UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
OR
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Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for
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| ☒ | Smaller reporting company | |||
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TABLE OF CONTENTS
i
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations or financial condition, business strategy, plans and objectives of management for future operations, and the benefits and timing of the rollout of our magnet production facility and timing of expected milestones, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will” or “would” or the negative of these words or other similar terms or expressions. These forward-looking statements include, but are not limited to, statements concerning the following:
| ● | the ability to realize the benefits expected from the Business Combination; |
| ● | the ability to maintain the listing of the Common Stock and the USAR Warrants on Nasdaq; |
| ● | the ability to raise financing in the future and to comply with restrictive covenants related to long-term indebtedness; |
| ● | the future financial performance of USAR; |
| ● | USAR’s ability to comply with laws and regulations applicable to its business; and |
| ● | expansion plans and opportunities. |
These forward-looking statements are based on information available as of the date of this Quarterly Report and USAR’s management team’s current expectations, forecasts and assumptions, and involve a number of judgments, known and unknown risks and uncertainties and other factors, many of which are outside the control of USAR and its directors, officers and affiliates. Accordingly, forward-looking statements should not be relied upon as representing USAR’s management team’s views as of any subsequent date. USAR does not undertake any obligation to update, add or to otherwise correct any forward-looking statements contained herein to reflect events or circumstances after the date they were made, whether as a result of new information, future events, inaccuracies that become apparent after the date hereof or otherwise, except as may be required under applicable securities laws.
You should not place undue reliance on these forward-looking statements. Should one or more of a number of known and unknown risks and uncertainties materialize, or should any of our assumptions prove incorrect, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include, but are not limited to:
| ● | the fact that USAR has no history in commercial operations which limits the accuracy of any forward-looking forecasts, prospects or business outlook or plans; |
| ● | that USAR has generated negative operating cash flows and may experience negative cash flow from operations in the future and that USAR may not be able to generate positive cashflow from its expected future business operations; |
| ● | risks related to the development of our magnet production facility and the timing of expected production milestones and the timing and amount of future production, including any time delays, unforeseen expenses, increased capital costs, negative tariff implications, and other complications; |
| ● | timing of future cash flow provided by operating activities, if any; |
| ● | the magnet production business is subject to the availability of rare earth element (“REE”) oxide and metal feedstock; |
| ● | the supply and demand for rare earth minerals, including fluctuations in demand for, and prices of, Neodymium Iron Boron (“NdFeB or neo”) magnets, magnet materials, and necessary feedstock; |
| ● | uncertainty in any mineral estimates, uncertainty in any geological, metallurgical, and geotechnical studies and opinions; |
| ● | inability to convert current commercial discussions and/or memorandums of understanding with customers into definitive contracts; | |
| ● | the growth of existing and emerging uses for neo magnets; changes in the global supply of neo magnets due to tariffs, trade restrictions, or otherwise; |
| ● | competition in the magnet manufacturing industry; |
ii
| ● | changes in China’s or the United States’ political environment and policies; |
| ● | inability to obtain sufficient capital or other resources necessary to provide for such production; |
| ● | any failure by management to manage growth properly which could negatively impact our business; |
| ● | power or other utility disruption or shortage and limited access to raw materials; |
| ● | costs of production, capital expenditures, requirements for additional capital, and increasing costs, including rising electricity and other utility costs and cost increases due to tariffs; |
| ● | fluctuations in transportation costs or disruptions in transportation services or damage or loss during transport; |
| ● | our ability to build or maintain relationships with customers and suppliers, including any inability to meet individual customer specifications; |
| ● | diminished access to water; |
| ● | work stoppages or similar difficulties, breakdown in labor relations, or a shortage of skilled technicians and engineers; |
| ● | failure to retain key personnel or attract additional qualified personnel; |
| ● | failure to comply with certain agreements with government entities that have provided us with certain incentives and favorable financing; |
| ● | inability to access debt or equity capital when necessary or advisable; |
| ● | impacts of force majeure events; |
| ● | failure to develop and maintain relationships with local communities and stakeholders; |
| ● | extensive and costly environmental requirements; |
| ● | the need to obtain and sustain governmental permits and approvals; |
| ● | failure to comply with applicable anti-corruption, anti-bribery, anti-money laundering and similar laws and regulations; |
| ● | costs of compliance with environmental, health and safety regulations; |
| ● | the impacts of climate change; |
| ● | possible litigation risks, including permit disputes (including in respect of access and/or validity of tenure), environmental claims, occupational health and safety claims and employee claims; |
| ● | any infringement of the intellectual property rights of third parties; |
| ● | failure to adequately protect intellectual property rights; |
| ● | issues with information technology systems, including cyber threats, disruption, damage and failure; and |
| ● | use of resources and management attention related to the requirements of being a public company in the United States. |
iii
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
USA Rare Earth, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except par value)
| As of | ||||||||
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Deferred offering costs | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Non-current assets: | ||||||||
| Property, plant and equipment, net | ||||||||
| Mineral interests, at cost | ||||||||
| Equipment deposits | ||||||||
| Lease right-of-use assets | ||||||||
| Other non-current assets | ||||||||
| Total non-current assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES, MEZZANINE AND STOCKHOLDERS’ (DEFICIT) EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued liabilities | ||||||||
| Derivative liability, current | ||||||||
| Notes payable, current | ||||||||
| Finance lease liability, current | ||||||||
| Operating lease liability, current | ||||||||
| Other current liabilities | ||||||||
| Total current liabilities | ||||||||
| Deferred grants | ||||||||
| Finance lease liability, non-current | ||||||||
| Operating lease liability, non-current | ||||||||
| Earnout liability | ||||||||
| Warrant liability | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 8) | ||||||||
| Mezzanine equity: | ||||||||
| Subscription receivable | ( | ) | ||||||
| Total mezzanine equity | ||||||||
| Stockholders’ (deficit) equity: | ||||||||
| Common Stock $ | ||||||||
| Subscription receivable | ( | ) | ||||||
| Additional paid-in-capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Non-controlling interest | ||||||||
| Total stockholders’ (deficit) equity | ( | ) | ||||||
| Total liabilities, mezzanine and stockholders’ (deficit) equity | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
1
USA Rare Earth, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(Unaudited)
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Operating costs and expenses | ||||||||
| Selling, general and administrative | $ | $ | ||||||
| Research and development | ||||||||
| Total operating costs and expenses | ||||||||
| Operating loss | ( | ) | ( | ) | ||||
| Other income (expense) | ||||||||
| Interest and dividend income | ||||||||
| Gain on fair market value of financial instruments | ||||||||
| Interest and other expense | ( | ) | ( | ) | ||||
| Total other income | ||||||||
| Net income (loss) | ( | ) | ||||||
| Net income (loss) attributable to non-controlling interest | ( | ) | ( | ) | ||||
| Net income (loss) attributable to common stockholders | $ | $ | ( | ) | ||||
| Net income (loss) per common share - basic | $ | $ | ( | ) | ||||
| Net income (loss) per common share - diluted | $ | $ | ( | ) | ||||
| Weighted average shares outstanding - basic | ||||||||
| Weighted average shares outstanding - diluted | ||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
2
USA Rare Earth, Inc.
