20-F - KWM - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

(Mark One)

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934

☐ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended ________

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

☒ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report: May 13, 2025

Commission File Number: 001-42648

K WAVE MEDIA LTD.

(Exact name of Registrant as specified in its charter)

Not applicable	Cayman Islands
(Translation of Registrant’s<br><br> <br>name into English)	(Jurisdiction of incorporation<br><br> <br>or organization)

121 South Church Street

George Town, Grand Cayman,

KY1-1104Cayman Islands

(Address of principal executive offices)

Copy to:

Tan Chin Hwee

Chief Executive Officer

121 South Church Street

George Town, Grand Cayman,

KY1-1104Cayman Islands

Telephone: 703-790-0717

(Name, Telephone, Email and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Ordinary shares, no par value per share	KWM	The Nasdaq Stock Market LLC
Warrants, each exercisable to purchase one ordinary share at an exercise price of $11.50 per share	KWMW	The Nasdaq Stock Market LLC

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the shell company report:

On May 13, 2025, the issuer had 63,246,290 ordinary shares, no par value per share outstanding.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ☐ No ☒

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or an emerging growth company. See definition of “accelerated filer,” “large accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

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

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, 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 13(a) of the Exchange Act. ☐

†	The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S.<br> GAAP	☐	International Financial Reporting Standards as issued by the International Accounting Standards Board	☒	Other	☐

If “Other” has been checked in response to the previous question indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☐

TABLE OF CONTENTS

EXPLANATORY NOTE		iii
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS		v
PART I		1
ITEM 1.	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS	1
A.	Directors and Senior Management	1
B.	Advisers	1
C.	Auditors	1
ITEM 2.	OFFER STATISTICS AND EXPECTED TIMETABLE	1
ITEM 3.	KEY INFORMATION	1
A.	[Reserved.]	1
B.	Capitalization and Indebtedness	2
C.	Reasons for the Offer and Use of Proceeds	2
D.	Risk Factors	2
ITEM 4.	INFORMATION ON THE COMPANY	2
A.	History and Development of the Company	2
B.	Business Overview	3
C.	Organizational Structure	3
ITEM 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS	3
ITEM 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	4
A.	Directors and Senior Management	4
B.	Compensation	4
C.	Board Practices	6
D.	Employees	6
E.	Share Ownership	6

ITEM 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	6
A.	Major Shareholders	6
B.	Related Party Transactions	7
C.	Interests of Experts and Counsel	7
ITEM 8.	FINANCIAL INFORMATION	8
A.	Consolidated Statements and Other Financial Information	8
B.	Significant Changes	8
ITEM 9.	THE OFFER AND LISTING	8
A.	Offer and Listing Details	8
B.	Plan of Distribution	8
C.	Markets	8
D.	Selling Shareholders	8
E.	Dilution	8
F.	Expenses of the Issue	8
ITEM 10.	ADDITIONAL INFORMATION	9
A.	Share Capital	9
B.	Memorandum and Articles of Association	9
C.	Material Contracts	9
D.	Exchange Controls and Other Limitations Affecting Security Holders	9
E.	Taxation	9
F.	Dividends and Paying Agents	9
G.	Statement by Experts	9
H.	Documents on Display	10
I.	Subsidiary Information	11
ITEM 11.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS	11
ITEM 12.	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	11
PART II		12
ITEM 16F.	CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT	11
PART III		13
ITEM 17.	FINANCIAL STATEMENTS	13
ITEM 18.	FINANCIAL STATEMENTS	13

ii

EXPLANATORY NOTE

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 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.
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●

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.

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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.

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.

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.

iii

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 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.

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 common stock 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 shares of Common Stock, $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 Registration Rights Agreement, the Company agrees to provide certain registration rights with respect to the shares of its Common Stock issuable upon conversion of the PIPE Notes in accordance with the terms of the PIPE Notes.

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

Except as otherwise indicated or required by context, references in this Shell Company Report on Form 20-F (the “Report”) to “we”, “us”, “our”, “Pubco” or the “Company” refer to K Wave Media Ltd., a Cayman Islands exempted company.

iv

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Report and the documents incorporated by reference herein include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements relate to, among others, our plans, objectives and expectations for our business, operations and financial performance and condition, and can be identified by terminology such as “may”, “should”, “expect”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, “continue” and similar expressions that do not relate solely to historical matters. Forward-looking statements are based on management’s belief and assumptions and on information currently available to management. Although we believe that the expectations reflected in forward-looking statements are reasonable, such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by forward-looking statements.

Forward-looking statements in this Report and in any document incorporated by reference in this Report may include, but are not limited to, statements about:

●	the ability of Pubco to realize the benefits expected from the Business Combination and to maintain the listing of the Pubco Ordinary Shares on Nasdaq;
●	changes in global, regional or local business, market, financial, political and legal conditions, including the development, effects and enforcement of laws and regulations and the impact of any current or new government regulations in the United States and Cayman Islands affecting Pubco’s operations and the continued listing of Pubco’s securities;
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●	Pubco’s success in retaining or recruiting, or changes required in, its officers, key employees or directors;
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●	Actions relating to the business, operations and financial performance of Pubco
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●	Pubco’s ability to comply with applicable anti-corruption legislation and other governmental laws;
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●	Pubco’s ability to respond to general economic conditions;
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●	Pubco’s ability to develop and maintain effective internal controls;
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●	assumptions regarding interest rates and inflation; and
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●	competition and competitive pressures from other companies worldwide in the industries in which Pubco operates.
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Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements for many reasons, including the factors discussed under the “Risk Factors” section of the proxy statement/prospectus (the “Proxy Statement/Prospectus”) forming a part of the Registration Statement filed in connection with the Business Combination, which section is incorporated herein by reference. Accordingly, you should not rely on these forward-looking statements, which speak only as of the date of this Report. We undertake no obligation to publicly revise any forward-looking statement to reflect circumstances or events after the date of this Report or to reflect the occurrence of unanticipated events. You should, however, review the factors and risks described in the reports we will file from time to time with the SEC after the date of this Report.

Although we believe the expectations reflected in the forward-looking statements were reasonable at the time made, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assume responsibility for the accuracy or completeness of any of these forward-looking statements. You should carefully consider the cautionary statements contained or referred to in this section in connection with the forward looking statements contained in this Report and any subsequent written or oral forward-looking statements that may be issued by the Company or persons acting on its behalf.

PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

A. Directors and Senior Management

Information regarding the directors and executive officers of the Company after the closing of the Business Combination is included in the Proxy Statement/Prospectus under the section titled “Pubco’s Directors and Executive Officers After the Business Combination” and is incorporated herein by reference.

The business address for each of the directors and executive officers of the Company is 121 South Church Street, George Town, Grand Cayman, KY1-1104 Cayman Islands.

B. Advisers

Duane Morris LLP, 901 New York Ave NW 700 E, Washington, DC 20001, United States, has acted as U.S. securities counsel for the Global Star and Merger Sub and will act as U.S. securities counsel to the Company following the completion of the Business Combination.

Loeb & Loeb LLP, 345 Park Avenue, New York, NY 10154, has acted as U.S. securities counsel for the Company prior to closing. Maples and Calder (Cayman) LLP, Cayman Islands, have acted as counsel for the Company with respect to Cayman law.

C. Auditors

For the period from June 22, 2023 (inception) to December 31, 2023, Samil PricewaterhouseCoopers, has acted as the independent registered public accounting firm for K Wave Media Ltd. and will be the Company’s independent registered public accounting firm following the Business Combination.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3. KEY INFORMATION

A. [Reserved.]

B. Capitalization and Indebtedness

The following table sets forth the capitalization of the Company on an unaudited pro forma combined basis as of December 31, 2024, after giving effect to the Business Combination and the agreements as described above:

	As<br> of<br> DECEMbER 31,<br> 2024
	Pro<br> Forma
(in<br> thousands)
Cash<br> and cash equivalents	$	9,080
Equity:
Ordinary<br> shares		6
Share<br> premium		155,383
Reserves		(19.918	)
Accumulated<br> loss		(29,566	)
Total<br> equity:		105,905
Debt:
Short-term<br> borrowings		3,975
Current<br> portion of long-term borrowing		1,427
Promissory<br> note - underwriter		2,000
Consideration<br> payable		23,816
Contingent<br> consideration payable		8,630
Convertible<br> senior unsecured notes		8,466
Total<br> Debt:		46,887
Total<br> capitalization	$	154,219

C. Reasons for the Offer and Use of Proceeds

Not applicable.

D. Risk Factors

The risk factors related to the business and operations of the Company are described in the Proxy Statement/Prospectus under the section titled “Risk Factors”, which is incorporated herein by reference.

ITEM 4. INFORMATION ON THE COMPANY

A. History and Development of the Company

See “Explanatory Note” in this Report for additional information regarding the Company and the Merger Agreement. Certain additional information about the Company is included in the Proxy Statement/Prospectus under the section titled “K Wave’s Business” and is incorporated herein by reference. The material terms of the Business Combination are described in the Proxy Statement/Prospectus under the section titled “Questions and Answers About the Business Combination and the Special Meeting,” which is incorporated herein by reference.

The Company is subject to certain of the informational filing requirements of the Exchange Act. Since the Company is a “foreign private issuer,” it is exempt from the rules and regulations under the Exchange Act prescribing the furnishing and content of proxy statements, and the officers, directors and principal shareholders of the Company are exempt from the reporting and “short-swing” profit recovery provisions contained in Section 16 of the Exchange Act with respect to their purchase and sale of Pubco Ordinary Shares. In addition, the Company is not required to file reports and financial statements with the SEC as frequently or as promptly as U.S. public companies whose securities are registered under the Exchange Act. However, the Company is required to file with the SEC an Annual Report on Form 20-F containing financial statements audited by an independent accounting firm. The SEC also maintains a website at www.sec.gov that contains reports and other information that the Company files with or furnishes electronically to the SEC.

The website address of the Company is www.kwavemedia.com. The information contained on the website does not form a part of, and is not incorporated by reference into, this Report.

B. Business Overview

Information regarding the business of the Company is included in the Proxy Statement/Prospectus under the sections titled “K Wave’s Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of K Wave Media Ltd.,” which are incorporated herein by reference.

C. Organizational Structure

The diagram below depicts a simplified version of the Company immediately following the consummation of the Business Combination.

ITEM 4A. UNRESOLVED STAFF COMMENTS

None.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The discussion and analysis of the financial condition and results of operations of the Company is set forth in Exhibit 15.2 hereto, which is incorporated herein by reference.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. Directors and Senior Management

B. Compensation

K Wave Named Executive Officer and Director 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 of K Enter and Director
Tan Chin Hwee	52	Director and 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

This discussion may contain forward-looking statements that are based on K Enter’s current plans, considerations, expectations, and determinations regarding future compensation programs.

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 — FiscalYears 2024 and 2023

Name and Principal Position	Year	Salary()	Bonus()	StockAwards()	OptionAwards()	Non-EquityIncentive PlanCompensation()	Non-QualifiedDeferredCompensationEarnings<br>()	All OtherCompensation()	Total()
Tan Chin Hwee	2024
Executive Chairman and interim CEO	2023
Jun Jong	2024
CFO	2023
Jihun Byun	2024
	2023

All values are in US Dollars.

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.

Director Compensation — Fiscal2024

The following table sets forth information regarding the compensation paid to, or earned by our directors, during fiscal 2024:

Name	Fees Earned orPaid in Cash()	StockAwards()	Total()
Pyeung Ho Choi
Young Jae Lee
Tan Chin Hwee
Ted Kim
Han Jae(Patrick) Kim
Hyuk Jin Lee

All values are in US Dollars.

As of December 31, 2024, Pubco had no formal plan for compensating its directors.

Following Closing, decisions with respect to the compensation of Pubco’s executive officers, including its named executive officers, will be made by the compensation committee of the Pubco Board. The following discussion is based on the present expectations as to the compensation of the named executive officers and directors following the Business Combination. 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.

Pubco anticipates that compensation for its 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. PubCo intends 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

Pubco expects that it 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. It expects 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

Pubco expects 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 PubCo shareholders. Stock-based awards for its directors and named executive officers may be awarded in future years under a new employee incentive plan upon or after consummation of the Business Combination, which would be adopted by the PubCo Board in connection with the Business Combination.

Director Compensation

Following the Business Combination, non-employee directors of Pubco will 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 will be put in place following the Business Combination. Pubco anticipates determining director compensation in accordance with industry practice and standards.

C. Board Practices

Information regarding the board of directors of the Company subsequent to the Business Combination is included in the Proxy Statement/Prospectus under the section titled “Pubco’sDirectors and Executive Officers After the Business Combination” and is incorporated herein by reference.

D. Employees

Information regarding the employees of the Company is included in the Proxy Statement/Prospectus under the section titled “Business of K Enter —Employees” and is incorporated herein by reference.

E. Share Ownership

Information regarding the ownership of the Post-Closing Pubco Ordinary Shares by our directors and executive officers is set forth in Item 7.A of this Report.

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A. Major Shareholders

The following table sets forth information relating to the beneficial ownership of the Post-Closing Pubco Ordinary Shares as of the Closing Date by:

●	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;
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●	each of our executive officers; and
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●	all of our directors and executive officers as a group.
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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 Pubco Ordinary Shares beneficially owned is computed on the basis of 63,162,000 Pubco Ordinary Shares outstanding on the Closing Date, after giving effect to the Business Combination and the agreements described above, 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 Pubco Ordinary Shares beneficially owned by them. To our knowledge, no Post-Closing Pubco 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<br>Pubco<br>Ordinary<br>Shares<br>Beneficially<br>Owned
5% Holders of Pubco:
Anthony Ang^(1)(2)^		2,488,047	3.94	%
Ted Kim^(1)(2)(3)^		8,594,918	13.61	%
Directors and Executive Officers of PubCo
Pyeung Ho Choi^(3)^		5,020,283	7.95	%
Young Jae Lee^(4)^		4,671,301	7.40	%
Ted Kim^(1)(2)(3)^		8,594,918	13.61	%
Tan Chin Hwee^(4)^		572,792	0.91	%
Hyung Seok Cho^(4)^		8,673,667	13.74	%
Tae Woo Kim^(4)^		214,758	0.34	%
Jihun Byun^(4)^		214,758	0.34	%
Jung Hoon Bae^(4)^		603,071	0.96	%
Jae Keun Kim^(^^5^^)^		5,280,511	8.36	%
All Executive Officers and Directors as a Group		33,846,059	53.61	%
^(1)^	Global Star Acquisition 1 LLC, Global Star’s sponsor, is the record holder of 2,438,225 shares of Global Star common stock that will be converted into shares of PubCo Ordinary Shares on a 1-for-1 basis in the Reincorporation Merger. Anthony Ang, Global Star’s Chairman and Chief Executive Officer and Ted Kim, are managing members of Global Star’s Sponsor. By virtue of this relationship, Mr. Ang and Mr. Kim may be deemed to share beneficial ownership of the securities held of record by Global Star’s Sponsor. Mr. Ang and Mr. Kim disclaim any such beneficial ownership except to the extent of his pecuniary interest. The business address of Global Star Acquisition 1 LLC, Mr. Ang and Mr. Kim is 1641 International Drive, Unit 208, McLean, VA.
---	---
^(2)^	Interests shown before the Business Combination consist solely of founder shares, classified as shares of Class B Common Stock, as well as placement shares after the IPO. Founder shares are convertible into shares of Class A Common Stock on a one-for-one basis, subject to adjustment. These shares will be converted into Pubco Ordinary Shares on a 1-for-1 basis. The business address of Mr. Khoo, Mr. Cui, Mr. Drew, Mr. Win, Mr. Chong, Mr. Chew and Mr. Rannila is 1641 International Drive, Unit 208, McLean, VA.
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^(3)^	Ted Kim is the beneficial owner of 19,564 shares of K Enter common stock through his ownership and control of Global Fund LLC, which owns 12,000 shares of K Enter common stock, and Lodestar USA, Inc. which owns 7,564 shares of K Enter common stock. The 19,564 shares of K Enter common stock beneficially owned by Mr. Kim through his ownership and control of Global Fund LLC and Lodestar USA, Inc. will be converted into an aggregate amount of 6,106,871 PubCo Ordinary Shares in the Business Combination.
---	---
^(4)^	The business address of Pyeung Ho Choi, Young Jae Lee, Tan Chin Hwee, Hyung Seok Cho, Tae Woo Kim, Jihun Byun, Jung Hoon Bae and Jae Keun Kim is 16192 Coastal Highway, Lewes DE 19958.
---	---
^(5)^	Jae Keun Kim is the beneficial owner of 16,917 shares of K Enter common stock as follows 250 shares of K Enter common stock he owns individually and through his ownership and control of Xeno Investment Asia, which owns 10,000 shares of K Enter common stock, and JVC Inc. which owns 6,667 shares of K Enter common stock. The 16,917 shares of K Enter common stock beneficially owned by Mr. Kim individually and through his ownership and control of Xeno Investment Asia and JVC Inc. will be converted into an aggregate amount of 5,280,511 PubCo Ordinary Shares in the Business Combination.

B. Related Person Transactions

Information regarding certain related person transactions is included in the Proxy Statement/Prospectus under the section titled “Certain Relationships and Related Person Transactions — K Enter” and is incorporated herein by reference.

C. Interests of Experts and Counsel

None.

ITEM 8. FINANCIAL INFORMATION

A. Consolidated Financial Statements and Other Financial Information

See Item 18 of this Report for consolidated financial statements and other financial information.

B. Significant Changes

A discussion of significant changes since December 31, 2024 is provided under Item 4 of this Report and is incorporated herein by reference.

ITEM 9. THE OFFER AND LISTING

A. Offer and Listing Details

Nasdaq Listing of Pubco Ordinary Shares and Pubco Warrants

Pubco Ordinary Shares and Pubco Warrants are listed on Nasdaq under the symbols “KWM” and “KWMW”, respectively. Holders of the Pubco Ordinary Shares and Pubco Warrants should obtain current market quotations for their securities.

Lock-ups

Information regarding the lock-up restrictions applicable to the Pubco Ordinary Shares is included in the Proxy Statement/Prospectus under the section titled “Summary of the Proxy Statement/Prospectus – Other Documents Relating to the Business Combination” and is incorporated herein by reference.

Warrants

Upon the completion of the Business Combination, there were 9,698,225 Pubco Warrants outstanding. The Warrants, which entitle the holder to purchase one Pubco Ordinary Share at an exercise price of $11.50 per share, will become exercisable 30 days after the completion of the Business Combination. The Warrants will expire five years after the completion of the Business Combination or earlier upon redemption or liquidation in accordance with their terms.

B. Plan of Distribution

Not applicable.

C. Markets

The Pubco Ordinary Shares and Warrants are listed on Nasdaq under the symbols KWM and KWMW, respectively. There can be no assurance that the Ordinary Shares and/or Warrants will remain listed on Nasdaq.

D. Selling Shareholders

Not applicable.

E. Dilution

Not applicable.

F. Expenses of the Issue

Not applicable.

ITEM 10. ADDITIONAL INFORMATION

A. Share Capital

The Company has a share capital of US$50,000 divided into 5,000,000 ordinary shares of par value US$0.01 each, and there is no limit on the number of shares of any class which the Company is authorized to issue.

Information regarding our share capital is included in the Proxy Statement/Prospectus under the section titled “Description of Pubco’s Securities” and is incorporated herein by reference.

B. Amended and Restated Articles of Association

Information regarding certain material provisions of the A&R Articles of Association is included in the Proxy Statement/Prospectus under the section titled “Proposal No. 3 The Governance Proposals” and is incorporated herein by reference.

C. Material Contracts

Except as described above under the heading “Explanatory Note”, information regarding certain material contracts is included in the Proxy Statement/Prospectus under the sections titled “The Business Combination Agreement” and “Related Agreements” and is incorporated herein by reference.

D. Exchange Controls and Other Limitations Affecting Security Holders

There are no governmental laws, decrees, regulations or other legislation in Cayman that may affect the import or export of capital, including the availability of cash and cash equivalents for use by Pubco, or that may affect the remittance of dividends, interest, or other payments by Pubco to non-resident holders of its Post-Closing Pubco Ordinary Shares. There is no limitation imposed by Cayman law or in the A&R Articles of Association on the right of non-residents to hold or vote shares.

E. Taxation

Information regarding certain tax consequences of owning and disposing of Pubco Ordinary Shares and Pubco Warrants is included in the Proxy Statement/Prospectus under the section titled “Material U.S. Federal Income Tax Consequences of The Business Combination” and is incorporated herein by reference.

F. Dividends and Paying Agents

Pubco has not paid any dividends to its shareholders. Following the completion of the Business Combination, Pubco’s board of directors will consider whether or not to institute a dividend policy. The determination to pay dividends will depend on many factors, including, among others, Pubco’s financial condition, current and anticipated cash requirements, contractual restrictions and financing agreement covenants, solvency tests imposed by applicable corporate law and other factors that Pubco’s board of directors may deem relevant.

G. Statement by Experts

The financial statements of Global Star Acquisition Inc. as of December 31, 2024 and 2023, and for the years then ended, included in the Annual Report on Form 10-K for the year ended December 31, 2024, have been audited by Marcum, LLP, an independent registered public accounting firm, as set forth in their report thereon (which contains an explanatory paragraph expressing substantial doubt about the ability of Global Star Acquisition Inc. to continue as a going concern as described in Note 1 to those financial statements) which is incorporated herein by reference. Such consolidated financial statements have been incorporated by reference in reliance upon the report pertaining to such consolidated financial statements of such firm given upon the authority of said firm as experts in auditing and accounting.

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 Shell Company Report on Form 20-F 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 Shell Company Report on Form 20-F 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 Shell Company Report on Form 20-F 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 Solaire Partners LLC. as of December 31, 2024 and December 31, 2023 and for the years then ended included in this Shell Company Report on Form 20-F 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 Apeitda Co., Ltd. as of December 31, 2024 and December 31, 2023 and for the years then ended included in this Shell Company Report on Form 20-F 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 Shell Company Report on Form 20-F 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 Shell Company Report on Form 20-F 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 Studio Anseilen Co., Ltd. as of December 31, 2024 and December 31, 2023 and for the year ended December 31, 2024 and for the period from March 6, 2023 (inception) to December 31, 2023 included in this Shell Company Report on Form 20-F 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.

H. Documents on Display

We are subject to the informational requirements of the Exchange Act. Accordingly, we are required to file reports and other information with the SEC, including annual reports on Form 20-F and reports on Form 6-K. The SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements and other information we have filed electronically with the SEC. As a foreign private issuer, we are exempt under the Exchange Act from, among other things, the rules prescribing the furnishing and content of proxy statements, and our executive 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 U.S. companies whose securities are registered under the Exchange Act.

We also make available on our website, free of charge, our Annual Report and the text of our reports on Form 6-K, including any amendments to these reports, as well as certain other SEC filings, as soon as reasonably practicable after they are electronically filed with or furnished to the SEC. Our website address is www.kwavemedia.com. The reference to our website is an inactive textual reference only, and information contained therein or connected thereto is not incorporated into this Form 20-F.

I. Subsidiary Information

Not applicable.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

Information regarding quantitative and qualitative disclosure about market risk is set forth in Exhibits 15.2, 15.3, and 15.4 hereto, which is incorporated herein by reference.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Information pertaining to the Pubco Warrants is described in the Proxy Statement/Prospectus under the section titled “Description of Pubco’s Securities—Pubco Warrants.”

PART II

ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

Not applicable.

PART III

ITEM 17. FINANCIAL STATEMENTS

See Item 18.

ITEM 18. FINANCIAL STATEMENTS

The consolidated 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 are attached as exhibit 15.14.

The consolidated 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 are attached as exhibit 15.15

The financial statements of Solaire Partners LLC. as of December 31, 2024 and December 31, 2023 and for the years then ended are attached as exhibit 15.16

The financial statements of Apeitda Co., Ltd. as of December 31, 2024 and December 31, 2023 and for the years then ended are attached as exhibit 15.17

The financial statements of The LAMP Co., Ltd. as of December 31, 2024 and December 31, 2023 and for the years then ended are attached as exhibit 15.18

The consolidated financial statements of Bidangil Pictures Co., Ltd. as of December 31, 2024 and December 31, 2023 and for the years then ended are attached as exhibit 15.19

The consolidated financial statements of Global Star Acquisition Inc. as of December 31, 2024, and December 31, 2023 and for the years then ended are incorporated by reference. Form 10-K filed with the SEC on April 29, 2025.

ITEM 19. EXHIBITS

ExhibitNumber	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 (File No. 001-41506) filed with the SEC on January 8, 2025).
2.1	Warrant Agreement, dated as of September 22, 2022, between Global Star Acquisition Inc. and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 4.1 to Global Star Form 8-K (File No. 001-41506) filed with the SEC on September 22, 2022).
2.2	Rights Agreement, dated as of September 22, 2022, between Global Star Acquisition Inc. and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 4.2 to Global Star Form 8-K (File No. 001-41506) filed with the SEC on September 22, 2022).
2.3	Specimen Common Share Certificate of K Wave Media Ltd. (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form F-4/A (File No. 333-278221) filed with the SEC on December 23, 2024).
2.4	Specimen Warrant Certificate of K Wave Media Ltd. (incorporated by reference to Exhibit 4.8 to the Company’s Registration Statement on Form F-4/A (File No. 333-278221) filed with the SEC on December 23, 2024).
2.5	Specimen Rights Certificate of K Wave Media Ltd. (incorporated by reference to Exhibit 4.9 to the Company’s Registration Statement on Form F-4/A (File No. 333-278221) filed with the SEC on December 23, 2024).
4.1	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 Exhibit 2.1 to the Company’s Registration Statement on Form F-4/A (File No. 333-278221) filed with the SEC on December 23, 2024).
4.2	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 Exhibit 2.2 to the Company’s Registration Statement on Form F-4/A (File No. 333-278221) filed with the SEC on December 23, 2024).
4.3	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 Exhibit 2.3 to the Company’s Registration Statement on Form F-4/A (File No. 333-278221) filed with the SEC on December 23, 2024).
4.4	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 Exhibit 2.4 to the Company’s Registration Statement on Form F-4/A (File No. 333-278221) filed with the SEC on December 23, 2024).
4.5	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 Exhibit 2.5 to the Company’s Registration Statement on Form F-4/A (File No. 333-278221) filed with the SEC on December 23, 2024).
4.6	Form of Registration Rights Agreement (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed with the SEC on June 22, 2023).

4.7	Form of Lock-Up Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the SEC on June 22, 2023).
4.8	Form of Joinder Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the SEC on July 18, 2023).
4.7	PIPE Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to Global Star Form 8-K filed with the SEC on February 7, 2025).
4.8	PIPE Notes (incorporated by reference to Exhibit 10.2 to Global Star Form 8-K filed with the SEC on February 7, 2025).
4.9	PIPE Registration Rights Agreement (incorporated by reference to Exhibit 10.3 to Global Star Form 8-K filed with the SEC on February 7, 2025).
15.1*	Unaudited pro forma condensed combined financial information.
15.2*	Management’s Discussion and Analysis of Financial Condition and Results of Operations of K Enter
15.3*	Management’s Discussion and Analysis of Financial Condition and Results of Operations of K Wave Media Ltd.
15.4*	Management’s Discussion and Analysis of Financial Condition and Results of Operations of Play Company Co., Ltd., Solaire Partners<br>LLC., Bidangil Pictures Co., Ltd., The LAMP Co., Ltd., Apeitda Co., Ltd. and Studio Anseilen Co., Ltd.
15.5*	Consent of Samil PricewaterhouseCoopers of K Wave Media Ltd. for report dated May 14, 2025
15.6*	Consent of Samil<br> PricewaterhouseCoopers, independent registered public accounting firm of K Enter Holdings Inc. for report dated May 14, 2025
15.7*	Consent of Samil<br> PricewaterhouseCoopers, independent registered public accounting firm of Play Company Co., Ltd. for report dated May 14,<br> 2025
15.8*	Consent<br> of Samil PricewaterhouseCoopers, independent auditors of Solaire Partners LLC. for report dated May 14, 2025
15.9*	Consent of Samil<br> PricewaterhouseCoopers, independent auditors of Bidangil Pictures Co., Ltd. for report dated May 14, 2025
15.10*	Consent of<br> Samil PricewaterhouseCoopers, independent auditors of The LAMP Co., Ltd. for report dated May 14, 2025
15.11*	Consent of Samil PricewaterhouseCoopers, independent auditors of Apeitda Co., Ltd. for report dated May 14, 2025
15.12*	Consent of Samil PricewaterhouseCoopers, independent auditors of Studio Anseilen Co., Ltd. for report dated May 14, 2025
15.13*	Consent of<br> Marcum LLP independent registered public accounting firm for Global Star Acquisition, Inc. for report dated April 29, 2025

15.14*	The consolidated financial statements of K Wave Media Ltd. as of December 31, 2024 and December 31, 2023 and for the year ended December<br>31, 2024 and the period from June 22, 2023 (inception) to December 31, 2023
15.15*	The consolidated financial statements of Play Company Co., Ltd. as of December 31, 2024 and December 31, 2023 and for each of the three<br>years in the period ended December 31, 2024
15.16*	The financial statements of Solaire Partners LLC. as of December 31, 2024 and December 31, 2023 and for the years then ended
15.17*	The financial statements of Apeitda Co., Ltd. as of December 31, 2024 and December 31, 2023 and for the years then ended
15.18*	The financial statements of The LAMP Co., Ltd. as of December 31, 2024 and December 31, 2023 and for the years then ended
15.19*	The consolidated financial statements of Bidangil Pictures Co., Ltd. as of December 31, 2024 and December 31, 2023 and for the years then<br>ended
15.20*	The financial statements of Studio Anseilen Co., Ltd. as of December 31, 2024 and December 31, 2023 and for the year ended December 31,<br>2024 and for the period from March 6, 2023 (inception) to December 31, 2023.
15.21*	The financial statements of K Enter Holdings Inc. as of December 31, 2024, and December 31, 2023, and for the year ended December 31,<br>2024 and for the period from January 4, 2023 (Inception) to December 31, 2023
15.22**	The Financial statements of Global Star Acquisition Inc. as filed in the Form 10-K for the year ended December 31, 2024
*	Filed herewith.
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**	Filed Previously

SIGNATURE

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this report on its behalf.

	K WAVE MEDIA LTD.
May 14, 2025	By:	/s/ Chin Hwee Tan
		Name:	Chin Hwee Tan
		Title:	Executive Chairman and Interim Chief Executive Officer

Exhibit 15.1

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Defined terms included below shall have the same meaning as terms defined and included elsewhere in this Current Report on Form 8-K (the “Form 8-K”) filed with the Securities and Exchange Commission (the “SEC”.)

Introduction

The following unaudited pro forma condensed combined financial information presents the combination of financial information of Global Star and K Wave, and the six Korean Entities as of December 31, 2024, adjusted to give effect to the Business Combination, the acquisition of the Six Korean entities and related transactions. The following unaudited pro forma condensed combined financial information 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”). Global Star has elected not to present Management’s Adjustments and will only be presenting Transaction Accounting Adjustments in the unaudited pro forma condensed combined financial information.

The following unaudited pro forma condensed combined balance sheet as of December 31, 2024, assumes that the Business Combination occurred December 31, 2024. The following unaudited pro forma condensed combined statement of operations for the year ended December 31, 2024, presents pro forma effect to the Business Combination as if it had occurred on January 1, 2024.

The unaudited pro forma condensed combined financial statements have been presented for illustrative purposes only and do not necessarily reflect what the Combined Company’s financial condition or results of operations would have been had the acquisition occurred on the dates indicated. Further, the pro forma condensed combined financial information also may not be useful in predicting the future financial condition and results of operations of the Combined Company. 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 combined balance sheet as of December 31, 2024, has been derived from:

●	the historical financial statements of K Wave as of December 31, 2024 and 2023, and for the years then ended and for the period from June<br>22, 2023 (inception) to December 31, 2023; and
●	the historical financial statements of K Enter as of December 31,<br>2024 and 2023, and for the years then ended, and for the period from January 4, 2023 (inception) to December 31, 2023; and
●	the historical consolidated financial statements of Global Star as of December 31, 2024 and 2023 and for the years then ended; and
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●	the historical consolidated financial statements of Play Company as of December 31, 2024 and 2023 and for the years then ended; and
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●	the historical financial statements of LAMP as of December 31, 2024 and 2023 and for the years then ended; and
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●	the historical financial statements of Bidangil as of December 31, 2024 and 2023 and for the years then ended; and
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●	the historical financial statements of Apeitda as of December 31, 2024 and 2023 and for the years then ended; and
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●	the historical financial statements of Anseilen as of December 31, 2024 and 2023 and for the years then ended and for the period from<br>March 6, 2023 (inception) to December 31, 2023; and
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●	the historical financial statements of Solaire Partners as of December 31, 2024 and 2023 and for the years then ended.
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The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X as in effect on the date of this Super 20-F which incorporates Transaction Accounting Adjustments. K Wave Media and Global Star have elected not to present any estimates related to potential synergies and other transaction effects that are reasonably expected to occur or have already occurred and will only be presenting Transaction Accounting Adjustments in the unaudited pro forma condensed combined financial information.

This information should be read together with the financial statements and related notes, as applicable, of each of Global Star, Play Company, LAMP, Bidangil, Apeitda, Anseilen, Solaire Partners, K Wave. and K Enter included in this proxy statement/prospectus and Global Star’s, Play Company’s, LAMP’s, Bidangil’s, Apeitda’s, Ansilen’s, Solaire Partners’, 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.

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 the Closing Date, 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”):

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
K Enter Stockholders	59,160,000	93.4	%
Global Star Public Stockholders	960,043	1.6	%
Sponsor and Initial Stockholders	2,961,247	4.7	%
Representative Shares	165,000	0.3	%
Total ordinary shares	63,246,290	100.0	%

The following table shows the per share book value of K Wave Media held by non-redeeming holders of K Wave Media Ordinary Shares:

Shares		63,246,290
Book equity per share	$	1.84

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 be 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 will hold a majority of the voting rights of PubCo post Business Combination;
●	By virtue of such estimated voting interest upon the Closing, New K Enter’s existing stockholders will 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 will have control over the Board;
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●	New K Enter’s operations will 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 will comprise 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 will be 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 are 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 will be 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) will be IFRS.

The acquisitions of each of the Six Korean Entities other than Play Company by K Enter will also be 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 will be IFRS, consistent with that of its predecessor, Play Company.

The overall impact of the accounting conclusions set out above will be that the financial statements of Play Company will become those of K-Enter post-consummation and will 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 will experience a change in basis as a result of the application of the acquisition method and will be reflected in the consolidated financial statements of Play Company on a prospective basis post-consummation.

This determination was primarily based on the assumption that:

●	Play Company’s existing stockholders will hold 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 will substantially comprise 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.

