{"url_path":"/sec/kwmww/10-k/2026/item-18","section_key":"item-18","section_title":"Item 18 FINANCIAL STATEMENTS**","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/2000756/0001829126-26-005357-index.html","accession_number":"0001829126-26-005357","cik":"0002000756","ticker":"KWM","issuer_name":"Nexus Advanced Technologies Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/2000756/0001829126-26-005357-index.html","primary_entity_key":"0002000756","primary_entity_name":"K Wave Media Ltd."},"word_count":46824,"has_tables":true,"body_markdown":"**ITEM 18. FINANCIAL STATEMENTS**\n\n \n\nThe consolidated financial statements of K Wave Media Ltd and its subsidiaries are included at the end of this annual report on Form 20-F.\n\n \n\n106\n\n \n\n \n\n**Exhibit Number**\n \n**Description**\n\n**1.1****\n \n[Form of Amended and Restated Memorandum and Articles of Association of K Wave Media Ltd. (incorporated by reference to Annex B to Global Star Prospectus/Proxy Statement filed with the SEC on January 8, 2025).](https://www.sec.gov/Archives/edgar/data/1922331/000182912625000117/globalstaracq_defm14a.htm#annex-b)\n\n \n \n \n\n**2.1****\n \n[Specimen Common Share Certificate of K Wave Media Ltd. (incorporated by reference to Exhibit 4.7 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624001882/kwavemedia_ex4-7.htm)\n\n \n \n \n\n**2.2****\n \n[Specimen Warrant Certificate of K Wave Media Ltd. (incorporated by reference to Exhibit 4.8 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624001882/kwavemedia_ex4-8.htm)\n\n \n \n \n\n**2.3****\n \n[Form of Warrant Agreement between Global Star Acquisition, Inc. and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 4.4 of Global Star Acquisition, Inc.’s Form S-1 filed with the SEC on July 28, 2022).](https://www.sec.gov/Archives/edgar/data/1922331/000119312522205295/d316854dex44.htm)\n\n \n \n \n\n**2.4****\n \n[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).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624001882/kwavemedia_ex4-8.htm)\n\n \n \n \n\n**2.5***\n \n[Description of securities registered under Section 12 of the Securities Exchange Act.](kwavemedia_ex2-5.htm)\n\n \n \n \n\n**4.1****\n \n[Merger Agreement, dated as of June 15, 2023, by and among Global Star Acquisition Inc., K Enter Holdings Inc., K Wave Media Ltd. and GLST Merger Sub Inc. (incorporated by reference to Annex A to Global Star Prospectus/Proxy Statement filed with the SEC on January 8, 2025).](https://www.sec.gov/Archives/edgar/data/1922331/000182912625000117/globalstaracq_defm14a.htm#annexaaaa_001)\n\n \n \n \n\n**4.2****\n \n[First Amendment to the Merger Agreement, dated as of March 11, 2024, by and among Global Star Acquisition Inc., K Enter Holdings Inc., K Wave Media Ltd. and GLST Merger Sub Inc. (incorporated by reference to Annex A to Global Star Prospectus/Proxy Statement filed with the SEC on January 8, 2025).](https://www.sec.gov/Archives/edgar/data/1922331/000182912625000117/globalstaracq_defm14a.htm#annexaaaa_001)\n\n \n \n \n\n**4.3****\n \n[Second Amendment to the Merger Agreement, dated as of June 28, 2024, by and among Global Star Acquisition Inc., K Enter Holdings Inc., K Wave Media Ltd. and GLST Merger Sub Inc. (incorporated by reference to Annex A to Global Star Prospectus/Proxy Statement filed with the SEC on January 8, 2025).](https://www.sec.gov/Archives/edgar/data/1922331/000182912625000117/globalstaracq_defm14a.htm#annexaaaa_001)\n\n \n \n \n\n**4.4****\n \n[Third Amendment to the Merger Agreement, dated as of July 25, 2024, by and among Global Star Acquisition Inc., K Enter Holdings Inc., K Wave Media Ltd. and GLST Merger Sub Inc. (incorporated by reference to Annex A to Global Star Prospectus/Proxy Statement filed with the SEC on January 8, 2025).](https://www.sec.gov/Archives/edgar/data/1922331/000182912625000117/globalstaracq_defm14a.htm#annexaaaa_001)\n\n \n \n \n\n**4.5****\n \n[Fourth Amendment to the Merger Agreement, dated as of December 11, 2024, by and among Global Star Acquisition Inc., K Enter Holdings Inc., K Wave Media Ltd. and GLST Merger Sub Inc. (incorporated by reference to Annex A to Global Star Prospectus/Proxy Statement filed with the SEC on January 8, 2025).](https://www.sec.gov/Archives/edgar/data/1922331/000182912625000117/globalstaracq_defm14a.htm#annexaaaa_001)\n\n \n \n \n\n**4.6****\n \n[Form of Amended and Restated Registration Rights Agreement (incorporated by reference to Annex D to Global Star Prospectus/Proxy Statement filed with the SEC on January 8, 2025).](https://www.sec.gov/Archives/edgar/data/1922331/000182912625000117/globalstaracq_defm14a.htm#annex-d)\n\n \n\n**4.7****\n \n[Form of Lock-Up Agreement by and among K Wave Media Ltd., Global Star Acquisition, Inc., K Enter Holdings Inc. and certain other persons (incorporated by reference to Exhibit 10.1 of Global Star Acquisition, Inc.’s Current Report on Form 8-K filed with the SEC on June 22, 2023).](https://www.sec.gov/Archives/edgar/data/1922331/000119312523172700/d458880dex101.htm)\n\n \n \n \n\n**4.8****\n \n[Form of Amended and Restated Registration Rights Agreement by and among K Wave Media Ltd., Global Star Acquisition, Inc., certain former stockholders of Global Star Acquisition, Inc., certain former stockholders of K Enter Holdings Inc. and certain other persons (incorporated by reference to Exhibit 10.2 of Global Star Acquisition, Inc.’s Current Report on Form 8-K filed with the SEC on June 22, 2023).](https://www.sec.gov/Archives/edgar/data/1922331/000119312523172700/d458880dex102.htm)\n\n \n\n107\n\n \n\n \n\n**4.9****\n \n[Form of PubCo’s 2024 Equity Incentive Plan (incorporated by reference to Annex C to Global Star Prospectus/Proxy Statement filed with the SEC on January 8, 2025).](https://www.sec.gov/Archives/edgar/data/1922331/000182912625000117/globalstaracq_defm14a.htm#annex-c)\n\n \n \n \n\n**4.10****\n \n[Share Purchase Agreement, dated April 9, 2023, by and between K Enter Holdings Inc. and certain shareholders of Apeitda Co., Ltd. and Amendment thereto dated September 14, 2023 (incorporated by reference to Exhibit 10.12 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624001882/kwavemedia_ex10-12.htm)\n\n \n \n \n\n**4.11****\n \n[Share Purchase Agreement, dated April 10, 2023, by and between K Enter Holdings Inc. and certain shareholders of Bidangil Pictures Co., Ltd. and Amendment thereto dated September 14, 2023 (incorporated by reference to Exhibit 10.13 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624001882/kwavemedia_ex10-13.htm)\n\n \n \n \n\n**4.12****\n \n[Share Purchase Agreement, dated April 10, 2023, by and between K Enter Holdings Inc. and certain shareholders of The LAMP Co., Ltd. and Amendment thereto dated September 14, 2023. (incorporated by reference to Exhibit 10.14 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624001882/kwavemedia_ex10-14.htm)\n\n \n \n \n\n**4.13****\n \n[Share Purchase Agreement, dated April 9, 2023, by and between K Enter Holdings Inc. and certain shareholders of Studio Anseilen Co., Ltd. and Amendment thereto dated September 14, 2023 (incorporated by reference to Exhibit 10.15 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624001882/kwavemedia_ex10-15.htm)\n\n \n \n \n\n**4.14****\n \n[Share Purchase Agreement and Shareholder Agreement, both dated April 12, 2023, by and between K Enter Holdings Inc. and certain shareholders of First Virtual Lab Inc. (incorporated by reference to Exhibit 10.16 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624001882/kwavemedia_ex10-16.htm)\n\n \n \n \n\n**4.15****\n \n[Share Purchase Agreement, dated March 31, 2023, by and between K Enter Holdings Inc. and certain shareholders of Play Company Co., Ltd. and Amendment thereto dated September 30, 2023 (incorporated by reference to Exhibit 10.17 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624001882/kwavemedia_ex10-17.htm)\n\n \n \n \n\n**4.16****\n \n[Equity Purchase Agreement, dated March 31, 2023, by and between K Enter Holdings Inc. and certain shareholders of Solaire Partners LLC. and Amendments thereto dated September 14, 2023 and January 18, 2024, respectively (incorporated by reference to Exhibit 10.18 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624001882/kwavemedia_ex10-18.htm)\n\n \n \n \n\n**4.17****\n \n[Share Purchase Agreement, dated January 31, 2024, by and between Solaire Partners Limited Liability Company and K Enter Holdings Inc. (incorporated by reference to Exhibit 10.19 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624001882/kwavemedia_ex10-19.htm)\n\n \n \n \n\n**4.18****\n \n[Share Purchase Agreement, dated January 31, 2024, by and between King Bear Film LLC and K Enter Holdings Inc. (incorporated by reference to Exhibit 10.20 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624001882/kwavemedia_ex10-20.htm)\n\n \n \n \n\n**4.19****\n \n[April 27, 2023 Lease between Zoa Zoa, Inc., as landlord and K Enter Holdings Inc., as tenant (incorporated by reference to Exhibit 10.21 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624001882/kwavemedia_ex10-21.htm)\n\n \n \n \n\n**4.20****\n \n[June 1, 2023 Lease between Solaire Partners, LLC, as landlord and K Enter Holdings Inc., as tenant (incorporated by reference to Exhibit 10.22 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624001882/kwavemedia_ex10-22.htm)\n\n \n\n108\n\n \n\n \n\n**4.21****\n \n[Development Agreement, dated May 25, 2023, between K Enter Holdings Inc. and Studio Anseilen Co., Ltd. (incorporated by reference to Exhibit 10.23 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624001882/kwavemedia_ex10-23.htm)\n\n \n \n \n\n**4.22****\n \n[$1,000,000 Convertible Bond, issued by Prototype Group, Inc., dated August 10, 2023 (incorporated by reference to Exhibit 10.24 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624001882/kwavemedia_ex10-24.htm)\n\n \n \n \n\n**4.23****\n \n[Loan Agreement, dated September 6, 2023, between K Enter Holdings Inc., as lender and Studio V Plus Co., Ltd., as borrower (incorporated by reference to Exhibit 10.25 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624001882/kwavemedia_ex10-25.htm)\n\n \n \n \n\n**4.24****\n \n[Series A Convertible Preferred Stock Purchase Agreement, dated as of May 4, 2023, by and between K Enter Holdings Inc. and K Enter Holdings Korea Investment Partnership (incorporated by reference to Exhibit 10.26 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624001882/kwavemedia_ex10-26.htm)\n\n \n \n \n\n**4.25****\n \n[Series A Convertible Preferred Stock Purchase Agreement, dated as of June 13, 2023, by and between K Enter Holdings Inc. and Tan Chin Hwee (incorporated by reference to Exhibit 10.27 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624001882/kwavemedia_ex10-27.htm)\n\n \n \n \n\n**4.26****\n \n[Series A Convertible Preferred Stock Purchase Agreement, dated as of June 13, 2023, by and between K Enter Holdings Inc. and Young Han Yoon (incorporated by reference to Exhibit 10.28 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624001882/kwavemedia_ex10-28.htm)\n\n \n \n \n\n**4.27****\n \n[Series A Convertible Preferred Stock Purchase Agreement, dated as of June 13, 2023, by and between K Enter Holdings Inc. and Hyeonho Yoon (incorporated by reference to Exhibit 10.29 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624001882/kwavemedia_ex10-29.htm)\n\n \n \n \n\n**4.28****\n \n[Series A Convertible Preferred Stock Purchase Agreement, dated as of June 19, 2023, by and between K Enter Holdings Inc. and Assai OY (incorporated by reference to Exhibit 10.30 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624001882/kwavemedia_ex10-30.htm)\n\n \n \n \n\n**4.29****\n \n[Series A Convertible Preferred Stock Purchase Agreement, dated as of June 19, 2023, by and between K Enter Holdings Inc. and Graham NG Yong Qian (incorporated by reference to Exhibit 10.31 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624001882/kwavemedia_ex10-31.htm)\n\n \n \n \n\n**4.30****\n \n[Series A Convertible Preferred Stock Purchase Agreement, dated as of June 19, 2023, by and between K Enter Holdings Inc. and Integrity Capital International (incorporated by reference to Exhibit 10.32 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624001882/kwavemedia_ex10-32.htm)\n\n \n \n \n\n**4.31****\n \n[Series A Convertible Preferred Stock Purchase Agreement, dated as of June 19, 2023, by and between K Enter Holdings Inc. and Rossipohja Sijoitus OY (incorporated by reference to Exhibit 10.33 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624001882/kwavemedia_ex10-33.htm)\n\n \n \n \n\n**4.32****\n \n[Series A Convertible Preferred Stock Purchase Agreement, dated as of June 20, 2023, by and between K Enter Holdings Inc. and Gan Cher Siong (incorporated by reference to Exhibit 10.34 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624001882/kwavemedia_ex10-34.htm)\n\n \n \n \n\n**4.33****\n \n[Series A Convertible Preferred Stock Purchase Agreement, dated as of June 30, 2023, by and between K Enter Holdings Inc. and Xeno Investment Asia (incorporated by reference to Exhibit 10.35 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624001882/kwavemedia_ex10-35.htm)\n\n \n\n109\n\n \n\n \n\n**4.34****\n \n[Series A Convertible Preferred Stock Purchase Agreement, dated as of August 22, 2023, by and between K Enter Holdings Inc. and JVC INC. (incorporated by reference to Exhibit 10.36 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624001882/kwavemedia_ex10-36.htm)\n\n \n \n \n\n**4.35****\n \n[Series A-1 Convertible Preferred Stock Purchase Agreement, dated as of August 25, 2023, by and between K Enter Holdings Inc. and Studio Santa Claus Entertainment (incorporated by reference to Exhibit 10.37 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624001882/kwavemedia_ex10-37.htm)\n\n \n \n \n\n**4.36****\n \n[Series A-1 Convertible Preferred Stock Purchase Agreement, dated as of August 31, 2023, by and between K Enter Holdings Inc. and Dong Hwan Kim (incorporated by reference to Exhibit 10.38 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624001882/kwavemedia_ex10-38.htm)\n\n \n \n \n\n**4.37****\n \n[Series A-1 Convertible Preferred Stock Purchase Agreement, dated as of September 5, 2023, by and between K Enter Holdings Inc. and Dan Ah Kim (incorporated by reference to Exhibit 10.39 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624001882/kwavemedia_ex10-39.htm)\n\n \n \n \n\n**4.38****\n \n[Series A-1 Convertible Preferred Stock Purchase Agreement, dated as of September 5, 2023, by and between K Enter Holdings Inc. and Ji Gun Kim (incorporated by reference to Exhibit 10.40 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624001882/kwavemedia_ex10-40.htm)\n\n \n \n \n\n**4.39****\n \n[Series A-1 Convertible Preferred Stock Purchase Agreement, dated as of September 5, 2023, by and between K Enter Holdings Inc. and Woon Jun Sung (incorporated by reference to Exhibit 10.41 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624001882/kwavemedia_ex10-41.htm)\n\n \n \n \n\n**4.40****\n \n[Series A-1 Convertible Preferred Stock Purchase Agreement, dated as of September 7, 2023, by and between K Enter Holdings Inc. and Younglan Choi (incorporated by reference to Exhibit 10.42 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624001882/kwavemedia_ex10-42.htm)\n\n \n \n \n\n**4.41****\n \n[Termination and Amendment to the Share Purchase Agreement and the Shareholders Agreement by and amongst Sungkwon Kim, King Bear Film LLC, and K Enter Holdings Inc., dated January 31, 2024 (incorporated by reference to Exhibit 10.43 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624001882/kwavemedia_ex10-43.htm)\n\n \n \n \n\n**4.42****\n \n[Termination Agreement and Re-purchase Option Agreement by and amongst Sungkwon Kim, King Bear Film LLC, and K Enter Holdings Inc., dated March 5, 2024 (incorporated by reference to Exhibit 10.44 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624001882/kwavemedia_ex10-44.htm)\n\n \n \n \n\n**4.43****\n \n[Convertible Senior Unsecured Note, dated June 4, 2024 issued by K Enter Holdings, Inc. to Innocus Global Group Pte Ltd., as Purchaser (incorporated by reference to Exhibit 10.45 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624004507/kwavemedia_ex10-45.htm)\n\n \n \n \n\n**4.44****\n \n[Convertible Senior Unsecured Note, dated June 5, 2024 issued by K Enter Holdings, Inc. to Global Star Capital VCC – Alpha Opportunities Fund, as Purchaser (incorporated by reference to Exhibit 10.46 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624004507/kwavemedia_ex10-46.htm)\n\n \n \n \n\n**4.45††****\n \n[Form of Employment Agreement by and between K Wave Media Ltd. and Tan Chin Hwee (incorporated by reference to Exhibit 10.47 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](http://www.sec.gov/Archives/edgar/data/2000756/000182912624006274/kwavemedia_ex10-47.htm)\n\n \n \n \n\n**4.46††****\n \n[Form of Employment Agreement by and between K Wave Media Ltd. and Jun Jong (incorporated by reference to Exhibit 10.48 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](http://www.sec.gov/Archives/edgar/data/2000756/000182912624006274/kwavemedia_ex10-48.htm)\n\n \n\n110\n\n \n\n \n\n**4.47††****\n \n[Form of Employment Agreement by and between K Wave Media Ltd. and Jihun Byun (incorporated by reference to Exhibit 10.49 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](http://www.sec.gov/Archives/edgar/data/2000756/000182912624006274/kwavemedia_ex10-49.htm)\n\n \n \n \n\n**4.48****\n \n[Loan Agreement, dated April 22, 2024 between K Enter Holdings, Inc. and Young Jae Lee (incorporated by reference to Exhibit 10.50 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](http://www.sec.gov/Archives/edgar/data/2000756/000182912624004507/kwavemedia_ex10-50.htm)\n\n \n \n \n\n**4.49****\n \n[Loan Agreement, dated April 23, 2024 between K Enter Holdings, Inc. and Young Jae Lee (incorporated by reference to Exhibit 10.51 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](http://www.sec.gov/Archives/edgar/data/2000756/000182912624004507/kwavemedia_ex10-51.htm)\n\n \n \n \n\n**4.50****\n \n[Loan Agreement, dated May 3, 2024 between K Enter Holdings, Inc. and Young Jae Lee (incorporated by reference to Exhibit 10.52 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](http://www.sec.gov/Archives/edgar/data/2000756/000182912624004507/kwavemedia_ex10-52.htm)\n\n \n \n \n\n**4.51****\n \n[Loan Agreement, dated April 26, 2024 between K Enter Holdings, Inc. and Bidangil Pictures Co., Ltd (incorporated by reference to Exhibit 10.53 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](http://www.sec.gov/Archives/edgar/data/2000756/000182912624004507/kwavemedia_ex10-53.htm)\n\n \n \n \n\n**4.52****\n \n[Extension and Amendment Agreement to the Convertible Bond, dated August 9, 2024 (incorporated by reference to Exhibit 10.54 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](http://www.sec.gov/Archives/edgar/data/2000756/000182912624005808/kwavemedia_ex10-54.htm)\n\n \n \n \n\n**4.53****\n \n[Loan Agreement, dated August 19, 2024 between Global Star Acquisition I LLC and K Enter Holdings Inc. (incorporated by reference to Exhibit 10.55 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](http://www.sec.gov/Archives/edgar/data/2000756/000182912624005808/kwavemedia_ex10-55.htm)\n\n \n \n \n\n**4.54†****\n \n[Agreement between Play Company Co., Ltd. and Hybe Co., Ltd, dated January 26, 2024 (incorporated by reference to Exhibit 10.56 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](http://www.sec.gov/Archives/edgar/data/2000756/000182912624006274/kwavemedia_ex10-56.htm)\n\n \n \n \n\n**4.55†****\n \n[Agreement between Play Company Co., Ltd. and SM Entertainment Co., Ltd, dated December 12, 2023 (incorporated by reference to Exhibit 10.57 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](http://www.sec.gov/Archives/edgar/data/2000756/000182912624006274/kwavemedia_ex10-57.htm)\n\n \n \n \n\n**4.56****\n \n[Share Subscription Agreement, dated September 24, 2024 between K Enter Holdings, Inc. and GF Korea Inc. (incorporated by reference to Exhibit 10.58 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624006540/kwavemedia_ex10-58.htm)\n\n \n \n \n\n**4.57****\n \n[Series A-1 Convertible Preferred Stock Purchase Agreement, dated as of October 10, 2023, by and between K Enter Holdings Inc. and Mavs Inc. (incorporated by reference to Exhibit 10.59 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624007003/kwavemedia_ex10-59.htm)\n\n \n \n \n\n**4.58****\n \n[Series A-1 Convertible Preferred Stock Purchase Agreement, dated as of September 21, 2024, by and between K Enter Holdings Inc. and Shawn Loh (incorporated by reference to Exhibit 10.60 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624007003/kwavemedia_ex10-60.htm)\n\n \n \n \n\n**4.59****\n \n[Series A-1 Convertible Preferred Stock Purchase Agreement, dated as of September 25, 2024, by and between K Enter Holdings Inc. and Innocus Global Group PTE. Ltd. (incorporated by reference to Exhibit 10.61 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624007003/kwavemedia_ex10-61.htm)\n\n \n \n \n\n**4.60****\n \n[Release Agreement No. 1, dated as of September 30, 2024, by and between K Enter Holdings Inc. and KPMG Samjong Accounting Corp. (incorporated by reference to Exhibit 10.62 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624007003/kwavemedia_ex10-62.htm)\n\n \n\n111\n\n \n\n \n\n**4.61****\n \n[Release Agreement No. 2, dated as of September 30, 2024, by and between K Enter Holdings Inc. and KPMG Samjong Accounting Corp. (incorporated by reference to Exhibit 10.63 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624007003/kwavemedia_ex10-63.htm)\n\n \n \n \n\n**4.62****\n \n[Release Agreement, dated as of September 30, 2024, by and between K Enter Holdings Inc. and Lee & Ko. (incorporated by reference to Exhibit 10.64 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624007003/kwavemedia_ex10-64.htm)\n\n \n \n \n\n**4.63****\n \n[Release Agreement, dated as of September 30, 2024, by and between K Enter Holdings Inc. and BAE, Kim & Lee LLC. (incorporated by reference to Exhibit 10.65 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624007003/kwavemedia_ex10-65.htm)\n\n \n \n \n\n**4.64****\n \n[Loan Extension Agreement, dated October 23, 2024 between K Enter Holdings, Inc. and Young Jae Lee (incorporated by reference to Exhibit 10.66 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624007003/kwavemedia_ex10-66.htm)\n\n \n \n \n\n**4.65****\n \n[Loan Extension Agreement, dated October 25, 2024 between K Enter Holdings, Inc. and Bindangil Pictures Co., Ltd. (incorporated by reference to Exhibit 10.67 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](http://www.sec.gov/Archives/edgar/data/2000756/000182912624007782/kwavemedia_ex10-67.htm)\n\n \n \n \n\n**4.66****\n \n[Loan Extension Agreement, dated November 4, 2024 between K Enter Holdings, Inc. and Young Jae Lee (incorporated by reference to Exhibit 10.68 of K Wave Media Ltd.’s Registration Statement on Form F-4/A, dated December 23, 2024).](https://www.sec.gov/Archives/edgar/data/2000756/000182912624007782/kwavemedia_ex10-68.htm)\n\n \n \n \n\n**4.67****\n \n[PIPE Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 of Global Star Acquisition, Inc.’s Current Report on Form 8-K filed with the SEC on February 7, 2025).](https://www.sec.gov/Archives/edgar/data/0001922331/000182912625000773/globalstaracq_ex10-1.htm)\n\n \n \n \n\n**4.68****\n \n[PIPE Notes (incorporated by reference to Exhibit 10.2 of Global Star Acquisition, Inc.’s Current Report on Form 8-K filed with the SEC on February 7, 2025).](https://www.sec.gov/Archives/edgar/data/0001922331/000182912625000773/globalstaracq_ex10-2.htm)\n\n \n \n \n\n**4.69****\n \n[PIPE Registration Rights Agreement (incorporated by reference to Exhibit 10.3 of Global Star Acquisition, Inc.’s Current Report on Form 8-K filed with the SEC on February 7, 2025).](https://www.sec.gov/Archives/edgar/data/0001922331/000182912625000773/globalstaracq_ex10-3.htm)\n\n \n \n \n\n**4.70****\n \n[Securities Purchase Agreement, dated July 3, 2025, among K Wave Media Ltd., Anson Investments Master Fund, LP and Anson East Master Fund LP and Anson Investments Master Fund L.P. (incorporated by reference to Exhibit 99.2 of K Wave Media Ltd.’s Report on Form 6-K, dated July 30, 2025).](https://www.sec.gov/Archives/edgar/data/2000756/000182912625005603/kwavemedia_ex99-2.htm)\n\n \n \n \n\n**4.71****\n \n[Standby Equity Purchase Agreement, dated June 3, 2025, by and between K Wave Media Ltd. and Bitcoin Strategic Reserve, LLC (incorporated by reference to Exhibit 99.2 of K Wave Media Ltd.’s Report on Form 6-K, dated June 4, 2025).](https://www.sec.gov/Archives/edgar/data/2000756/000182912625004235/kwavemedia_ex99-2.htm)\n\n \n \n \n\n**4.72****\n \n[Securities Purchase Agreement, by and between K Wave Media Ltd. and Galaxy Digital LP, dated September 26, 2025 (incorporated by reference to Exhibit 99.2 of K Wave Media Ltd’s Report on Form 6-K, dated September 30, 2025).](http://www.sec.gov/Archives/edgar/data/2000756/000182912625007784/kwavemedia_ex99-2.htm)\n\n \n \n \n\n**4.73****\n \n[Share Purchase Agreement, dated August 27, 2025 incorporated by reference to Exhibit 99.2 of K Wave Media Ltd.’s Report on Form 6-K, dated September 2, 2025).](https://www.sec.gov/Archives/edgar/data/2000756/000182912625007012/kwavemedia_ex99-2.htm)\n\n \n \n \n\n**4.74***\n \n[Form of Employment Agreement, by and between K Wave Media Ltd and Ted Kim.](kwavemedia_ex4-74.htm)\n\n \n \n \n\n**8.1***\n \n[List of Subsidiaries of K Wave Media Ltd.](kwavemedia_ex8-1.htm)\n\n \n \n \n\n**11.1***\n \n[Code of Business Conduct and Ethics of K Wave Media Ltd.](kwavemedia_ex11-1.htm)\n\n \n\n112\n\n \n\n \n\n**12.1***\n \n[Certification by Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](kwavemedia_ex12-1.htm)\n\n \n \n \n\n**12.2***\n \n[Certification by Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](kwavemedia_ex12-2.htm)\n\n \n \n \n\n**13.1***\n \n[Certification by Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](kwavemedia_ex13-1.htm)\n\n \n \n \n\n**13.2***\n \n[Certification by Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](kwavemedia_ex13-2.htm)\n\n \n \n \n\n**97.1***\n \n[Executive Compensation Recovery Policy of K Wave Media Ltd.](kwavemedia_ex97-1.htm)\n\n \n \n \n\n**101**\n \nInline Interactive Data Files\n\n \n \n \n\n**104**\n \nCover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)\n\n \n\n \n\n*\nFiled herewith.\n\n**\nPreviously filed.\n\n†\nThe Registrant has redacted provisions or terms of this Exhibit pursuant to Regulation S-K Item 601(b)(10)(iv). While portions of the Exhibits have been omitted, these Exhibits include a prominent statement on the first page of each redacted Exhibit that certain identified information has been excluded from the exhibit because it is both not material and is the type that the Registrant treats as private or confidential. The Registrant agrees to furnish an unredacted copy of the Exhibit to the SEC upon its request.\n\n††\nIndicates a management contract or compensatory plan.\n\n \n\n113\n\n \n\n \n\n**SIGNATURE**\n\n \n\nThe 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.\n\n \n\n \n**K WAVE MEDIA LTD.**\n\n \n \n \n\nMay 15, 2026\nBy:\n/s/ Ted Kim\n\n \n \nName:\nTed Kim\n\n \n \nTitle:\nChief Executive Officer\n\n \n\n114\n\n \n\n \n\n**INDEX\nTO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**Content**\n \n**Page(s)**\n\n[**Report\nof Independent Registered Public Accounting Firm (PCAOB ID 1103)**](#fin_001)\n \n**F-2**\n\n[**Consolidated Balance Sheets as of December 31, 2024 and 2025**](#fin_002)\n \n**F-3**\n\n[**Consolidated Statements of Operations and Comprehensive I**ncome (**Loss) for the years ended December 31, 2023, 2024 and 2025**](#fin_003)\n \n**F-6**\n\n[**Consolidated Statements of Changes in Equity for the years ended December 31, 2023, 2024 and 2025**](#fin_004)\n \n**F-7**\n\n[**Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2024 and 2025**](#fin_005)\n \n**F-8**\n\n[**Notes to the Consolidated Financial Statements**](#fin_006)\n \n**F-9**\n\n** **\n\n****\n\nF-1\n\n \n\n \n\n****\n\n \n\n \n\n**Report\nof Independent Registered Public Accounting Firm**\n\n \n\nTo\nthe Board of Directors and Shareholder of\n\nK Wave Media Ltd.\n\n \n\n**Opinion\non the Financial Statements**\n\n \n\nWe\nhave audited the accompanying consolidated statements of financial position of K Wave Media Ltd. and its subsidiaries (the “Company”) as\nof December 31, 2025 and 2024, and the related consolidated statements of operations and comprehensive income(loss), of changes\nin equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively\nreferred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly,\nin all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and\nits cash flows for each of the three years in the period ended December 31, 2025 in conformity with International Financial Reporting\nStandards as issued by the International Accounting Standards Board.\n\n \n\n**Substantial\nDoubt about the Company’s Ability to Continue as a Going Concern**\n\n \n\nThe\naccompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed\nin Note 2 to the consolidated financial statements, the Company has incurred recurring losses and negative cash flows from operations\nand has an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. Management’s plans\nin regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might\nresult from the outcome of this uncertainty.\n\n \n\n**Basis\nfor Opinion**\n\n \n\nThese\nconsolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion\non the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public\nCompany Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance\nwith the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\n \n\nWe\nconducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require\nthat we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material\nmisstatement, whether due to error or fraud.\n\n \n\nOur\naudits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether\ndue to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence\nregarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles\nused and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.\nWe believe that our audits provide a reasonable basis for our opinion.\n\n \n\n/s/\nSamil PricewaterhouseCoopers\n\n \n\nSeoul,\nKOREA\n\nMay 15, 2026\n\n \n\nWe\nhave served as the Company’s auditor since 2024.\n\n \n\nF-2\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n \n\n**CONSOLIDATED STATEMENTS OF FINANCIAL POSITION**\n\n \n\n**As of December 31, 2025 and 2024**\n\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n**Note**\n \n \n \n**December 31, 2025**\n \n \n**December 31,2024**\n \n\n \n \n \n \n \n \n**(In thousands of Korean won)**\n \n\n**Assets**\n \n \n \n \n \n \n \n \n \n \n \n \n\nCash and cash equivalents\n \n17, 24\n \n₩\n \n \n8,364,432\n \n \n \n4,150,572\n \n\nShort-term financial instruments\n \n24\n \n \n \n \n21,560\n \n \n \n423,524\n \n\nAccounts receivable — trade, net\n \n16, 24\n \n \n \n \n4,380,886\n \n \n \n9,210,441\n \n\n- Related parties\n \n37\n \n \n \n \n2,051,987\n \n \n \n1,983,270\n \n\n- Non-related parties\n \n \n \n \n \n \n2,328,899\n \n \n \n7,227,171\n \n\nShort-term loans, net\n \n24\n \n \n \n \n3,427,400\n \n \n \n787,400\n \n\n- Related parties\n \n37\n \n \n \n \n2,067,369\n \n \n \n662,400\n \n\n- Non-related parties\n \n \n \n \n \n \n1,360,031\n \n \n \n125,000\n \n\nAccounts receivable — other, net\n \n16, 24\n \n \n \n \n536,134\n \n \n \n130,482\n \n\n- Related parties\n \n37\n \n \n \n \n165,439\n \n \n \n125,687\n \n\n- Non-related parties\n \n \n \n \n \n \n370,695\n \n \n \n4,795\n \n\nValue added tax receivables\n \n \n \n \n \n \n162,558\n \n \n \n-\n \n\nOther current assets\n \n14\n \n \n \n \n5,844,544\n \n \n \n664,632\n \n\nOther current financial assets\n \n24\n \n \n \n \n735,110\n \n \n \n40,000\n \n\nContract assets\n \n7\n \n \n \n \n1,065,645\n \n \n \n-\n \n\n- Related parties\n \n37\n \n \n \n \n517,518\n \n \n \n-\n \n\n- Non-related parties\n \n \n \n \n \n \n548,127\n \n \n \n-\n \n\nCurrent tax assets\n \n \n \n \n \n \n45,228\n \n \n \n347,480\n \n\nInventories, net\n \n15\n \n \n \n \n1,612,302\n \n \n \n818,324\n \n\n**Total current assets**\n \n \n \n \n \n \n26,195,799\n \n \n \n16,572,855\n \n\nLong-term financial instruments\n \n24\n \n \n \n \n310,908\n \n \n \n322,538\n \n\nLong-term loans, net\n \n24\n \n \n \n \n191,023\n \n \n \n-\n \n\n- Related parties\n \n37\n \n \n \n \n136,054\n \n \n \n-\n \n\n- Non-related parties\n \n \n \n \n \n \n54,969\n \n \n \n-\n \n\nLong-term investment securities\n \n24, 31\n \n \n \n \n3,983,858\n \n \n \n730,391\n \n\n- Related parties\n \n37\n \n \n \n \n300,000\n \n \n \n-\n \n\n- Non-related parties\n \n \n \n \n \n \n3,683,858\n \n \n \n730,391\n \n\nInvestments in associates\n \n19\n \n \n \n \n587,278\n \n \n \n-\n \n\nProperty and equipment including right-of-use assets\n \n20\n \n \n \n \n7,055,228\n \n \n \n12,049,988\n \n\nIntangible assets other than goodwill\n \n21\n \n \n \n \n17,178,097\n \n \n \n4,533,587\n \n\nGoodwill\n \n21\n \n \n \n \n60,617,031\n \n \n \n3,267,730\n \n\nInvestment properties\n \n18\n \n \n \n \n2,023,317\n \n \n \n400,999\n \n\nOther non-current financial assets\n \n24\n \n \n \n \n2,180,055\n \n \n \n1,803,220\n \n\nOther non-current non-financial assets\n \n14\n \n \n \n \n4,393,482\n \n \n \n1,907,965\n \n\nDeferred tax assets\n \n \n \n \n \n \n1,016,960\n \n \n \n1,011,013\n \n\n**Total non-current assets**\n \n \n \n \n \n \n99,537,236\n \n \n \n26,027,431\n \n\nTotal assets\n \n \n \n \n \n \n125,733,036\n \n \n \n42,600,286\n \n\n \n\nThe accompanying notes are an integral part of these consolidated financial statements.\n\n \n\nF-3\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n \n\n**CONSOLIDATED STATEMENTS OF FINANCIAL POSITION**\n\n \n\n**As of December 31, 2025 and 2024**\n\n \n\n \n \n**Note**\n \n \n \n**December 31,2025**\n \n \n**December 31,2024**\n \n\n \n \n \n \n \n \n**(In thousands of Korean won)**\n \n\n**Liabilities**\n \n \n \n \n \n \n \n \n \n \n \n \n\nTrade and other payables\n \n24, 29, 31\n \n₩\n \n \n58,040,411\n \n \n \n14,039,752\n \n\n- Related parties\n \n37\n \n \n \n \n40,549,480\n \n \n \n1,357,101\n \n\n- Non-related parties\n \n \n \n \n \n \n17,490,931\n \n \n \n12,682,651\n \n\nOther current financial liabilities\n \n24, 31\n \n \n \n \n250,000\n \n \n \n130,000\n \n\nCurrent derivative liabilities\n \n24, 25, 32\n \n \n \n \n330,417\n \n \n \n-\n \n\nWarrants\n \n24, 25\n \n \n \n \n528,772\n \n \n \n-\n \n\nOther current non-financial liabilities\n \n \n \n \n \n \n1,936,895\n \n \n \n1,443,694\n \n\n- Related parties\n \n37\n \n \n \n \n285,490\n \n \n \n-\n \n\n- Non-related parties\n \n \n \n \n \n \n1,651,405\n \n \n \n1,443,694\n \n\nContract liabilities\n \n7\n \n \n \n \n1,252,195\n \n \n \n-\n \n\n- Related parties\n \n37\n \n \n \n \n75,506\n \n \n \n-\n \n\n- Non-related parties\n \n \n \n \n \n \n1,176,689\n \n \n \n-\n \n\nShort-term borrowings\n \n24, 28\n \n \n \n \n11,171,899\n \n \n \n3,764,000\n \n\n- Related parties\n \n37\n \n \n \n \n1,566,863\n \n \n \n864,000\n \n\n- Non-related parties\n \n \n \n \n \n \n9,605,036\n \n \n \n2,900,000\n \n\nCurrent portion of long-term borrowings, net\n \n24, 28\n \n \n \n \n2,200,000\n \n \n \n2,108,956\n \n\n- Related parties\n \n37\n \n \n \n \n2,200,000\n \n \n \n2,090,236\n \n\n- Non-related parties\n \n \n \n \n \n \n-\n \n \n \n18,720\n \n\nConvertible Notes\n \n24, 32\n \n \n \n \n28,634,020\n \n \n \n-\n \n\n- Related parties\n \n37\n \n \n \n \n2,956,091\n \n \n \n-\n \n\n- Non-related parties\n \n \n \n \n \n \n25,677,929\n \n \n \n-\n \n\nCurrent lease liabilities\n \n28, 34\n \n \n \n \n1,702,300\n \n \n \n1,786,577\n \n\nOther current provisions\n \n30\n \n \n \n \n769,693\n \n \n \n \n \n\nCurrent tax liabilities\n \n13\n \n \n \n \n1,634,666\n \n \n \n108,961\n \n\n**Total current liabilities**\n \n \n \n \n \n \n108,451,267\n \n \n \n23,381,940\n \n\nTrade and other non-current payables\n \n29\n \n \n \n \n27,297,393\n \n \n \n21,694\n \n\n- Related parties\n \n37\n \n \n \n \n27,294,377\n \n \n \n-\n \n\n- Non-related parties\n \n \n \n \n \n \n3,016\n \n \n \n21,694\n \n\nLong-term borrowings, excluding current portion, net\n \n24, 28\n \n \n \n \n2,611,563\n \n \n \n-\n \n\n- Related parties\n \n37\n \n \n \n \n2,611,563\n \n \n \n-\n \n\nOther non-current financial liabilities\n \n24\n \n \n \n \n220,000\n \n \n \n150,000\n \n\nOther non-current non-financial liabilities\n \n \n \n \n \n \n2,565\n \n \n \n-\n \n\nNon-current Contract liabilities\n \n7\n \n \n \n \n650,000\n \n \n \n-\n \n\nDefined benefit liabilities\n \n12\n \n \n \n \n1,257,693\n \n \n \n559,270\n \n\nOther non-current provisions\n \n30\n \n \n \n \n455,822\n \n \n \n609,951\n \n\nNon-current lease liabilities\n \n28, 31, 34\n \n \n \n \n6,268,969\n \n \n \n9,302,661\n \n\nDeferred tax liabilities\n \n13\n \n \n \n \n125,759\n \n \n \n399,158\n \n\n**Total non-current liabilities**\n \n \n \n \n \n \n38,889,764\n \n \n \n11,042,733\n \n\n**Total liabilities**\n \n \n \n₩\n \n \n147,341,032\n \n \n \n34,424,673\n \n\n \n\nThe accompanying notes are an integral part of these consolidated financial statements.\n\n \n\nF-4\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n \n\n**CONSOLIDATED STATEMENTS OF FINANCIAL POSITION**\n\n \n\n**As of December 31, 2025 and 2024**\n\n \n\n \n \n**Note**\n \n \n \n**December 31, 2025**\n \n \n**December 31,2024**\n \n\n \n \n \n \n \n \n**(In thousands of Korean won)**\n \n\n**Equity**\n \n \n \n \n \n \n \n \n \n \n \n \n\nShare capital\n \n26\n \n₩\n \n \n9,077\n \n \n \n1,226\n \n\nShare premium\n \n26\n \n \n \n \n205,980,674\n \n \n \n498,774\n \n\nAccumulated other comprehensive loss\n \n \n \n \n \n \n(4,447,032\n)\n \n \n181,516\n \n\nOther reserves\n \n26\n \n \n \n \n(53,073,717\n)\n \n \n(27,874,562\n)\n\nRetained earnings(Accumulated Deficit)\n \n10\n \n \n \n \n(169,783,492\n)\n \n \n35,959,433\n \n\n**Equity attributable to owners of the Parent Company**\n \n \n \n \n \n \n(21,314,489\n)\n \n \n8,766,387\n \n\n**Non-controlling interest**\n \n \n \n \n \n \n(293,506\n)\n \n \n(590,774\n)\n\n**Total equity**\n \n \n \n \n \n \n(21,607,996\n)\n \n \n8,175,613\n \n\n**Total liabilities and equity**\n \n \n \n₩\n \n \n125,733,036\n \n \n \n42,600,286\n \n\n \n\nThe accompanying notes are an integral part of these consolidated financial statements.\n\n \n\nF-5\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n \n\n**CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(LOSS)**\n\n \n\n**For the Years Ended December 31, 2025, 2024 and 2023**\n\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n**Note**\n \n \n \n**2025**\n \n \n**2024**\n \n \n**2023**\n \n\n \n \n \n \n \n \n**(In thousands of Korean won except per share data)**\n \n\n**Revenues**\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nContent Merchandising Revenue\n \n6, 7\n \n₩\n \n \n44,415,967\n \n \n \n28,379,904\n \n \n \n49,771,824\n \n\n- Related parties\n \n37\n \n \n \n \n9,396,922\n \n \n \n8,785,673\n \n \n \n11,184,157\n \n\n- Non-related parties\n \n \n \n \n \n \n35,019,045\n \n \n \n19,594,231\n \n \n \n38,587,667\n \n\nF&B Revenue\n \n6, 7\n \n \n \n \n12,228,818\n \n \n \n14,630,426\n \n \n \n17,709,332\n \n\n- Related parties\n \n37\n \n \n \n \n54,369\n \n \n \n70,477\n \n \n \n15,303\n \n\n- Non-related parties\n \n \n \n \n \n \n12,174,449\n \n \n \n14,559,949\n \n \n \n17,694,029\n \n\nContent production revenue\n \n6, 7\n \n \n \n \n20,690,997\n \n \n \n-\n \n \n \n-\n \n\n- Related parties\n \n37\n \n \n \n \n(14,598\n)\n \n \n-\n \n \n \n-\n \n\n- Non-related parties\n \n \n \n \n \n \n20,705,595\n \n \n \n-\n \n \n \n-\n \n\nContent investment revenue\n \n6, 7\n \n \n \n \n745,138\n \n \n \n-\n \n \n \n-\n \n\n- Related parties\n \n37\n \n \n \n \n736,761\n \n \n \n-\n \n \n \n-\n \n\n- Non-related parties\n \n \n \n \n \n \n8,377\n \n \n \n-\n \n \n \n-\n \n\n**Total revenues**\n \n \n \n \n \n \n78,080,920\n \n \n \n43,010,330\n \n \n \n67,481,156\n \n\n**Cost of revenues**\n \n8\n \n \n \n \n(71,203,348\n)\n \n \n(41,911,949\n)\n \n \n(60,837,065\n)\n\n**Gross profit**\n \n \n \n \n \n \n6,877,572\n \n \n \n1,098,381\n \n \n \n6,644,091\n \n\nSelling, general and administrative expenses\n \n8\n \n \n \n \n(69,208,430\n)\n \n \n(3,984,317\n)\n \n \n(4,598,226\n)\n\nOther income\n \n8\n \n \n \n \n1,299,367\n \n \n \n1,022,129\n \n \n \n1,487,080\n \n\nOther expenses\n \n8\n \n \n \n \n(133,696,369\n)\n \n \n(1,643,085\n)\n \n \n(35,547\n)\n\n**Operating profit(loss)**\n \n \n \n \n \n \n(194,727,860\n)\n \n \n(3,506,892\n)\n \n \n3,497,398\n \n\nFinance income\n \n9\n \n \n \n \n24,647,541\n \n \n \n576,570\n \n \n \n1,743,941\n \n\n- Related parties\n \n37\n \n \n \n \n589,224\n \n \n \n125,779\n \n \n \n831,200\n \n\n- Non-related parties\n \n \n \n \n \n \n24,058,317\n \n \n \n450,791\n \n \n \n912,741\n \n\nFinance costs\n \n9\n \n \n \n \n(37,594,482\n)\n \n \n(1,381,523\n)\n \n \n(1,688,210\n)\n\n- Related parties\n \n37\n \n \n \n \n(2,740,497\n)\n \n \n(242,559\n)\n \n \n(176,597\n)\n\n- Non-related parties\n \n \n \n \n \n \n(34,853,985\n)\n \n \n(1,138,964\n)\n \n \n(1,511,612\n)\n\n**Profit(Loss) before income tax**\n \n \n \n \n \n \n(207,674,801\n)\n \n \n(4,311,845\n)\n \n \n3,553,129\n \n\nIncome tax benefit(expense)\n \n13\n \n \n \n \n(435,086\n)\n \n \n753,650\n \n \n \n(760,779\n)\n\n**Profit(Loss) for the period**\n \n \n \n₩\n \n \n(208,109,887\n)\n \n \n(3,558,195\n)\n \n \n2,792,350\n \n\n**Other comprehensive loss**\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nItems that will not be reclassified to income or loss:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nForeign Currency Translation adjustments\n \n \n \n \n \n \n(4,890,859\n)\n \n \n-\n \n \n \n-\n \n\nRemeasurement of defined benefit liabilities\n \n \n \n \n \n \n311,214\n \n \n \n44,085\n \n \n \n109,558\n \n\n**Total comprehensive loss for the period**\n \n \n \n₩\n \n \n(212,689,532\n)\n \n \n(3,514,110\n)\n \n \n2,901,908\n \n\n**Loss attributable to:**\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nOwners of the Parent Company\n \n \n \n \n \n \n(205,742,925\n)\n \n \n(2,541,375\n)\n \n \n3,137,186\n \n\nNon‑controlling interest\n \n \n \n \n \n \n(2,366,962\n)\n \n \n(1,016,820\n)\n \n \n(344,836\n)\n\n**Total comprehensive loss attributable to:**\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nOwners of the Parent Company\n \n \n \n \n \n \n(210,371,472\n)\n \n \n(2,511,780\n)\n \n \n3,210,734\n \n\nNon-controlling interest\n \n \n \n \n \n \n(2,318,059\n)\n \n \n(1,002,330\n)\n \n \n(308,826\n)\n\n**Earnings per share (in Korean won)**\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nBasic earnings per share\n \n10\n \n₩\n \n \n(3,341\n)\n \n \n(290\n)\n \n \n357\n \n\nDiluted earnings per share\n \n10\n \n \n \n \n(3,341\n)\n \n \n(290\n)\n \n \n357\n \n\n \n\nThe accompanying notes are an integral part of these consolidated financial statements.