Condensed Consolidated Statements of Mezzanine Equity and
Stockholders’ Equity
(in thousands)
(Unaudited)
| Mezzanine Equity | Stockholders’ (Deficit) Equity | |||||||||||||||||||||||||||||||||||||||||||
| Preferred Stock | Subscription | Total Mezzanine | Common Stock | Additional Paid-In- | Subscription | Accumulated | Non- controlling | Total
Stockholders’ (Deficit) | ||||||||||||||||||||||||||||||||||||
| Shares | Amount | Receivable | Equity | Shares | Amount | Capital | Receivable | Deficit | Interest | Equity | ||||||||||||||||||||||||||||||||||
| Balance as of January 1, 2025 as recast* | $ | $ | ( | ) | $ | $ | | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||||||||||||
| Equity-based compensation - incentive units | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock - transaction bonus | ||||||||||||||||||||||||||||||||||||||||||||
| Extinguishment of note payable | ||||||||||||||||||||||||||||||||||||||||||||
| Convertible Preferred dividends (Class A and C) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Issuance of preferred stock and warrants, net of issuance costs | - | |||||||||||||||||||||||||||||||||||||||||||
| Forgiveness of related party promissory note | - | |||||||||||||||||||||||||||||||||||||||||||
| Deferred offering costs | - | ( | ) | ( | ) | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Deemed dividend - preferred accretion to redemption value | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Issuance of Common Stock in reverse recapitalization merger | - | ( | ) | |||||||||||||||||||||||||||||||||||||||||
| Earnout liability at Closing of the Merger | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Conversion of Series A Investor Warrants into liability-classified warrants | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Forward purchase agreements prepayment | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Early terminations of forward purchase agreements | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Accretion of forward purchase agreements | - | ( | ) | |||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Balance as of March 31, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||||||||||||
| * |
| Common Stock | Class
A Common | Class
B Common | Class
C Convertible Preferred | Class C-1 Convertible Preferred | Additional Paid- | Accumulated | Non- controlling | Total Stockholders’ | ||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | In-Capital | Deficit | Interest | Equity | |||||||||||||||||||||||||||||||||||||||||||
| Balance as of January 1, 2024 as previously reported | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
| Retroactive application of recapitalization | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Balance as of January 1, 2024 as adjusted* | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Class C and C-1 Convertible Preferred dividends | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of warrants | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Dilution of non-controlling interest | - | - | - | - | - | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||
| Balance as of March 31, 2024 | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||
| * | The shares of the Company’s common stock prior to the Merger have been retrospectively recast to reflect the change in the capital structure as a result of the Merger as described in Note 3. |
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
USA Rare Earth, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash Flows From Operating Activities: | ||||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
| Equity-based compensation | ||||||||
| Depreciation and amortization | ||||||||
| Non-cash interest expense | ||||||||
| Amortization of right-of-use assets | ||||||||
| Loss on sale of property and equipment | ||||||||
| Loss on Hatch note extinguishment | ||||||||
| Gain on fair market value of financial instruments | ( | ) | ( | ) | ||||
| Changes in assets and liabilities: | ||||||||
| Prepaid and other current assets | ( | ) | ( | ) | ||||
| Accounts payable | ( | ) | ||||||
| Accrued and other current liabilities | ( | ) | ( | ) | ||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Other liabilities | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash Flows From Investing Activities: | ||||||||
| Purchase of property, plant and equipment | ( | ) | ( | ) | ||||
| Equipment deposits | ( | ) | ( | ) | ||||
| Cash used in investing activities | ( | ) | ( | ) | ||||
| Cash Flows From Financing Activities: | ||||||||
| Proceeds from issuance of series A-2 preferred and warrants | ||||||||
| Proceeds from issuance of series A preferred and warrants | ||||||||
| Issuance cost for series A preferred and warrants | ( | ) | ||||||
| IPXX contribution of capital through merger | ||||||||
| Prepayment of forward purchase agreements | ( | ) | ||||||
| Proceeds from early termination of forward purchase agreements | ||||||||
| Payment of issuance costs of Class C-1 Convertible Preferred units | ( | ) | ||||||
| Payment of securities issuance costs | ( | ) | ( | ) | ||||
| Net cash provided by (used in) financing activities | ( | ) | ||||||
| Net increase (decrease) in cash | ( | ) | ||||||
| Cash and cash equivalents, Beginning of Year | ||||||||
| Cash and cash equivalents, End of Period | $ | $ | ||||||
| Supplemental Disclosure of Noncash Investing and Financing Activities: | ||||||||
| Class C and C-1 convertible preferred stock dividends | $ | $ | ||||||
| Class A-1 and A-2 convertible preferred stock dividends | $ | $ | ||||||
| Finance right-out-use assets obtained in exchange for finance lease liabilities | $ | $ | ||||||
| Operating right-of-use assets obtained in exchange for operating lease liabilities | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
USA Rare Earth, Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
NOTE 1. ORGANIZATION
The mission of USA Rare Earth, Inc. (formerly known as Inflection Point Acquisition Corp. II or “IPXX”), collectively with its subsidiaries (the “Company,” or “USAR”) is to establish a domestic rare earth magnet supply chain that supports the future state of energy, mobility, technology and national security in the United States (“U.S.”). USAR is developing a rare earth sintered neo magnet (“neo magnet” or “NdFeB”) manufacturing plant in Stillwater, Oklahoma, and intends to establish domestic rare earth and critical minerals supply, extraction, and processing capabilities to both supply its magnet manufacturing plant and market surplus materials to third parties. Rare earth magnets are critical to various business sectors and industries, including the defense, automotive, aviation, industrial, AI Robotics, medical, and consumer electronics industries, among others. USAR is planning to take a broad approach to the industries it serves with the intention of providing high quality NdFeB magnets to a variety of industries and customers. USAR’s focus on developing domestic rare earth production aligns with national priorities, offering the potential of a sustainable and secure domestic supply of materials critical to key industries.
USAR was a special purpose acquisition company incorporated as a Cayman Islands exempted corporation on March 6, 2023. The Company was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. Following the closing of the Merger Transactions (as defined below), shares of USAR common stock (“Common Stock”) and USAR warrants began trading on Nasdaq Stock Market LLC (“Nasdaq”) under the symbols “USAR” and “USARW”, respectively, on March 14, 2025.
These condensed consolidated financial statements refer to the mining operations of the Company, conducted through Round Top Mountain Development, LLC (“RTMD”), at Round Top Mountain in Texas (“Round Top”) and the Company’s research and development facility in Colorado as the “Round Top Project”. RTMD has mining rights in Texas and is developing processing technology for the rare earth minerals which are to be mined in Texas.
IPXX Business Combination Agreement
On August 21, 2024, IPXX entered into a Business Combination Agreement (as amended on November 12, 2024 and January 30, 2025, the “Business Combination Agreement”), by and among IPXX, USA Rare Earth, LLC, a Delaware limited liability company (“USARE LLC”), and IPXX Merger Sub, LLC, a Delaware limited liability company and a direct wholly owned subsidiary of IPXX (“Merger Sub”). Pursuant to the Business Combination Agreement, Merger Sub merged with and into the USARE LLC, with the USARE LLC continuing as the surviving company (the “Merger”).
On March 12, 2025, as contemplated by the Business Combination Agreement,
IPXX filed a notice of deregistration with the Cayman Islands Registrar of Companies and filed a certificate of incorporation and certificate
of corporate domestication with the Delaware Secretary of State, pursuant to which IPXX was domesticated and continues as a Delaware corporation,
changing its name to USA Rare Earth, Inc (the “Domestication”). As a result of the Domestication, each issued and outstanding
Class A ordinary share of IPXX automatically converted, on a one-for-one basis, into a share of Common Stock and each of the issued and
outstanding warrants to purchase Class A ordinary shares of IPXX automatically became a warrant exercisable for
On March 13, 2025 (the “Closing Date”
or “Closing”), USAR consummated the previously announced Merger and related transactions (the “Merger Transactions”)
contemplated by the Business Combination Agreement and USARE LLC became a direct wholly owned subsidiary of USAR. As a result of
the Merger Transactions, all issued and outstanding Class A and B common units, Class C and C-1 preferred units, equity-based incentive
units and warrants to acquire Class B common units and Class C preferred units of USARE LLC were converted into shares of Common Stock
using an exchange ratio of approximately
5
As a result of the Merger, USAR is a holding company, in which substantially all of the assets and business are held by USARE LLC and its subsidiaries and continues to operate through USARE LLC and its subsidiaries. The Merger is accounted for as a reverse recapitalization in accordance with generally accepted accounting principles in the U.S. (“U.S. GAAP”) and not as a business combination. Under this method of accounting, IPXX is treated as the acquired company for financial reporting purposes. Accordingly, for accounting purposes, the Merger will be treated as the equivalent of USARE LLC issuing stock for the net assets of IPXX, accompanied by a recapitalization. USARE LLC has been determined to be the accounting predecessor to the combined entity.