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

FOR K WAVE

AS OF DECEMBER 31, 2024^(1)^

	K Wave<br> Media<br> (IFRS Historical)			New K Enter <br> Pro Forma<br> Combined <br> (IFRS Historical)			Global Star<br> (IFRS Historical -<br> Note 4)			Share Redemption<br> Adjustment and<br> Elimination<br> Adjustment				Global Star <br> Pro Forma<br> Adjusted <br> (IFRS Historical)			Transaction<br> Accounting<br> Adjustments				Pro Forma<br> Combined<br> (IFRS)
ASSETS
Current assets
Cash and cash equivalents	$	-		$	7,059,075		$	510,939		$	-			$	510,939		$	462,442		B	$	9,079,947
																		(500,000	)	C
																		(2,429,769	)	D
																		-		-
																		(22,740	)	N
																		4,000,000		Z
Short-term financial instruments		-			286,579			-			-				-			-				286,579
Short-term investment securities		-			583,863			-			-				-			-				583,863
Accounts receivable - trade, net		-			6,348,679			-			-				-			-				6,348,679
Other receivables		-			905,827			-			-				-							905,827
Other receivables - related parties		50,000			-			-			-				-			(50,000	)	U		-
Preferred stock subscription receivable		-			-			-			-				-			-		-		-
Deferred transaction costs		-			2,152,048			-			-				-							2,152,048
Short-term loans, net		-			468,515			-			-				-			-				468,515
Accounts receivable - other, net		-			1,153,853			-			-				-			-				1,153,853
Value added tax receivables		-			37,097			-			-				-			-				37,097
Other current financial assets		-			158,756			-			-				-			-				158,756
Prepaid expenses and other current assets		-			422,239			-			-				-			-				422,239
Prepaid expenses and other current assets - related party		-			67,699			-			-				-			-				67,699
Other current assets		-			1,363,573			7,500			-				7,500			-				1,371,073
Contract assets		-			1,156,802			-			-				-			-				1,156,802
Current tax assets		-			235,124			-			-				-			-				235,124
Inventories, net		-			553,722			-			-				-			-				553,722
Total current assets		50,000			22,953,451			518,439			-				518,439			1,459,933				24,981,823
Non-current assets
Long-term financial instruments		-			218,247			-			-				-			-				218,247
Long-term loans, net		-			88,003			-			-				-			-				88,003
Long-term investment securities		-			1,566,486			-			-				-			-				1,566,486
Investments in associates and joint ventures		-			56,163			-			-				-			-				56,163
Investment in subsidiary		-			-			-			50,000		T		50,000			(50,000	)	U		-
Investment in equity securities		-			1,600,000			-			-				-			-				1,600,000
Investment in equity securities - related party		-			-			-			-				-			-				-
Property, plant and equipment, including right-of-use assets		-			8,569,812			-			-				-			-				8,569,812
Investment properties		-			271,337			-			-				-			-				271,337
Operating lease right-of-use assets, net		-			1,858			-			-				-			-				1,858
Operating lease right-of-use assets, net - related party		-			19,189			-			-				-			-				19,189
Intangible Asset - Intellectual Property		-			15,560,353			-			-				-			-				15,560,353
Intangible Asset - Customer relationships		-			10,552,564			-			-				-			-				10,552,564
Intangible Asset - Trademarks		-			4,025,354			-			-				-			-				4,025,354
Intangible Asset - Non-compete		-			175,069			-			-				-			-				175,069
Intangible assets other than goodwill		-			3,067,670			-			-				-			-				3,067,670
Goodwill		-			126,827,806			-			-				-			-				126,827,806
Other non-current assets		-			679,688			-			-				-			-				679,688
Other non-current financial assets		-			1,595,020			-			-				-			-				1,595,020
Other non-current non-financial assets		-			2,968,585			-			-				-			-				2,968,585
Defined benefit assets		-			-			-			-				-			-				-
Deferred tax assets		-			715,127			-			-				-			-				715,127
Investments held in Trust Account		-			-			4,374,657			(3,936,142	)	X		425,863			(462,442	)	B		-
											(12,652	)	X					13,839		J
																		22,740		N
Long-term accounts receivable - other, net		-			31,058			-			-				-			-				31,058
Total non-current assets		-			178,589,389			4,374,657			(3,898,794	)			475,863			(475,863	)			178,589,389
Total assets	$	50,000		$	201,542,841		$	4,893,096		$	(3,898,794	)		$	994,302		$	984,070			$	203,571,213
LIABILITIES
Current liabilities
Trade and other payables	$	-		$	17,269,737		$	1,726,331		$	-			$	1,726,331		$	(2,613,864	)	D	$	16,382,204
Trade and other payables - related party		-			1,330,731			-			-				-			-				1,330,731
Other current financial liabilities		-			152,965			-			-				-			-				152,965
Other current non-financial liabilities		-			1,155,302			-			-				-			-				1,155,302
Contract liabilities		-			240,614			-			-				-			-				240,614
Other payables		7,257			(65	)		-			-				-			-				7,192
Other payables - related parties		5,550			-			-			50,000		T		50,000			(50,000	)	U		5,550
Short-term borrowings		-			4,229,575			-			-				-			(500,000	)	Z		3,729,575
Short-term borrowings - related party		-			245,312			-			-				-			-				245,312
Current portion of long-term borrowings, net		-			1,427,034			-			-				-			-				1,427,034
Current lease liabilities		-			1,358,084			-			-				-			-				1,358,084
Lease liability, current - related party		-			19,189			-			-				-			-				19,189
Current tax liabilities		-			273,563			324,943			(12,652	)	X		312,291			-				585,854
Due to Sponsor		-			-			15,094			-				15,094			-		-		15,094
Sponsor working capital loan		-			-			1,596,000			-				1,596,000			(1,596,000	)	L		-
Excise tax payable attributable to redemption of common stock		-			-			959,070			-				959,070			-				959,070
Promissory note - related party		-			-			733,661			-				733,661			(982,000	)	L		-
																		248,339		L
Promissory note - underwriter		-			-			-			-				-			2,000,000		C		2,000,000
Consideration payable		-			12,057,680			-			-				-			-				12,057,680
Contingent consideration payable		-			8,630,305			-			-				-			-				8,630,305
Accrued franchise tax payable		-			-			131,798			-				131,798			-				131,798
Accrued expenses		-			-			-			-				-			-				-
Financial guarantee liability		-			1,741			-			-				-			-				1,741
Total current liabilities		12,807			48,391,767			5,486,897			37,348				5,524,245			(3,493,525	)			50,435,294
Non-current liabilities
Trade and other non-current payables		-			14,679			-			-				-			-				14,679
Long-term borrowings, excluding current portion, net		-			-			-			-				-			-				-
Other non-current financial liabilities		-			101,498			-			-				-			-				101,498
Other non-current non-financial liabilities		-			-			-			-				-			-				-
Defined benefit liabilities		-			741,137			-			-				-			-				741,137
Convertible note					-																	-
Derivative liabilities		-			602,061			-			-				-							602,061
Contract liabilities		-			608,989																	608,989
Other non-current provisions		-			424,967			-			-				-			-				424,967
Non-current lease liabilities		-			6,296,138			-			-				-			-				6,296,138
Deferred tax liabilities		-			6,605,579			-			-				-			-				6,605,579
Deferred underwriting commissions		-			-			3,220,000			-				3,220,000			(3,220,000	)	C		-
Warrant liabilities		-			-			290,947			-				290,947			4,500		L		295,447
Call option liability		-			849,022			-			-				-			-				849,022
Earnout liability		-			-			-			-				-			-				-
Consideration payable, non-current		-			11,758,370			-			-				-			-				11,758,370
Convertible senior unsecured notes		-			4,166,833			-			-				-			4,500,000		Z		8,666,833
Discount on note		-			(200,687	)		-			-				-			-				(200,687	)
Class A common stock subject to possible redemption		-			-			4,430,398			(3,936,142	)	X		494,256			(460,852	)	G		-
																		(33,404	)	G
Total non-current liabilities		-			31,968,586			7,941,345			(3,936,142	)			4,005,203			790,244				36,764,033
Total liabilities		12,807			80,360,353			13,428,242			(3,898,794	)			9,529,448			(2,703,281	)			87,199,327
Class A common stock subject to possible redemption		-			-			-			-				-			-				-
EQUITY
Share capital		-			-			-			-				-			-				-
Global Star preferred stock		-			-			-			-				-			-				-
K Enter Series A-1 convertible preferred stock		-			-			-			-				-			-				-
K Enter Series A convertible preferred stock		-			355			-			-				-			(355	)	P		-
K Enter common stock		-			2,468			-			-				-			4		P		-
																		(2,472	)	E
Pubco ordinary shares		50,000			-			-			-				-			5,683		E		6,326
																		5		C
																		217		D
																		(50,000	)	U
																		421		M
Global Star Class A common stock		-			-			62			-				62			4		G		-
																		230		I
																		97		K
																		28		L
																		(421	)	M
Global Star Class B common stock		-			-			230			-				230			(230	)	I		-
Preferred stock subscription receivable		-			-			-			-				-			-				-
Additional paid-in capital		-			106,247,121			-							-			16,539,612		D		155,367,788
																		536,057		C
																		(3,211	)	E
																		(10,205,097	)	F
																		460,848		G
																		38,041,732		H
																		(97	)	K
																		2,573,472		L
																		1,150,000		O
																		351		P
Share premium		-			-			-			-				-			-				-
Other reserves		(1,376	)		(19,916,668	)		-			-				-			-		-		(19,918,044	)
Retained earnings (Accumulated deficit)		(11,431	)		24,367,148			(8,535,438	)		-				(8,535,438	)		10,189,975		F		(29,566,248	)
																		156,938		C
																		33,404		G
																		(38,041,732	)	H
																		13,839		J
																		(248,339	)	L
																		(16,355,734	)	D
																		(1,150,000	)	O
Accumulated other comprehensive income (loss)		-			(251,337	)		-							-			-				(251,337	)
Equity attributable to the equity holders of the Company		37,193			110,449,087			(8,535,146	)		-				(8,535,146	)		3,687,351				105,638,485
Non-controlling interest		-			10,733,400			-			-				-			-				10,733,400
Total equity		37,193			121,182,487			(8,535,146	)		-				(8,535,146	)		3,687,351				116,371,885
Total equity and liabilities	$	50,000		$	201,542,841		$	4,893,096		$	(3,898,794	)		$	994,302		$	984,070			$	203,571,213
(1)	The unaudited pro forma condensed combined balance sheet for K Wave as of December 31, 2024, combines the unaudited pro forma combined balance sheet of New K Enter as of December 31, 2024, with the historical audited balance sheet of Global Star as of December 31, 2024.
---	---

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

FOR NEW K ENTER

AS OF DECEMBER 31, 2024^(2)^

							K Enter<br> (IFRS <br> Historical - <br> Note 4)			Transaction<br> Accounting<br> Adjustments				New K Enter <br> Pro Forma<br> Combined <br> (IFRS<br> Historical)
ASSETS
Current assets
Cash and cash equivalents							$	333,069		$	1,500,000		V	$	7,059,075
											375,000		V
Short-term financial instruments								-			-				286,579
Short-term investment securities								-			-				583,863
Accounts receivable - trade, net								6,496			-				6,348,679
Other receivables								905,827			-				905,827
Other receivables - related parties								-			-				-
Preferred stock subscription receivable											-				-
Deferred transaction costs								2,152,048							2,152,048
Short-term loans, net								-			(91,348	)	W		468,515
											(64,282	)	Y
Accounts receivable - other, net								-			(64,831	)	R		1,153,853
											(375,000	)	V
											(1,872	)	W
											(65	)	Y
Value added tax receivables								-			-				37,097
Other current financial assets								-			-				158,756
Prepaid expenses and other current assets								422,239			-				422,239
Prepaid expenses and other current assets - related party								67,699			-				67,699
Other current assets								-			-				1,363,573
Contract assets								-			-				1,156,802
Current tax assets								-			-				235,124
Inventories, net								-			-				553,722
Total current assets								3,887,378			1,277,602				22,953,451
Non-current assets
Long-term financial instruments								-			-				218,247
Long-term loans, net								-			-				88,003
Long-term investment securities								-			-				1,566,486
Investments in associates and joint ventures								-			-				56,163
Investment in subsidiary								-			-				-
Investment in equity securities								1,600,000			-				1,600,000
Investment in equity securities - related party								1,178,055			(1,178,055	)	S		-
Property, plant and equipment, including right-of-use assets								24,356			29,008		R		8,569,812
Investment properties								-			-				271,337
Operating lease right-of-use assets, net								21,048			(19,190	)	R		1,858
Operating lease right-of-use assets, net - related party								19,189			-				19,189
Intangible Asset - Intellectual Property								-			15,560,353		A		15,560,353
Intangible Asset - Customer relationships								-			10,552,564		A		10,552,564
Intangible Asset - Trademarks								-			4,025,354		A		4,025,354
Intangible Asset - Non-compete								-			175,069		A		175,069
Intangible assets other than goodwill								-			-				3,067,670
Goodwill								-			124,616,683		A		126,827,806
Other non-current assets								1,762,368			(1,014,981	)	Q		679,688
											(67,699	)	R
Other non-current financial assets								-			(2,701	)	R		1,595,020
Other non-current non-financial assets								-			-				2,968,585
Defined benefit assets								-			-				-
Deferred tax assets								-			-				715,127
Investments held in Trust Account								-			-				-
Long-term accounts receivable - other, net								-			-				31,058
Total non-current assets								4,605,016			152,676,405				178,589,389
Total assets							$	8,492,394		$	153,954,008			$	201,542,841
LIABILITIES
Current liabilities
Trade and other payables							$	4,597,739		$	(67,699	)	R	$	17,269,737
Trade and other payables - related party								1,332,603			(1,872	)	W		1,330,731
Other current financial liabilities								-			-				152,965
Other current non-financial liabilities								-			-				1,155,302
Contract liabilities								-			-				240,614
Other payables								-			(65	)	Y		(65	)
Other payables - related parties								-			-				-
Short-term borrowings								564,282			-				4,229,575
Short-term borrowings - related party								400,942			(91,348	)	W		245,312
											(64,282	)	Y
Current portion of long-term borrowings, net								-			-				1,427,034
Current lease liabilities								20,165			(19,189	)	R		1,358,084
Lease liability, current - related party								19,189			-				19,189
Current tax liabilities								-			-				273,563
Due to Sponsor								-			-				-
Sponsor working capital loan								-			-				-
Excise tax payable attributable to redemption of common stock								-			-				-
Promissory note - related party								-			-				-
Promissory note - underwriter								-			-				-
Consideration payable								-			12,057,680		A		12,057,680
Contingent consideration payable											8,630,305		A		8,630,305
Accrued franchise tax payable								-			-				-
Accrued expenses								-			-				-
Financial guarantee liability								-			-				1,741
Total current liabilities								6,934,920			20,443,530				48,391,767
Non-current liabilities
Trade and other non-current payables								-			-				14,679
Long-term borrowings, excluding current portion, net								-			-				-
Other non-current financial liabilities								-			-				101,498
Other non-current non-financial liabilities								-			(1,014,981	)	Q		-
Defined benefit liabilities								-			-				741,137
Convertible note								-			-				-
Derivative liabilities								401,374			200,687		V		602,061
Contract liabilities								-			-				608,989
Other non-current provisions								-			-				424,967
Non-current lease liabilities											(73,576	)	R		6,296,138
Deferred tax liabilities								-			6,335,488		A		6,605,579
Deferred underwriting commissions								-			-				-
Warrant liabilities								-			-				-
Call option liability								-			849,022		A		849,022
Earnout liability								-			-				-
Consideration payable, non-current								-			11,758,370		A		11,758,370
Convertible senior unsecured notes								2,666,833			1,500,000		V		4,166,833
Discount on note								-			(200,687	)	V		(200,687	)
Class A common stock subject to possible redemption								-			-				-
Total non-current liabilities								3,068,207			19,354,323				31,968,586
Total liabilities								10,003,127			39,797,853				80,360,353
Class A common stock subject to possible redemption								-			-				-
EQUITY
Share capital								-			(964,286	)	A		-
Global Star preferred stock								-			-				-
K Enter Series A-1 convertible preferred stock								-			-				-
K Enter Series A convertible preferred stock								355			-				355
K Enter common stock								1,000			1,468		A		2,468
											-		-
Pubco ordinary shares								-			-				-
Global Star Class A common stock								-			-				-
Global Star Class B common stock								-			-				-
Preferred stock subscription receivable											-				-
Additional paid-in capital								20,542,076			85,705,045		A		106,247,121
											-		-
											-		-
Share premium		)						-			77,284		A		-
Other reserves	)		)	)	)	)		-			1,525,650		A		(19,916,668	)
											(1,178,055	)	S
Retained earnings (Accumulated deficit)					)	)		(21,802,827	)		17,820,847		A		24,367,148
											35,051		R
											-		-
Accumulated other comprehensive income (loss)								(251,337	)		-				(251,337	)
Equity attributable to the equity holders of the Company					)			(1,510,733	)		103,023,004				110,449,087
Non-controlling interest	)							-			11,133,150		A		10,733,400
Total equity					)			(1,510,733	)		114,156,154				121,182,487
Total equity and liabilities							$	8,492,394		$	153,954,008			$	201,542,841

All values are in US Dollars.

(2)	The unaudited pro forma condensed combined balance sheet for New K Enter as of December 31, 2024, combines the historical unaudited balance sheets of the Six Korean Entities as of December 31, 2024, with the historical unaudited balance sheet of K Enter as of December 31, 2024 as adjusted for conversion to IFRS (see also Note 2 — “IFRS Conversion and Presentation Alignment”).

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR K WAVE

FOR THE YEAR ENDED DECEMBER 31, 2024^(^^3^^)^

	K Wave<br> Media<br> (IFRS Historical)		New K<br> Enter Pro<br> Forma<br> Combined<br> (IFRS Historical)			Global Star<br> (IFRS<br> Historical -<br> Note 4)			Transaction<br> Accounting<br> Adjustments				Pro Forma<br> Combined<br> (IFRS)
Sales revenue	$	-	$	57,691,073		$	-		$	-			$	57,691,073
Investment management revenue		-		999,202			-			-				999,202
Investment revenue		-		33,310			-			-				33,310
Gains from investments in associates		-		12,022			-			-				12,022
Cost of sales		-		(55,038,513	)		-			-				(55,038,513	)
Gross profit		-		3,697,094			-			-				3,697,094
Administration fee - related party							(120,000	)
Operating expenses		-		-			(1,971,648	)		120,000		BB		(1,851,648	)
Selling, general, and administrative expenses		-		(17,529,109	)		-			-				(17,529,109	)
Investment expenses		-		(14,757	)		-			-				(14,757	)
Losses from investments in associates		-		(46,257	)		-			-				(46,257	)
Stock-based compensation expense		-		-			-			(1,150,000	)	EE		(1,150,000	)
Other income		-		975,030			-			-				975,030
Other expenses		-		(5,370,975	)		-			-				(5,370,975	)
Transaction costs		-		-			-			(38,041,732	)	CC		(51,975,148	)
										(6,830,599	)	FF
										(7,102,817	)	LL
Operating income (loss)		-		(18,288,974	)		(2,091,648	)		(53,005,148	)			(73,265,770	)
Other income (expense)
Finance income		-		589,804			-			-				589,804
Finance costs		-		(1,611,677	)		-			-				(1,611,677	)
Change in fair value of warrant liability		-		-			(193,965	)		-				(193,965	)
Loss on initial issuance of debt		-		-			-			-				-
Interest income		-		399			18,394			-				18,793
Other income (expense), net		-		(1,034,045	)					-				(1,034,045	)
Amortization of deferred finance cost		-		-			(58,855	)		(248,339	)	OO		(307,194	)
Interest income on marketable securities held in Trust Account		-		-			1,722,436			(1,722,436	)	AA		-
Net income (loss) before taxes		-		(20,344,493	)		(603,638	)		(54,975,923	)			(75,804,054	)
Provision for taxes		-		427,196			(358,878	)		358,878		DD		427,196
Net income (loss)		-		(19,917,297	)		(962,516	)		(54,617,045	)			(75,376,858	)
Net loss attributable to noncontrolling interest in subsidiaries		-		(2,325,352	)		-							(2,325,352	)
Income (loss) attributable to shareholders of New K Enter	$	-	$	(17,591,945	)	$	(962,516	)	$	(54,617,045	)		$	(73,051,506	)
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														63,246,290
Pro forma net loss per share - basic and diluted													$	(1.19	)
(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 six months ended June 30, 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.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR NEW K ENTER

FOR THE YEAR ENDED DECEMBER 31, 2024^(5)^

		K Enter<br> (US GAAP <br> Historical)								Transaction<br> Accounting<br> Adjustments				New K Enter<br> Pro Forma<br> Combined<br> (IFRS Historical)
Sales revenue		$	485,271							$	-			$	57,691,073
Investment management revenue			-								-				999,202
Investment revenue			-								-				33,310
Gains from investments in associates			-								-				12,022
Cost of sales	)		(483,462	)	)	)					-				(55,038,513	)
Gross profit			1,809								-				3,697,094
Administration fee - related party
Operating expenses			-								-				-
Selling, general, and administrative expenses	)		(11,838,397	)	)	)	)	)	)		45,873		II		(17,529,109	)
											(73,744	)	JJ
Investment expenses			-						)		-				(14,757	)
Losses from investments in associates			-						)						(46,257	)
Stock-based compensation expense			-								-				-
Other income			-								237		II		975,030
											73,744		JJ
Other expenses	)		-		)	)	)	)			(3,872,542	)	HH		(5,370,975	)
											(46,110	)	II
Transaction costs			-								-				-
Operating income (loss)	)		(11,836,588	)			)	)	)		(3,872,542	)			(18,288,974	)
Other income (expense)
Finance income			-								(2,029	)	NN		589,804
Finance costs	)		-		)	)	)	)	)		(335,687	)	KK		(1,611,677	)
											2,029		NN
Change in fair value of warrant liability			-								-				-
Loss on initial issuance of debt			-								-				-
Interest income			399								-				399
Other income (expense), net			(1,034,045	)							-				(1,034,045	)
Amortization of deferred finance cost			-								-				-
Interest income on marketable securities held in Trust Account			-								-				-
Net income (loss) before taxes	)		(12,870,234	)			)	)	)		(4,208,229	)			(20,344,493	)
Provision for taxes			-		)	)	)		)		-				427,196
Net income (loss)	)		(12,870,234	)			)	)	)		(4,208,229	)			(19,917,297	)
Net loss attributable to noncontrolling interest in subsidiaries	)		-								(1,579,576	)	GG		(2,325,352	)
Income (loss) attributable to shareholders of New K Enter	)	$	(12,870,234	)			)	)	)	$	(2,628,653	)		$	(17,591,945	)
Basic and diluted net income per share	)	$	(116.68	)			)

All values are in US Dollars.

(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.

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 will be 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 will be IFRS.

The acquisitions of each of the Six Korean Entities other than Play Company by K Enter post the acquisition of Play Company will be 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 will be IFRS.

The Business Combination will be 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 balance sheet and statements of operations reflects the acquisition of the Six Korean Entities that closed on January 2, 2025 as if it had occurred on December 3 1, 2024, and January 1, 2024, respectively.

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 will be 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 will be used by PubCo. See Note 3 – IFRS Conversion and Presentation Alignment.

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 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. Two 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 were to (i) reclassify Global Star Class A Common Stock subject to redemption to non-current financial liabilities under IFRS 2, as stockholders have the right to require Global Star to redeem the common stock and Global Star has an irrevocable obligation to deliver cash or another financial instrument for such redemption, and (ii) 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.

BALANCE SHEET

FOR GLOBAL STAR

AS OF DECEMBER 31, 2024

	Global Star<br> (US GAAP <br> Historical)			IFRS Conversion <br> and Presentation<br> Alignment			Global Star<br> (IFRS <br> Historical)
ASSETS
Cash and cash equivalents	$	510,939		$	-		$	510,939
Other current assets		7,500			-			7,500
Total current assets		518,439			-			518,439
Investments held in Trust Account		4,374,657			-			4,374,657
Total non-current assets		4,374,657			-			4,374,657
Total assets	$	4,893,096		$	-		$	4,893,096
LIABILITIES
Trade and other payables		-			1,726,331	^(2)^		1,726,331
Sponsor working capital loan		1,596,000			-			1,596,000
Promissory note - related party		733,661			-			733,661
Excise tax payable attributable to redemption of common stock		959,070			-			959,070
Current tax liabilities		324,943			-			324,943
Due to Sponsor		15,094			-			15,094
Accrued franchise tax payable		131,798			-			131,798
Accrued expenses		1,726,331			(1,726,331	)^(2)^		-
Total current liabilities		5,486,897			-			5,486,897
Deferred underwriting commissions		3,220,000			-			3,220,000
Warrant liabilities		-			290,947	^(1)^		290,947
Class A common stock subject to possible redemption		-			4,430,398	^(1)^		4,430,398
Total non-current liabilities		3,220,000			4,721,345			7,941,345
Total liabilities		8,706,897			4,721,345			13,428,242
Class A common stock subject to possible redemption		4,430,398			(4,430,398	)^(2)^		-
EQUITY
Global Star preferred stock		-			-			-
Global Star Class A common stock		62			-			62
Global Star Class B common stock		230			-			230
Additional paid-in capital		-			-			-
Retained earnings (Accumulated deficit)		(8,244,491	)		(290,947	)^(1)^		(8,535,438	)
Total stockholders’ equity		(8,244,199	)		(290,947	)		(8,535,146	)
Total equity and liabilities	$	4,893,096		$	-		$	4,893,096
(1)	IFRS Conversion
---	---
(2)	Presentation Alignment

STATEMENT OF OPERATIONS

FOR GLOBAL STAR

FOR THE YEAR ENDED DECEMBER 31, 2024

	Global Star<br> (US GAAP <br> Historical)			IFRS Conversion <br> and Presentation<br> Alignment			Global Star<br> (IFRS <br> Historical)
Administration fee - related party	$	(120,000	)		-			(120,000	)
General and administrative expenses		(1,971,648	)		-			(1,971,648	)
Total operating expenses		(2,091,648	)		-			(2,091,648	)
Loss from operations		(2,091,648	)		-			(2,091,648	)
Other income (expense)
Amortization of deferred finance cost		(58,855	)		-			(58,855	)
Change in fair value of warrant liability		-			(193,965	)^(1)^		(193,965	)
Interest income		18,394			-			18,394
Interest income on marketable securities held in Trust Account		1,722,436			-			1,722,436
Net income before taxes		(409,673	)		(193,965	)		(603,638	)
Provision for taxes		(358,878	)		-			(358,878	)
Net income	$	(768,551	)	$	(193,965	)	$	(962,516	)
Basic and diluted net income per share, redeemable Class A common stock	$	(0.13	)				$	(0.17	)
Basic and diluted net income per share, non-redeemable Class A and Class B common stock	$	(0.13	)				$	(0.17	)

BALANCE SHEET

FOR K ENTER

AS OF DECEMBER 31, 2024

	K Enter<br> (US GAAP <br> Historical)			IFRS Conversion <br> and Presentation<br> Alignment			K Enter<br> (IFRS <br> Historical)
ASSETS
Cash and cash equivalents		333,069			-			333,069
Accounts receivable		6,496			-			6,496
Other receivables		905,827			-			905,827
Deferred transaction costs		2,152,048			-			2,152,048
Prepaid expenses and other current assets		422,239						422,239
Prepaid expenses and other current assets - related party		67,699			-			67,699
Total current assets		3,887,378			-			3,887,378
Investment in equity securities		1,600,000			-			1,600,000
Investment in equity securities - related party		1,178,055			-			1,178,055
Property, plant and equipment, net		24,356			-			24,356
Operating lease right-of-use assets, net		21,048			-			21,048
Operating lease right-of-use assets, net - related party		19,189			-			19,189
Other non-current assets		1,762,368			-			1,762,368
Total non-current assets		4,605,016			-			4,605,016
Total assets	$	8,492,394		$	-		$	8,492,394
LIABILITIES
Trade and other payables		-			4,597,739	^(2)^		4,597,739
Trade and other payables - related party					1,332,603	^(2)^		1,332,603
Accounts payable		836,592			(836,592	)^(2)^		-
Accounts payable - related party		1,332,603			(1,332,603	)^(2)^		-
Accrued expenses and other current liabilities		3,761,147			(3,761,147	)^(2)^		-
Short-term borrowings		564,282						564,282
Short-term borrowings - related party		400,942						400,942
Lease liability, current		20,165			-			20,165
Lease liability, current - related party		19,189			-			19,189
Total current liabilities		6,934,920			-			6,934,920
Convertible note		2,666,833			-			2,666,833
Derivative liabilities		401,374			-			401,374
Total liabilities		10,003,127			-			10,003,127
Equity
Series A-1 convertible preferred stock		-						-
Series A convertible preferred stock		355			-			355
Common stock		1,000			-			1,000
Additional paid-in capital		20,542,076			-			20,542,076
Accumulated deficit		(21,801,180	)		(1,647	)^(2)^		(21,802,827	)
Accumulated other comprehensive income		(252,984	)		1,647	^(2)^		(251,337	)
Total stockholders’ equity		(1,510,733	)		-			(1,510,733	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	8,492,394		$	-		$	8,492,394
(1)	IFRS Conversion
---	---
(2)	Presentation Alignment

STATEMENT OF OPERATIONS

FOR K ENTER

FOR THE YEAR ENDED DECEMBER 31, 2024


Revenue	485,271		-	485,271
Cost of revenue	(483,462	)		(483,462	)
Gross profit	1,809		-	1,809
Selling, general and administrative expenses	(11,838,397	)	-	(11,838,397	)
Operating income (loss)	(11,836,588	)	-	(11,836,588	)
Other income (expense)
Interest income (expense), net	399		-	399
Other income (expense), net	(1,034,045	)	-	(1,034,045	)
Total other expense	(1,033,646	)	-	(1,033,646	)
Provision for taxes	-		-	-
Net loss	(12,870,234	)	-	(12,870,234	)

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 financial information 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”). EFHAC 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 are based upon the number of the Combined Company’s shares outstanding, assuming the Business Combination occurred on January 1, 2024.

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 December 31, 2024, are as follows:

A.	Reflects the allocation, on a preliminary basis, of the cost associated with the acquisition of K Enter and the Six Korean Entities other than Play Company as if the acquisition had occurred on December 31, 2024. Play Company was determined to be the accounting acquirer under IFRS 3. The final allocation of the purchase consideration will be determined after the completion of a thorough analysis to determine the fair value of all assets acquired and liabilities assumed, but in no event later than one year following the completion of the transaction. Accordingly, the final acquisition accounting adjustments could differ materially from the unaudited pro forma adjustments presented herein. Any increase or decrease in the fair value of the assets acquired and liabilities assumed, as compared to the information shown herein, could also change the portion of the purchase consideration allocable to goodwill and could impact the operating results of New K Enter due to differences in the allocation of the purchase consideration, depreciation and amortization related to some of these assets and liabilities. The preliminary allocation of the purchase price is as follows:
	K Enter			LAMP			Bidangil			Apeitda			Anseilen			Solaire Partners			Total
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Estimated fair value of common stock issued (see below)	$	62,450,402		$	14,986,150		$	9,987,754		$	7,493,062		$	3,769,006		$	6,973,906		$	105,660,280
Fair value of Earnout^(b)^		-			-			-			-			-			-			-
Contingent consideration payable^(e)^		8,630,305			-			-			-			-			-			8,630,305
Call option liability^(c)^		849,022			-			-			-			-			-			849,022
Proportionate share of non-controlling interest^(k)^		-			3,642,941			3,791,199			2,207,873			1,253,814			237,324			11,133,150
Cash to be paid^(d)^		23,816,050			-			-			-			-			-			23,816,050
Total consideration		95,745,779			18,629,091			13,778,953			9,700,935			5,022,820			7,211,230			150,088,807
Allocated to:
Cash	$	333,069		$	584,580		$	980,123		$	233,132		$	244,430		$	240		$	2,375,574
Accounts receivable - trade		6,496			61,262			428			12,484			-			35,727			116,397
Value added tax receivable		-			-			-			-			37,097			-			37,097
Short-term financial instruments		-			-			-			-			-			-			-
Short-term investment securities		-			-			583,863			-			-			-			583,863
Other receivables, contract assets and current assets		905,827			1,347,112			571,528			1,542			29			1,789,458			4,615,496
Short-term loans, net		-			-			91,348			-			-			-			91,348
Prepaid expenses and other		489,938			-			-			-			-			-			489,938
Property, plant and equipment, net		24,356			107,952			83,762			149,434			497			21,130			387,131
Long-term loans, net		-			88,003			-			-			-			-			88,003
Convertible debt security		-			-			-			-			-			-			-
Deferred transaction costs		2,152,048			-			-			-			-			-			2,152,048
Long-term investment securities		-			541,323			-			48,679			-			482,262			1,072,264
Investments in associates and joint ventures		-			-			-			-			-			56,163			56,163
Investment in equity securities		1,600,000			-			-			-			-			-			1,600,000
Investment in equity securities - related parties		1,178,055			-			-			-			-			-			1,178,055
Operating lease right-of-use assets, net		21,048			-			-			-			-			-			21,048
Operating lease right-of-use assets, related party		19,189			-			-			-			-			-			19,189
Other non-current assets		1,762,368			987,924			409,294			292,198			396,519			203			3,848,506
Long-term accounts receivable - other, net		-			31,058			-			-			-			-			31,058
Accounts payable, accrued expenses, contract liabilities and other current liabilities		(4,597,739	)		(1,619,362	)		(616,832	)		(12,933	)		(11,992	)		(1,219,139	)		(8,077,997	)
Accounts payable - related party		(1,332,603	)		-			-			-			-			-			(1,332,603	)
Current portion of long-term borrowings		-			-			-			-			-			-			-
Lease liability, current		(20,165	)		(54,244	)		(52,730	)		-			-			(41,239	)		(168,378	)
Short term borrowings		(564,282	)		(978,072	)		-			-			-			(140,295	)		(1,682,649	)
Short-term borrowings - related party		(400,942	)		-			-			-			-			-			(400,942	)
Other current financial liabilities		-			-			-			-			-			(65,000	)		(65,000	)
Other current non-financial liabilities		-			(36,063	)		(5,017	)		(79,747	)		(41,424	)		(16,170	)		(178,421	)
Current tax liability		-			(10,093	)		(55,156	)		(3,384	)		-			(131,201	)		(199,834	)
Financial guarantee liability		-			(1,741	)		-			-			-			-			(1,741	)
Lease liability - related party		(19,189	)		-			-			-			-			-			(19,189	)
Other non-current liabilities, contract liabilities, and provisions		-			(612,321	)		-			-			(1,014,981	)		(8,909	)		(1,636,211	)
Other non-current financial liabilities		-			-			-			-			-			-			-
Long-term borrowings		-			-			-			-			-			-			-
Defined benefit liabilities		-			(172,551	)		-			(82,227	)		(4,825	)		(103,101	)		(362,704	)
Convertible note		(2,666,833	)		-			-			-			-			-			(2,666,833	)
Derivative liabilities		(401,374	)		-			-			-			-			-			(401,374	)
Defined severance benefits non-current		-			-			-			-			-			-			-
Lease liability, non-current		-			(44,309	)		(30,721	)		-			-			-			(75,030	)
Long-term lease liability, related party		-			-			-			-			-			-			-
Deferred tax liability^(j)^		-			(1,906,133	)		(1,526,479	)		(1,042,803	)		(780,369	)		(1,079,704	)		(6,335,488	)
Net assets acquired (liabilities assumed)		(1,510,733	)		(1,685,675	)		433,411			(483,625	)		(1,175,019	)		(419,575	)		(4,841,216	)
Excess of purchase price over net tangible assets acquired, aggregate fair value purchase consideration, non-controlling interest, and net liabilities assumed before allocation to identifiable intangible assets and goodwill	$	97,256,512		$	20,314,766		$	13,345,542		$	10,184,560		$	6,197,839		$	7,630,805		$	154,930,023

Management made an initial determination that approximately $30.3 million of the excess of the purchase price over the net assets acquired (liabilities assumed), non-controlling interest, and aggregate fair value purchase consideration should be allocated to identifiable intangible assets. The unidentified excess of the purchase price over the fair value of the net assets acquired has been recorded as goodwill.

(a)	The Six Korean Entities were issued an aggregate of 14,675,034 shares of K Wave Media ordinary shares, par value $0.0001, at a value of $7.20 per share. The price per share was calculated as follows:
Total shares of K Wave Media issued to the Six Korean Entities		14,675,034
---	---	---
Estimated Price per share of Global<br> Star as of May 12, 2025	$	7.20
Value of K Wave Media ordinary shares	$	105,660,245
(b)	The Earnout was determined to be part of the business combination (i.e., consideration) and therefore in accordance with IFRS 3, such contingent consideration will be measured at fair value at the acquisition date and included within the calculation of goodwill. The liability-classified arrangement is recorded at fair value at initial recognition; measurement is updated at each reporting date, with changes recognized in the income statement each reporting period until the arrangement is settled or derecognized. The terms of the Earnout state that depending on the achievement by Play Company of the annual average net profit for Fiscal Years 2023 to 2025, New K Enter shall make additional payments to the Seller as follows: (1) if the average net profit for the 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), New K Enter shall pay to the Seller in cash (KRW) on January 31, 2027 and January 31, 2028 (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 no less than 75% of the target amount (KRW 12.105 billion) and no greater than 125% of the target amount (KRW 20.175 billion) New K Enter shall pay KRW 9.05 billion to the Seller on each Payment Date. Each payment above shall be deemed as an adjustment to the Purchase Price. The Earnout was valued with a Monte Carlo Model simulation. The fair value was the discounted cash flow from the date of payment. The net profit was assumed to grow at a specified industry growth rate and fluctuate with the projected earnings volatility. The projected earnings volatility was based upon guideline public companies.
---	---
(c)	In accordance with IAS 32 and IFRS 9, the call option liability is representative of a financial liability to potentially issue equity shares and/or transfer assets of the combined entity; therefore, the call option liability will be measured at fair value at the acquisition date and included within the calculation of goodwill. The liability-classified arrangement is recorded at fair value at initial recognition; measurement is updated at each reporting date, with changes recognized in the income statement each reporting period until the arrangement is settled or derecognized. The fair value pricing of the call option liability was determined by applying the binomial option pricing model. The assumptions utilized in the option pricing model included: (a) equity share price of 10,010,425,600 KRW, (b) volatility of 43.75%, and (c) risk-free rate of 3.642%
(d)	Pursuant to the Play Company equity purchase agreement, an aggregate of KRW 36,233,103,400 (or approximately USD $24,716,377) will be paid as follows:
Payment Date	PurchasePrice (KRW)		Purchase<br>Price()	Present<br>Value()
---	---	---	---	---
Within 3 months from the listing date		18,133,103,400
January 31, 2025		9,050,000,000
January 31, 2026		9,050,000,000
Total		36,233,103,400

All values are in US Dollars.