\n\n \n\nF-6\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n \n\n**CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY**\n\n \n\n**For the Years Ended December 31, 2025, 2024 and 2023**\n\n \n\n  \n \n  \n \n    \n    \n    \n    \n    \n    \n    \n   \n\n** **** **\n \n \n \n \n**Attributable\nto owners of the Parent Company**\n \n \n ** **\n\n** **** **\n**Note**\n ** **\n \n**Share\ncapital**** **** **\n**Capital\nSurplus**** **** **\n**Accumulated\nother comprehensive\nincome**** **** **\n**Other\nComponent of\nEquity**** **** **\n**Retained\nEarnings**** **** **\n**Total**** **** **\n**Non- controlling\ninterest**** **** **\n**Total\nequity**** **\n\n** **** **\n \n \n \n \n**(in\nthousands of Korean Won)**** **\n\nBalance\nat January 1, 2023 \n \n** **₩\n \n 1,226  \n 498,774  \n 78,374  \n (27,874,562) \n 35,363,622  \n 8,067,434  \n 720,382  \n 8,787,816 \n\nTotal\ncomprehensive loss for the period \n \n  \n \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n - \n\nProfit\nfor the period \n \n  \n \n -  \n -  \n -  \n -  \n 3,137,186  \n 3,137,186  \n (344,836) \n 2,792,350 \n\nRemeasurement\nof defined benefit liabilities \n \n  \n \n -  \n -  \n 73,548  \n -  \n -  \n 73,548  \n 36,011  \n 109,559 \n\nBalance\nat December 31, 2023 \n \n  \n \n 1,226  \n 498,774  \n 151,922  \n (27,874,562) \n 38,500,808  \n 11,278,168  \n 411,556  \n 11,689,724 \n\nBalance\nat January 1, 2024 \n \n  \n \n 1,226  \n 498,774  \n 151,922  \n (27,874,562) \n 38,500,808  \n 11,278,168  \n 411,556  \n 11,689,724 \n\nTotal\ncomprehensive loss for the period \n \n  \n \n    \n    \n    \n    \n    \n    \n    \n   \n\nLoss\nfor the period \n \n  \n \n -  \n -  \n -  \n -  \n (2,541,375) \n (2,541,375) \n (1,016,820) \n (3,558,195)\n\nRemeasurement\nof defined benefit liabilities \n \n  \n \n -  \n -  \n 29,594  \n -  \n -  \n 29,594  \n 14,490  \n 44,084 \n\nBalance\nat December 31, 2024 \n \n  \n \n 1,226  \n 498,774  \n 181,516  \n (27,874,562) \n 35,959,433  \n 8,766,387  \n (590,774) \n 8,175,613 \n\nBalance\nat January 1, 2025 \n \n  \n \n 1,226  \n 498,774  \n 181,516  \n (27,874,562) \n 35,959,433  \n 8,766,387  \n (590,774) \n 8,175,613 \n\nTransaction\nwith owners, recognized directly in equity \n \n  \n \n    \n    \n    \n    \n    \n    \n    \n   \n\nBusiness\ncombination - K enter \n22\n  \n \n 7,115  \n 192,340,130  \n -  \n (36,629,422) \n -  \n 155,717,823  \n 2,615,327  \n 158,333,150 \n\nAcquisition\nMerger \n23\n  \n \n 588  \n 12,514,831  \n -  \n (588,099) \n -  \n 11,927,320  \n -  \n 11,927,320 \n\nIssuance\nof new shares, not yet issued \n \n  \n \n -  \n -  \n -  \n 1,282,685  \n -  \n 1,282,685  \n -  \n 1,282,685 \n\nConversion\nof convertible bonds, shares not yet issued \n32\n  \n \n -  \n -  \n -  \n 9,943,731  \n -  \n 9,943,731  \n -  \n 9,943,731 \n\nConversion\nof convertible bonds \n \n  \n \n 148  \n 626,939  \n -  \n -  \n -  \n 627,087  \n -  \n 627,087 \n\nLow-interest\nloan from a related party \n \n  \n \n -  \n -  \n -  \n 791,950  \n -  \n 791,950  \n -  \n 791,950 \n\nTotal\ncomprehensive loss for the year \n \n  \n \n    \n    \n    \n    \n    \n    \n    \n   \n\nLoss\nfor the period \n \n  \n \n -  \n -  \n -  \n -  \n (205,742,925) \n (205,742,925) \n (2,366,962) \n (208,109,887)\n\nRemeasurement\nof defined benefit liabilities \n \n  \n \n -  \n -  \n 262,311  \n    \n -  \n 262,311  \n 48,903  \n 311,214 \n\nForeign\nCurrency Translation adjustments \n \n  \n \n -  \n -  \n (4,890,859) \n -  \n -  \n (4,890,859) \n -  \n (4,890,859)\n\nBalance\nat December 31, 2025 \n \n ₩\n \n 9,077  \n 205,980,674  \n (4,447,032) \n (53,073,717) \n (169,783,492) \n (21,314,490) \n (293,506) \n (21,607,996)\n\n \n\nThe accompanying notes are an integral part of these consolidated financial statements.\n\n \n\nF-7\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n \n\n**CONSOLIDATED STATEMENTS OF CASH FLOWS**\n\n \n\n**For the Years Ended December 31, 2025, 2024 and 2023**\n\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n**Note**\n \n \n \n**2025**\n \n \n**2024**\n \n \n**2023**\n \n\n \n \n \n \n \n \n**(In thousands of Korean won)**\n \n\n**Cash flows from operating activities**\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nNet income(loss) for the period\n \n \n \n₩\n \n \n(208,109,887\n)\n \n \n(3,558,195\n)\n \n \n2,792,350\n \n\nAdjustments to reconcile net income to net cash provided by (used in) operating activities\n \n23\n \n \n \n \n199,104,676\n \n \n \n2,368,242\n \n \n \n(6,881,338\n)\n\nInterest received\n \n \n \n \n \n \n61,374\n \n \n \n38,436\n \n \n \n70,995\n \n\nInterest paid\n \n \n \n \n \n \n(1,094,541\n)\n \n \n(999,198\n)\n \n \n(1,184,042\n)\n\nIncome tax refund (paid)\n \n \n \n \n \n \n262,561\n \n \n \n(707,915\n)\n \n \n(3,176,978\n)\n\nDividend received\n \n \n \n \n \n \n2,613\n \n \n \n1,463\n \n \n \n1,463\n \n\nNet cash outflow from operating activities\n \n \n \n \n \n \n(9,773,204\n)\n \n \n(2,857,167\n)\n \n \n(8,377,550\n)\n\n**Cash flows from investing activities**\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nProceeds from short-term loans\n \n \n \n \n \n \n439,284\n \n \n \n1,779,500\n \n \n \n320,000\n \n\n- Related parties\n \n37\n \n \n \n \n240,000\n \n \n \n1,279,500\n \n \n \n310,000\n \n\n- Non-related parties\n \n \n \n \n \n \n199,284\n \n \n \n500,000\n \n \n \n10,000\n \n\nProceeds from disposal of property and equipment\n \n \n \n \n \n \n25,255\n \n \n \n53,277\n \n \n \n4,293\n \n\nDisposal of Short-term investment securities\n \n \n \n \n \n \n1,065,688\n \n \n \n-\n \n \n \n-\n \n\nDisposal of Long-term investment securities\n \n \n \n \n \n \n526,710\n \n \n \n-\n \n \n \n-\n \n\n- Related parties\n \n \n \n \n \n \n500,000\n \n \n \n-\n \n \n \n-\n \n\n- Non-related parties\n \n \n \n \n \n \n26,710\n \n \n \n-\n \n \n \n-\n \n\nDisposal of Short-term financial instruments\n \n \n \n \n \n \n37,926\n \n \n \n-\n \n \n \n-\n \n\nDisposal of other financial assets\n \n \n \n \n \n \n1,157,094\n \n \n \n334,987\n \n \n \n4,135,728\n \n\nPayments for short-term loans\n \n \n \n \n \n \n(2,986,461\n)\n \n \n(2,079,000\n)\n \n \n(3,840,576\n)\n\n- Related parties\n \n37\n \n \n \n \n(1,626,460\n)\n \n \n(1,834,000\n)\n \n \n(3,690,576\n)\n\n- Non-related parties\n \n \n \n \n \n \n(1,360,001\n)\n \n \n(245,000\n)\n \n \n(150,000\n)\n\nPurchase of property and equipment\n \n \n \n \n \n \n(114,734\n)\n \n \n(273,220\n)\n \n \n(949,583\n)\n\nAcquisition of Long-term investment securities\n \n \n \n \n \n \n(2,391,167\n)\n \n \n-\n \n \n \n-\n \n\nAcquisition of Short-term financial instruments\n \n \n \n \n \n \n(26,032\n)\n \n \n-\n \n \n \n-\n \n\nAcquisition of other financial assets\n \n \n \n \n \n \n(742,380\n)\n \n \n(178,068\n)\n \n \n(610,093\n)\n\nProceeds from Lease Incentives\n \n \n \n \n \n \n-\n \n \n \n1,486\n \n \n \n150,150\n \n\nPurchase of intangible assets\n \n \n \n \n \n \n(13,823,661\n)\n \n \n-\n \n \n \n-\n \n\nPayments for long-term loans\n \n \n \n \n \n \n(21,000\n)\n \n \n-\n \n \n \n(1,000,000\n)\n\n- Related parties\n \n37\n \n \n \n \n-\n \n \n \n-\n \n \n \n(1,000,000\n)\n\nAcquisitions, net of cash acquired\n \n22\n \n \n \n \n3,508,608\n \n \n \n-\n \n \n \n-\n \n\nIncrease of cash from merger\n \n23\n \n \n \n \n146\n \n \n \n-\n \n \n \n-\n \n\nPrepayment for acquisition of HANSOL INTICUBE Co., Ltd.\n \n35\n \n \n \n \n(3,000,367\n)\n \n \n-\n \n \n \n-\n \n\nNet cash outflow from investing activities\n \n \n \n \n \n \n(16,345,091\n)\n \n \n(361,038\n)\n \n \n(1,790,081\n)\n\n**Cash flows from financing activities**\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nProceeds from issuance of convertible notes, net of issuance costs\n \n \n \n \n \n \n25,572,797\n \n \n \n-\n \n \n \n-\n \n\nProceeds from long-term borrowings\n \n \n \n \n \n \n3,390,000\n \n \n \n-\n \n \n \n-\n \n\n- Related parties\n \n \n \n \n \n \n3,390,000\n \n \n \n-\n \n \n \n-\n \n\nProceeds from short-term borrowings\n \n \n \n \n \n \n6,352,333\n \n \n \n870,000\n \n \n \n130,000\n \n\n- Related parties\n \n37\n \n \n \n \n1,009,387\n \n \n \n470,000\n \n \n \n130,000\n \n\n- Non-related parties\n \n \n \n \n \n \n5,342,946\n \n \n \n400,000\n \n \n \n-\n \n\nRepayment of current portion of long-term borrowings\n \n \n \n \n \n \n(18,720\n)\n \n \n(24,960\n)\n \n \n(24,960\n)\n\nRepayment of short-term borrowings\n \n \n \n \n \n \n(3,410,294\n)\n \n \n(394,000\n)\n \n \n-\n \n\n- Related parties\n \n37\n \n \n \n \n(976,480\n)\n \n \n(394,000\n)\n \n \n-\n \n\n- Non-related parties\n \n \n \n \n \n \n(2,433,814\n)\n \n \n-\n \n \n \n-\n \n\nIssuance of new shares, net of investment withholdings\n \n \n \n \n \n \n1,408,406\n \n \n \n-\n \n \n \n-\n \n\nAcquisition of Treasury shares\n \n \n \n \n \n \n(725,630\n)\n \n \n(75,000\n)\n \n \n(10,677,100\n)\n\nRepayment of lease liabilities\n \n \n \n \n \n \n(2,055,725\n)\n \n \n(1,663,415\n)\n \n \n(1,617,756\n)\n\nProceeds from Capital Reorganisation\n \n23\n \n \n \n \n62,655\n \n \n \n-\n \n \n \n-\n \n\nPrepayment of Deposit for treasury stock repurchase\n \n \n \n \n \n \n(284,776\n)\n \n \n-\n \n \n \n-\n \n\nNet cash inflow(outflow) from financing activities\n \n \n \n \n \n \n30,291,046\n \n \n \n(1,287,375\n)\n \n \n(12,189,816\n)\n\n**Effect of exchange rate changes on cash and cash equivalents**\n \n \n \n \n \n \n41,109\n \n \n \n70,518\n \n \n \n361,525\n \n\n**Net increase (decrease) in cash and cash equivalents**\n \n \n \n \n \n \n4,213,860\n \n \n \n(4,505,580\n)\n \n \n(22,357,447\n)\n\n**Cash and cash equivalents at beginning of the year**\n \n \n \n \n \n \n4,150,572\n \n \n \n8,585,634\n \n \n \n30,581,556\n \n\n**Cash and cash equivalents at end of the year**\n \n \n \n₩\n \n \n8,364,432\n \n \n \n4,150,572\n \n \n \n8,585,634\n \n\n \n\nThe accompanying notes are an integral part of these consolidated financial statements.\n\n \n\nF-8\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**1. Corporate Information**\n\n \n\nK WAVE MEDIA LTD. (hereinafter referred to as “KWM”), together with its consolidated subsidiaries (hereinafter referred to as “the Company”), is engaged in the “IP content business,” which focuses on the creation, investment, management, licensing, and monetization of intellectual property (IP) content such as TV programs, movies, dramas, and music. At the core of the Company’s IP content business is the production of original content or the acquisition of rights to existing valuable intellectual property content, including films and TV shows, from creators, artists, or other sources. In the case of the merchandising company, the business includes the sale of merchandise related to IP content based on popular musicians, TV programs, and movies. The Company regards intellectual property rights, including copyrights, registered and pending trademarks, service marks, domain names, trade secrets, and proprietary technologies, as critical to its success. The Company protects its proprietary rights through trademark laws, trade secret protection, confidentiality measures, and license agreements with employees and other relevant parties. In addition to our core IP content business, the Company is strengthening its ’Digital Treasury Strategy’ as a second corporate strategy: acquiring and holding bitcoin. We have adopted bitcoin as our primary treasury reserve asset, which we plan to utilize as a trust asset to enhance settlement stability within our platform and secure global liquidity. We believe bitcoin is a dependable store of value, supported by a robust and public open-source architecture, that is untethered to sovereign monetary policy. We believe that undertaking these two, interdependent corporate strategies—growing our IP content business and pursuing our Digital Treasury Strategy—serves as a key differentiator for our business. Our IP content business provides stable cash flows that allow us to acquire and hold bitcoin for the long-term, and we believe our bitcoin strategy raises our profile in the global market, which may, in turn, benefit our IP content business.\n\n \n\nOn May 13, 2025 (the “Closing Date”), KWM consummated the business combination pursuant to the merger agreement, dated as of June 15, 2023, as modified by the joinder agreement, dated July 13, 2023, the First Amendment, dated March 11, 2024, the Second Amendment, dated June 28, 2024, the Third Amendment to Merger Agreement, dated July 25, 2024 and the Fourth Amendment to Merger Agreement, dated December 11, 2024 (the “Merger Agreement”), by and among the Company, Global Star Acquisition Inc., a Delaware corporation (“Global Star”), K Enter Holdings Inc., a Delaware corporation (“K Enter”) and GLST Merger Sub, Inc., a Delaware corporation (“Merger Sub”),\n\n \n\nThe following transactions occurred pursuant to the terms of the Merger Agreement (collectively, the “Business Combination”):\n\n \n\n \n-\nOn May 13, 2025, Global Star was reincorporated to Cayman Islands by merging with and into KWM, with KWM remaining as the surviving publicly traded entity (the “Reincorporation Merger”). In connection with the closing of the Reincorporation Merger, (i) each issued and outstanding share of common stock of Global Star, other than Global Star common stock owned by Global Star as treasury shares or any Global Star common stock owned by any direct or indirect wholly owned subsidiary of Global Star, was converted into one ordinary share of KWM (the “KWM Ordinary Share”), (ii) each issued and outstanding warrant of Global Star was converted automatically into a warrant to purchase one KWM Ordinary Share at a price of $11.50 per whole share (the “KWM Warrant”), (iii) each issued and outstanding right of Global Star was converted automatically into a right to receive one-tenth (1/10) of one KWM Ordinary Share at the closing of a business combination (the “KWM Right”), and (iv) each issued and outstanding unit of Global Star was separated and converted automatically into one KWM Ordinary Share, one KWM Warrant, and one KWM Right. At the closing of the Reincorporation Merger, all common stock, warrants, rights, units and other securities of Global Star ceased to be outstanding and were automatically canceled and retired and ceased to exist.\n\n \n\nF-9\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n \n-\nOn May 13, 2025, Merger Sub merged with and into K Enter, resulting in K Enter being a wholly owned subsidiary of KWM (the “Acquisition Merger”). In connection with the closing of the Acquisition Merger, (i) each share of K Enter capital stock that was owned by Global Star, Merger Sub and K Enter (as treasury stock or otherwise), was automatically cancelled and retired without any conversion, (ii) each share of K Enter preferred stock issued and outstanding was deemed converted into shares of K Enter common stock, (iii) each share of K Enter common stock issued and outstanding, including shares of K Enter common stock deemed outstanding as a result of the mandatory conversion of K Enter preferred stock, was converted into the right to receive a number of KWM Ordinary Shares equal to the Conversion Ratio, and (iv) each share of Merger Sub common stock issued and outstanding was converted into and become one newly issued, fully paid and nonassessable share of K Enter common stock.\n\n \n\nK Enter’s acquisition of Play Company Co., Ltd. (“Play Company”), Solaire Partners LLC (“Solaire”), Apeitda Co., Ltd. (“Apeitda”), The LAMP Co., Ltd. (“Lamp”), Bidangil Pictures Co., Ltd. (“Bidangil”), and Studio Anseilen Co., Ltd. (“Anseilen”), and collectively, the “Six Korean Entities”) was a closing condition to the Business Combination. On January 3, 2025, K Enter closed the equity purchase for Play Company first and the acquisitions of each of the Six Korean Entities other than Play Company closing subsequently.\n\n \n\nDetails of the consolidated subsidiaries as of December 31, 2025 and 2024 are as follows:\n\n \n\nSchedule of consolidated subsidiaries\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**Percentage of ownership(%)**\n \n \n \n \n \n\n**Subsidiary**\n \n**Location**\n \n**December 31,2025**\n \n \n**December 31,2024**\n \n \n**Fiscal year end**\n \n**Main business**\n\nPlay Company(1)\n \nSeoul\n \n \n100.0\n%\n \n \n**-**\n \n \nDecember\n \nSale and distribution of content consumer products and providing production services\n\nPlay F&B Co., Ltd.(1)\n \nSeoul\n \n \n67.1\n%\n \n \n67.1\n%\n \nDecember\n \nFood and beverage\n\nPlayverse Co., Ltd(1)(2)\n \nSeoul\n \n \n100.0\n%\n \n \n-\n \n \nDecember\n \nSpecial Purpose Company\n\nLAMP(1)\n \nSeoul\n \n \n51.3\n%\n \n \n-\n \n \nDecember\n \nFilm and drama content production\n\nBidangil(1)\n \nSeoul\n \n \n53.7\n%\n \n \n-\n \n \nDecember\n \nFilm and drama content production\n\nTrigger Limited Company Specializing in The Cultural Industry(1)\n \nSeoul\n \n \n53.7\n%\n \n \n-\n \n \nDecember\n \nPlanning, development and production of the film Trigger\n\nApeitda(1)\n \nSeoul\n \n \n51.0\n%\n \n \n-\n \n \nDecember\n \nFilm and drama content production\n\nAnseilen(1)\n \nSeoul\n \n \n51.0\n%\n \n \n-\n \n \nDecember\n \nFilm and drama content production\n\nSolaire(1)\n \nSeoul\n \n \n95.0\n%\n \n \n-\n \n \nDecember\n \nInvestment in film and drama content\n\nK Enter\n \nDelaware\n \n \n100.0\n%\n \n \n-\n \n \nDecember\n \nFilm and drama content production\n\n \n\n \n\n(1)Indirect Subsidiaries\n\n(2)Playverse Co., Ltd. Is a special purpose company for the purpose\nof consummating an acquisition of HANSOL INTICUBE Co., Ltd. (Note 23, 35, 38).\n\n \n\nF-10\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**Condensed financial information of subsidiary**\n\n \n\nCondensed financial information of the subsidiaries as of and for the year ended December 31, 2025 is as follows:\n\n \n\nSchedule of financial information of subsidiary\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**December 31, 2025**\n \n\n**Subsidiary**\n \n \n \n**Total assets**\n \n \n**Total liabilities**\n \n \n**Revenues**\n \n \n**Profit(Loss)\nfor the period**\n \n\n \n \n \n \n**(In thousands of Korean Won)**\n \n\nPlay Company\n \n₩\n \n \n32,940,685\n \n \n \n13,709,519\n \n \n \n44,415,967\n \n \n \n3,560,865\n \n\nPlay F&B Co., Ltd.\n \n \n \n \n10,008,789\n \n \n \n17,998,489\n \n \n \n12,323,986\n \n \n \n(2,243,682\n)\n\nPlayverse Co., Ltd\n \n \n \n \n3,016,188\n \n \n \n10,016\n \n \n \n-\n \n \n \n(2,337\n)\n\nLAMP\n \n \n \n \n3,240,702\n \n \n \n3,985,189\n \n \n \n5,971,517\n \n \n \n(1,079,108\n)\n\nBidangil\n \n \n \n \n2,484,303\n \n \n \n288,831\n \n \n \n586,554\n \n \n \n(700,970\n)\n\nTrigger Limited Company Specializing in The Cultural Industry(1)\n \n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nApeitda\n \n \n \n \n1,331,607\n \n \n \n810,810\n \n \n \n26,033\n \n \n \n(317,513\n)\n\nAnseilen\n \n \n \n \n2,583,789\n \n \n \n3,932,637\n \n \n \n13,916,681\n \n \n \n(776,392\n)\n\nSolaire\n \n \n \n \n3,895,984\n \n \n \n5,722,734\n \n \n \n745,138\n \n \n \n(3,012,058\n)\n\nK Enter\n \n \n \n \n100,486,632\n \n \n \n86,210,004\n \n \n \n190,212\n \n \n \n(38,009,784\n)\n\n \n\n \n\n(1)Bidangil established a special purpose company to plan, develop\nand manage the production of the new project ‘Trigger’ as of April 5, 2023. The initial capital amounted to Korean won\n10,000 thousand, but no capital has been contributed as of December 31, 2025.\n\n \n\nCondensed financial information of the subsidiaries as of December 31, 2024 and for the year ended December 31, 2024 are as follows:\n\n \n\n \n \n \n \n**December 31, 2024**\n \n\n**Subsidiary**\n \n \n \n**Total assets**\n \n \n**Total liabilities**\n \n \n**Revenues**\n \n \n**Loss for\nthe year**\n \n\n \n \n \n \n**(In thousands of Korean Won)**\n \n\nPlay F&B Co., Ltd\n \n₩\n \n \n13,174,076\n \n \n \n18,990,058\n \n \n \n14,630,426\n \n \n \n(3,101,420\n)\n\n \n\n**2. Basis of Accounting**\n\n \n\nThese 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, 2026.\n\n \n\nDetails of the Company’s accounting policies, including changes thereto, are included in Note 5.\n\n \n\n**Basis of measurement**\n\n \n\nThe 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.\n\n \n\n**Items**\n \n**Measurement bases**\n\nDefined benefit liabilities\n \nPresent value\n\nFinancial instruments measured at fair value through profit or loss (“FVTPL”)\n \nFair value\n\n \n\nF-11\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**Going concern**\n\n \n\nThe Company has incurred significant losses and negative cash flows from operations, net loss was Korean Won 208,109,887 thousand for the year ended December 31, 2025. During 2025, the Company had negative cash flows from operations of Korean Won 9,773,204 thousand. As of December 31, 2025, the Company’s accumulated deficit was Korean Won 169,783,492 thousand and total current liabilities exceed total current asset by Korean Won 82,255,468 thousand. The Company has funded its operations to date through equity and debt financing and has cash equivalents of Korean Won 8,364,432 thousand as of December 31, 2025. The Company monitors its cash flow projections on a current basis and takes active measures to obtain the funding it requires to continue its operations. However, these cash flow projections are subject to various uncertainties concerning their fulfilment such as the ability to increase revenues by attracting and expanding its customer base and completing additional financing. The Company expects to fund operations using cash on hand and raising additional proceeds. There are no assurances, however, that the Company will be able to generate the revenue necessary to support its cost structure or that it will be successful in obtaining the level of financing necessary for its operations. These conditions and events indicate that a material uncertainty exists that may raise substantial doubt about 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.\n\n \n\n**3. Functional and presentation currency**\n\n \n\nThe financial statements of each entity within the consolidated entity are prepared using the functional currency of the primary economic environment in which each entity operates. The consolidated financial statements of the Company are prepared and presented in Korean Won, taking into consideration the functional currencies and presentation currency of the principal operating activities of each operating segment. All amounts have been rounded to the nearest thousand, unless otherwise indicated.\n\n \n\n**4. Use of judgements and estimates**\n\n \n\nIn preparing these consolidated 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.\n\n \n\nEstimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognized prospectively.\n\n \n\n**A.****Judgements**\n\n \n\nInformation 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:\n\n \n\nNote 34(A): lease term: whether the Company is reasonably certain to exercise extension options.\n\n \n\n**B.****Assumptions and estimation uncertainties**\n\n \n\nInformation 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:\n\n \n\n●Note 7: Revenue Recognition – Content Production: Revenue\nfrom content production recognized over time\n\n \n\nF-12\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\nThe Company primarily recognizes content production revenue over time, as the performance obligation is satisfied over the production period, when the customer simultaneously receives and consumes the benefits of the Company’s performance or controls the content as it is being produced.\n\n \n\nTotal revenue is affected by the stage of completion measured based on cumulative contract costs incurred. Total contract costs are estimated based on future projections, including material costs, labor costs, and the project duration. The Company periodically reviews whether there are significant changes in the estimated total contract costs and reflects such changes in determining the stage of completion as of the end of the reporting period.\n\n \n\n●Note 12(C): Defined benefit obligation: The defined benefit\nobligation is measured using actuarial valuations (projected unit credit method) and is sensitive to key assumptions such as the discount\nrate, salary growth, and demographic assumptions. Changes in these assumptions could result in a material adjustment to the carrying\namount of the defined benefit obligation within the next financial year.\n\n \n\n●Note 13: Recognition of deferred tax assets: The recognition\nof deferred tax assets requires significant judgment in assessing whether sufficient future taxable profits will be available to utilize\ndeductible temporary differences and tax losses/credits. Changes in assumptions underlying taxable profit forecasts, utilization periods,\ntax planning, or tax laws could result in a material adjustment within the next financial year.\n\n \n\n●Note 15: Allowance for inventories valuation: The allowance\nfor inventories valuation involves significant judgment regarding aging and recoverability, including the Company’s policy to fully\nprovide for inventories aged more than one year from project initiation and to provide for certain inventories aged less than one year\nwhen the estimated recovery period exceeds one year. Changes in assumptions about recoverability (including expected selling prices,\ncosts to complete/sell, and obsolescence) may result in a material adjustment within the next financial year.\n\n \n\n●Note 21(C): goodwill impairment: The Company estimates the recoverable\namount of an individual asset, and if it is impossible to measure the individual recoverable amount of an asset, the Company estimates\nthe recoverable amount of cash-generating unit (“CGU”). The value in use is estimated by applying a weighted average cost\nof capital that reflects current market assessments of the time value of money and the risks specific to the asset or CGU for which estimated\nfuture cash flows have not been adjusted, to the estimated future cash flows expected to be generated by the asset or CGU.\n\n \n\n●Note 30: Provisions\n\n \n\nSite restoration: The site restoration provision is based on management’s estimate of expected restoration costs and timing (and discounting where applicable). Changes in cost assumptions, scope, timing, or discount rate could result in a material adjustment within the next financial year.\n\n \n\nLitigation provision: The litigation provision reflects management’s best estimate of expected outcomes based on the status of proceedings and legal advice. Actual settlements or judgments may differ in amount and timing, which could result in a material adjustment within the next financial year.\n\n \n\nLoss provision: The loss provision is measured using management’s estimate of unavoidable costs to meet obligations, net of expected recoveries. Changes in expected costs, recoveries, or timing could result in a material adjustment within the next financial year.\n\n \n\n●Note 31(B): financial instruments.\n\n \n\nF-13\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\nA 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 and are sensitive to key assumptions such as the discount rate, risk-free interest rate and historical volatility. Changes in these assumptions could result in a material adjustment to the carrying amount of the financial instruments within the next financial year.\n\n \n\n**5. Material Accounting Policies**\n\n \n\nThe material accounting policies followed by the Company in preparation of its consolidated financial statements are as follows:\n\n \n\n**A.****New and amended standards or interpretations adopted by the\nCompany**\n\n \n\nThe Company has applied the following standards and amendments for the first time for their annual reporting period commencing January 1, 2025.\n\n \n\n**IAS 21 The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability**\n\n \n\nThe amendments that 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 amendments do not have a significant impact on the financial statements.\n\n \n\n**B.****New and amended standards or interpretations not yet adopted\nby the Company**\n\n \n\nThe following new accounting standards and interpretations that have been published are not mandatory for December 31, 2025 reporting periods and have not been early adopted by the Company.\n\n \n\n**IFRS 9 Financial Instruments - IFRS 7 Financial Instruments: Disclosures – Classification and Measurement of Financial Instruments**\n\n \n\nThe 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. 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.\n\n \n\n**Annual Improvements to IFRS Accounting Standards – Volume 11**\n\n \n\nThe amendments are annual improvements to the following standards:\n\n \n\n \n-\nIFRS 1 First-time adoption of International Financial Reporting Standards;\n\n \n\n \n-\nIFRS 7 Financial instruments: Disclosures;\n\n \n\nF-14\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n \n-\nIFRS 9 Financial instruments;\n\n \n\n \n-\nIFRS 10 Consolidated financial statements; and\n\n \n\n \n-\nIAS 7 Statement of cash flows\n\n \n\nThe 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.\n\n \n\n**IFRS 18 Presentation and Disclosure in Financial Statements**\n\n \n\nItems 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.\n\n \n\n**IFRS 19 Subsidiaries without Public Accountability: Disclosures**\n\n \n\nIFRS 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.\n\n \n\n**Basis of consolidation**\n\n \n\n \ni.\nBusiness combinations\n\n \n\nThe Company accounts for business combinations using the acquisition method when the acquired set of activities and assets meets the definition of a business and control is transferred to the Company. In determining whether a particular set of activities and assets is a business, the Company assesses whether the set of assets and activities acquired includes, at a minimum, an input and substantive process and whether the acquired set has the ability to produce outputs.\n\n \n\nThe 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.\n\n \n\nThe consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognized in profit or loss.\n\n \n\nAny 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.\n\n \n\nF-15\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\nIf 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.\n\n \n\n \nii.\nNon-controlling interests\n\n \n\nNon-controlling interests are measured initially at their proportionate share of the acquiree’s identifiable net assets at the date of acquisition.\n\n \n\nChanges in the Company’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.\n\n \n\n \niii.\nLoss of control\n\n \n\nWhen the Company loses control over a subsidiary, it derecognizes the assets and liabilities of the subsidiary, and any related non-controlling interests and other components of equity. Any resulting gain or loss is recognized in profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost.\n\n \n\n \niv.\nInterests in equity- accounted investees\n\n \n\nThe Company’s interests in equity- accounted investees comprise interests in associates. Associates are those entities in which the Company has significant influence, but not control or joint control, over the financial and operating policies. Generally, if the Company holds 20% or more of the voting power of the investee, it is presumed that the Company has significant influence.\n\n \n\nInterests in associates are accounted for using the equity method. They are initially recognized at cost, which includes transaction costs. Subsequent to initial recognition, the consolidated financial statements include the Company’s share of the profit or loss and other comprehensive income (“OCI”) of equity- accounted investees, until the date on which significant influence ceases. 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.\n\n \n\nIf 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.\n\n \n\nThe 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.\n\n \n\n \nv.\nTransactions eliminated on consolidation\n\n \n\nIntra-group balances and transactions, and any unrealized income and expenses (except for foreign currency transaction gains or losses) arising from intra-group transactions, are eliminated. Unrealized gains arising from transactions with equity- accounted investees are eliminated against the investment to the extent of the Company’s interest in the investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.\n\n \n\nF-16\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**Foreign currency**\n\n \n\n \ni.\nForeign currency transactions\n\n \n\nTransactions in foreign currencies are translated into the respective functional currencies of Company companies at the exchange rates at the dates of the transactions.\n\n \n\nMonetary 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.\n\n \n\nHowever, foreign currency differences arising from the translation of the following items are recognized in OCI:\n\n \n\n●an investment in equity securities designated as at FVOCI (except\non impairment, in which case foreign currency differences that have been recognized in OCI are reclassified to profit or loss);\n\n \n\n●a financial liability designated as a hedge of the net investment\nin a foreign operation to the extent that the hedge is effective; and\n\n \n\n●qualifying cash flow hedges to the extent that the hedges are\neffective.\n\n \n\n**Revenue from contracts with customers**\n\n \n\nThe Company determines revenue recognition by:\n\n \n\n●identifying the contract, or contracts, with a customer;\n\n \n\n●identifying the performance obligations in each contract;\n\n \n\n●determining the transaction price;\n\n \n\n●allocating the transaction price to the performance obligations\nin each contract; and\n\n \n\n●recognizing revenue when, or as, we satisfy performance obligations\nby transferring the promised goods or services.\n\n \n\nThe Company generates revenue primarily through the following business operations:\n\n \n\n \ni.\nContent Merchandising revenue\n\n \n\nContent Merchandising revenues consist of sales of the physical and digital content consumer products and merchandises. The Company recognizes revenues from the sale of consumer products and merchandises after both (1) control of the products has been transferred to customers and (2) the underlying performance obligations have been satisfied.\n\n \n\nContent 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.\n\n \n\nF-17\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n \nii.\nFood and beverages revenue\n\n \n\nFood and beverages revenues consist primarily of sales of consumer products, including food and beverages, as well as franchise royalties and fees derived from franchise agreements. The Company recognizes revenues from the sale of consumer products when both (1) control of the products has been transferred to customers and (2) the underlying performance obligations have been satisfied.\n\n \n\nUnder franchise agreements, the Company’s performance obligation is to provide a license to use Our Bakery’s trademarks and other intellectual property. Franchise royalties and fees are typically charged as a percentage of food and beverage revenues and are treated as variable consideration. Such franchise-related revenues are recognized as the underlying food and beverage revenues occur.\n\n \n\nFood and beverages revenues are recognized net of estimated allowances for returns, which are accounted for as variable consideration when estimating the amount of revenue to recognize.\n\n \n\n \niii.\nContent production revenue\n\n \n\nThe Company operates the content production business that consists of planning, producing, and selling the theatrical films and television programs. The Company identifies the license which is provided along with media product as combined output and recognizes revenue over time by measuring its progress based on cost incurred towards complete satisfaction of the performance obligation of media production in accordance with Paragraph 35 (3) of IFRS 15 Revenue from contracts with customers. The percentage-of-completion for each contract is calculated by dividing the cumulative cost incurred in relation to service performed by the Company by estimated total contract costs. The Company is also eligible to receive its share of profits from film distributors once the film generates profits beyond the break-even point, which is considered as variable consideration and recognized as the revenue on the settlement date.\n\n \n\nThe 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.\n\n \n\nIn addition to content production revenue, according to the terms of the contract with the customer, the Company provides 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.\n\n \n\nIn 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.\n\n \n\nF-18\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n \niv.\nContent investment revenue\n\n \n\nThe Company manages and operates the investment funds on behalf of investors and receives commissions from its customers. The content investment revenues are received in exchange for investment management services that include a series of fund administration services, fund compliance, fund transfer agent services and fund distribution services. Control of investment management services is transferred to the customer over time as these customers receive and consume the benefits provided by these services. Investment management revenues are calculated as a contractual percentage of financial assets the Company manages for clients on either a discretionary or non-discretionary basis. Content investment revenue is 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.\n\n \n\n**Operating segments**\n\n \n\nAn operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company’s other components. The chief operating decision-maker has been identified as the chief executive officer. The Company’s operating segments have been determined to be each business unit, for which the Company generates separately identifiable financial information that is regularly reported to the chief executive officer for the purpose of resource allocation and assessment of segment performance. The Company has four 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.\n\n \n\n**Employee benefits**\n\n \n\n \ni.\nShort- term employee benefits\n\n \n\nShort-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.\n\n \n\n \nii.\nShare-based payment arrangements\n\n \n\nThe 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.\n\n \n\nThe 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.\n\n \n\nF-19\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\nThe 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.\n\n \n\n \niii.\nDefined contribution plans\n\n \n\nObligations 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.\n\n \n\n \niv.\nDefined benefit plans\n\n \n\nThe 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.\n\n \n\nThe 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.\n\n \n\nRemeasurements 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.\n\n \n\nWhen 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.\n\n \n\n**Finance income and finance costs**\n\n \n\nThe Company’s finance income and finance costs include:\n\n \n\n●interest income;\n\n \n\n●interest expense;\n\n \n\n●dividend income;\n\n \n\n●the net gain or loss on financial assets at FVTPL;\n\n \n\n●the foreign currency gain or loss on financial assets and financial\nliabilities;\n\n \n\nF-20\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\nThe ‘effective interest rate’ is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:\n\n \n\n●the gross carrying amount of the financial asset; or\n\n \n\n●the amortized cost of the financial liability.\n\n \n\nIn 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.\n\n \n\n**Income tax expense**\n\n \n\nIncome 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.\n\n \n\nThe 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.\n\n \n\n \ni.\nCurrent income tax\n\n \n\nCurrent 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.\n\n \n\nCurrent tax assets and liabilities are offset only if certain criteria are met.\n\n \n\n \n-\nHas a legally enforceable right to set off the recognized amounts; and\n\n \n\n \n-\nIntends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.\n\n \n\n \nii.\nDeferred income tax\n\n \n\nDeferred 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:\n\n \n\n●temporary differences on the initial recognition of assets or\nliabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss;\n\n \n\n●temporary differences related to investments in subsidiary,\nassociates and joint arrangements to the extent that the Company is able to control the timing of the reversal of the temporary differences\nand it is probable that they will not reverse in the foreseeable future; and\n\n \n\n●taxable temporary differences arising on the initial recognition\nof goodwill.\n\n \n\nF-21\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\nDeferred 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 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.\n\n \n\nThe 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.\n\n \n\nDeferred tax assets and liabilities are offset only if certain criteria are met.\n\n \n\n \n-\nHas a legally enforceable right to set off the recognized amounts; and\n\n \n\n \n-\nIntends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.\n\n \n\n**Cash and Cash Equivalents**\n\n \n\nCash 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.\n\n \n\n**Inventories**\n\n \n\nInventories 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.\n\n \n\nThe Company makes adjustments to reduce the cost of inventory to its net realizable value, for estimated excess, obsolescence or impaired balances.\n\n \n\n**Investment property**\n\n \n\nProperty 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.\n\n \n\nAmong 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.\n\n \n\nF-22\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**Property and equipment**\n\n \n\n \ni.\nRecognition and measurement\n\n \n\nItems of property and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses.\n\n \n\nIf 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 and equipment.\n\n \n\nAny gain or loss on disposal of an item of property and equipment is recognized in profit or loss.\n\n \n\n \nii.\nSubsequent expenditure\n\n \n\nSubsequent 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.\n\n \n\n \niii.\nDepreciation\n\n \n\nDepreciation 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.\n\n \n\nThe estimated useful lives of property and equipment for current and comparative periods are as follows:\n\n \n\nSchedule of property and equipment\n \n \n\nMachinery\n \n5 ~ 8 years\n\nVehicles\n \n\n5 years\n\nOffice equipment\n \n5 ~ 8 years\n\nFurniture and fixtures\n \n5 ~ 8 years\n\nRight-of-use assets\n \n2 ~ 10 years\n\n \n\nDepreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.\n\n \n\n**Intangible assets and goodwill**\n\n \n\n \ni.\nRecognition and measurement\n\n \n\nGoodwill: Goodwill arising on the acquisition of subsidiary is measured at cost less accumulated impairment losses.\n\n \n\nCrypto assets: Crypto assets acquired by the Company are classified as intangible asset and are measured at cost less accumulated impairment losses. Cost is determined by using the weighted average method and includes the purchase price and costs directly attributable to the acquisition. Impairment losses and gains or losses on disposal of crypto assets are recognized as other income (expenses).\n\n \n\nOther intangible assets: Other intangible assets, including trademarks that are acquired by the Company and have finite useful lives are measured at cost less accumulated amortization and any accumulated impairment losses.\n\n \n\nF-23\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n \nii.\nSubsequent expenditure\n\n \n\nSubsequent 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.\n\n \n\n \niii.\nAmortization\n\n \n\nAmortization 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:\n\n \n\nSchedule of amortization of estimated useful lives\n \n \n\nSoftware\n \n5 years\n\nBrand\n \n20 years\n\nContents IP\n \n7 ~ 8 years\n\nGoodwill\n \nIndefinite\n\nCrypto assets\n \nIndefinite\n\n \n\nAmortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.\n\n \n\n**Financial instruments**\n\n \n\n \ni.\nRecognition and initial measurement\n\n \n\nTrade receivables and debt\nsecurities issued are initially recognized when they are originated. All other financial assets and financial liabilities are initially\nrecognized when the Company becomes a party to the contractual provisions of the instrument.\n\n \n\nA 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.\n\n \n\n \nii.