Unless otherwise noted or the context otherwise requires, references to the “Company,” “USAR,” “USA Rare Earth, Inc.,” refer to the business of USARE LLC and its subsidiaries prior to the Closing and to the business of USAR and its subsidiaries, including USARE LLC, following the Closing.
See additional information in Note 3, “Merger Transaction”.
Going Concern
The accompanying condensed consolidated financial statements have been
prepared in conformity with U.S. GAAP, which contemplates continuation of the Company as a going concern and the continuity of operations,
realization of assets, and liquidation of liabilities in the normal course of business. The Company has generated no revenues since inception,
continues to incur losses from operations, and has an accumulated deficit. For the three months ended March 31, 2025, the Company had net income of $
Subsequent to March 31, 2025, the Company received additional
cash proceeds of $
Although, as of March 31, 2025, the Company had
cash on its condensed consolidated balance sheet of $
Based on the Company’s need to raise additional capital as well as milestones required for its current strategic plan to generate sustainable commercial revenues, there is substantial doubt regarding its ability to continue as a going concern for the twelve months following the issuance of these condensed consolidated financial statements.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial reporting and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations relating to interim financial statements. In management’s opinion, these unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the Company’s financial position as of March 31, 2025 and December 31, 2024 and the results of operations and cash flows for the three months ended March 31, 2025 and 2024. The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results to be expected for the full year or any other future interim or annual period. The December 31, 2024 balances reported herein are derived from the audited consolidated financial statements of USARE LLC.
6
The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements of USARE LLC as of and for the years ended December 31, 2024 and 2023 contained in a Form 8-K dated and filed with the SEC on March 19, 2025.
These financial statements have been prepared on a basis that assumes that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.
Emerging Growth Company Status
The Company is an emerging growth company as defined in the Jumpstart Our Business Startups Act (“JOBS Act”). The JOBS Act, as defined, provides emerging growth companies with certain exemptions from public company reporting requirements for up to five fiscal years while a company remains an emerging growth company. As part of these exemptions, the Company need only provide two fiscal years of audited financial statements instead of three, it has reduced disclosure obligations such as for executive compensation, and it is not required to comply with auditor attestation requirements from Section 404(b) of the Sarbanes-Oxley Act of 2002, as amended, regarding its internal control over financial reporting. Additionally, the JOBS Act has allowed the Company the option to delay adoption of new or revised financial accounting standards until private companies are required to comply with new or revised financial accounting standards.
Principles of Consolidation
The condensed consolidated financial statements include the accounts of the Company, as well as its wholly-owned subsidiaries and variable interest entities (“VIEs”) for which the Company is the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. The amounts that involve significant estimates include equity-based compensation, asset and liability valuations, certain equity issuances, and other fair value estimates reported. The assumptions used in calculating fair value represent the Company’s best estimates. However, these estimates involve inherent uncertainties and the application of judgment. As a result, if factors change or the Company uses different assumptions, any gain or loss recognized using estimates could be materially different.
Cash and Cash Equivalents
Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash deposits. The Company considers cash equivalents to be highly liquid investments, including U.S. treasury and agency securities purchased with original maturities of three months or less. The Company maintains its cash in institutions insured by the Federal Deposit Insurance Corporation (“FDIC”). Management considers the risk of loss to be minimal.
Cash and cash equivalents consist of cash and
liquid investments with an original maturity of three months or less. At March 31, 2025 and December 31, 2024, cash and cash
equivalents consisted of $
The Company continually monitors its cash positions with the financial institutions through which it invests. The Company maintains balances in various U.S. financial institutions in excess of U.S. federally insured limits.
7
Deferred Offering Costs
Deferred offering costs consist of direct legal, advisory, and other
fees related to the Business Combination Agreement, and the Merger transactions as described in Note 1, “Organization”. These
costs are capitalized as incurred and are presented as part of current assets in the Company’s condensed consolidated balance sheets
and totaled and $
Changes in Ownership Interest Without Loss of Control
Changes in a parent’s ownership interest that do not result in a change in control of the subsidiary that is a business are accounted for as equity transactions (i.e., no gain or loss is recognized in earnings) and in accordance with Accounting Standards Codification (“ASC”) 810, Consolidation. The carrying amount of the non-controlling interest (“NCI”) is adjusted to reflect the change in the NCI’s ownership interest in the subsidiary. Any difference between the amount by which the NCI is adjusted and the fair value of the consideration received is attributed to shareholders’/members’ equity and recognized in additional paid-in capital (“APIC”).
Fair Value
U.S. GAAP defines fair value as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price), and establishes a fair value hierarchy that prioritizes the inputs used to measure fair value using the following definitions (from highest to lowest priority):
| ● | Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. |
| ● | Level 2 — Observable inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data by correlation or other means. |
| ● | Level 3 — Prices or valuation techniques requiring inputs that are both significant to the fair-value measurement and unobservable. |
To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.
See additional information in Note 4, “Fair Value Measurements”.
Long-lived Assets
In accordance with ASC 360-10, Impairment or Disposal of Long-Lived Assets, the Company periodically reviews the carrying value of its long-lived assets, such as property, plant and equipment, mineral interests and equipment deposits, to test whether current events or circumstances indicate that such carrying value may not be recoverable. When impairment indicators are identified, a recoverability analysis is performed by comparing estimated future net cash flows with the carrying value and future obligations on an undiscounted basis. If an asset’s carrying value exceeds such estimated cash flows, the Company would record an impairment loss for the difference between the asset’s carrying amount and its fair value. Where estimates of future net cash flows are not determinable and where other conditions indicate the potential for impairment, management uses available market information and/or third-party valuation experts to assess if the carrying value can be recovered and to estimate fair value.
The Company did not record an impairment loss related to long-lived assets for the three months ended March 31, 2025 and the year ended December 31, 2024.
8
Property, Plant, and Equipment
Property, plant, and equipment are stated at cost,
less accumulated depreciation. Advance payments of equipment not yet received are recorded as equipment deposits on the condensed consolidated
balance sheets.
| Property and Equipment | Useful Life | |
| Land improvements | ||
| Buildings | ||
| Magnet plant equipment | ||
| Lab equipment | ||
| Leasehold improvements |
Depreciation commences once the asset is ready for its intended use. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation, is removed from the accounts and any resulting gain or loss is reflected in the condensed consolidated statements of operations.
The costs of normal maintenance, repairs, and minor replacements are expensed as incurred.
Mineral Properties and Evaluation and Exploration Costs
Mining property acquisition costs, including indirectly related acquisition costs, are capitalized when incurred. The cost of mining properties is included in mineral interests on the Company’s condensed consolidated balance sheets. Acquisition costs include cash consideration and the fair market value of shares issued as consideration. Evaluation and exploration costs are expensed as incurred. When it is determined that a mining deposit can be economically and legally extracted or produced based on established proven and probable reserves under Item 1300 of Regulation S-K, development costs incurred after such determination will be considered for capitalization. The establishment of proven and probable reserves is based on results of feasibility studies, which indicate whether a property is economically feasible. The Company also capitalizes the cost for value beyond proven and probable (“VBPP”) reserves when it acquires the rights to mining properties. Upon commencement of commercial production, capitalized costs will be amortized over their estimated useful lives or units of production, whichever is a more reliable measure. Capitalized amounts relating to a property that is abandoned or otherwise considered uneconomic for the foreseeable future are written off.
The recoverability of the carrying values of mining properties is dependent upon economic reserves being discovered or developed on the properties. Development and/or start-up of a project will depend on, among other things, management’s ability to raise sufficient capital for these purposes.
The Company assesses the carrying value of mining properties for impairment whenever information or circumstances indicate the potential for impairment. This would include events and circumstances such as the inability to obtain all the necessary permits, changes in the legal status of mining properties, government actions, the results of exploration activities and technical evaluations, and changes in economic conditions, including the price of commodities or input prices.
