holdings. Even if we pursue any such strategies, the Company may not be able to create income streams or otherwise generate cash from our bitcoin holdings, and any such strategies may subject us to additional risks.

Our bitcoin acquisition strategy has not been tested. The Company’s bitcoin acquisition strategy has not been tested. Although we believe bitcoin, due to its limited supply, has the potential to serve as a hedge against inflation in the long-term, the short-term price of bitcoin declined in recent periods during which the inflation rate increased. Some investors and other market participants may disagree with our bitcoin acquisition strategy or actions we undertake to implement it. If bitcoin prices were to decrease or our bitcoin acquisition strategy otherwise proves unsuccessful, our financial condition, results of operations, and the market price of our Ordinary Shares would be materially adversely impacted.

We will be subject to counterparty risks, including in particular risks relating to our custodians.

Applicable insolvency law is not fully developed with respect to the holding of digital assets in custodial accounts. If our custodially-held bitcoin were nevertheless considered to be the property of our custodians’ estates in the event that any such custodians were to enter bankruptcy, receivership or similar insolvency proceedings, we could be treated as a general unsecured creditor of such custodians, inhibiting our ability to exercise ownership rights with respect to such bitcoin and this may ultimately result in the loss of the value related to some or all of such bitcoin. Even if we are able to prevent our bitcoin from being considered the property of a custodian’s bankruptcy estate as part of an insolvency proceeding, it is possible that we would still be delayed or may otherwise experience difficulty in accessing our bitcoin held by the affected custodian during the pendency of the insolvency proceedings. Any such outcome could have a material adverse effect on our financial condition and the market price of our Ordinary Shares.

The broader digital assets industry is subject to counterparty risks, which could adversely impact the adoption rate, price, and use of bitcoin

A series of high-profile bankruptcies, closures, liquidations, regulatory enforcement actions and other events relating to companies operating in the digital asset industry, including the filings for bankruptcy protection by Three Arrows Capital, Celsius Network, Voyager Digital, FTX Trading and Genesis Global Capital, the closure or liquidation of certain financial institutions that provided lending and other services to the digital assets industry, including Signature Bank and Silvergate Bank, SEC enforcement actions against Coinbase, Inc. and Binance Holdings Ltd., the placement of Prime Trust, LLC into receivership following a cease-and-desist order issued by Nevada’s Department of Business and Industry, and the filing and subsequent settlement of a civil fraud lawsuit by the New York Attorney General against Genesis Global Capital, its parent company Digital Currency Group, Inc., and former partner Gemini Trust Company, have highlighted the counterparty risks applicable to owning and transacting in digital assets. Any similar bankruptcies, closures, liquidations and other events may result in loss or misappropriation of our intended bitcoin holdings, or adversely impact our access to our bitcoin holdings.

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We may use the net proceeds from our offerings to purchase bitcoin, the price of which has been, and will likely continue to be, highly volatile.

We may use a portion of the net proceeds from one or more of our offerings to purchase bitcoin toward BTC purchases. Bitcoin is a highly volatile asset that has traded below $53,000 per bitcoin and above $109,000 per bitcoin on Coinbase in the 12 months preceding the date of this prospectus. In addition, bitcoin does not pay interest or other returns, so the ability to generate a return on investment in bitcoin will depend on whether there is appreciation in the value of bitcoin following our purchases of bitcoin. Future fluctuations in bitcoin trading prices may result in our converting bitcoin purchased by us into cash with a value substantially below the then purchase price by us.

Bitcoin and other digital assets are novel assets, and are subject to significant legal, commercial, regulatory and technical uncertainty.

Bitcoin and other digital assets are relatively novel and subject to significant uncertainty, which could adversely impact their price. The application of state and federal securities laws and other laws and regulations to digital assets is unclear in certain respects, and it is possible that regulators in the United States or foreign countries may interpret or apply existing laws and regulations in a manner that adversely affects the price of bitcoin.

The U.S. federal government, states, regulatory agencies, and foreign countries may also enact new laws and regulations, or pursue regulatory, legislative, enforcement or judicial actions, that could materially impact the price of bitcoin or the ability of individuals or institutions such as us to own or transfer bitcoin. For example, the U.S. executive branch, the SEC, the European Union’s Markets in Crypto Assets Regulation, among others have been active in recent years, and in the U.K., the Financial Services and Markets Act 2023, or FSMA 2023 became law. It is not possible to predict whether, or when, any of these developments will lead to Congress granting additional authorities to the SEC or other regulators, or whether, or when, any other federal, state or foreign legislative bodies will take any similar actions. Further, it is also not possible to predict the nature of any such additional authorities, how additional legislation or regulatory oversight might impact the ability of digital asset markets to function or the willingness of financial and other institutions to continue to provide services to the digital assets industry, or how any new regulations or changes to existing regulations might impact the value of digital assets generally and bitcoin specifically. The consequences of increased regulation of digital assets and digital asset activities could adversely affect the market price of bitcoin and in turn adversely affect the market price of our Ordinary Shares.

In addition, the risks of engaging in a bitcoin treasury strategy are relatively novel and have created, and could continue to create, complications due to the lack of experience that third parties have with companies engaging in such a strategy, such as increased costs of director and officer liability insurance or the potential inability to obtain such coverage on acceptable terms in the future.

The growth of the digital assets industry in general, and the use and acceptance of bitcoin in particular, may also impact the price of bitcoin and is subject to a high degree of uncertainty. Growth in the adoption and use of bitcoin may depend, for instance, on public familiarity with digital assets, ease of buying, accessing or gaining exposure to bitcoin, institutional demand for bitcoin as an investment asset, the participation of traditional financial institutions in the digital assets industry, consumer demand for bitcoin as a means of payment, and the availability and popularity of alternatives to bitcoin. Even if growth in bitcoin adoption occurs in the near or medium-term, there is no assurance that bitcoin usage will continue to grow over the long-term.

Because bitcoin has no physical existence beyond the record of transactions on the bitcoin blockchain, a variety of technical factors related to the bitcoin blockchain could also impact the price of bitcoin. Malicious attacks by miners, inadequate mining fees to incentivize validating of bitcoin transactions, hard “forks” of the bitcoin blockchain into multiple blockchains, and advances in digital computing, algebraic geometry, and quantum computing could undercut the integrity of the bitcoin blockchain and negatively affect the price of bitcoin. The liquidity of bitcoin may also be reduced and damage to the public perception of bitcoin may occur, if financial institutions, for example, were to deny or limit banking services to businesses that hold bitcoin, provide bitcoin-related services or accept bitcoin as payment, which could also decrease the price of bitcoin. The open-source nature of the bitcoin blockchain also means the contributors and developers of the bitcoin blockchain are generally not directly compensated for their contributions in maintaining and developing the blockchain, and any failure to properly monitor and upgrade the bitcoin blockchain could adversely affect the bitcoin blockchain and negatively affect the price of bitcoin.

Recent actions by U.S. banking regulators have reduced the ability of bitcoin-related services providers to gain access to banking services and liquidity of bitcoin may also be impacted to the extent that changes in applicable laws and regulatory requirements negatively impact the ability of exchanges and trading venues to provide services for bitcoin and other digital assets.

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Regulatory change reclassifying bitcoin as a security could lead to our classification as an “investment company” under the Investment Company Act of 1940, as amended, or the 1940 Act, and could adversely affect the market price of bitcoin and the market price of our Ordinary Shares.

Under Sections 3(a)(1)(A) and (C) of the 1940 Act, a company generally will be deemed to be an “investment company” for purposes of the 1940 Act if (1) it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities or (2) it engages, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. We do not believe that we are an “investment company,” as such term is defined in the 1940 Act, and are not registered as an “investment company” under the 1940 Act as of the date of this prospectus.

While senior SEC officials have stated their view that bitcoin is not a “security” for purposes of the federal securities laws, a contrary determination by the SEC could lead to our classification as an “investment company” under the 1940 Act, if the portion of our assets consists of investments in bitcoins exceeds 40% safe harbor limits prescribed in the 1940 Act, which would subject us to significant additional regulatory controls that could have a material adverse effect on our business and operations and may also require us to change the manner in which we conduct our business.

We may be subject to regulatory developments related to crypto assets and crypto asset markets, which could adversely affect our business, financial condition, and results of operations.

As bitcoin and other digital assets are relatively novel and the application of state and federal securities laws and other laws and regulations to digital assets is unclear in certain respects, and it is possible that regulators in the United States or foreign countries may interpret or apply existing laws and regulations in a manner that adversely affects the price of bitcoin. The U.S. federal government, states, regulatory agencies, and foreign countries may also enact new laws and regulations, or pursue regulatory, legislative, enforcement or judicial actions, that could materially impact the price of bitcoin or the ability of individuals or institutions such as us to own or transfer bitcoin.

If bitcoin is determined to constitute a security for purposes of the federal securities laws, the additional regulatory restrictions imposed by such a determination could adversely affect the market price of bitcoin and in turn adversely affect the market price of our Ordinary Shares. Moreover, the risks of us engaging in a bitcoin treasury strategy have created, and could continue to create, complications due to the lack of experience that third parties have with companies engaging in such a strategy, such as increased costs of director and officer liability insurance or the potential inability to obtain such coverage on acceptable terms in the future.

Our intended bitcoin holdings may be less liquid than our existing cash and cash equivalents and may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents.

The bitcoin markets have been characterized by significant volatility in price, limited liquidity and trading volumes compared to sovereign currencies markets, relative anonymity, a developing regulatory landscape, potential susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges, and various other risks inherent in its entirely electronic, virtual form and decentralized network. During times of market instability, we may not be able to sell our bitcoin at favorable prices or at all. As a result, our bitcoin holdings may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents.

Bitcoin we hold with our custodians and transact with our trade execution partners may not enjoy the same protections as are available to cash or securities deposited with or transacted by institutions subject to regulation by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation. Additionally, we may be unable to enter into term loans or other capital raising transactions collateralized by our unencumbered bitcoin or otherwise generate funds using our bitcoin holdings, including in particular during times of market instability or when the price of bitcoin has declined significantly. If we are unable to sell our bitcoin, enter into additional capital raising transactions using bitcoin as collateral, or otherwise generate funds using our bitcoin holdings, or if we are forced to sell our bitcoin at a significant loss, in order to meet our working capital requirements, our business and financial condition could be negatively impacted.

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Due to the unregulated nature and lack of transparency surrounding the operations of many bitcoin trading venues, bitcoin trading venues may experience greater fraud, security failures or regulatory or operational problems than trading venues for more established asset classes, which may result in a loss of confidence in bitcoin trading venues and adversely affect the value of our bitcoin.

Bitcoin trading venues are relatively new and, in many cases, unregulated. There are also many bitcoin trading venues which do not provide the public with significant information regarding their ownership structure, management teams, corporate practices and regulatory compliance. As a result, the marketplace may lose confidence in bitcoin trading venues, including prominent exchanges that handle a significant volume of bitcoin trading and/or are subject to regulatory oversight, in the event one or more bitcoin trading venues cease or pause for a prolonged period the trading of bitcoin or other digital assets, or experience fraud, significant volumes of withdrawal, security failures or operational problems.

If we or our third-party service providers experience a security breach or cyberattack and unauthorized parties obtain access to our bitcoin, or if our private keys are lost or destroyed, or other similar circumstances or events occur, we may lose some or all of our bitcoin and our financial condition and results of operations could be materially adversely affected.

Currently, we use BitGo Trust Company, Inc. (“BitGo”), as custodian to hold our bitcoin. Security breaches and cyberattacks are of particular concern with respect to our bitcoin. Bitcoin and other blockchain-based cryptocurrencies and the entities that provide services to participants in the bitcoin ecosystem have been, and may in the future be, subject to security breaches, cyberattacks, or other malicious activities. A successful security breach or cyberattack could result in:

● a partial or total loss of our bitcoin in a manner that may not be covered by insurance or the liability provisions of the custody agreements with BitGo or other custodians who may hold our bitcoin in the future;

● harm to our reputation and brand;

● improper disclosure of data and violations of applicable data privacy and other laws; or

● significant regulatory scrutiny, investigations, fines, penalties, and other legal, regulatory, contractual and financial exposure.

All of the digital assets we own and held in custody accounts at BitGo are currently held in “hot wallets.” Hot wallets, which are connected to the Internet, facilitate transactions but are more vulnerable to hacking and other cyber incidents. Security breaches and cyberattacks will be of particular concern with respect to our digital assets. Bitcoin and other blockchain-based cryptocurrencies and the entities that provide services to participants in the Bitcoin ecosystem have been, and may in the future be, subject to security breaches, cyberattacks, or other malicious activities. 

Any actual or perceived data security breach or cybersecurity attack directed at other companies with digital assets or companies that operate digital asset networks, regardless of whether we are directly impacted, could lead to a general loss of confidence in the broader bitcoin blockchain ecosystem or in the use of the bitcoin network to conduct financial transactions, which could negatively impact us.

Staking activities involve significant risks, including the risks of borrower default and operational failures, which could materially and adversely affect the Company’s financial performance and the value of its crypto assets.

While K Wave currently does not currently engage in any staking activities of its bitcoin assets, it may do so in the future. Staking bitcoin will expose us to a variety of operational, economic, technological, and regulatory risks. Although staking can generate rewards, the process involves locking or delegating our bitcoin tokens to a validator, thereby restricting our immediate liquidity and ability to freely trade or use these tokens. Any operational disruptions, cybersecurity breaches, or software errors affecting our staking providers, validators, or the underlying blockchain network may result in partial or total loss of our staked bitcoin.

Unlike traditional financial instruments, staking transactions are final and irreversible once executed, increasing the risk associated with potential human errors, operational failures, or malicious activities. Additionally, the underlying validator operations and staking infrastructure may be subject to technical vulnerabilities or exploits. A failure, security breach, or operational deficiency in validator performance or infrastructure could significantly reduce or eliminate staking rewards or result in economic penalties that adversely affect our financial condition.

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If we engage in staking activities, we will depend on third-party providers, such as our Custodian, and affiliated or independent validators, facilitate and manage our staking activities. If our Custodian or validator experiences financial distress, insolvency, cybersecurity incidents, or other operational failures, we may experience significant delays or difficulty recovering staked tokens, lose expected staking rewards, or incur permanent loss of the underlying staked assets. Additionally, third-party staking providers may not maintain insurance coverage sufficient to protect us against all types of loss scenarios, leaving us potentially exposed to substantial economic risk.

Staking activities may also subject us to regulatory uncertainty and evolving interpretations of securities, commodities, and financial services laws. Regulators may impose licensing, registration, reporting, or other compliance requirements on our staking activities, leading to increased legal and operational burdens, costs, or interruptions. Furthermore, we may be required to alter, limit, or cease staking activities altogether in response to future regulatory or enforcement developments.

Additionally, many staking platforms impose lock-up periods during which staked assets cannot be accessed or traded. This lack of liquidity can be problematic, especially during market downturns when users may want to liquidate their assets. 

The occurrence of any of these risks could materially impair our bitcoin asset holdings and adversely affect the financial performance of our business.

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THE PIPE SECURITIES PURCHASE AGREEMENT

On January 31, 2025, the Company entered into a Securities Purchase Agreement (the “PIPE Securities Purchase Agreement”), with Nikhil Nanda, Gan Cher Siong, Joshua Guok and Goldstar Global Capital VCC-Alpha Opportunities Fund (collectively, the “PIPE Investors”) and another institutional, accredited investor (the “Other PIPE Investor”), pursuant to which the PIPE Investors and the Other PIPE Investor agreed to subscribe for and purchase, and the Company agreed to issue and sell to the PIPE Investors and the Other PIPE Investor, at the closing of the transactions contemplated by the Business Combination Agreement, Convertible Senior Unsecured Promissory Notes (the “PIPE Notes”) convertible into shares Ordinary Shares (the financing under the PIPE Securities Purchase Agreement hereinafter referred to as the “PIPE Financing”) with an aggregate original principal amount of $4.5 million.

On May 13, 2025, upon the closing of the Business Combination, the Company issued and sold an original aggregate principal amount of $4.4 million of the PIPE Notes (the “Aggregate Closing PIPE Proceeds”) to the PIPE Investors in accordance with the terms and conditions of the PIPE Securities Purchase Agreement. In connection with the closing of the PIPE Financing, the Other PIPE Investor failed to pay for $100,000 for the PIPE Note for which the Other PIPE Investor had committed to purchase pursuant to the PIPE Securities Purchase Agreement.

The PIPE Notes are convertible into Ordinary Shares at a price of $5.00 per Ordinary Share, provided, that, under the terms of the PIPE Notes, a PIPE Investor may not convert its PIPE Notes to the extent (but only to the extent) such PIPE Investor or any of its affiliates would beneficially own a number of Ordinary Shares which would exceed 4.99% of the outstanding Ordinary Shares of the Company. The PIPE Notes bear interest at a rate of 3.00% per annum, which interest is payable semi-annually. The PIPE Notes mature and all principal and unpaid accrued interest will be payable on the date that is thirty-sixth (36) months following the issuance date of the PIPE Notes.

Pursuant to the PIPE Securities Purchase Agreement, the PIPE Investors who purchased the PIPE Notes were also entitled to receive an aggregate of 880,000 Ordinary Shares from the Company upon the issuance of the PIPE Notes (the “Company PIPE Share Obligation”). In order to incentivize the PIPE Investors to consummate the transactions contemplated by the PIPE Securities Purchase Agreement, including the purchase of the PIPE Notes, following the Closing of the Business Combination on May 13, 2025, Ted Kim, the Company’s Co-Founder, Chief Executive Officer and a member of the Company’s Board, transferred an aggregate of 880,000 Ordinary Shares then held by Lodestar USA, Inc., an entity of which Ted Kim is the sole owner (“Lodestar”), to the PIPE Investors in order to satisfy the Company PIPE Share Obligation. In connection with this transfer of 880,000 Ordinary Shares to the PIPE Investors, following the Closing of the Business Combination on May 13, 2025, Ted Kim also caused Lodestar to transfer to certain individuals who assisted the Company in the consummation of its initial public offering an aggregate of 73,651 Ordinary Shares then held by Lodestar.

The PIPE Securities Purchase Agreement contains customary representations, warranties and covenants of the parties. The representations, warranties and covenants contained in such agreement 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.

The Aggregate Closing PIPE Proceeds were released to the Company in connection with the transactions contemplated by the Business Combination Agreement.

Pursuant to the PIPE Securities Purchase Agreement, the Company and the PIPE Investors entered into a Registration Rights Agreement (the “PIPE Registration Rights Agreement”), pursuant to which the Company agreed to file with the SEC a registration statement covering the Ordinary Shares into which the PIPE Notes are convertible.

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As of the date of the Registration Statement on Form F-1 of which this prospectus forms a part, each of the PIPE Investors has provided to the Company written notice that such PIPE Investors desire to convert in full all of their respective PIPE Notes into Ordinary Shares. Accordingly, upon the effectiveness of the Registration Statement on Form F-1 of which this prospectus forms a part, the Company intends to issue an amount of Ordinary Shares equal to the aggregate amount of principal and unpaid interest under the PIPE Notes, divided by $5.00 (which is the per Ordinary Share conversion price under the PIPE Notes). Because interest under the PIPE Notes accrues at 3.0% per annum and is paid semi-annually, the Company is registering for resale by the PIPE Investors an aggregate of 893,200 Ordinary Shares under the Registration Statement on Form F-1 of which this prospectus forms a part, which number of Ordinary Shares represents the maximum amount of Ordinary Shares which may be payable under the PIPE Notes at any given time (and assumes six months of interest is accrued and payable under the PIPE Notes at the applicable time of conversion).

The PIPE Securities Purchase Agreement, the form of PIPE Note and the PIPE Registration Rights Agreement are attached as Exhibits 10.1, 10.2 and 10.3, respectively, to the Current Report on Form 8-K filed by Global Star with the SEC on February 7, 2025.

Of the 12,451,200 Ordinary Shares being registered pursuant to the Registration Statement on Form F-1 of which this prospectus forms a part, 893,200 are being so registered for resale by the PIPE Investors in connection with Ordinary Shares the PIPE Investors may acquire upon conversion of the PIPE Notes.

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THE STANDBY EQUITY PURCHASE AGREEMENT

On June 3, 2025, the Company entered into a Standby Equity Purchase Agreement (the “SEPA”) with the Bitcoin Strategic Reserve KWM LLC, a Delaware limited liability company (“Bitcoin Strategic”).

Pursuant to the SEPA, from the date of the SEPA until the date the SEPA is terminated in accordance with its terms (and as described in greater detail below) (the “SEPA Commitment Period”), the Company has the right but not the obligation, to issue and sell to Bitcoin Strategic (in which case Bitcoin Strategic will have the obligation to subscribe for) (each, a “SEPA Advance”), up to $500 million (the “SEPA Commitment Amount”) of the Company’s Ordinary Shares (“SEPA Advance Shares”). In connection with the execution of the SEPA, the Company agreed to pay to Bitcoin Strategic, a structuring fee in the amount of $25,000, which will be paid on a date agreed by the Company and Bitcoin Strategic and will be payable by way of the issuance of an amount of Ordinary Shares with a value equal to such fee (calculated based on a price per Ordinary Share equal to the average of the daily volume weighted average price of the Ordinary Shares during the three trading days immediately prior to the date of the SEPA) (the “SEPA Commitment Fee”).

At any time during the SEPA Commitment Period, the Company may, by giving notice to Bitcoin Strategic (a “SEPA Advance Notice”), require Bitcoin Strategic to subscribe for SEPA Advance Shares provided that, at the time of the Advance Notice, the following conditions (collectively, the “SEPA Advance Conditions”) have been met:

(i) The Company’s representations and warranties in the SEPA are true and correct in all material respects as of the date of the SEPA Advance Notice (other than representations and warranties which address matters only as of a certain date, which are true and correct as written as of such certain date);

(ii) There is an effective registration statement (the “SEPA Registration Statement”) for the registration of the resale from time to time by Bitcoin Strategic of the SEPA Advance Shares subject to the applicable SEPA Advance Notice(s);

(iii) The Company has timely filed with the SEC all reports, notices and other documents required under the Exchange Act and applicable SEC regulations since November 15, 2023 and including the twelve-month period immediately preceding the applicable date of the applicable SEPA Advance Notice;

(iv) The Company will have obtained all permits and qualifications required by any applicable state for the allotment and issuance of all the Ordinary Shares issuable pursuant to the applicable SEPA Advance Notice, or shall have the availability of exemptions therefrom and the allotment and issuance of such Ordinary Shares are legally permitted by all laws and regulations to which the Company is subject;

(v) No Material Outside Event (as defined in the SEPA) has occurred and be continuing;

(vi) The Company’s Board of Directors has approved the transactions contemplated by the SEPA and the applicable SEPA Advance Notice;

(vii) The Company has obtained shareholder approval for the Company’s directors to exercise any power of the Company to issue Ordinary Shares;

(viii) The Company has performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the SEPA at or prior the date of the applicable SEPA Advance Notice;

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(ix) No statute, rule, regulation, executive order, decree, ruling or injunction has been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits or directly, materially and adversely affects any of the transactions contemplated by the SEPA;

(x) Trading in the Ordinary Shares has not been suspended by the SEC, the Nasdaq Stock Market or other market or exchange on which the Ordinary Shares are ever listed (the “SEPA Principal Market”) or FINRA, the Company has have received any final and non-appealable notice that the listing or quotation of the Ordinary Shares on the SEPA Principal Market will be terminated on a date certain (unless, prior to such date certain, the Ordinary Shares are listed or quoted on any subsequent SEPA Principal Market), nor has there been imposed any suspension of, or restriction on, accepting additional deposits of the Ordinary Shares, electronic trading or book-entry services by DTC with respect to the Ordinary Shares that is continuing, the Company has not received any notice from DTC to the effect that a suspension of, or restriction on, accepting additional deposits of the Ordinary Shares, electronic trading or book-entry services by DTC with respect to the Ordinary Shares is being imposed or is contemplated (unless, prior to such suspension or restriction, DTC shall have notified the Company in writing that DTC has determined not to impose any such suspension or restriction);

(xi) The representations contained in the applicable SEPA Advance Notice are true and correct in all material respects as of the applicable SEPA Advance Notice date; and

(xii) Except with respect to the first SPA Advance Notice, the Company has issued all SEPA Advance Shares relating to all prior SEPA Advances.

Pursuant to the SEPA, the Company may, in its sole discretion, select the number of SEPA Advance Shares it desires to sell to Bitcoin Strategic in each SEPA Advance Notice and the time it desires to deliver each SEPA Advance Notice; provided, however, that the SEPA Ordinary Shares subject to a SEPA Advance Notice may not exceed an amount of shares equal to the average daily trading volume of the Company’s Ordinary Shares on the SEPA Principal Market during the five trading days immediately preceding such SEPA Advance Notice.

Pursuant to the SEPA, there are no mandatory minimum SEPA Advances and no non-usages fee for not utilizing the SEPA Commitment Amount or any part thereof.

Regardless of the number of Advance Shares requested by the Company in the Advance Notice, the final number of Shares to be allotted and issued pursuant to an Advance Notice shall be reduced (if at all) in accordance with each of the following limitations:

(i) Bitcoin Strategic will not be obligated, but may choose to subscribe for or acquire Ordinary Shares under the SEPA which, when aggregated with all other Ordinary Shares acquired under the SEPA, would result in the total beneficial ownership by Bitcoin Strategic and its affiliates (on an aggregated basis) to exceed 4.99% of the then number of Ordinary Shares issued in the capital of the Company (the “SEPA Ownership Limitation”).

(ii) No SEPA Advance may exceed the number of Ordinary Shares registered in respect of the transactions contemplated hereby under the SEPA Registration Statement then in effect.

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(iii) The Company may not effect any sales under the SEPA and Bitcoin Strategic will not have the obligation to subscribe for Ordinary Shares under the SEPA to the extent (but only to the extent) that after giving effect to such subscription the aggregate number of Ordinary Shares issued under the SEPA would exceed 19.99% of the aggregate amount of Ordinary Shares issued in the capital of the Company immediately prior to the date of the SEPA, calculated in accordance with the rules of the SEPA Principal Market (such maximum number of shares, the “SEPA Exchange Cap”), provided that, the SEPA Exchange Cap will not apply if (a) the Company’s shareholders have approved issuances in excess of the SEPA Exchange Cap in accordance with the rules of the SEPA Principal Market, or (b) the Average Price of all applicable subscriptions for Ordinary Shares under the SEPA (including any subscriptions covered by a SEPA Advance Notice that has been delivered prior to the determination of whether the SEPA Exchange Cap applies) equals or exceed $10.00 per share (which represents the lower of (i) the Nasdaq Official Closing Price (as reflected on Nasdaq.com) immediately preceding the date of the SEPA; or (ii) the average Nasdaq Official Closing Price for the five Trading Days immediately preceding the Effective Date).

Pursuant to the SEPA, subject to certain adjustments in the case where the Company specifies a minimum price per SEPA Advance Share in the applicable SEPA Advance Notice, the price payable for SEPA Advance Shares in a valid SEPA Advance Notice will be equal to 97.5% of the Market Price multiplied by the total number of SEPA Advance Shares to be allotted and issued under such SEPA Advance, where “Market Price is defined as the lowest of the daily volume weighted average price of the Ordinary Shares on the Principal Market during the three consecutive trading days commencing on the date of the applicable SEPA Advance Notice.

Pursuant to the SEPA, the Company is obligated to prepare and file with the SEC a registration statement with the SEC and, thereafter, use commercially reasonable efforts to maintain the effectiveness of any such registration statement that has been declared effective.

Unless earlier terminated, the SEPA will terminate automatically on the earliest of (i) the first day of the month next following the 36-month anniversary of the date of the SEPA, or (ii) the date on which Bitcoin Strategic has made payment of SEPA Advances pursuant to the SEPA for SEPA Advance Shares equal to the SEPA Commitment Amount. Additionally, the Company may unilaterally terminate the SEPA three business days’ prior written notice to Bitcoin Strategic; provided that (i) there are no outstanding SEPA Advance Notices, the Ordinary Shares under which have yet to be allotted and issued, and (ii) the Company has paid all amounts owed to Bitcoin Strategic pursuant to the SEPA, including the SEPA Commitment Fee. The SEPA may also be terminated at any time by the mutual written consent of the Company and Bitcoin Strategic.

Neither the Company nor Bitcoin Strategic may assign or transfer respective rights and obligations under the SEPA, and no provision of the SEPA may be modified or waived other than by an instrument in writing signed by both parties.

The SEPA contains customary representations, warranties, conditions and indemnification obligations of the parties. The representations, warranties and covenants contained in such agreement 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.

Stephen Drew is the Managing Member of Bitcoin Strategic. Mr. Drew is an Initial Stockholder of the Company and a member of the Company’s Advisory Board. In addition, Mr. Drew served as a director of Global Star and is a Managing Partner of Global Fund LLC, along with Ted Kim, the Company’s Co-Founder, Chief Executive Officer and a member of the Company’s Board. The transactions consummated in connection with the SEPA and all negotiations relating thereto were conducted on an “arm’s length” basis.

The SEPA is attached as Exhibit 99.2 to the Report on 6-K filed by the Company with the SEC on June 4, 2025.

Of the 12,451,200 Ordinary Shares being registered pursuant to the Registration Statement on Form F-1 of which this prospectus forms a part, 5,000,000 are being so registered for resale by Bitcoin Strategic in connection with Ordinary Shares it may acquire under the SEPA.

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THE RABBIT WALK SHARE PURCHASE AGREEMENT

On August 27, 2025, the Company entered into a Share Purchase Agreement (the “Rabbit Walk Share Purchase Agreement”), by and among the Company, Joong-Jae Lee, Myung-jong Kim, Yoon-wook Eo and Phillip Kim, and the other sellers signatories to the SPA (collectively, the “Rabbit Walk Sellers”).

Pursuant to the Rabbit Walk Share Purchase Agreement, the Rabbit Walk Sellers have agreed to sell to the Company, and the Company has agreed to purchase from the Rabbit Walk Sellers, an aggregate of 110,000 of the common shares (the “Rabbit Walk Shares”) of Rabbit Walk Inc., a company duly incorporated and existing under the laws of the Republic of Korea and engaged in the business of video and content media production (“Rabbit Walk”), which Rabbit Walk Shares represented 55% of the issued and outstanding common stock of Rabbit Walk as of the date of the Rabbit Walk Share Purchase Agreement.

In consideration of the Company’s purchase from the Rabbit Walk Sellers of the Rabbit Walk Shares, the Company agreed to, at the closing of the transactions contemplated by the Rabbit Walk Share Purchase Agreement (the “Rabbit Walk Closing”), issue to the Rabbit Walk Sellers Ordinary Shares (collectively, the “Rabbit Walk Consideration Shares”) having an aggregate value of South Korean Won (“KRW”) 9,075,000,000, calculated based on the average closing prices of the Ordinary Shares for the five consecutive business days ending on the day immediately preceding August 21, 2025 (or, USD $2.50 per Ordinary Share). The number of Rabbit Walk Consideration Shares to be issued by the Company to the Rabbit Walk Sellers will be dependent on the exchange rate of KRW to U.S. Dollars as of the Rabbit Walk Closing.

Additionally, the Rabbit Walk Share Purchase Agreement provides that, in the event that Rabbit Walk’s Performance Based Consolidated Operating Profit (as defined below) for Rabbit Walk’s 2025 or 2026 fiscal year is equal to or exceeds KRW 1,200,000,000, then the Company will issue to the Rabbit Walk Sellers an additional number of Ordinary Shares (collectively, the “Rabbit Walk Earnout Shares”) having an aggregate value of KRW 9,075,000,000, calculated based on a per Ordinary Share value of USD $2.50. The number of Rabbit Walk Earnout Shares to be issued by the Company, if any, to the Rabbit Walk Sellers will be dependent on the exchange rate of KRW to U.S. Dollars as of the time of such issuance.

Pursuant to the Rabbit Walk Share Purchase Agreement, the term “Performance Based Consolidated Operating Profit is defined as the consolidated operating profit of Rabbit Walk as determined in accordance with the Korean International Financial Reporting Standards (K-IFRS), provided that the following items of income and expenses are excluded from such calculation: (i) non-recurring income or expenses of Rabbit Walk not directly related to its operations, (ii) income or expenses of Rabbit Walk arising from the acquisition or disposal of other companies made by Rabbit Walk following the Closing, and (iii) nonrecurring expenses of Rabbit Walk (such as costs relating to the transactions contemplated by the Rabbit Walk Share Purchase Agreement and any management advisory fees charged by the Company to Rabbit Walk).

Pursuant to the Rabbit Walk Share Purchase Agreement, the Company and the Rabbit Walk Sellers agreed to negotiate in good faith to, on or before December 31, 2026, enter into an agreement for the Company’s acquisition, in exchange for a to-be-determined number of Ordinary Shares, of the remaining issued and outstanding Rabbit Walk common shares (the “Remaining Rabbit Walk Shares”), which Remaining Rabbit Walk Shares are held by the Rabbit Walk Sellers and represented 45% of Rabbit Walk’s issued and outstanding capital stock as of the date of the Rabbit Walk Share Purchase Agreement.

The Rabbit Walk Closing is subject to customary closing conditions, including the parties’ obtaining any necessary governmental approvals and third party consents to consummate such purchase and sale. The Rabbit Walk Share Purchase Agreement provides that the Company and the Rabbit Walk Sellers will use their best efforts to consummate the Rabbit Walk Closing.

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The Rabbit Walk Share Purchase Agreement provides that for a period of six years following the Closing, the Company will cause Rabbit Walk to retain each of Joong-Jae Lee, Myung-jong Kim, Yoon-wook Eo and Phillip Kim in their management positions at Rabbit Walk, subject to certain termination for cause exceptions. The Rabbit Walk Share Purchase Agreement also provides that, following the Closing, the Company will pay (each, a “Rabbit Walk Bonus Payment”) to Joong-Jae Lee, Myung-jong Kim, Yoon-wook Eo and Phillip Kim (the “Rabbit Walk Bonus Recipients”), an aggregate of 20% of Rabbit Walk’s Performance Based Consolidated Operating Profit with respect to each fiscal year in which such Performance Based Consolidated Operating Profit exceeds KRW 2,000,000,000, provided that no Bonus Payment with respect to any fiscal year can exceed KRW 700,000,000. The Rabbit Walk Share Purchase Agreement provides that each Rabbit Walk Bonus Payment, if any, will be payable to the Rabbit Walk Bonus Recipients within 30 days after the completion of an external audit for Rabbit Walk’s applicable fiscal year and will be apportioned among the Rabbit Walk Bonus Recipients based on reasonable performance criteria. The Rabbit Walk Share Purchase Agreement provides that if any Rabbit Walk Bonus Recipient is no longer employed or is subject to a termination for cause at the time a Rabbit Walk Bonus Payment is payable by the Company, then such Rabbit Walk Bonus Recipient’s apportioned share of such Rabbit Walk Bonus Payment will be forfeited.

The Rabbit Walk Share Purchase Agreement provides that, following the Rabbit Walk Closing, the Rabbit Walk board of directors will be comprised of three directors to be nominated by the Company, and two directors to be nominated by the joint recommendation of Joong-Jae Lee and Myung-jong Kim.

Further, following the Rabbit Walk Closing, Rabbit Walk has agreed acquire the remaining 49% equity interest in three of its subsidiaries (of which it owned 51% as of the date of the Rabbit Walk Share Purchase Agreement), Nice Production, Dal C Film and Just Creative, provided that such subsidiaries meet certain operating profit thresholds set forth in the Rabbit Walk Share Purchase Agreement, for aggregate proceeds of up to KRW 9,150,000,000.

The Rabbit Walk Share Purchase Agreement provides that the Rabbit Walk Sellers are subject to certain lock-up provisions, pursuant to which each of the Rabbit Walk Sellers has agreed to not sell, transfer, pledge or otherwise dispose of (i) 50% of the Rabbit Walk Consideration Shares received by such Seller until the earlier of the date that is three months following the Closing and November 15, 2025; and (ii) 50% of the Rabbit Walk Consideration Shares received by such Rabbit Walk Seller until the date that is six months following the Rabbit Walk Closing.

The Rabbit Walk Share Purchase Agreement may be terminated prior to the Rabbit Walk Closing by mutual agreement of the Company and the Rabbit Walk Sellers, or by either the Company, on one hand, or the Rabbit Walk Sellers, on the other hand, if (i) the other party materially breaches its representations, warranties covenants or obligations under the Rabbit Walk Share Purchase Agreement and such breach is not cured as provided in the Rabbit Walk Share Purchase Agreement, provided that the Company may only so terminate the Rabbit Walk Share Purchase Agreement if the Rabbit Walk Sellers’ breach results in a material adverse effect (as such term is defined in the Rabbit Walk Share Purchase Agreement) to Rabbit Walk, (ii) if a governmental authority issues a final, non-appealable order permanently restraining or prohibiting the Rabbit Walk Closing, (iii) if the other party fails to perform its obligations to consummate the Rabbit Walk Closing after all closing conditions have been met, (iv) if dissolution, liquidation, bankruptcy or rehabilitation proceedings are initiated against Rabbit Walk, or (v) if the performance of the Rabbit Walk Share Purchase Agreement becomes substantially impossible due to a force majeure event.

The Rabbit Walk Share Purchase Agreement contains customary representations, warranties, covenants, conditions and indemnification obligations of the parties. The representations, warranties and covenants contained in such agreement 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.

The Rabbit Walk Share Purchase Agreement is attached as Exhibit 99.2 to the Report on 6-K filed by the Company with the SEC on September 2, 2025.

Of the 12,451,200 Ordinary Shares being registered pursuant to the Registration Statement on Form F-1 of which this prospectus forms a part, 5,808,000 Ordinary Shares are being so registered for resale by the Rabbit Walk Sellers, which consists of 2,904,000 Rabbit Walk Consideration Shares and 2,904,000 Rabbit Walk Earnout Shares Ordinary Shares which Rabbit Walk may acquire pursuant to the Rabbit Walk Share Purchase Agreement. The amounts of Rabbit Walk Consideration Shares and Rabbit Walk Earnout Shares being registered for resale pursuant to the Registration Statement on Form F-1 of which this prospectus forms a part have been calculated based on an estimated conversion rate of 1.00 KRW:0.00080 U.S. Dollars.

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GALAXY DIGITAL SECURITIES PURCHASE AGREEMENT

On September 26, 2025, the Company entered into a Securities Purchase Agreement with Galaxy Digital LP (the “Galaxy Securities Purchase Agreement”). Galaxy Digital LP is an affiliate of Galaxy Digital Capital Management LP, which serves as an asset manager and strategic advisor of the Company.

Pursuant to the Galaxy Securities Purchase Agreement, on September 30, 2025, the Company issued and sold to Galaxy Digital LP (i) 400,000 Ordinary Shares for an aggregate purchase price of $1,000,000, and (ii) warrants to purchase 200,000 Ordinary Shares (the “Galaxy Warrants”).

The Galaxy Securities Purchase Agreement contains customary representations, warranties, conditions and indemnification obligations of the parties. The representations, warranties and covenants contained in such agreement 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.

The Galaxy Warrants provide Galaxy Digital LP the right to purchase an aggregate of 200,000 Ordinary Shares at an exercise price of $2.75 per Ordinary Share (subject to customary adjustment provisions in the Warrants, including adjustments upon dividends by the Company of Ordinary Shares and upon any stock splits effectuated by the Company) and are immediately exercisable. The Galaxy Warrants expire on the fifth anniversary of the date of the Galaxy Digital Securities Purchase Agreement. 

Pursuant to the Galaxy Warrants, Galaxy Digital LP will not have the right to exercise the Galaxy Warrants, to the extent that after giving effect to the exercise, Galaxy Digital LP and certain of 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 Galaxy Warrants may be exercised by Galaxy Digital LP by paying the exercise price in cash or on a cashless basis. No fractional shares will be issued upon any exercise of the Galaxy Warrants. If, upon exercise of the Warrants, a holder would be entitled to receive a fractional interest in an Ordinary Share, the Company will round up to the nearest whole share. 

Pursuant to the Galaxy Securities Purchase Agreement, on September 26, 2025, the Company and Galaxy Digital LP entered into a Registration Rights Agreement with Galaxy Digital LP (the “Galaxy Registration Rights Agreement”). The Registration Rights Agreement requires the Company to, within 30 days following the September 30, 2025, file a registration statement with the SEC under the Securities Act providing for the resale of all 400,000 Ordinary Shares to be issued and sold to Galaxy Digital LP under the Galaxy Securities Purchase Agreement and all 200,000 Ordinary Shares into which the Galaxy Warrants are exercisable.

Pursuant to the Registration Rights Agreement, the Company will use its best efforts to cause the Registration Statement to be declared effective by the SEC no later than the earlier of (a) the 90th calendar day following the Closing Date if the SEC notifies the Company that it will “review” the Registration Statement and (b) the fifth business day after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that the Registration Statement will not be “reviewed” or will not be subject to further review. Pursuant to the Registration Rights Agreement, the Company will also use its best efforts to keep the Registration Statement effective for the periods specified therein.

The Galaxy Securities Purchase Agreement is attached as Exhibit 99.2 to the Report on 6-K filed by the Company with the SEC on September 30, 2025. The Galaxy Warrant and the Galaxy Registration Rights Agreement are attached as Exhibits B and C, respectively, to the Galaxy Securities Purchase Agreement.

Of the 12,451,200 Ordinary Shares being registered pursuant to the Registration Statement on Form F-1 of which this prospectus forms a part, 600,000 are being so registered for resale by Galaxy Digital LP in connection with Ordinary Shares it acquired under the Galaxy Securities Purchase Agreement and may acquire upon its exercise of the Galaxy Warrant.

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ISSUANCE OF SHARES TO GLOBAL FUND LLC

In connection with the Business Combination, on May 14, 2025, Global Fund LLC transferred 150,000 Ordinary Shares (the “Reimbursement Shares”) to the law firm, Loeb & Loeb LLP, as payment for legal services which it provided to the Company in connection with the Business Combination. The Company will reimburse Global Fund for this transfer of the Reimbursement Shares by issuing to 150,000 Ordinary Shares to Global Fund LLC upon the effectiveness of the Registration Statement on Form F-1 of which this prospectus forms a part.

Ted Kim, the Company’s Co-Founder, Chief Executive Officer and a member of the Company’s Board, and Stephen Drew, an Initial Stockholder of the Company and a member of the Company’s Advisory Board, are the Managing Partners of Global Fund LLC. Stephen Drew is also the Managing Member of Bitcoin Strategic and served as a director of Global Star.

Of the 12,451,200 Ordinary Shares being registered pursuant to the Registration Statement on Form F-1 of which this prospectus forms a part, 150,000 Ordinary Shares represent the Reimbursement Shares are being so registered for resale by Global Fund LLC.

Effect of Sales of our Securities under the SEPA, the PIPE Agreement, the Rabbit Walk Share Purchase Agreement and the Galaxy Share Purchase Agreement and of the Reimbursement Shares on our Stockholders

The Ordinary Shares that have been issued or are issuable (as applicable) under the SEPA, the PIPE Agreement, the Rabbit Walk Share Purchase Agreement and the Galaxy Share Purchase Agreement and the Reimbursement Shares 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 their 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 SEPA, the PIPE Agreement, the Rabbit Walk Share Purchase Agreement and the Galaxy Share Purchase Agreement, 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 November 26, 2025, there were 63,198,074 our Ordinary Shares outstanding. If all of the 12,451,200 Ordinary Shares offered for resale by the Selling Shareholders under this prospectus were issued and outstanding, such shares would represent approximately 16.45% of the total number of outstanding shares of Ordinary Shares and approximately 40% of the total number of outstanding shares of Ordinary Shares held by non-affiliates of our Company, in each case as of November 26, 2025.

The issuance of any Ordinary Shares to the Selling Shareholders 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.

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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. We will, however, receive the proceeds of any (i) sales of our Ordinary Shares to Bitcoin Strategic under the SEPA, and (ii) cash exercise of the Galaxy Warrant by Galaxy LP.

We expect to use any proceeds that we receive from any sales under the SEPA and in connection with any cash exercise of the Galaxy Warrant by Galaxy LP, for working capital and general corporate purposes, for M&A activities and for purposes of implementing our treasury strategy (described in greater detail below). The amounts and timing of these expenditures will depend on a number of factors, such as the status of our development efforts, sales and marketing activities and the amount of cash generated or used by our operations. As of the date of this prospectus, we cannot specify with certainty all of the particular uses, and the respective amounts we may allocate to those uses, for any net proceeds we receive. Accordingly, we will retain broad discretion over the use of these 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”.

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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 November 26, 2025, there were 241 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.

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UNAUDITED PRO FORMA FINANCIAL INFORMATION

Introduction

The following unaudited pro forma condensed consolidated financial information presents the financial information of K Wave as of and for the six months ended June 30, 2025, adjusted to give effect to the issuance of the notes for aggregate proceeds of $13,495,000 (net of transaction costs of $2,294,474) and the use of $9,815,108 of those proceeds to acquire 88 units of Bitcoin at a cost of $111,535/Bitcoin. Also, the following unaudited pro forma condensed combined statement of operations for the year ended December 31, 2024 presents the combination of financial information of Global Star and K Wave, and the six Korean Entities, adjusted to give effect to the Business Combination, the acquisition of the Six Korean entities and related transactions. The following unaudited pro forma condensed consolidated or combined financial information has been prepared in accordance with Article 11 of Regulation S-X to depict the accounting for the transaction (“Transaction Accounting Adjustments”). K Wave has elected not to present Management’s Adjustments in the unaudited pro forma condensed combined financial information.

The unaudited pro forma condensed consolidated or combined financial information has been presented for illustrative purposes only and do not necessarily reflect what K Wave’s financial condition or results of operations would have been had the acquisition occurred on the dates indicated. Further, the pro forma condensed consolidated or combined financial information also may not be useful in predicting the future financial condition and results of operations of K Wave. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.

The unaudited pro forma condensed consolidated balance sheet as of June 30, 2025 and the statement of operations for the period ended June 30, 2025 and the year ended December 31, 2024, have been derived from (and by applying pro forma adjustments to):

● the historical financial statements of K Wave as of June 30, 2025 and December 31, 2024 and for the period ended June 30, 2025 and for the year ended December 31, 2024, and

● the historical financial statements of K Enter as of December 31, 2024 and for the year then ended and

● the historical consolidated financial statements of Global Star as of December 31, 2024 and for the year then ended and

● the historical consolidated financial statements of Play Company as of December 31, 2024 and for the years then ended and

● the historical financial statements of LAMP as of December 31, 2024 and for the year then ended and

● the historical financial statements of Bidangil as of December 31, 2024 and for the year then ended and

● the historical financial statements of Apeitda as of December 31, 2024 and for the year then ended and

● the historical financial statements of Anseilen as of December 31, 2024 and for the year then ended and

● the historical financial statements of Solaire Partners as of December 31, 2024 and for the year then ended

This information should be read together with (i) the financial statements and related notes, as applicable, of each of Play Company, LAMP, Bidangil, K Wave. and K Enter included in this prospectus and Play Company’s, LAMP’s, Bidangil’s, K Wave’s and K Enter’s “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other financial information included elsewhere herein and (ii) the financial statements and related notes of Global Star and Global Star’s “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other financial information included in the Form 10-K of Global Star filed with SEC on April 29, 2025. (iii) the financial statements and related notes of Apeitda, Anseilen, Solaire Partners and Apeitda’s, Ansilen’s, Solaire Partners’, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other financial information included in the Form 20-F/A of K Wave filed with SEC on May 16, 2025.

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Description of the Transactions

Business Combination

Pursuant to the Share Purchase Agreements, on January 2, 2025, K Enter consummated the business combinations with the six Korean Entities (“New K Enter”). Pursuant to the Business Combination Agreement, on May 13, 2025, Global Star reincorporated to Cayman Islands by merging with and into K Wave Media Ltd, a Cayman Islands exempted company and wholly owned subsidiary of Global Star (“PubCo”), with PubCo remaining as the surviving publicly traded entity (the “Reincorporation Merger”); (ii) one (1) business day following the Reincorporation Merger, GLST Merger Sub, Inc. (“Merger Sub”), a Delaware corporation and wholly owned subsidiary of PubCo, merged with and into K Enter, resulting in K Enter being a wholly owned subsidiary of PubCo (the “Acquisition Merger”). The Reincorporation Merger and the Acquisition Merger are collectively referred to herein as the “Business Combination.”. Also on the Closing Date, the Global Star acquired all of the issued and outstanding ordinary shares of K Wave Media (the “Purchased Shares”) from the Sellers in exchange for the Company’s ordinary shares (“Company Ordinary Shares”) par value $0.0001 per share (the “Share Exchange”).

More specifically, pursuant to the Business Combination Agreement, at the effective time of the Business Combination (the “Effective Time”):

● On May 13, 2025, Global Star was reincorporated to Cayman Islands by merging with and into PubCo, with PubCo remaining as the surviving publicly traded entity (the “Reincorporation Merger”). In connection with the closing of the Reincorporation Merger, (i) each issued and outstanding share of common stock of Global Star, other than Global Star common stock owned by Global Star as treasury shares or any Global Star common stock owned by any direct or indirect wholly owned subsidiary of Global Star, was converted into one ordinary share of PubCo (the “PubCo Ordinary Share”), (ii) each issued and outstanding warrant of Global Star was converted automatically into a warrant to purchase one PubCo Ordinary Share at a price of $11.50 per whole share (the “PubCo Warrant”), (iii) each issued and outstanding right of Global Star was converted automatically into a right to receive one-tenth (1/10) of one PubCo Ordinary Share at the closing of a business combination (the “PubCo Right”), and (iv) each issued and outstanding unit of Global Star was separated and converted automatically into one PubCo Ordinary Share, one PubCo Warrant, and one PubCo Right. At the closing of the Reincorporation Merger, all common stock, warrants, rights, units and other securities of Global Star ceased to be outstanding and were automatically canceled and retired and ceased to exist.

● On May 13, 2025, Merger Sub merged with and into K Enter, resulting in K Enter being a wholly owned subsidiary of PubCo (the “Acquisition Merger”). In connection with the closing of the Acquisition Merger, (i) each share of K Enter capital stock that was owned by Global Star, Merger Sub and K Enter (as treasury stock or otherwise), was automatically cancelled and retired without any conversion, (ii) each share of K Enter preferred stock issued and outstanding was deemed converted into shares of K Enter common stock, (iii) each share of K Enter common stock issued and outstanding, including shares of K Enter common stock deemed outstanding as a result of the mandatory conversion of K Enter preferred stock, was converted into the right to receive a number of PubCo Ordinary Shares equal to the Conversion Ratio (i.e., 312.1:1), and (iv) each share of Merger Sub common stock issued and outstanding was converted into and become one newly issued, fully paid and nonassessable share of K Enter common stock.

The following table summarizes the pro forma number of shares of K Wave Media outstanding following the consummation of the Business Combination and the Domestication, discussed further in the sections below, excluding the potential dilutive effect of the K Wave Media Public Warrants, Private Warrants, and Convertible Note Warrants.

Equity Capitalization Summary	Shares		%
K Enter Stockholders		59,160,000		93.4	%
Global Star Public Stockholders		960,027		1.6	%
Sponsor and Initial Stockholders		2,963,047		4.7	%
Representative Shares		115,000		0.3	%
Total ordinary shares		63,198,074		100.0	%

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Accounting for the Business Combination

The Business Combination was accounted for as a capital reorganization, in accordance with IFRS. Under this method of accounting, Global Star is treated as the “acquired” company for financial reporting purposes, and New K Enter is the accounting “acquirer”. This determination was primarily based on the assumption that:

● New K Enter’s existing stockholders are holding a majority of the voting rights of PubCo post Business Combination;

● New K Enter’s existing stockholders have the ability to control decisions regarding the election and removal of directors and officers of New K Enter following the Closing;

● New K Enter’s former shareholders have control over the Board;

● New K Enter’s operations substantially comprise the ongoing operations of PubCo;

● New K Enter is the larger entity in terms of substantive operations and employee base; and

● New K Enter’s senior management comprises the senior management of PubCo.

Another determining factor was that Global Star does not meet the definition of a “business” pursuant to IFRS 3, and thus, for accounting purposes, the Business Combination was accounted for as a capital reorganization within the scope of IFRS 2, where New K Enter issues stock for the net assets of Global Star. The net assets of Global Star were stated at historical cost, with no goodwill or intangible assets recorded. Any excess of the fair value of shares issued to Global Star over the fair value of Global Star’s identifiable net assets acquired represents compensation for the service of a stock exchange listing for its shares and is expensed as incurred.

The acquisition of Play Company 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 for financial reporting purposes. As Play Company’s basis of accounting is IFRS, K Enter’s basis of accounting (following the acquisition of Play Company) is IFRS.

The acquisitions of each of the Six Korean Entities other than Play Company by K Enter was also accounted for in accordance with the acquisition method of accounting under IFRS 3, with K Enter (following the acquisition of Play Company, its predecessor) considered to be the acquirer of each of the Six Korean Entities other than Play Company. New K Enter’s basis of accounting is IFRS, consistent with that of its predecessor, Play Company.

The overall impact of the accounting conclusions set out above is that the financial statements of Play Company are those of K-Enter post-consummation and did not experience a change in basis as a result of the application of the acquisition method while each of K Enter and the Six Korean Entities other than Play Company experienced a change in basis as a result of the application of the acquisition method and was reflected in the consolidated financial statements of Play Company on a prospective basis post-consummation.

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This determination was primarily based on the assumption that:

● Play Company’s existing stockholders are holding a large minority voting interest in New K Enter where no other owner has a significant voting interest;

● Play Company’s CEO has the ability to appoint a majority of directors of New K Enter’s board of directors;

● Play Company’s CEO has the ability to appoint the senior management of New K Enter;

● Play Company’s operations substantially comprises the ongoing operations of New K Enter; and

● Play Company is the larger entity in terms of substantive operations and employee base.

Under the acquisition method of accounting, the preliminary purchase price is 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 are expensed as incurred.

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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

FOR K WAVE

AS OF JUNE 30, 2025⁽¹⁾

(In thousands, except per share amounts)	As of June 30, 2025 K Wave (Historical)			Pro Forma Adjustments				As of June 30, 2025 Pro Forma Combined
Assets
Cash and cash equivalents	$	6,432		$	1,330		A,B	$	7,762
Short-term financial instruments		321							321
Short-term investment securities		332							332
Accounts receivable — trade, net		4,186							4,186
- Related parties		2,274							2,274
- Non related parties		1,912							1,912
Short-term loans, net		813							813
- Related parties		761							761
- Non related parties		52							52
Accounts receivable — other, net		968							967
- Related parties		88							88
- Non related parties		879							879
Value added tax receivables		44							44
Other current assets		3,491							3,491
Other current financial assets		81							81
Contract assets		628							628
- Related parties		76							76
- Non related parties		552							552
Current tax assets
Inventories, net		1,511							1,511
Total current assets		18,809							20,136
Long-term financial instruments		228							228
Long-term loans, net		89							89
- Related parties		89							89
- Non related parties
Long-term investment securities		2,536			1,761				4,297
- Related parties		590							590
- Non related parties		1,946			1,761		B		3,707
Investments in associates		56							56
Property and equipment including right-of-use assets		6,688							6,688
Intangible assets other than goodwill		4,678			9,815		A		14,493
Goodwill		133,881							133,881
Investment properties		1,114							1,114
Other non-current financial assets		1,719							1,719
Other non-current non-financial assets		3,717							3,717
Deferred tax assets		928							928
Investment property
Defined benefit assets
Total non-current assets		155,634							167,210
Total assets		174,443							187,346
Liabilities
Trade and other payables		41,957							41,958
- Related parties		28,943							28,943
- Non related parties		13,015							13,015
Other current financial liabilities		148							148
- Related parties		1							1
- Non related parties		147							147
Current derivative liabilities		756							755
- Related parties		280							280
- Non related parties		475							475
Warrants		1,283							1,283
Other current non-financial liabilities		2,990							2,990
Contract liabilities		3,555							3,554
- Related parties		69							69
- Non related parties		3,485							3,485
Short-term borrowings		7,591			(500	)			7,090
- Related parties		1,000							1,000
- Non related parties		6,590			(500	)	A,B		6,090
Current portion of long-term borrowings, net		1,586							1,586
- Related parties		1,586							1,586
- Non related parties
Convertible Note		2,971			14,069				17,040
- Related parties		1,949							1,949
- Non related parties		1,022			14,069		A		15,091
Current Lease liabilities		1,371							1,371
Current tax liabilities		795							795
Total current liabilities		65,002							78,570
Trade and other non-current payables		3,081							3,081
- Related parties		3,078							3,078
- Non related parties		3							3
Other non-current financial liabilities		88							88
Other non-current non-financial liabilities		523							523
Defined benefit liabilities		858							858
Other non-current provisions		769							769
Non-current Lease liabilities		5,259							5,259
Deferred tax liabilities		363							363
Total non-current liabilities		10,941							10,941
Total liabilities		75,943							89,511
Equity
Share capital		7							7
Share premium		151,396							151,396
Other comprehensive income (loss)		(8,869	)						(8,869	)
Other reserves		(42,387	)						(42,387	)
Retained earnings		(2,499	)		(665	)	A,B		(3,164	)
Equity attributable to owners of the Parent Company		97,648							96,983
Non-controlling interest		852							852
Total equity		98,500							97,835
Total liabilities and equity		174,443							187,346

88

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR K WAVE

(In thousands, except per share amounts)	Six Months Ended June 30, K Wave (Historical)			Pro Forma Adjustments				Six Months Ended June 30, Pro forma Combined
Revenues
Content Merchandising Revenue		12,578							12,578
- Related parties		2,800							2,800
- Non related parties		9,778							9,778
F&B Revenue		4,475							4,475
- Related parties		12							12
- Non related parties		4,463							4,463
Content production revenue		4,224							4,224
- Related parties		(23	)						(23	)
- Non related parties		4,247							4,247
Content investment revenue		153							153
Other revenue
Revenues		21,431							21,431
Cost of revenues		(19,693	)						(19,693	)
Gross profit		1,738							1,738
Selling, general and administrative expenses		(27,097	)		(23	)	OO		(27,121	)
Other income		552							552
Other expenses		(605	)						(605	)
Operating profit		(25,413	)						(25,437	)
Finance income		335							335
- Related parties		51							51
- Non related parties		284							284
Finance costs		(3,091	)						(3,697	)
- Related parties		(124	)						(124	)
- Non related parties		(2,968	)		(606	)	OO,NN		(3,574	)
Profit before income tax		(28,169	)						(28,799	)
Income tax incomes		5							5
Profit for the period		(28,165	)						(28,794	)
Profit (loss) attributable to:
Owners of the Parent Company		(27,556	)						(28,169	)
Non-controlling interest		(609	)						(609	)
Weighted-average number of ordinary shares for the six months ended June 30									63,198,074
Earnings per share
Basic earnings per share		(0.46	)						(0.45	)
Diluted earnings per share		(0.46	)						(0.45	)

89

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR K WAVE

FOR THE YEAR ENDED DECEMBER 31, 2024⁽³⁾

(In thousands, except per share amounts)	K Wave Media (IFRS Historical)		New K Enter Pro Forma Combined (IFRS Historical)			Global Star (IFRS Historical - Note 4)			Transaction Accounting Adjustments				Pro Forma Combined (IFRS)
Sales revenue	$	-	$	57,691		$	-		$	-			$	57,691
Investment management revenue		-		999			-			-				999
Investment revenue		-		33			-			-				33
Gains from investments in associates		-		12			-			-				12
Cost of sales		-		(55,039	)		-			-				(55,039	)
Gross profit		-		3,697			-			-				3,697
Administration fee - related party				-			(120	)		-				-
Operating expenses		-		-			(1,972	)		120		BB		(1,852	)
Selling, general, and administrative expenses		-		(17,529	)		-			-				(17,529	)
Investment expenses		-		(15	)		-			-				(15	)
Losses from investments in associates		-		(46	)		-			-				(46	)
Stock-based compensation expense		-		-			-			(1,150	)	DD		(1,150	)
Other income		-		975			-			-				975
Other expenses		-		(1,687	)		-			-				(1,687	)
Transaction costs		-		-			-			(2,467	)	EE		(9,569	)
				-			-			(7,103	)	KK		-
Operating income (loss)		-		(14,605	)		(2,092	)		(10,599	)			(27,176	)
Other income (expense)				-			-			-				-
Finance income		-		590			-			-				590
Finance costs		-		(1,619	)		-			(1,147	)	NN		(2,767	)
Change in fair value of warrant liability		-		-			(194	)		-				(194	)
Loss on initial issuance of debt		-		-			-			-				-
Interest income		-		0			18			-				19
Other income (expense), net		-		(1,034	)		-			-				(1,034	)
Amortization of deferred finance cost		-		-			(59	)		(248	)	MM		(307	)
Interest income on marketable securities held in Trust Account		-		-			1,722			(1,722	)	AA		-
Net income (loss) before taxes		-		(16,668	)		(604	)		(13,717	)			(30,869	)
Provision for taxes		-		427			(359	)		359		CC		427
Net income (loss)		-		(16,241	)		(963	)		(13,359	)			(30,442	)
Net loss attributable to noncontrolling interest in subsidiaries		-		(892	)		-			-				(892	)
Income (loss) attributable to shareholders of New K Enter	$	-	$	(15,349	)	$	(963	)	$	(13,359	)		$	(29,550	)
Basic and diluted net income per share
Basic net income per share, Class A common stock subject to possible redemption						$	(0.17	)
Basic net income per share, Class B common stock						$	(0.17	)
Pro forma weighted average number of shares outstanding - basic and diluted														63,198,074
Pro forma net loss per share - basic and diluted													$	(0.48	)

(3)

The unaudited pro forma condensed combined statement of operations for K Wave for the year ended December 31, 2024, combines the unaudited pro forma condensed combined statements of operations for the Six Korean Entities as converted to USD and K Enter(5) for the year ended December 31, 2024 with the historical audited statement of operations of Global Star for the year ended December 31, 2024 and the historical audited statement of operations of K Wave for the year ended December 31, 2024.

(4)

Please refer to Note 8 — “Net Loss per Share” for details.

90

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR NEW K ENTER

FOR THE YEAR ENDED DECEMBER 31, 2024⁽⁵⁾

(In thousands, except per share amounts)	Play Company as converted to USD (IFRS Historical)			K Enter (US GAAP Historical)			Lamp as converted to USD (IFRS Historical)			Bidangil as converted to USD (IFRS Historical)			Apeitda as converted to USD (IFRS Historical)			Anseilen as converted to USD (IFRS Historical)			Solaire Partners as converted to USD (IFRS Historical)			Transaction Accounting Adjustments				New K Enter Pro Forma Combined (IFRS Historical)
Sales revenue	$	31,545		$	485		$	11,981		$	13,666		$	13		$	-		$	-		$	-			$	57,691
Investment management revenue		-			-			-			-			-			-			999			-				999
Investment revenue		-			-			-			-			-			-			33			-				33
Gains from investments in associates		-			-			-			-			-			-			12			-				12
Cost of sales		(30,740	)		(483	)		(11,019	)		(12,796	)		-			-			-			-				(55,039	)
Gross profit		806			2			963			870			13			-			1,045			-				3,697
Administration fee - related party		-			-			-			-			-			-			-			-				-
Operating expenses		-			-			-			-			-			-			-			-				-
Selling, general, and administrative expenses		(2,922	)		(11,838	)		(696	)		(521	)		(231	)		(169	)		(1,124	)		46		HH		(17,529	)
		-			-			-			-			-			-			-			(74	)	II		-
Investment expenses		-			-			-			-			-			-			(15	)		-				(15	)
Losses from investments in associates		-			-			-			-			-			-			(46	)		-				(46	)
Stock-based compensation expense		-			-			-			-			-			-			-			-				-
Other income		750			-			143			0			0			9			0							975
		-			-			-			-			-			-			-			74		II		-
Other expenses		(1,205	)		-			(209	)		(16	)		(22	)		(0	)		-			(188	)	GG		(1,687	)
		-			-			-			-			-			-			-			(46	)	HH		-
Transaction costs		-			-			-			-			-			-			-			-				-
Operating income (loss)		(2,572	)		(11,837	)		201			333			(240	)		(161	)		(140	)		(188	)			(14,605	)
Other income (expense)		-			-			-			-			-			-			-			-				-
Finance income		423			-			17			41			38			0			73			(2	)	LL		590
Finance costs		(1,013	)		-			(100	)		(108	)		(18	)		(22	)		(17	)		(343	)	JJ		(1,619	)
		-			-			-			-			-			-			-			2		LL		-
Change in fair value of warrant liability		-			-			-			-			-			-			-			-				-
Loss on initial issuance of debt		-			-			-			-			-			-			-			-				-
Interest income		-			0			-			-			-			-			-			-				0
Other income (expense), net		-			(1,034	)		-			-			-			-			-			-				(1,034	)
Amortization of deferred finance cost		-			-			-			-			-			-			-			-				-
Interest income on marketable securities held in Trust Account		-			-			-			-			-			-			-			-				-
Net income (loss) before taxes		(3,162	)		(12,870	)		117			266			(220	)		(183	)		(84	)		(532	)			(16,668	)
Provision for taxes		553			-			(68	)		(3	)		(6	)		-			(50	)		-				427
Net income (loss)		(2,610	)		(12,870	)		49			263			(225	)		(183	)		(134	)		(532	)			(16,241	)
Net loss attributable to noncontrolling interest in subsidiaries		(746	)		-			-			-			-			-			-			(146	)	FF		(892	)
Income (loss) attributable to shareholders of New K Enter	$	(1,864	)	$	(12,870	)	$	49		$	263		$	(225	)	$	(183	)	$	(134	)	$	(386	)		$	(15,349	)
Basic and diluted net income per share	$	(18.64	)	$	(116.68	)	$	49.49		$	26.28		$	(22.51	)	$	-		$	-
Basic net income per share, Class A common stock subject to possible redemption
Basic net income per share, Class B common stock
Pro forma weighted average number of shares outstanding - basic and diluted
Pro forma net loss per share - basic and diluted

(5)

The unaudited pro forma condensed combined statement of operations for New K Enter for the year ended December 31, 2024, combines the historical statements of operations of the Six Korean Entities for the year ended December 31, 2024 as converted to USD, with the historical audited statement of operations of K Enter for the year ended December 31, 2024, as adjusted for conversion to IFRS (see also Note 4 — “IFRS Conversion and Presentation Alignment”).

(6)

Please refer to Note 8 — “Net Loss per Share” for details.

91

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

Note 1 — Basis of Presentation and Accounting Policies

Acquisition of the Six Korean Entities

K Enter closed the equity purchase for Play Company first and the acquisitions of each of the Six Korean Entities other than Play Company closed subsequently on January 2, 2025.

The acquisition of each of the Six Korean Entities by K Enter is 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 is IFRS.

The acquisitions of each of the Six Korean Entities other than Play Company by K Enter post the acquisition of Play Company is 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 is IFRS, New K Enter’s basis of accounting is IFRS.

Under the acquisition method of accounting, the preliminary purchase price is 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 are expensed as incurred. K Enter and Play Company are referred to as “New K Enter” in these unaudited pro forma condensed combined financial statements.

The Business Combination is 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 is treated as the acquired company for financial reporting purposes, and New K Enter is treated as the acquirer for financial statement reporting purposes.

The unaudited pro forma condensed combined financial information is for illustrative purposes only. The financial results may have been different had the companies always been combined. You should not rely on the unaudited pro forma condensed combined financial information as being indicative of the historical results that would have been achieved had the companies always been combined or the future results that PubCo will experience. New K Enter and Global Star have not had any historical relationship prior to the Business Combination. Accordingly, no pro forma adjustments were required to eliminate activities between the companies.

The unaudited pro forma condensed combined statements of operations for the year ended December 31, 2024 reflects the acquisition of the Six Korean Entities that closed on January 2, 2025 and the issuance of the notes for aggregate proceeds of $13,495,000 (net of transaction costs of $2,294,474) as if it had occurred on January 1, 2024.

The unaudited pro forma condensed consolidated balance sheet and statement of operation as of June 30, 2025 and for the period ended June 30, 2025, reflect the issuance of the notes for aggregate proceeds of $13,495,000 (net of transaction costs of $2,294,474) and the use of $9,815,108 of those proceeds to acquire 88 units of Bitcoin at a cost of $111,535/Bitcoin.

The historical financial statements of the Six Korean Entities have been prepared in accordance with IFRS as issued by the IASB and in its presentation and functional currency of the Korean Republic Won (“KRW”). The historical financial statements of Global Star have been prepared in accordance with U.S. GAAP and in its presentation and functional currency of the USD. The historical financial statements of K Enter have been prepared in accordance with U.S. GAAP and in its presentation currency of USD. The historical financial statements of K Wave Media Ltd have been prepared in accordance with IFRS and in its presentation currency of USD. The unaudited pro forma condensed combined financial information reflects IFRS, the basis of accounting that is used by PubCo. Global Star’s and K Enter’s historical financial statements have been converted from U.S. GAAP to IFRS to align with the basis of accounting that is used by PubCo. See Note 2 – IFRS Conversion and Presentation Alignment.

92

The historical financial statements of the Six Korean Entities have been translated into and are presented in USD using the following exchange rates:

● at the period exchange rate as of June 30, 2025 of US$1.00 to KRW$1,356.40 for the balance sheet;

● the average exchange rate for the period ended June 30, 2025 of US$1.00 to KRW$1,427.94 for the statement of operations for the period ending on that date;

● at the period exchange rate as of December 31, 2024 of US$1.00 to KRW$1,477.86 for the balance sheet;

● the average exchange rate for the year ended December 31, 2024 of US$1.00 to KRW$1,363.438 for the statement of operations for the period ending on that date;

Note 2 — IFRS Conversion and Presentation Alignment

The historical financial information of Global Star has been adjusted to give effect to the differences between U.S. GAAP and IFRS as issued by the IASB for the purposes of the unaudited pro forma condensed combined financial information. One adjustments required to convert Global Star’s financial statements from U.S. GAAP to IFRS for purposes of the unaudited pro forma condensed combined financial information was to reclassify GLST Warrants from equity (under U.S. GAAP) to non-current financial liabilities under IAS 32 measured at fair value through profit or loss, due to the “cashless” settlement provisions in the warrant agreement.

There were no adjustments required to adjust the historical financial information of K Enter to give effect to the differences between U.S. GAAP and IFRS as issued by the IASB for the purposes of the unaudited pro forma condensed combined financial information.

Further, as part of the preparation of the unaudited pro forma condensed combined financial information, certain reclassifications were made to align Global Star’s historical financial information and K Enter’s historical financial information in accordance with the presentation of Play Company’s historical financial information.

93

STATEMENT OF OPERATIONS

FOR GLOBAL STAR

FOR THE YEAR ENDED DECEMBER 31, 2024

	Global Star (US GAAP Historical)			IFRS Conversion and Presentation Alignment			Global Star (IFRS Historical)
Administration fee - related party	$	(120	)		-			(120	)
General and administrative expenses		(1,972	)		-			(1,972	)
Total operating expenses		(2,092	)		-			(2,092	)
Loss from operations		(2,092	)		-			(2,092	)
Other income (expense)
Amortization of deferred finance cost		(59	)		-			(59	)
Change in fair value of warrant liability		-			(194	)		(194	)
Interest income		18			-			18
Interest income on marketable securities held in Trust Account		1,722			-			1,722
Net loss before taxes		(410	)		(194	)		(604	)
Provision for taxes		(359	)		-			(359	)
Net loss	$	(769	)	$	(194	)	$	(963	)
Basic and diluted net loss per share, redeemable Class A common stock	$	(0.13	)				$	(0.17	)
Basic and diluted net loss per share, non-redeemable Class A and Class B common stock	$	(0.13	)				$	(0.17	)

94

STATEMENT OF OPERATIONS

FOR K ENTER

FOR THE YEAR ENDED DECEMBER 31, 2024

	K Enter (US GAAP Historical)			IFRS Conversion and Presentation Alignment		K Enter (IFRS Historical)
Revenue	$	485			-		485
Cost of revenue		(483	)				(483	)
Gross profit		2			-		2
Selling, general and administrative expenses		(11,838	)		-		(11,838	)
Operating income (loss)		(11,837	)		-		(11,837	)
Other income (expense)
Interest income (expense), net		0			-		0
Other income (expense), net		(1,034	)		-		(1,034	)
Total other expense		(1,034	)		-		(1,034	)
Provision for taxes		-			-		-
Net loss	$	(12,870	)		-		(12,870	)

95

Note 3 — Adjustments to Unaudited Pro Forma Condensed Combined Financial Information

The unaudited pro forma condensed combined financial information has been prepared to illustrate the effect of the Business Combination and has been prepared for informational purposes only. 

The following unaudited pro forma condensed combined statement of operations has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses” to depict the accounting for the transaction (“Transaction Accounting Adjustments”) and present the reasonably estimable synergies and other transaction effects that have occurred or are reasonably expected to occur (“Management’s Adjustments”). K Wave has elected not to present Management’s Adjustments and is only presenting Transaction Accounting Adjustments in the unaudited pro forma condensed combined financial information. The historical financial statements have been adjusted in the unaudited pro forma condensed combined financial information to include all necessary Transaction Accounting Adjustments pursuant to Article 11 of Regulation S-X, including those that are not expected to have a continuing impact. 

The audited historical financial statements have been adjusted in the unaudited pro forma condensed combined financial information to give pro forma effect to transaction accounting adjustments that reflect the accounting for the transaction under IFRS. K Wave Media and Global Star have not had any historical relationship prior to the Business Combination. Accordingly, no pro forma adjustments were required to eliminate activities between the companies. 

The pro forma basic and diluted earnings per share amounts presented in the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2024 are based upon the number of K Wave’s shares outstanding, assuming the Business Combination occurred on January 1, 2024.

The pro forma condensed consolidated balance sheet does not reflect any adjustments related to the Business Combination or the acquisition of each of the Six Korean Entities by K Enter, as the transaction accounting adjustments related to the balance sheet was already reflected in the actual historical consolidated balance sheet for K Wave, as of June 30, 2025.

Transaction Accounting Adjustments to Unaudited Pro Foma Condensed Combined Balance Sheet

The Transaction Accounting Adjustments to the unaudited pro forma condensed combined balance sheet as of June 30, 2025, are as follows:

A. Reflects the issuance of the notes for aggregate proceeds of $13,495,000 (net of transaction costs of $2,294,474) and the use of $9,815,108 of those proceeds to acquire 88 units of Bitcoin at a cost of $111,535/Bitcoin, assuming the transaction executed on January 1, 2024. And the transaction costs related to the issuance of convertible notes totaling $2,294,474 are scheduled to be amortized over the 24-month term of the notes and recognized as finance expense.

B. Reflects a new short-term borrowing of $2,211,737 and upfront fees of $24,637. The borrowing has a six-month maturity and bears interest at an annual rate of 5.8%. And reflects an acquisition of long term financial securities, totaling $1,761,193 from its associates.

Transaction Accounting Adjustments to Unaudited Pro Forma Condensed Combined Statements of Operations

The Transaction Accounting Adjustments included in the unaudited pro forma condensed consolidated statement of operations for the period ended June 30, 2025 and year ended December 31, 2024 are as follows:

AA. Reflects the elimination of interest income generated from the investments held in the Trust Account.

BB. Reflects the elimination of administrative service fees that will cease to be paid upon the closing of the Business Combination.

96

CC.	Reflects the income tax impacts of the pre-tax transaction adjustments.
DD.	Reflects the recognition of stock-based compensation related to the sale of Founders Shares to Global Star’s directors and strategic advisors at the consummation of the Business Combination.
EE.	Reflects the expenses incurred by New K Enter for transaction costs related to accounting, advisory and valuation services.
FF.	Reflects the recognition of net loss attributable to non-controlling interests in the Six Korean Entities other than Play Company.
GG.	Reflects the amortization of Intellectual Property, Trademarks, Non-competes and Customer Relationships intangible assets recognized on New K Enter.

	K Enter		Lamp		Bidangil		Apeitda	Anseilen	Solaire Partners	Total
Intellectual Property (USD)	$	-	$	884,105	$	545,881	$	$	$	$	1,429,986
Useful Life				8		7
Customer Relationships (USD)	$	-	$		$		$	$	$	$
Useful Life				8		8
Trademarks (USD)	$	-	$		$		$	$	$	$
Useful Life				5		5
Non-competes (USD)	$	-	$		$		$	$	$	$
Useful Life				4		5
Annual Amortization	$	-	$	110,513	$	77,983	$	$	$	$	188,496
6 months Amortization	$	-	$	55,256	$	38,992	$	$	$	$	94,248

HH. Reflects the elimination upon consolidation of the sublease agreement between K Enter.

II. Reflects the elimination upon consolidation of the intercompany balances related to the consulting transaction between K Enter and Solaire Partners.

JJ. Reflects the amortization of the debt discount of $0.1 million, and the interest expense recognized on the conversion of the convertible notes of $0.4 million.

KK. Reflects the expense recognized for the K Enter shares issued for the satisfaction of transaction expenses.

LL. Reflects the intercompany elimination upon consolidation of the short-term borrowing from Bidangil to K Enter.

MM. Reflects the amortization of the deferred finance cost on the Global Star promissory note.

NN. Reflects the amortization of the debt issuance costs of $2,294,474 related to the convertible notes discussed in Adjustment A above, amortized over a 24-month period.

OO. Reflects the finance costs related to the short-term borrowing discussed in Adjustment B above.

97

Note 3 — Net Loss per Share

Represents the loss per share calculated using the historical weighted average shares outstanding, and the issuance of additional shares in connection with the Business Combination, assuming the shares were outstanding since January 1, 2024. As the Business Combination is being reflected as if it had occurred at the beginning of the period presented, the calculation of weighted average shares outstanding for basic and diluted loss per share assumes that the shares issued in connection with the Business Combination have been outstanding for the entire period presented.

	Period Ended June 30, 2025
Pro forma net loss	$	(28,793,908	)
Weighted average shares outstanding of ordinary shares – basic and diluted		63,198,074
Net loss per share – basic and diluted	$	(0.45	)
Excluded securities:(1)
Public Warrants		9,200,000
Private Warrants		498,225
Convertible Note Warrants		150,000
Shares underlying convertible senior secured notes		325,000

The unaudited pro forma condensed combined financial information has been prepared with the actual redemptions of Public Shares by Global star’s Public Shareholders for the year ended December 31, 2024:

	Year Ended December 31, 2024
Pro forma net loss	$	(30,442,017	)
Weighted average shares outstanding of ordinary shares – basic and diluted		63,198,074
Net loss per share – basic and diluted	$	(0.48	)
Excluded securities:(1)
Public Warrants		9,200,000
Private Warrants		498,225
Convertible Note Warrants		150,000
Shares underlying convertible senior secured notes		450,000

(1) The potentially dilutive outstanding securities were excluded from the computation of pro forma net loss per share, basic and diluted, because their effect would have been anti-dilutive.

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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 Consolidated financial condition and results of operations should be read in conjunction with (in each case, included elsewhere herein) K Wave Media Ltd.’s consolidated financial statements as of June 30, 2025 and December 31, 2024 and for the period ended June 30, 2025 and for the period ended December 31, 2024 (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 the date of the prospectus, 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.

Business Combinations

Merger Agreement with Global Star

Global Star has 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 provides 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:

● On May 13, 2025, Global Star was reincorporated to Cayman Islands by merging with and into K Wave, with K Wave remaining as the surviving publicly traded entity(the “Reincorporation Merger”). In connection with the closing of the Reincorporation Merger, (i) each issued and outstanding share of Ordinary Shares of Global Star, other than Global Star Ordinary Shares owned by Global Star as treasury shares or any Global Star Ordinary Shares owned by any direct or indirect wholly owned subsidiary of Global Star, was converted into one ordinary share of K Wave (the “K Wave Ordinary Share”), (ii) each issued and outstanding warrant of Global Star was converted automatically into a warrant to purchase one K Wave’s Ordinary Share at a price of $11.50 per whole share (the “K Wave Warrant”), (iii) each issued and outstanding right of Global Star was converted automatically into a right to receive one-tenth (1/10) of one K Wave Ordinary Share at the closing of a business combination (the “K Wave Right”), and (iv) each issued and outstanding unit of Global Star was separated and converted automatically into one K Wave Ordinary Share, one K Wave Warrant, and one K Wave Right. At the closing of the Reincorporation Merger, all common stock, warrants, rights, units and other securities of Global Star ceased to be outstanding and were automatically cancelled and retired and ceased to exist.

● On May 13, 2025, Merger Sub merged with and into K Enter, resulting in K Enter being a wholly owned subsidiary of K Wave (the “Acquisition Merger”). In connection with the closing of the Acquisition Merger, (i) each share of K Enter capital stock that was owned by Global Star, Merger Sub and K Enter (as treasury stock or otherwise), was automatically cancelled and retired without any conversion, (ii) each share of K Enter preferred stock issued and outstanding was deemed converted into shares of K Enter common stock, (iii) each share of K Enter Ordinary Shares issued and outstanding, including shares of K Enter Ordinary Shares deemed outstanding as a result of the mandatory conversion of K Enter preferred stock, was converted into the right to receive a number of K Wave Ordinary Shares equal to the Conversion Ratio (i.e., 312.1:1), and (iv) each share of Merger Sub Ordinary Shares issued and outstanding was converted into and become one newly issued, fully paid and nonassessable share of K Enter common stock.

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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 canceled 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 consists of 101,202 shares of outstanding K Enter’s common stock, 47,013 shares of K Enter common stock 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 shares of common stock 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 were 59,000,000 ordinary shares in connection with the closing of the Business Combination.

The Business Combination was accounted for as a capital reorganization in accordance with IFRS 2 as KWM does not meet the criteria to be determined a business under IFRS 3. Under this method of accounting, KWM was treated as the acquired company for financial reporting purposes, and New K Enter was treated as the acquirer for financial statement reporting purposes. In such a transaction structure, the difference between the fair value of the assets and liabilities transferred and the fair value of the equity instruments issued at the grant date is recognized in profit or loss as compensation for listing services, rather than as goodwill or a gain from a bargain purchase.

A. Listing expenses

		May 14, 2025
		(In thousands of Korean won)
Listing expenses
Fair value of shares issued			15,285,412
Fair Value of Identifiable Net Assets			(9,789,813	)
Reverse merger impact in the consolidated statement of profit or (loss) due to IFRS 2 accounting treatment	₩		25,075,225

B. The identifiable net assets acquired and liabilities recognized on acquisition were:

		May 14, 2025
		KWM
		(In thousands of Korean won)
- Asset
Cash and cash equivalents			62,655
Others			15,334
Subtotal	₩		77,989
- Liabilities
Trade payables and other financial liabilities			4,792,234
derivative liabilities			357,647
Warrants			1,241,231
Borrowings			3,017,994
Others			458,696
Subtotal	₩		9,867,802
Fair Value of Identifiable Net Assets	₩		(9,789,813	)

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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 3, 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 Play company 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. The acquisitions of each of the Six Korean Entities other than Play Company by K Enter post the acquisition of Play Company (“New K Enter”) 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. 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 consideration transferred for the acquisition of interests in each entity is as follows:

- Play Company Corp:

Acquired 100% of the outstanding shares of Play Company in exchange for 27,787 shares of K enter common stock (Subsequently converted to 8,673,667 shares of KWM) and cash consideration of USD 24,648,370 (Korean Won 36,233,103 thousand). Additional payments in cash will be made to the owner of Play Company if the annual average net profit for fiscal years from 2023 to 2025 reaches specified thresholds, with payments due to the owner of Play Company on January 31, 2027 and January 31, 2028. Furthermore, an additional cash payment may be required if the shares of KWM (into which K Enter common stock converted upon the closing of the Acquisition Merger) are sold during the three-month period following the six-month lock-up at a price below the per-share value at closing, subject to adjustments for subsequent gains or unrealized gains as of December 31, 2026.

- Lamp

Acquired 51.3% of the outstanding shares of Lamp in exchange for 6,668 shares of K Enter common stock (Subsequently converted to 2,081,405 shares of KWM).

- Bidangil

Acquired 53.7% of the outstanding shares of Bidangil in exchange for 4,444 shares of K Enter common stock (Subsequently converted to 1,387,188 shares of KWM).

- Apeitda

Acquired 51% of the outstanding shares of Apeitda in exchange for 3,334 shares of K Enter common stock (Subsequently converted to 1,040,703 shares of KWM).

- Anseilen

Acquired 51% of the outstanding shares of Anseilen in exchange for 1,677 shares of K Enter common stock (Subsequently converted to 523,473 shares of KWM).

- Solaire Partners

Acquired 95% of the outstanding shares of Solaire Partners in exchange for 3,103 shares of K Enter common stock (Subsequently converted to 968,598 shares of KWM).

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A. The identifiable net assets acquired and liabilities recognized on acquisition were:

		January 1, 2025 (Deemed acquisition date)
		K enter			Lamp		Bidangil		Apeitda		Anseilen			Solaire Partners		Total
		(In thousands of Korean won)
- Asset
Cash and cash equivalents	₩		490,070			863,927		1,448,485		344,537		361,234			355		3,508,608
Accounts receivable and financial assets (*1)			4,254,387			1,684,662		1,863,496		522,218		54,824			3,314,474		11,694,061
Other non-financial assets			3,128,462			2,656,784		584,523		2,279		586,011			97		6,958,156
Property and equipment including right-of-use assets			77,734			159,538		123,789		220,843		735			74,097		656,736
Intangible assets other than goodwill			-			1,306,583		806,737		-		-			-		2,113,320
Deferred tax assets			-			45,845		-		-		-			-		45,845
Deferred transaction costs			3,163,511			-		-		-		-			-		3,163,511
Others			128,491			130,057		-		-		31			135,943		394,522
Subtotal	₩		11,242,655			6,847,396		4,827,030		1,089,877		1,002,835			3,524,966		28,534,759
- Liabilities
Trade payables and other financial liabilities			8,414,624			2,040,169		911,596		19,112		17,724			1,993,839		13,397,064
Borrowings			1,420,528			1,445,453		-		-		-			207,336		3,073,317
Convertible Note			3,920,244			-		-		-		-			-		3,920,244
Derivative liabilities			590,020			-		-		-		-			-		590,020
Contract liabilities			-			900,000		-		-		-			-		900,000
Lease liabilities			88,488			145,647		123,328		-		-			60,945		418,408
Defined benefit liabilities			-			255,006		-		121,521		7,130			152,368		536,025
Deferred tax liabilities			-			129,352		-		-		-			-		129,352
Others			294,162			428,731		88,928		122,857		1,561,219			134,899		2,630,796
Subtotal			14,728,066			5,344,358		1,123,852		263,490		1,586,073			2,549,387		25,595,226
Fair Value of Identifiable Net Assets			(3,485,411	)		1,503,038		3,703,178		826,387		(583,238	)		975,579		2,939,533

(*1) The fair value of trade receivables acquired through the business combination is KRW 172 million. The contractual amount of trade receivables as of the acquisition date is KRW 172 million, and no trade receivables are expected to be uncollectible.

The fair value of other receivables acquired through the business combination is KRW 11,522 million. The contractual amount of other receivables as of the acquisition date is KRW 11,522 million, and no other receivables are expected to be uncollectible.

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B. Measurement of fair values:

Assets acquired	Measurement bases
Intangible assets	The fair value is determined by projecting the future cash flows attributable to the specific intangible asset over its expected useful life, deducting contributory asset charges for the use of supporting assets, and discounting the resulting excess earnings to present value using an appropriate discount rate that reflects the risk associated with the asset.

C. Goodwill:

		January 1, 2025 (Deemed acquisition date)
		K enter			Lamp			Bidangil			Apeitda			Anseilen			Solaire Partners			Total
		(In thousands of Korean won)
Consideration transferred			169,012,604			7,959,688			5,310,988			3,979,845			2,005,971			3,714,183			191,983,279
Fair Value of Net Assets Attributable to the Acquired Interest			(3,485,411	)		770,789			1,988,022			421,458			(297,451	)		926,800			324,207
- Fair Value of Identifiable Net Assets			(3,485,411	)		1,503,038			3,703,178			826,387			(583,238	)		975,579			2,939,533
- Non-controlling interest			-			(732,249	)		(1,715,156	)		(404,929	)		285,787			(48,779	)		(2,615,326	)
Goodwill (*1)	₩		172,498,015			7,188,899			3,322,966			3,558,387			2,303,422			2,787,383			191,659,072

(*1) The goodwill of KRW 191,659,072 thousand arising from the acquisition is attributable to synergies expected from the combination of operations and the customer base acquired. None of the goodwill recognised is expected to be deductible for income tax purposes.

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

K Wave’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:

● At the period exchange rate as of June 30, 2025 of US$1.00 to KRW1,353.50 for the balance sheet;

● At the average exchange rate for the six months ended June 30, 2025 of US$1.00 to KRW1,425.49 for the statements of operations and cash flow;

● At the average exchange rate for the six months ended June 30, 2024 of US$1.00 to KRW 1,350.04 for the statements of operations and cash flow;

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Results of operations

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

Comparison of the period ended June 30, 2025 and June 30, 2024

	Six Months Ended June 30, 2025						Six Months Ended June 30, 2024
	(In millions of Korean won and US dollar)
Income Statement:
Revenues	₩	30,602		$	21,467,730		₩	18,982		$	14,060,328
Cost of sales		(28,120	)		(19,726,752	)		(16,838	)		(12,471,883	)
Gross profit		2,482			1,740,978			2,144			1,588,445
Operating expenses		(38,770	)		(27,197,734	)		(1,828	)		(1,354,529	)
Operating income(loss)		(36,288	)		(25,456,756	)		316			233,916
Other expense		(3,936	)		(2,760,986	)		(735	)		(544,643	)
Profit(Loss) before taxes		(40,224	)		(28,217,742	)		(419	)		(310,727	)
Income tax benefit (expense)		7			4,762			61			45,438
Net income(loss)	₩	(40,217	)	$	(28,212,980	)	₩	(358	)	$	(265,289	)

Revenues by operating segments

	Six Months Ended June 30, 2025				Six Months Ended June 30, 2024
	(In millions of Korean won and US dollar)
Content Merchandising	₩	17,961	$	12,599,919	₩	11,480	$	8,503,292
Food and beverages		6,390		4,483,004		7,502		5,557,036
Content production		6,032		4,231,549		-		-
Content investment		219		153,258		-		-
Total		30,602		21,467,730		18,982		14,060,328

Content Merchandising

For the six months ended June 30, 2025 and 2024, content merchandising segment revenue increased by Korean Won 6,481 million ($4.1 million). This is primarily attributable to an increase in merchandise revenue resulted from a K-pop boyband’s Europe tour in 2025.

Food and Beverages

For the six months ended June 30, 2025 and 2024, food and beverages segment revenue decreased by Korean Won 1,112 million ($1.1 million). The decrease in food and beverages segment revenue was primarily attributable to the closure of certain store locations of following the expiration of lease agreements.

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Content Production and Content Investment

The increase in content production segment revenue and content investment segment revenue is primarily due to incremental revenues from the acquisition of Six Korean Entities. These revenues were included for the six-month period in 2025 subsequent to the completion of the business combination, whereas no such revenues were included in the six months ended June 30, 2024.

For the six months ended June 30, 2025 and 2024, one of K Wave media’s customers account for 13.1% and 21.3%, respectively, of total K Wave media’s revenue.

Gross profit by operating segments

	Six Months Ended June 30, 2025						Six Months Ended June 30, 2024
	(In millions of Korean won and US dollar)
Content Merchandising	₩	1,964		$	1,377,889		₩	2,032	$	1,505,432
Food and beverages		(44	)		(30,918	)		112		83,013
Content production		353			247,936			-		-
Content investment		209			146,071			-		-
Total		2,482			1,740,978			2,144		1,588,445

Content Merchandising

Content merchandising segment’s gross profit decreased for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 by Korean Won 68 million ($0.1 million), or 3.3%, despite the increase in revenue of Korean Won 6,481 million ($4.1 million), or 56.5%. The lower growth rate in gross profit compared to the increase in revenue was primarily attributable to the increase in revenue driven by merchandise sales associated with a K-pop boyband’s overseas tour in Europe in 2025. These overseas merchandise sales generally involved a lower gross profit ratio as such transactions were executed through a third-party agent, rather than directly by the Company.

Food and Beverages

Food and beverage segment’s gross profit decreased for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 by Korean Won 156 million ($0.1 million), or 139.3%, corresponding to a decrease in revenue of Korean Won 1,112 million ($1.1 million), or 14.8%. Food and beverages segment generates revenue through the sale of coffee and bakery products, with key raw materials consisting primarily of milk, fresh cream, flour, butter, and related ingredients. For the six months ended June 30, 2025, gross profit decreased due to a significant increase in raw material costs as compared to the six months ended June 30, 2024.

Content production

Gross profit consists of total revenue less cost of revenue. Cost of revenue of content production segment consists primarily of direct production costs, including pre-production expenditures such as planning, scripting, directing, and producer-related fees; staff and talent-related costs, including royalties, casting, performers’ fees, stunt services, and other production personnel expenses; production-stage costs, including camera and lighting equipment, special effects, vehicles, set construction, art department materials, costumes, props, location rentals, insurance, and other on-site production support costs such as lodging, meals, transportation, consumables, communications, and related miscellaneous expenses. Cost of revenue also includes post-production costs, such as color correction, editing, music composition and licensing, recording services, and post-production support, as well as general production management expenses.

Content investment

Gross profit consists of total revenue less cost of revenue. Cost of revenue of content investment segment consists primarily of investment expenses and losses from investments in associates.

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Operating expenses by operating segments

	Six Months Ended June 30, 2025				Six Months Ended June 30, 2024
	(In millions of Korean won and US dollar)
Content Merchandising	₩	1,295	$	908,592	₩	1,691	$	1,252,772
Food and beverages		669		469,242		137		101,757
Content production		36,175		25,376,973		-		-
Content investment		631		442,927		-		-
Total		38,770		27,197,734		1,828		1,354,529

Content Merchandising

For the six months ended June 30, 2025 and 2024, content merchandising segment’s operating expenses are primarily driven by payroll and payroll related costs of Korean Won 1,270 million ($0.89 million) and Korean Won 1,181 million ($0.87 million), respectively, and depreciation expenses of Korean Won 373 million ($0.26 million) and Korean Won 333 million ($0.25 million), respectively. Content merchandising segment’s operating expenses decreased for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 by Korean Won 396 million ($0.34 million). This is primarily attributable to other bad debt expenses of Korean 306 million ($0.23 million) for the six months ended June 30, 2025, which did not occur during the six months ended June 30, 2024.

Food and Beverages

For the six months ended June 30, 2025 and 2024, food and beverages segment’s operating expenses are primarily driven by payroll and payroll related costs of Korean Won 599 million ($0.42 million) and Korean Won 430 million ($0.32 million), respectively, and commissions expenses of Korean Won 59 million ($0.26 million) and Korean Won 71 million ($0.05 million), respectively. Food and beverages segment’s operating expenses increased for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 by Korean Won 532 million ($0.37 million). This is primarily attributable to losses on disposal of property, plant and equipment of Korean 495 million ($0.35 million) for the six months ended June 30, 2025, which did not occur during the six months ended June 30, 2024.

Content Production

For the six months ended June 30, 2025, content production segment’s operating expenses are primarily driven by listing expenses of Korean Won 25,075 million ($17.6 million), payroll and payroll related costs of Korean Won 2,382 million ($1.7 million), and commissions expenses of Korean Won 4,672 million ($3.4 million).

Content Investment

For the six months ended June 30, 2025, content investment segment’s operating expenses are primarily driven by payroll and payroll related costs of Korean Won 491 million ($0.3 million), depreciation expenses of Korean Won 31 million (less than $0.1 million), and commissions expenses of Korean Won 36 million (less than $0.1 million).

For the six months ended June 30, 2025 and 2024, K Wave’s other income (expense) is comprised of:

● finance income of Korean Won 479 million ($0.34 million) and Korean Won 173 million ($0.13 million), respectively, primarily attributable to interest income of Korean Won 189 million ($0.13 million) and Korean Won 148 million ($0.11 million), respectively, gains on foreign currency translation of Korean Won 128 million (less than $0.1 million) and Korean Won 6 million (less than $0.1 million), respectively.

● finance costs of Korean Won 4,414 million ($3.10 million) and Korean Won 908 million ($0.67 million), respectively, primarily attributable to interest expense of Korean Won 766 million ($0.54 million) and Korean Won 657 million ($0.49 million), respectively, and losses on disposal of long-term investment securities of Korean Won 2,141 million ($1.5 million) and losses on valuation of derivative instruments of Korean Won 931 million ($0.65 million), which did not occur for the six months ended June 30, 2024.

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Cash Flow:

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

Comparison of the period ended June 30, 2025 and June 30, 2024

	Six Months Ended June 30, 2025						Six Months Ended June 30, 2024
	(In millions of Korean won and US dollar)
Net cash provided by (used in)
Operating activities	₩	(4,733	)	$	(3,320,551	)	₩	(3,089	)	$	(2,288,108	)
Investing activities		4,225			2,963,587			(351	)		(259,952	)
Financing activities		5,168			3,625,658			(813	)		(601,988	)
Effect of exchange rates on cash		(86	)		(60,031	)		(133	)		(98,469	)
Net change in cash and cash equivalents	₩	4,574		$	3,208,663		₩	(4,386	)	$	(3,248,517	)

Net cash flows used in operating activities increased for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 by Korean Won 1,644 million ($1 million).

This is primarily attributable to an increase in net loss of Korean Won 39,859 million ($27.9 million), an increase in listing fee of Korean Won 25,075 million ($17.6 million), an increase in losses on disposal of long-term investment securities of Korean Won 2,141 million ($1.5 million), a decrease in cash outflows from prepaid expenses of Korean Won 6,966 million ($5.2 million), and a decrease in cash outflows from contract liabilities of Korean Won 4,276 million ($3.0 million).

K Wave’s cash flows provided by investing activities for the six months ended June 30, 2025 was Korean Won 4,225 million ($3.0 million), compared to Korean Won 351 million ($0.3 million) of cash flows used in investing activities for the six months ended June 30, 2024. This is primarily attributable to an increase in cash flows from the acquisition of Six Korean Entities of Korean Won 3,571 million ($2.5 million) and a decrease in cash outflows from the short-term loans of Korean Won 1,423 million ($1.1 million).

K Wave’s cash flows provided by financing activities for the six months ended June 30, 2025 was Korean Won 5,168 million ($3.6 million), compared to Korean Won 813 million ($0.6 million) of cash flows used in financing activities for the six months ended June 30, 2024.

This is primarily attributable to cash inflows from the proceeds from convertible notes issued of Korean Won 7,150 million ($5.0 million) during the six months ended June 30, 2025, partially offset by an increase in cash outflows from the repayments made of short-term borrowings of Korean Won 852 million ($0.6 million).

Liquidity and capital resources

K Wave has incurred significant losses and negative cash flows from operations, net loss was Korean Won 40,217 million ($28.2 million) for the period ended June 30, 2025.

During the period ended June 30, 2025, K Wave had negative cash flows from operations of Korean Won 4,733 million ($3.3 million). K Wave has funded its operations to date through equity and debt financing and has cash equivalents of Korean Won 8,724 million ($6.4 million) as of June 30, 2025 Also, as of June 30, 2025, we had a net working capital deficit of Korean Won 62,656 million ($46.3 million). K Wave 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 Wave expects to fund operations using cash on hand and raising additional proceeds. There are no assurances, however, that K Wave 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 Wave’s ability to continue as a going concern.

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

Our future capital requirements will depend on many factors, including K Wave’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 securities such as convertible notes and preferred stock, and through the follow on offering. 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 Wave’s business, results of operations and financial condition would be materially and adversely affected.

Contractual obligations and commitments

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 $500 million of Ordinary Shares.

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 issued and sold Senior Secured Convertible Notes on July 11, 2025 to the Selling Shareholders in the aggregate principal amount of $15,789,474 and warrants to purchase up to $15,789,478 of our Ordinary Shares. Additionally, if the Second Closing and the Additional Closings are consummated, we will receive (i) $10,000,000 and up to $475,000,000 in gross proceeds under the SPA from the sales of the Second Notes and the Additional Notes, respectively, and (ii) $10,526,316 and $500,000,000 if the Second Warrants and the Additional Warrants (if any), respectively, are cash exercised in full into Ordinary Shares by the Anson Funds. 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.

Service Provider Agreements

On September 24, 2023, Global star has engaged EF Hutton, 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.

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On January 31, 2025, Global star and EF Hutton entered into a satisfaction and discharge of indebtedness agreement (the “Satisfaction and Discharge Agreement”), effective November 5, 2024, pursuant to which, in lieu of the $3.2 million deferred underwriting commission payable by K Wave to EF Hutton in connection with the consummation of the Business Combination, EF Hutton agreed to accept (i) $500,000 in cash, payable starting from the date of the consummation of the Business Combination (ii) 50,000 Ordinary Shares of K Wave; and (iii) a promissory note in the principal amount of $2,000,000 (the “EF Hutton Note”). Accordingly, at the closing of the Business Combination on May 13, 2025, K Wave paid to EF Hutton $150,000 in cash and delivered the EF Hutton Note. The number of Ordinary shares of K Wave deliverable within 60 following the closing of the Business Combination stipulated in the Satisfaction and Discharge Agreement are subject various provisions, including a make whole provision and a floor price at the date of their issuance and can range to, but not exceed 100,000. The Company accounts for such shares as financial liability which is remeasured at the fair value at the end of each reporting period subsequent to the date of the agreement with resulting gain or loss recorded in the Company’s statement of operations for the respective period. As of June 30, 2025, the amount of liability to settled in shares was $386,277.

The EF Hutton Note only bears interest at 5% per annum if there is an event of default under the EF Hutton Note. The EF Hutton note matures on January 31, 2027, and, if by such date, K Wave fails to (i) consummate any EF Hutton Financing (as defined below), or (ii) consummate a sufficient amount of EF Hutton Financings so as to satisfy the outstanding amount owed under the EF Hutton Note, the EF Hutton Note will expire and any unpaid amounts thereunder will be forgiven. As of March 31, 2025, the amount outstanding under EF Hutton Note was 2,000,000.

Pursuant to the EF Hutton Note, K Wave is only obligated to pay to EF Hutton the amounts of principal, interest (if any) and other amounts payable thereunder from the gross proceeds pursuant to a the closing, if any, of one or more financings from the sale of any equity, equity derivative or debt instruments of K Wave and/or any of its subsidiaries involving EF Hutton (an “EF Hutton Financing”). Pursuant to the EF Hutton Note, K Wave is obligated to pay to EF Hutton 10% of the gross proceeds of any EF Hutton Financing until amounts payable under the EF Hutton note are paid in full.

On May 13, 2025, K Wave entered into an engagement letter agreement with EF Hutton (the “May 2025 EF Hutton Engagement Letter”), pursuant to which EF Hutton was engaged to serve as the sole underwriter and/or placement agent for the proposed registered and/or unregistered offering of the Company’s equity, debt and/or equity derivative instruments (or the equity, debt and/or equity derivative instruments of any legal successor of the Company, including K Wave). As consideration for such services, the Company agreed to pay to D. Boral Capital LLC, upon the closing of the Offering, 7% of the gross proceeds of the Offering (provided that this percentage would be reduced to 3.5% if the Company raised proceeds outside of the United States), plus 1%) of the gross proceeds of the Offering for non-accountable expenses (together, the “8% Placement Fee”).