(e)	An additional payment in cash may be owed to the owner of Play Company if the shares of PubCo that the shares of New K Enter’s common stock 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 realized gains from the sale of additional shares of PubCo by the owner of Play Company 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 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). The contingent consideration liability is recorded at fair value determined using a Black Scholes model that values the put option related to the Shortfall payment obligation as detailed in the Shares Purchase Agreement.
(f)	Trademarks were valued based on a Relief of Royalty Method (“RRM”) with a 5-year life. RRM determines the value of an intangible asset by calculating how much a company would save in hypothetical royalty payments if it we to own the asset rather than licensing it from a third party.
(g)	IP/Technology was valued based on a Multi-Period Excess Earnings Method (“MPEE”) for LAMP, Bidangil, Apeitda, and Anseilen. The expected life was 10 years. MPEE is a financial valuation model that estimates revenues and cash flows derived from the intangible asset and then deducts portions of the cash flow that can be attributed to supporting assets, such as a brand name or fixed assets, that contributed to the generation of the cash flows. IP/Technology was valued based on RRM for Solaire Partners. The expected life was 5 years.
(h)	Customer relationships/bases were valued using MPEE. The expected life for LAMP was 8 years, the expected life for Bidangil was 8 years, the expected life for Apeitda was 8 years, and the expected life for Solaire Partners was 8.4 years.
(i)	Non-competes were valued using a With and Without Method (“WWM”) with a 5-year term for Bidangil, Apeitda, Anseilen, and Solaire Partners and a 4 year term for LAMP. WWM calculates the difference between two discounted cash flow models: one that represents the status quo for the business enterprise with the asset in place, and another without it.
(j)	The table below presents the calculation of the deferred tax liability on the intangible assets recorded in Entry (A) in the unaudited pro forma balance sheet of New K Enter using a tax rate of 20.9%:
	K Enter		LAMP		Bidangil		Apeitda		Anseilen		Solaire Partners		Total
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Trademark^(f)^	$	-	$	718,789	$	1,161,370	$	1,086,872	$	-	$	1,058,323	$	4,025,354
Intellectual property^(g)^		-		4,368,088		3,443,501		2,350,644		3,693,016		1,705,104		15,560,353
Customer relationships^(h)^		-		4,018,319		2,661,564		1,535,634		-		2,337,047		10,552,564
Non-competes^(i)^		-		15,052		37,294		16,338		40,807		65,578		175,069
Goodwill		97,256,512		11,194,517		6,041,813		5,195,072		2,464,016		2,464,754		124,616,684
Total	$	97,256,512	$	20,314,765	$	13,345,542	$	10,184,560	$	6,197,839	$	7,630,806	$	154,930,024
*	The goodwill for K Enter is supported by the following qualitative factor:
---	---

●	Synergic growth between (a) content production and investment businesses, in which K Enter secures IP rights of its films and TV series for additional distribution and advertisement revenues and (b) content production and merchandising businesses, in which K Enter produces goods and merchandises for its films and TV series for additional merchandising revenues.

This is further supported by the following qualitative factors:

●	Organic growth of the content production business, assuming an increase in the production of films and TV series collectively by the four studios (Anseilen, Apeitda, Bidangil and Lamp) and K Enter’s internal production team;
●	Organic growth of the content merchandising business, assuming an increase in the IP rights coverage for merchandising by Play Company, reflecting Play Company’s recent contract with SM Entertainment;
●	Organic growth of the content investment business, assuming a serial launching of new content investment funds by Solaire Partners.
(k)	As part of the acquisition, the sellers of the Six Korean entities other than Play maintained their respective non-controlling interests. The following table presents the proportionate share of the non-controlling interest recorded to goodwill for each company calculated on the intangible assets identified and the net assets acquired (liabilities assumed), net of the deferred tax liability:
---	---
Company	Net Assets Acquired (Liabilities Assumed) ()		Intangible Assets Identified ()	Deferred Tax Liability ()		Subtotal		Non-Controlling<br>Interest %			Total Non-Controlling Interest Recorded to Goodwill ()
---	---	---	---	---	---	---	---	---	---	---	---
LAMP					)	$	7,434,574		49.00	%
Bidangil					)		7,737,140		49.00	%
Apeitda					)		4,505,863		49.00	%
Anseilen		)			)		2,558,804		49.00	%
Solaire Partners					)		4,746,476		5.00	%
					)	$	26,982,857

All values are in US Dollars.

B.	Reflects the liquidation and reclassification of $0.5 million of funds held in the Trust Account to cash that becomes available following the Business Combination.
C.	Reflects the settlement of deferred underwriting fees payable of $3.0 million upon the closing of the Business Combination with a payment of $0.5 million, the issuance of a promissory note of $2.0 million and the issuance of 50,000 of PubCo shares at $10 per share.
D.	Reflects the payment of Global Star transaction costs of approximately $1.2 million and the accrual of $0.6 million of business combination-related fees to be paid post-closing of the Business Combination. The costs for Global Star are accounted for as a reduction in the combined cash account with a corresponding reduction in accumulated deficit.

	Reflects the payment of K Enter transaction costs of $1.2 million and to accrue $0.7 of business combination-related fees to be paid post-closing of the Business Combination. $15.8 million is reflected as an adjustment to accumulated deficit and $16.5 million is included as an adjustment to additional paid-in capital. The adjustment to accumulated losses includes $15.6 million related to success fees, with a corresponding increase to trade and other payables as 30% of the success fee is due three months after the Combined Company is listed and traded publicly and 70% of the success fee is due twelve months after the Combined Company is listed and traded publicly. These transaction costs are non-recurring. $8.5 million of the K Enter transaction costs are being paid in shares of K Enter common stock. The 4,997 shares of K Enter common stock were converted to 2,170,125 shares of Pubco, par value of $0.0001 per share at a value of $7.20 per share. A net amount of $6.7 million was recorded to accumulated deficit for the difference between the value of the shares issued and the value of the debt transferred.
	The Global Star transaction costs exclude the deferred underwriting commissions included (C) above.
E.	Represents the exchange of outstanding New K Enter shares into 56,829,875 PubCo Ordinary Shares at par value of $0.0001 per share. These shares plus the 2,170,125 shares presented as being issued to satisfy K Enter transaction expenses, as described in (D) above, total the 59,000,000 New K Enter shares to be issued at the consummation of the Business Combination.
F.	Represents the elimination of Global Star’s historical accumulated losses after recording the transaction costs to be incurred by Global Star as described in (D) above, the remeasurement common stock subject to redemption in (G) below, the interest earned in the Trust as described in (J) below and the stock-based compensation as described in (O) below.
G.	Reflects the remeasurement and reclassification of 40,043 shares of Global Star common stock subject to redemption to permanent equity.
H.	Represents the expense recognized, in accordance with IFRS 2, for the excess of the deemed costs of the shares issued by PubCo and the fair value of Global Star’s identifiable net assets at the date of the Business Combination, resulting in a $38.0 million increase to accumulated deficit. The fair value of shares issued was based on a market price of $7.20 per share (as of May 12, 2025).
	Shares		Dollars
---	---	---	---	---	---
Global Star shareholders
Public shareholders^(1)^		960,043
Sponsor and other shareholders^(2)^		3,126,247
Deemed costs of shares to be issued to Global Star shareholders			$	29,421,288
Net assets of Global Star as of December 31, 2024				(3,813,801	)
Less: Global Star Transaction Costs				(566,902	)
Less: Global Star Warrant liabilities				(290,947	)
Less: Effect of March redemptions and interest withdrawal				(3,948,794	)
Adjusted net assets (liabilities) of Global Star as of December 31, 2024				(8,620,444	)
Difference – being IFRS 2 charge for listing services			$	38,041,732
(1)	Includes 9,200,000 Public Rights automatically converted into 920,000 shares of common stock upon consummation of the Business Combination.
---	---
(2)	Includes 498,225 Private Rights automatically converted into 49,822 shares of common stock upon consummation of the Business Combination and includes 150,000 Convertible Note Rights automatically converted into 15,000 shares of common stock upon consummation of the Business Combination.

I.	Reflects the conversion of Global Star Class B Common Stock into Class A Common Stock on a one-for-one basis upon consummation of the Business Combination.
J.	Reflects the net effect of interest earned in and interest withdrawn from the Trust Account subsequent to December 31, 2024.
K.	Reflects the conversion of 9,698,225 GLST Rights into 969,823 ordinary shares upon the closing of the Business Combination.
L.	Reflects additional draws on the Global Star April 15, 2024, promissory note of $96,000 subsequent to December 31, 2024. Reflects the conversion of $1.5 million of the July 31, 2023, Global Star Working Capital Loan into 150,000 GLST Units at a price of $10.00 per unit upon consummation of the Business Combination. Each unit consists of one share of GLST Class A Common Stock, one GLST Warrant, and one GLST Right. Also reflects the conversion of 150,000 GLST Rights into 15,000 shares of GLST Class A Common Stock upon the closing of the Business Combination. The warrants were recorded as non-current financial liabilities under IAS 32.Reflects the conversion of $100,000 of the Global Star July 31, 2023, Working Capital Loan and $807,000 of the Global Star April 15, 2024, promissory note into shares of Global Star Class B common stock at a price of $10.00 per share upon the consummation of the business combination.
M.	Reflects the conversion of GLST Class A Common Stock into PubCo ordinary shares upon consummation of the Business Combination.
N.	Reflects the extension payments made to the Trust Account subsequent to December 31, 2024.
O.	Reflects the recognition of stock-based compensation related to the sale of Founders Shares to Global Star’s directors and strategic advisors upon consummation of the Business Combination.
P.	Reflects the conversion of 35,484 shares of K Enter Series A preferred stock to New K Enter common stock, par value $0.01, and the conversion of 5,314 shares of K Enter Series A-1 preferred stock to New K Enter common stock, par value $0.01, at a conversion ratio of 1:1 at the consummation of the business combination.
Q.	Reflects the elimination upon consolidation of the intercompany balances for advances paid by K Enter to Anseilen for content development.
R.	Reflects the elimination upon consolidation of legal fees paid by Solaire Partners on behalf of K Enter and the sublease agreement between K Enter and Solaire Partners.
S.	Reflects the elimination of the Investment in Play Company related to the 1,000 shares of Play Company owned by Solaire Partners.
T.	Reflects the adjustment to Global Star historical balance sheet to reverse the consolidation of its wholly-owned subsidiary, K Wave Media, Ltd.
U.	Reflects the intercompany elimination upon consolidation of the intercompany accounts of Global Star and K Wave Media Ltd.
V.	Reflects the proceeds of $1.5 million from the convertible senior unsecured<br> debt and the bifurcation of the conversion option at a fair value of $0.6 million and the cash received from a pre-PIPE investor of $0.4 million.
W.	Reflects the intercompany elimination upon consolidation of the short-term borrowing from Bidangil to K Enter.

x.	Reflects the redemption of 340,832 shares of Global Star Class A common stock at approximately $11.55 per share for $3.9 million and the withdrawal of $0.01 million of interest income from the Trust to pay certain tax obligations.
Y.	Reflects the intercompany elimination upon consolidation of the short-term borrowing from Bidangil to K Enter.
Z.	Reflects the proceeds received under the PIPE agreement of $4.0 million and the reclassification of $0.5 million of funding from short-term borrowings to convertible senior unsecured notes. The Company is currently evaluating the accounting treatment of the PIPE agreement.

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

The Transaction Accounting Adjustments included in the unaudited pro forma condensed combined statement of operations for 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.
CC.	Represents the preliminary estimated expense recognized, in accordance with IFRS 2, for the excess of the deemed costs of the shares issued by PubCo over the fair value of Global Star’s identifiable net assets at the date of the Business Combination, as described in (H) above. This cost is a non-recurring item.
DD.	Reflects the income tax impacts of the pre-tax transaction adjustments.
EE.	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.
FF.	Reflects the expenses incurred by New K Enter for transaction costs related to accounting, advisory and valuation services.
GG.	Reflects the recognition of net loss attributable to non-controlling interests in the Six Korean Entities other than Play Company.
HH.	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)	$	-	$	4,368,088	$	3,443,501	$	2,350,644	$	3,693,016	$	1,705,104	$	15,560,353
Useful Life			$	10	$	10	$	10	$	10	$	5
Customer Relationships (USD)	$	-	$	4,018,319	$	2,661,564	$	1,535,634	$	-	$	2,337,047	$	10,552,564
Useful Life				8		8		8		-		8.4
Trademarks (USD)	$	-	$	718,789	$	1,161,370	$	1,086,872	$	-	$	1,058,323	$	4,025,354
Useful Life				5		5		5		-		5
Non-competes (USD)	$	-	$	15,052	$	37,294	$	16,338	$	40,807	$	65,578	$	175,069
Useful Life				4		5		5		5		5
Annual Amortization	$	-	$	1,086,619	$	916,778	$	647,661	$	377,463	$	844,021	$	3,872,542
6 months Amortization	$	-	$	543,310	$	458,390	$	323,830	$	188,732	$	422,010	$	1,936,272

II.	Reflects the elimination upon consolidation of the sublease agreement between K Enter.
JJ.	Reflects the elimination upon consolidation of the intercompany balances related to the consulting transaction between K Enter and Solaire Partners.
KK.	Reflects the amortization of the debt discount of $0.2 million, and accrual of interest expense at an annual coupon rate of 3% of $0.1 million.
LL.	Reflects the expense recognized for the K Enter shares issued for the satisfaction of transaction expenses as described in (D) above.
NN.	Reflects the intercompany elimination upon consolidation of the short-term borrowing from Bidangil to Kenter
OO.	To record the amortization of deferred finance cost on the Global Star promissory note

Note 4 — 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.

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<br> December 31,<br> 2024
Pro forma net loss	$	(73,051,506	)
Weighted average shares outstanding of ordinary shares – basic and diluted		63,246,290
Net loss per share – basic and diluted	$	(1.19	)
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.
---	---

Exhibit 15.2

MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS OF K ENTER

The following discussion and analysis should be read in conjunction with “Selected Financial Information of K Enter” and the audited financial statements and related notes that are included elsewhere in this proxy statement/prospectus. The discussion and analysis should also be read together with K Enter’s pro forma financial information for the period ended December 31, 2024 and as of December 31, 2024 (in the section entitled “Unaudited Pro Forma Condensed Combined Financial Information”). 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 proxy statement/prospectus of Form 20-F. 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 will become the business of PubCo 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. On March 11, 2024, Global Star, K Enter, PubCo and Merger Sub executed the First Amendment to Merger Agreement. On June 28, 2024, Global Star, K Enter, PubCo and Merger Sub entered into the Second Amendment to Merger Agreement. On July 25, 2024, Global Star, K Enter, PubCo and Merger Sub entered into the Third Amendment to Merger Agreement. On December 11, 2024, Global Star, K Enter, PubCo and Merger Sub entered into the Fourth Amendment to Merger Agreement. Under the terms of the proposed transaction, the estimated combined enterprise value of the surviving entity following the proposed transaction is approximately $590.0 million, which is based on an assumed share price of PubCo’s Ordinary Shares of $10.00 per share. The actual fair value, which will be determined on the acquisition date, may be significantly different from the estimated combined enterprise value disclosed herein. See the rest of this proxy statement/prospectus for additional information regarding the Business Combination, including the sections entitled “Proposal No. 1 The Reincorporation Merger Proposal” and Proposal No. 2 The Acquisition Merger Proposal.”

While the legal acquirer in the Business Combination is Global Star, for financial accounting and reporting purposes under International Financial Reporting Standards (“IFRS”), based on K Enter’s initial analysis, we believe we will be the accounting acquirer and the business combination will be accounted for as a “reverse recapitalization.” A reverse recapitalization does not result in a new basis of accounting, and the financial statements of the combined entity represent the continuation of K Enter’s financial statements in many respects. Under this method of accounting, Global Star will be treated as the acquired entity whereby we will be deemed to have issued common stock for the net assets and equity of Global Star consisting mainly of cash, accompanied by a simultaneous equity recapitalization of Global Star (the “Recapitalization”).

Upon consummation of the Business Combination, the most significant change in K Enter’s future reported financial position and results is expected to be an estimated increase in cash (on a pro forma basis as compared to K Enter’s balance sheet at June 30, 2024) of approximately $0.1 million. Total direct and incremental transaction costs are estimated at approximately $2.2 million. Total direct and incremental transaction costs will be treated as a reduction of the cash proceeds and deducted from the combined company’s additional paid-in-capital or added to the combined company’s accumulated deficit. See the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.”

As a consequence of the Business Combination, we will become 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 expect its capital and operating expenditures will increase significantly in connection with K Enter’s ongoing activities as we:

●	complete the acquisition of the Six Korean Entities
●	increase K Enter’s investment in marketing, advertising, sales infrastructure for K Enter’s products and services;
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●	obtain, maintains and improves K Enter’s operational, financials and management information systems;
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●	hire additional personnel;
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●	obtain, maintains, expands and protects its intellectual property portfolio; and
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●	operate a public company
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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.

Acquisitions of Six Korean Entities

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.

Recent Developments

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 common stock 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.

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.
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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.

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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.

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Based on the termination of the New FVL Agreements, Global Star and K Enter agreed to decrease the base merger consideration Global Star will issue 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 will issue 59,000,000 ordinary shares of PubCo to the stockholders of K Enter in exchange for all of the shares of common stock 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% 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
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(3)	the remaining 50% at the time of shareholder approval and going public.
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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
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(3)	the remaining 25% at the time of shareholder approval and going public.
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From the time K Enter issued the Notes and until the closing of the Business Combination, the Notes will be 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 shall 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, Kenter received $375,000 Pursuant to the 1.5MM Note. Accordingly, K Enter is not due any payment under the $3MM Note and 1.5 MM Note at the time SEC declares effectiveness on the F-4.

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 F4 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 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 K Enter and the use of the loan for working capital purposes related to 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 Proxy Statement/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 the Proxy Statement/Prospectus entitled “Risk Factors — Risks Related to K Enter Holdings Inc.’s Business and Industry”.

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<br>December 31,<br>2024
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	)

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<br>December 31,<br>2024
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.

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.

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 common stock 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. Common Stock for an aggregate purchase price of $1,178,055 from Solaire Partners LLC.

On April 22, 2024, Young Jae Lee, K Enter’s 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 nine 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 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 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. 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 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 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 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 common stock 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 common stock 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 common stock 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 common stock 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 common stock 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 common stock 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.

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 common 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 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 common stock because it is not publicly traded. As such, the fair value of K Enter’s common stock was determined by K Enter’s board of directors as of the date shares of common stock 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 common stock 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 common stock 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 common stock at the time shares of common stock 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.

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 common stock as of December 31, 2024, the following assumptions were used:


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 common stock 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 common stock newly issued or issued from treasury shares is driven by the length of the restricted period for which the underlying share of common stock 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 are contingent upon PubCo’s proxy statement/prospectus on Form F-4 being declared effective by the SEC. 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 is the primary driver of the increase in the estimated fair value of the common stock from the date of the common stock 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 common stock 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 common stock 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 common stock as of the valuation date.

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 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, we intend to rely on such exemptions, 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.

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. The Merger Agreement was approved by NASDAQ on February [●], 2025.

On February 10, 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.

Exhibit 15.3

MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL 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 financial condition and results of operations should be read in conjunction with (in each case, included elsewhere herein) K Wave Media Ltd.’s audited financial statements as of December 31, 2024 and December 31, 2023 and for the period ended December 31, 2024 and the period from June 22, 2023 (inception) to December 31, 2023 (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”), 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 Agreement. As of December 31, 2024, Merger Sub had no operations. The Company and Merger Sub are together referred to as the “Group”.

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 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, Merger Sub will be merged with and into K Enter, resulting in K Enter being a wholly owned subsidiary of the Group.

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. Also, the Company expects to issue 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 will be 59,000,000 ordinary shares in connection with the closing of the Business Combination.

Following the consummation of the transactions contemplated by the Merger Agreement, the Group will be the surviving publicly-traded entity. However, the consummation of the transactions contemplated by the Merger Agreement is subject to numerous conditions, and there can be no assurances that such conditions will be satisfied.

Results of operations

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

Comparisonof the year ended December 31, 2024 and the Period from June 22, 2023 (inception) to December 31, 2023

	For the<br> year ended<br> December 31,<br> 2024		For the<br> period from<br><br> June 22, 2023<br> (inception) through<br> December 31,<br> 2023
Statement of Profit or Loss:
Operating expenses	$	-	$	(11,431	)
General and Administrative		-		(11,431	)
Loss From Operations		-		(11,431	)
Other income		-		-
Net loss	$	-	$	(11,431	)

K Wave Media’s all expenses decreased for the year ended December 31, 2024 as compared to the period from June 22, 2023 (inception) to December 31, 2023, by $11,431 or 100%. For the period from June 22, 2023 (inception) to December 31, 2023, K Wave Media’s all expenses have been related to initial start-up costs incurred with setting up a legal entity. As of December 31, 2024, the Company had no operation and the Company expects to incur the operating expenses after becoming the ultimate parent company following the transactions contemplated in the Merger Agreement.

Liquidity and capital resources

As of December 31, 2024, we had no cash or cash equivalents.

From inception to December 31, 2024, we did not have any operating, investing, or financing cash flows.

Contractual obligations and commitments

As of December 31, 2024, we have no contractual obligations and commitments outside of our related party transaction with K Wave Media.

Off-balance sheet arrangements

As of December 31, 2024, 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 “Note3 - Material accounting policies” in the accompanying Financial Statements for discussion of the accounting policies applied by us. From inception to December 31, 2024, we did not have operating activities or become party to transactions requiring the application of significant, difficult, subjective, or complex accounting judgements.

Quantitative and qualitative disclosures about market risk

As of December 31, 2024, we had no material exposure to market risk.

Subsequent Event

In January 2025, K Wave Media entered into agreements with five investors issuing a Convertible Senior Unsecured Note (PIPE), which is entitled to convert to common shares of K Wave Media immediately after the completion of the business combination. The agreement includes various conditions, including the issuance of free trading bonus shares by K Wave Media and 3-year maturity with 3% annual coupon rate. The total amount of principal is $4.41 million and will be paid upon the completion of business combination, with $0.5 million of the total principal being paid to K Enter Holdings Inc as a working capital loan.

Exhibit 15.4

MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS OF Play Company

References to the “Play Company” refer to Play Company Co., Ltd. The following discussion and analysis of Play Company’s financial condition and results of operations should be read in conjunction with (in each case, included elsewhere herein): Play Company’s audited financial statements as of December 31, 2024 and 2023 and for the years ended December 31, 2024, 2023 and 2022 (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

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;

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<br>December 31,<br> 2024						Year Ended<br>December 31,<br> 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.

(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 generate substantial revenue in 2025.

(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." This project resulted in a significant achievement and led to new opportunities in Play Company’s core business areas. The slower-than-expected progress in developing these opportunities contributed to the relatively low performance in the year ended December 31, 2024. However, Play Company is currently investing substantial effort and resources to launch these new business initiatives, aiming to generate meaningful revenue in 2025.

Play Company is actively implementing strategies to address and overcome the current challenges, as mentioned above. Play Company, however, runs the risk of generating annual results that fall short of forecasted 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 to meet its forecasted revenue for the financial year of 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.

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<br>December 31,<br> 2024						Year Ended<br>December 31,<br> 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.

Liquidity and Capital Resources:

Anseilen incurred a loss of Korean Won 248,885 thousand ($ 168,488) for the year ended December 31, 2024, and had net total deficit of Korean Won 596,517 thousand ($ 403,824) as of December 31, 2024. Anseilen acknowledges that there is a risk that the quantum and timing of cash flows sufficient to sustain operations may not be achievable and that management forecasts regarding cash flow from operations may prove inaccurate. The continuation of Anseilen’s activities is dependent on the availability of adequate financial support. Anseilen has stated that these conditions indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern.

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.

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<br>cost of capital			Terminal<br>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.

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.

MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS OF SOLAIRE

References to the “Solaire” refer to Solaire Partners, LLC. The following discussion and analysis of Solaire’s financial condition and results of operations should be read in conjunction with (in each case, included elsewhere herein): (i) Solaire’s audited financial statements as of December 31, 2024 and 2023 and for the years ended December 31, 2024 and 2023 (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

Solaire Partners, LLC (“Solaire”) is a content-specialized private equity firm based in Korea that invests in movies, dramas, and content companies since 2017. It is led by their CEO, Pyeungho Choi and Solaire’s team of content and finance experts with extensive experience in the entertainment industry. Solaire follows a disciplined project selection process, followed by a thorough hands-on, value add approach to investments. It monitors, reviews and shapes marketing and distribution strategy (teaser, poster, setting release date, distribution), scenario development, and participates in the casting of a project. Solaire has invested in some of the highest-grossing films out of Korea. It has also invested in entertainment tech companies that digitize.

Among its distinctions, it has created Korea’s first and only movie investment fund based on proprietary movie data. The fund invests to capture the returns of the broad segment of Korean commercial movies. Solaire has invested over $138 million in over 200 content projects in the last five years. Solaire has received distinctions from the Korean government as one of the leading venture capitalist firms in the cultural content sector and has secured the investments from some of the largest financial institutions in Korea such as Samsung Securities, Industrial Bank of Korea that have started to invest in the movie industry.

The revenues of Solaire would account for approximately 1.8% of New K Enter’s total revenues in 2023 on a pro forma basis. Solaire derives revenues through a management fee (around 1%) on the amount invested. Solaire expect its share of total New K Enter revenues to remain at these levels.

Solaire’s priority includes helping K Enter extend the investment scope from films to TV series and other formats of content including webtoons and animation and expanding K Enter’s business globally.

Solaire’s distinctiveness stems from the fact that its all members have a various experience in contents investment and also possess finance capabilities. This combination allows Solaire to approach investments in the content industry with a deeper understanding of the creative and artistic aspects, rather than solely focusing on the financial aspects of a project. In addition, due to their extensive experience and expertise in the content industry, Solaire has built a strong network in this industry. Strong relationships with influential producers and directors have allowed it to become the anchor investor in acclaimed movies such as “Parasite” and “Decision to Leave.” This showcases their ability to identify and support promising projects and talent.

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

Solaire’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;

Results of Operations

A summary of Solaire’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	₩	1,424		$	1,044,534		₩	1,716		$	1,313,449
Cost of sales		(83	)		(61,014	)		(146	)		(111,904	)
Gross profit		1,341			983,520			1,570			1,201,545
Operating expenses		(1,532	)		(1,123,640	)		(1,755	)		(1,343,224	)
Operating income		(191	)		(140,120	)		(185	)		(141,679	)
Other income (expense)		76			56,059			(77	)		(58,604	)
Loss before taxes		(115	)		(84,061	)		(262	)		(200,283	)
Income tax expense		(68	)		(49,724	)		(39	)		(30,264	)
Net income	₩	(183	)	$	(133,785	)	₩	(301	)	$	(230,547	)

For the year ended December 31, 2024 and 2023, Solaire’s operating income was driven by its content investment segment, which realized revenues totaling Korean Won 1,424 million ($1,044,534) and Korean Won 1,716 million ($1,313,450), respectively.

Solaire’s gross profit has decreased for the year ended December 31, 2024 as compared to the year ended December 31, 2023 by Korean Won 229 million ($218,025), or 14.6% corresponding to a decrease in revenue of Korean Won 292 million ($268,916), or 17.0%. This is attributable to a decrease in investment management revenue resulting from investment funds that were liquidated in September 2024. For the year ended December 31, 2024 and 2023, four of Solaire’s customers account for 100% and 100% of total Solaire revenue, respectively.

For the year ended December 31, 2024 and 2023, Solaire’s operating expenses are primarily driven by payroll and payroll related costs, commissions expenses, share-based payments for both periods presented.

Solaire’s operating expenses decreased for the year ended December 31, 2024 as compared to the year ended December 31, 2023 by Korean Won 223 million ($219,584), or 12.7%. This is primarily attributable to an increase in payroll and payroll related costs of Korean Won 263 million ($169,754) associated with an increased average salary of the management, a decrease in commission expenses of Korean Won 20 million ($17,082) associated with the development of software, and a decrease in share-based payments of Korean Won 421 million ($322,365) associated with the shares transferred to the employees that was held by Solaire Partners’ largest shareholder during the year ended December 31, 2023.

Cash Flows

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

Comparison of Year Ended December 31, 2024 and 2023

	Year Ended<br>December 31,<br> 2024						Year Ended<br>December 31,<br> 2023
	(In millions of Korean won and US dollar)
Net cash provided by (used in)
Operating activities	₩	(511	)	$	(374,580	)	₩	417		$	319,212
Investing activities	₩	101		$	74,052		₩	(115	)	$	(88,447	)
Financing activities	₩	67		$	49,294		₩	(31	)	$	(23,435	)
Net change in cash and cash equivalents	₩	(343	)	$	(251,234	)	₩	271		$	207,330

Solaire’s net cash flows used in operating activities for the year ended December 31, 2024 was Korean Won 511 million ($374,580), compared to Korean Won 417 million ($319,212) of net cash flows provided by operating activities for the year ended December 31, 2023. This is primarily attributable to an increase in Solaire’s income tax paid by Korean Won 18 million ($13,240), a decrease in share-based payments of Korean Won 421 million ($322,365), a decrease in project investment assets of Korean Won 220 million ($162,143), and a decrease in contract assets of Korean Won 149 million ($105,564) during the year ended December 31, 2024.

Solaire’s net cash flows provided by investing activities for the year ended December 31, 2024 was Korean Won 101 million ($74,052), compared to Korean Won 116 million ($88,447) of net cash flows used in investing activities for the year ended December 31, 2023. This is primarily attributable to a decrease in leasehold deposit of Korean Won 65 million ($47,674) and a decrease in payment made for leasehold deposit of Korean Won 150 million ($114,788).

Solaire’s net cash flows provided by financing activities for the year ended December 31, 2024 was Korean Won 67 million ($49,294), compared to Korean Won 31 million ($23,435) of net cash flows used in financing activities for the year ended December 31, 2023. This is primarily attributable to an increase in short-term borrowings of Korean Won 207 million ($152,069), partially offset by security deposits received during the year ended December 31, 2023, which did not recur in the year ended December 31, 2024.

Liquidity and Capital Resources

Historically, Solaire’s sources of liquidity have been cash flows from fundraising and the generation of net income. As of December 31, 2024, Solaire had an aggregate cash balance of Korean Won 0.4 million ($240) and net working capital of Korean Won 314 million ($212,382).

Solaire intends to operate with its current cash on hand and the profits it anticipates earning in the future. Solaire intends to expand it current business operations through oversea fund raising and exploit investment opportunities to scale up its profit. Solaire may need to borrow money or sell equity to finance its operations and planned growth.

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

Related Parties

The related parties of Solaire comprise individuals, entities with significant influence over the Company, and associates. Solaire entered into multiple investment management agreements with said associates, pursuant to which Solaire will deliver investment management services.

See Related Parties under Note 28 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, Solaire 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.

Critical Accounting Estimates

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

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

Equity-accounted investees

In determining whether Solaire has significant influence, Solaire takes into account whether Solaire directly or indirectly holds 20% or more of the voting rights over the investee, whether Solaire participates in the board or other decision-making body equivalent thereto of the investees, or whether Solaire’s potential voting rights will affect these rights.

Although Solaire holds less than 20% of equity interests in investment fund, investments in such investees were classified as investments in associates as Solaire can exercise significant influence over financial and operating policy decisions as a general partner.

Financial Instruments – Fair values and risk management

The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. Solaire uses its judgment to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting period.

These valuation techniques use as much market observable information as possible and use the least amount of Solaire-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

Quantitative and Qualitative Disclosures about Market Risk

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

See Summary of Solaire’s financial risk management under Note 24 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, Solaire believes that the impact of recently issued standards that are not yet effective will not have a material impact on Solaire’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 Solaire’s assessment, to the extent Solaire has made one, of their potential impact on Solaire’s financial condition and results of operations.

MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS OF APEITDA

References to the “Apeitda” refer to Apeitda Co., Ltd. The following discussion and analysis of Apeitda’s financial condition and results of operations should be read in conjunction with (in each case, included elsewhere herein): (i) Apeitda’s audited financial statements as of December 31, 2024 and 2023 and for the years ended December 31, 2024 and 2023 (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

Established in 2013, Apeitda Co., Ltd. (“Apeitda”)’s main business is a film production studio and is led by Jung Byung-gil and his brother Jung Byung-sik. Apeitda’s focus has been on action and thriller movies such as The Villainess and Carter which received recognition from Hollywood for its unique camerawork to create a sense of realism in action films.

Apeitda is actively involved in the film production business, producing both domestic and foreign movies. As a forward-thinking production company with a commitment to original ideas, Apeitda creates content that remains true to the fundamental values of entertainment and visual enjoyment. Apeitda’s portfolio includes films spanning various genres, from commercial blockbusters to independent features. Notably, Apeitda’s recent success in the box office was marked by the global streaming of the action film "Carter" on Netflix, solidifying its position as a production company capable of delivering world-class films.

Looking ahead, Apeitda has ambitious plans for numerous upcoming projects set to be streamed on global OTT channels like Amazon and Netflix. This strategic move reflects its dedication to further expanding its capabilities as a global film production studio.

Basis of Presentation

Key Components of Statement of Operations

Apeitda’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;

Results of Operations

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

Comparison of Years Ended December 31, 2024 and 2023

	Year Ended<br>December 31,<br> 2024						Year Ended<br>December 31,<br> 2023
	(In millions of Korean won and US dollar)
Income Statement:
Revenues	₩	18		$	12,984		₩	90		$	68,873
Cost of sales		-			-			(26	)		(20,259	)
Gross profit		18			12,984			64			48,614
Operating expenses		(346	)		(253,314	)		(321	)		(245,456	)
Operating profit (loss)		(328	)		(240,330	)		(257	)		(196,842	)
Other income (expense)		29			20,812			87			66,258
Loss before taxes		(299	)		(219,518	)		(170	)		(130,584	)
Income tax benefit (expense)		(8	)		(5,557	)		15			11,181
Net income (loss)	₩	(307	)	$	(225,075	)	₩	(155	)	$	(119,403	)

For the years ended December 31, 2024 and 2023, Apeitda’s operating income was driven by its content production segment, which realized revenues totalling Korean Won 18 million ($12,984) and Korean Won 90 million ($68,873) from settlement proceeds related to the secondary distribution rights of previously released films, respectively.

Apeitda’s gross profit has decreased for the year ended December 31, 2024 as compared to the year ended December 31, 2023 by Korean Won 46 million ($35,630), or 71.9% corresponding to a decrease in revenue of Korean Won 72 million ($55,889), or 80.0%.

For the years ended December 31, 2024 and 2023, Apeitda’s operating expenses are primarily driven by payroll and payroll related costs, depreciation expenses, commissions expenses and other bad debt expenses for both periods presented.

Apeitda’s operating expenses increased for the year ended December 31, 2024 as compared to the year ended December 31, 2023 by Korean Won 25 million ($7,858), or 7.8%. This is primarily attributable to a decrease in commission expenses of Korean Won 18 million ($13,654) associated with professional consulting fees, an increase in advertising expenses of Korean Won 20 million ($14,669) due to Apeitda’s marketing efforts, a decrease in entertainment expenses of Korean Won 13 million ($10,084), and an increase in impairment of prepayment of Korean Won 30 million ($22,003) which incurred due to the delay in completing the projects.

Apeitda typically takes approximately three years to complete a content project. Apeitda currently has no content projects in the production stage, but Apeitda may generate revenue from agreements Apeitda has entered into, or may enter into, with respect to Apeitda’s content project candidates, as well as content projects in production stage in the future. Apeitda’s ability to generate content revenues will depend on the successful development of its content project candidates.

Cash Flows

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

Comparison of Years Ended December 31, 2024 and 2023

	Year Ended<br>December 31,<br> 2024						Year Ended<br>December 31,<br> 2023
	(In millions of Korean won and US dollar)
Net cash provided by (used in)
Operating activities	₩	(217	)	$	(158,979	)	₩	(159	)	$	(121,559	)
Investing activities		1		$	924		₩	428		$	327,256
Financing activities		(100	)	$	(73,344	)	₩	(83	)	$	(63,439	)
Effect of exchange rates on cash		-		$	314		₩	-		$	10
Net change in cash and cash equivalents	₩	(316	)	$	(231,085	)	₩	186		$	142,268

Net cash flows used in operating activities increased for the year ended December 31, 2024 as compared to the year ended December 31, 2023 by Korean Won 58 million ($37,420). This is primarily attributable to an increase in Apeitda’s net loss by Korean Won 151 million ($105,672) and a decrease in accounts receivable due to a decline in revenue of Korean Won 232 million ($176,851) for the year ended December 31, 2024. These effects were partially offset by an increase in cash inflows from an income tax refund by Korean Won 302 million ($230,616) and an increase in other bad debt expenses of Korean Won 30 million ($22,003).

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 427 million ($326,332). This was primarily attributable to a decrease in cash inflows from the disposal of short-term financial instruments by Korean Won 500 million ($382,626) and an acquisition of property, plant, and equipment of Korean Won 70 million ($53,874) for the year ended December 31, 2023, which did not recur in the year ended December 31, 2024.

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 17 million ($9,905). This is attributable to the repayment of long-term borrowings of Korean Won 17 million ($9,905).

Liquidity and Capital Resources

Historically, Apeitda’s sources of liquidity have been cash flows from the generation of net income. As of December 31, 2024, Apeitda had an aggregate cash balance of Korean Won 345 million ($233,132) and net working capital of Korean Won 223 million ($151,094).

Related Parties

The related parties of Apeitda comprise two of Apeitda’s Chief Executive Officers, who are also the shareholders of Apeitda, and other related parties. Apeitda entered into multiple agreements for leasing the office space and loans with related parties.

See Related Parties under Note 24 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, Apeitda 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

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

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

Measurement of defined benefit obligations: key actuarial assumptions

Apeitda’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 Apeitda, 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

Apeitda 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

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

See Summary of Apeitda’s financial risk management under Note 21 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, Apeitda believes that the impact of recently issued standards that are not yet effective will not have a material impact on Apeitda’s financial position or results of operations 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 Apeitda’s assessment, to the extent Apeitda has made one, of their potential impact on Apeitda’s financial statements upon operations.

MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS OF THE LAMP

References to the “The Lamp” refer to The LAMP Co., Ltd. The following discussion and analysis of The Lamp’s financial condition and results of operations should be read in conjunction with (in each case, included elsewhere herein): (i) The Lamp’s audited financial statements as of December 31, 2024 and 2023 and for the years ended December 31, 2024 and 2023 (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

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

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;

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<br>December 31,<br> 2024						Year Ended<br>December 31,<br> 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 totalling 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<br> December 31,<br> 2024						Year Ended<br> December 31,<br> 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

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.