9
Leases
The Company leases real estate and lab equipment in noncancelable operating and finance leases accounted for in accordance with ASC 842, Leases.
At the inception of an arrangement, the Company determines whether the arrangement is, or contains, a lease. A contract is, or contains, a lease when there is a right to control the use of an identified asset for a period of time.
A lease is a finance lease if one or more of the following criteria are met: (i) the lease transfers ownership of the asset by the end of the lease term, (ii) the lease contains an option to purchase the asset that is reasonably certain to be exercised, (iii) the lease term is for the major part of the remaining useful life of the asset, (iv) the present value of the lease payments equals or exceeds substantially all of the fair value of the asset, or (v) the asset is specialized in nature to have no alternative use to the lessor at the end of the lease term.
A lease is classified as an operating lease if it does not meet any of the finance lease criteria noted above. The Company’s operating leases consist of real estate and the Company’s finance leases consist of lab equipment.
At lease commencement, the Company recognizes a right-of-use asset and lease liability for all leases, except short-term leases with an original term of 12 months or less. A right-of-use asset is initially measured by adding the initial measurement of the lease liability, any lease payments made to the lessor at or before lease commencement, any initial direct costs incurred by the lessee, and subtracting any lease incentives received. The lease liability is initially measured at the present value of the minimum lease payments, discounted using the rate implicit in the lease or the Company’s incremental borrowing rate based on the original lease term. The rate implicit in the lease is used whenever that rate is readily determinable. If the rate implicit in the lease is not readily determinable, the Company utilizes its incremental borrowing rate, which is the rate for a collateralized loan with the same term as the lease.
The Company recognizes lease expense for its operating leases on a straight-line basis over the lease term plus variable lease payments as incurred. The Company recognizes lease expense for its finance leases as the amortization of the right-of-use asset on a straight-line basis over the lease term or useful life of the underlying asset, interest expense on the lease liabilities, and any variable lease payments as incurred. The Company amortizes right-of-use assets for finance leases over the useful life of the asset when it is reasonably certain to exercise a purchase option, otherwise the right-of-use asset is amortized over the shorter of the lease term or the useful life of the asset. Variable lease payments that depend on an index or a rate are initially measured using the index or rate at the commencement date.
Lease costs are presented in the condensed consolidated statements of operations as follows: (i) operating lease expense in General and administrative expenses, (ii) finance lease right-of-use asset amortization in Depreciation, and (iii) interest on finance lease liabilities in Interest expense, net. Finance lease right-of-use assets are presented within Property, plant and equipment, net on the condensed consolidated balance sheets.
Derivatives
The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain embedded derivatives that should be bifurcated from the host contract, pursuant to ASC 815, Derivatives and Hedging. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period
The Company’s note payable, extinguished during the three months ended March 31, 2025, contained an embedded derivative that was bifurcated from the host contract and recognized as a liability. This liability was remeasured at fair value at December 31, 2024 and the Company reviewed whether there were material changes during interim periods. Changes to the fair value are recognized as fair market gains or losses in other income and expense in the condensed consolidated statements of operations. See Note 10, “Note Payable” for further details of the Company’s note payable.
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Earnout Liabilities
In accordance with ASC 815, unvested Earnout Shares (as defined below) are classified as a liability because they are not considered to be indexed to the Company’s common stock due to the change of control provisions in the Business Combination Agreement. At each period end, the Earnout Shares are remeasured to their fair value with the changes during that period recognized in other income (expense) on the condensed consolidated statement of operations. Upon issuance and release of the shares after each Triggering Event (as defined in Note 3, “Merger Transaction”) is met, the related Earnout Shares will be remeasured to fair value at that time with the changes recognized in other income (expense), and such Earnout Shares will be reclassed to shareholders’ equity on the condensed consolidated balance sheet. As of March 31, 2025, of the Triggering Events have occurred.
Government Grants
Because there is no specific guidance under U.S. GAAP that addresses the recognition and measurement of government assistance received by non-government entities, the Company accounts for government assistance by analogy to International Accounting Standards (“IAS”) 20, Accounting for Government Grants (“IAS 20”). The guidance within IAS 20 allows companies to choose between two options for how the associated profit or loss relating to the deferred income over the life of an underlying asset will be presented for grants related to assets. The Company has elected to account for these grants through profit and loss over the depreciable life of the underlying assets. The guidance within IAS 20 also allows companies to choose between two options of accounting for grants related to income. The Company has elected to report this category of grants as a reduction in the related expenses. See Note 13, “Government Grants” for further details of the Company’s government grants.
Warrants
The Company accounts for warrants as either equity or liability classified instruments based on an assessment of the warrant’s specific terms pursuant to the guidance of ASC 480, Distinguishing Liabilities from Equity and ASC 815. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, that meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815.
As of March 31, 2025, warrants to purchase approximately
Equity-based Compensation
The Company expenses equity-based compensation to employees and non-employees in accordance with ASC 718, Compensation - Stock Compensation. The fair value of equity-based compensation awards is measured at the date of grant and amortized over the requisite service period, which is generally the vesting period, with a corresponding increase in additional paid-in capital. The Company uses the Black-Scholes option valuation model to calculate the fair value of awards granted.
In the case of a share-based compensation award that is either cancelled or forfeited prior to vesting, the amortized expense associated with the unvested awards is reversed. The Company has elected to account for forfeitures as they occur. See Note 12, “Equity-Based Compensation” for further information regarding equity-based compensation expense and the assumptions used in estimating the expense.
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Dividends
As the Company has an accumulated deficit, dividends are recorded as a reduction to additional paid in capital. Once additional paid-in capital is reduced to zero, dividends are recorded against accumulated deficit. Paid-in-kind dividends are recorded at estimated fair value in accordance with ASC 845, Nonmonetary Transactions.
Net Income (Loss) per Share
The Company reports both basic and diluted earnings per share. Basic earnings per share is calculated based on the weighted average number of shares of common stock outstanding and excludes the dilutive effect of warrants, incentive units and other types of convertible securities. Diluted earnings per share is calculated based on the weighted average number of shares of common stock outstanding and the dilutive effect of warrants, incentive units and other types of convertible securities are included in the calculation. Securities are excluded from the diluted earnings per share calculation if their effect is anti-dilutive, such as in periods where a net loss has been reported.
Variable Interest Entities
The Company assesses its investments and other significant relationships to determine whether it has a variable interest in any legal entities and whether or not those entities are VIEs. A VIE is an entity with insufficient equity at risk for the entity to finance its activities without additional subordinated financial support or in which equity investors lack the characteristics of a controlling financial interest. If an entity is determined to be a VIE, the Company evaluates whether it is the primary beneficiary. The primary beneficiary analysis is a qualitative analysis based on power and economics. The Company has concluded that it is the primary beneficiary and has consolidated the VIE because it has both (i) the power to direct the activities of the VIE that most significantly influence the VIE’s economic performance and (ii) the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE.
Income Taxes
The Company accounts for income taxes under an asset-and-liability approach. Deferred income taxes reflect the impact of temporary differences between assets and liabilities recognized for tax and financial reporting purposes measured by applying enacted tax rates and laws that will be in effect when the differences are expected to reverse, net operating loss carryforwards and tax credits. Valuation allowances are provided when necessary to reduce net deferred tax assets to an amount that is more likely than not to be realized. The Company has provided a full valuation allowance against its net deferred tax assets as of March 31, 2025 and December 31, 2024. In addition, and given the Company’s cumulative losses, no current income tax benefit has been recognized in the condensed consolidated statements of operations. The Company’s policy is to include interest and penalties related to unrecognized tax benefits within the Company’s provision for income taxes.
Recently Issued Accounting Pronouncements Not Yet Adopted
In January 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-01 - Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. This ASU amends the effective date of Update 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact of adopting this ASU on its financial reporting disclosures.