On July 4, 2025, K Wave and EF Hutton entered into Amendment No. 1 to the May 2025 EF Hutton Letter Agreement, pursuant to which (i) K Wave paid the $1,200,000 payable under the May 2025 EF Hutton Letter Agreement in connection with the Initial Closing (representing the 8% Placement Fee in connection with such offering), and, (ii) K Wave and EF Hutton agreed to amend the payment terms in the EF Hutton Note, as they pertain solely to the Initial Closing, such that K Wave would pay to EF Hutton at the time of the Initial Closing $500,000 as partial payment on the EF Hutton Note, rather than a payment of $1,500,000 (as required under the EF Hutton Note), leaving a balance of $1,500,000 of principal due on the EF Hutton Note. Pursuant to the Amendment No. 1, the parties also agreed to reduce the amount of gross proceeds payable under the EF Hutton Note in connection with the Second Closing and any Additional Closing (as such terms are defined in the SPA) from 10% to 7%.

Previously, K Enter, which was acquired following the merger with K Wave on May 13, 2025, was obligated to pay USD 2,218,541.80 in legal fees to Loeb & Loeb LLP for DeSPAC-related services under an engagement letter dated April 24, 2023. This obligation was modified by a Fee Deferral Agreement entered into on May 13, 2025. Under the new terms, the K Enter paid USD 1,000,000 in cash during the current period and settled the remaining USD 1,218,541.80 with a short-term promissory note that accrues interest at 7% per annum and matures on November 28, 2025. The promissory note is still unpaid and the Company is negotiating to extend the maturity date thereof with Loeb & Loeb LLP.

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Shareholders’ agreement in relation to the Share Purchase Agreement of Play Company Co., Ltd.

K Enter entered into a Share Purchase Agreement on March 31, 2023(which became effective on January 3, 2025) with the Cho, Hyungseok, CEO of Play Company Co., Ltd. The agreement includes option rights and earn-out provisions as follows:

	Equity Price Protection Right	Earn-out
Exercise right holder	Cho, Hyungseok (CEO of Play Company Co., Ltd.)	Cho, Hyungseok (CEO of Play Company Co., Ltd.)
Exercise right obligor	Buyer (K Enter)	Buyer (K Enter)
Object of exercise	KWM shares received as consideration (listed on Nasdaq)	Additional purchase price adjustment based on Play Company’s average net profit for FY2023–FY2025
Exercise period	During 3 months following 6-month lock-up expiration	Settlement due on Jan 31, 2027 and Jan 31, 2028
Exercise price / Settlement basis	Buyer to compensate Seller for any shortfall if shares sold below initial value; adjusted for gains realized/distributable up to December 31, 2026.	If the achievement rate is less than 75% or greater than 125% of the target of Korean Won 16.14 billion, the settlement amount will be calculated as the achieved percentage multiplied by Korean Won 9.05 billion. If the achievement rate falls between 75% and 125%, the settlement amount will be a fixed Korean Won 9.05 billion per year.

As of June 30, 2025, liabilities related to Equity Price Protection Right (which is accounted under share based payment and classified as employes benefits liabilities in the Consolidated financial statements) and Earn-out provision (which is classified as employes benefits liabilities in the Consolidated financial statements) amount to Korean Won 3,017,591 thousand and Korean Won 1,157,325 thousand.

Off-balance sheet arrangements

As of June 30, 2025, 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 2 – Basis of Presentation and Material accounting policies” in the accompanying Financial Statements for discussion of the accounting policies applied by us.

While K Wave’s significant accounting policies are described in the notes to K Wave’s consolidated 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 Wave’s financial condition and results of operations.

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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 now publicly traded.

The following assumptions were used in determining the fair value of the convertible bond as of June 30, 2025:

Risk-free interest rate	3.74~4.29%
Debt rate	6.83~7.32%

Estimating Fair Value of common stock

The Fair value of the common stock prior to being a public company was determined using Monte Carlo Model technique, which generates many possible (but random) price paths for the underlying (or underlyings) via simulation, and then calculates the associated payment value of the security features. The price of the underlying common stock is modeled such that it follows a geometric Brownian motion with constant drift, and constant volatility. K Wave’s stock price is determined by a random sampling from a normal distribution. Since the underlying random process is the same, for enough price paths, the value of security is derived from path dependent scenarios and outcomes

The following assumptions were used in determining the fair value of the convertible bond as of June 30, 2025:

Risk-free interest rate	4.42	%
Volatility	33.4	%
Implied DLOM	4.4	%

Estimating Fair Value of derivatives on the Share Purchase Agreement of Play Company Co., Ltd.

The fair value of the derivatives were determined using CRR model for Equity Price Protection Right and Monte Carlo Model for Earn out option respectively.

The following assumptions were used in determining the fair value of the convertible bond as of June 30, 2025:

Category	Valuation Technique	Significant Unobservable Inputs
Equity Price Protection Right	CRR	Volatility: 63.5% Risk Free Rate: 4.21%
Earn-out	Monte Carlo Model	Revenue Volatility: -3.4% Income Volatility: 74.2%, 4.8%

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Emerging Growth Company Status

K Wave 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, K Wave intend to rely on such exemptions, K Wave are not required to, among other things: (a) provide an auditor’s attestation report on K Wave’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.

K Wave will remain an emerging growth company under the JOBS Act until the earliest of (a) the day of K Wave’s first fiscal year following the fifth anniversary of the Closing, (b) the last date of K Wave’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

As of June 30, 2025, we had no material exposure to market risk.

Interest Rate Risk

K Wave 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 June 30, 2025, we had a cash balance of 8,724 million ($6.4 million), consisting of operating accounts which are not affected by changes in the general level of U.S. interest rates.

Foreign Currency Risk

K Wave conduct its operations through two branches, one located in the United States and one in Korea and 6 subsidiaries in Korea. The transactions of each branch and subsidiary 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 Korean Won. As foreign exchange rates change, the Korean Won equivalent of K Wave’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 Wave’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 Wave’s ability to manage K Wave’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 Wave’s business. Inflation may become a greater risk in the event of changes in current economic and governmental fiscal policy.

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Recent Development

K Wave’s Bitcoin Treasury Strategy

In addition to its core operating business, K Wave has adopted a bitcoin treasury strategy that aligns its corporate goals with the products it offers to its customers.

K Wave does not consider bitcoin as a source for working capital, but rather a strategic reserve asset that, in the long run, will provide long-term value preservation. In addition, bitcoin and its underlying blockchain technology can enable K Wave to invest in content creation and, ultimately, serve as a foundation for new ways to monetize the content K Wave develops and will help it achieve the goal of becoming a tech and IP-based diversified entertainment company. Specifically, K Wave views its digital asset treasury strategy as complementary to its entertainment operations. For example, K Wave is exploring ways in which blockchain-based tools may be used in ticketing, fan engagement, and merchandising for K Wave’s subsidiaries and other affiliated entities. These initiatives are designed to integrate digital assets into K Wave’s existing business model, rather than replace or divert from our core operations.

K Wave envisions a democratization of content participation, where blockchain technology can enable fans to directly engage with and support the bands, content and merchandise they care about. Over time, fans may be willing to invest directly in the bands, content, and merchandise they support by using bitcoin and blockchain technology, potentially creating a new model of engagement and support. K Wave has started these activities on a limited scale and plans to expand them until they have a material impact on its business.

Underlying K Wave’s bitcoin treasury strategy is its view that bitcoin is a reserve asset that, in the long run will provide the goal of long-term value preservation. As such, K Wave does not intend to monetize the bitcoin it holds in its treasury nor does it intend to hedge its bitcoin exposure.

As of the date of this prospectus, K Wave does not have a formal policy governing the percentage of treasury holdings that will be held in bitcoin. The Company intends to adopt guidelines governing the proportion of treasury assets that may be allocated to bitcoin. Such guidelines are expected to ensure that sufficient liquidity in cash and cash equivalents will always be maintained for working capital and near-term M&A activities, with bitcoin reserved for excess capital and long-term strategic purposes.

K Wave intends to continue to accumulate bitcoin in the future. K Wave’s Board of Directors will determine the portion of any proceeds received pursuant to the Standby Equity Purchase Agreement(“SEPA”) to allocate to the purchase of bitcoin and will consider various alternatives for raising capital for the purchase of bitcoin, which may include public offerings of K Wave’s securities. K Wave’s expectation is that, over time, all of K Wave’s operating companies will become self-sustaining and generate sufficient earnings to support their business activities. Once K Wave’s working capital needs and funds for its M&A activities have been secured, the remaining funds can be allocated to the purchase of bitcoin.

As of the date of this prospectus, K Wave has accumulated 88 bitcoin in its bitcoin treasury, all of which were purchased by K Wave on July 9, 2025 at a per bitcoin purchase price of $111,532,32. These 88 bitcoin were purchased by K Wave in accordance with the terms and conditions of the Securities Purchase Agreement (“SPA”), which requires K Wave to allocate at least 80% of the proceeds received from sales of the SPA Notes and the SPA Warrants for the purchase of bitcoin. As of September 19, 2025, K Wave’s bitcoin holdings represented approximately 80% of K Wave’s treasury assets, and the value of these bitcoin holdings was approximately $10.33 million.

Use of Custodians and Storage of Bitcoin

We do not self-custody and, as of the date of this prospectus, only use BitGo Trust Company, Inc. (“BitGo”), as custodian to hold our bitcoin.

On July 3, 2025, K Wave and BitGo entered into a Custodial Services Agreement (the “Custodial Agreement”), under which BitGo safeguards the private keys and crypto assets that K Wave deposits with it.

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Pursuant to the Custodial Services Agreement, BitGo, through its custodial services enables K Wave to create one or more custody accounts, controlled and secured by BitGo to store certain supported digital currencies and digital tokens or certain fiat currencies such as dollars or euros. BitGo also provides K Wave with the option to create non-custodial wallets that support certain digital assets via an application programming interface (API) and web interface. K Wave may also elect to store fiat currency with BitGo.

The Custodial Services Agreement has an initial term of one year, after which the agreement automatically renews for successive one-year periods, unless either party notifies the other of its intention not to renew at least 60 days prior to the expiration of the then-current term. K Wave may terminate the Custodial Services Agreement at any time for any reason upon 30 days’ prior written notice.

BitGo’s cold wallets are supported by a $250 million policy issued by Lloyd’s of London. Specifically, the policy covers: copying and theft of private keys; insider theft or dishonest acts by BitGo employees or executives; and loss of keys. Any theft of assets directly related to BitGo’s custody of key would be covered by the policy. The policy does not cover cases where the client or a third-party holds some of the keys themselves (e.g., hot wallets), since BitGo would not be solely responsible for protecting the keys. This insurance coverage applies to all digital assets held by BitGo. The Company is not a named insured on such insurance policies and such insurance is not specific to the Company, but BitGo has represented to the Company that such insurance covers customer losses, including losses suffered by the Company, arising from specified events, including fraud, theft, and cybersecurity breaches.

All of K Wave’s digital (i.e., 88 Bitcoin (BTC)) assets are held in “hot wallets.” Pursuant to the SPA, on July 11, 2025, K Wave and Anson Investments Master Fund, LP (in such capacity, the “Secured Party”), entered into a Security Agreement (the “Security Agreement”), pursuant to which K Wave granted to the Secured Party a security interest in certain digital asset accounts, which are jointly managed and controlled by the Company and the Anson Funds (the “Collateral”) in order to secure all payment and other 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. As of the date of this prospectus, the Collateral includes all of K Wave’s digital assets (88 Bitcoin (BTC)), and all such digital assets are held in “hot wallets” in order to permit the Anson Funds to hold private keys for such Bitcoin and have joint control with K Wave with respect thereto in accordance with the Security Agreement. Hot wallets, which are connected to the Internet, facilitate transactions but are more vulnerable to hacking and other cyber incidents.  Because BitGo’s policy does not cover cases where the client or a third-party holds some of the keys themselves, including in hot wallets, BitGo’s insurance may not be available or sufficient to protect the Company from all possible losses or sources of losses.

BitGo has established a comprehensive set of controls governing the business processes and technology systems using industry standards and frameworks such as the National Institute of Standards and Technology, CryptoCurrency Security Standard, Center for Internet Security and Federal Financial Institutions Examination Council. In addition, these controls have been independently tested and issued SOC 1 & SOC 2 (Type 2) reports. Customers will decide upon which specific wallets are required based on their use case and they determine the portion of assets held in hot or cold wallets. BitGo holds keys to cold wallets in undisclosed locations. BitGo’s cold storage solution is housed at undisclosed secure facilities. Any facilities that are co-located are secured by human guards and video surveillance, with 24x7 coverage. All BitGo vaults and manned facilities are located within the United States.

BitGo’s vaults are restricted from public access. BitGo follows role-based access controls and the principle of least privilege. Only individuals who have a specific business need to complete their job function are granted access to client information. Insurance providers rely on our BitGo’s external auditors to ensure that there is sufficient controls in place for accessing the vault and key material. BitGo maintains $250 million of insurance coverage against loss, theft and misuse in situations where BitGo holds all keys. As part of this coverage, BitGo’s insurance underwriters have inspection rights associated with the crypto assets held in storage. As noted above, this insurance coverage does not cover hot wallets and all of K Wave’s digital assets are held in hot wallets. Accordingly, this insurance may not be available or sufficient to protect the Company from all possible losses or sources of losses.

As all custody wallets are segregated, and the existence of K Wave’s bitcoin held by BitGo can be verified on-chain by K Wave or any other authorized party.

BitGo has private key procedures as well as the security and procedures in place for securing assets and in withdrawing and transferring assets. The BitGo ecosystem and architecture for private key management includes the BitGo platform, hardware security modules and modular services. The BitGo cold custody solution is built on BitGo’ world class security to manage keys on behalf of our clients. BitGo only signs transactions that have been authorized by its clients and follow the policies set by the account administrators. BitGo engages an external third-party auditor to verify the digital assets it holds on a periodic basis. In addition, in the course of performing its annual audit of K Wave’s financial statements, K Wave’s independent registered public accounting firm sends annual confirmation requests to BitGo to confirm K Wave’s digital assets held by BitGo. While neither K Wave nor its insurance providers have any independent inspection rights associated with the digital assets held by BitGo, BitGo’s insurer, Lloyd’s of London, does have inspection rights with respect to the digital assets that BitGo holds.

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Asset Management Agreement with Galaxy Digital

On June 25, 2025, K Wave entered into an Asset Management Agreement (the “Asset Management Agreement” with Galaxy Digital Capital Management LP (“Galaxy Digital”).

Pursuant to the Asset Management Agreement, the Galaxy Digital will provide discretionary investment management services with respect to assets (the “Account Assets”) maintained from time to time in accounts or cryptocurrency “wallets” maintained with one or more custodian(s) or cryptocurrency wallet providers acceptable to the Galaxy Digital. As of the date of this prospectus, no assets are currently managed by Galaxy Digital pursuant to the Asset Management Agreement.

The Asset Management Agreement provides that Galaxy Digital must pursue a long-only investment strategy investing in bitcoin, which strategy may include making purchases or sales in spot bitcoin (whether directly in secondary transactions or through one or more brokers, dealers, exchanges or other market participants); lending bitcoin; purchasing one or more options, swaps or derivatives contracts for hedging purposes; bitcoin options underwriting; and maintaining bitcoin in any rewards-based or security-based node or smart contract arrangement on one or more digital asset networks.

Pursuant to the Asset Management Agreement, the Galaxy Digital has sole responsibility and authority with respect to the discretionary investment management of the Account Assets, including the ability to make all investment decisions in respect of the Account Assets

K Wave will pay the Galaxy Digital a tiered asset-based fee (the “Asset-based Fee”) ranging from 0.50% to 1.50% per annum of the Galaxy Digital’s Account Assets under management. The Asset-based Fee shall be calculated and invoiced to K Wave on the first business day of each calendar month in arrears for the previously-concluded month, as determined by the Galaxy Digital in a commercially reasonable manner and in good faith, by reference to such pricing source as agreed between the Galaxy Digital and K Wave from time to time. K Wave must pay the invoice from the Galaxy Digital no later than ten business days after K Wave receives an invoice.

The Asset Management Agreement will, unless terminated earlier in accordance with its terms, remain in effect until the second anniversary the date of the Asset Management Agreement, after which time, the Asset Management Agreement will automatically renew for one-year terms upon the mutual agreement between K Wave and the Galaxy Digital. The Asset Management Agreement may be terminated at any time for cause by K Wave or the Galaxy Digital upon at least 30 days prior written notice to the other party.

The Company and Galaxy Digital and the Company will discuss in good faith the timing for initiating the yield-optimization of the Company’s bitcoin holdings. The Company anticipates that such yield optimization will not commence until K Wave accumulates at least an aggregate of 100 bitcoin.

Related Parties Transaction

See Related Parties under Note 24 in the notes to the consolidated financial statement for the period ended June 30, 2025, and 2024 for more information about transactions entered into with related parties.

Subsequent Event

A. Issuance of Convertible Notes and Purchase of Bitcoin

On July 3, 2025, the Company entered into a Securities Purchase Agreement to sell Senior Secured Convertible Notes (the “Notes”) and Warrants to purchase Ordinary Shares (the “Warrants”). On July 11, 2025, The Company consummated an initial closing under this agreement, raising aggregate proceeds of $15,000,000 (KRW 20,346,000 thousand) through the issuance of Notes with a principal amount of $15,789,473.68 (KRW 21,416,842 thousand) and Warrants to purchase 4,312,180 Ordinary Shares. The agreement also provides for potential subsequent closings for additional financing under certain conditions. The Notes are convertible into Ordinary Shares at a conversion price of $4.40 per share, and the Warrants are exercisable at $3.6616 per share. The Company is using the net proceeds from the sale of these securities to acquire bitcoin. From the net proceeds of approximately $12,995,000 (KRW 17,626,418 thousand) received from the initial closing, the Company used $9,815,108.16 (KRW 13,313,213 thousand) on July 9, 2025, to purchase 88 bitcoins at an average price of approximately $111,532.32 (KRW 151,282 thousand) per bitcoin, inclusive of fees and expenses.

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B. Acquisition of Rabbit Walk Inc.

On, August 27, 2025 The Company acquired a 55% controlling interest in Rabbit Walk Inc., (“Rabbit Walk”)a Production of commercials, films, and video content, for a total initial consideration of approximately Korean Won 9,075,000 thousand consisting of 110,000 shares of Rabbit Walk’s common stock. The agreement also provides for a contingent consideration arrangement based on future performance, under which the Company is required to issue additional stock of a specified value if certain consolidated operating income targets are met. The Company has also agreed to negotiate the acquisition of the remaining 45% interest by the end of 2026.

C. Securities Purchase Agreement with Galaxy Digital LP

On September 25, 2025, The Company entered into an investment agreement with Galaxy Digital LP, a third-party investor, raising aggregate gross proceeds of $1,000,000. Pursuant to the Investment Agreement, the Company issued 400,000 shares of its common stock and warrants to purchase an additional 200,000 shares of common stock to the Investor. The net proceeds from the financing are intended to be used for general working capital purposes.

The warrants are exercisable for a period of five years from the date of issuance and entitle the holder to purchase one share of the Company’s common stock at an exercise price of $2.75 per share.

D. Reorganization of Korean Operations

The board of the Company approved a strategic reorganization of its business operations in the Republic of Korea. This reorganization involved the legal closure and deregistration of the Company’s existing branch in Korea and the simultaneous incorporation of, a new, wholly-owned subsidiary. In connection with this reorganization, all assets, liabilities, personnel, and commercial operations of the former Korean branch were transferred to the newly established subsidiary.

E. Borrowings of Solaire Partners

On September 18, 2025, the Company entered into the loan agreement with MG Community Credit Cooperatives at Seocho in the amount of Korean Won 3,000,000 thousand, bearing interest at an annual rate of 5.8%, with repayment due upon maturity. The loan is guaranteed by the Chief Executive Officer, Pyeungho Choi and was obtained to finance the acquisition of investment assets.

F. Gifts and Loans of Shares of Ordinary Shares to K Wave Treasury

On October 16, 2025, the Company entered into agreements with the shareholders of K Wave Media pursuant to which the shareholders agreed to contribute 6.24 million of the Company’s ordinary shares to treasury, and the Company agreed to temporarily lend, without consideration, an additional 1.55 million ordinary shares to be held as treasury shares.

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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 the financial statements and related notes that are included elsewhere in this prospectus. 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.

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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”):

● On May 13, 2025, Global Star was reincorporated to Cayman Islands by merging with and into PubCo, with PubCo remaining as the surviving publicly traded entity (the “Reincorporation Merger”). In connection with the closing of the Reincorporation Merger, (i) each issued and outstanding share of ordinary shares of Global Star, other than Global Star ordinary shares owned by Global Star as treasury shares or any Global Star ordinary shares owned by any direct or indirect wholly owned subsidiary of Global Star, was converted into one Ordinary Share of K Wave, (ii) each issued and outstanding warrant of Global Star was converted automatically into a warrant to purchase one Ordinary Share at a price of $11.50 per whole share (the “Warrant”), (iii) each issued and outstanding right of Global Star was converted automatically into a right to receive one-tenth (1/10) of one Ordinary Share at the closing of a business combination (the “K Wave Right”), and (iv) each issued and outstanding unit of Global Star was separated and converted automatically into one Ordinary Share, one Warrant, and one K Wave Right. At the closing of the Reincorporation Merger, all common stock, warrants, rights, units and other securities of Global Star ceased to be outstanding and were automatically cancelled and retired and ceased to exist.

● On May 13, 2025, Merger Sub merged with and into K Enter, resulting in K Enter being a wholly owned subsidiary of PubCo (the “Acquisition Merger”). In connection with the closing of the Acquisition Merger, (i) each share of K Enter capital stock that was owned by Global Star, Merger Sub and K Enter (as treasury stock or otherwise), was automatically cancelled and retired without any conversion, (ii) each share of K Enter preferred stock issued and outstanding was deemed converted into shares of K Enter common stock, (iii) each share of K Enter ordinary shares issued and outstanding, including shares of K Enter ordinary shares deemed outstanding as a result of the mandatory conversion of K Enter preferred stock, was converted into the right to receive a number of Ordinary Shares equal to the conversion ratio of 312.1:1 (the “Conversion Ratio”), and (iv) each share of Merger Sub ordinary shares issued and outstanding was converted into and become one newly issued, fully paid and nonassessable share of K Enter common stock.

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:

● integrate the Six Korean Entities;

● increase K Enter’s investment in marketing, advertising, sales infrastructure for K Enter’s products and services;

● obtain, maintains and improves K Enter’s operational, financials and management information systems;

● hire additional personnel;

● obtain, maintains, expands and protects its intellectual property portfolio; and

● operate a public company

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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.

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.

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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.

● The Company shall repurchase shares if the related suits are finally resolved by a final, non-appealable judgment or the involved parties’ mutually agreed settlement with prejudice of all claims related to and arising from the related suits in each case in a manner satisfactory to the Company as determined by the Company at its sole discretion based on what is considered legally and commercially reasonable.

● The repurchase price shall be the fair market value, which shall be determined by an accounting firm selected by both parties’ mutual agreement. The transaction shall be consummated within 15 days after the determination of the fair value, excluding the date of government approval if required. The term of this agreement shall be effective and in force only for the time period between the agreement date and the five year anniversary thereof.

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 3.0% 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:

(1) 25% of the committed amount at the time of signing this definitive agreement,

(2) 25% at the time SEC declares effectiveness on the F-4, and

(3) the remaining 50% at the time of shareholder approval and going public.

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:

(1) 25% of the committed amount at the time of signing this definitive agreement,

(2) 50% at the time SEC declares effectiveness on the F-4, and

(3) the remaining 25% at the time of shareholder approval and going public.

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:

● 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

● a Floor price of $4 per share.

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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 totaling $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”.

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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:

	Year Ended December 31, 2024			For the period from January 4, 2023 (inception) to December 31, 2023
Statement of Profit or Loss:
Revenue	$	485,271		$	208,704
Operating expenses
Cost of revenues		483,462			207,153
General and Administrative		11,838,397			8,954,316
Loss From Operations		(11,836,588	)		(8,952,765	)
Other income (expense)
Interest income		399			7,956
Other income (expense)		(1,034,045	)		13,863
Total other income (expense)		(1,033,646	)		21,819
Net loss	$	(12,870,234	)	$	(8,930,946	)

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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:

	Year Ended December 31, 2024			For the period from January 4, 2023 (inception) to December 31, 2023
Net cash provided by (used in)
Operating activities	$	(5,800,647	)	$	(8,002,540	)
Investing activities		(16,819	)		(2,637,390	)
Financing activities		3,776,281			13,121,268
Effect of exchange rates on cash		(151,428	)		44,344
Net change in cash and cash equivalents	$	(2,192,613	)	$	2,525,682

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.

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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.

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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.

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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.

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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:

Risk-neutral probability	49.43	%
Risk-free interest rate	4.14	%
Risk interest rate reflect the credit risk of the obligor	16.31	%

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.

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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:

Risk-free interest rate	3.62 ~ 4.55	%
Debt rate	6.67 ~ 7.31	%

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:

● Our business, financial condition and results of operations, including related industry trends affecting K Enter’s operations and the progress of conversations concerning:

○ the potential acquisitions of controlling equity interests of the Six Korean Entities

○ a potential merger with Global Star and the eventual execution of the Merger Agreement

○ a capital rise through the issuance of convertible preferred stock

● Our forecasted operating performance and projected future cash flows;

● the lack of an active market for K Enter’s Ordinary Shares and K Enter’s convertible preferred stock;

● the likelihood of securing additional financing beyond the ongoing Series A and Series A-1 capital raises

● liquidation preferences, redemption rights and other rights and privileges of K Enter’s Ordinary Shares and convertible preferred stock;

● market multiples of K Enter’s comparable public peers; and

● market conditions affecting K Enter’s industry.

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.

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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:

	SPAC Merger Scenario			Sale Scenario
Probability		90.0	%		10.0	%
Time to liquidity event		0.33 years			2.5 years
Risk free rate		4.38	%		4.38	%
Volatility		42.8	%		42.8	%
Discount for lack of marketability		6.9	%		6.9	%

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.

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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 rely on the other exemptions and reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, as an emerging growth company 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.

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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.

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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 should be read in conjunction with the financial statements and related notes that are included elsewhere in this prospectus. 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:

● At the period exchange rate as of December 31, 2024 of US$1.00 to KRW1,477.86 for the balance sheet;

● At the average exchange rate for the year ended December 31, 2024 of US$1.00 to KRW1,363.44 for the statements of operations and cash flow;

● At the average exchange rate for the year ended December 31, 2023 of US$1.00 to KRW 1,306.76 for the statements of operations and cash flow;

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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

	Year Ended December 31, 2024						Year Ended December 31, 2023
	(In millions of Korean won and US dollar)
Income Statement:
Revenues	₩	43,010		$	31,545,495		₩	67,481		$	51,640,054
Cost of sales		(41,912	)		(30,739,899	)		(60,837	)		(46,555,654	)
Gross profit		1,098			805,596			6,644			5,084,400
Operating expenses		(4,605	)		(3,377,691	)		(3,147	)		(2,408,011	)
Operating income (loss)		(3,507	)		(2,572,095	)		3,497			2,676,389
Other income (expense)		(805	)		(590,384	)		56			42,647
Profit (Loss) before taxes		(4,312	)		(3,162,479	)		3,553			2,719,036
Income tax benefit (expense)		754			552,757			(761	)		(582,186	)
Net income (loss)	₩	(3,558	)	$	(2,609,722	)	₩	2,792		$	2,136,850

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.

(i) Unexpectedly delayed projects: As stated within this document, Play Company entered into a new business agreement with SM Entertainment in December 2023 and has been developing new merchandise projects for K-Pop artists from SM Entertainment. Since this is the first year of business cooperation between Play Company and SM Entertainment, the two companies needed to work closely to align their teamwork. As a result, several projects that were initially planned for release in the first half of the year have been adjusted, revised and delayed to ensure quality improvements. The first merchandise project for a top-tier K-pop artist under SM Entertainment’s management, Aespa, was released in the first quarter of 2025. This project generated approximately Korean Won 1.8 billion in revenue and is comparable to that of previous projects involving other top-tier K-pop artists under HYBE. Play Company is currently focusing on releasing the delayed projects according to the revised schedule, aiming to restore sales performance in 2025.

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(ii) New business development: As stated in this document, Play Company has been preparing for several new business opportunities to offset the anticipated decline in HYBE-related revenues in 2024. These opportunities include expanding from K-pop artists to a broader range of artists, including actors and virtual artists, and diversifying its merchandise offerings, such as light sticks and other concert-related collectibles. During the year ended December 31, 2024, Play Company developed and released merchandise for the fan meeting of Korean male actor Byun Woo-seok, the lead cast in the Korean drama “Lovely Runner.” However, the slower-than-expected progress in developing these opportunities contributed to the relatively low performance in the year ended December 31, 2024. The company continues to take measures in 2025 to try to offset the shortfall in revenues

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.

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

● finance income of $0.4 million and $1.3 million, respectively, primarily attributable to gains on foreign currency translation of less than $0.1 million and $0.3 million, respectively, gains on foreign currency transactions of less than $0.1 million and $0.2 million, respectively. Interest income earned from interest bearing notes and accounts was $0.2 million and $0.3 million, respectively. Gains on disposal of financial instruments of $0.5 million of was recognized for the year ended December 31, 2023 that did not recur for the year ended December 31, 2024.

● finance costs of $1.0 million and $1.3 million, respectively, primarily attributable to interest expense relating to lease liabilities of $0.9 and $1.1 million, respectively, and losses on foreign currency transactions of less than $0.1 million and $0.2 million, respectively.

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

	Year Ended December 31, 2024						Year Ended December 31, 2023
	(In millions of Korean won and US dollar)
Net cash provided by (used in)
Operating activities	₩	(2,857	)	$	(2,095,561	)	₩	(8,378	)	$	(6,410,933	)
Investing activities		(361	)		(264,799	)		(1,790	)		(1,369,862	)
Financing activities		(1,287	)		(944,212	)		(12,190	)		(9,328,274	)
Effect of exchange rates on cash		71			51,721			362			276,657
Net change in cash and cash equivalents	₩	(4,434	)	$	(3,252,851	)	₩	(21,996	)	$	(16,832,412	)

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.

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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.

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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

	Weighted average cost of capital			Terminal growth rate
2024		9.6	%		1.0	%
2023		10.7	%		1.0	%

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.

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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.

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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 should be read in conjunction with the financial statements and related notes that are included elsewhere in this prospectus. 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:

● At the period exchange rate as of December 31, 2024 of US$1.00 to KRW1,477.86 for the balance sheet;

● At the average exchange rate for the year ended December 31, 2024 of US$1.00 to KRW1,363.44 for the statements of operations and cash flow;

● At the average exchange rate for the year ended December 31, 2023 of US$1.00 to KRW 1,306.76 for the statements of operations and cash flow;

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Results of Operations

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

Comparison of Year Ended December 31, 2024 and 2023

	Year Ended December 31, 2024						Year Ended December 31, 2023
	(In millions of Korean won and US dollar)
Income Statement:
Revenues	₩	16,336		$	11,981,495		₩	20,837		$	15,945,434
Cost of sales		(15,024	)		(11,018,875	)		(19,509	)		(14,929,569	)
Gross profit		1,312			962,620			1,328			1,015,865
Operating expenses		(1,039	)		(762,076	)		(750	)		(573,991	)
Operating income		273			200,544			578			441,874
Other expense, net		(114	)		(83,511	)		(59	)		(45,107	)
Profit before taxes		159			117,033			519			396,767
Income tax benefit (expense)		(92	)		(67,543	)		19			14,386
Net income	₩	67		$	49,490		₩	538		$	411,153

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

A summary of The Lamp’s operating, investing and financing cash flows is as follows:

Comparison of Years Ended December 31, 2024 and 2023

	Year Ended December 31, 2024						Year Ended December 31, 2023
	(In millions of Korean won and US dollar)
Net cash provided by (used in)
Operating activities	₩	(1,009	)	$	(740,194	)	₩	876		$	670,014
Investing activities		103			75,887			225			172,125
Financing activities		(150	)		(110,198	)		(124	)		(94,517	)
Net change in cash and cash equivalents	₩	(1,056	)	$	(774,505	)	₩	977		$	747,622

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Net cash flows used in operating activities for the year ended December 31, 2024 was Korean Won 1,009 million ($740,194), compared to Korean Won 876 million ($670,014) of net cash flows provided by operating activities for the year ended December 31, 2023. This is primarily attributable to a decrease in contract liabilities related to in-progress content projects of Korean Won 2,636 million ($1,958,276), partially offset by a decrease in trade receivables of Korean Won 184 million ($137,184) as a major content project reached completion during the year ended December 31, 2024, an increase in income tax expenses of Korean Won 111 million ($81,929) and other bad debt expenses of Korean Won 137 million ($97,141).

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 122 million ($96,238). This is primarily attributable to a decrease in long-term investment securities collection of Korean Won 331 million ($253,576), partially offset by a decrease in leasehold deposit receivables of Korean Won 160 million ($118,941), an increase in collection of other deposits receivables of Korean Won 15 million ($10,645), and a decrease in long-term borrowings of Korean Won 20 million ($15,305).

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 26 million ($15,681). This is primarily attributable to the repayments made of short-term borrowings of Korean Won 30 million ($22,003).

Liquidity and Capital Resources

Historically, The Lamp’s sources of liquidity have been cash flows from the generation of net income. As of December 31, 2024, The Lamp had an aggregate cash balance of Korean Won 864 million ($584,580) and net working capital deficit of Korean Won 1,044 million ($706,621).

The Lamp intends to operate with its current cash on hand and the profits it anticipates earning in the future. The Lamp intends to expand its current business operations, including increasing drama and movie projects with global OTT and expanding its international footprint. The Lamp may need to borrow money or sell equity to finance its operations and planned growth.

The Lamp’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, The Lamp may need to raise additional financing. While there can be no assurances, if additional capital is required, The Lamp intends to raise such capital through operations or additional issuances of equity. If additional financing is required from outside sources, The Lamp may not be able to raise it on terms acceptable to it or at all. If The Lamp is unable to raise additional capital when desired, The Lamp’s business, results of operations and financial condition would be materially and adversely affected.

Related Parties

The related parties of The Lamp comprise the Chief Executive Officers of The Lamp, who is also the shareholder of The Lamp, and other related parties. The Lamp entered into multiple agreements for loans with related parties.

See Related Parties under Note 26 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, The Lamp 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.

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Critical Accounting Estimates

The Lamp’s financial statements have been prepared in accordance with IFRS as issued by the IASB. The preparation of these financial statements requires The Lamp 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 The Lamp’s financial statements.

The Lamp believes the accounting policies discussed in the notes to The Lamp’s financial statements are critical to understanding The Lamp’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 The Lamp’s material accounting policies.

Measurement of defined benefit obligations: key actuarial assumptions

The Lamp’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 The Lamp, 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

The Lamp 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

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

See Summary of The Lamp’s financial risk management under Note 22 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, The Lamp believes that the impact of recently issued standards that are not yet effective will not have a material impact on The Lamp’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 The Lamp’s assessment, to the extent The Lamp has made one, of their potential impact on The Lamp’s financial condition and results of operations.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF BIDANGIL PICTURES

References to the “Bidangil” refer to Bidangil Pictures Co., Ltd. The following discussion and analysis should be read in conjunction with the financial statements and related notes that are included elsewhere in this prospectus. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Business Overview

Bidangil Pictures Co., Ltd. (“Bidangil”) is engaged in the vibrant landscape of content production, covering a spectrum that includes both domestic and international movies and dramas. Distinguished by a world-class production sense and a highly efficient production system, Bidangil actively pursues innovation by venturing into diverse genres within the film industry. Many acclaimed directors play pivotal roles in shaping the landscape of K-content, and Bidangil stands out as an exceptional production studio, skillfully navigating the intersection of artistic quality and commercial success.

Established in 2005 and led by Kim, Soo Jin and Yoon, In Bum. Bidangil is a production studio that has produced over 10 movies including thrillers such as The Chaser and Korea’s first space-based sci-fi movie Space Sweepers which was released on Netflix. Bidangil has also been successful in discovering talented new directors, including Na Hongjin for The Chaser and Jo Sunghee for A Werewolf Boy and Space Sweepers. Bidangil also has created a distinctive portfolio of films with unique story lines and settings.

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

Bidangil’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:

● At the period exchange rate as of December 31, 2024 of US$1.00 to KRW1,477.86 for the balance sheet;

● At the average exchange rate for the year ended December 31, 2024 of US$1.00 to KRW1,363.44 for the statements of operations and cash flow;

● At the average exchange rate for the year ended December 31, 2023 of US$1.00 to KRW 1,306.76 for the statements of operations and cash flow;

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Results of Operations

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

Comparison of Years Ended December 31, 2024 and 2023

	Year Ended December 31, 2024						Year Ended December 31, 2023
	(In millions of Korean won and US dollar)
Income Statement:
Revenues	₩	18,633		$	13,665,823		₩	7,746		$	5,927,700
Cost of sales		(17,447	)		(12,796,273	)		(7,070	)		(5,410,029	)
Gross profit		1,186			869,550			676			517,671
Operating expenses		(732	)		(536,698	)		(725	)		(555,119	)
Operating income (loss)		454			332,852			(49	)		(37,448	)
Other income (expense)		(92	)		(67,313	)		234			178,982
Profit before taxes		362			265,539			185			141,534
Income tax benefit (expense)		(4	)		(2,737	)		2			1,165
Net income	₩	358		$	262,802		₩	187		$	142,699

For the year ended December 31, 2024 and 2023, Bidangil’s operating income (loss) was driven by its content production segment, which realized revenues totaling Korean Won 18,633 million ($13,665,823) and Korean Won 7,746 million ($5,927,700), respectively.

Bidangil’s gross profit has increased for the year ended December 31, 2024 as compared to the year ended December 31, 2023 by Korean Won 510 million ($351,879), or 75.4%, corresponding to an increase in revenue of Korean Won 10,887 million ($7,738,123), or 140.5%. This is attributable to an increase in media production revenue due to a new agreement initiated in August 2023. For the year ended December 31, 2024 and 2023, one of Bidangil Pictures’ customers accounts for 99.4% and 97.6%, respectively, of total revenue.

For the year ended December 31, 2024 and 2023, Bidangil’s operating expenses are primarily driven by payroll and payroll related costs, depreciation expenses, and commissions expenses for both periods presented.

Bidangil’s operating expenses increased for the year ended December 31, 2024 as compared to the year ended December 31, 2023 by Korean Won 7 million (decreased by $18,421 due to foreign exchange rate fluctuation), or 1.0%. This is primarily attributable to other bad debt expenses of Korean Won 21 million ($15,402), which did not occur in the year ended December 31, 2023, partially offset by a decrease in payroll and payroll related costs of Korean Won 10 million ($24,732).

Cash Flows

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

Comparison of Years Ended December 31, 2024 and 2023

	Year Ended December 31, 2024						Year Ended December 31, 2023
	(In millions of Korean won and US dollar)
Net cash provided by (used in)
Operating activities	₩	(1,401	)	$	(1,027,600	)	₩	2,088		$	1,598,066
Investing activities		1,417			1,039,135			1,293			989,446
Financing activities		(2,291	)		(1,680,061	)		(685	)		(524,298	)
Net change in cash and cash equivalents	₩	(2,275	)	$	(1,668,526	)	₩	2,696		$	2,063,214

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Net cash flows used in operating activities for the year ended December 31, 2024 was Korean Won 1,401 million ($1,027,600), compared to Korean Won 2,088 million ($1,598,066) of net cash flows provided by operating activities for the year ended December 31, 2023. This is primarily attributable to a decrease in contract liabilities of Korean Won 12,366 million ($9,266,349) as one of the content projects are nearing completion, partially offset by an increase in net income by Korean Won 172 million ($120,103) and a decrease in prepaid expenses of Korean Won 8,236 million ($6,171,954).

Net cash flows provided by investing activities increased for the year ended December 31, 2024 as compared to the year ended December 31, 2023 by Korean Won 124 million ($49,689). This is attributable to a decrease in payments made for the purchase of short-term investment securities of Korean Won 4,932 million ($3,838,049) and an increase in the proceeds from short-term loans collected of Korean Won 953 million ($698,602), partially offset by a decrease in the proceeds from disposal of short-term investment securities of Korean Won 5,748 million ($4,480,155).

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 1,606 million ($1,155,763). This is primarily attributable to the purchase of treasury shares of Korean Won 2,000 million ($1,466,880), partially offset by a decrease in cash outflows from other current liabilities by Korean Won 400 million ($312,775).

Liquidity and Capital Resources

Historically, Bidangil’s sources of liquidity have been cash flows from the generation of net income. As of December 31, 2024, Bidangil had an aggregate cash balance of Korean Won 1,448 million ($980,123) and net working capital of Korean Won 2,078 million ($1,406,205).

Bidangil intends to operate with its current cash on hand and the profits it anticipates earning in the future. Bidangil intends to expand its current business operations, increasing drama and movie projects with global OTT and expanding its international footprint. Bidangil may need to borrow money or sell equity to finance its operations and planned growth.

Bidangil’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, Bidangil may need to raise additional financing. While there can be no assurances, if additional capital is required, Bidangil intends to raise such capital through operations or additional issuances of equity. If additional financing is required from outside sources, Bidangil may not be able to raise it on terms acceptable to it or at all. If Bidangil is unable to raise additional capital when desired, Bidangil’s business, results of operations and financial condition would be materially and adversely affected.

Related Parties

The related parties of Bidangil comprise two of Chief Executive Officers, who are also the shareholder of Bidangil. Bidangil entered into a loan agreement with two of Bidangil’s Chief Executive Officers.

See Related Parties under Note 25 in the notes to the consolidated 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, Bidangil 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.

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Critical Accounting Estimates

Bidangil’s consolidated financial statements have been prepared in accordance with IFRS as issued by the IASB. The preparation of these financial statements requires Bidangil 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 Bidangil’s consolidated financial statements.

Bidangil believes the accounting policies discussed in the notes to Bidangil’s consolidated financial statements are critical to understanding Bidangil’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 consolidated financial statements as of and for the years ended December 31, 2024 and 2023 for more information about Bidangil’s material accounting policies.

Uncertain tax treatments

Bidangil 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

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

See Summary of Bidangil’s financial risk management under Note 22 in the notes to the consolidated 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, Bidangil believes that the impact of recently issued standards that are not yet effective will not have a material impact on Bidangil’s consolidated financial statements upon adoption.

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

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DESCRIPTION OF K WAVE’S BUSINESS

Overview

Formation. K Wave Media Ltd. (“K Wave” or “K Wave”), was a wholly-owned subsidiary of Global Star Acquisition Inc. (“Global Star”), and was incorporated on June 22, 2023 as a Cayman Islands exempted company. K Wave was formed for the purpose of becoming the ultimate parent company following the transactions contemplated in the Merger Agreement. K Wave 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 Merger Agreement. As of the date of the prospectus, Merger Sub has been merged with and into K Enter in connection with the Business Combination.

Business Combination Activities. On May 13, 2025 (the “Closing Date”), K Wave Media Ltd., a Cayman Islands exempted company (“Pubco” or the “Company”), consummated the previously announced business combination pursuant to the merger agreement, dated as of June 15, 2023, as modified by the joinder agreement, dated July 13, 2023, the First Amendment, dated March 11, 2024, the Second Amendment, dated June 28, 2024, the Third Amendment to Merger Agreement, dated July 25, 2024 and the Fourth Amendment to Merger Agreement, dated December 11, 2024 (the “Merger Agreement”), by and among the Company, Global Star Acquisition Inc., a Delaware corporation (“Global Star”), K Enter Holdings Inc., a Delaware corporation (“K Enter”) and GLST Merger Sub, Inc., a Delaware corporation (“Merger Sub”),

The following transactions occurred pursuant to the terms of the Merger Agreement (collectively, the “Business Combination”):

● On May 13, 2025, Global Star was reincorporated to Cayman Islands by merging with and into PubCo, with PubCo remaining as the surviving publicly traded entity (the “Reincorporation Merger”). In connection with the closing of the Reincorporation Merger, (i) each issued and outstanding share of ordinary shares of Global Star, other than Global Star ordinary shares owned by Global Star as treasury shares or any Global Star ordinary shares owned by any direct or indirect wholly owned subsidiary of Global Star, was converted into one Ordinary Share of K Wave, (ii) each issued and outstanding warrant of Global Star was converted automatically into a warrant to purchase one Ordinary Share at a price of $11.50 per whole share (the “Warrant”), (iii) each issued and outstanding right of Global Star was converted automatically into a right to receive one-tenth (1/10) of one Ordinary Share at the closing of a business combination (the “K Wave Right”), and (iv) each issued and outstanding unit of Global Star was separated and converted automatically into one Ordinary Share, one Warrant, and one K Wave Right. At the closing of the Reincorporation Merger, all common stock, warrants, rights, units and other securities of Global Star ceased to be outstanding and were automatically cancelled and retired and ceased to exist.

● On May 13, 2025, Merger Sub merged with and into K Enter, resulting in K Enter being a wholly owned subsidiary of PubCo (the “Acquisition Merger”). In connection with the closing of the Acquisition Merger, (i) each share of K Enter capital stock that was owned by Global Star, Merger Sub and K Enter (as treasury stock or otherwise), was automatically cancelled and retired without any conversion, (ii) each share of K Enter preferred stock issued and outstanding was deemed converted into shares of K Enter common stock, (iii) each share of K Enter ordinary shares issued and outstanding, including shares of K Enter ordinary shares deemed outstanding as a result of the mandatory conversion of K Enter preferred stock, was converted into the right to receive a number of Ordinary Shares equal to the conversion ratio of 312.1:1 (the “Conversion Ratio”), and (iv) each share of Merger Sub ordinary shares issued and outstanding was converted into and become one newly issued, fully paid and nonassessable share of K Enter common stock.

On June 3, 2025, K Wave entered into a securities purchase agreement with Bitcoin Strategic Reserve KWM LLC (“Bitcoin Strategic”), providing for the sale by K Wave of up to $500 million of Ordinary Shares. Proceeds from the Bitcoin Strategic facility will be used to support K Wave’s 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, K Wave plans to operate Bitcoin Lightning Network nodes and invest in Bitcoin-native infrastructure to enhance decentralization and facilitate on-chain transaction rewards.

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On June 25, 2025, the Company entered into an Asset Management Agreement (the “Galaxy Asset Management Agreement”) with Galaxy Digital Capital Management. Pursuant to the Galaxy Asset Management Agreement, Galaxy Digital Capital Management will provide discretionary investment management services with respect to assets (the “Account Assets”) maintained from time to time in accounts or cryptocurrency “wallets” maintained with one or more custodian(s) or cryptocurrency wallet providers acceptable to Galaxy Digital Capital Management. As of the date of this prospectus, no assets are currently managed by Galaxy Digital Capital Management pursuant to the Galaxy Asset Management Agreement. The Galaxy Asset Management Agreement provides that Galaxy Digital Capital Management must pursue a long-only investment strategy investing in bitcoin, which strategy may include making purchases or sales in spot bitcoin (whether directly in secondary transactions or through one or more brokers, dealers, exchanges or other market participants); lending bitcoin; purchasing one or more options, swaps or derivatives contracts for hedging purposes; bitcoin options underwriting; and maintaining bitcoin in any rewards-based or security-based node or smart contract arrangement on one or more digital asset networks. Pursuant to the Galaxy Asset Management Agreement, Galaxy Digital Capital Management has sole responsibility and authority with respect to the discretionary investment management of the Account Assets, including the ability to make all investment decisions in respect of the Account Assets.

On July 3, 2025, we entered into a Securities Purchase Agreement, by and among the Company, the Anson Funds, and Anson Investments Master Fund L.P., as collateral agent for the Anson Funds (the “SPA”), pursuant to which we issued and sold Senior Secured Convertible Notes on July 11, 2025 to the Anson Funds in the aggregate principal amount of $15,789,474 and warrants to purchase up to $15,789,478 of our Ordinary Shares. Additionally, if the Second Closing and the Additional Closings are consummated, we will receive (i) $10,000,000 and up to $475,000,000 in gross proceeds under the SPA from the sales of the Second Notes and the Additional Notes, respectively, and (ii) $10,526,316 and $500,000,000 if the Second Warrants and the Additional Warrants (if any), respectively, are cash exercised in full into Ordinary Shares by the Selling Shareholders. 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. 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.

On September 26, 2025, the Company entered into a Securities Purchase Agreement with an affiliate of Galaxy Digital, Galaxy Digital LP (the “Galaxy Securities Purchase Agreement”). Pursuant to the Galaxy Securities Purchase Agreement, on September 30, 2025, the Company issued and sold to Galaxy Digital LP (i) 400,000 Ordinary Shares for an aggregate purchase price of $1,000,000, and (ii) warrants to purchase 200,000 Ordinary Shares. Galaxy Digital LP is an affiliate of Galaxy Digital Capital Management LP (“Galaxy Digital Capital Management”).

On August 27, 2025, the Company entered into a Share Purchase Agreement to acquire an aggregate of 110,000 of the common shares of Rabbit Walk Inc., a company duly incorporated and existing under the laws of the Republic of Korea and engaged in the business of video and content media production (“Rabbit Walk), which Rabbit Walk Shares represented 55% of the issued and outstanding common stock of Rabbit Walk as of the date of the Share Purchase Agreement. Rabbit Walk has visual effects, 3D, and advertising capacity, which can be utilized by the Company’s existing content studios when they produce films, dramas, and advertise. KWM purchased Rabbit Walk so it can create synergies with its existing studios.

Business Operations. K Wave is engaged in the “IP content business,” which refers to a business that focuses on creating, investing in, managing, licensing, and monetizing intellectual property (“IP”) content such as TV shows, movies, dramas and music. At the heart of K Wave’s IP 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 Play Company Co., Ltd., which is in the content merchandising business (the “Merchandising Company”), it involves the merchandise sales of IP content based on a popular musicians, TV shows and movies. K Wave regards its IP content, including copyrights, registered trademark and pending trademarks, service marks, domain names, trade secrets, proprietary technologies and similar intellectual property as critical to its success. K Wave will relies on trademark law, trade secret protection and confidentiality and license agreements with employees and others to protect K Wave’s proprietary rights.

Corporate Information. K Wave’s offices are located at:

K Wave Media

c/o Maples Corporate Services Limited

PO Box 309, Ugland House

Grand Cayman, KY1-1104
Cayman Islands

(703) 790-0717

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DESCRIPTION OF K ENTER’S BUSINESS

OVERVIEW

K Enter was formed to be an intellectual property (“IP”) entertainment company primarily through the acquisition, management, and development of companies in the Korean 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.

K Enter’s vision is to become a leading tech and IP-based diversified entertainment company. As K Enter works on fulfilling its vision the first step was acquiring a controlling equity interest in the following Korean entertainment companies: Apeitda Co., Ltd., Bidangil Pictures Co., Ltd., The LAMP Co., Ltd., Studio Anseilen Co., Ltd., Play Company Co., Ltd. and Solaire Partners LLC (collectively the “Six Korean Entities”) which combine three initial capabilities, K Enter believes, are necessary to carry out its business plan. They include content production, content merchandising, and content investment. K Enter has a plan to develop virtual production capabilities in the future through K Enter’s internal tech team and in collaboration with content virtualization companies. The combined three capabilities noted below and the developing capability will serve as an initial foundation for K Enter’s growth.

1. Content production (4 companies). The equity interest acquired is 51% in each of the following production studios.

① Apeitda Co., Ltd.

② Bidangil Pictures Co., Ltd.

③ The LAMP Co., Ltd.

④ Studio Anseilen Co., Ltd.

2. Content merchandising (1 company). The equity interest to be acquired is 100%.

⑤ Play Company Co., Ltd.

3. Content investment (1 company). The equity interest to be acquired is 95%.

⑥ Solaire Partners LLC.

Below K Enter describes the four initial capabilities and the businesses of the Six Korean Entities that K Enter acquired prior to the closing of the business combination with Global Star Acquisition, Inc. (the “Business Combination”).

The three initial capabilities defined

1. Content Production

K Enter’s content production will initially be in film and drama production, through its acquisition of the following production studios Apeitda Co., Ltd., Bidangil Pictures Co., Ltd., The LAMP Co., Ltd., Studio Anseilen Co., Ltd., which are four of the Six Korean Entities K Enter acquired prior to the Business Combination.

Content production entails overseeing the entire process of bringing a film or drama to life including taking an initial idea, developing a script, securing actors and a director, financing the project, producing the content, marketing the content so that the work can be brought to the viewer.

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2. Content Merchandising

Content merchandising means the enhancement of the fan experience through the IP merchandise K Enter creates and sells, which also helps artists maintain a strong bond with their fanbase. K Enter will engage in content merchandising through Play Company Co., Ltd. (“Play Company’), an IP content merchandising company. The Korean music industry generated $9.2 billion in sales in 2024 according to the Korea Creative Content Agency. (See: Korea Creative Content Agency (KOCCA), “2024 Yearly Analysis of Content Industry Trends”, p.17 (2024 kocca.kr)). In 2024 over 93 million physical K Pop Albums were sold according to the Korean Culture and Information Service (See: KOCIS, May. 23, 2025 News Release, (kocis.go.kr)), almost 20% higher than 2022. As a comparison 78.7 million CDs and others were sold in the U.S. in 2024 according to the Recording Industry Association of America (RIAA, Year-end 2024 RIAA Revenue Statistics, (RIAA.com)). Korea also exported $291 million in physical album sales in 2024 (See: Circle Chart by KMCA, “Korea Music Content Association, K-POP Physical Album Exports Data Review”, Feb. 26, 2025, (Circle Chart.kr)). While buying Physical Album may seem outdated when music streaming is the most popular way to listen to music, many fans in Korea purchase Physical album to show their support and increase an artist’s popularity ranking. Physical Albums and the accompanying package in Korea are also bought many times for the inherent value it has to the fan as a collector’s item. The Physical Album can contain valuable photo cards (some which are traded on the market), merchandise, and to fans valuable raffle tickets which allows ticket holders to attend fan meetings, conduct video calls with their artist, etc. During COVID-19, the opportunity to conduct a video call gained great value to fans rather than in person meetings, and this new form of engaging with fans has become very well accepted. It is not uncommon for some fans to buy more than one Physical Album.

This behavior of buying Physical album spills over to the purchase of the specialized video merchandise created by Play Company Co., Ltd., one of the Six Korean Entities. Fans of K-Pop artists such as BTS have purchased specialized video merchandise created by Play Company to show support for their artist. These fans have been known to buy billboards and ads to congratulate their artists on their birthday. The fans also derive satisfaction from owning unique and exclusive video merchandise that is treated as a collectible item. The video package, for example, contains unique footage with behind-the-scenes videos and photos of the artists in concerts, music videos, dance practices and intimate aspects of their everyday lives. They also usually include special photo albums, stickers, and post cards of the artists. The items included depends on the type of item that is most popular at that time. Items have varied from masking tapes and badges to key rings.

3. Content Investing

Content investing by K Enter, will initially entail investing in the production of film and drama through Solaire Partners LLC, a venture capital firm that specializes in investment into movies, dramas and content related companies, which is one of the Six Korean Entities, K Enter acquired prior to the Business Combination. Revenues are derived from the management fees it receives and performance fees. Solaire Partners LLC’s investment capabilities will also be leveraged to select which films and dramas will be produced by K Enter.

The contribution of each of the Six Korean Entities to total pro forma revenues is noted in tabular form below.

Contribution of each entity to total pro forma revenues in 2022

Unit: $ Millions, %
Entity	Revenues		% of Total
K Enter		-		0	%
Apeitda		3.3		2	%
Bidangil		0.3		0	%
The Lamp		13.9		9	%
Studio Anseilen		-		0	%
Play		130.8		87	%
Solaire		1.4		1	%
Total		149.8		100	%

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Contribution of each entity to total pro forma revenues in 2023

Unit: $ Millions, %
Entity	Revenues		% of Total
K Enter		0.2		0	%
Apeitda		0.1		0	%
Bidangil		5.9		8	%
The Lamp		15.9		21	%
Studio Anseilen		-		0	%
Play		51.6		69	%
Solaire		1.3		2	%
Total		75.1		100	%

Contribution of each entity to total pro forma revenues in 2024

Unit: $ Millions, %
Entity	Revenues		% of Total
K Enter		0.45		1	%
Apeitda				0	%
Bidangil		13.7		23	%
The Lamp		12.0		20	%
Studio Anseilen		-		0	%
Play		31.5		54	%
Solaire		1.0		2	%
Total		58.7		100	%

Aggregate consideration paid by K Enter for the control interests of the Six Korean Entities.

Stock Consideration payable to each of the Six Korean Entities.

Name	Value of K Enter common stock to be issued (US $)		Number of shares
Play Company Co., Ltd.		62,450,402		27,787
The LAMP Co., Ltd		14,986,115		6,668
Bidangil Pictures Co., Ltd		9,987,754		4,444
Apeitda Co., Ltd.		7,493,062		3,334
Studio Anseilen Co., Ltd.		3,769,006		1,677
Solaire Partners LLC.		6,973,906		3,103
Total		105,660,245		47,013

* Exchange rate: 1,470,00 applied.

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Additional consideration payable to the owner Play Company (the “PC Seller”)

Cash payments payable to the PC Seller.

Payment Date	Purchase Price (US $)
Within three (3) months from the listing date		12,269,838
January 31, 2025		6,123,719
January 31, 2026		6,123,719
Total		24,517,276

(*) The payment date is subject to change pursuant to mutual agreement by both parties.

Potential earn out payments potentially payable to the PC Seller.

In the event the business of Play Company, following its acquisition by K Enter, achieves a certain annual average net profit for Fiscal Years 2023 to 2025, then PubCo shall be required to make additional payments to the PC Seller as follows: (i) if the average net profit for the Play Company business for said years is less than 75% (KRW 12.105 Billion) of the target amount separately agreed between the Parties (KRW 16.14 Billion) or exceeds 125% of the said target amount (KRW 20.175 Billion), then PubCo shall pay to the PC Seller in cash (KRW) on January 31, 2027 and January 31, 2028 (for the purpose of this Section, the “Payment Date,” respectively), an amount calculated by multiplying the achieved percentage based on the annual average net profit for Fiscal Years 2023 to 2025 by KRW 9.05 Billion, and (ii) if the average net profit for the said years is not less than 75% of the target amount (KRW 12.105 Billion) and not greater than 125% of the target amount (KRW 20.175 Billion), PubCo shall pay KRW 9.05 Billion to the PC Seller on each Payment Date. Each earn out payment above shall be deemed as an adjustment to the Purchase Price.

An additional payment in cash may be owed to the PC Seller if the shares of PubCo that the shares of New K Enter’s Ordinary Shares convert into at the closing of the Acquisition Merger are sold during the three-month period (the “Sale Period”) following the six-month lock-up period of the newly issued shares of PubCo at a per share price less than the per share value at closing of the Acquisition Merger for the shortfall in share price. The amount to be paid will be reduced by (i) any realized gains from the sale of additional shares of PubCo by the PC Seller between the end of the Sale Period and December 31, 2026, and (ii) the unrealized gain as of December 31, 2026 for the shares that continue to be held by the PC Seller (calculated as the number of remaining shares of PubCo times the difference of (i) the average closing price of PubCo from December 1, 2026 to December 31, 2026 and (ii) the per-share value of PubCo at the closing of the Acquisition Merger).

The PC Seller and K Enter also will enter into a call option agreement under which the PC Seller will be granted an option to acquire the shares of Play F&B Co., Ltd. held by Play Company within three years from the Closing Date. The exercise price for the call option will be the book value of Play F&B Co., Ltd. on the financial statements of Play Company as of the end of Fiscal Year 2022 prepared in accordance with K-GAAP.

Company and Industry Background

1. K Enter businesses engaged in content production (following the business combination): Apeitda Co., Ltd, Bidangil Pictures Co., Ltd., The LAMP Co., Ltd., Studio Anseilen Co., Ltd.

Products and Service offered

The products and services provided

Apeitda	Bidangil	The Lamp	Studio Anseilen
Film production for the global audience	Film and drama production for the global audience	Drama and film production for the global audience	Drama production for the global audience

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Revenues generated (In 2024, 2023 and 2022)

$25.7 million in revenues were generated by the four companies in 2024, $21.9 in 2023 and $17.5 million in 2022. A breakdown by company is shown below. Revenues are generated primarily from providing media productions services.

2024, 2023 and 2022 Revenues and share of total 6 company revenue Unit: $ Millions, %

Year	Apeitda	Bidangil	The Lamp	Studio Anseilen
2024	0 (0%)	13.7 (53.3%)	12.0 (46.7%)	0 (0%)
2023	0 (0.1%)	5.9 (7.8%)	15.9 (21.2%)	0 (0%)
2022	3.2 (2.1%)	0.3 (0.2%)	13.9 (9.3%)	0 (0%)

Note: Studio Anseilen was newly established (Mar. 2023)

Contribution to total revenue

The total revenues of $25.7 million in 2024 would have represented 43.7% of the combined revenues of all six companies.

The total revenues of $21.9 million in 2023 would have represented 29.2% of the combined revenues of all six companies.

The total revenues of $17.5 million in 2022 would have represented 11.6% of the combined revenues of all six companies.

Current operational status of business

Upcoming Film & Drama Lineup ⁽¹⁾

Format	Title	Production	Expected	Director	Writer	Starring	Status
Drama	Trigger	Bidangil Pictures	2025	Kwon Oh-Seung	Kwon Oh-Seung	Kim Nam-Gil	A Netflix Original series / Currently in production
	Aema	The Lamp Pictures	2025	Lee Hae-Young	Lee Hae-Young	Lee Haree	A Netflix Original series / Currently in production
	Scarecrow	Studio Anseilen	TBD	Park Jun-Woo	Lee Ji-Hyun	TBD	A TV series / Currently in development
	Ace Club	Bidangil Pictures	TBD	TBD	Kim Jia	TBD	An OTT original series / Currently in development
Film	Resonance	Bidangil Pictures	2024	Jung Da-Won	Jung Da-Won	Jin Seon-Kyu	A theatrical release / Currently in post-production
	Starlight is Falling	The LAMP Pictures	2024	Choi Kuk-Hee	Choi Kuk-Hee	Esom	A theatrical release / Currently in post-production
	Pavane	The LAMP Pictures	2025	Son Yong-Ho	Son Yong-Ho	TBD	A theatrical release / Currently in production
	Blood for Blood	Bidangil Pictures	TBD	Son Yong-Ho	Son Yong-Ho	TBD	A theatrical release / Currently in development

Trigger Aema Resonance

Note (1) The summary lists are selected examples to illustrate certain capabilities of K Enter and do not, by themselves, reflect the track record of K Enter as a whole.

In the drama segment, we highlight two primary projects that started production in 2023. It is the production of Aema (The Lamp) and Trigger (Bidangil). Aema is a Netflix original series. According to Netflix’s press release it is a fictional comedy revealing the harsh realities of actors behind the glitzy veneer of Korean show business in the 80s. Trigger is also a Netflix original series. The series has been described in the local press as an action thriller set in gun-free South Korea and the societal impact when firearms suddenly become widely available.

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In the film segment, Bidangil is currently in production for the movie Resonance. The Lamp is currently in production of Starlight is Falling and Pavane

Change following business combination and future business activity

The objective for K Enter’s drama and film production business is to develop a diverse portfolio of shows with global appeal. K Enter aims to curate a wide range of shows and facilitate partnerships with distributors to showcase K Enter’s work to audiences in Korea, Southeast Asia, and beyond. K Enter’s expansion strategy involves not only drama and thrillers but also venturing into other genres such as romantic comedies.

We believe that the high quality of K Enter’s content will enhance its marketability, facilitating distribution. Utilizing K Enter’s in-house expertise in developing merchandising, we also intend to establish stronger connections with K Enter’s audience. Additionally, by retaining intellectual property (IP) rights for K Enter’s productions, we anticipate achieving greater financial returns from K Enter’s creative endeavors.

Timeline and status of developing such capabilities

Drama and film production is currently underway, and K Enter’s plan is to expand these efforts further. We will leverage K Enter’s in-house resources and invest in high-quality content to enrich K Enter’s portfolio. 2024 marked the initiation of this journey, and the tour goal is to strengthen and diversify K Enter’s collection of shows.

Industry in which Apeitda Co., Ltd, Bidangil Pictures Co., Ltd., The LAMP Co., Ltd., Studio Anseilen Co., Ltd. competes (following the business combination): Content production industry

Industry overview and market opportunity

The Korean content market is estimated to produce around $104 billion in revenues in 2025 and has grown at 5.0% CAGR since 2019. (See: Korea Creative Content Agency (KOCCA), “2023 Yearly Analysis of Content Industry Trends”, p.66 (2023 kocca.kr)). This industry includes sectors such as content that is broadcasted (TV shows, dramas, etc.), publishing, games, music, animation, movies, etc.). Korean content has gained popularity in Northeast Asia, including Japan and China, and has spread to Southeast Asia, the United States, and Europe. With the development of digital transmission technology, the spread of social media platforms like YouTube, and the growth of global content platforms like Netflix, Korean content has gained significant attention worldwide. Exports have also been growing to $13.3 billion in 2023 and has grown at 6.8% CAGR since 2019. Among the Total viewing hours on Netflix, Korean content occupies 17% of the non-English content among top 500 Shows, while the United States occupies 56~59% of the total, including English content, and Korean content occupies 17% (Source: Netflix). Korean content is also popular globally, with 30 out of 100 TV shows worldwide being Korean content, compared to 32 from the United States. (See: Variety, “Korea Rivals the U.S. in New Scripted Shows’s Global Internet Popularity”, Jun. 28, 2023, (variety.com)) Due to its high popularity overseas, CNBC, CNN, Reuters, CBS reported Netflix announced it would invest approximately $2.5 billion in Korean content from 2024 to 2028. The content industry is the third-largest exporter in the Korean economy, making it an important driving force for the economy. Additionally, Korea has a base of an eager and discerning audience. In 2019, South Korea had the highest number of moviegoers per capita, with 123 million visits to theaters, and an average of 2.4 movie admissions per person, making it the country with the highest movie consumption in the world. (Source: Kobis, “Korea box office admissions down 1.6% in 2024 as local titles dominate”, Kobis, the Korean Film Council’s box office tracking service (Kobis)).

K Enter plans to compete in this industry with its internal drama production company and through its acquisitions of Apeitda Co., Ltd., Bidangil Pictures Co., Ltd., The LAMP Co., Ltd., and Studio Anseilen Co., Ltd.

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Customers

Customers for content production are primarily companies that provide content to audiences. They include companies that distribute content such as traditional TV broadcasters, cable companies, streaming companies, Internet Protocol Television (IPTV) operators and major cinema chains that distribute, produce, and invest in movies such as CJ ENM, Lotte Entertainment. These customers have points of contact with the end audience. Our content production companies expect its customer base to broaden globally as Apeitda grow. Our content production companies’ customers also include the end audience that watch its content and are the ultimate evaluators of the quality of the work.

Suppliers

Movies and dramas are collaborative efforts involving a team of experts which contribute to the final product. Some of the major contributors are listed below. Directors: They determine and oversee the visual and directorial direction of the content. Writers: They are responsible for developing the story and script for the content. Actors: They portray the main characters of the content, breathing life into the story. Cinematographers: They contribute to filming and implementing the visual style. Art Directors: They design and create the aesthetic elements and settings of the content. Studio set providers. They provide and construct the necessary shooting spaces. CG/VFX (Computer Graphics/Visual Effects): They enhance the visual elements through computer-generated graphics and special effects. Additionally, investors who provide funding for content production can also be considered suppliers.

Sales & Marketing

Sales and marketing play crucial roles in the revenue aspect of the films and TV series production industry. In marketing IP video content, we plan to focus on the following elements:

(1) Trailers and Promotional Materials: the video content trailers, and promotional materials capture the interest of the audience, encouraging them to make reservations or watch the video content in advance. These visual media materials play a vital role in highlighting the core story and compelling characters of the video content. Extensive advertising and various promotions are carried out to increase the exposure of trailers and promotional materials, aiming to establish high awareness and preference among the video content’s primary customers, the audience.

(2) Social Media Marketing: In recent years, social media marketing has emerged as a critical element in the video content marketing. Social media platforms enable direct interaction with the public and are used to quickly disseminate information about the video content. Various social media channels such as Twitter, Facebook, Instagram, and YouTube are leveraged to increase the frequency of exposure to the video content among the audience. Efforts are made to encourage audience interest in the video content encountered through social media, ultimately leading to the video content attendance.

(3) Special Events and Premieres: the video content-related special events and premieres provide audiences with the opportunity for direct interaction with actors, directors, producers, and others involved in the video content. This can elevate audience affinity for the video content and potentially lead to viral marketing.

(4) Reviews and Press Coverage: the video content reviews and press coverage can emphasize the strengths of the video content and create a positive impression among audiences. Therefore, press releases and reviews related to the video content are disseminated to contribute to the video content’s success through media promotion All these elements collectively contribute to the marketing strategies employed within the video content industry.

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Competition

Our content production companies face numerous competitors in the video content production industry. Every production studio that creates film or drama video content is a competitor of K Enter. Among them, SLL, formerly known as JTBC Studios, is a well-known Korean drama production, distribution and K-pop agency that will compete directly with K Enter related to K content as well as Studio Dragon Corp. Kakao Entertainment Co., Ltd is another, much bigger competitor in the market.

Competitive Strength

First K-Enter has numerous talented and experienced creators who will provide a diverse range of quality content. One strength of K Enter lies in its ability to secure investment. Content production typically requires substantial funding, and acquiring this funding can be time-consuming and challenging. K Enter can directly invest in content projects. It can also leverage its content-specialized venture capital firm Solaire Partners, which we believe will provide sufficient financing to secure the IP content of attractive projects which can lead to greater profitability. Furthermore, K Enter does not own its own streaming platform. This offers flexibility to collaborate independently with various platforms globally and maximize potential earnings.

2. K Enter business engaged in content merchandising (following the business combination): Play company Co, Ltd.

Products and Service offered

Play’s primary focus is on creating specialized video merchandise for renowned K-pop artists. Play also engages in the food and beverage industry, which contributed approximately 18% to the overall sales in 2024.

Revenue generated (In 2024, 2023 and 2022)

$31.5 million in revenues were generated in 2024, $51.6 million in 2023 and $130.8 million in 2022. Revenues were generated primarily from the sale of specialized video merchandise packages. Approximately 18% of revenues in 2024 were generated from food and beverages in the form of baked goods and coffee. In 2023 26% and 2022 10% of revenues came from food and beverages.

Contribution to total revenue

Total revenues were $31.5 million in 2024 they would have represented 53.7% of the combined revenues of all six companies.

Total revenues were $51.6 million in 2023 they would have represented 68.7% of the combined revenues of all six companies.

Total revenues were $130.8 million in 2022 they would have represented 87.3% of the combined revenues of all six companies.

Current operational status of business:

We highlight some key projects this year including the release of the following merchandise:

- Release of Aespa Aepisode Synk #1 merchandise in 2025.

- ATEEZ Merchandise for 2025 world tour. 

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In 2022 approximately 80% of sales have come from HYBE specifically from its two subsidiaries Weverse Company Inc. and Universal Music Japan. In 2023 52% of sales came from HYBE specifically from its two subsidiaries Weverse Company Inc. and Universal Music Japan. In 2024 18% of sales came from HYBE.

While Play used to have a more comprehensive agreement with HYBE, in 2024 HYBE signed a limited, distribution only agreement with Play Company targeting the first half of 2024. This distribution agreement with HYBE was signed on March 19, 2024 for four specific merchandise products. This one-year distribution agreement yielded limited revenues to Play Company in 2024. A copy of a redacted version of Play Company’s agreement with Hybe, dated January 26, 2024 is attached as Exhibit 10.56 to the Registration Statement on Form F-4/A filed by the Company with the SEC on December 23, 2024. Play Company is in the process of negotiating new agreements with HYBE and its subsidiaries for 2025 and 2026 but there is no guarantee any such agreements will be executed and whether the terms will revert back to a comprehensive agreement noted previously. As of July 7, 2025 there are no agreements in place with HYBE. If the agreement is not executed or if the terms are changed Play Company runs the risk that revenue will decline further from HYBE.K Pop agencies can exert significant buyer power over Play Company.

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.

1. Video Publication Production and Distribution for SM Entertainment
SM Entertainment is a leading K-pop agency. Play Company has secured exclusive rights to produce and distribute video publications for all SM artists. The two companies have been in ongoing discussions about new product releases, and Play launched three initial products in 2024. These early releases were smaller in scale and did not feature SM’s top artists. However, Play expects that future product launches will potentially lead to higher sales per release. In early 2025, Play released its first video publication for AESPA, one of SM’s flagship artists, which generated over USD 1 million in revenue. Additional product releases are currently being discussed.

2. Expansion of Product Line-Up Including Concert Merchandise
In 2024, Play Company secured the rights to sell merchandise during ATEEZ’s World Tour. This arrangement ATEEZ is an artist managed by KQ Entertainment. Play prepared new products, including ATEEZ light sticks sweatshirts, hoodies, sling bags, etc. Sales of ATEEZ World Tour-related merchandise in 2024 generated approximately USD 4.5 million in revenue. This arrangement will continue in 2025. As a continuation of this work with ATEEZ, in 2025, Play Company sold merchandise directly at ATEEZ’s European and North American tour locations. Leveraging this experience, Play Company is negotiating with other entertainment companies to secure similar rights for the sale of official World Tour merchandise.

3. New Artist Partnerships and Business Expansion Beyond K-pop
Similar to its exclusive agreement with SM Entertainment, Play Company is actively pursuing comparable agreements with other K-pop agencies. At the same time, the company is expanding beyond K-pop. In 2024, as part of this diversification effort, Play Company signed an agreement with actor Byun Woo-seok to produce and distribute merchandise and video content for his fan meetings. This project generated approximately USD 2.5 million in revenue. The company is also working to capture additional opportunities tied to KWM’s movie and drama actors, particularly by marketing merchandise during fan events.

Change following business combination and future business activity

Play plans to continue its ongoing efforts to elevate the visibility of K-pop artists. To achieve this, we aim to collaborate with leading K-Pop agencies and work closely with their most popular artists. Furthermore, Play is committed to expanding its footprint in international markets, with a specific focus on Japan and Southeast Asian regions. Play recognizes the global appeal of K-pop and aim to capitalize on this by growing Play’s business in creating specialized video merchandise tailored for K-pop fans worldwide.

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Timeline and status of developing such capabilities

The most immediate priority is to continue to develop and expand fandom-targeted merchandisable IP of K Pop artists that will resonate with fans. Play will also expand its merchandising business in Japan by partnering with top tier K Pop and J Pop artists.

Within the next two years we aim to enter new markets with a particular emphasis on Southeast Asia. By understanding and meeting the unique demands of each market, we aim to cultivate a global fan base for Play’s specialized merchandise. In addition, we want to create a new portfolio of collectible merchandise for non K Pop content including from film and TV series.

Industry in which Play company Co., Ltd. competes (following the business combination): Content merchandising industry

According to the Korean Creative Content Agency’s analysis of the fourth quarter of 2024 and annual trends in the content industry, the revenue of the Korean music industry reached $9.2 billion in 2024. This industry has grown at a 4.5% CAGR since 2019. This industry consists of several segments including physical albums, digital music, performances, and licensing. During COVID-19, off-line performances were not held for about two years, but online streaming performances were introduced as an alternative. Since then performers have introduced live streaming systems in concert venues to simultaneously hold offline and online hybrid performances. Many agencies are now broadcasting performances to platforms such as cinemas. Against this backdrop, K-Pop merchandising (“MD”) market has been growing and we expect it to become larger. We estimate the four major entertainment agencies in Korea (HYBE Co., Ltd., JYP Entertainment Corporation, SM Entertainment Co., Ltd., YG Entertainment Inc.) earned $592 million in MD sales and licensing in 2022, accounting for more than 23% of their total revenues. (Source: KB Securities, May 2, 2023, Focusing on what only Hybe can do, p.6, (kbsec.com); Daishin Securities, September 6, 2022, Entertainment p. 62, (daishin.com) SM 2022 Quarterly Earnings Reports; Samsung Securities, May 12, 2023, YG Entertainment, p.2 (samsungpop.com); and Kyobo Securities, July 12, 2023, JYP Ent, p.2, (mk.co.kr), internal company estimates.) Merchandise purchase by K-Pop fans is driven by emotion and we find that they will purchase multiple physical CDs to obtain a specific item that is randomly placed in CDs or to obtain tickets to attend fan meetings. The specialized video merchandise we provide appeals to the same fan base. These fans have been willing to purchase higher ticket amounts. We expect the demand for merchandise will expand beyond just music related goods to photos, clothing, accessories, cosmetics, food, and beverages. In addition, we expect demand for K-Pop merchandise to grow internationally. Major entertainment agencies in Korea have opened pop-up stores related to K-Pop merchandise. K Enter plans to compete in the content merchandising industry through its proposed acquisition of Play Company.

Customers

The main customers of Play Company are K-pop agencies that work with K-Pop artists. While we work with large agencies we also work with smaller agencies with budding stars as well as other popular Korean music genres other than K-Pop that have a strong fan base in Korea. The fans of the K-Pop artists are also important customers that evaluate the quality of Play’s video merchandise as well as the ancillary photo albums, calendars and other items that are included in Play’s merchandise package.

Suppliers

Play’s suppliers are also the talent agencies that work with K-Pop stars that supply the video content in its video merchandise. Play also work with manufacturers of photo albums, printing services and other suppliers for the packaged merchandise we create.

Sales & Marketing

Play’s sales and marketing is focused on supporting music talent agencies (such as SM Entertainment Corporation, KQ Entertainment Co., Ltd.) which manage the artists and the distributors of the merchandise goods. Play works closely with both parties to design an attractive merchandise to be released, including special gifts, photo cards, and other inducements such as the opportunity to have a video call with their favorite artist that will be included in the package. Play also works with lesser known artists and talent agencies to develop new talent which could turn out to be the next stars. Play started working with some of the biggest K-Pop artists long before they became famous.

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Competition

Play believes its main competitors are the internal teams within major music talent agencies. Talent agencies could bring these capabilities in house, but the competencies required to produce, manufacture, and distribute quality video merchandise is not necessarily their core competency. Talent agencies have come to understand the tight deadlines Play Company works under to deliver this video merchandise and have come to appreciate the value of one-stop solution that Play Company provides. We are aware of other companies including Copan Global that competes with us. While some players can create the merchandising materials, we believe many are not able to produce the critical specialized video content that is included as part of the package. In terms of the quality of the video content we believe we create the highest quality content. Play Company’s competitiveness comes from its ability to produce, film, and edit to create superior video productions of the artist in their natural state especially during concerts.

Competitive Strength

Play Company’s video merchandises are planned to be released in regular intervals during the year. This is a model Play Company first developed. The merchandise is released during specific times and events such as concerts, album releases and fan meetings. Play Company’s ability to produce a merchandise package consisting of quality video merchandise and other goods that fans (primarily female teenagers) will want, and then manufacture, and distribute these goods on time is one of its competitive strength. New, desirable, goods must be continuously created yet be consistent with the image of the artist. Play Company is also a pioneer by providing a full service end-to-end solution to talent agencies by designing, producing, and distributing video merchandise. This turnkey approach is also a unique competitive strength. Management companies that have worked with Play company have seen the benefit of additional meaningful sales and profits from video merchandise products which tangibly benefit both the artist and their K-pop agency and have thus been willing partners.

4. K Enter business engaged in content investment (following the business combination): Solaire Partners LLC.

Products and Service offered

Investments into the cultural content sector particularly movies.

Revenue generated (In 2024, 2023 and 2022)

$1.0 million in revenues were generated by Solaire in 2024, $1.3 million in 2023, and $1.4 million in 2022. Revenues are generated from investment management revenues in exchange from investment management services the includes fund administration, fund compliance, fund transfer agent and fund distribution services. Investment management services are calculated as a contractual percent of the fund Solaire Partners manages for its clients. For successful projects profit sharing also contributes to revenues.

Contribution to total revenue:

Total revenues of $1.0 million in 2024 would have represented 1.8% of the combined revenues of all Six Korean Entities combined.

Total revenues of $1.3 million in 2023 would have represented 1.7% of the combined revenues of all Six Korean Entities combined.

Total revenues of $1.4 million in 2022 would have represented 0.9% of the combined revenues of all Six Korean Entities combined.

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Current operational status of business

Following the success of “12.12: The Day”, which ranked No. 1 at the Korean box office in 2023, Solaire also participated in the investment of “Exhuma”, the top-grossing film in Korea in 2024. “Exhuma” was released on February 22, 2024, and attracted more than 11.51 million viewers. The film exceeded its break-even point through theatrical revenues alone and further generated substantial revenue from overseas distribution and ancillary rights. As of December 31, 2024, the investment yielded an estimated return of approximately 120%.

Among the top 10 box office films in Korea in 2024, Solaire invested in 7 titles, including “Pilot”, in which the company served as a lead investor. “Pilot” surpassed 4.17 million cumulative admissions, exceeding its break-even point through domestic theatrical performance alone. It is currently available via OTT platforms, and consistent income from ancillary rights is expected to further enhance overall profitability. In addition, other co-invested titles such as “Firefighters”, “Escape”, and “Handsome Guys” have also achieved break-even performance.

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.

Change following business combination and future business activity

Solaire Partners will continue to be dedicated to investing in the expanding Korean cultural content industry. One change, however, involves actively supporting K Enter in its content investment initiatives. Solaire Partners’ role extends beyond traditional investment to providing strategic advice, assisting in the selection of content that possesses the potential to resonate with a global audience.

Timeline and status of developing such capabilities

Solaire will grow by leveraging the capabilities it currently has today.

Industry in which Solaire Partners LLC competes (following the business combination): Content Investment industry

Korea’s cultural venture capital market is estimated to be $2.9 billion. (See: Korea Creative Content Agency (KOCCA), “2024 Half and Yearly Analysis of Content Industry Trends”, p. 117, (kocca.kr)). The Korean cultural industry consists of various sectors such as film, drama, music, games, and e-sports. Growth has been driven in part by government policies to support the growth of this industry, and the increase in both individual and institutional investors who want to invest in the growth of this industry. The Korean content investment industry is driven primarily by venture capital firms, strategic investors that both invest and distribute content such as CJ ENM and Lotte Entertainment as well as financial investors. Financial investors are primarily securities firms, banks, insurers, and other financial firms. Another important player in the content investment industry is KVIC, a venture capital specialist managing fund of funds that is backed by the Korean government.

Customers

Solaire is a specialized VC firm focused on cultural content. Solaire in the past has secured some part of their funding from the Korea Venture Investment Corporation, a government agency, and other public agencies such as the Regional Film Council. Large Korean institutional financial investors and major cinema chains that distribute, produce, and invest in movies also fund Solaire’s projects. Past performance is not indicative of future performance and there can be no assurance that prior investors in Solaire projects will invest in K Enter’s projects.

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Suppliers

Investment targets include production companies who require investments for their production. Solaire reviews on average 250 movie scenarios every year from production companies that seek investments. Solaire also invests in the projects of major cinema chains that distribute, produce, and invest in movies. Within this environment suppliers can also be customers.

Sales & Marketing

In the context of content investment, sales and marketing are relevant when creating a fund. Sales efforts are directed at potential investors, including the following segments: Financial Investors (Banks, Securities Firms, etc.): Seeking Profit and Stability - Investors looking to pursue investment returns. Strategic Investors (Production Companies, Distributors, etc.): Synergy and Collaboration - Investors aiming to align their internal investment portfolio with the fund’s objectives. Public Investors (Korea Venture Capital, Regional Film Commission, etc.): Achieving Social Goals - Government or public sector entities seeking to achieve specific social objectives through their investments.

The stages of fund sales targeting these investors are as follows:

(1) Targeting: Identifying potential investors that align with the characteristics of the fund, such as film or drama-related projects, and understanding their key needs.

(2) Proposal Writing: Creating a detailed proposal that explains the fund’s objectives, strategies, and potential profitability.

(3) Meetings and Presentations: Conducting presentations based on the proposal, addressing investors’ questions comprehensively, and emphasizing the advantages of the investment.

(4) Negotiation and Terms Definition: Engaging in negotiations with investors and defining investment conditions, amounts, and other terms.

(5) Contract Signing: Finalizing the negotiation process by signing the investment agreement.

Solaire Partners has several marketing strengths when it comes to establishing and operating funds for customers and suppliers, as follows:

1. Solaire Partners has a well-balanced team composed of content industry experts with extensive experience in content investment and a financial professional holding a CFA qualification. With a deep understanding of the content industry and significant expertise in business development and M&A, the team brings a high level of expertise to the table.

2. Solaire Partners has formed a wide-reaching network of industry players both domestically and internationally, known for their competitive IP production capabilities. Through years of content investment and collaboration, Solaire Partners has established strong relationships with proven producers and directors, providing access to high-quality information about their projects and opportunities to invest in their projects.

3. Solaire Partners has successfully developed and operated South Korea’s first cultural content index fund with funding primarily from financial institutions such as banks, securities firms, and insurance companies.

Past performance is not indicative of future performance. Thus, the fact that Solaire had projects in the past, does not mean that K Enter’s will have successful project in the future.

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Competition

Competitors in the cultural venture capital industry include Daesung Private Equity, a listed company in KOSDAQ with an AUM of $220 million, and KC Ventures specializing in cultural content with an AUM of $139 million. See Disclosure Information of Venture Capital Analysis (DIVA), (vcs.go.kr).

Solaire Partners competes with other VC firms that specialize in the content sector. There are others venture capital firms that invest in the content sector as part of a broader investment strategy.

Competitive Strength

Solaire Partners has a unique funding approach, unlike most Korean cultural VCs that initially rely on investments from the Korea Venture Investment Corp (“KVIC”), Solaire Partners initiated its business using funds from financial investors to create movie investment funds. KVIC is a venture capital specialist managing fund of funds that is backed by the Korean government.

This was made possible due to the Solaire team’s deep understanding of the Korean content industry, which they gained through years of experience in the sector. Unlike other VCs, many of which have financial backgrounds and venture into cultural content VC, Solaire Partners’ team brings a deeper industry-specific knowledge. Solaire Partners has recorded a cumulative AUM of $112 million (Period covers Jan. 1, 2017-Dec. 31, 2024, from internal company documents). In over seven years, Solaire Partners’ has invested in 184 movies, with 47% of invested commercial movies (production cost over $2.3 million) surpassing break even. This is significant as the percentage of Korean commercial movies in the market that achieve break-even is typically around 33%. See KOFIC, “2021 and 2022 Korean Film Market Analysis Report”, p. 101, (2021 kofic.or.kr), p. 101-102 (2022 kofic.or.kr).

Past performance is not indicative of future performance and there can be no assurance that investors in Solaire Partners will be able to obtain investors in future K Enter’s projects nor that K Enter’s future projects will be successful.

Our goal and vision

To achieve its goals we plan to initially secure the intellectual property (“IP”) rights for quality drama and film content (as measured in terms of audience reception or artistic merit) instead of following the traditional content production business model in Korea where streaming companies have provided content producers a certain level of markup (5-10%) above the cost of production while taking the full IP rights of what is produced. By investing in at least 30% of the production cost of films and drama we will be able to secure its share of IP rights. We believe that by owning the IP rights of quality content, we will be able to monetize on the value of this IP as it is distributed globally. Additionally, we will nurture, enable film and drama creators to expand by providing them with an alternative source of financing. This contrasts with the existing practice where creators rely primarily on local major cinema chains and streaming (subscription video on demand companies) for financing. Leveraging Solaire Partners’ expertise, we expect to be able to invest in film and drama and content companies.

We will also help creators distribute their content globally and find a wider audience for their work. K content popularity on global streaming platforms has increased in part because it is cost efficient (20-30% of Hollywood costs) and in recent years has become one of the most popular forms of non-English content especially in Asia. In the case of Squid Games it cost Netflix $2.4 million per episode vs. $8 million for Stranger Things and $10 million for The Crown according to Variety. Squid Games beat Stranger Things in terms of viewership during the first 91 days since release to become one of Netflix’s most popular series ever. Over 4 billion hours were viewed for Squid Games franchise. According to KOCCA K content exports (including video games, music, animation, movies, TV series, etc.) grew from $4.3 billion in 2011 to $13.6 billion by 2024. (See: Korea Creative Content Agency (KOCCA), “2024 4th Quarter and Yearly Analysis of Content Industry Trends”, p. 15. (2024 kocca.kr)) K content has been growing in worldwide popularity and K Enter believes there is still room for continued growth.

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Our ultimate vision is to become a leading tech and IP-based total entertainment company, covering a wide spectrum of content genres, formats, and technologies. We plan to expand our business capabilities and market presence by recruiting new talents and acquiring accretive M&A targets. Our vision is focused on creating an IP-based business model, global expansion and ecosystem expansion.

IP-Based business model

(1) integrate core capabilities to create an IP-based business model maximizing synergic value creations with content IPs

(2) extend content investment to secure and fully capture market potential of content IP

(3) Financing and profit-sharing alternatives for creators to existing outsourcing models for global streaming platforms

Global Expansion

(1) expand to Southeast Asia and Japan, by developing local distribution networks and co-production partnerships

(2) Expect strong co-production opportunities in Southeast Asia by transferring K Content expertise in producing local content

(3) enter into American and European markets based upon our strong track records in Asian markets

Ecosystem Expansion

(1) We plan to identify innovative opportunities for crossover synergies between different content genres, formats and technologies

(2) We plan to acquire new business capabilities to expand the IP-based ecosystem through recruiting new talents and executing M&A transactions, in such areas as webtoons, animations, music, talent management, games and interactive content

We aim to create a diversified content ecosystem by acquiring controlling equity interests in the Six Korean Entities and then seeking out additional strategic acquisitions spanning from video content to gaming and interactive content. In the future, we plan to expand video capabilities and expand into webtoons and webnovels to adapt as IP sources for film and TV series production, and then we expect to acquire talented musicians, actors and creators and tech-based interactive content capabilities to fully leverage our IP libraries

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DIRECTORS AND EXECUTIVE OFFICERS

K Wave’s Executive Officers and Directors

The following table sets forth the names, ages and positions of the directors and executive officers of K Wave Media Ltd.

Name	Age	Position
Pyeung Ho Choi	66	Co-Founder and Chairman
Yong Jae Lee	49	Co-Founder and Director
Ted Kim	53	Co-Founder, Chief Executive Officer, and Director
Hyung Seok Cho	46	Director
Yang Kan Chong	70	Director
Tae Woo Kim	41	Director
Jaekeun (Jason) Kim	43	Director
Yong (Howard) Fang	47	Chief Financial Officer
Jihun Byun	45	Chief Accounting Officer
Jeong Hoon Bae	45	Head of Content Production

K Wave’s Board Members

Pyeung-ho Choi. Mr. Pyeung-ho Choi serves as Chairman of K Wave and has been a member of the Board since May 15, 2025. Mr. Pyeung-ho Choi is the co-founder and Chairman of K Enter Holdings Inc. and the founder and CEO of Solaire Partners LLC, one of the leading Korean content VC firm and one of the pioneers in the Korean entertainment industry. Prior to Solaire Partners LLC, Mr. Choi was the appointed President Fund Manager of the Union Global Contents Investment Fund at Union Investment Partners Inc. from 2012 to 2016. At a size of US $120 million, the fund partnered with major Korean distributors and financiers, the Korean government, and foreign investors, with an aim to invest in international co-productions to globalize the Korean film and content industry. Through Mr. Choi’s vast experience in content investment, the Union Global Contents Investment Fund collaborated with Korean companies, directors, and actors in co-productions with countries including the United States, China, and Japan. Before joining Union Investment Partners, Choi was the Chief Executive Officer of Sidus FNH at Korea Telecom Group, where he oversaw the company’s film financing, production, and distribution operations. He spearheaded the aggregation and digital distribution of content through multiple new media platforms that Korea Telecom Group owned and operated from 2008 to 2011; these platforms included IPTV, Internet VOD, Satellite TV, and mobile.

Mr. Choi began his entertainment industry career at CJ Group, where he was one of the founding members of CJ Entertainment (CJENM). He served as Executive Vice President at CJENM from 2000 to 2007 after serving as General Manager of strategic planning and international business teams from 1995 to 1999. He played a critical role in shaping CJ Group’s film business portfolio, including: the inception of CJ Entertainment through the CJ Group’s investment in DreamWorks SKG in the United States; the joint venture that distributed CJ films across Asia; the formation of CJ Group’s exhibition arm, CGV, that became Korea’s largest exhibitor, initially jointly established by CJ Group, Golden Harvest, and Village Roadshow. During his 12 year tenure at CJ Entertainment, Choi financed and distributed a number of notable Korean films that introduced many talented Korean directors and actors. He launched filmed entertainment, music licensing, TV drama series, animation, and cable broadcasting businesses. In 1982, he started at the Samsung Group in business planning at CJ CheilJedang Corporation, where he was responsible for business strategy planning, M&A, overseas business and export, and overseas marketing. From 1987 to 1994, he served as head of the strategy planning team and head of the overseas business team. Mr. Choi holds a Ph.D. in holographic engineering, a Master’s degree in 3D contents from Kwangwoon University, and a Bachelor’s degree in chemical engineering from Youngnam University.

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Young Jae Lee. Mr. Youngjae Lee serves as a member of the Board of Directors of K Wave and has been a member of the Board since May 15, 2025. Youngjae Lee co-founded K Enter Holdings Inc. and Solaire Partners LLC in October 2023 and June 2007, respectively, and has been serving as their Chief Executive Officer since then. Youngjae Lee worked at KT from 2000 to 2016, where he undertook various positions such as a team member, deputy director, and project leader. During his stay at KT, Mr. Lee oversaw subsidiaries such as NTC and Mongol Telecom, handled mergers and acquisitions planned by KT, led business developments of KT, and was responsible for various in-house consulting tasks. While overseeing KT’s Russian telecommunications subsidiary NTC in Vladivostok, he contributed to its growth and exit strategy and made it the largest telecommunications operator in the Far East region. From April 2006 to September 2010, he served as the Chief Financial Officer and the Chief Information Officer at Sidus FNH, a movie production company acquired by KT as its strategy to enter the Korean content media industry. This experience equipped him with insights into the content industry, where he introduced real-time production management systems to enhance budget efficiency in movie productions. Starting in October 2010, Mr. Lee was responsible for overseas subsidiaries and international telecommunications operators within KT’s in-house consulting department. During this period he made substantial contributions to the growth of KT’s subsidiaries East Telecom and EVO in Uzbekistan by conducting management assessments and formulating growth strategies. His efforts led to KT’s recognitions such as Outstanding Employee Award in 2011, and further responsibilities such as Project Manager position for the Game Changer Project at Botswana’s government-owned telecommunications company, BoFiNet in 2015. Through Mr. Lee’s initiative, BoFiNet gained global recognition in 2016 as the most innovative telecommunications company. In 2017, Mr. Lee founded Solaire Partners, a venture capital firm specializing in content investments. Solaire Partners has amassed assets under management (AUM) amounting to USD $112 million and secured investments of USD $44 million from the South Korean government for four distinct funds, with Mr. Lee taking on the role of manager for three of these funds. Up until the date of this prospectus, Solaire Partners invested in approximately 200 films, with 49% surpassing the break-even point, significantly outperforming the market average of 33% and even surpassing the 16% market average return. Under Mr. Lee’s leadership, Solaire Partners has achieved substantial success by investing in various films and content, leveraging South Korean commercial film industry data to enhance investment strategies and yield higher returns. Furthermore, Solaire Partners has been diversifying investments into the digital human and virtual production studio sectors to lead the paradigm shift in the Korean content industry. Mr. Lee received a degree in Business Administration from Chungbuk National University in 2000. He furthered his education by participating in the Global MBA program at Sungkyunkwan University and attending Indiana University’s Kelly Business School as an exchange student, enhancing his academic background class of 2015. He also holds the Chartered Financial Analyst (CFA) qualification, demonstrating his expertise in financial matters. Currently, he serves as an instructor for the Cultural Content segment of the Korean Venture Capital Association’s Venture Capitalist program, starting in 2021.

Ted Kim. Mr. Kim serves as Chief Executive Officer and a member of the Board of Directors of K Wave and has been a member of the Board since May 15, 2025. Mr. Kim founded Global Fund LLC in August 2013, a US-based private equity firm that focuses on investing in high-growth companies across various industries and geographies, including the pre-IPO period, and has been serving as its Managing Partner ever since. Global Fund LLC is also the managing member of Tribeca Global SPAC Fund I, III, and IV LLC which were founded during 2021 and 2022. Mr. Kim is a highly experienced and disciplined private equity specialist who has successfully launched and closed multiple U.S.-based private equity funds. Mr. Kim has also been a member of the Korea-America Business Summit, Washington D.C., since 2019. He co-founded Global Star Acquisition I LLC in September 2022, the sponsoring entity for the US Nasdaq listed SPAC “Global Star Acquisition Inc.”, and served as its Managing Member until May 2025. He also co-founded K Enter Holdings Inc. in January 2023. Mr. Kim is also an Attorney at Law focusing on mergers and acquisitions and cross-border transactions. He was a Guest Lecturer at Tsinghua University in 2005 on American venture capitalism. Mr. Kim received his Juris Doctor degree from the Pennsylvania State University’s Dickinson School of Law in May 1997. He received his Bachelor of Arts degree in Finance and Politics, a double major, from the Catholic University of America in May 1993.

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Hyeng Seok Cho. Mr. Cho and has been a member of the Board of Directors of K Wave since May 15, 2025. Mr. Cho began his career at Between Corporation which was formed by former members of the DVD team of Samsung’s content division. Next, he worked at SBS, one of the leading Korean broadcasting channels. He oversaw the division that produced DVDs of Korean dramas and movies as well as K pop artists. Building on his experience working with K pop artists he founded Play Company (Play) in 2012. He currently serves as its CEO. Play works with Korea’s top tier K pop talent agencies and pioneered a full service end-to-end solution of designing, producing, and distributing video merchandise. This model has allowed talent agencies and artists to see meaningful sales and profits from video merchandise products. In 2022 Play’s revenues exceeded $134 million. The artists Play has worked with includes BTS, Seventeen, Twice, Enhypen, TXT, Stray Kids, GOT7, ATEEZ, Block.B, CRAVITY, ASTRO, and Monsta X. Under his leadership Play has broadened the offerings of merchandise products and has even expanded to creating merchandise for popular Korea actors such as Lee Joon-gi, Park Bo-gum, and Kim Seon-ho. Cho Hyung Seok is a graduate of Kwangwoon University and holds a Bachelor’s degree in chemistry.

Yang Kan Chong. Mr. Chong and has been a member of the Board of Directors of K Wave since June 19, 2025. Mr. Chong is a also member of the board of directors of Global Star, serves as a member of Global Star’s board of directors and as Chairman of Global Star’s Compensation Committee. Mr. Chong brings thirty years of expertise in the areas of energy, oil, gas, power, and infrastructure in the international arena. He is experienced in senior management in multi- and crossed-cultural environments. Mr. Chong holds a strong network of key contacts in the financial industry, and has accumulated extensive experience in treasury, financial management, and capital operation. Mr. Chong has previously served as Managing Director of Asia Petroleum Technology Pte Ltd, President and CEO of the U.S.-listed China New Energy Group Company, Group Deputy CEO of the Singapore-listed China EnerSave Limited, and several U.S. energy giants and Singapore Government-linked companies. From 2018 to 2019, Mr. Chong served as an independent director of China Star Food Group Ltd. Since 2016, Mr. Chong has acted as a Director of Sport Lifestyle Initiative Pte Ltd., a Singapore sport education company. Finally, since 2020, Mr. Chong works as an Investment Committee Member and Equity Partner of Global Fund LLC, a sponsor affiliate. He holds a Master of Science Degree (Mechanical Engineering) accredited by the National University of Singapore and a Bachelor of Engineering Degree (Mechanical and Production) accredited by the University of Singapore.

Tae Woo Kim. Tae Woo Kim and has been a member of the Board of Directors of K Wave since May 15, 2025. Mr. Kim is currently the CFO of Play Company Co., Ltd. managing the financial planning, budgeting, forecasting and the financial operations of the company. He brings with him a diverse set of experience primarily in the content industry. He has worked in strategic planning at JTBC, a major broadcasting network in Korea known for its entertainment, drama and variety shows. He also worked in strategic planning in T-broad holdings, a large cable operator. In addition to his experience in the content industry he also worked in strategic planning at Boryung holdings, a holding company of Boryung, a KOSDAQ listed pharmaceutical company. He has also worked in strategic planning in SF Innovation, a Korean fast food restaurant operator. Tae Woo received a Bachelor of Arts degree in business from Korea University.

Jaekeun (Jason) Kim. Mr. Jaekeun Kim (Jason Kim) serves as a member of the board of directors of K Wave. Jason Kim is a seasoned investor and private equity specialist and he currently owns and operates Naviator Global Holdings LLC in Abu Dhabi, taking on the role of Founding Partner. His leadership has been pivotal in transforming investment strategies across multiple assets, establishing the firm as an influential player in the region. Prior to that, he founded and operated Innocus Global Group Pte, a Singapore-based investment firm, from March 2022 until March 2024, during which time he provided key regional strategies and investments across multiple assets. Since January 2016, he has also maintained the CEO position of “EQ Investment Inc.” a private equity fund based in Seoul, Korea. From late 2014 to late 2015, Jason served as a Regional Director at JD Capital in Beijing, focusing on investment opportunities in South Korea and Japan. Following this, Jason ascended to the role of Chief Executive Officer at EQ Investments Inc. in Seoul, a position he has held since January 2016. In this role, Jason has been instrumental in providing business consultancy services and guiding acquisitions of targeted properties and assets. Jason Kim embarked on his professional career as an Equity Research Intern at Mariners Investment Advisory Group in New York in early 2011. Shortly thereafter, he moved to Bloomberg Japan LLC in Tokyo, where Jason worked as a Credit Analyst from June 2011 to June 2012. Jason earned a Bachelor of Arts and Sciences in Economics and Sociology from the University of Illinois at Urbana-Champaign in December 2007 and a Master of International Affairs from Columbia University School of International Affairs in New York, in May 2011, where he specialized in International Finance with an East Asia focus.

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K Wave’s Executive Officers

Yong (Howard) Fang, CPA has served as the Chief Financial Officer of K Wave and K Enter Holdings Inc. since November 1, 2025. He is an experienced global finance executive with public-company expertise, having helped take one company public. His strengths include capital raising, investor relations, financial reporting, and compliance. Previously, Mr. Fang served as CFO of Baijiayun Group from 2022 to 2023 (Nasdaq: RTC), Director of Finance at GigaCloud Technology from 2023 to 2025 (Nasdaq: GCT), Associate Global Controller at Sanergy Group from 2018 to 2021 (HKEX:2459. HK), and Senior Auditor at Marcum LLP. Mr. Fang holds a B.S. in Management from Hunan University, an M.S. in Accounting and Financial Management from Temple University, and an MBA from Thomas Jefferson University. 

Jihun Byun, CPA, is currently the CAO of K Enter holdings, managing the accounting field of the company. He brings with him a diverse set of experience primarily in accounting, M&A, and corporate governance restructuring more than 10 years. He worked as general manager in corporate center at Wonik corporations, own several KOSDAQ listed corporations in the semiconductor/display, secondary battery, beauty, and digital healthcare sectors. Jihun received a Bachelor of Arts degree in business from Sogang University.

Jeong Hoon Bae. Mr. Jeong Hoon Bae serves as the Head of Content Production of K Wave. Mr. Bae is a veteran and popular executive producer in Korea who has worked in the TV drama industry for 21 years. He started his career as an Assistant Director at drama department of SBS TV, one of the leading Korean broadcasting channels, from 2003 to 2007, helping to produce numerous dramas. Subsequently, he worked at TVN, a pay television network owned by CJ E&M. Next he worked at Bone Factory, a TV drama production company, as executive producer and created popular works such as “You’re Beautiful”, which was part of the first generation of Korean dramas to be aired in Asia and Japan. Subsequently he worked at Huayi Brothers as its executive producer, creating mini series for Korean broadcasting channels. Subsequently he worked as the Chief Executive Officer of Big Pictures, where he created several dramas that were aired in JTBC. Subsequently he was the senior vice president and executive producer of Ace Factory, where he led drama planning, production, distribution, and investment. Mr. Bae also worked on projects for streaming companies such as “The Grid” for Disney+. One of his earlier works “My Name” was also released on Netflix. Jeong Hoon Bae has a Bachelor of Arts in statistics and communications from SungkyunKwan University.