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.

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

References to the “Bidangil” refer to Bidangil Pictures Co., Ltd. The following discussion and analysis of Bidangil’s financial condition and results of operations should be read in conjunction with (in each case, included elsewhere herein): (i) Bidangil’s audited financial statements as of December 31, 2024 and 2023 and for the years ended December 31, 2024 and 2023 (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

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

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;

Results of Operations

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

Comparison of Years Ended December 31, 2024 and 2023

	Year Ended<br>December 31,<br> 2024						Year Ended<br>December 31,<br> 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 totalling 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 10,887million ($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<br> December 31,<br> 2024						Year Ended<br> December 31,<br> 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

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.

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.

MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS OF ANSEILEN

References to the “Anseilen” refers to Studio Anseilen Co., Ltd. The following discussion and analysis of Anseilen’s financial condition and results of operations should be read in conjunction with (in each case, included elsewhere herein)): (i) Anseilen’s audited financial statements as of December 31, 2024 and 2023 and for the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023 (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

Studio Anseilen Co., Ltd. (“Anseilen”) is engaged in the video content production business, spanning movies and dramas, and including IP planning and development. Anseilen’s team comprises accomplished directors who have played key roles in shaping the landscape of K-drama, contributing invaluable expertise to the creation of global video content. Recognizing the evolving trends in the video content market that demand diversity, Anseilen strategically plans and develops new content, drawing on Anseilen’s extensive experience across various formats, including plays, classics, novels, foreign dramas, and documentaries.

In alignment with the global demand for content, Anseilen is actively working on projects slated for streaming on platforms such as Disney and Netflix. Anseilen’s upcoming productions aim to lead the way in the ever-changing landscape of video content trends. Through the independent directorial skills and the synergy derived from Studio Anseilen’s seasoned directors, Anseilen plans to spearhead the emergence of fresh and innovative video content.

Anseilen’s main business is production studio for multi-form TV series and movies. While it is a newly established entity (March 2023), it is led by Kyung-su Shin, Jun-Woo Park, Seung-Ho Kim, 3 top executive producers who worked for SBS, one of the leading Korean TV broadcasting channels. They have created some of Korea’s most famous dramas such as an adaptation of the webtoons taxi driver and other works such as the ‘First Responders’ and ‘Twenty-Five Twenty-One’.

Basis of Presentation

Key Components of Statement of Operations

Anseilen’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;

Results of Operations

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

Comparison of Year Ended December 31, 2024 and the Period from March 6, 2023 (inception) to December 31, 2023

	Year Ended<br> December 31,<br> 2024						For the<br> Period from<br> March 6, 2023<br> (inception) to<br> December 31,<br> 2023
	(In millions of Korean won and US dollar)
Statement of Profit or Loss
Operating expenses	₩	(219	)	$	(160,694	)	₩	(348	)	$	(266,258	)
Operating loss		(219	)		(160,694	)		(348	)		(266,258	)
Other income (expense)		(30	)		(21,848	)		-			232
Net loss	₩	(249	)	$	(182,542	)	₩	(348	)	$	(266,026	)

For the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023, Anseilen’s operating expenses consist of personnel-related expenses for administrative functions and expenses for outside professional services, including legal, audit and accounting services. Personnel-related expenses consist of salaries and severance.

Anseilen’s operating expenses decreased for the year ended December 31, 2024 as compared to the period from March 6, 2023 (inception) to December 31, 2023 by Korean Won 129 million ($105,563), or 37.1%. This is primarily attributable to a decrease in payroll and payroll-related costs of Korean Won 138 million ($111,619) due to a decrease in the number of employees supporting the internal multi-format TV series and film production team, partially offset by an increase in rent expenses by Korean Won 11 million ($7,539).

Cash Flows

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

Comparison of Year Ended December 31, 2024 and the Period from March 6, 2023 (inception) to December 31, 2023

	Year Ended<br> December 31,<br> 2024						For the<br> period from<br> March 6, 2023<br> (inception) to<br> December 31,<br> 2023
	(In millions of Korean won and US dollar)
Net cash provided by (used in)
Operating activities	₩	87		$	63,690		₩	343		$	262,482
Investing activities		(2	)		(1,100	)		(81	)		(62,024	)
Financing activities		-			-			14			10,672
Net change in cash and cash equivalents	₩	85		$	62,590		₩	276		$	211,130

Net cash flows provided by operating activities decreased for the year ended December 31, 2024 as compared to the period from March 6, 2023 (inception) to December 31, 2023 by Korean Won 256 million ($198,792).This is primarily attributable to an decrease in cash inflows of Korean Won 500 million ($398,531) from contract liabilities, partially offset by a decrease in Anseilen’s net loss by Korean Won of 99 million ($83,484) and an increase in cash inflows of Korean Won of 134 million ($109,733) from other non-current non-financial assets.

Net cash flows used in investing activities decreased for the year ended December 31, 2024 as compared to the period from March 6, 2023 (inception) to December 31, 2023 by Korean Won 79 million ($60,924). This is due to advances of leasehold deposit receivables of Korean Won 49 million ($37,162) and purchase of investment securities of Korean Won 30 million ($22,958) for the period from March 6, 2023 (inception) to December 31, 2023, which did not recur for the year ended December 31, 2024.

Net cash flows provided by financing activities decreased for the year ended December 31, 2024 as compared to the period from March 6, 2023 (inception) to December 31, 2023 by Korean Won 14 million ($10,672). This is primarily attributable to the proceeds received from the common shares issued, which did not recur for the year ended December 31, 2024.

Liquidity and Capital Resources

Historically, Anseilen’s sources of liquidity have been cash flows from the payments received from K Enter Holdings. In June 2024, Anseilen entered into the agreement with K Enter Holdings to receive payment totaling Korean Won 1,000 million ($676,654) by June 30, 2025. Also, Anseilen has received totaling Korean Won 500 million ($338,327) has been received and the remaining Korean Won 500 million ($338,327) will be received before June 30, 2025. As of December 31, 2024, Anseilen had an aggregate cash balance of Korean Won 361 million ($244,430) and net working capital of Korean Won 337 million ($228,139).

Anseilen intends to operate with its current cash on hand and the profits it anticipates earning in the future. Anseilen intends to expand its current business operations, including providing additional offerings such as producing intellectual property rights of K-Drama and expand its international footprint. Anseilen may need to borrow money or sell equity to finance its operations and planned growth.

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

Related Parties

The related parties of Anseilen comprise shareholders of the Company and other related parties.

See Related Parties under Note 22 in the notes to the financial statement for the year ended December 31, 2024 and for the period from March 6, 2023 (inception) to December 31, 2023 for more information about transactions entered into with related parties.

Off-Balance Sheet Arrangements

During the period presented, Anseilen 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.

Critical Accounting Estimates

Anseilen’s financial statements have been prepared in accordance with IFRS as issued by the IASB. The preparation of these financial statements requires Anseilen to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the reporting date, 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 Anseilen’s financial statements.

Anseilen believes the accounting policies discussed in the notes to Anseilen’s financial statements are critical to understanding Anseilen’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 year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023 for more information about Anseilen’s significant accounting policies.

Measurement of defined benefit obligations: key actuarial assumptions

Anseilen’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 Anseilen, 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.

Quantitative and Qualitative Disclosures about Market Risk

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

See Summary of Anseilen’s financial risk management under Note 19 in the notes to the financial statements for the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 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, Anseilen believes that the impact of recently issued standards that are not yet effective will not have a material impact on Anseilen’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 year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023 for more information about recent accounting pronouncements, the timing of their adoption and Anseilen’s assessment, to the extent Anseilen has made one, of their potential impact on Anseilen’s financial condition and results of operations.

Exhibit 15.5

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the use in this Shell Company Report on Form 20-F of K Wave Media Ltd. of our report dated May 14, 2025 relating to the financial statements of K Wave Media Ltd., which appears in this Shell Company Report on Form 20-F. We also consent to the reference to us under the heading “Statement by Experts” in this Shell Company Report on Form 20-F.

/s/ Samil PricewaterhouseCoopers

Seoul, KOREA

May 14, 2025

Exhibit 15.6

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the use in this Shell Company Report on Form 20-F of K Wave Media Ltd. of our report dated May 14, 2025 relating to the financial statements of K Enter Holdings Inc., which appear in this Shell Company Report on Form 20-F. We also consent to the reference to us under the heading “Statement by Experts” in this Shell Company Report on Form 20-F.

/s/ Samil PricewaterhouseCoopers

Seoul, KOREA

May 14, 2025

Exhibit 15.7

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the use in this Shell Company Report on Form 20-F of K Wave Media Ltd. of our report dated May 14, 2025 relating to the financial statements of Play Company Co., Ltd., which appears in this Shell Company Report on Form 20-F. We also consent to the reference to us under the heading “Statement by Experts” in this Shell Company Report on Form 20-F.

/s/ Samil PricewaterhouseCoopers

Seoul, KOREA

May 14, 2025

Exhibit 15.8

CONSENT OF INDEPENDENT AUDITORS

We hereby consent to the use in this Shell Company Report on Form 20-F of K Wave Media Ltd. of our report dated May 14, 2025 relating to the financial statements of Solaire Partners LLC., which appears in this Shell Company Report on Form 20-F. We also consent to the reference to us under the heading “Statement by Experts” in this Shell Company Report on Form 20-F.

/s/ Samil PricewaterhouseCoopers

Seoul, KOREA

May 14, 2025

Exhibit 15.9

CONSENT OF INDEPENDENT AUDITORS

We hereby consent to the use in this Shell Company Report on Form 20-F of K Wave Media Ltd. of our report dated May 14, 2025 relating to the financial statements of Bidangil Pictures Co., Ltd., which appears in this Shell Company Report on Form 20-F.We also consent to the reference to us under the heading “Statement by Experts” in this Shell Company Report on Form 20-F.

/s/ Samil PricewaterhouseCoopers

Seoul, KOREA

May 14, 2025

Exhibit 15.10

CONSENT OF INDEPENDENT AUDITORS

We hereby consent to the use in this Shell Company Report on Form 20-F of K Wave Media Ltd. of our report dated May 14, 2025 relating to the financial statements of The LAMP Co., Ltd., which appears in this Shell Company Report on Form 20-F. We also consent to the reference to us under the heading “Statement by Experts” in this Shell Company Report on Form 20-F.

/s/ Samil PricewaterhouseCoopers

Seoul, KOREA

May 14, 2025

Exhibit 15.11

CONSENT OF INDEPENDENT AUDITORS

We hereby consent to the use in this Shell Company Report on Form 20-F of K Wave Media Ltd. of our report dated May 14, 2025 relating to the financial statements of Apeitda Co., Ltd., which appears in this Shell Company Report on Form 20-F. We also consent to the reference to us under the heading “Statement by Experts” in this Shell Company Report on Form 20-F.

/s/ Samil PricewaterhouseCoopers

Seoul, KOREA

May 14, 2025

Exhibit 15.12

CONSENT OF INDEPENDENT AUDITORS

We hereby consent to the use in this Shell Company Report on Form 20-F of K Wave Media Ltd. of our report dated May 14, 2025 relating to the financial statements of Studio Anseilen Co., Ltd., which appears in this Shell Company Report on Form 20-F. We also consent to the reference to us under the heading “Statement by Experts” in this Shell Company Report on Form 20-F.

/s/ Samil PricewaterhouseCoopers

Seoul, KOREA

May 14, 2025

Exhibit 15.13

CONSENT OF INDEPENDENT REGISTERED PUBLICACCOUNTING FIRM

We consent to the incorporation by reference in this Report on Form 20-F of our report dated April 29, 2025 with respect to the financial statements of Global Star Acquisition Inc. for the years ended December 31, 2024 and 2023 included in the Annual Report on Form 10-K. We also consent to the reference to us under the heading “Experts” in such Report.

/s/ Marcum LLP

New York, NY

May 14, 2025

Exhibit 15.14

K WAVE MEDIA LTD.

INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements:
Consolidated Statements of Financial Position as of December 31, 2024 and 2023	F-2
Consolidated Statements of Operations for the year ended December 31, 2024 and period from June 22, 2023 (inception) to December 31, 2023	F-3
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-4
Consolidated Statements of Cash Flows for the year ended December 31, 2024 and period from June 22, 2023 (inception) to December 31, 2023	F-5
Notes to Consolidated Financial Statements	F-6 – F-9

F-1

K WAVE MEDIA LTD.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

As of December 31, 2024 and December 31, 2023

	December 31,<br> 2024			December 31,<br> 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-2

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<br> period from<br> June 22, 2023<br> (inception) to<br> December 31, <br> 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 shares of common stock 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-3

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-4

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 <br> period from<br><br> June 22, 2023<br> (inception) to<br> December 31,<br> 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-5

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 Agreement. As of June 30, 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 common stock 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 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 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-6

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<br> period from<br> June 22, 2023<br> (inception) to<br> December 31,<br> 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

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.

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

IFRS 9 Financial Instruments - IFRS 7 Financial Instruments: Disclosures – Classification and Measurement of Financial Instruments

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.

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.

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

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,<br><br> <br>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-9

Exhibit 15.15

PLAY COMPANY CO., LTD. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

As of December 31, 2024 and 2023

	Note		December 31,<br> <br>2024
			(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.

PLAY COMPANY CO., LTD. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

As of December 31, 2024 and 2023

	Note
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.

PLAY COMPANY CO., LTD. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(LOSS)

For the Years Ended December 31, 2024,2023 and 2022

	Note		2024
			(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.

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.

PLAY COMPANY CO., LTD. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 2024,2023 and 2022

	Note		2024
			(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.

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<br><br> (in shares)		Percentage of ownership<br><br> (%)			Number of shares <br><br>(in shares)		Percentage of ownership<br><br> (%)
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,<br><br>2024		December 31,<br><br>2023		January 1,<br><br> 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<br><br> (*)		Total liabilities<br><br> (*)		Revenues<br><br> (*)		Profit for the period<br><br> (*)
Play F&B		13,174,076		18,990,058		14,630,426		(3,101,420	)

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<br><br> (*)	Total liabilities<br><br> (*)		Revenues<br><br> (*)		Profit for the period<br><br> (*)
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.

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<br>identical assets or liabilities.
●	Level 2: inputs other than quoted prices included in Level<br>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<br>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.
---	---

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 FinancialInstruments: Disclosures – Supplier finance arrangements

IFRS 16 – Lease Liability in a Saleand Leaseback

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 ForeignExchange 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.

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 FinancialInstruments: 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 FinancialStatements

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.

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.

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<br>(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<br>in a foreign operation to the extent that the hedge is effective; and
---	---
●	qualifying cash flow hedges to the extent that the hedges<br>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<br>in each contract; and
---	---
●	recognizing revenue when, or as, we satisfy performance obligations<br>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.

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.

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<br>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.

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024,2023 and 2022

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<br>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,<br>associates and joint arrangements to the extent that the Group is able to control the timing of the reversal of the temporary differences<br>and it is probable that they will not reverse in the foreseeable future; and
---	---
●	taxable temporary differences arising on the initial recognition<br>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.

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.

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.
---	---

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<br>hold assets to collect contractual cash flows; and
●	its contractual terms give rise on specified dates to cash<br>flows that are solely payments of principal and interest on the principal amount outstanding.
---	---

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024,2023 and 2022

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<br>by both collecting contractual cash flows and selling financial assets; and
●	its contractual terms give rise on specified dates to cash<br>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<br>the operation of those policies in practice. These include whether management’s strategy focuses on earning contractual interest<br>income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related<br>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<br>to the Group’s management;
---	---
●	the risks that affect the performance of the business model<br>(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<br>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<br>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.

Financial assets - Assessment whether contractualcash 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.

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024,2023 and 2022

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<br>of cash flows;
●	terms that may adjust the contractual coupon rate, including<br>variable-rate features;
---	---
●	prepayment and extension features; and
---	---
●	terms that limit the Group’s claim to cash flows from<br>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 measurementand 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<br>asset expire; or
●	it transfers the rights to receive the contractual cash flows<br>in a transaction in which either:
---	---
-	substantially all of the risks and rewards of ownership of<br>the financial asset are transferred; or
---	---
-	the Group neither transfers nor retains substantially all<br>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.

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024,2023 and 2022

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<br>at the reporting date; and
●	other debt securities and bank balances for which credit<br>risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial<br>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.

The Group considers a financial asset to be in default when:

●	the debtor is unlikely to pay its credit obligations to the<br>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.

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024,2023 and 2022

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<br>90 days past due;
---	---
●	the restructuring of a loan or advance by the Group on terms<br>that the Group would not consider otherwise;
---	---
●	it is probable that the debtor will enter bankruptcy or other<br>financial reorganization; or
---	---
●	the disappearance of an active market for a security because<br>of financial difficulties.
---	---

Presentation of allowance for ECL in the statementof 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.

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024,2023 and 2022

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.

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;

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024,2023 and 2022

●	variable lease payments that depend on an index or a rate,<br>initially measured using the index or rate as at the commencement date;
●	amounts expected to be payable under a residual value guarantee;<br>and
---	---
●	the exercise price under a purchase option that the Group<br>is reasonably certain to exercise, lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension<br>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.

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.

PLAY COMPANY CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2024,2023 and 2022

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.

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.

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

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
		(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

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
		(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
		(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

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,<br><br> 2024		December 31,<br><br>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
		(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
		(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

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
		(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
		(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

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

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe 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<br> 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 instrumentts	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

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe Years Ended December 31, 2024, 2023 and 2022

B.	Measurement of fair values
i.	Cash-settled<br> 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)
		(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<br> (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<br>(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		-		₩	-

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe Years Ended December 31, 2024, 2023 and 2022

Details of the liabilities arising from the share option plan (cash-settled) are as follows.

		2024
		(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,<br><br>2024		December 31,<br><br>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

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe 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<br> assumptions
---	---

Details of actuarial assumptions used for the years ended December 31, 2024, 2023 and 2022 are as follows:

	2024	2023	2022
Discount<br> rate	4.2%	4.9%	5.6%
Future<br> 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<br> 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%			Decreasedby 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<br> of employee benefit expenses recognized for the years ended December 31, 2024, 2023 and 2022<br> 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

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe Years Ended December 31, 2024, 2023 and 2022

ii.	Expenses<br> 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.

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe 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)<br><br>benefit		Net of tax		Before tax		Tax (expense)<br><br>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.

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe Years Ended December 31, 2024, 2023 and 2022

D.	Movement in deferred tax balances
i.	Movement<br> 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.

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe Years Ended December 31, 2024, 2023 and 2022

ii.	Movement<br> 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.

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe Years Ended December 31, 2024, 2023 and 2022

E.	Deferred assets (liabilities)
i.	Details<br> 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<br> of unused tax loss carryforwards and unused tax credit carryforwards that are not recognized<br> as deferred income tax assets as of December 31, 2024 are as follows:
---	---
Year of expiration		Unused loss carryforwards		Unused tax credit<br><br><br> <br>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<br> timing of recovery of deferred tax assets and liabilities as of December 31, 2024 and 2023<br> is as follows:
---	---
		December 31,<br><br>2024			December 31,<br><br>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	)

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe 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,<br><br>2024
		(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,<br><br>2024
		(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.

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe 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,<br> 2024			December 31,<br> 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,<br><br>2024			December 31,<br><br>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

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe 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,<br><br>2024
		(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<br> of Investment properties as of December 31, 2024 and 2023 are as follows:
---	---
		December 31,<br><br>2024			December 31,<br><br>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
		(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		-

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe 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		Accumulateddepreciation			Accumulatedimpairmentloss			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

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe 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-<br><br>in-progress		Furniture and fixture			Right-of-useassets			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-<br><br>in-progress			Furniture and fixture			Right-of-useassets			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.

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe Years Ended December 31, 2024, 2023 and 2022

		2022
		Machinery			Vehicles			Office equipment			Construction-<br><br>in-progress			Furniture and fixture			Right-of-useassets			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
		(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.

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe 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
		(In thousands of Korean won)
		Book value		Accumulated depreciation			Carrying amount
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
---	---	---	---	---	---	---	---	---
		(In thousands of Korean won)
		Book value		Accumulated depreciation			Carrying amount
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

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe 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.

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe 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,<br><br>2024
		(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)

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe Years Ended December 31, 2024, 2023 and 2022

		December 31,<br><br>2024
		(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,<br><br>2024
		(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<br> December 31,<br><br>2024
		(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

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe 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

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe 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,<br><br>2024
		(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

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe Years Ended December 31, 2024, 2023 and 2022

i.	Ordinary<br> 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<br> 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,<br><br>2024			December 31,<br><br>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	)

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe 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,<br><br>2024
		(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
		(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)

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe 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<br><br><br> <br>interest rate	Maturity	Face value		Carrying amount		Face value		Carrying amount
Secured borrowings ^(*1)^	KRW	KORIBOR<br> +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<br> +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.

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe 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<br><br><br> <br>interestrate	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,<br><br>2024
		(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

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe 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
		(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.

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe 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
		(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
		(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.

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe 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<br> 1: quoted prices (unadjusted) in active markets for identical asset or liability
●	Level<br> 2: all inputs other than quoted prices included in Level 1 that are observable (either directly<br> that is, prices, or indirectly that is, derived from prices) for the asset or liability
---	---
●	Level<br> 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<br> price or dealer price of a similar financial instrument
●	The<br> fair value of derivative instruments is determined by discounting the amount to present value<br> 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<br> 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.

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe 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,<br><br>2024
		(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<br> amount		Loss<br> 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	99.21%			703,223		697,666
Total		₩		9,945,757		735,317
As of December 31, 2023	Expected<br><br><br> <br>loss rate		Carrying<br><br><br> <br>amount		Loss<br><br>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

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe Years Ended December 31, 2024, 2023 and 2022

ii.	Liquidity<br> risk

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
		CarryingAmount		Lessthan3 months		3months~ 1 year		1~2 years		2~5 years		Morethan5 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
		CarryingAmount		Less than<br><br><br> <br>3 months		3months~ 1 year		1~2 years		2~5 years		More than<br><br>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<br> 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

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe Years Ended December 31, 2024, 2023 and 2022

iii.	Market<br> risk
(a)	Foreign<br> 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:


		Liabilities in foreign currency		Assets in Korean Won		Liabilities in Korean Won
				(In thousands of Korean won)
	55,174		222		81,105		327
	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

All values are in US Dollars.


		Liabilities in foreign currency		Assets in Korean Won		Liabilities in Korean Won
				(In thousands of Korean won)
	60,191		-		79,018		-
	805,407,622		5,448,213		7,350,633		49,724
Total					7,429,651		49,724

All values are in US Dollars.

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe 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:

					2023
		Decreased by 10%			Decreased by 10%		Decreased by 10%

	8,078		(8,078	)		7,902		(7,902	)
	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	)

All values are in US Dollars.

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<br> 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)

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe 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
		(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
		(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

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe 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<br> 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,<br><br>2024		December 31,<br><br>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,<br><br>2024			December 31,<br><br>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,<br><br>2024			December 31,<br><br>2023
---	---	---	---	---	---	---
		(In thousands of Korean won)
Right-of-use assets (Accumulated impairment loss)
Buildings	₩		(216,464	)		-
Vehicles			-			-
Total	₩		(216,464	)		-
		December 31,<br><br>2024		December 31,<br><br>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

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe 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

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe Years Ended December 31, 2024, 2023 and 2022

ii.	Amounts<br> 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
		(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<br> 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
		(In thousands of Korean won)
Total cash outflows of leases	₩		2,947,475	3,536,265	2,594,294
iv.	Extension<br> 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.

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe Years Ended December 31, 2024, 2023 and 2022

B.	Leases as lessor
i.	Operating<br> 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
		(In thousands of Korean won)
Less than 1 year	₩		59,315	830,723
1 ~ 2 years			-	549,062
Total	₩		59,315	1,379,785

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe 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
			(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.

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe 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
			(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

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe 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,<br><br>2024
				(In thousands of Korean won)
Short-term financial instruments	Industrial Bank of Korea	Provided as collateral <br> for employee loans(*)	₩		300,000	300,000
Machinery	Industrial Bank of Korea	Provided as collateral<br> for short-term<br> <br>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.

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe 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
		(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

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe 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
		(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
		(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	-

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe 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<br> borrowings
		(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.

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe Years Ended December 31, 2024, 2023 and 2022

		2024
		(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,<br><br> 2024	December 31,<br><br> 2023
Other<br> related parties	FF<br> Company Co., Ltd. (“FF Company”)	FF<br> Company Co., Ltd. (“FF Company”)
Other<br> related parties	OURcoffee<br> gangnamjum Co.,Ltd. (“OURcoffee Gangnamjum”)	OURcoffee<br> gangnamjum Co.,Ltd. (“OURcoffee Gangnamjum”)
Other<br> related parties	SecondPlan<br> Co.,Ltd. (“SecondPlan”)	SecondPlan<br> Co.,Ltd. (“SecondPlan”)
Other<br> related parties	ThirdPlan<br> Co., Ltd. (“ThirdPlan”)	ThirdPlan<br> Co., Ltd. (“ThirdPlan”)
Other<br> related parties	PLAYVERSE<br> Co., Ltd. (“PLAYVERSE”)	PLAYVERSE<br> Co., Ltd. (“PLAYVERSE”)
Other<br> related parties	Studio<br> Cuat. Co., Ltd. (“Studio Cuat”)	Studio<br> Cuat. Co., Ltd. (“Studio Cuat”)
Other<br> related parties	Beacon<br> Holdings, Inc. (“Beacon Holdings”)	Beacon<br> 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		Financeincome		Purchases		FinanceCosts
			(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

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe Years Ended December 31, 2024, 2023 and 2022

			2023
Related party	Name of entity		Revenue		Financeincome		Purchases		FinanceCosts
			(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		Financeincome		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 <br>personnel	Cho Hyeong Seok		-	-	1,115,906	2,790,236	-	-	1,256,876	2,689,321
Key management <br>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

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe 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.

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe 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
				(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<br> <br>enterprise financing(*2)			500,000	500,000
Key management personnel	Industrial Bank of Korea	Small and medium-sized<br> <br>enterprise financing(*3)			1,000,000	1,000,000
Key management personnel	Industrial Bank of Korea	Small and medium-sized<br> <br>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.

PLAYCOMPANY CO., LTD. AND SUBSIDIARY

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

Forthe 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
				(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<br> <br>enterprise financing(*2)			500,000	500,000
Key management personnel	Industrial Bank of Korea	Small and medium-sized<br> <br>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
		(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.

Exhibit 15.16

SOLAIRE PARTNERS LLC.

STATEMENTS OF FINANCIAL POSITION

As of December 31, 2024 and 2023

	Note	December 31,<br> 2024
Assets		(In thousands of Korean won)
Cash and cash equivalents	14,17,19,24,27	₩	355	342,896
Short-term investment securities	17,24		-	1,664,720
Accounts receivable — trade, net	13,17,24		52,800	384,675
- Related parties	28		52,800	384,675
Accounts receivable — other, net	13,17,24		2,129,732	118,633
- Related parties	28		1,854,732	118,633
- Non related parties			275,000	-
Other current financial assets	13,17,24		144,019	-
- Non related parties			144,019	-
Other current assets	12		97	-
Contract assets	7		370,720	110,988
- Related parties	28		183,866	110,988
- Non related parties			186,854	-
Total current assets			2,697,723	2,621,912
Long-term investment securities	17,24		712,715	12,180
Investments in associates	16		83,001	669,043
Property and equipment including right-of-use asset	15,25		31,227	83,659
Other non-current financial assets	13,17,24		300	231,846
- Related parties	28		-	36,082
- Non related parties			300	195,764
Deferred tax assets	11		-	64,863
Defined benefit assets	10		-	21
Total non-current assets			827,243	1,061,612
Total assets		₩	3,524,966	3,683,524
Liabilities
Trade and other payables	17,22,24	₩	1,801,718	1,830,848
- Related parties	28		308	27,346
- Non related parties			1,801,410	1,803,502
Other current financial liabilities	17,24		96,060	-
- Related parties	28		96,060	-
Other current non-financial liabilities	17,24		23,896	26,988
Short-term borrowings	17,21,24		207,336	-
Current tax liabilities	11		193,897	211,124
Current Lease liabilities	21,24,25		60,945	145,798
Total current liabilities			2,383,852	2,214,758
Other non-current financial liabilities	17,24		-	87,123
- Related parties	28		-	87,123
Defined benefit liabilities	10		152,368	-
Other non-current provisions	23		13,167	12,989
Non-current Lease liabilities	21,24,25		-	55,275
Total non-current liabilities			165,535	155,387
Total liabilities		₩	2,549,387	2,370,145

The accompanying notes are an integral part of these financial statements.

SOLAIRE PARTNERS LLC.

STATEMENTS OF FINANCIAL POSITION

As of December 31, 2024 and 2023

	Note	December 31,<br> 2024
Equity		(In thousands of Korean won)
Share capital	18	₩	850,000		850,000
Share premium	18,20		421,254		421,254
Other reserves	10,18		(201,030	)	(45,637	)
Retained earnings			(94,645	)	87,762
Total equity			975,579		1,313,379
Total liabilities and equity		₩	3,524,966		3,683,524

The accompanying notes are an integral part of these financial statements.

SOLAIRE PARTNERS LLC.

STATEMENTS OF COMPREHENSIVE INCOME

For the Years Ended December 31, 2024 and2023

	Note	2024
		(In thousands of Korean won)
Operating income
Investment management revenue	6,7		1,362,349		1,714,271
- Related parties	28		1,276,195		1,714,271
- Non-related parties			86,154		-
Investment revenue	6,7		45,417		2,092
- Related parties	28		-		114
- Non-related parties			45,417		1,978
Gains from investments in associates	6,7		16,391		-
- Related parties	28		16,391		-
			1,424,157		1,716,363
Operating expenses
Selling, general and administrative expenses	8		(1,532,099	)	(1,710,391	)
Investment expenses	8		(20,121	)	-
Losses from investments in associates	8		(63,068	)	(146,232	)
- Related parties	28		(63,068	)	(146,232	)
			(1,615,288	)	(1,856,623	)
Other income	8		86		7
Other expense	8		-		(44,886	)
Operating loss			(191,045	)	(185,139	)
Finance income	9,17,25		99,164		21,382
- Related parties	28		84,895		8,826
- Non-related parties			14,269		12,556
Finance costs	9,17,25		(22,730	)	(97,964	)
- Related parties	28		(8,938	)	(4,825	)
- Non-related parties			(13,792	)	(93,139	)
loss before income tax			(114,611	)	(261,721	)
Income tax expenses	11		(67,796	)	(39,549	)
loss for the year		₩	(182,407	)	(301,270	)
Other comprehensive income
Items that will not be reclassified to income or loss:
Remeasurement of defined benefit liabilities	10,11,18		(155,393	)	(12,724	)
Total comprehensive loss for the year		₩	(337,800	)	(313,994	)

The accompanying notes are an integral part of these financial statements.

SOLAIRE PARTNERS LLC.

STATEMENTS OF CHANGES IN EQUITY

For the Years Ended December 31, 2024 and2023

	Note	Share<br> <br>capital
Balance at January 1, 2023	1	₩	850,000	-	(32,913	)	389,032		1,206,119
Total comprehensive income for the year
loss for the year			-	-	-		(301,270	)	(301,270	)
Remeasurement of defined benefit liabilities	18		-	-	(12,724	)	-		(12,724	)
Total comprehensive loss for the year			-	-	(12,724	)	(301,270	)	(313,994	)
Share-based Payment	18		-	421,254	-		-		421,254
Balance at December 31, 2023	1	₩	850,000	421,254	(45,637	)	87,762		1,313,379
Balance at January 1, 2024	1	₩	850,000	421,254	(45,637	)	87,762		1,313,379
Total comprehensive income for the year
loss for the year			-	-	-		(182,407	)	(182,407	)
Remeasurement of defined benefit liabilities	18		-	-	(155,393	)	-		(155,393	)
Total comprehensive loss for the year			-	-	(155,393	)	(182,407	)	(337,800	)
Balance at December 31, 2024	1	₩	850,000	421,254	(201,030	)	(94,645	)	975,579

The accompanying notes are an integral part of these financial statements.

SOLAIRE PARTNERS LLC.

STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 2024 and2023

	Note	2024
		(In thousands of Korean won)
Cash flows from operating activities
loss for the year		₩	(182,407	)	(301,270	)
Adjustments to reconcile profit for the year to net cash provided by operating activities	27		(303,862	)	594,658
Interest received			9,329		9,286
Interest paid			(13,615	)	(16,757	)
Income taxes refunded(paid)			(20,161	)	131,217
Net cash inflow(outflow) from operating activities		₩	(510,716	)	417,134
Cash flows from investing activities
Payment for other non-current financial assets		₩	-		(150,000	)
Collection of lease receivables			104,410		38,435
Collection of other non-current financial assets			-		80
Purchase of property and equipment			(3,444	)	(4,094	)
Net cash inflow(outflow) in investing activities		₩	100,966		(115,579	)
Cash flows from financing activities	27
Proceeds from short-term borrowings		₩	207,336		-
Collection of rent deposit			-		100,050
Repayment of lease liabilities			(140,127	)	(130,674	)
Net cash inflow(outflow) in financing activities		₩	67,209		(30,624	)
Net increase (decrease) in cash and cash equivalents			(342,541	)	270,931
Cash and cash equivalents at beginning of the year		₩	342,896		71,965
Cash and cash equivalents at end of the year	14	₩	355		342,896

The accompanying notes are an integral part of these financial statements.

SOLAIRE PARTNERS LLC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and2023

1. Reporting entity

The Company

Solaire Partners LLC. (“the Company”) was incorporated in June 2017 and the Company's registered office is at 112, Yeoksam-ro, Gangnam-gu, Seoul, Republic of Korea. The Company is investment management company focusing on contents. The Company primarily generates revenue from the investment in securities of Korean content companies and commissions received from the customers from providing the investment management services.

The 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 (%)
Choi, Pyeung ho		514,250,000		60.5	%		514,250,000		60.5	%
Lee, Young Jae		208,250,000		24.5	%		208,250,000		24.5	%
Song, Hyo Jeong		42,500,000		5.0	%		42,500,000		5.0	%
CY Holdings Co., Ltd		42,500,000		5.0	%		42,500,000		5.0	%
Park, Su Kyung		17,000,000		2.0	%		17,000,000		2.0	%
Hyun, Na Young		8,500,000		1.0	%		8,500,000		1.0	%
Lee, Myung Hyun		8,500,000		1.0	%		8,500,000		1.0	%
Kim, Min Soo		8,500,000		1.0	%		8,500,000		1.0	%
Total		850,000,000		100.0	%		850,000,000		100.0	%

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 management on May 14, 2025.

Details of the Company’s accounting policies are included in Note 5.

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 bases
Financial instruments measured at fair value through profit or loss (“FVTPL”)	Fair value
Defined benefit plans – plan assets	Fair value

SOLAIRE PARTNERS LLC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and2023

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 25(A): lease term: whether the Company is reasonably certain to exercise extension options.

B.	Assumptions and estimation uncertainties

●	Note 16: Equity-accounted investees;

In determining whether the Company has significant influence, the Company takes into account whether the Company directly or indirectly holds 20% or more of the voting rights over the investee, whether the Company participates in the board or other decision-making body equivalent thereto of the investees, or whether the Company’s potential voting rights will affect these rights.

●	Note 24(B): Financial Instruments – Fair values and<br>risk management;

The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. The Company uses its judgment to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting period.

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 measured at FVTPL, 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<br>identical assets or liabilities.
●	Level 2: inputs other than quoted prices included in Level<br>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<br>on observable market data (unobservable inputs).
---	---

SOLAIRE PARTNERS LLC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and2023

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 24(B): financial instruments.

5. Material accounting policies

The Company has consistently applied the following accounting policies to all periods presented in these financial statements, except if mentioned otherwise.

A.	New and amended standards or interpretations adopted the Company

The Company has applied the following standards and amendments for the first time for its annual reporting period commencing January 1, 2024.

IAS 1 Presentation of Financial Statements- Classification of Liabilities as Current or Non-current

IAS 7 Statement of Cash Flows - IFRS 7 FinancialInstruments: Disclosures – Supplier finance arrangements

IFRS 16 – Lease Liability in a Saleand Leaseback

SOLAIRE PARTNERS LLC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and2023

B.	New and amended standards or interpretations not yet adopted

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 ForeignExchange Rates – Lack of Exchangeability

IFRS 9 Financial Instruments - IFRS 7 FinancialInstruments: 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
---	---

IFRS 18 Presentation and Disclosure in FinancialStatements

IFRS 19 Subsidiaries without Public Accountability:Disclosures

SOLAIRE PARTNERS LLC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and2023

C.	Revenue from contracts with customers

The Company generates revenue primarily through providing the service for investment management for investment funds, investing in Korean theatrical films, and investing in content companies based in Korea.

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<br>in each contract; and
---	---
●	recognizing revenue when, or as, we satisfy performance obligations<br>by transferring the promised goods or services.
---	---

Investment management revenue

The Company manages and operates the investment funds on behalf of investors and receives commissions from its customers. The investment management 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. Investment management revenues 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.