In November 2024, the FASB issued its ASU 2024-03, Income Statement - Reporting Comprehensive Income (Topic 220): Disaggregation of Income Statement Expenses. The ASU requires additional disclosures by disaggregating the costs and expense line items that are presented on the face of the income statement. The disaggregation includes: (i) amounts of purchased inventory, employee compensation, depreciation, amortization, and other related costs and expenses; (ii) an explanation of costs and expenses that are not disaggregated on a quantitative basis; and (iii) the definition and total amount of selling expenses. This ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The ASU should be applied prospectively. Retrospective application is permitted for all prior periods presented in the financial statements. The Company is currently evaluating the impact of adopting this ASU on its financial reporting disclosures.
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In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in this ASU provide for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid. This ASU is effective for the Company prospectively to all annual periods beginning after December 15, 2024. The Company is currently evaluating the impact of this standard on its disclosures.
Recently Adopted Accounting Pronouncement
In March 2024, the FASB issued ASU 2024-01, Compensation - Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards, which improves current GAAP by adding an illustrative example to demonstrate how an entity should apply the scope guidance to determine whether a profits interest award should be accounted for in accordance with Topic 718. This ASU is effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years and did not have a material effect on the Company’s condensed consolidated financial statements.
NOTE 3. MERGER TRANSACTION
As discussed in Note 1, “Organization”, IPXX and USARE LLC entered into a Business Combination Agreement on August 21, 2024. In connection with the transactions contemplated by the Merger, the following funding events occurred prior to the Closing:
| ● | On
August 21, 2024, the Company and certain accredited investors, including certain funds related to IPXX entered into Securities Purchase
Agreements (“SPA”) for such investors to purchase (i) USARE LLC Class A Convertible Preferred Units and (ii) USARE Class
A Preferred Investor Warrants for gross cash proceeds of $ |
| ● | On
January 31, 2025, the Company and certain accredited investors, including USARE LLC Class A-2 Convertible Preferred Unit Investors, Mr.
Blitzer, and Collective Capital Management LLC entered into SPAs for such investors to purchase (i) USARE LLC Class A-2 Convertible Preferred
Units and (ii) USARE LLC Class A Preferred Investor Warrants for an aggregate purchase price of approximately $ |
The Merger was accounted for as a reverse recapitalization whereby
USARE LLC is the successor continuing existing business operations. Outstanding Class A-1 and A-2 preferred units of USARE LLC were converted
into Series A convertible preferred stock on a one-for-one basis taking into account payment-in-kind dividends on such units from the
date of issuance through the Closing Date. Immediately prior to the Closing Date, outstanding Class C and C-1 preferred units of USARE
LLC were converted into Class B units taking into account certain antidilution provisions and payment-in-kind dividends on such units
from the date of issuance through the Closing Date. Outstanding Class A and B units including the newly converted C and C-1 preferred
units of USARE LLC were converted into shares of Common Stock using an exchange ratio of approximately
| ● | USARE LLC’s unvested incentive units became immediately vested and all vested incentive units were converted to Common Stock, see Note 12, “Equity-Based Compensation”; |
| ● | USARE LLC’s warrants to purchase Class B units and Class C preferred units were exercised on a cashless basis and converted to Common Stock, see Note 11, “Mezzanine and Stockholders’ (Deficit) Equity”; |
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| ● | The Hatch Note converted into approximately |
| ● | The Company issued approximately |
| ● | The Company issued approximately |
| ● | The Company issued approximately |
The following table summarizes the number of equity instruments outstanding immediately following the Merger and the PIPE investment (in thousands):
| Shares | % of Common | % of Voting | ||||||||||
| Public shareholders | % | |||||||||||
| Inflection Point Holdings II LLC | % | |||||||||||
| USARE LLC shareholders | % | |||||||||||
| Shares issued to CCM (Issuance cost) | % | |||||||||||
| Total Common Stock | % | |||||||||||
| Series A Preferred Stock - USARE LLC shareholders | ||||||||||||
| Series A Preferred Stock - PIPE Investors | ||||||||||||
| Series A Preferred Stock - Blitzer promissory note | ||||||||||||
| Total Voting Shares | ||||||||||||
In connection with the Merger, approximately $
The following table summarizes the net proceeds from the Merger (in thousands):
| Sources | ||||
| Cash - PIPE investment | $ | |||
| Cash - IPXX Trust Account | ||||
| Cash - IPXX Op Account (Blitzer note) | ||||
| Total Cash in IPXX going into the Merger | $ | |||
| Uses | ||||
| Transaction costs allocated to equity | $ | ( | ) | |
| Issuance costs for the PIPE investment | $ | ( | ) | |
| FPA Prepayments | ( | ) | ||
| Other Expenses and Prepayments | ( | ) | ||
| Total Cash used immediately after the merger | $ | ( | ) | |
| Net Cash to USARE LLC | $ | |||
| Transaction costs allocated to equity | $ | |||
| Net cash used by USARE LLC | ( | ) | ||
| $ |
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Earnout Liability
In connection
with the Closing of the Merger, USAR is required to issue to certain USARE LLC shareholders as of the effective date of the Merger and
CCM up to
Management considered the guidance within ASC 815 and determined that the contractual requirement to issue the Earnout Shares meets the definition of a derivative. Management next considered whether or not the Earnout Shares meet the requirements for the scope exception under the “Own Equity” scope exception in ASC 815 for contracts indexed to an entity’s own equity. The change of control clause in the Business Combination Agreement represents an exercise contingency related to an event outside of the Company’s control, which is not based on an observable market or an observable index. The obligation to issue the Earnout Shares that include exercise contingencies that are outside the control of the Company are classified as liabilities and excluded from equity classification. Instruments not classified in equity do not meet the “Own Equity” scope exception.
The Earnout Shares are classified as liabilities and no additional
analysis under ASC 815 is required. The Merger is accounted for as a reverse recapitalization and the Earnout Shares represent consideration
of IPXX securities that are being transferred to the holders of the Company. As such, the Earnout Shares are recorded through the recapitalization
of equity within additional paid-in capital upon recognition and are remeasured on a recurring basis. As of the Closing Date, the Earnout
Shares had a fair value of $
Forward Purchase Agreements
On March
11, 2025, IPXX entered into a FPA with three separate investors (“Sellers”) pursuant to which the investors agreed
to hold up to a total of approximately
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Each FPA provided that no later than the earlier
of (a) one business day after the Closing and (b) the date any assets from IPXX’s trust account are disbursed in connection with
the Merger Transaction, the Seller under such FPA was paid directly, out of the funds held in IPXX’s trust account, an amount (the
“Prepayment Amount”) equal to the product of (i) the FPA Shares and (ii) an amount (the “Initial Price”) equal
to the redemption price per share payable to investors who elected to redeem in connection with the Merger Transactions, which Initial
Price was approximately $
The optional early termination economically results in the prepaid forward contract being akin to a written put option with the Sellers’ right to sell all or a portion of the FPA Shares to the Company on the Maturity Date.
Pursuant to the guidance in ASC 815, the FPAs
are each a single freestanding financial instrument comprising of a subscription receivable under SEC Rule 5-02.29 of Regulation S-X.
The FPAs were not precluded from equity classification and therefore the Company recorded the FPAs within equity as a subscription receivable.
The subscription receivable was initially measured at its fair value of $
On various
dates between the closing of the merger and March 31, 2025, the Sellers exercised their rights under the FPAs with respect to approximately
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NOTE 4. FAIR VALUE MEASUREMENTS
The following tables present the Company’s financial instruments measured at fair value on a recurring basis as of March 31, 2025 and December 31, 2024 (in thousands):
| As of March 31, 2025 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Assets: | ||||||||||||||||
| Money market funds | $ | $ | $ | $ | ||||||||||||
| Total assets, measured at fair value | $ | $ | $ | $ | ||||||||||||
| Liabilities: | ||||||||||||||||
| Earnout liability | $ | $ | $ | $ | ||||||||||||
| Warrant liability | ||||||||||||||||
| Total liabilities, measured at fair value | $ | $ | $ | $ | ||||||||||||
| As of December 31, 2024 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Assets: | ||||||||||||||||
| Money market funds | $ | $ | $ | $ | ||||||||||||
| Total assets, measured at fair value | $ | $ | $ | $ | ||||||||||||
| Liabilities: | ||||||||||||||||
| Derivative liability | $ | $ | $ | $ | ||||||||||||
| Total liabilities, measured at fair value | $ | $ | $ | $ | ||||||||||||
Money market funds are valued at cost, which approximates fair value. These amounts are included on the condensed consolidated balance sheets in cash and cash equivalents as of March 31, 2025 and December 31, 2024.