The directors and officers of K Wave own 33,128,623 Ordinary Shares representing 52.02% of K Wave.

K Wave’s Advisory Board

Michael Harpster. Mr. Harpster started his film career in 1970 with a small film company, New Line Cinema, releasing foreign films for the non-theatrical US market. In 1972, Mr. Harpster moved to New York City and became the head of Marketing for New Line. Key benchmarks in New Line’s growth were films like Jean Luc Godard’s Sympathy for the Devil and Reefer Madness. In 1984, Mr. Harpster participated in the development and marketing of the first A Nightmare On Elm Street, which grossed well over $57 million on a $1.1 million dollar budget. In 2021, A Nightmare on Elm Street was selected for preservation in the United States National Film Registry by the Library of Congress as being “culturally, historically, or aesthetically significant”. That first Nightmare led to a number of sequels and an approach to filmmaking and releasing that became known as “niche marketing” and lad to a number of high impact and low-cost films that were major successes for New Line in the “80 and 1990’s including films like House Party, the first Teenage Mutant Ninja Turtles, The Mask. and many more. As President of Marketing at New Line, Mr. Harpster has devised campaigns for and released well over 200 feature films. He participated in an IPO and oversaw the development of video marketing with RCA Columbia. New Line Cinema was sold to Turner and then to Warner Brothers. It is one of the few independent film firms that prospered for over 40 years and its alumni are a virtual who’s who in Hollywood today. It became worth well over $4 billion. In 1995 Mr. Harpster broke open the “faith” market in the US with the release of The Omega Code which ended up selling well over 2,000,000 video units. In 2007, Mr Harpster worked with the award-winning producer, Moctezuma Esparza to raise funding for Maya Releasing, an effort directed to the Latin market. In 2011, Mr. Harpster became interested in the Asian market and consulted with several Asian producers including Yasushi Akimoto the founder of the well-known singing group AKB 48. In 2014 Mr. Harpster established his own consulting group, Orange Gove Media and continues to work today to help investors identify lucrative and safe media investments.

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Faith Chu. Mr. Faith Chu has been serving as the Chairman and Chief Executive Officer of IPG Wealth Management LLC since January 2012. He has 40 years of experience in international finance and investment. He worked in AIG and AIA over 28 years since 1983. He was involved in numerous investment projects. He was appointed as the director of financial companies. He is experienced in strategic management, sales and marketing, capital allocation, and he has cultivated a lot of successful leaders and entrepreneurs. He is the founder of IPG Integrity Group, Chairman of Golden Great China Fund Management Limited. He is also the founder and president of HappyMen Foundation, and the co-founder of Hong Kong International Blockchain and Financial Association (HKIBFA). He was also the guest lecturer of Tsinghua University, Peking University, Zhongshan University and City University of Hong Kong. Mr. Chu is a member of the following institutes: Asia Pacific Financial Services Association (APFinSA), The Institute of Financial Accountants(IFA), Chartered Insurance Agency Management(CIAM), LIMRA International, Registered Financial Planner Institute(RFP).

Anthony Ang. Mr. Anthony Ang served as the Chairman and CEO of Global Star Acquisition Inc. until May 2025. He is a global executive with over 40 years of senior management experience. His broad expertise covers international marketing, investment promotion, manufacturing, and fund management. Mr. Ang started his career at the Singapore Economic Development Board in 1980, and his last position was Regional Director for North America (based in the United States for six years) responsible for the promotion of investments from North America. He went on to become Group General Manager of Armstrong Industrial Corporation, a Singapore precision engineering company that he helped list on the Singapore Exchange in 1995. Mr. Ang then joined Vertex Management as Senior Vice President (Investment) in 1999, a leading venture Capital firm with its headquarters in Singapore and subsequently GIC Real Estate Pte. Ltd. (a unit of the Sovereign wealth fund of the Singapore Government) as Executive Vice President for Admin and Corporate Affairs in 2001. Mr. Ang went on to serve as founding Executive Director of Majulah Connection, a consulting and networking organization sponsored by the Government of Singapore. In 2006, Mr. Ang joined the ARA Group, a leading real estate fund management house with its headquarters in Singapore and asset under management (“AUM”) of $140 billion. From 2008 to 2010, Mr. Ang served as the CEO of ARAAsia Dragon Limited (“ADF”), the flagship private equity real estate fund of the ARA Group. ADF had a committed capital of $1.13 billion and was focused on investments across Asia. Mr. Ang was responsible for raising the fund with global investors and overseeing its investments of over fourteen assets. From February 2010 to December 2016, Mr. Ang served as the CEO and Executive Director of ARA Asset Management (Fortune) Pte. Ltd. (a subsidiary of the ARA Group), as the manager of Fortune Real Estate Investment Trust (“Fortune REIT”) with HK$36 billion of retail assets in Hong Kong. During his tenure at Fortune REIT, Mr. Ang was recognized as “Best CEO (Third)” and “Best CEO (First)” for Hong Kong in 2013 and 2014 respectively for successfully expanding Fortune REIT, by the Annual Best Managed Companies Poll by FinanceAsia. From March 2017 to July 2021, Mr. Ang served as CEO of Sasseur Asset Management Pte Ltd (SGX:CRPU), where he led the listing process for the initial public offering of Sasseur Real Estate Investment Trust (“Sasseur REIT”) (AUM US$1.2 billion) in March 2018. In 2019, under Mr. Ang’s leadership, Sasseur REIT was recognized as the “REIT of the Year” and “Best Retail REIT (platinum)” in Singapore. Mr. Ang was awarded “Best CEO (platinum)” in Singapore in 2019 and 2020 by The Fortune Times Award. Mr. Ang currently holds various senior positions. Since January 2016, Mr. Ang has served as an independent director of Yong Tai Bhd, a property development company listed on Bursa Malaysia, the Malaysian stock exchange. Since April 2017, Mr. Ang has served as an independent director with Heatec Jietong Holding Ltd., a marine industry manufacturing and service company that is listed on the Singapore Exchange. Mr. Ang has represented his country as the Ambassador Extraordinary and Plenipotentiary of the Republic of Singapore to the Republic of Tunisia since September 2017. In that role he represents the interests of Singapore and helps to maintain the relations of amity and concord between the two countries. In December 2020, Mr. Ang began his position as a director at Truufin Pte. Ltd., where he provides guidance for the company in the Fintech industry. Mr. Ang has served as a director of Sinospring Venture Ltd. (Singapore) since May 2021 and as a director of GCIC Ltd since June 2021, both of which are consultancy services companies. In the education consultancy services industry, Mr. Ang has served as a director of ITE Education Services Pte. Ltd. since July 2021. Finally, Mr. Ang currently serves as the Chairman and director for R. Vantage Pte. Ltd. (Singapore), a crowd funded real estate investment platform since November 2021, and as Chairman and director of Singapore Digital Exchange Pte. Ltd., a digital exchange of cryptocurrency and digital assets in Singapore since December 2021. Mr. Ang holds a Bachelor of Science in Mechanical Engineering degree with First Class Honors from the Imperial College of Science and Technology at the University of London. He also obtained an MBA degree and an International Directorship Certificate from INSEAD, France in and completed a Marketing Management Program at the Graduate School of Business at Stanford University.

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Nicholas Aaron Khoo. Mr. Khoo has a diversified career that spans over 20 years within the technology, gaming, fintech, real estate, and consulting industries. In the financial services and consulting industry, Mr. Khoo has led Asia Pacific and Japan for Visa Inc’s Cybersource Managed Services from 2012 to 2017. In the real estate industry, Mr. Khoo has served as an independent director of Hatten Land Ltd. since January 2022. Mr. Khoo is a known figure in the esports and video games industry, serving as an advisor to the board of the Global Esports Federation. Mr. Khoo also serves as an investment committee member of the Tribeca Global SPAC Fund since September 2021. Since October 2021, he has also served as an Investment Committee Member of Global Fund, a sponsor affiliate. Mr. Khoo has experience in the public sector as he has served on various official boards and committees in Singapore including the Gambling Regulatory Authority, National Crime Prevention Council, and the Internet and Media Advisory Committee. Mr. Khoo was the valedictorian when he graduated with a Masters of Business Administration from Arcadia University.

Jukka Rannila. Mr. Rannila is a seasoned professional with vast experience in investment management and real estate. From 2013 to 2020, Mr. Rannila served as the Chairman of the board of directors of Berlin Invest 3 Oy, from 2012-2020 with Berlin Invest 2 Oy, and from 2011 to 2022 with Berlin Invest Oy, where he oversaw residential real estate portfolios. Mr. Rannila currently serves as a board member of the investment management company for the Berlin Invest Oy groups, Confido Kiinteistöhallinta Oy, where he oversees a residential real estate portfolio in Berlin, Germany. Similarly, since 2018, Mr. Rannila has acted as a member of the board of Assai Commercial Oy, where he oversees a commercial real estate portfolio in the greater Helsinki area. Since 2004, Mr. Rannila has acted as a board member and investment manager of Assai Oy, where he is responsible for the operations and investment portfolio of listed and non-listed companies in the family office. Since 2009, Mr. Rannila has acted as chairman of the board of Nosh Company Oy, where he co-directs a high growth fashion and design group of companies. Currently, Mr. Rannila also co-directs a high growth robotics company with international expansion, Trussmatic Oy. Similarly, since 2018, Mr. Rannila co-directs a high growth manufacturing group of companies through his director position with Tikli Group Oy. More recently in 2021, Mr. Rannila manages all operations of Warp Bridge Oy, a SPV investing in a venture capital fund, as a Managing Director. Mr. Rannila studied at the University of Manchester in the Department of Accounting and Finance.

Stephen Drew. Mr. Drew has 25 years of experience in private equity, investment banking, real estate, and Fintech-related businesses. Stephen Drew, a director of Global Star served as a director of K Enter Holdings, Inc. from January 3, 2023 to April 25, 2023. Mr. Drew began his career at Wall Street firms Citigroup and Gruntal & Co. In the real estate financing and investing arena, Mr. Drew acted as the principal of Pinnacle Funding for over ten years, where he managed over 50 professional investors. Mr. Drew was also a member of Greenwich Realty Capital LLC from 2017 to 2019, where he managed commercial real estate development. From 2019 to 2020, Mr. Drew served as a Managing Member of Tribeca Realty Capital LLC, the US-based partner of a $27.5 billion asset manager based in Asia for equity investments and is responsible for successfully closing hundreds of millions in transactions. Since 2018, Mr. Drew has served as a Managing Partner of Global Fund LLC, a sponsor affiliate. Since 2021, Mr. Drew has also served as a Managing Partner of Tribeca Global SPAC Fund LLC. Mr. Drew studied Finance at Central Connecticut State University.

On March 22, 2020, Mr. Ted Kim voluntarily petitioned the United States Bankruptcy Court for the Eastern District of Virginia for personal bankruptcy under Chapter 7 of the United States Bankruptcy Code and was assigned Case No. 2010885BFK. Mr. Kim was discharged in December 2020 and the matter was terminated in December 2020. There were no allegations of fraud made in the proceedings. Except for Mr. Kim, none of K Wave’s proposed executive officers or directors has filed a petition for personal bankruptcy or has been affiliated with any company that has filed for bankruptcy within the last ten years.

Family Relationships

None of our directors or executive officers has a family relationship as defined in Item 401 of Regulation S-K.

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Involvement in Certain Legal Proceedings

To the best of our knowledge, none of our directors or executive officers has, during the past 10 years, been involved in any legal proceedings described in subparagraph (f) of Item 401 of Regulation S-K.

Board Practices

Board of Directors

The Company’s Board of Directors consists of seven directors, including two independent directors, Jaekeun (Jason) Kim and Yang Kan Chong. A director is not required to hold any shares in the Company to qualify as a director. Pursuant to the K Wave Charter, the Board may exercise all the powers of the Company, including powers to borrow money and to mortgage or charge its undertaking, property and assets (present and future) and uncalled capital or any part thereof and to issue debentures, debenture stock, mortgages, bonds and other such securities whether outright or as security for any debt, liability or obligation of the Company or of any third party.

None of the Company’s directors has a service contract with the Company that provides for benefits upon termination of service as a director.

No member of the Board was elected to the Board as a result of any arrangement, understanding or other contract with major shareholders, customers, suppliers or others.

Duties and Functions of Directors

Under Cayman Islands law, the Company’s directors owe fiduciary duties to the Company, including a duty of loyalty, a duty to act honestly and a duty to act in what they consider in good faith to be in the Company’s best interests. The Company’s directors must also exercise their powers only for a proper purpose. The Company’s directors also owe to the Company a duty to act with skill and care. It was previously considered that a director need not exhibit in the performance of his duties a greater degree of skill than may reasonably be expected from a person of his knowledge and experience. However, English and Commonwealth courts have moved towards an objective standard with regard to the required skill and care and these authorities are likely to be followed in the Cayman Islands. In fulfilling their duty of care to the Company, the Company’s directors must ensure compliance with the K Wave Charter, as amended and restated from time to time. The Company has the right to seek damages if a duty owed by its directors is breached. In limited exceptional circumstances, a shareholder may have the right to seek damages in the Company’s name if a duty owed by the Company’s directors is breached. The functions and powers of the Company’s Board of Directors include, among others, (i) convening shareholders’ annual and extraordinary general meetings and reporting its work to shareholders at such meetings, (ii) declaring dividends, (iii) appointing directors or officers and determining their terms of offices and responsibilities, and (iv) approving the transfer of shares of the Company, including the registering of such shares in the Company’s registrar of members.

Terms of Directors and Officers

The Company’s officers are elected by and serve at the discretion of the board. Each director is not subject to a term of office and holds office until such time as his successor takes office or until the earlier of his death, resignation or removal from office by ordinary resolution of all shareholders. K Wave shareholders may appoint or remove any K Wave director by ordinary resolution under Cayman Islands law, which requires a resolution passed by a simple majority of the K Wave shareholders who vote in person or, where proxies are allowed, by proxy at a general meeting, or by a unanimous written resolution.

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Interested Transactions

Pursuant to the K Wave Charter:

● A director may hold any other office or place of profit under the Company in conjunction with their office of director of the Company for such period and on such terms as to remuneration and otherwise as the Board may determine;

● A director may, directly or indirectly through an entity, act in a professional capacity for the Company and be entitled to remuneration for professional services as if they were not a director of the Company;

● No person shall be disqualified from serving on the Board as a result of their contracting with the Company, either as vendor, purchaser or otherwise;

● No contract or transaction entered with the Company in which a director has an interest will be voided as a result of such interest and no director will be liable to account to the Company for any profit realized by or arising in connection with any such contract or transaction by reason of their being a director or by reason of the fiduciary duties established as a result of such directorship;

● A director may vote in respect of any contract or transaction in which they are interested, provided that the nature of the interest of any director in any such contract or transaction is disclosed by them at or prior to its consideration and any vote thereon. A general notice that a director is a shareholder, director, officer or employee of any specified firm or company and is to be regarded as interested in any transaction with such firm or company will be sufficient disclosure for the purposes of voting on a resolution in respect of a contract or transaction in which they have an interest, and after such general notice it shall not be necessary to give special notice relating to any particular transaction.

Board Diversity

We seek to achieve board diversity through the consideration of a number of factors when selecting the candidates to our Board, including but not limited to gender, skills, age, professional experience, knowledge, cultural, education background, ethnicity and length of service. The ultimate decision of the appointment will be based on merit and the contribution which the selected candidates will bring to our Board.

Our directors have a balanced mix of knowledge and skills. We have two independent directors with different industry backgrounds.

Committees of the Board of Directors

We have established an audit committee of the Board and intend to establish a compensation committee and a nominating and corporate governance committee under the Board. We have not adopted a charter for the audit committee.

Audit Committee

Our audit committee consists of Jaekeun (Jason) Kim and Yang Kan Chong, and is chaired by Mr. Chong. We have determined that each of these three directors satisfies the “independence” requirements of the Nasdaq Listing Rules and meet the independence standards under Rule 10A-3 under the Exchange Act. The audit committee oversees our accounting and financial reporting processes and the audits of our financial statements. The audit committee is responsible for, among other things:

● selecting the independent registered public accounting firm and pre-approving all auditing and non-auditing services permitted to be performed by the independent registered public accounting firm;

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● reviewing with the independent registered public accounting firm any audit problems or difficulties and management’s responses;

● reviewing and approving all proposed related party transactions, as defined in Item 404 of Regulation S-K under the Securities Act;

● discussing the annual audited financial statements with management and the independent registered public accounting firm;

● reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any special steps taken to monitor and control major financial risk exposures;

● meeting separately and periodically with management and the independent registered public accounting firm; and

● reporting regularly to the board.

Foreign Private Issuer Exemption

We are a “foreign private issuer,” as defined by the SEC. As a result, in accordance with the rules and regulations of Nasdaq, we may choose to comply with home country governance requirements and certain exemptions thereunder rather than complying with Nasdaq corporate governance standards. We may choose to take advantage of the following exemptions afforded to foreign private issuers:

● Exemption from filing quarterly reports on Form 10-Q, from filing proxy solicitation materials on Schedule 14A or 14C in connection with annual or special meetings of shareholders, or from providing current reports on Form 8-K disclosing significant events within four (4) days of their occurrence, and from the disclosure requirements of Regulation FD.

● Exemption from Section 16 rules regarding sales of Ordinary Shares by insiders, which will provide less data in this regard than shareholders of U.S. companies that are subject to the Exchange Act.

● Exemption from the Nasdaq rules applicable to domestic issuers requiring disclosure within four (4) business days of any determination to grant a waiver of the code of business conduct and ethics to directors and officers. Although we will require board approval of any such waiver, we may choose not to disclose the waiver in the manner set forth in the Nasdaq rules, as permitted by the foreign private issuer exemption.

Furthermore, Nasdaq Rule 5615(a)(3) provides that a foreign private issuer, such as us, may rely on our home country corporate governance practices in lieu of certain of the rules in the Nasdaq Rule 5600 Series and Rule 5250(d), provided that we nevertheless comply with Nasdaq’s Notification of Noncompliance requirement (Rule 5625), the Voting Rights requirement (Rule 5640) and that we have an audit committee that satisfies Rule 5605(c)(3), consisting of committee members that meet the independence requirements of Rule 5605(c)(2)(A)(ii). If we rely on our home country corporate governance practices in lieu of certain of the rules of Nasdaq, our shareholders may not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of Nasdaq. If we choose to do so, we may utilize these exemptions for as long as we continue to qualify as a foreign private issuer.

Although we are permitted to follow certain corporate governance rules that conform to the Cayman Islands requirements in lieu of many of the Nasdaq corporate governance rules, we intend to comply with the Nasdaq corporate governance rules applicable to foreign private issuers, including the requirement to hold annual meetings of shareholders.

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EXECUTIVE COMPENSATION

This section discusses material components of the executive compensation programs for the Company’s executive officers who are named in the “Summary Compensation Table” below. In 2024, the Company named executive officers (“NEO”) and their positions were as follows:

Name	Age	Position
Pyeung Ho Choi	66	Co-Founder and Chairman
Ted Kim	53	Co-Founder, Chief Executive Officer, and Director
Tan Chin Hwee*	52	Former Director, Executive Chairman and Interim Chief Executive Officer
Hyuk Jin Lee	51	Director
Han Jae Kim (Patrick Kim)**	35	Director
Young Jae Lee	49	Co-Founder and Director
Jun Jong***	53	Chief Financial Officer
Jihun Byun	45	Chief Accounting Officer
Jeong Hoon Bae	45	Head of Content Production

*	Effective on June 6, 2025, (i) Tan Chin Hwee resigned from his position as a member of the Board and from his roles as Executive Chairman and Interim Co-Chief Executive Officer of the Company; and (ii) Ted Kim became the Chief Executive Officer of the Company.
**	Effective July 5, 2025, Han Jae (Patrick) Kim resigned from his position as a member of the Board.
***	Effective October 31, 2025, Jun Jong resigned from his position as Chief Financial Officer of the Company. Yong Fang was appointed as the new Chief Financial Officer of the Company effective as of November 1, 2025.

Summary Compensation Table

The following table contains information pertaining to the compensation of K Enter named executives for the fiscal years 2023 and 2024.

Summary Compensation Table — Fiscal Years 2024 and 2023

Name and Principal Position	Year	Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Non-Qualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Total ($)
Tan Chin Hwee Former Executive Chairman and interim CEO*	2024	$	214,200		0	$	500,000		0		0		0		0		714,200
	2023	$	0		0		0		0		0		0		0	$	0
Jun Jong	2024	$	88,013		0		0		0		0		0		0		88,013
CFO**	2023	$	57,394		0		0		0		0		0	$	0	$	57,394
Jihun Byun	2024	$	146,689		0	$	2,147,580		0		0		0		0		2,294,269
	2023	$	38,263		0		0		0		0		0	$	0	$	38,263

*	Effective on June 6, 2025, (i) Tan Chin Hwee resigned from his position as a member of the Board and from his roles as Executive Chairman and Interim Co-Chief Executive Officer of the Company; and (ii) Ted Kim became the Chief Executive Officer of the Company.
**	Effective October 31, 2025, Jun Jong resigned from his position as Chief Financial Officer of the Company. Yong Fang was appointed as the new Chief Financial Officer of the Company effective as of November 1, 2025.

Outstanding Equity Awards as of December 31, 2024

There were no outstanding options to acquire K Wave ordinary shares held by K Wave NEOs as of December 31, 2024. The K Wave NEOs did not hold any other outstanding equity awards as of that date.

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Director Compensation — Fiscal 2024

The following table sets forth information regarding the compensation paid to, or earned by our directors, during fiscal 2024:

Name	Fees Earned or Paid in Cash ($)		Stock Awards ($)		Total ($)
Pyeung Ho Choi	$	0		0	$	0
Young Jae Lee	$	0		0	$	0
Tan Chin Hwee*	$	0		0	$	0
Ted Kim	$	13,000		0	$	13,000
Han Jae(Patrick) Kim**	$	0		0	$	0
Hyuk Jin Lee	$	0		0	$	0

*	Effective on June 6, 2025, Tan Chin Hwee resigned from his position as a member of the Board and from his roles as Executive Chairman and Interim Co-Chief Executive Officer of the Company.
**	Effective July 5, 2025, Han Jae (Patrick) Kim resigned from his position as a member of the Board.

As of December 31, 2024, K Wave had no formal plan for compensating its directors.

Decisions with respect to the compensation of K Wave’s executive officers, including its named executive officers, are made by the compensation committee of the Board. The following discussion is based on the present expectations as to the compensation of the named executive officers and directors. The actual compensation of the named executive officers will depend on the judgment of the members of the compensation committee and may differ from that set forth in the following discussion.

We anticipate that compensation for our executive officers will have the following components: base salary, cash bonus opportunities, long-term incentive compensation, broad-based employee benefits, supplemental executive perquisites and severance benefits. Base salaries, broad-based employee benefits, supplemental executive perquisites and severance benefits will be designed to attract and retain senior management talent. We intend to also use annual cash bonuses and long-term equity awards to promote performance-based pay that aligns the interests of its named executive officers with the long-term interests of its equity owners and to enhance executive retention.

Annual Bonuses

We expects that we will use annual cash incentive bonuses for the named executive officers to motivate their achievement of short-term performance goals and tie a portion of their cash compensation to performance. We expect that, near the beginning of each year, the compensation committee will select the performance targets, target amounts, target award opportunities and other terms and conditions of annual cash bonuses for the named executive officers, subject to the terms of their employment and service agreements. Following the end of each year, the compensation committee will determine the extent to which the performance targets were achieved and the amount of the award that is payable to the named executive officers.

Stock-Based Awards

We expect to use stock-based awards in future years to promote its interests by providing these executives with the opportunity to acquire equity interests as an incentive for their remaining in its service and aligning the executives’ interests with those of our shareholders. Stock-based awards for its directors and named executive officers may be awarded in future years under a new employee incentive plan after consummation of the Business Combination, which was adopted by the K Wave Board in connection with the Business Combination.

Director Compensation

Non-employee directors of Pubco receive varying levels of compensation for their services as directors and members of committees of the Pubco Board, in accordance with a non-employee director compensation policy that we put in place following the Business Combination. Pubco anticipates determining director compensation in accordance with industry practice and standards.

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PRINCIPAL STOCKHOLDERS

The following table sets forth information relating to the beneficial ownership of our ordinary shares:

● each person, or group of affiliated persons, known by us to beneficially own more than 5% of outstanding Pubco Ordinary Shares;

● each of our directors;

● each of our executive officers; and

● all of our directors and executive officers as a group.

Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, and includes shares underlying options and warrants that are currently exercisable or exercisable within 60 days. In computing the number of shares beneficially owned by a person or entity and the percentage ownership of that person or entity in the table below, all shares subject to options or warrants held by such person or entity were deemed outstanding if such securities are currently exercisable, or exercisable within 60 days of the Closing Date. These shares were not deemed outstanding, however, for the purpose of computing the percentage ownership of any other person or entity.

The percentage of our Ordinary Shares beneficially owned is computed on the basis of 63,198,074 Ordinary Shares outstanding as of the date of this prospectus, not including the Ordinary Shares issuable upon the exercise of outstanding warrants.

Unless otherwise indicated, we believe that all persons named in the table below have sole voting and investment power with respect to all Post-Closing K Wave Ordinary Shares beneficially owned by them. To our knowledge, no Post-Closing K Wave Ordinary Shares beneficially owned by any executive officer, director or director nominee have been pledged as security.

Unless otherwise noted, the business address of each of our shareholders is 16192 Coaster Highway, Lewes, Delaware 19958.

Name and Address of Beneficial Owner	Number of Pubco Ordinary Shares Beneficially Owned		Percentage of Pubco Ordinary Shares
5% Holders of Pubco:
Hyung Seok Cho(1)		8,668,867		13.72	%
Pyeung Ho Choi(2)		5,020,283		7.94	%
Jae Keun Kim(3)		5,280,511		8.36	%
Ted Kim(4)		8,018,432		12.59	%
Young Jae Lee(5)		4,671,301		7.39	%
Directors and Executive Officers of PubCo
Yang Kan Chong(6)		436,642		*	%
Tae Woo Kim(7)		214,758		*	%
Jung Hoon Bae(8)		603,071		*	%
Jihun Byun(9)		214,758		*	%
All Executive Officers and Directors as a Group		33,128,623		52.01	%

* Represents less than 1.0%.

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(1)	Hyung Seok Cho is a member of the Company’s Board. The business address of Mr. Cho is 16192 Coastal Highway, Lewes, Delaware 19958.
(2)	Pyeung Ho Choi is a Co-Founder of the Company and is the Chairman of the Company’s Board. The business address of Mr. Choi is 16192 Coastal Highway, Lewes, Delaware 19958.
(3)	Jae Keun Kim is a member of the Company’s Board. Jae Keun Kim is the beneficial owner of 5,280,511 of our shares as follows: 78,043 shares he owns individually and through his ownership and control of Xeno Investment Asia, which owns 3,121,700 of our shares, and JVC Inc. which owns 2,080,768 of our shares. The business address of Mr. Kim is 16192 Coastal Highway, Lewes, Delaware 19958.
(4)	Ted Kim is a Co-Founder of the Company, a member of the Company’s Board and is the Company’s Chief Executive Officer. Mr. Kim is the beneficial owner of 4,896,900 Ordinary Shares through his ownership and control of Global Fund LLC, which owns 3,489,721 of our Ordinary Shares and Lodestar USA, Inc., which owns 1,407,439 of our Ordinary Shares. As a result of Mr. Kim’s position as manager of Global Star Acquisition I, LLC, the sponsor, to Global Star, Mr. Kim also is the beneficial owner of 2,623,047 Ordinary Shares held by Global Star Acquisition I, LLC. The Ordinary Shares also include 498,225 Ordinary Shares into which warrants held by Mr. Kim are exercisable within 60 days of the date of this prospectus. The business address of Mr. Kim is Mr. Kim is 1641 International Drive, Unit 208, McLean, Virginia 22102.
(5)	Young Jae Lee is a Co-Founder of the Company and a member of the Company’s Board. The business address of Mr. Lee is 16192 Coastal Highway, Lewes, Delaware 19958.
(6)	Yang Kan Chong is a member of the Company’s Board.
(7)	Tae Woo Kim is a member of the Company’s Board.
(8)	Jung Hoon Bae is the Company’s Head of Content Production.
(9)	Jihun Byun is the Company’s Chief Accounting Officer.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Certain Relationships and Related Person Transactions-K Enter

One of K Enter’s directors and K Wave’s CEO, Ted Kim, is also the manager of Global Star Acquisition I, LLC, the sponsor, to Global Star. 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 of K Enter’s ordinary shares to Lodestar USA, Inc. in consideration for services rendered to K Enter by Ted Kim, the owner of Lodestar USA Inc. Ted Kim owned 19,564 shares or 10.12% of the shares of ordinary shares of K Enter based on the shares of K Enter to be issued and outstanding immediately prior to the closing of the Business Combination through his ownership and control of Global Fund LLC, which owned 12,000 shares, and Lodestar USA, Inc., which owned 7,564 shares.

Two of K Enter’s directors, Pyeung-ho Choi, who is the Chairman of K Enter and Young Jae Lee, who is the former Chief Executive Officer of K Enter, are also senior officers of Solaire Partners, one of the Six Korean Entities.

On September 24, 2024, K Enter entered into a share subscription agreement with GF Korea Inc. (the “GF Agreement”) pursuant to which K Enter issued 4,997 shares of K Enter’s ordinary shares to GF Korea Inc. (“GF Korea”) in consideration for GF Korea Inc. assuming certain payment obligations of K Enter 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 K Enter’s ordinary shares to GF Korea, which were 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. K Enter entered into the GF Agreement for the purpose of transferring certain of K Enter’s payment obligations to gain greater financial flexibility. Mina Kim, a co-founder of K Enter, is the CEO of GF Korea and Mina Kim’s spouse is the owner of GF Korea.

On September 30, 2024, K Enter issued Tan Chin Hwee, a director, Executive Chairman and Interim CEO of K Enter, 168 shares of K Enter’s ordinary shares in consideration for services rendered and to be rendered to K Enter.

On September 25, 2024, Innocus Global Group Pte, Ltd., an entity owned by Jaekeun (Jason) Kim, a director K Wave, entered into an agreement to purchase 250 shares of K Enter’s Series A-1 Preferred Stock for gross proceeds of $150,000. Each issued share of Series A-1 Preferred Stock is convertible into ordinary shares of K Enter on a one-for-one basis.

On August 31, 2024, K Enter issued Jae Ha Lee, an employee of K Enter, 1,932 shares of K Enter’s ordinary shares in consideration for services rendered and to be rendered to K Enter.

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 nominee director K Wave (the “$3MM Note”). The $3MM 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 $3MM Notes. Under the $3MM Note, the proceeds shall be wired to K Enter 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 K Enter issued the $3MM Note and until the closing of the Business Combination, the $3MM Note were 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.

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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. The proceeds of the 1st Lee Loan will be used to fund the operations of K Enter. The 1st Lee Loan is attached as Exhibit 10.50 to the Registration Statement on Form F-4/A filed by the Company with the SEC on December 23, 2024. On October 23, 2024, Mr. Lee and K Enter extended the maturity date of the 1st Lee Loan to the earlier of June 30, 2025 or within 5 business days after the Company’s proxy statement/prospectus on Form F-4 becomes effective. A copy of the loan extension agreement between Mr. Lee and K Enter is attached as Exhibit 10.66 to the Registration Statement on Form F-4/A filed by the Company with the SEC on December 23, 2024. On February 10, 2025, K Enter fully repaid the 1^st Lee Loan, leaving a balance of $0.00. The 1st Lee Loan is attached as Exhibit 10.50 to the Registration Statement on Form F-4/A filed by the Company with the SEC on December 23, 2024.

On April 25, 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. The proceeds of the 2nd Lee Loan will be used to fund the operations of K Enter. The 2nd Lee Loan is attached as Exhibit 10.51 to the Registration Statement on Form F-4/A filed by the Company with the SEC on December 23, 2024. 

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. The 3rd Lee Loan is attached as Exhibit 10.52 to the Registration Statement on Form F-4/A filed by the Company with the SEC on December 23, 2024.

On April 26, 2024, Bidangil Pictures Co., Ltd. loaned the $91,348 (the “Bidangil Loan”). The loan is unsecured, for a term of three months and bears interest at the rate of 3% per annum. The proceeds of the loan will be used to fund the operations of K Enter. The Bidangil Loan is attached as Exhibit 10.53 to the Registration Statement on Form F-4/A filed by the Company with the SEC on December 23, 2024.

On May 25, 2023, K Enter entered into a production development agreement with Studio Anseilen, one of the Six Korean Entities, to advance Studio Anseilen $676,654 for content development. The advance does not accrue interest, is not secured and is evidenced by an agreement dated May 25, 2023, a copy of which is attached as Exhibit 10.23 to the Registration Statement on Form F-4/A filed by the Company with the SEC on December 23, 2024.

On June 1, 2023, K Enter entered into a two-year written lease with Solaire Partners, as landlord (“Lease 2”) for 2,520 square feet of office space located at 11F, Telepia Building, 527, Eonju-ro, Gangnam-gu, Seoul, Korea 06138 commencing on June 1, 2023. Solaire Partners., one of the Six Korean Entities, is the landlord under the Lease 2. At inception, total gross rental payments due under this operating lease approximated $92,938 and a security deposit due approximated $67,699. A copy of Lease 2 is attached as Exhibit 10.22 to the Registration Statement on Form F-4/A filed by the Company with the SEC on December 23, 2024.

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During August 2023, K Enter purchased a $1,000,000 convertible bond from Prototype Groupe, Inc. (“Prototype Groupe”), a company that operates in virtual studio technology and who First Virtual, which is a Korean company K Enter had an agreement to acquire a controlling equity interest. Virtualization remains a future strategic initiative for K Enter, but its management has decided to terminate the planned acquisition of First Virtual, an emerging company with plans to establish virtual production capabilities. The share purchase agreement with First Virtual has been terminated but includes a re-purchase option. 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. First Virtual has a 19% ownership interest in the Prototype Groupe. The convertible bond is due and payable on demand after August 10, 2024. The convertible bond will bear interest at a fixed rate equal to the Applicable Federal Rate for short term loans as of the date of the bond (4.96%). At K Enter’s option, at any time prior to payment in full of the principal amount and all accrued interest, the convertible bond can be converted into such number of shares of ordinary shares of Prototype Groupe equal to the entire principal amount of the convertible bond and all accrued and unpaid interest thereon, divided by $7.40 per share in case the pre-money valuation of Prototype Groupe shall meet or exceed $94,800,000. In the event the pre-money valuation is below $94,800,000, the conversion price shall be proportionally reduced. If the convertible bond is not repaid or converted through K Enter’s voluntary election and Prototype Groupe issues and sells shares of its equity securities before the maturity date resulting in gross proceeds of $10,000,000 (excluding the conversion of this bond), then at any time on or after the maturity date, Prototype Groupe shall have the option to (a) repay all outstanding principal and accrued unpaid interest of the convertible bond or (b) convert all or any portion of the outstanding principal and accrued unpaid interest of the convertible bond into such number of its common shares equal to the principal amount and all accrued unpaid interest thereon to be converted divided by the conversion price.

On June 3, 2025, K Wave entered into a Standby Equity Purchase Agreement with Bitcoin Strategic Reserve KWM LLC, providing for the sale by K Wave of up to $500 million of Ordinary Shares. Stephen Drew is the Managing Member of Bitcoin Strategic. Mr. Drew is an Initial Stockholder of the Company and a member of the Company’s Advisory Board. In addition, Mr. Drew served as a director of Global Star and is a Managing Partner of Global Fund LLC, along with Ted Kim, the Company’s Co-Founder, Chief Executive Officer and a member of the Company’s Board. The transactions consummated in connection with the SEPA and all negotiations relating thereto were conducted on an “arm’s length” basis.

Proceeds from the facility will be used to support K Wave’s 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, K Wave plans to operate Bitcoin Lightning Network nodes and invest in Bitcoin-native infrastructure to enhance decentralization and facilitate on-chain transaction rewards.

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DESCRIPTION OF K WAVE’S SECURITIES

K Wave is a Cayman Islands exempted company and its affairs are governed by the memorandum and articles of association, as amended and restated from time to time, and Companies Act (As Revised) of the Cayman Islands, referred to herein as the “Companies Act” below, and the common law of the Cayman Islands.

K Wave currently has only one class of issued ordinary shares, which have identical rights in all respects and rank equally with one another. The share capital of K Wave is $100,000 divided into 990,000,000 ordinary shares of par value of $0.0001 each and 10,000,000 preference shares or a par value US $0.0001 each.

K Wave Ordinary Shares

The following includes a summary of the terms of K Wave Ordinary Shares, based on its Memorandum and Articles of Association and Cayman Islands law. Immediately prior to the consummation of the Reincorporation Merger, K Wave amended its memorandum and articles of association, which amendment is referred to herein as the “Memorandum and Articles of Association.” According to the Memorandum and Articles of Association, the authorized share capital of post-closing company is $100,000 divided into 990,000,000 ordinary shares of par value of $0.0001 each and 10,000,000 preference shares or a par value US $0.0001 each.

General. Immediately prior to the consummation of the Business Combination, K Wave’s authorized share capital was $100,000 divided into 990,000,000 ordinary shares of par value of $0.0001 each and 10,000,000 preference shares or a par value US $0.0001 each. All of K Wave’s issued and outstanding ordinary shares are fully paid and non-assessable. Certificates representing the ordinary shares are issued in registered form. K Wave may not issue share to bearer. K Wave’s shareholders who are non-residents of the Cayman Islands may freely hold and transfer their ordinary shares.

Dividends. The holders of K Wave’s ordinary shares are entitled to such dividends as may be declared by its Board of Directors subject to its Memorandum and Articles of Association and the Companies Act. In addition, K Wave’s shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by its directors. K Wave’s Memorandum and Articles of Association provide that no dividend or other distribution shall be paid except out of the realized or unrealized profits of the Company, out of the share premium account or as otherwise permitted by law. Dividends may also be declared and paid out of share premium account or any other fund or account which can be authorized for this purpose in accordance with the Companies Act. No dividend may be declared and paid unless K Wave’s directors determine that, immediately after the payment, K Wave will be able to pay its debts as they become due in the ordinary course of business and K Wave has funds lawfully available for such purpose.

Voting Rights. In respect of all matters subject to a shareholders’ vote, each K Wave ordinary share is entitled to one vote. Voting at any meeting of shareholders is by poll and not on a show of hands.

A quorum required for a meeting of shareholders consists of holders of a majority of the Shares being individuals present in person or by proxy or, if a corporation or other non-natural person, by its duly authorized representative or proxy shall be a quorum. As a Cayman Islands exempted company, K Wave is not obliged by the Companies Act to call shareholders’ annual general meetings. K Wave’s Memorandum and Articles of Association provide that K Wave may (but are not obliged to) in each year hold a general meeting as its annual general meeting in which case K Wave will specify the meeting as such in the notices calling it, and the annual general meeting will be held at such time and place as may be determined by its directors. We, however, will hold an annual shareholders’ meeting during each fiscal year, as required by the Listing Rules at the Nasdaq. Each general meeting, other than an annual general meeting, shall be an extraordinary general meeting. Shareholders’ annual general meetings and any other general meetings of K Wave’s shareholders may be called by a majority of its Board of Directors or its chairman. K Wave’s Memorandum and Articles of Association provide its shareholders with the right to put any proposals before annual general meetings. Shareholders seeking to bring business before the annual general meeting or to nominate candidates for appointment as directors at the annual general meeting must deliver notice to the principal executive offices of K Wave not less than 120 calendar days before the date of K Wave’s proxy statement released to shareholders in connection with the previous year’s annual general meeting or, if the Company did not hold an annual general meeting the previous year, or if the date of the current year’s annual general meeting has been changed by more than 30 days from the date of the previous year’s annual general meeting, then the deadline shall be set by the board of Directors with such deadline being a reasonable time before K Wave begins to print and send its related proxy materials.

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An ordinary resolution is a resolution passed by a simple majority of the shareholders, as being entitled to do so, vote in person or by proxy at a general meeting, and includes a unanimous written resolution. In computing the majority when a poll is demanded regard shall be had to the number of votes to which each Member is entitled by the Articles, while a special resolution is a resolution passed by no less than two-thirds of the shareholders as, being entitled to do so, vote in person or by proxy at a general meeting, and includes a unanimous written resolution. A special resolution will be required for important matters such as a change of name or making changes to K Wave’s Memorandum and Articles of Association.

Transfer of Ordinary Shares. Subject to the restrictions in K Wave’s Memorandum and Articles of Association as set out below, any of K Wave’s shareholders may transfer all or any of his or her ordinary shares by an instrument of transfer in the usual or common form or any other form approved by K Wave’s Board of Directors.

K Wave’s Board of Directors may, in its absolute discretion, decline to register any transfer of any ordinary share which is not fully paid up or on which K Wave has a lien. K Wave’s Board of Directors may also decline to register any transfer of any ordinary share unless:

● the instrument of transfer is lodged with us, accompanied by the certificate for the ordinary shares to which it relates and such other evidence as K Wave’s Board of Directors may reasonably require to show the right of the transferor to make the transfer;

● the instrument of transfer is in respect of only one class of shares;

● the instrument of transfer is properly stamped, if required;

● in the case of a transfer to joint holders, the number of joint holders to whom the ordinary share is to be transferred does not exceed four; and

● a fee of such maximum sum as the Nasdaq may determine to be payable or such lesser sum as K Wave’s directors may from time to time require is paid to K Wave in respect thereof.

If K Wave’s directors refuse to register a transfer they shall, within two months after the date on which the instrument of transfer was lodged, send to each of the transferor and the transferee notice of such refusal.

The registration of transfers may, after compliance with any notice required of the Nasdaq, be suspended and the register closed at such times and for such periods as K Wave’s Board of Directors may from time to time determine, provided, however, that the registration of transfers shall not be suspended nor the register closed for more than 30 days in any year as K Wave’s board may determine.

Liquidation. On a return of capital on winding up or otherwise (other than on conversion, redemption or purchase of ordinary shares), if the assets available for distribution amongst K Wave’s shareholders shall be more than sufficient to repay the whole of the share capital at the commencement of the winding up, the surplus shall be distributed amongst K Wave’s shareholders in proportion to the par value of the shares held by them at the commencement of the winding up, subject to a deduction from those shares in respect of which there are monies due, of all monies payable to K Wave for unpaid calls or otherwise. If K Wave’s assets available for distribution are insufficient to repay all of the paid-up capital, the assets will be distributed so that the losses are borne by K Wave’s shareholders in proportion to the par value of the shares held by them. Any distribution of assets or capital to a holder of ordinary share will be the same in any liquidation event.

Redemption, Repurchase and Surrender of Ordinary Shares. K Wave may issue shares on terms that such shares are subject to redemption, at K Wave’s option or at the option of the holders thereof, on such terms and in such manner as may be determined, before the issue of such shares, by K Wave’s Board of Directors or by a special resolution of K Wave’s shareholders. K Wave may also repurchase any of its shares provided that the manner and terms of such purchase have been approved by its Board of Directors or are otherwise authorized by its Memorandum and Articles of Association. Under the Companies Act, the redemption or repurchase of any share may be paid out of K Wave’s profits or out of the proceeds of a fresh issue of shares made for the purpose of such redemption or repurchase, or out of capital (including share premium account and capital redemption reserve) if the company can, immediately following such payment, pay its debts as they fall due in the ordinary course of business. In addition, under the Companies Act no such share may be redeemed or repurchased (a) unless it is fully paid up, (b) if such redemption or repurchase would result in there being no shares outstanding, or (c) if the company has commenced liquidation. In addition, K Wave may accept the surrender of any fully paid share for no consideration.

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Variations of Rights of Shares. If at any time K Wave’s share capital is divided into different classes or series of shares, the rights attached to any class or series of shares (unless otherwise provided by the terms of issue of the shares of that class or series), whether or not K Wave is being wound-up, be varied without the consent of the holders of the issued shares of that class where such variation is considered by the directors of K Wave not to have a material adverse effect upon such rights; otherwise, any such variation shall be made only with the consent in writing of the holders of not less than two-thirds of the issued shares of that class, or with the approval of a resolution passed by a majority of not less than two-thirds of the votes cast at a separate meeting of the holders of the shares of that class. For the avoidance of doubt, the directors of K Wave reserve the right, notwithstanding that any such variation may not have a material adverse effect, to obtain consent from the holders of shares of the relevant class. To any such meeting all the provisions of PurCo’s Charter relating to general meetings shall apply mutatis mutandis, except that the necessary quorum shall be one person holding or representing by proxy at least one-third of the issued shares of the class and that any holder of Shares of the class present in person or by proxy may demand a poll.

Inspection of Books and Records. Holders of K Wave Ordinary Shares have no general right under Cayman Islands law to inspect or obtain copies of K Wave’s list of shareholders or its corporate records. However, K Wave will provide its shareholders with annual audited financial statements. See “Where You Can Find Additional Information.”

Issuance of Additional Shares. K Wave’s Memorandum and Articles of Association authorize its Board of Directors to issue additional ordinary shares from time to time as its Board of Directors shall determine, to the extent of available authorized but unissued shares.

K Wave’s Memorandum and Articles of Association also authorize its Board of Directors to establish from time to time one or more series of preferred shares and to determine, with respect to any series of preferred shares, the terms and rights of that series, including:

● the designation of the series;

● the number of shares of the series;

● the dividend rights, dividend rates, conversion rights, voting rights; and

● the rights and terms of redemption and liquidation preferences.

K Wave’s Board of Directors may issue preferred shares without action by its shareholders to the extent authorized but unissued. Issuance of these shares may dilute the voting power of holders of ordinary shares.

Anti-Takeover Provisions. Some provisions of K Wave’s Memorandum and Articles of Association may discourage, delay or prevent a change of control of K Wave or management that shareholders may consider favorable, including provisions that authorize K Wave’s Board of Directors to issue preferred shares in one or more series and to designate the price, rights, preferences, privileges and restrictions of such preferred shares without any further vote or action by its shareholders.

Exempted Company. K Wave is an exempted company with limited liability under the Companies Act. The Companies Act distinguishes between ordinary resident companies and exempted companies. Any company that is registered in the Cayman Islands but conducts business mainly outside the Cayman Islands may apply to be registered as an exempted company. The requirements for an exempted company are essentially the same as for an ordinary company except that an exempted company:

● does not have to file an annual return of its shareholders with the Registrar of Companies;

● is not required to open its register of members for inspection;

● does not have to hold an annual general meeting;

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● may issue shares with no par value;

● may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first instance);

● may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;

● may register as a limited duration company; and

● may register as a segregated portfolio company.

“Limited liability” means that the liability of each shareholder is limited to the amount unpaid by the shareholder on that shareholder’s shares of the company.

K Wave Warrants

Set forth below is also a description of K Wave Warrants that are issued and outstanding upon the consummation of the Business Combination.

The following summary is not complete and is subject to, and is qualified in its entirety by reference to, the provisions of the Memorandum and Articles of Association.

Each K Wave Warrant entitles the holder thereof to purchase one K Wave Ordinary Share at a price of $11.50 per full share. K Wave will not issue fractional shares. As a result, a warrant holder must exercise its K Wave Warrants in multiples of two, at a price of $11.50 per full share, subject to adjustment, to validly exercise K Wave Warrants. K Wave Warrants became exercisable June 13, 2025. the K Wave Warrants will expire June 13, 2030.

K Wave may redeem the outstanding K Wave Warrants (excluding the private warrants that are part of the Private Units), in whole and not in part, at a price of $0.01 per warrant:

● at any time while K Wave Warrants are exercisable,

● upon a minimum of 30 days’ prior written notice of redemption,

● if, and only if, the last sales price of K Wave Ordinary Shares equals or exceeds $18.00 per share for any 20 trading days within a 30 trading day period ending three business days before K Wave sends the notice of redemption, and

● if, and only if, there is a current registration statement in effect with respect to K Wave Ordinary Shares underlying K Wave Warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption.

If the foregoing conditions are satisfied and K Wave issues a notice of redemption, each warrant holder can exercise his, her or its K Wave Warrant prior to the scheduled redemption date. However, the price of K Wave Ordinary Shares may fall below the $18.00 trigger price as well as the $11.50 warrant exercise price per full share after the redemption notice is issued and not limit K Wave’s ability to complete the redemption.

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If K Wave calls K Wave Warrants for redemption as described above, K Wave’s management will have the option to require all warrant holders that wish to exercise K Wave Warrants to do so on a “cashless basis.” In such event, each warrant holder would pay the exercise price by surrendering the whole K Wave Warrant for that number of K Wave Ordinary Shares equal to the quotient obtained by dividing (x) the product of the number of K Wave Ordinary Shares underlying K Wave Warrants, multiplied by the difference between the exercise price of K Wave Warrants and the “fair market value” (as defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of K Wave Ordinary Shares for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the warrant holders. Whether K Wave will exercise its option to require all warrant holders to exercise their K Wave Warrants on a “cashless basis” will depend on a variety of factors including the price of K Wave Ordinary Shares at the time K Wave Warrants are called for redemption, K Wave’s cash needs at such time and concerns regarding dilutive share issuances.

Summary of the 2024 Incentive Plan

The following is a summary description of K Wave Media, Ltd. 2024 Equity Incentive Plan. The summary is not a complete statement of the 2024 Plan and is qualified in its entirety by reference to the complete text of the 2024 Plan, a copy of which is attached as Annex C to the Global Star Prospectus/Proxy Statement filed with the SEC on January 8, 2025). In the event of a conflict between the information in this description and the terms of the 2024 Plan, the 2024 Plan shall control.

Purpose of the 2024 Plan

The purpose of the 2024 Plan is to secure and retain the services of employees, directors and consultants, to provide incentives for such persons to exert maximum efforts for K Wave’s success and to provide a means by which such persons may be given an opportunity to benefit from increases in value of the K Wave Ordinary Shares through the granting of awards under the 2024 Plan. We believe that the awards to be issued under the 2024 Plan will motivate award recipients to offer their maximum effort to K Wave and help focus them on the creation of long-term value consistent with the interests of K Wave shareholders. We believe that grants of incentive awards are necessary to enable K Wave to attract and retain top talent.

Awards

The 2024 Plan provides for the grant of incentive stock options (“ISOs”) within the meaning of Section 422 of the Code, to K Wave employees and subsidiary corporations’ employees, and for the grant of non-statutory stock options (“NSOs”), stock appreciation rights, restricted stock awards, restricted stock unit awards, and other forms of awards to K Wave’s employees, directors and consultants and any of K Wave’s affiliates’ employees and consultants. K Wave has approximately 15 employees of K Wave, including 5 executive officers, 6 non-employee directors and 1 consultant eligible to be granted awards under the 2024 Plan.

Authorized Shares

The maximum number of Ordinary Shares that may be issued under the 2024 Plan will be 5,900,000 of the outstanding Ordinary Shares, which amount shall automatically increase on January 1 of each year for a period of ten years commencing on January 1, 2024 and ending on (and including) January 1, 2033, in an amount equal to five percent (5%) of the total number of shares of Stock outstanding on December 31 of the preceding year; provided, however, that the Board may act prior to January 1^st of a given year to provide that the increase for such year will be a lesser number of shares of stock.

Our Ordinary Shares are subject to awards that will be granted under the 2024 Plan that expire or terminate without being exercised in full will not reduce the number of our Ordinary Shares available for issuance under the 2024 Plan. The settlement of any portion of an award in cash will not reduce the number of our Ordinary Shares available for issuance under the 2024 Plan. Our Ordinary Shares withheld under an award to satisfy the exercise, strike or purchase price of an award or to satisfy a tax withholding obligation will not reduce the number of our Ordinary Shares that will be available for issuance under the 2024 Plan. With respect to a stock appreciation right, only our Ordinary Shares that are issued upon settlement of the stock appreciation right will count towards reducing the number of our Ordinary Shares available for issuance under the 2024 Plan. If any of our Ordinary Shares issued pursuant to an award are forfeited back to or repurchased or reacquired by K Wave due to forfeiture, cancellation or expiration, then our Ordinary Shares that are forfeited or repurchased or reacquired will revert to and again become available for issuance under the 2024 Plan.

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Plan Administration

K Wave’s board of directors, or a duly authorized committee of K Wave’s board of directors, will administer the 2024 Plan. K Wave’s board of directors, or a duly authorized committee of K Wave’s board of directors, may, in accordance with the terms of the 2024 Plan, delegate to one or more of K Wave’s officers the authority to (i) designate employees (other than officers) to be recipients of specified awards, and to the extent permitted by applicable law, the terms of such awards; and (ii) determine the number of Ordinary Shares to be subject to such awards granted to such employees. Under the 2024 Plan, our board of directors, or a duly authorized committee of our board of directors, will have the authority to determine: award recipients; how and when each award will be granted; the types of awards to be granted; the provisions of each award, including the period of exercisability and the vesting conditions applicable to an award; the number of our Ordinary Shares or cash equivalent subject to each award; and the fair market value applicable to an award.

Under the 2024 Plan, (i) our board of directors will not, without stockholder approval, (a) reduce the exercise or strike price of an option or stock appreciation right (other than in connection with a capitalization adjustment), and (b) at any time when the exercise or strike price of an option or stock appreciation right is above the fair market value of Ordinary Shares, cancel and re-grant or exchange such option or stock appreciation right for a new award with a lower (or no) purchase price or for cash, and (ii) a participant’s rights under any award will not be materially adversely impaired by any amendment without the participant’s written consent.

We will also designate a plan administrator to administer the day-to-day operations of the 2024 Plan.

Stock Options

Options will be granted under stock option agreements adopted by our board of directors. Each option will be designated in writing as an ISO or an NSO. Our board of directors will determine the exercise price for stock options, within the terms and conditions of the 2023 Plan, except the exercise price of a stock option generally will not be less than 100% (or 110% in the case of ISOs granted to a person who owns or is deemed to own stock possessing more than 10% of K Wave’s total combined voting power or that of any of K Wave’s parent or subsidiary corporations, or a ten percent stockholder) of the fair market value of K Wave Ordinary Shares on the date of grant. Options granted under the 2024 Plan will vest at the rate specified in the stock option agreement as will be determined by our board of directors. The terms and conditions of separate options need not be identical.

No option will be exercisable after the expiration of ten years (or five years in the case of ISOs granted to a ten percent stockholder) or a shorter period specified in the applicable award agreement. Unless the terms of an optionholder’s stock option agreement, or other written agreement between K Wave and the recipient, provide otherwise, if an optionholder’s service relationship with K Wave or any of K Wave’s affiliates ceases for any reason other than disability, death or cause, the optionholder may generally exercise any vested options for a period of three months following the cessation of service. If an optionholder’s service relationship with K Wave or any of K Wave’s affiliates ceases due to death, or an optionholder dies within a certain period following cessation of service, the optionholder or a beneficiary may generally exercise any vested options for a period of 18 months following the date of death. If an optionholder’s service relationship with K Wave or any of K Wave’s affiliates ceases due to disability, the optionholder may generally exercise any vested options for a period of 12 months following the cessation of service. In the event of a termination for cause, options generally terminate upon the termination date. An optionholder may not exercise an option at any time that the issuance of shares upon such exercise would violate applicable law. Unless provided otherwise in the optionholder’s stock option agreement or other written agreement between an optionholder and us, if an optionholder’s service relationship with K Wave or any of K Wave’s affiliates ceases for any reason other than for cause and, at any time during the last thirty days of the applicable post-termination exercise period: (i) the exercise of the optionholder’s option would be prohibited solely because the issuance of shares of Ordinary Shares upon such exercise would violate applicable law, or (ii) the immediate sale of any shares of K Wave Ordinary Shares issued upon such exercise would violate K Wave’s trading policy, then the applicable post-termination exercise period will be extended to the last day of the calendar month that begins after the date the award would otherwise expire, with an additional extension of the exercise period to the last day of the next calendar month to apply if any of the foregoing restrictions apply at any time during such extended exercise period. There is no limitation as to the maximum permitted number of extensions. However, in no event may an option be exercised beyond the expiration of its term.

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Acceptable consideration for the purchase of K Wave Ordinary Shares issued upon the exercise of a stock option will be determined by K Wave’s board of directors and may include (i) cash or check, bank draft or money order payable to us; (ii) a broker-assisted cashless exercise; (iii) subject to certain conditions, the tender of shares of K Wave’s Ordinary Shares previously owned by the optionholder; (iv) a net exercise of the option if it is an NSO; or (v) other legal consideration acceptable to K Wave’s board of directors.

Unless our board of directors provides otherwise, options or stock appreciation rights generally will not be transferable except by will or the laws of descent and distribution. Subject to approval of our board of directors or a duly authorized officer, an option may be transferred pursuant to a domestic relations order.

Limitations on ISOs

The aggregate fair market value, determined at the time of grant, of K Wave Ordinary Shares with respect to ISOs that are exercisable for the first time by an optionholder during any calendar year under all of K Wave’s stock plans or plans of K Wave’s affiliates may not exceed $100,000. Options or portions thereof that exceed such limit will generally be treated as NSOs. No ISO may be granted to any person who, at the time of the grant, owns or is deemed to own stock possessing more than 10% of K Wave’s total combined voting power or that of any of K Wave’s parent or subsidiary corporations unless (i) the option exercise price is at least 110% of the fair market value of the stock subject to the option on the date of grant; and (ii) the term of the ISO does not exceed five years from the date of grant.

Restricted Stock Unit Awards

A restricted stock unit award represents a participant’s right to be issued on a future date the number of our Ordinary Shares that is equal to the number of restricted stock units subject to the award. A participant will not have voting or any other rights as a stockholder of K Wave’s with respect to any restricted stock unit award (unless and until shares are actually issued in settlement of a vested restricted stock unit award). A restricted stock unit award will be granted in consideration for a participant’s services to K Wave or an affiliate, such that the participant will not be required to make any payment to K Wave (other than such services) with respect to the grant or vesting of the restricted stock unit award, or the issuance of any Ordinary Shares pursuant to the restricted stock unit award. Our board of directors may determine that restricted stock unit awards may be granted in consideration for any form of legal consideration that may be acceptable to our board of directors and permissible under applicable law. A restricted stock unit award may be settled by cash, delivery of stock (or any combination of our Ordinary Shares and cash), or in any other form of consideration determined by our board of directors and set forth in the restricted stock unit award agreement. At the time of grant, K Wave’s board of directors may impose such restrictions or conditions on the award of restricted stock units that delay delivery to a date following the vesting of the award. Additionally, dividend equivalents may be paid or credited in respect of shares of K Wave Ordinary Shares covered by a restricted stock unit award. Except as otherwise provided in the applicable award agreement, or other written agreement between K Wave and the recipient, restricted stock unit awards that have not vested will be forfeited once the participant’s continuous service ends for any reason.

Restricted Stock Awards

Restricted stock awards will be granted under restricted stock award agreements adopted by our board of directors. A restricted stock award may be awarded in consideration for cash, check, bank draft or money order, past services to K Wave or any of K Wave’s affiliates, or any other form of legal consideration that may be acceptable to K Wave’s board of directors and permissible under applicable law. Our board of directors will determine the terms and conditions of restricted stock awards, including vesting and forfeiture terms. Dividends may be paid or credited with respect to shares subject to a restricted stock award, as determined by our board of directors and specified in the applicable restricted stock award agreement. If a participant’s service relationship with K Wave ends for any reason, K Wave may receive any or all of our Ordinary Shares held by the participant that have not vested as of the date the participant terminates service with K Wave through a forfeiture condition or a repurchase right.

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Stock Appreciation Rights

Stock appreciation rights will be granted under stock appreciation right agreements adopted by our board of directors and denominated in Ordinary Shares equivalents. The terms of separation stock appreciation rights need not be identical. K Wave’s board of directors will determine the purchase price or strike price for a stock appreciation right, which generally will not be less than 100% of the fair market value of our Ordinary Shares on the date of grant. A stock appreciation right granted under the 2023 Plan will vest at the rate specified in the stock appreciation right agreement as will be determined by K Wave’s board of directors. Stock appreciation rights may be settled in cash or shares of K Wave Ordinary Shares (or any combination of K Wave Ordinary Shares and cash) or in any other form of payment, as determined by our board of directors and specified in the stock appreciation right agreement.

Our board of directors will determine the term of stock appreciation rights granted under the 2024 Plan, up to a maximum of ten years. If a participant’s service relationship with us or any of K Wave’s affiliates ceases for any reason other than cause, disability, or death, the participant may generally exercise any vested stock appreciation right for a period of three months following the cessation of service. If a participant’s service relationship with K Wave or any of K Wave’s affiliates ceases due to death, or a participant dies within a certain period following cessation of service, the participant or a beneficiary may generally exercise any vested stock appreciation rights for a period of 18 months following the date of death. If a participant’s service relationship with K Wave or any of K Wave’s affiliates ceases due to disability, the participant may generally exercise any vested stock appreciation rights for a period of 12 months following the cessation of service. In the event of a termination for cause, stock appreciation rights generally terminate upon the termination date. A holder of a stock appreciation right may not exercise a stock appreciation right at any time that the issuance of shares upon such exercise would violate applicable law. Unless provided otherwise in the stock appreciation right agreement or other written agreement between the participant and us, if a participant’s service relationship with K Wave or any of K Wave’s affiliates ceases for any reason other than for cause and, at any time during the last thirty days of the applicable post-termination exercise period: (i) the exercise of the participant’s stock appreciation right would be prohibited solely because the issuance of shares upon such exercise would violate applicable law, or (ii) the immediate sale of any shares issued upon such exercise would violate K Wave’s trading policy, then the applicable post-termination exercise period will be extended to the last day of the calendar month that begins after the date the award would otherwise expire, with an additional extension of the exercise period to the last day of the next calendar month to apply if any of the foregoing restrictions apply at any time during such extended exercise period. There is no limitation as to the maximum permitted number of extensions. However, in no event may a stock appreciation right be exercised beyond the expiration of its term.

Other Stock Awards

Our board of directors are permitted to grant other awards, based in whole or in part by reference to, or otherwise based on Ordinary Shares, either alone or in addition to other awards. Our board of directors have the sole and complete discretion to determine the persons to whom and the time or times at which other stock awards are granted, the number of shares under the other stock award (or cash equivalent) and all other terms and conditions of such awards.

Non-Employee Director Compensation Limit

The aggregate value of all compensation granted or paid following the effective date of the 2024 Plan to any individual for service as a non-employee director with respect to any fiscal year, including awards granted under the 2024 Plan (valued based on the grant date fair value for financial reporting purposes) and cash fees paid by K Wave to such non-employee director, will not exceed $500,000 in total value.

Changes to Capital Structure

In the event there is a specified type of change in K Wave’s capital structure, such as a stock split, reverse stock split, or recapitalization, our board of directors will appropriately and proportionately adjust (i) the class(es) and maximum number of shares subject to the 2024 Plan and the maximum number of shares by which the share reserve may annually increase pursuant to the 2024 Plan; (ii) the class(es) and maximum number of shares that may be issued on the exercise of ISOs; and (iii) the class(es) and number of shares and exercise price, strike price, or purchase price, if applicable, of all outstanding awards granted under the 2024 Plan.

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Corporate Transactions

In the event of a corporate transaction (as defined below), unless otherwise provided in a participant’s award agreement or other written agreement with K Wave or one of K Wave’s affiliates or unless otherwise expressly provided by our board of directors at the time of grant, any awards outstanding under the 2024 Plan may be assumed, continued or substituted for, in whole or in part, by any surviving or acquiring corporation (or its parent company), and any reacquisition or repurchase rights held by K Wave with respect to our Ordinary Shares issued pursuant to awards may be assigned to the successor (or its parent company). If the surviving or acquiring corporation (or its parent company) does not assume, continue or substitute for such awards, then (i) with respect to any such awards that are held by participants whose continuous service has not terminated prior to the effective time of the corporate transaction, or current participants, the vesting (and exercisability, if applicable) of such awards will be accelerated in full (or, in the case of awards with performance-based vesting with multiple vesting levels depending on the level of performance, unless provided otherwise in the applicable award agreement, vesting will accelerate at 100% of the target level) to a date prior to the effective time of the corporate transaction (contingent upon the effectiveness of the corporate transaction) as our board of directors determines (or, if our board of directors does not determine such a date, to the date that is five days prior to the effective time of the corporate transaction), and such awards will terminate if not exercised (if applicable) at or prior to the effective time of the corporate transaction, and any reacquisition or repurchase rights held by K Wave with respect to such awards will lapse (contingent upon the effectiveness of the corporate transaction); and (ii) any such awards that are held by persons other than current participants will terminate if not exercised (if applicable) prior to the occurrence of the corporate transaction, except that any reacquisition or repurchase rights held by K Wave with respect to such awards will not terminate and may continue to be exercised notwithstanding the corporate transaction.

In the event an award will terminate if not exercised prior to the effective time of a corporate transaction, our board of directors may provide, in its sole discretion, that the holder of such award may not exercise such award but instead will receive a payment, in such form as may be determined by K Wave’s board of directors, equal in value to the excess (if any) of (i) the value of the property the participant would have received upon the exercise of the award, over (ii) any per share exercise price payable by such holder, if applicable. As a condition to the receipt of an award, a participant will be deemed to have agreed that the award will be subject to the terms of any agreement under the 2023 Plan governing a corporate transaction involving us.

Under the 2024 Plan, a “corporate transaction” generally will be the consummation, in a single transaction or in a series of related transactions, of (i) a sale or other disposition of all or substantially all, as determined by our board of directors, of the consolidated assets of K Wave and K Wave’s subsidiaries; (ii) a sale or other disposition of at least 50% of K Wave’s outstanding securities; (iii) a merger, consolidation or similar transaction following which K Wave is not the surviving corporation; or (iv) a merger, consolidation or similar transaction following which K Wave is the surviving corporation but the Ordinary Shares outstanding immediately prior to such transaction are converted or exchanged into other property by virtue of the transaction.

Transferability

Except as expressly provided in the 2024 Plan or the form of award agreement, awards granted under the 2024 Plan may not be transferred or assigned by a participant. After the vested shares subject to an award have been issued, or in the case of a restricted stock award and similar awards, after the issued shares have vested, the holder of such shares is free to assign, hypothecate, donate, encumber or otherwise dispose of any interest in such shares provided that any such actions are in compliance with the provisions herein, the terms of K Wave’s trading policy and applicable law.

Clawback/Recovery

All awards granted under the 2024 Plan will be subject to recoupment in accordance with any clawback policy that K Wave is required to adopt pursuant to the listing standards of any national securities exchange or association on which K Wave’s securities are listed or as is otherwise required by the Dodd-Frank Act or other applicable law and any clawback policy that K Wave otherwise adopts, to the extent applicable and permissible under applicable law. In addition, our board of directors may impose such other clawback, recovery or recoupment provisions in an award agreement as our board of directors determines necessary or appropriate, including but not limited to a reacquisition right in respect of previously acquired Ordinary Shares or other cash or property upon the occurrence of cause.

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Amendment or Termination

Our board of directors may accelerate the time at which an award granted under the 2024 Plan may first be exercised or the time during which an award grant under the 2024 Plan or any part thereof will vest, notwithstanding the provisions in the award agreement stating the time at which it may first be exercised or the time during which it will vest. Our board of directors will have the authority to amend, suspend, or terminate the 2024 Plan at any time, provided that such action does not materially impair the existing rights of any participant without such participant’s written consent. Certain material amendments will also require the approval of K Wave’s stockholders. No ISOs may be granted after the tenth anniversary of the date our board of directors adopts the 2024 Plan. No awards may be granted under the 2024 Plan while it is suspended or after it is terminated.

Certain U.S. Federal Income Tax Aspects of Awards under the 2024 Plan

The following is a general summary under current law of the material federal income tax consequences to participants in the 2024 Plan under U.S. law. This summary deals with the general tax principles that apply and is provided only for general information. Certain types of taxes, such as state and local income taxes and taxes imposed by jurisdictions outside the United States, are not discussed. Tax laws are complex and subject to change and may vary depending on individual circumstances and from locality to locality. The summary does not discuss all aspects of income taxation that may be relevant to a participant in light of his or her personal investment circumstances and this summarized tax information is not tax advice.

Section 162(m) of the Code

K Wave will be entitled to a tax deduction in connection with an award under the 2024 Plan only in an amount equal to the ordinary income realized by the participant at the time the participant recognizes the income. Section 162(m) of the Internal Revenue Code places a limit of $1 million on the amount of compensation that K Wave may deduct as a business expense in any year with respect to certain of K Wave’s most highly paid executive officers. While K Wave’s board of directors considers the deductibility of compensation as one factor in determining executive compensation, K Wave’s board of directors retains the discretion to pay compensation (including through the issuance of awards) that is not deductible as it believes that it is in the best interests of K Wave’s stockholders to maintain flexibility in K Wave’s approach to executive compensation and to structure a program that K Wave considers to be the most effective in attracting, motivating and retaining key employees.

Stock Options

A participant will not recognize taxable income at the time an option is granted, and K Wave will not be entitled to a tax deduction at that time. A participant will recognize compensation taxable as ordinary income (and subject to income tax withholding in respect of an employee) upon exercise of an NSO equal to the excess of the fair market value of the shares purchased over their purchase price, and K Wave will be entitled to a corresponding deduction, except to the extent the deduction limits of Section 162(m) of the Code apply. A participant will not recognize income (except for purposes of the alternative minimum tax) upon exercise of an ISO. If the shares acquired by exercise of an ISO are held for at least two years from the date the option was granted and one year from the date it was exercised, any gain or loss arising from a subsequent disposition of those shares will be taxed as long-term capital gain or loss, and K Wave will not be entitled to any deduction. If, however, such shares are disposed of within either of the above-described periods, then in the year of that disposition, the participant will recognize compensation taxable as ordinary income equal to the excess of the lesser of (i) the amount realized upon that disposition, and (ii) the excess of the fair market value of those shares on the date of exercise over the exercise price, and K Wave will be entitled to a corresponding deduction, except to the extent the deduction limits of Section 162(m) of the Code apply.

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Stock Appreciation Rights

A participant will not recognize taxable income at the time a stock appreciation right is granted, and K Wave will not be entitled to a tax deduction at that time. Upon exercise, the participant will recognize compensation taxable as ordinary income (and subject to income tax withholding in respect of an employee) in an amount equal to the fair market value of any shares delivered and the amount of cash paid upon settlement. This amount is deductible by K Wave as a compensation expense, except to the extent the deduction limits of Section 162(m) of the Code apply.

Restricted Stock

A participant will not recognize taxable income at the time restricted stock is granted, and K Wave will not be entitled to a tax deduction at that time, unless the participant makes an election to be taxed at that time. If such an election is made, the participant will recognize compensation taxable as ordinary income (and subject to income tax withholding in respect of an employee) at the time of the grant in an amount equal to the excess of the fair market value for the shares of K Wave Ordinary Shares at such time over the amount, if any, paid for those shares of K Wave Ordinary Shares. If such election is not made, the participant will recognize compensation taxable as ordinary income (and subject to income tax withholding in respect of an employee) at the time the restrictions constituting a substantial risk of forfeiture lapse in an amount equal to the excess of the fair market value of the Ordinary Shares at such time over the amount, if any, paid for those shares of K Wave Ordinary Shares. The amount of ordinary income recognized by making the above-described election or upon the lapse of restrictions is deductible by K Wave as compensation expense, except to the extent the deduction limits of Section 162(m) of the Code apply.

Restricted Stock Units

A participant will not recognize taxable income at the time that restricted stock units are granted, and K Wave will not be entitled to a tax deduction at that time. Upon settlement of restricted stock units, the participant will recognize compensation taxable as ordinary income (and subject to income tax withholding in respect of an employee) in an amount equal to the fair market value of any shares of K Wave Ordinary Shares or other consideration delivered and the amount of any cash paid by us. The amount of ordinary income recognized is deductible by K Wave as compensation expense, except to the extent the deduction limits of Section 162(m) of the Code apply.

Other Stock Awards

The tax consequences associated with any other stock award will vary depending on the specific terms of such award. Among the relevant factors are whether or not the award has a readily ascertainable fair market value, whether or not the award is subject to forfeiture provisions or restrictions on transfer, the nature of the property to be received by the participant under the award, and the participant’s holding period and tax basis for the award or underlying Ordinary Shares.

The tax consequences for equity awards outside of the United States may differ significantly from the U.S. federal income tax consequences described above.

New Plan Benefits

The awards, if any, that will be made to eligible persons under the 2024 Plan are subject to the discretion of the compensation committee of K Wave. Therefore, we cannot currently determine the benefits or number of shares of our Ordinary Shares subject to awards that may be granted in the future and a new plan benefits table is thus not provided.

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MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES

The following is a summary of certain United States federal income tax consequences of the ownership and disposition of our Ordinary Shares.

As used in this prospectus, the term “U.S. Holder” means a beneficial owner of Ordinary Shares, that is, for U.S. federal income tax purposes:

● an individual who is a citizen or resident of the United States;

● a corporation (or other entity that is classified as a corporation for U.S. federal income tax purposes) that is created or organized in or under the laws of the United States or any State thereof or the District of Columbia;

● an estate the income of which is subject to U.S. federal income tax regardless of its source; or

● a trust (i) if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (ii) that has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person for U.S. federal income tax purposes.

A “Non-U.S. Holder” means a beneficial owner of Ordinary Shares that is neither a U.S. Holder nor a partnership (or an entity or arrangement treated as a partnership) for U.S. federal income tax purposes.

This summary is based upon provisions of the Code, and regulations, rulings and judicial decisions as of the date hereof. Those authorities may be changed, perhaps retroactively, so as to result in United States federal income tax consequences different from those summarized below. This summary does not address all of the United States federal income tax consequences that may be relevant to you in light of your particular circumstances, nor does it address the Medicare tax on net investment income, United States federal estate and gift taxes or the effects of any state, local or non-United States tax laws. In addition, it does not represent a detailed description of the United States federal income tax consequences applicable to persons that or who are subject to special treatment under the United States federal income tax laws, including without limitation:

● banks or other financial institutions;

● insurance companies;

● mutual funds;

● pension or retirement plans;

● S corporations;

● broker or dealers in securities or currencies;

● traders in securities that elect mark-to-market treatment;

● regulated investment companies;

● real estate investment trusts;

● trusts or estates;

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● tax-exempt organizations (including private foundations);

● persons that hold the Ordinary Shares as part of a “straddle,” “hedge,” “conversion,” “synthetic security,” “constructive ownership transaction,” “constructive sale,” or other integrated transaction for U.S. federal income tax purposes;

● persons that have a functional currency other than the U.S. dollar;

● certain U.S. expatriates or former long-term residents of the United States;

● persons owning (directly, indirectly, or constructively) 5% (by vote or value) or more of our stock;

● persons that acquired the Ordinary Shares pursuant to an exercise of employee stock options or otherwise as compensation;

● partnerships or other entities or arrangements treated as pass-through entities for U.S. federal income tax purposes and investors in such entities;

● “controlled foreign corporations” within the meaning of Section 957(a) of the Code;

● partnerships or other pass-through entity for United States federal income tax purposes; “passive foreign investment companies” within the meaning of Section 1297(a) of the Code; and

● corporations that accumulate earnings to avoid U.S. federal income tax.

or).

We cannot assure you that a change in law will not alter significantly the tax considerations that we describe in this summary.

If a partnership (or other entity or arrangement treated as a partnership for United States federal income tax purposes) holds our Ordinary Shares, the tax treatment of a partner generally will depend upon the status of the partner and the activities of the partnership. If you are a partnership or a partner of a partnership considering an investment in our Ordinary Shares, you should consult your tax advisors.

If you are considering the purchase of our Ordinary Shares, you should consult your own tax advisors concerning the particular United States federal income tax consequences to you of the ownership and disposition of our Ordinary Shares, as well as the consequences to you arising under other United States federal tax laws and the laws of any other taxing jurisdiction.

Tax Residence of PubCo for U.S. Federal Income Tax Purposes

Pursuant to the opinion provided by Nelson Mullins Riley & Scarborough LLP, counsel to Global Star (the predecessor to PubCo) as to the material U.S. federal income tax consequences of the Business Combination to the U.S. Holders of Global Star securities, as a result of the Business Combination, although PubCo is incorporated under the laws of the Cayman Islands, PubCo expects that PubCo will be taxed as a U.S. corporation for U.S. federal income tax purposes under Section 7874 of the Code, and that PubCo will, among other consequences, be liable for U.S. federal income tax on its income. This discussion assumes that Section 7874 of the Code continues to apply to treat PubCo as a U.S. corporation for all purposes under the Code. If, for some reason (e.g., future repeal of Section 7874 of the Code), PubCo were no longer treated as a U.S. corporation under the Code, the U.S. federal income tax consequences described herein could be materially and adversely affected.

U.S. Federal Income Tax Consequences to U.S. Holders

The following discussion is a summary of certain material U.S. federal income tax consequences to U.S. Holders of the ownership and disposition of Ordinary Shares. Because under Section 7874 of the Code PubCo is treated as a U.S. corporation for U.S. federal income tax purposes, it cannot be a “passive foreign investment company” under Section 1297 of the Code.

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Distribution on PubCo Ordinary Shares

The gross amount of any distribution on our Ordinary Shares that is made out of our current and accumulated earnings and profits (as determined for U.S. federal income tax purposes) will generally be taxable to a U.S. Holder as ordinary dividend income on the date such distribution is actually or constructively received by such U.S. Holder. Any such dividends paid to corporate U.S. Holders generally will qualify for a dividends received deduction (pursuant to which a portion of the dividend may be deducted) if the requisite holding period is satisfied. Subject to applicable requirements and limitations, dividends paid to a non-corporate U.S. Holder generally will constitute “qualified dividends” that will be subject to tax at the preferential tax rate accorded to long-term capital gains.

Non-corporate U.S. Holders that do not meet a minimum holding period requirement or that elect to treat the dividend income as “investment income” pursuant to Section 163(d)(4) of the Code (dealing with the deduction for investment interest expense) will not be eligible for the reduced rates of taxation applicable to qualified dividends. In addition, the rate reduction will not apply to dividends if the recipient of a dividend is obligated to make related payments with respect to positions in substantially similar or related property. This disallowance applies even if the minimum holding period has been met.

To the extent that the amount of any distribution on our Ordinary Shares exceeds our current and accumulated earnings and profits for a taxable year (as determined under U.S. federal income tax principles), the distribution will first be treated as a tax-free return of capital, causing a reduction (but not below zero) in the adjusted basis of the U.S. Holder’s PubCo Ordinary Shares, and to the extent the amount of the distribution exceeds the U.S. Holder’s tax basis, the excess will be taxed as capital gain recognized on a sale or exchange as described below under “— Sale, Exchange, Redemption or Other Taxable Disposition of PubCo Securities.” However, we may not calculate earnings and profits in accordance with U.S. federal income tax principles. In such event, a U.S. Holder should expect to generally treat distributions on our Ordinary Shares as dividends.

Sale, Exchange, Redemption or Other Taxable Disposition of PubCo Ordinary Shares

A U.S. Holder will generally recognize gain or loss on any sale, exchange, redemption, or other taxable disposition of our Ordinary Shares in an amount equal to the difference between the amount realized on the disposition and such U.S. Holder’s adjusted tax basis in such Ordinary Shares. Any gain or loss recognized by a U.S. Holder on a taxable disposition of Ordinary Shares will generally be capital gain or loss and will be long-term capital gain or loss if the holder’s holding period in the Ordinary Shares exceeds one year at the time of the disposition. Preferential tax rates may apply to long-term capital gains of non-corporate U.S. Holders (including individuals). The amount of gain or loss recognized will generally be equal to the difference between (i) the sum of the amount of cash and the fair market value of any property received in such disposition and (ii) the U.S. Holder’s adjusted tax basis in its Ordinary Shares so disposed of. A U.S. Holder’s adjusted tax basis in its Ordinary Shares will generally equal the U.S. Holder’s acquisition cost for such shares, less any prior distributions treated as a return of capital. Long-term capital gains recognized by non-corporate U.S. Holders are generally eligible for reduced rates of tax. If the U.S. Holder’s holding period for its Ordinary Shares so disposed of is one year or less, any gain on a sale or other taxable disposition of the shares would be subject to short-term capital gain treatment and would be taxed at ordinary income tax rates. The deductibility of capital losses is subject to limitations.

U.S. Federal Income Tax Consequences to non-U.S. Holders

Dividends

In the event that we make a distribution of cash or other property (other than certain pro rata distributions of our stock) in respect of our Ordinary Shares, the distribution generally will be treated as a dividend for United States federal income tax purposes to the extent it is paid from our current or accumulated earnings and profits, as determined under United States federal income tax principles. Any portion of a distribution that exceeds our current and accumulated earnings and profits generally will be treated first as a tax-free return of capital, causing a reduction in the adjusted tax basis of a non-U.S. Holder’s Ordinary Shares, and to the extent the amount of the distribution exceeds a non-U.S. Holder’s adjusted tax basis in our Ordinary Shares, the excess will be treated as gain from the disposition of our Ordinary Shares (the tax treatment of which is discussed below under “— Gain on Disposition of Ordinary Shares”).

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Dividends paid to a non-U.S. Holder generally will be subject to withholding of United States federal income tax at a 30% rate or such lower rate as may be specified by an applicable income tax treaty. However, dividends that are effectively connected with the conduct of a trade or business by the non-U.S. Holder within the United States (and, if required by an applicable income tax treaty, are attributable to a United States permanent establishment) are not subject to the withholding tax, provided certain certification and disclosure requirements are satisfied. Instead, such dividends are subject to United States federal income tax on a net income basis generally in the same manner as if the non-U.S. Holder were a United States person as defined under the Code. Any such effectively connected dividends received by a foreign corporation may be subject to an additional “branch profits tax” at a 30% rate or such lower rate as may be specified by an applicable income tax treaty.

A non-U.S. Holder who wishes to claim the benefit of an applicable treaty rate and avoid backup withholding, as discussed below, for dividends will be required (a) to provide the applicable withholding agent with a properly executed Internal Revenue Service (“IRS”) Form W-BEN or Form W-8BEN-E (or other applicable form) certifying under penalty of perjury that such holder is not a United States person as defined under the Code and is eligible for treaty benefits or (b) if our Ordinary Shares are held through certain foreign intermediaries, to satisfy the relevant certification requirements of applicable United States Treasury regulations. Special certification and other requirements apply to certain non-U.S. Holder that are pass-through entities rather than corporations or individuals.

A non-U.S. Holder eligible for a reduced rate of United States federal withholding tax pursuant to an income tax treaty may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS.

Gain on Disposition of Ordinary Shares

Subject to the discussion of backup withholding below, any gain realized by a non-U.S. Holder on the sale or other disposition of our Ordinary Shares generally will not be subject to United States federal income tax unless:

● the gain is effectively connected with a trade or business of the non-U.S. Holder in the United States (and, if required by an applicable income tax treaty, is attributable to a United States permanent establishment of the non-U.S. Holder);

● the non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable year of that disposition, and certain other conditions are met; or

● we are or have been a “United States real property holding corporation” for United States federal income tax purposes and certain other conditions are met.

A non-U.S. Holder described in the first bullet point immediately above will be subject to tax on the gain derived from the sale or other disposition in the same manner as if the non-U.S. Holder were a United States person as defined under the Code. In addition, if any non-U.S. Holder described in the first bullet point immediately above is a foreign corporation, the gain realized by such non-U.S. Holder may be subject to an additional “branch profits tax” at a 30% rate or such lower rate as may be specified by an applicable income tax treaty. An individual non-U.S. Holder described in the second bullet point immediately above will be subject to a 30% (or such lower rate as may be specified by an applicable income tax treaty) tax on the gain derived from the sale or other disposition, which gain may be offset by United States source capital losses even though the individual is not considered a resident of the United States.

Generally, a corporation is a “United States real property holding corporation” if the fair market value of its United States real property interests equals or exceeds 50% of the sum of the fair market value of its worldwide real property interests and its other assets used or held for use in a trade or business (all as determined for United States federal income tax purposes). We believe we are not and do not anticipate becoming a “United States real property holding corporation” for United States federal income tax purposes.

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Information Reporting and Backup Withholding

U.S. Holders

In general, information reporting will apply to U.S. Holders dividends in respect of our Ordinary Shares held by U.S. Holders and the proceeds from the sale, exchange or other disposition of our ordinary shares that are paid to U.S. Holders within the United States (and in certain cases, outside the United States), unless U.S. Holders are an exempt recipient. A backup withholding tax may apply to such payments if U.S. Holders fail to provide a taxpayer identification number or certification of exempt status or fail to report in full dividend and interest income. Backup withholding is not an additional tax and any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against a U.S. Holder’s U.S. federal income tax liability, if any, provided the required information is timely furnished to the IRS.

Non-U.S. Holders

Distributions paid to a non-U.S. Holder and the amount of any tax withheld with respect to such distributions generally will be reported to the IRS. Copies of the information returns reporting such distributions and any withholding may also be made available to the tax authorities in the country in which the non-U.S. Holder resides under the provisions of an applicable income tax treaty.

A non-U.S. Holder will not be subject to backup withholding on distributions received if such holder certifies under penalty of perjury that it is a non-U.S. Holder (and the payor does not have actual knowledge or reason to know that such holder is a United States person as defined under the Code), or such holder otherwise establishes an exemption.

Information reporting and, depending on the circumstances, backup withholding will apply to the proceeds of a sale or other disposition of our Ordinary Shares within the United States or conducted through certain United States-related financial intermediaries, unless the beneficial owner certifies under penalty of perjury that it is a non-U.S. Holder (and the payor does not have actual knowledge or reason to know that the beneficial owner is a United States person as defined under the Code), or such owner otherwise establishes an exemption.

Backup withholding is not an additional tax and any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against a non-U.S. holder’s United States federal income tax liability provided the required information is timely furnished to the IRS.

Additional Withholding Requirements

Under Sections 1471 through 1474 of the Code (such Sections commonly referred to as “FATCA”), a 30% United States federal withholding tax may apply to any dividends paid on our Ordinary Shares to (i) a “foreign financial institution” (as specifically defined in the Code and whether such foreign financial institution is the beneficial owner or an intermediary) which does not provide sufficient documentation, typically on IRS Form W-8BEN-E, evidencing either (x) an exemption from FATCA, or (y) its compliance (or deemed compliance) with FATCA (which may alternatively be in the form of compliance with an intergovernmental agreement with the United States) in a manner which avoids withholding, or (ii) a “non-financial foreign entity” (as specifically defined in the Code and whether such non-financial foreign entity is the beneficial owner of an intermediary) which does not provide sufficient documentation, typically on IRS Form W-8BEN-E, evidencing either (x) an exemption from FATCA, or (y) adequate information regarding certain substantial United States beneficial owners of such entity (if any). If a dividend payment is both subject to withholding under FATCA and subject to the withholding tax discussed above under “- Dividends,” an applicable withholding agent may credit the withholding under FATCA against, and therefore reduce, such other withholding tax. While withholding under FATCA would also have applied to payments of gross proceeds from the sale or other taxable disposition of our Ordinary Shares, proposed United States Treasury regulations (upon which taxpayers may rely until final regulations are issued) eliminate FATCA withholding on payments of gross proceeds entirely. You should consult your own tax advisors regarding these requirements and whether they may be relevant to your ownership and disposition of our Ordinary Shares.

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SELLING SECURITYHOLDERS

This prospectus relates to the possible resale from time to time by the Selling Shareholders of any or all of the Offered Shares, which include the sum of (i) 893,200 Ordinary Shares into which the PIPE Notes may be converted by the PIPE Investors, (ii) 5,000,000 Ordinary Shares which the Company may sell to Bitcoin Strategic under the SEPA, (iii) 5,808,000 Ordinary Shares which the Company may issue to the Rabbit Walk Sellers pursuant to the Rabbit Walk Share Purchase Agreement, which consists of 2,904,000 Rabbit Walk Consideration Shares and 2,904,000 Rabbit Walk Earnout Shares Ordinary Shares, and (iv) 600,000 Ordinary Shares, 200,000 shares of which the Company issued to Galaxy Digital LP and 400,000 shares of which are issuable by the Company to Galaxy Digital upon its exercise of the Galaxy Warrant, in each case, in accordance with the Galaxy Securities Purchase Agreement. Because (i) the Company may issue in excess of 5,000,000 Ordinary Shares to Bitcoin Strategic under the SEPA,(ii) the number of shares issuable by the Company to the Rabbit Walk Sellers under the Rabbit Walk Share Purchase Agreement will depend on the exchange rate of KRW to U.S. Dollars as of the dates such shares are issued, and (iii) the exercise price of the Galaxy Warrants may be adjusted, the number of shares that will actually be issued by the Company to the Selling Shareholders may be more or less than the number of shares being offered by this prospectus.

Of the 12,451,200 Ordinary Shares being registered pursuant to the Registration Statement on Form F-1 of which this prospectus forms a part, 5,808,000 Ordinary Shares are being so registered for resale by the Rabbit Walk Sellers and are set forth in the table below. However, the number of Ordinary Shares to be issued by the Company to the Rabbit Walk Sellers pursuant to the Rabbit Walk Share Purchase Agreement will be dependent on the exchange rate of KRW to U.S. Dollars as of the time of the issuance of such Ordinary Shares. The number of Ordinary Shares being registered for resale pursuant to the Registration Statement on Form F-1 of which this prospectus forms a part has been calculated based on an estimated conversion rate of 1.00 KRW:0.00080 U.S. Dollars. Accordingly, the number of Ordinary Shares to be issued by the Company to the Rabbit Walk Sellers pursuant to the Rabbit Walk Share Purchase Agreement may be different than the number of shares set forth herein and in the table below, depending on the actual exchange rate of KRW to U.S. Dollars as of the time of the issuance of such Ordinary Shares

We are registering the Offered Shares in order to permit the Selling Shareholders to offer the shares for resale from time to time.

Except for the transactions contemplated by the PIPE Securities Purchase Agreement, the SEPA, the Rabbit Walk Share Purchase Agreement and the Galaxy Digital Securities Purchase Agreement, the Selling Shareholders (as applicable) have not had any material relationship with us within the past three years; provided that, Galaxy Digital LP is an affiliate of Galaxy Digital Capital Management LP, which serves as an asset manager and strategic advisor of the Company.

The table below lists the Selling Shareholders and other information regarding the beneficial ownership (as determined under Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder) of the Ordinary Shares held by each of the Selling Shareholders.

The second column lists the number of Ordinary Shares beneficially owned by the Selling Shareholders as of November 26, 2025, taking into account of any limitations (described below) on (i) the conversion of the PIPE Notes by the PIPE Investors as set forth in the PIPE Securities Purchase Agreement, (ii) the exercise of the Galaxy Warrant by Galaxy Digital LP as set forth in the Galaxy Securities Purchase Agreement, and (iii) the sale by the Company of Ordinary Shares to Bitcoin Strategic as set forth in the SEPA.

The third column lists the Offered Shares being offered by this prospectus by the Selling Shareholders and does not take into account any limitations on (i) the conversion of the PIPE Notes by the PIPE Investors as set forth in the PIPE Securities Purchase Agreement, (ii) the exercise of the Galaxy Warrant by Galaxy Digital LP as set forth in the Galaxy Securities Purchase Agreement, and (iii) the sale by the Company of Ordinary Shares to Bitcoin Strategic as set forth in the SEPA.

Under the terms of the PIPE Notes, a PIPE Investor may not convert its PIPE Notes to the extent (but only to the extent) such PIPE Investor or any of its affiliates would beneficially own a number of Ordinary Shares which would exceed 4.99% of the outstanding Ordinary Shares of the Company.

Pursuant to the Galaxy Warrants, Galaxy Digital LP may not exercise the Galaxy Warrants to the extent that after giving effect to the exercise, Galaxy Digital LP and certain of its affiliates would beneficially own in excess of 4.99%.

Pursuant to the SEPA, the Company may not effect any sales under the SEPA to the extent (but only to the extent) that after giving effect to such subscription the aggregate number of Ordinary Shares issued under the SEPA would exceed 19.99% of the aggregate amount of Ordinary Shares issued in the capital of the Company immediately prior to the date of the SEPA.

The fourth column assumes the sale of all of the Offered Shares by the Selling Shareholders.

The Selling Shareholders may sell all, some or none of their shares in this offering. See “Plan of Distribution.”

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The percentages used in the table below are based on 63,198,074 shares of our Ordinary Shares outstanding as of November 26, 2025.

	Number of Ordinary Shares Owned Prior to Offering					Maximum Number of Ordinary Shares to be Offered Pursuant to		Number of Ordinary Shares Owned After Offering
Name of Selling Shareholder	Number(1)(3)(4)		Percent			this Prospectus(2)(3)		Number		Percent
PIPE Investors:
Goldstar Global Capital VCC -Alpha Opportunities Fund		403,000		0.64	%		203,000		200,000		0.64	%
Joshua Guok		403,000		0.64	%		203,000		200,000		0.64	%
Nikhil Nanda		403,000		0.64	%		203,000		200,000		0.64	%
Gan Cher Siong		564,200		0.73	%		284,200		280,000		0.73	%
Rabbit Walk Sellers:
Yoon-wook Eo		316,800		0.50	%		316,800		0		0	%
Ho-Kyung Kim		105,600		0.17	%		105,600		0		0	%
Joong-Jae Lee		3,168,000		5.01	%		3,168,000		0		0	%
Myung-jong Kim		1,689,600		2.67	%		1,689,600		0		0	%
Phillip Kim		211,200		0.33	%		211,200		0		0	%
Young-Chun Kim		105,600		0.17	%		105,600		0		0	%
Seung-min Lee		52,800		0.08	%		52,800		0		0	%
Eun-Sook Park		52,800		0.08	%		52,800		0		0	%
Yeil Tax Corporation		105,600		0.17	%		105,600		0		0	%
Bitcoin Strategic Reserve KWM LLC		5,000,000		7.9	%		5,000,000		0		0	%
Galaxy Digital LP		600,000		0.95	%		600,000		0		0	%
Global Fund LLC		3,489,721		5.52			150,000		3,339,721		5.28	%

(1)	This number represents all of the Ordinary Shares we may issue to the Selling Shareholder under this prospectus and takes into account the limitations on (i) the conversion of the PIPE Notes by the PIPE Investors as set forth in the PIPE Securities Purchase Agreement, (ii) the exercise of the Galaxy Warrant by Galaxy Digital LP as set forth in the Galaxy Securities Purchase Agreement, and (iii) the sale by the Company of Ordinary Shares to Bitcoin Strategic as set forth in the SEPA.
(2)	This number represents all of the Ordinary Shares we may issue to the Selling Shareholder under this prospectus and does not take into account the limitations on (i) the conversion of the PIPE Notes by the PIPE Investors as set forth in the PIPE Securities Purchase Agreement, (ii) the exercise of the Galaxy Warrant by Galaxy Digital LP as set forth in the Galaxy Securities Purchase Agreement, and (iii) the sale by the Company of Ordinary Shares to Bitcoin Strategic as set forth in the SEPA.
(3)	Assumes six months of interest at 3.0% per annum is accrued and payable under the PIPE Notes at the applicable time of conversion. Also assumes a conversion rate of 1.00 KRW:0.00080 U.S. Dollars at the time the Rabbit Walk Consideration Shares and the Rabbit Walk Earnout Shares are issued.
(4)	Includes an aggregate of 200,000, 200,000, 200,000 and 280,000 Ordinary Shares transferred by Lodestar USA, Inc. to Goldstar Global Capital VCC-Alpha Opportunities Fund, Joshua Guok, Nikhil Nanda and Gan Cher Siong, respectively, to satisfy the Company PIPE Share Obligation following the Business Combination, which shares are not being offered for resale pursuant to this prospectus. See “The PIPE Securities Purchase Agreement” beginning on page 73 of this prospectus for additional information regarding the transfer of such Ordinary Shares by Lodestar.

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PLAN OF DISTRIBUTION

We are registering the Offered Shares to permit the resale of these Ordinary Shares by the Selling Shareholders from time to time after the date of this prospectus. We will not receive any of the proceeds from the sale by the Selling Shareholders of the Offered Shares. We will, however, receive the proceeds of any (i) sales of our Ordinary Shares to Bitcoin Strategic under the SEPA, and (ii) cash exercise of the Galaxy Warrant by Galaxy LP.

We will bear all fees and expenses incident to our obligation to register the Offered Shares.

The Selling Shareholders may sell all or a portion of the Offered Shares held by them and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents. If the Offered Shares are sold through underwriters or broker-dealers, the Selling Shareholders will be responsible for underwriting discounts or commissions or agent’s commissions. The Offered Shares may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale or at negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions, pursuant to one or more of the following methods:

● on any national securities exchange or quotation service on which the Offered Shares may be listed or quoted at the time of sale;

● in the over-the-counter market;

● in transactions otherwise than on these exchanges or systems or in the over-the-counter market;

● through the writing or settlement of options, whether such options are listed on an options exchange or otherwise;

● ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

● block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

● purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

● an exchange distribution in accordance with the rules of the applicable exchange;

● privately negotiated transactions;

● short sales made after the date the Registration Statement on Form F-1 of which this prospectus forms a part is declared effective by the SEC;

● broker-dealers may agree with a selling security holder to sell a specified number of such shares at a stipulated price per share;

● a combination of any such methods of sale; and

● any other method permitted pursuant to applicable law.

The Selling Shareholders may also sell the Offered Shares under Rule 144 promulgated under the Securities Act, if available, rather than under this prospectus. In addition, the Selling Shareholders may transfer the Offered Shares by other means not described in this prospectus. If the Selling Shareholders effect such transactions by selling Offered Shares to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from the Selling Shareholders or commissions from purchasers of the Offered Shares for whom they may act as agent or to whom they may sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers or agents may be in excess of those customary in the types of transactions involved). In connection with sales of the Offered Shares or otherwise, the Selling Shareholders may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the Offered Shares in the course of hedging in positions they assume. The Selling Shareholders may also sell Offered Shares short and deliver Offered Shares covered by this prospectus to close out short positions and to return borrowed shares in connection with such short sales. The Selling Shareholders may also loan or pledge Offered Shares to broker-dealers that in turn may sell such shares.

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The Selling Shareholders may pledge or grant a security interest in some or all of the Offered Shares owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the Offered Shares from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act amending, if necessary, the list of Selling Shareholders to include the pledgee, transferee or other successors in interest as Selling Shareholders under this prospectus. The Selling Shareholders also may transfer and donate the Offered Shares in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

To the extent required by the Securities Act and the rules and regulations thereunder, the Selling Shareholders and any broker-dealer participating in the distribution of the Offered Shares may be deemed to be “underwriters” within the meaning of the Securities Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed to be underwriting commissions or discounts under the Securities Act. At the time a particular offering of the Offered Shares is made, a prospectus supplement, if required, will be distributed, which will set forth the aggregate amount of Offered Shares being offered and the terms of the offering, including the name or names of any broker-dealers or agents, any discounts, commissions and other terms constituting compensation from the Selling Shareholders and any discounts, commissions or concessions allowed or re-allowed or paid to broker-dealers.

Under the securities laws of some states, the Offered Shares may be sold in such states only through registered or licensed brokers or dealers. In addition, in some states the Offered Shares may not be sold unless such shares have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with.

There can be no assurance that any Selling Shareholder will sell any or all of the Ordinary Shares registered pursuant to the Registration Statement on Form F-1 of which this prospectus forms a part.

The Selling Shareholders and any other person participating in such distribution will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including, without limitation, to the extent applicable, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the Offered Shares by the Selling Shareholders and any other participating person. To the extent applicable, Regulation M may also restrict the ability of any person engaged in the distribution of the Offered Shares to engage in market-making activities with respect to the Offered Shares. All of the foregoing may affect the marketability of the Offered Shares and the ability of any person or entity to engage in market-making activities with respect to Offered Shares.

We will pay all expenses of the registration of the Offered Shares, estimated to be $50,000 in total, including, without limitation, Securities and Exchange Commission filing fees and expenses of compliance with state securities or “Blue Sky” laws; provided, however, the Selling Shareholders will pay all underwriting discounts and selling commissions, if any. We will indemnify the Selling Shareholders against liabilities, including some liabilities under the Securities Act in accordance with the registration rights agreements or the Selling Shareholders will be entitled to contribution. We may be indemnified by the Selling Shareholders against civil liabilities, including liabilities under the Securities Act that may arise from any written information furnished to us by the Selling Shareholder specifically for use in this prospectus, in accordance with the related registration rights agreements or we may be entitled to contribution.

Once sold under the registration statement, of which this prospectus forms a part, the Offered Shares will be freely tradable in the hands of persons other than our affiliates.

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EXPERTS

The financial statements of K Wave Media Ltd. as of December 31, 2024 and December 31, 2023 and for the year ended December 31, 2024 and the period from June 22, 2023 (inception) to December 31, 2023 included in this Form F-1 have been so included in reliance on the report of Samil PricewaterhouseCoopers, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

The financial statements of K Enter Holdings Inc. as of December 31, 2024 and December 31, 2023 and for the year ended December 31, 2024 and for the period from January 4, 2023 (inception) to December 31, 2023 included in this Form F-1 have been so included in reliance on the report (which contains an explanatory paragraph relating to the Company’s ability to continue as a going concern as described in Note 2 to the financial statements) of Samil PricewaterhouseCoopers, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

The financial statements of Play Company Co., Ltd. as of December 31, 2024 and December 31, 2023 and for each of the three years in the period ended December 31, 2024 included in this Form F-1 have been so included in reliance on the report of Samil PricewaterhouseCoopers, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

The financial statements of The LAMP Co., Ltd. as of December 31, 2024 and December 31, 2023 and for the years then ended included in this Form F-1 have been so included in reliance on the report of Samil PricewaterhouseCoopers, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

The financial statements of Bidangil Pictures Co., Ltd. as of December 31, 2024 and December 31, 2023 and for the years then ended included in this Form F-1 have been so included in reliance on the report of Samil PricewaterhouseCoopers, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

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LEGAL MATTERS

The validity of the Ordinary Shares offered by this prospectus has been passed upon for us by Maples and Calder (Hong Kong) LLP. Certain matters regarding certain U.S. federal securities laws and material United States federal income tax consequences of the offering have been passed upon for us by Duane Morris LLP, Washington, DC.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form F-1 under the Securities Act with respect to the shares of Ordinary Shares offered by this prospectus. This prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement, some of which is contained in exhibits to the registration statement as permitted by the rules and regulations of the SEC. For further information with respect to us and our Ordinary Shares, we refer you to the registration statement, including the exhibits filed as a part of the registration statement.

Statements contained in this prospectus concerning the contents of any contract or any other document are not necessarily complete. If a contract or document has been filed as an exhibit to the registration statement, please see the copy of the contract or document that has been filed. Each statement is this prospectus relating to a contract or document filed as an exhibit is qualified in all respects by the filed exhibit. The SEC maintains an Internet website that contains reports, proxy statements and other information about issuers, like us, that file electronically with the SEC. The address of that website is www.sec.gov.