\nClassification and subsequent measurement\n\n \n\n \n*(a)*\n*Financial assets*\n\n \n\nOn initial recognition, a financial asset is classified as measured at:\n\n \n\n●amortized cost;\n\n \n\n●FVOCI - debt investment;\n\n \n\n●FVOCI - equity investment;\n\n \n\n●or FVTPL.\n\n \n\nFinancial 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.\n\n \n\nF-24\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\nA financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:\n\n \n\n●it is held within a business model whose objective is to hold\nassets to collect contractual cash flows; and\n\n \n\n●its contractual terms give rise on specified dates to cash flows\nthat are solely payments of principal and interest on the principal amount outstanding.\n\n \n\nA debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:\n\n \n\n●it is held within a business model whose objective is achieved\nby both collecting contractual cash flows and selling financial assets; and\n\n \n\n●its contractual terms give rise on specified dates to cash flows\nthat are solely payments of principal and interest on the principal amount outstanding.\n\n \n\nOn 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.\n\n \n\nAll 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.\n\n \n\n \n*(b)*\n*Financial assets - Business model assessment*\n\n \n\nThe 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:\n\n \n\n●the stated policies and objectives for the portfolio and the\noperation of those policies in practice. These include whether management’s strategy focuses on earning contractual interest income,\nmaintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities\nor expected cash outflows or realizing cash flows through the sale of the assets;\n\n \n\n●how the performance of the portfolio is evaluated and reported\nto the Company’s management;\n\n \n\n●the risks that affect the performance of the business model\n(and the financial assets held within that business model) and how those risks are managed;\n\n \n\n●how managers of the business are compensated - e. g. whether\ncompensation is based on the fair value of the assets managed or the contractual cash flows collected; and\n\n \n\n●the frequency, volume and timing of sales of financial assets\nin prior periods, the reasons for such sales and expectations about future sales activity.\n\n \n\nTransfers 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.\n\n \n\nF-25\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\nFinancial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.\n\n \n\n \n*(c)*\n*Financial assets - Assessment whether contractual cash flows are solely payments of principal and interest*\n\n \n\nFor 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.\n\n \n\nIn 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:\n\n \n\n●contingent events that would change the amount or timing of\ncash flows;\n\n \n\n●terms that may adjust the contractual coupon rate, including\nvariable-rate features;\n\n \n\n●prepayment and extension features; and\n\n \n\n●terms that limit the Company’s claim to cash flows from\nspecified assets (e.g. non-recourse features).\n\n \n\nA prepayment feature is consistent with the sole 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.\n\n \n\n \n*(d)*\n*Financial assets - Subsequent measurement and gains and losses*\n\n \n\n*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.\n\n \n\nFinancial 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.\n\n \n\n \n*(e)*\n*Financial liabilities - Classification, subsequent measurement and gains and losses*\n\n \n\nFinancial 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.\n\n \n\nF-26\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n \niii.\nDerecognition\n\n \n\n \n*(a)*\n*Financial assets*\n\n \n\nThe Company derecognizes a financial asset when:\n\n \n\n●the contractual rights to the cash flows from the financial\nasset expiration; or\n\n \n\n●it transfers the rights to receive the contractual cash flows\nin a transaction in which either:\n\n \n\n-substantially all of the risks and rewards of ownership of the\nfinancial asset are transferred; or\n\n \n\n-the Company neither transfers nor retains substantially all\nof the risks and rewards of ownership and it does not retain control of the financial asset.\n\n \n\nThe 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.\n\n \n\n \n*(b)*\n*Financial liabilities*\n\n \n\nThe 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.\n\n \n\nOn 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.\n\n \n\nWhen 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.\n\n \n\n**Impairment**\n\n \n\n \ni.\nNon- derivative financial assets\n\n \n\n*Financial instruments and contract assets*\n\n \n\nThe Company recognizes loss allowances for ECLs on:\n\n \n\n●financial assets measured at amortized cost;\n\n \n\n●debt investments measured at FVOCI; and\n\n \n\n●contract assets.\n\n \n\nThe Company also recognizes loss allowances for ECLs on lease receivables, which are disclosed as part of trade and other receivables.\n\n \n\nF-27\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\nThe Company measures loss allowances at an amount equal to lifetime ECLs, except for the following, which are measured at 12-month ECLs:\n\n \n\n●debt securities that are determined to have low credit risk\nat the reporting date; and\n\n \n\n●other debt securities and bank balances for which credit risk\n(i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial\nrecognition.\n\n \n\nLoss allowances for trade receivables (including lease receivables) and contract assets are always measured at an amount equal to lifetime ECLs.\n\n \n\nWhen 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, which includes forward-looking information.\n\n \n\nThe Company assumes that the credit risk on a financial asset has increased significantly if it is more than 12 months past due.\n\n \n\nThe Company considers a financial asset to be in default when:\n\n \n\n●the debtor is unlikely to pay its credit obligations to the\nCompany in full, without recourse by the Company to actions such as realizing security (if any is held).\n\n \n\nLifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.\n\n \n\n12-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).\n\n \n\nThe maximum period considered when estimating ECLs is the maximum contractual period over which the Company is exposed to credit risk.\n\n \n\n \n*(a)*\n*Measurement of ECLs*\n\n \n\nECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Company expects to receive).\n\n \n\nECLs are discounted at the effective interest rate of the financial asset.\n\n \n\n \n*(b)*\n*Credit-impaired financial assets*\n\n \n\nAt each reporting date, the Company assesses whether financial assets carried at amortized cost and debt securities at FVOCI are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.\n\n \n\nF-28\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\nEvidence that a financial asset is credit-impaired includes the following observable data:\n\n \n\n●significant financial difficulty of the debtor;\n\n \n\n●a breach of contract such as a default or being more than 90\ndays past due;\n\n \n\n●the restructuring of a loan or advance by the Company on terms\nthat the Company would not consider otherwise;\n\n \n\n●it is probable that the debtor will enter bankruptcy or other\nfinancial reorganization; or\n\n \n\n●the disappearance of an active market for a security because\nof financial difficulties.\n\n \n\n*Presentation of allowance for ECL in the statement of financial position*\n\n \n\nLoss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets.\n\n \n\nFor debt securities at FVOCI, the loss allowance is charged to profit or loss and is recognized in OCI.\n\n \n\n \n*(c)*\n*Write-off*\n\n \n\nThe 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.\n\n \n\n \nii.\nNon-financial assets\n\n \n\nAt 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.\n\n \n\nFor impairment testing, assets are grouped together into the smallest group of assets that generate 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.\n\n \n\nThe 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.\n\n \n\nF-29\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\nAn impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.\n\n \n\nImpairment losses are recognized in profit or loss. The Company recognizes the impairment loss if there is any indication of impairment of individual CGU. And then, the Company performed impairment test of goodwill for groups of CGUs.\n\n \n\nAn impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.\n\n \n\n**Provisions**\n\n \n\nProvisions 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 recognized as finance cost.\n\n \n\nBuilding restoration: In accordance with the Company’s policies and applicable legal requirements, a provision for restoration related to leased buildings, along with the corresponding expense, is recognized at the commencement of the lease term.\n\n \n\nLoss provisions: A provision for losses is recognized when the Company has a present obligation as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation, and the amount can be reliably estimated.\n\n \n\nLitigation provisions: A provision for litigation is recognized for ongoing legal proceedings when an unfavorable outcome is considered probable and the related amount can be reasonably estimated as of the reporting date.\n\n \n\n**Leases**\n\n \n\nAt 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.\n\n \n\n \ni.\nAs a lessee\n\n \n\nAt 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.\n\n \n\nThe 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.\n\n \n\nThe 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.\n\n \n\nF-30\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\nThe 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.\n\n \n\nThe 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.\n\n \n\nLease payments included in the measurement of the lease liability comprise the following:\n\n \n\n●fixed payments, including in-substance fixed payments;\n\n \n\n●variable lease payments that depend on an index or a rate, initially\nmeasured using the index or rate as at the commencement date;\n\n \n\n●amounts expected to be payable under a residual value guarantee;\nand\n\n \n\n●the exercise price under a purchase option that the Company\nis reasonably certain to exercise, lease payments in an optional renewal period if the Company is reasonably certain to exercise an extension\noption, and penalties for early termination of a lease unless the Company is reasonably certain not to terminate early.\n\n \n\nThe 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.\n\n \n\nWhen 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.\n\n \n\nAt the date of transition to IFRSs, The Company applies the following approach to all of its leases.\n\n \n\nThe Company measures 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.\n\n \n\nThe 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.\n\n \n\nThe 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\n \n\nThe 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.\n\n \n\nF-31\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n \nii.\nAs a lessor\n\n \n\nAt 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.\n\n \n\nWhen the Company acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease.\n\n \n\nTo classify each lease, the Company makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.\n\n \n\nWhen 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.\n\n \n\nIf an arrangement contains lease and non-lease components, then the Company applies IFRS 15 to allocate the consideration in the contract.\n\n \n\nThe Company applies the derecognition and impairment requirements in IFRS 9 to the net investment in the lease. The Company further regularly reviews estimated unguaranteed residual values used in calculating the gross investment in the lease.\n\n \n\nThe Company recognizes lease payments received under operating leases as income on a straight-line basis over the lease term as part of ‘other income’.\n\n \n\n**Fair value measurement**\n\n \n\n‘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.\n\n \n\nA number of the Company’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:\n\n \n\n●Level 1: quoted prices (unadjusted) in active markets for identical\nassets or liabilities.\n\n \n\n●Level 2: inputs other than quoted prices included in Level 1\nthat are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).\n\n \n\n●Level 3: inputs for the asset or liability that are not based\non observable market data (unobservable inputs).\n\n \n\nWhen 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.\n\n \n\nF-32\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\nIf 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.\n\n \n\nIf 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.\n\n \n\nThe Company recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.\n\n \n\nThe 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\n \n\n**Earnings per Share**\n\n \n\nBasic 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.\n\n \n\nDiluted 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.\n\n \n\n**Concentration of Credit Risk**\n\n \n\nThe 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.\n\n \n\n**Convertible notes**\n\n \n\nConvertible notes are accounted for in accordance with IFRS 9 Financial Instruments and IAS 32 Financial Instruments: Presentation.\n\n \n\nAt initial recognition, the liability component is measured at fair value by discounting future cash flows at the market interest rate. The proceeds from the issuance were allocated between the host debt instrument and the embedded conversion option. The host contract was classified as a financial liability measured at amortized cost, while the embedded conversion option was separately recognized as a derivative liability in accordance with applicable accounting standards. The liability component is subsequently measured at amortized cost using the effective interest method. Interest expense is recognized in profit or loss over the term of the notes. Upon conversion, the liability component is reclassified to equity.\n\n \n\nF-33\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**Listing expense**\n\n \n\nManagement has computed the listing expense in accordance with IFRS 2. Accounting of reverse merger is a complex accounting topic, wherein, management had to determine the listing expense to be recognized in the income statement based on the fair value of the shared issued net off the net assets acquired and fair value of the warrants issued. Please refer to note 23 for key estimates and judgements used for determination of listing expense.\n\n \n\n**Warrants**\n\n \n\nKWM has issued both public warrants and private warrants convertible into ordinary shares. Management reviewed the classification of the warrants in accordance with IAS 32. According to IAS 32, a contract that will be settled by exchanging a fixed amount of cash for a fixed number of own shares is classified as an equity instrument. However, the warrants contain several features that do not meet the ‘fixed-for-fixed’ criteria. Therefore, management concluded that classifying the warrants as financial liabilities is appropriate under IFRS.\n\n \n\n**A.****Basis of measurement**\n\n \n\nThe 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.\n\n \n\n**Items**\n \n**Measurement bases**\n\nDefined benefit liabilities\n \nPresent value\n\nFinancial instruments measured at fair value through profit or loss (“FVTPL”)\n \nFair value\n\n \n\n**6. Operating segments**\n\n \n\n**A.****Basis for segmentation**\n\n \n\nThe Company’s operating segments have been identified to be each business unit, by which the Company provides different services and merchandise.\n\n \n\nThe Company assesses the performance of each operating segment based on operating profit, and there is no difference with the amounts reported on the consolidated statement of profit or loss, except for intergroup transactions.\n\n \n\nThe following summary describes the operations of each reportable segment.\n\n \n\nSchedule of segment operations\n \n \n\n**Operating segments**\n \n**Operations**\n\nContent Merchandising\n \nSale and distribution of content consumer products and providing production services\n\nFood and beverages\n \nSale of food and beverages products and licensing of the intellectual property\n\nContent production\n \nPlanning, producing, and selling the media content such as theatrical films and television programs\n\nContent investment\n \nProviding investment management services to investment funds\n\n \n\nF-34\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**B.****Information about reportable segments**\n\n \n\nInformation 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.\n\n \n\nThe segment information for the years ended December 31, 2025, 2024 and 2023 is as follows:\n\n \n\nSchedule of segment results\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**Year ended December 31, 2025**\n \n\n \n \n \n \n**Content merchandising**\n \n \n**F&B**\n \n \n**Content production**\n \n \n**Contentinvestment**\n \n \n**Total**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nSegment revenue\n \n₩\n \n \n44,415,967\n \n \n \n12,323,986\n \n \n \n20,690,997\n \n \n \n745,138\n \n \n \n78,176,088\n \n\nElimination of intersegment revenue\n \n \n \n \n-\n \n \n \n(95,168\n)\n \n \n-\n \n \n \n-\n \n \n \n(95,168\n)\n\nConsolidated net revenue\n \n \n \n \n44,415,967\n \n \n \n12,228,818\n \n \n \n20,690,997\n \n \n \n745,138\n \n \n \n78,080,920\n \n\nDepreciation\n \n \n \n \n467,669\n \n \n \n1,638,642\n \n \n \n417,102\n \n \n \n126,524\n \n \n \n2,649,937\n \n\nAmortization\n \n \n \n \n52,104\n \n \n \n269,400\n \n \n \n278,570\n \n \n \n-\n \n \n \n600,074\n \n\nEmployee benefit expenses\n \n \n \n \n4,220,468\n \n \n \n4,915,334\n \n \n \n4,370,899\n \n \n \n923,271\n \n \n \n14,429,972\n \n\nSegment operating profit(loss) (*)\n \n \n \n \n3,996,955\n \n \n \n(1,964,917\n)\n \n \n(143,774,320\n)\n \n \n(856,648\n)\n \n \n(142,598,930\n)\n\nOther adjustment (**)\n \n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n(52,128,930\n)\n\nCompany operating profit\n \n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n(194,727,860\n)\n\n \n\n \n\n(*)During the year ended December 31, 2025, segment operating\nloss of Korean Won 143,774,320 was incurred mainly due to the impairment loss on goodwill allocated to Content production CGUs(Note 21).\n\n(**)The adjustment relates to the listing expenses accounted in\naccordance to IFRS 2 due to the merger between K Enter Holdings Inc. and K Wave Media Ltd., and measurement of liabilities related to\nshareholders’ agreement.\n\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**Year ended\nDecember 31, 2024**\n \n\n \n \n \n \n**Content merchandising**\n \n \n**F&B**\n \n \n**Total**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nSegment revenue\n \n₩\n \n \n28,379,904\n \n \n \n14,630,426\n \n \n \n43,010,330\n \n\nElimination of intersegment revenue\n \n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nConsolidated net revenue\n \n \n \n \n28,379,904\n \n \n \n14,630,426\n \n \n \n43,010,330\n \n\nDepreciation/Amortization\n \n \n \n \n501,513\n \n \n \n2,672,170\n \n \n \n3,173,683\n \n\nSegment operating profit\n \n \n \n \n(969,001\n)\n \n \n(2,537,890\n)\n \n \n(3,506,891\n)\n\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**Year ended\nDecember 31, 2023**\n \n\n \n \n \n \n**Content merchandising**\n \n \n**F&B**\n \n \n**Total**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nSegment revenue\n \n₩\n \n \n49,771,824\n \n \n \n17,709,332\n \n \n \n67,481,156\n \n\nElimination of intersegment revenue\n \n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nConsolidated net revenue\n \n \n \n \n49,771,824\n \n \n \n17,709,332\n \n \n \n67,481,156\n \n\nDepreciation/Amortization\n \n \n \n \n750,031\n \n \n \n2,534,001\n \n \n \n3,284,032\n \n\nSegment operating profit(loss)\n \n \n \n \n3,802,307\n \n \n \n(304,909\n)\n \n \n3,497,398\n \n\n \n\nF-35\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**C.****Geographic information**\n\n \n\nContent merchandising segment, Food and beverages segment, Content production segment, Content Investment segment are managed on a worldwide basis, but operate manufacturing facilities and sales offices primarily in Seoul, South Korea. The geographic information analyses the Company’s revenue by the customer’s country of domicile. In presenting the geographic information, segment revenue and non-current assets have been based on the geographic location of customers.\n\n \n\nSummary of the Company’s operation by region based on the location of customers for the years ended December 31, 2025, 2024 and 2023 is as follows:\n\n \n\nSchedule of geographic\ninformation\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n\n**Year ended**\n\n**December 31,\n2025**\n\n \n \n**Year ended\nDecember 31,\n2024**\n \n \n**Year ended\nDecember 31,\n2023**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nKorea\n \n₩\n \n \n53,639,087\n \n \n \n39,343,631\n \n \n \n54,892,741\n \n\nUSA\n \n \n \n \n13,777,853\n \n \n \n13\n \n \n \n335,239\n \n\nGermany\n \n \n \n \n2,480,957\n \n \n \n-\n \n \n \n-\n \n\nUK\n \n \n \n \n2,162,847\n \n \n \n-\n \n \n \n-\n \n\nFrance\n \n \n \n \n1,613,298\n \n \n \n-\n \n \n \n-\n \n\nJapan\n \n \n \n \n957,327\n \n \n \n3,516,708\n \n \n \n11,948,054\n \n\nOther\n \n \n \n \n3,449,551\n \n \n \n149,978\n \n \n \n305,122\n \n\nTotal\n \n₩\n \n \n78,080,920\n \n \n \n43,010,330\n \n \n \n67,481,156\n \n\n \n\nSummary of the Company’s non-current assets based on the location as of December 31, 2025 and December 31, 2024 is as follows:\n\n \n\n \n \n \n \n**December 31,\n2025**\n \n \n**December 31,\n2024**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nKorea\n \n₩\n \n \n50,095,186\n \n \n \n23,963,489\n \n\nUSA\n \n \n \n \n41,759,247\n \n \n \n-\n \n\n \n\n**D.****Major customer**\n\n \n\nRevenues from major customers that amount to 10% or more of the Company’s revenue for the years ended December 31, 2025, 2024 and 2023 are as follows:\n\n \n\nSchedule of revenues from major customers\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**Year ended\nDecember 31,\n2025**\n \n \n**Year ended\nDecember 31,\n2024**\n \n \n**Year ended\nDecember 31,\n2023**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nCustomer A (Content merchandising segment)\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nRevenue\n \n₩\n \n \n9,396,922\n \n \n \n8,785,673\n \n \n \n11,184,157\n \n\n%\n \n \n \n \n12.04\n%\n \n \n20.43\n%\n \n \n16.57\n%\n\nCustomer B (Content production segment)\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nRevenue\n \n \n \n \n13,774,629\n \n \n \n-\n \n \n \n-\n \n\n%\n \n \n \n \n17.64\n%\n \n \n-\n \n \n \n-\n \n\nCustomer C (Content merchandising segment)\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nRevenue\n \n \n \n \n-\n \n \n \n-\n \n \n \n11,463,821\n \n\n%\n \n \n \n \n-\n \n \n \n-\n \n \n \n16.99\n%\n\nCustomer D (Content merchandising segment)\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nRevenue\n \n \n \n \n-\n \n \n \n-\n \n \n \n17,859,876\n \n\n%\n \n \n \n \n-\n \n \n \n-\n \n \n \n26.47\n%\n\n \n\nF-36\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**7. Revenue**\n\n \n\n**A.****Revenue streams**\n\n \n\nThe Company generates revenue primarily through the sale of the Company’s entertainment content and production services, Media production, Investment funds for Korean film and food and beverage products. Other sources of revenue include the franchise royalty fees from licensing of the Company’s intellectual property in food and beverage business.\n\n \n\nRevenue from contracts with customers for the years ended December 31, 2025, 2024 and 2023 are as follows:\n\n \n\nSchedule of revenue from contracts with customers\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**Year ended\nDecember 31,\n2025**\n \n \n**Year ended\nDecember 31,\n2024**\n \n \n**Year ended\nDecember 31,\n2023**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nRevenue from contracts with customers\n \n₩\n \n \n78,064,500\n \n \n \n43,010,330\n \n \n \n67,481,156\n \n\nInvestment revenue\n \n \n \n \n16,420\n \n \n \n-\n \n \n \n-\n \n\nTotal\n \n₩\n \n \n78,080,920\n \n \n \n43,010,330\n \n \n \n67,481,156\n \n\n \n\n**B.****Disaggregation of revenue from contracts with customers**\n\n \n\nIn the following table, revenue from contracts with customers is disaggregated by major products and service lines and timing of revenue recognition. The table also includes a reconciliation of the disaggregated revenue with the Company’s reportable segments (see Note 6).\n\n \n\nRevenue from contracts with customers based on the service contract type, the timing of satisfaction of performance obligations for the years ended December 31, 2025, 2024 and 2023 are as follows:\n\n \n\nSchedule of disaggregation of revenue from contracts with customers\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**Year ended\nDecember 31,\n2025**\n \n \n**Year ended\nDecember 31,\n2024**\n \n \n**Year ended\nDecember 31,\n2023**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nMajor products/service lines\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nContent goods and merchandises\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nVideo Project & Merchandise Items\n \n₩\n \n \n39,479,217\n \n \n \n23,536,076\n \n \n \n47,511,123\n \n\nOthers\n \n \n \n \n4,936,750\n \n \n \n4,843,828\n \n \n \n2,260,701\n \n\nSubtotal\n \n₩\n \n \n44,415,967\n \n \n \n28,379,904\n \n \n \n49,771,824\n \n\nF&B\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nFood and beverages\n \n₩\n \n \n11,600,569\n \n \n \n13,697,884\n \n \n \n17,067,663\n \n\nFranchise royalties and fees\n \n \n \n \n628,249\n \n \n \n932,542\n \n \n \n641,669\n \n\nSubtotal\n \n₩\n \n \n12,228,818\n \n \n \n14,630,426\n \n \n \n17,709,332\n \n\nMajor products/service lines\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nMedia production\n \n \n \n \n20,690,997\n \n \n \n-\n \n \n \n-\n \n\nInvestment funds for Korean film\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nInvestment management revenue\n \n \n \n \n728,717\n \n \n \n-\n \n \n \n-\n \n\nInvestment revenue\n \n \n \n \n16,421\n \n \n \n-\n \n \n \n-\n \n\nSubtotal\n \n \n \n \n745,138\n \n \n \n-\n \n \n \n-\n \n\nTotal\n \n₩\n \n \n78,080,920\n \n \n \n43,010,330\n \n \n \n67,481,156\n \n\nTiming of revenue recognition\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nAt a point in time\n \n₩\n \n \n56,190,379\n \n \n \n42,453,366\n \n \n \n66,925,610\n \n\nOver time\n \n \n \n \n21,890,541\n \n \n \n556,964\n \n \n \n555,546\n \n\nTotal\n \n₩\n \n \n78,080,920\n \n \n \n43,010,330\n \n \n \n67,481,156\n \n\n \n\nF-37\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**C.****Contract balance**\n\n \n\nThe balance of contract assets and liabilities from contracts with customers as of December 31, 2025 and 2024 is as follows:\n\n \n\nSchedule of contract assets and liabilities\n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**December 31, 2025**\n \n \n**December 31,\n2024**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\n**Current**\n \n \n \n \n \n \n\nContract assets (Unbilled revenue)\n \n₩\n \n \n1,065,645\n \n \n \n-\n \n\nContract liabilities (Deferred revenue)\n \n \n \n \n1,252,195\n \n \n \n-\n \n\n**Non-current**\n \n \n \n \n \n \n \n \n \n \n\nContract liabilities (Deferred revenue)\n \n \n \n \n650,000\n \n \n \n-\n \n\n \n\nThe Company recognizes unbilled receivables from media production service as contract assets. The Company capitalizes the cost associated with the production, including development costs, direct costs, and production overhead per title as prepayments and prepaid expenses. The Company amortizes the capitalized asset in ‘Cost of revenues’ on the combined statements of comprehensive income based on the percentage-of-completion for each contract.\n\n \n\nThe 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.\n\n \n\n**8. Income and Expenses**\n\n \n\n**A.****Other income**\n\n \n\nDetails of other income for the years ended December 31, 2025, 2024 and 2023 are as follows:\n\n \n\nSchedule of other income\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**2025**\n \n \n**2024**\n \n \n**2023**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nGain from merger (Note 23)\n \n₩\n \n \n8,509\n \n \n \n-\n \n \n \n-\n \n\nReversal of other bad debt expenses\n \n \n \n \n156,333\n \n \n \n-\n \n \n \n-\n \n\nGains on disposal of Property and Equipment\n \n \n \n \n2,113\n \n \n \n6,100\n \n \n \n928\n \n\nGains on disposal of right-of-use assets\n \n \n \n \n461,212\n \n \n \n131,193\n \n \n \n1,042,833\n \n\nRental income\n \n \n \n \n472,235\n \n \n \n808,123\n \n \n \n283,983\n \n\nMiscellaneous income\n \n \n \n \n198,965\n \n \n \n76,713\n \n \n \n159,336\n \n\nTotal\n \n₩\n \n \n1,299,367\n \n \n \n1,022,129\n \n \n \n1,487,080\n \n\n \n\n**B.****Other expenses**\n\n \n\nDetails of other expenses for the years ended December 31, 2025, 2024 and 2023 are as follows:\n\n \n\nSchedule of other expenses\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**2025**\n \n \n**2024**\n \n \n**2023**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nOther bad debt expenses\n \n₩\n \n \n595,861\n \n \n \n347,419\n \n \n \n-\n \n\nLosses on disposal of Property and Equipment\n \n \n \n \n781,522\n \n \n \n329,882\n \n \n \n31,975\n \n\nImpairment loss on Property and Equipment\n \n \n \n \n152,816\n \n \n \n964,626\n \n \n \n2,246\n \n\nImpairment loss on Intangible Assets\n \n \n \n \n2,897,920\n \n \n \n-\n \n \n \n-\n \n\nDonations\n \n \n \n \n1,000\n \n \n \n-\n \n \n \n-\n \n\nImpairment losses on goodwill\n \n \n \n \n129,071,743\n \n \n \n-\n \n \n \n-\n \n\nMiscellaneous expenses\n \n \n \n \n195,506\n \n \n \n1,158\n \n \n \n1,326\n \n\nTotal\n \n₩\n \n \n133,696,368\n \n \n \n1,643,085\n \n \n \n35,547\n \n\n \n\nF-38\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**C.****Expenses by nature**\n\n \n\nDetails of classification of expenses by nature for the years ended December 31, 2025, 2024 and 2023 are as follows:\n\n \n\nSchedule of other expenses classification\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**2025**\n \n \n**2024**\n \n \n**2023**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nChanges in inventories\n \n₩\n \n \n(793,978\n)\n \n \n(393,764\n)\n \n \n2,931,297\n \n\nRaw materials and consumables\n \n \n \n \n4,504,813\n \n \n \n5,029,668\n \n \n \n4,989,957\n \n\nEmployee benefits\n \n \n \n \n14,443,222\n \n \n \n9,549,202\n \n \n \n11,777,876\n \n\nDepreciation\n \n \n \n \n2,649,937\n \n \n \n2,817,673\n \n \n \n2,921,232\n \n\nAmortization\n \n \n \n \n600,074\n \n \n \n356,010\n \n \n \n362,800\n \n\nCommission paid\n \n \n \n \n26,210,530\n \n \n \n13,430,421\n \n \n \n21,501,616\n \n\nOutsourcing fee\n \n \n \n \n35,008,651\n \n \n \n11,421,682\n \n \n \n16,071,848\n \n\nCopyright fee\n \n \n \n \n722,685\n \n \n \n714,124\n \n \n \n1,348,620\n \n\nRent\n \n \n \n \n2,581,796\n \n \n \n484,204\n \n \n \n856,282\n \n\nSupplies\n \n \n \n \n420,237\n \n \n \n234,611\n \n \n \n307,350\n \n\nWater and fuel expenses\n \n \n \n \n436,850\n \n \n \n487,384\n \n \n \n633,874\n \n\nTransportation\n \n \n \n \n1,445,150\n \n \n \n347,864\n \n \n \n369,182\n \n\nBad debt expenses\n \n \n \n \n404\n \n \n \n297,162\n \n \n \n171,560\n \n\nBuilding Maintenance\n \n \n \n \n149,424\n \n \n \n110,866\n \n \n \n96,425\n \n\nLosses from investments in the associate\n \n \n \n \n10,413\n \n \n \n-\n \n \n \n-\n \n\nShare-based compensation expense\n \n \n \n \n25,636,854\n \n \n \n-\n \n \n \n-\n \n\nListing expenses (Note 23)\n \n \n \n \n25,075,227\n \n \n \n-\n \n \n \n-\n \n\nOther expenses\n \n \n \n \n1,309,491\n \n \n \n1,009,159\n \n \n \n1,095,372\n \n\nTotal\n \n \n \n \n140,411,780\n \n \n \n45,896,266\n \n \n \n65,435,291\n \n\n \n\nTotal expenses consist of cost of sales and selling, general and administrative expenses.\n\n \n\nF-39\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**9. Finance income and costs**\n\n \n\nDetails of finance income and costs for the years ended December 31, 2025, 2024 and 2023 are as follows:\n\n \n\nSchedule of finance income and costs\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**2025**\n \n \n**2024**\n \n \n**2023**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\n**Finance income**\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nInterest income\n \n₩\n \n \n407,595\n \n \n \n287,285\n \n \n \n406,933\n \n\nDividend income\n \n \n \n \n2,613\n \n \n \n1,463\n \n \n \n1,462\n \n\nRealized gains on foreign currency transaction\n \n \n \n \n460,665\n \n \n \n43,037\n \n \n \n199,697\n \n\nUnrealized gains on foreign currency transaction\n \n \n \n \n120,693\n \n \n \n88,458\n \n \n \n376,295\n \n\nGains on valuation of short-term financial instruments\n \n \n \n \n-\n \n \n \n33\n \n \n \n55\n \n\nGains on valuation of short-term investment securities\n \n \n \n \n208,737\n \n \n \n-\n \n \n \n-\n \n\nGains on valuation of long-term financial instruments\n \n \n \n \n9,192\n \n \n \n6,368\n \n \n \n7,241\n \n\nReversal of loss on valuation of long-term investments\n \n \n \n \n6,536\n \n \n \n-\n \n \n \n-\n \n\nGains on valuation of long-term investment securities\n \n \n \n \n78,955\n \n \n \n149,926\n \n \n \n116,900\n \n\nGains on valuation of warrants\n \n \n \n \n16,622,386\n \n \n \n-\n \n \n \n-\n \n\nGains on valuation of derivative instruments\n \n \n \n \n860,353\n \n \n \n-\n \n \n \n-\n \n\nProject Settlement Gain\n \n \n \n \n904\n \n \n \n-\n \n \n \n-\n \n\nGains on debt forgiveness\n \n \n \n \n309,850\n \n \n \n-\n \n \n \n-\n \n\nGains on disposal of short-term loans\n \n \n \n \n-\n \n \n \n-\n \n \n \n12,819\n \n\nGains on disposal of long-term loans\n \n \n \n \n-\n \n \n \n-\n \n \n \n622,539\n \n\nGains on valuation of FVPL liabilities\n \n \n \n \n5,559,062\n \n \n \n-\n \n \n \n-\n \n\nTotal\n \n₩\n \n \n24,647,541\n \n \n \n576,570\n \n \n \n1,743,941\n \n\n**Finance costs**\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nInterest expenses\n \n₩\n \n \n3,904,290\n \n \n \n1,257,378\n \n \n \n1,385,142\n \n\nRealized losses on foreign currency transaction\n \n \n \n \n22,716\n \n \n \n57,308\n \n \n \n255,886\n \n\nUnrealized losses on foreign currency transaction\n \n \n \n \n874,297\n \n \n \n6,447\n \n \n \n26,064\n \n\nLosses on valuation of short-term investment securities\n \n \n \n \n2,388,883\n \n \n \n-\n \n \n \n-\n \n\nLosses on valuation of derivative instruments\n \n \n \n \n1,710,264\n \n \n \n-\n \n \n \n-\n \n\nLosses on disposal of short-term investment securities\n \n \n \n \n5,917\n \n \n \n-\n \n \n \n-\n \n\nLosses on disposal of long-term investment securities\n \n \n \n \n2,132,188\n \n \n \n-\n \n \n \n-\n \n\nLosses on valuation of long-term financial instruments\n \n \n \n \n889\n \n \n \n115\n \n \n \n8,717\n \n\nLosses on valuation of long-term investment securities\n \n \n \n \n9,136\n \n \n \n60,275\n \n \n \n12,395\n \n\nLosses on valuation of short-term financial instruments\n \n \n \n \n-\n \n \n \n-\n \n \n \n6\n \n\nLosses on disposal of short-term borrowings\n \n \n \n \n317,625\n \n \n \n-\n \n \n \n-\n \n\nLosses on initial recognition of FVPL liabilities\n \n \n \n \n26,228,277\n \n \n \n-\n \n \n \n-\n \n\nTotal\n \n₩\n \n \n37,594,482\n \n \n \n1,381,523\n \n \n \n1,688,210\n \n\n \n\nF-40\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**10. Loss per share**\n\n \n\n**A.****Basic loss per share**\n\n \n\nThe calculation of basic Earning per share has been based on the following profit attributable to ordinary shareholders and weighted-average number of ordinary shares outstanding.\n\n \n\n \ni.\nProfit attributable to ordinary shareholders (basic)\n\n \n\nSchedule of\nearning per shares basic and diluted\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n\n**Year ended December 31,**\n\n**2025**\n\n \n \n**Year ended\nDecember 31,\n2024**\n \n \n**Year ended\nDecember 31,\n2023**\n \n\n \n \n \n \n**(In thousands of Korean Won)**\n \n\nLoss for the period, attributable to the owners of Parent Company\n \n₩\n \n \n(205,742,925\n)\n \n \n(2,541,375\n)\n \n \n3,137,186\n \n\nDividends on non-redeemable preference shares\n \n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nLoss attributable to ordinary shareholders\n \n₩\n \n \n(205,742,925\n)\n \n \n(2,541,375\n)\n \n \n3,137,186\n \n\n \n\n \nii.\nWeighted-average number of ordinary shares (basic)\n\n \n\nSchedule of weighted-average\nnumber of ordinary shares basic\n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n**Year ended\nDecember 31,\n2025**\n \n \n**Year ended\nDecember 31,\n2024**\n \n \n**Year ended\nDecember 31,\n2023**\n \n\n \n \n**(In number of shares)**\n \n\nNumber of ordinary shares issued at January 1\n \n \n10,397,836\n \n \n \n10,397,836\n \n \n \n10,397,836\n \n\nBusiness Combination\n \n \n48,602,164\n \n \n \n-\n \n \n \n-\n \n\nAcquisition Merger\n \n \n2,668,375\n \n \n \n-\n \n \n \n-\n \n\nEffect of treasury shares held\n \n \n(101,699\n)\n \n \n(1,620,191\n)\n \n \n(1,620,191\n)\n\nConversion of Convertible Notes\n \n \n8,409\n \n \n \n-\n \n \n \n-\n \n\nWeighted-average number of ordinary shares for the year ended December 31\n \n \n61,575,085\n \n \n \n8,777,645\n \n \n \n8,777,645\n \n\n \n\n**B.****Anti-diluted earnings per share**\n\n \n\nDiluted 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, 2025, 2024 and 2023.\n\n \n\n**C.****Loss per share**\n\n \n\nSchedule of Loss per share basic\n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**Year ended\nDecember 31,\n2025**\n \n \n**Year ended\nDecember 31,\n2024**\n \n \n**Year ended\nDecember 31,\n2023**\n \n\n \n \n \n \n**(In Korean Won)**\n \n\nBasic earnings per share\n \n₩\n \n \n(3,341\n)\n \n \n(290\n)\n \n \n357\n \n\n \n\nF-41\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**D.****Anti-dilutive shares**\n\n \n\nAnti-dilutive shares could potentially dilute basic earnings per share in future periods and therefore, were not included in diluted earnings per share. The number of anti-dilutive shares as of December 31, 2025, 2024 and 2023 are as follows:\n\n \n\nSchedule of anti-dilutive shares\n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n**Year ended\nDecember 31,\n2025**\n \n \n**Year ended\nDecember 31,\n2024**\n \n \n**Year ended\nDecember 31,\n2023**\n \n\n \n \n**(In number of shares)**\n \n\nWarrant\n \n \n14,210,405\n \n \n \n-\n \n \n \n-\n \n\nConvertible notes\n \n \n18,663,437\n \n \n \n-\n \n \n \n-\n \n\n \n\n**11. Share-based payment arrangements**\n\n \n\n**A.****Description of share-based payment arrangements**\n\n \n\nAs of December 31, 2025, the Company had the following share-based payment arrangements.\n\n \n\n \ni.\nShare option plan (cash-settled)\n\n \n\nOn June 30, 2021, Play F&B Co., Ltd, a subsidiary of Play Company, granted 400 share options to its employees. These options entitle the holders to a cash payment upon meeting the vesting conditions. The amount of the cash payment is determined based on the difference between the Company’s share price at the time of exercise and the exercise price.\n\n \n\nThe key terms and conditions related to the grants under these plans are as follows:\n\n \n\nSchedule of share option plan\n \n \n \n \n \n \n \n \n \n \n\nGrant date\n \nNumber of instruments\n \nVesting conditions\n \nContractual life of options\n \nType\n \nUnderlying assets\n\n**Options granted to employees**\n \n \n \n \n \n\nAs of June 30, 2021\n \n400\n \n2 years’ service from grant date and the Play F&B Co., Ltd’s\nannual average Adjusted EBITDA (*1) equals or exceeds Korean Won 1,375,000 thousand at the date of exercise\n \n7 years\n \nCash-settled\n \nPlay F&B Co., Ltd’s ordinary shares\n\n \n\n \n\n(*1)Adjusted EBITDA = Operating Income +Depreciation of PP&E\n+Amortization of Intangible Assets +Advertising & marketing expenses\n\n \n\nF-42\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n \nii.\nEquity Price Protection Right\n\n \n\nOn March 31, 2023, the Company entered into a Share Purchase Agreement with Hyeong Seok Cho (CEO of Play Company), which became effective on January 3, 2025. Under this agreement, Hyeong Seok Cho was granted a right to receive a cash payment based on the performance of KWM shares received as a compensation. The amount of the cash payment is determined based on the difference between the initial value and the actual selling price of the shares during the exercise period. In 2025, among 8,668,867 shares previously owned by Hyeong Seok Cho, 8,622,587 shares were disposed and related liabilities of Korean Won 25,738,891 thousand were calculated and classified as Trade and other non-current payables. The remaining 46,280 shares were measured at fair value using a binomial model (CRR), and related liabilities of Korean Won 145,431 thousand were calculated and classified as Trade and other non-current payables.\n\n \n\nThe key terms and conditions related to the grants under these plans are as follows:\n\n \n\nSchedule of share option grant\n \n \n \n \n \n \n \n \n \n \n\nGrant date\n \nNumber of instruments\n \nVesting conditions\n \nContractual life of options\n \nType\n \nUnderlying assets\n\n**Options granted to employees**\n \n \n \n \n \n\nAs of January 3, 2025\n \nN/A\n \nBuyer compensates Seller for any shortfall if shares sold below initial value; adjusted for gains realized/distribute up to Dec 31, 2026\n \n3 months following 6 month lock-up expiration\n \nCash-settled\n \nKWM shares listed on Nasdaq\n\n \n\n**B.****Measurement of fair values**\n\n \n\n \ni.\nCash-settled share-based payment arrangement\n\n \n\nThe fair value of the employee share options has been measured using a binomial model.\n\n \n\nThe 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:\n\n \n\nSchedule of cash-settled share-based payment\n \n \n \n \n \n \n \n \n \n \n\n**Share appreciation rights (cash-settled)**\n \n \n \n**December 31,2025**\n \n \n**December 31,2024**\n \n\nFair value of option\n \n₩\n \n \n7,540\n \n \n \n54,230\n \n\nShare price\n \n \n \n \n410,136\n \n \n \n643,735\n \n\nExercise price\n \n₩\n \n \n1,100,000\n \n \n \n1,100,000\n \n\nRisk- free interest rate (based on government bonds)\n \n \n \n \n2.98\n%\n \n \n2.71\n%\n\nVolatility (*)\n \n \n \n \n35.50\n%\n \n \n30.00\n%\n\n \n\n \n\n(*)Volatility has been based on an evaluation of the historical\nvolatility of other companies’ share price, which are listed in KOSDAQ, particularly over the historical period commensurate with\nprior one year.\n\n \n\nF-43\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n \nii.\nEquity Price Protection Right\n\n \n\nThe fair value of the employee share options related to remaining 46,280 shares owned by Hyeong Seok Cho has been measured using a binomial model(CRR).\n\n \n\nThe 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:\n\n \n\nSchedule of measurement of the fair\n \n \n \n \n \n \n \n \n \n \n\n**Share appreciation rights (cash-settled)**\n \n \n \n**December 31,2025**\n \n \n**December 31,2024**\n \n\nFair value of option\n \nUSD\n \n \n2.19\n \n \n \n-\n \n\nShare price\n \nUSD\n \n \n0.41\n \n \n \n-\n \n\nExercise price\n \nUSD\n \n \n2.6\n \n \n \n-\n \n\nRisk- free interest rate (based on government bonds)\n \n \n \n \n3.67\n%\n \n \n-\n \n\nVolatility (*)\n \n \n \n \n53.5\n%\n \n \n-\n \n\n \n\n \n\n(*)Volatility has been based on an evaluation of the historical\nvolatility of other companies’ share price, which are listed in NASDAQ, particularly over the historical period commensurate with\nprior one year.\n\n \n\n**C.****Reconciliation of outstanding share options**\n\n \n\nThe number and exercise prices of share options under the share option plan for the years ended December 31, 2025, 2024 and 2023 are as follows:\n\n \n\n \ni.