The balances of assets and liabilities categorized within Level 3 of the fair value hierarchy measured at fair value on a recurring basis are reconciled as follows:
| Derivative liability | Earnout liability | Warrant liability | Total | |||||||||||||
| Balance at January 1, 2025 | $ | $ | $ | $ | ||||||||||||
| Establishment of earnout and warrant liabilities | ||||||||||||||||
| Change in estimated fair value | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Settlement of the Note upon conversion | ( | ) | ( | ) | ||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | $ | ||||||||||||
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Valuation of the Derivative Liability
On February 26, 2025, the Company remeasured the derivative liability using the Black-Scholes model upon the change in terms of the Hatch Note. See Note 10, “Note Payable” for additional information regarding the Hatch Note. The following table summarizes the significant inputs:
| As of | ||||||||
| February 26, 2025 | December 31, 2024 | |||||||
| Class C-1 unit price | $ | |||||||
| Class A common unit price | $ | |||||||
| Expected volatility | % | % | ||||||
| Risk-free rate | % | % | ||||||
| Credit risk spread | % | % | ||||||
| Remaining term (in years) | ||||||||
Valuations of the Earnout Liability
The Company valued the earnout liability using a Monte Carlo simulation which includes Level 3 unobservable inputs on the initial valuation date (March 13, 2025) and March 31, 2025. The following table summarizes the significant inputs:
| As of | ||||||||
| March 13, 2025 | March 31, 2025 | |||||||
| Share price | $ | $ | ||||||
| Expected volatility | % | % | ||||||
| Risk-free interest rate | % | % | ||||||
| Remaining term (in years) | ||||||||
Valuations of the Warrant Liability
The Company issued Series A Investor Warrants
in exchange for prior Class A Purchase Warrants in connection with the Merger and related transactions.
| As of | ||||||||
| March 13, 2025 | March 31, 2025 | |||||||
| Share price | $ | $ | ||||||
| Expected volatility | % | % | ||||||
| Risk-free rate | % | % | ||||||
| Exercise price | $ | $ | ||||||
| Dividend yield | % | % | ||||||
| Call term (in years) | ||||||||
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NOTE 5. PROPERTY, PLANT AND EQUIPMENT, NET
Property, plant, and equipment, net is comprised of the following (in thousands):
| As of | ||||||||
| March 31, 2025 | December 31, 2024 | |||||||
| Land | $ | $ | ||||||
| Land improvements | ||||||||
| Construction in progress - Buildings | ||||||||
| Construction in progress - Magnet plant equipment | ||||||||
| Lab equipment | ||||||||
| Leasehold improvements | ||||||||
| Computer equipment | ||||||||
| Property, plant and equipment, gross | $ | $ | ||||||
| Less: Accumulated depreciation | ( | ) | ( | ) | ||||
| Property, plant and equipment, net | ||||||||
| Finance lease right-of-use assets | ||||||||
| Less: Accumulated amortization | ( | ) | ||||||
| Finance lease-right-of-use assets, net | ||||||||
| Total property, plant and equipment, net | $ | $ | ||||||
Depreciation and amortization expense is comprised of the following (in thousands):
| For the Three Months Ended | ||||||||
| March 31, 2025 | March 31, 2024 | |||||||
| Depreciation expense | $ | | $ | | ||||
| Amortization expense | ||||||||
| Total | $ | $ | ||||||
NOTE 6. VARIABLE INTEREST ENTITY
Round Top Mountain Development
On May 17, 2021, the Company completed the acquisition
of
Effective
June 26, 2023, RTMD, the USARE LLC and TMRC entered into an amended and restated limited liability company agreement of RTMD pursuant
to which, in the event that TMRC does not fund its share of mandatory capital contributions called for by USARE LLC as the manager of
RTMD, USARE LLC is obligated to cover the shortfall by making additional capital contributions to RTMD (or in the event that USARE LLC
does not fund, the capital call will be withdrawn). If USARE LLC does fund the capital contribution, additional equity interests in RTMD
will be issued to USARE LLC and TMRC will be proportionally diluted in accordance with the terms of the amended and restated limited liability
company agreement. As of March 31, 2025 and December 31, 2024, TMRC’s interest in RTMD had been reduced to
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The Company’s condensed consolidated financial
statements include assets and liabilities associated with RTMD.
| As of | ||||||||
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Cash and cash equivalents | $ | $ | ||||||
| Prepaid expenses and other current assets | ||||||||
| Lease right-of-use asset | ||||||||
| Mineral interests | ||||||||
| Property, plant and equipment, net | ||||||||
| Other assets | ||||||||
| Consolidated assets | $ | $ | ||||||
| Accounts payable | $ | $ | ||||||
| Accrued liabilities | ||||||||
| Lease liability | ||||||||
| Consolidated liabilities | $ | $ | ||||||
RTMD did not record depletion expense for the Mineral interests for the three months ended March 31, 2025 and 2024.
RTMD’s creditors have no recourse against the Company for the RTMD consolidated liabilities included within the Company’s condensed consolidated balance sheets as of March 31, 2025 and December 31, 2024.
The assets of the consolidated VIE can only be used to settle the obligations of the consolidated VIE and not the obligations of the Company.
Mineral Interests
The Company acquired two mineral rights leases
along with an associated groundwater lease in Hudspeth County, Texas as part of the acquisition of RTMD. Mineral property acquisition
costs, including acquired intangibles, licenses and lease payments, are capitalized. The net carrying value of mineral rights were $
Impairment losses are recorded on mineral interests when indicators of impairment are present and the carrying amount exceeds the associated estimated future undiscounted cash flows. As of March 31, 2025 and December 31, 2024, the Company had not recognized any impairment losses related to mineral interests held.
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NOTE 7. ACCRUED LIABILITIES
A summary of the Company’s accrued liabilities (in thousands):
| As of | ||||||||
| March 31, 2025 | December 31, 2024 | |||||||
| Accrued payroll and related | $ | | $ | | ||||
| Accrued other liabilities | ||||||||
| Total accrued liabilities | $ | $ | ||||||
NOTE 8. COMMITMENTS AND CONTINGENCIES
Potential Future Environmental Contingency
The Company’s planned exploration and development activities are subject to various federal and state laws and regulations governing the protection of the environment. These laws and regulations are continually changing and generally have become more restrictive. The Company will conduct its operations to protect public health and the environment and believes that its current engineering operations are materially in compliance with all applicable laws and regulations. While the Company’s mining activities are not yet operational, the Company has made, and expects to make in the future, expenditures to comply with all local and federal environmental laws and regulations. The ultimate amount of reclamation and other future site-restoration costs to be incurred for future mining interests is unknown and uncertain as of March 31, 2025.
Litigation
From time to time, the Company may become subject to legal proceedings, claims or litigation arising in the ordinary course of business. In addition, the Company may receive notices alleging infringement of patents or other intellectual property rights. The outcomes of any legal proceedings, claims, notices or litigation are subject to uncertainty, and any claims against the Company, whether meritorious or not, can be time-consuming, result in costly litigation, require significant management time, create negative perceptions with communities, stakeholders, and government agencies and result in the diversion of significant operational resources. If an unfavorable outcome was to occur in any proceeding, claim or litigation, we could be adversely affected in the period in which they are resolved and the impact could be material to the Company’s business, financial condition, cash flow or results of operations, depending on the specific circumstances of the outcome. The Company accrues loss contingencies when it is both probable that the Company will incur the loss and when it can reasonably estimate the amount of the loss or range of loss.