201

INDEX TO FINANCIAL STATEMENTS

	Page
Audited Consolidated Financial Statements of K Wave Media Ltd.
Report of Independent Registered Public Accounting Firm	F-3
Consolidated Statements of Financial Position as of December 31, 2024 and 2023	F-4
Consolidated Statements of Operations for the year ended December 31, 2024 and period from June 22, 2023 (inception) to December 31, 2023	F-5
Consolidated Statements of Changes in Stockholders’ Deficit (Equity) for the year ended December 31, 2024 and period from June 22, 2023 (inception) to December 31, 2023	F-6
Consolidated Statements of Cash Flows for the year ended December 31, 2024 and period from June 22, 2023 (inception) to December 31, 2023	F-7
Notes to Consolidated Financial Statements	F-8 – F-11
Unaudited Condensed Consolidated Financial Statements of K Wave Media Ltd.
Unaudited Condensed Consolidated Statements of Financial Position as of June 30, 2025 and December 31, 2024	F-12 – F-14
Unaudited Condensed Consolidated Statements of Comprehensive Income for the six-month periods ended June 30, 2025 and 2024	F-15
Unaudited Condensed Consolidated Statements of Changes in Equity for the six-month periods ended June 30, 2025 and 2024	F-16
Unaudited Condensed Consolidated Statements of Cash Flows for the six-month periods ended June 30, 2025 and 2024	F-17
Notes to Unaudited Condensed Consolidated Financial Statements	F-18 – F-90
Audited Consolidated Financial Statements of Play Company Co., Ltd.
Report of Independent Registered Public Accounting Firm	F-91
Consolidated Statements of Financial Position as of December 31, 2024 and 2023	F-92 – F-93
Consolidated Statements of Operations for the years ended December 31, 2024 and 2023	F-94
Consolidated Statements of Changes in Equity for the years ended December 31, 2024, 2023 and 2022	F-95
Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022	F-96
Notes to Consolidated Financial Statements	F-97 – F-170
Audited Financial Statements of The LAMP Co., Ltd.
Report of Independent Registered Public Accounting Firm	F-171 – F-172
Statements of Financial Position as of December 31, 2024 and 2023	F-173
Statements of Operations for the years ended December 31, 2024 and 2023	F-174
Statements of Changes in Equity for the years ended December 31, 2024 and 2023	F-175
Statements of Cash Flows for the years ended December 31, 2024 and 2023	F-176
Notes to Financial Statements	F-177 – F-221

F-1

Audited Consolidated Financial Statements of Bidangil Pictures Co., Ltd.
Report of Independent Registered Public Accounting Firm	F-222 – F-223
Consolidated Statements of Financial Position as of December 31, 2024 and 2023	F-224 – F-225
Consolidated Statements of Operations for the years ended December 31, 2024 and 2023	F-226
Consolidated Statements of Changes in Equity for the years ended December 31, 2024 and 2023	F-227
Consolidated Statements of Cash Flows for the years ended December 31, 2024 and 2023	F-228
Notes to Consolidated Financial Statements	F-229 – F-268
Audited Financial Statements of K Enter Holdings Inc.
Report of Independent Registered Public Accounting Firm	F-269
Balance Sheets as of December 31, 2024 and 2023	F-270
Statements of Operations and Comprehensive Loss for the year ended December 31, 2024 and for the period from January 4, 2023 (inception) through December 31, 2023	F-271
Statements of Changes in Stockholders’ Equity for the year ended December 31, 2024 and for the period from January 4, 2023 (inception) through December 31, 2023	F-272
Statements of Cash Flow for the year ended December 31, 2024 and for the period from January 4, 2023 (inception) through December 31, 2023	F-273
Notes to Financial Statements	F-274 – F-296

F-2

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholder of
K Wave Media Ltd.

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of financial position of K Wave Media Ltd. and its subsidiary (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations and comprehensive loss, of changes in equity and of cash flows for the year ended December 31, 2024 and the period from June 22, 2023 (inception) to December 31, 2023, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the year ended December 31, 2024 and the period from June 22, 2023 (inception) to December 31, 2023 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Samil PricewaterhouseCoopers

Seoul, KOREA

May 14, 2025

We have served as the Company’s auditor since 2024.

F-3

K WAVE MEDIA LTD.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

As of December 31, 2024 and December 31, 2023

	December 31, 2024			December 31, 2023
ASSETS
Other receivables – related parties		50,000			50,000
TOTAL ASSETS	$	50,000		$	50,000
LIABILITIES AND STOCKHOLDERS’ EQUITY
Other payables		7,256			7,256
Other payables – related parties		5,551			5,551
TOTAL LIABILITIES	$	12,807		$	12,807
STOCKHOLDERS’ EQUITY
Common stock		50,000			50,000
Other reserves		(1,376	)		(1,376	)
Accumulated deficit		(11,431	)		(11,431	)
Total stockholders’ equity		37,193			37,193
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	50,000		$	50,000

The accompanying notes are an integral part of these consolidated financial statements.

F-4

K WAVE MEDIA LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

For the year ended December 31, 2024 and period from June 22, 2023 (inception) to December 31, 2023

	2024		For the period from June 22, 2023 (inception) to December 31, 2023
Revenue	$	-	$	-
Operating expenses
General and administrative expenses		-		11,431
Total operating cost and expenses		-		11,431
Loss from operations		-		(11,431	)
Net loss	$	-	$	(11,431	)
Comprehensive loss	$	-	$	(11,431	)
Weighted average number of Ordinary Shares outstanding, basic and diluted		5,000,000		5,000,000
Basic and diluted net loss per share of common stock	$	-	$	(0.002	)

The accompanying notes are an integral part of these consolidated financial statements.

F-5

K WAVE MEDIA LTD.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the year ended December 31, 2024 and period from June 22, 2023 (inception) to December 31, 2023

	Common stock				Other			Accumulated
	Shares		Amount		Reserves			Deficit			Total
Balance, June 22, 2023 (inception)		-	$	-	$	-		$	-		$	-
Shares issued for related party receivable		5,000,000		50,000		-			-			50,000
Other reserves		-		-		(1,376	)		-			(1,376	)
Net loss		-		-		-			(11,431	)		(11,431	)
Balance, December 31, 2023		5,000,000	$	50,000	$	(1,376	)	$	(11,431	)	$	37,193
Balance, January 1, 2024		5,000,000	$	50,000	$	(1,376	)	$	(11,431	)	$	37,193
Net loss		-		-		-			-			-
Balance, December 31, 2024		5,000,000	$	50,000	$	(1,376	)	$	(11,431	)	$	37,193

The accompanying notes are an integral part of these consolidated financial statements.

F-6

K WAVE MEDIA LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the year ended December 31, 2024 and period from June 22, 2023 (inception) to December 31, 2023

	2024		For the period from June 22, 2023 (inception) to December 31, 2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	-	$	(11,431	)
Adjustments to reconcile net income to net cash used in operations:
Changes in operating assets and liabilities:
Other payables		-		7,257
Other payables – related parties		-		4,174
CASH USED IN OPERATING ACTIVITIES		-		-
CASH FLOWS FROM INVESTING ACTIVITIES		-		-
CASH USED IN INVESTING ACTIVITIES		-		-
CASH FLOWS FROM FINANCING ACTIVITIES		-		-
CASH USED IN FINANCING ACTIVITIES		-		-
Cash and cash equivalents, beginning of period		-		-
Cash and cash equivalents, end of period	$	-	$	-

The accompanying notes are an integral part of these consolidated financial statements.

F-7

K WAVE MEDIA LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2024 and period from June 22, 2023 (inception) to December 31, 2023

1. General Information

K Wave Media Ltd. (“the Company”), a wholly-owned subsidiary of Global Star Acquisition Inc. (“Global Star”), 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 maintains 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. As of December 31, 2024, Merger Sub had no operations. 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 (the “Merger Agreement”), which provides 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 will be effected in two steps: (i) subject to the approval and adoption of the Merger Agreement by the stockholders of Global Star, Global Star will reincorporate 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, the Merger Sub will be merged with and into K Enter, resulting in K Enter being a wholly owned subsidiary of the Company.

On July 13, 2023, the Company and the Merger Sub executed a written Joinder Agreement to become parties to the Merger Agreement to comply with the terms and conditions of the Merger Agreement, accordingly, the Merger Agreement is by and among Global Star, the Company, Merger Sub, and K Enter.

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 expects to cancel all the outstanding 5,000,000 shares of the Company’s ordinary shares as of the effective date of the Business Combination. In connection with the Reincorporation Merger, the Company expects to issue 4,178,790 ordinary shares of the Company to the stockholders of Global Star, Also, pursuant to the Merger Agreement the Company expects to issue a total of 59,000,000 ordinary shares of the Company as consideration for a total of 189,013 shares of K Enter. This consists 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 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 will be 59,000,000 ordinary shares in connection with the closing of the Business Combination. Following the consummation of all the transactions contemplated by the Business Combination, the total outstanding shares of the Company will be 63,178,790.

On February 3, 2025, shareholders of Global Star approved the proposals regarding Merger Agreement on the shareholders’ meeting. The Merger Agreement was completed on May 13, 2025, and the Company became the surviving publicly-traded entity.

2. Basis of Accounting

These consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”), on the historical cost basis, and in the presentation currency USD. All amounts are in actual USD unless otherwise stated. The costs of business operations are paid by K Enter and therefore no accounting transactions have been recorded in 2024. These consolidated financial statements were authorized for issuance by the board of directors on May 14, 2025.

The number of shares used to calculate diluted loss per share of common shares attributable to common shareholders is the same as the number of shares used to calculate basic loss per share of common shares attributable to common shareholders for the period presented because there were no potentially dilutive securities outstanding during the period.

F-8

K WAVE MEDIA LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2024 and period from June 22, 2023 (inception) to December 31, 2023

The loss per share presented in the statements of operations and comprehensive loss is based on the following for the year ended December 31, 2024 and period from June 22, 2023 (inception) to December 31, 2023:

	2024		For the period from June 22, 2023 (inception) to December 31, 2023
Basic and diluted net loss per share:
Numerator
Allocation of net loss	$	-	$	(11,431	)
Denominator:
Basic and diluted weighted average number of shares outstanding		5,000,000		5,000,000
Basic and diluted net loss per share	$	-	$	(0.002	)

3. Material accounting policies

The material accounting policies followed by the Group in preparation of its financial statements are as follows:.

A. New and amended standards or interpretations adopted by the Company

IAS 1 Presentation of Financial Statements - Classification of Liabilities as Current or Non-current

The amendments to IAS 1 clarify that liabilities are classified as either current or non-current, depending on the substantive rights that exist at the end of the reporting period. Classification is unaffected by the likelihood that an entity will exercise right to defer settlement of the liability or the expectations of management. Also, the settlement of liability includes the transfer of the entity’s own equity instruments, however, it would be excluded if an option to settle them by the entity’s own equity instruments if compound financial instruments is met the definition of equity instruments and recognized separately from the liability. The amendments do not have a significant impact on the financial statements.

IAS 7 Statement of Cash Flows - IFRS 7 Financial Instruments: Disclosures – Supplier finance arrangements

The amendments to IAS 7 require entity to disclose information about its supplier finance arrangements that enables users of financial statements to assess the effects of those arrangements on the entity’s liabilities and cash flows and on the entity’s exposure to liquidity risk when applying supplier finance arrangements. The amendments do not have a significant impact on the financial statements.

IFRS 16 – Lease Liability in a Sale and Leaseback

The amendments to IFRS 16 require a seller-lessee shall determine lease payments or revised lease payments in a way that the seller-lessee would not recognize any amount of the gain or loss that relates to the right of use retained by the seller-lessee when subsequently measuring lease liabilities arising from a sale and leaseback. The amendments do not have a significant impact on the financial statements.

B. New and amended standards or interpretations not yet adopted by the Company

The following new accounting standards and interpretations that have been published that are not mandatory for December 31, 2024 reporting periods and have not been early adopted by the Company.

F-9

K WAVE MEDIA LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2024 and period from June 22, 2023 (inception) to December 31, 2023

IAS 21 The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability

The amendments require exchangeability of two currencies should be assessed in order to clarify reporting of foreign currency transactions in the absence of normal-functioning foreign exchange market. The amendments also require applicable spot exchange rate should be determined when the assessment indicates two currencies lack exchangeability. The amendments are effective for annual reporting periods beginning on or after January 1, 2025, with early application permitted. The Company does not expect that these amendments have a significant impact on the Company’s financial statements.

IFRS 9 Financial Instruments - IFRS 7 Financial Instruments: Disclosures – Classification and Measurement of Financial Instruments

The amendments clarify that a financial liability is derecognised on the ‘settlement date’ and introduce an accounting policy choice to derecognise financial liabilities settled using an electronic payment system before the settlement date. Other clarifications include the classification of financial assets with ESG linked features via additional guidance on the assessment of contingent features. Clarifications have been made to non-recourse loans and contractually linked instruments. Additional disclosures are introduced for financial instruments with contingent features and equity instruments classified at fair value through OCI.

The amendments should be applied for annual periods beginning on or after January 1, 2026, and earlier application is permitted, with an option to early adopt the amendments for contingent features only. The Company does not expect that these amendments have a significant impact on the financial statements.

Annual Improvements to IFRS Accounting Standards – Volume 11

The amendments are annual improvements to the following standards:

- IFRS 1 First-time adoption of International Financial Reporting Standards;

- IFRS 7 Financial instruments: Disclosures;

- IFRS 9 Financial instruments;

- IFRS 10 Consolidated financial instruments; and

- IAS 7 Statement of cash flows

The new standard should be applied for annual periods beginning on or after January 1, 2026, and earlier application is permitted. The Company is in review for the impact of this new standard on the financial statements.

IFRS 18 Presentation and Disclosure in Financial Statements

Items in the statement of profit or loss will need to be classified into one of five categories: operating, investing, financing, income taxes and discontinued operations. IFRS 18 requires the Company to present specified totals and subtotals: ‘Operating profit or loss’, ‘Profit or loss’ and ‘Profit or loss before financing and income taxes’. Information related to management-defined performance measures should be disclosed. IFRS 18 also provides enhanced guidance on the principles of aggregation and disaggregation which focus on grouping items based on their shared characteristics. The new standard should be applied for annual periods beginning on or after January 1, 2027, and earlier application is permitted. The Company is in review for the impact of this new standard on the financial statements.

IFRS 19 Subsidiaries without Public Accountability: Disclosures

IFRS 19 allows eligible subsidiaries to apply IFRS Accounting Standards with the reduced disclosure requirements of IFRS 19. A subsidiary may choose to apply the new standard in its consolidated, separate or individual financial statements provided that, at the reporting date, it does not have public accountability, and its parent produces consolidated financial statements under IFRS Accounting Standards. A subsidiary applying IFRS 19 is required to disclose in its explicit and unreserved statements of compliance with IFRS Accounting Standards that IFRS 19 has been adopted. The amendments should be applied for annual periods beginning on or after January 1, 2027, and earlier application is permitted. The Company does not expect that these amendments have a significant impact on the financial statements.

F-10

K WAVE MEDIA LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2024 and period from June 22, 2023 (inception) to December 31, 2023

C. Financial assets and Financial liabilities

Financial instruments are any form of contract that gives rise to a financial asset in one company and a financial liability or equity instrument in another company. A financial asset or financial liability is included in the balance sheet when the entity becomes a party to the contractual terms of the instrument. Other financial liabilities and other financial assets, including liabilities to and receivables from related parties, are valued at amortized cost. A financial asset is removed from the balance sheet when the contractual right to cash flow from the asset has ceased or been settled. The same applies where the risks and benefits associated with the holding are essentially transferred to another party and the entity no longer has control over the financial asset. A financial liability is derecognized when the agreed obligation has been fulfilled or ceased.

D. Transaction costs in issuing equity securities, organization costs, and other service fees

When issuing common stock, incremental costs directly attributable to the equity transaction that otherwise would have been avoided are accounted for as a deduction from equity while other issuing related costs and organization costs are expensed as incurred. For the period from June 22, 2023 (inception) to December 31, 2023, $1,376 was deducted from equity while $3,882 was expensed as incurred. $7,549 service fees were expensed as incurred. $5,551 is owed to Global Star and recorded as a payable under the caption Other payables - related parties in the Group’s Consolidated Statement of Financial Position.

4. Share capital

Details of share capital as of December 31, 2024 and 2023 are as follows:

	December 31, 2024		December 31, 2023
Number of authorized shares		5,000,000		5,000,000
Value per share	$	0.01	$	0.01
Number of shares issued		5,000,000		5,000,000
Common shares	$	50,000	$	50,000

During June 2023, the Group entered into an agreement to issue 5,000,000 shares of common shares for gross proceeds of $50,000. Each ordinary share maintains one voting right. The entire amount of this equity is held by Global Star and recorded as a receivable under the caption Other receivables - related parties in the Group’s Consolidated Statements of Financial Position.

5. Subsequent Events

During January 2025, the Company entered into agreements with five investors to issue Convertible Senior Unsecured Notes (principal amount $4.5 million), contingent upon the consummation of the business combination. The agreements include various terms and conditions, including the issuance of bonus shares by the Company and 3-year maturity with 3% annual coupon rate.

On February 3, 2025, shareholders of Global Star approved the proposals regarding Merger Agreement on the shareholders’ meeting. The Merger Agreement was completed on May 13, 2025.

F-11

K WAVE MEDIA LTD.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

As of June 30, 2025 and December 31, 2024

	Note		June 30, 2025		December 31, 2024
			(In thousands of Korean won)
Assets
Cash and cash equivalents		₩		8,724,499		4,150,572
Short-term financial instruments	18			435,674		423,524
Short-term investment securities	18			450,680		-
Accounts receivable — trade, net				5,677,833		9,210,441
- Related parties				3,084,488		1,983,270
- Non-related parties				2,593,345		7,227,171
Short-term loans, net	17, 18			1,103,400		787,400
- Related parties				1,032,400		662,400
- Non-related parties				71,000		125,000
Accounts receivable — other, net				1,312,352		130,482
- Related parties				119,563		125,687
- Non-related parties				1,192,789		4,795
Value added tax receivables				59,695		-
Other current assets				4,735,833		664,632
Other current financial assets	17, 18			110,110		40,000
Contract assets	4			852,385		-
- Related parties				103,484
- Non-related parties				748,901
Current tax assets				373		347,480
Inventories, net	9			2,050,053		818,324
Total current assets				25,512,887		16,572,855
Long-term financial instruments	17, 18			308,830		322,538
Long-term loans, net	17, 18			120,054		-
- Related parties				120,054		-
Long-term investment securities	18			3,439,262		730,391
- Related parties				800,000
- Non related parties				2,639,262
Investments in associates	11			76,322		-
Property and equipment including right-of-use assets	12			9,071,860		12,049,988
Intangible assets other than goodwill	13			6,345,570		4,533,587
Goodwill	13, 14			181,596,343		3,267,730
Investment properties	10			1,511,564		400,999
Other non-current financial assets	17, 18			2,331,697		1,803,220
Other non-current non-financial assets	17, 18			5,041,723		1,907,965
Deferred tax assets	8			1,258,384		1,011,013
Total non-current assets				211,101,609		26,027,431
Total assets		₩		236,614,496		42,600,286

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-12

K WAVE MEDIA LTD.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

As of June 30, 2025 and December 31, 2024

	Note		June 30, 2025		December 31, 2024
			(In thousands of Korean won)
Liabilities
Trade and other payables		₩		56,911,144		14,039,752
- Related parties				35,083,179		1,357,101
- Non-related parties				21,827,965		12,682,651
Other current financial liabilities	17, 18			201,286		130,000
- Related parties				1,286		-
- Non-related parties				200,000		-
Current derivative liabilities				1,024,823		-
- Related parties				380,298
- Non-related parties				644,525
Warrants				1,740,565		-
Other current non-financial liabilities	17, 18			4,055,359		1,443,694
Contract liabilities	4			4,821,533		-
- Related parties				93,932		-
- Non-related parties				4,727,601		-
Short-term borrowings	17, 18			10,296,121		3,764,000
- Related parties				1,356,881		864,000
- Non-related parties				8,939,240		2,900,000
Current portion of long-term borrowings, net	17, 18			2,150,907		2,108,956
- Related parties				2,150,907		2,090,236
- Non-related parties				-		18,720
Convertible Note	19			4,029,616		-
- Related parties				2,643,583
- Non related parties				1,386,033
Current lease liabilities	21			1,859,391		1,786,577
Current tax liabilities	8			1,077,781		108,961
Total current liabilities				88,168,526		23,381,940
Trade and other non-current payables				4,178,787		21,694
- Related parties				4,174,916
- Non related parties				3,871		21,694
Other non-current financial liabilities	17, 18			120,000		150,000
Other non-current non-financial liabilities	17, 18			710,000		-
Defined benefit liabilities	7			1,164,006		559,270
Other non-current provisions				1,042,918		609,951
Non-current lease liabilities	21			7,132,941		9,302,661
Deferred tax liabilities	8			492,271		399,158
Total non-current liabilities				14,840,923		11,042,733
Total liabilities		₩		103,009,449		34,424,673

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-13

K WAVE MEDIA LTD.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

As of June 30, 2025 and December 31, 2024

	Note		June 30, 2025			December 31, 2024
			(In thousands of Korean won)
Equity
Share capital	16	₩		8,929			1,226
Share premium				205,353,734			498,774
Accumulated other comprehensive loss				(12,029,900	)		181,516
Other reserves	16			(57,494,281	)		(27,874,562	)
Retained earnings (Accumulated Deficit)	5			(3,389,033	)		35,959,433
Equity attributable to owners of the Parent Company				132,449,449			8,766,387
Non-controlling interest				1,155,598			(590,774	)
Total equity				133,605,047			8,175,613
Total liabilities and equity		₩		236,614,496			42,600,286

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-14

K WAVE MEDIA LTD.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Six-month Periods Ended June 30, 2025 and 2024

	Note		Six-month period ended June 30, 2025			Six-month period ended June 30, 2024
			(In thousands of Korean won except per share data)
Revenues
Content Merchandising Revenue	3, 4	₩		17,961,103			11,479,769
- Related parties				4,191,797			4,046,663
- Non-related parties				13,769,306			7,433,106
F&B Revenue	3, 4			6,390,493			7,502,210
- Related parties				17,518			29,992
- Non-related parties				6,372,975			7,472,218
Content production revenue	3, 4			6,032,045			-
- Related parties				(33,024	)		-
- Non-related parties				6,065,069			-
Content investment revenue	3, 4			218,469			-
- Related parties				209,083			-
- Non-related parties				9,386			-
Total revenues				30,602,110			18,981,979
Cost of revenues				(28,120,357	)		(16,837,518	)
Gross profit				2,481,753			2,144,461
Selling, general and administrative expenses				(38,693,415	)		(2,054,742	)
Other income				787,720			548,442
Other expenses				(864,500	)		(322,366	)
Operating profit				(36,288,442	)		315,795
Finance income				478,684			172,646
- Related parties				73,274			60,750
- Non-related parties				405,410			111,896
Finance costs				(4,414,451	)		(907,934	)
- Related parties				(176,752	)		(120,831	)
- Non-related parties				(4,237,699	)		(787,103	)
Loss before income tax				(40,224,209	)		(419,493	)
Income tax benefit	8			6,788			61,343
Loss for the period		₩		(40,217,421	)		(358,150	)
Other comprehensive loss
Items that will not be reclassified to income or loss:
Foreign Currency Translation adjustments				(12,211,416	)		-
Total comprehensive loss for the period		₩		(52,428,837	)		(358,150	)
Loss attributable to:
Owners of the Parent Company				(39,348,466	)		(78,784	)
Non‑controlling interest				(868,955	)		(279,366	)
Total comprehensive loss attributable to:
Owners of the Parent Company				(51,559,882	)		(78,784	)
Non-controlling interest				(868,955	)		(279,366	)
Earnings per share (in Korean won)
Basic earnings per share	5	₩		(655	)		(9	)
Diluted earnings per share	5			(655	)		(9	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-15

K WAVE MEDIA LTD.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the Six-month Periods Ended June 30, 2025 and 2024

			Attributable to owners of the Parent Company
	Note		Share capital		Capital Surplus		Accumulated other comprehensive income			Other Component of Capital			Retained Earnings			Total			Non-controlling interest			Total equity
				(in thousands of Korean won)
Balance at January 1, 2024		₩		1,226		498,774		151,922			(27,874,562	)		38,500,808			11,278,168			411,556			11,689,724
Total comprehensive loss for the period								-			-
Loss for the period				-		-		-			-			(78,784	)		(78,784	)		(279,366	)		(358,150	)
Balance at June 30, 2024				1,226		498,774		151,922			(27,874,562	)		38,422,024			11,199,384			132,190			11,331,574
Balance at January 1, 2025				1,226		498,774		181,516			(27,874,562	)		35,959,433			8,766,387			(590,774	)		8,175,613
Transaction with owners, recognized directly in equity																	-						-
Business combination - K enter	14			7,115		192,340,130		-			(36,630,522	)		-			155,716,723			2,615,327			158,332,050
Acquisition Merger	16			588		12,514,830		-			(588,099	)		-			11,927,319			-			11,927,319
conversion of convertible bonds, shares not yet issued	19			-		-		-			7,598,902			-			7,598,902			-			7,598,902
Total comprehensive loss for the period																	-						-
Loss for the year				-		-		-			-			(39,348,466	)		(39,348,466	)		(868,955	)		(40,217,421	)
Other comprehensive loss				-		-		(12,211,416	)		-			-			(12,211,416	)		-			(12,211,416	)
Balance at June 30, 2025		₩		8,929		205,353,734		(12,029,900	)		(57,494,281	)		(3,389,033	)		132,449,449			1,155,598			133,605,047

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-16

K WAVE MEDIA LTD.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six-Month Periods Ended June 30, 2025 and 2024

	Note		Six-month period ended June 30, 2025			Six-month period ended June 30, 2024
			(In thousands of Korean won)
Cash flows from operating activities
Net income(loss) for the period		₩		(40,217,421	)		(358,150	)
Adjustments to reconcile net income to net cash provided by (used in) operating activities	23			35,454,670			(1,900,652	)
Interest received				21,041			20,694
Interest paid				(341,147	)		(527,262	)
Income taxes paid				347,174			(325,126	)
Dividend received				2,258			1,463
Net cash outflow from operating activities				(4,733,425	)		(3,089,033	)
Cash flows from investing activities
Disposal of other financial assets				376,485			-
Proceeds from short-term loans				70,000			1,489,500
- Related parties				70,000			1,189,500
- Non related parties				-			300,000
Proceeds from disposal of property and equipment				25,255			12,100
Disposal of Long-term investment securities				2,885			-
Disposal of Short-term financial instruments				493,661			-
Collection of other non-current financial assets				200,760			-
Collection of other financial assets				101,900			320,334
Payments for short-term loans				(453,207	)		(1,875,862	)
- Related parties				(440,000	)		(1,724,988	)
- Non related parties				(13,207	)		(150,874	)
Purchase of property and equipment				(45,377	)		(144,540	)
Purchase of Long-term investment securities				(280	)
Payments for other non-current financial assets				(100,270	)
Payments for other current financial assets				(18,500	)		(153,964	)
Proceeds from Lease Incentives				-			1,486
Acquisitions, net of cash acquired				3,571,263
Net cash inflow(outflow) from investing activities				4,224,575			(350,946	)
Cash flows from financing activities
Proceeds from issuance of convertible notes, net of issuance costs				7,149,579			-
Proceeds from short-term borrowings				766,783			80,000
- Related parties				40,000			80,000
- Non related parties				726,783			-
Repayment of current portion of long-term borrowings				(12,480	)		(12,480	)
Decrease in Short-term borrowings				(892,128	)		(40,000	)
- Related parties				(183,996	)		(40,000	)
- Non related parties				(708,132	)
Acquisition of Treasury shares				(725,630	)		-
Repayment of lease liabilities				(1,117,772	)		(840,227	)
Net cash inflow(outflow) from financing activities				5,168,352			(812,707	)
Effect of exchange rate changes on cash and cash equivalents				(85,575	)		(132,937	)
Net increase (decrease) in cash and cash equivalents				4,573,927			(4,252,686	)
Cash and cash equivalents at beginning of the period				4,150,572			8,585,634
Cash and cash equivalents at end of the period		₩		8,724,499			4,200,011

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-17

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Corporate Information

K WAVE MEDIA LTD. (hereinafter referred to as “KWM”), together with its consolidated subsidiaries (hereinafter referred to as “the Company”), is engaged in the “IP content business,” which focuses on the creation, investment, management, licensing, and monetization of intellectual property (IP) content such as TV programs, movies, dramas, and music. At the core of the Company’s IP content business is the production of original content or the acquisition of rights to existing valuable intellectual property content, including films and TV shows, from creators, artists, or other sources. In the case of the merchandising company, the business includes the sale of merchandise related to IP content based on popular musicians, TV programs, and movies. The Company regards intellectual property rights, including copyrights, registered and pending trademarks, service marks, domain names, trade secrets, and proprietary technologies, as critical to its success. The Company protects its proprietary rights through trademark laws, trade secret protection, confidentiality measures, and license agreements with employees and other relevant parties. In addition to our core IP content business, the Company is strengthening its ‘Digital Treasury Strategy’ as a second corporate strategy: acquiring and holding bitcoin. We have adopted bitcoin as our primary treasury reserve asset, which we plan to utilize as a trust asset to enhance settlement stability within our platform and secure global liquidity. We believe bitcoin is a dependable store of value, supported by a robust and public open-source architecture, that is untethered to sovereign monetary policy. We believe that undertaking these two, interdependent corporate strategies—growing our IP content business and pursuing our Digital Treasury Strategy—serves as a key differentiator for our business. Our IP content business provides stable cash flows that allow us to acquire and hold bitcoin for the long-term, and we believe our bitcoin strategy raises our profile in the global market, which may, in turn, benefit our IP content business.

On May 13, 2025 (the “Closing Date”), KWM consummated the business combination pursuant to the merger agreement, dated as of June 15, 2023, as modified by the joinder agreement, dated July 13, 2023, the First Amendment, dated March 11, 2024, the Second Amendment, dated June 28, 2024, the Third Amendment to Merger Agreement, dated July 25, 2024 and the Fourth Amendment to Merger Agreement, dated December 11, 2024 (the “Merger Agreement”), by and among the Company, Global Star Acquisition Inc., a Delaware corporation (“Global Star”), K Enter Holdings Inc., a Delaware corporation (“K Enter”) and GLST Merger Sub, Inc., a Delaware corporation (“Merger Sub”),

The following transactions occurred pursuant to the terms of the Merger Agreement (collectively, the “Business Combination”):

- On May 13, 2025, Global Star was reincorporated to Cayman Islands by merging with and into KWM, with KWM remaining as the surviving publicly traded entity (the “Reincorporation Merger”). In connection with the closing of the Reincorporation Merger, (i) each issued and outstanding share of common stock of Global Star, other than Global Star common stock owned by Global Star as treasury shares or any Global Star common stock owned by any direct or indirect wholly owned subsidiary of Global Star, was converted into one ordinary share of KWM (the “KWM Ordinary Share”), (ii) each issued and outstanding warrant of Global Star was converted automatically into a warrant to purchase one KWM Ordinary Share at a price of $11.50 per whole share (the “KWM Warrant”), (iii) each issued and outstanding right of Global Star was converted automatically into a right to receive one-tenth (1/10) of one KWM Ordinary Share at the closing of a business combination (the “KWM Right”), and (iv) each issued and outstanding unit of Global Star was separated and converted automatically into one KWM Ordinary Share, one KWM Warrant, and one KWM Right. At the closing of the Reincorporation Merger, all common stock, warrants, rights, units and other securities of Global Star ceased to be outstanding and were automatically canceled and retired and ceased to exist.

- On May 13, 2025, Merger Sub merged with and into K Enter, resulting in K Enter being a wholly owned subsidiary of KWM (the “Acquisition Merger”). In connection with the closing of the Acquisition Merger, (i) each share of K Enter capital stock that was owned by Global Star, Merger Sub and K Enter (as treasury stock or otherwise), was automatically cancelled and retired without any conversion, (ii) each share of K Enter preferred stock issued and outstanding was deemed converted into shares of K Enter common stock, (iii) each share of K Enter common stock issued and outstanding, including shares of K Enter common stock deemed outstanding as a result of the mandatory conversion of K Enter preferred stock, was converted into the right to receive a number of KWM Ordinary Shares equal to the Conversion Ratio, and (iv) each share of Merger Sub common stock issued and outstanding was converted into and become one newly issued, fully paid and nonassessable share of K Enter common stock.

F-18

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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. (“Anseilen”), and collectively, the “Six Korean Entities”) was a closing condition to the Business Combination. On January 3, 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.

Details of the consolidated subsidiaries as of June 30, 2025 and December 31, 2024 are as follows:

		Percentage of ownership(%)
Subsidiary	Location	June 30, 2025	December 31, 2024	Fiscal year end	Main business
Play Company(1)	Seoul	100%	-	December	Sale and distribution of content consumer products and providing production services
Play F&B Co., Ltd.(1)	Seoul	67%	67%	December	Food and beverage
LAMP(1)	Seoul	51.3%	-	December	Film and drama content production
Bidangil(1)	Seoul	53.7%	-	December	Film and drama content production
Trigger Limited Company Specializing in The Cultural Industry(1)	Seoul	53.7%	-	December	Planning, development and production of the film Trigger
Apeitda(1)	Seoul	51%	-	December	Film and drama content production
Anseilen(1)	Seoul	51%	-	December	Film and drama content production
Solaire(1)	Seoul	95%	-	December	Investment in film and drama content
K Enter	Delaware	100%	-	December	Film and drama content production

(1) Indirect Subsidiaries

F-19

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Condensed financial information of subsidiary

Condensed financial information of the subsidiaries as of and for the six-month periods ended June 30, 2025 are as follows:

		June 30, 2025
Subsidiary		Total assets		Total liabilities		Revenues		Profit (Loss) for the period
		(In thousands of Korean won)
Play Company	₩		26,420,739		10,761,534		17,961,103		780,855
Play F&B Co., Ltd.			10,582,668		17,458,215		6,390,493		(1,059,566	)
LAMP			5,268,323		5,613,201		3,951,666		(670,684	)
Bidangil			3,274,041		369,995		534,544		7,604
Trigger Limited Company Specializing in The Cultural Industry(1)			-		-		-		-
Apeitda			998,495		270,462		-		(98,353	)
Anseilen			6,052,888		6,692,053		1,521,130		(55,927	)
Solaire			3,231,275		2,681,947		218,469		(426,251	)
K Enter			59,917,797		23,648,654		24,706		(10,026,104	)

(1) Bidangil established a special purpose company to plan, develop and manage the production of the new project ‘Trigger’ as of April 5, 2023. The initial capital amounted to Korean won 10,000 thousand, but no capital has been contributed as of June 30, 2025.

Condensed financial information of the subsidiaries as of December 31, 2024 and for the six-month periods ended June 30, 2024 are as follows:

		December 31, 2024				June 30, 2024
Subsidiary		Total assets		Total liabilities		Revenues		Loss for the period
		(In thousands of Korean won)
Play F&B Co., Ltd	₩		13,174,076		18,990,058		7,502,210		(439,162	)

2. Basis of Presentation and Material Accounting Policies

A. Basis of Presentation

These interim financial statements for the six months ended June 30, 2025 and 2024 have been prepared in accordance with International Accounting Standards (“IAS”) 34 Interim Financial Reporting as issued by International Accounting Standard Board (“IASB”), and should be read in conjunction with the Company’s last annual consolidated financial statements as at and for the year ended December 31, 2024 (“last annual financial statements”). They do not include all of the information required for a complete set of financial statements prepared in accordance with IFRS Accounting Standards. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Company’s financial position and performance since the last annual financial statements.

F-20

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Going concern

The Company has incurred significant losses and negative cash flows from operations, net loss was Korean Won 40,217,421 thousand for the period ended June 30, 2025. During 2025, the Company had negative cash flows from operations of Korean Won 4,733,425 thousand. As of June 30, 2025, the Company’s accumulated deficit was Korean Won 3,389,033 thousand and total current liabilities exceed total current asset by Korean Won 62,655,639 thousand. The Company has funded its operations to date through equity and debt financing and has cash equivalents of Korean Won 8,724,499 thousand as of June 30, 2025. The Company 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. The Company expects to fund operations using cash on hand and raising additional proceeds. There are no assurances, however, that the Company 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 material uncertainties as to the Company’s ability to continue as a going concern. These financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty.

B. Material Accounting Policies

Material accounting policies and method of computation used in the preparation of the condensed consolidated interim financial statements are consistent with those of the last annual financial statements for the year ended December 31, 2024, except for the changes as described below.

Basis of consolidation

i. Business combinations

The Company accounts for business combinations using the acquisition method when the acquired set of activities and assets meets the definition of a business and control is transferred to the Company. In determining whether a particular set of activities and assets is a business, the Company assesses whether the set of assets and activities acquired includes, at a minimum, an input and substantive process and whether the acquired set has the ability to produce outputs.

The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognized in profit or loss immediately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities.

The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognized in profit or loss.

Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent consideration that meets the definition of a financial instrument is classified as equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, other contingent consideration is remeasured at fair value at each reporting date and subsequent event changes in the fair value of the contingent consideration are recognized in profit or loss.

If share-based payment awards are required to be exchanged for awards held by the acquiree’s employees (acquiree’s awards), then all or a portion of the amount of the acquirer’s replacement awards is included in measuring the consideration transferred in the business combination. This determination is based on the market-based measure of the replacement awards compared with the market-based measure of the acquiree’s awards and the extent to which the replacement awards relate to pre-combination service.

F-21

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ii. Non-controlling interests

Non-controlling interests are measured initially at their proportionate share of the acquiree’s identifiable net assets at the date of acquisition.

Changes in the Company’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

iii. Loss of control

When the Company loses control over a subsidiary, it derecognizes the assets and liabilities of the subsidiary, and any related non-controlling interests and other components of equity. Any resulting gain or loss is recognized in profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost.

iv. Interests in equity- accounted investees

The Company’s interests in equity-accounted investees comprise interests in associates and a joint venture. Associates are those entities in which the Company has significant influence, but not control or joint control, over the financial and operating policies. A joint venture is an arrangement in which the Company has joint control, whereby the Company has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities.

Interests in associates and the joint venture are accounted for using the equity method. They are initially recognized at cost, which includes transaction costs. Subsequent to initial recognition, the consolidated financial statements include the Company’s share of the profit or loss and other comprehensive income (“OCI”) of equity-accounted investees, until the date on which significant influence or joint control ceases.

v. Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealized income and expenses (except for foreign currency transaction gains or losses) arising from intra-group transactions, are eliminated. Unrealized gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Company’s interest in the investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.

Foreign currency

i. Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of Company companies at the exchange rates at the dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Foreign currency differences are generally recognized in profit or loss and presented within finance costs. Translation differences on Non-monetary assets and liabilities carried at fair value are reported as part of the fair value gain or loss.

F-22

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

However, foreign currency differences arising from the translation of the following items are recognized in OCI:

● an investment in equity securities designated as at FVOCI (except on impairment, in which case foreign currency differences that have been recognized in OCI are reclassified to profit or loss);

● a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; and

● qualifying cash flow hedges to the extent that the hedges are effective.

Revenue from contracts with customers

The Company determines revenue recognition by:

● identifying the contract, or contracts, with a customer;

● identifying the performance obligations in each contract;

● determining the transaction price;

● allocating the transaction price to the performance obligations in each contract; and

● recognizing revenue when, or as, we satisfy performance obligations by transferring the promised goods or services.

The Company generates revenue primarily through the following business operations:

i. Content Merchandising revenue

Content Merchandising revenues consist of sales of the physical and digital content consumer products and merchandises. The Company recognizes revenues from the sale of consumer products and merchandises after both (1) control of the products has been transferred to customers and (2) the underlying performance obligations have been satisfied.

Content revenues are recognized after deducting the estimated allowance for returns, which are accounted for as variable consideration when estimating the amount of revenue to recognize. Returns are estimated at contract inception and updated at the end of each reporting period as additional information becomes available.

ii. Food and beverages revenue

Food and beverages revenues consist of sales of the consumer products including food and beverages. The Company recognizes revenues from the sale of consumer products after both (1) control of the products has been transferred to customers and (2) the underlying performance obligations have been satisfied.

Food and beverages revenues are recognized after deducting the estimated allowance for returns, which are accounted for as variable consideration when estimating the amount of revenue to recognize.

F-23

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

iii. Content production revenue

The Company operates the content production business that consists of planning, producing, and selling the theatrical films and television programs. The Company identifies the license which is provided along with media product as combined output and recognizes revenue over time by measuring its progress based on cost incurred towards complete satisfaction of the performance obligation of media production in accordance with Paragraph 35 (3) of IFRS 15 Revenue from contracts with customers. The percentage-of-completion for each contract is calculated by dividing the cumulative cost incurred in relation to service performed by the Company by estimated total contract costs. The Company is also eligible to receive its share of profits from film distributors once the film generates profits beyond the break-even point, which is considered as variable consideration and recognized as the revenue on the settlement date.

The Company recognizes unbilled receivables from media production service as contract assets and recognizes receipts in advance for prepaid media production services as contract liabilities. The Company capitalizes the cost associated with the production, including development costs, direct costs, and production overhead per title as prepayments and prepaid expenses. The Company amortizes the capitalized asset in ‘Cost of revenues’ on the combined statements of comprehensive income based on the percentage-of-completion for each contract.

In addition to content production revenue, according to the terms of the contract with the customer, the Company is providing additional cable TV rights for the produced film with no other goods or services to be transferred to the customer under the contract apart from the obligation to provide licenses. The license agreement pertains to the right to use the entity’s intellectual property as that intellectual property exists at the point in time. This means that at the time of transferring the license, the customer can instruct the use of the license and obtain most of the remaining benefits arising from the license. For the rights, revenue is recognized at the point when the rights become available for use after the execution of the rights usage agreement.

In certain licensing agreements, the Company is entitled to receive consideration in the form of sales-based royalties, which are calculated as a percentage of the customer’s sales of licensed media content. In accordance with Paragraph B63 of IFRS 15 Revenue from Contracts with Customers, the Company recognizes revenue from such arrangements only when the subsequent sales occur.

iv. Content investment revenue

The Company manages and operates the investment funds on behalf of investors and receives commissions from its customers. The content investment revenues are received in exchange for investment management services that include a series of fund administration services, fund compliance, fund transfer agent services and fund distribution services. Control of investment management services is transferred to the customer over time as these customers receive and consume the benefits provided by these services. Investment management revenues are calculated as a contractual percentage of financial assets the Company manages for clients on either a discretionary or non-discretionary basis. Content investment revenue are recognized for each distinct performance obligation identified in customer contracts when the performance obligation has been satisfied by transferring services to a customer over time.

v. Other revenues

Under franchise agreements, the Company’s performance obligation is to provide a license to use Our Bakery’s trademarks and other intellectual property. Franchise royalties and fees are typically charged as a percentage of food and beverage revenues and are treated as variable consideration, recognized as the underlying food and beverage revenues occur.

Franchise agreements also contain a promise to provide training support and recipe teaching services to franchise-operated stores. A monthly franchise loyalty fee, based on gross food and beverage revenues, is charged, and recognized over time as these services are delivered.

F-24

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Operating segments

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company’s other components. The chief operating decision-maker has been identified as the chief executive officer. The Company’s operating segments have been determined to be each business unit, for which the Company generates separately identifiable financial information that is regularly reported to the chief executive officer for the purpose of resource allocation and assessment of segment performance. The Company has two reportable segments as described in Note 3. Segment results that are reported to the chief operating decision maker include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

Employee benefits

i. Short-term employee benefits

Short-term employee benefits are employee benefits due to be settled within 12 months after the end of the period in which the employees render related services. When an employee has rendered a service to the Company during an accounting period, the Company recognizes the undiscounted amount of short-term employee benefits expected to be paid in exchange for that service.

ii. Share-based payment arrangements

The grant-date fair value of equity-settled share-based payment arrangements granted to employees is generally recognized as an expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognized is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant-date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

The fair value of the amount payable to employees in respect of share-based payment arrangements, which are settled in cash, is recognized as an expense with a corresponding increase in liabilities, over the period during which the employees become unconditionally entitled to payment. The liability is remeasured at each reporting date and at settlement date based on the fair value of the share-based payment arrangements. Any changes in the liability are recognized in profit or loss.

The fair value of the share-based payment arrangements with cash alternatives granted to employees, which is sum of the fair values of the equity component and liabilities component, is recognized as an expense, with a corresponding increase in equity and liabilities, over the vesting period of the awards. The liability is remeasured at each reporting date and at settlement date based on the fair value of the share-based payment arrangements. Any changes in the liability are recognized in profit or loss.

iii. Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in future payments is available.

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K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

iv. Defined benefit plans

The Company’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 using the projected unit credit method. When the calculation results in a potential asset for the Company, 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.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in OCI. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

Finance income and finance costs

The Company’s finance income and finance costs include:

● interest income;

● interest expense;

● dividend income;

● the net gain or loss on financial assets at FVTPL;

● the foreign currency gain or loss on financial assets and financial liabilities;

The ‘effective interest rate’ is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:

● the gross carrying amount of the financial asset; or

● the amortized cost of the financial liability.

In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortized cost of the liability. However, for financial assets that have become credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortized cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.

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K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Income tax expense

Income tax expense for the interim period is recognized based on management’s best estimate of the weighted average annual income tax rate expected for the full financial year. The estimated average annual effective income tax rate is applied to the pre-tax income of the interim period.

Cash and Cash Equivalents

Cash and cash equivalents comprise cash on hand, deposits held at banks, and investment securities with maturities of three months or less from the acquisition date that are easily convertible to cash and subject to an insignificant risk of changes in their fair value.

Inventories

Inventories are measured at the lower of cost and net realizable value. The cost of inventories is based on the first-in, first-out allocation method, and includes expenditures incurred in acquiring the inventories, production or conversion cost and other costs incurred in bringing them to their existing location and condition. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated selling expenses.

The Company makes adjustments to reduce the cost of inventory to its net realizable value, for estimated excess, obsolescence or impaired balances.

Investment property

Property held by a lessee as a right-of-use asset to earn rentals or for capital appreciation or both is classified as investment property. Investment properties held by a lessee as a right-of-use assets are initially measured at its cost in accordance with IFRS 16. The Company remeasures the investment property held by a lessee as a right-of-use asset if necessary, in accordance with IFRS 16.

Among investment properties, land is not depreciated, and investment properties except land are depreciated on a straight-line basis according to the economic depreciation period. Depreciation methods, useful lives and residual values of investment properties are reviewed at each reporting period-end and if appropriate, the changes are accounted for as changes in accounting estimates.

Property and equipment

i. Recognition and measurement

Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

ii. Subsequent expenditure

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company. The carrying amount of the replaced parts are derecognized and the repairs and maintenance expenses are recognized in profit or loss in the period they are incurred.

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K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

iii. Depreciation

Depreciation is calculated to write off the cost of items of property and equipment less their estimated residual values using the straight-line method over their estimated useful lives, and is generally recognized in profit or loss. Land is not depreciated.

The estimated useful lives of property and equipment for current and comparative periods are as follows:

Machinery	5 ~ 8 years
Vehicles	5 years
Office equipment	5 ~ 8 years
Furniture and fixtures	5 ~ 8 years
Right-of-use assets	2 ~ 10 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

Intangible assets and goodwill

i. Recognition and measurement

Goodwill: Goodwill arising on the acquisition of subsidiary is measured at cost less accumulated impairment losses.

Other intangible assets: Other intangible assets, including trademarks that are acquired by the Company and have finite useful lives are measured at cost less accumulated amortization and any accumulated impairment losses.

ii. Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognized in profit or loss as incurred.

iii. Amortization

Amortization is calculated using the straight-line method to allocate the cost or revalued amounts of the assets, net of their residual values, over their estimated useful lives as follows:

Software	5 years
Other Intangible assets	7 ~ 20 years
Goodwill	Indefinite

Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

Financial instruments

i. Recognition and initial measurement

Trade receivables and debt securities issued are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument.

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K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus or minus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

ii. Classification and subsequent measurement

(a) Financial assets

On initial recognition, a financial asset is classified as measured at:

● amortized cost;

● FVOCI - debt investment;

● FVOCI - equity investment;

● or FVTPL.

Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

● it is held within a business model whose objective is to hold assets to collect contractual cash flows; and

● its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

● it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

● its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment’s fair value in OCI. This election is made on an investment-by-investment basis.

All financial assets not classified as measured at amortized cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

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K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(b) Financial assets - Business model assessment

The Company makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes:

● the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether management’s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realizing cash flows through the sale of the assets;

● how the performance of the portfolio is evaluated and reported to the Company’s management;

● the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed;

● how managers of the business are compensated - e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flows collected; and

● the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.

Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, consistent with the Company’s continuing recognition of the assets.

Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.

(c) Financial assets - Assessment whether contractual cash flows are solely payments of principal and interest

For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.

In assessing whether the contractual cash flows are solely payments of principal and interest, the Company considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Company considers:

● contingent events that would change the amount or timing of cash flows;

● terms that may adjust the contractual coupon rate, including variable-rate features;

● prepayment and extension features; and

● terms that limit the Company’s claim to cash flows from specified assets (e.g. non-recourse features).

A prepayment feature is consistent with the solely payments of principal and interest criterion if the prepayment amount substantially represents unpaid amounts of principal and interest on the principal amount outstanding, which may include reasonable compensation for early termination of the contract. Additionally, for a financial asset acquired at a discount or premium to its contractual par amount, a feature that permits or requires prepayment at an amount that substantially represents the contractual par amount plus accrued (but unpaid) contractual interest (which may also include reasonable compensation for early termination) is treated as consistent with this criterion if the fair value of the prepayment feature is insignificant at initial recognition.

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K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(d) Financial assets - Subsequent measurement and gains and losses

Financial assets - Subsequent measurement and gains and losses Financial assets at FVTPL: These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

Financial assets at amortized cost: These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

(e) Financial liabilities - Classification, subsequent measurement and gains and losses

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss. Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

iii. Derecognition

(a) Financial assets

The Company derecognizes a financial asset when:

● the contractual rights to the cash flows from the financial asset expire; or

● it transfers the rights to receive the contractual cash flows in a transaction in which either:

- substantially all of the risks and rewards of ownership of the financial asset are transferred; or

- the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Company enters into transactions whereby it transfers assets recognized in its statement of financial position, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

(b) Financial liabilities

The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Company also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

When changes were made to a financial asset or financial liability in addition to changes to the basis for determining the contractual cash flows required by interest rate benchmark reform, the Company first updated the effective interest rate of the financial asset or financial liability to reflect the change that is required by interest rate benchmark reform. After that, the Company applied the policies on accounting for modifications to the additional changes.

F-31

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Impairment

i. Non-derivative financial assets

Financial instruments and contract assets

The Company recognizes loss allowances for ECLs on:

● financial assets measured at amortized cost;

● debt investments measured at FVOCI; and

● contract assets.

The Company also recognizes loss allowances for ECLs on lease receivables, which are disclosed as part of trade and other receivables.

The Company measures loss allowances at an amount equal to lifetime ECLs, except for the following, which are measured at 12-month ECLs:

● debt securities that are determined to have low credit risk at the reporting date; and

● other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowances for trade receivables (including lease receivables) and contract assets are always measured at an amount equal to lifetime ECLs.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company’s historical experience and informed credit assessment, that includes forward-looking information.

The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 12 months past due.

The Company considers a financial asset to be in default when:

● the debtor is unlikely to pay its credit obligations to the Company in full, without recourse by the Company to actions such as realising security (if any is held).

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.

12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECLs is the maximum contractual period over which the Company is exposed to credit risk.

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K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(a) Measurement of ECLs

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Company expects to receive).

ECLs are discounted at the effective interest rate of the financial asset.

(b) Credit-impaired financial assets

At each reporting date, the Company assesses whether financial assets carried at amortized cost and debt securities at FVOCI are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

Evidence that a financial asset is credit-impaired includes the following observable data:

● significant financial difficulty of the debtor;

● a breach of contract such as a default or being more than 90 days past due;

● the restructuring of a loan or advance by the Company on terms that the Company would not consider otherwise;

● it is probable that the debtor will enter bankruptcy or other financial reorganization; or

● the disappearance of an active market for a security because of financial difficulties.

Presentation of allowance for ECL in the statement of financial position

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets.

For debt securities at FVOCI, the loss allowance is charged to profit or loss and is recognized in OCI.

(c) Write-off

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For individual customers, the Company has a policy of writing off the gross carrying amount when the financial asset is 180 days past due based on historical experience of recoveries of similar assets. For corporate customers, the Company individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Company expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company’s procedures for recovery of amounts due.

ii. Non-financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than biological assets, investment property, inventories, contract assets and deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill is tested annually for impairment.

F-33

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs of disposal. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

Impairment losses are recognized in profit or loss. The Company recognizes the impairment loss if there is any indication of impairment of individual CGU. And then, the Company performed impairment test of goodwill for groups of CGUs.

An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

Provisions

Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost.

Building restoration: In accordance with the Company’s policy and applicable legal requirements, a provision for restoration in respect of leased buildings, and the related expense, is recognized when the lease term is commenced.

Leases

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

i. As a lessee

At commencement or on modification of a contract that contains a lease component, the Company allocates the consideration in the contract to each lease component on the basis of its relative stand-alone prices. However, for the leases of property the Company has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

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K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Company by the end of the lease term or the cost of the right-of-use asset reflects that the Company will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

The Company determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased.

Lease payments included in the measurement of the lease liability comprise the following:

● fixed payments, including in-substance fixed payments;

● variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

● amounts expected to be payable under a residual value guarantee; and

● the exercise price under a purchase option that the Company is reasonably certain to exercise, lease payments in an optional renewal period if the Company is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Company is reasonably certain not to terminate early.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee, if the Company changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

At the date of transition to IFRSs, The Company applies the following approach to all of its leases.

The Company measures that lease liability at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate at the date of transition to IFRSs.

The Company measures right-of-use asset at its carrying amount as if IFRS 16 had been applied since the commencement date of the lease, but discounted using the lessee’s incremental borrowing rate at the date of transition to IFRSs.

The Company uses hindsight in applying IFRS 16 such as the determination of lease term for contracts that contain options to extend or terminate a lease.

F-35

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company has elected not to recognize right-of-use assets and lease liabilities for leases of low-value assets (leases for which the underlying asset is valued at USD 5,000 or less) and short-term leases (leases that have a lease term of 12 months or less at the commencement date), including IT equipment. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

ii. As a lessor

At inception or on modification of a contract that contains a lease component, the Company allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices.

When the Company acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease.

To classify each lease, the Company makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Company applies the exemption described above, then it classifies the sub-lease as an operating lease.

If an arrangement contains lease and non-lease components, then the Company applies IFRS 15 to allocate the consideration in the contract.

The Company applies the derecognition and impairment requirements in IFRS 9 to the net investment in the lease. The Company further regularly reviews estimated unguaranteed residual values used in calculating the gross investment in the lease.

The Company recognizes lease payments received under operating leases as income on a straight-line basis over the lease term as part of ‘other income’.

Fair value measurement

‘Fair value’ is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or, in its absence, the most advantageous market to which the Company has access at that date. The fair value of a liability reflects its non-performance risk.

A number of the Company’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.

When one is available, the Company measures the fair value of an instrument using the quoted price in an active market for that instrument. A market is regarded as ‘active’ if transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis.

If there is no quoted price in an active market, then the Company uses valuation techniques that maximize the use of relevant observable inputs and minimize the use of unobservable inputs. The chosen valuation technique incorporates all of the factors that market participants would take into account in pricing a transaction.

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K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The best evidence of the fair value of a financial instrument on initial recognition is normally the transaction price - i.e. the fair value of the consideration given or received. If the Company determines that the fair value on initial recognition differs from the transaction price and the fair value is evidenced neither by a quoted price in an active market for an identical asset or liability nor based on a valuation technique for which any unobservable inputs are judged to be insignificant in relation to the measurement, then the financial instrument is initially measured at fair value, adjusted to defer the difference between the fair value on initial recognition and the transaction price. Subsequently, that difference is recognised in profit or loss on an appropriate basis over the life of the instrument but no later than when the valuation is wholly supported by observable market data or the transaction is closed out.

Equity-accounted investees

Associates are entities over which the Company has significant influence over the financial and operating policy decisions. Generally, if the Company holds 20% or more of the voting power of the investee, it is presumed that the Company has significant influence.

Investments in associates are initially recognized at cost and equity method is applied after initial recognition. The carrying amount is increased or decreased to recognize the Company’s share of the profit or loss of the investee and changes in the investee’s equity after the date of acquisition. Distributions received from an investee reduce the carrying amount of the investment. Unrealized gains and losses resulting from transactions between the Company and associates are eliminated to the extent of the Company’s share in associates. If unrealized losses are an indication of an impairment that requires recognition in the consolidated financial statements, those losses are recognized for the period.

If associates use accounting policies other than those of the Company for like transactions and events in similar circumstances, if necessary, adjustments shall be made to make the associates’ accounting policies conform to those of the Company when the associates’ financial statements are used by the Company in applying the equity method.

If the Company’s share of losses of associates equals or exceeds its interest in the associates (including long-term interests that, in substance, form part of the Company’s net investment in the associates), the Company discontinues recognizing its share of further losses. After the Company’s interest is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the investee.

The Company determines at each reporting period whether there is any objective evidence that the investments in the associates are impaired. If this is the case, the Company calculates the amount of impairment as the difference between the recoverable amount of the associates and its carrying amount and recognizes the amount as non-operating expenses in the consolidated statement of comprehensive income.

Earnings per Share

Basic earnings per share is calculated by dividing the net profit for the period available to the ordinary shareholders by the weighted-average number of ordinary shares outstanding during the year.

Diluted earnings per share is calculated by dividing the profit for the year attributable to owners of the parent company from the consolidated statements of profit or loss by the weighted-average number of ordinary shares outstanding and potential dilutive shares. Potential dilutive shares are used in the calculation of dilutive earnings per share only when they have dilutive effects.

F-37

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Concentration of Credit Risk

The Company performs periodic credit evaluations of its customers’ financial condition and generally does not require collateral for customers on accounts receivable. The Company maintains reserves for potential credit losses, which are periodically reviewed.

Convertible notes

Convertible notes are accounted for in accordance with IFRS 9 Financial Instruments and IAS 32 Financial Instruments: Presentation.

At initial recognition, the liability component is measured at fair value by discounting future cash flows at the market interest rate. The difference between the proceeds and the liability component is recognized as equity representing the conversion option. The liability component is subsequently measured at amortized cost using the effective interest method. Interest expense is recognized in profit or loss over the term of the notes. Upon conversion, the liability component is reclassified to equity.

Listing expense

Management has computed the listing expense in accordance with IFRS 2. Accounting of reverse merger is a complex accounting topic, wherein, management had to determine the listing expense to be recognized in the income statement based on the fair value of the shared issued net off the net assets acquired and fair value of the warrants issued. Please refer to note 22 for key estimates and judgements used for determination of listing expense.

Warrants

KWM has issued both public warrants and private warrants convertible into ordinary shares. Management reviewed the classification of the warrants in accordance with IAS 32. According to IAS 32, a contract that will be settled by exchanging a fixed amount of cash for a fixed number of own shares is classified as an equity instrument. However, the warrants contain several features that do not meet the ‘fixed-for-fixed’ criteria. Therefore, management concluded that classifying the warrants as financial liabilities is appropriate under IFRS.

C. Accounting standards and Interpretation issued and adopted by the Company

The material accounting policies applied by the Company in these condensed consolidated interim financial statements are the same as those applied by the Company in its consolidated financial statements as of and for the year ended December 31, 2024, except for the adoption of new and revised IFRS applied from January 1, 2025, which are summarized below. The Company has not early applied the new and revised IFRS and interpretations that have been issued but are not yet effective.

The following amended IFRS is effective from January 1, 2025 and it did not have a material impact on the Company’s condensed consolidated interim financial statements.

● Lack of Exchangeability (Amendments to IAS 21 The Effect of Changes in Foreign Exchange Rates and IFRS 1)

F-38

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

D. Accounting standards and Interpretation issued but not yet adopted by the Company

The following new accounting standards and interpretations have been published that are not mandatory for June 30, 2025 reporting periods and have not been early adopted by the Company.

(i) Amendments to IFRS 9 Financial Instrument and IFRS 7 Financial Instruments: Disclosures

IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures have been amended to respond to recent questions arising in practice, and to include new requirements. The amendments should be applied for annual periods beginning on or after January 1, 2026, and earlier application is permitted. The key amendments are as follows. The Company is currently reviewing the impact of these amendments on it’s financial statements.

- clarify the date of recognition and derecognition of some financial assets and liabilities, with a new exception for some financial liabilities settled through an electronic cash transfer system;

- clarify and add further guidance for assessing whether a financial asset meets the solely payments of principal and interest (SPPI) criterion;

- add new disclosures of impact on the entity and the extent to which the entity is exposed for each type of financial instruments if the timing or amount of contractual cash flow changes due to amendment of contract term;

- update the disclosures for equity instruments designated at fair value through other comprehensive income (FVOCI).

(ii) Annual Improvements to IFRS - Volume 11

Annual Improvements to IFRS - Volume 11 shall be effective for fiscal years beginning on or after January 1, 2026, and early application is effective. The amendments are not expected to have a significant impact on the financial statements.

- IFRS 1 First-time Adoption of International Financial Reporting Standards: Hedge accounting by a first-time adopter

- IFRS 7 Financial Instruments: Disclosures: Gain or loss on derecognition and implementation guidance

- IFRS 9 Financial Instruments: Derecognition of lease liabilities and definition of transaction price

- IFRS 10 Consolidated Financial Statements: Determination of a ‘de facto agent’

- IAS 7 Statement of Cash Flows: Cost method

F-39

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(iii) IFRS 18 Presentation and Disclosure in Financial Statements

In April 2024, the International Accounting Standards Board (IASB) issued IFRS 18 Presentation and Disclosure in Financial Statements, which replaces IAS 1 Presentation of Financial Statements.

IFRS 18 introduces significant changes to the presentation and disclosure of financial performance by requiring entities to classify all income and expenses in the statement of profit or loss into five categories – operating, investing, financing, income taxes and discontinued operations – and to present defined subtotals for “operating profit or loss” and “profit or loss before financing and income taxes.”

The Standard also introduces new disclosure requirements for management-defined performance measures and provides enhanced guidance on aggregation and disaggregation of information.

IFRS 18 and related amendments are effective for reporting periods beginning on or after January 1, 2027, with earlier application permitted. The Company is currently assessing the potential impact of this Standard on its financial statements.

E. Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis except for the following items, which are measured on an alternative basis on each reporting date.

Items	Measurement bases
Defined benefit liabilities	Present value
Financial instruments measured at fair value through profit or loss (“FVTPL”)	Fair value

3. Operating segments

A. Basis for segmentation

The Company’s operating segments have been identified to be each business unit, by which the Company provides different services and merchandise.

The Company assesses the performance of each operating segment based on operating profit, and there is no difference with the amounts reported on the consolidated statement of profit or loss, except for intergroup transactions.

The following summary describes the operations of each reportable segment.

Operating segments	Operations
Content Merchandising	Sale and distribution of content consumer products and providing production services
Food and beverages	Sale of food and beverages products and licensing of the intellectual property
Content production	Planning, producing, and selling the media content such as theatrical films and television programs
Content investment	Providing investment management services to investment funds

F-40

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

B. Information about reportable segments

Information related to each reportable segment is set out below. Segment operating profit is used to measure performance because management believes that this information is the most relevant in evaluating the results of the respective segments relative to other entities that operate in the same industries.

The segment information for the six-month periods ended June 30, 2025 and 2024 is as follows:

		Six-month period ended June 30, 2025
		Content merchandising		F&B			Content production			Investment funds			Total
		(In thousands of Korean won)
Segment revenue	₩		17,961,103		6,390,493			6,032,046			218,469			30,602,110
Elimination of intersegment revenue			-		-			-			-			-
Consolidated net revenue			17,961,103		6,390,493			6,032,046			218,469			30,602,110
Depreciation			234,914		851,306			219,188			74,124			1,379,532
Amortization			27,350		134,700			139,285			-			301,335
Employee benefit expenses			2,120,022		2,779,911			6,111,002			489,230			11,500,165
Segment operating profit			802,018		(847,676	)		(10,744,393	)		(423,166	)		(11,213,217	)
Other adjustment (*)														(25,075,225	)
Company Operating Profit														(36,288,442	)

(*) The adjustment relates to the listing expense due to the merger between K Enter Holdings Inc. and K Wave Media Ltd, and elimination of intercompany transactions. Listing expense was accounted in accordance to IFRS 2.

		Six-month period ended June 30, 2024
		Content merchandising		F&B			Total
		(In thousands of Korean won)
Segment revenue	₩		11,479,769		7,502,209			18,981,978
Elimination of intersegment revenue			-		-			-
Consolidated net revenue			11,479,769		7,502,209			18,981,978
Depreciation/Amortization			270,615		1,401,830			1,672,445
Segment operating profit			475,802		(160,007	)		315,795

C. Geographic information

Content merchandising segment, Food and beverages segment, Content production segment, Content Investment segment are managed on a worldwide basis, but operate manufacturing facilities and sales offices primarily in Seoul, South Korea. The geographic information analyses the Company’s revenue by the customer’s country of domicile. In presenting the geographic information, segment revenue and non-current assets have been based on the geographic location of customers.

F-41

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Summary of the Company’s operation by region based on the location of customers for the six-month periods ended June 30, 2025 and 2024 is as follows:

		Six-month period ended June 30, 2025		Six-month period ended June 30, 2024
		(In thousands of Korean won)
Korea	₩		18,901,238		16,860,856
USA			1,676,354		13
Germany			2,577,838		-
UK			2,239,593		-
France			1,720,435		-
Japan			68,962		2,045,268
Other			3,417,690		75,841
Total	₩		30,602,110		18,981,978

Summary of the Company’s non-current assets based on the location as of June 30, 2025 and December 31, 2024 is as follows:

		June 30, 2025		December 31, 2024
		(In thousands of Korean won)
Korea	₩		44,399,505		23,963,489
USA			159,167,554

D. Major customer

Revenues from major customers that amount to 10% or more of the Company’s revenue for the six-month periods ended June 30, 2025 and 2024 are as follows:

		Six-month period ended June 30, 2025			Six-month period ended June 30, 2024
		(In thousands of Korean won)
Customer A (Content merchandising segment)
Revenue	₩		3,998,205			4,046,663
%			13.07	%		21.32	%

F-42

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

4. Revenue

A. Revenue streams

The Company generates revenue primarily through the sale of the Company’s entertainment content and production services, Media production, Investment funds for Korean film and food and beverage products. Other sources of revenue include the franchise royalty fees from licensing of the Company’s intellectual property in food and beverage business.

Revenue from contracts with customers for the six-month periods ended June 30, 2025 and 2024 are as follows:

		Six-month period ended June 30, 2025		Six-month period ended June 30, 2024
		(In thousands of Korean won)
Revenue from contracts with customers	₩		30,592,726		18,981,979
Investment revenue			9,385		-
Total	₩		30,602,110		18,981,979

B. Disaggregation of revenue from contracts with customers

In the following table, revenue from contracts with customers is disaggregated by major products and service lines and timing of revenue recognition. The table also includes a reconciliation of the disaggregated revenue with the Company’s reportable segments (see Note 3).

Revenue from contracts with customers based on the service contract type, the timing of satisfaction of performance obligations for the six-month periods ended June 30, 2025 and 2024 are as follows:

		Six-month period ended June 30, 2025		Six-month period ended June 30, 2024
		(In thousands of Korean won)
Major products/service lines
Content goods and merchandises
Video Project & Merchandise Items	₩		17,223,165		8,124,822
Others			737,938		3,354,947
Subtotal	₩		17,961,103		11,479,769
F&B
Food and beverages	₩		6,174,603		6,923,383
Franchise royalties and fees			215,891		578,827
Subtotal	₩		6,390,493		7,502,210
Major products/service lines
Media production			6,032,045		-
Investment funds for Korean film
Investment management revenue			209,084		-
Investment revenue			9,385		-
Subtotal			218,469		-
Total	₩		30,602,110		18,981,979
Timing of revenue recognition
At a point in time	₩		24,176,909		18,687,441
Over time			6,425,201		294,538
Total	₩		30,602,110		18,981,979

F-43

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

C. Contract balance

The balance of contract assets and liabilities from contracts with customers as of June 30, 2025 and December 31, 2024 is as follows:

		June 30, 2025		December 31, 2024
		(In thousands of Korean won)
Current
Contract assets (Unbilled revenue)	₩		852,385		-
Contract liabilities (Deferred revenue)			4,821,533		-
Non-current
Contract liabilities (Deferred revenue)			710,000		-

The Company recognizes unbilled receivables from media production service as contract assets. The Company capitalizes the cost associated with the production, including development costs, direct costs, and production overhead per title as prepayments and prepaid expenses. The Company amortizes the capitalized asset in ‘Cost of revenues’ on the combined statements of comprehensive income based on the percentage-of-completion for each contract.

The contract liabilities primarily relate to the advance consideration received from customers for media production service, for which revenue is recognized over time. This will be recognized as revenue when the Company satisfies the performance obligations.

5. Loss per share

A. Basic loss per share

The calculation of basic Earning per share has been based on the following profit attributable to ordinary shareholders and weighted-average number of ordinary shares outstanding.

i. Profit attributable to ordinary shareholders (basic)

		Six-month period ended June 30, 2025			Six-month period ended June 30, 2024
		(In thousands of Korean won)
Loss for the period, attributable to the owners of Parent Company	₩		(39,348,466	)		(78,784	)
Dividends on non-redeemable preference shares			-			-
Loss attributable to ordinary shareholders	₩		(39,348,466	)		(78,784	)

F-44

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ii. Weighted-average number of ordinary shares (basic)

	Six-month period ended June 30, 2025			Six-month period ended June 30, 2024
	(In number of shares)
Number of ordinary shares issued at January 1		10,397,836			10,397,836
Business Combination		48,602,164			-
Acquisition Merger		1,113,306			-
Effect of treasury shares held		(42,431	)		(1,620,191	)
Weighted-average number of ordinary shares for the six months ended June 30		60,070,875			8,777,645

B. Anti-diluted earnings per share

Diluted earnings per share is not different from basic earnings per share as there is no dilution effects of potential ordinary shares for the six-month periods ended June 30, 2025 and 2024.

C. Loss per share

		Six-month period ended June 30, 2025			Six-month period ended June 30, 2024
		(In Korean won)
Basic earnings per share	₩		(655	)		(9	)

D. Anti-dilutive shares were

Anti-dilutive shares could potentially dilute basic earnings per share in future periods and therefore, were not included in diluted earnings per share. The number of anti-dilutive shares as of period ended June 30, 2025, 2024 are as follows:

	Six-month period ended June 30, 2025		Six-month period ended June 30, 2024
	(In number of shares)
Warrant		9,848,225		-
Convertible notes		325,000		-

F-45

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

6. Share-based payment arrangements

A. Description of share-based payment arrangements

As of June 30, 2025, the Company had the following share-based payment arrangements.

i. Share option plan (cash-settled)

On June 30, 2021, Play F&B Co., Ltd, a subsidiary of Play Company, granted 400 share options to its employees. These options entitle the holders to a cash payment upon meeting the vesting conditions. The amount of the cash payment is determined based on the difference between the Company’s share price at the time of exercise and the exercise price.

The key terms and conditions related to the grants under these plans are as follows:

Grant date	Number of instruments	Vesting conditions	Contractual life of options	Type	Underlying assets
Options granted to employees
As of June 30, 2021	400	2 years’ service from grant date and the Play F&B Co., Ltd’s annual average Adjusted EBITDA (*1) equals or exceeds Korean Won 1,375,000 thousand at the date of exercise	7 years	Cash-settled	Play F&B Co., Ltd’s ordinary shares

(*1) Adjusted EBITDA = Operating Income + Depreciation of PP&E + Amortization of Intangible Assets + Advertising & marketing expenses

ii. Equity Price Protection Right

On March 31, 2023, the Company entered into a Share Purcahse Agreement with K Enter, which became effective on January 3, 2025. Under this agreement, the seller (CEO of Play Company) was granted a right to receive a cash payment based on the performance of KWM shares received as consideration. The amount of the cash payment is determined based on the difference between the initial value and the actual selling price of the shares during the exercise period.

The key terms and conditions related to the grants under these plans are as follows:

Grant date	Number of instruments	Vesting conditions	Contractual life of options	Type	Underlying assets
Options granted to employees
As of January 3, 2025	N/A	Buyer compensates Seller for any shortfall if shares sold below initial value; adjusted for gains realized/distribute up to Dec 31, 2026	3 months following 6 month lock-up expiration	Cash-settled	KWM shares listed on Nasdaq

F-46

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

B. Measurement of fair values

i. Cash-settled share-based payment arrangement

The fair value of the employee share options has been measured using a binomial model.

The inputs used in the measurement of the fair values at grant date and measurement date of the cash-settled share-based payment arrangement are as follows:

Share appreciation rights (cash-settled)		June 30, 2025			December 31, 2024
Fair value of option	₩		9,677			54,230
Share price			368,806			643,735
Exercise price	₩		1,100,000			1,100,000
Risk-free interest rate (based on government bonds)			2.46	%		2.71	%
Volatility (*)			37.60	%		30.00	%

(*) Volatility has been based on an evaluation of the historical volatility of other companies’ share price, which are listed in KOSDAQ, particularly over the historical period commensurate with prior one year.

ii. Equity Price Protection Right

The fair value of the employee share options has been measured using a binomial model (CRR).

The inputs used in the measurement of the fair values at grant date and measurement date of the cash-settled share-based payment arrangement are as follows:

Share appreciation rights (cash-settled)		June 30, 2025			December 31, 2024
Fair value of option	USD		0.26			-
Share price	USD		3.4			-
Exercise price	USD		2.6			-
Risk-free interest rate (based on government bonds)			4.21	%		-
Volatility (*)			63.50	%		-

(*) Volatility has been based on an evaluation of the historical volatility of other companies’ share price, which are listed in NASDAQ, particularly over the historical period commensurate with prior one year.

F-47

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

C. Reconciliation of outstanding share options

The number and exercise prices of share options under the share option plan for the six-month periods ended June 30, 2025 and 2024 are as follows.

i. Cash-settled share-based payment arrangement

	Six-month period ended June 30, 2025					Six-month period ended June 30, 2024
Share option plan (cash-settled)	Number of options			Exercise price		Number of options			Exercise price
	(In Korean Won and number of options)
Outstanding at January 1		400	₩		1,100,000		400	₩		1,100,000
Outstanding at June 30		400			1,100,000		400			1,100,000
Exercisable at June 30		-	₩		-		-	₩		-

Details of the liabilities arising from the share option plan (cash-settled) are as follows.

		As of June 30, 2025		As of December 31, 2024
		(In thousands of Korean won)
Total carrying amount of liabilities for share-based payment	₩		3,021,462		21,692
Total intrinsic value of liabilities for vested benefits			-		-

7. Employee benefits

Details of defined benefit liability recognized as of June 30, 2025 and December 31, 2024 are as follows:

		June 30, 2025		December 31, 2024
		(In thousands of Korean won)
Net defined benefit liability	₩		1,164,006		559,270

The Company operates both the defined benefit plans and defined contribution plans as a retirement pension scheme. Defined benefit plans expose the Company to actuarial risks, such as longevity risk, currency risk, interest rate risk and market (investment) risk.

The expense recognized in relation to defined contribution plan for the six-month periods ended June 30, 2025 is Korean Won 262,439 thousand.

F-48

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

A. Movement in net defined benefit (asset) liability

Details of reconciliation from the opening balances to the closing balances for the net defined benefit liability and its components as of June 30, 2025 and 2024 are as follows:

		Defined benefit obligation						Fair value of plan assets				Net defined Benefit liabilities
		June 30, 2025			June 30, 2024			June 30, 2025		June 30, 2024		June 30, 2025			June 30, 2024
		(In thousands of Korean won)
Beginning Balance	₩		559,270			706,102			-		-		559,270			706,102
Included in profit or loss													-
Current service cost			252,255			255,138			-		-		252,255			255,138
Interest expense			23,125			15,559			6,363		-		16,762			15,559
Subtotal			275,380			270,697			6,363		-		269,017			270,697
Included in OCI
Remeasurement loss(gain)
- Demographic assumption			-			-			-		-		-			-
- Financial assumption			-			-			-		-		-			-
- Adjustment based on experience			-			-			-		-		-			-
- Return on plan assets excluding interest income			-			-			-		-		-			-
Other			-			-			-		-		-			-
Changes in scope of consolidation			931,378			-			395,353		-		536,025			-
Contributions paid by the employer			-			-			-		-		-			-
Benefits paid			(200,306	)		(305,847	)		-		-		(200,306	)		(305,847	)
Subtotal			731,072			(305,847	)		395,353		-		335,719			(305,847	)
Ending Balance	₩		1,565,722			670,952			401,716		-		1,164,006			670,952

B. Plan assets

		June 30, 2025		December 31, 2024
		(In thousands of Korean won)
Cash	₩		299		-
Time deposits			401,417		-
Total	₩		401,716		-

F-49

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

C. Employee benefit expenses

i. Details of employee benefit expenses recognized for the six-month periods ended June 30, 2025 and 2024 are as follows:

		Six-month period ended June 30, 2025		Six-month period ended June 30, 2024
		(In thousands of Korean won)
Wages and salaries	₩		7,176,287		3,938,796
Expenses related to post-employment plans			531,456		469,393
Social security contributions			189,797		206,297
Fringe benefit			602,855		282,408
Cash settled Share-based payments			2,999,770		24,022
Total	₩		11,500,165		4,920,916

ii. Expenses are recognized in the condensed consolidated statements of comprehensive income (loss) as follows:

		Six-month period ended June 30, 2025		Six-month period ended June 30, 2024
		(In thousands of Korean won)
Cost of revenues	₩		4,290,483		3,716,180
Selling, general and administrative expenses			7,209,682		1,204,736
Total	₩		11,500,165		4,920,916

8. Income taxes

Tax provision from income taxes for interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. The Company’s resulting effective tax rate differs from the applicable statutory rate.

9. Inventories

Details of inventories as of June 30, 2025 and December 31, 2024 are as follows:

		June 30, 2025			December 31, 2024
		(In thousands of Korean won)
Merchandise	₩		3,835,834			2,717,915
Work in process			663,725			756,802
Allowance for Inventories valuation			(2,449,506	)		(2,656,393	)
Total	₩		2,050,053			818,324

F-50

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In 2025, inventories amounted to Korean Won 18,352,363 thousand (2024: Korean Won 32,616,031 thousand) were recognized as an expense during the year and included in ‘cost of sales’.

The Company recognizes the full provision for inventories with more than one year aging from the initiation of project according to the Company’s accounting policies. For inventories with less than one year aging from the initial production with an estimated recovery period exceeding one year, it is also recognized as a provision. Loss on valuation of inventories amounted to Korean Won 99,005 thousand (2024: Korean Won 1,919,734 thousand) and reversal of allowance for inventories valuation amounted to Korean Won 305,892 thousand (2024: Korean Won 341,694 thousand) were recognized during the six-month period ended June 30, 2025.

10. Investment properties

A. Reconciliation of carrying amount

Details of Investment properties as of June 30, 2025 and December 31, 2024 are as follows:

		June 30, 2025			December 31, 2024
		(In thousands of Korean won)
Book value	₩		2,373,127			667,739
Accumulated depreciation			(861,563	)		(266,740	)
Carrying amount	₩		1,511,564			400,999

Changes in Investment properties for the six-month periods ended June 30, 2025 and 2024 are as follows:

		Six-month period ended June 30, 2025			Six-month period ended June 30, 2024
		(In thousands of Korean won)
Balance as of January 1	₩		400,999			3,260,795
Transfer			1,156,511			-
Lease modification			16,640			(34,091	)
Depreciation			(62,586	)		(277,943	)
Balance as of June 30	₩		1,511,564			2,948,761

B. Amounts recognized in profit or loss

Rental income recognized by the Company for the six-month periods ended June 30, 2025 was Korean Won 98,943 thousand (2024: 42,914). Depreciation expense, included in ‘cost of revenues’, was as follows:

		Six-month period ended June 30, 2025		Six-month period ended June 30, 2024
		(In thousands of Korean won)
Depreciation	₩		62,587		277,943

F-51

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

11. Equity accounted investees

A. Acquisition cost of investments in associates

Details of acquisition cost of investments in associates as of June 30, 2025 is as follows:

		June 30, 2025
		Percentage of Ownership (*)			Acquisition Cost
		(In thousands of Korean won)
Investments in associates
SOLAIRE SCALE-UP MOVIE INVESTMENT FUND NO.2 (*)	₩		1.04	%		88,000

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

B. Carrying amount of investments in associates

Details of carrying amount of investments in associates as of June 30, 2025 is as follows:

		June 30, 2025
		Percentage of Ownership (*)			Carrying amount
		(In thousands of Korean won)
Investments in associates
SOLAIRE SCALE-UP MOVIE INVESTMENT FUND NO.2 (*)	₩		1.04	%		76,322

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

C. Movement of investments in associates

Details of the changes in investments in associates for June 30, 2025 are as follows:

		January 1, 2025		Changes in scope of consolidation		Share in the profit of associates			Changing Account Classification		June 30, 2025
		(In thousands of Korean won)
Investments in associates
SOLAIRE SCALE-UP MOVIE INVESTMENT FUND NO.2	₩		-		83,001		(6,679	)		-		76,322

F-52

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

D. Summary of financial information of associates

Details of the summary of financial information of associates for the years ended June 30, 2025 is as follows:

		June 30, 2025
		Current assets		Investment asset		Total assets		Current liabilities		Total liabilities
		(In thousands of Korean won)
Investments in associates
SOLAIRE SCALE-UP MOVIE INVESTMENT FUND NO.2	₩		881,312		6,651,687		7,532,999		206,088		206,088

		Six-month period ended June 30, 2025
		Investment income		Profit (Loss) for the year		Total Comprehensive income
Investments in associates
SOLAIRE SCALE-UP MOVIE INVESTMENT FUND NO.2	₩		192,454	(641,196	)		(641,196	)

12. Property and equipment

A. Reconciliation of carrying amount

Details of property and equipment as of June 30, 2025 and December 31, 2024 are as follows:

		June 30, 2025
		Book value		Accumulated depreciation			Accumulated impairment loss			Carrying amount
Machinery	₩		2,357,722		(1,097,077	)		-			1,260,645
Vehicles			319,130		(257,607	)		-			61,523
Office equipment			644,640		(414,518	)		-			230,122
Construction-in-progress			11,600		-			-			11,600
Furniture and fixtures			3,831,695		(1,773,861	)		(747,407	)		1,310,427
Right-of-use assets			11,875,983		(5,309,160	)		(369,280	)		6,197,543
Total	₩		19,040,770		(8,852,223	)		(1,116,687	)		9,071,860

		December 31, 2024
		Book value		Accumulated depreciation			Accumulated impairment loss			Carrying amount
Machinery	₩		2,601,550		(1,078,409	)		-			1,523,141
Vehicles			51,419		(51,418	)		-			1
Office equipment			559,571		(343,099	)		-			216,472
Construction-in-progress			8,662		-			-			8,662
Furniture and fixtures			4,401,909		(1,787,018	)		(748,162	)		1,866,729
Right-of-use assets			13,716,930		(5,065,483	)		(216,464	)		8,434,983
Total	₩		21,340,041		(8,325,427	)		(964,626	)		12,049,988

F-53

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Details of the changes in property and equipment for the for the six-month periods ended June 30, 2025 and 2024 are as follows:

		2025
		Machinery			Vehicles			Office equipment			Construction- in-progress			Furniture and fixture			Right-of- use assets			Total
		(In thousands of Korean won)
Beginning balance	₩		1,523,141			2			216,472			8,662			1,866,729			8,434,982			12,049,988
Changes in scope of consolidation			-			22,733			61,880			-			43,229			528,894			656,736
Acquisitions			478			3,826			30,271			9,000			-			515,219			558,794
Depreciation			(147,859	)		(14,530	)		(45,120	)		-			(168,789	)		(940,646	)		(1,316,944	)
Disposals			(121,177	)		-			(33,382	)		-			(431,497	)		-			(586,056	)
Transfer (*1)			6,062			49,493			-			(6,062	)		-			(1,206,004	)		(1,156,511	)
Impairment loss (*2)			-			-			-			-			756			(152,816	)		(152,060	)
Lease modification			-			-			-			-			-			202,659			202,659
Lease termination			-			-			-			-			-			(1,184,746	)		(1,184,746	)
Ending balance	₩		1,260,645			61,524			230,121			11,600			1,310,428			6,197,542			9,071,860

(*1)	During the period ended June 30, 2025, the Company transferred Right-of-use assets to investment properties because the Company decided to lease the building to a third party. (Note 10)
(*2)	The Company identified each bakery-café store as a CGU. An impairment loss of 756 thousand won related to the Lotte Jamsil store was reversed due to its disposal, and a new impairm1ent loss of 152.816 thousand won was recognized for the Sidus store.

		2024
		Machinery			Vehicles		Office equipment			Construction- in-progress		Furniture and fixture			Right-of- use assets			Total
		(In thousands of Korean won)
Beginning balance	₩		1,828,023			2		283,292			-		3,330,540			9,425,821			14,867,678
Acquisitions			12,000			-		10,760			-		121,780			353,064			497,604
Depreciation			(164,438	)		-		(57,550	)		-		(352,373	)		(638,850	)		(1,213,211	)
Disposals			(9,480	)		-		-			-		-			-			(9,480	)
Lease termination			-			-		-			-		-			(527,732	)		(527,732	)
Ending balance	₩		1,666,105			2		236,502			-		3,099,947			8,612,303			13,614,859

The classification of depreciation expenses in the statements of comprehensive income for the period ended June 30, 2025 and 2024 are as follows:

		2025		2024
		(In thousands of Korean won)
Cost of revenues	₩		774,367		998,897
Selling, general and administrative expenses			542,577		214,314
Total	₩		1,316,944		1,213,211

F-54

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

13. Intangible assets and goodwill

A. Reconciliation of carrying amount

Details of intangible assets as of June 30, 2025 and December 31, 2024 are as follows:

		June 30, 2025
		Book value		Accumulated amortization			Carrying amount
		(In thousands of Korean won)
Software	₩		487,309		(403,722	)		83,587
Brand			5,388,000		(1,100,050	)		4,287,950
Contents IP			2,113,319		(139,286	)		1,974,033
Goodwill			181,596,343		-			181,596,343
Total	₩		189,584,971		(1,643,058	)		187,941,913

		December 31, 2024
		Book value		Accumulated amortization			Carrying amount
		(In thousands of Korean won)
Software	₩		487,309		(376,372	)		110,937
Brand			5,388,000		(965,350	)		4,422,650
Goodwill			3,267,730		-			3,267,730
Total	₩		9,143,039		(1,341,722	)		7,801,317

Details of the changes in intangible assets for the six-month periods ended June 30, 2025 and 2024 are as follows:

		Six-month period ended June 30, 2025
		Software			Brand			Goodwill			Contents IP			Total
		(In thousands of Korean won)
Beginning balance	₩		110,937			4,422,650			3,267,730			-			7,801,317
Changes in scope of consolidation			-			-			191,659,072			2,113,319			193,772,390
Foreign currency translation loss			-			-			(13,330,459	)		-			(13,330,459	)
Amortization			(27,350	)		(134,700	)		-			(139,286	)		(301,335	)
Ending balance	₩		83,587			4,287,950			181,596,343			1,974,033			187,941,913

		Six-month period ended June 30, 2024
		Software			Brand			Goodwill		Total
		(In thousands of Korean won)
Beginning balance	₩		197,547			4,692,050			3,267,730		8,157,327
Amortization			(46,591	)		(134,700	)		-		(181,291	)
Ending balance	₩		150,956			4,557,350			3,267,730		7,976,036

F-55

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

B. Amortization

The classification of amortization in the statements of comprehensive income for the six-month periods ended June 30, 2025 and 2024 are as follows:

		Six-month period ended June 30, 2025		Six-month period ended June 30, 2024
		(In thousands of Korean won)
Selling, general and administrative expenses	₩		301,335		181,291

14. Business Combinations

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 3, 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 Play company 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. The acquisitions of each of the Six Korean Entities other than Play Company by K Enter post the acquisition of Play Company (“New K Enter”) 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. 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 consideration transferred for the acquisition of interests in each entity is as follows:

- Play Company Corp.
Acquired 100% of the outstanding shares of Play Company in exchange for 27,787 shares of K enter common stock (Subsequently converted to 8,673,667 shares of KWM) and cash consideration of USD 24,648,370 (Korean Won 36,233,103 thousand). Additional payments in cash will be made to the owner of Play Company if the annual average net profit for fiscal years from 2023 to 2025 reaches specified thresholds, with payments due to the owner of Play Company on January 31, 2027 and January 31, 2028. Furthermore, an additional cash payment may be required if the shares of KWM (into which K Enter common stock converted upon the closing of the Acquisition Merger) are sold during the three-month period following the six-month lock-up at a price below the per-share value at closing, subject to adjustments for subsequent gains or unrealized gains as of December 31, 2026.

- Lamp
Acquired 51.3% of the outstanding shares of Lamp in exchange for 6,668 shares of K Enter common stock (Subsequently converted to 2,081,405 shares of KWM).

- Bidangil
Acquired 53.7% of the outstanding shares of Bidangil in exchange for 4,444 shares of K Enter common stock (Subsequently converted to 1,387,188 shares of KWM).

F-56

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

- Apeitda
Acquired 51% of the outstanding shares of Apeitda in exchange for 3,334 shares of K Enter common stock (Subsequently converted to 1,040,703 shares of KWM).

- Anseilen
Acquired 51% of the outstanding shares of Anseilen in exchange for 1,677 shares of K Enter common stock (Subsequently converted to 523,473 shares of KWM).

- Solaire Partners
Acquired 95% of the outstanding shares of Solaire Partners in exchange for 3,103 shares of K Enter common stock (Subsequently converted to 968,598 shares of KWM).

A. The identifiable net assets acquired and liabilities recognized on acquisition were:

		January 1, 2025 (Deemed acquisition date)
		K enter			Lamp		Bidangil		Apeitda		Anseilen			Solaire Partners		Total
		(In thousands of Korean won)
- Asset
Cash and cash equivalents	₩		490,070			863,927		1,448,485		344,537		361,234			355		3,508,608
Accounts receivable and financial assets (*1)			4,254,387			1,684,662		1,863,496		522,218		54,824			3,314,474		11,694,061
Other non-financial assets			3,128,462			2,656,784		584,523		2,279		586,011			97		6,958,156
Property and equipment including right-of-use assets			77,734			159,538		123,789		220,843		735			74,097		656,736
Intangible assets other than goodwill			-			1,306,583		806,737		-		-			-		2,113,320
Deferred tax assets			-			45,845		-		-		-			-		45,845
Deferred transaction costs			3,163,511			-		-		-		-			-		3,163,511
Others			128,491			130,057		-		-		31			135,943		394,522
Subtotal	₩		11,242,655			6,847,396		4,827,030		1,089,877		1,002,835			3,524,966		28,534,759
- Liabilities
Trade payables and other financial liabilities			8,414,624			2,040,169		911,596		19,112		17,724			1,993,839		13,397,064
Borrowings			1,420,528			1,445,453		-		-		-			207,336		3,073,317
Convertible Note			3,920,244			-		-		-		-			-		3,920,244
Derivative liabilities			590,020			-		-		-		-			-		590,020
Contract liabilities			-			900,000		-		-		-			-		900,000
Lease liabilities			88,488			145,647		123,328		-		-			60,945		418,408
Defined benefit liabilities			-			255,006		-		121,521		7,130			152,368		536,025
Deferred tax liabilities			-			129,352		-		-		-			-		129,352
Others			294,162			428,731		88,928		122,857		1,561,219			134,899		2,630,796
Subtotal			14,728,066			5,344,358		1,123,852		263,490		1,586,073			2,549,387		25,595,226
Fair Value of Identifiable Net Assets			(3,485,411	)		1,503,038		3,703,178		826,387		(583,238	)		975,579		2,939,533

(*1) The fair value of trade receivables acquired through the business combination is KRW 172 million. The contractual amount of trade receivables as of the acquisition date is KRW 172 million, and no trade receivables are expected to be uncollectible.

F-57

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The fair value of other receivables acquired through the business combination is KRW 11,522 million. The contractual amount of other receivables as of the acquisition date is KRW 11,522 million, and no other receivables are expected to be uncollectible.

B. Measurement of fair values:

Assets acquired	Measurement bases
Intangible assets	The fair value is determined by projecting the future cash flows attributable to the specific intangible asset over its expected useful life, deducting contributory asset charges for the use of supporting assets, and discounting the resulting excess earnings to present value using an appropriate discount rate that reflects the risk associated with the asset.

C. Goodwill:

		January 1, 2025 (Deemed acquisition date)
		K enter			Lamp			Bidangil			Apeitda			Anseilen			Solaire Partners			Total
		(In thousands of Korean won)
Consideration transferred			169,012,604			7,959,688			5,310,988			3,979,845			2,005,971			3,714,183			191,983,279
Fair Value of Net Assets Attributable to the Acquired Interest			(3,485,411	)		770,789			1,988,022			421,458			(297,451	)		926,800			324,207
- Fair Value of Identifiable Net Assets			(3,485,411	)		1,503,038			3,703,178			826,387			(583,238	)		975,579			2,939,533
- Non-controlling interest			-			(732,249	)		(1,715,156	)		(404,929	)		285,787			(48,779	)		(2,615,326	)
Goodwill (*1)	₩		172,498,015			7,188,899			3,322,966			3,558,387			2,303,422			2,787,383			191,659,072

(*1) The goodwill of KRW 191,659,072 thousand arising from the acquisition is attributable to synergies expected from the combination of operations and the customer base acquired. None of the goodwill recognised is expected to be deductible for income tax purposes.

F-58

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

15. Listing expenses

On May 13, 2025, Global Star was reincorporated to Cayman Islands by merging with and into KWM, with KWM remaining as the surviving publicly traded entity (the “Reincorporation Merger”). In connection with the closing of the Reincorporation Merger, (i) each issued and outstanding share of common stock of Global Star, other than Global Star common stock owned by Global Star as treasury shares or any Global Star common stock owned by any direct or indirect wholly owned subsidiary of Global Star, was converted into one ordinary share of KWM (the “KWM Ordinary Share”), (ii) each issued and outstanding warrant of Global Star was converted automatically into a warrant to purchase one KWM Ordinary Share at a price of $11.50 per whole share (the “KWM Warrant”), (iii) each issued and outstanding right of Global Star was converted automatically into a right to receive one-tenth (1/10) of one KWM Ordinary Share at the closing of a business combination (the “KWM Right”), and (iv) each issued and outstanding unit of Global Star was separated and converted automatically into one KWM Ordinary Share, one KWM Warrant, and one KWM Right. At the closing of the Reincorporation Merger, all common stock, warrants, rights, units and other securities of Global Star ceased to be outstanding and were automatically canceled and retired and ceased to exist.

On May 13, 2025, Merger Sub merged with and into K Enter, resulting in K Enter being a wholly owned subsidiary of KWM (the “Acquisition Merger”). In connection with the closing of the Acquisition Merger, (i) each share of K Enter capital stock that was owned by Global Star, Merger Sub and K Enter (as treasury stock or otherwise), was automatically cancelled and retired without any conversion, (ii) each share of K Enter preferred stock issued and outstanding was deemed converted into shares of K Enter common stock, (iii) each share of K Enter common stock issued and outstanding, including shares of K Enter common stock deemed outstanding as a result of the mandatory conversion of K Enter preferred stock, was converted into the right to receive a number of KWM Ordinary Shares equal to the Conversion Ratio, and (iv) each share of Merger Sub common stock issued and outstanding was converted into and become one newly issued, fully paid and nonassessable share of K Enter common stock.

The Business Combination was accounted for as a capital reorganization in accordance with IFRS 2 as KWM does not meet the criteria to be determined a business under IFRS 3. Under this method of accounting, KWM was treated as the acquired company for financial reporting purposes, and New K Enter was treated as the acquirer for financial statement reporting purposes. In such a transaction structure, the difference between the fair value of the assets and liabilities transferred and the fair value of the equity instruments issued at the grant date is recognized in profit or loss as compensation for listing services, rather than as goodwill or a gain from a bargain purchase.

A. Listing expenses

		May 14, 2025
		(In thousands of Korean won)
Listing expenses
Fair value of shares issued			15,285,412
Fair Value of Identifiable Net Assets			(9,789,813	)
Reverse merger impact in the consolidated statement of profit or (loss) due to IFRS 2 accounting treatment	₩		25,075,225

F-59

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

B. The identifiable net assets acquired and liabilities recognized on acquisition were:

		May 14, 2025
		KWM
		(In thousands of Korean won)
- Asset
Cash and cash equivalents			62,655
Others			15,334
Subtotal	₩		77,989
- Liabilities
Trade payables and other financial liabilities			4,792,234
derivative liabilities			357,647
Warrants			1,241,231
Borrowings			3,017,994
Others			458,696
Subtotal	₩		9,867,802
Fair Value of Identifiable Net Assets	₩		(9,789,813	)

16. Capital and reserves

A. Share capital

Details of share capital and share premium as of June 30, 2025 and December 31, 2024 are as follows:

	June 30, 2025		December 31, 2024
	(In Korean won and US Dollar and number of shares)
Number of authorized shares		1,000,000,000		1,000,000,000
Value per share	USD	0.0001	USD	0.0001
Number of shares issued		63,198,074		8,777,645
Common shares(USD)	USD	6,319.80	USD	877.76
Common shares(KRW)	KRW	8,928,731	KRW	1,226,196

i. Ordinary shares

Holders of these shares are entitled to dividends as declared from time to time and are entitled to one vote per share at general meetings of the Company.

F-60

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ii. Treasury shares

Details of treasury shares for the six-month periods ended June 30, 2025 and 2024 are as follows:

		Six-month period ended June 30, 2025				Six-month period ended June 30, 2024
		Numbers of shares		Carrying amount		Numbers of shares		Carrying amount
		(In Korean won and number of shares)
Beginning balance (*1)	₩		-		-		15,582		27,128,262
Business Combination (*2)			160,000		588,099		-		-
Ending balance	₩		160,000		588,099		15,582		27,128,262

(*1)	As the accounting acquirer, PlayCompany Co., Ltd. held 15,582 shares of its own stock prior to the acquisition merger. Upon completion of the merger, these treasury shares were retired and reclassified as other capital surplus.
(*2)	As a result of the Acquisition Merger, the common shares of KWM held by K Enter were recognized as treasury shares.

B. Share premium and Other components of equity

		June 30, 2025			December 31, 2024
		(In thousands of Korean won)
Share premium
Capital surplus (*1)	₩		205,353,734			-
Other components of equity
Other capital surplus (*2)			(56,906,182	)		(746,300	)
Remeasurements of defined benefit liability			181,516			181,516
Treasury shares			(588,100	)		(27,128,262	)
Foreign currency translation differences			(12,211,415	)		-
Total	₩		(69,524,181	)		(27,693,046	)

(*1)	Among the costs incurred in connection with the reincorporation merger and acquisition merger, those specifically related to the share exchange and issuance for the existing shareholders of K Enter were accounted for as a deduction from equity. The amount recognized as a deduction from equity KRW 2,769,995 thousand.
(*2)	During the period, treasury shares amounting to KRW 27,128,262 thousand were retired and reclassified as a result of a completion of the merger. In addition, shares amounting to KRW 7,267,859 thousand related to the conversion of convertible bonds, which have not yet been issued, were recognized.

F-61

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

17. Borrowings/payable and Loans/receivable

Borrowings as of June 30, 2025 and December 31, 2024 are as follows:

		June 30, 2025		December 31, 2024
		(In thousands of Korean won)
Current Liabilities
Short-term borrowings	₩		10,296,121		3,764,000
Current portion of long-term borrowings, net			2,150,907		2,108,956
Current lease liabilities (*)			1,859,391		1,786,577
Total	₩		14,306,419		7,659,533
Non-Current liabilities
Non-current lease liabilities (*)			7,132,941		9,302,661
Total	₩		7,132,941		9,302,661

(*) The interest rate related to lease liabilities reflects the incremental borrowing rate based on the Company’s credit. The amount of interest expense related to lease liabilities incurred during the six-month period ended June 30, 2025 is Korean Won 322,370 thousand (June 30, 2024: Korean Won 454,773 thousand). Additionally, the amount of short-term lease payments and low-value assets lease payments not included in the measurement of lease liabilities during the six-month period ended June 30, 2025 are Korean Won 327,539 thousand (June 30, 2024: Korean Won 18,829 thousand).

A. Terms and repayment schedule of Borrowings

The terms and conditions of outstanding borrowings as of June 30, 2025 and December 31, 2024 are as follows:

			June 30, 2025				December 31, 2024
	Nominal interest rate	Maturity	Face value		Carrying amount		Face value		Carrying amount
			(In thousands of Korean won)
Secured borrowings (*1)	KORIBOR + 1.75%	20-Dec-25		500,000		500,000		500,000		500,000
Secured borrowings (*2)	6.78%	27-Feb-26		1,000,000		1,000,000		1,000,000		1,000,000
Secured borrowings (*3)	4.69%	26-Jun-26		1,000,000		1,000,000		1,000,000		1,000,000
Secured borrowings (*4)	KORIBOR + 2.39%	16-Sep-25		100,000		6,240		100,000		18,720
Secured borrowings (*5)	4.98%	02-Dec-25		400,000		400,000		400,000		400,000
Unsecured borrowings	4.60%	31-Dec-25		700,000		700,000		700,000		700,000
Unsecured borrowings	4.60%	31-Dec-25		2,200,000		2,144,667		2,200,000		2,090,236
Unsecured borrowings	4.60%	31-Dec-25		164,000		164,000		164,000		164,000
Secured bank loans (*6)	CD + 3.00%	08-May-26		490,000		490,000		-		-
Secured bank loans (*7)	4.48%	23-Sep-25		940,000		895,000		-		-
Secured borrowings (*8)	5.84%	17-Jul-26		300,000		288,610		-		-
Unsecured borrowings (*9)	4.60%	30-Apr-26		313,709		313,709		-		-
Unsecured borrowings (*10)	-	13-May-26		130,214		130,214		-		-
Unsecured borrowings (*11)	-	13-May-26		48,958		48,958		-		-
Unsecured borrowings (*12)	-	31-Jan-27		2,712,800		2,712,800		-		-
Unsecured borrowings (*13)	7.00%	13-Nov-25		1,652,830		1,652,830		-		-
Total				12,652,511		12,447,028		6,064,000		5,872,956

(*1) As of June 30, 2025, the Company is provided a guarantee of Korean Won 458,526 thousand (December 31, 2024: Korean Won 458,526 thousand) by the CEO of the Company, with a credit limit of Korean Won 500,000 thousand. The Company provided the intellectual property (IP) rights as collateral.

F-62

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(*2)	As of June 30, 2025, the Company is provided a guarantee of Korean Won 1,200,000 thousand (December 31, 2024: Korean Won 1,200,000 thousand) from the CEO of the Company, with a credit limit of Korean Won 1,000,000 thousand.
(*3)	As of June 30, 2025, the Company is provided a guarantee of Korean Won 900,000 thousand (December 31, 2024: Korean Won 900,000 thousand) by Korea Credit Guarantee Fund, with a credit limit of Korean Won 1,000,000 thousand.
(*4)	As of June 30, 2025, the Company provides machines with a carrying amount of Korean Won 95,047 thousand (December 31, 2024: Korean Won 113,874 thousand) as collaterals for the secured borrowings, which carry a credit limit of Korean Won 100,000 thousand and are repayable under equal amortization terms.
(*5)	As of June 30, 2025, the Company is provided a building as collateral of Korean Won 400,000 thousand (December 31, 2024: Korean Won 480,000 thousand) by the key management personnel, with a credit limit of Korean Won 400,000 thousand.
(*6)	The Company has received a payment guarantee of Korean Won 441,000 thousand from Korea Credit Guarantee Fund as of June 30, 2025.
(*7)	The Company is provided a joint guarantee of Korean Won 1,190,400 thousand by the CEO of the Company as of June 30, 2025. The borrowing will be repaid in monthly installments of 5,000 thousand.
(*8)	As of June 30, 2025, the company is provided a joint and several guarantee of Korean Won 330,000 thousand by the CEO of the company, with a credit limit of Korean Won 300,000 thousand.
(*9)	As of June 30, 2025, the Company has a credit limit of Korean Won 315,000 thousand.
(*10)	As of June 30, 2025, the Company has a credit limit of Korean Won 2,170,240 thousand.
(*11)	As of June 30, 2025, the Company has a credit limit of Korean Won 1,356,400 thousand.
(*12)	As of June 30, 2025, the Company has a short-term borrowing under a non-recourse promissory note, with a credit limit of Korean Won 2,712,800 thousand, under which the Company shall pay 10% or 7% of gross proceeds from specified financings. Any unpaid balance shall be forgiven if no such financing occurs by January 31, 2027.
(*13)	As of May 13, 2025, the Company has a short-term borrowing under a promissory note, with a credit limit of Korean Won 1,652,830 thousand, which requires monthly payments of USD 20,000 starting one month after issuance, applied first to interest and then to principal. Any unpaid balance shall accrue interest at a default rate of 18% per annum if not fully repaid by the maturity date.