\nCash-settled share-based payment arrangement\n\n \n\nSchedule of\nreconciliation of outstanding share options\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n**2025**\n \n \n**2024**\n \n \n**2023**\n \n\n \n \n**Number of options**\n \n \n \n \n**Exercise price**\n \n \n**Number of options**\n \n \n \n \n**Exercise price**\n \n \n**Number of options**\n \n \n \n \n**Exercise price**\n \n\n \n \n**(In Korean Won and number of options)**\n \n\nOutstanding at January 1\n \n \n400\n \n \n₩\n \n \n1,100,000\n \n \n \n400\n \n \n₩\n \n \n1,100,000\n \n \n \n400\n \n \n₩\n \n \n1,100,000\n \n\nOutstanding at December 31\n \n \n400\n \n \n \n \n \n1,100,000\n \n \n \n400\n \n \n \n \n \n1,100,000\n \n \n \n400\n \n \n \n \n \n1,100,000\n \n\nExercisable at December 31\n \n \n-\n \n \n₩\n \n \n-\n \n \n \n-\n \n \n₩\n \n \n-\n \n \n \n-\n \n \n₩\n \n \n-\n \n\n \n\nDetails of the liabilities arising from the share option plan (cash-settled) are as follows.\n\n \n\nSchedule of liabilities arising from the share option plan\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**As of\nDecember 31,\n2025**\n \n \n**As of\nDecember 31,\n2024**\n \n \n**As of\nDecember 31,\n2023**\n \n\n \n \n \n \n \n**(In thousands of Korean won)**\n \n\nTotal carrying amount of liabilities for share-based payment\n \n₩\n \n \n25,887,338\n \n \n \n21,692\n \n \n \n201,819\n \n\nTotal intrinsic value of liabilities for vested benefits\n \n \n \n \n-\n \n \n \n-\n \n \n \n58,933\n \n\n \n\nF-44\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**12. Employee benefits**\n\n \n\nDetails of defined benefit liability recognized as of December 31, 2025 and 2024 are as follows:\n\n \n\nSchedule of employee benefits liability recognized\n \n \n \n \n \n \n \n \n\n \n \n \n \n**December 31,\n2025**\n \n \n**December 31,\n2024**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nNet defined benefit liability\n \n₩\n \n \n1,257,693\n \n \n \n559,270\n \n\n \n\nThe Company operates both the defined benefit plans and defined contribution plans as a retirement pension scheme. Defined benefit plans expose the Company to actuarial risks, such as longevity risk, currency risk, interest rate risk and market (investment) risk.\n\n \n\nThe expense recognized in relation to defined contribution plan for the year ended December 31, 2025, 2024 and 2023 is Korean Won 593,562 thousand, 295,080 thousand and 435,139 thousand, respectively.\n\n \n\n**A.****Movement in net defined benefit (asset) liability**\n\n \n\nDetails of reconciliation from the opening balances to the closing balances for the net defined benefit liability and its components as of December 31, 2025, 2024 and 2023 are as follows:\n\n \n\nSchedule of reconciliation from the opening balances \n  \n    \n    \n    \n    \n    \n    \n    \n    \n   \n\n  \n \n \nDefined benefit obligation\n  \nFair value of plan assets  \nNet defined benefit liabilities \n\n  \n \n \n2025\n  \n2024  \n2023  \n2025  \n2024  \n2023  \n2025  \n2024  \n2023 \n\n  \n(In thousands of Korean won)\n\nBalance at 1 January \n₩ \n 559,271  \n 706,102  \n 928,148  \n -  \n -  \n -  \n 559,271  \n 706,102  \n 928,148 \n\nIncluded in profit or loss \n  \n    \n    \n    \n    \n    \n    \n    \n    \n   \n\nCurrent service cost \n  \n 457,795  \n 375,158  \n 514,505  \n -  \n -  \n -  \n 457,795  \n 375,158  \n 514,505 \n\nPast service credit \n  \n 292,523  \n 19,015  \n 31,375  \n -  \n -  \n -  \n 292,523  \n 19,015  \n 31,375 \n\nGains on Settlement \n  \n 1,132  \n -  \n -  \n -  \n -  \n -  \n 1,132  \n -  \n - \n\nInterest expense \n  \n 46,760  \n -  \n -  \n 9,126  \n -  \n -  \n 37,634  \n -  \n - \n\nSubtotal \n  \n 798,210  \n 394,173  \n 545,880  \n 9,126  \n -  \n -  \n 789,084  \n 394,173  \n 545,880 \n\nIncluded in OCI \n  \n    \n    \n    \n    \n    \n    \n    \n    \n   \n\nRemeasurement loss(gain) \n  \n    \n    \n    \n    \n    \n    \n    \n    \n   \n\nDemographic assumption \n  \n -  \n (4,954) \n -  \n -  \n -  \n -  \n -  \n (4,954) \n - \n\nFinancial assumption \n  \n (47,762) \n 41,683  \n 49,584  \n -  \n -  \n -  \n (47,762) \n 41,683  \n 49,584 \n\nAdjustment based on experience \n  \n (261,251) \n (80,813) \n (159,142) \n -  \n -  \n -  \n (261,251) \n (80,813) \n (159,142)\n\nReturn on plan assets excluding interest income \n  \n -  \n -  \n -  \n 1,407  \n -  \n -  \n (1,407) \n -  \n - \n\nSubtotal \n  \n (309,013) \n (44,084) \n (109,558) \n 1,407  \n -  \n -  \n (310,420) \n (44,084) \n (109,558)\n\nOther \n  \n    \n    \n    \n    \n    \n    \n    \n    \n   \n\nChanges in scope of consolidation \n  \n 931,378  \n -  \n -  \n 395,353  \n -  \n -  \n 536,025  \n -  \n - \n\nBenefits paid \n  \n (316,267) \n (496,920) \n (658,368) \n -  \n -  \n -  \n (316,267) \n (496,920) \n (658,368)\n\nSubtotal \n  \n 615,111  \n (496,920) \n (658,368) \n 395,353  \n -  \n -  \n 219,758  \n (496,920) \n (658,368)\n\nBalance at 31 December \n₩ \n 1,663,579  \n 559,271  \n 706,102  \n 405,886  \n -  \n -  \n 1,257,693  \n 559,271  \n 706,102 \n\n \n\nF-45\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**B.**\n**Plan assets**\n\n \n\nSchedule of\nplan assets\n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**December 31,\n2025**\n \n \n**December 31,\n2024**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nCash\n \n₩\n \n \n53\n \n \n \n-\n \n\nTime deposits\n \n \n \n \n405,833\n \n \n \n-\n \n\nTotal\n \n₩\n \n \n405,886\n \n \n \n-\n \n\n \n\n**C.**\n**Defined benefit obligation**\n\n \n\n \ni.\nActuarial assumptions\n\n \n\nDetails of actuarial assumptions used for the years ended December 31, 2025, 2024 and 2023 are as follows:\n\n \n\nSchedule of\nassumptions\n \n \n \n \n \n \n \n \n \n \n\n \n \n**2025**\n \n**2024**\n \n \n**2023**\n \n\nDiscount rate\n \n3.7% ~ 4.6%\n \n \n4.2\n%\n \n \n4.9\n%\n\nFuture salary growth\n \n6.28% ~ 7.1%\n \n \n7.1\n%\n \n \n7.24\n%\n\n \n\nAssumptions regarding future longevity and standard salary scale have been based on issued by Korea Insurance Development Institute.\n\n \n\nAs of December 31, 2025, the weighted average duration of the defined benefit obligation was 7.76 years.\n\n \n\n \nii.\nSensitivity analysis\n\n \n\nThe 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, 2025 and 2024 are as follows:\n\n \n\nSchedule of defined benefit obligation\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**December 31,\n2025**\n \n \n**December 31,\n2024**\n \n\n \n \n \n \n**Increased by\n1%**\n \n \n**Decreased by\n1%**\n \n \n\n**Increased by**\n\n**1%**\n\n \n \n**Decreased by 1%**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nDiscount rate\n \n₩\n \n \n(119,694\n)\n \n \n138,208\n \n \n \n(55,066\n)\n \n \n66,463\n \n\nFuture salary growth\n \n \n \n \n137,766\n \n \n \n(121,689\n)\n \n \n66,204\n \n \n \n(55,864\n)\n\n \n\nAlthough 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.\n\n \n\nF-46\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**D.**\n**Employee benefit expenses**\n\n \n\n \ni.\nDetails of employee benefit expenses recognized for the years ended December 31, 2025, 2024 and 2023 are as follows:\n\n \n\nSchedule of employee benefit expenses recognized\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**Year ended\nDecember 31,\n2025**\n \n \n**Year ended\nDecember 31,\n2024**\n \n \n**Year ended\nDecember 31,\n2023**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nWages and salaries\n \n₩\n \n \n11,854,114\n \n \n \n8,056,765\n \n \n \n9,641,567\n \n\nExpenses related to post-employment plans\n \n \n \n \n1,382,647\n \n \n \n689,253\n \n \n \n981,019\n \n\nSocial security contributions\n \n \n \n \n351,143\n \n \n \n398,066\n \n \n \n582,545\n \n\nFringe benefit\n \n \n \n \n860,744\n \n \n \n585,245\n \n \n \n598,503\n \n\nCash settled Share-based payments\n \n \n \n \n(18,676\n)\n \n \n(180,127\n)\n \n \n(25,758\n)\n\nTotal\n \n₩\n \n \n14,429,972\n \n \n \n9,549,202\n \n \n \n11,777,876\n \n\n \n\n \nii.\nExpenses are recognized in the consolidated statements of comprehensive income (loss) as follows:\n\n \n\nSchedule of Expenses are recognized in the consolidated statements of comprehensive\nincome\n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**Year ended\nDecember 31,\n2025**\n \n \n**Year ended\nDecember 31,\n2024**\n \n \n**Year ended\nDecember 31,\n2023**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nCost of revenues\n \n₩\n \n \n7,341,369\n \n \n \n7,280,355\n \n \n \n9,290,041\n \n\nSelling, general and administrative expenses\n \n \n \n \n7,088,603\n \n \n \n2,268,847\n \n \n \n2,487,835\n \n\nTotal\n \n₩\n \n \n14,429,972\n \n \n \n9,549,202\n \n \n \n11,777,876\n \n\n \n\n**13. Income taxes**\n\n \n\n**A.**\n**Amounts recognized in profit or loss**\n\n \n\nSchedule of deferred tax expense\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**2025**\n \n \n**2024**\n \n \n**2023**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\n**Current tax expense**\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nCurrent year\n \n₩\n \n \n876,391\n \n \n \n233,403\n \n \n \n1,319,643\n \n\nAdjustments recognized\nrelated to prior period incomes (*)\n \n \n \n \n(79,248\n)\n \n \n(263,935\n)\n \n \n(518,699\n)\n\n Total Current tax expense\n \n₩\n \n \n797,143\n \n \n \n(30,532\n)\n \n \n800,944\n \n\n**Deferred tax expense**\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nOrigination and reversal of temporary differences\n \n₩\n \n \n(362,851\n)\n \n \n(723,118\n)\n \n \n(40,165\n)\n\nDeferred taxes charged directly to equity\n \n \n \n \n794\n \n \n \n-\n \n \n \n-\n \n\n**Tax expense(benefit) on continuing operations**\n \n \n \n \n**435,086**\n \n \n \n**(753,650**\n**)**\n \n \n**760,779**\n \n\n \n\n \n\n(*)In the normal course of business, the Company and its respective\nsubsidiaries are examined by taxation authority. Our management regularly assesses the potential outcomes of these examinations and any\nfuture examinations for the current or prior years in determining the adequacy of its liabilities for income taxes.\n\n \n\nF-47\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\nWe 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.\n\n \n\n**B.**\n**Amounts recognized in OCI**\n\n \n\nSchedule of consolidated statements\nof income taxes\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**2025**\n \n \n**2024**\n \n \n**2023**\n \n\n \n \n \n \n**Before tax**\n \n \n**Tax (expense)benefit**\n \n \n**Net of tax**\n \n \n**Before tax**\n \n \n**Tax (expense)benefit**\n \n \n**Net of tax**\n \n \n**Before tax**\n \n \n**Tax (expense)benefit**\n \n \n**Net of tax**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\n**Items that will not be reclassified to profit or loss**\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nRemeasurements of defined benefit liability\n \n₩\n \n \n309,013\n \n \n \n(794\n)\n \n \n308,219\n \n \n \n44,085\n \n \n \n-\n \n \n \n44,085\n \n \n \n109,558\n \n \n \n-\n \n \n \n109,558\n \n\n \n\n**C.**\n**Reconciliation of effective tax rate**\n\n \n\nSchedule of effective tax rate\n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**2025**\n \n \n**2024**\n \n \n**2023**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nProfit before income tax\n \n₩\n \n \n(207,674,801\n)\n \n \n(4,311,845\n)\n \n \n3,553,129\n \n\nTax at the statutory income tax rate\n \n \n \n \n(10,535,806\n)\n \n \n(844,871\n)\n \n \n720,604\n \n\n**Adjustments:**\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nTax-exempt income\n \n \n \n \n(1,857\n)\n \n \n(408\n)\n \n \n(92\n)\n\nExpenses not deductible for tax purposes\n \n \n \n \n6,826,010\n \n \n \n31,689\n \n \n \n37,369\n \n\nTax credits\n \n \n \n \n(94,216\n)\n \n \n(84,755\n)\n \n \n(124,290\n)\n\nChanges in unrecognized deferred tax\n \n \n \n \n3,481,880\n \n \n \n380,738\n \n \n \n(149,470\n)\n\nAdjustments recognized related to prior period incomes\n \n \n \n \n(79,248\n)\n \n \n(263,935\n)\n \n \n121,794\n \n\nOthers (differences in tax rate, etc.)\n \n \n \n \n838,323\n \n \n \n27,892\n \n \n \n154,864\n \n\nIncome tax expenses\n \n₩\n \n \n435,086\n \n \n \n(753,650\n)\n \n \n760,779\n \n\n**Effective income tax rate (*)**\n \n \n \n \n-\n \n \n \n-\n \n \n \n21.4\n%\n\n \n\n \n\n(*)The effective tax rate is not calculated as the Company incurred\na loss before income taxes for the years ended December 31, 2025 and 2024.\n\n \n\nF-48\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**D.**\n**Movement in deferred tax balances**\n\n \n\n \ni.\nMovement in deferred tax balances as of December 31, 2025\n\n \n\nSchedule of deferred tax balances\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**Beginning**\n \n \n**Changes resulting\nfrom business\ncombinations**\n \n \n**Increase\n(decrease)**\n \n \n**Exchange\nRate Diff**\n \n \n**Ending**\n \n\nAccrued income\n \n₩\n \n \n(15,876\n)\n \n \n(603\n)\n \n \n(30,570\n)\n \n \n-\n \n \n \n(47,049\n)\n\nShort-term financial instruments\n \n \n \n \n91,074\n \n \n \n19,278\n \n \n \n14,934\n \n \n \n-\n \n \n \n125,286\n \n\nInventories\n \n \n \n \n569,966\n \n \n \n(23,760\n)\n \n \n37,008\n \n \n \n-\n \n \n \n583,214\n \n\nProperty & equipment including right-of-use assets\n \n \n \n \n(2,052,129\n)\n \n \n(44,226\n)\n \n \n927,989\n \n \n \n-\n \n \n \n(1,168,366\n)\n\nIntangible assets other than goodwill\n \n \n \n \n6,998\n \n \n \n(129,352\n)\n \n \n607,864\n \n \n \n5,427\n \n \n \n490,937\n \n\nAllowance for bad debts\n \n \n \n \n395,217\n \n \n \n-\n \n \n \n(5,102\n)\n \n \n-\n \n \n \n390,115\n \n\nInvestments in associate and subsidiary (*)\n \n \n \n \n1,205,749\n \n \n \n23,950\n \n \n \n(1,305,999\n)\n \n \n-\n \n \n \n(76,300\n)\n\nAccrued expenses\n \n \n \n \n(5,291\n)\n \n \n175,901\n \n \n \n(65,189\n)\n \n \n-\n \n \n \n105,422\n \n\nLease liabilities\n \n \n \n \n2,246,860\n \n \n \n26,629\n \n \n \n(583,844\n)\n \n \n-\n \n \n \n1,689,645\n \n\nProvisions\n \n \n \n \n175,126\n \n \n \n-\n \n \n \n(43,162\n)\n \n \n-\n \n \n \n131,964\n \n\nInvestment property\n \n \n \n \n(83,809\n)\n \n \n-\n \n \n \n(361,321\n)\n \n \n-\n \n \n \n(445,130\n)\n\nDefined benefit liabilities\n \n \n \n \n117,936\n \n \n \n53,066\n \n \n \n18,445\n \n \n \n-\n \n \n \n189,447\n \n\nBrand\n \n \n \n \n(399,157\n)\n \n \n-\n \n \n \n399,157\n \n \n \n-\n \n \n \n-\n \n\nContract assets\n \n \n \n \n-\n \n \n \n(60,788\n)\n \n \n54,869\n \n \n \n-\n \n \n \n(5,919\n)\n\nPrepaid expenses\n \n \n \n \n-\n \n \n \n(120,089\n)\n \n \n(79,337\n)\n \n \n-\n \n \n \n(199,427\n)\n\nPrepayments\n \n \n \n \n-\n \n \n \n(55,537\n)\n \n \n27,876\n \n \n \n-\n \n \n \n(27,661\n)\n\nTrade and other payables\n \n \n \n \n-\n \n \n \n-\n \n \n \n186,815\n \n \n \n3,514\n \n \n \n190,330\n \n\nConvertible Notes\n \n \n \n \n-\n \n \n \n-\n \n \n \n569,322\n \n \n \n10,710\n \n \n \n580,031\n \n\nOther\n \n \n \n \n57,399\n \n \n \n812,858\n \n \n \n768,957\n \n \n \n27,499\n \n \n \n1,666,713\n \n\nTotal\n \n₩\n \n \n2,310,064\n \n \n \n683,358\n \n \n \n1,147,367\n \n \n \n47,150\n \n \n \n4,187,939\n \n\nLoss carried forward\n \n₩\n \n \n1,039,258\n \n \n \n4,155,051\n \n \n \n2,546,380\n \n \n \n134,615\n \n \n \n7,875,304\n \n\nCarryover tax credit\n \n \n \n \n3,118,117\n \n \n \n346,716\n \n \n \n150,984\n \n \n \n-\n \n \n \n3,615,817\n \n\nUnrecognized deferred tax liabilities (assets) (*)\n \n \n \n \n(5,855,583\n)\n \n \n(5,268,632\n)\n \n \n(3,481,880\n)\n \n \n(181,764\n)\n \n \n(14,787,859\n)\n\nDeferred tax assets (liabilities)\n \n₩\n \n \n611,857\n \n \n \n(83,507\n)\n \n \n362,851\n \n \n \n-\n \n \n \n891,201\n \n\n \n\n \n\n(*)As of December 31, 2025, the Company did not recognize\ndeferred income tax assets for the temporary difference relating to investments in subsidiary as it is not probable such temporary differences\ncan be utilized in the foreseeable future.\n\n \n\n \nii.\nMovement in deferred tax balances as of December 31, 2024\n\n \n\nF-49\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n \n \n \n \n**Tax effect**\n \n\n \n \n \n \n**Beginning**\n \n \n**Increase\n(decrease)**\n \n \n**Ending**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nAccrued income\n \n₩\n \n \n(54,469\n)\n \n \n38,593\n \n \n \n(15,876\n)\n\nShort-term financial instruments\n \n \n \n \n74,007\n \n \n \n17,067\n \n \n \n91,074\n \n\nInventories\n \n \n \n \n220,559\n \n \n \n349,407\n \n \n \n569,966\n \n\nProperty & equipment including right-of-use assets\n \n \n \n \n(2,261,920\n)\n \n \n209,791\n \n \n \n(2,052,129\n)\n\nIntangible assets other than goodwill\n \n \n \n \n(10,712\n)\n \n \n17,710\n \n \n \n6,998\n \n\nAllowance for bad debts\n \n \n \n \n267,801\n \n \n \n127,416\n \n \n \n395,217\n \n\nInvestments in associate and subsidiary (*)\n \n \n \n \n924,522\n \n \n \n281,227\n \n \n \n1,205,749\n \n\nAccrued expenses\n \n \n \n \n-\n \n \n \n(5,291\n)\n \n \n(5,291\n)\n\nLease liabilities\n \n \n \n \n2,988,900\n \n \n \n(742,040\n)\n \n \n2,246,860\n \n\nProvisions\n \n \n \n \n192,644\n \n \n \n(17,518\n)\n \n \n175,126\n \n\nInvestment property\n \n \n \n \n(681,506\n)\n \n \n597,697\n \n \n \n(83,809\n)\n\nDefined benefit liabilities\n \n \n \n \n143,140\n \n \n \n(25,204\n)\n \n \n117,936\n \n\nBrand\n \n \n \n \n(676,406\n)\n \n \n277,249\n \n \n \n(399,157\n)\n\nOther\n \n \n \n \n50,733\n \n \n \n6,667\n \n \n \n57,400\n \n\nTotal\n \n₩\n \n \n1,177,293\n \n \n \n1,132,771\n \n \n \n2,310,064\n \n\nLoss carried forward\n \n₩\n \n \n509,696\n \n \n \n529,562\n \n \n \n1,039,258\n \n\nCarryover tax credit\n \n \n \n \n4,246,455\n \n \n \n(1,128,338\n)\n \n \n3,118,117\n \n\nUnrecognized deferred tax liabilities (assets) (*)\n \n \n \n \n(6,044,706\n)\n \n \n189,123\n \n \n \n(5,855,583\n)\n\nDeferred tax assets (liabilities)\n \n₩\n \n \n(111,262\n)\n \n \n723,118\n \n \n \n611,856\n \n\n \n\n \n\n(*)As of December 31, 2024, the Company did not recognize\ndeferred income tax asset for the temporary difference relating to investments in subsidiary as it is not probable such temporary differences\ncan be utilized in the foreseeable future.\n\n \n\n**E.**\n**Deferred assets (liabilities)**\n\n \n\n \ni.\nDetails of unrecognized as deferred income tax assets as of December 31, 2025 and 2024 are as follows:\n\n \n\nSchedule of deferred assets liabilities\n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**2025**\n \n \n**2024**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nTax loss carryforwards\n \n₩\n \n \n7,875,304\n \n \n \n1,039,258\n \n\nTax credit carryforwards\n \n \n \n \n3,615,817\n \n \n \n3,118,117\n \n\nUnrecognized temporary difference\n \n \n \n \n3,296,738\n \n \n \n1,698,208\n \n\n \n\n \nii.\nDetails of unused tax loss carryforwards and unused tax credit carryforwards that are not recognized as deferred income tax assets as of December 31, 2025 are as follows:\n\n \n\nF-50\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\nSchedule of unused tax loss carryforwards\n \n \n \n \n \n \n \n \n \n \n\n**Year of expiration**\n \n \n \n**Unused loss\ncarryforwards**\n \n \n**Unused tax credit\ncarryforwards**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\n2026\n \n₩\n \n \n-\n \n \n \n-\n \n\n2027\n \n \n \n \n-\n \n \n \n-\n \n\n2028\n \n \n \n \n-\n \n \n \n-\n \n\n2029\n \n \n \n \n-\n \n \n \n188,128\n \n\n2030\n \n \n \n \n-\n \n \n \n2,929,990\n \n\n2031\n \n \n \n \n-\n \n \n \n-\n \n\nAfter 2031\n \n \n \n \n7,543,356\n \n \n \n497,699\n \n\nNo expiry date\n \n \n \n \n28,815,986\n \n \n \n-\n \n\nTotal\n \n₩\n \n \n36,359,342\n \n \n \n3,615,817\n \n\n \n\n \niii.\nThe timing of recovery of deferred tax assets and liabilities as of December 31, 2025 and 2024 is as follows:\n\n \n\nSchedule of recovery of deferred tax assets and liabilities\n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**December 31,\n2025**\n \n \n**December 31,\n2024**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nDeferred tax assets\n \n \n \n \n \n \n \n \n \n \n\n- Deferred tax assets to be recovered after more than 12 months\n \n₩\n \n \n1,334,368\n \n \n \n593,760\n \n\n- Deferred tax assets to be recovered within 12 months\n \n \n \n \n1,337,718\n \n \n \n978,311\n \n\nSub-total\n \n \n \n \n2,672,086\n \n \n \n1,572,071\n \n\nDeferred tax liabilities\n \n \n \n \n \n \n \n \n \n \n\n- Deferred tax liabilities to be recovered after more than 12 months\n \n \n \n \n(1,469,704\n)\n \n \n(939,073\n)\n\n- Deferred tax liabilities to be recovered within 12 months\n \n \n \n \n(311,181\n)\n \n \n(21,142\n)\n\nSub-total\n \n \n \n \n(1,780,885\n)\n \n \n(960,215\n)\n\nDeferred tax assets (liabilities), net\n \n₩\n \n \n891,201\n \n \n \n611,856\n \n\n \n\n**14. Other assets**\n\n \n\nDetails of other assets as of December 31, 2025 and 2024 are as follows:\n\n \n\nSchedule of other assets\n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**December 31,\n2025**\n \n \n**December 31,\n2024**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\n**Current**\n \n \n \n \n \n \n \n \n \n \n\nPrepayments\n \n₩\n \n \n3,375,986\n \n \n \n3,078\n \n\nPrepaid expenses\n(*1)\n \n \n \n \n2,468,559\n \n \n \n661,554\n \n\nSubtotal\n \n \n \n \n5,844,545\n \n \n \n664,632\n \n\n**Non-Current**\n \n \n \n \n \n \n \n \n \n \n\nPrepayments (*2)\n \n \n \n \n3,107,254\n \n \n \n-\n \n\nNon-current prepaid\nexpenses (*1)\n \n \n \n \n1,286,228\n \n \n \n1,907,965\n \n\nSubtotal\n \n \n \n \n4,393,482\n \n \n \n1,907,965\n \n\nTotal\n \n₩\n \n \n10,238,027\n \n \n \n2,572,597\n \n\n \n\n \n\n(*1)On July 2023, the Company granted a retention bonus to\n7 employees, as a compensation for being employed for the next 5 years. Non-current prepaid expenses are expensed in a straight-line\nbasis, during the employment period defined in the contract. As of December 31, 2025, total prepaid expense of Korean Won 620,000\nthousand and total non-current prepaid expense of Korean Won 930,000 thousand related to retention bonus are classified as prepaid expense,\nrespectively.\n\n(*2)The Company recognized an impairment loss amounting to Korean\nWon 1,145,306 thousand in 2025.\n\n \n\nF-51\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**15. Inventories**\n\n \n\nDetails of inventories as of December 31, 2025 and 2024 are as follows:\n\n \n\nSchedule of inventories\n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**December 31,\n2025**\n \n \n**December 31,\n2024**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nMerchandise\n \n₩\n \n \n3,507,426\n \n \n \n2,717,915\n \n\nWork in process\n \n \n \n \n694,738\n \n \n \n756,802\n \n\nAllowance for Inventories valuation\n \n \n \n \n(2,589,862\n)\n \n \n(2,656,393\n)\n\nTotal\n \n \n \n \n1,612,302\n \n \n \n818,324\n \n\n \n\nIn 2025, inventories amounted to Korean Won 40,688,156 thousand (2024: Korean Won 32,616,031 thousand, 2023: Korean Won 38,465,045 thousand) were recognized as an expense during the year and included in ‘cost of sales’.\n\n \n\nThe Company recognizes the\nfull provision for inventories with more than one year aging from the initiation of project according to the Company’s\naccounting policies. For inventories with less than one year aging from the initial production with an estimated recovery period\nexceeding one year, it is also recognized as a provision. Loss on valuation of inventories amounted to Korean Won 287,016\nthousand (2024: Korean Won 1,919,734\nthousand, 2023: Korean Won 140,077\nthousand). During the year ended December 31, 2025, reversal of allowance for inventories valuation amounted to Korean Won 18,307\nthousand (2024: Korean Won 341,694\nthousand, 2023: Korean Won 538,072\nthousand). In addition, other decreases in the allowance, including write-offs and disposals of inventories, amounted to Korean Won 335,240\nthousand (2024: Korean Won nil 0, 2023: Korean Won nil 0) for the year ended December 31, 2025.\n\n \n\n**16. Trade and other receivables**\n\n \n\nDetails of trade and other receivables as of December 31, 2025 and 2024 are as follows:\n\n \n\nSchedule of trade and other receivables\n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**December 31,2025**\n \n \n**December 31,2024**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\n**Trade receivable**\n \n \n \n \n \n \n \n \n \n \n\nAccounts receivable — Trade\n \n₩\n \n \n5,112,044\n \n \n \n9,945,757\n \n\nAllowance for doubtful accounts (Accounts receivable)\n \n \n \n \n(731,158\n)\n \n \n(735,316\n)\n\nAccounts receivable — trade, net\n \n₩\n \n \n4,380,886\n \n \n \n9,210,441\n \n\n \n\n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**December 31,2025**\n \n \n**December 31,2024**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\n**Other receivables**\n \n \n \n \n \n \n \n \n \n \n\nAccrued income\n \n₩\n \n \n138,591\n \n \n \n74,233\n \n\nAllowance for doubtful accounts (Accrued income)\n \n \n \n \n(39,151\n)\n \n \n(44,104\n)\n\nNon-trade receivables\n \n \n \n \n936,694\n \n \n \n600,352\n \n\nAllowance for doubtful accounts (Non-trade receivables)\n \n \n \n \n(500,000\n)\n \n \n(500,000\n)\n\nAccounts receivable — other, net\n \n₩\n \n \n536,134\n \n \n \n130,482\n \n\n \n\nF-52\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\nDetails of the changes in the loss allowance of trade and other receivables for the years ended December 31, 2025, 2024 and 2023 are as follows:\n\n \n\nSchedule of allowance for doubtful accounts trade receivable\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**2025**\n \n \n**2024**\n \n \n**2023**\n \n\n \n \n \n \n**(In thousands of Korean Won)**\n \n\n**Allowance for doubtful accounts (Trade receivable)**\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nBeginning of the year\n \n₩\n \n \n735,316\n \n \n \n438,155\n \n \n \n766,595\n \n\nBad debt expenses\n \n \n \n \n-\n \n \n \n297,162\n \n \n \n-\n \n\nReversal of bad debt expenses\n \n \n \n \n(4,159\n)\n \n \n-\n \n \n \n(328,440\n)\n\nEnding of the year\n \n₩\n \n \n731,157\n \n \n \n735,316\n \n \n \n438,155\n \n\n \n\nSchedule of allowance for doubtful accounts other receivable\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**2025**\n \n \n**2024**\n \n \n**2023**\n \n\n \n \n \n \n**(In thousands of Korean Won)**\n \n\n**Allowance for doubtful accounts (Other receivables)**\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nBeginning of the year\n \n₩\n \n \n544,104\n \n \n \n526,685\n \n \n \n26,685\n \n\nBad debt expenses - other\n \n \n \n \n(4,953\n)\n \n \n17,419\n \n \n \n500,000\n \n\nEnding of the year\n \n₩\n \n \n539,151\n \n \n \n544,104\n \n \n \n526,685\n \n\n \n\n**17. Cash and cash equivalents**\n\n \n\nCash and cash equivalents as of December 31, 2025 and 2024 are as follows:\n\n \n\nSchedule of cash and cash equivalents\n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**December 31,\n2025**\n \n \n**December 31,\n2024**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nCash on hand\n \n₩\n \n \n15,121\n \n \n \n2,355\n \n\nDeposits in banks\n \n \n \n \n8,349,311\n \n \n \n4,148,217\n \n\nTotal\n \n₩\n \n \n8,364,432\n \n \n \n4,150,572\n \n\n \n\nThe Company has restricted cash and cash equivalents of Korean Won 174,916 thousand as of December 31, 2025.\n\n \n\n**18. Investment properties**\n\n \n\n**A.**\n**Reconciliation of carrying amount**\n\n \n\nDetails of Investment properties as of December 31, 2025 and 2024 are as follows:\n\n \n\nSchedule of Investment\nproperties investment properties\n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**December 31,\n2025**\n \n \n**December 31,\n2024**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nBook value\n \n₩\n \n \n3,961,680\n \n \n \n667,739\n \n\nAccumulated depreciation\n \n \n \n \n(1,938,363\n)\n \n \n(266,740\n)\n\nCarrying amount\n \n₩\n \n \n2,023,317\n \n \n \n400,999\n \n\n \n\nF-53\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\nChanges in Investment properties for the years ended December 31, 2025, 2024 and 2023 are as follows:\n\n \n\nSchedule of changes in Investment properties\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**Year ended\nDecember 31,\n2025**\n \n \n**Year ended\nDecember 31,\n2024**\n \n \n**Year ended\nDecember 31,\n2023**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nBalance as of January 1\n \n₩\n \n \n400,999\n \n \n \n3,260,795\n \n \n \n-\n \n\nTransfer\n \n \n \n \n1,903,601\n \n \n \n(2,385,812\n)\n \n \n3,483,371\n \n\nLease modification\n \n \n \n \n16,640\n \n \n \n(35,216\n)\n \n \n-\n \n\nDepreciation\n \n \n \n \n(297,923\n)\n \n \n(438,768\n)\n \n \n(222,576\n)\n\nBalance as of December 31\n \n₩\n \n \n2,023,317\n \n \n \n400,999\n \n \n \n3,260,795\n \n\n \n\n**B.**\n**Amounts recognized in profit or loss**\n\n \n\nRental income recognized by the Company for the year ended December 31, 2025 was Korean Won 472,235 thousand (2024: Korean Won 808,123 thousand, 2023: Korean Won 283,983 thousand). Depreciation expense, included in ’cost of revenues’, was as follows:\n\n \n\nSchedule of rental income recognized\n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**Year ended\nDecember 31,\n2025**\n \n \n**Year ended\nDecember 31,\n2024**\n \n \n**Year ended\nDecember 31,\n2023**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nDepreciation\n \n₩\n \n \n297,923\n \n \n \n438,768\n \n \n \n222,576\n \n\n \n\n**19. Equity accounted investees**\n\n \n\n**A.**\n**Acquisition cost of investments in associates**\n\n \n\nDetails of acquisition cost of investments in associates as of December 31, 2025 are as follows:\n\n \n\nSchedule of acquisition cost of investments\n \n \n \n \n \n \n \n \n\n \n \n**December 31, 2025**\n \n\n \n \n**Percentage ofOwnership (*)**\n \n \n \n**Acquisition\nCost**\n \n\n \n \n**(In thousands of Korean won)**\n \n\n**Investments in associates**\n \n \n \n \n \n \n \n \n\nSOLAIRE SCALE-UP MOVIE INVESTMENT\nFUND NO. 1 (*)\n \n1.04%\n \n₩\n \n \n128,601\n \n\nSolaire Culture Plus Fund (*)\n \n1.25%\n \n \n \n \n270,139\n \n\nSolaire Main Movie Fund (*)\n \n1.00%\n \n \n \n \n300,000\n \n\nSOLAIRE\nSCALE-UP MOVIE INVESTMENT FUND NO. 2 (*)\n \n1.04%\n \n \n \n \n154,000\n \n\nTotal\n \n \n \n₩\n \n \n852,740\n \n\n \n\n \n\n(*)Although the Company holds less than 20% of equity interests\nin investment fund, investments in such investees were classified as investments in associates as the Company can exercise significant\ninfluence over financial and operating policy decisions as a general partner.\n\n \n\nF-54\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**B.**\n**Carrying amount of investments in associates**\n\n \n\nDetails of carrying amount of investments in associates as of December 31, 2025 are as follows:\n\n \n\nSchedule of carrying amount of investments\n \n \n \n \n \n \n \n \n\n \n \n**December 31, 2025**\n \n\n \n \n**Percentage ofOwnership (*)**\n \n \n \n**Carrying\namount**\n \n\n \n \n**(In thousands of Korean won)**\n \n\n**Investments in associates**\n \n \n \n \n \n \n \n \n\nSOLAIRE SCALE-UP MOVIE INVESTMENT\nFUND NO. 1 (*)\n \n1.04%\n \n₩\n \n \n22,657\n \n\nSolaire Culture Plus Fund (*)\n \n1.25%\n \n \n \n \n140,085\n \n\nSolaire Main Movie Fund (*)\n \n1.00%\n \n \n \n \n285,948\n \n\nSOLAIRE\nSCALE-UP MOVIE INVESTMENT FUND NO. 2 (*)\n \n1.04%\n \n \n \n \n138,588\n \n\nTotal\n \n \n \n₩\n \n \n587,278\n \n\n \n\n \n\n(*)Although the Company holds less than 20% of equity interests\nin investment fund, investments in such investees were classified as investments in associates as the Company can exercise significant\ninfluence over financial and operating policy decisions as a general partner.\n\n \n\n**C.**\n**Movement of investments in associates**\n\n \n\nDetails of the changes in investments in associates for the year ended December 31, 2025 are as follows:\n\n \n\nSchedule of changes in investments in associates\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**Changes in scope of consolidation**\n \n \n**Changing Account Classification(*)**\n \n \n**Capital contribution**\n \n \n**Capital withdrawal**\n \n \n**Share in the profit of associates**\n \n \n**December 31,\n2025**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\n**Investments in associates**\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nSOLAIRE SCALE-UP MOVIE INVESTMENT\nFUND NO. 1\n \n \n \n \n-\n \n \n \n40,417\n \n \n \n-\n \n \n \n(18,031\n)\n \n \n271\n \n \n \n22,657\n \n\nSolaire Culture Plus Fund\n \n \n \n \n-\n \n \n \n169,932\n \n \n \n-\n \n \n \n(29,861\n)\n \n \n15\n \n \n \n140,086\n \n\nSolaire Main Movie Fund\n \n \n \n \n-\n \n \n \n280,331\n \n \n \n-\n \n \n \n-\n \n \n \n5,616\n \n \n \n285,947\n \n\nSOLAIRE\nSCALE-UP MOVIE INVESTMENT FUND NO. 2\n \n \n \n \n83,001\n \n \n \n-\n \n \n \n66,000\n \n \n \n-\n \n \n \n(10,413\n)\n \n \n138,588\n \n\nTotal\n \n₩\n \n \n83,001\n \n \n \n490,680\n \n \n \n66,000\n \n \n \n(47,892\n)\n \n \n(4,511\n)\n \n \n587,278\n \n\n \n\n \n\n(*)Solaire reinitiated its operation from October 2025 and\nregained its significant influence over 3 associates. The Company reclassified its investment assets from Long-term investment securities\nto investments in associates.\n\n \n\nF-55\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**D.**\n**Summary of financial information of associates**\n\n \n\nDetails of the summary of financial information of associates for the year ended December 31, 2025 are as follows:\n\n \n\nSchedule of financial information of associates\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**December 31, 2025**\n \n\n \n \n \n \n**Currentassets**\n \n \n**Investment\nasset**\n \n \n**Totalassets**\n \n \n**Currentliabilities**\n \n \n**Totalliabilities**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\n**Investments in associates**\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nSOLAIRE\nSCALE-UP MOVIE INVESTMENT FUND NO. 1\n\n \n \n \n \n29,811\n \n \n \n2,183,173\n \n \n \n2,212,984\n \n \n \n26,596\n \n \n \n26,596\n \n\nSolaire Culture Plus Fund\n \n \n \n \n1,096,258\n \n \n \n10,192,518\n \n \n \n11,288,776\n \n \n \n81,949\n \n \n \n81,949\n \n\nSolaire Main Movie Fund\n \n \n \n \n5,555,314\n \n \n \n23,206,869\n \n \n \n28,762,183\n \n \n \n167,401\n \n \n \n167,401\n \n\nSOLAIRE\nSCALE-UP MOVIE INVESTMENT FUND NO. 2\n\n \n \n \n \n626,513\n \n \n \n13,090,940\n \n \n \n13,717,453\n \n \n \n413,010\n \n \n \n413,010\n \n\nTotal\n \n₩\n \n \n7,307,896\n \n \n \n48,673,500\n \n \n \n55,981,396\n \n \n \n688,956\n \n \n \n688,956\n \n\n \n\n \n \n \n \n\n**Year ended**\n\n**December 31, 2025**\n\n \n\n \n \n \n \n**Investment\nincome**\n \n \n**Profit (Loss)for the year**\n \n \n**Total Comprehensiveincome**\n \n\n**Investments in associates**\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nSOLAIRE\nSCALE-UP MOVIE INVESTMENT FUND NO. 1\n\n \n \n \n \n156,345\n \n \n \n20,214\n \n \n \n20,214\n \n\nSolaire Culture Plus Fund\n \n \n \n \n10,117\n \n \n \n102,830\n \n \n \n102,830\n \n\nSolaire Main Movie Fund\n \n \n \n \n602,000\n \n \n \n(1,310,050\n)\n \n \n(1,310,050\n)\n\nSOLAIRE\nSCALE-UP MOVIE INVESTMENT FUND NO. 2\n\n \n \n \n \n482,154\n \n \n \n(999,663\n)\n \n \n(999,663\n)\n\nTotal\n \n₩\n \n \n1,250,616\n \n \n \n(2,186,669\n)\n \n \n(2,186,669\n)\n\n \n\n**20. Property and equipment**\n\n \n\n**A.**\n**Reconciliation of carrying amount**\n\n \n\nDetails of property and equipment as of December 31, 2025 and 2024 are as follows:\n\n \n\nSchedule of property plant and equipment\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**December 31, 2025**\n \n\n \n \n \n \n**Book value**\n \n \n**Accumulateddepreciation**\n \n \n**Accumulatedimpairment loss**\n \n \n**Carrying\namount**\n \n\nMachinery\n \n₩\n \n \n2,097,807\n \n \n \n(1,114,048\n)\n \n \n-\n \n \n \n983,759\n \n\nVehicles\n \n \n \n \n319,130\n \n \n \n(272,138\n)\n \n \n-\n \n \n \n46,992\n \n\nOffice equipment\n \n \n \n \n591,900\n \n \n \n(400,167\n)\n \n \n-\n \n \n \n191,733\n \n\nFurniture and fixtures\n \n \n \n \n3,276,043\n \n \n \n(1,700,947\n)\n \n \n(425,252\n)\n \n \n1,149,844\n \n\nRight-of-use assets\n \n \n \n \n9,271,720\n \n \n \n(4,219,540\n)\n \n \n(369,280\n)\n \n \n4,682,900\n \n\nTotal\n \n₩\n \n \n15,556,600\n \n \n \n(7,706,839\n)\n \n \n(794,532\n)\n \n \n7,055,228\n \n\n \n\nF-56\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n \n \n \n \n**December 31, 2024**\n \n\n \n \n \n \n**Book value**\n \n \n**Accumulateddepreciation**\n \n \n**Accumulatedimpairment loss**\n \n \n**Carrying\namount**\n \n\nMachinery\n \n₩\n \n \n2,601,550\n \n \n \n(1,078,409\n)\n \n \n-\n \n \n \n1,523,141\n \n\nVehicles\n \n \n \n \n51,419\n \n \n \n(51,418\n)\n \n \n-\n \n \n \n1\n \n\nOffice equipment\n \n \n \n \n559,571\n \n \n \n(343,099\n)\n \n \n-\n \n \n \n216,472\n \n\nConstruction-in-progress\n \n \n \n \n8,662\n \n \n \n-\n \n \n \n-\n \n \n \n8,662\n \n\nFurniture and fixtures\n \n \n \n \n4,401,909\n \n \n \n(1,787,018\n)\n \n \n(748,162\n)\n \n \n1,866,729\n \n\nRight-of-use assets\n \n \n \n \n13,716,930\n \n \n \n(5,065,483\n)\n \n \n(216,464\n)\n \n \n8,434,983\n \n\nTotal\n \n₩\n \n \n21,340,041\n \n \n \n(8,325,427\n)\n \n \n(964,626\n)\n \n \n12,049,988\n \n\n \n\nDetails of the changes in property and equipment for the years ended December 31, 2025, 2024 and 2023 are as follows:\n\n \n\nSchedule of changes in property and equipment\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**2025**\n \n\n \n \n \n \n**Machinery**\n \n \n**Vehicles**\n \n \n**Office equipment**\n \n \n**Construction-in-progress**\n \n \n**Furniture and fixture**\n \n \n**Right-of-useassets**\n \n \n**Total**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nBeginning balance\n \n₩\n \n \n1,523,141\n \n \n \n1\n \n \n \n216,472\n \n \n \n8,662\n \n \n \n1,866,729\n \n \n \n8,434,983\n \n \n \n12,049,988\n \n\nChanges in scope of consolidation\n \n \n \n \n-\n \n \n \n22,733\n \n \n \n61,881\n \n \n \n-\n \n \n \n43,229\n \n \n \n528,894\n \n \n \n656,737\n \n\nAcquisitions\n \n \n \n \n40,520\n \n \n \n3,826\n \n \n \n47,787\n \n \n \n-\n \n \n \n20,800\n \n \n \n452,612\n \n \n \n565,545\n \n\nDepreciation\n \n \n \n \n(264,984\n)\n \n \n(29,061\n)\n \n \n(84,062\n)\n \n \n-\n \n \n \n(350,174\n)\n \n \n(1,623,732\n)\n \n \n(2,352,013\n)\n\nDisposals\n \n \n \n \n(319,496\n)\n \n \n-\n \n \n \n(51,828\n)\n \n \n(2,600\n)\n \n \n(430,740\n)\n \n \n-\n \n \n \n(804,664\n)\n\nTransfer (*1)\n \n \n \n \n4,578\n \n \n \n49,493\n \n \n \n1,483\n \n \n \n(6,062\n)\n \n \n-\n \n \n \n(1,953,094\n)\n \n \n(1,903,602\n)\n\nImpairment loss (*2)\n \n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n(152,816\n)\n \n \n(152,816\n)\n\nLease modification\n \n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n190,705\n \n \n \n190,705\n \n\nLease termination\n \n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n(1,194,651\n)\n \n \n(1,194,651\n)\n\nEnding balance\n \n₩\n \n \n983,759\n \n \n \n46,992\n \n \n \n191,733\n \n \n \n-\n \n \n \n1,149,844\n \n \n \n4,682,900\n \n \n \n7,055,228\n \n\n \n\n \n\n(*1)For the year ended December 31, 2025, the Company reclassified\nRight-of-use assets associated with five stores to investment properties as the Company decided to sublease the right-of-use asset to\na third party. (Note 18)\n\n(*2)The Company identified each bakery-café store as a CGU.\nAn impairment loss of 152,816 thousand won was recognized for the Sidus store.\n\n \n\nF-57\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n \n \n \n \n**2024**\n \n\n \n \n \n \n**Machinery**\n \n \n**Vehicles**\n \n \n**Office equipment**\n \n \n**Construction-\nin-progress**\n \n \n**Furniture and fixture**\n \n \n**Right-of-use\nassets**\n \n \n**Total**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nBeginning balance\n \n₩\n \n \n1,828,022\n \n \n \n2\n \n \n \n283,292\n \n \n \n-\n \n \n \n3,330,540\n \n \n \n9,425,821\n \n \n \n14,867,677\n \n\nAcquisitions\n \n \n \n \n42,801\n \n \n \n46,057\n \n \n \n13,919\n \n \n \n8,662\n \n \n \n161,780\n \n \n \n419,934\n \n \n \n693,153\n \n\nDepreciation\n \n \n \n \n(322,641\n)\n \n \n(1,535\n)\n \n \n(80,739\n)\n \n \n-\n \n \n \n(569,932\n)\n \n \n(1,404,058\n)\n \n \n(2,378,905\n)\n\nDisposals\n \n \n \n \n(25,041\n)\n \n \n(44,523\n)\n \n \n-\n \n \n \n-\n \n \n \n(307,497\n)\n \n \n-\n \n \n \n(377,061\n)\n\nTransfer (*1)\n \n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n2,385,812\n \n \n \n2,385,812\n \n\nImpairment loss (*2)\n \n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n(748,162\n)\n \n \n(216,464\n)\n \n \n(964,626\n)\n\nLease modification\n \n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n(1,603,440\n)\n \n \n(1,603,440\n)\n\nLease termination\n \n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n(572,622\n)\n \n \n(572,622\n)\n\nEnding balance\n \n₩\n \n \n1,523,141\n \n \n \n1\n \n \n \n216,472\n \n \n \n8,662\n \n \n \n1,866,729\n \n \n \n8,434,983\n \n \n \n12,049,988\n \n\n \n\n \n\n(*1)As of December 31, 2023, the right-of-use assets associated\nwith six stores were reclassified as investment properties. For the year ended December 31, 2024, five of these investment properties\nwere reclassified back to right-of-use assets due to a change in intended use, as the Company determined to utilize the properties for\nits own operations (Note 18).\n\n(*2)An impairment loss was recognized due to the discontinuation\nof operations at six stores.\n\n \n\n \n \n \n \n**2023**\n \n\n \n \n \n \n**Machinery**\n \n \n**Vehicles**\n \n \n**Office equipment**\n \n \n**Construction-\nin-progress**\n \n \n**Furniture and fixture**\n \n \n**Right-of-use\nassets**\n \n \n**Total**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nBeginning balance\n \n₩\n \n \n2,041,579\n \n \n \n4,075\n \n \n \n276,711\n \n \n \n9,950\n \n \n \n3,207,619\n \n \n \n15,089,571\n \n \n \n20,629,505\n \n\nAcquisitions\n \n \n \n \n172,534\n \n \n \n-\n \n \n \n92,819\n \n \n \n-\n \n \n \n684,228\n \n \n \n578,409\n \n \n \n1,527,990\n \n\nDepreciation\n \n \n \n \n(345,202\n)\n \n \n(4,074\n)\n \n \n(86,238\n)\n \n \n-\n \n \n \n(559,061\n)\n \n \n(1,704,081\n)\n \n \n(2,698,656\n)\n\nDisposals\n \n \n \n \n(50,839\n)\n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n(50,839\n)\n\nTransfer (*1)\n \n \n \n \n9,950\n \n \n \n1\n \n \n \n-\n \n \n \n(9,950\n)\n \n \n-\n \n \n \n(3,483,372\n)\n \n \n(3,483,371\n)\n\nImpairment loss (*2)\n \n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n(2,246\n)\n \n \n-\n \n \n \n(2,246\n)\n\nLease modification\n \n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n(45,282\n)\n \n \n(45,282\n)\n\nLease termination\n \n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n(1,009,424\n)\n \n \n(1,009,424\n)\n\nEnding balance\n \n₩\n \n \n1,828,022\n \n \n \n2\n \n \n \n283,292\n \n \n \n-\n \n \n \n3,330,540\n \n \n \n9,425,821\n \n \n \n14,867,677\n \n\n \n\n \n\n(*1)For the year ended December 31, 2023, the Group transferred\nRight-of-use assets to investment properties because the Group decided to lease the building to a third party. (Note 18)\n\n(*2)The Group identified each bakery-café store as CGU and\nrecognized impairment loss to bakery-café stores located in Garosu-gil and Jamwon.