Other revenues

Other revenues are from other sources, not from the contract with customers. Other sources of revenue are earned from investing in investment funds, which are investees accounted for using the equity method. An associate is an entity in which the Company has significant influence, but not control, over the entity’s financial and operating policies. Under this method of accounting, the Company typically records its proportionate share of the net earnings or losses of equity method investees and a corresponding increase or decrease to the investment balances. Other revenues also include valuation gains or losses on investment funds that are not accounted for using the equity method. In addition, other sources of revenue are also earned from investing directly in content being produced such as theatrical films and television programs.

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, 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 a single business unit, for which the Company 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 Company 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.

SOLAIRE PARTNERS LLC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and2023

E.	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.	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.

F.	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<br>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.
---	---

SOLAIRE PARTNERS LLC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and2023

G.	Income tax

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 income tax

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
---	---

●	temporary differences on the initial recognition of assets<br>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,<br>associates and joint arrangements to the extent that the Company is able to control the timing of the reversal of the temporary differences<br>and it is probable that they will not reverse in the foreseeable future; and
---	---
●	taxable temporary differences arising on the initial recognition<br>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 plan 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 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 Company has not rebutted this presumption.

SOLAIRE PARTNERS LLC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and2023

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.
---	---
H.	Cash and Cash Equivalents
---	---

I.	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 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
Right-of-use assets	Lease term

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

J.	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.

SOLAIRE PARTNERS LLC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and2023

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<br>hold assets to collect contractual cash flows; and
●	its contractual terms give rise on specified dates to cash<br>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<br>by both collecting contractual cash flows and selling financial assets; and
●	its contractual terms give rise on specified dates to cash<br>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.

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<br>the operation of those policies in practice. These include whether management’s strategy focuses on earning contractual interest<br>income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related<br>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<br>to the Company’s management;
---	---
●	the risks that affect the performance of the business model<br>(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<br>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<br>in prior periods, the reasons for such sales and expectations about future sales activity.
---	---

SOLAIRE PARTNERS LLC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and2023

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 contractualcash flows are solely payments of principal and interest

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<br>of cash flows;
●	terms that may adjust the contractual coupon rate, including<br>variable-rate features;
---	---
●	prepayment and extension features; and
---	---
●	terms that limit the Company’s claim to cash flows<br>from specified assets (e.g. non-recourse features).
---	---

Financial assets - Subsequent measurementand 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 liabilities - Classification,subsequent measurement and gains and losses

SOLAIRE PARTNERS LLC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and2023

iii.	Derecognition

Financial assets

The Company derecognizes a financial asset when:

●	the contractual rights to the cash flows from the financial<br>asset expire; or
●	it transfers the rights to receive the contractual cash flows<br>in a transaction in which either:
---	---
-	substantially all of the risks and rewards of ownership of<br>the financial asset are transferred; or
---	---
-	the Company neither transfers nor retains substantially all<br>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.

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.

SOLAIRE PARTNERS LLC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and2023

K.	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.
---	---

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<br>at the reporting date; and
●	other debt securities and bank balances for which credit<br>risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial<br>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<br>Company in full, without recourse by the Company 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.

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 discounted at the effective interest rate of the financial asset.

SOLAIRE PARTNERS LLC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and2023

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.

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<br>90 days past due;
---	---
●	the restructuring of a loan or advance by the Company on<br>terms that the Company would not consider otherwise;
---	---
●	it is probable that the debtor will enter bankruptcy or other<br>financial reorganization; or
---	---
●	the disappearance of an active market for a security because<br>of financial difficulties.
---	---

Presentation of allowance for ECL in thestatement 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, 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.

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.

SOLAIRE PARTNERS LLC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and2023

L.	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.

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,<br>initially measured using the index or rate as at the commencement date;
---	---
●	amounts expected to be payable under a residual value guarantee;<br>and
---	---
●	the exercise price under a purchase option that the Company<br>is reasonably certain to exercise, lease payments in an optional renewal period if the Company is reasonably certain to exercise an extension<br>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.

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.

SOLAIRE PARTNERS LLC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and2023

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), 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 Group 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 (see Note 4(K)(i)). The Company further regularly reviews estimated unguaranteed residual values used in calculating the gross investment in the lease.

The Company recognises lease payments received under operating leases as income on a straight-line basis over the lease term as part of ‘other revenue’.

M.	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.

SOLAIRE PARTNERS LLC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and2023

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.

N.	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.

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.

SOLAIRE PARTNERS LLC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and2023

6. Operating segments

A.	Basis for segmentation

The Company’s operating segments have been identified to be a single business unit, by which the Company provides the services for investment fund management.

The following summary describes the operations of each reportable segment

Reportable segments	Operations
Investment management	Providing investment management services to investment funds

B. Information about reportable segments

Information related to each reportable segment is set out below. Segment operating loss 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 and 2023 is as follows:

	2024
	(In thousands of Korean won)
Segment revenue	₩	1,424,157		1,716,363
Depreciation/Amortization		(55,876	)	(93,126	)
Investment expenses		(20,121	)	-
Losses from investments in associates		(63,068	)	(146,232	)
Segment operating loss		(191,045	)	(185,139	)

C. Geographic information

Investment and commission revenues are managed and operated in Seoul, 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.

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:

	2024		2023
	(In thousands of Korean won)
Korea	₩	1,424,157		1,716,363

Summary of the Company’s non-current assets based on the location as of December 31, 2024 and 2023 is as follows:

	December 31,<br><br> 2024		December 31,<br><br>2023
	(In thousands of Korean won)
Korea	₩	114,228		752,702

SOLAIRE PARTNERS LLC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and2023

D. Major customer

Revenues from major customers that amount to 10% or more of the Company’s revenue for the years ended December 31, 2024 and 2023 is as follows:

	2024
	(In thousands of Korean won)
Solaire Main Movie Fund
Revenue	₩	562,528		748,459
%		39	%	44	%
SOLAIRE SCALE-UP MOVIE INVESTMENT FUND NO.2
Revenue	₩	395,066		89,858
%		28	%	5	%
Solaire Culture Plus Fund
Revenue	₩	358,580		573,678
%		25	%	33	%
SOLAIRE SCALE-UP MOVIE INVESTMENT FUND NO.1
Revenue	₩	104,007		302,276
%		7	%	18	%
Total	₩	1,420,181		1,714,271

7. Operating income

A.	Operating income streams

The Company generates operating income primarily through providing the services for investment management for initial exhibition in theaters.

Revenue from contracts with customers and other operating income for the years ended December 31, 2024 and 2023 are as follows:

	2024
	(In thousands of Korean won)
Revenue from contracts with customers	₩	1,366,325	1,716,363
Other sources of operating income (*)
Investment revenue		41,441	-
Gains from investments in associates		16,391	-
Total	₩	1,424,157	1,716,363
(*)	Other sources of operating income consists of the entity's<br>interest in the profit of associates accounted for by the equity method, and gains from disposal of investments in associates.
---	---

SOLAIRE PARTNERS LLC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and2023

B.	Disaggregation of revenue from contracts with customers

In the following table, revenue from contracts with customers is disaggregated by primary geographical market, 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 6)

Revenue from contracts with customers based on the service contract type, the timing of satisfaction of performance obligations for the years ended December 31, 2024 and 2023 are as follows:

	2024
	(In thousands of Korean won)
Major products/service lines
Investment management revenue	₩	1,362,350	1,714,271
Investment revenue		3,976	2,092
Total	₩	1,366,326	1,716,363
Timing of revenue recognition
Over time		1,366,326	1,716,363
Revenue from contracts with customers		1,366,326	1,716,363
Other sources of operating income		57,831	-
External operating income as reported in Note 6	₩	1,424,157	1,716,363

C.	Contract balance

The balance of contract assets and contract liabilities from contracts with customers as of December 31, 2024 and 2023 are as follows:

	December 31, <br><br>2024		December 31, <br><br>2023
	(In thousands of Korean won)
Contract assets (Unbilled revenue)	₩	370,719		110,988

The contract liabilities primarily relate to the advance consideration received from customers, for which revenue is recognized over time. This will be recognized as revenue when the Company satisfies the performance obligations.

No information is provided about remaining performance obligations as of December 31, 2024 or as of December, 31 2023 that have an original expected duration of one year or less, as allowed by IFRS 15.

SOLAIRE PARTNERS LLC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and2023

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)
Other income	₩	86		7

B.	Other expenses

Details of other expenses for the years ended December 31, 2024 and 2023 are as follows:

	2024
	(In thousands of Korean won)
Donations	₩	-	30,000
Losses on disposition of PP&E		-	14,367
Other expenses		-	520
Total	₩	-	44,887

C.	Expenses by nature

Details of classification of expenses by nature for the years ended December 31, 2024 and 2023 are as follows:

	2024
	(In thousands of Korean won)
Losses from investments in associates	₩	63,068	146,232
Investment expenses		20,121	-
Employee benefits		1,208,645	978,553
Depreciation and amortization		55,876	93,126
Commission paid		52,165	68,534
Other expenses		215,414	570,178
Total	₩	1,615,289	1,856,623

SOLAIRE PARTNERS LLC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and2023

9. Finance income and costs

Details of finance income and costs for the years ended December 31, 2024 and 2023 are as follows:

	2024
	(In thousands of Korean Won)
Finance income
Interest income	₩	22,884	21,382
Gains on dispoal of short-term investment securities		76,280	-
Total	₩	99,164	21,382
Finance costs
Interest expenses	₩	22,730	21,684
Losses on valuation of short-term investment securities		-	76,280
Total	₩	22,730	97,964

10. Employee benefits

Details of Net defined benefit liability(asset) recognized as of December 31, 2024 and 2023 are as follows:

	December 31, <br><br>2024
	(In thousands of Korean Won)
Defined benefit asset	₩	(395,354	)	(314,885	)
Defined benefit liability		547,722		314,864
Net defined benefit liability(asset)	₩	152,368		(21	)

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.

SOLAIRE PARTNERS LLC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and2023

A.	Movement in net defined benefit liability(asset)

Details of reconciliation from the opening balances to the closing balances for the net defined benefit liability(asset) and its components for the years ended December 31, 2024 and 2023 is as follows:

	Defined benefit obligation						Fair value of plan assets					Net defined benefit<br> <br>liabilities (asset)
	(In thousands of Korean won)
	2024			2023			2024		2023			2024			2023
Balance at 1 January	₩	314,864			243,736			314,885		246,218			(21	)		(2,482	)
Included in profit or loss
Current service cost		66,863			56,091			-		-			66,863			56,091
Past service credit		-			-			-		-			-			-
Interest		9,427			9,394			9,429		7,943			(2	)		1,451
Subtotal		76,290			65,485			9,429		7,943			66,861			57,542
Included in OCI
Remeasurement loss(gain)
Demographic assumption		(67	)		-			-		-			(67	)		-
Financial assumption		35,899			16,645			-		-			35,899			16,645
Adjustment based on experience		120,736			236			-		-			120,736			236
Return on plan assets excluding interest income		-			-			1,174		2,759			(1,174	)		(2,759	)
Subtotal		156,568			16,881			1,174		2,759			155,394			14,122
Other
Benefits paid		-			(11,238	)		-		(6,131	)		-			(5,107	)
Contribution paid by the employer		-			-			69,866		64,096			(69,866	)		(64,096	)
Subtotal		-			(11,238	)		69,866		57,965			(69,866	)		(69,203	)
Balance at 31 December	₩	547,722			314,864			395,354		314,885			152,368			(21	)

B.	Plan assets

In 2024, the Company contributed Korean Won 69,866 thousand to the defined benefit plans. In 2023, the Company contributed Korean Won 64,096 thousand to the defined benefit plans.

Details of plan assets as of December 31, 2024 and 2023 are as follows:

	December 31, <br><br>2024
	(In thousands of Korean Won)
Cash	₩	295	76
Time deposits		395,059	314,809
Total	₩	395,354	314,885

Most of the plan assets are invested in one-year time deposits.

Company invests in financial instruments with guaranteed principal to manage risks to plan assets, and there are no separate restrictions on refundability.

Company reviews the level of fund reserves every year and has a policy to compensate for the deficit in the plan assets.

The estimated contribution for 2025 is nil.

SOLAIRE PARTNERS LLC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and2023

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		3.3	%		3.9	%
Future salary growth		3.7	%		3.7	%

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 4.6 years.

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 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 <br><br>by 1%			Decreased<br><br> by 1%			Increased<br><br> by 1%			Decreased<br><br> by 1%
	(In thousands of Korean won)
Discount rate	₩	(23,537	)		26,377			(13,013	)		14,572
Future salary growth		26,038			(23,693	)		14,470			(13,169	)

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<br>follows:
	2024		2023
---	---	---	---	---
	(In thousands of Korean won)
Wages and salaries	₩	1,092,393		876,912
Defined benefits plan expenses		66,862		57,542
Social security contributions		49,390		44,099
Total	₩	1,208,645		978,553
ii.	Expenses are recognized in the statements of comprehensive income (loss) as follows:
---	---
	2024		2023
---	---	---	---	---
	(In thousands of Korean won)
Selling, general and administrative expenses	₩	1,208,645		978,553

SOLAIRE PARTNERS LLC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and2023

11. Income taxes

A.	Amounts recognized in profit or loss

	2024
	(In thousands of Korean won)
Current tax expense
Current year	₩	11,018		24,875
Adjustments recognized related to period income taxes (*)		(8,086	)	51,253
		2,932		76,128
Deferred tax expense
Origination and reversal of temporary differences	₩	64,864		(37,977	)
Deferred taxes charged directly to equity		-		1,398
Tax expense on continuing operations	₩	67,796		39,549
(*)	In the normal course of business, the Company and its respective<br>subsidiary are examined by taxation authority. Our management regularly assesses the potential outcomes of these examinations and any<br>future examinations for the current or prior years in determining the adequacy of its liabilities for income taxes.
---	---

The Company 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 statements of operations.

B.	Amounts recognized in OCI

	2024								2023
	Before tax			Tax (expense)<br> <br>benefit		Net of tax			Before tax			Tax (expense)<br> <br>benefit		Net of tax
	(In thousands of Korean won)
Items that will not be reclassified to profit or loss
Remeasurements of defined benefit liability	₩	(155,393	)		-		(155,393	)		(14,122	)		1,398		(12,724	)

SOLAIRE PARTNERS LLC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and2023

C.	Reconciliation of effective tax rate

	2024			2023
	(In thousands of Korean won)
Profit (loss) before income tax	₩	(114,611	)		(261,721	)
Tax at the statutory income tax rate		(11,347	)		(25,910	)
Adjustments:
Expenses not deductible for tax purposes		-			455
Tax credits		-			(13,740	)
Adjustments recognized related to prior period incomes		(8,086	)		38,044
Changes in unrecognized deferred tax assets		86,814			-
Other (differences in tax rate, etc)		415			40,700
Income tax expenses	₩	67,796			39,549
Effective income tax rate (*)		-			-
(*)	The effective tax rate is not calculated as the Company incurred<br>a loss before income taxes for the year ended December 31, 2024 and 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)
Short-term financial instruments	₩	7,552			(7,552	)		-
Long-term investment securities		-			23,455			23,455
Property and equipment including right-of-use assets		(7,632	)		5,213			(2,419	)
Investments in associates		21,677			(21,182	)		495
Lease liabilities		19,906			(13,872	)		6,034
Lease receivables		(12,595	)		8,656			(3,939	)
Defined benefit liabilities		(2	)		15,086			15,084
Other		6,541			332			6,873
Total	₩	35,447			10,136			45,583
Loss carried forward	₩	-			11,815			11,815
Carryover tax credit		29,416			-			29,416
Unrecognized deferred tax income asset (*)		-			(86,814	)		(86,814	)
Deferred tax assets (liabilities)	₩	64,863			(64,863	)		-
(*)	As of December 31, 2024, the Company did not recognize deferred<br>income tax asset for the temporary difference as it is not probable such loss carried forward and carryover tax credit can be utilized<br>in the foreseeable future.
---	---

SOLAIREPARTNERS LLC.

NOTESTO FINANCIAL STATEMENTS

Forthe Years Ended December 31, 2024 and 2023

ii	Movement<br>in deferred tax balances as of December 31, 2023
	Tax effect
---	---	---	---	---	---	---	---	---	---
	Beginning			Increase (decrease)			Ending
	(In thousands of Korean won)
Short-term financial instruments	₩	-			7,552			7,552
Property and equipment including right-of-use assets		(8,731	)		1,099			(7,632	)
Investments in associates		12,453			9,224			21,677
Lease liabilities		8,423			11,483			19,906
Lease receivables		-			(12,595	)		(12,595	)
Defined benefit liabilities		(5,216	)		5,214			(2	)
Other		4,282			2,259			6,541
Total	₩	11,211			24,236			35,447
Loss carried forward	₩	-			-			-
Carryover tax credit		15,676			13,740			29,416
Deferred tax assets (liabilities)	₩	26,887			37,976			64,863
E.	Deferred assets (liabilities)
---	---
i.	The<br> timing of recovery of deferred tax assets and liabilities as of December 31, 2024 and 2023<br> 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	₩	205,426			127,210
- Deferred tax assets to be recovered within 12 months		177,737			6,977
Sub-total		383,163			134,187
Deferred tax liabilities
- Deferred tax liabilities to be recovered after more than 12 months		(120,045	)		(56,730	)
- Deferred tax liabilities to be recovered within 12 months		(176,304	)		(12,594	)
Sub-total		(296,349	)		(69,324	)
Unrecognized deferred tax assets		(86,814	)		-
Deferred tax assets (liabilities), net	₩	-			64,863
ii.	Details<br>of unrecognized as deferred income tax assets as of December 31, 2024 and 2023 is as follows:
---	---
	December 31, 2024		December 31, 2023
---	---	---	---	---
	(In thousands of Korean won)
Unrecognized temporary difference	₩	45,583		-
Loss carried forward		11,815		-
Carryover tax credit		29,416		-
Total	₩	86,814		-

SOLAIREPARTNERS LLC.

NOTESTO FINANCIAL STATEMENTS

Forthe Years Ended December 31, 2024 and 2023

iii.	Details<br>of unused tax loss carryforwards and unused tax credit carryforwards that are not recognized as deferred income tax assets as of December<br>31, 2024, are as follows:
Year of expiration	Unused loss carryforwards		Unused tax credit carryforwards
---	---	---	---	---
	(In thousands of Korean won)
2032	₩	-		15,676
2033		-		13,740
2039		119,346		-
Total	₩	119,346		29,416

12.Other assets

Details of other assets as of December 31, 2024 and 2023 are as follows:

	December 31, 2024
	(In thousands of Korean Won)
Current
Prepaid expenses	₩	97	-

13.Trade and other receivables

Details of trade and other receivables as of December 31, 2024 and 2023 are as follows:

	December 31,<br> 2024
	(In thousands of Korean won)
Trade receivable
Accounts receivable — Trade	₩	52,800	384,675
Other receivables
Non-trade receivables		2,089,948	27,498
Lease receivable(current)		39,784	91,135
Other current financial assets
Leasehold deposit receivables(current)		144,019	-
Other non-current financial assets
Leasehold deposit receivables		-	195,464
Other deposits receivables		300	300
Lease receivable(non-current)		-	36,082
Total	₩	2,326,851	735,154

SOLAIREPARTNERS LLC.

NOTESTO FINANCIAL STATEMENTS

Forthe Years Ended December 31, 2024 and 2023

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	₩	355		342,896

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	₩	27,584		(17,792	)		9,792
Right-of-use assets		102,887		(81,452	)		21,435
Total	₩	130,471		(99,244	)		31,227
	December 31, 2023
---	---	---	---	---	---	---	---
	Book value		Accumulated depreciation			Carrying amount
	(In thousands of Korean won)
Office equipment	₩	24,140		(15,129	)		9,011
Right-of-use assets		270,012		(195,363	)		74,649
Total	₩	294,152		(210,492	)		83,660

Details of the changes in property and equipment for the years ended December 31, 2024 and 2023 are as follows:

	2024
	Office equipment			Right-of-use assets			Total
	(In thousands of Korean won)
Beginning balance	₩	9,011			74,649			83,660
Acquisitions		3,444			-			3,444
Depreciation		(2,663	)		(53,214	)		(55,877	)
Ending balance	₩	9,792			21,435			31,227

SOLAIREPARTNERS LLC.

NOTESTO FINANCIAL STATEMENTS

Forthe Years Ended December 31, 2024 and 2023

	2023
	Office equipment			Right-of-use assets			Total
	(In thousands of Korean won)
Beginning balance	₩	6,869			86,739			93,608
Acquisitions		4,094			308,663			312,757
Depreciation		(1,952	)		(91,174	)		(93,126	)
Lease modification		-			(23,804	)		(23,804	)
Provision of sublease		-			(205,775	)		(205,775	)
Ending balance	₩	9,011			74,649			83,660

The classification of depreciation expenses in the statements of comprehensive income for the years ended December 31, 2024 and 2023 are as follows:

	2024
	(In thousands of Korean won)
Selling, general and administrative expenses	₩	55,877	93,126
B.	Leased property and equipment
---	---

The Company leased the building during the years ended December 31, 2024 and 2023. As of December 31, 2024, Korean Won 21,435 thousand of right-of-use assets was recognized. (December 31, 2023: Korean Won 74,649 thousand of building.).

SOLAIREPARTNERS LLC.

NOTESTO FINANCIAL STATEMENTS

Forthe Years Ended December 31, 2024 and 2023

16.Equity-accounted investees

A.	Acquisition cost of investments in associates

Details of acquisition cost of investments in associates as of December 31, 2024 and 2023 are as follows:

	December 31, 2024					December 31, 2023
	Percentageof<br> <br>*Ownership(1)**			Acquisition Cost		Percentageof<br> <br>*Ownership(1)**			Acquisition Cost
	(In thousands of Korean won)
Investments in associates
SOLAIRE SCALE-UP MOVIE INVESTMENT FUND NO.1 (*2)	₩	-			-		1.04	%		200,000
Solaire Culture Plus Fund (*2)		-			-		1.25	%		300,000
Solaire Main Movie Fund (*2)		-			-		1.00	%		300,000
SOLAIRE SCALE-UP MOVIE INVESTMENT FUND NO.2		1.04	%		88,000		1.04	%		88,000
Total	₩				88,000					888,000
(*1)	Although<br>the Company holds less than 20% of equity interests in investment fund, investments in such investees were classified as investments<br>in associates as the Company can exercise significant influence over financial and operating policy decisions as a general partner.
---	---
(*2)	Due to loss of exercising significant influence account has<br>been reclassified as Long-term investment securities.
---	---
B.	Carrying amount of investments in associates
---	---

Details of carrying amount of investments in associates as of December 31, 2024 and 2023 are as follows:

	December 31, 2024					December 31, 2023
	Percentageof<br> <br>*Ownership(1)**			Carrying amount		Percentageof<br> <br>*Ownership(1)**			Carrying amount
	(In thousands of Korean won)
Investments in associates
SOLAIRE SCALE-UP MOVIE INVESTMENT FUND NO.1 (*2)	₩	-			-		1.04	%		112,425
Solaire Culture Plus Fund (*2)		-			-		1.25	%		208,522
Solaire Main Movie Fund (*2)		-			-		1.00	%		260,944
SOLAIRE SCALE-UP MOVIE INVESTMENT FUND NO.2		1.04	%		83,001		1.04	%		87,152
Total	₩				83,001					669,043
(*1)	Although<br>the Company holds less than 20% of equity interests in investment fund, investments in such investees were classified as investments<br>in associates as the Company can exercise significant influence over financial and operating policy decisions as a general partner.
---	---
(*2)<br>Due to loss of exercising significant influence account has been reclassified as Long-term investment securities.
---

SOLAIREPARTNERS LLC.

NOTESTO FINANCIAL STATEMENTS

Forthe Years Ended December 31, 2024 and 2023

C.	Movement of investments in associates

Details of the changes in investments in associates for the years ended December 31, 2024 are as follows:

	January1,<br> <br>2024
	(In thousands of Korean won)
Investments in associates
SOLAIRE SCALE-UP MOVIE INVESTMENT FUND NO.1 (*)	₩	112,425	(53,368	)	(38,306	)	(20,751	)	-
Solaire Culture Plus Fund (*)		208,522	-		(20,611	)	(187,911	)	-
Solaire Main Movie Fund (*)		260,944	-		16,391		(277,335	)	-
SOLAIRE SCALE-UP MOVIE INVESTMENT FUND NO.2		87,152	-		(4,151	)	-		83,001
Total	₩	669,043	(53,368	)	(46,677	)	(485,997	)	83,001
(*)	Due<br>to loss of exercising significant influence account has been reclassified as Long-term investment securities.
---	---

Details of the changes in investments in associates for the years ended December 31, 2023 are as follows:

	January1,<br> <br>2023
	(In thousands of Korean won)
Investments in associates
SOLAIRE Contents Investment Fund No.8 (*)	₩	35,636	-	(22,155	)	(13,481	)	-
SOLAIRE SCALE-UP MOVIE INVESTMENT FUND NO.1		158,862	-	-		(46,437	)	112,425
Solaire Culture Plus Fund		264,846	-	-		(56,324	)	208,522
Solaire Main Movie Fund		290,086	-	-		(29,142	)	260,944
SOLAIRE SCALE-UP MOVIE INVESTMENT FUND NO.2		-	88,000	-		(848	)	87,152
Total	₩	749,430	88,000	(22,155	)	(146,232	)	669,043
(*)	Investment<br>fund was liquidated during the year ended December 31, 2023.
---	---

SOLAIREPARTNERS LLC.

NOTESTO FINANCIAL STATEMENTS

Forthe Years Ended December 31, 2024 and 2023

D.Summary of financial information of associates

Details of the summary of financial information of associates for the years ended December 31, 2024 and 2023 are as follows:

	December 31, 2024
	Current<br> <br>assets		Investment asset		Total<br> <br>assets		Current<br> <br>liabilities		Total<br> <br>liabilities
	(In thousands of Korean won)
Investments in associates
SOLAIRE SCALE-UP MOVIE INVESTMENT FUND NO.2		2,517,418		5,711,104		8,228,522		260,416		260,416
	2024
---	---	---	---	---	---	---	---	---
	Investment income		Profit(Loss)<br> <br>forthe year			TotalComprehensive<br> <br>income
	(In thousands of Korean won)
Investments in associates
SOLAIRE SCALE-UP MOVIE INVESTMENT FUND NO.2		972,269		(398,508	)		(398,508	)
	December 31, 2023
---	---	---	---	---	---	---	---	---	---	---
	Current<br> <br>assets		Investment asset		Total<br> <br>assets		Current<br> <br>liabilities		Total<br> <br>liabilities
	(In thousands of Korean won)
Investments in associates
SOLAIRE SCALE-UP MOVIE INVESTMENT FUND NO.1	₩	3,149,532		7,767,287		10,916,819		67,819		67,819
Solaire Culture Plus Fund		2,270,036		14,561,389		16,831,425		149,698		149,698
Solaire Main Movie Fund		1,084,379		25,204,198		26,288,577		194,154		194,154
SOLAIRE SCALE-UP MOVIE INVESTMENT FUND NO.2		4,644,693		3,800,000		8,444,693		78,079		78,079
Total	₩	11,148,640		51,332,874		62,481,514		489,750		489,750
	2023
---	---	---	---	---	---	---	---	---
	Investment income		Profit(Loss)<br> <br>forthe year			TotalComprehensive<br> <br>income
	(In thousands of Korean won)
Investments in associates
SOLAIRE SCALE-UP MOVIE INVESTMENT FUND NO.1	₩	350,251		(4,481,096	)		(4,481,096	)
Solaire Culture Plus Fund		40,872		(4,505,988	)		(4,505,988	)
Solaire Main Movie Fund		11,332		(2,914,190	)		(2,914,190	)
SOLAIRE SCALE-UP MOVIE INVESTMENT FUND NO.2		12,202		(81,386	)		(81,386	)
Total	₩	414,657		(11,982,660	)		(11,982,660	)

SOLAIREPARTNERS LLC.

NOTESTO FINANCIAL STATEMENTS

Forthe 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,<br> 2024		December 31,<br> 2023
	(In thousands of Korean won)
Financial assets at amortized cost
Cash and cash equivalents	₩	355		342,896
Accounts receivable — trade, net		52,800		384,675
Accounts receivable — other, net		2,129,732		118,633
Other current financial assets		144,019		-
Other non-current financial assets		300		231,846
Financial assets at fair value through profit or loss
Short-term investment securities		-		1,664,720
Long-term investment securities		712,715		12,180
Total	₩	3,039,921		2,754,950
	December 31,<br> 2024		December 31,<br> 2023
---	---	---	---	---
	(In thousands of Korean won)
Financial liabilities at amortized cost
Trade and other payables (*)	₩	1,747,396		1,784,365
Other current financial liabilities		96,060		-
Short-term borrowings		207,336		-
Other non-current financial liabilities		-		87,123
Total	₩	2,050,792		1,871,488
(*)	Trade<br>and other payables that are not financial liabilities are excluded.
---	---

SOLAIREPARTNERS LLC.

NOTESTO FINANCIAL STATEMENTS

Forthe Years Ended December 31, 2024 and 2023

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,<br> 2024
	(In thousands of Korean won)
Equity securities – at FVTPL	₩	510,317	1,667,720
Project investment		202,398	9,180
Total	₩	712,715	1,676,900
B.	Equity Securities designated as at FVTPL
---	---

The Company designated the investments shown below as equity securities at FVTPL because these equity securities represent investment that the Company intends to sell for strategic purposes.

	Fairvalue at<br> <br>December31, 2024
	(In thousands of Korean won)
Equity Securities (unlisted stocks)	₩	510,317	1,667,720
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 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			Total
	(In thousands of Korean won)
Interest income	₩	22,884		-			-			22,884
Interest expense		-		-			(9,261	)		(9,261	)
Gain or loss on disposal of investment securities		-		76,280			-			76,280
Investment revenue		-		45,417			-			45,417
Investment expense		-		(20,121	)		-			(20,121	)
Total	₩	22,884		101,576			(9,261	)		115,199

SOLAIREPARTNERS LLC.

NOTESTO FINANCIAL STATEMENTS

Forthe Years Ended December 31, 2024 and 2023

	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	₩	21,382		-			-			21,382
Interest expense		-		-			(4,825	)		(4,825	)
Gain or loss on valuation of investment securities		-		(76,280	)		-			(76,280	)
Total	₩	21,382		(76,280	)		(4,825	)		(59,723	)

18.Capital and reserves

A.	Share Capital

Details of share capital as of December 31, 2024 and 2023 are as follows:

	December 31,<br> 2024		December 31,<br> 2023
	(In thousands of Korean won)
Shares	₩	850,000		850,000
B.	Share Premium
---	---
	December 31,<br> 2024		December 31,<br> 2023
---	---	---	---	---
	(In thousands of Korean won)
Share Premium(*)	₩	421,254		421,254
*()**	On<br>January 2, 2023, Choi, Pyeung ho, the Company's major shareholder, transferred the Company's shares to the employees for less than fair<br>value.
---	---
C.	Other reserves
---	---
	December 31,<br> 2024			December 31,<br> 2023
---	---	---	---	---	---	---
	(In thousands of Korean won)
Remeasurements of defined benefit liability	₩	(201,030	)		(45,637	)

SOLAIREPARTNERS LLC.

NOTESTO FINANCIAL STATEMENTS

Forthe Years Ended December 31, 2024 and 2023

19.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 liabilities (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 are as follows.

	December 31,<br> 2024
	(In thousands of Korean won)
Total liabilities	₩	2,549,387		2,370,145
Less: Cash and cash equivalents		(355	)	(342,896	)
Net debt		2,549,032		2,027,249
Total equity		975,579		1,313,379
Net debt to total equity ratio		261.28	%	154.35	%

SOLAIREPARTNERS LLC.

NOTESTO FINANCIAL STATEMENTS

Forthe Years Ended December 31, 2024 and 2023

20.Share-based payment arrangements

A.	Measurement of fair values

The fair value of the employee share options has been measured using a discounted cash flow method.

The inputs used in the measurement of the fair values at grant date are as follows:

Share option plan (Either of equity-settled or cash-settled)		December 31, 2023
		(In thousands of Korean won)
Estimated fair value of Share (in aggregate)	₩		455,254
Transfer Price			34,000
Fair Value of options	₩		421,254
Risk- free interest rate (based on government bonds)			3.74	%
Discount rate			15.80	%

21.Borrowings

Borrowings as of December 31, 2024 and 2023 are as follows:

	December 31,<br> 2024
	(In thousands of Korean won)
Current Liabilities
Short-term borrowings	₩	207,336	-
Lease liabilities (*)		60,945	145,798
Subtotal		268,281	145,798
Non-Current liabilities
Lease liabilities (*)		-	55,275
Total	₩	268,281	201,073
(*)	The<br>interest rate related to lease liabilities reflects the incremental borrowing rate based on the Company's credit. The amount of interest<br>expense related to lease liabilities incurred during 2024 is Korean Won 13,293 thousand (2023: Korean Won 16,757 thousand). Additionally,<br>the amount of low-value assets lease payments not included in the measurement of lease liabilities during 2024 is Korean Won 2,327 thousand<br>(2023: Korean Won 3,034 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
								(In thousands of Korean won)
	Currency		Nominal<br> <br>interestrate			Maturity		Limit Amount		Exercise Amount		Limit Amount		Exercise Amount
Unsecured borrowings		KRW		6.85	%		17-Jul-25		300,000		207,336		-		-

The company is provided a joint and several guarantee of Korean Won 330,000 thousand by the CEO of the Company as of December 31, 2024.

SOLAIREPARTNERS LLC.

NOTESTO FINANCIAL STATEMENTS

Forthe Years Ended December 31, 2024 and 2023

22.Trade and other payables

Trade and other payables as of December 31, 2024 and 2023 are as follows:

	December 31,<br> 2024
	(In thousands of Korean won)
Other payable	₩	1,747,396	1,784,364
Accrued expenses		54,322	46,484
Total	₩	1,801,718	1,830,848

23.Provisions

Provisions for the years ended December 31, 2024 and 2023 are as follows:

	2024
	(In thousands of Korean Won)
Site restoration
Beginning of the year	₩	12,989	-
Provisions made during the year		-	12,888
Interest expense		178	101
Ending of the year	₩	13,167	12,989

The provision for building restoration relates mainly to buildings leased during 2023. The provision has been estimated based on historical data associated with similar buildings.

SOLAIREPARTNERS LLC.

NOTESTO FINANCIAL STATEMENTS

Forthe Years Ended December 31, 2024 and 2023

24.Financial Instruments – Fair values and risk management

A.	Accounting classifications and fair values

Carrying amounts of financial instruments by category as of December 31, 2024 are as follows:

	Fair value
	(In thousands of Korean won)
Financial assets at fair value		****	****	****	****	****
Long-term investment securities	₩	510,317	-	-	510,317	510,317
Project investment		202,398	-	-	202,398	202,398
Total	₩	712,715	-	-	712,715	712,715

Carrying amounts of financial instruments by category as of December 31, 2023 are as follows:

	Fair value
	(In thousands of Korean won)
Financial assets at fair value
Short-term investment securities	₩	1,664,720	-	-	1,664,720	1,664,720
Long-term investment securities		3,000	-	-	3,000	3,000
Project investment		9,180	-	-	9,180	9,180
Total	₩	1,676,900	-	-	1,676,900	1,676,900

Details of the changes in financial instruments for the years ended December 31, 2024 and 2023 are as follows:

	2024
	(In thousands of Korean won)
Beginning balance	₩	1,676,900		38,875
Acquisitions(*1)		200,000		1,741,000
Changing Account Classification(*2)		485,997		-
Disposals(*3)		(1,671,502	)	(26,695	)
Valuation(*4)		21,320		(76,280	)
Ending balance	₩	712,715		1,676,900
(*1)	On<br>March 23, 2023, the Company acquired 1,000 shares of Play Company Co., Ltd., which represents 1% of total shares issued. Acquisition<br>price per share is Korean Won 1,741 thousand. On April 23, 2024, the Company invest Korean Won 200 thousand for the purpose of planning<br>and developing a movie.
---	---
(*2)	Due to loss of exercising significant influence account has been reclassified as Long-term investment securities.
---	---
(*3)	On January 31, 2024, the Company disposed of all shares of Play Company Co., Ltd..
---	---
(*4)	Unlisted stocks were revalued on December 31, 2024 and 2023.
---	---

SOLAIREPARTNERS LLC.

NOTESTO FINANCIAL STATEMENTS

Forthe 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<br> 1: quoted prices (unadjusted) in active markets for identical asset or liability;
●	Level<br> 2: all inputs other than quoted prices included in Level 1 that are observable (either directly<br> that is, prices, or indirectly that is, derived from prices) for the asset or liability;
---	---
●	Level<br> 3: unobservable inputs for the asset or liability.
---	---

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<br> price or dealer price of a similar financial instrument
●	The<br> fair value of derivative instruments is determined by discounting the amount to present value<br> using the leading exchange rate as of the end of the reporting period
---	---
C.	Financial risk management
---	---

The Company’s operating activities expose itself to a variety of financial risks: 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<br> 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.

SOLAIREPARTNERS LLC.

NOTESTO FINANCIAL STATEMENTS

Forthe 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,<br> 2024
	(In thousands of Korean won)
Cash and cash equivalents	₩	355	342,896
Other current financial assets		144,019	-
Other non-current financial assets		300	231,846
Accounts receivable — trade, net		52,800	384,675
Accounts receivable — other, net		2,129,732	118,633
Contract assets		370,720	110,988
Total	₩	2,697,926	1,189,038

Cash and cash equivalents are deposited in financial institutions with strong credit rating. Accounts receivables are mainly due from investment funds, which management believes such customers are of low credit risk.

ii.	Liquidity<br> 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. All assets and liabilities on the balance sheet and off-balance sheet transactions are subject to liquidity risk management.