F-63

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

B. Terms and collection schedule of Loans

The terms and conditions of outstanding loans as of June 30, 2025 and December 31, 2024 are as follows:

			June 30, 2025				December 31, 2024
	Nominal interest rate	Maturity	Face value		Carrying amount		Face value		Carrying amount
			(In thousands of Korean won)
Cho Mi Kyung (*1)	2.00%	31-Aug-25		400,000		-		400,000		-
Bonanza Pictures (*2)	4.60%	31-Mar-21		30,000		-		30,000		-
Jung Kyung Han	3.00%	14-Sep-23		30,000		30,000		30,000		30,000
YY entertainment (*3)	4.60%	31-Dec-23		150,000		-		150,000		-
Second plan (*4)	4.60%	31-Dec-25		374,400		374,400		394,400		394,400
Rainier (*5)	4.60%	31-Dec-25		150,000		-		150,000		-
Beacon Holdings, Inc. (*4)	4.60%	31-Dec-25		615,000		615,000		225,000		225,000
K-Enter Holdings Korea (*6)	4.60%	23-Dec-25		-		-		95,000		95,000
Studio Cuat (*4)	4.60%	31-Dec-25		43,000		43,000		43,000		43,000
Park, Un Kyoung	-	16-Jan-26		10,000		10,000		-		-
Falling Starlight Limited Company Specializing in The Cultural Industry (“Falling Starlight”) (*7)	-	-		120,054		120,054		-		-
Us and Them Limited Company Specializing in The Cultural Industry (“Us and Them”) (*8)	-	-		31,000		31,000		-		-
Total				1,953,454		1,223,454		1,517,400		787,400

(*1)	The Company recognized a full provision for the balance of loan and accrued interest income. Accrued interest income as of June 30, 2025 and December 31, 2024 are Korean Won 26,685 thousand and Korean Won 26,685 thousand, respectively.
(*2)	The Company recognized a full provision for the balance of loan and accrued interest income. Accrued interest income as of June 30, 2025 and December 31, 2024 are Korean Won 7,296 thousand and Korean Won 7,296 thousand, respectively.
(*3)	The Company recognized a full provision for the balance of loan and accrued interest income. Accrued interest income as of June 30, 2025 and December 31, 2024 are Korean Won 6,333 thousand and Korean Won 6,333 thousand, respectively.
(*4)	The contract is automatically extended by one year if the loan is not collected until maturity date.
(*5)	The Company recognized a full provision for the balance of loan and accrued interest income as of December 31, 2024. Accrued interest income as of June 30, 2025 and December 31, 2024 are Korean Won 3,789 thousand and Korean Won 3,789 thousand, respectively.
(*6)	As a result of the business combination, this amount has been eliminated as an intercompany transaction in the consolidated financial statements.
(*7)	The loan is contractually repayable upon the liquidation of the Falling Starlight.
(*8)	The loan is contractually repayable prior to the release date of the film.

F-64

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

18. Financial Instruments – Fair values and risk management

A. Accounting classifications and fair values

The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.

The carrying amounts of financial instruments by category as of June 30, 2025 are as follows:

		Fair value		Level 1		Level 2		Level 3		Total
		(In thousands of Korean won)
Financial assets at fair value
Guaranteed Return Insurances (short-term) (*)	₩		25,674		-		25,674		-		25,674
Guaranteed Return Insurances (long-term) (*)			308,830		-		308,830		-		308,830
Short-term investment securities			450,680		-		450,680		-		450,680
Long-term investment securities			3,439,262		245,104		-		3,194,157		3,439,262
Total	₩		4,224,446		245,104		785,184		3,194,157		4,224,446

(*) The fair value of guaranteed return insurances classified at Level 2 in the fair value hierarchy is determined using an evaluation of surrender proceeds received from financial institutions.

		Fair value		Level 1		Level 2		Level 3		Total
		(In thousands of Korean won)
Financial liability at fair value
Financial Guarantee Liability	₩		1,286		-		1,286		-		1,286
Warrants			1,740,565		1,740,565		-		-		1,740,565
Current derivative liabilities			1,024,823		-		-		1,024,823		1,024,823
Total	₩		2,766,674		1,740,565		1,286		1,024,823		2,766,674

The carrying amounts of financial instruments by category as of December 31, 2024 are as follows:

		Fair value		Level 1		Level 2		Level 3		Total
		(In thousands of Korean won)
Financial assets at fair value
Guaranteed Return Insurances (short-term) (*)	₩		13,524		-		13,524		-		13,524
Guaranteed Return Insurances (long-term) (*)			322,538		-		322,538		-		322,538
Long-term investment securities			730,390		143,992		-		586,398		730,390
Total	₩		1,066,452		143,992		336,062		586,398		1,066,452

(*) The fair value of guaranteed return insurances classified at Level 2 in the fair value hierarchy is determined using an evaluation of surrender proceeds received from financial institutions.

F-65

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Details of the changes in financial instruments for the years ended June 30, 2025 are as follows:

		Long-term investment securities
		(In thousands of Korean won)
Financial assets at fair value
Beginning balance	₩		-
Changes in scope of consolidation			3,199,114
Disposals (*1)			(2,398	)
Valuation (*2)			(2,558	)
Ending balance	₩		3,194,157

(*1)	In 2025, the Company received a return of principal from a project investment directly made by the Company.
(*2)	Unlisted stocks were revalued on June 30, 2025.

		Current derivative liabilities
		(In thousands of Korean won)
Financial liability at fair value
Beginning balance	₩		-
Changes in scope of consolidation			947,666
Issuance			389,964
Exercised			(1,269,932	)
Valuation			1,049,560
Foreign exchange differences			(92,435	)
Ending balance	₩		1,024,823

B. Measurement of fair values

Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

● Level 1: quoted prices (unadjusted) in active markets for identical asset or liability

● Level 2: all inputs other than quoted prices included in Level 1 that are observable (either directly that is, prices, or indirectly that is, derived from prices) for the asset or liability

● Level 3: unobservable inputs for the asset or liability.

F-66

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The fair value of financial instruments traded in an active market is determined based on the quoted market price as of the end of the reporting period. If the quoted prices are readily and regularly available through exchanges, sellers, brokers, industry groups, rating agencies or regulators and such prices represent actual market transactions that occur regularly between independent parties, they are considered active markets.

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. These valuation techniques use as much market observable information as possible and use the least amount of group-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.

For the purpose of measuring fair value under Level 2 and Level 3 of the fair value hierarchy, the valuation techniques used and the significant unobservable inputs are as follows:

Category	Valuation Technique	Significant Unobservable Inputs	Relationship between Fair Value and Unobservable Inputs
Project investment	Cost Model (*)	-	-
Derivative liabilities (Conversion Option)	Probability Weighted Expected Return Model (PWERM) with Monte Carlo simulation	Volatility (June 30, 2025: 30.7% ~ 33.8%)	Estimated fair value increases (decreases) as expected volatility increases (decreases).
Derivative liabilities (EF Hutton)	Monte Carlo Simulation (Discounted Cash Flow)	Volatility (June 30, 2025: 33.4%)	Estimated fair value increases (decreases) as expected volatility increases (decreases).

(*) Project Investments are related to investments in movie making projects. Due to the inability to reasonably assume the future cash flow, management believes that Cost Model best represents the fair value of these financial instruments.

19. Convertible notes

In connection with the Business Combination consummated during the current period, the Company recognized $3.0 million in aggregate principal amount of convertible senior unsecured notes previously issued by K Enter. In May 2025, the Company issued an additional $5.15 million in aggregate principal amount of convertible senior unsecured notes. The convertible notes contain a right to convert the notes into the common shares. The Company accounted 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 Company accounted the embedded conversion feature as a derivative instrument and periodically measures its fair value in accordance with IFRS 9. The Company determined the carrying amount of the convertible notes 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.

F-67

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Details of convertible notes issued and outstanding as of June 30, 2025 and 2024 are as follows:

		June 30, 2025			December 31, 2024
		(In thousands of Korean won)
Original amount	₩		4,408,300			-
Discount on Notes			(378,684	)		-
Convertible Notes (Current)	₩		4,029,616			-

Amounts recognized in profit or loss and changes in fair value of derivative liabilities at fair value through profit or loss for the period ended June 30, 2025 are as follows:

		1st			2nd			3rd			4th			5th			6th			Total
			(In thousands of Korean won)
Balance at 1 January	₩		-			-			-			-			-			-			-
Changes in scope of consolidation			442,514			147,506			-			-			-			-			590,020
Issuance			-			86,046			72,640			90,973			81,845			58,460			389,964
Exercised			-			(503,865	)		(329,682	)		(235,315	)		(201,070	)		-			(1,269,932	)
Adjustment to fair value			(29,497	)		295,380			270,360			153,079			126,609			67,329			883,260
Foreign exchange differences			(32,719	)		(25,067	)		(13,318	)		(8,737	)		(7,384	)		(5,210	)		(92,435	)
Balance at 30 June	₩		380,298			-			-			-			-			120,579			500,877

Details of the convertible notes issued by the Company and outstanding as of June 30, 2025 are as follows:

Series	1st		2nd(*)	3rd(*)
Type	Convertible Notes		Convertible Notes	Convertible Notes
Issuance amount($)	2,250,000		1,500,000	1,000,000
Coupon rate (%)	3%		3%	3%
Issuance date	2024-06-04/2024-10-03/2024-10-18		2024-06-05/2024-12-30/2025-05-13	2025-05-14
Maturity date	3 years from issue date		3 years from issue date	2028-05-13
Principal redemption	1. Redemption at maturity: Redeemed on the maturity date, at their outstanding principal amount, which has not been early redeemed		1. Redemption at maturity: Redeemed on the maturity date, at their outstanding principal amount, which has not been early redeemed	1. Redemption at maturity: Redeemed on the maturity date, at their outstanding principal amount, which has not been early redeemed

F-68

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Series	1st		2nd(*)	3rd(*)
Conversion price	● Conversion before the business combination: Before the consummation of the Business Combination, the holders shall be entitled to convert the Pre-PIPE Notes into ordinary shares in the Company at the conversion price of $1,200 per share (the Pre-Merger Conversion Price). Upon the consummation of the Business Combination, 1 ordinary share of the Company shall be converted into 300 ordinary shares (1 share is worth $10.00) of a combined entity (the Combined Entity). ● Conversion after the business combination Upon the consummation of the Business Combination, the Pre-PIPE Notes shall be a part of the Combined Entity and the Investor shall be entitled to convert the Pre- PIPE Notes into ordinary shares in the Combined Entity at the conversion price of $10 per share (the Post-Merger Conversion Price). The Post-Merger Conversion Prices shall be adjusted downwardly to the greater of the following: ● 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 ● Floor price of $4 per share.		● Conversion before the business combination: Before the consummation of the Business Combination, the Investor shall be entitled to convert the Pre-PIPE Notes into ordinary shares in the Company at the conversion price of $1,200 per share (the Pre-Merger Conversion Price). Upon the consummation of the Business Combination, 1 ordinary share of the Company shall be converted into 300 ordinary shares (1 share is worth $10.00) of a combined entity (the Combined Entity). ● Conversion after the business combination Upon the consummation of the Business Combination, the Pre-PIPE Notes shall be a part of the Combined Entity and the Investor shall be entitled to convert the Pre- PIPE Notes into ordinary shares in the Combined Entity at the conversion price of $10 per share (the Post-Merger Conversion Price). The Post-Merger Conversion Prices shall be adjusted downwardly to the greater of the following: ● 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 ● Floor price of $4 per share.	● Conversion after the business combination: Upon the consummation of the Business Combination, the PIPE Notes shall be a part of the Combined Entity and the Investor shall be entitled to convert the PIPE Notes into ordinary shares in the Combined Entity at the conversion price of $10 per share (the Post-Merger Conversion Price). The Post-Merger Conversion Prices shall be adjusted downwardly to the greater of the following: ● 50% 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 ● Floor price of $5 per share.

(*) In June 2025, the entire principal amount of the convertible notes was fully converted into common stock; however, the related common shares had not been issued as of June 30, 2025.

F-69

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Series	4th(*)		5th(*)	6th
Type	Convertible Notes		Convertible Notes	Convertible Notes
Issuance amount($)	1,000,000		1,400,000	1,000,000
Coupon rate (%)	3%		3%	3%
Issuance date	2025-05-14		2025-05-14	2025-05-14
Maturity date	2028-05-13		2028-05-13	2028-05-13
Principal redemption	1. Redemption at maturity: Redeemed on the maturity date, at their outstanding principal amount, which has not been early redeemed		1. Redemption at maturity: Redeemed on the maturity date, at their outstanding principal amount, which has not been early redeemed	1. Redemption at maturity: Redeemed on the maturity date, at their outstanding principal amount, which has not been early redeemed
Conversion price	● Conversion before the business combination: Before the consummation of the Business Combination, the holders shall be entitled to convert the PIPE Notes into ordinary shares in the Company at the conversion price of $10 per share (the Post-Merger Conversion Price).		● Conversion before the business combination: Before the consummation of the Business Combination, the holders shall be entitled to convert the PIPE Notes into ordinary shares in the Company at the conversion price of $10 per share (the Post-Merger Conversion Price).	● Conversion before the business combination: Before the consummation of the Business Combination, the holders shall be entitled to convert the PIPE Notes into ordinary shares in the Company at the conversion price of $10 per share (the Post-Merger Conversion Price).
	● Conversion after the business combination: Upon the consummation of the Business Combination, the PIPE Notes shall be a part of the Combined Entity and the Investor shall be entitled to convert the PIPE Notes into ordinary shares in the Combined Entity at the conversion price of $10 per share (the Post-Merger Conversion Price). The Post-Merger Conversion Prices shall be adjusted downwardly to the greater of the following: ● 50% 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 ● Floor price of $5 per share.		● Conversion after the business combination: Upon the consummation of the Business Combination, the PIPE Notes shall be a part of the Combined Entity and the Investor shall be entitled to convert the PIPE Notes into ordinary shares in the Combined Entity at the conversion price of $10 per share (the Post-Merger Conversion Price). The Post-Merger Conversion Prices shall be adjusted downwardly to the greater of the following: ● 50% 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 ● Floor price of $5 per share.	● Conversion after the business combination: Upon the consummation of the Business Combination, the PIPE Notes shall be a part of the Combined Entity and the Investor shall be entitled to convert the PIPE Notes into ordinary shares in the Combined Entity at the conversion price of $10 per share (the Post-Merger Conversion Price). The Post-Merger Conversion Prices shall be adjusted downwardly to the greater of the following: ● 50% 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 ● Floor price of $5 per share.

(*) In June 2025, the entire principal amount of the convertible notes was fully converted into common stock; however, the related common shares had not been issued as of June 30, 2025.

F-70

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

20. Non-controlling interests

A. Summary of financial statements

Summary of financial statements of the Company’s subsidiaries that has material non-controlling interests, before any intercompany transaction eliminations for the six month period ended June 30, 2025 is as follows:

		Play F&B Co., Ltd.			LAMP			Bidangil			Apeitda			Anseilen			Solaire
		(In thousands of Korean won)
NCI percentage	₩		32.90	%		48.72	%		46.32	%		49.00	%		49.00	%		5.00	%
Current assets			1,738,290			2,674,462			2,514,743			265,397			5,521,011			2,147,130
Non-current assets			8,844,377			2,593,861			759,298			733,098			531,877			1,084,145
Current liabilities			10,802,463			4,694,841			358,403			141,023			4,577,829			2,365,621
Non-current liabilities			6,655,752			918,360			11,592			129,439			2,114,224			316,326
Net assets			(6,875,548	)		(344,878	)		2,904,046			728,033			(639,165	)		549,328
Revenue	₩		6,390,493			3,951,666			534,544			-			1,521,130			218,469
Profit (loss)			(1,059,566	)		(670,684	)		7,604			(98,353	)		(55,927	)		(426,251	)
Total comprehensive income			(1,059,566	)		(670,684	)		7,604			(98,353	)		(55,927	)		(426,251	)
Cash flows from operation activities			(330,800	)		324,268			(630,871	)		(81,147	)		3,895,436			274
Cash flows from investment activities			128,896			(3,815	)		540,375			(280	)		(27,195	)		87,582
Cash flows from financing activities			114,890			(133,896	)		(86,875	)		-			-			(87,324	)
Effect of exchange rate changes on cash and cash equivalents			-			-			-			(1	)		-			-
Net increase(decrease) in cash and cash equivalents			(87,014	)		186,557			(177,371	)		(81,428	)		3,868,241			532

Summary of financial statements of the Company’s subsidiary that has material non-controlling interest, before any intercompany transaction eliminations for the six month period ended June 30, 2024 is as follows:

		Play F&B Co., Ltd.
		(In thousands of Korean won)
NCI percentage	₩		32.90	%
Current assets			1,992,680
Non-current assets			15,419,473
Current liabilities			6,844,713
Non-current liabilities			13,765,248
Net assets			(3,197,808	)
Revenue	₩		7,502,210
Profit (loss)			(439,162	)
Total comprehensive income			(439,162	)
Cash flows from operation activities			781,305
Cash flows from investment activities			(78,568	)
Cash flows from financing activities			(613,939	)
Net increase(decrease) in cash and cash equivalents			88,798

F-71

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

B. Movement in NCI

Movement in NCI for the six month period ended June 30, 2025 is as follows:

		Play F&B Co., Ltd.			LAMP			Bidangil			Apeitda			Anseilen			Solaire			Total
		(In thousands of Korean won)
Net assets attributable to NCI at beginning of the year	₩		(590,774	)		-			-			-			-			-			(590,774	)
Acquisition Merger			-			732,250			1,715,156			404,929			(285,787	)		48,779			2,615,327
Profit allocated to NCI			(383,287	)		(362,589	)		(24,095	)		(48,193	)		(27,404	)		(23,387	)		(868,955	)
Net assets attributable to NCI at the end of the year			(974,061	)		369,661			1,691,061			356,736			(313,191	)		25,392			1,155,598

Movement in NCI for the year ended June 30, 2024 is as follows:

		Play F&B Co., Ltd.
		(In thousands of Korean won)
Net assets attributable to NCI at beginning of the year	₩		411,556
Profit allocated to NCI			(279,366	)
Net assets attributable to NCI at the end of the year			132,190

21. Leases

A. Leases as lessee

The Company leases buildings and vehicles. The leases typically run for a period of 1 ~5 years, with an option to renew or terminate the lease after that date. The Company also leases water purifiers, copy machines, and others with contract terms of one to three years. These leases are short-term and/or leases of low-value items. The Company has elected not to recognize right-of-use assets and lease liabilities for these leases. Information about leases for which the Company is a lessee is presented below.

i. Right-of-use assets

Right-of-use assets related to leased properties that do not meet the definition of investment property are presented as property and equipment.

Details of right-of-use assets and lease liabilities recognized in the consolidated statements of financial position as of June 30, 2025 and December 31, 2024 are as follows:

		June 30, 2025		December 31, 2024
		(In thousands of Korean won)
Right-of-use assets (Acquisition price)
Buildings	₩		11,232,144		13,168,074
Vehicles			643,839		548,856
Total	₩		11,875,983		13,716,930

F-72

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

		June 30, 2025			December 31, 2024
		(In thousands of Korean won)
Right-of-use assets (Accumulated depreciation)
Buildings	₩		(5,059,588	)		(4,895,688	)
Vehicles			(249,573	)		(169,795	)
Total	₩		(5,309,161	)		(5,065,483	)

		June 30, 2025			December 31, 2024
		(In thousands of Korean won)
Right-of-use assets (Accumulated impairment loss)
Buildings	₩		(369,280	)		(216,464	)
Total	₩		(369,280	)		(216,464	)

		June 30, 2025		December 31, 2024
		(In thousands of Korean won)
Right-of-use assets (Net book value)
Buildings	₩		5,803,276		8,055,922
Vehicles			394,267		379,061
Total	₩		6,197,543		8,434,983

Changes in right-of-use assets for the six-month periods ended June 30, 2025 and 2024 are as follows:

		Six-month period ended June 30, 2025
		Building			Vehicles			Total
		(In thousands of Korean won)
Beginning balance	₩		8,055,922			379,060			8,434,982
Changes in scope of consolidation			444,531			84,364			528,895
Depreciation			(870,030	)		(70,616	)		(940,646	)
Acquisitions			513,417			1,802			515,219
Transfer			(1,156,511	)		(49,493	)		(1,206,004	)
Impairment loss			(152,816	)		-			(152,816	)
Lease termination			(1,184,053	)		(693	)		(1,184,746	)
Lease modification			152,816			49,843			202,659
Ending balance	₩		5,803,276			394,267			6,197,543

		Six-month period ended June 30, 2024
		Building			Vehicles			Total
		(In thousands of Korean won)
Beginning balance	₩		9,268,936			156,885			9,425,821
Depreciation			(602,554	)		(36,296	)		(638,850	)
Acquisitions			56,084			296,980			353,064
Lease termination			(527,731	)		-			(527,731	)
Ending balance	₩		8,194,735			417,569			8,612,304

F-73

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ii. Amounts recognized in profit or loss

Amounts recognized in profit or loss for the six-month periods ended June 30, 2025 and 2024 are as follows:

		Six-month period ended June 30, 2025			Six-month period ended June 30, 2024
		(In thousands of Korean won)
Interest expense relating to lease liabilities (included in finance cost)	₩		284,406			454,773
Expense relating to short-term leases			320,507			9,880
Expense relating to leases of low-value assets excluding short-term leases			7,032			8,949
Gains on disposal of right-of-use assets			633,794			96,251
Expense relating to variable lease payments not included in the measurement of lease liabilities			141,390			259,140
Impairment loss on right-of-use asset	₩		(152,816	)		-

iii. Amounts recognized in statement of cash flows

Amounts recognized in statements of cash flows for the six-month periods ended June 30, 2025 and 2024 are as follows:

		Six-month period ended June 30, 2025		Six-month period ended June 30, 2024
		(In thousands of Korean won)
Total cash outflows of leases	₩		1,806,971		1,572,970

iv. Extension options

Some property leases contain extension options exercisable by the Company. Where practicable, the Company seeks to include extension options in new leases to provide operational flexibility. The extension options held are exercisable only by the Company and not by the lessors. The Company assesses at the lease commencement date whether it is reasonably certain to exercise the extension options. The Company reassesses whether it is reasonably certain to exercise the options if there is a significant event or significant changes in circumstances within its control.

v. Variable lease payments

The Company has entered into a contract to pay revenue-based rent payment for a several lease agreements. If the revenue of the store that entered into the contract increase, the rent to be paid may proportionally increase. According to the contract, it is expected that 9 to 18% of sales will be paid.

F-74

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

B. Leases as lessor

i. Operating lease

The Company leases out its investment property consisting of its leased property.

The Company has classified these leases as operating leases because they do not transfer substantially all the risk and rewards incidental to the ownership of the assets. Note 10 sets out information about the operating leases of investment property.

Rental income recognized by the Company for the six-month periods ended June 30, 2025 was Korean Won 98,943 thousand (2024: Korean Won 42,914 thousand).

Maturity analysis of lease payments, showing the undiscounted lease payments to be received after June 30, 2025 and 2024 as follows:

		Six-month period ended June 30, 2025		Six-month period ended June 30, 2024
		(In thousands of Korean won)
Less than 1 year	₩		263,441		832,031
1 ~ 2 years			99,000		132,728
Total	₩		362,441		964,759

22. Commitments

A. Key commitments

Key commitments the Company has entered into with financial institutions and others as of June 30, 2025 are as follows:

Financial institutions	Categories		Credit limit		Borrowings amount
			(In thousands of Korean won)
Industrial Bank of Korea	Small and medium-sized enterprise financing (*1)	₩		2,000,000		-
Industrial Bank of Korea	Small and medium-sized enterprise financing (*2)			500,000		500,000
Industrial Bank of Korea	Small and medium-sized enterprise financing (*3)			1,000,000		1,000,000
Industrial Bank of Korea	Small and medium-sized enterprise financing (*4)			100,000		6,240
Industrial Bank of Korea	Small and medium-sized enterprise financing (*5)			400,000		400,000
Industrial Bank of Korea	Small and medium-sized enterprise financing (*6)			1,000,000		1,000,000
Woori Bank	Corporate operating borrowings (*7)			490,000		490,000
Woori Bank	Corporate operating borrowings (*8)			940,000		895,000
KB Kookmin Bank	Overdraft loan (*9)			300,000		288,610
Total		₩		6,730,000		4,579,850

(*1) The Company is provided a joint guarantee of Korean Won 2,400,000 thousand by the Director of the Company.

F-75

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(*2) The Company is provided a joint guarantee of Korean Won 458,526 thousand by the Director of the Company. Also, the Company provides intellectual property (IP) rights of Korean Won 600,000 thousand as collateral for the borrowing.

(*3) The Company is provided a guarantee of Korean Won 900,000 thousand by Korea Credit Guarantee Fund.

(*4) The Company provides Korean Won 95,047 thousand of machinery as collateral for the borrowing.

(*5) The Company is provided a building as collateral of Korean Won 400,000 thousand for the borrowings by the key management personnel.

(*6) The Company is provided a joint guarantee of Korean Won 1,200,000 thousand by the Director of the Company.

(*7) The Company has received a payment guarantee of Korean Won 441,000 thousand from Korea Credit Guarantee Fund as of June 30, 2025.

(*8) The Company is provided a joint guarantee of Korean Won 1,190,400 thousand by the CEO of the Company as of June 30, 2025.

(*9) The Company is provided a joint guarantee of Korean Won 330,000 thousand by the CEO of the Company as of June 30, 2025.

The Director of the Company provides a joint guarantee for the vehicle lease to Mirae Asset Securities as of June 30, 2025.

The Company has a credit limit of Korean Won 315,000 thousand under an unsecured borrowing agreement with a nominal interest rate of 4.60%, maturing on April 30, 2026. As of June 30, 2025, Korean Won 313,709 thousand has been utilized under this facility. The Company has a credit limit of Korean Won 2,170,240 thousand under an unsecured borrowing agreement, maturing on May 13, 2026. As of June 30, 2025, Korean Won 130,214 thousand has been utilized under this facility. The Company has a credit limit of Korean Won 1,356,400 thousand under an unsecured borrowing agreement, maturing on May 13, 2026. As of June 30, 2025, Korean Won 48,958 thousand has been utilized under this facility. Unused portions of these credit facilities remain available to the Company.

Key commitments the Company has entered into with financial institutions and others as of December 31, 2024 are as follows:

Financial institutions	Categories		Credit limit		Borrowings amount
			(In thousands of Korean won)
Industrial Bank of Korea	Small and medium-sized enterprise financing (*1)	₩		2,000,000		-
Industrial Bank of Korea	Small and medium-sized enterprise financing (*2)			500,000		500,000
Industrial Bank of Korea	Small and medium-sized enterprise financing (*3)			1,000,000		1,000,000
Industrial Bank of Korea	Small and medium-sized enterprise financing (*4)			1,000,000		1,000,000
Industrial Bank of Korea	Small and medium-sized enterprise financing (*5)			100,000		18,720
Industrial Bank of Korea	Small and medium-sized enterprise financing (*6)			400,000		400,000
Shinhan Bank	Revolving credit (*7)			500,000		-
Total		₩		5,500,000		2,918,720

(*1)	The Company is provided a joint guarantee of Korean Won 2,400,000 thousand by the CEO of the Company.
(*2)	The Company is provided a joint guarantee of Korean Won 458,526 thousand by the CEO of the Company. Also, the Company provides intellectual property (IP) rights of Korean Won 676,000 thousand as collateral for the borrowing.
(*3)	The Company is provided a joint guarantee of Korean Won 1,200,000 thousand by the CEO of the Company.
(*4)	The Company is provided a guarantee of Korean Won 900,000 thousand by Korea Credit Guarantee Fund.
(*5)	The Company provides Korean Won 113,874 thousand of machinery as collateral for the borrowing.
(*6)	The Company is provided a building as collateral of Korean Won 480,000 thousand for the borrowings by the key management personnel.
(*7)	The Company is provided a joint guarantee of Korean Won 600,000 thousand by the CEO of the Company.

The CEO of the Company provides a joint guarantee for the vehicle lease to Mirae Asset Securities as of December 31, 2024.

F-76

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

B. Shareholders’ agreement in relation to the Share Purchase Agreement of Play Company Co., Ltd.

The Company entered into a Share Purchase Agreement on March 31, 2023 (which became effective on January 3, 2025) with the Cho, Hyungseok, CEO of Play Company Co., Ltd. The agreement includes option rights and earn-out provisions as follows:

	Equity Price Protection Right	Earn-out
Exercise right holder	Cho, Hyungseok (CEO of Play Company Co., Ltd.)	Cho, Hyungseok (CEO of Play Company Co., Ltd.)
Exercise right obligor	Buyer (K Enter)	Buyer (K Enter)
Object of exercise	KWM shares received as consideration (listed on Nasdaq)	Additional purchase price adjustment based on Play Company’s average net profit for FY2023–FY2025
Exercise period	During 3 months following 6-month lock-up expiration	Settlement due on Jan 31, 2027 and Jan 31, 2028
Exercise price / Settlement basis	Buyer to compensate Seller for any shortfall if shares sold below initial value; adjusted for gains realized/distributable up to December 31, 2026.	If the achievement rate is less than 75% or greater than 125% of the target of Korean Won 16.14 billion, the settlement amount will be calculated as the achieved percentage multiplied by Korean Won 9.05 billion. If the achievement rate falls between 75% and 125%, the settlement amount will be a fixed Korean Won 9.05 billion per year.

As of June 30, 2025, liabilities related to Equity Price Protection Right (which is accounted under share based payment and classified as employes benefits liabilities in the Consolidated financial statements) and Earn-out provision (which is classified as employes benefits liabilities in the Consolidated financial statements) amount to Korean Won 3,017,591 thousand and Korean Won 1,157,325 thousand.

C. Standby Equity Purchase Agreement (“SEPA”)

On June 3, 2025, the Company entered into a Standby Equity Purchase Agreement with Bitcoin Strategic Reserve LLC (the “Investor”). Under the SEPA, the Company has the right, but not the obligation, to direct the Investor to purchase, from time to time during a commitment period of 36 months from the effective date, newly issued ordinary shares of the Company having an aggregate purchase price of up to US$500 million (the “Commitment Amount”). The purchase price for the ordinary shares to be issued under the SEPA is based on 97.5% of the volume weighted average price of the Company’s ordinary shares during the applicable pricing period, subject to a minimum acceptable price as determined by the Company. The Investor’s ownership of the Company’s ordinary shares is limited to 4.99% at any time, and issuances under the SEPA are further subject to the 19.99% cap under Nasdaq listing rules unless shareholder approval is obtained. In connection with the execution of the SEPA, the Company agreed to pay the Investor a structuring fee of US$25,000 and to issue a certain number of commitment shares as consideration. The SEPA also requires the Company to maintain an effective registration statement with the SEC covering the resale of the ordinary shares issued thereunder. The SEPA may be terminated earlier upon mutual consent, upon full utilization of the Commitment Amount, or by the Company with prior notice, provided certain conditions are satisfied.

As of June 30, 2025, no share was issued under SEPA.

F-77

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

D. Guarantees by individuals

Details of guarantees provided by individuals other than related parties as of June 30, 2025 are as follows:

Guaranteed by	Details of guarantee		Guarantee limit
			(In thousands of Korean won)
Seoul Guarantee Insurance Company	Performance guarantee, etc.	₩		613,588
Korea credit guarantee fund	Loan guarantee			900,000
Korea credit guarantee fund	Payment guarantee			441,000
Total		₩		1,513,588

Details of guarantees provided by individuals other than related parties as of December 31, 2024 are as follows:

Guaranteed by	Details of guarantee		Guarantee limit
			(In thousands of Korean won)
Seoul Guarantee Insurance Company	Performance guarantee, etc.	₩		814,371
Korea credit guarantee fund	Loan guarantee			900,000
Total		₩		1,714,371

E. List of assets provided as collateral

List of assets that the Company provided as collateral as of June 30, 2025 and December 31, 2024 are as follows:

	Counterparty receiving the collateral	usage restrictions		June 30, 2025		December 31, 2024
				(In thousands of Korean won)
Short-term financial instruments	Industrial Bank of Korea	Provided as collateral for employee loans (*)	₩		300,000		300,000
Machinery	Industrial Bank of Korea	Provided as collateral for short-term borrowings			95,047		113,874

(*1) The Company provided a joint guarantee of Korean Won 231,000 thousand as of June 30, 2025 (December 31, 2024 Korean Won 231,000 thousand)

The Company provides intellectual property (IP) rights as collateral for the borrowing.

F-78

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

F. Amount of investment agreement

The outstanding balances of contributions according to the investment agreements as of June 30, 2025 are as follows:

June 30, 2025		Total amount of investment agreement		Cumulative investment		Outstanding Balance
		(In thousands of Korean won)
SOLAIRE SCALE-UP MOVIE INVESTMENT FUND NO.1	₩		200,000		200,000		-
SOLAIRE SCALE-UP MOVIE INVESTMENT FUND NO.2			220,000		88,000		132,000
Solaire Culture Plus Fund			300,000		300,000		-
Solaire Main Movie Fund			300,000		300,000		-
Total	₩		1,020,000		888,000		132,000

G. Other commitments and settlements of liabilities

Previously, Global Star, which was dissolved following the merger with KWM on May 13, 2025, was originally obligated to pay USD 3,220,000 in deferred underwriting commission to EF Hutton LLC (Currently, D-Boral Capital LLC (“D Boral”),) pursuant to an agreement dated September 19, 2022. This liability was subsequently restructured on November 5, 2024, through a Satisfaction and Discharge of Indebtedness Agreement. The settlement included the following:

1) a partial cash payment of USD 500,000 (Remaining balance of Korean Won 474,740 thousand is included in trade and other payables as of June 30, 2025)

2) the issuance of 50,000 ordinary shares valued at USD 500,000 (Remaining balance of Korean Won 523,946 thousand is included in current derivatives liabilities as of June 30, 2025)

3) and the settlement of USD 2,000,000 through a non-recourse promissory note. (Remaining balance of Korean Won 2,712,800 thousand is included in short term borrowings as of June 30, 2025)

 
Previously, K Enter, which was acquired following the merger with KWM on May 13, 2025, was obligated to pay USD 2,218,541.80 in legal fees to Loeb & Loeb LLP for DeSPAC-related services under an engagement letter dated April 24, 2023. This obligation was modified by a Fee Deferral Agreement entered into on May 13, 2025. Under the new terms, the Company paid USD 1,000,000 in cash during the current period and settled the remaining USD 1,218,541.80 with a short-term promissory note that accrues interest at 7% per annum and matures on November 28, 2025. The promissory note is still unpaid and the Company is negotiating to extend the maturity date thereof with Loeb & Loeb LLP.

H. Legal Proceeding

As of June 30, 2025, the injunction lawsuit in which the Company had been involved as a defendant at the end of the prior fiscal year, seeking to suspend the effectiveness of a contract termination, was dismissed on May 27, 2025, and the claimed amount was confirmed as zero on June 30, 2025, resulting in a favorable outcome for the Company. Subsequently, the plaintiff filed a new lawsuit with the Seoul Central District Court against the Company for confirmation of contract termination and damages. As of the end of the current interim period, the Company is involved in the new proceeding as a defendant, and the total claimed amount is KRW 100 million. The outcome of the lawsuit is currently not reasonably predictable, and the timing and amount of any potential outflow of resources are uncertain. However, the Group believes that the ultimate resolution of this matter is not expected to have a material adverse effect on its financial statements for the current interim period.
 

The Company is currently a defendant in litigation with RBDK Co., Ltd.(“RBDK”) relating to the early termination of a building lease agreement originally entered into on May 1, 2022 and scheduled to expire on May 1, 2027. In connection with the lease commencement, the Company received an Tenant Improvement allowance of Korean Won 1,076.1 million. Following the termination of the lease, RBDK has initiated a claim for the return of the allowance. Based on an assessment of the remaining lease term and consultation with legal counsel, management has determined that the Company is more likely than not to be required to settle part of the claim. As of June 30, 2025, the Company has recognized a litigation provision of Korean Won 526.5 million in its consolidated financial statements, representing the estimated outflow of resources required to settle the obligation.

F-79

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

23. Statement of Cash flows

Adjustments for income and expenses from operating activities for the six-month periods ended June 30, 2025 and 2024 are as follows:

		Six-month period ended June 30, 2025			Six-month period ended June 30, 2024
		(In thousands of Korean won)
Depreciation	₩		1,379,532			1,491,154
Amortization			301,335			181,291
Impairment loss			152,816			-
Reversal of bad debt expenses			(32,010	)		85,069
Other Bad debt expenses			146,620			306,333
Losses on valuation of short-term investment securities			-			26,287
Losses on valuation of long-term investment securities			3,642			-
Losses on disposal of long-term investment securities			2,140,764			-
Gains on valuation of short-term investment securities			(89,417	)		(13,347	)
Losses on disposal of short-term investment securities			5,917			-
Gains on valuation of short-term financial instruments			(513	)		(33	)
Inventory valuation loss			-			205,324
Losses on foreign currency translation			9,580			177,541
Gains on foreign currency translation			(127,724	)		(6,121	)
Gains on disposal of right-of-use assets			(633,794	)		(96,251	)
Losses on disposal of property and equipment			562,158			3,480
Gains on disposal of property and equipment			(2,113	)		(6,100	)
Interest expenses			765,712			657,385
Interest income			(189,443	)		(147,965	)
Dividend income			(2,258	)		(1,463	)
Miscellaneous expenses			451			-
Miscellaneous income			(2,206	)		-
(Reversal of) Share-based payments expenses			3,158,920			24,022
Change in fair value of warrants			545,934			-
Listing expenses			25,075,225			-
Severance Benefits			269,017			270,697
Losses on valuation of derivative instruments			930,595			-
Tax expenses			(6,788	)		(61,343	)
Losses on valuation of securities under equity method			6,679			-
Investment expenses			3,566			-
Gain on valuation of derivative instruments			(28,415	)		-
Gains on valuation of long-term financial instruments			(35,873	)		-
Reversal of inventory valuation loss			(206,887	)		-
(Reversal of) Gains on valuation of long-term investments			(2,885	)		-
Investment revenue			(1,008	)		-
Total	₩		34,097,129			3,095,960

F-80

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Changes in assets and liabilities from operating activities for the six-month periods ended June 30, 2025 and 2024 are as follows:

		Six-month period ended June 30, 2025			Six-month period ended June 30, 2024
		(In thousands of Korean won)
Other non-current non-financial assets	₩		301,257			373,553
Other current non-financial liabilities			(500,350	)		833,326
Other current assets			-			(6,922,634	)
Accounts receivable — trade, net			3,738,476			3,716,013
Accounts receivable — other, net			(145,192	)		39,821
Trade and other payables			860,421			(1,097,399	)
Inventories, net			(1,024,843	)		(1,200,523	)
Defined benefit liabilities			-			(305,845	)
Contract liabilities			4,275,939			-
Value added tax receivables			(324	)		(432,924	)
Other current liabilities			2,278,353			-
Trade and other payables			(6,284,766	)		-
Other non-current financial assets			(1,747,351	)		-
Trade and other payables			(53,195	)		-
Liabilities due to payment of benefits			(200,307	)		-
Contract assets			857,206			-
Long-term investment securities			(997,602	)		-
Total	₩		1357,542			(4,996,612	)

Significant non-cash transactions for the six-month periods ended June 30, 2025 and 2024 are as follows:

	Six-month period ended June 30, 2025		Six-month period ended June 30, 2024
	(In thousands of Korean won)
Reclassification of Long-term borrowings		-		12,480
Reclassification of Non-current lease liabilities		1,154,421		663,507
Increase in Lease liabilities		370,159		297,797
Reclassification of Long-term loans		10,000		-
Reclassification of Investment properties		1,160,468		-
Reclassification of Long-term Non-trade receivables		50,000		-
Offset of deferred transaction cost against equity		2,998,727		-
Issuance of shares due to Business combination		211,009,849		-
Conversion of convertible bonds		7,267,859		-

F-81

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The movements of liabilities to cash flows arising from financing activities for the six-month periods ended June 30, 2025 and 2024 are as follows:

		Short-term borrowings			Current portion of long-term borrowings			Long-term borrowings			Current Convertible notes			Current lease liabilities			Non-current lease liabilities			Total
		(In thousands of Korean won)
Balance at 1 January 2024	₩		3,330,000			24,960			2,008,041			-			1,630,482			12,878,027			19,871,510
Changes from financing cash flows																					-
Proceeds from borrowings			80,000			-			-			-			-			-			80,000
Repayment of borrowings			(40,000	)		(12,480	)		-			-			-			-			(52,480	)
Payment of lease liabilities			-			-			-			-			(840,227	)		-			(840,227	)
Reclassification			-			12,480			(12,480	)		-			663,507			(663,507	)		-
Total	₩		40,000			-			(12,480	)		-			(176,720	)		(663,507	)		(812,707	)
Other changes
New leases			-			-			-			-			297,797			-			297,797
Lease termination/lease modification			-			-			-			-			(94,422	)		(489,933	)		(584,355	)
Interest expense			-			-			50,872			-			454,773			-			505,645
Interest paid			-			-			-			-			(454,773	)		-			(454,773	)
Total	₩		-			-			50,872			-			203,375			(489,933	)		(235,686	)
Balance at 30 June 2024	₩		3,370,000			24,960			2,046,433			-			1,657,137			11,724,587			18,823,117
Balance at 1 January 2025	₩		3,764,000			2,108,956			-			-			1,786,577			9,302,661			16,962,194
Changes from financing cash flows																					-
Proceeds from borrowings			766,783			-			-			7,149,579			-			-			7,916,362
Repayment of borrowings			(892,128	)		(12,480	)		-			-			-			-			(904,608	)
Payment of lease liabilities			-			-			-			-			(1,117,772	)		-			(1,117,772	)
Reclassification			-			-			-			-			1,159,437			(1,159,437	)		-
Total	₩		(125,345	)		(12,480	)		-			7,149,579			41,665			(1,159,437	)		5,893,982
Other changes
Changes in scope of consolidation			7,566,108			-			-			3,920,244			250,806			110,883			11,848,041
Foreign exchange differences			(908,642	)		-			-			(259,179	)		49			2			(1,167,770	)
Conversion of Convertible Bonds to Common Stock			-			-			-			(6,762,471	)		-			-			(6,762,471	)
Other non-cash transactions			-			-			-			(101,730	)		-			-			(101,730	)
New leases			-			-			-			-			-			370,159			370,159
Lease termination/lease modification			-			-			-			-			(219,706	)		(1,491,327	)		(1,711,033	)
Interest expense			56,741			54,431			-			83,173			284,406			-			478,751
Interest paid			(56,741	)		-			-			-			(284,406	)		-			(341,147	)
Total	₩		6,657,466			54,431			-			(3,119,963	)		31,149			(1,010,283	)		2,612,800
Balance at 30 June 2025	₩		10,296,121			2,150,907			-			4,029,616			1,859,391			7,132,941			25,468,976

F-82

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

24. Related parties

A. List of related parties

List of related parties as of June 30, 2025 and December 31, 2024 are as follows:

Relationship	June 30, 2025	December 31, 2024
Other related parties	FF Company Co., Ltd.	FF Company Co., Ltd.
Other related parties	SecondPlan Co., Ltd.	SecondPlan Co., Ltd.
Other related parties	ThirdPlan Co., Ltd.	ThirdPlan Co., Ltd.
Other related parties	PLAYVERSE Co., Ltd.	PLAYVERSE Co., Ltd.
Other related parties	Studio Cuat. Co., Ltd.	Studio Cuat. Co., Ltd.
Other related parties	Beacon Holdings, Inc	Beacon Holdings, Inc
Other related parties	Falling starlight	-
Other related parties	Pluto Co., Ltd.	-
Other related parties	Dominico Inc.	-
Other related parties	Shining park Co., Ltd.	-
Other related parties	Its story Co., Ltd.	-
Other related parties	SOLAIRE SCALE-UP MOVIE INVESTMENT FUND NO.2	-
Other related parties	Bluefire Studio Co., Ltd	-
Other related parties	Global Fund LLC	-
Other related parties	Lodestar USA Inc	-
Other related parties	Global Star Acquisition I LLC	-
Other related parties	Innocus Global Group Pte, Ltd.,	-
Other related parties	XENO INVESTMENT ASIA INC	-
Other related parties	JVC INC	-
Other related parties	Sport Lifesyle Initiative Pte Ltd.	-
Other related parties	Beatro	-
Other related parties	Naviator Global Holdings LLC

F-83

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

B. Transactions with related parties

Details of transaction with related parties for the six-month periods ended June 30, 2025 and 2024 are as follows:

			Six-month period ended 30-Jun-25									Six-month period ended 30-Jun-24
Related party	Name of entity		Revenue			Finance income		Purchases		Finance Costs		Revenue		Finance income		Purchases		Finance Costs
			(In thousands of Korean won)
Other related parties	FF Company	₩		3,998,205			-		1,358		-		4,046,663		-		5,084		-
Other related parties	SecondPlan			17,518			8,437		3,091		-		15,999		5,635		-		-
Other related parties	ThirdPlan			-			-		-		3,741		-		-		-		3,442
Other related parties	Studio Cuat.			-			981		26,590		-		13,993		986		179,510		-
Other related parties	Beacon Holdings			-			9,425		-		-		-		2,958		-		-
Other related parties	Falling starlight			(33,024	)		-		-		-		-		-		-		-
Other related parties	Pluto Co., Ltd.			0			-		-		24,581		-		-		-		-
Other related parties	SOLAIRE SCALE-UP MOVIE INVESTMENT FUND NO.2			209,084			-		6,679		-		-		-		-		-
Other related parties	Innocus Global Group Pte, Ltd.,			-			-		-		12,041		-		-		-		-
Other related parties	Beatro			-			-		8,076,422		-		-		-		-		-
Key management personnel	Lee, Youngjae			14			-		-		15,806		-		-		-		-
Key management personnel	Cho Hyung seok			-			54,431		-		120,583		-		51,056		-		117,389
Key management personnel	Jeong Bo Ram			-			-		-		-		-		116		-		-
Total		₩		4,191,797			73,274		8,114,140		176,752		4,076,655		60,751		184,594		120,831

F-84

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

C. Account balances with related parties

The balances of receivables and payables to related parties as of June 30, 2025 and December 31, 2024 are as follows:

			June 30, 2025
Related party	Name of entity		Receivables		Contract assets		Loans		Project investment
			(In thousands of Korean won)
Other related parties	FF Company	₩		892,015		-		-		-
Other related parties	SecondPlan			44,131		-		374,400		-
Other related parties	Studio Cuat			3,153		-		43,000		-
Other related parties	Beacon Holdings			17,038		-		615,000		-
Other related parties	Falling starlight			20,000		-		120,054		800,000
Other related parties	SOLAIRE SCALE-UP MOVIE INVESTMENT FUND NO.2			52,800		103,484		-		-
Other related parties	Beatro			2,119,673		-		-		-
Key management personnel	Lee, Youngjae			11,520		-		-		-
Key management personnel	Jeong, Bo Ram			43,721		-		-		-
Total		₩		3,204,051		103,484		1,152,454		800,000

F-85

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

			June 30, 2025
Related party	Name of entity		Payables		Borrowings		Financial Guarantee Liability		derivative liabilities		Contract liabilities		Convertible Note
			(In thousands of Korean won)
Other related parties	FF Company	₩		49		-		-		-		-		-
Other related parties	SecondPlan			3,582		-		-		-		-		-
Other related parties	ThirdPlan			13,508		164,000		-		-		-		-
Other related parties	Studio Cuat			12,320		-		-		-		-		-
Other related parties	Beacon Holdings			76		-		-		-		-		-
Other related parties	Falling starlight			-		-		1,286		-		93,932		-
Other related parties	Pluto Co., Ltd.			1,209,409		-		-		-		-		-
Other related parties	Global Star Acquisition I, LLC			-		179,172		-		-		-		-
Other related parties	Innocus Global Group Pte, Ltd.,			75,838				-		380,298		-		2,643,583
Other related parties	Beatro			2,769				-		-		-		-
Key management personnel	Lee, Youngjae			24,628		313,709		-		-		-		-
Key management personnel	Cho, Hyung Seok			37,888,573		2,850,907		-		-		-		-
Key management personnel	Choi, Pyeungho			3,680		-		-		-		-		-
Key management personnel	Other Key management personnel			23,663		-		-		-		-		-
Total		₩		39,258,095		3,507,788		1,286		380,298		93,932		2,643,583

			December 31, 2024
Related party	Name of entity		Receivables		Loans		Payables		Borrowings
			(In thousands of Korean won)
Other related parties	FF Company	₩		1,934,166		-		230,698		-
Other related parties	SecondPlan			121,284		394,400		730		-
Other related parties	ThirdPlan			-		-		9,767		164,000
Other related parties	Studio Cuat			2,172		43,000		-		-
Other related parties	Beacon Holdings			7,613		225,000		-		-
Key management personnel	Cho Hyung Seok			-		-		1,115,906		2,790,236
Key management personnel	Jeong Bo Ram			43,721		-		-		-
Total		₩		2,108,956		662,400		1,357,101		2,954,236

F-86

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

D. Financial transactions with related parties

Details of significant financial transactions with related parties for the six-month periods ended June 30, 2025 and 2024 are as follows:

			Six-month period ended June 30, 2025
Related party	Company		Loans		Collection		Borrowings		Repayment
			(In thousands of Korean won)
Other related parties	SecondPlan	₩		50,000		70,000		-		-
Other related parties	Beacon Holdings			390,000		-		40,000		40,000
Other related parties	Global Star Acquisition I, LLC			-		-		-		31,197
Key management personnel	Lee, Youngjae			-		-		-		112,799
Total		₩		440,000		70,000		40,000		183,996

			Six-month period ended June 30, 2024
Related party	Company		Loans		Collection		Borrowings		Repayment
			(In thousands of Korean won)
Other related parties	SecondPlan	₩		267,500		30,000		-		-
Other related parties	ThirdPlan			-		-		80,000		40,000
Other related parties	Studio Cuat.			19,500		19,500		-		-
Other related parties	Beacon Holdings			1,325,000		1,140,000		-		-
Key management personnel	Cho Hyung Seok			69,267		-		-		-
Key management personnel	Jeong Bo Ram			43,721		-		-		-
Total		₩		1,724,988		1,189,500		80,000		40,000

F-87

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

E. Commitments with related parties

Commitments the Company has entered into with related parties as of June 30, 2025 are as follows:

Related party	Financial institutions	Categories		Credit limit		Borrowings amount
				(In thousands of Korean won)
Key management personnel	Industrial Bank of Korea	Small and medium-sized enterprise financing (*1)	₩		2,000,000		-
Key management personnel	Industrial Bank of Korea	Small and medium-sized enterprise financing (*2)			500,000		500,000
Key management personnel	Industrial Bank of Korea	Small and medium-sized enterprise financing (*3)			400,000		400,000
Key management personnel	Industrial Bank of Korea	Small and medium-sized enterprise financing (*4)			1,000,000		1,000,000
Key management personnel	KB Kookmin Bank	overdraft loan (*5)			300,000		288,610
Key management personnel	Woori Bank	Corporate operating borrowings (*6)			940,000		895,000
Total			₩		5,140,000		3,083,610

(*1)	The Company is provided a joint guarantee of Korean Won 2,400,000 thousand by the CEO of the Company.
(*2)	The Company is provided a joint guarantee of Korean Won 458,526 thousand by the CEO of the Company.
(*3)	The Company is provided a joint guarantee of Korean Won 400,000 thousand by the CEO of the Company.
(*4)	The Company is provided a building as collateral of Korean Won 1,200,000 thousand for the borrowings by the key management personnel.
(*5)	The Company is provided a joint guarantee of Korean Won 330,000 thousand by the CEO of the Company.
(*6)	The Company is provided a joint guarantee of Korean Won 1,190,400 thousand by the CEO of the Company.

F-88

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Commitments the Company has entered into with related parties as of December 31, 2024 are as follows:

Related party	Financial institutions	Categories		Credit limit		Borrowings amount
				(In thousands of Korean won)
Key management personnel	Industrial Bank of Korea	Revolving credit (*1)	₩		2,000,000		-
Key management personnel	Industrial Bank of Korea	Small and medium-sized enterprise financing (*2)			500,000		500,000
Key management personnel	Industrial Bank of Korea	Small and medium-sized enterprise financing (*3)			1,000,000		1,000,000
Key management personnel	Industrial Bank of Korea	Small and medium-sized enterprise financing (*4)			400,000		400,000
Key management personnel	Shinhan Bank	Revolving credit (*5)			500,000		-
Total			₩		4,400,000		1,900,000

(*1)	The Company is provided a joint guarantee of Korean Won 2,400,000 thousand by the CEO of the Company.
(*2)	The Company is provided a joint guarantee of Korean Won 458,526 thousand by the CEO of the Company.
(*3)	The Company is provided a joint guarantee of Korean Won 1,200,000 thousand by the CEO of the Company.
(*4)	The Company is provided a building as collateral of Korean Won 480,000 thousand for the borrowings by the key management personnel.
(*5)	The Company is provided a joint guarantee of Korean Won 600,000 thousand by the CEO of the Company.

F. Key management personnel compensation

The compensation for the key management personnel for the six-month periods ended June 30, 2025 and 2024 are as follows:

		Six-month period ended June 30, 2025		Six-month period ended June 30, 2024
		(In thousands of Korean won)
Short-term employee benefits	₩		3,163,021		597,223
Post-employment benefits			261,057		141,867
Share-based payments			2,882,496		18,017
Total	₩		6,306,574		757,107

Compensation of the Company’s key management personnel includes salaries, non-cash benefits and contributions to a post-employment defined benefit plan and defined contribution plan.

F-89

K WAVE MEDIA LTD.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

25. Subsequent events

A. Issuance of Convertible Notes and Purchase of Bitcoin

On July 3, 2025, the Company entered into a Securities Purchase Agreement to sell Senior Secured Convertible Notes (the “Notes”) and Warrants to purchase Ordinary Shares (the “Warrants”). On July 11, 2025, The Company consummated an initial closing under this agreement, raising aggregate proceeds of $15,000,000 (KRW 20,346,000 thousand) through the issuance of Notes with a principal amount of $15,789,473.68 (KRW 21,416,842 thousand) and Warrants to purchase 4,312,180 Ordinary Shares. The agreement also provides for potential subsequent closings for additional financing under certain conditions. The Notes are convertible into Ordinary Shares at a conversion price of $4.40 per share, and the Warrants are exercisable at $3.6616 per share. The Company is using the net proceeds from the sale of these securities to acquire bitcoin. From the net proceeds of approximately $12,995,000 (KRW 17,626,418 thousand) received from the initial closing, the Company used $9,815,108.16 (KRW 13,313,213 thousand) on July 9, 2025, to purchase 88 bitcoins at an average price of approximately $111,532.32 (KRW 151,282 thousand) per bitcoin, inclusive of fees and expenses.

B. Acquisition of Rabbit Walk Inc.

On, August 27, 2025, the Company acquired a 55% controlling interest in Rabbit Walk Inc., (“Rabbit Walk”) a Production of commercials, films, and video content, for a total initial consideration of approximately Korean Won 9,075,000 thousand consisting of 110,000 shares of Rabbit Walk’s common stock. The agreement also provides for a contingent consideration arrangement based on future performance, under which the Company is required to issue additional stock of a specified value if certain consolidated operating income targets are met. The Company has also agreed to negotiate the acquisition of the remaining 45% interest by the end of 2026.

C. Securities Purchase Agreement with Galaxy Digital LP

On September 25, 2025, The Company entered into an investment agreement with Galaxy Digital LP, a third-party investor, raising aggregate gross proceeds of $1,000,000. Pursuant to the Investment Agreement, the Company issued 400,000 shares of its common stock and warrants to purchase an additional 200,000 shares of common stock to the Investor. The net proceeds from the financing are intended to be used for general working capital purposes.

The warrants are exercisable for a period of five years from the date of issuance and entitle the holder to purchase one share of the Company’s common stock at an exercise price of $2.75 per share.

D. Reorganization of Korean Operations

The board of the Company approved a strategic reorganization of its business operations in the Republic of Korea. This reorganization involved the legal closure and deregistration of the Company’s existing branch in Korea and the simultaneous incorporation of, a new, wholly-owned subsidiary. In connection with this reorganization, all assets, liabilities, personnel, and commercial operations of the former Korean branch were transferred to the newly established subsidiary.

E. Borrowings of Solaire Partners

On September 18, 2025, the Company entered into the loan agreement with MG Community Credit Cooperatives at Seocho in the amount of Korean Won 3,000,000 thousand, bearing interest at an annual rate of 5.8%, with repayment due upon maturity. The loan is guaranteed by the Chief Executive Officer, Pyeungho Choi and was obtained to finance the acquisition of investment assets.

F. Gifts and Loans of Shares of Ordinary Shares to K Wave Treasury

On October 16, 2025, the Company entered into agreements with the shareholders of K Wave Media pursuant to which the shareholders agreed to contribute 4.77 million of the Company’s ordinary shares to treasury, and the Company agreed to temporarily lend, without consideration, an additional 1.55 million ordinary shares to be held as treasury shares.

F-90

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of
Play Company Co., Ltd.

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of financial position of Play Company Co., Ltd. and its subsidiary (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of comprehensive income(loss), of changes in equity and of cash flows for each of the three years in the period ended December 31, 2024, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Samil PricewaterhouseCoopers

Seoul, KOREA

May 14, 2025

We have served as the Company’s auditor since 2023.

F-91

PLAY COMPANY CO., LTD. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

As of December 31, 2024 and 2023

	Note		December 31, 2024		December 31, 2023
			(In thousands of Korean won)
Assets
Cash and cash equivalents	17,21,23,27,32	₩		4,150,572		8,585,634
Short-term financial instruments	21,27			423,524		419,391
Accounts receivable — trade, net	16,21,27			9,210,441		6,754,011
- Related parties	32			1,983,270		1,017,018
- Non-related parties				7,227,171		5,736,993
Short-term loans, net	21,24,27			787,400		859,900
- Related parties	32			662,400		149,900
- Non-related parties				125,000		710,000
Accounts receivable — other, net	16,21,27			130,482		351,166
- Related parties	32			125,687		51,619
- Non-related parties				4,795		299,547
Value added tax receivables				-		200,407
Other current assets	14			664,632		719,193
Other current financial assets	21,27			40,000		203,266
Contract assets	7			-		73,463
Current tax assets	13			347,480		-
Inventories, net	15			818,324		424,560
Total current assets				16,572,855		18,590,991
Long-term financial instruments	21,27			322,538		307,729
Long-term investment securities	21,27			730,391		640,739
Property, plant and equipment including right-of-use assets	19,29			12,049,988		14,867,677
Intangible assets other than goodwill	20			4,533,587		4,889,597
Goodwill	20			3,267,730		3,267,730
Investment properties	18			400,999		3,260,795
Other non-current financial assets	21,27			1,803,220		1,390,486
Other non-current non-financial assets	14			1,907,965		2,606,623
Deferred tax assets	13			1,011,013		565,144
Total non-current assets				26,027,431		31,796,520
Total assets		₩		42,600,286		50,387,511

The accompanying notes are an integral part of these consolidated financial statements.

F-92

PLAY COMPANY CO., LTD. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

As of December 31, 2024 and 2023

	Note		December 31, 2024			December 31, 2023
Liabilities
Trade and other payables	21,25,27	₩		14,039,752			14,407,610
- Related parties	32			1,357,101			1,297,426
- Non-related parties				12,682,651			13,110,184
Other current financial liabilities	21,27			130,000			-
Other current non-financial liabilities				1,443,694			870,830
Short-term borrowings	21,24,27			3,764,000			3,330,000
- Related parties	32			864,000			830,000
- Non-related parties				2,900,000			2,500,000
Current portion of long-term borrowings, net	21,24,27			2,108,956			24,960
- Related parties	32			2,090,236			-
- Non-related parties				18,720			24,960
Current lease liabilities	24,29			1,786,577			1,630,482
Current tax liabilities	13			108,961			845,547
Total current liabilities				23,381,940			21,109,429
Trade and other non-current payables	21,25,27			21,694			335,871
Long-term borrowings, excluding current portion, net	21,24,27			-			2,008,041
- Related parties	32			-			1,989,321
- Non-related parties				-			18,720
Other non-current financial liabilities	21			150,000			200,000
Other non-current non-financial liabilities				-			109,764
Defined benefit liabilities	12			559,270			706,102
Other non-current provisions	26			609,951			674,148
Non-current lease liabilities	24,29			9,302,661			12,878,027
Deferred tax liabilities	13			399,158			676,406
Total non-current liabilities				11,042,733			17,588,359
Total liabilities		₩		34,424,673			38,697,788
Equity
Share capital	22	₩		500,000			500,000
Other reserves	22			(27,693,046	)		(27,722,641	)
Retained earnings				35,959,433			38,500,808
Equity attributable to owners of the Parent Company				8,766,387			11,278,167
Non-controlling interest	28			(590,774	)		411,556
Total equity				8,175,613			11,689,723
Total liabilities and equity		₩		42,600,286			50,387,511

The accompanying notes are an integral part of these consolidated financial statements.

F-93

PLAY COMPANY CO., LTD. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

For the Years Ended December 31, 2024, 2023 and 2022

	Note		2024			2023			2022
			(In thousands of Korean won)
Revenues
Content revenue	6,7	₩		28,379,904			49,771,824			151,858,729
- Related parties	32			8,785,673			11,184,157			4,167,544
- Non-related parties				19,594,231			38,587,667			147,691,185
F&B revenue	6,7			13,697,884			16,984,621			16,469,551
- Related parties	32			70,477			15,303			8,529
- Non-related parties				13,627,407			16,969,318			16,461,022
Other revenue	6,7			932,542			724,711			694,108
Total revenues				43,010,330			67,481,156			169,022,388
Cost of revenues	8			(41,911,949	)		(60,837,065	)		(150,752,230	)
Gross profit				1,098,381			6,644,091			18,270,158
Selling, general and administrative expenses	8			(3,984,317	)		(4,598,226	)		(5,146,556	)
Other income	8			1,022,129			1,487,080			84,462
Other expenses	8			(1,643,085	)		(35,547	)		(46,157	)
Operating profit (loss)				(3,506,892	)		3,497,398			13,161,907
Finance income	9,21			576,570			1,743,941			1,221,147
- Related parties	32			125,779			831,200			215,988
- Non-related parties				450,791			912,741			1,005,159
Finance costs	9,21,24,30			(1,381,523	)		(1,688,210	)		(1,811,321	)
- Related parties	32			(242,559	)		(176,597	)		-
- Non-related parties				(1,138,964	)		(1,511,612	)		(1,811,321	)
Profit (Loss) before income tax				(4,311,845	)		3,553,129			12,571,733
Income tax benefit (expense)	13			753,650			(760,779	)		(2,687,108	)
Profit (Loss) for the year		₩		(3,558,195	)		2,792,350			9,884,625
Other comprehensive income
Items that will not be reclassified to income or loss:
Remeasurement of defined benefit liabilities	12,22			44,085			109,558			143,829
Total comprehensive income (loss) for the year		₩		(3,514,110	)		2,901,908			10,028,454
Profit (loss) attributable to:
Owners of the Parent Company				(2,541,375	)		3,137,186			10,189,718
Non-controlling interest	28			(1,016,820	)		(344,836	)		(305,093	)
Total comprehensive income (loss) attributable to:
Owners of the Parent Company				(2,511,780	)		3,210,734			10,286,272
Non-controlling interest	28			(1,002,330	)		(308,826	)		(257,818	)
Earnings (Loss) per share (in Korean won)
Basic earnings (loss) per share	10	₩		(30,105	)		35,683			101,897
Diluted earnings (loss) per share	10			(30,105	)		35,683			101,897

The accompanying notes are an integral part of these consolidated financial statements.

F-94

PLAY COMPANY CO., LTD. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the Years Ended December 31, 2024, 2023 and 2022

			Attributable to owners of the Parent Company											Non-
	Note		Share capital		Other reserves			Retained earnings			Total			controlling interest			Total equity
			(In thousands of Korean won)
Balance at January 1, 2022		₩		500,000		(988,645	)		25,173,904			24,685,259			1,273,314			25,958,573
Total comprehensive income (loss) for the year
Profit (loss) for the year				-		-			10,189,718			10,189,718			(305,093	)		9,884,625
Remeasurement of defined benefit liabilities				-		96,554			-			96,554			47,275			143,829
Total comprehensive income (loss) for the year				-		96,554			10,189,718			10,286,272			(257,818	)		10,028,454
Transaction with owners, recognized directly in equity
Additional acquisition of non-controlling interest in subsidiary				-		(1,004,886	)		-			(1,004,886	)		(295,114	)		(1,300,000	)
De-recognition of the obligation to purchase the Group’s own equity instruments				-		1,229,050			-			1,229,050			-			1,229,050
Balance at December 31, 2022		₩		500,000		(667,927	)		35,363,622			35,195,695			720,382			35,916,077
Balance at January 1, 2023		₩		500,000		(667,927	)		35,363,622			35,195,695			720,382			35,916,077
Total comprehensive income (loss) for the year
Profit (loss) for the year				-		-			3,137,186			3,137,186			(344,836	)		2,792,350
Remeasurement of defined benefit liabilities	12			-		73,548			-			73,548			36,010			109,558
Total comprehensive income (loss) for the year				-		73,548			3,137,186			3,210,734			(308,826	)		2,901,908
Transaction with owners, recognized directly in equity
Acquisition of Treasury shares	31			-		(27,128,262	)		-			(27,128,262	)		-			(27,128,262	)
Balance at December 31, 2023		₩		500,000		(27,722,641	)		38,500,808			11,278,167			411,556			11,689,723
Balance at January 1, 2024		₩		500,000		(27,722,641	)		38,500,808			11,278,167			411,556			11,689,723
Total comprehensive income (loss) for the year
Loss for the year				-		-			(2,541,375	)		(2,541,375	)		(1,016,820	)		(3,558,195	)
Remeasurement of defined benefit liabilities	12			-		29,595			-			29,595			14,490			44,085
Total comprehensive income (loss) for the year				-		29,595			(2,541,375	)		(2,511,780	)		(1,002,330	)		(3,514,110	)
Balance at December 31, 2024		₩		500,000		(27,693,046	)		35,959,433			8,766,387			(590,774	)		8,175,613

The accompanying notes are an integral part of these consolidated financial statements.

F-95

PLAY COMPANY CO., LTD. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 2024, 2023 and 2022

	Note		2024			2023			2022
			(In thousands of Korean won)
Cash flows from operating activities	31
Net income		₩		(3,558,195	)		2,792,350			9,884,625
Adjustments to reconcile net income to net cash provided by (used in) operating activities	31			2,368,242			(6,881,338	)		19,396,280
Interest received				38,436			70,995			72,808
Interest paid				(999,198	)		(1,184,042	)		(800,423	)
Income taxes paid				(707,915	)		(3,176,978	)		(2,369,065	)
Dividend received				1,463			1,463			700
Net cash inflow(outflow) from operating activities				(2,857,167	)		(8,377,550	)		26,184,925
Cash flows from investing activities
Payments for short-term loans				(2,079,000	)		(3,840,576	)		(3,773,050	)
- Related parties	32			(1,834,000	)		(3,690,576	)		(520,050	)
- Non-related parties				(245,000	)		(150,000	)		(3,253,000	)
Proceeds from short-term loans				1,779,500			320,000			2,700,000
- Related parties	32			1,279,500			310,000			-
- Non-related parties				500,000			10,000			2,700,000
Payments for long-term loans				-			(1,000,000	)		(700,000	)
- Related parties	32			-			(1,000,000	)		(700,000	)
- Non-related parties				-			-			-
Payments for other financial assets				(178,068	)		(610,093	)		(5,543,599	)
Collection of other financial assets				334,987			4,135,728			3,956,661
Collection of long-term financial instruments				-			-			63,138
Purchase of long-term investment securities				-			-			(443,164	)
Proceeds from disposal of property and equipment				53,277			4,293			-
Purchase of property and equipment				(273,220	)		(949,583	)		(3,166,783	)
Purchase of intangible assets				-			-			(113,900	)
Proceeds from lease incentives				1,486			150,150			1,980,492
Net cash outflow from investing activities				(361,038	)		(1,790,081	)		(5,040,205	)
Cash flows from financing activities	31
Proceeds from short-term borrowings				870,000			130,000			-
- Related parties	32			470,000			130,000			-
- Non-related parties				400,000			-			-
Repayment of short-term borrowings				(394,000	)		-			-
- Related parties	32			(394,000	)		-			-
- Non-related parties				-			-			-
Repayment of current portion of long-term borrowings				(24,960	)		(24,960	)		(24,960	)
Acquisition of Treasury shares				(75,000	)		(10,677,100	)		-
Transaction with non-controlling interests				-			-			(650,000	)
Repayment of lease liabilities				(1,663,415	)		(1,617,756	)		(1,088,224	)
Net cash outflow for financing activities				(1,287,375	)		(12,189,816	)		(1,763,184	)
Effect of exchange rate changes on cash and cash equivalents				70,518			361,525			96,536
Net increase(decrease) in cash and cash equivalents				(4,505,580	)		(22,357,447	)		19,381,536
Cash and cash equivalents at beginning of the year	17			8,585,634			30,581,556			11,103,484
Cash and cash equivalents at end of the year	17	₩		4,150,572			8,585,634			30,581,556

The accompanying notes are an integral part of these consolidated financial statements.

F-96

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

1. Reporting entity

The Parent Company

Play Company Co., Ltd. (“the Parent Company”) was incorporated in June 2012 and the Parent Company’s registered office is at Business Tower 20F, 396 World Cup buk-ro, Mapo-gu, Seoul, Korea. These consolidated financial statements comprise the Parent Company and its subsidiary (together referred to as the “Group”). The Group generates revenue primarily through the sale of the Group’s entertainment content and services, and food and beverage products as well as through the licensing of the Group’s intellectual property in food and beverage business. The Parent company primarily engages in the provision of goods to its customers by offering made-to-order services to plan the projects, design merchandise, and deliver customized products to its customers, utilizing the intellectual property associated with K-pop artists. Play F&B Co., Ltd. (the “Subsidiary”) operates a retail bakery-cafe 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.

The Parent Company’s major shareholders and their respective percentage of ownership as of December 31, 2024 and 2023 are as follows:

	December 31, 2024					December 31, 2023
	Number of shares (in shares)		Percentage of ownership (%)			Number of shares (in shares)		Percentage of ownership (%)
Cho, Hyeong Seok		83,418		83.4	%		83,418		83.4	%
K Enter Holdings		1,000		1.0	%		-		-
Solaire Partners LLC.		-		-			1,000		1.0	%
Subtotal (outstanding)		84,418		84.4	%		84,418		84.4	%
Plus: Treasury shares		15,582		15.6	%		15,582		15.6	%
Total (issued)		100,000		100.0	%		100,000		100.0	%

Consolidated Subsidiary

Details of the consolidated subsidiary as of December 31, 2024 and 2023 are as follows:

		Percentage of ownership (%)
Subsidiary	Location	December 31, 2024		December 31, 2023		January 1, 2023		Fiscal year end	Main business
Play F&B	Korea		67.1		67.1		67.1	December	Sale of food and beverages

Condensed financial information of subsidiary

Condensed financial information of subsidiary as of and for the years ended December 31, 2024 and 2023 are as follows:

	December 31, 2024
	(In thousands of Korean Won)
Subsidiary	Total assets (*)		Total liabilities (*)		Revenues (*)		Profit for the period (*)
Play F&B		13,174,076		18,990,058		14,630,426		(3,101,420	)

F-97

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

	December 31, 2023
	(In thousands of Korean Won)
Subsidiary	Total assets (*)	Total liabilities (*)		Revenues (*)		Profit for the period (*)
Play F&B	18,958,244		21,716,891		17,709,332		(1,140,267	)

(*) The condensed financial information was prepared based on amounts before eliminating intergroup transactions.

2. Basis of Accounting

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by International Accounting Standard Board (“IASB”). These consolidated financial statements were authorized for issuance by the Board of directors on May 14, 2025.

Details of the Group’s accounting policies, including changes thereto, are included in Note 5.

Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis except for the following items, which are measured on an alternative basis on each reporting date.

Items	Measurement bases
Defined benefit liabilities	Present value
Financial instruments measured at fair value through profit or loss (“FVTPL”)	Fair value

3. Functional and presentation currency

These consolidated financial statements are presented in Korean Won, which the Group’s functional currency. All amounts have been rounded to the nearest thousand, unless otherwise indicated.

4. Use of judgements and estimates

In preparing these consolidated financial statements, management has made judgements and estimates that affect the application of the Group’s accounting policies and the reported amounts of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognized prospectively.

F-98

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

A. Judgements

Information about judgements made in applying accounting policies that have the most significant effects on the amounts recognized in the financial statements is included in the following notes:

● Note 29(A): lease term: whether the Group is reasonably certain to exercise extension options.

B. Assumptions and estimation uncertainties

Information about assumptions and estimation uncertainties at the reporting date that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year is included in the following notes:

● Note 20(C): goodwill impairment: The Group estimates the recoverable amount of an individual asset, and if it is impossible to measure the individual recoverable amount of an asset, the Group 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.

i. Measurement of fair values

A number of the Group’s accounting policies and disclosures require the measurement of fair values for financial assets.

When measuring the fair value of a financial instruments measured at FVTPL, the Group uses observable market data as far as possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.

● Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

● Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).

● Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The Group recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

Further information about the assumptions made in measuring fair values is included in the following notes:

● Note 11(B): share-based payment arrangements;

● Note 27(B): financial instruments.

F-99

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

5. Material accounting policies

The material accounting policies followed by the Group in preparation of its consolidated financial statements are as follows:

A. New and amended standards or interpretations adopted by the Group

The Group has applied the following standards and amendments for the first time for their annual reporting period commencing January 1, 2024.

IAS 1 Presentation of Financial Statements - Classification of Liabilities as Current or Non-current, Non-current Liabilities with Covenants

The amendments to IAS 1 clarify that liabilities are classified as either current or non-current, depending on the substantive rights that exist at the end of the reporting period. Classification is unaffected by the likelihood that an entity will exercise right to defer settlement of the liability or the expectations of management. Also, the settlement of liability includes the transfer of the entity’s own equity instruments, however, it would be excluded if an option to settle them by the entity’s own equity instruments if compound financial instruments is met the definition of equity instruments and recognized separately from the liability. Covenants that the entity must comply with after the end of the reporting period do not affect the classification of a liability at the end of the reporting period. However, if a liability is classified as non-current as of the end of the reporting period despite covenants that must be complied with within 12 months after that date, the entity shall disclose information about the risk that the liability could become repayable within 12 months after the reporting period. The amendments do not have a significant impact on the financial statements.

IAS 7 Statement of Cash Flows - IFRS 7 Financial Instruments: Disclosures – Supplier finance arrangements

The amendments to IAS 7 require entity to disclose information about its supplier finance arrangements that enables users of financial statements to assess the effects of those arrangements on the entity’s liabilities and cash flows and on the entity’s exposure to liquidity risk when applying supplier finance arrangements. The amendments do not have a significant impact on the financial statements.

IFRS 16 – Lease Liability in a Sale and Leaseback

The amendments to IFRS 16 require a seller-lessee shall determine lease payments or revised lease payments in a way that the seller-lessee would not recognize any amount of the gain or loss that relates to the right of use retained by the seller-lessee when subsequently measuring lease liabilities arising from a sale and leaseback. The amendments do not have a significant impact on the financial statements.

B. New and amended standards or interpretations not yet adopted by the Group

The following new accounting standards and interpretations that have been published that are not mandatory for December 31, 2024 reporting periods and have not been early adopted by the Group.

IAS 21 The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability

The amendments require exchangeability of two currencies should be assessed in order to clarify reporting of foreign currency transactions in the absence of normal-functioning foreign exchange market. The amendments also require applicable spot exchange rate should be determined when the assessment indicates two currencies lack exchangeability. The amendments are effective for annual reporting periods beginning on or after January 1, 2025, with early application permitted. The Group does not expect that these amendments have a significant impact on the Group’s financial statements.

F-100

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

IFRS 9 Financial Instruments - IFRS 7 Financial Instruments: Disclosures – Classification and Measurement of Financial Instruments

The amendments clarify that a financial liability is derecognised on the ‘settlement date’ and introduce an accounting policy choice to derecognise financial liabilities settled using an electronic payment system before the settlement date. Other clarifications include the classification of financial assets with ESG linked features via additional guidance on the assessment of contingent features. Clarifications have been made to non-recourse loans and contractually linked instruments. Additional disclosures are introduced for financial instruments with contingent features and equity instruments classified at fair value through OCI. The amendments should be applied for annual periods beginning on or after January 1, 2026, and earlier application is permitted, with an option to early adopt the amendments for contingent features only. The Group does not expect that these amendments have a significant impact on the financial statements.

Annual Improvements to IFRS Accounting Standards – Volume 11

The amendments are annual improvements to the following standards:

- IFRS 1 First-time adoption of International Financial Reporting Standards;

- IFRS 7 Financial instruments: Disclosures;

- IFRS 9 Financial instruments;

- IFRS 10 Consolidated financial instruments; and

- IAS 7 Statement of cash flows

The new standard should be applied for annual periods beginning on or after January 1, 2026, and earlier application is permitted. The Group is in review for the impact of this new standard on the financial statements.

IFRS 18 Presentation and Disclosure in Financial Statements

Items in the statement of profit or loss will need to be classified into one of five categories: operating, investing, financing, income taxes and discontinued operations. IFRS 18 requires the Group to present specified totals and subtotals: ‘Operating profit or loss’, ‘Profit or loss’ and ‘Profit or loss before financing and income taxes’. Information related to management-defined performance measures should be disclosed. IFRS 18 also provides enhanced guidance on the principles of aggregation and disaggregation which focus on grouping items based on their shared characteristics. The new standard should be applied for annual periods beginning on or after January 1, 2027, and earlier application is permitted. The Group is in review for the impact of this new standard on the financial statements.

IFRS 19 Subsidiaries without Public Accountability: Disclosures

IFRS 19 allows eligible subsidiaries to apply IFRS Accounting Standards with the reduced disclosure requirements of IFRS 19. A subsidiary may choose to apply the new standard in its consolidated, separate or individual financial statements provided that, at the reporting date, it does not have public accountability, and its parent produces consolidated financial statements under IFRS Accounting Standards. A subsidiary applying IFRS 19 is required to disclose in its explicit and unreserved statements of compliance with IFRS Accounting Standards that IFRS 19 has been adopted. The amendments should be applied for annual periods beginning on or after January 1, 2027, and earlier application is permitted. The Group does not expect that these amendments have a significant impact on the financial statements.

Basis of consolidation

i. Business combinations

The Group accounts for business combinations using the acquisition method when the acquired set of activities and assets meets the definition of a business and control is transferred to the Group. In determining whether a particular set of activities and assets is a business, the Group assesses whether the set of assets and activities acquired includes, at a minimum, an input and substantive process and whether the acquired set has the ability to produce outputs.

The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognized in profit or loss immediately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities.

F-101

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognized in profit or loss.

Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent consideration that meets the definition of a financial instrument is classified as equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, other contingent consideration is remeasured at fair value at each reporting date and subsequent event changes in the fair value of the contingent consideration are recognized in profit or loss.

If share-based payment awards are required to be exchanged for awards held by the acquiree’s employees (acquiree’s awards), then all or a portion of the amount of the acquirer’s replacement awards is included in measuring the consideration transferred in the business combination. This determination is based on the market-based measure of the replacement awards compared with the market-based measure of the acquiree’s awards and the extent to which the replacement awards relate to pre- combination service.

ii. Subsidiary

Subsidiary is an entity controlled by the Group. The Group ‘controls’ an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiary are included in the consolidated financial statements from the date on which control commences until the date on which control ceases.

iii. Non-controlling interests

Non-controlling interests are measured initially at their proportionate share of the acquiree’s identifiable net assets at the date of acquisition.

Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

iv. Loss of control

When the Group loses control over a subsidiary, it derecognizes the assets and liabilities of the subsidiary, and any related non-controlling interests and other components of equity. Any resulting gain or loss is recognized in profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost.

v. Interests in equity- accounted investees

The Group’s interests in equity- accounted investees comprise interests in associates and a joint venture. Associates are those entities in which the Group has significant influence, but not control or joint control, over the financial and operating policies. A joint venture is an arrangement in which the Group has joint control, whereby the Group has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities.

Interests in associates and the joint venture are accounted for using the equity method. They are initially recognized at cost, which includes transaction costs. Subsequent to initial recognition, the consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income (“OCI”) of equity- accounted investees, until the date on which significant influence or joint control ceases.

vi. Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealized income and expenses (except for foreign currency transaction gains or losses) arising from intra-group transactions, are eliminated. Unrealized gains arising from transactions with equity- accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.

F-102

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

C. Foreign currency

i. Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of Group companies at the exchange rates at the dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Foreign currency differences are generally recognized in profit or loss and presented within finance costs. Translation differences on Non-monetary assets and liabilities carried at fair value are reported as part of the fair value gain or loss.

However, foreign currency differences arising from the translation of the following items are recognized in OCI:

● an investment in equity securities designated as at FVOCI (except on impairment, in which case foreign currency differences that have been recognized in OCI are reclassified to profit or loss);

● a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; and

● qualifying cash flow hedges to the extent that the hedges are effective.

D. Revenue from contracts with customers

The Group generates revenue primarily through the sale of the Group’s entertainment content and services, and food and beverage products as well as through the licensing of the Group’s intellectual property in food and beverage business.

The Group determines revenue recognition by:

● identifying the contract, or contracts, with a customer;

● identifying the performance obligations in each contract;

● determining the transaction price;

● allocating the transaction price to the performance obligations in each contract; and

● recognizing revenue when, or as, we satisfy performance obligations by transferring the promised goods or services.

Content revenue

Content revenues consist of sales of the physical and digital content consumer products and merchandises. The Group recognizes revenues from the sale of consumer products and merchandises after both (1) control of the products has been transferred to customers and (2) the underlying performance obligations have been satisfied.

Content revenues are recognized after deducting the estimated allowance for returns, which are accounted for as variable consideration when estimating the amount of revenue to recognize. Returns are estimated at contract inception and updated at the end of each reporting period as additional information becomes available.

Food and beverages revenue

Food and beverages revenues consist of sales of the consumer products including food and beverages. The Group recognizes revenues from the sale of consumer products after both (1) control of the products has been transferred to customers and (2) the underlying performance obligations have been satisfied.

Food and beverages revenues are recognized after deducting the estimated allowance for returns, which are accounted for as variable consideration when estimating the amount of revenue to recognize.

F-103

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

Other revenues

Under franchise agreements, the Group’s performance obligation is to provide a license to use Our Bakery’s trademarks and other intellectual property. Franchise royalties and fees are typically charged as a percentage of food and beverage revenues and are treated as variable consideration, recognized as the underlying food and beverage revenues occur.

Franchise agreements also contain a promise to provide training support and recipe teaching services to franchise-operated stores. A monthly franchise loyalty fee, based on gross food and beverage revenues, is charged, and recognized over time as these services are delivered.

E. Operating segments

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. The chief operating decision-maker has been identified as the chief executive officer. The Group’s operating segments have been determined to be each business unit, for which the Group generates separately identifiable financial information that is regularly reported to the chief executive officer for the purpose of resource allocation and assessment of segment performance. The Group has two reportable segments as described in Note 6. Segment results that are reported to the chief operating decision maker include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

F. Employee benefits

i. Short-term employee benefits

Short-term employee benefits are employee benefits due to be settled within 12 months after the end of the period in which the employees render related services. When an employee has rendered a service to the Group during an accounting period, the Group recognizes the undiscounted amount of short-term employee benefits expected to be paid in exchange for that service.

ii. Share-based payment arrangements

The grant-date fair value of equity-settled share-based payment arrangements granted to employees is generally recognized as an expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognized is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant-date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

The fair value of the amount payable to employees in respect of share-based payment arrangements, which are settled in cash, is recognized as an expense with a corresponding increase in liabilities, over the period during which the employees become unconditionally entitled to payment. The liability is remeasured at each reporting date and at settlement date based on the fair value of the share-based payment arrangements. Any changes in the liability are recognized in profit or loss.

The fair value of the share-based payment arrangements with cash alternatives granted to employees, which is sum of the fair values of the equity component and liabilities component, is recognized as an expense, with a corresponding increase in equity and liabilities, over the vesting period of the awards. The liability is remeasured at each reporting date and at settlement date based on the fair value of the share-based payment arrangements. Any changes in the liability are recognized in profit or loss.

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PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

iii. Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in future payments is available.

iv. Defined benefit plans

The Group’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 using the projected unit credit method. When the calculation results in a potential asset for the Group, 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.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in OCI. The Group determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then- net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Group recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

G. Finance income and finance costs

The Group’s finance income and finance costs include:

● interest income;

● interest expense;

● dividend income;

● the net gain or loss on financial assets at FVTPL;

● the foreign currency gain or loss on financial assets and financial liabilities;

The ‘effective interest rate’ is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:

● the gross carrying amount of the financial asset; or

● the amortized cost of the financial liability.

In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortized cost of the liability. However, for financial assets that have become credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortized cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.

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PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

H. Income tax

Income tax expense comprises current and deferred tax. It is recognized in profit or loss except to the extent that it relates to a business combination, or items recognized directly in equity or in OCI.

The Group has determined that interest and penalties related to income taxes, including uncertain tax treatments, do not meet the definition of income taxes, and therefore accounted for them under IAS 37 Provisions, Contingent Liabilities and Contingent Assets.

i. Current income tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax also includes any tax arising from dividends.

Current tax assets and liabilities are offset only if certain criteria are met.

- Has a legally enforceable right to set off the recognized amounts; and

- Intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

ii. Deferred income tax

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for:

● temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss;

● temporary differences related to investments in subsidiary, associates and joint arrangements to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

● taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax assets are recognized for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Future taxable profits are determined based on the reversal of relevant taxable temporary differences. If the amount of taxable temporary differences is insufficient to recognize a deferred tax asset in full, then future taxable profits, adjusted for reversals of existing temporary differences, are considered, based on the business plans for individual subsidiary in the Group. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized; such reductions are reversed when the probability of future taxable profits improves.

The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. For this purpose, the carrying amount of investment property measured at fair value is presumed to be recovered through sale, and the Group has not rebutted this presumption.

Deferred tax assets and liabilities are offset only if certain criteria are met.

- Has a legally enforceable right to set off the recognized amounts; and

- Intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

I. Cash and Cash Equivalents

Cash and cash equivalents comprise cash on hand, deposits held at banks, and investment securities with maturities of three months or less from the acquisition date that are easily convertible to cash and subject to an insignificant risk of changes in their fair value.

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PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

J. Inventories

Inventories are measured at the lower of cost and net realizable value. The cost of inventories is based on the first-in, first-out allocation method, and includes expenditures incurred in acquiring the inventories, production or conversion cost and other costs incurred in bringing them to their existing location and condition. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated selling expenses.

The Group makes adjustments to reduce the cost of inventory to its net realizable value, for estimated excess, obsolescence or impaired balances.

K. Investment property

Property held by a lessee as a right-of-use asset to earn rentals or for capital appreciation or both is classified as investment property. Investment properties held by a lessee as a right-of-use assets are initially measured at its cost in accordance with IFRS 16. The Company remeasures the investment property held by a lessee as a right-of-use asset if necessary, in accordance with IFRS 16.

Among investment properties, land is not depreciated, and investment properties except land are depreciated on a straight-line basis according to the economic depreciation period. Depreciation methods, useful lives and residual values of investment properties are reviewed at each reporting period-end and if appropriate, the changes are accounted for as changes in accounting estimates.

L. Property, plant and equipment

i. Recognition and measurement

Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

ii. Subsequent expenditure

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Group. The carrying amount of the replaced parts are derecognized and the repairs and maintenance expenses are recognized in profit or loss in the period they are incurred.

iii. Depreciation

Depreciation is calculated using the straight-line method to allocate the cost or revalued amounts of the assets, net of their residual values, over their estimated useful lives as follows:

Machinery	5 ~ 8 years
Vehicles	5 years
Office equipment	5 ~ 8 years
Furniture and fixtures	5 ~ 8 years
Right-of-use assets	2 ~ 10 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

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PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

M. Intangible assets and goodwill

i. Recognition and measurement

Goodwill: Goodwill arising on the acquisition of subsidiary is measured at cost less accumulated impairment losses.

Other intangible assets: Other intangible assets, including trademarks that are acquired by the Group and have finite useful lives are measured at cost less accumulated amortization and any accumulated impairment losses.

ii. Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognized in profit or loss as incurred.

iii. Amortization

Amortization is calculated using the straight-line method to allocate the cost or revalued amounts of the assets, net of their residual values, over their estimated useful lives as follows:

Software	5 years
Other Intangible assets	20 years
Goodwill	Indefinite

Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

N. Financial instruments

i. Recognition and initial measurement

Trade receivables and debt securities issued are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Group becomes a party to the contractual provisions of the instrument.

A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus or minus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

ii. Classification and subsequent measurement

Financial assets

On initial recognition, a financial asset is classified as measured at:

● amortized cost;

● FVOCI - debt investment;

● FVOCI - equity investment;

● or FVTPL.

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PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

● it is held within a business model whose objective is to hold assets to collect contractual cash flows; and

● its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

● it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

● its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in the investment’s fair value in OCI. This election is made on an investment-by-investment basis.

All financial assets not classified as measured at amortized cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

Financial assets - Business model assessment

The Group makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes:

● the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether management’s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realizing cash flows through the sale of the assets;

● how the performance of the portfolio is evaluated and reported to the Group’s management;

● the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed;

● how managers of the business are compensated - e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flows collected; and

● the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.

Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, consistent with the Group’s continuing recognition of the assets.

Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.

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PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

Financial assets - Assessment whether contractual cash flows are solely payments of principal and interest

For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.

In assessing whether the contractual cash flows are solely payments of principal and interest, the Group considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Group considers:

● contingent events that would change the amount or timing of cash flows;

● terms that may adjust the contractual coupon rate, including variable-rate features;

● prepayment and extension features; and

● terms that limit the Group’s claim to cash flows from specified assets (e.g. non-recourse features).

A prepayment feature is consistent with the solely payments of principal and interest criterion if the prepayment amount substantially represents unpaid amounts of principal and interest on the principal amount outstanding, which may include reasonable compensation for early termination of the contract. Additionally, for a financial asset acquired at a discount or premium to its contractual par amount, a feature that permits or requires prepayment at an amount that substantially represents the contractual par amount plus accrued (but unpaid) contractual interest (which may also include reasonable compensation for early termination) is treated as consistent with this criterion if the fair value of the prepayment feature is insignificant at initial recognition.

Financial assets - Subsequent measurement and gains and losses

Financial assets at FVTPL: These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

Financial assets at amortized cost: These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

Financial liabilities - Classification, subsequent measurement and gains and losses

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss. Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

iii. Derecognition

Financial assets

The Group derecognizes a financial asset when:

● the contractual rights to the cash flows from the financial asset expire; or

● it transfers the rights to receive the contractual cash flows in a transaction in which either:

- substantially all of the risks and rewards of ownership of the financial asset are transferred; or

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PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

- the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Group enters into transactions whereby it transfers assets recognized in its statement of financial position, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

Financial liabilities

The Group derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Group also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

When changes were made to a financial asset or financial liability in addition to changes to the basis for determining the contractual cash flows required by interest rate benchmark reform, the Group first updated the effective interest rate of the financial asset or financial liability to reflect the change that is required by interest rate benchmark reform. After that, the Group applied the policies on accounting for modifications to the additional changes.

O. Impairment

i. Non-derivative financial assets

Financial instruments and contract assets

The Group recognizes loss allowances for ECLs on:

● financial assets measured at amortized cost;

● debt investments measured at FVOCI; and

● contract assets.

The Group also recognizes loss allowances for ECLs on lease receivables, which are disclosed as part of trade and other receivables.

The Group measures loss allowances at an amount equal to lifetime ECLs, except for the following, which are measured at 12-month ECLs:

● debt securities that are determined to have low credit risk at the reporting date; and

● other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowances for trade receivables (including lease receivables) and contract assets are always measured at an amount equal to lifetime ECLs.

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PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group’s historical experience and informed credit assessment, that includes forward-looking information.

The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 12 months past due.

The Group considers a financial asset to be in default when:

● the debtor is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to actions such as realising security (if any is held).

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.

12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk.

Measurement of ECLs

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Group expects to receive).

ECLs are discounted at the effective interest rate of the financial asset.

Credit-impaired financial assets

At each reporting date, the Group assesses whether financial assets carried at amortized cost and debt securities at FVOCI are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

Evidence that a financial asset is credit-impaired includes the following observable data:

● significant financial difficulty of the debtor;

● a breach of contract such as a default or being more than 90 days past due;

● the restructuring of a loan or advance by the Group on terms that the Group would not consider otherwise;

● it is probable that the debtor will enter bankruptcy or other financial reorganization; or

● the disappearance of an active market for a security because of financial difficulties.

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PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

Presentation of allowance for ECL in the statement of financial position

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets.

For debt securities at FVOCI, the loss allowance is charged to profit or loss and is recognized in OCI.

Write-off

The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For individual customers, the Group has a policy of writing off the gross carrying amount when the financial asset is 180 days past due based on historical experience of recoveries of similar assets. For corporate customers, the Group individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Group expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’s procedures for recovery of amounts due.

ii. Non-financial assets

At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than biological assets, investment property, inventories, contract assets and deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill is tested annually for impairment.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs of disposal. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

Impairment losses are recognized in profit or loss. The Group recognizes the impairment loss if there is any indication of impairment of individual CGU. And then, the Group performed impairment test of goodwill for groups of CGUs.

An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

P. Provisions

Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost.

Building restoration: In accordance with the Group’s policy and applicable legal requirements, a provision for restoration in respect of leased buildings, and the related expense, is recognized when the lease term is commenced.

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PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

Q. Leases

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

i. As a lessee

At commencement or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of its relative stand-alone prices. However, for the leases of property the Group has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.

The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.

The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased.

Lease payments included in the measurement of the lease liability comprise the following:

● fixed payments, including in-substance fixed payments;

● variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

● amounts expected to be payable under a residual value guarantee; and

● the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably certain not to terminate early.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.

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PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

At the date of transition to IFRSs, The Group applies the following approach to all of its leases.

The Group measures that lease liability at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate at the date of transition to IFRSs.

The Group measures right-of-use asset at its carrying amount as if IFRS 16 had been applied since the commencement date of the lease, but discounted using the lessee’s incremental borrowing rate at the date of transition to IFRSs.

The Group uses hindsight in applying IFRS 16 such as the determination of lease term for contracts that contain options to extend or terminate a lease.

The Group has elected not to recognize right-of-use assets and lease liabilities for leases of low-value assets (leases for which the underlying asset is valued at USD 5,000 or less) and short-term leases (leases that have a lease term of 12 months or less at the commencement date), including IT equipment. The Group recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

ii. As a lessor

At inception or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices.

When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease.

To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Group applies the exemption described above, then it classifies the sub-lease as an operating lease.

If an arrangement contains lease and non-lease components, then the Group applies IFRS 15 to allocate the consideration in the contract.

The Group applies the derecognition and impairment requirements in IFRS 9 to the net investment in the lease. The Group further regularly reviews estimated unguaranteed residual values used in calculating the gross investment in the lease.

The Group recognizes lease payments received under operating leases as income on a straight-line basis over the lease term as part of ‘other income’.

R. Fair value measurement

‘Fair value’ is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or, in its absence, the most advantageous market to which the Group has access at that date. The fair value of a liability reflects its non-performance risk.

F-115

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.

When one is available, the Group measures the fair value of an instrument using the quoted price in an active market for that instrument. A market is regarded as ‘active’ if transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis.

If there is no quoted price in an active market, then the Group uses valuation techniques that maximize the use of relevant observable inputs and minimize the use of unobservable inputs. The chosen valuation technique incorporates all of the factors that market participants would take into account in pricing a transaction.

The best evidence of the fair value of a financial instrument on initial recognition is normally the transaction price - i.e. the fair value of the consideration given or received. If the Group determines that the fair value on initial recognition differs from the transaction price and the fair value is evidenced neither by a quoted price in an active market for an identical asset or liability nor based on a valuation technique for which any unobservable inputs are judged to be insignificant in relation to the measurement, then the financial instrument is initially measured at fair value, adjusted to defer the difference between the fair value on initial recognition and the transaction price. Subsequently, that difference is recognised in profit or loss on an appropriate basis over the life of the instrument but no later than when the valuation is wholly supported by observable market data or the transaction is closed out.

S. Earnings per Share

Basic earnings per share is calculated by dividing the net profit for the period available to the ordinary shareholders by the weighted-average number of ordinary shares outstanding during the year.

Diluted earnings per share is calculated by dividing the profit for the year attributable to owners of the parent company from the consolidated statements of profit or loss by the weighted-average number of ordinary shares outstanding and potential dilutive shares. Potential dilutive shares are used in the calculation of dilutive earnings per share only when they have dilutive effects.

T. Concentration of Credit Risk

The Group performs periodic credit evaluations of its customers’ financial condition and generally does not require collateral for customers on accounts receivable. The Group maintains reserves for potential credit losses, which are periodically reviewed.

U. Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of ordinary shares and share options are recognized as a deduction from equity, net of any tax effects.

When the Group repurchases its own shares, the amount of the consideration paid is recognized as a deduction from equity and classified as treasury shares. The gains or losses from the purchase, disposal, reissue, or retirement of treasury shares are directly recognized in equity being as transaction with owners.

F-116

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

6. Operating segments

A. Basis for segmentation

The Group’s operating segments have been identified to be each business unit, by which the Group provides different services and merchandise.

The Group assesses the performance of each operating segment based on operating profit, and there is no difference with the amounts reported on the consolidated statement of profit or loss, except for intergroup transactions.

The following summary describes the operations of each reportable segment.

Operating segments	Operations
Content	Sale and distribution of content consumer products and providing production services
Food and beverages	Sale of food and beverages products and licensing of the intellectual property

The Group’s chief executive officer reviews the internal management reports of each business unit at least quarterly.

B. Information about reportable segments

Information related to each reportable segment is set out below. Segment operating profit is used to measure performance because management believes that this information is the most relevant in evaluating the results of the respective segments relative to other entities that operate in the same industries.

The segment information for the years ended December 31, 2024, 2023 and 2022 is as follows:

		2024
		Content			F&B			Total
		(In thousands of Korean won)
Segment revenue	₩		28,379,904			14,630,426			43,010,330
Elimination of intersegment revenue			-			-			-
Consolidated net revenue			28,379,904			14,630,426			43,010,330
Depreciation/Amortization			501,513			2,672,170			3,173,683
Segment operating profit (loss)			(969,001	)		(2,537,890	)		(3,506,891	)

		2023
		Content		F&B			Total
		(In thousands of Korean won)
Segment revenue	₩		49,771,824		17,709,332			67,481,156
Elimination of intersegment revenue			-		-			-
Consolidated net revenue			49,771,824		17,709,332			67,481,156
Depreciation/Amortization			750,031		2,534,001			3,284,032
Segment operating profit (loss)			3,802,307		(304,909	)		3,497,398

F-117

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

		2022
		Content		F&B			Total
		(In thousands of Korean won)
Segment revenue	₩		151,858,729		17,163,659			169,022,388
Elimination of intersegment revenue			-		-			-
Consolidated net revenue			151,858,729		17,163,659			169,022,388
Depreciation/Amortization			733,182		1,702,091			2,435,273
Segment operating profit (loss)			13,546,382		(384,475	)		13,161,907

C. Geographic information

Content segment and food and beverages segments are managed on a worldwide basis, but operate manufacturing facilities and sales offices primarily in Seoul, South Korea. The geographic information analyses the Group’s revenue by the customer’s country of domicile. In presenting the geographic information, segment revenue and non-current assets have been based on the geographic location of customers.

Summary of the Group’s operation by region based on the location of customers for the years ended December 31, 2024, 2023 and 2022 is as follows:

		2024		2023		2022
		(In thousands of Korean won)
Korea	₩		39,343,631		54,892,741		93,764,173
USA			13		335,239		9,879,723
Japan			3,516,708		11,948,054		64,996,330
China			141,419		142,303		353,095
Other			8,560		162,819		29,067
Total	₩		43,010,330		67,481,156		169,022,388

Summary of the Group’s non-current assets based on the location as of December 31, 2024 and 2023 is as follows:

		2024		2023
		(In thousands of Korean won)
Korea	₩		23,963,489		30,282,905

F-118

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

D. Major customer

Revenues from major customers that amount to 10% or more of the Group’s revenue for the years ended December 31, 2024, 2023 and 2022 are as follows:

		2024			2023			2022
		(In thousands of Korean won)
Customer A (Content segment)
Revenue	₩		8,785,673			11,184,157			4,167,544
%			20.43	%		16.57	%		2.47	%
Customer B (Content segment)
Revenue			2,063,499			11,463,821			62,713,081
%			4.80	%		16.99	%		37.10	%
Customer C (Content segment)
Revenue			926,101			17,859,876			62,174,920
%			2.15	%		26.47	%		36.79	%
Total	₩		11,775,273			40,507,854			129,055,545

7. Revenue

A. Revenue streams

The Group generates revenue primarily through the sale of the Group’s entertainment content and production services, and food and beverage products. Other sources of revenue include the franchise royalty fees from licensing of the Group’s intellectual property in food and beverage business.

Revenue from contracts with customers for the years ended December 31, 2024, 2023 and 2022 are as follows:

		2024		2023		2022
		(In thousands of Korean won)
Revenue from contracts with customers	₩		43,010,330		67,481,156		169,022,388

B. Disaggregation of revenue from contracts with customers

In the following table, revenue from contracts with customers is disaggregated by major products and service lines and timing of revenue recognition. The table also includes a reconciliation of the disaggregated revenue with the Group’s reportable segments (see Note 6).