\n\n \n\nF-58\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\nThe classification of depreciation expenses in the statements of comprehensive income for the years ended December 31, 2025, 2024 and 2023 are as follows:\n\n \n\nSchedule of classification of depreciation expenses\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**2025**\n \n \n**2024**\n \n \n**2023**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nCost of revenues\n \n₩\n \n \n1,367,703\n \n \n \n1,970,417\n \n \n \n2,318,730\n \n\nSelling, general and administrative expenses\n \n \n \n \n984,310\n \n \n \n408,488\n \n \n \n379,926\n \n\nTotal\n \n₩\n \n \n2,352,013\n \n \n \n2,378,905\n \n \n \n2,698,656\n \n\n \n\n**21. Intangible assets and goodwill**\n\n \n\n**A. Reconciliation of carrying amount**\n\n \n\nDetails of intangible assets as of December 31, 2025 and 2024 are as follows:\n\n \n\nSchedule of intangible assets\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**December 31, 2025**\n \n\n \n \n \n \n**Book value**\n \n \n**Accumulated\namortization**\n \n \n**Accumulated\nimpairment**\n \n \n**Carrying\namount**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nSoftware\n \n₩\n \n \n273,500\n \n \n \n(214,667\n)\n \n \n-\n \n \n \n58,833\n \n\nBrand\n \n \n \n \n5,388,000\n \n \n \n(1,234,750\n)\n \n \n-\n \n \n \n4,153,250\n \n\nCrypto assets\n \n \n \n \n13,823,661\n \n \n \n-\n \n \n \n(2,692,396\n)\n \n \n11,131,265\n \n\nContents IP\n \n \n \n \n2,113,318\n \n \n \n(278,570\n)\n \n \n-\n \n \n \n1,834,748\n \n\nGoodwill\n \n \n \n \n190,807,972\n \n \n \n-\n \n \n \n(130,190,941\n)\n \n \n60,617,031\n \n\nTotal\n \n₩\n \n \n212,406,452\n \n \n \n(1,727,987\n)\n \n \n(132,883,337\n)\n \n \n77,795,128\n \n\n \n\n \n \n \n \n**December 31, 2024**\n \n\n \n \n \n \n**Book value**\n \n \n**Accumulated\namortization**\n \n \n**Carrying\namount**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nSoftware\n \n₩\n \n \n487,309\n \n \n \n(376,372\n)\n \n \n110,937\n \n\nBrand\n \n \n \n \n5,388,000\n \n \n \n(965,350\n)\n \n \n4,422,650\n \n\nGoodwill\n \n \n \n \n3,267,730\n \n \n \n-\n \n \n \n3,267,730\n \n\nTotal\n \n₩\n \n \n9,143,039\n \n \n \n(1,341,722\n)\n \n \n7,801,317\n \n\n \n\nDetails of the changes in intangible assets for the years ended December 31, 2025, 2024 and 2023 are as follows:\n\n \n\nSchedule of changes on intangible\nassets\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**2025**\n \n\n \n \n \n \n**Software**\n \n \n**Brand**\n \n \n**Goodwill**\n \n \n**Crypto assets**\n \n \n**Contents IP**\n \n \n**Total**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nBeginning balance\n \n₩\n \n \n110,937\n \n \n \n4,422,650\n \n \n \n3,267,730\n \n \n \n-\n \n \n \n-\n \n \n \n7,801,317\n \n\nChanges in scope of consolidation\n \n \n \n \n-\n \n \n \n \n \n \n \n191,659,072\n \n \n \n-\n \n \n \n2,113,319\n \n \n \n193,772,391\n \n\nAcquisition\n \n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n13,823,661\n \n \n \n-\n \n \n \n13,823,661\n \n\nAmortization\n \n \n \n \n(52,104\n)\n \n \n(269,400\n)\n \n \n-\n \n \n \n-\n \n \n \n(278,571\n)\n \n \n(600,075\n)\n\nImpairment\n \n \n \n \n-\n \n \n \n-\n \n \n \n(129,071,743\n)\n \n \n(2,897,921\n)\n \n \n-\n \n \n \n(131,969,664\n)\n\nOther (*)\n \n \n \n \n-\n \n \n \n-\n \n \n \n(5,238,028\n)\n \n \n205,525\n \n \n \n-\n \n \n \n(5,032,503\n)\n\nEnding balance\n \n₩\n \n \n58,833\n \n \n \n4,153,250\n \n \n \n60,617,031\n \n \n \n11,131,265\n \n \n \n1,834,748\n \n \n \n77,795,128\n \n\n \n\n \n\n(*)\nOther includes effects of changes in foreign currency exchange rates and others.\n\n \n\nF-59\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n \n \n \n \n**2024**\n \n\n \n \n \n \n**Software**\n \n \n**Brand**\n \n \n**Goodwill**\n \n \n**Total**\n \n\n \n \n \n \n**(In thousands of Korean Won)**\n \n\nBeginning balance\n \n₩\n \n \n197,547\n \n \n \n4,692,050\n \n \n \n3,267,730\n \n \n \n8,157,327\n \n\nAmortization\n \n \n \n \n(86,610\n)\n \n \n(269,400\n)\n \n \n-\n \n \n \n(356,010\n)\n\nEnding balance\n \n₩\n \n \n110,937\n \n \n \n4,422,650\n \n \n \n3,267,730\n \n \n \n7,801,317\n \n\n \n\n \n \n \n \n**2023**\n \n\n \n \n \n \n**Software**\n \n \n**Brand**\n \n \n**Goodwill**\n \n \n**Total**\n \n\n \n \n \n \n**(In thousands of Korean Won)**\n \n\nBeginning balance\n \n₩\n \n \n290,947\n \n \n \n4,961,450\n \n \n \n3,267,730\n \n \n \n8,520,127\n \n\nAmortization\n \n \n \n \n(93,400\n)\n \n \n(269,400\n)\n \n \n-\n \n \n \n(362,800\n)\n\nEnding balance\n \n₩\n \n \n197,547\n \n \n \n4,692,050\n \n \n \n3,267,730\n \n \n \n8,157,327\n \n\n \n\n**B.**\n**Amortization**\n\n \n\nThe classification of amortization in the statements of comprehensive income for the years ended December 31, 2025, 2024 and 2023 are as follows:\n\n \n\nSchedule of amortization in the statements of comprehensive income\n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**2025**\n \n \n**2024**\n \n \n**2023**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nSelling, general and administrative expenses\n \n₩\n \n \n600,074\n \n \n \n356,010\n \n \n \n362,800\n \n\n \n\n**C.**\n**Details of crypto assets**\n\n \n\nThe Company adopted a digital asset treasury strategy centered on holding Bitcoin(“BTC”) as a reserve asset and holds the acquired BTC to pursue a Bitcoin-centric treasury strategy for treasury diversification, inflation hedging, and general corporate purpose. The Company has recognized it as intangible assets based on its fair value at the time of acquisition.\n\n \n\nDetails of the changes in crypto assets in quantity for the year ended December 31, 2025 are as follows:\n\n \n\nSchedule of changes in crypto assets  \n \n  \n\n** **** **** **\n** **\n**2025**** **\n\n** **** **** **\n** **\n**Beginning\nBalance**** **** **\n**Acquisition**** **** **\n**Disposal**** **** **\n**Ending\nBalance**** **\n\nBitcoin(Quantity)  \n \n -  \n 88  \n -  \n 88 \n\n \n\nThe Company acquired\nBitcoin using proceeds obtained from the issuance of convertible notes to Anson Investments Master Fund LP and Anson East Master\nFund LP. Pursuant to the terms of such convertible note agreements, all BTC held by the Company has been pledged as collateral to\nsecure its obligations thereunder.\n\n \n\nDetails of the changes in crypto assets for the year ended December 31, 2025 are as follows:\n\n \n\n \n \n \n \n**2025**\n \n\n \n \n \n \n**Beginning\nBalance**\n \n \n**Acquisition**\n \n \n**Impairment**\n \n \n**Other**\n \n \n**Ending\nBalance**\n \n\n \n \n \n \n**(In thousands of Korean Won)**\n \n\nBitcoin\n \n₩\n \n \n-\n \n \n \n13,823,661\n \n \n \n(2,897,921\n)\n \n \n205,525\n \n \n \n11,131,265\n \n\n \n\nF-60\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\nThe price of the crypto assets held by the Company fluctuated between a high of USD $126,110 and a low of USD $80,843 from the acquisition date to the end of the current period. As a result of the decline in the market price of Bitcoin for the year ended December 31, 2025, the Company recognized an impairment loss of USD $2,057,588 in the consolidated statements of operations.\n\n \n\nAlthough the fair value of these crypto assets has fluctuated significantly after the reporting date, the impact of such significant fluctuations on the financial statements cannot be predicted as of the date of preparation. Accordingly, the Company’s financial statements do not include any potential adjustments that may arise from such uncertainties.\n\n \n\n**D.**\n**Goodwill**\n\n \n\nDetails of goodwill allocation for cash generating units (“CGU”s) operated by management for the year ended December 31, 2025 is as follows:\n\n \n\nSchedule of intangible assets and\ngoodwill\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**2025**\n \n\n \n \n \n \n**Ending Balance(Before impairment)**\n \n \n**Impairment**\n \n \n**Ending Balance(After impairment)**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nPlay F&B Co., Ltd.\n \n₩\n \n \n3,267,730\n \n \n \n-\n \n \n \n3,267,730\n \n\nK Enter Holdings\n \n \n \n \n168,379,183\n \n \n \n(126,619,936\n)\n \n \n41,759,247\n \n\nThe Lamp\n \n \n \n \n7,188,900\n \n \n \n-\n \n \n \n7,188,900\n \n\nBidangil\n \n \n \n \n3,322,966\n \n \n \n(1,504,472\n)\n \n \n1,818,494\n \n\nApeitda\n \n \n \n \n3,558,388\n \n \n \n(1,852,687\n)\n \n \n1,705,701\n \n\nAnseilen\n \n \n \n \n2,303,422\n \n \n \n-\n \n \n \n2,303,422\n \n\nSolaire\n \n \n \n \n2,787,383\n \n \n \n(213,846\n)\n \n \n2,573,537\n \n\nTotal\n \n₩\n \n \n190,807,972\n \n \n \n(130,190,941\n)\n \n \n60,617,031\n \n\n \n\n**E.**\n**Impairment assessment on CGU**\n\n \n\nThe Company performs impairment test for goodwill annually and identifies each subsidiary as cash-generating units (“CGU”). 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 Company’s products used in the forecast was determined considering external sources and the 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 seven CGUs 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:\n\n \n\nSchedule of impairment\nassessment\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n**2025**\n \n\n \n \n**Discount rate**\n \n \n**Terminal\ngrowth rate**\n \n \n \n \n**Carrying\namount**\n \n \n**Recoverable\namount**\n \n\n \n \n**(In thousands of Korean won)**\n \n\nPlay F&B Co., Ltd.\n \n \n9.6\n%\n \n \n1.0\n%\n \n₩\n \n \n8,846,956\n \n \n \n9,664,293\n \n\nK Enter Holdings\n \n \n11.1\n%\n \n \n1.0\n%\n \n \n \n \n171,674,366\n \n \n \n45,054,431\n \n\nThe Lamp\n \n \n11.1\n%\n \n \n1.0\n%\n \n \n \n \n7,496,511\n \n \n \n10,873,435\n \n\nBidangil\n \n \n11.1\n%\n \n \n1.0\n%\n \n \n \n \n4,210,862\n \n \n \n2,706,389\n \n\nApeitda\n \n \n11.1\n%\n \n \n1.0\n%\n \n \n \n \n3,804,173\n \n \n \n1,951,487\n \n\nAnseilen\n \n \n11.1\n%\n \n \n1.0\n%\n \n \n \n \n1,600,604\n \n \n \n1,812,626\n \n\nSolaire\n \n \n11.1\n%\n \n \n1.0\n%\n \n \n \n \n4,668,736\n \n \n \n4,454,890\n \n\n \n\nF-61\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\nThe 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 ten Korean listed companies in the same industry and the Company. Cost of debt was calculated using the yield rate of non-guaranteed corporate bond considering the Company’s credit rating and debt ratio was determined using the average of the debt ratios of the ten Korean listed companies in the same industry and the Company. The Company calculates the value in use of CGU using post-tax cash flows and a post-tax discount rate.\n\n \n\nAs a result of the impairment test, the carrying amount of goodwill for the seven CGUs including K Enter Holding exceeded the recoverable amount by Korean Won 129,071,743 thousand, and the excess was recognized as an impairment loss in other expenses in the consolidated statements of comprehensive income.\n\n \n\nThe value in use determined for this CGU is sensitive to the discount rate and terminal growth rate used in the discounted cash flow model. The impact of a 0.5% fluctuation in discount rates and terminal growth rates on the value in use as of December 31, 2025 are as follows:\n\n \n\n**Schedule of terminal growth rate**\n****\n\n \n   \n  \n\nDecember 31, 2025 \n0.5% Increase  \n0.5% Decrease \n\nDiscount rate \n (-) 7.9% \n 8.7%\n\nTerminal growth rate \n 5.0% \n (-) 4.5%\n\n \n\n**22. Business Combinations**\n\n \n\nK Enter’s acquisition of Play Company Co., Ltd. (“Play Company”), Solaire Partners LLC (“Solaire”), Apeitda Co., Ltd. (“Apeitda”), The LAMP Co., Ltd. (“Lamp”), Bidangil Pictures Co., Ltd. (“Bidangil”), and Studio Anseilen Co., Ltd. (“Studio,” and collectively, the “Six Korean Entities”) was a closing condition to the Business Combination. On January 3, 2025, K Enter closed the equity purchase for Play Company first and the acquisitions of each of the Six Korean Entities other than Play Company closing subsequently. The acquisition of Play company by K Enter was accounted for in accordance with the acquisition method of accounting under IFRS 3, with Play Company considered to be the acquirer of K Enter. The acquisitions of each of the Six Korean Entities other than Play Company by K Enter post the acquisition of Play Company (“New K Enter”) was accounted for in accordance with the acquisition method of accounting under IFRS 3, with K Enter post the acquisition of Play Company considered to be the acquirer of each of the Six Korean Entities other than Play Company. Under the acquisition method of accounting, the preliminary purchase price was allocated to the underlying tangible and intangible assets acquired and liabilities assumed based on their respective fair market values, with the excess purchase price, if any, allocated to goodwill. Costs related to the transaction were expensed as incurred.\n\n \n\nThe consideration transferred for the acquisition of interests in each entity is as follows:\n\n \n\n \n-\nPlay Company Corp.\nAcquired 100% of the outstanding shares of Play Company in exchange for 27,787 shares of K enter common stock (Subsequently converted to 8,673,667 ordinary shares of KWM) and cash consideration of USD $24,648,370 (Korean Won 36,233,103 thousand). Additional payments in cash will be made to the owner of Play Company if the annual average net profit for fiscal years from 2023 to 2025 reaches specified thresholds, with payments due to the owner of Play Company on January 31, 2027 and January 31, 2028. Furthermore, an additional cash payment may be required if the shares of KWM (into which K Enter common stock converted upon the closing of the Acquisition Merger) are sold during the three-month period following the six-month lock-up at a price below the per-share value at closing, subject to adjustments for subsequent gains or unrealized gains as of December 31, 2026.\n\n \n\n \n-\nLamp\nAcquired 51.3% of the outstanding shares of Lamp in exchange for 6,668 shares of K Enter common stock (Subsequently converted to 2,081,405 ordinary shares of KWM).\n\n \n\nF-62\n\n \n\n \n\n**K WAVE MEDIA\nLTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n \n-\nBidangil\nAcquired 53.7% of the outstanding shares of Bidangil in exchange for 4,444 shares of K Enter common stock (Subsequently converted to 1,387,188 ordinary shares of KWM).\n\n \n\n \n-\nApeitda\nAcquired 51% of the outstanding shares of Apeitda in exchange for 3,334 shares of K Enter common stock (Subsequently converted to 1,040,703 ordinary shares of KWM).\n\n \n\n \n-\nAnseilen\nAcquired 51% of the outstanding shares of Anseilen in exchange for 1,677 shares of K Enter common stock (Subsequently converted to 523,473 ordinary shares of KWM).\n\n \n\n \n-\nSolaire Partners\nAcquired 95% of the outstanding shares of Solaire Partners in exchange for 3,103 shares of K Enter common stock (Subsequently converted to 968,598 ordinary shares of KWM).\n\n \n\n**A.****The identifiable net assets acquired and liabilities recognized\non acquisition were:**\n\n \n\nSchedule of net assets acquired and liabilities recognized\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**January 1, 2025\n(Deemed acquisition date)**\n \n\n \n \n \n \n**K enter**\n \n \n**Lamp**\n \n \n**Bidangil**\n \n \n**Apeitda**\n \n \n**Anseilen**\n \n \n**Solaire\nPartners**\n \n \n**Total**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\n- Asset\n \n₩\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nCash and cash equivalents\n \n \n \n \n490,070\n \n \n \n863,927\n \n \n \n1,448,485\n \n \n \n344,537\n \n \n \n361,234\n \n \n \n355\n \n \n \n3,508,608\n \n\nAccounts receivable and financial assets\n(*1)\n \n \n \n \n4,254,387\n \n \n \n1,684,662\n \n \n \n1,863,496\n \n \n \n522,218\n \n \n \n54,824\n \n \n \n3,314,474\n \n \n \n11,694,061\n \n\nOther non-financial assets\n \n \n \n \n3,128,462\n \n \n \n2,656,784\n \n \n \n584,523\n \n \n \n2,279\n \n \n \n586,011\n \n \n \n97\n \n \n \n6,958,156\n \n\nProperty and equipment including right-of-use assets\n \n \n \n \n77,734\n \n \n \n159,538\n \n \n \n123,789\n \n \n \n220,843\n \n \n \n735\n \n \n \n74,097\n \n \n \n656,736\n \n\nIntangible assets other than goodwill\n \n \n \n \n-\n \n \n \n1,306,583\n \n \n \n806,737\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n2,113,320\n \n\nDeferred tax assets\n \n \n \n \n-\n \n \n \n45,845\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n45,845\n \n\nDeferred transaction costs\n \n \n \n \n3,163,511\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n3,163,511\n \n\nOthers\n \n \n \n \n128,491\n \n \n \n130,057\n \n \n \n-\n \n \n \n-\n \n \n \n31\n \n \n \n135,943\n \n \n \n394,522\n \n\nSubtotal\n \n₩\n \n \n11,242,655\n \n \n \n6,847,396\n \n \n \n4,827,030\n \n \n \n1,089,877\n \n \n \n1,002,835\n \n \n \n3,524,966\n \n \n \n28,534,759\n \n\n- Liabilities\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nTrade payables and other financial liabilities\n \n \n \n \n8,414,624\n \n \n \n2,040,169\n \n \n \n911,596\n \n \n \n19,112\n \n \n \n17,724\n \n \n \n1,993,839\n \n \n \n13,397,064\n \n\nBorrowings\n \n \n \n \n1,420,528\n \n \n \n1,445,453\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n207,336\n \n \n \n3,073,317\n \n\nConvertible Notes\n \n \n \n \n3,920,244\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n3,920,244\n \n\nDerivative liabilities\n \n \n \n \n590,020\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n590,020\n \n\nContract liabilities\n \n \n \n \n-\n \n \n \n900,000\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n900,000\n \n\nLease liabilities\n \n \n \n \n88,488\n \n \n \n145,647\n \n \n \n123,328\n \n \n \n-\n \n \n \n-\n \n \n \n60,945\n \n \n \n418,408\n \n\nDefined benefit liabilities\n \n \n \n \n-\n \n \n \n255,006\n \n \n \n-\n \n \n \n121,521\n \n \n \n7,130\n \n \n \n152,368\n \n \n \n536,025\n \n\nDeferred tax liabilities\n \n \n \n \n-\n \n \n \n129,352\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n129,352\n \n\nOthers\n \n \n \n \n294,162\n \n \n \n428,731\n \n \n \n88,928\n \n \n \n122,857\n \n \n \n1,561,219\n \n \n \n134,899\n \n \n \n2,630,796\n \n\nSubtotal\n \n \n \n \n14,728,066\n \n \n \n5,344,358\n \n \n \n1,123,852\n \n \n \n263,490\n \n \n \n1,586,073\n \n \n \n2,549,387\n \n \n \n25,595,226\n \n\nFair Value of Identifiable Net Assets\n \n \n \n \n(3,485,411\n)\n \n \n1,503,038\n \n \n \n3,703,178\n \n \n \n826,387\n \n \n \n(583,238\n)\n \n \n975,579\n \n \n \n2,939,533\n \n\n \n\n \n\n(*1)The fair value of trade receivables acquired through the business\ncombination is Korean Won 172 million. The contractual amount of trade receivables as of the acquisition date is Korean Won 172 million,\nand no trade receivables are expected to be uncollectible.\n\n \n\nF-63\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\nThe fair value of other receivables acquired through the business combination is Korean Won 11,522 million. The contractual amount of other receivables as of the acquisition date is Korean Won 11,522 million, and no other receivables are expected to be uncollectible.\n\n \n\n**B.****Measurement of fair values:**\n\n \n\nSchedule of business combinations of measurement of fair values\n \n \n\n**Assets acquired**\n \n**Measurement bases**\n\nIntangible assets\n \nThe fair value is determined by projecting the future cash flows attributable to the specific intangible asset over its expected useful life, deducting contributory asset charges for the use of supporting assets, and discounting the resulting excess earnings to present value using an appropriate discount rate that reflects the risk associated with the asset.\n\n \n\n**C.****Goodwill:**\n\n \n\nSchedule of business combinations of goodwill\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**January 1, 2025\n(Deemed acquisition date)**\n \n\n \n \n \n \n**K enter**\n \n \n**Lamp**\n \n \n**Bidangil**\n \n \n**Apeitda**\n \n \n**Anseilen**\n \n \n**Solaire\nPartners**\n \n \n**Total**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nConsideration transferred\n \n \n \n \n169,012,604\n \n \n \n7,959,688\n \n \n \n5,310,988\n \n \n \n3,979,845\n \n \n \n2,005,971\n \n \n \n3,714,183\n \n \n \n191,983,279\n \n\nFair Value of Net Assets Attributable to the Acquired Interest\n \n \n \n \n(3,485,411\n)\n \n \n770,789\n \n \n \n1,988,022\n \n \n \n421,458\n \n \n \n(297,451\n)\n \n \n926,800\n \n \n \n324,207\n \n\n- Fair Value of Identifiable Net Assets\n \n \n \n \n(3,485,411\n)\n \n \n1,503,038\n \n \n \n3,703,178\n \n \n \n826,387\n \n \n \n(583,238\n)\n \n \n975,579\n \n \n \n2,939,533\n \n\n- Non-controlling interest\n \n \n \n \n-\n \n \n \n(732,249\n)\n \n \n(1,715,156\n)\n \n \n(404,929\n)\n \n \n285,787\n \n \n \n(48,779\n)\n \n \n(2,615,326\n)\n\n**Goodwill (*1)**\n \n₩\n \n \n172,498,015\n \n \n \n7,188,899\n \n \n \n3,322,966\n \n \n \n3,558,387\n \n \n \n2,303,422\n \n \n \n2,787,383\n \n \n \n191,659,072\n \n\n \n\n \n\n(*1)The goodwill of Korean Won 191,659,072 thousand arising from\nthe acquisition is attributable to synergies expected from the combination of operations and the customer base acquired. None of the\ngoodwill recognized is expected to be deductible for income tax purposes.\n\n \n\nF-64\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**23. Listing expenses**\n\n \n\nOn May 13, 2025, Global Star was reincorporated to Cayman Islands by merging with and into KWM, with KWM remaining as the surviving publicly traded entity (the “Reincorporation Merger”). In connection with the closing of the Reincorporation Merger, (i) each issued and outstanding share of common stock of Global Star, other than Global Star common stock owned by Global Star as treasury shares or any Global Star common stock owned by any direct or indirect wholly owned subsidiary of Global Star, was converted into one ordinary share of KWM (the “KWM Ordinary Share”), (ii) each issued and outstanding warrant of Global Star was converted automatically into a warrant to purchase one KWM Ordinary Share at a price of $11.50 per whole share (the “KWM Warrant”), (iii) each issued and outstanding right of Global Star was converted automatically into a right to receive one-tenth (1/10) of one KWM Ordinary Share at the closing of a business combination (the “KWM Right”), and (iv) each issued and outstanding unit of Global Star was separated and converted automatically into one KWM Ordinary Share, one KWM Warrant, and one KWM Right. At the closing of the Reincorporation Merger, all common stock, warrants, rights, units and other securities of Global Star ceased to be outstanding and were automatically canceled and retired and ceased to exist.\n\n \n\nOn May 13, 2025, Merger Sub merged with and into K Enter, resulting in K Enter being a wholly owned subsidiary of KWM (the “Acquisition Merger”). In connection with the closing of the Acquisition Merger, (i) each share of K Enter capital stock that was owned by Global Star, Merger Sub and K Enter (as treasury stock or otherwise), was automatically cancelled and retired without any conversion, (ii) each share of K Enter preferred stock issued and outstanding was deemed converted into shares of K Enter common stock, (iii) each share of K Enter common stock issued and outstanding, including shares of K Enter common stock deemed outstanding as a result of the mandatory conversion of K Enter preferred stock, was converted into the right to receive a number of KWM Ordinary Shares equal to the Conversion Ratio, and (iv) each share of Merger Sub common stock issued and outstanding was converted into and become one newly issued, fully paid and nonassessable share of K Enter common stock.\n\n \n\nThe Business Combination was accounted for as a capital reorganization in accordance with IFRS 2 as KWM does not meet the criteria to be determined a business under IFRS 3. Under this method of accounting, KWM was treated as the acquired company for financial reporting purposes, and New K Enter was treated as the acquirer for financial statement reporting purposes. In such a transaction structure, the difference between the fair value of the assets and liabilities transferred and the fair value of the equity instruments issued at the grant date is recognized in profit or loss as compensation for listing services, rather than as goodwill or a gain from a bargain purchase.\n\n \n\n**A.****Listing expenses**\n\n \n\nSchedule of listing expenses\n \n \n \n \n \n \n\n \n \n \n \n**May 14,\n2025**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\n**Listing expenses**\n \n \n \n \n \n \n\nFair value of shares issued\n \n₩\n \n \n15,285,412\n \n\nFair Value of Identifiable Net Assets\n \n \n \n \n(9,789,813\n)\n\n**Reverse merger impact in the consolidated statement of profit or (loss) due to IFRS 2 accounting treatment**\n \n₩\n \n \n25,075,225\n \n\n \n\nF-65\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**B.****The identifiable net assets acquired and liabilities recognized\non acquisition were:**\n\n \n\nSchedule of listing expenses net assets acquired and liabilities\n \n \n \n \n \n \n\n \n \n \n \n**May 14,\n2025**\n \n\n \n \n \n \n**KWM**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\n- Asset\n \n \n \n \n \n \n\nCash and cash equivalents\n \n \n \n \n62,655\n \n\nOthers\n \n \n \n \n15,334\n \n\nSubtotal\n \n₩\n \n \n77,989\n \n\n- Liabilities\n \n \n \n \n \n \n\nTrade payables and other financial liabilities\n \n \n \n \n4,661,188\n \n\nDerivative liabilities\n \n \n \n \n488,693\n \n\nWarrants\n \n \n \n \n1,241,231\n \n\nBorrowings\n \n \n \n \n3,017,994\n \n\nOthers\n \n \n \n \n458,696\n \n\nSubtotal\n \n₩\n \n \n9,867,802\n \n\nFair Value of Identifiable Net Assets\n \n₩\n \n \n(9,789,813\n)\n\n \n\n**C.**\n**Acquisition of Playverse Co., Ltd. through a share donation arrangement**\n\n \n\nOn November 30, 2025, Play Company Co., Ltd. (“Play Company”) obtained control of Playverse Co., Ltd. (“Playverse”) through a share transfer arrangement, pursuant to which Play Company received shares of Playverse at no consideration. Legal ownership was transferred upon completion of the share register update. Management assessed the acquired set of activities and assets and concluded that the transaction did not meet the definition of a business under IFRS 3. Accordingly, the transaction was not accounted for as a business combination.\n\n \n\nThe shares received were measured at their fair value on the date control was obtained. As no consideration was transferred, the difference between the fair value of the shares received and the consideration transferred (nil) was recognized in profit as a gain on donation.\n\n \n\nAs the transaction was completed through a share donation arrangement, there was no cash consideration paid and therefore no cash outflow arose from the acquisition.\n\n \n\n**D.**\n**The identifiable net assets acquired and liabilities recognized on acquisition were:**\n\n \n\nSchedule of listing expenses identifiable net assets acquired and liabilities\n \n \n \n \n \n \n\n \n \n \n \n**Nov 30,\n2025**\n \n\n \n \n \n \n**Playverse**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\n- Asset\n \n₩\n \n \n \n \n\nCash and cash equivalents\n \n \n \n \n146\n \n\nFinancial assets and others\n \n \n \n \n8,363\n \n\nSubtotal\n \n₩\n \n \n8,509\n \n\n- Liabilities\n \n \n \n \n \n \n\nSubtotal\n \n \n \n \n-\n \n\nFair Value of Identifiable Net Assets\n \n \n \n \n8,509\n \n\n \n\nF-66\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**24. Financial instruments by category**\n\n \n\nThe carrying amounts of financial instruments by category as of December 31, 2025 and 2024 are as follows:\n\n \n\nSchedule of financial instruments by category\n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**December 31,\n2025**\n \n \n**December 31,\n2024**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\n**Financial assets at amortized cost**\n \n \n \n \n \n \n \n \n \n \n\nCash and cash equivalents\n \n₩\n \n \n8,364,432\n \n \n \n4,150,572\n \n\nShort-term financial instruments (*1)\n \n \n \n \n-\n \n \n \n410,000\n \n\nAccounts receivable — trade, net\n \n \n \n \n4,380,886\n \n \n \n9,210,441\n \n\nAccounts receivable — other, net\n \n \n \n \n536,134\n \n \n \n130,482\n \n\nShort-term loans, net\n \n \n \n \n3,427,400\n \n \n \n787,400\n \n\nOther current financial assets\n(*2)\n \n \n \n \n735,110\n \n \n \n40,000\n \n\nLong-term loans, net\n \n \n \n \n191,023\n \n \n \n-\n \n\nOther non-current financial assets\n \n \n \n \n2,180,055\n \n \n \n1,803,220\n \n\n**Financial assets at fair value through profit or loss**\n \n \n \n \n \n \n \n \n \n \n\nShort-term financial instruments\n \n \n \n \n21,560\n \n \n \n13,524\n \n\nLong-term financial instruments\n \n \n \n \n310,908\n \n \n \n322,538\n \n\nLong-term investment securities\n \n \n \n \n3,983,858\n \n \n \n730,391\n \n\nTotal\n \n₩\n \n \n24,131,366\n \n \n \n17,598,568\n \n\n \n\n \n\n(*1)Short-term financial instruments consist of time deposits and\nsaving-based insurance. As of December 31, 2024, Korean Won 231,000 thousand of time deposits in banks are provided as collateral\nfor employee loans and restricted for use.\n\n(*2)Interest-bearing notes included in other current financial assets\namount to Korean Won 410,000 thousand, of which Korean Won 330,000 thousand have been pledged as collateral for loans to employees.\n\n \n\n \n \n \n \n**December 31,2025**\n \n \n**December 31,2024**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\n**Financial liability at amortized cost**\n \n \n \n \n \n \n \n \n \n \n\nTrade and other payables (*)\n \n₩\n \n \n57,403,609\n \n \n \n13,280,410\n \n\nShort-term borrowings\n \n \n \n \n11,171,899\n \n \n \n3,764,000\n \n\nCurrent portion of long-term borrowings, net\n \n \n \n \n2,200,000\n \n \n \n2,108,956\n \n\nOther current financial liabilities\n \n \n \n \n250,000\n \n \n \n130,000\n \n\nLong-term borrowings, excluding current portion, net\n \n \n \n \n2,611,563\n \n \n \n-\n \n\nOther non-current financial liabilities\n \n \n \n \n220,000\n \n \n \n150,000\n \n\nConvertible notes\n \n \n \n \n4,631,460\n \n \n \n-\n \n\n**Financial liability at fair value through profit or loss**\n \n \n \n \n \n \n \n \n \n \n\nConvertible notes\n \n \n \n \n24,002,560\n \n \n \n-\n \n\nWarrant\n \n \n \n \n528,772\n \n \n \n-\n \n\nDerivative liabilities\n \n \n \n \n330,417\n \n \n \n-\n \n\nTotal\n \n₩\n \n \n103,350,280\n \n \n \n19,433,366\n \n\n \n\n \n\n(*)Trade and other payables that are not financial liabilities\nare excluded.\n\n \n\nF-67\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**A.**\n**Classification of investment assets based on liquidity**\n\n \n\nThe classification of investment assets as of December 31, 2025 and 2024 are as follows:\n\n \n\nSchedule of classification of investment assets\n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**December 31,2025**\n \n \n**December 31,2024**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\n**Current investments**\n \n \n \n \n \n \n \n \n \n \n\nFixed deposit – at amortized cost\n(*)\n \n₩\n \n \n-\n \n \n \n410,000\n \n\nSaving based insurance – at FVTPL\n \n \n \n \n21,560\n \n \n \n13,524\n \n\nTotal\n \n₩\n \n \n21,560\n \n \n \n423,524\n \n\n**Non-Current investments**\n \n \n \n \n \n \n \n \n \n \n\nSaving based insurance – at FVTPL\n \n₩\n \n \n310,908\n \n \n \n322,538\n \n\nEquity securities – at FVTPL\n \n \n \n \n858,167\n \n \n \n726,991\n \n\nDebt securities – at FVTPL\n \n \n \n \n102,600\n \n \n \n3,400\n \n\nProject investment\n \n \n \n \n3,023,091\n \n \n \n-\n \n\nTotal\n \n₩\n \n \n4,294,766\n \n \n \n1,052,929\n \n\n \n\n \n\n(*)As of December 31, 2024, Korean Won 231,000 thousand of\ntime deposits is provided as collateral for employee loans and restricted for use.\n\n \n\n**B.**\n**Equity Securities designated as at FVTPL**\n\n \n\nThe 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.\n\n \n\nSchedule of equity securities designated\n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**Fair value atDecember 31,2025**\n \n \n**Fair value atDecember 31,2024**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nEquity Securities (listed stocks)\n \n₩\n \n \n268,768\n \n \n \n140,592\n \n\nEquity Securities (unlisted stocks)\n \n \n \n \n589,399\n \n \n \n586,398\n \n\nTotal\n \n₩\n \n \n858,167\n \n \n \n726,990\n \n\n \n\nF-68\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**C.**\n**Net gains and losses by category of financial instruments**\n\n \n\nThe net gains and losses by category of financial instruments for the years ended December 31, 2025, 2024 and 2023 are as follows:\n\n \n\nSchedule of net gains and losses by category of financial instruments\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**2025**\n \n\n \n \n \n \n**Financial\nassets at\namortized cost**\n \n \n**Financial\nassets at\nfair value through\nprofit or loss**\n \n \n**Financial\nliabilities at\namortized cost**\n \n \n**Financial\nliabilities at\nfair value through\nprofit or loss**\n \n \n**Total**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nInterest income\n \n₩\n \n \n407,595\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n407,595\n \n\nInterest expense\n \n \n \n \n-\n \n \n \n-\n \n \n \n(3,348,504\n)\n \n \n-\n \n \n \n(3,348,504\n)\n\nForeign currency differences\n \n \n \n \n(314,664\n)\n \n \n-\n \n \n \n(992\n)\n \n \n-\n \n \n \n(315,656\n)\n\nGain or loss on disposal of investment securities\n \n \n \n \n-\n \n \n \n(2,138,105\n)\n \n \n-\n \n \n \n-\n \n \n \n(2,138,105\n)\n\nGain or loss on valuation of investment securities\n \n \n \n \n-\n \n \n \n(2,110,327\n)\n \n \n-\n \n \n \n-\n \n \n \n(2,110,327\n)\n\nGain or loss on valuation of financial instruments\n \n \n \n \n-\n \n \n \n14,839\n \n \n \n-\n \n \n \n-\n \n \n \n14,839\n \n\nGain or loss on warrants\n \n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n16,622,386\n \n \n \n16,622,386\n \n\nGain or loss on derivative instruments\n \n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n(849,911\n)\n \n \n(849,911\n)\n\nGain on debt forgiveness\n \n \n \n \n-\n \n \n \n-\n \n \n \n309,850\n \n \n \n-\n \n \n \n309,850\n \n\nInvestment Revenue\n \n \n \n \n-\n \n \n \n904\n \n \n \n-\n \n \n \n-\n \n \n \n904\n \n\nLosses on disposal of short-term borrowings\n \n \n \n \n-\n \n \n \n-\n \n \n \n(317,624\n)\n \n \n-\n \n \n \n(317,624\n)\n\nLoss on initial recognition of FVPL liabilities\n \n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n(26,228,277\n)\n \n \n(26,228,277\n)\n\nGain on valuation of FVPL liabilities\n \n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n5,559,062\n \n \n \n5,559,062\n \n\nDividend income\n \n \n \n \n-\n \n \n \n2,613\n \n \n \n-\n \n \n \n-\n \n \n \n2,613\n \n\nTotal\n \n₩\n \n \n92,931\n \n \n \n(4,230,076\n)\n \n \n(3,357,270\n)\n \n \n(4,896,740\n)\n \n \n(12,391,155\n)\n\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**2024**\n \n\n \n \n \n \n**Financial\nassets at\namortized cost**\n \n \n**Financial\nassets at\nfair value through\nprofit or loss**\n \n \n**Financial\nliabilities at\namortized cost**\n \n \n**Total**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nInterest income\n \n₩\n \n \n287,067\n \n \n \n-\n \n \n \n-\n \n \n \n287,067\n \n\ninterest expense\n \n \n \n \n-\n \n \n \n-\n \n \n \n(389,080\n)\n \n \n(389,080\n)\n\nForeign currency differences\n \n \n \n \n74,646\n \n \n \n-\n \n \n \n(6,906\n)\n \n \n67,740\n \n\nGain or loss on valuation of investment securities\n \n \n \n \n-\n \n \n \n89,651\n \n \n \n-\n \n \n \n89,651\n \n\nGain or loss on valuation of financial instruments\n \n \n \n \n-\n \n \n \n6,286\n \n \n \n-\n \n \n \n6,286\n \n\nDividend income\n \n \n \n \n-\n \n \n \n1,463\n \n \n \n-\n \n \n \n1,463\n \n\nTotal\n \n₩\n \n \n361,713\n \n \n \n97,400\n \n \n \n(395,986\n)\n \n \n63,127\n \n\n \n\nF-69\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**2023**\n \n\n \n \n \n \n**Financial\nassets at\namortized cost**\n \n \n**Financial\nassets at\nfair value through\nprofit or loss**\n \n \n**Financial\nliabilities at\namortized cost**\n \n \n**Total**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nInterest income\n \n₩\n \n \n406,933\n \n \n \n-\n \n \n \n-\n \n \n \n406,933\n \n\ninterest expense\n \n \n \n \n-\n \n \n \n-\n \n \n \n(320,209\n)\n \n \n(320,209\n)\n\nForeign currency differences\n \n \n \n \n294,087\n \n \n \n-\n \n \n \n(45\n)\n \n \n294,042\n \n\nGain or loss on disposal of financial instruments\n \n \n \n \n635,358\n \n \n \n-\n \n \n \n-\n \n \n \n635,358\n \n\nGain or loss on valuation of investment securities\n \n \n \n \n-\n \n \n \n104,505\n \n \n \n-\n \n \n \n104,505\n \n\nGain or loss on valuation of financial instruments\n \n \n \n \n-\n \n \n \n(1,427\n)\n \n \n-\n \n \n \n(1,427\n)\n\nDividend income\n \n \n \n \n-\n \n \n \n1,463\n \n \n \n-\n \n \n \n1,463\n \n\nTotal\n \n₩\n \n \n1,336,378\n \n \n \n104,541\n \n \n \n(320,254\n)\n \n \n1,120,665\n \n\n \n\n**25. Warrants and derivatives liabilities**\n\n \n\nDetail of Warrant and derivative liabilities as of December 31, 2025 are as follows:\n\n \n\nSchedule of warrant and derivative liabilities\n \n \n \n \n \n \n\n \n \n \n \n**December 31,2025**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\n**Warrants**\n \n \n \n \n \n \n\nIPO Warrant & rights / Private placement Warrant & rights\n \n₩\n \n \n425,350\n \n\nWarrant added on Anson Convertible Notes\n \n \n \n \n94,669\n \n\nWarrant added on Galaxy Digital ordinary shares\n \n \n \n \n8,753\n \n\nTotal\n \n₩\n \n \n528,772\n \n\n**Derivative liabilities**\n \n \n \n \n \n \n\nD.Boral (previously, EF Hutton)\n \n₩\n \n \n56,119\n \n\nConversion rights added to Pre-PIPE\n \n \n \n \n37\n \n\nConversion rights added to Loeb & Loeb Convertible Notes\n \n \n \n \n274,261\n \n\nTotal\n \n₩\n \n \n330,417\n \n\n \n\n**A.**\n**IPO warrant & rights / Private placement Warrant & rights**\n\n \n\nAs part of the initial public offering of Global Star Acquisition, Inc. (“GLST”) on September 22, 2022 (the “IPO”), GLST issued public warrants (the “Public Warrants”), each of which entitles the holder to purchase one share of the GLST’s common stock at an exercise price of $11.50 per share. Simultaneously with the closing of the IPO, GLST issued private placement warrants (the “Private Placement Warrants”) to the GLST’s sponsor and/or its affiliates, where each whole warrant entitles the holder to purchase one share of the GLST’s common stock at an exercise price of $11.50 per share.\n\n \n\nThe warrants will become exercisable on the later of (i) 30 days after the completion of GLST’s initial business combination and (ii) 12 months from the closing of the IPO and will expire five years after the completion of the initial business combination, or earlier upon redemption or liquidation. As of December 31, 2025, GLST’s initial business combination was consummated, and GLST warrants were exchanged to the Company’s warrant.\n\n \n\nF-70\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\nThe Company may, at its option, redeem the outstanding warrants, in whole and not in part, at a price of $0.01 per warrant, subject to certain conditions, including the Company’s common stock trading above a specified price for a defined period of time. In addition, the warrants may be exercised on a cashless basis under certain circumstances.\n\n \n\nThe exercise price and the number of shares issuable upon exercise of the warrants are subject to adjustment in certain circumstances, including stock splits, stock dividends, reorganizations, recapitalizations and certain issuances of equity securities at a price below a specified threshold.\n\n \n\nAs of December 31, 2025, there were 9,200,000 Public Warrants outstanding and 498,225 Private Placement Warrants outstanding. In addition, 150,000 warrants were issued in connection with the settlement of $1,500,000 through the issuance of 150,000 units, resulting in a total of 9,848,225 warrants outstanding.\n\n \n\n**B.**\n**Conversion rights added on Anson Convertible Notes**\n\n \n\nOn July 11, 2025, the Company entered into securities purchase agreements with certain institutional investors, including Anson East Master Fund LP and Anson Investments Master Fund LP, pursuant to which the Company issued convertible promissory notes (the “SPA Notes”) and warrants to purchase ordinary shares of K Wave (the “SPA Warrants”).\n\n \n\n*Warrants*\n\n \n\nIn connection with the issuance of the SPA Notes, the Company issued SPA Warrants to purchase an aggregate of approximately 4,312,180 ordinary shares at an exercise price of $3.6616 per share, subject to adjustment as provided therein. The SPA Warrants are exercisable at any time from the issuance date through the applicable expiration date.\n\n \n\nThe SPA Warrants may be exercised on a cash or cashless basis, at the election of the holder. In the event that an effective registration statement is not available for the resale of the underlying shares, the holders may elect to exercise the SPA Warrants on a cashless basis and receive a net number of shares determined in accordance with the terms of the SPA Warrants.\n\n \n\nAs of December 31, 2025, there were 4,312,180 SPA Warrants outstanding.\n\n \n\n**C.**\n**Warrant added on Galaxy Digital ordinary shares**\n\n \n\nOn September 25, 2025, the Company entered into a Securities Purchase Agreement (the “Galaxy SPA”) with certain institutional investors, including Galaxy Digital LP, pursuant to which the Company agreed to issue and sell ordinary shares (the “Shares”) together with warrants to purchase additional ordinary shares (the “Galaxy Warrants”) in a private placement transaction.\n\n \n\nPursuant to the Galaxy SPA, the Company issued an aggregate of approximately 400,000 ordinary shares and warrants to purchase approximately 200,000 ordinary shares for an aggregate purchase price of approximately $1.0 million. The purchase price per unit, consisting of one ordinary share and a warrant to purchase one-half of one ordinary share, was approximately $2.50.\n\n \n\nThe Galaxy Warrants are exercisable for ordinary shares of the Company at an exercise price of $2.75 per share, subject to customary adjustments, and are exercisable beginning on the issuance date through the applicable expiration date.\n\n \n\nF-71\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\nThe Galaxy Warrants may be exercised on a cash or cashless basis, at the option of the holder, subject to the terms and conditions set forth therein. Upon exercise, the holder is entitled to receive the underlying shares, and the holder is deemed the record holder of such shares as of the exercise date.\n\n \n\nAs of December 31, 2025, there were 200,000 Galaxy Warrants outstanding.\n\n \n\n**D.**\n**D. Boral (previously, EF Hutton)**\n\n \n\nIn connection with the Company’s prior underwriting arrangements related to its initial public offering, the Company had an obligation to pay a deferred underwriting commission in the amount of $3,220,000 to D. Boral Capital LLC (“D. Boral”, previously EF Hutton LLC) upon the consummation of its initial business combination.\n\n \n\nOn January 31, 2025, the Company entered into a Satisfaction and Discharge of Indebtedness agreement with D. Boral, pursuant to which D. Boral agreed to accept alternative consideration in full satisfaction of the deferred underwriting commission. Such consideration consists of (i) $500,000 in cash, (ii) 50,000 ordinary shares of the post-combination public company valued at $10.00 per share, and (iii) a promissory note in the principal amount of $2,000,000.\n\n \n\nIn connection with the satisfaction and discharge of the deferred underwriting commission pursuant to the underwriting agreement, the Company agreed to settle a portion of such obligation through the issuance of 50,000 ordinary shares with an agreed value of $10.00 per share (aggregate value of $500,000) to D Boral.\n\n \n\nPursuant to the terms of the agreement, if the aggregate value of such shares, based on the volume-weighted average price (“VWAP”) at the relevant measurement date, is less than $500,000, the Company is required to compensate D Boral for the shortfall either in cash or through the issuance of additional ordinary shares. In such case, the issuance price of the additional shares shall be determined based on the lowest VWAP during a specified period, subject to a minimum price of $5.00 per share.\n\n \n\nIn connection with the foregoing, the Company has agreed to reserve up to an additional 50,000 ordinary shares for potential issuance to satisfy any such shortfall. The Company is also obligated to use its best efforts to register the resale of the issued shares within a specified period following the closing.\n\n \n\nAccordingly, the total number of ordinary shares that may be issued under this arrangement may exceed the initially committed 50,000 shares depending on market conditions.\n\n \n\n**E.**\n**Conversion rights added to Pre-PIPE and PIPE**\n\n \n\nIn connection with the Company’s bridge financing arrangements prior to its private investment in public equity (“PIPE”) financing and the subsequent PIPE financing, the Company issued convertible senior unsecured notes (collectively, the “Convertible Notes”), consisting of (i) pre-PIPE convertible promissory notes issued in June 2024 (the “Pre-PIPE Convertible Notes”) and (ii) PIPE Convertible notes issued pursuant to securities purchase agreements entered into in connection with the Company’s business combination (the “PIPE Convertible Notes”).