Financial liabilities and off-balance sheet transactions 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<br> <br>Amount		Lessthan<br> <br>3months		3months<br> <br>~1 year		1~2 years		2~5 years		Morethan<br> <br>5years		Total
	(In thousands of Korean won)
Non-derivative financial liabilities
Other payables(*1)	₩	1,747,396		6,396		1,741,000		-		-		-		1,747,396
Other current financial liabilities		96,060		-		100,050		-		-		-		100,050
Short-term borrowings		207,336		3,502		211,539		-		-		-		215,041
Lease liabilities		60,945		37,200		25,258		-		-		-		62,458
Off-balance sheet items
Commitments(*2)		-		-		-		-		132,000		-		132,000
Total	₩	2,111,737		47,098		2,077,847		-		132,000		-		2,256,945
(*1)	Payables<br>and accrued expense that are not financial liabilities are excluded.
---	---
(*2)	The Company classifies the amount, which is due to maintain the status of the member of investment fund in accordance with the agreement,<br>based on its earliest contractual maturity. (Note 26)
---	---

SOLAIREPARTNERS LLC.

NOTESTO FINANCIAL STATEMENTS

Forthe Years Ended December 31, 2024 and 2023

Financial liabilities and off-balance sheet transactions 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<br> <br><br> <br>Amount		Less than<br> <br><br> <br>3 months		3 months<br> <br><br> <br>~ 1 year		1~2 years		2~5 years		More than<br> <br><br> <br>5 years		Total
	(In thousands of Korean won)
Non-derivative financial liabilities
Other payables(*1)	₩	1,784,365		43,365		1,741,000		-		-		-		1,784,365
Other non-current financial liabilities		87,123		-		-		100,050		-		-		100,050
Lease liabilities		201,073		41,820		111,600		62,458		-		-		215,878
Off-balance sheet items
Commitments(*2)		-		-		-		-		132,000		-		132,000
Total	₩	2,072,561		85,185		1,852,600		162,508		132,000		-		2,232,293
(*1)	Payables and accrued expense that are not financial liabilities are excluded.
---	---
(*2)	The<br>Company classifies the amount, which is due to maintain the status of the member of investment fund in accordance with the agreement,<br>based on its earliest contractual maturity. (Note 26)
---	---

25.Leases

A.	Leases as lessee

The Company leases building. The leases typically run for a period of 1~3 years, with an option to renew or terminate the lease after that date. The Company also leases printer with contract terms of one year. These leases is 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<br> 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 statements of financial position as of December 31, 2024 and 2023 are as follows:

	December 31,<br> 2024
	(In thousands of Korean won)
Right-of-use assets (Building)
Acquisition price	₩	102,887		270,012
Accumulated depreciation		(81,452	)	(195,363	)
Book amount	₩	21,435		74,649

SOLAIREPARTNERS LLC.

NOTESTO FINANCIAL STATEMENTS

Forthe 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
	(In thousands of Korean won)
Balance as of January 1, 2024	₩	74,649
Depreciation		(53,214	)
Balance as of December 31, 2024	₩	21,435
	2023
---	---	---	---
	Building
	(In thousands of Korean won)
Balance as of January 1, 2023	₩	86,739
Depreciation		(91,174	)
Acquisitions		308,663
Lease modification		(23,804	)
Provision of sublease		(205,775	)
Balance as of December 31, 2023	₩	74,649
ii.	Amounts<br> recognized in profit or loss
---	---

Amounts recognized in profit or loss for the years ended December 31, 2024 and 2023 are as follows:

	2024
	(In thousands of Korean won)
Interest expense relating to lease liabilities (included in finance cost)	₩	13,293	16,757
Expense relating to leases of low-value assets excluding short-term leases		2,327	3,034
iii.	Amounts<br> 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
	(In thousands of Korean won)
Total cash outflows of leases	₩	155,747	150,464
B.	Leases as lessor
---	---
i.	Finance<br> lease
---	---

During the year ended December 31, 2024 the Company has sub-leased a building that has been presented as a right-of-use asset.

During the year ended December 31, 2024 the Company did not dispose of any right-of-use assets and therefore recognized no losses (2023 : Korean Won 14,367 thousand) on disposition of right-of-use asset.

During the year ended December 31, 2024 the Company recognized interest income on lease receivables Korean Won 8,615 thousand (2023 : Korean Won 8,826 thousand).

SOLAIREPARTNERS LLC.

NOTESTO FINANCIAL STATEMENTS

Forthe Years Ended December 31, 2024 and 2023

26.Commitments

A.	Amount of investment agreement The outstanding balances of contributions according to the investment agreements as of<br> December 31, 2024 and 2023 are as follows:
December 31, 2024	Total amount of investment agreement		Cumulative<br> <br>investment		Outstanding<br> <br>Balance
---	---	---	---	---	---	---
	(In thousands of Korean won)
SOLAIRE<br> SCALE-UP MOVIE INVESTMENT FUND NO.1	₩	200,000		200,000		-
SOLAIRE<br> 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
December 31, 2023	Total amount of investment agreement		Cumulative<br> <br>investment		Outstanding<br> <br>Balance
---	---	---	---	---	---	---
	(In thousands of Korean won)
SOLAIRE<br> SCALE-UP MOVIE INVESTMENT FUND NO.1	₩	200,000		200,000		-
SOLAIRE<br> 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
B.	Other commitments
---	---

On September 14, 2023, an amendment was made to the equity interest exchange agreement, originally entered into on March 31, 2023, between the CEO, other shareholders of the Company, and 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 on the date designated by K Enter Holdings. Upon the effective date, the CEO and other shareholders of the Company will exchange 95.1% of its shares with the equity interest of K Enter Holdings. Following the equity interest exchange transaction, the Company is expected to be a subsidiary of K Enter Holdings.

SOLAIREPARTNERS LLC.

NOTESTO FINANCIAL STATEMENTS

Forthe Years Ended December 31, 2024 and 2023

On August 9, 2024, the Company provided a guarantee for an investment made by Industrial Bank of Korea intended for movie production <pupil of the eye>. The investee for this investment is SPC(Special Purpose Company), which specializes in the cultural industry and is responsible for the production, and the investment amount is KRW 1.6 billion.

C.	Borrowing commitments

borrowing commitments the company has entered into with financial institutions as of December 31, 2024 are as follows:

Financial institutions	Categories		Credit limit	Borrowings amount
			(In thousands of Korean won)
KB Kookmin Bank	overdraft loan	₩	300,000		207,336

The company is provided a joint and several guarantee of Korean Won 330,000 thousand by the CEO of the Company as of December 31, 2024.

27.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
	(In thousands of Korean won)
Depreciation	₩	55,877		93,126
Interest expenses		22,730		21,684
Interest income		(22,884	)	(21,382	)
Severance Benefits		66,862		57,542
Share-based payments expenses		-		421,254
Tax expenses		67,796		39,549
Gains on valuation of securities under equity method		(16,391	)	-
Gains on disposal of securities under equity method		(76,280	)	-
Losses on valuation of short-term financial instruments		-		76,280
Losses on valuation of securities under equity method		63,068		146,232
Losses on disposition of PP&E		-		14,367
Investment revenue		(41,441	)	-
Investment expenses		20,121		-
Total	₩	139,458		848,652

SOLAIREPARTNERS LLC.

NOTESTO FINANCIAL STATEMENTS

Forthe 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
	(In thousands of Korean won)
Other current liabilities	₩	(3,092	)	(23,218	)
Other current assets		(97	)	520
Accounts receivable - other		(273,426	)	(29,139	)
Trade and other payables		(29,131	)	(33,673	)
Accounts receivable-trade		331,875		50,858
Liabilities due to payment of benefits		-		(5,107	)
Net defined benefit asset		(69,866	)	(64,096	)
Contract assets		(259,732	)	(110,988	)
Decrease(Increase) in Project investment		(193,218	)	26,695
Decrease in securities under equity method		53,367		22,154
Increase in securities under equity method		-		(88,000	)
Total	₩	(443,320	)	(253,994	)

Significant non-cash transactions for the years ended December 31, 2024 and 2023 are as follows:

	2024
	(In thousands of Korean won)
Increase in Lease liabilities (new contract)	₩	-	269,160
Decrease in Lease liabilities (lease modification)		-	(22,498	)
Increase in Short-term investment securities		-	1,741,000
Increase in Long-term investment securities (Reclassification)		485,997	-
Increase in Lease receivable		-	173,656
Decrease in Short-term investment securities		1,741,000	-

SOLAIREPARTNERS LLC.

NOTESTO FINANCIAL STATEMENTS

Forthe 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:

	Short term borrowings
Balance at 1 January 2023	₩	-		-	-		61,718		23,366		85,084
Changes from financing cash flows
Payment of lease liabilities	₩	-		-	-		(130,674	)	-		(130,674	)
Collection of rent deposit		-		-	100,050		-		-		-
Reclassification		-		-	-		237,252		(237,252	)	-
Total	₩	-		-	100,050		106,578		(237,252	)	(30,624	)
Other changes
New leases		-		-	-		-		269,160		269,160
Lease modification		-		-	-		(22,498	)	-		(22,498	)
Present value discount		-		-	(17,752	)	-		-		(17,752	)
Interest expense		-		-	4,825		16,757		-		21,582
Interest paid		-		-	-		(16,757	)	-		(16,757	)
Total	₩	-		-	(12,927	)	(22,498	)	269,160		233,735
Balance at 31 December 2023	₩	-		-	87,123		145,798		55,274		288,195
Balance at 1 January 2024		-		-	87,123		145,798		55,274		288,195
Changes from financing cash flows
Payment of lease liabilities	₩	-		-	-		(140,127	)	-		(140,127	)
Proceeds from borrowings		207,336		-	-		-		-		207,336
Reclassification		-		87,123	(87,123	)	55,274		(55,274	)	-
Total	₩	207,336		87,123	(87,123	)	(84,853	)	(55,274	)	67,209
Other changes
Interest expense		323		8,937	-		13,293		-		22,553
Interest paid		(323	)	-	-		(13,293	)	-		(13,616	)
Total	₩	-		8,937	-		-		-		8,937
Balance at 31 December 2024	₩	207,336		96,060	-		60,945		-		364,341

SOLAIREPARTNERS LLC.

NOTESTO FINANCIAL STATEMENTS

Forthe Years Ended December 31, 2024 and 2023

28.Related parties

A.	List of related parties

List of related parties as of December 31, 2024 and 2023 are as follows:

Relationship	December 31,<br><br> 2024	December 31,<br><br> 2023
Key<br> management personnel	Choi,<br> Pyeung ho	Choi,<br> Pyeung ho
Key<br> management personnel	Lee,<br> Young Jae	Lee,<br> Young Jae
Personnel<br> with significant<br><br> <br><br><br> <br>influence<br> over the Company	Song,<br> Hyo Jeong	Song,<br> Hyo Jeong
Entities<br> with significant<br><br> <br><br><br> <br>influence<br> over the Company	CY<br> Holdings Co., Ltd	CY<br> Holdings Co., Ltd
Personnel<br> with significant<br><br> <br><br><br> <br>influence<br> over the Company	Park,<br> Su Kyung	Park,<br> Su Kyung
Personnel<br> with<br><br> significant influence<br><br> over the Company	Hyun,<br> Na Young	Hyun,<br> Na Young
Personnel<br> with<br><br> significant influence<br><br> over the Company	Lee,<br> Myung Hyun	Lee,<br> Myung Hyun
Personnel<br> with<br><br> significant influence<br><br> over the Company	Kim,<br> Min Soo	Kim,<br> Min Soo
Other<br> related parties	K<br> Enter Holdings INC	K<br> Enter Holdings INC
Associates(*1)	-	SOLAIRE<br> SCALE-UP MOVIE INVESTMENT FUND NO.1
Associates	SOLAIRE<br><br> SCALE-UP MOVIE INVESTMENT FUND NO.2	SOLAIRE<br><br> SCALE-UP MOVIE INVESTMENT FUND NO.2
Associates(*1)	-	Solaire<br> Culture Plus Fund
Associates(*1)	-	Solaire<br> Main Movie Fund
Other<br> related parties	Bluefire<br> Studio Co., Ltd	Bluefire<br> Studio Co., Ltd
Other<br> related parties(*2)	-	Secret:<br> Untold Melody Limited Company Specializing in The Cultural Industry
Other<br> related parties(*2)	-	Next<br> Sohee Limited Company Specializing in The Cultural Industry
Other<br> related parties(*2)	-	Falling<br> starlight Limited Company Specializing in The Cultural Industry
(*1)	Investments<br>in associates were excluded from related parties due to a change in account classification during the year ended December 31, 2024.
---	---
(*2)	Due to the Company's loss of significant influence over the Solaire Main Movie Fund, the Limited Company Specializing in the Cultural<br>Industry—previously controlled by the Solaire Main Movie Fund—has been excluded from the scope of related parties.
---	---

SOLAIREPARTNERS LLC.

NOTESTO FINANCIAL STATEMENTS

Forthe Years Ended December 31, 2024 and 2023

B.Transactions with related parties

Details of transaction with related parties for the years ended December 31, 2024 and 2023 are as follows:

		2024				2023
Related party	Name of entity	Revenues		Purchases		Revenues		Purchases
		(In thousands of Korean won)
Key management <br> <br>personnel	Lee, Young Jae	₩	3		-		67		-
Personnel with<br> significant influence<br> over the Company	Song, Hyo Jeong		2		-		48		-
Other related parties(*1)	K Enter Holdings INC		84,895		8,938		8,826		4,825
Associates(*2)	SOLAIRE Contents<br> Investment Fund No.8		-		-		-		13,481
Associates(*3)	SOLAIRE SCALE-UP MOVIE INVESTMENT FUND NO.1		84,279		38,306		302,276		46,436
Associates	SOLAIRE SCALE-UP MOVIE INVESTMENT FUND NO.2		395,066		4,151		89,858		848
Associates(*3)	Solaire Culture Plus Fund		272,427		20,611		573,678		56,325
Associates(*3)	Solaire Main Movie Fund		540,815		-		748,459		29,142
Total		₩	1,377,487		72,006		1,723,212		151,057
(*1)	A<br>gain of 76,280 thousand won from the disposal of Play Company Co., Ltd shares was included.
---	---
(*2)	Amounts<br>before the liquidation during the year ended December 31, 2023.
---	---
(*3)	Due<br>to loss of exercising significant influence, account has been reclassified as Long-term investment securities, the amount represents<br>the balance prior to the loss of significant influence.
---	---

SOLAIREPARTNERS LLC.

NOTESTO FINANCIAL STATEMENTS

Forthe 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 and 2023 are as follows:

		December 31,<br> 2024						December 31,<br> 2023
Related party	Name of entity	Receivable		Lease receivable		Payables		Receivable		Lease<br> <br>receivable		Payables
		(In thousands of Korean won)
Key management <br>personnel	Lee, Young Jae	₩	-		-		180		-		-		1,949
Personnel with<br> significant influence<br> over the Company	Song, Hyo Jeong		-		-		128		-		-		1,392
Other related <br>parties	K Enter Holdings INC		1,814,948		39,784		96,060		27,498		127,217		87,123
Associates	SOLAIRE SCALE-UP <br> <br>MOVIE INVESTMENT FUND NO.1		-		-		-		87,238		-		24,005
Associates	SOLAIRE SCALE-UP <br> <br>MOVIE INVESTMENT FUND NO.2		236,666		-		-		76,550		-		-
Associates	Solaire Culture Plus Fund		-		-		-		144,375		-		-
Associates	Solaire Main Movie Fund		-		-		-		187,500		-		-
Total		₩	2,051,614		39,784		96,368		523,161		127,217		114,469

SOLAIREPARTNERS LLC.

NOTESTO FINANCIAL STATEMENTS

Forthe Years Ended December 31, 2024 and 2023

D.	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 of entity	Repayment		Borrowing		Repayment		Borrowing
		(In thousands of Korean won)
Key management personnel	Choi, Pyeung ho	₩	14,000		14,000		-		-
E.	Capital contribution transactions with related parties
---	---

Details of significant capital contribution transactions with related parties for the years ended December 31, 2024 and 2023 are as follows:

		2024				2023
Related party	Name of entity	Additional<br> <br>investment		Recoveryof<br> <br>investment		Additional<br> <br>investment		Recoveryof<br> <br>investment
		(In thousands of Korean won)
Associates	SOLAIRE Contents<br> Investment Fund No.8		-		-		-		22,155
Associates	SOLAIRE SCALE-UP <br> <br>MOVIE INVESTMENT FUND NO.1		-		53,368		-		-
Associates	SOLAIRE SCALE-UP <br> <br>MOVIE INVESTMENT FUND NO.2		-		-		88,000		-
Total		₩	-		53,368		88,000		22,155
F.	Key management personnel compensation
---	---

The compensation for the key management personnel for the years ended December 31, 2024 and 2023 are as follows:

	2024
	(In thousands of Korean won)
Short-term employee benefits	₩	736,324	552,935
Defined benefits plan expenses		62,675	41,084

Compensation of the Company’s key management personnel includes salaries, non-cash benefits and contributions to a post-employment defined benefit plan.

G.	Commitments with related parties

The Company is provided a joint and several guarantee of Korean Won 330,000 thousand by the CEO of the Company as of December 31, 2024.

SOLAIREPARTNERS LLC.

NOTESTO FINANCIAL STATEMENTS

Forthe Years Ended December 31, 2024 and 2023

29.Subsequent Events

On January 3, 2025, K Enter Holdings Inc. completed the acquisition of a controlling interest in six Korean entities, including Solaire Partners LLC., through a share exchange. Upon the approval, the CEO and other shareholders of the Company exchanged 95.0% of its 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.

Exhibit15.17

APEITDA CO., LTD.

STATEMENTS OF FINANCIAL POSITION

As of December 31, 2024 and 2023

	Note		December 31,<br> 2024
			(In thousands of Korean won)
Assets
Cash and cash equivalents	14,16,18,21	₩		344,537	659,606
Accounts receivable — trade, net	13,16,21			18,449	-
Accounts receivable — other, net	13,16,21			-	30
Other current assets	12			2,279	2,164
Value added tax receivable				-	384
Current tax assets				-	8,289
Total current assets				365,265	670,473
Long-term investment securities	16,21			71,941	93,219
Property, plant and equipment including right-of-use assets	15,22			220,843	301,006
Other non-current financial assets	16,21			431,827	385,494
- Related parties	24			431,827	385,494
- Non-related parties				-	-
Other non-current non-financial assets	12			-	30,000
Deferred tax assets	11			-	15,771
Total non-current assets				724,611	825,490
Total assets		₩		1,089,876	1,495,963
Liabilities
Trade and other payables	16,20,21	₩		19,112	19,119
Other current non-financial liabilities				116,588	133,700
- Related parties	24			115,000	128,905
- Non-related parties				1,588	4,795
Value added tax payable				1,267	-
Current portion of long-term borrowings, net	16,19,21,23			-	100,000
- Related parties	24			-	100,000
- Non-related parties				-	-
Current tax liabilities				5,002	-
Total current liabilities				141,969	252,819
Defined benefit liabilities	10			121,520	139,459
Total non-current liabilities				121,520	139,459
Total liabilities		₩		263,489	392,278

The accompanying notes are an integral part of these financial statements.

APEITDA CO., LTD.

STATEMENTS OF FINANCIAL POSITION

As of December 31, 2024 and 2023

	Note		December 31,<br> 2024
			(In thousands of Korean won)
Equity
Share capital	17	₩		10,000		10,000
Other reserves	17			(51,945	)	(81,522	)
Retained earnings				868,332		1,175,207
Total equity				826,387		1,103,685
Total liabilities and equity		₩		1,089,876		1,495,963

The accompanying notes are an integral part of these financial statements.

APEITDA CO., LTD.

STATEMENTS OF COMPREHENSIVE INCOME

For the Years Ended December 31, 2024 and 2023

	Note		2024
			(In thousands of Korean won except per share data)
Revenues
Contents revenue	6,7	₩		17,703		90,000
Cost of revenues	8			-		(26,473	)
Gross profit				17,703		63,527
Selling, general and administrative expenses	8			(315,021	)	(320,482	)
Other income	8			2		256
Other expenses	8			(30,359	)	(526	)
Operating loss				(327,675	)	(257,225	)
Finance income	9,16			52,319		87,852
- Related parties	24			46,334		41,362
- Non-related parties				5,985		46,490
Finance costs	9,16			(23,943	)	(1,269	)
Loss before income tax				(299,299	)	(170,642	)
Income tax benefit (expenses)	11			(7,576	)	14,612
Loss for the year		₩		(306,875	)	(156,030	)
Other comprehensive income (loss)
Items that will not be reclassified to income or loss:
Remeasurement of defined benefit liabilities	10			29,577		(40,126	)
Total comprehensive loss for the year		₩		(277,298	)	(196,156	)

The accompanying notes are an integral part of these financial statements.

APEITDA CO., LTD.

STATEMENTS OF CHANGES IN EQUITY

For the Years Ended December 31, 2024 and 2023

		Share capital
		(In thousands of Korean won)
Balance at January 1, 2023	₩		10,000	(41,396	)	1,331,237		1,299,841
Total comprehensive income (loss) for the year
Loss for the year			-	-		(156,030	)	(156,030	)
Remeasurement of defined benefit liabilities			-	(40,126	)	-		(40,126	)
Total comprehensive loss for the year			-	(40,126	)	(156,030	)	(196,156	)
Balance at December 31, 2023	₩		10,000	(81,522	)	1,175,207		1,103,685
Balance at January 1, 2024	₩		10,000	(81,522	)	1,175,207		1,103,685
Total comprehensive income (loss) for the year
Loss for the year			-	-		(306,875	)	(306,875	)
Remeasurement of defined benefit liabilities			-	29,577		-		29,577
Total comprehensive income (loss) for the year			-	29,577		(306,875	)	(277,298	)
Balance at December 31, 2024	₩		10,000	(51,945	)	868,332		826,387

The accompanying notes are an integral part of these financial statements.

APEITDA CO., LTD.

STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 2024 and 2023

	Note		2024
			(In thousands of Korean won)
Cash flows from operating activities	23
Loss for the year		₩		(306,875	)	(156,030	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities				75,782		260,798
Interest received				552		24,616
Income taxes refunded (paid)				12,528		(289,353	)
Dividend received				1,256		1,121
Net cash outflow from operating activities		₩		(216,757	)	(158,848	)
Cash flows from investing activities
Disposal of short-term financial instruments		₩		-		500,000
Purchase of long-term investment securities				(66,933	)	(40,944	)
Disposal of long-term investment securities				68,193		38,989
Purchase of property and equipment				-		(70,400	)
Net cash inflow in investing activities		₩		1,260		427,645
Cash flows from financing activities	23
Repayment of long-term borrowings		₩		(100,000	)	(82,900	)
- Related parties				(100,000	)	(82,900	)
- Non-related parties				-		-
Net cash outflow in financing activities		₩		(100,000	)	(82,900	)
Effect of exchange rate changes on cash and cash equivalents				428		13
Net increase (decrease) in cash and cash equivalents				(315,497	)	185,897
Cash and cash equivalents at beginning of the year	14			659,606		473,696
Cash and cash equivalents at end of the year	14	₩		344,537		659,606

The accompanying notes are an integral part of these financial statements.

APEITDA CO., LTD.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

1. Reporting entity

The Company

Apeitda Co., Ltd. (“the Company”) was incorporated in January 2013 and the Company’s registered office is at 156, Ohyeon-ro, Anigbogu, Seoul, Korea. The Company is primarily providing the media production service that consists of planning, producing, and selling the theatrical films and television programs. The Company is specialized film production company with expertise in action and thriller genres.

The 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 (%)
Jung, Byung Gil		9,000		90	%		9,000		90	%
Seo, Sun Yeo		1,000		10	%		1,000		10	%
Total		10,000		100	%		10,000		100	%

2. Basis of Accounting

Details of the Company’s accounting policies, including changes thereto, are included in Note 5.

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 bases
Financial instruments measured at fair value through profit or loss (“FVTPL”)	Fair value
Defined benefit liabilities	Present value

APEITDA CO., LTD.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

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

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 7(B): revenue recognition: whether revenue from providing service is recognized over time or at a point in time; and

Note 22(A): lease term: whether the Company is reasonably certain to exercise extension options.

B.	Assumptions and estimation uncertainties

●	Note 10(C): defined benefit obligations;
●	Note 11(A): uncertain tax treatments.
---	---

APEITDA CO., LTD.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

i.	Measurement of fair values

A number of the Company’s accounting policies and disclosures require the measurement of fair values, for financial assets.

●	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).
---	---

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 21(B): financial instruments.

APEITDA 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

The Company 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

IAS 7 Statement of Cash Flows - IFRS 7 Financial Instruments: Disclosures – Supplier finance arrangements

IFRS 16 – Lease Liability in a Sale and Leaseback

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

APEITDA CO., LTD.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

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
---	---

IFRS 18 Presentation and Disclosure in Financial Statements

IFRS 19 Subsidiaries without Public Accountability: Disclosures

APEITDA CO., LTD.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

C.	Foreign currency

Transactions in foreign currencies are translated into the functional currency of Company 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 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.
---	---

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 in accordance with Paragraph 35 (2) 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 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 statements of comprehensive income based on the percentage-of-completion for each contract.

APEITDA CO., LTD.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

In addition to media 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.

E.	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 segment has been determined to be a single business unit, for which the Company 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 Company 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.

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 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.	Defined benefit plans

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.

APEITDA 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 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.
---	---

H.	Income tax

i.	Current income tax

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.
---	---

APEITDA CO., LTD.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

ii.	Deferred income tax

●	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.
---	---

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 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.

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.
---	---

APEITDA CO., LTD.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

I.	Cash and cash Equivalents

J.	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

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:

Vehicles	5 years
Office equipment	5 years
Furniture and fixtures	5 years
Right-of-use assets	5 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

APEITDA 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.

ii.	Classification and subsequent measurement

Financial assets

On initial recognition, a financial asset is classified as measured at:

●	amortized cost; or
●	FVTPL
---	---

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;
●	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.
---	---

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.

APEITDA CO., LTD.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

Financial assets - Business model assessment

●	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.
---	---

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

●	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).
---	---

APEITDA 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 liabilities - Classification, subsequent measurement and gains and losses

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.
---	---

Financial liabilities

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.

APEITDA 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.
---	---

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.

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 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.

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 discounted at the effective interest rate of the financial asset.

APEITDA CO., LTD.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

Credit-impaired financial assets

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

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.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

APEITDA CO., LTD.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

M.	Leases

i.	As a lessee

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.

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.

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.

APEITDA CO., LTD.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

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.

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.

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

APEITDA CO., LTD.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

6. Operating segments

A.	Basis for segmentation

The Company’s operating segments have been identified to be a single business unit, by which the Company provides media production services.

The following summary describes the operations of each reportable segment.

Operating segment	Operations
Media Production	Planning, producing, and selling the media content such as theatrical films and television programs

The Company’s chief executive officer reviews the internal management reports at least quarterly.

B.	Geographic information

Media production segment is managed and operated in Seoul, South Korea. The geographic information analyses the Company’s revenue by the customer’s country of domicile and other countries. In presenting the geographic information, segment revenue and non-current assets have 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:

		2024		2023
		(In thousands of Korean won)
Korea	₩		17,703		90,000

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	₩		724,611		809,720

APEITDA CO., LTD.

NOTES TO 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 Company’s revenue for the years ended December 31, 2024 and 2023 are as follows:

		2024
		(In thousands of Korean won)
Customer A
Revenue	₩		-		90,000
%			-		100.0	%
Customer B
Revenue			16,772		-
%			94.7	%	-

7. Revenue

A.	Revenue streams

The Company generates revenue primarily through providing the services for planning, producing, and selling the media content such as theatrical films and television programs to third parties.

Revenue from contracts with customers for the years ended December 31, 2024 and 2023 are as follows:

		2024
		(In thousands of Korean won)
Revenue from contracts with customers	₩		17,703	90,000
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.

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
		(In thousands of Korean won)
Major products/service lines
Media production	₩		17,703	90,000
Timing of revenue recognition
At a point in time	₩		17,703	90,000
Total	₩		17,703	90,000

APEITDA CO., LTD.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

C.	Contract balance

The balance of accounts receivables and contract liabilities from contracts with customers as of December 31, 2024 and 2023 are as follows:

		December 31,<br> 2024		December 31, 2023
		(In thousands of Korean won)
Account receivables – trade, net	₩		18,449		-

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.

The amount of contract liabilities as of December 31, 2023 has been recognized as revenue in 2024 is nil (2023: Korean Won 90,000 thousand).

8. Income and Expenses

A.	Other income

Details of other income for the years ended December 31, 2024 and 2023 are as follows:

		2024
		(In thousands of Korean won)
Miscellaneous income	₩		2	256
B.	Other expenses
---	---

Details of other expenses for the years ended December 31, 2024 and 2023 are as follows:

		2024
		(In thousands of Korean won)
Impairment of prepayment (*)	₩		30,000	-
Miscellaneous expenses			359	526
Total	₩		30,359	526
(*)	Loss on impairment of prepaid movie development fee for the project that has been prolonged without progress.
---	---

APEITDA CO., LTD.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

C.	Expenses by nature

Details of classification of expenses by nature for the years ended December 31, 2024 and 2023 are as follows:

		2024
		(In thousands of Korean Won)
Employee benefits	₩		151,179	141,708
Depreciation			80,163	76,459
Actor’s appearance fee			-	19,300
Staff and equipment, etc			7,220	4,131
Transportation			27,965	26,261
Entertainment			7,378	20,250
Supplies			2,971	11,352
Vehicle maintenance			1,339	3,141
Advertising and marketing expenses			20,000	-
Other			16,806	44,353
Total	₩		315,021	346,955

Total expenses consist of cost of revenues and selling, general and administrative expenses.

9. Finance income and costs

Details of finance income and costs for the years ended December 31, 2024 and 2023 are as follows:

		2024
		(In thousands of Korean Won)
Finance income
Interest income	₩		46,885	65,979
Dividend income			1,256	1,121
Unrealized gains on foreign currency translation			428	13
Gains on valuation of long-term investment securities			3,750	20,739
Total	₩		52,319	87,852
Finance costs
Realized losses on foreign currency transaction	₩		176	106
Losses on valuation of long-term investment securities			23,767	1,163
Total	₩		23,943	1,269

APEITDA 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, <br> 2024		December 31, <br> 2023
		(In thousands of Korean won)
Defined benefit liability	₩		121,520		139,459

The Company operates defined benefit 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.

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 and 2023 is as follows:

		Defined benefit obligation					Fair value of plan assets				Net defined benefit liabilities
		(In thousands of Korean won)
		2024			2023		2024		2023		2024			2023
Beginning Balance	₩		139,459			80,707		-		-		139,459			80,707
Included in profit or loss
Current service cost			14,391			9,863		-		-		14,391			9,863
Interest cost			6,204			4,354		-		-		6,204			4,354
Subtotal			20,595			14,217		-		-		20,595			14,217
Included in OCI
Remeasurement loss (gain)
Demographic assumption			(163	)		-		-		-		(163	)		-
Financial assumption			19,266			2,022		-		-		19,266			2,022
Adjustment based on experience			(57,637	)		42,513		-		-		(57,637	)		42,513
Subtotal			(38,534	)		44,535		-		-		(38,534	)		44,535
Ending Balance	₩		121,520			139,459		-		-		121,520			139,459
B.	Plan assets
---	---

There are no contributions funded to its defined benefit plans as of December 31, 2024 and 2023.

APEITDA 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	3.90%	4.60%
Future salary growth	4.7%~7.6%	5.3%~7.4%

Assumptions regarding future longevity and standard salary scale have been based on issued by Korea Insurance Development Institute.

As of December 31, 2024 and 2023, the weighted average duration of the defined benefit obligation was 8.7 years and 9 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 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, <br> 2024						December 31, <br> 2023
		Increased by 1%			Decreased by 1%			Increased by 1%			Decreased by 1%
		(In thousands of Korean won)
Discount rate	₩		(9,956	)		11,255			(11,682	)		13,286
Future salary growth			11,270			(10,151	)		13,397			(11,983	)

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	₩		124,800		117,300
Defined benefits plan expenses			20,595		14,218
Fringe benefit			5,784		10,190
Total	₩		151,179		141,708
ii.	Expenses are recognized in the statements of comprehensive income (loss) as follows:
---	---
		2024		2023
---	---	---	---	---	---
		(In thousands of Korean won)
Selling, general and administrative expenses	₩		151,179		141,708

APEITDA 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 thousands of Korean won and number of shares)
Current tax expense
Current year	₩		-			8,217
Adjustments recognized related to prior period incomes (*)			762			910
			762			9,127
Deferred tax income
Origination and reversal of temporary differences			15,771			(28,148	)
Deferred taxes charged directly to equity			(8,957	)		4,409
			6,814			(23,739	)
Tax expense (benefit) on continuing operations	₩		7,576			(14,612	)
(*)	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 liabilities for income taxes.
---	---

The Company 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.

B.	Amounts recognized in OCI
		2024							2023
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
		Before tax		Tax (expense)<br><br> <br>benefit			Net of tax		Before tax			Tax (expense)<br><br> <br>benefit		Net of tax
		(In thousands of Korean won)
Items that will not be reclassified to profit or loss
Remeasurements of defined benefit liabilities	₩		38,534		(8,957	)		29,577		(44,535	)		4,409		(40,126	)

APEITDA 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)
Loss before income tax	₩		(299,299	)		(170,642	)
Tax at the statutory income tax rate			(29,631	)		(16,894	)
Adjustments:
Expenses not deductible for tax purposes			1,034			1,310
Changes in unrecognized temporary difference			40,553			-
Adjustments recognized related to prior period incomes			762			910
Other (differences in tax rate, etc)			(5,142	)		62
Tax expense (benefit)	₩		7,576			(14,612	)
Effective income tax rate (*)			-			-
(*)	The effective tax rate is not calculated as the Company incurred a loss before income taxes for the year ended December 31, 2024 and 2023.
---	---

APEITDA CO., LTD.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 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)
Prepayments	₩		(2,675	)		2,756			81
Property, plant and equipment			(22,212	)		4,985			(17,227	)
Other non-current financial assets			21,236			(2,330	)		18,906
Other non-current non-financial assets			(2,970	)		2,970			-
Contract liabilities			(2,473	)		2,473			-
Short-term borrowings			(327	)		-			(327	)
Withholdings			11,385			-			11,385
Other non-current non-financial liabilities			-			(5,229	)		(5,229	)
Defined benefit liabilities			13,807			(1,776	)		12,031
Total	₩		15,771			3,849			19,620
Loss carried forward	₩		-			20,933			20,933
Unrecognized deferred tax assets			-			(40,553	)		(40,553	)
Deferred tax assets (liabilities)	₩		15,771			(15,771	)		-
ii.	Movement in deferred tax balances as of December 31, 2023
---	---
		Tax effect
---	---	---	---	---	---	---	---	---	---	---
		Beginning			Increase (decrease)			Ending
		(In thousands of Korean won)
Accounts receivable — Trade	₩		(21,129	)		21,129			-
Prepayments			(5,509	)		2,834			(2,675	)
Property, plant and equipment			(25,323	)		3,111			(22,212	)
Other non-current financial assets			25,331			(4,095	)		21,236
Other non-current non-financial assets			-			(2,970	)		(2,970	)
Contract liabilities			3,817			(6,290	)		(2,473	)
Short-term borrowings			(18,434	)		18,107			(327	)
Long-term borrowings			18,107			(18,107	)		-
Withholdings			-			11,385			11,385
Defined benefit liabilities			7,990			5,817			13,807
Others			2,774			(2,774	)		-
Total	₩		(12,376	)		28,147			15,771
Deferred tax assets (liabilities)	₩		(12,376	)		28,147			15,771

APEITDA CO., LTD.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

E.	Deferred assets (liabilities)
i.	Details of unrecognized deferred income tax assets as of December 31, 2024 and 2023 is as follows:
---	---
		December 31,<br> 2024		December 31,<br> 2023
---	---	---	---	---	---
		(In thousands of Korean won)
Unrecognized temporary difference	₩		19,620		-
Loss carried forward			20,933		-
Total	₩		40,553		-
ii.	The maturity of unused loss carryforwards that are not recognized as deferred income tax assets as of December 31, 2024 is as follows:
---	---
Year of expiration	****	Unused loss carryforwards
---	---	---	---
****	****	(In thousands of Korean won)
2039	₩		211,448
iii.	The timing of recovery of deferred tax assets and liabilities as of December 31, 2024 and 2023 is as follows:
---	---
		December 31,<br> 2024			December 31, <br> 2023
---	---	---	---	---	---	---	---
		(In thousands of Korean won)
Deferred tax assets
- Deferred tax assets to be recovered after more than 12 months	₩		51,870			35,043
- Deferred tax assets to be recovered within 12 months			11,385			11,385
Sub-total			63,255			46,428
Deferred tax liabilities
- Deferred tax liabilities to be recovered after more than 12 months			(22,457	)		(25,182	)
- Deferred tax liabilities to be recovered within 12 months			(245	)		(5,475	)
Sub-total			(22,702	)		(30,657	)
Unrecognized deferred tax assets			(40,553	)		-
Deferred tax assets (liabilities), net	₩		-			15,771

12. Other assets

Details of other assets as of December 31, 2024 and 2023 are as follows:

		December 31, <br> 2024
		(In thousands of Korean won)
Current
Prepaid expenses	₩		2,279	2,164
Non-current
Non-current prepayments			-	30,000
Total	₩		2,279	32,164

APEITDA 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,<br> 2024
		(In thousands of Korean won)
Trade receivables
Accounts receivable — Trade	₩		18,449	-
Other receivables
Accounts receivable — Other	₩		-	30

APEITDA CO., LTD.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

14. Cash and cash equivalents

Cash and cash equivalents as of December 31, 2024 and 2023 are as follows:

		December 31, <br> 2024
		(In thousands of Korean won)
Deposits in banks	₩		344,530	645,917
Foreign currency deposit in banks			7	13,689
Total	₩		344,537	659,606

The Company doesn’t have any restricted cash and cash equivalents as of December 31, 2024 and 2023.