Revenue from contracts with customers based on the service contract type and the timing of satisfaction of performance obligations for the years ended December 31, 2024, 2023 and 2022 are as follows:

		2024		2023		2022
		(In thousands of Korean won)
Major products/service lines
Content goods and merchandises
Video Project & Merchandise Items	₩		23,536,076		47,511,123		150,972,943
Others			4,843,828		2,260,701		885,786
Subtotal	₩		28,379,904		49,771,824		151,858,729
F&B
Food and beverages	₩		13,697,884		17,067,663		16,469,551
Franchise royalties and fees			932,542		641,669		694,108
Subtotal	₩		14,630,426		17,709,332		17,163,659
Total	₩		43,010,330		67,481,156		169,022,388
Timing of revenue recognition
At a point in time	₩		42,453,366		66,925,610		168,328,280
Over time			556,964		555,546		694,108
Total	₩		43,010,330		67,481,156		169,022,388

F-119

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

C. Contract balance

The balance of contract assets from contracts with customers as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Contract assets	₩		-		73,463

8. Income and Expenses

A. Other income

Details of other income for the years ended December 31, 2024, 2023 and 2022 are as follows:

		2024		2023		2022
		(In thousands of Korean won
Gains on disposal of Property, Plant & Equipment	₩		6,100		928		-
Gains on disposal of right-of-use assets			131,193		1,042,833		-
Rental income			808,123		283,983		-
Miscellaneous income			76,713		159,336		84,462
Total	₩		1,022,129		1,487,080		84,462

B. Other expenses

Details of other expenses for the years ended December 31, 2024, 2023 and 2022 are as follows:

		2024		2023		2022
		(In thousands of Korean won)
Other bad debt expenses	₩		347,419		-		8,000
Losses on disposal of Property, Plant & Equipment			329,882		31,975		-
Impairment losses on Property, Plant & Equipment			964,626		2,246		15,583
Securities purchase expenses			-		-		188
Miscellaneous expenses			1,158		1,326		22,386
Total	₩		1,643,085		35,547		46,157

F-120

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

C. Expenses by nature

Details of classification of expenses by nature for the years ended December 31, 2024, 2023 and 2022 are as follows:

		2024			2023		2022
		(In thousands of Korean won)
Changes in inventories	₩		(393,764	)		2,931,297		(1,555,535	)
Raw materials and consumables			5,029,668			4,989,957		4,322,808
Employee benefits			9,549,202			11,777,876		11,483,075
Depreciation			2,817,673			2,921,232		2,082,277
Amortization of intangible assets			356,010			362,800		352,996
Commission paid			13,430,421			21,501,616		84,065,732
Outsourcing fee			11,421,682			16,071,848		48,710,311
Copyright fee			714,124			1,348,620		2,365,794
Rent			484,204			856,282		792,174
Supplies			234,611			307,350		470,966
Water and fuel expenses			487,384			633,874		444,240
Transportation			347,864			369,182		429,703
Bad debt expenses			297,162			171,560		696,977
Building Maintenance			110,866			96,425		201,353
Other expenses			1,009,159			1,095,372		1,035,915
Total			45,896,266			65,435,291		155,898,786

Total expenses consist of cost of sales and selling, general and administrative expenses.

9. Finance income and costs

Details of finance income and costs for the years ended December 31, 2024, 2023 and 2022 are as follows:

		2024		2023		2022
		(In thousands of Korean won)
Finance income
Interest income	₩		287,285		406,933		520,526
Dividend income			1,463		1,462		700
Realized gains on foreign currency transaction			43,037		199,697		529,995
Unrealized gains on foreign currency transaction			88,458		376,295		154,896
Gains on valuation of short-term financial instruments			33		55		-
Gains on valuation of long-term financial instruments			6,368		7,241		6,514
Gains on disposal of long-term investment securities			-		-		5,878
Gains on valuation of long-term investment securities			149,926		116,900		2,638
Gains on disposal of short-term loans			-		12,819		-
Gains on disposal of long-term loans			-		622,539		-
Total	₩		576,570		1,743,941		1,221,147
Finance costs
Interest expenses	₩		1,257,378		1,385,142		810,047
Realized losses on foreign currency transaction			57,308		255,886		723,307
Unrealized losses on foreign currency transaction			6,447		26,064		149,586
Losses on valuation of short-term financial instruments			-		6		421
Losses on valuation of long-term financial instruments			115		8,717		5,263
Losses on disposal of long-term investment securities			-		-		4,090
Losses on valuation of long-term investment securities			60,275		12,395		118,607
Total	₩		1,381,523		1,688,210		1,811,321

F-121

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

10. Earnings per share

A. Basic earnings per share

The calculation of basic EPS has been based on the following profit attributable to ordinary shareholders and weighted-average number of ordinary shares outstanding.

i. Profit attributable to ordinary shareholders (basic)

		2024			2023		2022
		(In thousands of Korean Won)
Profit for the year, attribute to the owners of Parent Company	₩		(2,541,375	)		3,137,186		10,189,718
Dividends on non-redeemable preference shares			-			-		-
Profit attributable to ordinary shareholders	₩		(2,541,375	)		3,137,186		10,189,718

ii. Weighted-average number of ordinary shares (basic)

	2024			2023			2022
	(In number of shares)
Number of ordinary shares issued at January 1		100,000			100,000			100,000
Effect of treasury shares held		(15,582	)		(12,081	)		-
Weighted-average number of ordinary shares at December 31		84,418			87,919			100,000

B. Anti-diluted earnings per share

Diluted earnings per share is not different from basic earnings per share as there is no dilution effects of potential ordinary shares for the years ended December 31, 2024, 2023 and 2022.

C. Earnings per share

		2024			2023		2022
		(In Korean Won)
Basic earnings per share	₩		(30,105	)		35,683		101,897

F-122

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

11. Share-based payment arrangements

A. Description of share-based payment arrangements

As of December 31, 2024, the Group had the following share-based payment arrangements.

i. Share option plan (cash-settled)

On June 30, 2021, the Subsidiary granted 400 share options entitling employees to a cash payment after satisfying 2 vesting conditions below. The amount of the cash payment is determined based on the difference between the share price of the Group at the time of exercise and exercise price.

The key terms and conditions related to the grants under these plans are as follows:

Grant date /employees entitled	Number of instruments	Vesting conditions	Contractual life of options	Type	Underlying assets
Options granted to employees
As of June 30, 2021	400	2 years’ service from grant date and the Play F&B’s annual average Adjusted EBITDA (*1) equals or exceeds Korean Won 1,375,000 thousand at the date of exercise	7 years	Cash-settled	Play F&B’s ordinary shares

(*1) Adjusted EBITDA = Operating Income +Depreciation of PP&E +Amortization of Intangible Assets +Advertising & marketing expenses

F-123

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

B. Measurement of fair values

i. Cash-settled share-based payment arrangement

The fair value of the employee share options has been measured using a binomial model.

The inputs used in the measurement of the fair values at grant date and measurement date of the cash-settled share-based payment arrangement are as follows:

Share appreciation rights (cash-settled)		December 31, 2024			December 31, 2023
			(In Korean Won)
Fair value of option	₩		54,230			504,547
Share price			643,735			1,247,333
Exercise price	₩		1,100,000			1,100,000
Risk- free interest rate (based on government bonds)			2.71	%		3.15	%
Volatility (*)			30.00	%		37.49	%

(*) Volatility has been based on an evaluation of the historical volatility of other companies’ share price, which are listed in KOSDAQ, particularly over the historical period commensurate with prior one year.

C. Reconciliation of outstanding share options

The number and exercise prices of share options under the share option plan for the years ended December 31, 2024, 2023 and 2022 are as follows.

	2024				2023				2022
Share option plan (cash-settled)	Number of options		Exercise price		Number of options		Exercise price		Number of options		Exercise price
	(In Korean Won and number of options)
Outstanding at January 1		400	₩	1,100,000		400	₩	1,100,000		400	₩	1,100,000
Outstanding at December 31		400		1,100,000		400		1,100,000		400		1,100,000
Exercisable at December 31		-	₩	-		-	₩	-		-	₩	-

	2022
Share option plan (Either of equity-settled or cash-settled)	Number of options			Exercise price
	(In Korean Won and number of options)
Outstanding at January 1		3,000		₩	560,000
Cancelled during the year		(3,000	)		(560,000	)
Outstanding at December 31		-			-
Exercisable at December 31		-		₩	-

F-124

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

Details of the liabilities arising from the share option plan (cash-settled) are as follows.

		2024		2023		2022
		(In thousands of Korean won)
Total carrying amount of liabilities for share-based payment	₩		21,692		201,819		227,577
Total intrinsic value of liabilities for vested benefits			-		58,933		115,306

12. Employee benefits

Details of defined benefit liability recognized as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Defined benefit liability	₩		559,271		706,102

The Group operates both the defined benefit plans and defined contribution plans as a retirement pension scheme. Defined benefit plans expose the Group to actuarial risks, such as longevity risk, currency risk, interest rate risk and market (investment) risk.

The expense recognized in relation to defined contribution plan for the year ended December 31, 2024, 2023 and 2022 is Korean Won 295,080 thousand, 435,139 thousand and 339,901 thousand, respectively.

A. Movement in net defined benefit (asset) liability

Details of reconciliation from the opening balances to the closing balances for the net defined benefit liability and its components for the years ended December 31, 2024, 2023 and 2022 is as follows:

		Defined benefit obligation									Fair value of plan assets						Net defined benefit liabilities
		2024			2023			2022			2024		2023		2022		2024			2023			2022
		(In thousands of Korean won)
Balance at 1 January	₩		706,102			928,148			796,366			-		-		-		706,102			928,148			796,366
Included in profit or loss
Current service cost			375,158			514,505			550,108			-		-		-		375,158			514,505			550,108
Interest expense			19,015			31,375			19,095			-		-		-		19,015			31,375			19,095
Subtotal			394,173			545,880			569,203			-		-		-		394,173			545,880			569,203
Included in OCI
Remeasurement loss(gain)
Demographic assumption			(4,954	)		-			-			-		-		-		(4,954	)		-			-
Financial assumption			41,683			49,584			(201,015	)		-		-		-		41,683			49,584			(201,015	)
Adjustment based on experience			(80,813	)		(159,142	)		57,186			-		-		-		(80,813	)		(159,142	)		57,186
Subtotal			(44,084	)		(109,558	)		(143,829	)		-		-		-		(44,084	)		(109,558	)		(143,829	)
Other
Benefits paid			(496,920	)		(658,368	)		(293,592	)		-		-		-		(496,920	)		(658,368	)		(293,592	)
Subtotal			(496,920	)		(658,368	)		(293,592	)		-		-		-		(496,920	)		(658,368	)		(293,592	)
Balance at 31 December	₩		559,271			706,102			928,148			-		-		-		559,271			706,102			928,148

F-125

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

B. Plan assets

There are no contributions funded to its defined benefit plans as of December 31, 2024 and 2023.

C. Defined benefit obligation

i. Actuarial assumptions

Details of actuarial assumptions used for the years ended December 31, 2024, 2023 and 2022 are as follows:

	2024	2023	2022
Discount rate	4.2%	4.9%	5.6%
Future salary growth	5.5% ~ 8.4%	6.1% ~ 8.2%	6.1% ~ 8.2%

Assumptions regarding future longevity and standard salary scale have been based on issued by Korea Insurance Development Institute.

As of December 31, 2024, the weighted average duration of the defined benefit obligation was 10.9 years.

ii. Sensitivity analysis

The Group measures the risk of actuarial assumption changes as a 1% fluctuation in the discount rate and future salary growth rate of the amounts of defined benefit obligation, which reflects the management’s assessment of the risk of actuarial assumption fluctuation that can reasonably occur. The impact of a 1% fluctuation in discount rates and future salary growth rates on the Group’s defined benefit obligation as of December 31, 2024 and 2023 are as follows:

		December 31, 2024						December 31, 2023
		Increased by 1%			Decreased by 1%			Increased by 1%			Decreased by 1%
		(In thousands of Korean won)
Discount rate	₩		(55,066	)		66,463			(68,906	)		83,674
Future salary growth			66,204			(55,864	)		83,967			(70,331	)

Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an approximation of the sensitivity of the assumptions shown.

D. Employee benefit expenses

i. Details of employee benefit expenses recognized for the years ended December 31, 2024, 2023 and 2022 are as follows:

		2024			2023			2022
		(In thousands of Korean won)
Wages and salaries	₩		8,056,765			9,641,567			9,321,946
Expenses related to post-employment plans			689,253			981,019			909,103
Social security contributions			398,066			582,545			476,938
Fringe benefit			585,245			598,503			622,293
Cash-settled Share-based payments			(180,127	)		(25,758	)		152,795
Total	₩		9,549,202			11,777,876			11,483,075

F-126

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

ii. Expenses are recognized in the consolidated statements of comprehensive income (loss) as follows:

		2024		2023		2022
		(In thousands of Korean won)
Cost of revenues	₩		7,280,355		9,290,041		8,454,607
Selling, general and administrative expenses			2,268,847		2,487,835		3,028,468
Total	₩		9,549,202		11,777,876		11,483,075

13. Income taxes

A. Amounts recognized in profit or loss

		2024			2023			2022
		(In thousands of Korean won)
Current tax expense
Current year	₩		233,403			1,319,643			2,827,858
Adjustments recognized related to prior period incomes (*)			(263,935	)		(518,699	)		539,038
	₩		(30,532	)		800,944			3,366,896
Deferred tax expense
Origination and reversal of temporary differences	₩		(723,118	)		(40,165	)		(679,788	)
Deferred taxes charged directly to equity			-			-			-
Tax expense on continuing operations	₩		(753,650	)		760,779			2,687,108

(*) In the normal course of business, the Group and its respective subsidiary are examined by taxation authority. Our management regularly assesses the potential outcomes of these examinations and any future examinations for the current or prior years in determining the adequacy of its liabilities for income taxes.

We establish 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, are included in income taxes in the consolidated statements of operations.

F-127

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

B. Amounts recognized in OCI

		2024						2023						2022
		Before tax		Tax (expense) benefit		Net of tax		Before tax		Tax (expense)  benefit		Net of tax		Before tax		Tax (expense)  benefit		Net of tax
		(In thousands of Korean won)
Items that will not be reclassified to profit or loss
Remeasurements of defined benefit liability	₩		44,085		-		44,085		109,558		-		109,558		143,829		-		143,829

C. Reconciliation of effective tax rate

		2024			2023			2022
		(In thousands of Korean won)
Profit before income tax	₩		(4,311,845	)		3,553,129			12,571,733
Tax at the statutory income tax rate			(844,871	)		720,604			2,743,781
Adjustments:
Tax-exempt income			(408	)		(92	)		(42	)
Expenses not deductible for tax purposes			31,689			37,369			33,114
Tax credits			(84,755	)		(124,290	)		(348,559	)
Changes in unrecognized deferred tax			380,738			(149,470	)		81,485
Adjustments recognized related to prior period incomes			(263,935	)		121,794			137,205
Other (differences in tax rate, etc)			27,892			154,864			40,124
Income tax expenses	₩		(753,650	)		760,779			2,687,108
Effective income tax rate (*)			-			21.4	%		21.4	%

(*) The effective tax rate is not calculated as the Group incurred a loss before income taxes for the year ended December 31, 2024.

F-128

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

D. Movement in deferred tax balances

i. Movement in deferred tax balances as of December 31, 2024

		Tax effect
		Beginning			Increase (decrease)			Ending
		(In thousands of Korean won)
Accrued income	₩		(54,469	)		38,593			(15,876	)
Short-term financial instruments			74,007			17,067			91,074
Inventories			220,559			349,407			569,966
Property, plant and equipment including right-of-use assets			(2,261,920	)		209,791			(2,052,129	)
Intangible assets other than goodwill			(10,712	)		17,710			6,998
Allowance for bad debts			267,801			127,416			395,217
Investments in associate and subsidiary (*)			924,522			281,227			1,205,749
Accrued expenses			-			(5,291	)		(5,291	)
Lease liabilities			2,988,900			(742,040	)		2,246,860
Provisions			192,644			(17,518	)		175,126
Investment property			(681,506	)		597,697			(83,809	)
Defined benefit liabilities			143,140			(25,204	)		117,936
Brand			(676,406	)		277,249			(399,157	)
Other			50,733			6,667			57,400
Total	₩		1,177,293			1,132,771			2,310,064
Loss carried forward	₩		509,696			529,562			1,039,258
Carryover tax credit			4,246,455			(1,128,338	)		3,118,117
Unrecognized deferred tax liabilities (assets) (*)			(6,044,706	)		189,123			(5,855,583	)
Deferred tax assets (liabilities)	₩		(111,262	)		723,118			611,856

(*) As of December 31, 2024, the Group did not recognize deferred income tax asset for the temporary difference relating to investments in subsidiary as it is not probable such temporary differences can be utilized in the foreseeable future.

F-129

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

ii. Movement in deferred tax balances as of December 31, 2023

		Tax effect
		Beginning			Increase (decrease)			Ending
		(In thousands of Korean won)
Accrued income	₩		(119,556	)		65,087			(54,469	)
Short-term financial instruments			79,158			(5,151	)		74,007
Inventories			(60,881	)		281,440			220,559
Property, plant and equipment including right-of-use assets			(3,600,206	)		1,338,286			(2,261,920	)
Intangible assets other than goodwill			15,853			(26,565	)		(10,712	)
Allowance for bad debts			203,306			64,495			267,801
Investments in associate and subsidiary (*)			805,615			118,907			924,522
Accrued expenses			102,454			(102,454	)		-
Lease liabilities			3,637,330			(648,430	)		2,988,900
Provisions			220,431			(27,787	)		192,644
Investment property			-			(681,506	)		(681,506	)
Defined benefit liabilities			193,983			(50,843	)		143,140
Brand			(1,036,943	)		360,537			(676,406	)
Other			869,670			(818,937	)		50,733
Total	₩		1,310,214			(132,921	)		1,177,293
Loss carried forward	₩		4,787			504,909			509,696
Carryover tax credit			2,756,092			1,490,363			4,246,455
Unrecognized deferred tax liabilities (assets) (*)			(4,222,519	)		(1,822,187	)		(6,044,706	)
Deferred tax assets (liabilities)	₩		(151,426	)		40,164			(111,262	)

(*) As of December 31, 2023, the Group did not recognize deferred income tax asset for the temporary difference relating to investments in subsidiary as it is not probable such temporary differences can be utilized in the foreseeable future.

F-130

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

E. Deferred assets (liabilities)

i. Details of unrecognized as deferred income tax assets as of December 31, 2024 and 2023 are as follows:

		2024		2023
		(In thousands of Korean won)
Tax loss carryforwards	₩		1,039,258		509,696
Tax credit carryforwards			3,118,117		4,246,455
Unrecognized temporary difference			1,698,208		1,288,555

ii. Details of unused tax loss carryforwards and unused tax credit carryforwards that are not recognized as deferred income tax assets as of December 31, 2024 are as follows:

Year of expiration		Unused loss carryforwards		Unused tax credit carryforwards
		(In thousands of Korean won)
2025	₩		-		-
2026			-		-
2027			-		-
2028			-		188,128
2029			-		-
2030			-		-
After 2030			4,972,526		2,929,989
Total	₩		4,972,526		3,118,117

iii. The timing of recovery of deferred tax assets and liabilities as of December 31, 2024 and 2023 is as follows:

		December 31, 2024			December 31, 2023
		(In thousands of Korean won)
Deferred tax assets
- Deferred tax assets to be recovered after more than 12 months	₩		593,760			510,711
- Deferred tax assets to be recovered within 12 months			978,311			516,316
Sub-total			1,572,071			1,027,027
Deferred tax liabilities
- Deferred tax liabilities to be recovered after more than 12 months			(939,073	)		(1,126,473	)
- Deferred tax liabilities to be recovered within 12 months			(21,142	)		(11,816	)
Sub-total			(960,215	)		(1,138,289	)
Deferred tax assets (liabilities), net	₩		611,856			(111,262	)

F-131

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

14. Other assets

Details of other assets as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Current
Prepayments	₩		3,078		18,423
Prepaid expenses (*)			661,554		700,770
Subtotal			664,632		719,193
Non-Current
Non-current prepaid expenses (*)			1,907,965		2,606,623
Total	₩		2,572,597		3,325,816

(*) On July 2023, the Group granted a retention bonus to 7 employees, as a compensation for being employed for the next 5 years. Prepaid and Non-current prepaid expenses are expensed in a straight-line basis, during the employment period defined in the contract.

15. Inventories

Details of inventories as of December 31, 2024 and 2023 are as follows:

		December 31, 2024			December 31, 2023
		(In thousands of Korean won)
Merchandise	₩		2,717,915			1,110,974
Work in process			756,802			391,939
Allowance for Inventories valuation			(2,656,393	)		(1,078,353	)
Total	₩		818,324			424,560

In 2024, inventories amounted to Korean Won 32,616,031 thousand (2023: Korean Won 38,465,045 thousand, 2022: Korean Won 65,875,206 thousand) were recognized as an expense during the year and included in ‘cost of sales’.

The Group recognizes the full provision for inventories with more than one year aging from the initiation of project according to the Company’s accounting policies. For inventories with less than one year aging from the initial production with an estimated recovery period exceeding one year, it is also recognized as a provision. Loss on valuation of inventories amounted to Korean Won 1,919,734 thousand (2023: Korean Won 140,077 thousand, 2022: Korean Won 1,358,651 thousand) and reversal of allowance for inventories valuation amounted to Korean Won 341,694 thousand (2023: Korean Won 538,072 thousand, 2022: Korean Won 215,553 thousand) were recognized during the year ended December 31, 2024 and 2023, respectively.

F-132

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

16. Trade and other receivables

Details of trade and other receivables as of December 31, 2024 and 2023 are as follows:

		December 31, 2024			December 31, 2023
		(In thousands of Korean won)
Trade receivable
Accounts receivable — Trade	₩		9,945,757			7,192,166
Allowance for doubtful accounts (Accounts receivable)			(735,316	)		(438,155	)
Accounts receivable — trade, net	₩		9,210,441			6,754,011

		December 31, 2024			December 31, 2023
		(In thousands of Korean won)
Other receivables
Accrued income	₩		74,233			46,893
Allowance for doubtful accounts (Accrued income)			(44,104	)		(26,685	)
Non-trade receivables			600,352			830,958
Allowance for doubtful accounts (Non-trade receivables)			(500,000	)		(500,000	)
Accounts receivable — other, net	₩		130,482			351,166

Details of the changes in the loss allowance of trade and other receivables during the years ended December 31, 2024, 2023 and 2022 are as follows:

		2024		2023			2022
		(In thousands of Korean Won)
Allowance for doubtful accounts (Trade receivable)
Beginning of the year	₩		438,155		766,595			69,618
Bad debt expenses			297,162		-			696,977
Reversal of bad debt expenses			-		(328,440	)		-
Ending of the year	₩		735,316		438,155			766,595

		2024		2023		2022
		(In thousands of Korean Won)
Allowance for doubtful accounts (Other receivables)
Beginning of the year	₩		526,685		26,685		18,685
Bad debt expenses - other			17,419		500,000		8,000
Ending of the year	₩		544,104		526,685		26,685

F-133

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

17. Cash and cash equivalents

Cash and cash equivalents as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Cash on hand	₩		2,355		2,661
Deposits in banks			4,148,217		8,582,973
Total	₩		4,150,572		8,585,634

The Group doesn’t have any restricted cash and cash equivalents as of December 31, 2024, 2023, and January 1, 2023.

18. Investment properties

A. Reconciliation of carrying amount

B. Details of Investment properties as of December 31, 2024 and 2023 are as follows:

		December 31, 2024			December 31, 2023
		(In thousands of Korean won)
Book value	₩		667,739			4,311,539
Accumulated depreciation			(266,740	)		(1,050,744	)
Carrying amount	₩		400,999			3,260,795

Changes in Investment properties for the years ended December 31, 2024, 2023 and 2022 are as follows:

		2024			2023			2022
		(In thousands of Korean won)
Balance as of January 1	₩		3,260,795			-			-
Transfer (*)			(2,385,812	)		3,483,371			-
Lease modification			(35,216	)		-			-
Depreciation			(438,768	)		(222,576	)		-
Balance as of December 31	₩		400,999			3,260,795			-

(*) As of December 31, 2023, the right-of-use assets associated with six stores were reclassified as investment properties. For the year ended December 31, 2024, five of these investment properties were reclassified back to right-of-use assets due to a change in intended use, as the Company determined to utilize the properties for its own operations (Note 19).

C. Amounts recognized in profit or loss

Rental income recognized by the Group during the year ended December 31, 2024 was Korean Won 808,123 thousand (2023: 283,983, 2022: nil). Depreciation expense, included in ‘cost of revenues’, was as follows:

		2024		2023		2022
		(In thousands of Korean won)
Depreciation	₩		438,768		222,576		-

F-134

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

19. Property, plant and equipment

A. Reconciliation of carrying amount

Details of property, plant and equipment as of December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Book value		Accumulated depreciation			Accumulated impairment loss			Carrying amount
Machinery	₩		2,601,550		(1,078,409	)		-			1,523,141
Vehicles			51,419		(51,418	)		-			1
Office equipment			559,571		(343,099	)		-			216,472
Construction-in-progress			8,662		-			-			8,662
Furniture and fixtures			4,401,909		(1,787,018	)		(748,162	)		1,866,729
Right-of-use assets			13,716,930		(5,065,483	)		(216,464	)		8,434,983
Total	₩		21,340,041		(8,325,427	)		(964,626	)		12,049,988

		December 31, 2023
		Book value		Accumulated depreciation			Carrying amount
		(In thousands of Korean won)
Machinery	₩		2,658,245		(830,223	)		1,828,022
Vehicles			51,419		(51,417	)		2
Office equipment			545,651		(262,359	)		283,292
Construction-in-progress			-		-			-
Furniture and fixtures			4,668,349		(1,337,809	)		3,330,540
Right-of-use assets			12,104,207		(2,678,386	)		9,425,821
Total	₩		20,027,871		(5,160,194	)		14,867,677

F-135

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

Details of the changes in property, plant and equipment for the years ended December 31, 2024, 2023 and 2022 are as follows:

		2024
		Machinery			Vehicles			Office equipment			Construction- in-progress		Furniture and fixture			Right-of- use assets			Total
		(In thousands of Korean won)
Beginning balance	₩		1,828,022			2			283,292			-		3,330,540			9,425,821			14,867,677
Acquisitions			42,801			46,057			13,919			8,662		161,780			419,934			693,153
Depreciation			(322,641	)		(1,535	)		(80,739	)		-		(569,932	)		(1,404,058	)		(2,378,905	)
Disposals			(25,041	)		(44,523	)		-			-		(307,497	)		-			(377,061	)
Transfer (*1)			-			-			-			-		-			2,385,812			2,385,812
Impairment loss (*2)			-			-			-			-		(748,162	)		(216,464	)		(964,626	)
Lease modification			-			-			-			-		-			(1,603,440	)		(1,603,440	)
Lease termination			-			-			-			-		-			(572,622	)		(572,622	)
Ending balance	₩		1,523,141			1			216,472			8,662		1,866,729			8,434,983			12,049,988

(*1)	As of December 31, 2023, the right-of-use assets associated with six stores were reclassified as investment properties. For the year ended December 31, 2024, five of these investment properties were reclassified back to right-of-use assets due to a change in intended use, as the Company determined to utilize the properties for its own operations (Note 18).
(*2)	An impairment loss was recognized due to the discontinuation of operations at six stores.

		2023
		Machinery			Vehicles			Office equipment			Construction- in-progress			Furniture and fixture			Right-of- use assets			Total
		(In thousands of Korean won)
Beginning balance	₩		2,041,579			4,075			276,711			9,950			3,207,619			15,089,571			20,629,505
Acquisitions			172,534			-			92,819			-			684,228			578,409			1,527,990
Depreciation			(345,202	)		(4,074	)		(86,238	)		-			(559,061	)		(1,704,081	)		(2,698,656	)
Disposals			(50,839	)		-			-			-			-			-			(50,839	)
Transfer (*1)			9,950			1			-			(9,950	)		-			(3,483,372	)		(3,483,371	)
Impairment loss (*2)			-			-			-			-			(2,246	)		-			(2,246	)
Lease modification			-			-			-			-			-			(45,282	)		(45,282	)
Lease termination			-			-			-			-			-			(1,009,424	)		(1,009,424	)
Ending balance	₩		1,828,022			2			283,292			-			3,330,540			9,425,821			14,867,677

(*1)	During the year ended December 31, 2023, the Group transferred Right-of-use assets to investment properties because the Group decided to lease the building to a third party. (Note 18)
(*2)	The Group identified each bakery-café store as CGU and recognized impairment loss to bakery-café stores located in Garosu-gil and Jamwon.

F-136

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

		2022
		Machinery			Vehicles			Office equipment			Construction- in-progress			Furniture and fixture			Right-of- use assets			Total
		(In thousands of Korean won)
Beginning balance	₩		1,124,834			8,150			320,471			20,000			1,615,335			7,974,791			11,063,581
Acquisitions			421,201			-			21,607			2,603,716			88,110			8,529,150			11,663,784
Depreciation			(235,991	)		(4,075	)		(65,367	)		-			(385,623	)		(1,391,221	)		(2,082,277	)
Transfer			731,535			-			-			(2,613,766	)		1,905,380			(23,149	)		-
Impairment loss (*)			-			-			-			-			(15,583	)		-			(15,583	)
Ending balance	₩		2,041,579			4,075			276,711			9,950			3,207,619			15,089,571			20,629,505

(*) The Group identified each bakery-café store as CGU and recognized impairment loss to bakery-café stores located in Garosu-gil and Jamwon.

The classification of depreciation expenses in the statements of comprehensive income for the years ended December 31, 2024, 2023 and 2022 are as follows:

		2024		2023		2022
		(In thousands of Korean won)
Cost of revenues	₩		1,970,417		2,318,730		1,706,191
Selling, general and administrative expenses			408,488		379,926		376,086
Total	₩		2,378,905		2,698,656		2,082,277

B. Leased property, plant and equipment

The Group leased the building and vehicles during the years ended December 31, 2024 and 2023. As of December 31, 2024, Korean Won 8,434,983 thousand of right-of-use assets was recognized. (December 31, 2023: Korean Won 9,425,821 thousand of building, vehicles and other).

C. Collateral

As of December 31, 2024 and 2023, Korean Won 113,874 thousand of machinery and Korean Won 133,948 thousand of machinery are pledged as collateral for short-term borrowings provided from Industrial Bank of Korea.

F-137

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

20. Intangible assets and goodwill

A. Reconciliation of carrying amount

Details of intangible assets as of December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Book value		Accumulated depreciation			Carrying amount
		(In thousands of Korean won)
Software	₩		487,309		(376,372	)		110,937
Brand			5,388,000		(965,350	)		4,422,650
Goodwill			3,267,730		-			3,267,730
Total	₩		9,143,039		(1,341,722	)		7,801,317

		December 31, 2023
		Book value		Accumulated depreciation			Carrying amount
		(In thousands of Korean won)
Software	₩		487,309		(289,762	)		197,547
Brand			5,388,000		(695,950	)		4,692,050
Goodwill			3,267,730		-			3,267,730
Total	₩		9,143,039		(985,712	)		8,157,327

Details of the changes in intangible assets for the years ended December 31, 2024, 2023 and 2022 are as follows:

		2024
		Software			Brand			Goodwill		Total
		(In thousands of Korean Won)
Beginning balance	₩		197,547			4,692,050			3,267,730		8,157,327
Amortization			(86,610	)		(269,400	)		-		(356,010	)
Ending balance	₩		110,937			4,422,650			3,267,730		7,801,317

		2023
		Software			Brand			Goodwill		Total
		(In thousands of Korean Won)
Beginning balance	₩		290,947			4,961,450			3,267,730		8,520,127
Amortization			(93,400	)		(269,400	)		-		(362,800	)
Ending balance	₩		197,547			4,692,050			3,267,730		8,157,327

F-138

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

		2022
		Software			Brand			Goodwill		Total
		(In thousands of Korean Won)
Beginning balance	₩		260,643			5,230,850			3,267,730		8,759,223
Acquisitions			113,900			-			-		113,900
Amortization			(83,596	)		(269,400	)		-		(352,996	)
Ending balance	₩		290,947			4,961,450			3,267,730		8,520,127

B. Amortization

The classification of amortization in the statements of comprehensive income for the years ended December 31, 2024, 2023 and 2022 are as follows:

		2024		2023		2022
		(In thousands of Korean won)
Selling, general and administrative expenses	₩		356,010		362,800		352,996

C. Impairment assessment on CGU

As of December 31, 2024, 2023 and January 1, 2023, the Group performed impairment test for Food and Beverages operating segment. The Group 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, the Group 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 the Group’s products used in the forecast was determined considering external sources and the Group’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.

	Weighted average cost of capital			Terminal growth rate
2024		9.6	%		1.0	%
2023		10.7	%		1.0	%

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 the Group. Cost of debt was calculated using the yield rate of non-guaranteed corporate bond considering the Group’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 the Group. The Group 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 2,524,000 thousand in 2024 (2023: Korean Won 4,778,529 thousand, 2022: 6,575,660 thousand). 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.

F-139

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

The impact of a 0.5% fluctuation in discount rates and terminal growth rates on the value in use as of December 31, 2024 and 2023 are as follows:

December 31, 2024	0.5% Increase			0.5% Decrease
Discount rate		(-) 5.5	%		6.1	%
Terminal growth rate		4.6	%		(-) 4.1	%

December 31, 2023	0.5% Increase			0.5% Decrease
Discount rate		(-) 4.6	%		5.1	%
Terminal growth rate		3.7	%		(-) 3.3	%

21. Financial instruments by category

The carrying amounts of financial instruments by category as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Financial assets at amortized cost
Cash and cash equivalents	₩		4,150,572		8,585,634
Short-term financial instruments (*)			410,000		410,000
Accounts receivable — trade, net			9,210,441		6,754,011
Accounts receivable — other, net			130,482		351,166
Short-term loans, net			787,400		859,900
Other current financial assets			40,000		203,266
Other non-current financial assets			1,803,220		1,390,486
Financial assets at fair value through profit or loss
Short-term financial instruments			13,524		9,391
Long-term financial instruments			322,538		307,729
Long-term investment securities			730,391		640,739
Total	₩		17,598,568		19,512,322

(*) Short-term financial instruments consist of time deposits and saving-based insurance. As of December 31, 2024, Korean Won 231,000 thousand of time deposits in banks are provided as collateral for employee loans and restricted for use. (December 31, 2023: Korean Won 231,000 thousand)

F-140

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Financial liabilities at amortized cost
Trade and other payables (*)	₩		13,280,410		12,086,332
Short-term borrowings			3,764,000		3,330,000
Current portion of long-term borrowings, net			2,108,956		24,960
Other current financial liabilities			130,000		-
Trade and other non-current payables (*)			2		134,052
Long-term borrowings, excluding current portion, net			-		2,008,041
Other non-current financial liabilities			150,000		200,000
Total	₩		19,433,368		17,783,385

(*) Trade and other payables that are not financial liabilities are excluded.

A. Classification of investment assets based on liquidity

The classification of investment assets as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Current investments
Fixed deposit – at amortized cost (*)	₩		410,000		410,000
Saving based insurance – at FVTPL			13,524		9,391
Total	₩		423,524		419,391
Non-Current investments
Saving based insurance – at FVTPL	₩		322,538		307,729
Equity securities – at FVTPL			726,991		637,478
Debt securities – at FVTPL			3,400		3,262
Total	₩		1,052,929		948,469

(*) As of December 31, 2024, Korean Won 231,000 thousand of time deposits is provided as collateral for employee loans and restricted for use. (December 31, 2023: Korean Won 231,000 thousand)

B. Equity Securities designated as at FVTPL

The Group designated the investments shown below as equity securities at FVTPL because these equity securities represent investment that the Group intends to sell for strategic purposes.

		Fair value at December 31, 2024		Fair value at December 31, 2023
		(In thousands of Korean won)
Equity Securities (listed stocks)	₩		140,592		198,468
Equity Securities (unlisted stocks)			586,398		439,010
Total	₩		726,990		637,478

F-141

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

C. Net gains and losses by category of financial instruments

The net gains and losses by category of financial instruments for the years ended December 31, 2024, 2023 and 2022 are as follows:

		2024
		Financial assets at amortized cost		Financial assets at fair value through profit or loss		Financial liabilities at amortized cost			Total
		(In thousands of Korean won)
Interest income	₩		287,067		-		-			287,067
interest expense			-		-		(389,080	)		(389,080	)
Foreign currency differences			74,646		-		(6,906	)		67,740
Gain or loss on valuation of investment securities			-		89,651		-			89,651
Gain or loss on valuation of financial instruments			-		6,286		-			6,286
Dividend income			-		1,463		-			1,463
Total	₩		361,713		97,400		(395,986	)		63,127

		2023
		Financial assets at amortized cost		Financial assets at fair value through profit or loss			Financial liabilities at amortized cost			Total
		(In thousands of Korean won)
Interest income	₩		406,933		-			-			406,933
interest expense			-		-			(320,209	)		(320,209	)
Foreign currency differences			294,087		-			(45	)		294,042
Gain or loss on disposal of financial instruments			635,358		-			-			635,358
Gain or loss on valuation of investment securities			-		104,505			-			104,505
Gain or loss on valuation of financial instruments			-		(1,427	)		-			(1,427	)
Dividend income			-		1,463			-			1,463
Total	₩		1,336,378		104,541			(320,254	)		1,120,665

F-142

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

		2022
		Financial assets at amortized cost			Financial assets at fair value through profit or loss			Financial liabilities at amortized cost			Total
		(In thousands of Korean won)
Interest income	₩		520,526			-			-			520,526
interest expense			-			-			(96,225	)		(96,225	)
Foreign currency differences			(191,335	)		-			3,333			(188,002	)
Gain or loss on disposal of investment securities			-			1,788			-			1,788
Gain or loss on valuation of investment securities			-			(115,969	)		-			(115,969	)
Gain or loss on valuation of financial instruments			-			830			-			830
Dividend income			-			700			-			700
Total	₩		329,191			(112,651	)		(92,892	)		123,648

22. Capital and reserves

A. Share capital and share premium

Details of share capital and share premium as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
		(In Korean won and number of shares)
Number of authorized shares			900,000		900,000
Value per share	₩		5,000		5,000
Number of shares issued			100,000		100,000
Common shares	₩		500,000,000		500,000,000

F-143

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

i. Ordinary shares

Holders of these shares are entitled to dividends as declared from time to time and are entitled to one vote per share at general meetings of the Group.

ii. Treasury shares

On March 24, 2023, the Group acquired a 15.6% interest of the Parent Company’s issued shares for approximately Korean Won 27,128,262 thousand.

Details of treasury shares for the years ended December 31, 2024, 2023 and 2022 are as follows:

		2024				2023				2022
		Number of shares		Carrying amount		Number of shares		Carrying amount		Number of shares		Carrying amount
		(In Korean won and number of shares)
Beginning balance	₩		15,582		27,128,262		-		-		-		-
Acquisition			-		-		15,582		27,128,262		-		-
Ending balance	₩		15,582		27,128,262		15,582		27,128,262		-		-

B. Other components of equity

		December 31, 2024			December 31, 2023
		(In thousands of Korean won)
Remeasurements of defined benefit liability	₩		181,515			151,921
Other capital surplus			(746,300	)		(746,300	)
Treasury shares			(27,128,262	)		(27,128,262	)
Other components of equity	₩		(27,693,047	)		(27,722,641	)

F-144

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

23. Capital management

The Group’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Group monitors capital using a ratio of ‘net debt’ to ‘total equity’. Net debt is calculated as total liabilities (as shown in the statement of financial position) less cash and cash equivalents. The Group’s net debt to adjusted equity ratio as of December 31, 2024 and 2023 is as follows.

		December 31, 2024			December 31, 2023
		(In thousands of Korean won)
Total liabilities	₩		34,424,674			38,697,788
Less: Cash and cash equivalents			(4,150,572	)		(8,585,634	)
Net debt			30,274,102			30,112,154
Total equity	₩		8,175,613			11,689,723
Net debt to total equity ratio			3.70			2.58

24. Borrowings/payable and Loans/receivable

Borrowings as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Current Liabilities
Short-term borrowings	₩		3,764,000		3,330,000
Current portion of long-term borrowings, net			2,108,956		24,960
Current lease liabilities (*)			1,786,577		1,630,482
Total	₩		7,659,533		4,985,442
Non-Current liabilities
Long-term borrowings, excluding current portion, net	₩		-		2,008,041
Non-current lease liabilities (*)			9,302,661		12,878,027
Total	₩		9,302,661		14,886,068

(*) The interest rate related to lease liabilities reflects the incremental borrowing rate based on the Group’s credit. The amount of interest expense related to lease liabilities incurred during the year ended December 31, 2024 is Korean Won 851,543 thousand (2023: Korean Won 1,047,738 thousand). Additionally, the amount of short-term lease payments and low-value assets lease payments not included in the measurement of lease liabilities during 2024 are Korean Won 33,846 thousand (2023: Korean Won 23,157 thousand)

F-145

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

A. Terms and repayment schedule

The terms and conditions of outstanding borrowings as of December 31, 2024 and 2023 are as follows:

				December 31, 2024				December 31, 2023
				(In thousands of Korean won)
	Currency	Nominal interest rate	Maturity	Face value		Carrying amount		Face value		Carrying amount
Secured borrowings (*1)	KRW	KORIBOR +1.75%	20-Dec-25		500,000		500,000		500,000		500,000
Secured borrowings (*2)	KRW	5.95%	27-Feb-25		1,000,000		1,000,000		1,000,000		1,000,000
Secured borrowings (*3)	KRW	5.55%	27-Jun-25		1,000,000		1,000,000		1,000,000		1,000,000
Secured borrowings (*4)	KRW	KORIBOR +2.39%	16-Sep-25		100,000		18,720		100,000		43,680
Secured borrowings (*5)	KRW	4.98%	02-Dec-25		400,000		400,000		-		-
Unsecured borrowings	KRW	4.60%	31-Dec-25		700,000		700,000		700,000		700,000
Unsecured borrowings	KRW	4.60%	31-Dec-25		2,200,000		2,090,236		2,200,000		1,989,321
Unsecured borrowings	KRW	4.60%	31-Dec-25		164,000		164,000		130,000		130,000
Total interest-bearing liabilities					6,064,000		5,872,956		5,630,000		5,363,001

(*1)	As of December 31, 2024, the Group is provided a guarantee of Korean Won 458,626 thousand (2023: Korean Won 412,775 thousand) by the CEO of the Group. The Group provided the intellectual property(IP) rights as collateral.
(*2)	As of December 31, 2024, the Group is provided a guarantee of Korean Won 1,200,000 thousand (2023: Korean Won 1,200,000 thousand) from the CEO of the Group.
(*3)	As of December 31, 2024, the Group is provided a guarantee of Korean Won 900,000 thousand (2023: Korean Won 900,000 thousand) by Korea Credit Guarantee Fund.
(*4)	As of December 31, 2024, the Group provides machines with a carrying amount of Korean Won 113,874 thousand (2023: Korean Won 133,948 thousand) as collaterals for the secured borrowings with equal amortization repayment condition.
(*5)	As of December 31, 2024, the Group is provided a building as collateral of Korean Won 480,000 thousand by the key management personnel.

F-146

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

B. Terms and collection schedule

The terms and conditions of outstanding loans as of December 31, 2024 and 2023 are as follows:

				December 31, 2024				December 31, 2023
				(In thousands of Korean won)
	Currency	Nominal interest rate	Maturity (*6)	Face value		Carrying amount		Face value		Carrying amount
Cho Mi Kyung (*1)	KRW	2.00%	31-Aug-25		400,000		-		400,000		-
Bonanza Pictures	KRW	4.60%	31-Mar-21		30,000		-		30,000		30,000
Coam payments (*2)	KRW	12.00%	31-May-22		-		-		500,000		500,000
Jung Kyung Han	KRW	3.00%	14-Sep-23		30,000		30,000		30,000		30,000
YY entertainment (*3)	KRW	4.60%	31-Dec-23		150,000		-		150,000		150,000
Second plan	KRW	4.60%	31-Dec-23		30,000		30,000		30,000		30,000
Second plan (*4)	KRW	4.60%	31-Dec-25		100,000		100,000		-		-
Rainier (*5)	KRW	4.60%	31-Dec-25		150,000		-		-		-
Beacon Holdings, Inc.	KRW	4.60%	31-Dec-25		100,000		100,000		-		-
K Wave Media Ltd.	KRW	4.60%	23-Dec-25		95,000		95,000		-		-
Second plan (*4)	KRW	4.60%	31-Dec-25		264,400		264,400		76,900		76,900
Studio Coite (*4)	KRW	4.60%	31-Dec-25		43,000		43,000		43,000		43,000
Beacon Holdings, Inc. (*4)	KRW	4.60%	31-Dec-25		125,000		125,000		-		-
Total					1,517,400		787,400		1,259,900		859,900

(*1) The Group recognized a full provision for the balance of loan and accrued interest income as of January 1, 2021. Accrued interest income as of December 31, 2024 and December 31, 2023 are Korean Won 26,685 thousand and Korean Won 26,685 thousand, respectively.

(*2) The Group is provided a joint guarantee by third party.

(*3) The Group recognized a full provision for the balance of loan and accrued interest income as of December 31, 2024. Accrued interest income as of December 31, 2024 are Korean Won 6,333 thousand.

(*4) The contract is automatically extended by one year if the loan is not collected until maturity date.

(*5) The Group recognized a full provision for the balance of loan and accrued interest income as of December 31, 2024. Accrued interest income as of December 31, 2024 are Korean Won 3,789 thousand.

(*6) If the repayment is not made by the due date, the repayment due date will be automatically extended for one year.

25. Trade and other payables

Trade and other payables as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
		(In thousands of Korean Won)
Trade payables	₩		10,073,408		9,536,869
Other payables			1,247,271		2,016,077
Accrued expenses			2,719,073		2,854,664
Trade and other non-current payables			21,694		335,871
Total	₩		14,061,446		14,743,481

F-147

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

26. Provisions

Provisions for the years ended December 31, 2024, 2023 and 2022 are as follows:

		2024			2023			2022
		(In thousands of Korean won)
Site restoration	₩
Beginning of the year			674,148			711,086			353,117
Provisions made during the year			12,578			26,833			350,837
Interest expense			16,755			17,195			9,262
Lease termination			(49,842	)		(78,722	)		-
Lease modification			(18,419	)		(2,244	)		-
Provisions used during the year			(25,269	)		-			(2,130	)
Ending of the year	₩		609,951			674,148			711,086

The provision for building restoration relates mainly to buildings leased during 2024, 2023, and 2022. The provision has been estimated based on historical data associated with similar buildings.

F-148

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

27. Financial Instruments – Fair values and risk management

A. Accounting classifications and fair values

The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.

The carrying amounts of financial instruments by category as of December 31, 2024 are as follows:

		Fair value		Level 1		Level 2		Level 3		Total
		(In thousands of Korean won)
Financial assets at fair value
Guaranteed Return Insurances (short-term) (*)	₩		13,524		-		13,524		-		13,524
Guaranteed Return Insurances (long-term) (*)			322,538		-		322,538		-		322,538
Long-term investment securities			730,390		143,992		-		586,398		730,390
Total	₩		1,066,452		143,992		336,062		586,398		1,066,452

(*) The fair value of guaranteed return insurances classified at Level 2 in the fair value hierarchy is determined using an evaluation of surrender proceeds received from financial institutions.

The carrying amounts of financial instruments by category as of December 31, 2023 are as follows:

		Fair value		Level 1		Level 2		Level 3		Total
		(In thousands of Korean won)
Financial assets at fair value
Guaranteed Return Insurances (short-term) (*)	₩		9,391		-		9,391		-		9,391
Guaranteed Return Insurances (long-term) (*)			307,729		-		307,729		-		307,729
Long-term investment securities			640,739		201,729		-		439,010		640,739
Total	₩		957,859		201,729		317,120		439,010		957,859

(*) The fair value of guaranteed return insurances classified at Level 2 in the fair value hierarchy is determined using an evaluation of surrender proceeds received from financial institutions.

F-149

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

B. Measurement of fair values

Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

● Level 1: quoted prices (unadjusted) in active markets for identical asset or liability

● Level 2: all inputs other than quoted prices included in Level 1 that are observable (either directly that is, prices, or indirectly that is, derived from prices) for the asset or liability

● Level 3: unobservable inputs for the asset or liability.

The fair value of financial instruments traded in an active market is determined based on the quoted market price as of the end of the reporting period. If the quoted prices are readily and regularly available through exchanges, sellers, brokers, industry groups, rating agencies or regulators and such prices represent actual market transactions that occur regularly between independent parties, they are considered active markets.

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. These valuation techniques use as much market observable information as possible and use the least amount of group-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:

● Market price or dealer price of a similar financial instrument

● The fair value of derivative instruments is determined by discounting the amount to present value using the leading exchange rate as of the end of the reporting period

C. Financial risk management

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

i. Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterpart to a financial instrument fails to meet its contractual obligations and arises principally from the Group’s receivables from customers. In order to manage credit risk, the Group regularly evaluate the credit worthiness of each customer or counterparty considering the party’s financial information, past experience, its own trading records and other factors. In relation to the impairment of financial assets subsequent to initial recognition, the Group recognizes the changes in expected credit loss(“ECL”) in profit or loss at each reporting date. The carrying amount of a financial asset represents the maximum exposure to credit risk.

F-150

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

The maximum exposure to credit risk of the Group as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Cash and cash equivalents	₩		4,150,572		8,585,634
Short-term financial instruments			410,000		410,000
Accounts receivable, net			9,340,923		7,105,177
Short-term loans, net			787,400		859,900
Other current financial assets			40,000		203,266
Other non-current financial assets			1,803,220		1,390,486
Total	₩		16,532,115		18,554,463

Cash and cash equivalents and short-term financial instruments are deposited in financial institutions with strong credit rating. Accounts receivables of the Subsidiary are mainly due from payment processing companies and platform service providers, which in the Group believes have low levels of credit risk. In addition, the Parent Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Group has established a credit policy under which each new customer is analyzed individually before the Group’s standard payment and delivery terms and conditions are offered. The Group’s review includes external ratings, if they are available, financial statements, credit agency information, industry information and in some cases bank references.

The Group monitors customer credit risk, customers are grouped according to their credit characteristics, including whether they are an individual or a legal entity, their geographic location, industry, trading history with the Group and existence of previous financial difficulties. The Group does not require collateral in respect of trade and other receivables. Expected credit losses (ECLs) and credit risk exposures for accounts as of December 31, 2024 and 2023 are as follows:

- Accounts receivables

As of December 31, 2024	Expected loss rate		Carrying amount		Loss allowance
			(In thousands of Korean won)
Not due or overdue less than 90 days	0.35%	₩		9,186,195		32,453
More than 90 days ~ Less than 180 days	3.95%			12,952		512
More than 180 days ~ Less than 270 days	13.01%			36,013		4,686
More than 270 days ~ Less than 1 year	0.00%			7,374		-
More than 1 year	99.13%			703,223		697,666
Total		₩		9,945,757		735,317

As of December 31, 2023	Expected loss rate		Carrying amount		Loss  allowance
			(In thousands of Korean won)
Not due or overdue less than 90 days	0.41%	₩		6,498,419		26,871
More than 90 days ~ Less than 180 days	0.00%			4,229		-
More than 180 days ~ Less than 270 days	32.14%			410,028		131,793
More than 270 days ~ Less than 1 year	0.00%			-		-
More than 1 year	100.00%			279,491		279,491
Total		₩		7,192,167		438,155

F-151

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

ii. Liquidity risk

Liquidity risk management includes the maintenance of sufficient cash and marketable securities, the availability of funds from appropriately committed credit lines, and the ability to settle market positions.

Financial liabilities of the Group by maturity according to the remaining period from December 31, 2024 to the contractual maturity date are as follows:

		December 31, 2024
		Carrying Amount		Less than 3 months		3 months ~1 year		1~2 years		2~5 years		More than 5 years		Total
		(In thousands of Korean won)
Non-derivative financial liabilities
Trade payables	₩		10,073,408		10,073,408		-		-		-		-		10,073,408
Other payable			1,239,546		1,239,544		-		2		-		-		1,239,546
Accrued expense			1,967,458		1,967,458		-		-		-		-		1,967,458
Secured borrowings			2,918,720		1,040,954		1,960,815		-		-		-		3,001,769
Non-secured borrowings			2,954,236		34,658		3,169,901		-		-		-		3,204,559
Lease liabilities			11,089,239		635,413		1,824,646		2,361,688		5,546,102		2,875,871		13,243,720
Other financial liabilities			280,000		50,000		80,000		130,000		20,000		-		280,000
Total	₩		30,522,607		15,041,435		7,035,362		2,491,690		5,566,102		2,875,871		33,010,460

Financial liabilities of the Group by maturity according to the remaining period from December 31, 2023 to the contractual maturity date are as follows:

		December 31, 2023
		Carrying Amount		Less than 3 months		3 months ~1 year		1~2 years		2~5 years		More than 5 years		Total
		(In thousands of Korean won)
Non-derivative financial liabilities
Trade payables	₩		9,536,869		9,527,035		9,834		-		-		-		9,536,869
Other payable			2,144,395		1,452,795		557,548		134,052		-		-		2,144,395
Accrued expense			539,120		539,048		72		-		-		-		539,120
Secured borrowings			2,543,680		1,038,189		1,555,661		19,206		6,305		-		2,619,361
Non-secured borrowings			2,819,321		34,654		934,725		2,301,200		-		-		3,270,579
Lease liabilities			14,508,509		752,242		1,882,864		2,499,840		6,927,468		6,399,847		18,462,261
Other non-current financial liabilities			200,000		-		-		200,000		-		-		200,000
Total	₩		32,291,894		13,343,963		4,940,704		5,154,298		6,933,773		6,399,847		36,772,585

F-152

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

iii. Market risk

(a) Foreign exchange risk

The Group is exposed to foreign exchange risk arising from cash equivalents and accounts receivables primarily with respect to the US Dollar and Japanese Yen, Chinese Yuan, Brazilian Real, Singapore Dollar, Malaysian Ringgit, Philippine Peso, and Thai Baht.

Financial assets and liabilities are exposed to foreign currency risk as of December 31, 2024 and 2023 are as follows:

	December 31, 2024
	Assets in foreign currency		Liabilities in foreign currency		Assets in Korean Won		Liabilities in Korean Won
	(Individual amounts in each foreign currency)				(In thousands of Korean won)
USD		55,174		222		81,105		327
JPY		275,425,381		7,665,387		2,579,304		71,785
CNY		157,619		-		31,724		-
BRL		340		-		81		-
SGD		1,051		-		1,136		-
MYR		10,721		-		3,530		-
PHP		910		-		23		-
THB		90,877		-		3,908		-
Total						2,700,811		72,112

	December 31, 2023
	Assets in foreign currency		Liabilities in foreign currency		Assets in Korean Won		Liabilities in Korean Won
	(Individual amounts in each foreign currency)				(In thousands of Korean won)
USD		60,191		-		79,018		-
JPY		805,407,622		5,448,213		7,350,633		49,724
Total						7,429,651		49,724

F-153

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

The Group measures foreign exchange risk as a 10% fluctuation in the exchange rate of each foreign currency, which reflects the management’s assessment of the risk of exchange rate fluctuation that can be reasonably occur. The impact of a 10% fluctuation in foreign currency exchange rates on the Group’s profit or loss (before income tax effects) for the years ended December 31, 2024 and 2023 are as follows:

	2024					2023
	Increased by 10%		Decreased by 10%			Decreased by 10%		Decreased by 10%
	(In thousands of Korean won)
USD		8,078		(8,078	)		7,902		(7,902	)
JPY		250,752		(250,752	)		730,091		(730,091	)
CNY		3,172		(3,172	)
BRL		8		(8	)		-		-
SGD		114		(114	)		-		-
MYR		353		(353	)		-		-
PHP		2		(2	)		-		-
THB		391		(391	)		-		-
Total		262,870		(262,870	)		737,993		(737,993	)

The sensitivity analysis is based on monetary assets and liabilities denominated in foreign currencies other than the functional currency as of the end of the reporting period.

(b) Interest rate risk

The sensitivity analysis is based on borrowing under variable interest rate conditions as of December 31, 2024 and 2023.

		December 31, 2024					December 31, 2023
		Increased by 100 bp		Decreased by 100 bp			Increased by 100 bp		Decreased by 100 bp
		(In thousands of Korean won)
Interest	₩		5,070		(5,070	)		5,329		(5,329)

F-154

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

28. Non-controlling interests

A. Summary of financial statements

Summary of financial statements of the Group’s subsidiary that has material non-controlling interest, before any intercompany transactions eliminations for the years ended December 31, 2024, 2023 and 2022 are as follows:

		2024			2023			2022
		(In thousands of Korean won)
NCI percentage			32.9	%		32.9	%		32.9	%
Current assets	₩		1,623,260			1,873,566			2,114,532
Non-current assets			15,973,466			21,776,729			24,406,198
Current liabilities			10,443,166			6,838,358			6,810,043
Non-current liabilities			8,946,049			15,859,171			17,514,118
Net assets			(1,792,489	)		952,766			2,196,569
Revenue			14,630,426			17,709,332			17,163,659
Profit (loss)			(3,101,420	)		(1,140,267	)		(772,658	)
OCI			44,084			109,558			143,829
Total comprehensive income	₩		(3,057,335	)		(1,030,709	)		(628,829	)
Cash flows from operation activities			568,367			(94,618	)		1,909,605
Cash flows from investment activities			(293,624	)		(860,374	)		(2,603,987	)
Cash flows from financing activities			(375,958	)		480,119			115,318
Net increase(decrease) in cash and cash equivalents	₩		(101,215	)		(474,873	)		(579,064	)

B. Movement in NCI

Movement in NCI for the years ended December 31, 2024, 2023 and 2022 are as follows:

		2024			2023			2022
		(In thousands of Korean won)
Net assets attributable to NCI at beginning of the year	₩		411,556			720,382			1,273,314
Profit allocated to NCI			(1,016,820	)		(344,836	)		(305,093	)
OCI allocated to NCI			14,490			36,011			47,275
Transaction with non-controlling interest			-			-			(295,114	)
Net assets attributable to NCI at the end of the year	₩		(590,774	)		411,556			720,382

F-155

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

29. Leases

A. Leases as lessee

The Group leases buildings and vehicles. The leases typically run for a period of 1 ~5 years, with an option to renew or terminate the lease after that date. The Group also leases water purifiers, copy machines, and others with contract terms of one to three years. These leases are short-term and/or leases of low-value items. The Group has elected not to recognize right-of-use assets and lease liabilities for these leases. Information about leases for which the Group is a lessee is presented below.

i. Right-of-use assets

Right-of-use assets related to leased properties that do not meet the definition of investment property are presented as property, plant and equipment.

Details of right-of-use assets and lease liabilities recognized in the consolidated statements of financial position as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Right-of-use assets (Acquisition price)
Buildings	₩		13,168,074		11,783,393
Vehicles			548,856		320,813
Total	₩		13,716,930		12,104,206

		December 31, 2024			December 31, 2023
		(In thousands of Korean won)
Right-of-use assets (Accumulated depreciation)
Buildings	₩		(4,895,688	)		(2,514,457	)
Vehicles			(169,795	)		(163,928	)
Total	₩		(5,065,483	)		(2,678,385	)

		December 31, 2024			December 31, 2023
		(In thousands of Korean won)
Right-of-use assets (Accumulated impairment loss)
Buildings	₩		(216,464	)		-
Vehicles			-			-
Total	₩		(216,464	)		-

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Right-of-use assets (Net book value)
Buildings	₩		8,055,922		9,268,936
Vehicles			379,061		156,885
Total	₩		8,434,983		9,425,821

F-156

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

Changes in right-of-use assets for the years ended December 31, 2024, 2023 and 2022 are as follows:

		2024
		Building			Vehicles			Total
		(In thousands of Korean won)
Balance as of January 1, 2024	₩		9,268,936			156,885			9,425,821
Depreciation			(1,307,211	)		(96,847	)		(1,404,058	)
Acquisitions			56,020			363,914			419,934
Transfer			2,385,812			-			2,385,812
Impairment loss			(216,464	)		-			(216,464	)
Lease termination			(527,731	)		(44,891	)		(572,622	)
Lease modification			(1,603,440	)		-			(1,603,440	)
Balance as of December 31, 2024	₩		8,055,922			379,061			8,434,983

		2023
		Building			Vehicles			Total
		(In thousands of Korean won)
Balance as of January 1, 2023	₩		14,941,069			148,502			15,089,571
Depreciation			(1,627,945	)		(76,136	)		(1,704,081	)
Acquisitions			489,855			88,554			578,409
Transfer			(3,483,371	)		(1	)		(3,483,372	)
Lease termination			(1,009,424	)		-			(1,009,424	)
Lease modification			(41,248	)		(4,034	)		(45,282	)
Balance as of December 31, 2023	₩		9,268,936			156,885			9,425,821

		2022
		Building			Vehicles			Other			Total
		(In thousands of Korean won)
Balance as of January 1, 2022	₩		7,791,572			158,100			25,119			7,949,672
Depreciation			(1,327,134	)		(62,117	)		(1,970	)		(1,389,251	)
Acquisitions			8,476,631			52,519						8,529,150
Transfer									(23,149	)		-
Balance as of December 31, 2022	₩		14,941,069			148,502			-			15,089,571

F-157

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

ii. Amounts recognized in profit or loss

Amounts recognized in profit or loss for the years ended December 31, 2024, 2023 and 2022 are as follows:

		2024		2023		2022
		(In thousands of Korean won)
Interest expense relating to lease liabilities (included in finance cost)	₩		851,543		1,047,738		704,560
Expense relating to short-term leases			17,763		6,268		-
Expense relating to leases of low-value assets excluding short-term leases			16,083		16,889		11,285
Gains on disposal of right-of-use assets			131,193		1,042,833		-
Expense relating to variable lease payments not included in the measurement of lease liabilities	₩		398,671		853,983		792,174

iii. Amounts recognized in statement of cash flows

Amounts recognized in statements of cash flows for the years ended December 31, 2024, 2023 and 2022 are as follows:

		2024		2023		2022
		(In thousands of Korean won)
Total cash outflows of leases	₩		2,947,475		3,536,265		2,594,294

iv. Extension options

Some property leases contain extension options exercisable by the Group. Where practicable, the Group seeks to include extension options in new leases to provide operational flexibility. The extension options held are exercisable only by the Group and not by the lessors. The Group assesses at the lease commencement date whether it is reasonably certain to exercise the extension options. The Group reassesses whether it is reasonably certain to exercise the options if there is a significant event or significant changes in circumstances within its control.

The Group has entered into a contract to pay revenue-based rent payment for a several lease agreements. If the revenue of the store that entered into the contract increase, the rent to be paid may proportionally increase. According to the contract, it is expected to pay 9 to 18% of sales will be paid.

F-158

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

B. Leases as lessor

i. Operating lease

The Group leases out its investment property consisting of its leased property.

The Group has classified these leases as operating leases because they do not transfer substantially all the risk and rewards incidental to the ownership of the assets. Note 18 sets out information about the operating leases of investment property.

Rental income recognized by the Group during the year ended December 31, 2024 was Korean Won 808,123 thousand (2023: 283,983, 2022: nil).

Maturity analysis of lease payments, showing the undiscounted lease payments to be received after December 31, 2024 and 2023 as follows:

		2024		2023
		(In thousands of Korean won)
Less than 1 year	₩		59,315		830,723
1 ~ 2 years			-		549,062
Total	₩		59,315		1,379,785

F-159

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

30. Commitments

A. Key commitments

Key commitments the Group has entered into with financial institutions and others as of December 31, 2024 are as follows:

Financial institutions	Categories		Credit limit		Borrowings amount
			(In thousands of Korean won)
Industrial Bank of Korea	Small and medium-sized enterprise financing (*1)	₩		2,000,000		-
Industrial Bank of Korea	Small and medium-sized enterprise financing (*2)			500,000		500,000
Industrial Bank of Korea	Small and medium-sized enterprise financing (*3)			1,000,000		1,000,000
Industrial Bank of Korea	Small and medium-sized enterprise financing (*4)			1,000,000		1,000,000
Industrial Bank of Korea	Small and medium-sized enterprise financing (*5)			100,000		18,720
Industrial Bank of Korea	Small and medium-sized enterprise financing (*6)			400,000		400,000
Shinhan Bank	Revolving credit (*7)			500,000		-
Total		₩		5,500,000		2,918,720

(*1) The Group is provided a joint guarantee of Korean Won 2,400,000 thousand by the CEO of the Group.

(*2) The Group is provided a joint guarantee of Korean Won 458,526 thousand by the CEO of the Group. Also, the Group provides intellectual property (IP) rights of Korean Won 676,000 thousand as collateral for the borrowing.

(*3) The Group is provided a joint guarantee of Korean Won 1,200,000 thousand by the CEO of the Group.

(*4) The Group is provided a guarantee of Korean Won 900,000 thousand by Korea Credit Guarantee Fund.

(*5) The Group provides machinery as collateral for the borrowing.

(*6) The Group is provided a building as collateral of Korean Won 480,000 thousand for the borrowings by the key management personnel.

(*7) The Group is provided a joint guarantee of Korean Won 600,000 thousand by the CEO of the Group.

(*8) The CEO of the Group provides a joint guarantee for the vehicle lease to Mirae Asset Securities as of December 31, 2024.

F-160

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

Key commitments the Group has entered into with financial institutions and others as of December 31, 2023 are as follows:

Financial institutions	Categories		Credit limit		Borrowings amount
			(In thousands of Korean won)
Industrial Bank of Korea	Small and medium-sized enterprise financing (*1)	₩		2,000,000		-
Industrial Bank of Korea	Small and medium-sized enterprise financing (*2)			500,000		500,000
Industrial Bank of Korea	Small and medium-sized enterprise financing (*3)			1,000,000		1,000,000
Industrial Bank of Korea	Small and medium-sized enterprise financing (*4)			1,000,000		1,000,000
Industrial Bank of Korea	Small and medium-sized enterprise financing (*5)			100,000		43,680
Shinhan Bank	Revolving credit (*6)			500,000		-
Total		₩		5,100,000		2,543,680

(*1) The Group is provided a joint guarantee of Korean Won 2,400,000 thousand by the CEO of the Group.

(*2) The Group is provided a joint guarantee of Korean Won 412,775 thousand by the CEO of the Group. Also, the Group provides intellectual property (IP) rights of Korean Won 676,000 thousand as collateral for the borrowing.

(*3) The Group is provided a joint guarantee of Korean Won 1,200,000 thousand by the CEO of the Group.

(*4) The Group is provided a guarantee of Korean Won 900,000 thousand by Korea Credit Guarantee Fund.

(*5) The Group provides machinery as collateral for the borrowing.

(*6) The Group is provided a joint guarantee of Korean Won 600,000 thousand by the CEO of the Group.

B. Guarantees by individuals

Details of guarantees provided by individuals other than related parties as of December 31, 2024 are as follows:

Guaranteed by	Details of guarantee		Guarantee limit
			(In thousands of Korean won)
Seoul Guarantee Insurance Company	Performance guarantee, etc.	₩		814,371
Korea credit guarantee fund	Loan guarantee			900,000
Total		₩		1,714,371

Details of guarantees provided by individuals other than related parties as of December 31, 2023 are as follows:

Guaranteed by	Details of guarantee		Guarantee limit
			(In thousands of Korean won)
Seoul Guarantee Insurance Company	Performance guarantee, etc.	₩		808,693
Korea credit guarantee fund	Loan guarantee			900,000
Total		₩		1,708,693

F-161

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

C. List of assets provided as collateral

List of assets that the Group provided as collateral as of December 31, 2024 and 2023 are as follows:

	Counterparty receiving the collateral	usage restrictions		December 31, 2024		December 31, 2023
				(In thousands of Korean won)
Short-term financial instruments	Industrial Bank of Korea	Provided as collateral for employee loans (*)	₩		300,000		300,000
Machinery	Industrial Bank of Korea	Provided as collateral for short-term   borrowings			113,874		133,948

(*) The Group provided a joint guarantee of Korean Won 231,000 thousand as of December 31, 2024. (December 31, 2023: Korean Won 231,000 thousand)

The Group provides intellectual property (IP) rights as collateral for the borrowing.

D. Other commitments

On March 31, 2023, the CEO, who is the dominant shareholder of the Group, entered into an equity interest exchange agreement with K Enter Holdings, for the purpose of listing on the NASDAQ through a merger with a SPAC company. The equity interest exchange agreement is effective upon the approval of the shareholders of K Enter Holdings and SPAC. Upon the approval, the CEO of the Group will exchange 83,418 shares with the equity interest of K Enter Holdings. Following the equity interest exchange transaction, the Parent Company is expected to be a subsidiary of K Enter Holdings.

On March 31, 2023, the CEO agreed to enter into a call option agreement prior to closing date of equity interest exchange agreement with K Enter Holdings, under which the CEO of Group will be granted with an option to acquire the shares of Play F&B Co., Ltd held by the Group within three years from the closing date of equity interest exchange agreement.

F-162

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

31. Statement of Cash flows

Adjustments for income and expenses from operating activities for the years ended December 31, 2024, 2023 and 2022 are as follows:

		2024			2023			2022
		(In thousands of Korean won)
Depreciation	₩		2,817,673			2,921,232			2,082,277
Amortization			356,010			362,800			352,996
Impairment loss on Property, Plant and Equipment			964,626			2,246			15,583
Bad debt expenses			297,162			500,000			696,977
Reversal of bad debt expenses			-			(328,439	)		-
Other Bad debt expenses			347,419			-			8,000
Losses on valuation of short-term financial instruments			-			6			421
Losses on valuation of long-term financial instruments			115			8,717			5,263
Losses on valuation of long-term investment securities			60,275			12,395			118,607
Losses on disposal of long-term investment securities			-			-			4,090
Gains on disposal of long-term investment securities			-			-			(5,878	)
Gains on valuation of long-term financial instruments			(6,368	)		(7,241	)		(6,514	)
Gains on valuation of long-term investment securities			(149,926	)		(116,900	)		(2,638	)
Gains on disposal of short-term financial instruments			-			(12,819	)		-
Gains on disposal of long-term financial instruments			-			(622,539	)		-
Gains on valuation of short-term financial instruments			(33	)		(55	)		-
Inventory valuation loss (gains)			1,578,040			(397,995	)		1,143,098
Losses on foreign currency translation			6,447			26,064			149,586
Gains on foreign currency translation			(88,458	)		(376,295	)		(154,896	)
Gains on disposal of right-of-use assets			(131,193	)		(1,042,833	)		-
Losses on disposal of property, plant and equipment			329,882			31,975			-
Gains on disposal of property, plant and equipment			(6,100	)		(928	)		-
Interest expenses			1,257,378			1,385,142			810,047
Interest income			(287,285	)		(406,933	)		(520,526	)
Dividend income			(1,463	)		(1,462	)		(700	)
Miscellaneous expenses			-			-			8,649
Miscellaneous income			-			-			(6,028	)
Share-based payments expenses (reversal)			(180,127	)		(25,758	)		152,795
Severance Benefits			394,173			545,880			569,203
Tax expenses			(747,380	)		760,779			2,687,108
Total	₩		6,810,867			3,217,039			8,107,520

F-163

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

Changes in assets and liabilities from operating activities for the years ended December 31, 2024, 2023 and 2022 are as follows:

		2024			2023			2022
		(In thousands of Korean won)
Other non-current non-financial assets	₩		698,657			-			-
Other current non-financial liabilities			593,949			299,334			9,264
Other current assets			54,560			(2,708,583	)		257,134
Accounts receivable – trade, net			(2,665,062	)		7,951,197			9,010,819
Accounts receivable — other, net			(346,964	)		(303,948	)		(303,462	)
Trade and other payables			(447,975	)		(19,972,438	)		4,579,752
Inventories, net			(1,971,804	)		3,329,293			(2,698,635	)
Defined benefit liabilities			(496,920	)		(658,367	)		(293,592	)
Value added tax receivables			145,204			1,965,135			727,480
Total	₩		(4,436,355	)		(10,098,377	)		11,288,760

Significant non-cash transactions for the years ended December 31, 2024, 2023 and 2022 are as follows:

		2024		2023		2022
		(In thousands of Korean won)
Recognition of restoration provision	₩		-		26,833		350,837
Transfer of construction in progress			-		9,950		2,613,766
Reclassification of long-term borrowings			2,218,720		24,960		24,960
Reclassification of Non-current lease liabilities			1,744,031		1,911,047		1,891,507
Increase in Lease liabilities			364,731		612,220		9,301,914
Offset of loans			42,000		14,804,782		-
Offset of other receivables			-		646,380		-
Loan Reassignment: Involvement of the Parent company’s CEO			-		2,900,000		-
Payables related to the acquisition of treasury shares			-		1,000,000		-
Reclassification of Investment properties			2,360,275		3,483,371		-

F-164

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

The movements of liabilities to cash flows arising from financing activities for the years ended December 31, 2024, 2023 and 2022 are as follows:

		Short-term borrowings			Current portion of long-term borrowings			Long-term borrowings			Current lease liabilities			Non-current lease liabilities			Total
		(In thousands of Korean won)
Balance at 1 January 2022			2,500,000			24,960			68,640			837,785			8,362,848			11,794,233
Changes from financing cash flows
Repayment of borrowings			-			(24,960	)		-			-			-			(24,960	)
Payment of lease liabilities			-			-			-			(1,088,224	)		-			(1,088,224	)
Reclassification (*1)			-			24,960			(24,960	)		1,880,677			(1,891,508	)		(10,831	)
Total			-			-			(24,960	)		792,453			(1,891,508	)		(1,124,015	)
Other changes																		-
New leases			-			-			-			-			9,301,914			9,301,914
Interest expense			-			-			-			704,560			-			704,560
Interest paid			-			-			-			(704,560	)		-			(704,560	)
Total			-			-			-			-			9,301,914			9,301,914
Balance at 31 December 2022			2,500,000			24,960			43,680			1,630,238			15,773,254			19,972,132
Balance at 1 January 2023	₩		2,500,000			24,960			43,680			1,630,238			15,773,254			19,972,132
Changes from financing cash flows																		-
Proceeds from borrowings			130,000			-			-			-			-			130,000
Repayment of borrowings			-			(24,960	)		-			-			-			(24,960	)
Payment of lease liabilities			-			-			-			(1,617,756	)		-			(1,617,756	)
Reclassification			-			24,960			(24,960	)		1,911,047			(1,911,047	)		-
Total	₩		130,000			-			(24,960	)		293,291			(1,911,047	)		(1,512,716	)
Other changes																		-
Borrowing assumed (*1)			700,000			-			2,200,000			-			-			2,900,000
Present value discount			-			-			(282,734	)		-			-			(282,734	)
New leases			-			-			-			-			612,220			612,220
Lease termination / lease modification			-			-			-			(293,047	)		(1,596,400	)		(1,889,447	)
Interest expense			-			-			72,055			1,047,738			-			1,119,793
Interest paid			-			-			-			(1,047,738	)		-			(1,047,738	)
Total	₩		700,000			-			1,989,321			(293,047	)		(984,180	)		1,412,094
Balance at 31 December 2023	₩		3,330,000			24,960			2,008,041			1,630,482			12,878,027			19,871,510
Balance at 1 January 2024	₩		3,330,000			24,960			2,008,041			1,630,482			12,878,027			19,871,510
Changes from financing cash flows
Proceeds from borrowings			870,000			-			-			-			-			870,000
Repayment of borrowings			(394,000	)		(24,960	)		-			-			-			(418,960	)
Payment of lease liabilities			-			-			-			(1,663,415	)		-			(1,663,415	)
Reclassification			-			2,218,720			(2,218,720	)		1,744,031			(1,744,031	)		-
Total			476,000			2,193,760			(2,218,720	)		80,616			(1,744,031	)		(1,212,375	)
Other changes																		-
Offset of loans			(42,000	)		-			-			-			-			(42,000	)
Present value discount			-			(109,764	)		210,679			-			-			100,915
New leases			-			-			-			10,081			354,650			364,731
Lease termination/lease modification			-			-			-			65,398			(2,185,986	)		(2,120,588	)
Interest expense			-			-			-			851,543			-			851,543
Interest paid			-			-			-			(851,543	)		-			(851,543	)
Total			(42,000	)		(109,764	)		210,679			75,479			(1,831,336	)		(1,696,942	)
Balance at 31 December 2024			3,764,000			2,108,956			-			1,786,577			9,302,660			16,962,193

(*1) Prior to 2023, the Parent Company granted a loan amounting to Korean Won 1,700,000 thousand to its subsidiary. Upon consolidation, this intercompany transaction was offset. During 2023, the obligation, along with a new loan of Korean Won 1,200,000 thousand borrowed by the subsidiary within the year, was transitioned to Cho Hyeong Seok, CEO of the Parent Company. This reallocated liability is presented as “borrowing assumed”, denoting a change in debtor, not the origination of a new loan.

F-165

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

		2024			2023			2022
		(In thousands of Korean won)
Cash flows from other financing activities									-
Acquisition of Treasury shares	₩		(75,000	)		(10,677,100	)		(650,000	)

32. Related parties

A. List of related parties

List of related parties as of December 31, 2024 and 2023 are as follows:

Relationship	December 31, 2024	December 31, 2023
Other related parties	FF Company Co., Ltd. (“FF Company”)	FF Company Co., Ltd. (“FF Company”)
Other related parties	OURcoffee gangnamjum Co.,Ltd. (“OURcoffee Gangnamjum”)	OURcoffee gangnamjum Co.,Ltd. (“OURcoffee Gangnamjum”)
Other related parties	SecondPlan Co.,Ltd. (“SecondPlan”)	SecondPlan Co.,Ltd. (“SecondPlan”)
Other related parties	ThirdPlan Co., Ltd. (“ThirdPlan”)	ThirdPlan Co., Ltd. (“ThirdPlan”)
Other related parties	PLAYVERSE Co., Ltd. (“PLAYVERSE”)	PLAYVERSE Co., Ltd. (“PLAYVERSE”)
Other related parties	Studio Cuat. Co., Ltd. (“Studio Cuat”)	Studio Cuat. Co., Ltd. (“Studio Cuat”)
Other related parties	Beacon Holdings, Inc. (“Beacon Holdings”)	Beacon Holdings, Inc. (“Beacon Holdings”)

B. Transactions with related parties

Details of transaction with related parties for the years ended December 31, 2024, 2023 and 2022 are as follows:

			2024
Related party	Name of entity		Revenue		Finance income		Purchases		Finance Costs
			(In thousands of Korean won)
Other related parties	FF Company	₩		8,785,673		-		556,469		-
Other related parties	SecondPlan			31,833		15,274		-		913
Other related parties	ThirdPlan			-		-		60,317		7,332
Other related parties	Studio Cuat			38,645		1,978		248,660		-
Other related parties	Beacon Holdings			-		7,613		-		-
Key management personnel	Cho Hyeong Seok			-		100,915		-		234,315
Key management personnel	Jeong Bo Ram			-		-		-		-
Total		₩		8,856,151		125,780		865,446		242,560

F-166

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

			2023
Related party	Name of entity		Revenue		Finance income		Purchases		Finance Costs
			(In thousands of Korean won)
Other related parties	FF Company	₩		11,184,157		-		62,415		-
Other related parties	SecondPlan			15,052		3,041		-		-
Other related parties	ThirdPlan			-		-		-		2,435
Other related parties	Studio Cuat			251		194		527,864		-
Other related parties	Beacon Holdings			-		-		-		-
Key management personnel	Cho Hyeong Seok			-		151,624		-		176,597
Key management personnel	Jeong Bo Ram			-		676,341		-		-
Total		₩		11,199,460		831,200		590,279		179,032

			2022
Related party	Name of entity		Revenue		Finance income		Purchases
			(In thousands of Korean won)
Other related parties	FF Company	₩		4,167,544		-		-
Other related parties	OURcoffee Gangnamjum			8,529		-		-
Other related parties	SecondPlan			-		-		-
Other related parties	ThirdPlan			-		-		-
Other related parties	PLAYVERSE			-		-		28,000
Other related parties	Studio Cuat			-		-		611,991
Key management personnel	Cho Hyeong Seok			-		179,749		-
Key management personnel	Jeong Bo Ram			-		36,239		-
Total		₩		4,176,073		215,988		639,991

C. Account balances with related parties

The balances of receivables and payables to related parties as of December 31, 2024 and 2023 are as follows:

			December 31, 2024				December 31, 2023
Related party	Name of entity		Receivables	Loans	Payables	Borrowings	Receivables	Loans	Payables	Borrowings
			(In thousands of Korean won)
Other related parties	FF Company	₩	1,934,166	-	230,698	-	1,002,931	-	38,115	-
Other related parties	SecondPlan		121,284	394,400	730	-	63,589	106,900	-	-
Other related parties	ThirdPlan		-	-	9,767	164,000	-	-	2,435	130,000
Other related parties	Studio Cuat		2,172	43,000	-	-	2,117	43,000	-	-
Other related parties	Beacon Holdings		7,613	225,000	-	-	-	-	-	-
Key management personnel	Cho Hyeong Seok		-	-	1,115,906	2,790,236	-	-	1,256,876	2,689,321
Key management personnel	Jeong Bo Ram		43,721	-	-	-	-	-	-	-
Total		₩	2,108,956	662,400	1,357,101	2,954,236	1,068,637	149,900	1,297,426	2,819,321

F-167

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

D. Financial transactions with related parties

Details of significant financial transactions with related parties for the years ended December 31, 2024, 2023 and 2022 are as follows:

			2024
Related party	Company		Loans		Collection (*1)		Borrowings		Repayment
				(In thousands of Korean won)
Other related parties	Second Plan (*1)	₩		449,500		120,000		355,000		313,000
Other related parties	ThirdPlan			-		-		80,000		46,000
Other related parties	Studio Cuat			19,500		19,500		-		-
Other related parties	Beacon Holdings			1,365,000		1,140,000		35,000		35,000
Total		₩		1,834,000		1,279,500		470,000		394,000

(*1) Short-term borrowings and short-term loans of Korean Won 42,000 thousand were offset during the year ended December 31, 2024.

			2023
Related party	Company		Loans		Collection (*1)		Borrowings
				(In thousands of Korean won)
Other related parties	Second Plan	₩		1,136,900		1,030,000		-
Other related parties	ThirdPlan			-		-		130,000
Other related parties	Studio Cuat			43,000		-		-
Key management personnel	Cho Hyeong Seok (*2)			10,738,538		15,084,782		2,900,000
Key management personnel	Jeong Bo Ram			-		2,905,000		-
Total		₩		11,918,438		19,019,782		3,030,000

(*1) During 2023, the collection of loans related to Second Plan and Jeong Bo Ram was due to a liability transfer to Cho Hyeong Seok, with no resulting cash inflows.

(*2) During 2023, the Parent Company secured a loan of Korean Won 3,510,676 thousand from Cho Hyeong Seok. Cho Hyeong Seok then assumed obligations for loans amounting to Korean Won 7,227,862 thousand made by Play Company to third parties. Of this amount, Korean Won 2,900,000 thousand originally loaned by Play Company to Play F&B is now effectively a loan from Cho Hyeong Seok to the Group. In addition, the Parent Company received repayments of Korean Won 280,000 thousand, and an outstanding loan of Korean Won 14,804,782 thousand was offset against proceeds from the purchase of treasury share.

F-168

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

			2022
Related party	Name of entity		Loans		Collection
			(In thousands of Korean won)
Key management personnel	Cho Hyeong Seok (*1)			520,050		-
Key management personnel	Jeong Bo Ram			700,000		-
Total		₩		1,220,050		-

E. Commitments with related parties

Commitments the Group has entered into with related parties as of December 31, 2024 are as follows:

Related party	Financial institutions	Categories		Credit limit		Borrowings amount
				(In thousands of Korean won)
Key management personnel	Industrial Bank of Korea	Revolving credit (*1)	₩		2,000,000		-
Key management personnel	Industrial Bank of Korea	Small and medium-sized   enterprise financing (*2)			500,000		500,000
Key management personnel	Industrial Bank of Korea	Small and medium-sized   enterprise financing (*3)			1,000,000		1,000,000
Key management personnel	Industrial Bank of Korea	Small and medium-sized   enterprise financing (*4)			400,000		400,000
Key management personnel	Shinhan Bank	Revolving credit (*5)			500,000		-
Total			₩		4,400,000		1,900,000

(*1) The Group is provided a joint guarantee of Korean Won 2,400,000 thousand by the CEO of the Group.

(*2) The Group is provided a joint guarantee of Korean Won 458,526 thousand by the CEO of the Group.

(*3) The Group is provided a joint guarantee of Korean Won 1,200,000 thousand by the CEO of the Group.

(*4) The Group is provided a building as collateral of Korean Won 480,000 thousand for the borrowings by the key management personnel.

(*5) The Group is provided a joint guarantee of Korean Won 600,000 thousand by the CEO of the Group.

(*6) The CEO of the Group provides a joint guarantee for the vehicle lease to Mirae Asset Securities as of December 31, 2024.

F-169

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024, 2023 and 2022

Commitments the Group has entered into with related parties as of December 31, 2023 are as follows:

Related party	Financial institutions	Categories		Credit limit		Borrowings amount
				(In thousands of Korean won)
Key management personnel	Industrial Bank of Korea	Revolving credit (*1)	₩		2,000,000		-
Key management personnel	Industrial Bank of Korea	Small and medium-sized   enterprise financing (*2)			500,000		500,000
Key management personnel	Industrial Bank of Korea	Small and medium-sized   enterprise financing (*3)			1,000,000		1,000,000
Key management personnel	Shinhan Bank	Revolving credit (*4)			500,000		-
Total			₩		4,000,000		1,500,000

(*1) The Group is provided a joint guarantee of Korean Won 2,400,000 thousand by the CEO of the Group.

(*2) The Group is provided a joint guarantee of Korean Won 412,775 thousand by the CEO of the Group.

(*3) The Group is provided a joint guarantee of Korean Won 1,200,000 thousand by the CEO of the Group.

(*4) The Group is provided a joint guarantee of Korean Won 600,000 thousand by the CEO of the Group.

F. Key management personnel compensation

The compensation for the key management personnel for the years ended December 31, 2024, 2023 and 2022 are as follows:

		2024			2023		2022
		(In thousands of Korean won)
Short-term employee benefits	₩		1,185,704			1,426,806		1,516,788
Post-employment benefits			270,695			279,982		91,773
Share-based payments			(135,095	)		38,530		114,596
Total	₩		1,321,304			1,745,318		1,723,157

Compensation of the Group’s key management personnel includes salaries, non-cash benefits and contributions to a post-employment defined benefit plan and defined contribution plan.

Executive officers also participate in the Group’s share option plan.

33. Subsequent event

On January 3, 2025, K Enter Holdings Inc. completed the acquisition of a controlling interest in six Korean entities, including Play Company Co., Ltd, through a share exchange. Upon the approval, the CEO of the Group exchanged 83,418 shares with the equity interest of K Enter Holdings Inc. Following the equity interest exchange transaction, the Company became a subsidiary of K Enter Holdings Inc.

F-170

Report of Independent Auditors

To the Board of Directors of
The LAMP Co., Ltd.

Opinion

We have audited the accompanying financial statements of The LAMP Co., Ltd. (the “Company”), which comprise the statements of financial position as of December 31, 2024 and 2023, and the related statements of comprehensive income, of changes in equity and of cash flows for the years then ended, including the related notes (collectively referred to as the “financial statements”). In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Basis for Opinion

We conducted our audit in accordance with auditing standards generally accepted in the United States of America (US GAAS). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern for at least, but not limited to, twelve months from the end of the reporting period, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with US GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

F-171

In performing an audit in accordance with US GAAS, we:

● Exercise professional judgment and maintain professional skepticism throughout the audit.

● Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

● Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, no such opinion is expressed.

● Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

● Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

/s/ Samil PricewaterhouseCoopers

Seoul, KOREA

May 14, 2025

F-172

THE LAMP CO., LTD.

STATEMENTS OF FINANCIAL POSITION

As of December 31, 2024 and 2023

	Note		December 31, 2024			December 31, 2023
			(In thousands of Korean won)
Assets
Cash and cash equivalents	14,16,18,22,25	₩		863,927			1,919,916
Accounts receivable — trade, net	7,13,16,22			90,537			196,380
- Related parties	26			20,000			20,000
- Non-related parties				70,537			176,380
Accounts receivable — other, net	13,16,22			95,124			7,287
- Related parties	26			1,357			897
- Non-related parties				93,767			6,390
Other current assets	12			1,281,695			2,270,255
Contract assets	7			614,023			158,697
Total current assets				2,945,306			4,552,535
Long-term loans, net	16,19,22			130,056			130,087
- Related parties	26			130,056			130,087
- Non-related parties				-			-
Long-term investments	9,16,22			800,000			800,000
- Related parties	26			800,000			800,000
- Non-related parties				-			-
Property and equipment including right-of-use assets	15,23			159,539			374,000
Other non-current financial assets	16,22			39,080			147,406
Other non-current non-financial assets	12			1,375,087			1,394,586
Long-term accounts receivable – other, net	13,16,22			45,899			-
Deferred tax assets	11			45,845			166,846
Total non-current assets				2,595,506			3,012,925
Total assets		₩		5,540,812			7,565,460
Liabilities
Trade and other payables	16,20,22	₩		2,037,596			1,999,967
- Related parties				1,184,828			1,138,798
- Non-related parties				852,768			861,169
Other current non-financial liability				53,296			69,553
Contract liability	7			355,594			2,210,942
Short-term borrowings	16,19,22			1,445,453			1,505,000
Current lease liability	19,22,23			80,165			62,797
Current tax liability	11			14,915			61,453
Financial guarantee liability	16,22,26			2,573			-
- Related parties				2,573			-
- Non-related parties				-			-
Total current liabilities				3,989,592			5,909,712
Defined benefit liability	10			255,006			258,999
Non-current contract liability	7			900,000			900,000
Other non-current provisions	21			4,924			3,471
Non-current lease liability	19,22,23			65,483			267,583
Total non-current liabilities				1,225,413			1,430,053
Total liabilities		₩		5,215,005			7,339,765
Equity
Share capital	17			78			78
Other reserves	17			(585,468	)		(585,468	)
Retained earnings				911,197			811,085
Total equity				325,807			225,695
Total liabilities and equity		₩		5,540,812			7,565,460

The accompanying notes are an integral part of these financial statements.

F-173

THE LAMP CO., LTD.

STATEMENTS OF COMPREHENSIVE INCOME

For the Years Ended December 31, 2024 and 2023

	Note		2024			2023
			(In thousands of Korean won)
Revenues
Media production revenue	6,7	₩		16,336,027			20,836,856
- Related parties	26			254,615			432,411
- Non-related parties				16,081,412			20,404,445
Cost of revenues	8			(15,023,554	)		(19,509,364	)
Gross profit				1,312,473			1,327,492
Selling, general and administrative expenses	8			(948,282	)		(729,875	)
Other income	8			194,401			89,285
Other expenses	8			(285,162	)		(109,479	)
Operating Profit				273,430			577,423
Finance income	9,16			22,690			48,640
- Related parties	26			428			430
- Non-related parties				22,262			48,210
Finance costs	9,16,22			(136,554	)		(107,583	)
- Related parties	26			(52,283	)		(57,521	)
- Non-related parties				(84,270	)		(50,062	)
Profit before income tax				159,566			518,480
Income tax benefit (expenses)	11			(92,089	)		18,799
Income for the year		₩		67,477			537,279
Other comprehensive income (loss)
Items that will not be reclassified to income or loss:
Remeasurement of defined benefit liabilities	10,17			32,635			(61,004	)
Total comprehensive income for the year		₩		100,112			476,275

The accompanying notes are an integral part of these financial statements.

F-174

THE LAMP CO., LTD.

STATEMENTS OF CHANGES IN EQUITY

For the Years Ended December 31, 2024 and 2023

	Note		Net parent investment			Share capital		Other reserves			Retained earnings			Total
			(In thousands of Korean won)
Balance at January 1, 2023		₩		1,874,660			-		-			-			1,874,660
Total comprehensive income (loss) for the year
Income (loss) for the year				(334,810	)		-		-			872,089			537,279
Remeasurement of defined benefit liabilities	17			-			-		-			(61,004	)		(61,004	)
Total comprehensive income (loss) for the year				(334,810	)		-		-			811,085			476,275
Transaction directly recognized in equity
Capital distribution to the Parent company				(2,125,240	)		-		-			-			(2,125,240	)
Capital re-organization				585,390			78		(585,468	)		-			-
Balance at December 31, 2023		₩		-			78		(585,468	)		811,085			225,694
Balance at January 1, 2024		₩		-			78		(585,468	)		811,085			225,695
Total comprehensive income (loss) for the year
Income (loss) for the year				-			-		-			67,477			67,477
Remeasurement of defined benefit liabilities	17			-			-		-			32,635			32,635
Total comprehensive income (loss) for the year				-			-		-			100,112			100,112
Balance at December 31, 2024		₩		-			78		(585,468	)		911,197			325,807

The accompanying notes are an integral part of these financial statements.

F-175

THE LAMP CO., LTD.

STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 2024 and 2023

	Note		2024			2023
			(In thousands of Korean won)
Cash flows from operating activities	25
Net income (loss)		₩		67,477			537,279
Adjustments to reconcile net loss to net cash provided by(used in) operating activities				(969,063	)		398,172
Interest received				4,802			1,995
Interest paid				(84,501	)		(48,130	)
Income taxes paid				(27,924	)		(13,770	)
Net cash inflow(outflow) from operating activities		₩		(1,009,209	)		875,546
Cash flows from investing activities
Payments for long-term loans		₩		-			(20,000	)
- Related parties	26			-			(20,000	)
- Non-related parties				-			-
Payments for other financial assets				(22,285	)		(64,730	)
Proceeds from other financial assets				138,505			13,410
Disposal of long-term investments				5,094			336,246
Purchase of property and equipment				(17,846	)		(40,000	)
Net cash inflow(outflow) from investing activities		₩		103,468			224,926
Cash flows from financing activities	25
Proceeds from short-term borrowings		₩		883,302			1,000,000
Repayments of short-term borrowings				(942,850	)		(15,000	)
Capital contribution(distribution) from(to) Parent company				-			(1,043,963	)
Repayment of lease liability				(90,700	)		(64,547	)
Net cash inflow(outflow) from financing activities		₩		(150,248	)		(123,510	)
Net increase(decrease) in cash and cash equivalents				(1,055,989	)		976,962
Cash and cash equivalents at beginning of the year	14			1,919,916			942,954
Cash and cash equivalents at end of the year	14	₩		863,927			1,919,916

The accompanying notes are an integral part of these financial statements.

F-176

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

1. Reporting entity

The LAMP Co., Ltd. (formerly, The LAMP Pictures Co., Ltd.)

On February 15, 2023, Pluto Co., Ltd. (formerly, The LAMP Co., Ltd.) (“Pluto” or “Parent”) announced the proposed plan (“the Separation Proposal”) to establish a new company, The LAMP Co., Ltd. (formerly, The LAMP Pictures Co., Ltd.) (the “Company”) through a spin-off of its media production business. Before the spin-off, Pluto produced television programs and feature films including “Commitment”, “Three Summer Night”, “Love, Lies”, “Taxi Driver”, “Samjin Company English Class”, “Life is beautiful”, and “Phantom”. Following the spin-off, the Company primarily engaged in the business of media production for theatrical films and television programs, and the surviving split, Pluto, continued to engage in the remaining investment properties leasing business. The Company was separated from the remaining businesses of Pluto through the spin-off that resulted in the transfer of the media production business. The spin-off will permit the Company to strengthen competitiveness and concentrate its financial resources solely on its own operations in media content production industry and increase transparency in governance and stability in management.

In accordance with the Separation Proposal, the Company’s common shares were distributed pro rata to the shareholders of Pluto. On March 31, 2023, the date of spin-off, the spin-off of media production business was completed. The Company’s registered office is at 35 Dosan-daero 26 gil, Gangnam-gu, Seoul, Korea. Park Un Kyoung, the CEO of the Company, holds 100% of ownership of the Company as of December 31, 2024 and 2023.

2. Basis of Accounting

These financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by International Accounting Standard Board (“IASB”). These financial statements were authorized for issuance by the Board of Directors on May 14, 2025.

These financial statements are presented in a combined basis whereby combining the Pluto’s standalone financial statements using historical results of operation, cashflows and assets and liabilities attributable to the media production division before the spin-off as at March 31, 2023 with the Company’s financial statements after the spin-off as at March 31, 2023. The Company accounts the spin-off as a capital re-organization. On the basis that there is no substantive economic change, the Company incorporated the assets and liabilities of the Pluto at their pre-transaction carrying amounts.

Details of the Company’s accounting policies, including changes thereto, are included in Note 5.

F-177

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

Basis of measurement

The financial statements have been prepared on the historical cost basis except for the following items, which are measured on an alternative basis on each reporting date.

Items	Measurement basis
Defined benefit liability	Present value
Financial instruments measured at fair value through profit or loss (“FVTPL”)	Fair value

3. Functional and presentation currency

These financial statements are presented in Korean Won, which the Company’s functional currency. All amounts have been rounded to the nearest thousand, unless otherwise indicated.

4. Use of judgements and estimates

In preparing these financial statements, management has made judgements and estimates that affect the application of the Company’s accounting policies and the reported amounts of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognized prospectively.

A. Judgements

Information about judgements made in applying accounting policies that have the most significant effects on the amounts recognized in the financial statements is included in the following notes:

Note 5(C): revenue recognition: whether revenue from providing service is recognized over time or at a point in time and the methods used to recognize revenue;

Note 23(A): lease term: whether the Company is reasonably certain to exercise extension options.

F-178

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

B. Assumptions and estimation uncertainties

Information about assumptions and estimation uncertainties at the reporting date that have a risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year is included in the following notes:

● Note 10(C) (i): measurement of defined benefit obligations: key actuarial assumptions;

● Note 11(E): uncertain tax treatments;

i. Measurement of fair values

A number of the Company’s accounting policies and disclosures require the measurement of fair values for financial assets.

When measuring the fair value of a financial instruments, the Company uses observable market data as far as possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.

● Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

● Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).

● Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The Company recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

Further information about the assumptions made in measuring fair values is included in the following notes:

● Note 22(B): financial instruments.

F-179

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

5. Material accounting policies

The material accounting policies followed by the Company in preparation of its financial statements are as follows:

A. New and amended standards or interpretations adopted by the Company

IAS 1 Presentation of Financial Statements - Classification of Liabilities as Current or Non-current, Non-current Liabilities with Covenants

The amendments to IAS 1 clarify that liabilities are classified as either current or non-current, depending on the substantive rights that exist at the end of the reporting period. Classification is unaffected by the likelihood that an entity will exercise right to defer settlement of the liability or the expectations of management. Also, the settlement of liability includes the transfer of the entity’s own equity instruments, however, it would be excluded if an option to settle them by the entity’s own equity instruments if compound financial instruments is met the definition of equity instruments and recognized separately from the liability. Covenants that the entity must comply with after the end of the reporting period do not affect the classification of a liability at the end of the reporting period. However, if a liability is classified as non-current as of the end of the reporting period despite covenants that must be complied with within 12 months after that date, the entity shall disclose information about the risk that the liability could become repayable within 12 months after the reporting period. The amendments do not have a significant impact on the financial statements.

IAS 7 Statement of Cash Flows - IFRS 7 Financial Instruments: Disclosures – Supplier finance arrangements

The amendments to IAS 7 require entity to disclose information about its supplier finance arrangements that enables users of financial statements to assess the effects of those arrangements on the entity’s liabilities and cash flows and on the entity’s exposure to liquidity risk when applying supplier finance arrangements. The amendments do not have a significant impact on the financial statements.

IFRS 16 – Lease Liability in a Sale and Leaseback

The amendments to IFRS 16 require a seller-lessee shall determine lease payments or revised lease payments in a way that the seller-lessee would not recognize any amount of the gain or loss that relates to the right of use retained by the seller-lessee when subsequently measuring lease liabilities arising from a sale and leaseback. The amendments do not have a significant impact on the financial statements.

B. New and amended standards or interpretations not yet adopted by the Company

The following new accounting standards and interpretations that have been published that are not mandatory for December 31, 2024 reporting periods and have not been early adopted by the Company.

IAS 21 The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability

The amendments require exchangeability of two currencies should be assessed in order to clarify reporting of foreign currency transactions in the absence of normal-functioning foreign exchange market. The amendments also require applicable spot exchange rate should be determined when the assessment indicates two currencies lack exchangeability. The amendments are effective for annual reporting periods beginning on or after January 1, 2025, with early application permitted. The Company does not expect that these amendments have a significant impact on the Company’s financial statements.

IFRS 9 Financial Instruments - IFRS 7 Financial Instruments: Disclosures – Classification and Measurement of Financial Instruments

The amendments clarify that a financial liability is derecognised on the ‘settlement date’ and introduce an accounting policy choice to derecognise financial liabilities settled using an electronic payment system before the settlement date. Other clarifications include the classification of financial assets with ESG linked features via additional guidance on the assessment of contingent features. Clarifications have been made to non-recourse loans and contractually linked instruments. Additional disclosures are introduced for financial instruments with contingent features and equity instruments classified at fair value through OCI.

The amendments should be applied for annual periods beginning on or after January 1, 2026, and earlier application is permitted, with an option to early adopt the amendments for contingent features only. The Company does not expect that these amendments have a significant impact on the financial statements.

F-180

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

Annual Improvements to IFRS Accounting Standards – Volume 11

The amendments are annual improvements to the following standards:

- IFRS 1 First-time adoption of International Financial Reporting Standards;

- IFRS 7 Financial instruments: Disclosures;

- IFRS 9 Financial instruments;

- IFRS 10 Consolidated financial instruments; and

- IAS 7 Statement of cash flows

The new standard should be applied for annual periods beginning on or after January 1, 2026, and earlier application is permitted. The Company is in review for the impact of this new standard on the financial statements.

IFRS 18 Presentation and Disclosure in Financial Statements

Items in the statement of profit or loss will need to be classified into one of five categories: operating, investing, financing, income taxes and discontinued operations. IFRS 18 requires the Company to present specified totals and subtotals: ‘Operating profit or loss’, ‘Profit or loss’ and ‘Profit or loss before financing and income taxes’. Information related to management-defined performance measures should be disclosed. IFRS 18 also provides enhanced guidance on the principles of aggregation and disaggregation which focus on grouping items based on their shared characteristics. The new standard should be applied for annual periods beginning on or after January 1, 2027, and earlier application is permitted. The Company is in review for the impact of this new standard on the financial statements.

IFRS 19 Subsidiaries without Public Accountability: Disclosures

IFRS 19 allows eligible subsidiaries to apply IFRS Accounting Standards with the reduced disclosure requirements of IFRS 19. A subsidiary may choose to apply the new standard in its consolidated, separate or individual financial statements provided that, at the reporting date, it does not have public accountability, and its parent produces consolidated financial statements under IFRS Accounting Standards. A subsidiary applying IFRS 19 is required to disclose in its explicit and unreserved statements of compliance with IFRS Accounting Standards that IFRS 19 has been adopted. The amendments should be applied for annual periods beginning on or after January 1, 2027, and earlier application is permitted. The Company does not expect that these amendments have a significant impact on the financial statements.

C. Revenue from contracts with customers

The Company generates revenue primarily through providing the media production service.

The Company determines revenue recognition by:

● identifying the contract, or contracts, with a customer;

● identifying the performance obligations in each contract;

● determining the transaction price;

● allocating the transaction price to the performance obligations in each contract; and

● recognizing revenue when, or as, we satisfy performance obligations by transferring the promised goods or services.

F-181

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

Media production revenue

The Company operates the media production business that consists of planning, producing, and selling the theatrical films and television programs. The Company identifies the license which is provided along with media product as combined output and recognizes revenue over time by measuring its progress based on cost incurred towards complete satisfaction of the performance obligation of media production in accordance with Paragraph 35 (3) of IFRS 15 Revenue from contracts with customers. The percentage-of-completion for each contract is calculated by dividing the cumulative cost incurred in relation to service performed by the Company by estimated total contract costs. The Company is also eligible to receive its share of profits from film distributors once the film generates profits beyond the break-even point, which is considered as variable consideration and recognized as the revenue on the settlement date.