\n\n \n\nThe Convertible Notes are unsecured senior obligations of the Company and bear interest at a stated annual coupon rate, payable periodically in accordance with the terms of the respective agreements. The Pre-PIPE Convertible Notes and PIPE Convertible Notes generally have contractual maturities of up to three years from their respective issuance dates, unless earlier converted or repaid in accordance with their terms.\n\n \n\nF-72\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\nThe principal amount and any accrued but unpaid interest under the Convertible Notes are convertible, at the option of the holders, into ordinary shares of the Company upon the occurrence of certain events, including the consummation of the Company’s business combination or subsequent equity financings. The conversion price is specified in the applicable agreements and is subject to adjustment based on various factors, including stock splits, stock dividends, recapitalizations and similar events.\n\n \n\nIn particular, the Pre-PIPE Convertible Notes provide for conversion into equity securities at predetermined conversion prices prior to and following the business combination. Following the business combination, the conversion price is subject to adjustment mechanisms based on the trading price of the Company’s ordinary shares, including a discount to the volume-weighted average price over a specified measurement period and a floor price, as defined in the agreements.\n\n \n\nUpon conversion of the Convertible Notes into ordinary shares, the Company is generally obligated to file a resale registration statement with the Securities and Exchange Commission covering the resale of such shares within a specified period and to use commercially reasonable efforts to cause such registration statement to become effective within the timeframes set forth in the applicable agreements.\n\n \n\nUpon maturity, the Convertible Notes are repayable in cash unless earlier converted into equity securities or otherwise settled in accordance with their terms.\n\n \n\nThe Convertible Notes contain customary representations and warranties, covenants and events of default, including, but not limited to, failure to make required payments, breach of covenants and insolvency-related events, upon the occurrence of which the outstanding principal and accrued interest may become immediately due and payable.\n\n \n\n**F.****Conversion rights added to Loeb & Loeb Convertible Notes**\n\n \n\nOn December 3, 2025, the Company issued a convertible promissory note (the “Loeb Convertible Note”) to Loeb & Loeb LLP (the “Payee”) in exchange for a previously outstanding promissory note, pursuant to Section 3(a)(9) of the Securities Act.\n\n \n\nThe Loeb Convertible Note had an aggregate principal amount of approximately $1.0 million and matured on February 13, 2026. The note bore interest at a rate of 18% per annum on the outstanding principal balance.\n\n \n\nThe Payee had the right, at its option, to convert all or any portion of the outstanding principal and accrued interest into ordinary shares of K Wave at a conversion price equal to 85% of the lowest volume-weighted average price of the Company’s ordinary shares over the five trading days immediately preceding the conversion date.\n\n \n\nThe conversion shares are subject to customary transfer restrictions under applicable securities laws. In addition, the Payee is entitled to certain registration rights, including one demand registration and piggyback registration rights for a specified period, subject to the terms and conditions set forth in the agreement.\n\n \n\nThe Loeb Convertible Note included customary events of default, including failure to make payments when due and insolvency-related events, upon the occurrence of which the outstanding principal and accrued interest may become immediately due and payable.\n\n \n\nF-73\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**G.****Conversion rights added on Anson Convertible Notes**\n\n \n\nOn July 11, 2025, the Company entered into securities purchase agreements with certain institutional investors, including Anson East Master Fund LP and Anson Investments Master Fund LP, pursuant to which the Company issued convertible promissory notes (the “SPA Notes”) and warrants to purchase ordinary shares (the “SPA Warrants”).\n\n \n\n*Convertible Notes*\n\n \n\nThe SPA Notes were issued with an aggregate principal amount of USD $15,789,474, bear interest at a rate of 0% per annum, and mature on July 12, 2027, unless earlier converted or repaid in accordance with their terms. The SPA Notes are convertible, at the option of the holder, into the Company’s ordinary shares at a conversion price based on a discount to the market price of the Company’s ordinary shares, subject to certain adjustments as provided in the Notes.\n\n \n\nThe SPA Notes are convertible, at the option of the holder, into the Company’s ordinary shares at an initial conversion price of $4.40 per share (the “Conversion Price”), subject to adjustment in accordance with the terms of the SPA Notes.\n\n \n\nIn addition, the holder has the right, at its option, to convert all or any portion of the outstanding conversion amount at an alternate conversion price (each, an “Alternate Conversion”), determined as 92% of the lowest volume-weighted average price of the Company’s ordinary shares during the ten (10) trading days immediately preceding the applicable conversion date (the “Alternate Conversion Price”).\n\n \n\nSuch conversion features may result in the issuance of a variable number of shares upon conversion, depending on the market price of the Company’s ordinary shares at the time of conversion.\n\n \n\nThe SPA Notes contain customary events of default, including, but not limited to, failure to make payments when due and breaches of covenants. Upon the occurrence of an event of default, the outstanding principal and accrued interest may become immediately due and payable, and may be subject to default interest.\n\n \n\n**26. Capital and reserves**\n\n \n\n**A.****Share capital**\n\n \n\nDetails of share capital and share premium as of December 31, 2025 and 2024 are as follows:\n\n \n\nSchedule of share capital  \n    \n   \n\n  \n\n**December 31,**\n\n**2025**\n  \nDecember 31,\n2024 \n\n  \n(In Korean won and US Dollar and number of shares) \n\nNumber of authorized shares \n 1,000,000,000  \n 1,000,000,000 \n\nValue per share \nUSD$0.0001  \nUSD$0.0001 \n\nNumber of shares issued \n 64,221,209  \n 8,777,645 \n\nCommon shares (USD) \nUSD$6,422.12  \nUSD$877.76 \n\nCommon shares (KRW) \nKRW9,076,295  \nKRW1,226,196 \n\n \n\n \ni.\nOrdinary shares\n\n \n\nHolders 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.\n\n \n\nF-74\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n \nii.\nTreasury shares\n\n \n\nDetails of treasury shares for the years ended December 31, 2025, 2024 and 2023 are as follows:\n\n \n\nSchedule of treasury shares\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**2025**\n \n \n**2024**\n \n \n**2023**\n \n\n \n \n \n \n**Number of\nshares**\n \n \n**Carrying\namount**\n \n \n**Number of\nshares**\n \n \n**Carrying\namount**\n \n \n**Number of\nshares**\n \n \n**Carrying\namount**\n \n\n \n \n \n \n**(In Korean won and number of shares)**\n \n\nBeginning balance (*1)\n \n₩\n \n \n-\n \n \n \n-\n \n \n \n15,582\n \n \n \n27,128,262\n \n \n \n-\n \n \n \n-\n \n\nBusiness Combination (*2)\n \n \n \n \n160,000\n \n \n \n588,099\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nAcquisition\n \n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n15,582\n \n \n \n27,128,262\n \n\nEnding balance\n \n₩\n \n \n160,000\n \n \n \n588,099\n \n \n \n15,582\n \n \n \n27,128,262\n \n \n \n15,582\n \n \n \n27,128,262\n \n\n \n\n \n\n(*1)As the accounting acquirer, Play Company Co., Ltd. held 15,582\nshares of its own stock prior to the acquisition merger. Upon completion of the merger, these treasury shares were retired and reclassified\nas other capital surplus.\n\n(*2)As a result of the Acquisition Merger, the common shares of\nKWM held by K Enter were recognized as treasury shares.\n\n \n\n**B.****Share premium and Other components of equity**\n\n \n\nSchedule of Share premium and Other components of equity\n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**December 31,\n2025**\n \n \n**December 31,\n2024**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\n**Share premium**\n \n \n \n \n \n \n \n \n \n \n\nCapital surplus (*1)\n \n₩\n \n \n205,980,674\n \n \n \n-\n \n\n**Other components of equity**\n \n \n \n \n \n \n \n \n \n \n\nOther capital surplus (*2)\n \n \n \n \n(52,485,618\n)\n \n \n(746,300\n)\n\nRemeasurements of defined benefit liability\n \n \n \n \n443,827\n \n \n \n181,516\n \n\nTreasury shares\n \n \n \n \n(588,099\n)\n \n \n(27,128,262\n)\n\nForeign currency translation differences\n \n \n \n \n(4,890,859\n)\n \n \n-\n \n\nTotal\n \n₩\n \n \n(57,520,749\n)\n \n \n(27,693,046\n)\n\n \n\n \n\n(*1)Among the costs incurred in connection with the reincorporation\nmerger and acquisition merger, those specifically related to the share exchange and issuance for the existing shareholders of K Enter\nwere accounted for as a deduction from equity. The amount recognized as a deduction from equity Korean Won 2,769,995 thousand.\n\n(*2)During the period, treasury shares amounting to Korean Won 27,128,262\nthousand were retired and reclassified as a result of a completion of the merger. In addition, shares amounting to Korean Won 9,943,731\nthousand related to the conversion of convertible bonds, which have not yet been issued, were recognized.\n\n \n\nF-75\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**27. Capital management**\n\n \n\nThe 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, 2025, 2024 and 2023 are as follows.\n\n \n\nSchedule of net debt to adjusted equity ratio\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**December 31,2025**\n \n \n**December 31,2024**\n \n \n**December 31,2023**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nTotal liabilities\n \n₩\n \n \n147,341,032\n \n \n \n34,424,674\n \n \n \n38,697,788\n \n\nLess: Cash and cash equivalents\n \n \n \n \n(8,364,432\n)\n \n \n(4,150,572\n)\n \n \n(8,585,634\n)\n\nNet debt\n \n \n \n \n138,976,600\n \n \n \n30,274,102\n \n \n \n30,112,154\n \n\nTotal equity\n \n₩\n \n \n(21,607,997\n)\n \n \n8,175,613\n \n \n \n11,689,723\n \n\nNet debt to total equity ratio\n \n \n \n \n-6.43\n \n \n \n3.70\n \n \n \n2.58\n \n\n \n\n**28. Borrowings/payable and Loans/receivable**\n\n \n\nBorrowings as of December 31, 2025 and 2024 are as follows:\n\n \n\nSchedule of borrowings payable\n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**December 31,2025**\n \n \n**December 31,2024**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\n**Current Liabilities**\n \n \n \n \n \n \n \n \n \n \n\nShort-term borrowings\n \n₩\n \n \n11,171,899\n \n \n \n3,764,000\n \n\nCurrent portion of long-term borrowings, net\n \n \n \n \n2,200,000\n \n \n \n2,108,956\n \n\nCurrent lease\nliabilities (*)\n \n \n \n \n1,702,300\n \n \n \n1,786,577\n \n\nTotal\n \n₩\n \n \n15,074,199\n \n \n \n7,659,533\n \n\n**Non-Current liabilities**\n \n \n \n \n \n \n \n \n \n \n\nLong-term borrowings, excluding current portion, net\n \n \n \n \n2,611,563\n \n \n \n-\n \n\nNon-current\nlease liabilities (*)\n \n \n \n \n6,268,969\n \n \n \n9,302,661\n \n\nTotal\n \n₩\n \n \n8,880,532\n \n \n \n9,302,661\n \n\n \n\n \n\n(*)The interest rate related to lease liabilities reflects the\nincremental borrowing rate based on the Company’s credit. The amount of interest expense related to lease liabilities incurred\nduring the year ended December 31, 2025 is Korean Won 543,208 thousand (December 31, 2024: Korean Won 851,543 thousand, December 31,\n2023: Korean Won 1,047,738 thousand). Additionally, the amount of short-term lease payments and low-value assets lease payments not included\nin the measurement of lease liabilities during the twelve-month period ended December 31, 2025 are Korean Won 2,349,723 thousand\n(December 31, 2024: Korean Won 33,846 thousand, December 31, 2023: Korean Won 23,157 thousand).\n\n \n\nF-76\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**A.**\n**Terms and repayment schedule of Borrowings**\n\n \n\nThe terms and conditions of outstanding borrowings as of December 31, 2025 and 2024 are as follows:\n\n \n\nSchedule of repayment\nborrowings\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n \n \n \n**December 31,\n2025**\n \n \n**December 31,\n2024**\n \n\n \n \n**Nominalinterest rate**\n \n**Maturity**\n \n \n**Face value**\n \n \n**Carrying\namount**\n \n \n**Face value**\n \n \n**Carrying\namount**\n \n\n \n \n \n \n \n \n \n**(In thousands of Korean won)**\n \n\nSecured borrowings\n \nKORIBOR +1.75%\n \n20-Dec-25\n \n \n \n-\n \n \n \n-\n \n \n \n500,000\n \n \n \n500,000\n \n\nSecured borrowings\n \nKORIBOR + 2.39%\n \n16-Sep-25\n \n \n \n-\n \n \n \n-\n \n \n \n100,000\n \n \n \n18,720\n \n\nSecured borrowings (*1)\n \n6.78%\n \n27-Feb-26\n \n \n \n1,000,000\n \n \n \n1,000,000\n \n \n \n1,000,000\n \n \n \n1,000,000\n \n\nSecured borrowings (*2)\n \n4.69%\n \n26-Jun-26\n \n \n \n1,000,000\n \n \n \n1,000,000\n \n \n \n1,000,000\n \n \n \n1,000,000\n \n\nSecured borrowings (*3)\n \n4.98%\n \n02-Dec-26\n \n \n \n400,000\n \n \n \n400,000\n \n \n \n400,000\n \n \n \n400,000\n \n\nUnsecured borrowings\n \n4.60%\n \n04-Dec-28\n \n \n \n2,000,000\n \n \n \n1,533,699\n \n \n \n-\n \n \n \n-\n \n\nUnsecured borrowings\n \n4.60%\n \n11-Dec-28\n \n \n \n1,000,000\n \n \n \n762,216\n \n \n \n-\n \n \n \n-\n \n\nUnsecured borrowings\n \n4.60%\n \n29-Dec-28\n \n \n \n280,000\n \n \n \n212,692\n \n \n \n-\n \n \n \n-\n \n\nUnsecured borrowings\n \n4.60%\n \n31-Dec-26\n \n \n \n700,000\n \n \n \n700,000\n \n \n \n700,000\n \n \n \n700,000\n \n\nUnsecured borrowings\n \n4.60%\n \n31-Dec-26\n \n \n \n2,200,000\n \n \n \n2,200,000\n \n \n \n2,200,000\n \n \n \n2,090,236\n \n\nUnsecured borrowings\n \n4.60%\n \n31-Dec-26\n \n \n \n164,000\n \n \n \n164,000\n \n \n \n164,000\n \n \n \n164,000\n \n\nSecured bank loans (*4)\n \nCD + 3.00%\n \n08-May-26\n \n \n \n490,000\n \n \n \n490,000\n \n \n \n-\n \n \n \n-\n \n\nSecured bank loans (*5)\n \nCD + 12.33%\n \n23-Mar-26\n \n \n \n800,000\n \n \n \n785,000\n \n \n \n-\n \n \n \n-\n \n\nSecured borrowings (*6)\n \n5.84%\n \n17-Jul-26\n \n \n \n300,000\n \n \n \n277,687\n \n \n \n-\n \n \n \n-\n \n\nSecured borrowings (*7)\n \nCOFIX (6 month)\n \n24-Sep-26\n \n \n \n3,000,000\n \n \n \n3,000,000\n \n \n \n-\n \n \n \n-\n \n\nUnsecured borrowings\n \n4.60%\n \n31-Dec-26\n \n \n \n248,500\n \n \n \n247,500\n \n \n \n-\n \n \n \n-\n \n\nUnsecured borrowings\n \n4.60%\n \n25-Dec-27\n \n \n \n220,000\n \n \n \n212,955\n \n \n \n-\n \n \n \n-\n \n\nUnsecured borrowings\n \n4.60%\n \n31-Mar-26\n \n \n \n26,680\n \n \n \n26,680\n \n \n \n-\n \n \n \n-\n \n\nUnsecured borrowings\n \n4.60%\n \n27-Dec-25\n \n \n \n1,000,000\n \n \n \n500,000\n \n \n \n-\n \n \n \n-\n \n\nUnsecured borrowings\n \n0.00%\n \n13-May-26\n \n \n \n3,730,740\n \n \n \n318,683\n \n \n \n-\n \n \n \n-\n \n\nUnsecured borrowings\n \n0.00%\n \n30-Jan-27\n \n \n \n2,869,800\n \n \n \n2,152,350\n \n \n \n-\n \n \n \n-\n \n\nTotal\n \n \n \n21,429,720\n \n \n \n15,983,462\n \n \n \n6,064,000\n \n \n \n5,872,956\n \n\n \n\n \n\n(*1)As of December 31, 2025, the Company is provided a guarantee\nof Korean Won 1,200,000 thousand (2024: Korean Won 1,200,000 thousand) from CEO of Play F&B.\n\n(*2)As of December 31, 2025, the Company is provided a guarantee\nof Korean Won 900,000 thousand (2024: Korean Won 900,000 thousand) by Korea Credit Guarantee Fund.\n\n(*3)\nAs of December 31, 2025, the Company is provided a building as collateral of Korean Won 480,000 thousand (2024: Korean Won 480,000\nthousand) by CEO of Play F&B.\n\n(*4)The Company has received a payment guarantee of Korean Won\n441,000 thousand from Korea Credit Guarantee Fund as of December 31, 2025.\n\n(*5)The Company is provided a joint guarantee of Korean Won 960,000\nthousand by CEO of The Lamp as of December 31, 2025.\n\n(*6)As of December 31, 2025, the Company is provided a joint\nand several guarantee of Korean Won 330,000 thousand by CEO of Solaire.\n\n(*7)As of December 31, 2025, Solaire is provided a joint\nand several guarantee of Korean Won 3,600,000 thousand by CEO of Solaire. Also, land and buildings owned by unrelated third parties,\nwith a pledged amount of Korean Won 3,000,000 thousand, are provided as collateral for the secured borrowings.\n\n \n\nF-77\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**B.**\n**Terms and collection schedule of Loans**\n\n \n\nThe terms and conditions of outstanding loans as of December 31, 2025 and 2024 are as follows:\n\n \n\nSchedule of terms and conditions of outstanding\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n \n \n \n**December 31,\n2025**\n \n \n**December 31,\n2024**\n \n\n \n \n**Nominalinterest rate**\n \n**Maturity**\n \n \n**Face value**\n \n \n**Carrying\namount**\n \n \n**Face value**\n \n \n**Carrying\namount**\n \n\n \n \n \n \n \n \n \n**(In thousands of Korean won)**\n \n\nCho Mi Kyung (*1)\n \n2.00%\n \n31-Aug-25\n \n \n \n400,000\n \n \n \n-\n \n \n \n400,000\n \n \n \n-\n \n\nBonanza Pictures (*2)\n \n4.60%\n \n31-Mar-21\n \n \n \n30,000\n \n \n \n-\n \n \n \n30,000\n \n \n \n-\n \n\nJung Kyung Han\n \n3.00%\n \n14-Sep-23\n \n \n \n30,000\n \n \n \n30,000\n \n \n \n30,000\n \n \n \n30,000\n \n\nYY entertainment\n \n4.60%\n \n30-Apr-26\n \n \n \n150,000\n \n \n \n150,000\n \n \n \n150,000\n \n \n \n-\n \n\nSecond plan (*4)\n \n4.60%\n \n31-Dec-26\n \n \n \n471,400\n \n \n \n471,400\n \n \n \n394,400\n \n \n \n394,400\n \n\nRainier (*3)(*4)\n \n4.60%\n \n31-Dec-26\n \n \n \n150,000\n \n \n \n-\n \n \n \n150,000\n \n \n \n-\n \n\nBeacon Holdings, Inc. (*4)\n \n4.60%\n \n31-Dec-26\n \n \n \n535,000\n \n \n \n535,000\n \n \n \n225,000\n \n \n \n225,000\n \n\nStudio Cuat (*4)\n \n4.60%\n \n31-Dec-26\n \n \n \n43,000\n \n \n \n43,000\n \n \n \n43,000\n \n \n \n43,000\n \n\nThird plan\n \n4.60%\n \n31-Dec-26\n \n \n \n8,000\n \n \n \n8,000\n \n \n \n-\n \n \n \n-\n \n\nOne to six\n \n4.60%\n \n30-Nov-26\n \n \n \n1,180,000\n \n \n \n1,180,000\n \n \n \n-\n \n \n \n-\n \n\nPark, Un Kyoung\n \n0.00%\n \n16-Jan-26\n \n \n \n10,000\n \n \n \n10,000\n \n \n \n-\n \n \n \n-\n \n\nFalling Starlight\n \n0.00%\n \n-\n \n \n \n136,054\n \n \n \n136,023\n \n \n \n-\n \n \n \n-\n \n\nYun, In Beom, Kim, Su Jin\n \n4.60%\n \n18-Sep-26\n \n \n \n600,000\n \n \n \n600,000\n \n \n \n-\n \n \n \n-\n \n\nYun, In Beom, Kim, Su Jin\n \n4.60%\n \n25-Nov-26\n \n \n \n400,000\n \n \n \n400,000\n \n \n \n-\n \n \n \n-\n \n\nCheongpung Contents Studio Co., Ltd.\n \n0.00%\n \n22-Jul-27\n \n \n \n5,000\n \n \n \n5,000\n \n \n \n-\n \n \n \n-\n \n\nLim Wan Cheol\n \n0.00%\n \n30-Oct-27\n \n \n \n50,000\n \n \n \n50,000\n \n \n \n-\n \n \n \n-\n \n\nK Enter Holdings Inc., Korea Branch\n \n4.60%\n \n23-Dec-25\n \n \n \n-\n \n \n \n-\n \n \n \n95,000\n \n \n \n95,000\n \n\nTotal\n \n \n \n4,198,454\n \n \n \n3,618,423\n \n \n \n1,517,400\n \n \n \n787,400\n \n\n \n\n \n\n(*1)The Company recognized a full provision for the balance of\nloan and accrued interest income as of January 1, 2021. Accrued interest income as of December 31, 2025 and December 31,\n2024 are Korean Won 26,685 thousand and Korean Won 26,685 thousand, respectively.\n\n(*2)The Company recognized a full provision for the balance of\nloan and accrued interest income as of December 31, 2024. Accrued interest income as of December 31, 2025 and December 31,\n2024 are Korean Won 8,676 thousand and Korean Won 7,296 thousand, respectively.\n\n(*3)The Company recognized a full provision for the balance of\nloan and accrued interest income as of December 31, 2024. Accrued interest income as of December 31, 2025 and December 31,\n2024 are Korean Won 3,789 thousand and Korean Won 3,789 thousand, respectively.\n\n(*4)The contract is automatically extended by one year if the\nloan is not collected until maturity date.\n\n \n\nF-78\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**29. Trade and other payables**\n\n \n\nTrade and other payables as of December 31, 2025 and 2024 are as follows:\n\n \n\nSchedule of trade and other payables\n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**December 31,\n2025**\n \n \n**December 31,\n2024**\n \n\n \n \n \n \n**(In thousands of Korean Won)**\n \n\nTrade payables\n \n₩\n \n \n5,745,363\n \n \n \n10,073,408\n \n\nOther payables\n \n \n \n \n44,297,635\n \n \n \n1,247,271\n \n\nAccrued expenses\n \n \n \n \n7,997,413\n \n \n \n2,719,073\n \n\nTrade and other non-current payables\n \n \n \n \n27,297,393\n \n \n \n21,694\n \n\nTotal\n \n₩\n \n \n85,337,804\n \n \n \n14,061,446\n \n\n \n\n**30. Provisions**\n\n \n\nProvisions for the years ended December 31, 2025, 2024 and 2023 are as follows:\n\n \n\nSchedule of provisions\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**2025**\n \n \n**2024**\n \n \n**2023**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\n**Site restoration**\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nBeginning of the year\n \n₩\n \n \n609,951\n \n \n \n674,148\n \n \n \n711,086\n \n\nChanges in scope of consolidation\n \n \n \n \n23,994\n \n \n \n-\n \n \n \n-\n \n\nProvisions made during the year\n \n \n \n \n10,352\n \n \n \n12,578\n \n \n \n26,833\n \n\nInterest expense\n \n \n \n \n12,578\n \n \n \n16,755\n \n \n \n17,195\n \n\nLease termination\n \n \n \n \n(134,142\n)\n \n \n(49,842\n)\n \n \n(78,722\n)\n\nLease modification\n \n \n \n \n(676\n)\n \n \n(18,419\n)\n \n \n(2,244\n)\n\nProvisions used during the year\n \n \n \n \n(18,300\n)\n \n \n(25,269\n)\n \n \n-\n \n\nEnding of the year\n \n₩\n \n \n503,757\n \n \n \n609,951\n \n \n \n674,148\n \n\n**Litigation provision**\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nBeginning of the year\n \n₩\n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nAdditional Provisions\n \n \n \n \n720,628\n \n \n \n-\n \n \n \n-\n \n\nEnding of the year\n \n₩\n \n \n720,628\n \n \n \n-\n \n \n \n-\n \n\n**Loss provision**\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nBeginning of the year\n \n₩\n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nAdditional Provisions\n \n \n \n \n1,130\n \n \n \n-\n \n \n \n-\n \n\nEnding of the year\n \n₩\n \n \n1,130\n \n \n \n-\n \n \n \n-\n \n\n \n\nThe provision for building restoration relates mainly to buildings leased during 2025 and 2024. The provision has been estimated based on historical data associated with similar buildings.\n\n \n\nLitigation provision is\nrelated to legal proceeding case. The provision has been estimated based on the outcome of the court of first instance (Note\n35).\n\n \n\nThe loss provision relates to projects currently in progress. The loss provision has been estimated based on expected losses arising when production costs are highly likely to exceed the related production revenue, considering project budgets and historical experience with similar productions.\n\n \n\nF-79\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**31. Financial Instruments – Fair values and risk management**\n\n \n\n**A.**\n**Accounting classifications and fair values**\n\n \n\nThe 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.\n\n \n\nThe carrying amounts of financial instruments by category as of December 31, 2025 are as follows:\n\n \n\nSchedule of financial assets\nand liability at fair value\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**Fair value**\n \n \n**Level 1**\n \n \n**Level 2**\n \n \n**Level 3**\n \n \n**Total**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\n**Financial assets at fair value**\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nGuaranteed Return Insurances\n(short-term) (*)\n \n₩\n \n \n21,560\n \n \n \n-\n \n \n \n21,560\n \n \n \n-\n \n \n \n21,560\n \n\nGuaranteed Return Insurances\n(long-term) (*)\n \n \n \n \n310,908\n \n \n \n-\n \n \n \n310,908\n \n \n \n-\n \n \n \n310,908\n \n\nLong-term investment securities\n \n \n \n \n3,983,858\n \n \n \n268,768\n \n \n \n-\n \n \n \n3,715,090\n \n \n \n3,983,858\n \n\nTotal\n \n₩\n \n \n4,316,326\n \n \n \n268,768\n \n \n \n332,468\n \n \n \n3,715,090\n \n \n \n4,316,326\n \n\n \n\n \n\n(*)The fair value of guaranteed return insurances classified\nat Level 2 in the fair value hierarchy is determined using an evaluation of surrender proceeds received from financial institutions.\n\n \n\n \n \n \n \n**Fair value**\n \n \n**Level 1**\n \n \n**Level 2**\n \n \n**Level 3**\n \n \n**Total**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\n**Financial liability at fair value**\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nConvertible Notes\n \n₩\n \n \n24,002,559\n \n \n \n-\n \n \n \n-\n \n \n \n24,002,559\n \n \n \n24,002,559\n \n\nWarrants\n \n \n \n \n528,772\n \n \n \n425,350\n \n \n \n-\n \n \n \n103,422\n \n \n \n528,772\n \n\nDerivative liabilities\n \n \n \n \n330,417\n \n \n \n-\n \n \n \n-\n \n \n \n330,417\n \n \n \n330,417\n \n\nTotal\n \n₩\n \n \n24,861,748\n \n \n \n425,350\n \n \n \n-\n \n \n \n24,436,398\n \n \n \n24,861,748\n \n\n \n\nThe carrying amounts of financial instruments by category as of December 31, 2024 are as follows:\n\n \n\n \n \n \n \n**Fair value**\n \n \n**Level 1**\n \n \n**Level 2**\n \n \n**Level 3**\n \n \n**Total**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\n**Financial assets at fair value**\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nGuaranteed Return Insurances\n(short-term) (*)\n \n₩\n \n \n13,524\n \n \n \n-\n \n \n \n13,524\n \n \n \n-\n \n \n \n13,524\n \n\nGuaranteed Return Insurances\n(long-term) (*)\n \n \n \n \n322,538\n \n \n \n-\n \n \n \n322,538\n \n \n \n-\n \n \n \n322,538\n \n\nLong-term investment securities\n \n \n \n \n730,390\n \n \n \n143,992\n \n \n \n-\n \n \n \n586,398\n \n \n \n730,390\n \n\nTotal\n \n₩\n \n \n1,066,452\n \n \n \n143,992\n \n \n \n336,062\n \n \n \n586,398\n \n \n \n1,066,452\n \n\n \n\n \n\n(*)The fair value of guaranteed return insurances classified\nat Level 2 in the fair value hierarchy is determined using an evaluation of surrender proceeds received from financial institutions.\n\n \n\nF-80\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\nDetails of the changes in financial assets classified as Level 3 of fair value measurements for the year ended December 31, 2025 are as follows:\n\n \n\nSchedule of fair value measurements\n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**2025**\n \n\n \n \n \n \n**Long-term\ninvestment\nsecurities**\n \n \n**Project\ninvestment**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\n**Financial assets at fair value**\n \n \n \n \n \n \n \n \n \n \n\nBeginning balance\n \n₩\n \n \n586,398\n \n \n \n-\n \n\nChanges in scope of consolidation\n \n \n \n \n3,000\n \n \n \n1,509,715\n \n\nAcquisition\n \n \n \n \n102,600\n \n \n \n4,911,974\n \n\nChanging Account Classification\n \n \n \n \n-\n \n \n \n(490,680\n)\n\nDisposal\n \n \n \n \n-\n \n \n \n(500,000\n)\n\nValuation\n \n \n \n \n-\n \n \n \n(2,407,918\n)\n\nEnding balance\n \n₩\n \n \n691,998\n \n \n \n3,023,091\n \n\n \n\n \n \n \n \n**2025**\n \n\n \n \n \n \n**Derivative\nliabilities**\n \n \n**Warrant**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\n**Financial liabilities at fair value**\n \n \n \n \n \n \n \n \n \n \n\nBeginning balance\n \n₩\n \n \n-\n \n \n \n-\n \n\nChanges in scope of consolidation\n \n \n \n \n1,078,713\n \n \n \n-\n \n\nIssuance\n \n \n \n \n1,070,677\n \n \n \n15,893,067\n \n\nExercised\n \n \n \n \n(2,650,417\n)\n \n \n-\n \n\nValuation\n \n \n \n \n849,911\n \n \n \n(15,791,555\n)\n\nForeign exchange differences\n \n \n \n \n(18,467\n)\n \n \n1,910\n \n\nEnding balance\n \n₩\n \n \n330,417\n \n \n \n103,422\n \n\n \n\n \n \n \n \n**2025**\n \n\n \n \n \n \n**Convertible\nNotes**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\n**Financial liabilities at fair value**\n \n \n \n \n \n \n\nBeginning balance\n \n₩\n \n \n-\n \n\nChanges in scope of consolidation\n \n \n \n \n-\n \n\nIssuance\n \n \n \n \n29,730,795\n \n\nExercised\n \n \n \n \n(612,351\n)\n\nValuation\n \n \n \n \n(5,559,062\n)\n\nForeign exchange differences\n \n \n \n \n443,177\n \n\nEnding balance\n \n₩\n \n \n24,002,559\n \n\n \n\nF-81\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**B.**\n**Measurement of fair values**\n\n \n\nFor the purpose of measuring fair value under Level 2 and Level 3 of the fair value hierarchy, the valuation techniques used and the significant unobservable inputs are as follows:\n\n \n\nSchedule of significant unobservable inputs\n \n \n \n \n \n \n\n**Category**\n \n**Valuation Technique**\n \n**Significant\nUnobservable Inputs**\n \n**Relationship between\nFair Value and\nUnobservable Inputs**\n\nUnlisted Equity Securities\n \nCost Model\n \n-\n \n-\n\nProject investment\n \nCost Model (*)\n \n-\n \n-\n\nConvertible Notes\n \nTsiveriotis-Fernandes Model\n \nVolatility (Dec 31, 2025: 53.5%)\n \nEstimated fair value decreases as expected volatility decreases.\n\nDerivative liabilities\n(Conversion Option)\n\n \nTsiveriotis-Fernandes Model\n \nVolatility (Dec 31, 2025: 53.5%)\n \nEstimated fair value increases as expected volatility increases.\n\nDerivative liabilities (D. Boral)\n \nMonte Carlo Simulation\n \nVolatility (Dec 31, 2025: 53.5%)\n \nEstimated fair value increases as expected volatility increases.\n\nWarrant\n \nBinomial option pricing model\n \nVolatility (Dec 31, 2025: 53.5%)\n \nEstimated fair value decreases as expected volatility decreases.\n\n \n\n \n\n(*)Project Investments are related to investments in movie making\nprojects. Due to the inability to reasonably assume the future cash flow, management believes that Cost Model best represents the fair\nvalue of these financial instruments.\n\n \n\n**C.**\n**Financial risk management**\n\n \n\nThe 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.\n\n \n\n \ni.\nCredit risk\n\n \n\nCredit 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.\n\n \n\nF-82\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\nThe maximum exposure to credit risk of the Company as of December 31, 2025 and 2024 are as follows:\n\n \n\nSchedule of financial risk management \n \n \n    \n   \n\n  \n \n \nDecember 31,\n2025\n  \nDecember 31,\n2024 \n\n  \n \n \n(In thousands of Korean won)\n \n\nCash and cash equivalents \n₩\n \n 8,364,432  \n 4,150,572 \n\nShort-term financial instruments \n \n \n 21,560  \n 410,000 \n\nAccounts receivable, net \n \n \n 4,917,020  \n 9,340,923 \n\nShort-term loans, net \n \n \n 3,427,400  \n 787,400 \n\nOther current financial assets \n \n \n 735,110  \n 40,000 \n\nLong-term financial instruments \n \n \n 310,908  \n - \n\nLong-term investment securities \n \n \n 3,983,858  \n - \n\nLong-term loans, net \n \n \n 191,023  \n - \n\nOther non-current financial assets \n \n \n 2,180,055  \n 1,803,220 \n\nTotal \n₩\n \n 24,131,366  \n 16,532,115 \n\n \n\nCash and cash equivalents and short-term financial instruments are deposited in financial institutions with strong credit rating. Accounts receivable of certain subsidiaries are mainly due from payment processing companies and platform service providers, which the Company believes have low levels of credit risk. In addition, 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.\n\n \n\nThe 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 as of December 31, 2025 and 2024 are as follows:\n\n \n\n①Accounts receivables\n\n \n\nSchedule\nof financial Instruments accounts receivables\n \n \n \n \n \n \n \n \n \n \n \n \n\n**As of December 31, 2025**\n \n**Expectedloss rate**\n \n \n \n**Carryingamount**\n \n \n**Lossallowance**\n \n\n \n \n \n \n \n \n**(In thousands of Korean won)**\n \n\nNot due or overdue less than 90 days\n \n0.03%\n \n \n \n \n4,066,384\n \n \n \n1,195\n \n\nMore than 90 days ~ Less than 180 days\n \n1.19%\n \n \n \n \n313,700\n \n \n \n3,745\n \n\nMore than 180 days ~ Less than 270 days\n \n0.00%\n \n \n \n \n-\n \n \n \n-\n \n\nMore than 270 days ~ Less than 1 year\n \n0.00%\n \n \n \n \n5,742\n \n \n \n-\n \n\nMore than 1 year\n \n100.00%\n \n \n \n \n726,218\n \n \n \n726,218\n \n\nTotal\n \n \n \n₩\n \n \n5,112,044\n \n \n \n731,158\n \n\n \n\n**As of December 31, 2024**\n \n**Expectedloss rate**\n \n \n \n**Carryingamount**\n \n \n**Lossallowance**\n \n\n \n \n \n \n \n \n**(In thousands of Korean won)**\n \n\nNot due or overdue less than 90 days\n \n0.35%\n \n₩\n \n \n9,186,195\n \n \n \n32,453\n \n\nMore than 90 days ~ Less than 180 days\n \n3.95%\n \n \n \n \n12,952\n \n \n \n512\n \n\nMore than 180 days ~ Less than 270 days\n \n13.01%\n \n \n \n \n36,013\n \n \n \n4,686\n \n\nMore than 270 days ~ Less than 1 year\n \n0.00%\n \n \n \n \n7,374\n \n \n \n-\n \n\nMore than 1 year\n \n99.21%\n \n \n \n \n703,223\n \n \n \n697,666\n \n\nTotal\n \n \n \n₩\n \n \n9,945,757\n \n \n \n735,317\n \n\n \n\nF-83\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n②Other receivables\n\n \n\n**As of December 31, 2025**\n \n**Expectedloss rate**\n \n \n \n**Carryingamount**\n \n \n**Lossallowance**\n \n\n \n \n \n \n \n \n**(In thousands of Korean won)**\n \n\nNot due or overdue less than 90 days\n \n0.00%\n \n \n \n \n529,639\n \n \n \n-\n \n\nMore than 90 days ~ Less than 180 days\n \n0.00%\n \n \n \n \n-\n \n \n \n-\n \n\nMore than 180 days ~ Less than 270 days\n \n0.00%\n \n \n \n \n-\n \n \n \n-\n \n\nMore than 270 days ~ Less than 1 year\n \n0.00%\n \n \n \n \n6,495\n \n \n \n-\n \n\nMore than 1 year\n \n100.00%\n \n \n \n \n539,151\n \n \n \n539,151\n \n\nTotal\n \n \n \n₩\n \n \n1,075,285\n \n \n \n539,151\n \n\n \n\n**As of December 31, 2024**\n \n**Expectedloss rate**\n \n \n \n**Carryingamount**\n \n \n**Lossallowance**\n \n\n \n \n \n \n \n \n**(In thousands of Korean won)**\n \n\nNot due or overdue less than 90 days\n \n0.00%\n \n₩\n \n \n124,729\n \n \n \n-\n \n\nMore than 90 days ~ Less than 180 days\n \n0.00%\n \n \n \n \n-\n \n \n \n-\n \n\nMore than 180 days ~ Less than 270 days\n \n0.00%\n \n \n \n \n-\n \n \n \n-\n \n\nMore than 270 days ~ Less than 1 year\n \n0.00%\n \n \n \n \n-\n \n \n \n-\n \n\nMore than 1 year\n \n98.95%\n \n \n \n \n549,856\n \n \n \n544,104\n \n\nTotal\n \n \n \n₩\n \n \n674,585\n \n \n \n544,104\n \n\n \n\n \nii.\nLiquidity risk\n\n \n\nLiquidity 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.\n\n \n\nFinancial liabilities of the Company by maturity according to the remaining period from December 31, 2025 to the contractual maturity date are as follows:\n\n \n\nSchedule\nof financial Instruments liquidity risk\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**December 31, 2025**\n \n\n \n \n \n \n**CarryingAmount**\n \n \n**Less than3 months**\n \n \n**3 months~ 1 year**\n \n \n**1~2 years**\n \n \n**2~5 years**\n \n \n**More\nthan5 years**\n \n \n**Total**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\n**Non-derivative financial liabilities**\n \n\nTrade payables\n \n₩\n \n \n7,494,343\n \n \n \n4,661,133\n \n \n \n2,833,210\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n7,494,343\n \n\nOther payables\n \n \n \n \n42,784,819\n \n \n \n42,338,213\n \n \n \n446,606\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n42,784,819\n \n\nAccrued expense\n \n \n \n \n7,124,447\n \n \n \n5,821,809\n \n \n \n1,302,638\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n7,124,447\n \n\nSecured borrowings\n \n \n \n \n6,952,687\n \n \n \n1,536,903\n \n \n \n5,551,863\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n7,088,766\n \n\nNon-secured borrowings\n \n \n \n \n9,030,775\n \n \n \n2,807\n \n \n \n6,317,790\n \n \n \n220,000\n \n \n \n3,280,000\n \n \n \n-\n \n \n \n9,820,597\n \n\nConvertible Notes\n \n \n \n \n28,634,020\n \n \n \n29,035,913\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n29,035,913\n \n\nLease liabilities\n \n \n \n \n7,971,269\n \n \n \n573,735\n \n \n \n1,619,185\n \n \n \n1,786,344\n \n \n \n4,002,611\n \n \n \n951,293\n \n \n \n8,933,168\n \n\nOther financial liabilities\n \n \n \n \n470,000\n \n \n \n-\n \n \n \n250,000\n \n \n \n220,000\n \n \n \n-\n \n \n \n-\n \n \n \n470,000\n \n\nTotal\n \n \n \n \n110,462,360\n \n \n \n83,970,513\n \n \n \n18,321,292\n \n \n \n2,226,344\n \n \n \n7,282,611\n \n \n \n951,293\n \n \n \n112,752,053\n \n\n \n\nF-84\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\nFinancial liabilities of the Company by maturity according to the remaining period from December 31, 2024 to the contractual maturity date are as follows:\n\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**December 31, 2024**\n \n\n \n \n \n \n**CarryingAmount**\n \n \n**Less than3 months**\n \n \n**3 months~ 1 year**\n \n \n**1~2 years**\n \n \n**2~5 years**\n \n \n**More\nthan5 years**\n \n \n**Total**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\n**Non-derivative financial liabilities**\n\nTrade payables\n \n₩\n \n \n10,073,408\n \n \n \n10,073,408\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n10,073,408\n \n\nOther payable\n \n \n \n \n1,239,546\n \n \n \n1,239,544\n \n \n \n-\n \n \n \n2\n \n \n \n-\n \n \n \n-\n \n \n \n1,239,546\n \n\nAccrued expense\n \n \n \n \n1,967,458\n \n \n \n1,967,458\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n1,967,458\n \n\nSecured borrowings\n \n \n \n \n2,918,720\n \n \n \n1,040,954\n \n \n \n1,960,815\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n3,001,769\n \n\nNon-secured borrowings\n \n \n \n \n2,954,236\n \n \n \n34,658\n \n \n \n3,169,901\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n3,204,559\n \n\nLease liabilities\n \n \n \n \n11,089,239\n \n \n \n635,413\n \n \n \n1,824,646\n \n \n \n2,361,688\n \n \n \n5,546,102\n \n \n \n2,875,871\n \n \n \n13,243,720\n \n\nOther\nnon-current financial liabilities\n\n \n \n \n \n280,000\n \n \n \n50,000\n \n \n \n80,000\n \n \n \n130,000\n \n \n \n20,000\n \n \n \n-\n \n \n \n280,000\n \n\nTotal\n \n₩\n \n \n30,522,607\n \n \n \n15,041,435\n \n \n \n7,035,362\n \n \n \n2,491,690\n \n \n \n5,566,102\n \n \n \n2,875,871\n \n \n \n33,010,460\n \n\n \n\n \niii.\nMarket risk\n\n \n\n \n(a)\nForeign exchange risk\n\n \n\nThe Company 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.\n\n \n\nFinancial assets and liabilities are exposed to foreign currency risk as of December 31, 2025 and 2024 are as follows:\n\n \n\nSchedule\nof financial Instruments financial assets and liabilities\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n**December 31, 2025**\n \n\n \n \n**Assets\nin foreign\ncurrency**\n \n \n**Liabilities\nin foreign\ncurrency**\n \n \n**Assets\nin Korean\nWon**\n \n \n**Liabilities\nin Korean\nWon**\n \n\n \n \n**(Individual amounts in each foreign currency)**\n \n \n**(In thousands of Korean won)**\n \n\nUSD\n \n \n233,358\n \n \n \n-\n \n \n \n334,846\n \n \n \n-\n \n\nJPY\n \n \n61,293,425\n \n \n \n2,922,387\n \n \n \n562,447\n \n \n \n26,817\n \n\nCNY\n \n \n235,483\n \n \n \n-\n \n \n \n48,218\n \n \n \n-\n \n\nBRL\n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nSGD\n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nMYR\n \n \n1,687\n \n \n \n-\n \n \n \n598\n \n \n \n-\n \n\nPHP\n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nTHB\n \n \n38,634\n \n \n \n-\n \n \n \n1,762\n \n \n \n-\n \n\nTotal\n \n \n \n \n \n \n \n \n \n \n947,871\n \n \n \n26,817\n \n\n \n\nF-85\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n \n \n**December 31, 2024**\n \n\n \n \n**Assets\nin foreign\ncurrency**\n \n \n**Liabilities\nin foreign\ncurrency**\n \n \n**Assets\nin Korean\nWon**\n \n \n**Liabilities\nin Korean\nWon**\n \n\n \n \n**(Individual amounts in each foreign currency)**\n \n \n**(In thousands of Korean won)**\n \n\nUSD\n \n \n55,174\n \n \n \n222\n \n \n \n81,105\n \n \n \n327\n \n\nJPY\n \n \n275,425,381\n \n \n \n7,665,387\n \n \n \n2,579,304\n \n \n \n71,785\n \n\nCNY\n \n \n157,619\n \n \n \n-\n \n \n \n31,724\n \n \n \n-\n \n\nBRL\n \n \n340\n \n \n \n-\n \n \n \n81\n \n \n \n-\n \n\nSGD\n \n \n1,051\n \n \n \n-\n \n \n \n1,136\n \n \n \n-\n \n\nMYR\n \n \n10,721\n \n \n \n-\n \n \n \n3,530\n \n \n \n-\n \n\nPHP\n \n \n910\n \n \n \n-\n \n \n \n23\n \n \n \n-\n \n\nTHB\n \n \n90,877\n \n \n \n-\n \n \n \n3,908\n \n \n \n-\n \n\nTotal\n \n \n \n \n \n \n \n \n \n \n2,700,811\n \n \n \n72,112\n \n\n \n\nThe 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, 2025 and 2024 are as follows:\n\n \n\nSchedule\nof financial Instruments foreign currency exchange rates\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n**2025**\n \n \n**2024**\n \n\n \n \n**Increased by\n10%**\n \n \n**Decreased by\n10%**\n \n \n**Decreased by\n10%**\n \n \n**Decreased by\n10%**\n \n\n \n \n**(In thousands of Korean won)**\n \n\nUSD\n \n \n33,485\n \n \n \n(33,485\n)\n \n \n8,078\n \n \n \n(8,078\n)\n\nJPY\n \n \n53,563\n \n \n \n(53,563\n)\n \n \n250,752\n \n \n \n(250,752\n)\n\nCNY\n \n \n4,822\n \n \n \n(4,822\n)\n \n \n3,172\n \n \n \n(3,172\n)\n\nBRL\n \n \n-\n \n \n \n-\n \n \n \n8\n \n \n \n(8\n)\n\nSGD\n \n \n-\n \n \n \n-\n \n \n \n114\n \n \n \n(114\n)\n\nMYR\n \n \n60\n \n \n \n(60\n)\n \n \n353\n \n \n \n(353\n)\n\nPHP\n \n \n-\n \n \n \n-\n \n \n \n2\n \n \n \n(2\n)\n\nTHB\n \n \n176\n \n \n \n(176\n)\n \n \n391\n \n \n \n(391\n)\n\nTotal\n \n \n92,106\n \n \n \n(92,106\n)\n \n \n262,870\n \n \n \n(262,870\n)\n\n \n\nThe 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.\n\n \n\n \n(b)\nInterest rate risk\n\n \n\nThe sensitivity analysis is based on borrowing under variable interest rate conditions as of December 31, 2025 and 2024.\n\n \n\nSchedule of variable interest rate\n \n \n \n \n \n \n \n \n\n \n \n \n \n**December 31,\n2025**\n \n \n**December 31,\n2024**\n \n\n \n \n \n \n**Increased by\n100 bp**\n \n \n**Decreased by\n100 bp**\n \n \n**Increased by\n100 bp**\n \n \n**Decreased by\n100 bp**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nInterest\n \n₩\n \n \n42,750\n \n \n \n(42,750\n)\n \n \n5,070\n \n \n \n(5,070\n)\n\n \n\nF-86\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**32. Convertible notes**\n\n \n\nDetails of convertible notes issued and outstanding as of December 31, 2025 and 2024 are as follows:\n\n \n\nSchedule\nof convertible notes issued and outstanding\n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**December 31, 2025**\n \n \n**December 31,2024**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\n**Current**\n \n \n \n \n \n \n \n \n \n \n\nOriginal amount\n \n₩\n \n \n29,035,913\n \n \n \n-\n \n\nDiscount on Notes\n \n \n \n \n(401,893\n)\n \n \n-\n \n\nConvertible Notes (Current)\n \n \n \n \n28,634,020\n \n \n \n**-**\n \n\n \n\nChanges in Convertible Notes for the years ended December 31, 2025, 2024 and 2023 are as follows:\n\n \n\nSchedule\nof changes in convertible notes\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**December 31,2025**\n \n \n**December 31,2024**\n \n \n**December 31,2023**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\n**Balance at 1 January**\n \n₩\n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nChanges in scope of consolidation\n \n \n \n \n3,920,244\n \n \n \n-\n \n \n \n-\n \n\nIssuance\n \n \n \n \n37,710,824\n \n \n \n-\n \n \n \n-\n \n\nExercised\n \n \n \n \n(8,045,803\n)\n \n \n-\n \n \n \n-\n \n\nAmortization\n \n \n \n \n259,508\n \n \n \n-\n \n \n \n-\n \n\nValuation\n \n \n \n \n(5,559,062\n)\n \n \n-\n \n \n \n-\n \n\nForeign exchange differences\n \n \n \n \n348,309\n \n \n \n-\n \n \n \n-\n \n\n**Balance at 31 December**\n \n₩\n \n \n28,634,020\n \n \n \n-\n \n \n \n-\n \n\n \n\nDetails of the convertible notes issued by the Company and outstanding as of December 31, 2025 are as follows:\n\n \n\nSchedule of convertible notes issued\n \n \n \n \n \n \n\n**Series**\n \n**1st**\n \n**2nd(*)**\n \n**3rd(*)**\n\nType\n \nConvertible Notes\n　\nConvertible Notes\n \nConvertible Notes\n\nIssuance\namount ($)\n \n2,250,000\n \n1,500,000\n \n1,000,000\n\nCoupon rate (%)\n \n3%\n　\n3%\n \n3%\n\nIssuance date\n \n2024-06-04/2024-10-03/2024-10-18\n \n2024-06-05/2024-12-30/2025-05-13\n \n2025-05-14\n\nMaturity date\n \n3 years from issue date\n　\n3 years from issue date\n \n2028-05-13\n\nPrincipal redemption\n \n\n1.