Ramco Complaint
A complaint was filed in Delaware Chancery Court by Ramco Asset Management, LLC (“Ramco”), US Trading Company Metals RE, LLC, and Dinsha Dynasty Trust (collectively, the “Plaintiffs”) on July 29, 2022 against USA Rare Earth, LLC (“USA Rare Earth”), Morzev Pty Ltd., Mordechai Gutnick ATF the Morzev Trust, Mordechai Gutnick, and Pini Althaus (collectively, the “Defendants”), captioned Ramco Asset Management, LLC v. USA Rare Earth, LLC, C.A. No. 2022-0665-SG (as amended, the “Complaint”). In connection with this matter and a disagreement regarding the number of units of USA Rare Earth LLC that were issued to the Plaintiffs in transactions during 2019, the Complaint alleged causes of action for breach of contract, breach of fiduciary duty, breach of the Corporations Act (Australia), fraud and misrepresentation, and breach of the duty of good faith and fair dealing. The Complaint seeks a variety of relief, including compensatory and punitive damages, curative equity, attorneys fees and expenses and other relief as may be granted by the court. USA Rare Earth thereafter filed a motion to dismiss Plaintiffs’ claims. After motion practice and argument, the court dismissed all claims, except for Ramco’s alleged breach of contract claim and alleged breach of good faith and fair dealing as asserted against USA Rare Earth. The remaining plaintiff has not quantified its alleged damages. Ramco and USA Rare Earth are now engaged in discovery, with trial scheduled for November 2025. USA Rare Earth intends to contest this matter vigorously.
21
Kleiner Notice
On April 1, 2025, the Company received notice from Stewart Kleiner asserting that a milestone triggering payment of certain equity outlined in a May 10, 2019 advisory agreement had been achieved as a result of the Company’s reverse merger with Inflection Point Acquisition Corp. II. The Company does not believe that the milestone was triggered and as such has denied payment at this time. A July 28, 2019 amendment to the advisory agreement guaranteed payment of the equity by Mordechai Gutnick in the event of a conflict between Mr. Kleiner and the Company.
As of the date of the filing of this report, the Company has not accrued a loss with respect to the Ramco Complaint or Kleiner Notice described above, the outcome of which is uncertain.
Transaction Bonuses
The Company has agreements with certain individuals and entities that require payment of cash and/or equity upon certain criteria as defined by the applicable agreement. The transaction bonuses are recognized when they are deemed to be probable or when the qualifying transaction has been consummated.
During the three months ended
March 31, 2025, the Company completed the Merger, which triggered $
As of March
31, 2025, the Company has agreements in place regarding the potential payment of up to $
NOTE 9. LEASES
The Company has operating leases for two offices in Wheat Ridge, Colorado, which expire on March 31, 2028 and a regional office in Sierra Blanca, Texas, which expires May 1, 2025.
In 2024, the Company entered into finance lease agreements for lab equipment with purchase options that the Company is reasonably certain to exercise in its magnet plant in Stillwater, Oklahoma, which commenced in the three months ended March 31, 2025 and will expire in March of 2028 and 2029. The agreements did not include termination options for either party to the lease or restrictive financial or other covenants.
22
Balance Sheet Components
The Company’s finance and operating leases were recorded on the condensed consolidated balance sheets as follows (in thousands):
| As of | ||||||||
| March 31, 2025 | December 31, 2024 | |||||||
| Finance Leases: | ||||||||
| Property plant and equipment, net | $ | $ | ||||||
| Finance lease liability, current | ||||||||
| Finance lease liability, non-current | ||||||||
| Operating Leases: | ||||||||
| Lease right-of-use assets | $ | $ | ||||||
| Operating lease liability, current | ||||||||
| Operating Lease liability, non-current | ||||||||
Finance lease assets are reported net of accumulated
amortization of $
Maturities of Lease Liabilities
Future minimum lease payments under non-cancelable finance and operating leases on an annual undiscounted cash flow basis as of March 31, 2025 were as follows (in thousands):
| Year Ending December 31, | Finance Leases | Operating Leases | ||||||
| 2025 (9 months) | $ | $ | ||||||
| 2026 | ||||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| Total lease payments | ||||||||
| Less imputed interest | ( | ) | ( | ) | ||||
| Present value of future minimum lease payments | ||||||||
| Less current obligations under leases | ( | ) | ( | ) | ||||
| Non-current lease obligations | $ | $ | | |||||
23
Lease Terms and Discount Rates:
The following table presents certain information related to lease terms and discount rates:
| As of | ||||||||
| March 31, 2025 | December 31, 2024 | |||||||
| Finance Leases: | ||||||||
| Weighted-average remaining lease term (in years) | ||||||||
| Weighted-average discount rate | % | |||||||
| Operating Leases: | ||||||||
| Weighted-average remaining lease term (in years) | ||||||||
| Weighted-average discount rate | % | % | ||||||
The following table presents the finance and operating lease activity (in thousands):
| Three months ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Finance Leases: | ||||||||
| Right-of-use amortization expense | $ | |||||||
| Lease liability interest expense | ||||||||
| Operating Leases: | ||||||||
| Lease expense | $ | $ | ||||||
| Cash paid | ||||||||
The Company obtained finance lease right-of-use assets and operating
lease right-of-use assets in exchange for lease liabilities of $
24
NOTE 10. NOTE PAYABLE
On July 28, 2023, USARE LLC and Hatch LTD
(“Hatch”) entered into an unsecured $
The Note originally had conversion options that could be triggered under the following scenarios:
| ● | Qualified financing – Capital issuance of at least $ |
| ● | Non-qualified financing – Any capital issuance by the Company that does not constitute a qualified financing. Upon the occurrence of a non-qualified financing, the principal and unpaid accrued interest may be paid in full or converted, at Hatch’s option, to a number of securities equal to the outstanding balance divided by the lesser of: (i) discount of |
| ● | Fundamental conversion – A sale, transfer, or other disposition of all or substantially all of the Company’s assets or exclusive license to all or substantially all of the Company’s material intellectual property, a merger or consolidation with another entity, or a transfer of equity of more than |
| ● | Maturity conversion – Conversion at maturity. The principal and unpaid accrued interest may be paid in full or converted, at Hatch’s option, to a number of securities equal to the outstanding balance divided by the quotient of the valuation cap of $ |
At
issuance, the Company determined that the conversion feature under certain scenarios of the Note was an embedded derivative in
accordance with ASC 815. The Company obtained a fair value analysis and valuation completed by a third-party specialist and recorded
a discount of $
On February 26, 2025, USARE LLC and Hatch entered
into a Letter Agreement to settle the Note in full by issuing approximately
25
The Note was settled as of the Closing Date of the Merger and accounted
for as an extinguishment. The Company did not fair value the derivative immediately before extinguishment due to the relative proximity
to the modification. The fair value of the USARE LLC Class A common issued to Hatch was calculated using the closing common stock price
on March 13, 2025, adjusted for the conversion ratio used to convert USARE LLC Class A units to Common Stock at the Merger. The Company
recognized a loss on extinguishment of $
Upon Closing of the Merger, the approximately
NOTE 11. MEZZANINE AND STOCKHOLDERS’ EQUITY
The total number of shares outstanding as of March 31, 2025 and the total number of shares of all classes of stock that USAR has authority to issue is follows (in thousands, except for par value):
| Class of Stock | Authorized | Par value | Outstanding | |||||||||
| Common Stock | $ | | ||||||||||
| Preferred Stock | $ | |||||||||||
| Total authorized | ||||||||||||
Common Stock
Common Stock Voting Rights. Each holder
of record of Common Stock has
Dividend rights. The payment of future dividends on the shares of Common Stock depends on the Company’s financial condition and is subject to the discretion of the Board.
Rights upon Liquidation. Upon liquidation, the holders of Common Stock are entitled to receive the remaining assets of the Company available for distribution to its stockholders ratably in proportion to the number of shares held by them after payment of debts and other liabilities and subject to the rights of the holders of outstanding Preferred Stock.