The Company recognizes unbilled receivables from media production service as contract assets and recognizes receipts in advance for prepaid media production services as contract liabilities. The Company capitalizes the cost associated with the production, including development costs, direct costs, and production overhead per title as prepayments and prepaid expenses. The Company amortizes the capitalized asset in ‘Cost of revenues’ on the combined statements of comprehensive income based on the percentage-of-completion for each contract.

D. Operating segments

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses. The Company has one reportable segment, for which it generates separately identifiable financial information that is regularly reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance.

E. Common control transactions

The Company accounts the Spin-off as a capital re-organization. On the basis that there is no substantive economic change, the Company incorporates the assets and liabilities of the Pluto at their pre-transaction carrying amounts.

F. Employee benefits

i. Short-term employee benefits

Short-term employee benefits are employee benefits due to be settled within 12 months after the end of the period in which the employees render related services. When an employee has rendered a service during an accounting period, the Company recognizes the undiscounted amount of short-term employee benefits expected to be paid in exchange for that service.

ii. Defined benefit plans

The Company’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 the Company, 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.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in OCI. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then- net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

F-182

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

G. Finance income and finance costs

The Company’s finance income and finance costs include:

● interest income;

● interest expense;

● dividend income;

● the net gain or loss on settlement and/or impairment of project investments;

● the foreign currency gain or loss on financial assets and financial liabilities;

The ‘effective interest rate’ is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:

● the gross carrying amount of the financial asset; or

● the amortized cost of the financial liability.

In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortized cost of the liability. However, for financial assets that have become credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortized cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.

H. Income tax

Income tax expense comprises current and deferred tax. It is recognized in profit or loss except to the extent that it relates to a business combination, or items recognized directly in equity or in OCI.

The Company has determined that interest and penalties related to income taxes, including uncertain tax treatments, do not meet the definition of income taxes, and therefore accounted for them under IAS 37 Provisions, Contingent Liabilities and Contingent Assets.

i. Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax also includes any tax arising from dividends.

Current tax assets and liabilities are offset only if certain criteria are met.

● Has a legally enforceable right to set off the recognized amounts; and

● Intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

ii. Deferred tax

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for:

● temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss;

● temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

● taxable temporary differences arising on the initial recognition of goodwill.

F-183

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

Deferred tax assets are recognized for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Future taxable profits are determined based on the reversal of relevant taxable temporary differences. If the amount of taxable temporary differences is insufficient to recognize a deferred tax asset in full, then future taxable profits, adjusted for reversals of existing temporary differences, are considered, based on the business plans of the Company. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized; such reductions are reversed when the probability of future taxable profits improves.

The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset only if certain criteria are met.

● Has a legally enforceable right to set off the recognized amounts; and

● Intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

I. Cash and Cash Equivalents

Cash and cash equivalents comprise cash on hand, deposits held at banks, and investment securities with maturities of three months or less from the acquisition date that are easily convertible to cash and subject to an insignificant risk of changes in their fair value.

J. Property and equipment

i. Recognition and measurement

Items of property and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property and equipment have different useful lives, then they are accounted for as separate items (major components) of property and equipment.

Any gain or loss on disposal of an item of property and equipment is recognized in profit or loss.

ii. Subsequent expenditure

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company. The carrying amount of the replaced parts are derecognized and the repairs and maintenance expenses are recognized in profit or loss in the period they are incurred.

iii. Depreciation

Depreciation is calculated to write off the cost of items of property and equipment less their estimated residual values using the straight-line method over their estimated useful lives, and is generally recognized in profit or loss. Land is not depreciated.

The estimated useful lives of property and equipment for current and comparative periods are as follows:

Office equipment	5 years
Furniture and fixtures	5 years
Right-of-use assets	5 – 10 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

F-184

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

K. Financial instruments

i. Recognition and initial measurement

Trade receivables and debt securities issued are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument.

A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus or minus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

ii. Classification and subsequent measurement

Financial assets

On initial recognition, a financial asset is classified as measured at:

● amortized cost;

● FVOCI - debt investment;

● FVOCI - equity investment;

● or FVTPL.

Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

● it is held within a business model whose objective is to hold assets to collect contractual cash flows; and

● its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

● it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

● its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment’s fair value in OCI. This election is made on an investment-by-investment basis.

All financial assets not classified as measured at amortized cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

F-185

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

Financial assets - Business model assessment

The Company makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes:

● the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether management’s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realizing cash flows through the sale of the assets;

● how the performance of the portfolio is evaluated and reported to the Company’s management;

● the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed;

● how managers of the business are compensated - e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flows collected; and

● the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.

Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, consistent with the Company’s continuing recognition of the assets.

Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.

Financial assets - Assessment whether contractual cash flows are solely payments of principal and interest

For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.

In assessing whether the contractual cash flows are solely payments of principal and interest, the Company considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Company considers:

● contingent events that would change the amount or timing of cash flows;

● terms that may adjust the contractual coupon rate, including variable-rate features;

● prepayment and extension features; and

● terms that limit the Company’s claim to cash flows from specified assets (e.g. non-recourse features).

A prepayment feature is consistent with the solely payments of principal and interest criterion if the prepayment amount substantially represents unpaid amounts of principal and interest on the principal amount outstanding, which may include reasonable compensation for early termination of the contract. Additionally, for a financial asset acquired at a discount or premium to its contractual par amount, a feature that permits or requires prepayment at an amount that substantially represents the contractual par amount plus accrued (but unpaid) contractual interest (which may also include reasonable compensation for early termination) is treated as consistent with this criterion if the fair value of the prepayment feature is insignificant at initial recognition.

F-186

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

Financial assets - Subsequent measurement and gains and losses

Financial assets at FVTPL: These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

Financial assets at amortized cost: These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

Financial liabilities - Classification, subsequent measurement and gains and losses

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss. Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

iii. Derecognition

Financial assets

The Company derecognizes a financial asset when:

● the contractual rights to the cash flows from the financial asset expire; or

● it transfers the rights to receive the contractual cash flows in a transaction in which either:

- substantially all of the risks and rewards of ownership of the financial asset are transferred; or

- the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Company enters into transactions whereby it transfers assets recognized in its statement of financial position, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

Financial liabilities

The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Company also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

When changes were made to a financial asset or financial liability in addition to changes to the basis for determining the contractual cash flows required by interest rate benchmark reform, the Company first updated the effective interest rate of the financial asset or financial liability to reflect the change that is required by interest rate benchmark reform. After that, the Company applied the policies on accounting for modifications to the additional changes.

F-187

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

L. Impairment

i. Non-derivative financial assets

Financial instruments and contract assets

The Company recognizes loss allowances for ECLs on:

● financial assets measured at amortized cost; and

● contract assets and financial guarantee contracts

The Company also recognizes loss allowances for ECLs on lease receivables, which are disclosed as part of trade and other receivables.

The Company measures loss allowances at an amount equal to lifetime ECLs, except for the following, which are measured at 12-month ECLs:

● debt securities that are determined to have low credit risk at the reporting date; and

● other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowances for trade receivables (including lease receivables) and contract assets are always measured at an amount equal to lifetime ECLs.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company’s historical experience and informed credit assessment, that includes forward-looking information.

The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.

The Company considers a financial asset to be in default when:

● the debtor is unlikely to pay its credit obligations to the Company in full, without recourse by the Company to actions such as realizing security (if any is held); or

● the financial asset is more than 90 days past due.

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.

12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECLs is the maximum contractual period over which the Company is exposed to credit risk.

Measurement of ECLs

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Company expects to receive).

ECLs are discounted at the effective interest rate of the financial asset.

Credit-impaired financial assets

At each reporting date, the Company assesses whether financial assets carried at amortized cost are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

F-188

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

Evidence that a financial asset is credit-impaired includes the following observable data:

● significant financial difficulty of the debtor;

● a breach of contract such as a default or being more than 90 days past due;

● the restructuring of a loan or advance by the Company on terms that the Company would not consider otherwise;

● it is probable that the debtor will enter bankruptcy or other financial reorganization; or

● the disappearance of an active market for a security because of financial difficulties.

Presentation of allowance for ECL in the statement of financial position

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets.

Write-off

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For individual customers, the Company has a policy of writing off the gross carrying amount when the financial asset is 180 days past due based on historical experience of recoveries of similar assets. For corporate customers, the Company individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Company expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company’s procedures for recovery of amounts due.

ii. Non-financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than biological assets, investment property, developing contents, contract assets and deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill is tested annually for impairment.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs of disposal. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

M. Leases

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

F-189

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

i. As a lessee

At commencement or on modification of a contract that contains a lease component, the Company allocates the consideration in the contract to each lease component on the basis of its relative stand-alone prices. However, for the leases of property the Company has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Company by the end of the lease term or the cost of the right-of-use asset reflects that the Company will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

The Company determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased.

Lease payments included in the measurement of the lease liability comprise the following:

● fixed payments, including in-substance fixed payments;

● variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

● amounts expected to be payable under a residual value guarantee; and

● the exercise price under a purchase option that the Company is reasonably certain to exercise, lease payments in an optional renewal period if the Company is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Company is reasonably certain not to terminate early.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee, if the Company changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

At the date of transition to IFRSs, the Company applies the following approach to all of its leases.

The Company measures that lease liability at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate at the date of transition to IFRSs.

The Company measures right-of-use asset at its carrying amount as if IFRS 16 had been applied since the commencement date of the lease, but discounted using the lessee’s incremental borrowing rate at the date of transition to IFRSs.

The Company uses hindsight in applying IFRS 16 such as the determination of lease term for contracts that contain options to extend or terminate a lease.

The Company has elected not to recognize right-of-use assets and lease liabilities for leases of low-value assets (leases for which the underlying asset is valued at USD 5,000 or less) and short-term leases (leases that have a lease term of 12 months or less at the commencement date). The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

F-190

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

N. Fair value measurement

‘Fair value’ is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or, in its absence, the most advantageous market to which the Company has access at that date. The fair value of a liability reflects its non-performance risk.

A number of the Company’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.

When one is available, the Company measures the fair value of an instrument using the quoted price in an active market for that instrument. A market is regarded as ‘active’ if transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis.

If there is no quoted price in an active market, then the Company uses valuation techniques that maximize the use of relevant observable inputs and minimize the use of unobservable inputs. The chosen valuation technique incorporates all of the factors that market participants would take into account in pricing a transaction.

The best evidence of the fair value of a financial instrument on initial recognition is normally the transaction price - i.e. the fair value of the consideration given or received. If the Company determines that the fair value on initial recognition differs from the transaction price and the fair value is evidenced neither by a quoted price in an active market for an identical asset or liability nor based on a valuation technique for which any unobservable inputs are judged to be insignificant in relation to the measurement, then the financial instrument is initially measured at fair value, adjusted to defer the difference between the fair value on initial recognition and the transaction price. Subsequently, that difference is recognized in profit or loss on an appropriate basis over the life of the instrument but no later than when the valuation is wholly supported by observable market data or the transaction is closed out.

O. Concentration of Credit Risk

The Company performs periodic credit evaluations of its customers’ financial condition and generally does not require collateral for customers on accounts receivable. The Company maintains reserves for potential credit losses, which are periodically reviewed.

6. Operating segments

A. Basis for segmentation

The Company’s operating segments have been identified to be a single unit, by which the Company provides the services for media production.

The following summary describes the operations of each reportable segment.

Reportable segments	Operations
Media Production	Media production revenue

B. Information about reportable segments

		2024			2023
		(In thousands of Korean won)
Segment revenue	₩		16,336,027			20,836,856
Depreciation/Amortization			(109,094	)		(77,808	)
Segment operating profit (loss)			273,430			577,423

F-191

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

C. Geographic information

Media production is managed and operated in Seoul, Korea. The geographic information analyses the Company’s revenue by the Company’s country of domicile and other countries. In presenting the geographic information, segment revenue has been based on the geographic location of customers.

Summary of the Company’s operation by region based on the location of customers for the years ended December 31, 2024 and 2023 is as follows:

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Korea	₩		16,336,027		20,836,856

Summary of the Company’s non-current assets based on the location as of December 31, 2024 and 2023 is as follows:

		2024		2023
		(In thousands of Korean won)
Korea	₩		1,534,626		1,768,586

D. Major customer

Revenues by major customers for the years ended December 31, 2024 and 2023 are as follows:

		2024			2023
		(In thousands of Korean won)
Customer A (Media production segment)
Revenue	₩		9,649,408			10,938,655
%			59	%		52	%
Customer B (Media production segment)
Revenue	₩		5,135,473			-
%			31	%		0	%
Customer C (Media production segment)
Revenue	₩		421,035			8,274,728
%			3	%		40	%
Total	₩		15,205,916			19,213,383

F-192

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

7. Revenue

A. Revenue streams

The Company generates revenue primarily through providing the services for production of feature films for initial exhibition in theaters and production of television programs to third parties for internal television and streaming services.

Revenue from contracts with customers for the years ended December 31, 2024 and 2023 are as follows:

		2024		2023
		(In thousands of Korean won)
Revenue from contracts with customers	₩		16,336,027		20,836,856

B. Disaggregation of revenue from contracts with customers

In the following table, revenue from contracts with customers is disaggregated by major products and service lines and timing of revenue recognition. The table also includes a reconciliation of the disaggregated revenue with the Company’s reportable segment. (see Note 6)

Revenue from contracts with customers based on the service contract type and the timing of satisfaction of performance obligations for the years ended December 31, 2024 and 2023 are as follows:

		2024		2023
		(In thousands of Korean won)
Major products/service lines
Media production	₩		16,336,027		20,836,856
Timing of revenue recognition
Over time	₩		16,336,027		20,836,856

C. Contract balance

The balance of accounts receivables and contract liability from contracts with customers as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Current
Accounts receivable — trade, net	₩		90,537		196,380
Contract asset (Unbilled receivables)			614,023		158,697
Contract liability (Deferred revenue)			355,594		2,210,942
Non-current
Contract liability (Deferred revenue)	₩		900,000		900,000

The contract liability primarily relate to the advance consideration received from customers for media production service, for which revenue is recognized over time. This will be recognized as revenue when the Company satisfies the performance obligations.

The amount of Korean Won 2,150,034 thousand included in contract liability as of December 31, 2023 has been recognized as revenue in 2024. (2023: Korean Won 1,306,160 thousand)

F-193

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

8. Income and Expenses

A. Other income

Details of other income for the years ended December 31, 2024 and 2023 are as follows:

		2024		2023
		(In thousands of Korean won)
Gain on disposal of right-of-use assets			14,767		-
Reversal of bad debt expenses (*1)			179,533		-
Grants for film production	₩		-		66,300
Miscellaneous income			101		22,985
Total	₩		194,401		89,285

(*1) A portion of the balance recognized under Other non-current non-financial assets was previously subject to an allowance for doubtful accounts. During the reporting period, certain amounts were recovered and the corresponding allowance was reversed. The reversal was recognized as other income.

B. Other expenses

Details of other expenses for the years ended December 31, 2024 and 2023 are as follows:

		2024		2023
		(In thousands of Korean won)
Other bad debt expenses	₩		242,000		105,000
Donations			2,500		-
Loss on retirement of Property and equipment			39,615		-
Miscellaneous expenses			1,047		4,479
Total	₩		285,162		109,479

C. Expenses by nature

Details of classification of expenses by nature for the years ended December 31, 2024 and 2023 are as follows:

		2024		2023
		(In thousands of Korean won)
Outsourcing Fee	₩		10,922,033		13,985,841
Employee benefits			1,176,699		1,372,480
Depreciation			109,094		77,809
Commission paid			119,051		63,236
Transportation			986,843		917,159
Rent			1,950,254		2,436,273
Supplies			585,700		1,271,958
Other expenses			122,162		114,483
Total	₩		15,971,836		20,239,239

Total expenses consist of cost of sales and selling, general and administrative expenses.

F-194

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

9. Finance income and costs

Details of finance income and costs for the years ended December 31, 2024 and 2023 are as follows:

		2024		2023
		(In thousands of Korean Won)
Finance income
Reversal of loss on valuation of long-term investments	₩		3,897		39,355
Gain on project settlements			3,165		3,999
Interest income			15,628		5,286
Total	₩		22,690		48,640
Finance costs
Interest expenses	₩		133,981		107,583
Financial guarantee expense			2,573		-
Total	₩		136,554		107,583

F-195

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

10. Employee benefits

Details of defined benefit liability recognized as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
		(In thousands of Korean Won)
Defined benefit liability	₩		255,006		258,999

The Company operates defined benefit plans as a retirement pension scheme. Defined benefit plans expose the Company to actuarial risks, such as longevity risk, interest rate risk and market (investment) risk.

A. Movement in net defined benefit (asset) liability

Details of reconciliation from the opening balances to the closing balances for the net defined benefit liability and its components as of December 31, 2024 and 2023 is as follows:

		Defined benefit obligation					Fair value of plan assets				Net defined benefit liability
		2024			2023		2024		2023		2024			2023
		(In thousands of Korean won)
Balance at January 1	₩		258,999			156,092		-		-		258,999			156,092
Included in profit or loss
Current service cost			28,464			20,542		-		-		28,464			20,542
Past service credit			-			-		-		-		-			-
Interest cost			10,473			7,948		-		-		10,473			7,948
Subtotal			38,937			28,490		-		-		38,937			28,490
Included in OCI
Remeasurement loss(gain)
Demographic assumption			(162	)		-		-		-		(162	)		-
Financial assumption			22,719			17,816		-		-		22,719			17,816
Adjustment based on experience			(65,487	)		56,601		-		-		(65,487	)		56,601
Return on plan assets excluding interest income			-			-		-		-		-			-
Subtotal			(42,930	)		74,417		-		-		(42,930	)		74,417
Other
Benefits paid			-			-		-		-		-			-
Subtotal			-			-		-		-		-			-
Balance at December 31	₩		255,006			258,999		-		-		255,006			258,999

B. Plan assets

There are no contributions funded to its defined benefit plans as of December 31, 2024 and 2023.

F-196

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

C. Defined benefit obligation

i. Actuarial assumptions

Details of actuarial assumptions used for the years ended December 31, 2024 and 2023 are as follows:

	2024	2023
Discount rate	3.50%	4.20%
Future salary growth	5.52 ~ 8.44%	6.10 ~ 8.20%

Assumptions regarding future longevity have been based on published statistics and mortality tables.

As of December 31, 2024 and 2023, the weighted average duration of the defined benefit obligation was 6.7 years and 6.7 years, respectively.

ii. Sensitivity analysis

The Company measures the risk of actuarial assumption changes as a 1% fluctuation in the discount rate and future salary growth rate of the amounts of defined benefit obligation, which reflects the management’s assessment of the risk of actuarial assumption fluctuation that can be reasonably occur. The impact of a 1% fluctuation in discount rates and future salary growth rates on the Company’s defined benefit obligation as of December 31, 2024 and 2023 are as follows:

		December 31, 2024						December 31, 2023
		Increased by 1%			Decreased by 1%			Increased by 1%			Decreased by 1%
		(In thousands of Korean won)
Discount rate	₩		(16,161	)		18,210			(16,283	)		18,227
Future salary growth			18,015			(16,300	)		18,158			(16,524	)

Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an approximation of the sensitivity of the assumptions shown.

D. Employee benefit expenses

i. Details of employee benefit expenses recognized for the years ended December 31, 2024 and 2023 are as follows:

		2024		2023
		(In thousands of Korean won)
Wages and salaries	₩		1,035,401		1,257,852
Fringe benefit			102,361		86,139
Expenses related to post-employment defined benefit plans			38,937		28,490
Total	₩		1,176,699		1,372,481

ii. Expenses are recognized in the statements of comprehensive income (loss) as follows:

		2024		2023
		(In thousands of Korean won)
Cost of revenues	₩		683,857		965,955
Selling, general and administrative expenses			492,842		406,525
Total	₩		1,176,699		1,372,481

F-197

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

11. Income taxes

A. Amounts recognized in profit or loss

		2024			2023
		(In Korean won and number of shares)
Current tax expenses (benefit)
Current year	₩		-			24,614
Adjustments recognized related to prior period incomes (*)			(18,616	)		5,563
			(18,616	)		30,177
Deferred tax expenses (benefit)
Origination and reversal of temporary differences	₩		121,001			(62,389	)
Deferred taxes charged directly to equity			(10,296	)		13,413
Income tax expenses (benefit)	₩		92,089			(18,799	)

(*) In the normal course of business, the Company is examined by taxation authority. The Company’s management regularly assesses the potential outcomes of these examinations and any future examinations for the current or prior years in determining the adequacy of its liability for income taxes.

The Company establish additional current tax liability 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 liability for uncertain tax positions, as well as the related net interest and penalties, are included in income taxes in the statements of operations.

B. Amounts recognized in OCI

		2024							2023
		Before tax		Tax (expense) benefit			Net of tax		Before tax			Tax (expense) benefit		Net of tax
		(In thousands of Korean won)
Items that will not be reclassified to profit or loss
Remeasurements of defined benefit liability	₩		42,931		(10,296	)		32,635		(74,418	)		13,413		(61,004	)

F-198

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

C. Reconciliation of effective tax rate

		2024			2023
		(In thousands of Korean won)
Profit before income tax	₩		159,566			518,480
Tax at the statutory income tax rate			15,798			86,362
Adjustments:
Expenses not deductible for tax purposes			3,526			3,661
Tax credits			-			(18,110	)
Adjustments recognized related to prior period incomes			(18,616	)		5,563
Changes in unrecognized deferred tax assets			-			(1,186	)
Change in tax rates			71,689			(102,326	)
Other			19,692			7,237
Income tax expenses (benefit)	₩		92,089			(18,799	)
Effective income tax rate (*)			57.7	%		-

(*) The effective tax rate is not calculated as the Company recognized tax benefit for the year ended December 31, 2023.

D. Movement in deferred tax balances

i. Movement in deferred tax balances as of December 31, 2024

		Tax effect
		Beginning			Increase (decrease)			Ending
		(In thousands of Korean won)
Defined benefit liability	₩		54,131			(28,885	)		25,246
Lease liability			69,049			(54,630	)		14,419
Right-of-use assets			(68,845	)		54,146			(14,699	)
Contract liability			427,192			(380,108	)		47,084
Contract assets			(48,476	)		(12,312	)		(60,788	)
Prepaid expenses			(409,539	)		289,450			(120,089	)
Prepayments			(98,809	)		77,444			(21,365	)
Other			222,994			(107,428	)		115,566
Total	₩		147,697			(162,323	)		(14,626	)
Loss carried forward	₩		-			41,322			41,322
Carryover tax credit			19,149			-			19,149
Deferred tax assets	₩		166,846			(121,001	)		45,845

F-199

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

ii. Movement in deferred tax balances as of December 31, 2023

		Tax effect
		Beginning			Increase (decrease)			Ending
		(In thousands of Korean won)
Defined benefit liability	₩		15,453			38,678			54,131
Lease liability			39,098			29,951			69,049
Right-of-use assets			(39,581	)		(29,264	)		(68,845	)
Contract liability			153,466			273,726			427,192
Contract assets			(17,837	)		(30,639	)		(48,476	)
Prepaid expenses			(96,550	)		(312,989	)		(409,539	)
Prepayments			(25,474	)		(73,335	)		(98,809	)
Other			63,519			159,475			222,994
Total	₩		92,094			55,603			147,697
Loss carried forward	₩		-			-			-
Carryover tax credit			13,549			5,600			19,149
Unrecognized deferred tax assets			(1,186	)		1,186			-
Deferred tax assets	₩		104,457			62,389			166,846

E. Details of unused tax loss carryforwards and unused tax credit carryforwards

i. Details of unused tax loss carryforwards and unused tax credit carryforwards as of December 31, 2024 are as follows:

Year of expiration		Unused loss carryforwards		Unused tax credit carryforwards
		(In thousands of Korean won)
2032	₩		-		10,969
2033			-		8,180
2039			417,397		-
Total	₩		417,397		19,149

F-200

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

ii. The timing of recovery of deferred tax assets and liability as of December 31, 2024 and 2023 is as follows:

		December 31, 2024			December 31, 2023
		(In thousands of Korean won)
Deferred tax assets
- Deferred tax assets to be recovered after more than 12 months	₩		150,218			248,080
- Deferred tax assets to be recovered within 12 months			141,020			579,367
Sub-total			291,238			827,447
Deferred tax liability
- Deferred tax liability to be recovered after more than 12 months			(166,504	)		(388,154	)
- Deferred tax liability to be recovered within 12 months			(78,889	)		(272,447	)
Sub-total			(245,393	)		(660,601	)
Deferred tax assets (liabilities), net	₩		45,845			166,846

12. Other assets

Details of other assets for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Current
Prepayments	₩		4,989		5,246
Prepaid expenses (*1)			1,213,021		1,959,519
Value added tax receivables			63,685		305,490
Non-current
Non-current prepayments (*2)			1,375,087		1,394,586
Total	₩		2,656,782		3,664,841

(*1)	The amount of Korean Won 1,040,653 thousand included in prepaid expenses as of December 31, 2023 has been recognized as cost of revenues in 2024. (2023: Korean Won 749,552 thousand)
(*2)	The Company recognized an impairment loss amounting to Korean Won 242,000 thousand in 2024. (2023: Korean Won 105,000 thousand)

F-201

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

13. Trade and other receivables

Details of trade and other receivables as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Trade receivable
Accounts receivable — Trade	₩		90,537		196,380

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Other current receivables
Accrued income	₩		3,326		6,325
Non-trade receivables			91,798		962
Sub-total			95,124		7,287
Other non-current receivables
Long-term accounts receivable – other, net			45,899		-
Total	₩		141,023		7,287

14. Cash and cash equivalents

Cash and cash equivalents as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Cash on hand	₩		8,232		3,214
Deposits in banks			855,695		1,916,702
Total	₩		863,927		1,919,916

The Company doesn’t have any restricted cash and cash equivalents as of December 31, 2024 and 2023.

15. Property and equipment

A. Reconciliation of carrying amount

Details of property and equipment as of December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Book value		Accumulated depreciation			Carrying amount
		(In thousands of Korean won)
Office equipment	₩		32,250		(21,183	)		11,067
Right-of-use assets			263,210		(114,738	)		148,472
Total	₩		295,460		(135,921	)		159,539

F-202

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

		December 31, 2023
		Book value		Accumulated depreciation			Carrying amount
		(In thousands of Korean won)
Office equipment	₩		22,304		(16,796	)		5,508
Furniture and fixtures			52,700		(13,608	)		39,092
Right-of-use assets			560,795		(231,395	)		329,400
Total	₩		635,799		(261,799	)		374,000

Details of the changes in property and equipment for the years ended December 31, 2024 and 2023 are as follows:

		2024
		Office equipment			Furniture and fixture			Right-of-Use assets			Total
		(In thousands of Korean won)
Beginning balance	₩		5,508			39,092			329,400			374,000
Acquisitions			9,947			7,900			119,948			137,795
Depreciation			(4,388	)		(7,377	)		(97,329	)		(109,094	)
Disposals			-			(39,615	)		(203,547	)		(243,162	)
Ending balance	₩		11,067			-			148,472			159,539

		2023
		Office equipment			Furniture and fixture			Right-of-Use assets			Total
		(In thousands of Korean won)
Beginning balance	₩		9,037			2,965			399,806			411,808
Acquisitions			-			40,000			-			40,000
Depreciation			(3,529	)		(3,873	)		(70,406	)		(77,808	)
Ending balance	₩		5,508			39,092			329,400			374,000

The classification of depreciation expenses in the statements of comprehensive income for the years ended December 31, 2024 and 2023 are as follows:

		2024		2023
		(In thousands of Korean won)
Selling, general and administrative expenses	₩		109,094		77,808

B. Leased property and equipment

As of December 31, 2024, the Company leased vehicles and building and recognized right-of-use assets of Korean Won 148,472 thousand. (2023: Korean Won 329,400 thousand)

F-203

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

16. Financial instruments by category

The carrying amounts of financial instruments by category as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Financial assets at amortized cost
Cash and cash equivalents	₩		863,927		1,919,916
Accounts receivable — trade, net			90,537		196,380
Accounts receivable — other, net			95,124		7,287
Long-term loans, net			130,056		130,087
Long-term accounts receivable – other, net			45,899		-
Other non-current financial assets			39,080		147,406
Financial assets at fair value through profit or loss
Long-term investments			800,000		800,000
Total	₩		2,064,623		3,201,076

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Financial liability at amortized cost
Trade and other payables (*)	₩		2,037,596		1,995,641
Short-term borrowings			1,445,453		1,505,000
Other financial liabilities
Financial guarantee liability			2,573		-
Total	₩		3,485,622		3,500,641

A. Classification of investment assets

The classification of investment assets as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Non-Current investments
Equity investments – at FVTPL (*)	₩		800,000		800,000

(*) Equity investments consist of profit-sharing project investment asset.

F-204

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

B. Project investment designated as at FVTPL

The Company designated the investments shown below as equity investments at FVTPL because there is no contractual obligation for repayment and it does not qualify as a cash flow with principal and interest payments.

	Fair value at December 31, 2024		Fair value at December 31, 2023
	(In thousands of Korean won)
Falling starlight		800,000		800,000

C. Net gains and losses by category of financial instruments

The net gains and losses by category of financial instruments as of December 31, 2024 and 2023 are as follows:

		2024
		Financial assets at amortized cost		Financial assets at fair value through profit or loss		Financial liabilities at amortized cost			Other Financial liabilities			Total
		(In thousands of Korean won)
Gain on project settlements	₩		-		3,165		-			-			3,165
Interest income			15,628		-		-			-			15,628
Interest expense			-		-		(124,087	)		-			(124,087	)
Reversal of losses on valuation of long-term investments			-		3,897		-			-			3,897
Financial guarantee expense			-		-		-			(2,573	)		(2,573	)
Total	₩		15,628		7,062		(124,087	)		(2,573	)		(103,970	)

		2023
		Financial assets at amortized cost		Financial assets at fair value through profit or loss		Financial liabilities at amortized cost			Total
		(In thousands of Korean won)
Gain on project settlements	₩		-		3,999		-			3,999
Interest income			5,286		-		-			5,286
Interest expense			-		-		(96,512	)		(96,512	)
Reversal of losses on valuation of long-term investments			-		39,355		-			39,355
Total	₩		5,286		43,354		(96,512	)		(47,872	)

F-205

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

17. Capital and reserves

A. Share capital

Details of share capital as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
		(In Korean won and number of shares)
Number of authorized shares			4,000		4,000
Value per share	₩		1,000		1,000
Number of shares issued			78		78
Common shares	₩		78,000		78,000

i. Ordinary shares

Holders of these shares are entitled to dividends as declared from time to time and are entitled to one vote per share at general meetings of the Company.

B. Other reserves

		December 31, 2024			December 31, 2023
		(In thousands of Korean won)
Other reserves	₩		(585,468	)		(585,468	)

Upon the spin-off, the aggregate net parent investment and accumulated other comprehensive income are reclassified to share capital and other reserves.

18. Capital management

The Company’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Company monitors capital using a ratio of ‘net debt’ to ‘total equity’. Net debt is calculated as total liability (as shown in the statement of financial position) less cash and cash equivalents. The Company’s net debt to total equity ratio as of December 31, 2024 and 2023 is as follows.

		December 31, 2024			December 31, 2023
		(In thousands of Korean won)
Total liability	₩		5,215,005			7,339,765
Less: Cash and cash equivalents			(863,927	)		(1,919,916	)
Net debt			4,351,078			5,419,849
Total equity	₩		325,807			225,695
Net debt to total equity ratio			13.35			24.01

F-206

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

19. Borrowings/payable and Loans/receivable

Borrowings as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Current Liability
Short-term borrowings	₩		1,445,453		1,505,000
Lease liability (*)			80,165		62,797
Total	₩		1,525,618		1,567,797
Non-Current liability
Lease liability (*)	₩		65,483		267,583

(*) The interest rate related to lease liability reflects the incremental borrowing rate based on the Company’s credit. The amount of interest expense related to lease liability incurred during 2024 is Korean Won 9,766 thousand (2023: Korean Won 11,049 thousand). Additionally, the amount of short-term lease payments not included in the measurement of lease liability during 2024 is Korean Won 1,950,254 thousand (2023: Korean Won 2,436,273 thousand).

A. Terms and repayment schedule

The terms and conditions of outstanding borrowings as of December 31, 2024 and 2023 are as follows:

				December 31, 2024				December 31, 2023
	Currency	Nominal interest rate	Maturity	Face value		Carrying amount		Face value		Carrying amount
				(In thousands of Korean won)
Secured bank borrowings (*1)	KRW	4.57%	09-May-25		520,000		520,000		520,000		520,000
Secured bank borrowings (*2)	KRW	4.45%	23-Sep-25		940,000		925,000		1,000,000		985,000
Secured bank borrowings (*3)	KRW	6.90%	17-Oct-25		2,000,000		453		-		-
Total interest-bearing liability					3,460,000		1,445,453		1,520,000		1,505,000

(*1) The Company has received a payment guarantee of Korean Won 468,000 thousand (2023: Korean Won 468,000 thousand) from Korea Credit Guarantee Fund as of December 31, 2024. The Company is provided a joint guarantee of Korean Won 62,400 thousand (2023: Korean Won 62,400 thousand) by the CEO of the Company as of December 31, 2024.

(*2) The Company is provided a joint guarantee of Korean Won 1,128,000 thousand (2023: Korean Won 1,200,000 thousand) by the CEO of the Company as of December 31, 2024. The borrowing will be repaid in monthly installments of 5,000 thousand.

(*3) The Company has received collateral in the form of land and buildings owned by Pluto Co., Ltd., a related party, to secure its borrowings of KRW 2,400,000 thousand as of December 31, 2024.

F-207

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

B. Terms and collection schedule

The terms and conditions of outstanding loans as of December 31, 2024 and 2023 are as follows:

				December 31, 2024				December 31, 2023
	Currency	Nominal interest rate	Maturity	Face value		Carrying amount		Face value		Carrying amount
				(In thousands of Korean won)
Falling Starlight Limited Company Specializing in The Cultural Industry	KRW	-	-		120,054		120,054		120,054		120,054
Park, Un Kyoung	KRW	4.60%	16-Jan-25		10,000		10,002		10,000		10,033
Total					130,054		130,056		130,054		130,087

(*) The maturity of the loan is set as the later of January 16, 2025, or the liquidation date of Falling Starlight Limited Company Specializing in The Cultural Industry.

20. Trade and other payables

Trade and other payables as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Other payable	₩		1,118,423		1,312,994
Accrued expenses			919,173		686,973
Total	₩		2,037,596		1,999,967

21. Provisions

Provisions for the years ended December 31, 2024 and 2023 are as follows:

		2024			2023
		(In thousands of Korean Won)
Site restoration
Beginning of the year	₩		3,471			3,448
Interest expense			128			23
Lease termination			(3,479	)		-
New Lease Contract			4,804			-
Ending of the year	₩		4,924			3,471

The provision for building restoration relates to buildings leased during 2024 and 2023. The provision has been estimated based on historical data associated with similar buildings.

F-208

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

22. Financial Instruments – Fair values and risk management

A. Accounting classifications and fair values

The following table shows the carrying amounts and fair values of financial assets and financial liability, including their levels in the fair value hierarchy. It does not include fair value information for financial assets and financial liability not measured at fair value if the carrying amount is a reasonable approximation of fair value.

Carrying amounts of financial instruments by category as of December 31, 2024 are as follows:

		Fair value		Level 1		Level 2		Level 3		Total
		(In thousands of Korean won)
Financial assets at fair value
Long-term investments	₩		800,000		-		-		800,000		800,000
Other financial liabilities
Financial guarantee liability	₩		2,573		-		-		2,573		2,573

Carrying amounts of financial instruments by category as of December 31, 2023 are as follows:

		Fair value		Level 1		Level 2		Level 3		Total
		(In thousands of Korean won)
Financial assets at fair value
Long-term investments	₩		800,000		-		-		800,000		800,000

F-209

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

B. Measurement of fair values

Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

● Level 1: quoted prices (unadjusted) in active markets for identical asset or liability;

● Level 2: all inputs other than quoted prices included in Level 1 that are observable (either directly that is, prices, or indirectly that is, derived from prices) for the asset or liability;

● Level 3: unobservable inputs for the asset or liability.

The fair value of financial instruments traded in an active market is determined based on the quoted market price as of the end of the reporting period. If the quoted prices are readily and regularly available through exchanges, sellers, brokers, industry groups, rating agencies or regulators and such prices represent actual market transactions that occur regularly between independent parties, they are considered active markets.

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. These valuation techniques use as much market observable information as possible and use the least amount of Company-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.

If the information is insufficient to measure fair value of the project investment, the Company recognizes gain on project settlements when the accumulated settlements exceed the project investment’s original invested amount. Before exceeding the project investment’s original invested amount, the settlements are recognized as the return of original project investment. The Company recognizes the valuation loss of the project investment based on its judgment as to whether the total amount of production costs and distribution fees could exceed the shared profit.

C. Financial risk management

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

i. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterpart to a financial instrument fails to meet its contractual obligations and arises principally from the Company’s receivables from customers. In order to manage credit risk, the Company regularly evaluate the credit worthiness of each customer or counterparty considering the party’s financial information, past experience, its own trading records and other factors. In relation to the impairment of financial assets subsequent to initial recognition, the Company recognizes the changes in expected credit loss(“ECL”) in profit or loss at each reporting date. The carrying amount of a financial asset represents the maximum exposure to credit risk.

F-210

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

The maximum exposure to credit risk of the Company as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Cash and cash equivalents (*1)	₩		863,927		1,919,916
Accounts receivable, net			185,661		203,667
Long-term loans, net			130,056		130,087
Long-term accounts receivable – other, net			45,899		-
Other non-current financial assets			39,080		147,406
Financial guarantee liability (*2)			318,256		-
Total	₩		1,582,879		2,401,076

(*1) Cash and cash equivalents are deposited in financial institutions with strong credit rating.

(*2) The Company has provided a financial guarantee for the repayment of loans to other related parties.

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Company has established a credit policy under which each new customer is analyzed individually before the Company’s standard payment and delivery terms and conditions are offered. The Company’s review includes external ratings, if they are available, financial statements, credit agency information, industry information and in some cases bank references.

The Company monitors customer credit risk, customers are grouped according to their credit characteristics, including whether they are an individual or a legal entity, their geographic location, industry, trading history with the Company and existence of previous financial difficulties. The Company does not require collateral in respect of trade and other receivables. Expected credit losses (ECLs) and credit risk exposures for accounts receivable and other receivables as of December 31, 2024 and 2023 are as follows:

- Accounts receivables and other receivables

As of December 31, 2024	Expected loss rate				Carrying amount		Loss allowance
					(In thousands of Korean won)
Not due or overdue less than 90 days		0.00	%	₩		231,560		-
More than 90 days ~ Less than 1 year		0.00	%			-		-
More than 1 year		100.00	%			-		-
Total				₩		231,560		-

As of December 31, 2023	Expected loss rate				Carrying amount		Loss allowance
					(In thousands of Korean won)
Not due or overdue less than 90 days		0.00	%	₩		203,667		-
More than 90 days ~ Less than 1 year		0.00	%			-		-
More than 1 year		100.00	%			-		-
Total				₩		203,667		-

F-211

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

ii. Liquidity risk

Liquidity risk management includes the maintenance of sufficient cash and marketable securities, the availability of funds from appropriately committed credit lines, and the ability to settle market positions.

Financial liability of the Company by maturity according to the remaining period from December 31, 2024 to the contractual maturity date are as follows:

		December 31, 2024
		Carrying Amount		Less than 3 months		3 months ~1 year		1~2 years		2~5 years		More than 5 years		Total
		(In thousands of Korean won)
Payables (*1)	₩		1,118,423		25,072		1,093,351		-		-		-		1,118,423
Accrued expense (*1)			919,173		58,222		860,951		-		-		-		919,173
Short-term borrowings			1,445,453		31,394		1,452,667		-		-		-		1,484,061
Lease liability			145,647		22,577		67,730		35,306		27,781		-		153,394
Financial guarantee liability (*2)			2,573		285,000		-		-		-		-		285,000
Total	₩		3,631,269		422,265		3,474,699		35,306		27,781		-		3,960,051

(*1) Payables and accrued expense exclude non-financial liability.

(*2) For issued financial guarantee contracts, the maximum amount of the guarantee is allocated to the earliest period in which the guarantee could be called.

Financial liability of the Company by maturity according to the remaining period from December 31, 2023 to the contractual maturity date are as follows:

		December 31, 2023
		Carrying Amount		Less than 3 months		3 months ~1 year		1~2 years		2~5 years		More than 5 years		Total
		(In thousands of Korean won)
Payables (*)	₩		1,312,994		238,741		1,074,253		-		-		-		1,312,994
Accrued expense (*)			682,647		472,164		210,483		-		-		-		682,647
Short-term borrowings			1,505,000		33,985		1,517,736		-		-		-		1,551,721
Lease liability			330,379		18,947		56,840		75,786		194,527		7,580		353,680
Total	₩		3,831,020		763,837		2,859,312		75,786		194,527		7,580		3,901,042

(*) Payables and accrued expense exclude non-financial liability.

iii. Interest rate risk

The sensitivity analysis is based on borrowing under variable interest rate conditions as of December 31, 2024 and 2023.

		December 31, 2024 (*)				December 31, 2023
		Increased by 100 bp		Decreased by 100 bp		Increased by 100 bp	Decreased by 100 bp
		(In thousands of Korean won)
Interest	₩		-		-	7,250		(7,250	)

(*) As of December 31, 2024, The company had no borrowings subject to variable interest rates. Accordingly, a sensitivity analysis for interest rate risk has not been presented.

F-212

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

23. Leases

A. Leases as lessee

The Company leases buildings and vehicles. The leases typically run for a period of 5 to 10 years, with an option to renew or terminate the lease after that date. The Company also leases vehicles with contract terms of one year. This lease is short-term item. The Company has elected not to recognize right-of-use assets and lease liability for these leases. Information about leases for which the Company is a lessee is presented below.

i. Right-of-use assets

Right-of-use assets related to leased properties that do not meet the definition of investment property are presented as property and equipment.

Details of right-of-use assets and lease liability recognized in the statements of financial position as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Right-of-use assets (Acquisition price)
Building	₩		119,948		417,533
Vehicles			143,262		143,262
Total	₩		263,210		560,795

		December 31, 2024			December 31, 2023
		(In thousands of Korean won)
Right-of-use assets (Accumulated depreciation)
Building	₩		(54,814	)		(200,123	)
Vehicles			(59,924	)		(31,272	)
Total	₩		(114,738	)		(231,395	)

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Right-of-use assets (Net book value)
Building	₩		65,134		217,410
Vehicles			83,338		111,990
Total	₩		148,472		329,400

F-213

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

Changes in right-of-use assets for the years ended December 31, 2024 and 2023 are as follows:

		2024
		Building			Vehicles			Total
		(In thousands of Korean won)
Balance as of January 1, 2024	₩		217,410			111,990			329,400
Depreciation			(68,677	)		(28,652	)		(97,329	)
Lease termination			(203,547	)		-			(203,547	)
Acquisitions			119,948			-			119,948
Balance as of December 31, 2024	₩		65,134			83,338			148,472

		2023
		Building			Vehicles			Total
		(In thousands of Korean won)
Balance as of January 1, 2023	₩		259,163			140,643			399,806
Depreciation			(41,753	)		(28,653	)		(70,406	)
Balance as of December 31, 2023	₩		217,410			111,990			329,400

ii. Amounts recognized in profit or loss

Amounts recognized in profit or loss for the years ended December 31, 2024 and 2023 are as follows:

		2024		2023
		(In thousands of Korean won)
Interest expense relating to lease liability (included in finance cost)	₩		9,766		11,049
Expense relating to short-term leases			1,950,254		2,436,273

iii. Amounts recognized in statement of cash flows

Amounts recognized in statement of cash flows for the years ended December 31, 2024 and 2023 are as follows:

		2024		2023
		(In thousands of Korean won)
Total cash outflows of leases	₩		2,050,720		2,511,869

iv. Extension options

Some property leases contain extension options exercisable by the Company. The Company reflected extension options in measuring the lease liability. The extension options held are exercisable only by the Company and not by the lessors. The Company assesses at the lease commencement date whether it is reasonably certain to exercise the extension options. The Company reassesses whether it is reasonably certain to exercise the options if there is a significant event or significant changes in circumstances within its control.

F-214

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

24. Commitments

A. Key commitments

Key commitments the Company has entered into with financial institutions and others as of December 31, 2024 are as follows:

Financial institutions	Categories		Credit limit		Disbursed borrowing amount
			(In thousands of Korean won)
Woori Bank	Corporate operating borrowings (*1)	₩		520,000		520,000
Woori Bank	Corporate operating borrowings (*2)			940,000		925,000
Pureun Savings Bank	Corporate operating borrowings (*3)			2,000,000		453
Total		₩		3,460,000		1,445,453

(*1) The Company has received a payment guarantee of Korean Won 468,000 thousand (2023: Korean Won 468,000 thousand) from Korea Credit Guarantee Fund as of December 31, 2024. The Company is provided a joint guarantee of Korean Won 62,400 thousand (2023: Korean Won 62,400 thousand) by the CEO of the Company as of December 31, 2024.

(*2) The Company is provided a joint guarantee of Korean Won 1,128,400 thousand (2023: Korean Won 1,200,000 thousand) by the CEO of the Company as of December 31, 2024.

(*3) The Company has received collateral in the form of land and buildings owned by Pluto Co., Ltd., a related party, to secure its borrowings of KRW 2,400,000 thousand as of December 31, 2024.

B. Other commitment

On September 14, 2023, an amendment was made to the equity interest exchange agreement, originally entered into on March 31, 2023, between the CEO, who is the dominant shareholder of the Company, and K Enter Holdings Inc. for the purpose of listing on the NASDAQ through a merger with a SPAC company. The equity interest exchange agreement is effective on the date designated by K Enter Holdings Inc. Upon the effective date, the CEO of the Company will exchange 40 shares with the equity interest of K Enter Holdings Inc. Following the equity interest exchange transaction, the Company is expected to be a subsidiary of K Enter Holdings Inc.

C. Guarantees received

Details of guarantees received as of December 31, 2024 are as follows:

Guaranteed by	Details of guarantee	Guarantee limit
		(In thousands of Korean won)
Korea Credit Guarantee Fund	Payment guarantee		468,000

Details of guarantees received as of December 31, 2023 are as follows:

Guaranteed by	Details of guarantee	Guarantee limit
		(In thousands of Korean won)
Korea Credit Guarantee Fund	Payment guarantee		468,000

F-215

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

D. Details of guarantees

Contingent liabilities on outstanding guarantees provided by The company as of December 31, 2024 are as follows:

Guarantor	Guarantee beneficiary	Guarantee limit	Guarantee amount
		(In thousands of Korean won)
The LAMP Co., Ltd.,	Falling Starlight Limited Company Specializing in The Cultural Industry (*)	285,000		285,000

(*) In relation to the above guarantee, the company assessed the financial guarantee obligation and recognized the associated financial guarantee expense under other financial liabilities in accordance with the relevant accounting standards.

E. Legal Proceedings

Subsequent to the end of the current fiscal year, the company is involved in one pending legal proceeding in which it is named as a defendant, with a total claimed amount of KRW 50 million.
The outcome of the lawsuit is currently not reasonably predictable, and the timing and amount of any potential outflow of resources are uncertain. However, the Company believes that the ultimate resolution of this matter is not expected to have a material adverse effect on its financial statements for the current fiscal year.

25. Statement of Cash flows

Adjustments for income and expenses from operating activities for the years ended December 31, 2024 and 2023 are as follows:

		2024			2023
		(In thousands of Korean won)
Depreciation	₩		109,094			77,808
Other bad debt expenses			242,000			105,000
Reversal of allowance for doubtful accounts			(179,533	)
Interest expenses			133,981			107,583
Interest income			(15,628	)		(5,286	)
Financial Guarantee Expense			2,573			-
Gain on project settlements			(3,165	)		(3,999	)
Reversal of losses on valuation of long-term investments			(3,897	)		(39,355	)
Severance benefits			38,937			28,490
Income tax expenses			92,089			(18,799	)
Loss on retirement of Property and equipment			39,615			-
Gain on disposal of right of use assets			(14,767	)		-
Total	₩		441,299			251,442

F-216

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

Changes in assets and liabilities from operating activities for the years ended December 31, 2024 and 2023 are as follows:

		2024			2023
		(In thousands of Korean won)
Other current non-financial liabilities	₩		(16,256	)		12,612
Other current assets			988,560			(1,180,909	)
Other non-current non-financial assets			(222,503	)		131,000
Accounts receivable — other, net			162,234			(77,888	)
Trade and other payables			(11,723	)		509,249
Contract liabilities			(1,855,348	)		780,775
Contract assets			(455,326	)		(28,109	)
Total	₩		(1,410,362	)		146,730

Significant non-cash transactions for the years ended December 31, 2024 and 2023 are as follows:

		2024			2023
		(In thousands of Korean won)
Unsettled distribution to Pluto due to Spin-off	₩		-			1,081,277
Reclassification of non-current lease liability			89,377			66,822
Right-of-use assets obtained in exchange for lease liability			(115,143	)		-
Lease termination			209,175			-
Total	₩		183,409			1,148,099

F-217

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

The movements of liability to cash flows arising from financing activities for the years ended December 31, 2024 and 2023 are as follows:

		Short-term borrowings			Current lease liability			Non-current lease liability			Total
		(In thousands of Korean won)
Balance at January 1, 2023	₩		520,000			60,522			334,405			914,927
Changes from financing cash flows
Proceeds from borrowings			1,000,000			-			-			1,000,000
Repayment of borrowings			(15,000	)		-			-			(15,000	)
Payment of lease liability			-			(64,547	)		-			(64,547	)
Reclassification			-			66,822			(66,822	)		-
Total			985,000			2,275			(66,822	)		920,453
Other changes
Interest expense			-			11,049			-			11,049
Interest paid			-			(11,049	)		-			(11,049	)
Total	₩		-			-			-			-
Balance at December 31, 2023	₩		1,505,000			62,797			267,583			1,835,380
Balance at January 1, 2024			1,505,000			62,797			267,583			1,835,380
Changes from financing cash flows
Proceeds from borrowings			883,302			-			-			883,302
Repayment of borrowings			(942,849	)		-			-			(942,849	)
Payment of lease liability			-			(90,700	)		-			(90,700	)
Reclassification			-			89,377			(89,377	)		-
Total	₩		(59,547	)		(1,323	)		(89,377	)		(150,247	)
Other changes
Right-of-use assets obtained in exchange for lease liability			-			56,321			58,822			115,143
Disposal of Lease liabilities						(37,630	)		(171,545	)		(209,175	)
Interest expense			-			9,766			-			9,766
Interest paid			-			(9,766	)		-			(9,766	)
Total	₩		-			18,691			(112,723	)		(94,032	)
Balance at December 31, 2024	₩		1,445,453			80,165			65,483			1,591,101

F-218

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

26. Related parties

A. List of related parties

List of related parties as of December 31, 2024 and 2023 are as follows:

Relationship	Entity
Other related parties	- Falling Starlight Limited Company Specializing in The Cultural Industry (hereafter referred to as “Falling Starlight”) - Pluto Co., Ltd
Key management personnel	- Park, Un Kyoung

B. Transactions with related parties

Details of transaction with related parties for the years ended December 31, 2024 and 2023 are as follows:

			2024
Related party	Name of entity		Revenue		Interest income		Interest expenses		Financial Guarantee Expense
			(In thousands of Korean won)
Other related parties	Falling Starlight	₩		239,615		-		-		2,573
Other related parties	Pluto			15,000		-		49,710
Key management personnel	Park, Un Kyoung			-		428		-		-
Total		₩		254,615		428		49,710		2,573

			2023
Related party	Name of entity		Revenue		Interest income		Interest expenses
			(In thousands of Korean won)
Other related parties	Falling Starlight	₩		432,411		-		-
Other related parties	Pluto			-		-		57,521
Key management personnel	Park, Un Kyoung			-		430		-
Total		₩		432,411		430		57,521

F-219

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

C. Account balances with related parties

The balances of receivables and payables to related parties as of December 31, 2024 are as follows:

Related party	Name of entity		Receivables		Loans		Project investment		Payables		Financial Guarantee Liability
			(In thousands of Korean won)
Other related parties	Falling Starlight	₩		20,000		120,054		800,000		-		2,573
Other related parties	Pluto (*)			-		-		-		1,184,828		-
Key management personnel	Park, Un Kyoung			1,357		10,002		-		-		-
Total		₩		21,357		130,056		800,000		1,184,828		2,573

(*) On March 31, 2023, the date of spin-off, the Company agreed to pay Korean Won 2,053,480 thousand to Pluto in accordance with the Separation Proposal. As of December 31, 2024, the payables to Pluto is Korean Won 1,184,828 thousand after the settlement during the period ended December 31, 2024.

The balances of receivables and payables to related parties as of December 31, 2023 are as follows:

Related party	Name of entity		Receivables		Loans		Project investment		Payables
			(In thousands of Korean won)
Other related parties	Falling Starlight	₩		20,000		120,054		800,000		-
Other related parties	Pluto (*)			-		-		-		1,138,798
Key management personnel	Park, Un Kyoung			897		10,033		-		-
Total		₩		20,897		130,087		800,000		1,138,798

(*) On March 31, 2023, the date of spin-off, the Company agreed to pay Korean Won 2,053,480 thousand to Pluto in accordance with the Separation Proposal. As of December 31, 2023, the payables to Pluto is Korean Won 1,138,798 thousand after the settlement during the period ended December 31, 2023.

D. Financing and investing transactions with related parties

Details of significant financing and investing transactions with related parties for the years ended December 31, 2024 and 2023 are as follows:

			2024
Related party	Name of entity		Loans		Increase in accrued income		Increase in Payables
			(In thousands of Korean won)
Other related parties	Pluto	₩		-		-		46,030
Key management personnel	Park, Un Kyoung			-		460		-
Total		₩		-		460		46,030

			2023
Related party	Name of entity		Loans		Increase in accrued income		Increase in Payables
			(In thousands of Korean won)
Other related parties	Falling starlight	₩		20,000		-		-
Other related parties	Pluto			-		-		1,043,964
Key management personnel	Park, Un Kyoung			-		460		-
Total		₩		20,000		460		1,043,964

F-220

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

E. Commitments with related parties

During the year ended December 31, 2022, the Company entered into an agreement with Falling Starlight for the production service and profit sharing.

As of December 31, 2024, the Company has been satisfying its performance obligation for production service in accordance with the agreement and has received the consideration for the service provided. After the release of the content, the Company is entitled to share the profits in accordance with the agreed profit-sharing ratio.

The Company is provided a joint guarantee of Korean Won 1,190,400 thousand by the CEO of the Company as of December 31, 2024.

As of December 31, 2024, the Company has provided a joint guarantee of Korean Won 285,000 thousand to Falling Starlight, classified as other related parties.

The Company has received collateral in the form of land and buildings owned by Pluto Co., Ltd., a related party, to secure its borrowings of KRW 2,400,000 thousand as of December 31, 2024.

F. Transactions with key management personnel

The compensation for the key management personnel for the years ended December 31, 2024 and 2023 are as follows:

		2024		2023
		(In thousands of Korean won)
Short-term employee benefits	₩		268,000		205,500
Post-employment benefits			27,760		19,468
Total	₩		295,760		224,968

Compensation of the Company’s key management personnel include salaries, non-cash benefits and contributions to a post-employment defined benefit plan.

27. Subsequent event

On January 3, 2025, K Enter Holdings Inc. completed the acquisition of a controlling interest in six Korean entities, including The LAMP Co., Ltd., through a share exchange. Upon the effective date, the CEO of the Company exchanged 40 shares with the equity interest of K Enter Holdings Inc. Following the equity interest exchange transaction, the Company became a subsidiary of K Enter Holdings Inc.

F-221

Report of Independent Auditors

To the Board of Directors of

Bidangil Pictures Co., Ltd.

Opinion

We have audited the accompanying consolidated financial statements of Bidangil Pictures Co.,Ltd. (the “Company”), which comprise the consolidated statements of financial position as of December 31, 2024 and 2023, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, including the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Basis for Opinion

We conducted our audit in accordance with auditing standards generally accepted in the United States of America (US GAAS). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Company’s ability to continue as a going concern for at least, but not limited to, twelve months from the end of the reporting period, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with US GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.

F-222

In performing an audit in accordance with US GAAS, we:

● Exercise professional judgment and maintain professional skepticism throughout the audit.

● Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

● Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, no such opinion is expressed.

● Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.

● Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

/s/ Samil PricewaterhouseCoopers

Seoul, KOREA

May 14, 2025

F-223

BIDANGIL PICTURES CO., LTD.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

As of December 31, 2024 and 2023

	Note		December 31, 2024		December 31, 2023
			(In thousands of Korean won)
Assets
Cash and cash equivalents	14,17,19,22,24	₩		1,448,485		3,723,417
Short-term financial instruments	17,22			862,868		1,537,640
Accounts receivable — trade, net	7,13,17,22			633		2,647
Accounts receivable — other, net	13,17,22			2,766		42,665
- Related parties	25			-		42,664
- Non-related parties				2,766		1
Short-term loans — net	15,17,22			135,000		952,500
- Related parties	25			-		952,500
- Non-related parties				135,000		-
Other current assets	12			66,424		5,070,905
Other current financial assets	17,22			50,600		49,000
Contract assets	7,17,22			724,848		143,834
Total current assets				3,291,624		11,522,609
Property, plant and equipment including right-of-use assets	16,23			123,789		138,006
Other non-current financial assets	17,22			86,781		131,620
Other non-current non-financial assets	12			518,100		441,600
Total non-current assets				728,670		711,226
Total assets		₩		4,020,294		12,233,835
Liabilities
Trade and other payables	17,21,22	₩		911,596		1,060,087
Other current financial liabilities	17,20,22			-		200,200
Other current non-financial liabilities				7,415		40,010
Contract liabilities	7			-		6,182,960
Current Lease liabilities	20,22			77,927		95,509
Current tax liabilities				81,512		72,520
Total current liabilities				1,078,450		7,651,286
Non-current Lease liabilities	20,22			45,402		44,421
Total non-current liabilities				45,402		44,421
Total liabilities		₩		1,123,852		7,695,707

The accompanying notes are an integral part of these consolidated financial statements.

F-224

BIDANGIL PICTURES CO., LTD.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

As of December 31, 2024 and 2023

	Note		December 31, 2024			December 31, 2023
			(In thousands of Korean won)
Equity
Share capital	18	₩		50,000			50,000
Share premium	18			50,000			50,000
Treasury shares	18			(2,000,000	)		-
Retained earnings				4,796,442			4,438,128
Equity attributable to owners of the Parent Company				2,896,442			4,538,128
Total equity				2,896,442			4,538,128
Total liabilities and equity		₩		4,020,294			12,233,835

The accompanying notes are an integral part of these consolidated financial statements.

F-225

BIDANGIL PICTURES CO., LTD.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Years Ended December 31, 2024 and 2023

	Note		2024			2023
			(In thousands of Korean won)
Revenues
Media production revenue	6,7	₩		18,632,504			7,746,081
Cost of revenues	8			(17,446,927	)		(7,069,610	)
Gross profit				1,185,577			676,471
Selling, general and administrative expenses	8			(710,258	)		(759,395	)
Other income	8			2			36,004
Other expenses	8			(21,498	)		(2,016	)
Operating profit (loss)				453,823			(48,936	)
Finance income	9,17			55,972			245,390
- Related parties	25			2,154			42,664
- Non-related parties				53,818			202,726
Finance costs	9,17			(147,749	)		(11,504	)
Profit before income tax				362,046			184,950
Income tax benefit (expenses)	11			(3,732	)		1,523
Profit for the year		₩		358,314			186,473
Total comprehensive income for the year		₩		358,314			186,473
Profit attributable to:
Owners of the Parent Company		₩		358,314			186,473
Total comprehensive income attributable to:
Owners of the Parent Company		₩		358,314			186,473

The accompanying notes are an integral part of these consolidated financial statements.

F-226

BIDANGIL PICTURES CO., LTD.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the Years Ended December 31, 2024 and 2023

	Note		Share capital		Share premium		Treasury shares			Retained earnings		Total
			(In thousands of Korean won)
Balance at January 1, 2023		₩		50,000		50,000		-			4,251,655		4,351,655
Total comprehensive income for the year
Profit for the year				-		-		-			186,473		186,473
Balance at December 31, 2023		₩		50,000		50,000		-			4,438,128		4,538,128
Balance at January 1, 2024		₩		50,000		50,000		-			4,438,128		4,538,128
Total comprehensive income for the year
Profit for the year				-		-		-			358,314		358,314
Transaction with owners, recognized directly in equity
Acquisition of treasury shares	18			-		-		(2,000,000	)		-		(2,000,000	)
Balance at December 31, 2024		₩		50,000		50,000		(2,000,000	)		4,796,442		2,896,442

The accompanying notes are an integral part of these consolidated financial statements.

F-227

BIDANGIL PICTURES CO., LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 2024 and 2023

	Note		2024			2023
			(In thousands of Korean won)
Cash flows from operating activities	24
Profit for the year		₩		358,314			186,473
Adjustments to reconcile net income to net cash provided by operating activities				(1,825,268	)		1,862,599
Interest received				71,241			58,849
Interest paid				(10,616	)		(11,504	)
Income taxes refund(paid)				5,260			(8,128	)
Net cash inflow(outflow) from operating activities		₩		(1,401,069	)		2,088,289
Cash flows from investing activities
Disposal of short-term financial instruments		₩		2,551,823			8,300,231
Purchase of short-term financial instruments				(2,001,527	)		(6,933,733	)
Payments for short-term loans				(135,000	)		(25,380	)
Payments for other current financial assets				-			(49,000	)
Proceeds from other current financial assets				49,000			-
Proceeds from other non-current financial assets				-			850
Collection of short-term loans				952,500			-
- Related parties				952,500			-
- Non-related parties				-			-
Net cash inflow in investing activities		₩		1,416,796			1,292,968
Cash flows from financing activities	24
Acquisition of treasury shares				(2,000,000	)		-
Repayment of investment withholdings				(200,200	)		(600,600	)
Repayment of lease liabilities				(90,459	)		(84,532	)
Net cash outflow in financing activities		₩		(2,290,659	)		(685,132	)
Net increase (decrease) in cash and cash equivalents				(2,274,932	)		2,696,125
Cash and cash equivalents at beginning of the year	14			3,723,417			1,027,292
Cash and cash equivalents at end of the year	14	₩		1,448,485			3,723,417

The accompanying notes are an integral part of these consolidated financial statements.

F-228

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

1. Reporting entity

The Parent Company

Bidangil Pictures Co., Ltd. (“the Parent Company”) was incorporated in February 2005 and the Parent Company’s registered office is at 220, Yeoksam-ro, Gangnam-gu, Seoul, Korea. These consolidated financial statements comprise the Parent Company and its subsidiary (together referred to as the “Group”). The Group generates revenue primarily through providing the media production services. The Parent Company is primarily providing the media production service that consists of planning, producing, and selling the theatrical films and television programs. Trigger Limited Company Specializing in The Cultural Industry (the “Subsidiary”) is engaged in the business of planning, development and production of the film Trigger.

The Parent Company’s major shareholders and their respective percentage of ownership as of December 31, 2024 and 2023 are as follows:

	December 31, 2024					December 31, 2023
	Number of shares		Ownership (%)			Number of shares		Ownership (%)
Yoon, In Bum		4,750		47.50	%		5,000		50	%
Kim, Soo Jin		4,750		47.50	%		5,000		50	%
Treasury shares		500		5.00	%		-		-
Total		10,000		100	%		10,000		100	%

Consolidated Subsidiary

Details of the consolidated subsidiary as of December 31, 2024 and December 31, 2023 are as follows:

		Percentage of ownership (%)
Subsidiary	Location	December 31, 2024	December 31, 2023	Fiscal year end	Main business
Trigger Limited Company Specializing in The Cultural Industry	Korea	100	100	December	Planning, development and production of the film Trigger

The Parent Company established a special purpose company to plan, develop and manage the production of the new project ‘Trigger’ as of April 5, 2023. The initial capital amounted to Korean won 10,000 thousand, but no capital has been contributed as of December 31, 2024.

F-229

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

2. Basis of Accounting

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by International Accounting Standard Board (“IASB”). These consolidated financial statements were authorized for issuance by the Board of Directors on May 14, 2025.

Details of the Group’s accounting policies are included in Note 5.

Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis except for the following items, which are measured on an alternative basis on each reporting date.

Items	Measurement bases
Financial instruments measured at fair value through profit or loss (“FVTPL”)	Fair value

3. Functional and presentation currency

These consolidated financial statements are presented in Korean Won, which the Group’s functional currency. All amounts have been rounded to the nearest thousand, unless otherwise indicated.

4. Use of judgements and estimates

In preparing these consolidated financial statements, management has made judgements and estimates that affect the application of the Group’s accounting policies and the reported amounts of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognized prospectively.

A. Judgements

Information about judgements made in applying accounting policies that have the most significant effects on the amounts recognized in the consolidated financial statements is included in the following note:

Note 7(B): revenue recognition: whether revenue from providing service is recognized over time or at a point in time; and

Note 23(A): lease term: whether the Group is reasonably certain to exercise extension options.

B. Assumptions and estimation uncertainties

Information about assumptions and estimation uncertainties at the reporting date that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year is included in the following notes:

● Note 11(A): uncertain tax treatments;

i. Measurement of fair values

A number of the Group’s accounting policies and disclosures require the measurement of fair values, for financial assets.

F-230

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

When measuring the fair value of a financial instruments measured at FVTPL, the Group uses observable market data as far as possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.

● Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

● Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).

● Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The Group recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

Further information about the assumptions made in measuring fair values is included in the following note:

● Note 22(B): financial instruments.

5. Material accounting policies

The material accounting policies followed by the Group in preparation of its consolidated financial statements are as follows:

A. New and amended standards or interpretations adopted by the Group

The Group has applied the following standards and amendments for the first time for their annual reporting period commencing January 1, 2024.

IAS 1 Presentation of Financial Statements - Classification of Liabilities as Current or Non-current, Non-current Liabilities with Covenants

The amendments to IAS 1 clarify that liabilities are classified as either current or non-current, depending on the substantive rights that exist at the end of the reporting period. Classification is unaffected by the likelihood that an entity will exercise right to defer settlement of the liability or the expectations of management. Also, the settlement of liability includes the transfer of the entity’s own equity instruments, however, it would be excluded if an option to settle them by the entity’s own equity instruments if compound financial instruments is met the definition of equity instruments and recognized separately from the liability. Covenants that the entity must comply with after the end of the reporting period do not affect the classification of a liability at the end of the reporting period. However, if a liability is classified as non-current as of the end of the reporting period despite covenants that must be complied with within 12 months after that date, the entity shall disclose information about the risk that the liability could become repayable within 12 months after the reporting period. The amendments do not have a significant impact on the consolidated financial statements.

IAS 7 Statement of Cash Flows - IFRS 7 Financial Instruments: Disclosures – Supplier finance arrangements

The amendments to IAS 7 require entity to disclose information about its supplier finance arrangements that enables users of financial statements to assess the effects of those arrangements on the entity’s liabilities and cash flows and on the entity’s exposure to liquidity risk when applying supplier finance arrangements. The amendments do not have a significant impact on the consolidated financial statements.

IFRS 16 – Lease Liability in a Sale and Leaseback

The amendments to IFRS 16 require a seller-lessee shall determine lease payments or revised lease payments in a way that the seller-lessee would not recognize any amount of the gain or loss that relates to the right of use retained by the seller-lessee when subsequently measuring lease liabilities arising from a sale and leaseback. The amendments do not have a significant impact on the consolidated financial statements.

F-231

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

B. New and amended standards or interpretations not yet adopted by the Group

The following new accounting standards and interpretation that have been published that are not mandatory for December 31, 2024 reporting periods and have not been early adopted by the Group.

IAS 21 The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability

The amendments require exchangeability of two currencies should be assessed in order to clarify reporting of foreign currency transactions in the absence of normal-functioning foreign exchange market. The amendments also require applicable spot exchange rate should be determined when the assessment indicates two currencies lack exchangeability. The amendments are effective for annual reporting periods beginning on or after January 1, 2025, with early application permitted. The Group does not expect that these amendments have a significant impact on the consolidated financial statements.

IFRS 9 Financial Instruments - IFRS 7 Financial Instruments: Disclosures – Classification and Measurement of Financial Instruments

The amendments clarify that a financial liability is derecognised on the ‘settlement date’ and introduce an accounting policy choice to derecognise financial liabilities settled using an electronic payment system before the settlement date. Other clarifications include the classification of financial assets with ESG linked features via additional guidance on the assessment of contingent features. Clarifications have been made to non-recourse loans and contractually linked instruments. Additional disclosures are introduced for financial instruments with contingent features and equity instruments classified at fair value through OCI. The amendments should be applied for annual periods beginning on or after January 1, 2026, and earlier application is permitted, with an option to early adopt the amendments for contingent features only. The Group does not expect that these amendments have a significant impact on the consolidated financial statements.

Annual Improvements to IFRS Accounting Standards – Volume 11

The amendments are annual improvements to the following standards:

- IFRS 1 First-time adoption of International Financial Reporting Standards;

- IFRS 7 Financial instruments: Disclosures;

- IFRS 9 Financial instruments;

- IFRS 10 Consolidated financial instruments; and

- IAS 7 Statement of cash flows

The new standard should be applied for annual periods beginning on or after January 1, 2026, and earlier application is permitted. The Group is in review for the impact of this new standard on the consolidated financial statements.

IFRS 18 Presentation and Disclosure in Financial Statements

Items in the statement of profit or loss will need to be classified into one of five categories: operating, investing, financing, income taxes and discontinued operations. IFRS 18 requires the Group to present specified totals and subtotals: ‘Operating profit or loss’, ‘Profit or loss’ and ‘Profit or loss before financing and income taxes’. Information related to management-defined performance measures should be disclosed. IFRS 18 also provides enhanced guidance on the principles of aggregation and disaggregation which focus on grouping items based on their shared characteristics. The new standard should be applied for annual periods beginning on or after January 1, 2027, and earlier application is permitted. The Group is in review for the impact of this new standard on the consolidated financial statements.

IFRS 19 Subsidiaries without Public Accountability: Disclosures

IFRS 19 allows eligible subsidiaries to apply IFRS Accounting Standards with the reduced disclosure requirements of IFRS 19. A subsidiary may choose to apply the new standard in its consolidated, separate or individual financial statements provided that, at the reporting date, it does not have public accountability, and its parent produces consolidated financial statements under IFRS Accounting Standards. A subsidiary applying IFRS 19 is required to disclose in its explicit and unreserved statements of compliance with IFRS Accounting Standards that IFRS 19 has been adopted. The amendments should be applied for annual periods beginning on or after January 1, 2027, and earlier application is permitted. The Group does not expect that these amendments have a significant impact on the consolidated financial statements.

F-232

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

C. Basis of consolidation

i. Subsidiary

Subsidiary is an entity controlled by the Group. The Group ‘controls’ an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiary are included in the consolidated financial statements from the date on which control commences until the date on which control ceases.

ii. Non-controlling interests

Non-controlling interests are measured initially at their proportionate share of the acquiree’s identifiable net assets at the date of acquisition.

Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

iii. Loss of control

When the Group loses control over a subsidiary, it derecognizes the assets and liabilities of the subsidiary, and any related non-controlling interests and other components of equity. Any resulting gain or loss is recognized in profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost.

iv. Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealized income and expenses (except for foreign currency transaction gains or losses) arising from intra-group transactions, are eliminated. Unrealized gains arising from transactions with equity- accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.

D. Foreign currency

Transactions in foreign currencies are translated into the respective functional currencies of Group at the exchange rates at the dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Foreign currency differences are generally recognized in profit or loss and presented within finance costs. Translation differences on Non-monetary assets and liabilities carried at fair value are reported as part of the fair value gain or loss.

However, foreign currency differences arising from the translation of the following items are recognized in OCI:

● an investment in equity securities designated as at FVOCI (except on impairment, in which case foreign currency differences that have been recognized in OCI are reclassified to profit or loss);

● a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; and

● qualifying cash flow hedges to the extent that the hedges are effective.

F-233

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

E. Revenue from contracts with customers

The Group generates revenue primarily through providing the media production service.

The Group determines revenue recognition by:

● identifying the contract, or contracts, with a customer;

● identifying the performance obligations in each contract;

● determining the transaction price;

● allocating the transaction price to the performance obligations in each contract; and

● recognizing revenue when, or as, we satisfy performance obligations by transferring the promised goods or services.

Media production revenue

The Group operates the media production business that consists of planning, producing, and selling the theatrical films and television programs. The Group identifies the license which is provided along with media product as combined output and recognizes revenue over time by measuring its progress based on cost incurred towards complete satisfaction of the performance obligation in accordance with Paragraph 35 (2) and (3) of IFRS 15 Revenue from contracts with customers. The percentage-of-completion for each contract is calculated by dividing the cumulative cost incurred in relation to service performed by the Group by estimated total contract costs.

The Group recognizes unbilled receivables from media production service as contract assets and recognizes receipts in advance for prepaid media production services as contract liabilities. The Group capitalizes the cost associated with the production, including development costs, direct costs, and production overhead per title as prepayments and prepaid expenses. The Group amortizes the capitalized asset in ‘Cost of revenues’ on the consolidated statements of comprehensive income based on the percentage-of-completion for each contract.

F. Operating segments

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. The chief operating decision-maker has been identified as the chief executive officer. The Group’s operating segment has been determined to be a single business unit, for which the Group generates identifiable financial information that is regularly reported to the chief executive officer for the purpose of resource allocation and assessment of segment performance. The Group has a reportable segment as described in Note 6. Segment results that are reported to the chief operating decision maker include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

G. Employee benefits

i. Short-term employee benefits

Short-term employee benefits are employee benefits due to be settled within 12 months after the end of the period in which the employees render related services. When an employee has rendered a service to the Group during an accounting period, the Group recognizes the undiscounted amount of short-term employee benefits expected to be paid in exchange for that service

ii. Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in future payments is available.

F-234

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

H. Finance income and finance costs

The Group’s finance income and finance costs include:

● interest income;

● interest expense;

● dividend income;

● the net gain or loss on financial assets at FVTPL;

● the foreign currency gain or loss on financial assets and financial liabilities;

The ‘effective interest rate’ is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:

● the gross carrying amount of the financial asset; or

● the amortized cost of the financial liability.

In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortized cost of the liability. However, for financial assets that have become credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortized cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.

I. Income tax

Income tax expense comprises current and deferred tax. It is recognized in profit or loss except to the extent that it relates to a business combination, or items recognized directly in equity or in OCI.

i. Current income tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax also includes any tax arising from dividends.

Current tax assets and liabilities are offset only if certain criteria are met.

- Has a legally enforceable right to set off the recognized amounts; and

- Intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

ii. Deferred income tax

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for:

● temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss;

● temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

● taxable temporary differences arising on the initial recognition of goodwill.

F-235

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

Deferred tax assets are recognized for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Future taxable profits are determined based on the reversal of relevant taxable temporary differences. If the amount of taxable temporary differences is insufficient to recognize a deferred tax asset in full, then future taxable profits, adjusted for reversals of existing temporary differences, are considered, based on the business plans for individual subsidiaries in the Group. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized; such reductions are reversed when the probability of future taxable profits improves.

The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. For this purpose, the carrying amount of investment property measured at fair value is presumed to be recovered through sale, and the Group has not rebutted this presumption.

Deferred tax assets and liabilities are offset only if certain criteria are met.

- Has a legally enforceable right to set off the recognized amounts; and

- Intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

J. Cash and Cash Equivalents

Cash and cash equivalents comprise cash on hand, deposits held at banks, and investment securities with maturities of three months or less from the acquisition date that are easily convertible to cash and subject to an insignificant risk of changes in their fair value.

K. Property, plant and equipment

i. Recognition and measurement

Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

ii. Subsequent expenditure

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Group. The carrying amount of the replaced parts are derecognized and the repairs and maintenance expenses are recognized in profit or loss in the period they are incurred.

iii. Depreciation

Depreciation is calculated using the straight-line method to allocate the cost or revalued amounts of the assets, net of their residual values, over their estimated useful lives as follows:

Office equipment	5 years
Furniture and fixtures	5 years
Right-of-use assets	5 ~ 7 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

L. Financial instruments

i. Recognition and initial measurement

Trade receivables and debt securities issued are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Group becomes a party to the contractual provisions of the instrument.

F-236

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus or minus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

ii. Classification and subsequent measurement

Financial assets

On initial recognition, a financial asset is classified as measured at:

● amortized cost; or

● FVTPL

Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

● it is held within a business model whose objective is to hold assets to collect contractual cash flows; and

● its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

● it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

● its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in the investment’s fair value in OCI. This election is made on an investment-by-investment basis.

All financial assets not classified as measured at amortized cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

Financial assets - Business model assessment

The Group makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes:

● the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether management’s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realizing cash flows through the sale of the assets;

● how the performance of the portfolio is evaluated and reported to the Group’s management;

● the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed;

● how managers of the business are compensated - e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flows collected; and

● the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.

F-237

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, consistent with the Group’s continuing recognition of the assets.

Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.

Financial assets - Assessment whether contractual cash flows are solely payments of principal and interest

For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.

In assessing whether the contractual cash flows are solely payments of principal and interest, the Group considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Group considers:

● contingent events that would change the amount or timing of cash flows;

● terms that may adjust the contractual coupon rate, including variable-rate features;

● prepayment and extension features; and

● terms that limit the Group’s claim to cash flows from specified assets (e.g. non-recourse features).

A prepayment feature is consistent with the solely payments of principal and interest criterion if the prepayment amount substantially represents unpaid amounts of principal and interest on the principal amount outstanding, which may include reasonable compensation for early termination of the contract. Additionally, for a financial asset acquired at a discount or premium to its contractual par amount, a feature that permits or requires prepayment at an amount that substantially represents the contractual par amount plus accrued (but unpaid) contractual interest (which may also include reasonable compensation for early termination) is treated as consistent with this criterion if the fair value of the prepayment feature is insignificant at initial recognition.

Financial assets - Subsequent measurement and gains and losses

Financial assets at FVTPL: These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

Financial assets at amortized cost: These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

Financial liabilities - Classification, subsequent measurement and gains and losses

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss. Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

F-238

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

iii. Derecognition

Financial assets

The Group derecognizes a financial asset when:

● the contractual rights to the cash flows from the financial asset expire; or

● it transfers the rights to receive the contractual cash flows in a transaction in which either:

- substantially all of the risks and rewards of ownership of the financial asset are transferred; or

- the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Group enters into transactions whereby it transfers assets recognized in its statement of financial position, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

Financial liabilities

The Group derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Group also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

When changes were made to a financial asset or financial liability in addition to changes to the basis for determining the contractual cash flows required by interest rate benchmark reform, the Group first updated the effective interest rate of the financial asset or financial liability to reflect the change that is required by interest rate benchmark reform. After that, the Group applied the policies on accounting for modifications to the additional changes.

M. Impairment

i. Non-derivative financial assets

Financial instruments and contract assets

The Group recognizes loss allowances for ECLs on:

● financial assets measured at amortized cost; and

● contract assets.

The Group also recognizes loss allowances for ECLs on lease receivables, which are disclosed as part of trade and other receivables.

The Group measures loss allowances at an amount equal to lifetime ECLs, except for the following, which are measured at 12-month ECLs:

● debt securities that are determined to have low credit risk at the reporting date; and

● other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowances for trade receivables (including lease receivables) and contract assets are always measured at an amount equal to lifetime ECLs.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group’s historical experience and informed credit assessment, that includes forward-looking information.

The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 12 months past due.

F-239

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

The Group considers a financial asset to be in default when:

● the debtor is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to actions such as realizing security (if any is held).

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.

12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk.

Measurement of ECLs

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Group expects to receive).

ECLs are discounted at the effective interest rate of the financial asset.

Credit-impaired financial assets

At each reporting date, the Group assesses whether financial assets carried at amortized cost are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

Evidence that a financial asset is credit-impaired includes the following observable data:

● significant financial difficulty of the debtor;

● the restructuring of a loan or advance by the Group on terms that the Group would not consider otherwise;

● it is probable that the debtor will enter bankruptcy or other financial reorganization; or

● the disappearance of an active market for a security because of financial difficulties.

Presentation of allowance for ECL in the statement of financial position

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets.

Write-off

The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For individual customers, the Group has a policy of writing off the gross carrying amount when the financial asset is 180 days past due based on historical experience of recoveries of similar assets. For corporate customers, the Group individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Group expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’s procedures for recovery of amounts due.

ii. Non-financial assets

At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than biological assets, investment property, developing contents, contract assets and deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill is tested annually for impairment.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.

F-240

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs of disposal. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

N. Leases

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

i. As a lessee

At commencement or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of its relative stand-alone prices. However, for the leases of property the Group has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.

The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.

The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased.

Lease payments included in the measurement of the lease liability comprise the following:

● fixed payments, including in-substance fixed payments;

● variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

● amounts expected to be payable under a residual value guarantee; and

● the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably certain not to terminate early.

F-241

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

At the date of transition to IFRSs, The Group applies the following approach to all of its leases.

The Group measures that lease liability at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate at the date of transition to IFRSs.

The Group measures right-of-use asset at its carrying amount as if IFRS 16 had been applied since the commencement date of the lease, but discounted using the lessee’s incremental borrowing rate at the date of transition to IFRSs.

The Group uses hindsight in applying IFRS 16 such as the determination of lease term for contracts that contain options to extend or terminate a lease.

The Group has elected not to recognize right-of-use assets and lease liabilities for leases of low-value assets (leases for which the underlying asset is valued at USD 5,000 or less) and short-term leases (leases that have a lease term of 12 months or less at the commencement date), including IT equipment. The Group recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

O. Fair value measurement

‘Fair value’ is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or, in its absence, the most advantageous market to which the Group has access at that date. The fair value of a liability reflects its non-performance risk.

A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.

When one is available, the Group measures the fair value of an instrument using the quoted price in an active market for that instrument. A market is regarded as ‘active’ if transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis.

If there is no quoted price in an active market, then the Group uses valuation techniques that maximize the use of relevant observable inputs and minimize the use of unobservable inputs. The chosen valuation technique incorporates all of the factors that market participants would take into account in pricing a transaction.

The best evidence of the fair value of a financial instrument on initial recognition is normally the transaction price - i.e. the fair value of the consideration given or received. If the Group determines that the fair value on initial recognition differs from the transaction price and the fair value is evidenced neither by a quoted price in an active market for an identical asset or liability nor based on a valuation technique for which any unobservable inputs are judged to be insignificant in relation to the measurement, then the financial instrument is initially measured at fair value, adjusted to defer the difference between the fair value on initial recognition and the transaction price. Subsequently, that difference is recognized in profit or loss on an appropriate basis over the life of the instrument but no later than when the valuation is wholly supported by observable market data or the transaction is closed out.

P. Concentration of Credit Risk

The Group performs periodic credit evaluations of its customers’ financial condition and generally does not require collateral for customers on accounts receivable. The Group maintains reserves for potential credit losses, which are periodically reviewed.

F-242

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

6. Operating segments

A. Basis for segmentation

The Group’s operating segments have been identified to be a single business unit, by which the Group provides media production services.

The following summary describes the operations of each reportable segment.

Reportable segment	Operations
Media Production	Planning, producing, and selling the media content such as theatrical films and television programs

The Group’s chief executive officer reviews the internal management reports at least quarterly.

B. Geographic information

Media production is managed and operated in Seoul, South Korea. The geographic information analyses the Group’s revenue by the customer’s country of domicile. In presenting the geographic information, segment revenue and non-current assets have been based on the geographic location of customers.

Summary of the Group’s operation by region based on the location of customers for the years ended December 31, 2024 and 2023 is as follows:

		2024		2023
		(In thousands of Korean won)
Korea	₩		115,571		188,823
USA			18,516,933		7,557,258
Total	₩		18,632,504		7,746,081

Summary of the Group’s non-current assets based on the location as of December 31, 2024 and 2023 is as follows:

		2024		2023
		(In thousands of Korean won)
Korea	₩		728,670		711,226

F-243

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

C. Major customer

Revenues from major customers that amount to 10% or more of the Group’s revenue for the years ended December 31, 2024 and 2023 are as follows:

		2024			2023
		(In thousands of Korean won)
Customer A (Media production segment)
Revenue	₩		18,516,933			7,557,258
%			99.4	%		97.6	%

7. Revenue

A. Revenue streams

The Group generates revenue primarily through providing the services for production of feature films for initial exhibition in theaters and streaming services.

Revenue from contracts with customers as of December 31, 2024 and 2023 are as follows:

		2024		2023
		(In thousands of Korean won)
Revenue from contracts with customers	₩		18,632,504		7,746,081

B. Disaggregation of revenue from contracts with customers

In the following table, revenue from contracts with customers is disaggregated by major products and service lines and timing of revenue recognition. The table also includes a reconciliation of the disaggregated revenue with the Group’s reportable segments (see Note 6).

Revenue from contracts with customers based on the service contract type and the timing of satisfaction of performance obligations for the years ended December 31, 2024 and 2023 are as follows:

		2024		2023
		(In thousands of Korean won)
Major products/service lines
Media production	₩		18,632,504		7,746,081
Timing of revenue recognition
At a point in time	₩		102,939		171,691
Over time			18,529,565		7,574,390
Total	₩		18,632,504		7,746,081

F-244

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

C. Contract balance

The balance of contract assets from contracts with customers as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Accounts receivable — trade, net	₩		633		2,647
Contract asset (Unbilled receivables)			724,848		143,834
Contract liabilities (Deferred revenue)			-		6,182,960

The contract liabilities primarily relate to the advance consideration received from customers for media production service, for which revenue is recognized over time. This will be recognized as revenue when the Group satisfies the performance obligations.

The amount of revenue recognized that was included in the contract liability balance at the beginning of the year is 6,182,960 thousand Korean won.

As of December 31, 2024, the Group had two ongoing projects. The aggregate transaction prices allocated to the remaining performance obligations under these contracts amounted to KRW 742,534 thousand and KRW 183,809 thousand, respectively, all of which are expected to be recognized as revenue during the year ending December 31, 2025.

D. Asset recognized from costs to fulfil a Contract

The Group recognized the expenses related to the screenplay for the film and drama production as assets, which are presented under “Other assets” in the statement of financial position.

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Asset recognized from costs to fulfil a contract (*)	₩		19,170		4,128,054

(*) This is presented within ‘other assets’ in the statements of financial position.

The costs relate directly to the contract, generate resources that will be used in satisfying the contract and are expected to be recovered. They were therefore recognized as an asset from costs to fulfil a contract. The asset is amortized as expense on a basis that is consistent with the transfer to the customer of the services to which the asset related over the term of the specific film production contract.

F-245

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

8. Income and Expenses

A. Other income

Details of other income for the years ended December 31, 2024 and 2023 are as follows:

		2024		2023
		(In thousands of Korean won)
Reversal for impairment of prepayments (*)	₩		-		20,000
Miscellaneous income			2		103
Debt forgiveness gain			-		15,901
Total	₩		2		36,004

(*) Recouping prepaid directing fees that were previously acknowledged as a prepayment impairment in the past.

B. Other expenses

Details of other expenses for the years ended December 31, 2024 and 2023 are as follows:

		2024		2023
		(In thousands of Korean won)
Miscellaneous expenses	₩		498		2,016
Impairment of prepayments (*)			21,000		-
Total	₩		21,498		2,016

(*) Loss on impairment of prepaid movie development fee for the project that has been prolonged without progress.

C. Expenses by nature

Details of classification of expenses by nature for the years ended December 31, 2024 and 2023 are as follows:

		2024		2023
		(In thousands of Korean won)
Subcontracted production and operating services	₩		959,872		690,459
Employee benefits			548,451		557,970
Depreciation and amortization			94,285		84,999
Actor’s appearance fee			4,435,410		1,673,030
Staff and equipment, etc			9,087,898		3,290,008
Transportation			477,886		147,706
Rent			1,624,749		816,587
Supplies			840,519		485,067
Other			88,115		83,179
Total	₩		18,157,185		7,829,005

Total expenses consist of cost of sales and selling, general and administrative expenses.

F-246

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

9. Finance income and costs

Details of finance income and costs for the years ended December 31, 2024 and 2023 are as follows:

		2024		2023
		(In thousands of Korean Won)
Finance income
Interest income	₩		43,315		69,940
Gains on disposal of short-term financial instruments			12,657		137,811
Gains on valuation of short-term financial instruments			-		37,639
Total	₩		55,972		245,390
Finance costs
Interest expenses	₩		10,617		11,504
Losses on valuation of short-term financial instruments			137,132		-
Total	₩		147,749		11,504

10. Employee benefits

The expenses recognized in relation to defined contribution plan for the years ended December 31, 2024 and 2023 are Korean Won 75,450 thousand and Korean Won 79,537 thousand.

A. Employee benefit expenses

i. Details of employee benefit expenses recognized for the years ended December 31, 2024 and 2023 are as follows:

		2024		2023
		(In thousands of Korean won)
Wages and salaries	₩		434,027		437,543
Expenses related to post-employment plans			75,450		79,537
Fringe benefit			38,974		40,890
Total	₩		548,451		557,970

ii. Expenses are recognized in the consolidated statements of comprehensive income (loss) as follows:

		2024		2023
		(In thousands of Korean won)
Selling, general and administrative expenses	₩		548,451		557,970

F-247

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

11. Income taxes

A. Amounts recognized in profit or loss

		2024		2023
		(In thousands of Korean won)
Current tax expense
Current year	₩		-		-
Adjustments recognized related to prior period incomes (*)			3,732		(1,523	)
Tax expense (benefit) on continuing operations	₩		3,732		(1,523	)

(*) In the normal course of business, the Group is examined by taxation authority. The Group’s management regularly assesses the potential outcomes of these examinations and any future examinations for the current or prior years in determining the adequacy of its liabilities for income taxes.

The Group establish 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, are included in income taxes in the consolidated statements of operations.

B. Reconciliation of effective tax rate

		2024			2023
		(In thousands of Korean won)
Profit before income tax	₩		362,046			184,950
Tax at the statutory income tax rate			35,843			18,310
Adjustments:
Expenses not deductible for tax purposes			1,119			1,658
Changes in unrecognized deferred tax assets			(36,703	)		(15,085	)
Adjustments recognized related to prior period incomes			3,732			(1,523	)
Differences in tax rate			(259	)		(4,883	)
Income tax expenses (benefit)	₩		3,732			(1,523	)
Effective income tax rate (*)			1.03	%		-

(*) The effective tax rate is not calculated as the Group incurred a income tax benefit for the year ended December 31, 2023.

F-248

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

C. Movement in deferred tax balances

i. Movement in deferred tax balances as of December 31, 2024

		Tax effect
		Beginning			Increase (decrease)			Ending
		(In thousands of Korean won)
Contract assets	₩		367,244			(488,801	)		(121,557	)
Prepayments			(1,311	)		(16,438	)		(17,749	)
Lease liabilities			2,086			(806	)		1,280
Others			(363,533	)		465,687			102,154
Total	₩		4,486			(40,358	)		(35,872	)
Loss carried forward	₩		29,972			3,395			33,367
Carryover tax credit			2,155,094			(1,870,543	)		284,551
Unrecognized deferred tax income asset (*)			(2,189,552	)		1,907,506			(282,046	)
Deferred tax assets (liabilities)	₩		-			-			-

(*) As of December 31, 2024, the Group did not recognize deferred income tax assets for the carryover tax credit exceeding taxable temporary difference as it is not probable such carryover tax credit can be utilized in the foreseeable future.

ii. Movement in deferred tax balances as of December 31, 2023

		Tax effect
		Beginning			Increase (decrease)			Ending
		(In thousands of Korean won)
Contract assets	₩		(584,353	)		951,597			367,244
Prepayments			539,340			(540,651	)		(1,311	)
Lease liabilities			3,137			(1,051	)		2,086
Others			10,703			(374,236	)		(363,533	)
Total	₩		(31,173	)		35,659			4,486
Loss carried forward	₩		85,649			(55,677	)		29,972
Carryover tax credit			2,119,665			35,429			2,155,094
Unrecognized deferred tax income assets (*)			(2,174,141	)		(15,411	)		(2,189,552	)
Deferred tax assets (liabilities)	₩		-			-			-

(*) As of December 31, 2023, the Group did not recognize deferred income tax asset for the temporary difference as it is not probable such loss carried forward and carryover tax credit can be utilized in the foreseeable future.

F-249

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

D. Deferred assets (liabilities)

i. Details of unrecognized deferred income tax assets as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Unrecognized temporary difference	₩		-		4,486
Loss carried forward			-		29,972
Carryover tax credit			282,046		2,155,094
Total	₩		282,046		2,189,552

ii. The maturity of unused carryover tax credit that are not recognized as deferred income tax assets as of December 31, 2024 is as follows:

Year of expiration		Unused carryover tax credit
		(In thousands of Korean won)
2029	₩		282,046
Total	₩		282,046

iii. The timing of recovery of deferred tax assets and liabilities as of December 31, 2024 and 2023 is as follows:

		December 31, 2024			December 31, 2023
		(In thousands of Korean won)
Deferred tax assets
- Deferred tax assets to be recovered after more than 12 months	₩		387,211			2,275,843
- Deferred tax assets to be recovered within 12 months			214,840			949,054
Sub-total			602,051			3,224,897
Deferred tax liabilities
- Deferred tax liabilities to be recovered after more than 12 months			(108,591	)		(132,409	)
- Deferred tax liabilities to be recovered within 12 months			(211,414	)		(902,936	)
Sub-total			(320,005	)		(1,035,345	)
Unrecognized deferred tax assets			(282,046	)		(2,189,552	)
Deferred tax assets (liabilities), net	₩		-			-

F-250

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

12. Other assets

Details of other assets as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Current
Prepaid expenses	₩		21,195		4,129,482
Value added tax receivables			45,229		941,424
Non-current
Non-current prepayments			518,100		441,600
Total	₩		584,524		5,512,505

13. Trade and other receivables

Details of trade and other receivables as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Trade receivable
Accounts receivable — Trade	₩		633		2,647
Other receivables
Accrued income			2,766		42,664
Non-trade receivables			-		1
Accounts receivable — other, net			2,766		42,665
Total	₩		3,399		45,312

14. Cash and cash equivalents

Cash and cash equivalents as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Deposits in banks	₩		1,448,485		3,723,417

The Group doesn’t have any restricted cash and cash equivalents as of December 31, 2024 and 2023.

F-251

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

15. Loans receivable

The terms and conditions of outstanding loans as of December 31, 2024 and 2023 are as follows:

			December 31, 2024				December 31, 2023
			(In thousands of Korean won)
	Currency	Nominal interest rate	Face value		Carrying amount		Face value		Carrying amount
Key management personnel	KRW	4.60%		-		-		927,120		927,120
Key management personnel	KRW	4.60%		-		-		25,380		25,380
K Enter Holdings Inc.	KRW	3.00%		135,000		135,000		-		-
Total loans receivable				135,000		135,000		952,500		952,500

16. Property, plant and equipment

A. Reconciliation of carrying amount

Details of property, plant and equipment as of December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Book value		Accumulated depreciation			Carrying amount
		(In thousands of Korean won)
Office equipment	₩		6,067		(6,063	)		4
Furniture and fixtures			2,500		(2,499	)		1
Right-of-use assets			678,021		(554,237	)		123,784
Total	₩		686,588		(562,799	)		123,789

		December 31, 2023
		Book value		Accumulated depreciation			Carrying amount
		(In thousands of Korean won)
Office equipment	₩		6,067		(6,063	)		4
Furniture and fixtures			2,500		(2,499	)		1
Right-of-use assets			597,953		(459,952	)		138,001
Total	₩		606,520		(468,514	)		138,006

F-252

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

Details of the changes in property and equipment for the years ended December 31, 2024 and 2023 are as follows:

		2024
		Office equipment		Furniture and fixture		Right-of-Use assets			Total
Beginning balance	₩		4		1		138,001			138,006
Depreciation			-		-		(94,285	)		(94,285	)
Lease modification			-		-		80,068			80,068
Ending balance	₩		4		1		123,784			123,789

		2023
		Office equipment		Furniture and fixture		Right-of-Use assets			Total
			(In thousands of Korean won)
Beginning balance	₩		4		1		145,725			145,730
Depreciation			-		-		(84,999	)		(84,999	)
Lease modification			-		-		77,275			77,275
Ending balance	₩		4		1		138,001			138,006

The classification of depreciation expenses in the consolidated statements of comprehensive income for the years ended December 31, 2024 and 2023 are as follows:

		2024		2023
		(In thousands of Korean won)
Cost of revenues	₩		27,000		18,400
Selling, general and administrative expenses			67,285		66,599
Total	₩		94,285		84,999

B. Leased property, plant and equipment

The Group leased the building and vehicles during the years ended December 31, 2024 and 2023. The amount of right-of-use assets recognized by category is as follows.

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Buildings	₩		122,758		111,555
Vehicles			1,026		26,446
Total	₩		123,784		138,001

F-253

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

17. Financial instruments by category

The carrying amounts of financial instruments by category as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Financial assets at amortized cost
Cash and cash equivalents	₩		1,448,485		3,723,417
Accounts receivable — trade, net			633		2,647
Accounts receivable — other, net			2,766		42,665
Contract assets			724,848		143,834
Short-term loans, net			135,000		952,500
Other current financial assets			50,600		49,000
Other non-current financial assets			86,781		131,620
Financial assets at fair value through profit or loss
Short-term financial instruments			862,868		1,537,640
Total	₩		3,311,981		6,583,323

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Financial liabilities at amortized cost
Trade and other payables (*)	₩		835,225		894,333
Other current financial liabilities			-		200,200
Total	₩		835,225		1,094,533

(*) Trade and other payables that are not financial liabilities are excluded.

A. Classification of investment assets

The classification of investment assets as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Current investments
Other securities – at FVTPL	₩		862,868		1,537,640

F-254

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

B. Net gains and losses by category of financial instruments

The net gains and losses by category of financial instruments for the years ended December 31, 2024 and 2023 are as follows:

		2024
		Financial assets at amortized cost		Financial assets at fair value through profit or loss			Total
		(In thousands of Korean won)
Interest income	₩		21,192		22,123			43,315
Gain on disposal of short-term financial instruments			-		12,657			12,657
Loss on valuation of short-term financial instruments			-		(137,132	)		(137,132	)
Total	₩		21,192		(102,352	)		(81,160	)

		2023
		Financial assets at amortized cost		Financial assets at fair value through profit or loss		Total
		(In thousands of Korean won)
Interest income	₩		66,322		3,618		69,940
Gain on disposal of short-term financial instruments			-		137,811		137,811
Gain on valuation of short-term financial instruments			-		37,639		37,639
Total	₩		66,322		179,068		245,390

F-255

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

18. Capital and reserves

A. Share capital

Details of share capital as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
		(In Korean won and number of shares)
Number of authorized shares			40,000		40,000
Value per share	₩		5,000		5,000
Number of shares issued			10,000		10,000
Common shares	₩		50,000,000		50,000,000

i. Ordinary shares

Holders of these shares are entitled to dividends as declared from time to time and are entitled to one vote per share at general meetings of the Group.

B. Share Premium

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Share premium	₩		50,000		50,000

C. Treasury shares

On January 31, 2024, the Group acquired a 5% interest of the Parent Company’s issued shares for Korean Won 2,000,000 thousand.

Details of treasury shares as of December 31, 2024 and 2023 are as follows:

		December 31, 2024				December 31, 2023
		Number of shares		Carrying amount		Number of shares		Carrying amount
		(In thousands of Korean won and number of shares)
Beginning balance	₩		-		-		-		-
Acquisition			500		2,000,000		-		-
Ending balance	₩		500		2,000,000		-		-

F-256

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

19. Capital management

The Group’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Group monitors capital using a ratio of ‘net debt’ to ‘adjusted equity’. Net debt is calculated as total liabilities (as shown in the statement of financial position) less cash and cash equivalents. The Group’s net debt to adjusted equity ratio as of December 31, 2024 and 2023 is as follows.

		December 31, 2024			December 31, 2023
		(In thousands of Korean won)
Total liabilities	₩		1,123,852			7,695,707
Less: Cash and cash equivalents			(1,448,485	)		(3,723,417	)
Net debt			(324,633	)		3,972,290
Total equity	₩		2,896,442			4,538,128
Net debt to total equity ratio (*)			-			87.5	%

(*) The net debt to total equity ratio is not calculated as the Company’s net debt is negative.

20. Borrowings/payable

Borrowings as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Current Liabilities
Lease liabilities (*1)			77,927		95,509
Investment withholdings (*2)			-		200,200
Total	₩		77,927		295,709
Non-Current liabilities
Lease liabilities (*1)			45,402		44,421

(*1)

The interest rate related to lease liabilities reflects the incremental borrowing rate based on the Group’s credit. The amount of interest expense related to lease liabilities incurred during the year ended December 31, 2024 is Korean Won 10,617 thousand (2023: Korean Won 11,504 thousand). Additionally, the amount of short-term lease payments and low-value assets lease payments not included in the measurement of lease liabilities during 2024 is Korean Won 6,280 thousand (2023: Korean Won 31,629 thousand).

(*2)

The amount corresponds to a payment made in accordance with the share subscription agreement with G&G Production, dated October 17, 2022. Notably, no shares were issued as a consequence of this subscription payment. On December 20, 2023, an additional agreement was established, outlining the complete refund of the subscription payment by June 30, 2024. A refund was fully processed and remitted to G&G Production as of December 31, 2024.

F-257

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

21. Trade and other payables

Trade and other payables as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Other payable	₩		576		381,377
Accrued expenses			911,020		678,710
Total	₩		911,596		1,060,087

22. Financial Instruments – Fair values and risk management

A. Accounting classifications and fair values

The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.

The carrying amounts of financial instruments by category as of December 31, 2024 are as follows:

		Fair value		Level 1		Level 2		Level 3		Total
		(In thousands of Korean won)
Financial assets at fair value
Short-term financial instruments	₩		862,868		-		862,868		-		862,868

Carrying amounts of financial instruments by category as December 31, 2023 are as follows:

		Fair value		Level 1		Level 2		Level 3		Total
		(In thousands of Korean won)
Financial assets at fair value
Short-term financial instruments	₩		1,537,640		-		1,537,640		-		1,537,640

F-258

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

B. Measurement of fair values

Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

● Level 1: quoted prices (unadjusted) in active markets for identical asset or liability;

● Level 2: all inputs other than quoted prices included in Level 1 that are observable (either directly that is, prices, or indirectly that is, derived from prices) for the asset or liability;

● Level 3: unobservable inputs for the asset or liability.

The fair value of financial instruments traded in an active market is determined based on the quoted market price as of the end of the reporting period. If the quoted prices are readily and regularly available through exchanges, sellers, brokers, industry groups, rating agencies or regulators and such prices represent actual market transactions that occur regularly between independent parties, they are considered active markets.

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. These valuation techniques use as much market observable information as possible and use the least amount of Company-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:

● Market price or dealer price of a similar financial instrument

● The fair value of derivative instruments is determined by discounting the amount to present value using the leading exchange rate as of the end of the reporting period

C. Financial risk management

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

i. Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterpart to a financial instrument fails to meet its contractual obligations and arises principally from the Group’s receivables from customers. In order to manage credit risk, the Group regularly evaluate the credit worthiness of each customer or counterparty considering the party’s financial information, past experience, its own trading records and other factors. In relation to the impairment of financial assets subsequent to initial recognition, the Group recognizes the changes in expected credit loss(“ECL”) in profit or loss at each reporting date. The carrying amount of a financial asset represents the maximum exposure to credit risk.