\n\nRedemption at maturity:\n\n \n\nRedeemed on the maturity date, at their outstanding principal amount, which has not been early redeemed\n\n \n\n1.\n\nRedemption at maturity:\n\n \n\nRedeemed on the maturity date, at their outstanding principal amount, which has not been early redeemed\n\n \n\n1.\n\nRedemption at maturity:\n\n \n\nRedeemed on the maturity date, at their outstanding principal amount, which has not been early redeemed\n\n \n\nF-87\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**Series**\n \n**1st**\n \n**2nd(*)**\n \n**3rd(*)**\n\nConversion price\n \n\n●\n\nConversion before the business combination:\n\n \n\nBefore 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).\n\n \n\nUpon 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).\n\n \n\n●\n\nConversion after the business combination\n\n \n\nUpon 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).\n\n \n\nThe Post-Merger Conversion Prices shall be adjusted downwardly to the greater of the following:\n\n \n\n●\n\n60% 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\n\n \n\n●\n\nFloor price of $4 per share.\n\n　\n\n●\n\nConversion before the business combination:\n\n \n\nBefore 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).\n\n \n\nUpon 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).\n\n \n\n●\n\nConversion after the business combination\n\n \n\nUpon 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).\n\n \n\nThe Post-Merger Conversion Prices shall be adjusted downwardly to the greater of the following:\n\n \n\n●\n\n60% 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\n\n \n\n●\n\nFloor price of $4 per share.\n\n \n\n●\n\nConversion after the business combination:\n\n \n\nUpon the consummation of the Business Combination, the PIPE Notes shall be a part of the Combined Entity and the Investor shall be entitled to convert the PIPE Notes into ordinary shares in the Combined Entity at the conversion price of $10 per share (the Post-Merger Conversion Price).\n\n \n\nThe Post-Merger Conversion Prices shall be adjusted downwardly to the greater of the following:\n\n \n\n●\n\n50% 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\n\n \n\n●\n\nFloor price of $5 per share.\n\n \n\n \n\n \n\n(*)In 2025, the entire principal amount of the convertible notes\nwas fully converted into common stock; however, the related common shares had not been issued as of December 31, 2025, as related\nregistration statements were not effective.\n\n \n\nF-88\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\nDetails of the convertible notes issued by the Company and outstanding as of December 31, 2025 are as follows: (Continued)\n\n \n\n**Series**\n \n**4th(*)**\n \n**5th(*)**\n \n**6th**\n\nType\n \nConvertible Notes\n　\nConvertible Notes\n \nConvertible Notes\n\nIssuance\namount ($)\n \n1,000,000\n \n1,400,000\n \n1,000,000\n\nCoupon rate (%)\n \n3%\n　\n3%\n \n3%\n\nIssuance date\n \n2025-05-14\n \n2025-05-14\n \n2025-05-14\n\nMaturity date\n \n2028-05-13\n　\n2028-05-13\n \n2028-05-13\n\nPrincipal redemption\n \n\n1.\n\nRedemption at maturity:\n\n \n\nRedeemed on the maturity date, at their outstanding principal amount, which has not been early redeemed\n\n \n\n1.\n\nRedemption at maturity:\n\n \n\nRedeemed on the maturity date, at their outstanding principal amount, which has not been early redeemed\n\n \n\n1.\n\nRedemption at maturity:\n\n \n\nRedeemed on the maturity date, at their outstanding principal amount, which has not been early redeemed\n\nConversion price\n \n\n●\n\nConversion before the business combination:\n\n \n\nBefore the consummation of the Business Combination, the holders shall be entitled to convert the PIPE Notes into ordinary shares in the\nCompany at the conversion price of $10 per share (the Post-Merger Conversion Price).\n\n \n\n●\n\nConversion after the business\ncombination:\n\n \n\n　\n\n●\n\nConversion before the business combination:\n\n \n\nBefore the consummation of the Business Combination, the holders shall be entitled to convert the PIPE Notes into ordinary shares in the\nCompany at the conversion price of $10 per share (the Post-Merger Conversion Price).\n\n \n\n●\n\nConversion after the business\ncombination:\n\n \n\n \n\n●\n\nConversion before the business combination:\n\n \n\nBefore the consummation of\nthe Business Combination, the holders shall be entitled to convert the PIPE Notes into ordinary shares in the Company at the conversion\nprice of $10 per share (the Post-Merger Conversion Price).\n\n \n\n●\n\nConversion after the business\ncombination:\n\n \n\n \n \n\nUpon the consummation of the Business Combination, the PIPE Notes shall be a part of the Combined Entity and the Investor shall be entitled to convert the PIPE Notes into ordinary shares in the Combined Entity at the conversion price of $10 per share (the Post-Merger Conversion Price).\n\n \n\nThe Post-Merger Conversion Prices shall be adjusted downwardly to the greater of the following:\n\n \n\n●\n\n50% discount to the 5-day average of the volume-weighted average prices of ordinary shares over 5 consecutive trading days following the\nconversion notice date; and\n\n \n\n●\n\nFloor price of $5 per share.\n\n　\n\nUpon the consummation of the Business Combination, the PIPE Notes shall be a part of the Combined Entity and the Investor shall be entitled to convert the PIPE Notes into ordinary shares in the Combined Entity at the conversion price of $10 per share (the Post-Merger Conversion Price).\n\n \n\nThe Post-Merger Conversion Prices shall be adjusted downwardly to the greater of the following:\n\n \n\n●\n\n50% discount to the 5-day average of the volume-weighted average prices of ordinary shares over 5 consecutive trading days following the\nconversion notice date; and\n\n \n\n●\n\nFloor price of $5 per share.\n\n \n\nUpon\nthe consummation of the Business Combination, the PIPE Notes shall be a part of the Combined Entity and the Investor shall be\nentitled to convert the PIPE Notes into ordinary shares in the Combined Entity at the conversion price of $10 per share (the Post-\nMerger Conversion Price).\n\n \n\nThe Post-Merger Conversion Prices shall be adjusted downwardly to the greater of the following:\n\n \n\n●\n\n50% discount to the 5-day average of the volume-weighted average prices of ordinary shares over 5 consecutive trading days following the\nconversion notice date; and\n\n \n\n●\n\nFloor price of $5 per share.\n\n \n\n \n\n(*)In 2025, the entire principal amount of the convertible notes\nwas fully converted into common stock; however, the related common shares had not been issued as of December 31, 2025.\n\n \n\nF-89\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**Series**\n \n**7th**\n \n**8th**\n\nType\n \nConvertible Notes\n　\nConvertible Notes\n\nIssuance\namount ($)\n \n15,789,474\n \n1,040,480\n\nCoupon rate (%)\n \n0%\n　\n18%\n\nIssuance date\n \n2025-07-11\n \n2025-11-13\n\nMaturity date\n \n2027-07-12\n　\n2026-02-13\n\nPrincipal redemption\n \n\n1.\n\nRedemption at maturity:\n\n \n\nRedeemed on the maturity date, at their outstanding principal amount, which has not been early redeemed\n\n \n\n1.\n\nRedemption at maturity:\n\n \n\nRedeemed on the maturity date at their outstanding principal amount together with accrued interest at 18% per annum, provided that no\nearly redemption has occurred.\n\nConversion price\n \n\n●\n\nThe conversion price in effect on any Conversion Date shall be equal to $4.40, subject to adjustment as provided herein (the “Conversion\nPrice”).\n\n \n\n●\n\nGeneral. Subject to Sections 4(d) and 5(i), at any time after the Original Issue Date, the Holder may, at the Holder’s option, convert\n(each, an “Alternate Conversion”, and the date of such Alternate Conversion, each, an “Alternate Conversion Date”)\nall, or any part of, the Conversion Amount (such portion of the Conversion Amount subject to such Alternate Conversion, each, an “Alternate\nConversion Amount”) into Ordinary Shares at a conversion price equal to 92% of the lowest VWAP in the ten (10) Trading Days prior\nto the applicable Alternate Conversion Date (the “Alternate Conversion Price”).\n\n　\n\n●\n\nThe Payee shall have the right, in its sole and absolute discretion, at any time, to convert all or any part of the outstanding amount\nunder this Note into fully paid and non-assessable shares of K Wave’s ordinary shares, par value $0.001 per share, or any sharesof\ncapital stock or other securities of the Maker into which such ordinary shares shall hereafter be changed or reclassified (the “Conversion\nShares”) at the conversion price (the “Conversion Price”) as provided herein\n\n \n\n●\n\nThe Conversion Price shall equal the 85% of the volume weighted average price of the lowest closing price of K Wave’s ordinary shares,\npar value $0.001 per share during the preceding five (5) Trading Day period ending on the latest complete Trading Dayprior to the conversion\ndate. “Trading Day” shall mean any day on which the Conversion Shares is tradable for any period on Nasdaq,the OTC Pink or\non other principal securities exchange, market place, or other securities market on which the Conversion Shares is being traded.\n\n \n\nF-90\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**33. Non-controlling interests**\n\n \n\n**A.**\n**Summary of financial statements**\n\n \n\nSummary of financial statements of the Company’s subsidiaries that has material non-controlling interests, before any intercompany transaction eliminations for the year ended December 31, 2025 is as follows:\n\n \n\nSchedule of financial statements non-controlling\ninterests\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n**Play F&B\nCo., Ltd.**\n \n \n**LAMP**\n \n \n**Bidangil**\n \n \n**Apeitda**\n \n \n**Anseilen**\n \n \n**Solaire**\n \n\n \n \n \n \n**(In thousands of Korean Won)**\n \n\nNCI percentage\n \n \n \n \n32.90\n%\n \n \n48.72\n%\n \n \n46.32\n%\n \n \n49.00\n%\n \n \n49.00\n%\n \n \n5.00\n%\n\nCurrent assets\n \n₩\n \n \n2,045,475\n \n \n \n1,138,776\n \n \n \n1,911,132\n \n \n \n611,118\n \n \n \n2,042,121\n \n \n \n2,431,728\n \n\nNon-current assets\n \n \n \n \n7,963,314\n \n \n \n2,101,926\n \n \n \n573,171\n \n \n \n720,489\n \n \n \n541,668\n \n \n \n1,464,256\n \n\nCurrent liabilities\n \n \n \n \n12,448,502\n \n \n \n3,071,754\n \n \n \n243,386\n \n \n \n442,179\n \n \n \n1,722,416\n \n \n \n5,613,579\n \n\nNon-current liabilities\n \n \n \n \n5,549,987\n \n \n \n913,434\n \n \n \n45,445\n \n \n \n368,632\n \n \n \n2,210,221\n \n \n \n109,154\n \n\nNet assets\n \n \n \n \n(7,989,700\n)\n \n \n(744,486\n)\n \n \n2,195,472\n \n \n \n520,796\n \n \n \n(1,348,848\n)\n \n \n(1,826,749\n)\n\nRevenue\n \n \n \n \n12,323,986\n \n \n \n5,971,517\n \n \n \n586,554\n \n \n \n26,033\n \n \n \n13,916,681\n \n \n \n745,138\n \n\nProfit (loss)\n \n \n \n \n(2,243,682\n)\n \n \n(1,079,108\n)\n \n \n(700,970\n)\n \n \n(317,513\n)\n \n \n(776,392\n)\n \n \n(3,012,058\n)\n\nOCI\n \n \n \n \n69,964\n \n \n \n8,815\n \n \n \n-\n \n \n \n11,923\n \n \n \n10,781\n \n \n \n209,730\n \n\nTotal comprehensive income\n \n \n \n \n(2,173,718\n)\n \n \n(1,070,293\n)\n \n \n(700,970\n)\n \n \n(305,590\n)\n \n \n(765,611\n)\n \n \n(2,802,328\n)\n\nCash flows from operation activities\n \n \n \n \n234,619\n \n \n \n(442,877\n)\n \n \n(890,230\n)\n \n \n11,204\n \n \n \n(26,482\n)\n \n \n(748,096\n)\n\nCash flows from investment activities\n \n \n \n \n(23,611\n)\n \n \n492,090\n \n \n \n112,402\n \n \n \n16,986\n \n \n \n(72,195\n)\n \n \n(2,306,301\n)\n\nCash flows from financing activities\n \n \n \n \n(126,230\n)\n \n \n(287,064\n)\n \n \n(110,236\n)\n \n \n220,000\n \n \n \n-\n \n \n \n3,103,355\n \n\nEffect of exchange rate changes on cash and cash equivalents\n \n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n(87\n)\n \n \n-\n \n \n \n-\n \n\nNet increase(decrease) in cash and cash equivalents\n \n₩\n \n \n84,778\n \n \n \n(237,851\n)\n \n \n(888,064\n)\n \n \n248,103\n \n \n \n(98,677\n)\n \n \n48,958\n \n\n \n\nSummary of financial statements of the Company’s subsidiary that has material non-controlling interest, before any intercompany transactions eliminations for the year ended December 31, 2024 is as follows:\n\n \n\n \n \n \n \n**Play F&B\nCo., Ltd.**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nNCI percentage\n \n \n \n \n32.90\n%\n\nCurrent assets\n \n₩\n \n \n1,623,260\n \n\nNon-current assets\n \n \n \n \n15,973,466\n \n\nCurrent liabilities\n \n \n \n \n10,443,166\n \n\nNon-current liabilities\n \n \n \n \n8,946,049\n \n\nNet assets\n \n \n \n \n(1,792,489\n)\n\nRevenue\n \n \n \n \n14,630,426\n \n\nProfit (loss)\n \n \n \n \n(3,101,420\n)\n\nOCI\n \n \n \n \n44,084\n \n\nTotal comprehensive income\n \n₩\n \n \n(3,057,335\n)\n\nCash flows from operation activities\n \n \n \n \n568,367\n \n\nCash flows from investment activities\n \n \n \n \n(293,624\n)\n\nCash flows from financing activities\n \n \n \n \n(375,958\n)\n\nNet increase(decrease) in cash and cash equivalents\n \n₩\n \n \n(101,215\n)\n\n \n\nF-91\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\nSummary of financial statements of the Company’s subsidiary that has material non-controlling interest, before any intercompany transactions eliminations for the year ended December 31, 2023 is as follows:\n\n \n\n \n \n \n \n**Play F&B\nCo., Ltd.**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nNCI percentage\n \n \n \n \n32.90\n%\n\nCurrent assets\n \n₩\n \n \n1,873,566\n \n\nNon-current assets\n \n \n \n \n21,776,729\n \n\nCurrent liabilities\n \n \n \n \n6,838,358\n \n\nNon-current liabilities\n \n \n \n \n15,859,171\n \n\nNet assets\n \n \n \n \n952,766\n \n\nRevenue\n \n \n \n \n17,709,332\n \n\nProfit (loss)\n \n \n \n \n(1,140,267\n)\n\nOCI\n \n \n \n \n109,558\n \n\nTotal comprehensive income\n \n₩\n \n \n(1,030,709\n)\n\nCash flows from operation activities\n \n \n \n \n(94,618\n)\n\nCash flows from investment activities\n \n \n \n \n(860,374\n)\n\nCash flows from financing activities\n \n \n \n \n480,119\n \n\nNet increase(decrease) in cash and cash equivalents\n \n₩\n \n \n(474,873\n)\n\n \n\n**B.**\n**Movement in NCI**\n\n \n\nMovement in NCI for the year ended December 31, 2025 is as follows:\n\n \n\nSchedule\nof non-controlling interests\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**Play F&B\nCo., Ltd.**\n \n \n**LAMP**\n \n \n**Bidangil**\n \n \n**Apeitda**\n \n \n**Anseilen**\n \n \n**Solaire**\n \n \n**Total**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nNet assets attributable to NCI at beginning of the year\n \n₩\n \n \n(590,774\n)\n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n(590,774\n)\n\nAcquisition Merger\n \n \n \n \n-\n \n \n \n732,249\n \n \n \n1,715,156\n \n \n \n404,930\n \n \n \n(285,787\n)\n \n \n48,779\n \n \n \n2,615,327\n \n\nProfit allocated to NCI\n \n \n \n \n(694,822\n)\n \n \n(603,536\n)\n \n \n(379,913\n)\n \n \n(155,582\n)\n \n \n(380,432\n)\n \n \n(152,677\n)\n \n \n(2,366,962\n)\n\nOCI allocated to NCI\n \n \n \n \n22,996\n \n \n \n4,295\n \n \n \n-\n \n \n \n5,843\n \n \n \n5,283\n \n \n \n10,486\n \n \n \n48,903\n \n\nNet assets attributable to NCI at the end of the year\n \n \n \n \n(1,262,600\n)\n \n \n133,008\n \n \n \n1,335,243\n \n \n \n255,191\n \n \n \n(660,936\n)\n \n \n(93,412\n)\n \n \n(293,506\n)\n\n \n\nMovement in NCI for the year ended December 31, 2024 is follows:\n\n \n\n \n \n \n \n**Play F&B\nCo., Ltd.**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nNet assets attributable to NCI at beginning of the year\n \n₩\n \n \n411,556\n \n\nProfit allocated to NCI\n \n \n \n \n(1,016,820\n)\n\nOCI allocated to NCI\n \n \n \n \n14,490\n \n\nNet assets attributable to NCI at the end of the year\n \n₩\n \n \n(590,774\n)\n\n \n\nF-92\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\nMovement in NCI for the year ended December 31, 2023 is follows:\n\n \n\n \n \n \n \n**Play F&B\nCo., Ltd.**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nNet assets attributable to NCI at beginning of the year\n \n₩\n \n \n720,382\n \n\nProfit allocated to NCI\n \n \n \n \n(344,836\n)\n\nOCI allocated to NCI\n \n \n \n \n36,011\n \n\nNet assets attributable to NCI at the end of the year\n \n₩\n \n \n411,556\n \n\n \n\n**34. Leases**\n\n \n\n**A.**\n**Leases as lessee**\n\n \n\nThe Company leases buildings and vehicles. The leases typically run for a period of 1 ~ 5 years, with an option to renew or terminate the lease after that date. The Company also leases water purifiers, copy machines, and others with contract terms of one to three years. These leases are short-term and/or leases of low-value items. The Company has elected not to recognize right-of-use assets and lease liabilities for these leases. Information about leases for which the Company is a lessee is presented below.\n\n \n\n \ni.\nRight-of-use assets\n\n \n\nRight-of-use assets related to leased properties that do not meet the definition of investment property are presented as property and equipment.\n\n \n\nDetails of right-of-use assets recognized in the consolidated statements of financial position as of December 31, 2025 and 2024 are as follows:\n\n \n\nSchedule of right-of-use assets\n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**December 31,\n2025**\n \n \n**December 31,\n2024**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\n**Right-of-use assets (Acquisition price)**\n \n \n \n \n \n \n \n \n \n \n\nBuildings\n \n₩\n \n \n8,627,880\n \n \n \n13,168,074\n \n\nVehicles\n \n \n \n \n643,839\n \n \n \n548,856\n \n\nTotal\n \n₩\n \n \n9,271,719\n \n \n \n13,716,930\n \n\n \n\n \n \n \n \n**December 31,\n2025**\n \n \n**December 31,\n2024**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\n**Right-of-use assets (Accumulated depreciation)**\n \n \n \n \n \n \n \n \n \n \n\nBuildings\n \n₩\n \n \n(3,904,631\n)\n \n \n(4,895,688\n)\n\nVehicles\n \n \n \n \n(314,908\n)\n \n \n(169,795\n)\n\nTotal\n \n₩\n \n \n(4,219,539\n)\n \n \n(5,065,483\n)\n\n \n\nF-93\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n \n \n \n \n**December 31,\n2025**\n \n \n**December 31,\n2024**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\n**Right-of-use assets (Accumulated impairment loss)**\n \n \n \n \n \n \n \n \n \n \n\nBuildings\n \n₩\n \n \n(369,280\n)\n \n \n(216,464\n)\n\nTotal\n \n₩\n \n \n(369,280\n)\n \n \n(216,464\n)\n\n \n\n \n \n \n \n**December 31,\n2025**\n \n \n**December 31,\n2024**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\n**Right-of-use assets (Net book value)**\n \n \n \n \n \n \n \n \n \n \n\nBuildings\n \n₩\n \n \n4,353,969\n \n \n \n8,055,922\n \n\nVehicles\n \n \n \n \n328,931\n \n \n \n379,061\n \n\nTotal\n \n₩\n \n \n4,682,900\n \n \n \n8,434,983\n \n\n \n\nChanges in right-of-use assets for the years ended December 31, 2025, 2024 and 2023 are as follows:\n\n \n\nSchedule of right-of-use assets\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**2025**\n \n\n \n \n \n \n**Building**\n \n \n**Vehicles**\n \n \n**Total**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nBeginning balance\n \n₩\n \n \n8,055,922\n \n \n \n379,061\n \n \n \n8,434,983\n \n\nChanges in scope of consolidation\n \n \n \n \n444,530\n \n \n \n84,364\n \n \n \n528,894\n \n\nDepreciation\n \n \n \n \n(1,487,781\n)\n \n \n(135,951\n)\n \n \n(1,623,732\n)\n\nAcquisitions\n \n \n \n \n450,810\n \n \n \n1,802\n \n \n \n452,612\n \n\nTransfer\n \n \n \n \n(1,903,601\n)\n \n \n(49,493\n)\n \n \n(1,953,094\n)\n\nImpairment loss\n \n \n \n \n(152,816\n)\n \n \n-\n \n \n \n(152,816\n)\n\nLease termination\n \n \n \n \n(1,193,957\n)\n \n \n(694\n)\n \n \n(1,194,651\n)\n\nLease modification\n \n \n \n \n140,862\n \n \n \n49,843\n \n \n \n190,705\n \n\nEnding balance\n \n₩\n \n \n4,353,969\n \n \n \n328,931\n \n \n \n4,682,900\n \n\n \n\n \n \n \n \n**2024**\n \n\n \n \n \n \n**Building**\n \n \n**Vehicles**\n \n \n**Total**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nBeginning balance\n \n₩\n \n \n9,268,936\n \n \n \n156,885\n \n \n \n9,425,821\n \n\nDepreciation\n \n \n \n \n(1,307,211\n)\n \n \n(96,847\n)\n \n \n(1,404,058\n)\n\nAcquisitions\n \n \n \n \n56,020\n \n \n \n363,914\n \n \n \n419,934\n \n\nTransfer\n \n \n \n \n2,385,812\n \n \n \n-\n \n \n \n2,385,812\n \n\nImpairment loss\n \n \n \n \n(216,464\n)\n \n \n-\n \n \n \n(216,464\n)\n\nLease termination\n \n \n \n \n(527,731\n)\n \n \n(44,891\n)\n \n \n(572,622\n)\n\nLease modification\n \n \n \n \n(1,603,440\n)\n \n \n-\n \n \n \n(1,603,440\n)\n\nEnding balance\n \n₩\n \n \n8,055,922\n \n \n \n379,061\n \n \n \n8,434,983\n \n\n \n\n \n \n \n \n**2023**\n \n\n \n \n \n \n**Building**\n \n \n**Vehicles**\n \n \n**Total**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nBeginning balance\n \n₩\n \n \n14,941,069\n \n \n \n148,502\n \n \n \n15,089,571\n \n\nDepreciation\n \n \n \n \n(1,627,945\n)\n \n \n(76,136\n)\n \n \n(1,704,081\n)\n\nAcquisitions\n \n \n \n \n489,855\n \n \n \n88,554\n \n \n \n578,409\n \n\nTransfer\n \n \n \n \n(3,483,371\n)\n \n \n(1\n)\n \n \n(3,483,372\n)\n\nLease termination\n \n \n \n \n(1,009,424\n)\n \n \n-\n \n \n \n(1,009,424\n)\n\nLease modification\n \n \n \n \n(41,248\n)\n \n \n(4,034\n)\n \n \n(45,282\n)\n\nEnding balance\n \n₩\n \n \n9,268,936\n \n \n \n156,885\n \n \n \n9,425,821\n \n\n \n\n \nii.\nAmounts recognized in profit or loss­\n\n \n\nF-94\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\nAmounts recognized in profit or loss for the years ended December 31, 2025, 2024 and 2023 are as follows:\n\n \n\nSchedule of lease-related expenses\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**2025**\n \n \n**2024**\n \n \n**2023**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nInterest expense from lease liabilities (included in finance cost)\n \n₩\n \n \n543,208\n \n \n \n851,543\n \n \n \n1,047,738\n \n\nExpense from short-term leases\n \n \n \n \n2,330,519\n \n \n \n17,763\n \n \n \n6,268\n \n\nExpense from leases of low-value assets excluding short-term leases\n \n \n \n \n19,204\n \n \n \n16,083\n \n \n \n16,889\n \n\nGains on disposal of right-of-use assets\n \n \n \n \n461,212\n \n \n \n131,193\n \n \n \n1,042,833\n \n\nExpense from variable lease payments not included in the measurement of lease liabilities\n \n \n \n \n229,313\n \n \n \n398,671\n \n \n \n853,983\n \n\nImpairment loss on right-of-use asset\n \n \n \n \n152,816\n \n \n \n964,626\n \n \n \n2,246\n \n\n \n\n \niii.\nAmounts recognized in statement of cash flows\n\n \n\nAmounts recognized in statements of cash flows for the years ended December 31, 2025, 2024 and 2023 are as follows:\n\n \n\nSchedule of amounts recognized in statements of cash flows\n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**2025**\n \n \n**2024**\n \n \n**2023**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nTotal cash outflows of leases\n \n₩\n \n \n5,177,970\n \n \n \n2,947,475\n \n \n \n3,536,265\n \n\n \n\n \niv.\nExtension options\n\n \n\nSome 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 are a significant event or significant changes in circumstances within its control.\n\n \n\n \nv.\nVariable lease payments\n\n \n\nThe Company has entered into a contract to pay revenue-based rent payment for several lease agreements. If the revenue of the store that entered into the contract increase, the rent to be paid may proportionally increase. According to the contract, it is expected that 9 to 18% of sales will be paid.\n\n \n\n**B.**\n**Leases as lessor**\n\n \n\n \ni.\nOperating lease\n\n \n\nThe Company leases out its investment property consisting of its leased property.\n\n \n\nThe Company has classified these leases as operating leases because they do not transfer substantially all the risk and rewards incidental to the ownership of the assets. Note 10 sets out information about the operating leases of investment property.\n\n \n\nF-95\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\nRental income recognized by the Company during the year ended December 31, 2025 was Korean Won 472,235 thousand (2024: Korean Won 808,123 thousand).\n\n \n\nMaturity analysis of lease payments, showing the undiscounted lease payments to be received after December 31, 2025 and 2024 as follows:\n\n \n\nSchedule\nof maturity analysis of lease payments\n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**2025**\n \n \n**2024**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nLess than 1 year\n \n₩\n \n \n737,004\n \n \n \n59,315\n \n\n1 ~ 2 years\n \n \n \n \n441,324\n \n \n \n-\n \n\nTotal\n \n₩\n \n \n1,178,328\n \n \n \n59,315\n \n\n \n\n**35. Commitments**\n\n \n\n**A.**\n**Key commitments**\n\n \n\nKey commitments the Company has entered into with financial institutions and others as of December 31, 2025 are as follows:\n\n \n\nSchedule\nof financial institutions and others\n \n \n \n \n \n \n \n \n \n \n \n \n\n**Financial institutions**\n \n**Categories**\n \n \n \n**Credit limit**\n \n \n**Borrowings amount**\n \n\n \n \n \n \n \n \n**(In thousands of Korean won)**\n \n\nIndustrial Bank of Korea\n \nSmall and medium-sized\nenterprise financing (*1)\n \n₩\n \n \n2,000,000\n \n \n \n-\n \n\nIndustrial Bank of Korea\n \nSmall and medium-sized enterprise\nfinancing (*2)\n \n \n \n \n1,000,000\n \n \n \n1,000,000\n \n\nIndustrial Bank of Korea\n \nSmall and medium-sized enterprise\nfinancing (*3)\n \n \n \n \n1,000,000\n \n \n \n1,000,000\n \n\nIndustrial Bank of Korea\n \nSmall and medium-sized enterprise\nfinancing (*4)\n \n \n \n \n400,000\n \n \n \n400,000\n \n\nWoori Bank\n \nCorporate operating borrowings (*5)\n \n \n \n \n490,000\n \n \n \n490,000\n \n\nWoori Bank\n \nCorporate operating borrowings (*6)\n \n \n \n \n800,000\n \n \n \n785,000\n \n\nKB Kookmin Bank\n \nOverdraft loan (*7)\n \n \n \n \n300,000\n \n \n \n277,687\n \n\nMG Community Credit Cooperatives\n \nCorporate\noperating borrowings (*8)\n \n \n \n \n3,000,000\n \n \n \n3,000,000\n \n\nTotal\n \n₩\n \n \n8,990,000\n \n \n \n6,952,687\n \n\n \n\n \n\n(*1)The Company is provided a joint guarantee of Korean Won 2,400,000\nthousand by Cho HyeongSeok, CEO of Play Company.\n\n(*2)The Company is provided a joint guarantee of Korean Won 1,200,000\nthousand by Jung BoRam, CEO of Play F&B Co., Ltd.\n\n(*3)The Company is provided a guarantee of Korean Won 900,000\nthousand by Korea Credit Guarantee Fund.\n\n(*4)The Company is provided a building as collateral of Korean\nWon 480,000 thousand for the borrowings by Jung BoRam, CEO of Play F&B Co., Ltd.\n\n(*5)The Company has received a payment guarantee of Korean Won\n441,000 thousand from Korea Credit Guarantee Fund as of December 31, 2025.\n\n(*6)The Company is provided a joint guarantee of Korean Won 960,000\nthousand by Park, UnKyoung, CEO of the LAMP as of December 31, 2025.\n\n(*7)The Company is provided a joint guarantee of Korean Won 330,000\nthousand by Choi, PyeungHo, CEO of Solaire as of December 31, 2025.\n\n(*8)The Company is provided a joint and several guarantee of\nKorean Won 3,600,000 thousand by Choi, PyeungHo, CEO of Solaire as of December 31, 2025. Also land and buildings owned by unrelated\nthird parties, with a pledged amount of Korean Won 3,000,000 thousand are provided as collateral for the secured borrowings.\n\n \n\nF-96\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\nCho HyeongSeok, CEO of Play Company provides a joint guarantee for the vehicle lease to Mirae Asset Securities as of December 31, 2025.\n\n \n\nThe Company has a credit limit of Korean Won 3,730,740 thousand under an unsecured borrowing agreement, maturing on May 13, 2026. As of December 31, 2025, Korean Won 318,683 thousand has been utilized under this facility. Unused portions of these credit facilities remain available to the Company.\n\n \n\nKey commitments the Company has entered into with financial institutions and others as of December 31, 2024 are as follows:\n\n \n\n**Financial institutions**\n \n**Categories**\n \n \n \n**Credit limit**\n \n \n**Borrowings amount**\n \n\n \n \n \n \n \n \n**(In thousands of Korean won)**\n \n\nIndustrial Bank of Korea\n \nSmall and medium-sized\nenterprise financing (*1)\n \n₩\n \n \n2,000,000\n \n \n \n-\n \n\nIndustrial Bank of Korea\n \nSmall and medium-sized enterprise\nfinancing (*2)\n \n \n \n \n500,000\n \n \n \n500,000\n \n\nIndustrial Bank of Korea\n \nSmall and medium-sized enterprise\nfinancing (*3)\n \n \n \n \n1,000,000\n \n \n \n1,000,000\n \n\nIndustrial Bank of Korea\n \nSmall and medium-sized enterprise\nfinancing (*4)\n \n \n \n \n1,000,000\n \n \n \n1,000,000\n \n\nIndustrial Bank of Korea\n \nSmall and medium-sized enterprise\nfinancing (*5)\n \n \n \n \n100,000\n \n \n \n18,720\n \n\nIndustrial Bank of Korea\n \nSmall and medium-sized enterprise\nfinancing (*6)\n \n \n \n \n400,000\n \n \n \n400,000\n \n\nShinhan Bank\n \nRevolving credit\n(*7)\n \n \n \n \n500,000\n \n \n \n-\n \n\nTotal\n \n₩\n \n \n5,500,000\n \n \n \n2,918,720\n \n\n \n\n \n\n(*1)The Company is provided a joint guarantee of Korean Won 2,400,000\nthousand by Cho HyeongSeok, CEO of Play Company.\n\n(*2)The Company is provided a joint guarantee of Korean Won 458,526\nthousand by Cho HyeongSeok, CEO of Play Company. Also, the Company provides intellectual property (IP) rights of Korean Won 676,000 thousand\nas collateral for the borrowing.\n\n(*3)The Company is provided a joint guarantee of Korean Won 1,200,000\nthousand by Cho HyeongSeok, CEO of Play Company.\n\n(*4)The Company is provided a guarantee of Korean Won 900,000\nthousand by Korea Credit Guarantee Fund.\n\n(*5)The Company provides Korean Won 113,874 thousand of machinery\nas collateral for the borrowing.\n\n(*6)The Company is provided a building as collateral of Korean\nWon 480,000 thousand for the borrowings by Jung BoRam, CEO of Play F&B Co., Ltd.\n\n(*7)The Company is provided a joint guarantee of Korean Won 600,000\nthousand by Cho HyeongSeok, CEO of Play Company.\n\n \n\nCho HyeongSeok, CEO of Play Company provides a joint guarantee for the vehicle lease to Mirae Asset Securities as of December 31, 2024.\n\n \n\n**B.**\n**Shareholders’ agreement in relation to the Share Purchase Agreement of Play Company Co., Ltd.**\n\n \n\nThe Company entered into a\nShare Purchase Agreement on March 31, 2023 (which became effective on January 3, 2025) with the Cho, Hyungseok, CEO of\nPlay Company Co., Ltd. The agreement includes option rights and earn-out provisions as follows:\n\n \n\n Schedule of share purchase agreement\n \n \n \n \n\n \n \n**Equity Price Protection Right**\n \n**Earn-out**\n\nExercise right holder\n \n\nCho, Hyungseok\n\n(CEO of Play Company Co., Ltd.)\n\n \n\nCho, Hyungseok\n\n(CEO of Play Company Co., Ltd.)\n\n \n \n \n \n \n\nExercise right obligor\n \nBuyer (K Enter)\n \nBuyer (K Enter)\n\n \n \n \n \n \n\nObject of exercise\n \nKWM shares received as a compensation (listed on Nasdaq)\n \nAdditional purchase price adjustment based on Play Company’s average net profit for FY2023–FY2025\n\n \n \n \n \n \n\nExercise period\n \nDuring 3 months following 6-month lock-up expiration\n \nSettlement due on Jan 31, 2027 and Jan 31, 2028\n\n \n \n \n \n \n\nExercise price / Settlement basis\n \nBuyer to compensate Seller for any shortfall if shares sold below initial value; adjusted for gains realized/distributable up to December 31, 2026.\n \nIf the achievement rate is less than 75% or greater than 125% of the target of Korean Won 16.14 billion, the settlement amount will be calculated as the achieved percentage multiplied by Korean Won 9.05 billion. If the achievement rate falls between 75% and 125%, the settlement amount will be a fixed Korean Won 9.05 billion per year.\n\n \n\nAs of December 31, 2025, liabilities related to Equity Price Protection Right, Earn-out provision (which are classified as long-term payables in the Consolidated financial statements) amount to Korean Won 25,884,322 thousand, Korean Won 1,410,054 thousand.\n\n \n\nF-97\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**C.**\n**Standby Equity Purchase Agreement (“SEPA”)**\n\n \n\nOn June 3, 2025, the Company entered into a Standby Equity Purchase Agreement with Bitcoin Strategic Reserve LLC. Under the SEPA, the Company has the right, but not the obligation, to direct Bitcoin Strategic Reserve LLC to purchase, from time to time during a commitment period of 36 months from the effective date, newly issued ordinary shares of the Company having an aggregate purchase price of up to $500 million (the “Commitment Amount”). The purchase price for the ordinary shares to be issued under the SEPA is based on 97.5% of the volume weighted average price of the Company’s ordinary shares during the applicable pricing period, subject to a minimum acceptable price as determined by the Company. Bitcoin Strategic Reserve LLC’s’s ownership of the Company’s ordinary shares is limited to 4.99% at any time, and issuances under the SEPA are further subject to the 19.99% cap under Nasdaq listing rules unless shareholder approval is obtained. In connection with the execution of the SEPA, the Company agreed to pay Bitcoin Strategic Reserve LLC a structuring fee of $25,000 and to issue a certain number of commitment shares as consideration. The SEPA also requires the Company to maintain an effective registration statement with the SEC covering the resale of the ordinary shares issued thereunder. The SEPA may be terminated earlier upon mutual consent, upon full utilization of the Commitment Amount, or by the Company with prior notice, provided certain conditions are satisfied.\n\n \n\nAs of December 31, 2025, no ordinary shares was issued under SEPA.\n\n \n\n**D.**\n**Guarantees by individuals**\n\n \n\nDetails of guarantees provided by individuals other than related parties as of December 31, 2025 are as follows:\n\n \n\nSchedule of provided by individuals other than related parties\n \n \n \n \n \n \n \n\n**Guaranteed by**\n \n**Details of guarantee**\n \n \n \n**Guarantee limit**\n \n\n \n \n \n \n \n \n**(In thousands of Korean won)**\n \n\nSeoul Guarantee Insurance Company\n \nPerformance guarantee, etc.\n \n₩\n \n \n560,650\n \n\nSeoul Guarantee Insurance Company\n \nPerformance guarantee, etc.\n \n \n \n \n1,840,200\n \n\nKorea credit guarantee fund\n \nLoan guarantee\n \n \n \n \n900,000\n \n\nKorea credit guarantee fund\n \nLoan guarantee\n \n \n \n \n441,000\n \n\nTotal\n \n₩\n \n \n3,741,850\n \n\n \n\nDetails of guarantees provided by individuals other than related parties as of December 31, 2024 are as follows:\n\n \n\n**Guaranteed by**\n \n**Details of guarantee**\n \n \n \n**Guarantee limit**\n \n\n \n \n \n \n \n \n**(In thousands of Korean won)**\n \n\nSeoul Guarantee Insurance Company\n \nPerformance guarantee, etc.\n \n₩\n \n \n814,371\n \n\nKorea credit guarantee fund\n \nLoan guarantee\n \n \n \n \n900,000\n \n\nTotal\n \n₩\n \n \n1,714,371\n \n\n \n\nF-98\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**E.**\n**List of assets provided as collateral**\n\n \n\nList of assets that the Company provided as collateral as of December 31, 2025 and December 31, 2024 are as follows:\n\n \n\nSchedule of provided as collateral\n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n**Counterparty receiving the collateral**\n \n**usage restrictions**\n \n \n \n**December 31,\n2025**\n \n \n**December 31,\n2024**\n \n\n \n \n \n \n \n \n \n \n**(In thousands of Korean won)**\n \n\nShort-term financial instruments\n \nIndustrial Bank of Korea\n \nProvided as collateral for\nemployee loans (*)\n \n₩\n \n \n400,000\n \n \n \n300,000\n \n\n \n\n \n\n(*1)The Company provided a joint guarantee of Korean Won 330,000\nthousand as of December 31, 2025 (December 31, 2024 Korean Won 231,000 thousand)\n\n \n\n**F.**\n**Investment Agreement and Share Acquisition Commitments**\n\n \n\n \ni.\nInvestment agreements\n\n \n\nThe outstanding balances of contributions according to the investment agreements as of December 31, 2025 are as follows:\n\n \n\nSchedule\nof outstanding balances of contributions according to the investment\nagreements\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n**December 31, 2025**\n \n \n \n**Total amount\nof investment\nagreement**\n \n \n**Cumulative\ninvestment**\n \n \n**Outstanding\nBalance**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nSOLAIRE SCALE-UP MOVIE INVESTMENT FUND NO.1\n \n₩\n \n \n200,000\n \n \n \n200,000\n \n \n \n-\n \n\nSOLAIRE SCALE-UP MOVIE INVESTMENT FUND NO.2\n \n \n \n \n220,000\n \n \n \n154,000\n \n \n \n66,000\n \n\nSolaire Culture Plus Fund\n \n \n \n \n300,000\n \n \n \n300,000\n \n \n \n-\n \n\nSolaire Main Movie Fund\n \n \n \n \n300,000\n \n \n \n300,000\n \n \n \n-\n \n\nTotal\n \n₩\n \n \n1,020,000\n \n \n \n954,000\n \n \n \n66,000\n \n\n \n\n \nii.\nShare acquisition of Rabbit Walk Inc\n\n \n\nIn August 2025, the Company signed on a contract to acquire 55% controlling interest in Rabbit Walk Inc. (“Rabbit Walk”) through a share exchange transaction for total consideration of Korean Won 9,075,000 thousand. Pursuant to the share purchase agreement, the Company is subject to a contingent consideration arrangement under which it may be required to issue additional common shares if Rabbit Walk achieves specified consolidated operating income thresholds for either the 2025 or 2026 fiscal year. If such performance conditions are satisfied, the Company would be obligated to issue additional shares with a value equivalent to the initial consideration. In addition, the Company has agreed to negotiate in good faith with the existing shareholders of Rabbit Walk for a potential acquisition of the remaining 45% equity interest by December 31, 2026. As of December 31, 2025, no binding agreement has been executed with respect to such remaining interest, and the terms and structure of any future transaction remain subject to further negotiation.\n\n \n\nF-99\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n \niii.\nShare acquisition agreement with HANSOL Holdings Co., Ltd. and others\n\n \n\nIn December 2025, the Company signed on a share purchase agreement with HANSOL Holdings Co., Ltd., as the lead seller, and certain other individual shareholders to acquire a total of 5,864,088 shares of HANSOL INTICUBE Co., Ltd. for an aggregate purchase price of Korean Won 15,000,337 thousand. As of December 31, 2025, the Company has paid a deposit of Korean Won 3,000,067 thousand, and the remaining balance of Korean Won 12,000,270 thousand remains payable upon completion of the transaction. The agreement includes provisions regarding the handling of the deposit upon termination. In the event of termination attributable to the Company, the deposit may be forfeited as liquidated damages. In the event of termination attributable to the sellers, the sellers are required to return an amount equal to twice the deposit. In other cases of termination, the deposit and any accrued interest are to be returned to the Company. The agreement also contains customary representations and warranties, indemnification provisions, and confidentiality obligations. In addition, certain material contracts of HANSOL INTICUBE Co., Ltd. may provide counterparties with termination or cancellation rights in connection with the consummation of the transaction. As of December 31, 2025, the Company remains subject to the rights and obligations under the agreement, including potential obligations related to indemnification and deposit arrangements. The ultimate outcome of such matters cannot be reasonably estimated at this time.\n\n \n\n**G.**\n**Other commitments and settlements of liabilities**\n\n \n\nPreviously, Global Star, which was dissolved following the merger with KWM on May 13, 2025, was originally obligated to pay USD $3,220,000 in deferred underwriting commission to EF Hutton LLC (Currently, D-Boral Capital LLC(“D Boral”),) pursuant to an agreement dated September 19, 2022. This liability was subsequently restructured on November 5, 2024, through a Satisfaction and Discharge of Indebtedness Agreement. The settlement included the following:\n\n \n\n \n1)\na partial cash payment of USD $500,000 (Remaining balance\nof USD 350,000 (Korean Won 502,215 thousand) is included in trade and other payables as of December 31, 2025)\n\n \n\n \n2)\nthe issuance of 50,000 ordinary shares valued at USD $500,000 (Remaining balance of Korean Won 56,119 thousand is included in current derivatives liabilities as of December 31, 2025)\n\n \n\n \n3)\nand the settlement of USD $2,000,000 through a non-recourse promissory note. Remaining balance of USD $1,500,000 (Korean Won 2,152,350 thousand) is included in short term borrowings as of December 31, 2025)\n\n \n\n \n4)\nthe remaining balance of USD $220,000 (Korean Won 309,850\nthousand) was recognized as a gain on debt forgiveness.\n\n \n\nPreviously, K Enter, which was acquired following the merger with KWM on May 13, 2025, was obligated to pay USD $2,218,541.80 in legal fees to Loeb & Loeb LLP for DeSPAC-related services under an engagement letter dated April 24, 2023. This obligation was modified by a Fee Deferral Agreement entered into on May 13, 2025. Under the new terms, the Company paid USD $1,000,000 in cash during the current period and settled the remaining USD $1,218,541.80 with a short-term promissory note that accrues interest at 7% per annum and matures on November 13, 2025. Subsequently, on December 3, 2025, the Company (K Enter Holdings, Inc. and K Wave Media, Ltd.) entered into a Convertible Promissory Note with Loeb & Loeb LLP pursuant to Section 3(a)(9) of the Securities Act in exchange for the existing promissory note in the amount of USD $1,218,541.80, and the principal amount of the new note was adjusted to USD $1,040,479.75. The note bears interest at 18% per annum and matures on February 13, 2026, and the holder has the right to convert all or a portion of the outstanding amount into ordinary shares of K Wave Media, Ltd.\n\n \n\nAs of December 31, 2025, the remaining balance of Korean Won 1,523,573 thousand is included in Convertible Note, in relation to promissory note.\n\n \n\nF-100\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**H.**\n**Legal Proceeding**\n\n \n\nAs of December 31, 2025, the injunction lawsuit that had been reported as a subsequent event, in which the Company had been involved as a defendant, seeking to suspend the effectiveness of a contract termination, was dismissed on May 27, 2025, and concluded at the first instance accordingly. Subsequently, the Company filed a new lawsuit with the Seoul Central District Court against the counterparty for confirmation of contract termination and damages. The Company is involved in the new proceeding as a plaintiff, and the total claimed amount is Korean Won 100,000 thousand.\n\nIn January 2026, the court entered an adverse judgment against the Company in litigation with RBDK Co., Ltd. (“RBDK”) relating to the early termination of a building lease agreement originally entered into on May 1, 2022 and scheduled to expire on May 1, 2027, and ordered the Company to pay Korean Won 720,628 thousand including the interest. In connection with the lease commencement, the Company received a Tenant Improvement allowance of Korean Won 1,076,100 thousand. Following the termination of the lease, RBDK has initiated a claim for the return of the allowance. Based on an assessment of the remaining lease term and consultation with legal counsel, management has determined that the Company is more likely than not to be required to settle part of the claim. As of December 31, 2025, the Company has recognized a litigation provision of Korean Won 720,628 thousand in its consolidated financial statements, representing the estimated outflow of resources required to settle the obligation.\n\n \n\n**I.