15. 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)
Vehicles	₩		86,947		(64,215	)		22,732
Office equipment			16,778		(12,492	)		4,286
Furniture and fixtures			70,400		(27,171	)		43,229
Right-of-use assets			259,838		(109,242	)		150,596
Total	₩		433,963		(213,120	)		220,843
		December 31, 2023
---	---	---	---	---	---	---	---	---
		Book value		Accumulated depreciation			Carrying amount
		(In thousands of Korean won)
Vehicles	₩		86,947		(52,925	)		34,022
Office equipment			16,778		(11,022	)		5,756
Construction in progress			70,400		(11,734	)		58,666
Right-of-use assets			259,838		(57,276	)		202,562
Total	₩		433,963		(132,957	)		301,006

APEITDA CO., LTD.

NOTES TO 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
		Vehicles			Office<br><br> <br>equipment			Furniture<br> and fixtures			Right-of-Use <br> assets			Total
		(In thousands of Korean won)
Beginning balance	₩		34,022			5,756			58,666			202,562			301,006
Depreciation			(11,290	)		(1,470	)		(15,437	)		(51,966	)		(80,163	)
Ending balance	₩		22,732			4,286			43,229			150,596			220,843
		2023
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
		Vehicles			Office<br><br> <br>equipment			Furniture<br> and fixtures			Construction-<br><br> <br>In progress			Right-of-Use <br> assets			Total
		(In thousands of Korean won)
Beginning balance	₩		45,311			7,225			-			70,400			254,529			377,465
Replacement			-			-			70,400			(70,400	)		-			-
Depreciation			(11,289	)		(1,469	)		(11,734	)		-			(51,967	)		(76,459	)
Ending balance	₩		34,022			5,756			58,666			-			202,562			301,006

The classification of depreciation expenses in the statements of comprehensive income for the years ended December 31, 2024 and 2023 are as follows:

		2024
		(In thousands of Korean won)
Selling, general and administrative expenses	₩		80,163	76,459
B.	Leased property, plant and equipment
---	---

The Company leased the building during the years ended December 31, 2024 and 2023. As of December 31, 2024, Korean Won 150,596 thousand of right-of-use assets was recognized (December 31, 2023: Korean Won 202,562 thousand of building).

APEITDA 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,<br> 2024		December 31,<br> 2023
		(In thousands of Korean won)
Financial assets at amortized cost
Cash and cash equivalents	₩		344,537		659,606
Accounts receivable			18,449		30
Other non-current financial assets			431,827		385,494
Financial assets at fair value through profit or loss
Long-term investment securities			71,941		93,219
Total	₩		866,754		1,138,349
		December 31,<br> 2024		December 31,<br> 2023
---	---	---	---	---	---
		(In thousands of Korean won)
Financial liabilities at amortized cost
Trade and other payables (*)	₩		19,112		19,119
Current portion of long-term borrowings, net			-		100,000
Total	₩		19,112		119,119
(*)	Trade and other payables that are not financial liabilities are excluded.
---	---

APEITDA CO., LTD.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

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,<br> 2024
		(In thousands of Korean won)
Non-Current investments
Equity securities – at FVTPL	₩		71,941	93,219
(*)	Short-term financial instruments are consisted of time deposits.
---	---
B.	Equity Securities as at FVTPL
---	---

The Company designated the investments shown below as equity securities at FVTPL because these equity securities represent investment that the Company intends to sell for strategic purposes.

		Fair value at<br><br> <br>December 31, 2024		Fair value at<br><br> <br>December 31, 2023
		(In thousands of Korean won)
Equity Securities (listed stocks)	₩		71,941		93,219

APEITDA CO., LTD.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

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 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	₩		46,885		-			46,885
Gain or loss on foreign currency transactions			253		-			253
Gain or loss on valuation of long-term investment securities			-		(20,017	)		(20,017	)
Dividend income			-		1,256			1,256
Total	₩		47,138		(18,761	)		28,377
****		2023							****
---	---	---	---	---	---	---	---	---	---
****	****	Financial assets at amortized cost		****	Financial assets at fair value through profit or loss		Total		****
****		(In thousands of Korean won)							****
Interest income	₩		65,979			-		65,979
Gain or loss on foreign currency transactions			(93	)		-		(93	)
Gain or loss on valuation of long-term investment securities			-			19,576		19,576
Dividend income			-			1,121		1,121
Total	₩		65,886			20,697		86,583

APEITDA CO., LTD.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

17. 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,<br> 2024		December 31,<br> 2023
		(In Korean won and number of shares)
Number of authorized shares			40,000		40,000
Value per share	₩		1,000		1,000
Number of shares issued			10,000		10,000
Common shares	₩		10,000,000		10,000,000
B.	Other components of equity
---	---
		December 31,<br> 2024			December 31,<br> 2023
---	---	---	---	---	---	---	---
		(In Korean won and number of shares)
Remeasurements of defined benefit liability	₩		(51,945	)		(81,522	)

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 liabilities (as shown in the statement of financial position) less cash and cash equivalents. The Company’s net debt to adjusted equity ratio as of December 31, 2024 and 2023 is as follows.

		December 31,<br> 2024
		(In Korean won and number of shares)
Total liabilities	₩		263,489		392,278
Less: Cash and cash equivalents			(344,537	)	(659,606	)
Net debt	₩		(81,048	)	(267,328	)
Total equity			826,387		1,103,685
Net debt to total equity ratio			-		-

APEITDA CO., LTD.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

19. Borrowings

Borrowings as of December 31, 2024 and 2023 are as follows:

		December 31,<br> 2024
		(In thousands of Korean won)
Current Liabilities
Current portion of long-term borrowings, net	₩		-	100,000
Total			-	100,000
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<br><br> <br>interest rate	Maturity	Face value		Carrying amount		Face value		Carrying amount
Unsecured borrowings	KRW	-	30-Sep-24		-		-		100,000		100,000

APEITDA CO., LTD.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

20. Trade and other payables

Trade and other payables as of December 31, 2024 and 2023 are as follows:

		December 31,<br> 2024		December 31,<br> 2023
		(In thousands of Korean won)
Other payable	₩		19,112		19,119

21. Financial Instruments – Fair values and risk management

A.	Accounting classifications and fair values

The carrying amounts of financial instruments by category as of December 31, 2024 and 2023 are as follows:

As of December 31, 2024		Fair value		Level 1		Level 2		Level 3		Total
		(In thousands of Korean won)
Financial assets at fair value
Long-term investment securities	₩		71,941		71,941		-		-		71,941
As of December 31, 2023		Fair value		Level 1		Level 2		Level 3		Total
---	---	---	---	---	---	---	---	---	---	---	---
		(In thousands of Korean won)
Financial assets at fair value
Long-term investment securities	₩		93,219		93,219		-		-		93,219

APEITDA 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 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 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.

APEITDA 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,<br> 2024
		(In thousands of Korean won)
Cash and cash equivalents	₩		344,537	659,606
Accounts receivable, net			18,449	30
Other non-current financial assets			431,827	385,494
Total	₩		794,813	1,045,130

Cash and cash equivalents and short-term financial instruments are deposited in financial institutions with strong credit rating.

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 as of December 31, 2024 and 2023 are as follows:

①	Accounts receivable — trade
As of December 31, 2024	Expected<br><br> <br>loss rate				Carrying<br><br> <br>amount		Loss<br><br> <br>allowance
---	---	---	---	---	---	---	---	---
					(In thousands of Korean won)
Not due or overdue less than 90 days		0.00	%	₩		18,449		-
More than 1 year		100.00	%			-		-
Total				₩		18,449		-
②	Other receivables
---	---
As of December 31, 2024	Expected<br><br> <br>loss rate				Carrying<br><br> <br>amount		Loss<br><br> <br>allowance
---	---	---	---	---	---	---	---	---
					(In thousands of Korean won)
Not due or overdue less than 90 days		0.00	%	₩		431,827		-
More than 1 year		100.00	%			-		-
Total				₩		431,827		-
As of December 31, 2023	Expected<br><br> <br>loss rate				Carrying<br><br> <br>amount		Loss<br><br> <br>allowance
---	---	---	---	---	---	---	---	---
					(In thousands of Korean won)
Not due or overdue less than 90 days		0.00	%	₩		385,524		-
More than 1 year		100.00	%			-		-
Total				₩		385,524		-

APEITDA 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 liabilities 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<br><br> <br>Amount		Less than<br><br> <br>3 months		3 months<br><br> <br>~ 1 year		1~2 years		2~5 years		More than<br><br> <br>5 years		Total
		(In thousands of Korean won)
Non-derivative financial liabilities
Other payable (*)	₩		19,112		19,112		-		-		-		-		19,112
(*)	Other payable excludes non-financial liabilities.
---	---

Financial liabilities 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<br><br> <br>Amount		Less than<br><br> <br>3 months		3 months<br><br> <br>~ 1 year		1~2 years		2~5 years		More than<br><br> <br>5 years		Total
		(In thousands of Korean won)
Non-derivative financial liabilities
Other payable (*)	₩		19,119		19,119		-		-		-		-		19,119
Current portion of long-term borrowings, net			100,000		-		100,000		-		-		-		100,000
Total	₩		119,119		19,119		100,000		-		-		-		119,119
(*)	Other payable excludes non-financial liabilities.
---	---

APEITDA CO., LTD.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

iii.	Market risk
(a)	Foreign exchange risk
---	---

The Company is exposed to foreign exchange risk arising from cash equivalents primarily with respect to the US Dollar. Financial assets are exposed to foreign currency risk as of December 31, 2024 and 2023 are as follows:


				(In thousands of Korean won)
	Liabilities in U.S. Dollars			Assets in Korean Won		Liabilities in Korean Won
4.69		-	₩		7		-

All values are in US Dollars.


				(In thousands of Korean won)
	Liabilities in U.S. Dollars			Assets in Korean Won		Liabilities in Korean Won
10,616		-	₩		13,689		-

All values are in US Dollars.

The Company 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 Company’s profit or loss (before income tax effects) for the years ended December 31, 2024 and 2023 are as follows:

				2023
	Decreased by 10%			Decreased by 10%		Decreased by 10%

1		(1	)		1,369		(1,369	)

All values are in US Dollars.

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.

APEITDA CO., LTD.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

(b)	Price risk

The Company’s marketable available-for-sale equity securities are susceptible to market price risk arising from the fluctuation in the price of the securities. The following table demonstrates the sensitivity analysis of a 10% change in the price of marketable equity securities on the Company’s statements of comprehensive income (before income tax effects) as of December 31, 2024 and 2023.

		December 31, 2024					December 31, 2023
		(In thousands of Korean won)
		Increased by 10%		Decreased by 10%			Increased by 10%		Decreased by 10%
Gain (loss) on valuation of financial assets at fair value through profit or loss	₩		7,194		(7,194	)		9,322		(9,322	)

22. Leases

A.	Leases as lessee

The Company leases building. The leases typically run for a period of 5 years with an option to renew or terminate the lease after that date.

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, plant and equipment.

Details of right-of-use assets and lease liabilities recognized in the statements of financial position as of December 31, 2024 and 2023 are as follows:

		December 31,<br>2024
		(In thousands of Korean won)
Right-of-use assets (Building)
Acquisition price	₩		259,838		259,838
Accumulated depreciation			(109,242	)	(57,276	)
Net book value	₩		150,596		202,562

APEITDA 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
		(In thousands of Korean won)
Beginning balance	₩		202,562		254,529
Depreciation			(51,966	)	(51,967	)
Ending balance	₩		150,596		202,562
ii.	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.

APEITDA CO., LTD.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

23. 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
		(In thousands of Korean won)
Depreciation	₩		80,163		76,459
Impairment of prepayment			30,000		-
Gains on valuation of long-term investment securities			(3,750	)	(20,739	)
Losses on valuation of long-term investment securities			23,767		1,163
Gains on foreign currency translation			(428	)	(13	)
Interest income			(46,885	)	(65,979	)
Severance benefits			20,595		14,217
Dividend income			(1,256	)	(1,121	)
Tax benefit (expenses)			7,576		(14,612	)
Total	₩		109,782		(10,625	)

Changes in assets and liabilities from operating activities for the years ended December 31, 2024 and 2023 are as follows:

		2024
		(In thousands of Korean won)
Other current non-financial liabilities	₩		(17,113	)	115,433
Other current assets			(84	)	26,724
Trade and other payables			(7	)	(959	)
Accounts receivable			(18,449	)	213,419
Value added tax payable			1,267		-
Value added tax receivable			385		6,806
Contract liabilities			-		(90,000	)
Total	₩		(34,001	)	271,423

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 borrowings	₩		-		100,000

APEITDA CO., LTD.

NOTES TO 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:


Balance at 1 January 2023	₩	82,900		100,000		182,900
Changes from financing cash flows
Repayment of borrowings		(82,900	)	-		(82,900	)
Reclassification		100,000		(100,000	)	-
Total	₩	17,100		(100,000	)	(82,900	)
Balance at 31 December 2023	₩	100,000		-		100,000
Balance at 1 January 2024		100,000		-		100,000
Changes from financing cash flows
Repayment of borrowings		(100,000	)	-		(100,000	)
Total	₩	(100,000	)	-		(100,000	)
Balance at 31 December 2024	₩	-		-		-

APEITDA CO., LTD.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

24. Related parties

A.	List of related parties

List of related parties as of December 31, 2024 and 2023 are as follows:

Relationship	Entity
Key management personnel	Jung, Byung Shik
Key management personnel	Jung, Byung Gil
Other related parties	Jung, Moon Young
Other related parties	Dominico Inc.
B.	Transactions with related parties
---	---

Details of transaction with related parties for the years ended December 31, 2024 and 2023 are as follows:

			2024		2023
Related party	Name		Interest income		Interest income
			(In thousands of Korean won)
Other related parties	Jung, Moon Young	₩		46,334		41,362
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		Other current<br><br> <br>non-financial<br><br> <br>liabilities<br><br> <br>*(1)**		Receivables		Borrowings		Other current<br><br> <br>non-financial<br><br> <br>liabilities<br><br> <br>*(1)**
			(In thousands of Korean won)
Key management personnel	Jung, Byung Gil	₩		-		70,000		-		100,000		83,905
Key management personnel	Jung, Byung Shik			-		45,000		-		-		45,000
Other related parties	Jung,<br> Moon Young (*2)			600,000		-		600,000		-		-
Total		₩		600,000		115,000		600,000		100,000		128,905
(*1)	The company has entered into a service contract with the key management personnels and an unrelated film production company for the provision of services. Pursuant to this agreement, the key management personnels undertakes the provision of services while the Company acts in the capacity of an agency. The company received the service contract amount from an unrelated film production company in the previous year and paid 13,905 thousand Korean won to the key management during the current period. As of December 31, 2024 and 2023, the outstanding amount payable to the key management personnels is related to this contract. In connection with this contract, the Company has neither recognized revenue from the received amount nor incurred expenses.
---	---
(*2)	This is the amount excluding the present value discount of 168,173 in thousands of Korean won (prior year: 214,506 in thousands of Korean won) for the lease deposit.

APEITDA CO., LTD.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

D.	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		Repayment of borrowings		Repayment of borrowings
			(In thousands of Korean won)
Key management personnel	Jung, Byung Gil	₩		100,000		82,900
Total		₩		100,000		82,900
E.	Key management personnel compensation
---	---

The compensation for the key management personnel for the years ended December 31, 2024 and 2023 are as follows:

		2024
		(In thousands of Korean won)
Short-term employee benefits	₩		124,800	111,300
Post-employment benefits			20,595	13,685
Total	₩		145,395	124,985

Compensation of the Company’s key management personnel includes salaries, non-cash benefits and contributions to a defined benefit plan.

25. Commitments

On September 14, 2023, an amendment was made to the equity interest exchange agreement, originally entered into on April 9, 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 approval, the CEO of the Company will exchange 5,100 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.

26. Subsequent event

On January 2, 2025, K Enter Holdings Inc. completed the acquisition of a controlling interest in six Korean entities, including Apeitda Co., Ltd., through a share exchange. Upon the approval, the CEO of the Company exchanged 5,100 shares with the equity interest of K Enter Holdings, Inc. Following the equity interest exchange transaction, the Company become a subsidiary of K Enter Holdings, Inc.

Exhibit 15.18

THE LAMP CO., LTD.

STATEMENTS OF FINANCIAL POSITION

As of December 31, 2024 and 2023

	Note		December 31,<br>2024
			(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.

THE LAMP CO., LTD.

STATEMENTS OF COMPREHENSIVE INCOME

For the Years Ended December 31, 2024 and 2023

	Note		2024
			(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.

THE LAMP CO., LTD.

STATEMENTS OF CHANGES IN EQUITY

For the Years Ended December 31, 2024 and 2023

	Note		Net parent investment
			(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.

THE LAMP CO., LTD.

STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 2024 and 2023

	Note		2024
			(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.

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 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.

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

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.

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;
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i.	Measurement of fair values
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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).
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●	Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
---	---

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.

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

IAS 7 Statement of Cash Flows - IFRS 7 Financial Instruments: Disclosures – Supplier finance arrangements

IFRS 16 – Lease Liability in a Sale and Leaseback

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

IFRS 9 Financial Instruments - IFRS 7 Financial Instruments: Disclosures – Classification and Measurement of Financial Instruments

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;
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-	IFRS 9 Financial instruments;
---	---
-	IFRS 10 Consolidated financial instruments; and
---	---
-	IAS 7 Statement of cash flows
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IFRS 18 Presentation and Disclosure in Financial Statements

IFRS 19 Subsidiaries without Public Accountability: Disclosures

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.
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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 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.

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;
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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.
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H.	Income tax

i.	Current tax

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
---	---

●	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.
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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.
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I.	Cash and Cash Equivalents
---	---

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

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.

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.

ii.	Classification and subsequent measurement

Financial assets

On initial recognition, a financial asset is classified as measured at:

●	amortized cost;
●	FVOCI - debt investment;
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●	FVOCI - equity investment;
---	---
●	or FVTPL.
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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.
---	---

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.

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

Financial assets - Business model assessment

●	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.
---	---

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

●	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).
---	---

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 liabilities - Classification, subsequent measurement and gains and losses

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.
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Financial liabilities

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.

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.

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.

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 discounted at the effective interest rate of the financial asset.

Credit-impaired financial assets

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.
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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

ii.	Non- financial assets

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

M.	Leases

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

i.	As a lessee

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.

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.
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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.

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 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.

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.

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

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
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		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

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,<br> 2024		December 31,<br> 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
		(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
		(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

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
		(In thousands of Korean won)
Revenue from contracts with customers	₩		16,336,027	20,836,856
B.	Disaggregation of revenue from contracts with customers
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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
		(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,<br> 2024
		(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)

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
		(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.
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B.	Other expenses
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Details of other expenses for the years ended December 31, 2024 and 2023 are as follows:

		2024
		(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
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Details of classification of expenses by nature for the years ended December 31, 2024 and 2023 are as follows:

		2024
		(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.

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
		(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

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,<br> 2024		December 31,<br> 2023
		(In thousands of Korean Won)
Defined benefit liability	₩		255,006		258,999

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.

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,<br> 2024						December 31,<br> 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

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)<br><br> <br>benefit			Net of tax		Before tax			Tax (expense)<br><br> <br>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	)

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<br>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

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<br> carryforwards		Unused tax credit carryforwards
---	---	---	---	---	---
		(In thousands of Korean won)
2032	₩		-		10,969
2033			-		8,180
2039			417,397		-
Total	₩		417,397		19,149

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,<br> 2024			December 31,<br> 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,<br> 2024
		(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)

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,<br>2024		December 31,<br>2023
		(In thousands of Korean won)
Trade receivable
Accounts receivable — Trade	₩		90,537		196,380
		December 31,<br>2024		December 31,<br>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,<br> 2024
		(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

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<br><br> <br>equipment			Furniture<br><br> <br>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<br><br> <br>equipment			Furniture<br><br> <br>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
		(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)

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,<br>2024		December 31,<br>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,<br>2024		December 31,<br>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,<br>2024
		(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.
---	---

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<br><br> <br>December 31,2024
	(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<br> amortized cost		Financial assets at<br> fair value through<br> profit or loss		Financial liabilities at<br> 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<br> amortized cost		Financial assets at<br> fair value through<br> 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	)

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,<br> 2024
		(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,<br> 2024			December 31,<br><br> <br>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,<br>2024
		(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

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,<br><br> <br>2024
		(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,<br>2024				December 31,<br>2023
	Currency	Nominal<br><br> <br>interest rate	Maturity	Face value		Carrying<br> amount		Face value		Carrying<br> 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.
---	---

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,<br> 2024				December 31,<br> 2023
	Currency	Nominal<br><br> <br>interest rate	Maturity	Face value		Carrying<br> amount		Face value		Carrying<br> 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,<br>2024
		(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
		(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.

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
		(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
		(In thousands of Korean won)
Financial assets at fair value
Long-term investments	₩		800,000	-	-	800,000	800,000

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 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

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.

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,<br>2024
		(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<br> (*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.
---	---

Accounts receivables and other receivables

As of December 31, 2024	Expected<br><br> <br>loss rate				Carrying<br><br> <br>amount		Loss<br><br> <br>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<br><br> <br>loss rate				Carrying<br><br> <br>amount		Loss<br><br> <br>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		-

THE LAMP CO., LTD

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2024 and 2023

ii.	Liquidity risk

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<br><br> <br>Amount		Less than<br><br> <br>3 months		3 months<br><br> <br>~ 1 year		1~2 years		2~5 years		More than<br><br> <br>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<br> (*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<br><br> <br>Amount		Less than<br><br> <br>3 months		3 months<br><br> <br>~ 1 year		1~2 years		2~5 years		More than<br><br> <br>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<br><br> <br>100 bp		Decreased by<br><br> <br>100 bp		Increased by<br><br> <br>100 bp	Decreased by<br><br> <br>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.
---	---

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,<br>2024		December 31,<br>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,<br>2024			December 31,<br>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,<br>2024		December 31,<br>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

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
		(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
		(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.

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
			(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

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
		(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
		(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

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
		(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
		(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

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<br>borrowings
		(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

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”)<br><br> <br>- 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

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
			(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<br>to pay Korean Won 2,053,480 thousand to Pluto in accordance with the Separation Proposal. As of December 31, 2024, the payables<br>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
			(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<br>to pay Korean Won 2,053,480 thousand to Pluto in accordance with the Separation Proposal. As of December 31, 2023, the payables<br>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<br><br> <br>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<br><br> <br>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

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
		(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.

Exhibit 15.19

BIDANGIL PICTURES CO., LTD.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

As of December 31, 2024 and 2023

	Note		December 31,<br>2024
			(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.

BIDANGIL PICTURES CO., LTD.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

As of December 31, 2024 and 2023

	Note		December 31,<br>2024
			(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.

BIDANGIL PICTURES CO., LTD.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Years Ended December 31, 2024 and 2023

	Note		2024
			(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.

BIDANGIL PICTURES CO., LTD.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the Years Ended December 31, 2024 and 2023

	Note		Share capital
			(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.

BIDANGIL PICTURES CO., LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 2024 and 2023

	Note		2024
			(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.

5
| **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,<br> 2024					December 31,<br> 2023
	Number of<br> shares		Ownership<br> (%)			Number of<br> shares		Ownership<br> (%)
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.

6
| **BIDANGIL PICTURES CO., LTD.** |

| --- | | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | | For the Years Ended December 31, 2024 and 2023 |

2. Basis of Accounting

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

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

●	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.

7
| **BIDANGIL PICTURES CO., LTD.** |

| --- | | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | | For the Years Ended December 31, 2024 and 2023 |

●	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).
---	---

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

IAS 7 Statement of Cash Flows - IFRS 7 Financial Instruments: Disclosures – Supplier finance arrangements

IFRS 16 – Lease Liability in a Sale and Leaseback

8
| **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

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
---	---

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.

9
| **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

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.

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.
---	---

10
| **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
---	---

ii.	Defined contribution plans

11
| **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.

I.	Income tax

i.	Current income tax

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
---	---

●	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.

12
| **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.

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
---	---

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

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
---	---

13
| **BIDANGIL PICTURES CO., LTD.** |

| --- | | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | | For the Years Ended December 31, 2024 and 2023 |

ii.	Classification and subsequent measurement

Financial assets

On initial recognition, a financial asset is classified as measured at:

●	amortized cost; or
●	FVTPL
---	---

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.
---	---

Financial assets - Business model assessment

●	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.
---	---

14
| **BIDANGIL PICTURES CO., LTD.** |

| --- | | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | | For the Years Ended December 31, 2024 and 2023 |

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

●	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).
---	---

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 liabilities - Classification, subsequent measurement and gains and losses

15
| **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.
---	---

Financial liabilities

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.

The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 12 months past due.

16
| **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.

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 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

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.

17
| **BIDANGIL PICTURES CO., LTD.** |

| --- | | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | | For the Years Ended December 31, 2024 and 2023 |

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

N.	Leases

i.	As a lessee

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.
---	---

18
| **BIDANGIL PICTURES CO., LTD.** |

| --- | | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | | For the Years Ended December 31, 2024 and 2023 |

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.

O.	Fair value measurement

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.

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

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| **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
		(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

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| **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
		(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
		(In thousands of Korean won)
Revenue from contracts with customers	₩		18,632,504	7,746,081
B.	Disaggregation of revenue from contracts with customers
---	---

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
		(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

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| **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,<br><br> <br>2024
		(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 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
		(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.

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| **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
		(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
		(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
		(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.

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| **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
		(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

24
| **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<br> 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.
---	---

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| **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. | | --- | --- |

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| **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 | ₩ | | - | | | - | |

27
| **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,<br> 2024
		(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,<br> 2024
		(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,<br> 2024		December 31,<br> 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.

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| **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,<br> 2024				December 31,<br> 2023
			(In thousands of Korean won)
	Currency	Nominal interest rate	Face value		Carrying<br> amount		Face value		Carrying<br> 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<br> depreciation			Carrying <br> 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 <br> depreciation			Carrying <br> 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

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| **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<br> equipment		Furniture and fixture		Right-of-Use<br> 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<br> equipment		Furniture and fixture		Right-of-Use<br> 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
		(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,<br> 2024
		(In thousands of Korean won)
Buildings	₩		122,758	111,555
Vehicles			1,026	26,446
Total	₩		123,784	138,001

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| **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,<br> 2024		December 31,<br> 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,<br> 2024		December 31,<br> 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,<br> 2024
		(In thousands of Korean won)
Current investments
Other securities – at FVTPL	₩		862,868	1,537,640

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| **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<br> amortized cost		Financial assets <br> at fair value<br> 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 <br> amortized cost		Financial assets<br> at fair value <br> 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

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| **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,<br> 2024
		(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,<br> 2024		December 31,<br> 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, <br> 2024				December 31,<br> 2023
		Number of <br> shares		Carrying<br> amount		Number of<br> shares		Carrying <br> amount
		(In thousands of Korean won and number of shares)
Beginning balance	₩		-		-		-		-
Acquisition			500		2,000,000		-		-
Ending balance	₩		500		2,000,000		-		-

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| **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,<br> 2024
		(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,<br> 2024
		(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.

34
| **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,<br> 2024
		(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 carrying amounts of financial instruments by category as of December 31, 2024 are as follows:

		Fair value
		(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
		(In thousands of Korean won)
Financial assets at fair value
Short-term financial instruments	₩		1,537,640	-	1,537,640	-	1,537,640

35
| **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 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
---	---

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.

36
| **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,<br> 2024
		(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.

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 1year		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 1year		0.00	%			-		-
More than 1 year		100.00	%			-		-
Total				₩		2,647		-

37
| **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 1year		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 1year		0.00	%			-		-
More than 1 year		100.00	%			-		-
Total				₩		223,285		-

38
| **BIDANGIL PICTURES CO., LTD.** |

| --- | | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | | For the Years Ended December 31, 2024 and 2023 | | ii. | Liquidity risk | | --- | --- |

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.
---	---

39
| **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,<br> 2024		December 31,<br> 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,<br> 2024			December 31,<br> 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,<br> 2024		December 31,<br> 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

40
| **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
		(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
		(In thousands of Korean won)
Total cash outflows of leases	₩		107,356	127,665
iv.	Extension options
---	---

41
| **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
		(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
		(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
		(In thousands of Korean won)
Reclassification of long-term loans	₩		-	927,120
Increase in lease liabilities due to lease agreements			73,858	67,166

42
| **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
		(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

43
| **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,<br> 2024		December 31, <br> 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 <br> accrued income		Collection (*)		Payment for <br> Loans		Increase in <br> 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
		(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).

44
| **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.

Exhibit 15.20

Studio Anseilen Co., Ltd.

STATEMENTS OF FINANCIAL POSITION

As of December 31, 2024 and 2023

	Note		December 31,<br> 2024
			(In thousands of Korean won)
Assets
Cash and cash equivalents	12,14,16,19	₩		361,234		275,897
Other current financial assets	14,19			54,824		50,000
Other current assets	11			43		26,465
Total current assets				416,101		352,362
Long-term investments	14,19			-		30,000
Property, plant, and equipment	13			735		945
Other non-current non-financial assets	11			586,000		360,000
Total non-current assets				586,735		390,945
Total assets		₩		1,002,836		743,307
Liabilities
Trade and other payables	14,17,19	₩		17,724		2,715
Other current non-financial liabilities	11			61,220		1,931
Total current liabilities				78,944		4,646
Other non-current non-financial liabilities	11,18			1,500,000		1,000,000
Defined benefit liability	9			7,130		72,347
Total non-current liabilities				1,507,130		1,072,347
Total liabilities				1,586,074		1,076,993
Equity
Share capital	15			15,000		15,000
Other reserves	15			(1,721	)	(1,054	)
Accumulated deficit	2			(596,517	)	(347,632	)
Total equity				(583,238	)	(333,686	)
Total liabilities and equity		₩		1,002,836		743,307

The accompanying notes are an integral part of these financial statements.

Studio Anseilen Co., Ltd.

STATEMENTS OF COMPREHENSIVE INCOME

For the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023

	Note		2024
			(In thousands of Korean won)
Revenue
Cost of revenue				-		-
Gross profit				-		-
Selling, general, and administrative expenses	7			(230,952	)	(348,549	)
Operating loss				(230,952	)	(348,549	)
Other income	7			11,905		614
Other expense				(49	)	-
Finance income	8,14			211		303
Finance costs	8,14			(30,000	)	-
Loss before income tax				(248,885	)	(347,632	)
Income tax income (expenses)	10			-		-
Loss for the period				(248,885	)	(347,632	)
Other comprehensive loss
Items that will not be reclassified to income or loss:
Remeasurement of defined benefit liability	9			(667	)	-
Total comprehensive loss for the period		₩		(249,552	)	(347,632	)

The accompanying notes are an integral part of these financial statements.

Studio Anseilen Co., Ltd.

STATEMENTS OF CHANGES IN EQUITY

For the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023

	Note		Share<br> capital
			(In thousands of Korean won)
Balance at March 6, 2023 (inception)	15	₩		-	-		-		-
Total comprehensive loss for the period
Loss for the period	****			-	-		(347,632	)	(347,632	)
Transaction with owners, recognized directly in equity
Shares issued	22			15,000	(1,054	)	-		13,946
Balance at December 31, 2023	15	₩		15,000	(1,054	)	(347,632	)	(333,686	)
Balance at January 1, 2024	15	₩		15,000	(1,054	)	(347,632	)	(333,686	)
Total comprehensive loss for the period
Loss for the period				-	-		(248,885	)	(248,885	)
Remeasurement of defined benefit liability	9			-	(667	)	-		(667	)
Balance at December 31, 2024	15	₩		15,000	(1,721	)	(596,517	)	(583,238	)

The accompanying notes are an integral part of these financial statements.

Studio Anseilen Co., Ltd.

STATEMENTS OF CASH FLOWS

For the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023

	Note		2024
			(In thousands of Korean won)
Cash flows from operating activities
Loss for the period		₩		(248,885	)	(347,632	)
Adjustments to reconcile net loss to net cash provided by operating activities	21			335,497		690,376
Interest received				211		303
Income taxes<br> received (paid)				13		(46	)
Net cash<br> provided (used) by operating activities		₩		86,836		343,001
Cash flows from investing activities
Payments for other current financial assets				(1,500	)	(50,000	)
Purchases of long-term investments				-		(30,000	)
Purchase of property and equipment				-		(1,050	)
Net cash outflow in investing activities		₩		(1,500	)	(81,050	)
Cash flows from financing activities
Proceeds from issues of shares	15,22			-		15,000
Share issue cost	15			-		(1,054	)
Net cash inflow in financing activities		₩		-		13,946
Net increase in cash and cash equivalents				85,337		275,897
Cash and cash equivalents at beginning of the period	12			275,897		-
Cash and cash equivalents at end of the period	12	₩		361,234		275,897

The accompanying notes are an integral part of these financial statements.

Studio Anseilen Co., Ltd.

NOTES TO FINANCIAL STATEMENTS

For the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023

1. Reporting entity

The Company

Studio Anseilen Co., Ltd. (“the Company”) was incorporated in March 2023 and the Company’s registered office is at B 907, 606, Hosu-ro, Ilsandong-gu, Goyang-si, Gyeonggi-do, Republic of Korea. The Company is primarily providing the media production service that consists of planning, producing, and selling the television programs.

The 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<br><br>shares		Ownership<br><br>(%)		Number of<br><br>shares		Ownership<br><br>(%)
Park, Jun Woo		1,000		33.33		1,000		33.33
Shin, Kyung Soo		1,000		33.33		1,000		33.33
Kim, Seung Ho		1,000		33.33		1,000		33.33
Total		3,000		100		3,000		100

2. Basis of Accounting

Details of the Company’s accounting policies are included in Note 5.

Going concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern which is dependent upon the Company receiving the proceeds from the loans or securing other forms of investment and/or financing. The Company incurred a loss of Korean Won 248,885 thousand for the year ended December 31, 2024, and had net total deficit of Korean Won 596,517 thousand as of December 31, 2024. The Company acknowledges that there is a risk that the quantum and timing of cash flows sufficient to sustain operations may not be achievable and that management forecasts regarding cash flow from operations may prove inaccurate. The continuation of the Company’s activities is dependent on the availability of adequate financial support. The Company has stated that these conditions indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Based on management’s forecasts, the day-to-day operations and expenditure requirements as described above are anticipated to be funded by the cash generated through the new commitments from K Enter Holdings. On June 21, 2024, the Company entered into an investment agreement with K Enter Holdings for Korean Won 1,000,000 thousand, designated for content development purposes. As of December 31, 2024, Korean Won 500,000 thousand has been received and the remaining Korean Won 500,000 thousand will be received before June 30, 2025. In addition, the Company received a separate non-binding loan LOI from K Enter Holdings to support the Company’s day-to-day operational expenditure. The maximum loan amount, conditions, and execution timing will be discussed in detail depending on the company’s future business environment.

Studio Anseilen Co., Ltd.

NOTES TO FINANCIAL STATEMENTS

For the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023

Basis of measurement

These 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 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

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognized prospectively.

Studio Anseilen Co., Ltd.

NOTES TO FINANCIAL STATEMENTS

For the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023

A.	Assumptions and estimation uncertainties

-	Note 9: measurement of defined benefit obligations: key actuarial<br>assumptions;
i.	Measurement of fair values
---	---

A number of the Company’s accounting policies and disclosures require the measurement of fair values, for financial assets.

●	Level 1: quoted prices (unadjusted) in active markets for<br>identical assets or liabilities.
●	Level 2: inputs other than quoted prices included in Level<br>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<br>on observable market data (unobservable inputs).
---	---

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 note:

●	Note 19(B): financial instruments.

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 theCompany

The Company 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

Studio Anseilen Co., Ltd.

NOTES TO FINANCIAL STATEMENTS

For the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023

IAS 7 Statement of Cash Flows - IFRS 7 Financial Instruments: Disclosures – Supplier finance arrangements

IFRS 16 – Lease Liability in a Sale and Leaseback

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

IFRS 9 Financial Instruments - IFRS 7 Financial Instruments: Disclosures – Classification and Measurement of Financial Instruments

The amendments clarify that a financial liability is derecognized on the ‘settlement date’ and introduce an accounting policy choice to derecognize 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.