F-259

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

The maximum exposure to credit risk of the Group as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Cash and cash equivalents	₩		1,448,485		3,723,417
Accounts receivable, net			3,399		45,312
Short-term loans, net			135,000		952,500
Other current financial assets			50,600		49,000
Contract assets			724,848		143,834
Other non-current financial assets			86,781		131,620
Total	₩		2,449,113		5,045,683

Cash and cash equivalents are deposited in financial institutions with strong credit rating. The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Group has established a credit policy under which each new customer is analyzed individually before the Group’s standard payment and delivery terms and conditions are offered. The Group’s review includes external ratings, if they are available, financial statements, credit agency information, industry information and in some cases bank references.

The Group monitors customer credit risk, customers are grouped according to their credit characteristics, including whether they are an individual or a legal entity, their geographic location, industry, trading history with the Group and existence of previous financial difficulties. The Group does not require collateral in respect of trade and other receivables. Expected credit losses (ECLs) and credit risk exposures for accounts and other receivables as of December 31, 2024 and 2023 are as follows:

① Accounts receivables — trade, net

As of December 31, 2024	Expected loss rate				Carrying amount		Loss allowance
					(In thousands of Korean won)
Not due or overdue less than 90 days		0.00	%	₩		633		-
More than 90 days ~ Less than 1 year		0.00	%			-		-
More than 1 year		100.00	%			-		-
Total				₩		633		-

As of December 31, 2023	Expected loss rate				Carrying amount		Loss allowance
					(In thousands of Korean won)
Not due or overdue less than 90 days		0.00	%	₩		2,647		-
More than 90 days ~ Less than 1 year		0.00	%			-		-
More than 1 year		100.00	%			-		-
Total				₩		2,647		-

F-260

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

② Other receivables

As of December 31, 2024	Expected loss rate				Carrying amount		Loss allowance
					(In thousands of Korean won)
Not due or overdue less than 90 days		0.00	%	₩		140,147		-
More than 90 days ~ Less than 1 year		0.00	%			-		-
More than 1 year		100.00	%			-		-
Total				₩		140,147		-

As of December 31, 2023	Expected loss rate				Carrying amount		Loss allowance
					(In thousands of Korean won)
Not due or overdue less than 90 days		0.00	%	₩		223,285		-
More than 90 days ~ Less than 1 year		0.00	%			-		-
More than 1 year		100.00	%			-		-
Total				₩		223,285		-

F-261

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

ii. Liquidity risk

Liquidity risk management includes the maintenance of sufficient cash and marketable securities, the availability of funds from appropriately committed credit lines, and the ability to settle market positions.

Financial liabilities of the Group by maturity according to the remaining period from December 31, 2024 to the contractual maturity date are as follows:

		December 31, 2024
		Carrying Amount		Less than 3 months		3 months ~1 year		1~2 years		2~5 years		More than 5 years		Total
		(In thousands of Korean won)
Non-derivative financial liabilities
Other payables (*)	₩		576		576		-		-		-		-		576
Accrued expense (*)			834,649		834,649		-		-		-		-		834,649
Lease liabilities			123,329		21,766		58,185		51,720		-		-		131,671
Total	₩		958,554		856,991		58,185		51,720		-		-		966,896

(*) Trade and other payables and accrued expense exclude non-financial liabilities.

Financial liabilities of the Group by maturity according to the remaining period from December 31, 2023 to the contractual maturity date are as follows:

		December 31, 2023
		Carrying Amount		Less than 3 months		3 months ~1 year		1~2 years		2~5 years		More than 5 years		Total
		(In thousands of Korean won)
Non-derivative financial liabilities
Other payables (*)	₩		381,377		381,377		-		-		-		-		381,377
Accrued expense (*)			512,956		512,956		-		-		-		-		512,956
Lease liabilities			139,930		24,849		74,547		50,731		-		-		150,127
Investment withholdings			200,200		-		200,200		-		-		-		200,200
Total	₩		1,234,463		919,182		274,747		50,731		-		-		1,244,660

(*) Trade and other payables and accrued expense exclude non-financial liabilities.

F-262

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

23. Leases

A. Leases as lessee

The Group leases building and vehicles. The leases typically run for a period of 1~5 years, with an option to renew or terminate the lease after that date. The Group also leases printer with contract terms of one year. These leases are short-term and/or leases of low-value items. The Group has elected not to recognize right-of-use assets and lease liabilities for these leases. Information about leases for which the Group is a lessee is presented below.

i. Right-of-use assets

Right-of-use assets related to leased properties that do not meet the definition of investment property are presented as property, plant and equipment.

Details of right-of-use assets and lease liabilities recognized in the consolidated statements of financial position as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Right-of-use assets (Acquisition price)
Buildings	₩		550,924		470,856
Vehicles			127,097		127,097
Total	₩		678,021		597,953

		December 31, 2024			December 31, 2023
		(In thousands of Korean won)
Right-of-use assets (Accumulated depreciation)
Buildings	₩		(428,166	)		(359,301	)
Vehicles			(126,071	)		(100,651	)
Total	₩		(554,237	)		(459,952	)

		December 31, 2024		December 31, 2023
		(In thousands of Korean won)
Right-of-use assets (Carrying amount)	₩
Buildings			122,758		111,555
Vehicles			1,026		26,446
Total	₩		123,784		138,001

F-263

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

Changes in right-of-use assets for the years ended December 31, 2024 and 2023 are as follows:

		2024
		Building			Vehicles			Total
		(In thousands of Korean won)
Balance as of January 1, 2024	₩		111,555			26,446			138,001
Depreciation			(68,865	)		(25,420	)		(94,285	)
Lease modification			80,068			-			80,068
Balance as of December 31, 2024	₩		122,758			1,026			123,784

		2023
		Building			Vehicles			Total
		(In thousands of Korean won)
Balance as of January 1, 2023	₩		93,860			51,865			145,725
Depreciation			(59,580	)		(25,419	)		(84,999	)
Lease modification			77,275			-			77,275
Balance as of December 31, 2023	₩		111,555			26,446			138,001

ii. Amounts recognized in profit or loss

Amounts recognized in profit or loss for the years ended December 31, 2024 and 2023 are as follows:

		2024		2023
		(In thousands of Korean won)
Interest expense relating to lease liabilities (included in finance cost)	₩		10,617		11,504
Expense relating to short-term leases			4,176		30,284
Expense relating to leases of low-value assets excluding short-term leases			2,104		1,345

iii. Amounts recognized in statement of cash flows

Amounts recognized in statement of cash flows for the years ended December 31, 2024 and 2023 are as follows:

		2024		2023
		(In thousands of Korean won)
Total cash outflows of leases	₩		107,356		127,665

iv. Extension options

Some property leases contain extension options exercisable by the Group. Where practicable, the Group seeks to include extension options in new leases to provide operational flexibility. The extension options held are exercisable only by the Group and not by the lessors. The Group assesses at the lease commencement date whether it is reasonably certain to exercise the extension options. The Group reassesses whether it is reasonably certain to exercise the options if there is a significant event or significant changes in circumstances within its control.

F-264

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

24. Statement of Cash flows

Adjustments for income and expenses from operating activities for the years ended December 31, 2024 and 2023 are as follows:

		2024			2023
		(In thousands of Korean won)
Depreciation	₩		94,285			84,999
Impairment of prepayments			21,000			-
Gains on disposal of short-term financial instruments			(12,657	)		(137,811	)
Gains on valuation of short-term financial instruments			-			(37,639	)
Losses on valuation of short-term financial instruments			137,132			-
Debt forgiveness gain			-			(15,901	)
Interest expenses			10,617			11,504
Interest income			(43,315	)		(69,940	)
Tax expenses (benefit)			3,732			(1,523	)
Total	₩		210,794			(166,311	)

Changes in assets and liabilities from operating activities for the years ended December 31, 2024 and 2023 are as follows:

		2024			2023
		(In thousands of Korean won)
Other current non-financial liabilities	₩		(32,595	)		32,634
Accounts receivable — trade, net			2,014			(843	)
Other current assets			5,004,481			(5,069,181	)
Other non-current non-financial assets			(97,500	)		(58,000	)
Accounts receivable — other, net			2			8,119
Trade and other payables			(148,491	)		925,353
Contract assets			(581,013	)		7,868
Contract liabilities			(6,182,960	)		6,182,960
Total	₩		(2,036,062	)		2,028,910

Significant non-cash transactions for the years ended December 31, 2024 and 2023 are as follows:

		2024		2023
		(In thousands of Korean won)
Reclassification of long-term loans	₩		-		927,120
Increase in lease liabilities due to lease agreements			73,858		67,166

F-265

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

The movements of liabilities to cash flows arising from financing activities for the years ended December 31, 2024 and 2023 are as follows:

		Current Lease liabilities			Non-current lease liabilities			Current investment withholdings			Non-current investment withholdings			Total
		(In thousands of Korean won)
Balance at 1 January 2023	₩		79,232			78,064			150,800			650,000			958,096
Changes from financing cash flows
Payment of lease liabilities			(84,532	)		-			-			-			(84,532	)
Repayment of investment withholdings			-			-			(600,600	)		-			(600,600	)
Reclassification			96,959			(96,959	)		650,000			(650,000	)		-
Total	₩		12,427			(96,959	)		49,400			(650,000	)		(685,132	)
Other changes
Lease modification			3,850			63,316			-			-			67,166
Interest expense			11,504			-			-			-			11,504
Interest paid			(11,504	)		-			-			-			(11,504	)
Total	₩		3,850			63,316			-			-			67,166
Balance at 31 December 2023	₩		95,509			44,421			200,200			-			340,130
Balance at 1 January 2024			95,509			44,421			200,200			-			340,130
Changes from financing cash flows
Payment of lease liabilities			(90,459	)		-			-			-			(90,459	)
Repayment of investment withholdings			-			-			(200,200	)		-			(200,200	)
Reclassification			73,660			(73,660	)		-			-			-
Total	₩		(16,799	)		(73,660	)		(200,200	)		-			(290,659	)
Other changes
Lease modification			(783	)		74,641			-			-			73,858
Interest expense			10,616			-			-			-			10,616
Interest paid			(10,616	)		-			-			-			(10,616	)
Total			(783	)		74,641			-			-			73,858
Balance at 31 December 2024	₩		77,927			45,402			-			-			123,329

F-266

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

25. Related parties

A. List of related parties

List of related parties as of December 31, 2024 and 2023 are as follows:

Relationship		Name
Key management personnel		Yoon, In Bum
Key management personnel		Kim, Soo Jin

B. Account balances with related parties

The balances of receivables and payables to related parties as of December 31, 2024 and 2023 are as follows:

			December 31, 2024		December 31, 2023
Related party	Name		Receivables		Receivables
			(In thousands of Korean won)
Key management personnel	Yoon, In Bum	₩		-		497,582
Key management personnel	Kim, Soo Jin			-		497,582
Total		₩		-		995,164

C. Financial transactions with related parties

Details of significant financial transactions with related parties for the years ended December 31, 2024 and 2023 are as follows:

			2024				2023
Related party	Name		Increase in accrued income		Collection (*)		Payment for Loans		Increase in accrued income		Collection (*)
			(In thousands of Korean won)
Key management personnel	Yoon, In Bum	₩		1,077		498,659		12,690		21,332		21,324
Key management personnel	Kim, Soo Jin			1,077		498,659		12,690		21,332		21,324
Total		₩		2,154		997,318		25,380		42,664		42,648

(*) Collection includes the accrued interest (2024: Korean Won 44,818 thousand, 2023: Korean Won 42,648 thousand).

Additionally, the Parent Company acquired 500 shares of treasury shares for Korean won 2,000 million from the Group’s key management personnel during the years ended December 31, 2024 (See Notes 1 and 18).

D. Transactions with key management personnel

The compensation for the key management personnel for the years ended December 31, 2024 and 2023 are as follows:

		2024		2023
		(In thousands of Korean won)
Wages and salaries	₩		336,000		363,000
Post-employment benefits			67,200		72,600

Compensation of the Group’s key management personnel includes salaries, non-cash benefits and contributions to a defined contribution plan (See Note 10).

F-267

BIDANGIL PICTURES CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

26. Commitments

On September 14, 2023, an amendment was made to the equity interest exchange agreement, originally entered into on April 10, 2023, between the CEOs, who is the dominant shareholder of the Parent Company, and K Enter Holdings, Inc. for the purpose of listing on the NASDAQ through a merger with a SPAC company. The equity interest exchange agreement is effective on the date designated by K Enter Holdings, Inc. Upon the approval, the CEOs of the Group will exchange 5,100 shares with the equity interest of K Enter Holdings, Inc. Following the equity interest exchange transaction, the Group is expected to be a subsidiary of K Enter Holdings, Inc.

27. Subsequent events

On January 3, 2025, K Enter Holdings Inc. completed the acquisition of a controlling interest in six Korean entities, including Bidangil Pictures Co., Ltd. through a share exchange. Upon the approval, the CEOs of the Group exchanged 5,100 shares with the equity interest of K Enter Holdings, Inc. Following the equity interest exchange transaction, the Group become a subsidiary of K Enter Holdings, Inc.

F-268

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

K Enter Holdings Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheets of K Enter Holdings Inc. (the “Company”) as of December 31, 2024 and 2023, and the related statements of operations and comprehensive loss, of changes in stockholders’ equity and of cash flows for the year ended December 31, 2024 and the period from January 4, 2023 (inception) to December 31, 2023, including the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the year ended December 31, 2024 and the period from January 4, 2023 (inception) to December 31, 2023 in conformity with accounting principles generally accepted in the United States of America.

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Samil PricewaterhouseCoopers

Seoul, KOREA

May 14, 2025

We have served as the Company’s auditor since 2023.

F-269

K ENTER HOLDINGS INC.

BALANCE SHEETS

	December 31, 2024			December 31, 2023
ASSETS
Current assets
Cash and cash equivalents	$	333,069		$	2,525,682
Accounts receivable		6,496			-
Other receivables		905,827			70,906
Convertible debt security		-			1,006,757
Deferred transaction costs		2,152,048			1,363,241
Prepaid expenses and other current assets		422,239			227,416
Prepaid expenses and other current assets - related party		67,699			-
Total current assets		3,887,378			5,194,002
Investment in equity securities		1,600,000			1,600,000
Investment in equity securities - related party		1,178,055			-
Property and equipment, net		24,356			33,598
Operating lease right-of-use assets, net		21,048			95,191
Operating lease right-of-use assets, net - related party		19,189			72,635
Other assets, noncurrent		1,762,368			1,705,412
Other assets, noncurrent - related party		-			77,500
Total non-current assets		4,605,016			3,584,336
TOTAL ASSETS	$	8,492,394		$	8,778,338
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	836,592		$	294,717
Accounts payable - related party		1,332,603			16,828
Accrued expenses and other current liabilities		3,761,147			2,237,163
Short-term borrowings		564,282			405
Short-term borrowings - related party		400,942			142
Defined severance benefits, current		-			2,462
Lease liabilities, current		20,165			60,619
Lease liabilities, current - related party		19,189			55,122
Total current liabilities		6,934,920			2,667,458
Defined severance benefits, noncurrent		-			46,691
Convertible Note		2,666,833			-
Derivative liabilities		401,374			-
Lease liabilities, noncurrent		-			34,571
Lease liabilities, noncurrent - related party		-			17,514
Total non-current liabilities		3,068,207			98,776
TOTAL LIABILITIES	$	10,003,127		$	2,766,234
STOCKHOLDERS’ EQUITY
Series A-1 convertible preferred stock		-			-
Series A convertible preferred stock		355			355
Preferred stock subscription receivable		-			(369,000	)
Common stock		1,000			1,000
Treasury Stock		-			(57	)
Additional paid-in capital		20,542,076			15,238,711
Accumulated deficit		(21,801,180	)		(8,930,946	)
Accumulated other comprehensive income (loss)		(252,984	)		72,041
Total stockholders’ equity	$	(1,510,733	)	$	6,012,104
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	8,492,394		$	8,778,338

The accompanying notes are an integral part of these financial statements.

F-270

K ENTER HOLDINGS INC.

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

	2024			For the period from January 4, 2023 (inception) to December 31, 2023
Revenue	$	485,271		$	208,704
Cost of revenues	$	483,462		$	207,153
Operating expenses
General and administrative expenses	$	11,838,397		$	8,954,316
Total operating expenses		12,321,859			9,161,469
Loss from operations		(11,836,588	)		(8,952,765	)
Other income (expense)
Interest income		399			7,956
Other income (expense)		(1,034,045	)		13,863
Total other income (expense), net		(1,033,646	)		21,819
Income tax expense		-			-
Net loss	$	(12,870,234	)	$	(8,930,946	)
Other comprehensive loss
Foreign currency translation adjustment		(277,727	)		65,284
Unrealized gain (loss) of available-for-sales		(47,297	)		6,757
Comprehensive loss	$	(13,195,258	)	$	(8,858,905	)
Weighted average number of Ordinary Shares outstanding, basic and diluted		96,150			76,540
Basic and diluted net loss per share of common stock	$	(133.86	)	$	(116.68	)

The accompanying notes are an integral part of these financial statements.

F-271

K ENTER HOLDINGS INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

	Series A-1 Convertible Preferred Stock				Series A Convertible Preferred Stock				Common stock				Treasury stock						Preferred Stock Subscription			Additional Paid-in		Accumulated			Accumulated Other Comprehensive
	Shares		Amount		Shares		Amount		Shares		Amount		Shares			Amount			Receivable			Capital		Deficit			Loss			Total
Balance, January 4, 2023 (inception)		-	$	-		-	$	-		-	$	-		-		$	-		$	-		$	-	$	-		$	-		$	-
Shares issued for common stock		-		-		-		-		100,000		1,000		-			-			-			-		-			-			1,000
Shares issued for Series A convertible preferred stock, net of issuance costs		-		-		35,484		355		-		-		-			-			-			10,600,609		-			-			10,600,964
Shares issued for Series A-1 convertible preferred stock		4,814		-		-		-		-		-		-			-			(369,000	)		2,888,400		-			-			2,519,400
Treasury stock shares acquired		-		-		-		-		-		-		(12,074	)		(121	)		-			-		-			-			(121	)
Shares transferred back to the Company		-		-		-		-		-		-		6,353			64			-			1,749,702		-			-			1,749,766
Net loss		-		-		-		-		-		-		-			-			-			-		(8,930,946	)		-			(8,930,946	)
Unrealized gain of available-for-sales																												6,757			6,757
Foreign currency translation adjustment		-		-		-		-		-		-		-			-			-			-		-			65,284			65,283
Balance, December 31, 2023		4,814	$	-		35,484	$	355		100,000	$	1,000		(5,721	)	$	(57	)	$	(369,000	)	$	15,238,711	$	(8,930,946	)	$	72,041		$	6,012,104
Balance, January 1, 2024		4,814	$	-		35,484	$	355		100,000	$	1,000		(5,721	)	$	(57	)	$	(369,000	)	$	15,238,711	$	(8,930,946	)	$	72,041		$	6,012,104
Shares issued for Series A-1 convertible preferred stock		500		-		-		-		-		-		-			-			-			300,000		-			-			300,000
Shares issued for Ordinary Shares as a share-based compensation		-		-		-		-		1,202		-		-			-			-			669,201		-			-			669,201
Cash received for Preferred Stock Subscription Receivable		-		-		-		-		-		-		-			-			369,000			-		-			-			369,000
Treasury stock shares acquired		-		-		-		-		-		-		(1,376	)		-			-			-		-			-			-
Shares issued for Ordinary Shares from the Company’s treasury shares		-		-		-		-		-		-		2,100			7			-			1,169,147		-			-			1,169,154
Settlement of liabilities by issuance of shares														4,997			50						2,781,980								2,782,030
Share-based compensation																							383,037								383,037
Net loss		-		-		-		-		-		-		-			-			-			-		(12,870,234	)		-			(12,870,234	)
Unrealized Loss of Available-For-Investments		-		-		-		-		-		-		-			-			-			-		-			(47,297	)		(47,297	)
Foreign currency translation adjustment		-		-		-		-		-		-		-			-			-			-		-			(277,728	)		(277,728	)
Balance, December 31, 2024		5,314	$	-		35,484	$	355		101,202	$	1,000		-		$	-		$	-		$	20,542,076	$	(21,801,180	)	$	(252,984	)	$	(1,510,733	)

The accompanying notes are an integral part of these financial statements.

F-272

K ENTER HOLDINGS INC.

STATEMENTS OF CASH FLOWS

	2024			For the period from January 4, 2023 (inception) to December 31, 2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(12,870,234	)	$	(8,930,946	)
Adjustments to reconcile net income to net cash provided by (used in) operating activities
Share-based compensation		2,221,393			1,749,741
Severance Benefits		37,078			48,559
Amortization of operating lease right-of-use assets		108,909			36,638
Amortization of operating lease right-of-use assets – related party		13,276			27,957
Depreciation expense		7,562			4,198
Interest expenses		41,445			-
Loss on valuation of Derivative liabilities		26,762
Impairment Loss on Convertible Debt Security		959,459			-
Loss on valuation of Convertible Debt Security		40,541			-
Changes in operating assets and liabilities
Accounts receivable		(7,041	)		-
Other receivables		51,473			(70,070	)
Deferred transaction costs		-			(212,079	)
Prepaid and other current assets		(49,713	)		(224,895	)
Other assets, noncurrent		(408,647	)		(1,684,800	)
Other assets, noncurrent – related party		-			(76,563	)
Accounts payable		(612,612	)		292,354
Accounts payable – related party		1,314,531			16,625
Accrued expenses and other current liabilities		3,531,931			1,085,336
Lease liabilities		(70,573	)		(36,638	)
Lease liabilities – related party		(52,568	)		(27,957	)
Defined benefit liabilities		(83,619	)		-
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		(5,800,647	)		(8,002,540	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment		(2,150	)		(37,390	)
Payments for short-term loans		(14,669	)		-
Collection of short-term loans		-			1,530,499
Advances under note receivable		-			(1,530,499	)
Purchase of convertible debt security		-			(1,000,000	)
Purchase of investment in equity securities		-			(1,600,000	)
CASH USED IN INVESTING ACTIVITIES		(16,819	)		(2,637,390	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of Series A-1 convertible preferred stock, net of issuance costs		669,000			2,519,400
Proceeds from issuance of Series A convertible preferred stock, net of issuance costs		-			10,600,964
Proceeds from issuance of convertible notes, net of issuance costs		2,625,000			-
Proceeds from issuance of common stock, net of issuance costs		-			1,000
Purchase of treasury shares		-			(121	)
Proceeds from issuance of Ordinary Shares from treasury shares		-			25
Proceeds from short-term borrowings		120,000			-
Proceeds from short-term borrowings – related party		740,265			-
Repayment of short-term borrowings		(120,547	)		-
Repayment of short-term borrowings – related party		(257,437	)		-
CASH PROVIDED BY FINANCING ACTIVITIES		3,776,281			13,121,268
Effect of exchange rate changes on cash		(151,428	)		44,345
Change in cash and cash equivalents		(2,192,613	)		2,525,682
Cash and cash equivalents, beginning of period		2,525,682			-
Cash and cash equivalents, end of period	$	333,069		$	2,525,682
Supplemental disclosure of noncash investing and financing activities:
Outstanding payable related to acquisition of Play Company common stock.	$	1,276,919		$	-
Operating right-of-use assets obtained in exchange for lease obligations					129,236
Operating right-of-use assets obtained in exchange for lease obligations – related party					98,613
Deferred transaction costs included in Accrued Expenses	$	788,694		$	1,151,162
Consulting Fee included in Accrued Expenses	$	2,781,980		$	-
Proceeds from Convertible Notes not yet received	$	375,000			-
Proceeds from short-term borrowings not yet received	$	500,000			-

The accompanying notes are an integral part of these financial statements.

F-273

K ENTER HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

For the Year Ended December 31, 2024 and Period from January 4, 2023 (inception) to December 31, 2023

1. NATURE OF OPERATIONS

K Enter Holdings Inc. (the “Company”), a Delaware corporation, was formed on January 4, 2023 to become a leading tech and intellectual property (“IP”) based diversified entertainment company. To fulfill this vision, the Company established an 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.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting: The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). References to GAAP in the accompanying financial statements are to the Accounting Standards Codification (“ASC”).

Going Concern: The Company has incurred significant losses and negative cash flows from operations, net loss was $12,870,234 for the year ended December 31, 2024. During 2024, the Company had negative cash flows from operations of $5,800,647. As of December 31, 2024, the Company’s accumulated deficit was $21,801,180. The Company has funded its operations to date through equity and debt financing and has cash equivalents of $333,069 as of December 31, 2024. The Company 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. The Company expects to fund operations using cash on hand and raising additional proceeds. There are no assurances, however, that the Company 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 the Company’s ability to continue as a going concern. These financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty.

Foreign Currency: The U.S. dollar is the reporting currency of the Company. The functional currency of the Company’s domestic branch and international branch is the U.S. dollar and Korean Won, respectively. The functional currencies are the local currencies used in the primary economic environment for each respective branch. Remeasurement gains and losses from transactions that are not denominated in the functional currency are recorded as other income (expense) in the statement of operations and comprehensive loss. The Company recognized realized loss of $2,249 on foreign currency transactions and balances within other income on the accompanying statement of operations and comprehensive loss for the year ended December 31, 2024.(2023: gains of $15,979)

Assets and liabilities of the international branch are translated into U.S. dollars at the exchange rate in effect at the balance sheet date. Revenue and expenses are translated at average exchange rates in effect during the period. Foreign currency translation gains and losses are recorded in the cumulative translation adjustment account, which is a separate component of other comprehensive income.

Use of Estimates: The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses in the financial statements and accompanying notes. The Company’s most significant estimates and judgments involve the valuation of share-based compensation, convertible debt security and convertible note, including the fair value of common stock. Management bases its estimates on historical experience and on 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 the Company’s financial statements.

F-274

K ENTER HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

For the Year Ended December 31, 2024 and Period from January 4, 2023 (inception) to December 31, 2023

Segment Information: ASC 280, Segment Reporting (“ASC 280”), defines operating segments as components of an enterprise where discrete financial information is available that is evaluated regularly by the chief operating decision-maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company operates as a single operating segment. The Company’s CODM is the chief executive officer, who has ultimate responsibility for the operating performance of the Company and the allocation of resources. The Company has concluded that net income (loss) is the measure of segment profitability. The CODM assesses performance for the Company, monitors budget versus actual results, and determines how to allocate resources based on net income (loss) as reported in the statements of operations. There are no other expense categories regularly provided to the CODM that are not already included in the primary financial statements herein. The Company currently operates a branch office in Korea, which serves as the Company’s principal business management. Accordingly, during the year ended December 31, 2024 and period from January 4, 2023 (inception) through December 31, 2023, the Company only generated revenues in Korea and as of December 31, 2024 and 2023, the Company did not have material assets located outside of Korea.

The following table sets forth the Company’s significant segment expenses:

	2024			2023
Revenue	$	485,271		$	208,704
Less:
Drama Production cost		483,462			207,153
Stock-based compensation expense		2,221,393			1,749,742
Salaries and benefits		1,696,289			807,088
Consulting Fees		7,427,273			6,160,204
Other items		493,442			237,283
Total cost and expense		12,321,859			9,161,469
Loss from operations		(11,836,588	)		(8,952,765	)
Interest income		399			7,956
Impairment loss on Investment Assets		(959,459	)		-
Other income (expense), net		(74,586	)		13,863
Income before income taxes		(12,870,234	)		(8,930,946	)
Provision for (benefit from) income taxes		-			-
Net income	$	(12,870,234	)	$	(8,930,946	)

Cash and Cash Equivalents: Cash and cash equivalents comprise cash in bank which are subject to an insignificant risk of changes in value. The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2024.

Fair Value Measurements: ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based upon assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the Company can assess at the measurement date.

Level 2: Significant other observable inputs other than level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market date.

Level 3: Significant unobservable inputs that reflect the Company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

F-275

K ENTER HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

For the Year Ended December 31, 2024 and Period from January 4, 2023 (inception) to December 31, 2023

An asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

Assets and liabilities measured at fair value are based on one or more of the following three valuation techniques noted in ASC 820:

● Market approach: Prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities.

● Cost approach: Amount that would be required to replace the service capacity of an asset (replacement cost).

● Income approach: Techniques to convert future amounts to a single present value amount based upon market expectations (including present value techniques, option pricing, and excess earning models)

The Company believes its valuation methods are appropriate and consistent with other market participants, however the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

The Company’s financial instruments with a carrying value that approximates fair value consists of cash, other receivables, accounts payable, accrued expenses, and other current liabilities because of the short-term nature of these instruments. The convertible note, classified as a non-current liability, is initially recognized at fair value, net of transaction costs directly attributable to the issuance of the financial liability. Subsequent to initial recognition, this financial liability is measured at amortized cost using the effective interest method. The Company’s financial instruments measured at fair value on a recurring basis consist of the convertible debt security and derivative liabilities (see Note 5, Note 10 and Note 11).

Other Receivables: Other receivables consist of a refund for value add tax from the government, outstanding loan amounts, and receivables from convertible senior unsecured note. All amounts are expected to be received within the next 12 months.

Convertible Debt Security: Convertible debt security consists of a convertible bond purchased from a private company and is considered an available for sale debt securities with a private company that is recorded at fair value (see Note 5).

Prepaid Expenses and Other Current Assets: Prepaid expenses and other current assets consist entirely of advance payments to vendors which are expected to be recognized or realized within the next 12 months.

Deferred Transaction Costs: Commissions, legal fees and other costs that are direct and incremental costs related to a contemplated transaction are capitalized as deferred transaction costs until the consummation of the transaction. The costs will be reclassified to additional paid-in capital upon the closing of the transaction. If the transaction does not close, these transaction costs will be written off to general and administrative expenses at such time the transaction is determined to be unsuccessful. As of December 31, 2024 and December 31, 2023, deferred transaction costs related to the Merger Agreement (see Note 3) totaled $2,152,048 and $1,363,241 respectively.

F-276

K ENTER HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

For the Year Ended December 31, 2024 and Period from January 4, 2023 (inception) to December 31, 2023

Investment in Equity Securities: Investments in equity securities that have a readily determinable fair value are reported at fair value. Changes in fair value between accounting periods are recorded in other income (expense) in the statement of operations and comprehensive loss. The Company has elected to account for investments in equity securities that do not have a readily determinable fair value under the measurement alternative permitted by ASC 321, Investments in Equity Securities (“ASC 321”). Under the measurement alternative, investments in equity securities that do not have a readily determinable fair value are recorded at cost, less impairment. The investment in equity securities without readily determinable fair values will be subsequently remeasured to fair value when observable price changes occur as of the date the transaction occurred or its impairment, with all changes in fair value reflected as a component of other income (expense) on the accompanying statement of operations and comprehensive loss. Realized gains or losses upon sale are recorded in other income (expense) in the statement of operations and comprehensive loss.

Property and Equipment, Net: Purchased and constructed property and equipment is recorded at cost. Property and equipment consists of office equipment and is depreciated using the straight-line method over a five year period.

Other Assets, Noncurrent: Other assets, noncurrent include security deposits on the Company’s office leases, capitalized implementation costs associated with the Company’s cloud computing arrangement, advances to production companies for content development, and advances to writers for content development which are not expected to be recognized or realized within the next 12 months.

The Company measures the capitalized implementation costs associated with its cloud computing arrangements for its accounting software at cost in accordance with ASC 350-40, Internal-use software (“ASC 350-40”), and will amortize these costs over the remaining life of the three-year hosting arrangement at the time the cloud computing arrangement is placed into service. Options to extend or terminate the hosting arrangement that are reasonably certain to be exercised will be included in the determination of the useful life at the time the cloud computing arrangement is placed into service.

The Company advanced money to additional production companies to fund the planning and development costs for the production of dramas. Certain contracts with production companies permit the Company to earn a set percentage of the profit of the drama. Other contracts with production companies require a separate agreement to be entered into that will define the Company’s role with the production of the drama (e.g., co-producer) as well as its investment stake in the drama. These factors will then be used to allocate the profits of the drama between the Company and the production company, at which point the recognition pattern of the costs will be determined. To the extent that the production of a drama developed using this advance is not approved, the planning and development costs paid by the Company will be reclassified to the statement of operations and comprehensive loss in the period the decision is made. Certain contracts permit the advance to be returned to the Company if a separate agreement is not entered into that will define the Company’s role with the production of the drama.

The Company advanced money to writers to fund the writing of drama scripts for a set number of episodes for a set number of dramas. Payments are owed to the writers based on achievement of milestones which may include (1) contract execution (2) start of filming (3) filming completion (4) broadcasting schedule confirmation (5) approval to write a subsequent draft of a script (6) approval of a script. Certain contracts with writers permit a revenue share of the profit distribution of the drama.

Impairment of Long-Lived Assets: The Company reviews long-lived assets, including property and equipment, for impairment whenever events or changes in circumstances indicate that an asset group’s carrying amount may not be recoverable. The Company conducts its long-lived asset impairment analysis in accordance with ASC 360-10, Impairment or Disposal of Long-Lived Assets (“ASC 360-10”), which requires the Company to group assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities and evaluate the asset group against the sum of the undiscounted future cash flows. If the undiscounted cash flows do not indicate the carrying amount of the asset group is recoverable, an impairment charge is measured as the amount by which the carrying amount of the asset group exceeds its fair value. The Company did not record impairment losses for the year ended December 31, 2024 and period from January 4, 2023 (inception) to December 31, 2023.

F-277

K ENTER HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

For the Year Ended December 31, 2024 and Period from January 4, 2023 (inception) to December 31, 2023

Leases: The Company’s determination of whether an arrangement contains a lease is based on an evaluation of whether the arrangement conveys the right to use and control specific property or equipment. The Company leases office facilities under operating leases primarily having initial terms of two years.

Leases are classified as either finance leases or operating leases. A lease is classified as a finance lease if any one of the following criteria are met: the lease transfers ownership of the asset by the end of the lease term, the lease contains an option to purchase the asset that is reasonably certain to be exercised, the lease term is for a major part of the remaining useful life of the asset or the present value of the lease payments equals or exceeds substantially all of the fair value of the asset. A lease is classified as an operating lease if it does not meet any one of these criteria.

The Company recognizes a lease liability and a right of use (“ROU”) asset at the commencement date of each lease. Lease payments may be fixed or variable; however, only fixed payments or in-substance fixed payments are included in the Company’s lease liability calculation. Lease agreements may include options to extend or terminate the lease which are included in the measurement of the lease liability when it is reasonably certain that the option will be exercised.

The lease liability is initially and subsequently recognized based on the present value of the contract’s fixed future lease payments. The discount rate used to calculate the present value is the implicit rate, if it is readily determinable, or the Company’s incremental borrowing rate. The Company’s incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms and in a similar economic environment. For all leases entered into during the year ended December 31, 2024 and period from January 4, 2023 (inception) to December 31, 2023, the ICE BofA BBB US Corporate Index Effective Yield in effect on the lease commencement date was used as the incremental borrowing rate.

Variable lease payments, such as periodic adjustments for inflation, reimbursement of real estate taxes, any variable common area maintenance and any other variable costs associated with the leased property, are expensed as incurred on the accompanying statement of operations and comprehensive loss and future variable rent obligations are not included within the lease liabilities on the balance sheet.

The depreciable life of right of use assets and leasehold improvements are limited by the expected lease term. None of the Company’s leases contain any material residual value guarantees or restrictive covenants.

The Company accounts for fixed lease and non-lease components of a lease as a single lease component. Leases with an initial term of 12 months or less are not recorded on the balance sheet and are recognized on a straight-line basis over the lease term within general administrative expenses on the accompanying statement of operations and comprehensive loss.

Rent expense for the Company’s operating leases, which may have escalating rentals over the term of the lease and may include rent holidays, is recorded on a straight-line basis over the initial lease term and those renewal or termination periods that are reasonably certain that the option to extend or terminate will be exercised. Payments received from landlords as incentives for leasehold improvements are recorded as a reduction of the operating lease right-of-use asset and amortized on a straight-line basis over the term of the lease as a reduction of rent expense.

Defined Severance Benefits: The Company accrues severance benefits for employees of Korean branch. Pursuant to the Employee Retirement Benefit Security Act of Korea, eligible employees with one or more years of service are entitled to severance payments upon the termination of their employment based on their length of service and pay rate.

F-278

K ENTER HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

For the Year Ended December 31, 2024 and Period from January 4, 2023 (inception) to December 31, 2023

The Company recognizes the defined severance benefits obligation in the balance sheets with a corresponding adjustment to operating expenses. The obligations are measured annually, or more frequently if there is a remeasurement event, based on the Company’s measurement date utilizing various actuarial assumptions and methodologies. The Company uses certain assumptions including, but not limited to, the selection of the: (i) discount rates; (ii) salary growth rates; and (iii) certain employee-related factors, such as turnover, retirement age and mortality. The Company reviews actuarial assumptions and make modifications to the assumptions based on current rates and trends when appropriate.

Defined Contribution plans: The Company has transitioned from a defined benefit retirement plan to a defined contribution retirement plan in 2024. Obligations for contributions to defined contributions plans are expensed as the related service is provided.

Revenue: The Company is a holding company which operates as a drama production studio. The Company provides the service for planning, producing, and selling stage set and prop production and the television programs such as dramas. The Company recognizes revenue using the input method for performance obligations to be satisfied over time, as the customers receive and use the benefits simultaneously. This determination is based on the actual costs incurred relative to the total expected costs. Payment for services is collected within a short period following transfer of control or commencement of delivery of services, as applicable.

Share-Based Compensation: The Company accounts for its share-based compensation awards in accordance with ASC 718, Compensation – Stock Compensation (“ASC 718”), under which share based payments that involve the issuance of Ordinary Shares from the Company’s treasury shares to employees and nonemployees and meet the criteria for equity-classified awards are recognized in the financial statements as share-based compensation expense based on the fair value of Ordinary Shares on the date of issuance. Also, the Company recognizes the fair value of common shares transferred from shareholders to employees as a share-based compensation, which is included within general and administrative expenses. The inputs and assumption used in determining the fair value of a share of Ordinary Shares are management’s best estimates, but the estimates involve inherent uncertainties and the application of management judgment (see Note 8). Share-based compensation is recognized in the period Ordinary Shares are issued from the Company’s treasury shares as the awards do not have a vesting period for employees or a specified contract period for nonemployees.

Other Comprehensive Loss: Other comprehensive loss reflects gains and losses that are recorded as a component of stockholders’ equity and are excluded from net loss and consists of foreign currency translation gains and losses related to the translation of the Company’s functional currency into its reporting currency.

Tax Incentives: In the normal course of business, the Company, or a third-party producing content on the Company’s behalf, may qualify for tax incentives through eligible spend on productions. The accounting for tax incentives is dependent on the particular type of incentive, including the nature of the benefit and the location where the incentive is earned. In general, tax incentives are realized as cash receipts and may be received prior to or after a title was launched. Tax incentives are generally accounted for as a reduction to the cost basis of the Company’s content assets and reduces cost of revenue when the content is sold on the statement of operations and comprehensive loss. For the year ended December 31, 2024 and period from January 4, 2023 (inception) to December 31, 2023, there were no tax incentives received.

Income Taxes: The Company accounts for income taxes in accordance with authoritative guidance, which requires the use of the asset and liability method. Under this method, deferred income tax assets and liabilities are determined based upon the difference between the financial statement carrying amounts and the tax basis of assets and liabilities and are measured using the enacted tax rate expected to apply to taxable income in the years in which the differences are expected to be reversed.

F-279

K ENTER HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

For the Year Ended December 31, 2024 and Period from January 4, 2023 (inception) to December 31, 2023

Significant judgment is required in determining any valuation allowance recorded against deferred tax assets. In assessing the need for a valuation allowance, the Company considers all available evidence, including past operating results, estimates of future taxable income, and the feasibility of tax planning strategies.

In the event that the Company changes its determination as to the amount of deferred tax assets that can be realized, the valuation allowance is adjusted with a corresponding impact to the provision for income taxes in the period in which such determination is made.

The Company is required to evaluate the tax positions taken when preparing its tax returns to determine whether tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax benefits of positions not deemed to meet the “more-likely-than-not” threshold would be recorded as a tax expense in the current year. The amount recognized is subject to estimate and management judgment with respect to the likely outcome of each uncertain tax position. The amount that is ultimately sustained for an individual uncertain tax position or for all uncertain tax positions in the aggregate could differ from the amount that is initially recognized.

Earnings (Loss) per Share: Basic earnings (loss) per share (“EPS”) is computed using the two-class method as the Company had issued securities, other than common stock, that contractually entitle the holds to participate in dividends and earnings. Under the two-class method, all securities that meet the definition of a participating security, irrespective of whether the securities are convertible, nonconvertible, or potential Ordinary Shares securities, are included in the computation of basic EPS. The two-class method requires earnings for the period to be allocated between Ordinary Shares and participating securities based upon their respective rights to receive distributed and undistributed earnings.

Under the two-class method, for period with net income, basic net income per common share is computed by dividing the net income attributable to common stockholders by the weighted average number of Ordinary Shares outstanding during the period. Net income attributable to common stockholders is computed by subtracting from net income the portion of current period earnings that the participating securities would have been entitled to receive pursuant to their dividend rights had all of the period’s earnings been distributed. No such adjustment to earnings is made during periods with a net loss, as the holders of the participating securities have no obligation to fund losses.

The number of shares used to calculate diluted loss per share of common shares attributable to common shareholders is the same as the number of shares used to calculate basic loss per share of common shares attributable to common shareholders for the period presented because there were no potentially dilutive securities outstanding during the period.

The earnings (loss) per share presented in the statement of operations and comprehensive loss is based on the following for the year ended December 31, 2024 and period from January 4, 2023 (inception) to December 31, 2023:

	December 31, 2024			Period from January 4, 2023 (inception) to December 31, 2023
Basic and diluted net loss per share:
Numerator
Allocation of net loss	$	(12,870,234	)	$	(8,930,946	)
Denominator:
Basic and diluted weighted average number of shares outstanding		96,150			76,540
Basic and diluted net loss per share	$	(133.86	)	$	(116.68	)

F-280

K ENTER HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

For the Year Ended December 31, 2024 and Period from January 4, 2023 (inception) to December 31, 2023

Emerging Growth Company: The Company is expected to be an “emerging growth company”, as defined in Section 2(a) of the Securities Act of 1933, as amended, (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company has elected to take advantage of the extended transition period to comply with new or revised accounting standards and to adopt certain of the reduced disclosure requirements available to emerging growth companies. As a result of the accounting standards election, the Company will not be subject to the same implementation timeline for new or revised accounting standards as other public companies that are not emerging growth companies. At times, the Company may elect to early adopt a new or revised accounting standard.

Recent Accounting Pronouncements, not yet adopted: In October 2023, the FASB issued ASU 2023-06, Disclosure Agreements - Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative (ASU 2023-06). This amendment will impact various disclosure areas, including the statement of cash flows, accounting changes and error corrections, earnings per share, debt, equity, derivatives, and transfers of financial assets. The amendments in ASU 2023-06 will be effective on the date the related disclosures are removed from Regulation S-X or Regulation S-K by the SEC, and will no longer be effective if the SEC has not removed the applicable disclosure requirement by June 30, 2027. Early adoption is prohibited. We are currently evaluating the impacts of the amendment on our disclosures.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) (“ASC 280”): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), that would enhance disclosures for significant segment expenses for all public entities required to report segment information in accordance with ASC 280. ASC 280 requires a public entity to report for each reportable segment a measure of segment profit or loss that its chief operating decision maker (“CODM”) uses to assess segment performance and to make decisions about resource allocations. The amendments in ASU 2023-07 improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more useful financial analyses. Currently, Topic 280 requires that a public entity disclose certain information about its reportable segments. For example, a public entity is required to report a measure of segment profit or loss that the CODM uses to assess segment performance and make decisions about allocating resources. ASC 280 also requires other specified segment items and amounts such as depreciation, amortization and depletion expense to be disclosed under certain circumstances. The amendments in ASU 2023-07 do not change or remove those disclosure requirements. The amendments in ASU 2023-07 also do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. A public entity should apply the amendments in ASU 2023-07 retrospectively to all prior periods presented in the financial statements. The Company adopted ASU 2023-07 for the year ended December 31, 2024 and the impact was considered immaterial on Company’s financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. ASU 2023-09 will be effective for us in the annual period beginning October 1, 2025, though early adoption is permitted. We are still evaluating the presentational effect that ASU 2023-09 will have on our financial statements, but we expect considerable changes to our income tax footnote.

F-281

K ENTER HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

For the Year Ended December 31, 2024 and Period from January 4, 2023 (inception) to December 31, 2023

In November 2024, the FASB issued ASU No. 2024-03, “Disaggregation of Income Statements Expenses (DISE)” (ASU 2024-03), which requires that a public entity provide additional disclosure of the nature of expenses included in the income statement. The new standard requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. ASU 2024-03 will be effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with retrospective application. The standard allows early adoption of these requirements. We are currently evaluating the impact of this standard on our financial statements and related disclosures.

In November 2024, the FASB issued ASU No. 2024-04, “Induced Conversions of Convertible Debt Instruments” (ASU 2024-04), which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as induced conversions. ASU 2024-04 will be effective for annual periods beginning after December 15, 2025, and interim reporting periods within those annual periods. The standard allows early adoption of these requirements for all entities that have adopted the amendments in ASU 2020-06. We are currently evaluating the impact of this standard on our financial statements and related disclosures.

3. BUSINESS COMBINATIONS

Merger Agreement with Global Star Acquisition, Inc.

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”):

● On May 13, 2025, Global Star was reincorporated to Cayman Islands by merging with and into PubCo, with PubCo remaining as the surviving publicly traded entity (the “Reincorporation Merger”). In connection with the closing of the Reincorporation Merger, (i) each issued and outstanding share of common stock of Global Star, other than Global Star common stock owned by Global Star as treasury shares or any Global Star common stock owned by any direct or indirect wholly owned subsidiary of Global Star, was converted into one ordinary share of PubCo (the “PubCo Ordinary Share”), (ii) each issued and outstanding warrant of Global Star was converted automatically into a warrant to purchase one PubCo Ordinary Share at a price of $11.50 per whole share (the “PubCo Warrant”), (iii) each issued and outstanding right of Global Star was converted automatically into a right to receive one-tenth (1/10) of one PubCo Ordinary Share at the closing of a business combination (the “PubCo Right”), and (iv) each issued and outstanding unit of Global Star was separated and converted automatically into one PubCo Ordinary Share, one PubCo Warrant, and one PubCo Right. At the closing of the Reincorporation Merger, all common stock, warrants, rights, units and other securities of Global Star ceased to be outstanding and were automatically canceled and retired and ceased to exist.

● On May 13, 2025, Merger Sub merged with and into K Enter, resulting in K Enter being a wholly owned subsidiary of PubCo (the “Acquisition Merger”). In connection with the closing of the Acquisition Merger, (i) each share of K Enter capital stock that was owned by Global Star, Merger Sub and K Enter (as treasury stock or otherwise), was automatically cancelled and retired without any conversion, (ii) each share of K Enter preferred stock issued and outstanding was deemed converted into shares of K Enter common stock, (iii) each share of K Enter common stock issued and outstanding, including shares of K Enter common stock deemed outstanding as a result of the mandatory conversion of K Enter preferred stock, was converted into the right to receive a number of PubCo Ordinary Shares equal to the Conversion Ratio, and (iv) each share of Merger Sub common stock issued and outstanding was converted into and become one newly issued, fully paid and nonassessable share of K Enter common stock.

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.

F-282

K ENTER HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

For the Year Ended December 31, 2024 and Period from January 4, 2023 (inception) to December 31, 2023

● The aggregate consideration for the Acquisition Merger is $590,000,000 and is expected to be settled by issuing 59,000,000 shares of PubCo’s ordinary shares in exchange for 189,013 shares of Company common stock, including the shares of the Company’s Ordinary Shares underlying the Company’s outstanding Series A and Series A-1 preferred stock at an exchange rate of approximately 312.148 shares of the Company’s Ordinary Shares on an as converted basis for each ordinary share of the PubCo (the “Conversion Ratio”) at the time of the Acquisition Merger.

● Certain of the Company’s stockholders have provided written consent, pursuant to which, among other things, such stockholders have approved the Merger Agreement and the Acquisition Merger. Each issued and outstanding share of the Company’s Ordinary Shares and each issued and outstanding share of convertible preferred stock on an as-converted basis will automatically be cancelled and converted into the right to receive the number of shares of the PubCo’s ordinary shares equal to the Conversion Ratio in accordance with the Acquisition Merger.

● The Merger Agreement is subject to the approval by the stockholders of the Company and Global Star. Holders of Global Star’s Class A Ordinary Shares will have the opportunity to redeem their shares of Global Star Class A Ordinary Shares for cash in connection with the Business Combination.

On February 3, 2025, the Company closed the previously announced business combination pursuant to the Merger Agreement, dated as of June 15, 2023, amended on March 11, 2024, June 28, 2024, and July 25, 2024, with Global Star and Merger Sub.

Acquisitions of Controlling Equity Interests in the Six Korean Entities

During March 2023, and as amended in December 2023, the Company entered into an equity purchase agreement with the owner of Play Company Corp (“Play Company”) to acquire 100% of the outstanding Ordinary Shares in exchange for 163,732,016,220 Korean Won ($110,789,937 at December 31, 2024), payable through the issuance of the shares of the Company’s Ordinary Shares totaling 127,498,912,820 Korean Won ($86,272,660 at December 31, 2024) and in exchange for cash totaling 36,233,103,400 Korean Won ($24,517,277 at December 31, 2024). Additional payments in cash will be made to the owner of Play Company if the annual average net profit for fiscal years from 2023 to 2025 reaches specified thresholds, with payments due to the owner of Play Company on January 31, 2027 and January 31, 2028.

An additional payment in cash may be owed to the owner of Play Company if the shares of PubCo that shares of the Company’s Ordinary Shares convert to at closing of the Acquisition Merger are sold during the three-month period (the “Sale Period”) following the six-month lock-up period of the newly issued shares of PubCo at a per share price less than the per-share value at closing of the Acquisition Merger for the shortfall in share price. The amount to be paid will be reduced by (i) any gains from the sale of shares of PubCo by the owner of Play Company between the end of the Sale Period and December 31, 2026 and (ii) any unrealized gain as of December 31, 2026 for the shares of PubCo that remain held by the owner of Play Company (calculated as the number of remaining shares of PubCo times the difference of (i) the average closing price of PubCo from December 1, 2026 to December 31, 2026 and (ii) the per-share value of PubCo at the closing of the Acquisition Merger).

During March 2023, and as amended in December 2023, the Company entered into an equity purchase agreement with the owners of Solaire Partners, LLC (“Solaire Partners”) to acquire 95% of the outstanding Ordinary Shares in exchange for shares of the Company’s Ordinary Shares totaling 14,250,000,000 Korean Won ($9,642,321 at December 31, 2024).

F-283

K ENTER HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

For the Year Ended December 31, 2024 and Period from January 4, 2023 (inception) to December 31, 2023

During April 2023, and as amended in December 2023, the Company entered into an equity purchase agreement with the owners of Studio Anseilen Co., Ltd (“Anseilen”) to acquire 51% of the outstanding Ordinary Shares in exchange for shares of the Company’s Ordinary Shares totaling 7,700,000,400 Korean Won ($5,210,237 at December 31, 2024).

During April 2023, and as amended in December 2023, the Company entered into an equity purchase agreement with the owner of Apeitda Co. Ltd (“Apeitda”) to acquire 51% of the outstanding Ordinary Shares in exchange for shares of the Company’s Ordinary Shares totaling 15,300,000,000 Korean Won ($10,352,807 at December 31, 2024).

During April 2023, and as amended in December 2023, the Company entered into an equity purchase agreement with the owners of Bidangil Pictures Co., Ltd. (“Bidangil”) to acquire 51% of the outstanding Ordinary Shares in exchange for shares of the Company’s Ordinary Shares totaling 20,400,000,000 Koren Won ($13,803,743 at December 31, 2024).

During April 2023, and as amended in December 2023, the Company entered into an equity purchase agreement with the owner of The LAMP Co., Ltd. (“Lamp”) to acquire 51% of the outstanding Ordinary Shares in exchange for shares of the Company’s Ordinary Shares totaling 30,600,000,000 Korean Won ($20,705,615 at December 31, 2024).

During April 2023, the Company entered into an equity purchase agreement with the owners of First Virtual Lab Inc.(“First Virtual”) to acquire 51% of the outstanding Ordinary Shares and preferred stock in exchange for shares of the Company’s Ordinary Shares totaling 25,500,000,000 Korean Won ($17,254,679 at December 31, 2024). However, the Company entered into the termination agreement during March 2024, which terminated all agreements entered into in connection with the original equity purchase agreement.

The number of shares of the Company’s Ordinary Shares to be issued to the sellers of the Six Korean Entities at closing of the respective transactions will be adjusted by changes in exchange rates as the share purchase agreements are denominated in Korean Won and the Company’s equity transactions are denominated in U.S. Dollar.

In certain circumstances, including prior to the closing of the Merger Agreement and if the shares of PubCo, excluding the shares subject to a lock-up on the Nasdaq market, remain not issued or registered sixty days after the shareholder vote approving the merger, either party may elect to terminate the equity purchase agreements.

4. REVENUE

Details of total revenue was as follows:

	2024		Period from January 4, 2023 (inception) to December 31, 2023
Revenue
Media production	$	485,271		208,704

	2024		Period from January 4, 2023 (inception) to December 31, 2023
Geographic information:
Korea	$	485,271		208,704

F-284

K ENTER HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

For the Year Ended December 31, 2024 and Period from January 4, 2023 (inception) to December 31, 2023

5. CONVERTIBLE DEBT SECURITY

During August 2023, the Company purchased a $1,000,000 convertible bond from Prototype Group, Inc. (“Prototype Group”), a company that operates in virtual studio technology. The convertible bond was due and payable on demand after August 10, 2024 and the company entered into 1-year extension agreement with Prototype group, and bears interest at a fixed rate equal to the Applicable Federal Rate plus 1% additional interest for short term loans, which as of the date of the bond was 5.96%. If there are any overdue payments, Prototype shall bear a late payment interest rate of the Applicable Federal Rate plus 10% additional interest.

At the Company’s option, at any time prior to payment in full of the principal amount and all accrued interest, the convertible bond can be converted into such number of Ordinary Shares of Prototype Group equal to the entire principal amount of the convertible bond and all accrued and unpaid interest thereon, divided by $7.40 per share in case the pre-money valuation of Prototype Group shall meet or exceed $94,800,000. In the event the pre-money valuation is below $94,800,000, the conversion price shall be proportionally reduced.

If the convertible bond is not repaid or converted through the Company’s voluntary election and Prototype Group issues and sells shares of its equity securities before the maturity date resulting in gross proceeds of $10,000,000 (excluding the conversion of this bond), then at any time on or after the maturity date, Prototype Group shall have the option to (a) repay all outstanding principal and accrued unpaid interest of the convertible bond or (b) convert all or any portion of the outstanding principal and accrued unpaid interest of the convertible bond into such number of its common shares equal to the principal amount and all accrued unpaid interest thereon to be converted divided by the conversion price.

On December 31, 2024, the company measured the repayment possibilities and concluded that the possibility of recovery is low. Therefore, the Company recognized $959,459 as an impairment loss, which was included within other expenses on the accompanying statement of operations and comprehensive loss

6. INVESTMENT IN EQUITY SECURITIES

During July 2023, the Company purchased 160,000 shares of Global Star Class B Ordinary Shares (the “Founder Shares”) for an aggregate purchase price of $1,600,000 from Global Star Acquisition 1, LLC, the sponsor of Global Star (the “Sponsor”). During January 2024, the Company purchased 1,000 shares of Play Company Co., Ltd. Ordinary Shares for an aggregate purchase price of $1,178,055 from Solaire Partners LLC. The Company’s investments are recorded at cost minus impairment and adjusted for changes in observable prices.

As of December 31, 2024, there were no indicators of impairment and for the period between the date of acquisition and December 31, 2024, there were no observable price changes or sales of Founder Shares and Play Company shares.

7. STOCKHOLDERS’ EQUITY

The Company was authorized to issue 100,000 Ordinary Shares at a par value of $0.01 when it was formed on January 4, 2023. The Company amended its certificate of incorporation on May 31, 2023 and again on August 31, 2023 in order to increase Ordinary Shares it is authorized to issue to 10,000,000 Ordinary Shares at a par value of $0.0001 per share and 1,000,000 shares of preferred stock at a par value of $0.0001 per share, of which 45,000 shares have been designated as Series A Convertible Preferred Stock (“Series A”) and 15,000 shares have been designated as Series A-1 Convertible Preferred Stock (“Series A-1”) by the board of directors (the “Board”).

F-285

K ENTER HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

For the Year Ended December 31, 2024 and Period from January 4, 2023 (inception) to December 31, 2023

Common Stock: On September 29, 2024, the Company issued 1,202 shares ($669,201, $556.74 per share) of the Company’s Ordinary Shares to Lodestar USA, Inc. in consideration for services rendered to the Company by Ted Kim, a co-founder and a director of the Company and the owner of Lodestar USA Inc. (See Note 18).

Convertible preferred stock: On September 21, 2024, the Company entered into an agreement to issue 250 shares of Series A-1 for gross proceeds of $150,000 (“Say Coon Loh Agreement”). Each issued Series A-1 shares are convertible into Ordinary Shares of the Company on a one-for-one basis. On September 25, 2024, the Company entered into an agreement to issue 250 shares of Series A-1 for gross proceeds of $150,000 (“Innocus Global Agreement”). Each issued Series A-1 shares are convertible into Ordinary Shares of the Company on a one-for-one basis.

Treasury Stock: On August 31, 2024, the Company issued 1,932 shares ($1,075,622, $556.74 per share) of the Company’s Ordinary Shares to one employee 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 the Company under the employment agreements, which were initially given to two employees. On September 24, 2024, the Company 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 the Company’s Ordinary Shares to GF Korea Inc. The liabilities were paid with the shares and the difference between fair value of issued shares and liabilities was recognized as expense. On September 30, 2024, the Company issued Tan Chin Hwee, a director, Executive Chairman and Interim CEO of the Company, 168 shares ($93,532, $556.74 per share) of the Company’s Ordinary Shares in consideration for services rendered. (See Note 18)

As of December 31, 2024 and 2023, 101,202 shares (no treasury share) and 94,279 shares (5,721 treasury shares) of Ordinary Shares were issued and outstanding, respectively, and the Company reserved 40,798 shares and 40,298 Ordinary Shares for the conversion of Series A and Series A-1, respectively.

8. SHARE-BASED COMPENSATION

Share-based compensation expense of $2,221,393 was recorded during the period from January 1, 2024 to December 31, 2024, and $1,749,741 was recorded during the period from January 4, 2023 (inception) to December 31, 2023, in connection with the issuance of Ordinary Shares from the Company’s treasury shares to employees and nonemployees (See Note 8) as the estimated fair value of such Ordinary Shares as of the issuance date exceeded the consideration paid, if any, and is included within general and administrative expenses on the accompanying statement of operations and comprehensive loss. Details of share-based compensation that the Company recognized as expense for the period from January 1, 2024 to December 31, 2024 are as follows:

Grant date	Holder	Total shares		Share fair value		Total fair value
August 31, 2024	Employee		1,932	$	556.74	$	1,075,622
September 29, 2024	Lodestar USA		1,202		556.74		669,201
September 30, 2024	Employee		168		556.74		93,532
September 12, 2024	Employee*		688		556.74		383,037
			3,990				2,221,393

* One employee purchased 688 shares from a shareholder at a price lower than the fair value. The difference between the transaction price and the fair value was accounted for as an expense.

F-286

K ENTER HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

For the Year Ended December 31, 2024 and Period from January 4, 2023 (inception) to December 31, 2023

The Company’s board of directors (the “Board”) determines the fair value of Ordinary Shares at the time of issuance due to the absence of an active market for the Company’s common stock. The Board determined the fair value of such Ordinary Shares by considering a number of objective and subjective factors, operating and financial performance, the lack of liquidity of capital stock, and general and industry-specific economic outlook, amongst other factors. The fair value of the underlying Ordinary Shares will be determined by the Company’s Board until such time the Company’s Ordinary Shares is listed on an established exchange or national market system.

In connection with estimating the fair value of Ordinary Shares at the time Ordinary Shares were issued from the Company’s treasury shares an option pricing model (the “OPM”) was utilized.

9. EMPLOYEE BENEFITS

Changes in defined severance benefits obligation were as follows:

	2024			2023
Balance at 1 January	$	49,153		$	-
Current service cost		37,078			48,559
Included in profit or loss (*1)		(12,712	)		-
Benefits paid		(6,752	)		-
Payments from plans for the transition to a defined contribution retirement plan		(58,665	)		-
Cumulative effects of foreign currency translation		(8,102	)		594
Balance at 31 December	$	-		$	49,153
Current		-			2,462
Noncurrent		-			46,691

(*1) The difference between the defined benefit obligations and the settled amount upon the transition of post-employment benefit.

Effective May 3, 2024, the Company has transitioned from a defined benefit retirement plan to a defined contribution retirement plan. The expense recognized in relation to defined contribution plan for the period ended December 31, 2024 is $55,392.

The principal actuarial assumptions used to determine defined severance benefits obligation were as follows:

	2024	2023
Discount rates	-	4.70%
Salary growth rates	-	3.38%+Experienced salary scale

F-287

K ENTER HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

For the Year Ended December 31, 2024 and Period from January 4, 2023 (inception) to December 31, 2023

10. FAIR VALUE MEASUREMENTS

The convertible debt security is classified within Level 3 value hierarchy because the value of the asset is based on the credit worthiness of the obligor, which is an unobservable input. The Company used a Tsiveriotis-Fernandes model (the “T-F Model”) to value the convertible debt security as of December 31, 2024.

Financial assets measured at fair value on a recurring basis are as follows:

	Level 1		Level 2		Level 3		Total
Financial liabilities:
Derivative liabilities	$	-		-		401,374		401,374

The table below presents the ranges of significant unobservable inputs used to value the Company’s Level 3 financial instruments. These ranges represent the significant unobservable inputs that were used in the valuation of each type of financial instrument. These inputs are not representative of the inputs that could have been used in the valuation of any one financial instrument. Valuation techniques and inputs for assets measured by the fair value hierarchy Level 3 are as follows:

Classification	Valuation technique	Input
Financial assets at fair value
Convertible debt security	Tsiveriotis-Fernandes model	Discount rate, stock price and volatility
Derivative liabilities	Probability Weighted Return model	Discount rate, stock price and volatility

A reconciliation of the beginning and ending balances for the convertible debt security measured at fair value on a recurring basis using significant unobservable inputs (Level 3) is as follows:

Balance as of January 1, 2024	$	1,006,757
Adjustment to fair value		(47,298	)
Impairment Loss		(959,459	)
Balance as of December 31, 2024	$

A reconciliation of the beginning and ending balances for the derivative liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) is as follows:

Balance as of January 1, 2024	$	-
Issuance		374,612
Adjustment to fair value		26,762
Balance as of December 31, 2024	$	401,374

F-288

K ENTER HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

For the Year Ended December 31, 2024 and Period from January 4, 2023 (inception) to December 31, 2023

11. CONVERTIBLE NOTES

In May and December 2024, The Company issued $3 million in aggregate principal amount of the convertible senior unsecured notes. The convertible notes contain a right to convert the notes into the common shares. The Company accounted 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 Company accounted the embedded conversion feature as a derivative instrument and periodically measures its fair value in accordance with ASC 820. The Company determined the carrying amount of the convertible notes 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.

Details of convertible notes issued and outstanding as of December 31, 2024 are as follows:

	December 31, 2024
Noncurrent
Convertible Notes	$	3,000,000
Discount on Notes		(333,168	)
	$	2,666,833

Amounts recognized in profit or loss and changes in fair value of derivative liabilities at fair value through profit or loss for the period ended December 31, 2024 are as follows:

	1st		2nd		Total
Balance at 1 January	$	-		-		-
Issuance		283,324		91,288		374,612
Adjustment to fair value		17,706		9,056		26,762
Balance at 31 December	$	301,030		100,344		401,374

F-289

K ENTER HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

For the Year Ended December 31, 2024 and Period from January 4, 2023 (inception) to December 31, 2023

Details of the convertible notes issued by the Company and outstanding as of December 31, 2024 are as follows:

Series	1st	2nd(*)
Type	Convertible Notes	Convertible Notes
Issuance amount	2,250,000	750,000
Coupon rate (%)	3%	3%
Issuance date	2024-06-04 / 2024-12-30	2024-06-05 / 2024-12-30
Maturity date	2027-06-03	2027-06-04
Principal redemption	1. Redemption at maturity: Redeemed on the maturity date, at their outstanding principal amount, which has not been early redeemed	1. Redemption at maturity: Redeemed on the maturity date, at their outstanding principal amount, which has not been early redeemed
Conversion price	● Conversion before the business combination: Before the consummation of the Business Combination, the holders shall be entitled to convert the Pre-PIPE Notes into ordinary shares in the Company at the conversion price of $1,200 per share (the Pre-Merger Conversion Price). Upon the consummation of the Business Combination, 1 ordinary share of the Company shall be converted into 300 ordinary shares (1 share is worth $10.00) of a combined entity (the Combined Entity). ● Conversion after the business combination Upon the consummation of the Business Combination, the Pre-PIPE Notes shall be a part of the Combined Entity and the Investor shall be entitled to convert the Pre- PIPE Notes into ordinary shares in the Combined Entity at the conversion price of $10 per share (the Post-Merger Conversion Price). The Post-Merger Conversion Prices shall be adjusted downwardly to the greater of the following: ● 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 ● Floor price of $4 per share.	● Conversion before the business combination: Before the consummation of the Business Combination, the Investor shall be entitled to convert the Pre-PIPE Notes into ordinary shares in the Company at the conversion price of $1,200 per share (the Pre-Merger Conversion Price). Upon the consummation of the Business Combination, 1 ordinary share of the Company shall be converted into 300 ordinary shares (1 share is worth $10.00) of a combined entity (the Combined Entity). ● Conversion after the business combination Upon the consummation of the Business Combination, the Pre-PIPE Notes shall be a part of the Combined Entity and the Investor shall be entitled to convert the Pre- PIPE Notes into ordinary shares in the Combined Entity at the conversion price of $10 per share (the Post-Merger Conversion Price). The Post-Merger Conversion Prices shall be adjusted downwardly to the greater of the following: ● 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 ● Floor price of $4 per share.

(*) As of December 31, 2024, the Company satisfied the conditions to receive $375,000; however, the payment remained outstanding as of that date and was subsequently received in January 2025.

F-290

K ENTER HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

For the Year Ended December 31, 2024 and Period from January 4, 2023 (inception) to December 31, 2023

12. PROPERTY AND EQUIPMENT, NET

Property and equipment, net consisted of the following as of December 31, 2024 and 2023:

	2024			2023
Office equipment	$	35,044		$	37,847
		35,044			37,847
Less: accumulated depreciation		(10,688	)		(4,249	)
Property and equipment, net	$	24,356		$	33,598

Depreciation expense for the year ended December 31, 2024 and for the period from January 4, 2023 (inception) to December 31, 2023 totaled $7,562 and $4,198 and was included within general and administrative expenses on the accompanying statement of operations and comprehensive loss.

13. PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consisted of the following as of December 31, 2024 and 2023:

	2024		2023
Advances to a production company for content development	$	153,328	$	77,461
Advances to writers for development of content				69,716
Prepaid cloud computing arrangement hosting services		96,925		61,413
Prepaid income tax		55		-
Accounting services		-		18,826
Security deposit for office lease		67,665		-
Capitalized implementation costs for cloud computing arrangement		104,265
	$	422,238	$	227,416

Prepaid expenses and other current assets – related party consisted of a security deposit for an office lease totaling $67,699 (see Note 18).

14. OTHER ASSETS, NONCURRENT

Other assets, noncurrent consisted of the following as of December 31, 2024 and 2023:

	2024		2023
Advances to production companies for content development	$	1,082,647	$	852,072
Advances to writers for development of content		630,303		480,259
Capitalized implementation costs for cloud computing arrangement		49,418		295,619
Security deposit for office lease		-		77,462
	$	1,762,368	$	1,705,412

As of December 31, 2023, Other assets, noncurrent – related party consisted of a security deposit for an office lease totaling $77,500 (see Note 18).

F-291

K ENTER HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

For the Year Ended December 31, 2024 and Period from January 4, 2023 (inception) to December 31, 2023

15. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consisted of the following as of December 31, 2024 and 2023:

	2024		2023
Accrued legal services	$	2,000,722	$	1,468,900
Accrued accounting services		1,461,779		667,906
Unearned Revenue		135,331		-
Annual leave allowance		66,479		65,272
Payroll withholding tax		36,784		34,337
Other payable		60,052		1,295
	$	3,761,147	$	2,237,710

16. COMMITMENTS AND CONTINGENCIES

Operating Leases: The Company has obligations as a lessee for two office space leases, both of which are classified as operating leases. For the year ended December 31, 2024, the total lease cost was $123,337.(2023: $70,831)

The weighted average remaining lease term was 0.4 years and the weighted average discount rate was 5.7% as of December 31, 2024.

Future minimum payments of lease liabilities under the noncancelable operating leases are as follows at December 31, 2024 and 2023:

	2024			2023
Less than 1 year	$	39,662		$	122,911
1 ~ 2years		-			51,213
Total undiscounted lease payments		39,662			174,124
Less: imputed interest		(307	)		(6,297	)
Total future minimum payments	$	39,354		$	167,826

Legal Matters: From time to time, the Company may become subject to legal proceedings, claims and litigation arising in the ordinary course of business. The Company is not currently a party to any legal proceedings, nor is it aware of any pending or threatened litigation, that would have a material adverse effect on the Company’s business, operating results, cash flows, or financing condition should such litigation be resolved unfavorably.

Loan: On December 31, 2024, the Company entered into a loan agreement with Nikhil Suresh Nanda, pursuant to which the Nikhil Suresh Nanda will provide working capital loans to the Company. The total loan amount will not exceed 50% of the total committed PIPE financing totaling $1,000,000 for the SPAC. The loan will be paid by converting the subject loan to a Convertible Senior Unsecured Note (PIPE) immediately prior to the completion of the business combination. The agreement includes various conditions, including the issuance of free trading bonus shares by the Company and the use of the loan for working capital purposes related to the business combination.

F-292

K ENTER HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

For the Year Ended December 31, 2024 and Period from January 4, 2023 (inception) to December 31, 2023

17. INCOME TAXES

The Company’s effective tax rate for the year ended December 31, 2024 and the period from January 4, 2023 (inception) the December 31, 2023 was zero percent. The effective tax rate may vary significantly from period to period and can be influenced by many factors. These factors include, but are not limited to, changes to the statutory rates in the jurisdictions where the Company has operations and changes in the valuation of deferred tax assets and liabilities. The difference between the effective tax rate and the federal statutory rate of 21.0% (Korea: 20.9%) primarily relates to certain nondeductible items, state and local income taxes, the absence of current income tax, and a full valuation allowance for deferred tax assets.

	2024			2023
Current taxes
United States	$	-	$	-
Foreign - Korea		-		-
Current taxes	$	-	$	-
Deferred taxes
United States	$	-	$	-
Foreign - Korea		-		-
Deferred taxes	$	-	$	-

Deferred tax assets of the following as of December 31, 2024 and 2023:

	2024			2023
Deferred tax assets
Net operating loss carryforward	$	2,802,948		$	1,837,180
Lease liabilities		8,225			48,741
Accrued Expenses		751,990			-
Stock Compensation		811,711			-
Defined severance benefits		-			10,273
Others		(1,283	)		(36,495	)
Total gross deferred tax assets		4,373,591			1,859,699
Valuation allowance		(4,373,591	)		(1,859,699	)
Net deferred tax assets	$	-		$	-

There are no deferred taxes that are directly charged to (credited from) equity for the years ended December 31, 2024 and 2023.

The Company’s policy is to record estimated interest and penalties related to the underpayment of income taxes or unrecognized tax benefits as a component of its income tax provision. The Company has not recorded any interest or penalties related to unrecognized tax benefits through December 31, 2024 and 2023.

In the normal course of business, the Company is subject to examination by federal and state jurisdictions where applicable based on the statute of limitations that apply in each jurisdiction. The Company is not currently under audit by the taxing jurisdictions to which the Company is subject.

F-293

K ENTER HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

For the Year Ended December 31, 2024 and Period from January 4, 2023 (inception) to December 31, 2023

18. RELATED PARTIES

Two of the Company’s directors, one of whom is the Executive Chairman and the other is also the Chief Executive Officer, are also senior officers of Solaire Partners. A director of the Company is also a managing member of Global Star Acquisition 1, LLC, the entity the Company purchased its shares of Global Star Class B Ordinary Shares from.

The Company 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, the Company 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, the Company 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, the Company’s Chief Executive Officer, loaned the Company $121,798 (the “1st Lee Loan”). On May 3, 2024, the Company 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 nine months and bears interest at the rate of 4.6% per annum. On October 23, 2024, the Company 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 April 23, 2024, Young Jae Lee, the Company’s Chief Executive Officer, loaned the Company $169,164 (the “2nd Lee Loan”). On May 3, 2024, the Company 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 the Company $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, the Company entered into the extension agreement with Bidangil in order to differ the maturity to October 23, 2024. On October 25, 2024, the Company 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 Chief Executive Officer, loaned the Company $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, the Company 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. The Loan bears interest at the rate of 4.6% per annum.

F-294

K ENTER HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

For the Year Ended December 31, 2024 and Period from January 4, 2023 (inception) to December 31, 2023

On June 4, 2024, the Company 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 nominee 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 will 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 shall be 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 August 19. 2024, Global Star Acquisition I LLC loaned the Company $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, the Company repaid $120,000 of Global Star Acquisition I LLC loan, leaving a balance of $0.00 on the loan.

On August 31, 2024, the Company issued 1,932 shares ($1,075,622, $556.74 per share) of the Company’s Ordinary Shares to an employee of the Company, 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 the Company under the employment agreements, which were initially given to two employees.

On September 12, 2024, one founder of the Company transferred a total of 688 shares ($383,037, $556.74 per share) of the founder to an employee at par value. The Company 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, the Company 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 the Company’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 the Company. The GF Agreement closed on September 25, 2024 and the company 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, the Company entered into an agreement with Lodestar USA, Inc. (the “Lodestar Agreement”) pursuant to which the Company issued 1,202 shares ($669,201, $556.74 per share) of the Company’s Ordinary Shares to Lodestar USA, Inc. in consideration for services rendered to the Company by Ted Kim, a co-founder and a director of the Company and the owner of Lodestar USA Inc. The Company’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, the Company issued Tan Chin Hwee, a director, Executive Chairman and Interim CEO of the Company, 168 shares ($93,532, $556.74 per share) of the Company’s Ordinary Shares in consideration for services rendered.

F-295

K ENTER HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

For the Year Ended December 31, 2024 and Period from January 4, 2023 (inception) to December 31, 2023

19. SUBSEQUENT EVENTS

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to May 14, 2025, the date that the financial statements were available to be issued.

On January 2, 2025, upon the closing of equity purchase agreement, the Company 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 approved the proposals regarding Merger Agreement on the shareholders’ meeting. The Merger Agreement was completed on May 13, 2025.

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

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

F-296

PART II - INFORMATION NOT REQUIRED IN PROSPECTUS

Item 6. Indemnification of Directors and Officers

Cayman Islands law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against willful default, actual fraud or the consequences of committing a crime. Our amended and restated memorandum and articles of association provides for indemnification of our officers and directors to the maximum extent permitted by law, including for any liability incurred in their capacities as such, except through their own actual fraud, willful default or willful neglect. We have entered into agreements with our directors and officers to provide contractual indemnification in addition to the indemnification provided for in our amended and restated memorandum and articles of association. We have purchased a policy of directors’ and officers’ liability insurance that insures our officers and directors against the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify our officers and directors.

Our officers and directors have agreed to waive any right, title, interest or claim of any kind in or to any monies in the trust account, and have agreed to waive any right, title, interest or claim of any kind they may have in the future as a result of, or arising out of, any services provided to us and will not seek recourse against the trust account for any reason whatsoever (except to the extent they are entitled to funds from the trust account due to their ownership of public shares). Accordingly, any indemnification provided will only be able to be satisfied by us if (i) we have sufficient funds outside of the trust account or (ii) we consummate an initial business combination.

We believe that these provisions, the insurance and the indemnity agreements are necessary to attract and retain talented and experienced officers and directors.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Item 7. Recent Sales of Unregistered Securities

PIPE Securities Purchase Agreement

On January 31, 2025, the Company entered into a securities purchase agreement (the “PIPE Securities Purchase Agreement”), with certain institutional and accredited investors (the “PIPE Investors”), pursuant to which the PIPE Investors have agreed to subscribe for and purchase, and the Company has agreed to issue and sell to the PIPE Investors, at the closing of the transactions contemplated by the Business Combination Agreement (the “Closing”), promissory notes (the “PIPE Notes”) convertible into shares of Company common stock, par value $0.0001 per share (the financing under the PIPE Securities Purchase Agreement hereinafter referred to as the “PIPE Financing”) with an aggregate original principal amount of $4.5 million (the “Aggregate Closing PIPE Proceeds”). The PIPE Notes issued in the PIPE Financing were offered in a private placement exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to the PIPE Subscription Agreements. In addition, upon conversion the PIPE Investors shall receive approximately 900,000 shares of K Enter Ordinary Shares from a K Enter shareholder, such shares shall be convertible into shares of Company common stock, par value $0.0001 per share.

The Aggregate Closing PIPE Proceeds will be a part of the aggregate cash proceeds available for release to the Company in connection with the transactions contemplated by the Business Combination Agreement. The PIPE Notes are convertible into Ordinary Shares, $0.0001 par value per share, at a price of $10.00 per share, to be adjusted downwardly as further described in the Form of Convertible Senior Unsecured Note, bear interest at 3.00% to be paid semi-annually, and mature on the thirty-sixth (36) month anniversary of the issuance date of the PIPE Notes.

Pursuant to the PIPE Securities Purchase Agreement, the PIPE Investors will entered into a registration rights agreement (the “PIPE Registration Rights Agreement”) at the closing of the transactions contemplated by the PIPE Securities Purchase Agreement (the “PIPE Closing”). Pursuant to the PIPE Registration Rights Agreement, the Company agrees to provide certain registration rights with respect to the shares of its Ordinary Shares issuable upon conversion of the PIPE Notes in accordance with the terms of the PIPE Notes.

II-1

Standby Equity Purchase Agreement

On June 3, 2025, we entered into a securities purchase agreement with Bitcoin Strategic Reserve KWM LLC, providing for the sale by the Company of up to $500 million of Ordinary Shares.

Proceeds from the facility will be used to support the Company’s 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 with the current report on Form 6-K filed with the SEC on June 4, 2025, available at www.sec.gov.

Item 8. Exhibits and Financial Statement Schedules.

(a) Exhibits

The exhibits of the registration statement are listed in the Exhibit Index to this registration statement and are incorporated herein by reference.

(b) Financial Statement Schedules

Schedules have been omitted because the information required to be set forth therein is not applicable or is shown in the audited consolidated financial statements or the notes thereto.

Item 9. Undertakings

(a) The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

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Provided, however, that: provided, however, that: Paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4) That, for the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

(5) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:

The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

II-3

Exhibit Number	Description
1.1**	Form of Amended and Restated Memorandum and Articles of Association of K Wave Media Ltd. (incorporated by reference to Annex B to Global Star Prospectus/Proxy Statement filed with the SEC on January 8, 2025).
2.1**	Merger Agreement, dated as of June 15, 2023, by and among Global Star Acquisition Inc., K Enter Holdings Inc., K Wave Media Ltd. and GLST Merger Sub Inc. (incorporated by reference to Annex A to Global Star Prospectus/Proxy Statement filed with the SEC on January 8, 2025).
2.2**	First Amendment to the Merger Agreement, dated as of March 11, 2024, by and among Global Star Acquisition Inc., K Enter Holdings Inc., K Wave Media Ltd. and GLST Merger Sub Inc. (incorporated by reference to Annex A to Global Star Prospectus/Proxy Statement filed with the SEC on January 8, 2025).
2.3**	Second Amendment to the Merger Agreement, dated as of June 28, 2024, by and among Global Star Acquisition Inc., K Enter Holdings Inc., K Wave Media Ltd. and GLST Merger Sub Inc. (incorporated by reference to Annex A to Global Star Prospectus/Proxy Statement filed with the SEC on January 8, 2025).
2.4**	Third Amendment to the Merger Agreement, dated as of July 25, 2024, by and among Global Star Acquisition Inc., K Enter Holdings Inc., K Wave Media Ltd. and GLST Merger Sub Inc. (incorporated by reference to Annex A to Global Star Prospectus/Proxy Statement filed with the SEC on January 8, 2025).
2.5**	Fourth Amendment to the Merger Agreement, dated as of December 11, 2024, by and among Global Star Acquisition Inc., K Enter Holdings Inc., K Wave Media Ltd. and GLST Merger Sub Inc. (incorporated by reference to Annex A to Global Star Prospectus/Proxy Statement filed with the SEC on January 8, 2025).
3.1**	Global Star Acquisition, Inc. Amended and Restated Certificate of Incorporation, dated September 19, 2022 (incorporated by reference to Exhibit 3.2 of Global Star Acquisition, Inc.’s Form S-1 filed with the SEC on July 28, 2022).
3.2**	Global Star Acquisition, Inc. Bylaws (incorporated by reference to Exhibit 3.3 of Global Star Acquisition, Inc.’s Form S-1 filed with the SEC on July 28, 2022).
3.3**	Form of PubCo’s Amended and Restated Memorandum and Articles of Association (incorporated by reference to Annex B to Global Star Prospectus/Proxy Statement filed with the SEC on January 8, 2025).
3.4**	First Amendment to the Amended and Restated Certificate of Incorporation of Global Star Acquisition Inc., dated August 28, 2023 (incorporated by reference to Exhibit 3.1 of Global Star Acquisition, Inc.’s Current Report on Form 8-K filed with the SEC on August 28, 2023).
3.5**	Second Amendment to the Amended and Restated Certificate of Incorporation of Global Star Acquisition Inc., dated June 14, 2024 (incorporated by reference to Exhibit 3.1 of Global Star Acquisition, Inc.’s Current Report on Form 8-K filed with the SEC on June 17, 2024).
3.6**	Third Amendment to the Amended and Restated Certificate of Incorporation of Global Star Acquisition Inc., dated December 6, 2024. (incorporated by reference to Exhibit 3.6 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
4.1**	Specimen Unit Certificate of Global Star Acquisition, Inc. (incorporated by reference to Exhibit 4.1 of Global Star Acquisition, Inc.’s Form S-1 filed with the SEC on July 28, 2022).

II-4

4.2**	Specimen Class A Common Stock Certificate of Global Star Acquisition, Inc. (incorporated by reference to Exhibit 4.2 of Global Star Acquisition, Inc.’s Form S-1 filed with the SEC on July 28, 2022).
4.3**	Specimen Warrant Certificate of Global Star Acquisition, Inc. (incorporated by reference to Exhibit 4.3 of Global Star Acquisition, Inc.’s Form S-1 filed with the SEC on July 28, 2022).
4.4**	Warrant Agreement, dated as of September 19, 2022, between Global Star Acquisition, Inc. and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 4.4 of Global Star Acquisition, Inc.’s Form S-1 filed with the SEC on July 28, 2022).
4.5**	Placement Unit Purchase Agreement, dated September 22, 2022, between Global Star Acquisition, Inc. and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 10.7 of Global Star Acquisition, Inc.’s Form S-1 filed with the SEC on July 28, 2022).
4.6**	Rights Agreement, dated September 22, 2022, between Global Star Acquisition, Inc. and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 4.2 of Global Star Acquisition, Inc.’s Current Report on Form 8-K filed with the SEC on September 22, 2022).
4.7**	Specimen Common Share Certificate of K Wave Media Ltd. (incorporated by reference to Exhibit 4.7 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
4.8**	Specimen Warrant Certificate of K Wave Media Ltd. (incorporated by reference to Exhibit 4.8 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
4.9**	Specimen Rights Certificate of K Wave Media Ltd. (incorporated by reference to Exhibit 4.9 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
5.1	Opinion of Maples and Calder (Cayman) LLP as to the validity of K Wave Media Ltd. ordinary shares.
8.1**	Tax Opinion Letter of Nelson Mullins Riley & Scarborough LLP (incorporated by reference to Exhibit 8.1 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
8.2**	Tax Opinion Letter of Loeb & Loeb LLP (incorporated by reference to Exhibit 8.2 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.1**	Letter Agreement, dated as of September 22, 2022, by and among Global Star Acquisition, Inc., its officer, its directors and Global Star Acquisition 1 LLC (incorporated by reference to Exhibit 10.1 of Global Star Acquisition, Inc.’s Current Report on Form 8-K filed with the SEC on September 22, 2022).
10.2**	Investment Management Trust Agreement, dated as of September 22, 2022, by and between Global Star Acquisition, Inc. and Continental Stock & Trust Company (incorporated by reference to Exhibit 10.2 of Global Star Acquisition, Inc.’s Current Report on Form 8-K filed with the SEC on September 22, 2022).
10.3**	Registration Rights Agreement, dated as of September 22, 2022, by and among Global Star Acquisition, Inc., Global Star Acquisition 1 LLC and certain security holders (incorporated by reference to Exhibit 10.3 of Global Star Acquisition, Inc.’s Current Report on Form 8-K filed with the SEC on September 22, 2022).

II-5

10.4**	Form of Amended and Restated Registration Rights Agreement (incorporated by reference to Annex D to Global Star Prospectus/Proxy Statement filed with the SEC on January 8, 2025).
10.5**	Placement Unit Purchase Agreement, dated as of September 22, 2022, by and between Global Star Acquisition, Inc. and Global Star Acquisition 1 LLC (incorporated by reference to Exhibit 10.4 of Global Star Acquisition, Inc.’s Current Report on Form 8-K filed with the SEC on September 22, 2022).
10.6**	Promissory Note, dated February 14, 2022, issued from Global Star Acquisition, Inc. to Global Star Acquisition 1 LLC (incorporated by reference to Exhibit 10.2 of Global Star Acquisition, Inc.’s Form S-1 filed with the SEC on July 28, 2022).
10.7**	Securities Subscription Agreement, dated as of February 14, 2022, by and between Global Star Acquisition, Inc. and Global Star Acquisition 1 LLC (incorporated by reference to Exhibit 10.5 of Global Star Acquisition, Inc.’s Form S-1 filed with the SEC on July 28, 2022).
10.8**	Administrative Services Agreement, dated as of September 22, 2022, by and between Global Star Acquisition, Inc. and Global Star Acquisition 1 LLC (incorporated by reference to Exhibit 10.6 of Global Star Acquisition, Inc.’s Current Report on Form 8-K filed with the SEC on September 22, 2022).
10.9**	Form of Lock-Up Agreement by and among K Wave Media Ltd., Global Star Acquisition, Inc., K Enter Holdings Inc. and certain other persons (incorporated by reference to Exhibit 10.1 of Global Star Acquisition, Inc.’s Current Report on Form 8-K filed with the SEC on June 22, 2023).
10.10**	Form of Amended and Restated Registration Rights Agreement by and among K Wave Media Ltd., Global Star Acquisition, Inc., certain former stockholders of Global Star Acquisition, Inc., certain former stockholders of K Enter Holdings Inc. and certain other persons (incorporated by reference to Exhibit 10.2 of Global Star Acquisition, Inc.’s Current Report on Form 8-K filed with the SEC on June 22, 2023).
10.11**	Form of PubCo’s 2024 Equity Incentive Plan (incorporated by reference to Annex C to Global Star Prospectus/Proxy Statement filed with the SEC on January 8, 2025).
10.12**	Share Purchase Agreement, dated April 9, 2023, by and between K Enter Holdings Inc. and certain shareholders of Apeitda Co., Ltd. and Amendment thereto dated September 14, 2023 (incorporated by reference to Exhibit 10.12 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.13**	Share Purchase Agreement, dated April 10, 2023, by and between K Enter Holdings Inc. and certain shareholders of Bidangil Pictures Co., Ltd. and Amendment thereto dated September 14, 2023 (incorporated by reference to Exhibit 10.13 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.14**	Share Purchase Agreement, dated April 10, 2023, by and between K Enter Holdings Inc. and certain shareholders of The LAMP Co., Ltd. and Amendment thereto dated September 14, 2023. (incorporated by reference to Exhibit 10.14 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.15**	Share Purchase Agreement, dated April 9, 2023, by and between K Enter Holdings Inc. and certain shareholders of Studio Anseilen Co., Ltd. and Amendment thereto dated September 14, 2023 (incorporated by reference to Exhibit 10.15 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.16**	Share Purchase Agreement and Shareholder Agreement, both dated April 12, 2023, by and between K Enter Holdings Inc. and certain shareholders of First Virtual Lab Inc. (incorporated by reference to Exhibit 10.16 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).

II-6

10.17**	Share Purchase Agreement, dated March 31, 2023, by and between K Enter Holdings Inc. and certain shareholders of Play Company Co., Ltd. and Amendment thereto dated September 30, 2023 (incorporated by reference to Exhibit 10.17 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.18**	Equity Purchase Agreement, dated March 31, 2023, by and between K Enter Holdings Inc. and certain shareholders of Solaire Partners LLC. and Amendments thereto dated September 14, 2023 and January 18, 2024, respectively (incorporated by reference to Exhibit 10.18 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.19**	Share Purchase Agreement, dated January 31, 2024, by and between Solaire Partners Limited Liability Company and K Enter Holdings Inc. (incorporated by reference to Exhibit 10.19 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.20**	Share Purchase Agreement, dated January 31, 2024, by and between King Bear Film LLC and K Enter Holdings Inc. (incorporated by reference to Exhibit 10.20 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.21**	April 27, 2023 Lease between Zoa Zoa, Inc., as landlord and K Enter Holdings Inc., as tenant (incorporated by reference to Exhibit 10.21 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.22††**	June 1, 2023 Lease between Solaire Partners, LLC, as landlord and K Enter Holdings Inc., as tenant (incorporated by reference to Exhibit 10.22 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.23**	Development Agreement, dated May 25, 2023, between K Enter Holdings Inc. and Studio Anseilen Co., Ltd. (incorporated by reference to Exhibit 10.23 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.24**	$1,000,000 Convertible Bond, issued by Prototype Group, Inc., dated August 10, 2023 (incorporated by reference to Exhibit 10.24 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.25**	Loan Agreement, dated September 6, 2023, between K Enter Holdings Inc., as lender and Studio V Plus Co., Ltd., as borrower (incorporated by reference to Exhibit 10.25 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.26**	Series A Convertible Preferred Stock Purchase Agreement, dated as of May 4, 2023, by and between K Enter Holdings Inc. and K Enter Holdings Korea Investment Partnership (incorporated by reference to Exhibit 10.26 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.27**	Series A Convertible Preferred Stock Purchase Agreement, dated as of June 13, 2023, by and between K Enter Holdings Inc. and Tan Chin Hwee (incorporated by reference to Exhibit 10.27 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.28**	Series A Convertible Preferred Stock Purchase Agreement, dated as of June 13, 2023, by and between K Enter Holdings Inc. and Young Han Yoon (incorporated by reference to Exhibit 10.28 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.29**	Series A Convertible Preferred Stock Purchase Agreement, dated as of June 13, 2023, by and between K Enter Holdings Inc. and Hyeonho Yoon (incorporated by reference to Exhibit 10.29 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).

II-7

10.30**	Series A Convertible Preferred Stock Purchase Agreement, dated as of June 19, 2023, by and between K Enter Holdings Inc. and Assai OY (incorporated by reference to Exhibit 10.30 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.31**	Series A Convertible Preferred Stock Purchase Agreement, dated as of June 19, 2023, by and between K Enter Holdings Inc. and Graham NG Yong Qian (incorporated by reference to Exhibit 10.31 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.32**	Series A Convertible Preferred Stock Purchase Agreement, dated as of June 19, 2023, by and between K Enter Holdings Inc. and Integrity Capital International (incorporated by reference to Exhibit 10.32 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.33**	Series A Convertible Preferred Stock Purchase Agreement, dated as of June 19, 2023, by and between K Enter Holdings Inc. and Rossipohja Sijoitus OY (incorporated by reference to Exhibit 10.33 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.34**	Series A Convertible Preferred Stock Purchase Agreement, dated as of June 20, 2023, by and between K Enter Holdings Inc. and Gan Cher Siong (incorporated by reference to Exhibit 10.34 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.35**	Series A Convertible Preferred Stock Purchase Agreement, dated as of June 30, 2023, by and between K Enter Holdings Inc. and Xeno Investment Asia (incorporated by reference to Exhibit 10.35 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.36**	Series A Convertible Preferred Stock Purchase Agreement, dated as of August 22, 2023, by and between K Enter Holdings Inc. and JVC INC. (incorporated by reference to Exhibit 10.36 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.37**	Series A-1 Convertible Preferred Stock Purchase Agreement, dated as of August 25, 2023, by and between K Enter Holdings Inc. and Studio Santa Claus Entertainment (incorporated by reference to Exhibit 10.37 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.38**	Series A-1 Convertible Preferred Stock Purchase Agreement, dated as of August 31, 2023, by and between K Enter Holdings Inc. and Dong Hwan Kim (incorporated by reference to Exhibit 10.38 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.39**	Series A-1 Convertible Preferred Stock Purchase Agreement, dated as of September 5, 2023, by and between K Enter Holdings Inc. and Dan Ah Kim (incorporated by reference to Exhibit 10.39 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.40**	Series A-1 Convertible Preferred Stock Purchase Agreement, dated as of September 5, 2023, by and between K Enter Holdings Inc. and Ji Gun Kim (incorporated by reference to Exhibit 10.40 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.41**	Series A-1 Convertible Preferred Stock Purchase Agreement, dated as of September 5, 2023, by and between K Enter Holdings Inc. and Woon Jun Sung (incorporated by reference to Exhibit 10.41 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).

II-8

10.42**	Series A-1 Convertible Preferred Stock Purchase Agreement, dated as of September 7, 2023, by and between K Enter Holdings Inc. and Younglan Choi (incorporated by reference to Exhibit 10.42 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.43**	Termination and Amendment to the Share Purchase Agreement and the Shareholders Agreement by and amongst Sungkwon Kim, King Bear Film LLC, and K Enter Holdings Inc., dated January 31, 2024 (incorporated by reference to Exhibit 10.43 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.44**	Termination Agreement and Re-purchase Option Agreement by and amongst Sungkwon Kim, King Bear Film LLC, and K Enter Holdings Inc., dated March 5, 2024 (incorporated by reference to Exhibit 10.44 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.45**	Convertible Senior Unsecured Note, dated June 4, 2024 issued by K Enter Holdings, Inc. to Innocus Global Group Pte Ltd., as Purchaser (incorporated by reference to Exhibit 10.45 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.46**	Convertible Senior Unsecured Note, dated June 5, 2024 issued by K Enter Holdings, Inc. to Global Star Capital VCC – Alpha Opportunities Fund, as Purchaser (incorporated by reference to Exhibit 10.46 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.47††**	Form of Employment Agreement by and between K Wave Media Ltd. and Tan Chin Hwee (incorporated by reference to Exhibit 10.47 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.48††**	Form of Employment Agreement by and between K Wave Media Ltd. and Jun Jong (incorporated by reference to Exhibit 10.48 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.49††**	Form of Employment Agreement by and between K Wave Media Ltd. and Jihun Byun (incorporated by reference to Exhibit 10.49 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.50**	Loan Agreement, dated April 22, 2024 between K Enter Holdings, Inc. and Young Jae Lee (incorporated by reference to Exhibit 10.50 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.51**	Loan Agreement, dated April 23, 2024 between K Enter Holdings, Inc. and Young Jae Lee (incorporated by reference to Exhibit 10.51 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.52**	Loan Agreement, dated May 3, 2024 between K Enter Holdings, Inc. and Young Jae Lee (incorporated by reference to Exhibit 10.52 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.53**	Loan Agreement, dated April 26, 2024 between K Enter Holdings, Inc. and Bidangil Pictures Co., Ltd (incorporated by reference to Exhibit 10.53 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.54**	Extension and Amendment Agreement to the Convertible Bond, dated August 9, 2024 (incorporated by reference to Exhibit 10.54 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.55**	Loan Agreement, dated August 19, 2024 between Global Star Acquisition I LLC and K Enter Holdings Inc. (incorporated by reference to Exhibit 10.55 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.56†**	Agreement between Play Company Co., Ltd. and Hybe Co., Ltd, dated January 26, 2024 (incorporated by reference to Exhibit 10.56 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).

II-9

10.57†**	Agreement between Play Company Co., Ltd. and SM Entertainment Co., Ltd, dated December 12, 2023 (incorporated by reference to Exhibit 10.57 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.58**	Share Subscription Agreement, dated September 24, 2024 between K Enter Holdings, Inc. and GF Korea Inc. (incorporated by reference to Exhibit 10.58 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.59**	Series A-1 Convertible Preferred Stock Purchase Agreement, dated as of October 10, 2023, by and between K Enter Holdings Inc. and Mavs Inc. (incorporated by reference to Exhibit 10.59 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.60**	Series A-1 Convertible Preferred Stock Purchase Agreement, dated as of September 21, 2024, by and between K Enter Holdings Inc. and Shawn Loh (incorporated by reference to Exhibit 10.60 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.61**	Series A-1 Convertible Preferred Stock Purchase Agreement, dated as of September 25, 2024, by and between K Enter Holdings Inc. and Innocus Global Group PTE. Ltd. (incorporated by reference to Exhibit 10.61 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.62**	Release Agreement No. 1, dated as of September 30, 2024, by and between K Enter Holdings Inc. and KPMG Samjong Accounting Corp. (incorporated by reference to Exhibit 10.62 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.63**	Release Agreement No. 2, dated as of September 30, 2024, by and between K Enter Holdings Inc. and KPMG Samjong Accounting Corp. (incorporated by reference to Exhibit 10.63 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.64**	Release Agreement, dated as of September 30, 2024, by and between K Enter Holdings Inc. and Lee & Ko. (incorporated by reference to Exhibit 10.64 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.65**	Release Agreement, dated as of September 30, 2024, by and between K Enter Holdings Inc. and BAE, Kim & Lee LLC. (incorporated by reference to Exhibit 10.65 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.66**	Loan Extension Agreement, dated October 23, 2024 between K Enter Holdings, Inc. and Young Jae Lee (incorporated by reference to Exhibit 10.66 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.67**	Loan Extension Agreement, dated October 25, 2024 between K Enter Holdings, Inc. and Bindangil Pictures Co., Ltd. (incorporated by reference to Exhibit 10.67 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.68**	Loan Extension Agreement, dated November 4, 2024 between K Enter Holdings, Inc. and Young Jae Lee (incorporated by reference to Exhibit 10.68 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
10.69**	Securities Purchase Agreement, dated July 3, 2025, among K Wave Media Ltd., Anson Investments Master Fund, LP and Anson East Master Fund LP and Anson Investments Master Fund L.P. (incorporated by reference to Exhibit 99.2 of K Wave Media Ltd.’s Report on Form 6-K, dated July 30, 2025).
10.70**	Standby Equity Purchase Agreement, dated June 3, 2025, by and between K Wave Media Ltd. and Bitcoin Strategic Reserve, LLC (incorporated by reference to Exhibit 99.2 of K Wave Media Ltd.’s Report on Form 6-K, dated June 4, 2025).

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10.71**	Purchase Agreement, dated July 12, 2023, by and between Global Star Acquisition I, K Enter Holdings Inc. and Global Star Acquisition I LLC (incorporated by reference to Exhibit 10.2 of Global Star Acquisition Inc.’s 8-K, dated July 17, 2023).
10.72**	Securities Purchase Agreement, dated January 31, 2025, by and among Global Star Acquisition Inc. and the investors named therein (incorporated by reference to Exhibits 10.1 Global Star Acquisition Inc.’s 8-K, dated February 7, 2025).
21**	List of Subsidiaries of K Wave Media Ltd. (incorporated by reference to Exhibit 21 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
23.1	Consent of Samil PricewaterhouseCoopers independent registered public accounting firm of K Wave Media Ltd. for report dated May 14, 2025.
23.2	Consent of Samil PricewaterhouseCoopers, independent registered public accounting firm of K Enter Holdings Inc. for report dated May 14, 2025.
23.3	Consent of Samil PricewaterhouseCoopers, independent registered public accounting firm of Play Company Co., Ltd. for report dated May 14, 2025.
23.4	Consent of Samil PricewaterhouseCoopers, independent auditors of Bidangil Pictures Co., Ltd. for report dated May 14, 2025.
23.5	Consent of Samil PricewaterhouseCoopers, independent auditors of The LAMP Co., Ltd. for report dated May 14, 2025.
23.6	Consent of Maples and Calder (Cayman) LLP (included in Exhibit 5.1).
23.10**	Consent of EverEdge Pte. Ltd., provider of fairness opinions to Global Star Acquisition, Inc. (incorporated by reference to Exhibit 23.11 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
23.11**	Consent of KPMG (incorporated by reference to Exhibit 23.12 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).
24.1	Power of attorney (included on the signature page to this registration statement).

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101	Inline Interactive Data Files
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
107	Filing Fee Table.

*	To be filed by amendment.
**	Previously filed.
†	The Registrant has redacted provisions or terms of this Exhibit pursuant to Regulation S-K Item 601(b)(10)(iv). While portions of the Exhibits have been omitted, these Exhibits include a prominent statement on the first page of each redacted Exhibit that certain identified information has been excluded from the exhibit because it is both not material and is the type that the Registrant treats as private or confidential. The Registrant agrees to furnish an unredacted copy of the Exhibit to the SEC upon its request.
††	Indicates a management contract or compensatory plan.

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Signatures

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-1 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in McLean, Virginia, on November 26, 2025.

K WAVE MEDIA LTD.
By:	/s/ Ted Kim
Name:	Ted Kim
Title:	Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Ted Kim and each of them, individually, as their true and lawful attorneys-in-fact and agent, with full power of substitution and resubstitution, for them and in their name, place and stead in any and all capacities, in connection with this registration statement, including to sign in the name and on behalf of the undersigned, this registration statement and any and all amendments thereto, including post-effective amendments and registrations filed pursuant to Rule 462 under the U.S. Securities Act of 1933, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the U.S. Securities and Exchange Commission, granting unto such attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as they might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Ted Kim	Director and Chief Executive Officer	November 26, 2025
Ted Kim	(Principal Executive Officer)
/s/ Yong (Howard) Fang	Chief Financial Officer	November 26, 2025
Yong (Howard) Fang	(Principal Financial Officer)
/s/ Jihun Byunn	Chief Accounting Officer	November 26, 2025
Jihun Byunn	(Principal Accounting Officer)
/s/ Pyeung Ho Choi	Director and Chairman	November 26, 2025
Pyeung Ho Choi
/s/ Hyung Seok Cho	Director	November 26, 2025
Hyung Seok Cho
/s/ Yang Kan Chong	Director	November 26, 2025
Yang Kan Chong
/s/ Jaekeun Kim	Director	November 26, 2025
Jaekeun Kim
/s/ Tae Woo Kim	Director	November 26, 2025
Tae Woo Kim
/s/ Young Jae Lee	Director	November 26, 2025
Young Jae Lee

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SIGNATURE OF AUTHORIZED REPRESENTATIVE IN THE UNITED STATES

Under the Securities Act of 1933, the undersigned, the duly authorized representative in the United States of K Wave Media Ltd., has signed this registration statement or amendment thereto on November 26, 2025.

Authorized United States Representative

/s/ Colleen A. De Vries
Name:	Colleen A. De Vries
Title:	Senior Vice-President on behalf of Cogency Global Inc.

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