**\n**Share Purchase Agreements with Key Shareholders**\n\n \n\nIn December 2025, K Enter Holdings Inc. (“K Enter”), a wholly owned subsidiary of the Company, entered into Share Purchase Agreements (the “Purchase Agreements”) with certain key shareholders and co-founders of the Company (the “Key Shareholders”). Under the terms of the Purchase Agreements, K Enter agreed to purchase an aggregate of 4,767,494 ordinary shares from the Key Shareholders for an aggregate purchase price of $2,002,347.48 ($0.42 per share). The payment terms for the purchase price are as follows:\n\n \n\n \n●\nInitial Payment: 10% of the purchase price, or $200,234.75(Korean Won 287,317 thousand), was paid upon the execution of the Purchase Agreements in December 2025.\n\n \n\n \n●\nRemaining Commitment: The remaining 90% of the purchase price, amounting to $1,802,112.73, is scheduled to be paid to the Key Shareholders on June 30, 2026.\n\n \n\nAs of December 31, 2025, the Company’s remaining obligation under the Purchase Agreements was $1,802,112.73, which is scheduled to be paid on June 30, 2026.\n\n \n\nF-101\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**36. Statement of Cash flows**\n\n \n\nAdjustments for income and expenses from operating activities for the years ended December 31, 2025, 2024 and 2023 are as follows:\n\n \n\nSchedule\nof statement of Cash flows\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**2025**\n \n \n**2024**\n \n \n**2023**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nDepreciation\n \n₩\n \n \n2,649,937\n \n \n \n2,817,673\n \n \n \n2,921,232\n \n\nAmortization\n \n \n \n \n600,074\n \n \n \n356,010\n \n \n \n362,800\n \n\nImpairment loss on property and equipment\n \n \n \n \n152,816\n \n \n \n964,626\n \n \n \n2,246\n \n\nBad debt expenses\n \n \n \n \n404\n \n \n \n297,162\n \n \n \n171,561\n \n\nLosses on valuation of short-term investment securities\n \n \n \n \n2,388,883\n \n \n \n-\n \n \n \n-\n \n\nOther bad debt expenses\n \n \n \n \n594,481\n \n \n \n347,419\n \n \n \n-\n \n\nLosses on disposal or retirement of property and equipment\n \n \n \n \n781,522\n \n \n \n329,882\n \n \n \n31,975\n \n\nLosses on valuation of long-term investment securities\n \n \n \n \n9,136\n \n \n \n60,275\n \n \n \n12,395\n \n\nLosses on disposal of long-term investment securities\n \n \n \n \n2,132,188\n \n \n \n-\n \n \n \n-\n \n\nImpairment loss on Intangible assets\n \n \n \n \n2,897,920\n \n \n \n-\n \n \n \n-\n \n\nImpairment loss on goodwill\n \n \n \n \n129,071,743\n \n \n \n-\n \n \n \n-\n \n\nLosses on disposal of short-term investment securities\n \n \n \n \n5,917\n \n \n \n-\n \n \n \n-\n \n\nInventory valuation loss (reversal)\n \n \n \n \n(66,530\n)\n \n \n1,578,040\n \n \n \n(397,995\n)\n\nUnrealized losses on foreign currency transaction\n \n \n \n \n874,296\n \n \n \n6,447\n \n \n \n26,064\n \n\nLosses on disposal of short-term borrowings\n \n \n \n \n317,625\n \n \n \n \n \n \n \n \n \n\nInterest expenses\n \n \n \n \n3,904,290\n \n \n \n1,257,378\n \n \n \n1,385,142\n \n\nMiscellaneous expenses\n \n \n \n \n220\n \n \n \n-\n \n \n \n-\n \n\n(Reversal of) Share-based compensation expenses\n \n \n \n \n25,636,854\n \n \n \n(180,127\n)\n \n \n(25,758\n)\n\nGains on valuation of warrants\n \n \n \n \n(16,622,386\n)\n \n \n-\n \n \n \n-\n \n\nListing expenses\n \n \n \n \n25,075,227\n \n \n \n-\n \n \n \n-\n \n\nSeverance Benefits\n \n \n \n \n789,084\n \n \n \n394,173\n \n \n \n545,880\n \n\nLosses on valuation of derivative instruments\n \n \n \n \n1,710,264\n \n \n \n-\n \n \n \n-\n \n\nIncome tax expense (benefit)\n \n \n \n \n435,086\n \n \n \n(747,380\n)\n \n \n760,779\n \n\nLoss from investments in associates\n \n \n \n \n10,413\n \n \n \n-\n \n \n \n-\n \n\nInvestment expenses\n \n \n \n \n18,778\n \n \n \n-\n \n \n \n-\n \n\nLosses on valuation of short-term financial instruments\n \n \n \n \n-\n \n \n \n-\n \n \n \n6\n \n\nLosses on valuation of long-term financial instruments\n \n \n \n \n889\n \n \n \n115\n \n \n \n8,717\n \n\nLoss on initial recognition of FVPL liabilities\n \n \n \n \n26,228,276\n \n \n \n-\n \n \n \n-\n \n\nDividend income\n \n \n \n \n(2,613\n)\n \n \n(1,463\n)\n \n \n(1,462\n)\n\nMiscellaneous income\n \n \n \n \n(2,573\n)\n \n \n-\n \n \n \n-\n \n\nGain on valuation of derivative instruments\n \n \n \n \n(860,353\n)\n \n \n-\n \n \n \n-\n \n\nGains on valuation of long-term financial instruments\n \n \n \n \n(9,192\n)\n \n \n(6,368\n)\n \n \n(7,241\n)\n\nReversal of loss on valuation of long-term investments\n \n \n \n \n(6,536\n)\n \n \n-\n \n \n \n-\n \n\nInvestment revenue\n \n \n \n \n(2,142\n)\n \n \n-\n \n \n \n-\n \n\nProject settlement gain\n \n \n \n \n(904\n)\n \n \n-\n \n \n \n-\n \n\nGain on debt forgiveness\n \n \n \n \n(309,849\n)\n \n \n-\n \n \n \n-\n \n\nGain from investments in associates\n \n \n \n \n(5,902\n)\n \n \n-\n \n \n \n-\n \n\nGains from merger\n \n \n \n \n(8,509\n)\n \n \n-\n \n \n \n-\n \n\nGains on valuation of short-term investment securities\n \n \n \n \n(208,737\n)\n \n \n-\n \n \n \n-\n \n\nReversal of other bad debt expenses\n \n \n \n \n(154,953\n)\n \n \n-\n \n \n \n-\n \n\nGains on valuation of short-term financial instruments\n \n \n \n \n-\n \n \n \n(33\n)\n \n \n(55\n)\n\nUnrealized gains on foreign currency transaction\n \n \n \n \n(120,693\n)\n \n \n(88,458\n)\n \n \n(376,295\n)\n\nGains on disposal of right-of-use assets\n \n \n \n \n(461,212\n)\n \n \n(131,193\n)\n \n \n(1,042,833\n)\n\nGains on disposal of property, plant and equipment\n \n \n \n \n(2,113\n)\n \n \n(6,100\n)\n \n \n(928\n)\n\nGains on disposal of short-term loans\n \n \n \n \n-\n \n \n \n-\n \n \n \n(12,819\n)\n\nGains on disposal of long-term loans\n \n \n \n \n-\n \n \n \n-\n \n \n \n(622,539\n)\n\nInterest income\n \n \n \n \n(407,595\n)\n \n \n(287,285\n)\n \n \n(406,933\n)\n\nGains on valuation of long-term investment securities\n \n \n \n \n(78,955\n)\n \n \n(149,926\n)\n \n \n(116,900\n)\n\nGains on valuation of FVPL liabilities\n \n \n \n \n(5,559,061\n)\n \n \n-\n \n \n \n-\n \n\nTotal\n \n₩\n \n \n201,395,515\n \n \n \n6,810,867\n \n \n \n3,217,039\n \n\n \n\nF-102\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\nChanges in assets and liabilities from operating activities for the years ended December 31, 2025, 2024 and 2023 are as follows:\n\n \n\nSchedule\nof changes in assets and liabilities from operating activities\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**2025**\n \n \n**2024**\n \n \n**2023**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nOther non-current non-financial assets\n \n₩\n \n \n(118,649\n)\n \n \n698,657\n \n \n \n-\n \n\nOther current non-financial assets\n \n \n \n \n578,126\n \n \n \n54,560\n \n \n \n(2,708,583\n)\n\nAccounts receivable — trade, net\n \n \n \n \n4,989,162\n \n \n \n(2,665,062\n)\n \n \n7,951,197\n \n\nAccounts receivable — other, net\n \n \n \n \n939,918\n \n \n \n(346,964\n)\n \n \n(303,948\n)\n\nTrade and other payables\n \n \n \n \n(8,056,159\n)\n \n \n(447,975\n)\n \n \n(19,972,438\n)\n\nInventories, net\n \n \n \n \n(727,447\n)\n \n \n(1,971,804\n)\n \n \n3,329,293\n \n\nContract liabilities\n \n \n \n \n646,601\n \n \n \n-\n \n \n \n-\n \n\nValue added tax receivables\n \n \n \n \n9,462\n \n \n \n145,204\n \n \n \n1,965,135\n \n\nValue added tax payables\n \n \n \n \n(20,715\n)\n \n \n-\n \n \n \n-\n \n\nOther current liabilities\n \n \n \n \n128,352\n \n \n \n593,949\n \n \n \n299,334\n \n\nOther non-current financial assets\n \n \n \n \n100,000\n \n \n \n-\n \n \n \n-\n \n\nLiabilities due to payment of benefits\n \n \n \n \n(316,267\n)\n \n \n(496,920\n)\n \n \n(658,367\n)\n\nContract assets\n \n \n \n \n643,945\n \n \n \n-\n \n \n \n-\n \n\nLong-term investment securities\n \n \n \n \n(2,449,482\n)\n \n \n-\n \n \n \n-\n \n\nPayments for Investments in associates\n \n \n \n \n(66,000\n)\n \n \n-\n \n \n \n-\n \n\nProceeds from Investments in associates\n \n \n \n \n47,892\n \n \n \n-\n \n \n \n-\n \n\nOther current provisions\n \n \n \n \n(17,170\n)\n \n \n-\n \n \n \n-\n \n\nOther non-current liabilities\n \n \n \n \n1,397,592\n \n \n \n-\n \n \n \n-\n \n\nTotal\n \n \n \n \n(2,290,839\n)\n \n \n(4,436,355\n)\n \n \n(10,098,377\n)\n\n \n\nSignificant non-cash transactions for the years ended December 31, 2025, 2024 and 2023 are as follows:\n\n \n\nSchedule\nof significant non-cash transactions\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**2025**\n \n \n**2024**\n \n \n**2023**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nReclassification of long-term borrowings\n \n₩\n \n \n-\n \n \n \n2,218,720\n \n \n \n24,960\n \n\nReclassification of non-current lease liabilities\n \n \n \n \n1,648,651\n \n \n \n1,744,031\n \n \n \n1,911,047\n \n\nIncrease in Lease liabilities\n \n \n \n \n414,622\n \n \n \n364,731\n \n \n \n612,220\n \n\nOffset of loans\n \n \n \n \n-\n \n \n \n42,000\n \n \n \n14,804,782\n \n\nReclassification of Investment properties\n \n \n \n \n1,953,094\n \n \n \n2,360,275\n \n \n \n3,483,371\n \n\nReclassification of long-term investment securities\n \n \n \n \n490,680\n \n \n \n-\n \n \n \n-\n \n\nConversion of convertible bonds\n \n \n \n \n10,570,818\n \n \n \n-\n \n \n \n-\n \n\nRecognition of restoration provision\n \n \n \n \n10,352\n \n \n \n-\n \n \n \n26,833\n \n\nTransfer of construction in progress\n \n \n \n \n6,062\n \n \n \n-\n \n \n \n9,950\n \n\nOffset of other receivables\n \n \n \n \n-\n \n \n \n-\n \n \n \n646,380\n \n\nLoan reassignment: Involvement of the Parent company’s CEO\n \n \n \n \n-\n \n \n \n-\n \n \n \n2,900,000\n \n\nPayables related to the acquisition of treasury shares\n \n \n \n \n-\n \n \n \n-\n \n \n \n1,000,000\n \n\nReclassification of long-term borrowings to capital surplus\n \n \n \n \n791,950\n \n \n \n-\n \n \n \n-\n \n\n \n\nF-103\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\nThe movements of liabilities to cash flows arising from financing activities for the years ended December 31, 2025, 2024 and 2023 are as follows:\n\n \n\nSchedule\nof liabilities to cash flows arising from financing activities\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**Borrowings**\n \n \n**Convertible notes**\n \n \n**Lease liabilities**\n \n \n**Total**\n \n\n**Balance at 1 January 2023**\n \n₩\n \n \n2,568,640\n \n \n \n-\n \n \n \n17,403,492\n \n \n \n19,972,132\n \n\n**Changes from financing cash flows**\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nProceeds from borrowings\n \n \n \n \n130,000\n \n \n \n-\n \n \n \n-\n \n \n \n130,000\n \n\nRepayment of borrowings\n \n \n \n \n(24,960\n)\n \n \n-\n \n \n \n-\n \n \n \n(24,960\n)\n\nPayment of lease liabilities\n \n \n \n \n-\n \n \n \n-\n \n \n \n(1,617,756\n)\n \n \n(1,617,756\n)\n\nReceipt of lease deposits\n \n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\n**Total**\n \n₩\n \n \n105,040\n \n \n \n-\n \n \n \n(1,617,756\n)\n \n \n(1,512,716\n)\n\n**Other changes**\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nBorrowing\nassumed (*1)\n \n \n \n \n2,900,000\n \n \n \n-\n \n \n \n-\n \n \n \n2,900,000\n \n\nPresent value discount\n \n \n \n \n(282,734\n)\n \n \n-\n \n \n \n-\n \n \n \n(282,734\n)\n\nNew leases\n \n \n \n \n-\n \n \n \n-\n \n \n \n612,220\n \n \n \n612,220\n \n\nLease termination / lease modification\n \n \n \n \n-\n \n \n \n-\n \n \n \n(1,889,447\n)\n \n \n(1,889,447\n)\n\nInterest expense\n \n \n \n \n72,055\n \n \n \n-\n \n \n \n1,047,738\n \n \n \n1,119,793\n \n\nInterest paid\n \n \n \n \n-\n \n \n \n-\n \n \n \n(1,047,738\n)\n \n \n(1,047,738\n)\n\n**Total**\n \n₩\n \n \n2,689,321\n \n \n \n-\n \n \n \n(1,277,227\n)\n \n \n1,412,094\n \n\n**Balance at 31 December 2023**\n \n₩\n \n \n5,363,001\n \n \n \n-\n \n \n \n14,508,509\n \n \n \n19,871,510\n \n\n**Balance at 1 January 2024**\n \n₩\n \n \n5,363,001\n \n \n \n-\n \n \n \n14,508,509\n \n \n \n19,871,510\n \n\n**Changes from financing cash flows**\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nProceeds from borrowings\n \n \n \n \n870,000\n \n \n \n-\n \n \n \n-\n \n \n \n870,000\n \n\nRepayment of borrowings\n \n \n \n \n(418,960\n)\n \n \n-\n \n \n \n-\n \n \n \n(418,960\n)\n\nPayment of lease liabilities\n \n \n \n \n-\n \n \n \n-\n \n \n \n(1,663,415\n)\n \n \n(1,663,415\n)\n\nReceipt of lease deposits\n \n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nRepayment of lease deposits\n \n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\n**Total**\n \n₩\n \n \n451,040\n \n \n \n-\n \n \n \n(1,663,415\n)\n \n \n(1,212,375\n)\n\n**Other changes**\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nOffset of loans\n \n \n \n \n(42,000\n)\n \n \n-\n \n \n \n-\n \n \n \n(42,000\n)\n\nPresent value discount\n \n \n \n \n100,915\n \n \n \n-\n \n \n \n-\n \n \n \n100,915\n \n\nNew leases\n \n \n \n \n-\n \n \n \n-\n \n \n \n364,731\n \n \n \n364,731\n \n\nLease termination / lease modification\n \n \n \n \n-\n \n \n \n-\n \n \n \n(2,120,588\n)\n \n \n(2,120,588\n)\n\nInterest expense\n \n \n \n \n-\n \n \n \n-\n \n \n \n851,543\n \n \n \n851,543\n \n\nInterest paid\n \n \n \n \n-\n \n \n \n-\n \n \n \n(851,543\n)\n \n \n(851,543\n)\n\n**Total**\n \n₩\n \n \n58,915\n \n \n \n-\n \n \n \n(1,755,857\n)\n \n \n(1,696,942\n)\n\n**Balance at 31 December 2024**\n \n₩\n \n \n5,872,956\n \n \n \n-\n \n \n \n11,089,238\n \n \n \n16,962,194\n \n\n**Balance at 1 January 2025**\n \n₩\n \n \n5,872,956\n \n \n \n-\n \n \n \n11,089,238\n \n \n \n16,962,194\n \n\n**Changes from financing cash flows**\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nProceeds from borrowings\n \n \n \n \n9,742,333\n \n \n \n25,572,796\n \n \n \n-\n \n \n \n35,315,129\n \n\nRepayment of borrowings\n \n \n \n \n(3,429,014\n)\n \n \n-\n \n \n \n-\n \n \n \n(3,429,014\n)\n\nPayment of lease liabilities\n \n \n \n \n-\n \n \n \n-\n \n \n \n(2,055,725\n)\n \n \n(2,055,725\n)\n\nReceipt of lease deposits\n \n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nReclassification\n \n \n \n \n-\n \n \n \n1,208,196\n \n \n \n-\n \n \n \n1,208,196\n \n\n**Total**\n \n₩\n \n \n6,313,319\n \n \n \n26,780,992\n \n \n \n(2,055,725\n)\n \n \n31,038,587\n \n\n**Other changes**\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nChanges in scope of consolidation\n \n \n \n \n5,861,311\n \n \n \n3,920,244\n \n \n \n361,690\n \n \n \n10,143,245\n \n\nForeign exchange differences\n \n \n \n \n(691,248\n)\n \n \n348,309\n \n \n \n(1,955\n)\n \n \n(344,894\n)\n\nConversion of Convertible Bonds to Common Stock\n \n \n \n \n-\n \n \n \n(8,045,803\n)\n \n \n-\n \n \n \n(8,045,803\n)\n\nOther non-cash transactions\n \n \n \n \n(1,504,194\n)\n \n \n10,929,831\n \n \n \n-\n \n \n \n9,425,637\n \n\nNew leases\n \n \n \n \n-\n \n \n \n-\n \n \n \n414,622\n \n \n \n414,622\n \n\nLease termination / lease modification\n \n \n \n \n-\n \n \n \n-\n \n \n \n(1,836,600\n)\n \n \n(1,836,600\n)\n\nInterest expense\n \n \n \n \n131,318\n \n \n \n259,508\n \n \n \n538,378\n \n \n \n929,204\n \n\nInterest paid\n \n \n \n \n-\n \n \n \n-\n \n \n \n(538,378\n)\n \n \n(538,378\n)\n\nGains on Valuation of FVPL\n \n \n \n \n-\n \n \n \n(5,559,062\n)\n \n \n-\n \n \n \n(5,559,062\n)\n\n**Total**\n \n₩\n \n \n3,797,187\n \n \n \n1,853,028\n \n \n \n(1,062,243\n)\n \n \n4,587,972\n \n\n**Balance at 31 December 2025**\n \n₩\n \n \n15,983,462\n \n \n \n28,634,020\n \n \n \n7,971,269\n \n \n \n52,588,751\n \n\n \n\n \n\n(*1)Prior to 2023, the Parent Company granted a loan amounting\nto Korean Won 1,700,000 thousand to its subsidiary. Upon consolidation, this intercompany transaction was offset. During 2023, the obligation,\nalong with a new loan of Korean Won 1,200,000 thousand borrowed by the subsidiary within the year, was transitioned to Cho Hyeong Seok,\nCEO of the Parent Company. This reallocated liability is presented as “borrowing assumed”, denoting a change in debtor, not\nthe origination of a new loan.\n\n \n\nF-104\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**37. Related parties**\n\n \n\n**A.**\n**List of related parties**\n\n \n\nList of related parties as of December 31, 2025 and 2024 are as follows:\n\n \n\nSchedule of related parties\n \n \n \n \n\n \n \n**December 31, 2025**\n \n**December 31, 2024**\n\nOther related parties\n \nFF Company Co., Ltd.\n \nFF Company Co., Ltd.\n\nOther related parties\n \n-\n \nOURcoffee Gangnamjum\n\nOther related parties\n \nSecondPlan Co.,Ltd.\n \nSecondPlan Co.,Ltd.\n\nOther related parties\n \nThirdPlan Co., Ltd.\n \nThirdPlan Co., Ltd.\n\nOther related parties\n \n-\n(*1)\n \nPLAYVERSE Co., Ltd.\n\nOther related parties\n \nStudio Cuat. Co., Ltd.\n \nStudio Cuat. Co., Ltd.\n\nOther related parties\n \nBeacon Holdings, Inc\n \nBeacon Holdings, Inc\n\nOther related parties\n \nFalling starlight\n \n-\n\nOther related parties\n \nPluto Co., Ltd.\n \n-\n\nOther related parties\n \nDominico Inc.\n \n-\n\nOther related parties\n \nJS CO., LTD.\n \n-\n\nAssociates\n \nSOLAIRE SCALE-UP MOVIE INVESTMENT FUND NO.1 (*2)\n \n-\n\nAssociates\n \nSolaire Culture Plus Fund\n \n-\n\nAssociates\n \nSolaire Main Movie Fund\n \n-\n\nAssociates\n \nSOLAIRE SCALE-UP MOVIE INVESTMENT FUND NO.2\n \n-\n\nOther related parties\n \nBluefire Studio Co., Ltd\n \n-\n\nOther related parties\n \nShining park Co., Ltd.\n \n-\n\nOther related parties\n \nIts story Co., Ltd.\n \n-\n\nOther related parties\n \nLodestar USA, Inc.\n \n-\n\nOther related parties\n \nGlobal Star Acquisition I, LLC\n \n-\n\nOther related parties\n \nGlobal Fund LLC\n \n-\n\nOther related parties\n \nInnocus Global Group Pte, Ltd.,\n \n-\n\nOther related parties\n \nXENO INVESTMENT ASIA INC\n \n-\n\nOther related parties\n \nJVC INC\n \n-\n\nOther related parties\n \nGF KOREA Co., Ltd\n \n-\n\nOther related parties\n \nNaviator Global Holdings LLC\n \n-\n\nOther related parties\n \nEQ Investment Inc.\n \n-\n\n \n\n \n\n(*1)Play Company Co., Ltd. obtained control over Playverse Co.,\nLtd. through a share transfer arrangement, resulting in its exclusion from other related parties.\n\n(*2)It was dissolved during the current period and is currently\nundergoing liquidation procedures.\n\n \n\nF-105\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**B.**\n**Transactions with related parties**\n\n \n\nDetails of transaction with related parties for the years ended December 31, 2025, 2024 and 2023 are as follows:\n\n \n\nSchedule\nof transaction with related parties\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n \n \n**2025**\n \n\n**Related party**\n \n**Name of entity**\n \n \n \n**Revenue**\n \n \n**Financeincome**\n \n \n**Purchases**\n \n \n**FinanceCosts**\n \n\n \n \n \n \n \n \n**(In thousands of Korean won)**\n \n\nOther related parties\n \nFF Company\n \n₩\n \n \n9,396,922\n \n \n \n-\n \n \n \n195,370\n \n \n \n-\n \n\nOther related parties\n \nSecondPlan\n \n \n \n \n37,869\n \n \n \n18,751\n \n \n \n3,091\n \n \n \n-\n \n\nOther related parties\n \nThirdPlan\n \n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n7,544\n \n\nOther related parties\n \nStudio Cuat\n \n \n \n \n16,500\n \n \n \n1,978\n \n \n \n44,900\n \n \n \n-\n \n\nOther related parties\n \nBeacon Holdings\n \n \n \n \n-\n \n \n \n24,147\n \n \n \n-\n \n \n \n97\n \n\nKey management personnel\n \nCho Hyeong seok\n \n \n \n \n-\n \n \n \n109,764\n \n \n \n-\n \n \n \n2,562,581\n \n\nOther related parties\n \nFalling starlight\n \n \n \n \n(14,598\n)\n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nKey management personnel\n \nPark, Un Kyoung\n \n \n \n \n-\n \n \n \n427\n \n \n \n-\n \n \n \n-\n \n\nOther related parties\n \nYun, In Beom\n \n \n \n \n-\n \n \n \n5,230\n \n \n \n-\n \n \n \n-\n \n\nOther related parties\n \nKim, Su Jin\n \n \n \n \n-\n \n \n \n4,991\n \n \n \n-\n \n \n \n-\n \n\nKey management personnel\n \nJung, Byung Gil\n \n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n1,248\n \n\nOther related parties\n \nIts story Co., Ltd.\n \n \n \n \n-\n \n \n \n-\n \n \n \n852,915\n \n \n \n-\n \n\nKey management personnel\n \nLee, Youngjae\n \n \n \n \n14\n \n \n \n-\n \n \n \n-\n \n \n \n22,557\n \n\nPersonnel\nwith significant influence over the Company\n \nSong, Hyo Jeong\n \n \n \n \n10\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nAssociates\n \nSOLAIRE SCALE-UP MOVIE INVESTMENT FUND NO.1\n \n \n \n \n271\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nAssociates\n \nSOLAIRE SCALE-UP MOVIE INVESTMENT FUND NO.2\n \n \n \n \n491,152\n \n \n \n-\n \n \n \n10,413\n \n \n \n-\n \n\nAssociates\n \nSolaire Culture Plus Fund\n \n \n \n \n78,975\n \n \n \n-\n \n \n \n2,388,883\n \n \n \n-\n \n\nAssociates\n \nSolaire Main Movie Fund\n \n \n \n \n166,363\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nOther related parties\n \nGF KOREA Co., Ltd\n \n \n \n \n-\n \n \n \n-\n \n \n \n40,000\n \n \n \n-\n \n\nOther related parties\n \nInnocus Global Group Pte, Ltd.,\n \n \n \n \n-\n \n \n \n423,936\n \n \n \n-\n \n \n \n146,470\n \n\n**Total**\n \n₩\n \n \n10,173,478\n \n \n \n589,224\n \n \n \n3,535,572\n \n \n \n2,740,497\n \n\n \n\nF-106\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n \n \n \n \n \n \n**2024**\n \n\n**Related party**\n \n**Name of entity**\n \n \n \n**Revenue**\n \n \n**Financeincome**\n \n \n**Purchases**\n \n \n**FinanceCosts**\n \n\n \n \n \n \n \n \n**(In thousands of Korean won)**\n \n\nOther related parties\n \nFF Company\n \n₩\n \n \n8,785,673\n \n \n \n-\n \n \n \n556,469\n \n \n \n-\n \n\nOther related parties\n \nSecondPlan\n \n \n \n \n31,833\n \n \n \n15,274\n \n \n \n-\n \n \n \n913\n \n\nOther related parties\n \nThirdPlan\n \n \n \n \n-\n \n \n \n-\n \n \n \n60,317\n \n \n \n7,332\n \n\nOther related parties\n \nStudio Cuat\n \n \n \n \n38,645\n \n \n \n1,978\n \n \n \n248,660\n \n \n \n-\n \n\nOther related parties\n \nBeacon Holdings\n \n \n \n \n-\n \n \n \n7,613\n \n \n \n-\n \n \n \n-\n \n\nKey management personnel\n \nCho Hyeong Seok\n \n \n \n \n-\n \n \n \n100,915\n \n \n \n-\n \n \n \n234,315\n \n\nKey management personnel\n \nJung Bo Ram\n \n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\n**Total**\n \n₩\n \n \n8,856,151\n \n \n \n125,780\n \n \n \n865,446\n \n \n \n242,560\n \n\n \n\n \n \n \n \n \n \n**2023**\n \n\n**Related party**\n \n**Name of entity**\n \n \n \n**Revenue**\n \n \n**Financeincome**\n \n \n**Purchases**\n \n \n**FinanceCosts**\n \n\n \n \n \n \n \n \n**(In thousands of Korean won)**\n \n\nOther related parties\n \nFF Company\n \n₩\n \n \n11,184,157\n \n \n \n-\n \n \n \n62,415\n \n \n \n-\n \n\nOther related parties\n \nSecondPlan\n \n \n \n \n15,052\n \n \n \n3,041\n \n \n \n-\n \n \n \n-\n \n\nOther related parties\n \nThirdPlan\n \n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n2,435\n \n\nOther related parties\n \nStudio Cuat\n \n \n \n \n251\n \n \n \n194\n \n \n \n527,864\n \n \n \n-\n \n\nOther related parties\n \nBeacon Holdings\n \n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nKey management personnel\n \nCho Hyeong Seok\n \n \n \n \n-\n \n \n \n151,624\n \n \n \n-\n \n \n \n176,597\n \n\nKey management personnel\n \nJung Bo Ram\n \n \n \n \n-\n \n \n \n676,341\n \n \n \n-\n \n \n \n-\n \n\n**Total**\n \n₩\n \n \n11,199,460\n \n \n \n831,200\n \n \n \n590,279\n \n \n \n179,032\n \n\n \n\n**C.**\n**Account balances with related parties**\n\n \n\nThe balances of receivables and payables to related parties as of December 31, 2025 and 2024 are as follows:\n\n \n\nSchedule\nof payables and receivables related parties\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n \n \n**December 31, 2025**\n \n\n**Related party**\n \n**Name of entity**\n \n \n \n**Receivables**\n \n \n**Contract assets**\n \n \n**Loans**\n \n \n**Project investment**\n \n\n \n \n \n \n \n \n**(In thousands of Korean won)**\n \n\nOther related parties\n \nFF Company\n \n₩\n \n \n1,936,400\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nOther related parties\n \nSecondPlan\n \n \n \n \n57,561\n \n \n \n-\n \n \n \n471,400\n \n \n \n-\n \n\nOther related parties\n \nThirdPlan\n \n \n \n \n-\n \n \n \n-\n \n \n \n8,000\n \n \n \n-\n \n\nOther related parties\n \nStudio Cuat\n \n \n \n \n22,300\n \n \n \n-\n \n \n \n43,000\n \n \n \n-\n \n\nOther related parties\n \nBeacon Holdings\n \n \n \n \n31,760\n \n \n \n-\n \n \n \n535,000\n \n \n \n-\n \n\nKey management personnel\n \nCho Hyeong seok\n \n \n \n \n20,445\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nKey management personnel\n \nJung Bo Ram\n \n \n \n \n43,721\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nOther related parties\n \nFalling starlight\n \n \n \n \n20,000\n \n \n \n-\n \n \n \n136,054\n \n \n \n300,000\n \n\nKey management personnel\n \nPark, Un Kyoung\n \n \n \n \n1,817\n \n \n \n-\n \n \n \n9,969\n \n \n \n-\n \n\nOther related parties\n \nYun, In Beom\n \n \n \n \n5,230\n \n \n \n-\n \n \n \n500,000\n \n \n \n-\n \n\nOther related parties\n \nKim, Su Jin\n \n \n \n \n4,991\n \n \n \n-\n \n \n \n500,000\n \n \n \n-\n \n\nAssociates\n \nSOLAIRE SCALE-UP MOVIE INVESTMENT FUND NO.2\n \n \n \n \n73,201\n \n \n \n279,952\n \n \n \n-\n \n \n \n-\n \n\nAssociates\n \nSolaire Culture Plus Fund\n \n \n \n \n-\n \n \n \n76,819\n \n \n \n-\n \n \n \n-\n \n\nAssociates\n \nSolaire Main Movie Fund\n \n \n \n \n-\n \n \n \n160,747\n \n \n \n-\n \n \n \n-\n \n\nTotal\n \n₩\n \n \n2,217,426\n \n \n \n517,518\n \n \n \n2,203,423\n \n \n \n300,000\n \n\n \n\nF-107\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n \n \n \n \n \n \n**December 31, 2025**\n \n\n**Related party**\n \n**Name of entity**\n \n \n \n**Payables**\n \n \n**Borrowings**\n \n \n**Contract liabilities**\n \n \n**Convertible Note**\n \n\n \n \n \n \n \n \n**(In thousands of Korean won)**\n \n\nOther related parties\n \nFalling starlight\n \n₩\n \n \n-\n \n \n \n-\n \n \n \n75,506\n \n \n \n-\n \n\nOther related parties\n \nPluto Co., Ltd.\n \n \n \n \n1,234,397\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nKey management personnel\n \nJung, Byung Gil\n \n \n \n \n151,493\n \n \n \n220,000\n \n \n \n-\n \n \n \n-\n \n\nKey management personnel\n \nJung, Byung shik\n \n \n \n \n135,245\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nKey management personnel\n \nLee, Youngjae\n \n \n \n \n8,410\n \n \n \n274,180\n \n \n \n-\n \n \n \n-\n \n\nPersonnel with significant influence over the Company\n \nSong, Hyo Jeong\n \n \n \n \n371\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nKey management personnel\n \nPark, Jun Woo\n \n \n \n \n4,655\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nKey management personnel\n \nShin, Kyung Soo\n \n \n \n \n4,655\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nOther related parties\n \nGlobal Star Acquisition I, LLC (*)\n \n \n \n \n92,112\n \n \n \n318,683\n \n \n \n-\n \n \n \n-\n \n\nOther related parties\n \nInnocus Global Group Pte, Ltd.,\n \n \n \n \n796\n \n \n \n-\n \n \n \n-\n \n \n \n2,956,091\n \n\nOther related parties\n \nThirdPlan\n \n \n \n \n17,311\n \n \n \n164,000\n \n \n \n-\n \n \n \n-\n \n\nKey management personnel\n \nCho Hyeong seok\n \n \n \n \n66,348,605\n \n \n \n5,408,608\n \n \n \n-\n \n \n \n-\n \n\nOther related parties\n \nFF Company\n \n \n \n \n122,400\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nOther related parties\n \nStudio Cuat\n \n \n \n \n8,800\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nOther related parties\n \nBeacon Holdings\n \n \n \n \n97\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nTotal\n \n \n \n \n68,129,347\n \n \n \n6,385,471\n \n \n \n75,506\n \n \n \n2,956,091\n \n\n \n\n \n\n(*)The Company has a credit limit of Korean Won 3,730,740 thousand\nunder an unsecured borrowing agreement, maturing on May 13, 2026. Unused portions of these credit facilities remain available to\nthe Company.\n\n \n\n \n \n \n \n \n \n**December 31, 2024**\n \n\n**Related party**\n \n**Name of entity**\n \n \n \n**Receivables**\n \n \n**Loans**\n \n \n**Payables**\n \n \n**Borrowings**\n \n\n \n \n \n \n \n \n**(In thousands of Korean won)**\n \n\nOther related parties\n \nFF Company\n \n₩\n \n \n1,934,166\n \n \n \n-\n \n \n \n230,698\n \n \n \n-\n \n\nOther related parties\n \nSecondPlan\n \n \n \n \n121,284\n \n \n \n394,400\n \n \n \n730\n \n \n \n-\n \n\nOther related parties\n \nThirdPlan\n \n \n \n \n-\n \n \n \n-\n \n \n \n9,767\n \n \n \n164,000\n \n\nOther related parties\n \nStudio Cuat\n \n \n \n \n2,172\n \n \n \n43,000\n \n \n \n-\n \n \n \n-\n \n\nOther related parties\n \nBeacon Holdings\n \n \n \n \n7,613\n \n \n \n225,000\n \n \n \n-\n \n \n \n-\n \n\nKey\nmanagement personnel\n\n \nCho Hyeong Seok\n \n \n \n \n-\n \n \n \n-\n \n \n \n1,115,906\n \n \n \n2,790,236\n \n\nKey\nmanagement personnel\n\n \nJung Bo Ram\n \n \n \n \n43,721\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\n**Total**\n \n₩\n \n \n2,108,956\n \n \n \n662,400\n \n \n \n1,357,101\n \n \n \n2,954,236\n \n\n \n\nF-108\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**D.****Financial transactions with related parties**\n\n \n\nDetails of significant financial transactions with related parties for the years ended December 31, 2025, 2024 and 2023 are as follows:\n\n \n\nSchedule\nof significant financial transactions with related parties\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n \n \n**2025**\n \n\n**Related party**\n \n**Company**\n \n \n \n**Loans**\n \n \n**Collection**\n \n \n**Borrowings**\n \n \n**Repayment**\n \n \n**Additional investment**\n \n \n**Recovery ofinvestment**\n \n\n \n \n \n \n \n \n**(In thousands of Korean won)**\n \n\nOther related parties\n \nSecondPlan\n \n₩\n \n \n206,000\n \n \n \n129,000\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nOther related parties\n \nBeacon Holdings\n \n \n \n \n420,000\n \n \n \n110,000\n \n \n \n82,000\n \n \n \n82,000\n \n \n \n-\n \n \n \n-\n \n\nKey management personnel\n \nCho Hyeong seok\n \n \n \n \n-\n \n \n \n-\n \n \n \n3,280,000\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nOther related parties\n \nThirdPlan\n \n \n \n \n-\n \n \n \n1,000\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nOther related parties\n \nFalling starlight\n \n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n500,000\n \n\nKey management personnel\n \nPark, Un Kyoung\n \n \n \n \n460\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nOther related parties\n \nYun, In Beom\n \n \n \n \n500,000\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nOther related parties\n \nKim, Su Jin\n \n \n \n \n500,000\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nKey management personnel\n \nJung, Byung Gil\n \n \n \n \n-\n \n \n \n-\n \n \n \n220,000\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nKey management personnel\n \nLee, Youngjae\n \n \n \n \n-\n \n \n \n-\n \n \n \n248,500\n \n \n \n420,882\n \n \n \n-\n \n \n \n-\n \n\nAssociates\n \nSolaire Culture Plus Fund\n \n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n29,861\n \n\nAssociates\n \nSOLAIRE SCALE-UP MOVIE INVESTMENT FUND NO.1\n \n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n18,031\n \n\nAssociates\n \nSOLAIRE SCALE-UP MOVIE INVESTMENT FUND NO.2\n \n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n66,000\n \n \n \n-\n \n\nOther related parties\n \nGlobal Star Acquisition I, LLC\n \n \n \n \n-\n \n \n \n-\n \n \n \n568,887\n \n \n \n473,598\n \n \n \n-\n \n \n \n-\n \n\nTotal\n \n₩\n \n \n1,626,460\n \n \n \n240,000\n \n \n \n4,399,387\n \n \n \n976,480\n \n \n \n66,000\n \n \n \n547,892\n \n\n \n\n \n \n \n \n \n \n**2024**\n \n\n**Related party**\n \n**Company**\n \n \n \n**Loans**\n \n \n**Collection\n(*1)**\n \n \n**Borrowings**\n \n \n**Repayment**\n \n\n \n \n \n \n \n \n**(In thousands of Korean won)**\n \n\nOther related parties\n \nSecond Plan (*1)\n \n₩\n \n \n449,500\n \n \n \n120,000\n \n \n \n355,000\n \n \n \n313,000\n \n\nOther related parties\n \nThirdPlan\n \n \n \n \n-\n \n \n \n-\n \n \n \n80,000\n \n \n \n46,000\n \n\nOther related parties\n \nStudio Cuat\n \n \n \n \n19,500\n \n \n \n19,500\n \n \n \n-\n \n \n \n-\n \n\nOther related parties\n \nBeacon Holdings\n \n \n \n \n1,365,000\n \n \n \n1,140,000\n \n \n \n35,000\n \n \n \n35,000\n \n\n**Total**\n \n₩\n \n \n1,834,000\n \n \n \n1,279,500\n \n \n \n470,000\n \n \n \n394,000\n \n\n \n\n \n\n(*1)Short-term borrowings and short-term loans of Korean Won\n42,000 thousand were offset during the year ended December 31, 2024.\n\n \n\nF-109\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n \n \n \n \n \n \n**2023**\n \n\n**Related party**\n \n**Company**\n \n \n \n**Loans**\n \n \n**Collection\n(*1)**\n \n \n**Borrowings**\n \n\n \n \n \n \n \n \n**(In thousands of Korean won)**\n \n\nOther related parties\n \nSecond Plan\n \n₩\n \n \n1,136,900\n \n \n \n1,030,000\n \n \n \n-\n \n\nOther related parties\n \nThirdPlan\n \n \n \n \n-\n \n \n \n-\n \n \n \n130,000\n \n\nOther related parties\n \nStudio Cuat\n \n \n \n \n43,000\n \n \n \n-\n \n \n \n-\n \n\nKey management personnel\n \nCho Hyeong Seok (*2)\n \n \n \n \n10,738,538\n \n \n \n15,084,782\n \n \n \n2,900,000\n \n\nKey management personnel\n \nJung Bo Ram\n \n \n \n \n-\n \n \n \n2,905,000\n \n \n \n-\n \n\n**Total**\n \n₩\n \n \n11,918,438\n \n \n \n19,019,782\n \n \n \n3,030,000\n \n\n \n\n \n\n(*1)During 2023, the collection of loans related to Second Plan\nand Jung Bo Ram was due to a liability transfer to Cho Hyeong Seok, with no resulting cash inflows.\n\n(*2)During 2023, Play Company secured a loan of Korean Won 3,510,676\nthousand from Cho Hyeong Seok. Cho Hyeong Seok then assumed obligations for loans amounting to Korean Won 7,227,862 thousand made by\nPlay Company to third parties. Of this amount, Korean Won 2,900,000 thousand originally loaned by Play Company to Play F&B is now\neffectively a loan from Cho Hyeong Seok to Play Company and its subsidiary. In addition, Play Company received repayments of Korean Won\n280,000 thousand, and an outstanding loan of Korean Won 14,804,782 thousand was offset against proceeds from the purchase of treasury\nshare.\n\n \n\n**E.**\n**Commitments with related parties**\n\n \n\nCommitments the Company has entered into with related parties as of December 31, 2025 are as follows:\n\n \n\nSchedule\nof Commitments with related parties\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n**Related party**\n \n**Financial institutions**\n \n**Categories**\n \n \n \n**Credit limit**\n \n \n**Borrowings amount**\n \n\n \n \n \n \n \n \n \n \n**(In thousands of Korean won)**\n \n\nKey management personnel\n \nIndustrial Bank of Korea\n \nSmall and medium-sized\nenterprise financing (*1)\n \n₩\n \n \n2,000,000\n \n \n \n-\n \n\nKey management personnel\n \nIndustrial Bank of Korea\n \nSmall and medium-sized enterprise\nfinancing (*2)\n \n \n \n \n1,000,000\n \n \n \n1,000,000\n \n\nKey management personnel\n \nIndustrial Bank of Korea\n \nSmall and medium-sized enterprise\nfinancing (*3)\n \n \n \n \n400,000\n \n \n \n400,000\n \n\nKey management personnel\n \nWoori Bank\n \nCorporate operating borrowings (*4)\n \n \n \n \n800,000\n \n \n \n785,000\n \n\nKey management personnel\n \nKB Kookmin Bank\n \noverdraft loan (*5)\n \n \n \n \n300,000\n \n \n \n277,687\n \n\nKey management personnel\n \nMG Community Credit Cooperatives\n \nCorporate\noperating borrowings (*6)\n \n \n \n \n3,000,000\n \n \n \n3,000,000\n \n\nTotal\n \n₩\n \n \n7,500,000\n \n \n \n5,462,687\n \n\n \n\n \n\n(*1)The Company is provided a joint guarantee of Korean Won 2,400,000\nthousand by Cho HyeongSeok, CEO of Play Company.\n\n(*2)The Company is provided a joint guarantee of Korean Won 1,200,000\nthousand by Jung BoRam, CEO of Play F&B Co., Ltd.\n\n(*3)The Company is provided a building as collateral of Korean\nWon 480,000 thousand for the borrowings by Jung BoRam, CEO of Play F&B Co., Ltd.\n\n(*4)The Company is provided a joint guarantee of Korean Won 960,000\nthousand by Park, UnKyoung, CEO of the LAMP.\n\n(*5)The Company is provided a joint guarantee of Korean Won 330,000\nthousand by Choi, Pyeungho, CEO of the Solaire.\n\n(*6)The Company is provided a joint guarantee of Korean Won 3,600,000\nthousand by Choi, Pyeungho, CEO of the Solaire.\n\n \n\nF-110\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\nCho HyeongSeok, CEO of Play Company provides a joint guarantee for the vehicle lease to Mirae Asset Securities as of December 31, 2025.\n\n \n\nCommitments the Company has entered into with related parties as of December 31, 2024 are as follows:\n\n \n\n**Related party**\n \n**Financial institutions**\n \n**Categories**\n \n \n \n**Credit limit**\n \n \n**Borrowings amount**\n \n\n \n \n \n \n \n \n \n \n**(In thousands of Korean won)**\n \n\nKey management personnel\n \nIndustrial Bank of Korea\n \nRevolving credit (*1)\n \n₩\n \n \n2,000,000\n \n \n \n-\n \n\nKey management personnel\n \nIndustrial Bank of Korea\n \n\nSmall and medium-sized\nenterprise financing (*2)\n\n \n \n \n \n500,000\n \n \n \n500,000\n \n\nKey management personnel\n \nIndustrial Bank of Korea\n \n\nSmall and medium-sized\nenterprise financing (*3)\n\n \n \n \n \n1,000,000\n \n \n \n1,000,000\n \n\nKey management personnel\n \nIndustrial Bank of Korea\n \n\nSmall and medium-sized\nenterprise financing (*4)\n\n \n \n \n \n400,000\n \n \n \n400,000\n \n\nKey management personnel\n \nShinhan Bank\n \nRevolving credit\n(*5)\n \n \n \n \n500,000\n \n \n \n-\n \n\nTotal\n \n₩\n \n \n4,400,000\n \n \n \n1,900,000\n \n\n \n\n \n\n(*1)The Company is provided a joint guarantee of Korean Won 2,400,000\nthousand by Cho HyeongSeok, CEO of Play Company.\n\n(*2)The Company is provided a joint guarantee of Korean Won 458,526\nthousand by Cho HyeongSeok, CEO of Play Company.\n\n(*3)The Company is provided a joint guarantee of Korean Won 1,200,000\nthousand by Jung BoRam, CEO of Play F&B Co., Ltd.\n\n(*4)The Company is provided a building as collateral of Korean\nWon 480,000 thousand by Jung BoRam, CEO of Play F&B Co., Ltd.\n\n(*5)The Company is provided a joint guarantee of Korean Won 600,000\nthousand by Cho HyeongSeok, CEO of Play Company.\n\n \n\nCho HyeongSeok, CEO of Play Company provides a joint guarantee for the vehicle lease to Mirae Asset Securities as of December 31, 2024.\n\n \n\n**F.**\n**Key management personnel compensation**\n\n \n\nThe compensation for the key management personnel for the years ended December 31, 2025, 2024 and 2023 are as follows:\n\n \n\nSchedule of management\npersonnel compensation related parties\n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n**2025**\n \n \n**2024**\n \n \n**2023**\n \n\n \n \n \n \n**(In thousands of Korean won)**\n \n\nShort-term employee benefits\n \n₩\n \n \n4,578,094\n \n \n \n1,185,704\n \n \n \n1,426,806\n \n\nPost-employment benefits\n \n \n \n \n719,179\n \n \n \n270,695\n \n \n \n279,982\n \n\nShare-based payments\n \n \n \n \n25,636,854\n \n \n \n(135,095\n)\n \n \n38,530\n \n\nTotal\n \n₩\n \n \n30,934,127\n \n \n \n1,321,304\n \n \n \n1,745,318\n \n\n \n\nCompensation of the Company’s key management personnel includes salaries, non-cash benefits, contributions to a post-employment defined benefit plan, and defined contribution plan and measurement of liabilities related to shareholders’ agreement\n\n \n\nF-111\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**38. Subsequent events**\n\n \n\n**A.**\n**Acquisition of new subsidiaries**\n\n \n\nOn March 11, 2026, the Company completed the acquisition of a 42.25% controlling interest in Hansol Inticube Co., Ltd., an AI language and software development company, for a total initial consideration of approximately Korean Won 15,000,337 thousand consisting of 5,864,088 shares of Hansol Inticube’s common stock.\n\n \n\nOn January 26, 2026, the Company completed the acquisition of a 55% controlling interest in Rabbit Walk Co., Ltd.\n\n \n\nThe consideration consisted of the issuance of 2,633,753 common shares of the Company at a price of $2.50 per share.\n\n \n\nThe transaction includes contingent consideration of up to 3,000,000 additional common shares, which are subject to the achievement of certain performance conditions.\n\n \n\nThe 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.\n\n \n\n**B.**\n**Extension of maturity date of short-term borrowings**\n\n \n\nOn February 27, 2026, Play F&B Co., Ltd. entered into an amendment to extend the maturity date of the short-term borrowing of Korean Won 1,000,000 thousand to February 27, 2027, and to revise the applicable interest rate from 6.775% to 9.438%.\n\n \n\nOn March 23, 2026, The LAMP Co., Ltd. entered into an amendment to extend the maturity date of the short-term borrowing of Korean Won 690,000 thousand to September 22, 2026, and to revise the applicable interest rate from CD+12.33% to CD+12.63%.\n\n \n\nOn May 7, 2026, The LAMP Co., Ltd. entered into an amendment to extend the maturity date of the short-term borrowing of Korean Won 441,000 thousand to May 7, 2027, and to revise the applicable interest rate from CD+3% to CD+2.36%.\n\n \n\n**C.**\n**Notice from the Nasdaq Stock Market**\n\n \n\nOn January 22, 2026, the Company received a notice from The Nasdaq Stock Market LLC indicating that its market value of listed securities was below $50,000,000 for the period from November 25, 2025 to January 20, 2026. The Company was provided a compliance period of 180 calendar days, expiring on July 21, 2026. On February 18, 2026, the Company received confirmation that its market value of listed securities was at least $50,000,000 for the period from January 20, 2026 to February 17, 2026, and the matter was closed.\n\n \n\nOn January 7, 2026, the Company received a notice from The Nasdaq Stock Market LLC indicating that it did not meet the minimum bid price requirement of $1.00 per share for the period from November 20, 2025 to January 6, 2026. The Company was provided a compliance period of 180 calendar days, expiring on July 6, 2026, to regain compliance. If the Company does not regain compliance within this period, it may be eligible for an additional compliance period of 180 calendar days, subject to meeting applicable listing requirements.\n\n \n\nF-112\n\n \n\n \n\n**K WAVE MEDIA LTD.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**D.**\n**Conversion of convertible notes**\n\n \n\nIn January 2026, the Company received notices of conversion from Anson Investments Master Fund LP and Anson East Master Fund LP in connection with the convertible notes.\n\n \n\nAccordingly, the Company issued an aggregate of 4,824,273 common shares upon conversion, including 3,857,634 shares to Anson Investments Master Fund LP and 966,639 shares to Anson East Master Fund LP.\n\n \n\nIn March 2026, the Company received notices of conversion from Loeb & Loeb LLP in connection with the convertible notes. Accordingly, the Company issued an aggregate of 1,952,662 common shares upon conversion and the note was cancelled in its entirety.\n\n \n\n**E.**\n**Borrowings of Play Company**\n\n \n\nOn March 25, 2026, Play Company entered into the loan agreement with Hana Bank in the amount of Korean Won 5,000,000 thousand, bearing interest at a variable annual rate equal to three-month Certificate of Deposit plus 2.396%. This borrowing is collateralized by 65,000 common shares of Playverse and 5,864,088 common shares of Hansol Inticube.\n\n \n\n**F.**\n**Amendment to Security Purchase Agreement and disposal of Play Company**\n\n \n\nOn April 29, 2026,\nthe Company entered into the amendment to Security Purchase Agreement. Pursuant to the agreement, the Company liquidated 88 Bitcoins\nand repaid part of Convertible notes issued to Anson Investments Master Fund LP and Anson East Master Fund LP. As a result of the\nliquidation, $6,952,000 was recovered and total loss of $2,863,108 incurred due to the investment in Bitcoins. It was also agreed\nthat Proceeds from sale of additional securities should be used not only for the purchase of Digital Assets but for investments in\nAI infrastructure assets.\n\n \n\nAs part of the transition to AI infrastructure business, on April 28,2026, the Board resolved rescission and termination of the Share Purchase Agreement relating to Play Company Co., Ltd. The final closing of the transaction is subject to shareholders’ approval.\n\n \n\nF-113"}