Annual Improvements to IFRS Accounting Standards – Volume 11

The amendments are annual improvements to the following standards:

A.	IFRS 1 First-time adoption of International Financial Reporting Standards;
B.	IFRS 7 Financial instruments: Disclosures;
---	---
C.	IFRS 9 Financial instruments;
---	---
D.	IFRS 10 Consolidated financial instruments; and
---	---
E.	IAS 7 Statement of cash flows
---	---

Studio Anseilen Co., Ltd.

NOTES TO FINANCIAL STATEMENTS

For the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023

IFRS 18 Presentation and Disclosure in 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.

The significant following accounting policies followed by the Company in preparation of its financial statements are as follows:

C.	Foreign currency

Transactions in foreign currencies are translated into the functional currency of the Company 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 income and 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<br>(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<br>in a foreign operation to the extent that the hedge is effective; and
---	---
●	qualifying cash flow hedges to the extent that the hedges<br>are effective.
---	---
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, 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 segment has been determined to be a single business unit, for which the Company 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 Company 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.

Studio Anseilen Co., Ltd.

NOTES TO FINANCIAL STATEMENTS

For the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023

E.	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.	Defined benefit plans

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.	Finance income and finance costs

The Company’s finance income and finance costs include:

●	interest income;
●	interest expense;
---	---
●	the net gain or loss on settlement of project investments;
---	---
●	the foreign currency gain or loss on financial assets and<br>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.
---	---

Studio Anseilen Co., Ltd.

NOTES TO FINANCIAL STATEMENTS

For the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023

G.	Income tax

i.	Current income tax

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<br> simultaneously.
---	---
ii.	Deferred income tax
---	---

●	temporary differences on the initial recognition of assets<br>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,<br>associates, and joint arrangements to the extent that the Company is able to control the timing of the reversal of the temporary differences<br>and it is probable that they will not reverse in the foreseeable future; and
---	---
●	taxable temporary differences arising on the initial recognition<br>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 subsidiaries in 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.

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<br> simultaneously.
---	---

Studio Anseilen Co., Ltd.

NOTES TO FINANCIAL STATEMENTS

For the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023

H.	Cash and cash Equivalents

Cash and cash equivalents comprise deposits held at banks 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.

I.	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.

ii.	Classification and subsequent measurement

Financial assets

On initial recognition, a financial asset is classified as measured at:

●	amortized cost; or
●	FVTPL
---	---
●	FVOCI
---	---

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<br>hold assets to collect contractual cash flows; and
●	its contractual terms give rise on specified dates to cash<br>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<br>by both collecting contractual cash flows and selling financial assets; and
●	its contractual terms give rise on specified dates to cash<br>flows that are solely payments of principal and interest on the principal amount outstanding.
---	---

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.

Studio Anseilen Co., Ltd.

NOTES TO FINANCIAL STATEMENTS

For the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 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<br>the operation of those policies in practice. These include whether management’s strategy focuses on earning contractual interest<br>income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related<br>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<br>to the Company’s management;
---	---
●	the risks that affect the performance of the business model<br>(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<br>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<br>in prior periods, the reasons for such sales and expectations about future sales activity.
---	---

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.

●	contingent events that would change the amount or timing<br>of cash flows;
●	terms that may adjust the contractual coupon rate, including<br>variable-rate features;
---	---
●	prepayment and extension features; and
---	---
●	terms that limit the Company’s claim to cash flows<br>from specified assets (e.g., non-recourse features).
---	---

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.

Studio Anseilen Co., Ltd.

NOTES TO FINANCIAL STATEMENTS

For the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023

Financial liabilities - Classification, subsequent measurement and gains and losses

iii.	Derecognition

Financial assets

The Company derecognizes a financial asset when:

●	the contractual rights to the cash flows from the financial<br>asset expire; or
●	it transfers the rights to receive the contractual cash flows<br>in a transaction in which either:
---	---
-	substantially all of the risks and rewards of ownership of<br>the financial asset are transferred; or
---	---
-	the Company neither transfers nor retains substantially all<br>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, 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.

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.

J.	Impairment
●	Non- financial assets
---	---

Studio Anseilen Co., Ltd.

NOTES TO FINANCIAL STATEMENTS

For the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

K.	Leases

●	As a lessee

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.

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,<br>initially measured using the index or rate as at the commencement date;
---	---
●	amounts expected to be payable under a residual value guarantee;<br>and
---	---
●	the exercise price under a purchase option that the Company<br>is reasonably certain to exercise, lease payments in an optional renewal period if the Company is reasonably certain to exercise an extension<br>option, and penalties for early termination of a lease unless the Company is reasonably certain not to terminate early.
---	---

Studio Anseilen Co., Ltd.

NOTES TO FINANCIAL STATEMENTS

For the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 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 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.

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.

L.	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.

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.

M.	Concentration of credit risk

Studio Anseilen Co., Ltd.

NOTES TO FINANCIAL STATEMENTS

For the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023

6. Operating segments

A.	Basis for segmentation

The Company’s operating segments have been identified to be a single business unit, by which the Company provides media production services.

The following summary describes the operations of the reportable segment.

Reportable segment	Operations
Media Production	Planning, producing, and selling the media content such as television programs

7. Income and Expenses

A.	Other income

Details of other income for the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023 are as follows:

	2024
	(In thousands of Korean won)
Miscellaneous income		11,905	614
B.	Expenses by nature
---	---

Details of classification of expenses by nature for the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023 are as follows:

		2024
		(In thousands of Korean won)
Employee benefits			182,082	320,372
Commission paid			6,005	5,732
Rent			22,800	12,000
Supplies			1,568	5,422
Taxes & dues			63	909
Depreciation and amortization			210	105
Other expenses			18,224	4,009
Total	₩		230,952	348,549

Total expenses consist of cost of sales and selling, general and administrative expenses.

Studio Anseilen Co., Ltd.

NOTES TO FINANCIAL STATEMENTS

For the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023

8. Finance income and costs

Details of finance income and costs for the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023 are as follows:

		2024
		(In thousands of Korean won)
Finance income
Interest income	₩		211	303
Finance costs
Loss on the fair value of financial investment assets			30,000	-

9. Employee benefits

Details of defined benefit liability recognized as of December 31, 2024 and 2023 are as follows:

		December 31,<br><br>2024		December 31,<br><br>2023
		(In thousands of Korean won)
Defined benefit liability	₩		7,130		72,347

The Company operates the 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 for the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023 are as follows:

		Defined benefit obligation					Fair value of plan assets				Net defined benefit liability
		(In thousands of Korean won)
		2024			2023		2024		2023		2024			2023
Balance at 1 January	₩		72,347			-		-		-		72,347			-
Included in profit or loss
Current service cost			91,684			72,347		-		-		91,684			72,347
Gains on settlement			(160,656	)		-		-		-		(160,656	)		-
Interest cost(income)			3,088			-		-		-		3,088			-
			(65,884	)		72,347		-		-		(65,884	)		72,347
Included in OCI
Remeasurement loss(gain)
- Demographic assumption			(13	)		-		-		-		(13	)		-
- Financial assumption			925			-		-		-		925			-
- Adjustment based on experience			(245	)		-		-		-		(245	)		-
- Return on plan assets excluding interest income						-		-		-		-			-
			667			-		-		-		667			-
Other
Benefits paid			-			-		-		-		-			-
Balance at 31 December	₩		7,130			72,347		-		-		7,130			72,347

Studio Anseilen Co., Ltd.

NOTES TO FINANCIAL STATEMENTS

For the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023

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 year ended December 31, 2024 and period from March 6, 2023 (inception) to December 31, 2023 are as follows:

	2024			2023
Discount rate		4.00	%		4.50	%
Future salary growth		2.88	%		2.88	%

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 9.2 years and 8.6 years, respectively.

The expected maturity analysis of undiscounted defined severance benefits as of December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Less than <br> 1 year		Between<br> 1~2 years		Between<br> 2~5 years		Over<br> 5 years		Total
Expected Retirement Benefits	₩		443		438		1,273		8,486		10,640
		December 31, 2023
---	---	---	---	---	---	---	---	---	---	---	---
		Less than <br> 1 year		Between<br> 1~2 years		Between<br> 2~5 years		Over<br> 5 years		Total
Expected Retirement Benefits	₩		4,564		4,550		13,496		87,210		109,820
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		(610	)		699			(5,819	)		6,578
Future salary growth		700			(622	)		6,625			(5,964	)

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.

Studio Anseilen Co., Ltd.

NOTES TO FINANCIAL STATEMENTS

For the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023

D.	Employee benefit expenses
i.	Details of employee benefit expenses recognized for the year<br>ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023 are as follows:
---	---
		2024			For the<br><br>period from<br><br>March 6, 2023<br><br>(inception) to<br><br>December 31,<br><br>2023
---	---	---	---	---	---	---
		(In thousands of Korean won)
Wages and salaries	₩		207,000			231,000
Expenses related to post-employment<br> plans (*)			(65,884	)		72,347
Fringe benefit			40,966			17,025
Total	₩		180,082			320,372
(*)	Gains on defined benefit settlement occurred as management agreed<br>on the settlement of retirement benefits in December, 2024.
---	---
ii.	Expenses are recognized in the statements of comprehensive income<br>(loss) as follows:
---	---
		2024		For the<br><br>period from<br><br>March 6, 2023<br><br>(inception) to<br><br>December 31,<br><br>2023
---	---	---	---	---	---
		(In thousands of Korean won)
Selling, general, and administrative expenses	₩		182,082		320,372

Studio Anseilen Co., Ltd.

NOTES TO FINANCIAL STATEMENTS

For the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023

10. Income Tax

A.	Amounts recognized in profit or loss
		2024		For the<br><br>period from<br><br>March 6, 2023<br><br>(inception) to<br><br>December 31,<br><br>2023
---	---	---	---	---	---
		(In thousands of Korean won)
Current tax expense
Current period	₩		-		-

B.	Reconciliation of effective tax rate
		2024			For the<br><br>period from<br><br>March 6, 2023<br><br>(inception) to<br><br>December 31,<br><br>2023
---	---	---	---	---	---	---	---
		(In thousands of Korean won)
Loss before income tax	₩		(248,885	)		(347,632	)
Tax at the statutory income tax rate			(24,640	)		(34,416	)
Adjustments:
Tax credits			-			-
Changes in unrecognized temporary difference			24,706			34,520
Other			(66	)		(104	)
Income tax expenses	₩		-			-
Effective income<br> tax rate (*)			-			-
(*)	The effective tax rate is not calculated as the Company incurred<br>a loss before income taxes for the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31,<br>2023.
---	---

Studio Anseilen Co., Ltd.

NOTES TO FINANCIAL STATEMENTS

For the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023

C.	Movement in deferred tax balances
A.	Movement in deferred tax balances for the year ended December 31, 2024
---	---
		Tax effect
---	---	---	---	---	---	---	---	---	---	---
		Beginning			Increase (decrease)			Ending
		(In thousands of Korean won)
Property and equipment			183			21			204
Defined benefit liability			7,162			(6,456	)		706
Non-current prepayments			(11,879	)		(46,134	)		(58,013	)
Long-term investments			-			2,970			2,970
Contract liabilities			-			49,500			49,500
Others			269			(229	)		40
Total			(4,265	)		(328	)		(4,593	)
Loss carried forward	₩		38,785			25,034			63,819
Unrecognized deferred tax income asset (*)			(34,520	)		(24,706	)		(59,226	)
Deferred tax assets (liabilities)	₩		-			-			-
(*)	As of December 31, 2024, the Company did not recognize<br>deferred income tax asset for the temporary difference as it is not probable such loss carried forward can be utilized in the foreseeable<br>future.
---	---
B.	Movement in deferred tax balances for the period from March 6, 2023 (inception) to December 31, 2023
---	---
		Tax effect
---	---	---	---	---	---	---	---	---	---
		Beginning		Increase (decrease)			Ending
		(In thousands of Korean won)
Property and equipment			-		183			183
Defined benefit liability			-		7,162			7,162
Non-current prepayments			-		(11,879	)		(11,879	)
Others			-		269			269
Total			-		(4,265	)		(4,265	)
Loss carried forward	₩		-		38,785			38,785
Unrecognized deferred tax income asset (*)			-		(34,520	)		(34,520	)
Deferred tax assets (liabilities)	₩		-		-			-
(*)	As of December 31, 2023, the Company did not recognize<br>deferred income tax asset for the temporary difference as it is not probable such loss carried forward can be utilized in the foreseeable<br>future.
---	---

Studio Anseilen Co., Ltd.

NOTES TO FINANCIAL STATEMENTS

For the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023

D.	Deferred assets (liabilities)
●	Details of unrecognized as deferred income tax assets as<br>of December 31, 2024 and 2023 are as follows:
---	---
		December 31, <br><br>2024		December 31, <br><br>2023
---	---	---	---	---	---
		(In thousands of Korean won)
Loss carried forward	₩		59,226		34,520
Total	₩		59,226		34,520
i.	The timing of recovery of deferred tax assets and liabilities as of December 31, 2024 and 2023 are as follows:
---	---
		December 31, <br><br>2024			December 31, <br><br>2023
---	---	---	---	---	---	---	---
		(In thousands of Korean won)
Deferred tax assets	₩
- Deferred tax assets to be recovered after more than 12 months			58,124			11,611
- Deferred tax assets to be recovered within 12 months			368			269
Sub-total			58,492			11,880
Deferred tax liabilities
- Deferred tax liabilities to be recovered after more than 12 months			(58,014	)		(11,880	)
- Deferred tax liabilities to be recovered within 12 months			(478	)		-
Sub-total			(58,492	)		(11,880	)
Deferred tax<br> assets (liabilities), net (*)	₩		-			-
(*)	Deferred tax assets have not been recognized because it is not<br>probable that sufficient taxable profit will be available against which part or all of the deferred tax assets can be utilized.
---	---
ii.	Details of unused tax loss carryforwards and unused tax credit carryforwards that<br> are recognized as deferred income tax assets as of December 31, 2024 are as follows:
---	---
Year of expiration		Unused loss<br><br>carryforwards
---	---	---	---
		(In thousands of Korean won)
2038	₩		34,191
2039			25,035
Total	₩		59,226

Studio Anseilen Co., Ltd.

NOTES TO FINANCIAL STATEMENTS

For the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023

11. Other assets and liabilities

Details of other assets as of December 31, 2024 and 2023 are as follows:

		December 31,<br><br>2024
		(In thousands of Korean won)
Current
Prepayments			11	-
Value added tax receivables			-	26,419
prepayment tax			32	46
Non-current
Non-current prepayments			586,000	360,000
Total	₩		586,043	386,465

Details of other liabilities as of December 31, 2024 and 2023 are as follows:

		December 31,<br><br>2024
		(In thousands of Korean won)
Current
Withholdings			15,929	1,931
Value added tax payables			45,291	-
Non-current
Contract<br> liabilities (*)			1,500,000	1,000,000
Total	₩		1,561,220	1,001,931
(*)	The contract liabilities primarily relate to the advance consideration<br>received from the counterparty for drama scenario development service.
---	---

12. Cash and cash equivalents

Cash and cash equivalents as of December 31, 2024 and 2023 are as follows:

		December 31,<br><br>2024		December 31,<br><br>2023
		(In thousands of Korean won)
Deposits in banks	₩		361,234		275,897

The Company doesn’t have any restricted cash and cash equivalents as of December 31, 2024 and 2023.

Studio Anseilen Co., Ltd.

NOTES TO FINANCIAL STATEMENTS

For the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023

13. Property, plant, 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							December 31, 2023
	Book<br><br>value		Accumulated<br><br>depreciation			Carrying<br><br>amount		Book<br><br>value		Accumulated<br><br>depreciation			Carrying<br><br>amount
	(In thousands of Korean won)							(In thousands of Korean won)
Office equipment		1,050		(315	)		735		1,050		(105	)		945

Details of the changes in property and equipment for the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023 are as follows:

		2024			For the<br><br>period from<br><br>March 6, 2023<br><br>(inception) to<br><br>December 31,<br><br>2023
		Office equipment			Office equipment
		(In thousands of Korean won)
Beginning balance	₩		945			-
Acquisitions			-			1,050
Depreciation			(210	)		(105	)
Ending balance	₩		735			945

The classification of depreciation expenses in the statements of comprehensive income for the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023 are as follows:

		December 31,<br><br>2024		For the<br><br>period from<br><br>March 6, 2023<br><br>(inception) to<br><br>December 31,<br><br>2023
		(In thousands of Korean won)
Selling, general and administrative expenses	₩		210		105

14. Financial instruments by category

The carrying amounts of financial instruments by category as of December 31, 2024 and 2023 are as follows:

		December 31,<br><br> 2024
		(In thousands of Korean won)
Financial assets at amortized cost
Cash and cash equivalents	₩		361,234	275,897
Other current<br> financial assets (*)			54,824	50,000
Subtotal	₩		416,058	325,897
Financial assets at fair value through profit or loss
Long-term investments			-	30,000
Total	₩		416,058	355,897
(*)	Other current financial assets consist of a rent deposit and<br>other receivables.
---	---

Studio Anseilen Co., Ltd.

NOTES TO FINANCIAL STATEMENTS

For the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023

		December 31,<br><br>2024		December 31,<br><br>2023
		(In thousands of Korean won)		(In thousands of Korean won)
Financial liabilities at amortized cost
Trade and other payables	₩		17,724		2,715
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,<br><br>2024		December 31,<br><br>2023
		(In thousands of Korean won)		(In thousands of Korean won)
Non-Current investments
Project investment<br> (*)	₩		-		30,000
(*)	An investment in a film production company.
---	---
B.	Net gains and losses by category of financial instruments
---	---

The net gains and losses by category of financial instruments for the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023 are as follows:

		2024			For the<br><br>period from<br><br>March 6, 2023<br><br>(inception) to<br><br>December 31,<br><br>2023
		Financial assets at<br><br>amortized cost			Financial assets at<br><br>amortized cost
		(In thousands of Korean won)
Interest income	₩		211			303
Loss on the fair value of financial investment assets			(30,000	)		-
Total	₩		(29,789	)		303

15. 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,<br><br>2024
		(In thousands of Korean won)
Number of authorized shares			1,000,000	1,000,000
Value per share	₩		5	5
Number of shares issued			3,000	3,000
Common shares	₩		15,000	15,000

Studio Anseilen Co., Ltd.

NOTES TO FINANCIAL STATEMENTS

For the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023

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

Details of other reserves as of December 31, 2024 and 2023 are as follows:

		December 31,<br><br>2024
		(In thousands of Korean won)
Share issue cost	₩		(1,054	)	(1,054	)
Remeasurement of defined benefit liability			(667	)	-
Total			(1,721	)	(1,054	)

16. 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 capital.’ Net debt is calculated as total borrowings (as shown in the statement of financial position) less cash and cash equivalents. The Company’s net debt to total capital ratio as of December 31, 2024 and 2023 are as follows:

		December 31,<br><br>2024
		(In thousands of Korean won)
Total liabilities	₩		1,586,074		1,076,993
Less: Cash and cash equivalents			(361,234	)	(275,897	)
Net debt			1,224,840		801,096
Total equity			(583,238	)	(333,686	)
Total capital	₩		641,602		467,410
Net debt to total capital ratio			191	%	171	%

17. Trade and other payables

Trade and other payables as of December 31, 2024 and 2023 are as follows:

	December 31,<br><br>2024
	(In thousands of Korean won)
Other payables		15,503	-
Accrued expenses		2,221	2,715
Total		17,724	2,715

18. Contract liabilities

Contract liabilities as of December 31, 2024 and 2023 are as follows:

	December 31,<br><br>2024		December 31,<br><br>2023
	(In thousands of Korean won)
Contract liabilities		1,500,000		1,000,000

The Company received Korean Won 250,000 thousand in October 2024, 250,000 thousand in June 2024 and 1,000,000 thousand in May 2023 from K Enter Holdings for the purpose of planning and developing a drama. In accordance with the terms of the contract with K Enter Holdings, the Company received payment before having completed performance obligations and recognized contract liabilities.

Studio Anseilen Co., Ltd.

NOTES TO FINANCIAL STATEMENTS

For the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023

19. Financial Instruments – Fair values and risk management

A.	Accounting classifications and fair values

The carrying amounts of financial instruments by category as of December 31, 2024 are as follows:

	Fair value
	(In thousands of Korean won)
Financial assets at fair value
Project investment		-	-	-	-	-

The carrying amounts of financial instruments by category as of December 31, 2023 are as follows:

	Fair value
	(In thousands of Korean won)
Financial assets at fair value
Project investment		30,000	-	-	30,000	30,000

Details of the changes in project investment for the year ended December 31, 2024 are as follows:

		2024
		Beginning balance		Loss on the fair value of financial investment assets			Ending balance
		(In thousands of Korean won)
Project investment	₩		30,000		(30,000	)		-

Details of the changes in project investment intangible assets for the period from March 6, 2023 (inception) to December 31, 2023 are as follows

****	****	For the period from March 6, 2023 (inception) to December 31, 2023
****	****	Beginning balance		Acquisitions		Ending balance
			(In thousands of Korean won)
Project investment	₩		-		30,000		30,000

Studio Anseilen Co., Ltd.

NOTES TO FINANCIAL STATEMENTS

For the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 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:

A.	Level 1: quoted prices (unadjusted) in active markets for identical asset or liability;
B.	Level 2: all inputs other than quoted prices included in Level 1 that are observable<br> (either directly that is, prices, or indirectly that is, derived from prices) for<br> the asset or liability;
---	---
C.	Level 3: unobservable inputs for the asset or liability.
---	---

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.

C.	Financial risk management

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 evaluates 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.

Studio Anseilen Co., Ltd.

NOTES TO FINANCIAL STATEMENTS

For the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023

The maximum exposure to credit risk of the Company as of December 31, 2024 and 2023 are as follows:

		December 31,<br><br>2024		December 31,<br><br>2023
		(In thousands of Korean won)		(In thousands of Korean won)
Cash and cash equivalents	₩		361,234		275,897
Other current financial assets			54,824		50,000
Total	₩		416,058		325,897

Cash and cash equivalents are deposited in financial institutions with strong credit rating. 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.

ii.	Liquidity risk

Financial liabilities of the Company by maturity according to the remaining period from December 31, 2024 and 2023 to the contractual maturity date are as follows:

	December 31, 2024
	Carrying<br> <br>Amount		Less than<br> <br>3 months		3 months<br> <br>~ 1 year		1~2 years		2~5 years		More than<br> <br>5 years		Total
	(In thousands of Korean won)
Non-derivative financial liabilities
Other payables		17,724		-		17,724		-		-		-		17,724
	December 31, 2023
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	Carrying<br> <br>Amount		Less than<br> <br>3 months		3 months<br> <br>~ 1 year		1~2 years		2~5 years		More than<br> <br>5 years		Total
	(In thousands of Korean won)
Non-derivative financial liabilities
Other payables		2,715		2,715		-		-		-		-		2,715

Studio Anseilen Co., Ltd.

NOTES TO FINANCIAL STATEMENTS

For the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023

20. Leases

A.	Leases as lessee

The Company leases an office. The lease typically run for a period of 1 year, with an option to renew or terminate the lease after that date. The Company has elected not to recognize right-of-use asset and lease liability for this lease. Information about lease for which the Company is a lessee is presented below.

i.	Amounts recognized in profit or loss.

Amounts recognized in profit or loss for the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023 are as follows:

		2024
		(In thousands of Korean won)
Expense relating to short-term leases	₩		22,800	12,000
ii.	Amounts recognized in statement of cash flows.
---	---

Amounts recognized in statements of cash flows for the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023 are as follows:

		2024
		(In thousands of Korean won)
Total cash outflows of leases	₩		22,800	12,000
iii.	Extension options
---	---

The lease contains an extension option exercisable by the Company. Where practicable, the Company seeks to include extension option in new lease to provide operational flexibility. The extension option held is exercisable only by the Company and not by the lessor. The Company assesses at the lease commencement date whether it is reasonably certain to exercise the extension option. The Company reassesses whether it is reasonably certain to exercise the option if there is a significant event or significant changes in circumstances within its control.

Studio Anseilen Co., Ltd.

NOTES TO FINANCIAL STATEMENTS

For the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023

21. Statement of cash flows

Adjustments for income from operating activities for the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023 are as follows:

		2024
		(In thousands of Korean won)
Interest income	₩		(211	)	(303	)
Severance Benefits			(65,884	)	72,347
Depreciation			210		105
Loss on the fair value of financial investment assets			30,000		-
Total	₩		(35,885	)	72,149

Changes in assets and liabilities from operating activities for the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023 are as follows:

		2024
		(In thousands of Korean won)
Other current assets	₩		26,408		(26,419	)
Other non-current non-financial assets			(226,000	)	(360,000	)
Accounts receivable — other, net			(3,324	)
Trade and other payables			15,010		2,715
Other current non-financial liabilities			59,288		1,931
Other non-current non-financial liabilities			500,000		1,000,000
Total	₩		371,382		618,227

Studio Anseilen Co., Ltd.

NOTES TO FINANCIAL STATEMENTS

For the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023

22. 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
Key management personnel	Park, Jun Woo (*1)	Park, Jun Woo
Key management personnel	Shin, Kyung Soo	Shin, Kyung Soo
Key management personnel	Kim, Seung Ho (*1)	Kim, Seung Ho
Other related parties	Shining park Co., Ltd.	Shining park Co., Ltd.
Other related parties	Its story Co., Ltd.	Its story Co., Ltd.
Other related parties	- (*2)	Poseidon pictures Co., Ltd.
(*1)	Two key management personnel resigned as registered directors<br>subsequent to the end of the reporting period.
---	---
(*2)	Due to a change in the management of Poseidon pictures Co.,<br>Ltd. during the year, the entity has been excluded from the scope of related parties.
B.	Transactions with related parties
---	---

Details of transactions with related parties for the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023 are as follows:

			2024		For the<br><br>period from<br><br>March 6, 2023<br><br>(inception) to<br><br>December 31,<br><br>2023
Related party	Name		Acquisition of prepayments		Acquisition of prepayments
			(In thousands of Korean won)
Other related parties	Its story Co., Ltd.	₩		-		60,000
C.	Account balances with related parties.
---	---

The balances of receivables and payables to related parties as of December 31, 2024 are as follows:

			December 31,<br><br>2024
Related party	Name of entity		Other payables<br> (*)
			(In thousands of Korean won)
Key management personnel	Park, Jun Woo	₩		4,655
Key management personnel	Shin, Kyung Soo			4,655
Key management personnel	Kim, Seung Ho			4,694
(*)	Other payables is the income tax refund payable to each management.
---	---

There are no balances of receivables and payables to related parties as of December 31, 2023.

D.	Financial transactions with related parties

There are no significant financial transactions with related parties for the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023.

Studio Anseilen Co., Ltd.

NOTES TO FINANCIAL STATEMENTS

For the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023

E.	Transactions with key management personnel

The compensation for the key management personnel for the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023 are as follows:

		2024
		(In thousands of Korean won)
Short-term employee benefits	₩		150,000		196,000
Post-employment<br> benefits (*)			(70,718	)	70,718
Total	₩		79,282		266,718
(*)	Gains on defined benefit settlement occurred as management agreed<br>on the settlement of retirement benefits in December, 2024.
---	---

Compensation of the Company’s key management personnel includes salaries, contributions to a post-employment defined benefit plan.

F.	Financial Transactions with key management personnel

Details of significant financial transaction the key management personnel for the year ended December 31, 2024 and the period from March 6, 2023 (inception) to December 31, 2023 are as follows:

		2024		For the<br><br>period from<br><br>March 6, 2023<br><br>(inception) to<br><br>December 31,<br><br>2023
		(In thousands of Korean won)
Shares issued	₩		-		15,000

23. Commitments

On September 14, 2023, an amendment was made to the equity interest exchange agreement, originally entered into on April 9, 2023, between the CEOs, who are the dominant shareholders of the Company, and K Enter Holdings for the purpose of listing on NASDAQ through a merger with a SPAC company. The equity interest exchange agreement is effective on the date designated by K Enter Holdings. Upon the approval, the CEOs of the Company will exchange each of 510 shares with the equity interest of K Enter Holdings. Following the equity interest exchange transaction, the Group is expected to be a subsidiary of K Enter Holdings, Inc.

24. Subsequent event

On January 3, 2025, K Enter Holdings Inc. completed the acquisition of a controlling interest in six Korean entities, including Studio Anseilen Co., Ltd., through a share exchange. Upon the approval, the CEOs of the Company exchanged 1,530 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.

Exhibit 15.21

K ENTER HOLDINGS INC.

INDEX TO THE FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm	F-2
Financial statements:
Balance Sheets as of December 31, 2024 and 2023	F-3
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-4
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-5
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-6
Notes to Financial Statements	F-7 – F-29

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

F-2

K ENTER HOLDINGS INC.

BALANCE SHEETS

	December 31,<br> 2024			December 31,<br> 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-3

K ENTER HOLDINGS INC.

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

	2024			For the<br> period from<br>January 4, 2023<br>(inception) to<br>December 31,<br>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 shares of common stock 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-4

K ENTER HOLDINGS INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

	Series A-1<br><br> <br>Convertible Preferred<br><br> <br>Stock				Series A<br><br> <br>Convertible Preferred Stock				Common<br> stock				Treasury<br> stock						Preferred Stock<br><br> <br>Subscription			Additional<br><br> <br>Paid-in		Accumulated			Accumulated Other Comprehensive
****	Shares		Amount		Shares		Amount		Shares		Amount		Shares		****	Amount		****	Receivable		****	Capital		Deficit		****	Loss		****	Total		****
Balance,<br> January 4, 2023 (inception)		-	$	-		-	$	-		-	$	-		-		$	-		$	-		$	-	$	-		$	-		$	-
Shares<br> issued for common stock		-		-		-		-		100,000		1,000		-			-			-			-		-			-			1,000
Shares<br> issued for Series A convertible preferred stock, net of issuance costs		-		-		35,484		355		-		-		-			-			-			10,600,609		-			-			10,600,964
Shares<br> issued for Series A-1 convertible preferred stock		4,814		-		-		-		-		-		-			-			(369,000	)		2,888,400		-			-			2,519,400
Treasury<br> stock shares acquired		-		-		-		-		-		-		(12,074	)		(121	)		-			-		-			-			(121	)
Shares<br> transferred back to the Company		-		-		-		-		-		-		6,353			64			-			1,749,702		-			-			1,749,766
Net<br> loss		-		-		-		-		-		-		-			-			-			-		(8,930,946	)		-			(8,930,946	)
Unrealized<br> gain of available-for-sales																												6,757			6,757
Foreign<br> currency translation adjustment		-		-		-		-		-		-		-			-			-			-		-			65,284			65,283
Balance,<br> 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,<br> 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<br> issued for Series A-1 convertible preferred stock		500		-		-		-		-		-		-			-			-			300,000		-			-			300,000
Shares<br> issued for common stock as a share-based compensation		-		-		-		-		1,202		-		-			-			-			669,201		-			-			669,201
Cash<br> received for Preferred Stock Subscription Receivable		-		-		-		-		-		-		-			-			369,000			-		-			-			369,000
Treasury<br> stock shares acquired		-		-		-		-		-		-		(1,376	)		-			-			-		-			-			-
Shares<br> issued for common stock from the Company’s treasury shares		-		-		-		-		-		-		2,100			7			-			1,169,147		-			-			1,169,154
Settlement<br> of liabilities by issuance of shares														4,997			50						2,781,980								2,782,030
Share-based<br> compensation																							383,037								383,037
Net<br> loss		-		-		-		-		-		-		-			-			-			-		(12,870,234	)		-			(12,870,234	)
Unrealized<br> Loss of Available-For-Investments		-		-		-		-		-		-		-			-			-			-		-			(47,297	)		(47,297	)
Foreign<br> currency translation adjustment		-		-		-		-		-		-		-			-			-			-		-			(277,728	)		(277,728	)
Balance,<br> 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-5

K ENTER HOLDINGS INC.

STATEMENTS OF CASH FLOWS

	2024			For the<br> period from<br><br> January 4, 2023<br> (inception) to<br> December 31,<br> 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-1convertible 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 common stock 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-6

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-7

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-8

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-9

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-10

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-11

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 shares of common stock 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 common stock 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 common stock 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 the shares of common stock 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-12

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 common stock securities, are included in the computation of basic EPS. The two-class method requires earnings for the period to be allocated between common stock 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 shares of common stock 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 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,<br><br> <br>2024			Period from<br>January 4, 2023<br>(inception) to<br>December 31,<br>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-13

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-14

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, and as amended on March 11, 2024, June 28, 2024, and July 25, 2024, the Company entered into a merger agreement (the “Merger Agreement”) with Global Star Acquisition Inc., a Delaware corporation, (“Global Star”) and GLST Merger Sub Inc., a Delaware corporation and wholly owned sub of Global Star, (“Merger Sub”). The Merger Agreement provides that Global Star will merge with and into K Wave Media Ltd., a Cayman Islands exempted company (“K Wave Media” or “PubCo”), with PubCo continuing as the surviving publicly traded entity (the “Reincorporation Merger”). One day following the Reincorporation Merger, Merger Sub will be merged with and into K Enter, with K Enter the surviving corporation and resulting in K Enter being a wholly owned subsidiary of PubCo (“Acquisition Merger”).The Reincorporation Merger and the Acquisition Merger are collectively referred to herein as the “Business Combination”.

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

●

The consideration for Reincorporation Merger is expected to be settled by issuing: (a) one share of PubCo’s ordinary shares in exchange for each share of Global Star Class A common stock that is outstanding as of the effective time of the Reincorporation Merger and (b) one warrant to purchase one of PubCo’s ordinary shares at an exercise price of $11.50 in exchange for each share of each Global Star warrant that is outstanding as of the effective time of the Reincorporation Merger.

●

Certain of Global Star’s stockholders have provided written consent, pursuant to which, among other things, such stockholders have approved the Merger Agreement and the Reincorporation Merger. Each issued and outstanding share of Global Star’s Class A common stock and each issued and outstanding Global Star right on an as-converted basis, will automatically be cancelled and converted into an equal number of shares of the PubCo’s ordinary shares in accordance with the Merger Agreement and each Global Star warrant shall be exchanged for a PubCo warrant.

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F-15

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 common stock 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 common stock 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 common stock 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 Common Stock will have the opportunity to redeem their shares of Global Star Class A Common Stock for cash in connection with the Business Combination.
---	---

On February 3, 2025 (the “Closing Date”), 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 shares of common stock 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 common stock 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 common stock 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 shares of common stock in exchange for shares of the Company’s common stock totaling 14,250,000,000 Korean Won ($9,642,321 at December 31, 2024).

F-16

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 shares of common stock in exchange for shares of the Company’s common stock 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 shares of common stock in exchange for shares of the Company’s common stock 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 shares of common stock in exchange for shares of the Company’s common stock 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 shares of common stock in exchange for shares of the Company’s common stock 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 shares of common stock and preferred stock in exchange for shares of the Company’s common stock 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 common stock 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<br> January 4, 2023<br> (inception) to<br> December 31,<br> 2023
Revenue
Media production	$	485,271		208,704
	2024		Period from<br> January 4, 2023<br> (inception) to<br> December 31,<br> 2023
---	---	---	---	---
Geographic information:
Korea	$	485,271		208,704

F-17

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 shares of common stock 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 Common Stock (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. Common Stock 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 shares of common stock 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 the shares of common stock it is authorized to issue to 10,000,000 shares of common stock 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-18

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 common stock 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 common stock 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 common stock 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 common stock 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 common stock 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 common stock 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 common stock were issued and outstanding, respectively, and the Company reserved 40,798 shares and 40,298 shares of common stock 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 shares of common stock from the Company’s treasury shares to employees and nonemployees (See Note 8) as the estimated fair value of such common stock 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		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.
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F-19

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 common stock 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 common stock 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 common stock will be determined by the Company’s Board until such time the Company’s common stock is listed on an established exchange or national market system.

In connection with estimating the fair value of common stock at the time shares of common stock 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-20

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
Adjustment to fair value		)
Impairment Loss		)
Balance as of December 31, 2024

All values are in US Dollars.

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-21

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,<br> 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:

****	1^st^
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-22

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	1^st^	2^nd^^*()**^
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:<br><br> <br>Redeemed on the maturity date, at their outstanding principal amount, which has not been early redeemed	1. Redemption at maturity:<br><br> <br>Redeemed on the maturity date, at their outstanding principal amount, which has not been early redeemed
Conversion price	●<br><br> <br>Conversion before the business combination:<br><br> <br><br><br> <br>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).<br><br> <br><br><br> <br>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).<br><br> <br><br><br> <br>●<br><br> <br>Conversion after the business combination<br><br> <br><br><br> <br>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).<br><br> <br><br><br> <br>The Post-Merger Conversion Prices shall be adjusted downwardly to the greater of the following:<br><br> <br><br><br> <br>●<br><br> <br>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<br><br> <br><br><br> <br>●<br><br> <br>Floor price of $4 per share.	●<br><br> <br>Conversion before the business combination:<br><br> <br><br><br> <br>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).<br><br> <br><br><br> <br>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).<br><br> <br><br><br> <br>●<br><br> <br>Conversion after the business combination<br><br> <br><br><br> <br>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).<br><br> <br><br><br> <br>The Post-Merger Conversion Prices shall be adjusted downwardly to the greater of the following:<br><br> <br><br><br> <br>●<br><br> <br>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<br><br> <br><br><br> <br>●<br><br> <br>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-23

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-24

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-25

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-26

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 common stock 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. Common Stock 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-27

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 common stock 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 common stock 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 common stock 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 common stock 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 common stock 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 common stock in consideration for services rendered.

F-28

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, 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-29