Lock-Up
Arrangements. Pursuant to the Company’s bylaws, certain former members of USARE LLC, (excluding the former holders of the USARE
LLC Class A Convertible Preferred Units and the USARE LLC Class A Preferred Investor Warrants, solely with respect to securities received
in exchange for such USARE LLC securities) (together with their permitted transferees, the “USARE Lock-Up Holders”), unless
released by the Company’s board of directors, are not permitted, prior to six months after the Closing Date to sell or otherwise
dispose of any shares of Common Stock that were issued to them in connection with the transactions contemplated by the Merger (“USAR
Lock-Up Shares”) without the prior written consent of the Company’s board of directors. Additionally, the USARE Lock-Up Holders
are not permitted to, prior to one year after the Closing Date, transfer more than
Pursuant to a Lock-Up Agreement,
dated March 13, 2025, by and between the Company and Inflection Point Holdings II LLC (the “Sponsor”) and its permitted assigns
agreed not to, sell or otherwise dispose of
26
Preferred Stock
As of March 31, 2025, the Company’s
approximately
Dividends:
The Series A Preferred Stock accrues dividends daily at the rate of
Liquidation
Preference: Upon any liquidation, the holders of Series A Preferred Stock will be entitled to receive out of the available proceeds
(i)
Voting: The Series A Preferred Stock will (i) vote together with the Common Stock as a single class, except as required by law and (ii) subject to certain protective provisions. Holders of Series A Preferred Stock shall be entitled to cast the number of votes equal to the number of whole shares of Common Stock into which the shares of Series A Preferred Stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matters.
Conversion: Each share of Series A Preferred
Stock is convertible into Common Stock at any time at the option of the holder at a rate equal to the Accrued Value, divided by the then-applicable
conversion price. The conversion price is initially $
Put Rights: Unless prohibited by applicable law governing distributions to stockholders, the Series A Preferred Stock is redeemable at the option of the holder commencing any time after the 5th anniversary of the Closing at a price equal to the Accrued Value.
Call Rights:
In accordance with ASC 480-10-S99, the Company classified Series A Preferred Stock subject to redemption in mezzanine equity as the redemption provisions are not solely within the control of the Company.
27
USAR Warrants
As of March
31, 2025, the Company granted warrants to acquire approximately
| Number of Shares of Common Stock Issuable Upon Exercise | Exercise Price | Balance Sheet Classification | ||||||||||
| Public Warrants | $ | |||||||||||
| Private Warrants | ||||||||||||
| Series A Investor Warrants | ||||||||||||
| Total Warrants | ||||||||||||
As a result of the Domestication, (a) each of the then issued and outstanding warrants to purchase Class A ordinary shares of IPXX automatically became a USAR Warrant exercisable for one share of Common Stock on the same terms as the pre-Domestication warrants; and (b) each unit of IPXX issued and outstanding as of immediately prior to the Domestication was automatically canceled and each holder received one share of Common Stock and one-half of one USAR Warrant exercisable for one share of Common Stock on the same terms as the pre-Domestication warrants, with any fractional USAR Warrants to be issued in connection with such separation rounded down to the nearest whole warrant.
USARE LLC Series A Investor Warrants
As a result of the Merger transaction closing, the USARE LLC Class A Units Purchase Warrants automatically converted into Series A Investor Warrants of USAR. The USARE LLC Class A Units Purchase Warrants were previously classified as equity. As the legal form of the warrants changed as a result of the Merger, management reassessed the classification of the warrants.
The Series A Investor USAR Warrants provide for a Black-Scholes value calculation, as defined, in the event of certain transactions (“Fundamental Transactions,” as defined in the Series A Investor USAR Warrants), which includes a floor on volatility utilized in the Black Scholes value calculation at 100% or greater. The Company has determined that this provision introduces leverage to the holders of the warrants that could result in a value that would be greater than the settlement amount of a fixed-for-fixed option on the Company’s own equity shares. Accordingly, pursuant to ASC 815, the Company has classified the fair value of the Series A Investor USAR Warrants as a liability to be re-measured at the end of every reporting period with the change in value reported in the condensed consolidated statement of operations.
The following table summarizes the activity related to the USARE LLC warrants to acquire shares of USARE LLC Class A common units as of January 1, 2025, and changes during the three months ended March 31, 2025 (units in thousands):
| USARE LLC Series A Investor Warrants | Units | Weighted Average Exercise Price | Intrinsic Value | |||||||||
| Outstanding as of January 1, 2025 | $ | $ | ||||||||||
| Issuance of warrants - additional Class A Preferred | ||||||||||||
| Conversion to Series A Preferred Investor Warrant | ( | ) | ||||||||||
| Outstanding as of March 31, 2025 | ||||||||||||
28
USARE LLC Warrants to Acquire Class B Common Units
The following table summarizes the activity related to the USARE LLC warrants to acquire USARE LLC Class B common units as of January 1, 2025, and changes during the three months ended March 31, 2025 (units and intrinsic value in thousands):
| USARE LLC Warrants to Acquire Class B Common Units | Units | Weighted Average Exercise Price | Intrinsic Value | |||||||||
| Outstanding as of January 1, 2025 | $ | | $ | | ||||||||
| Cashless exercise to class B Common Units | ( | ) | ||||||||||
| Outstanding as of March 31, 2025 | ||||||||||||
USARE LLC Warrants to Acquire Class C Preferred Units
The following table summarizes the activity related to the USARE LLC warrants to acquire USARE LLC Class C convertible preferred units as of January 1, 2024, and changes during the three months ended March 31, 2025 (units and intrinsic value in thousands):
| USARE LLC Warrants to Acquire Class C Preferred Units | Units | Weighted Average Exercise Price | Intrinsic Value | |||||||||
| Outstanding as of January 1, 2025 | $ | | $ | | ||||||||
| Dividends | ||||||||||||
| Cashless exercise to Common B Units | ( | ) | ||||||||||
| Outstanding as of March 31, 2025 | ||||||||||||
Upon Closing of the Merger, the following
USARE LLC warrants to acquire Class B common and Class C convertible preferred units of USARE LLC were converted into shares of Common
Stock using the treasury method of accounting on a cashless exercise basis and an exchange conversion ratio of approximately
| Title | Number of Shares of Common Stock | |||
| Class B Common Warrants | | |||
| Class C Convertible Preferred Warrants | ||||
| Total | ||||
29
NOTE 12. EQUITY-BASED COMPENSATION
The Company has the following equity award plans:
2024 Omnibus Incentive Plan (the “USAR Incentive Plan”)
The Company has reserved
USARE LLC Incentive Plan
USARE LLC issued incentive units under the Amended and Restated Incentive Plan dated May 1, 2020 and the Second Amended and Restated Equity Incentive Plan dated August 26, 2022 and amended November 2, 2022 and February 10, 2024 (the “Legacy Incentive Plan”). The incentive units were intended to constitute “profit interests” within the meaning of the U.S. Internal Revenue Service (“IRS”) Revenue Procedures 93-27 and 2001-43 (or the corresponding requirements of any subsequent guidance promulgated by the IRS or other applicable law). The rights and preferences of the incentive units were defined in the respective incentive unit agreements. The Company did not forfeit or grant any new incentive units under the Legacy Incentive Plan as of the closing date of the merger and during the three months ended March 31, 2025. In addition, no new grants will be awarded under this plan.
USARE LLC utilized an independent valuation company
to estimate the fair value of the underlying equity units into which the incentive units granted under the Legacy Incentive Plan would
be converted. During the year ended December 31, 2024, the Company then used this valuation in a Black-Scholes pricing model to determine
the fair value of the incentive units granted. Black-Scholes pricing method is considered to be a Level 3 fair value measurement
requiring highly judgmental assumptions including expected volatility. The expected volatility was estimated by taking the average historical
price volatility for industry peers, consisting of several public companies in its industry which are either similar in size, stage of
life cycle, or financial leverage, over a period equivalent to the expected term of the awards. USARE LLC recognized the associated costs
across the vesting period using the straight-line method. All outstanding and unvested incentive units under the USARE LLC Incentive
Plan vested upon the Closing of the Merger as of March 13, 2025 and unrecognized equity-based compensation expense of incentive units
vested on that date of $
The following table summarizes the activity related to the incentive units as of March 31, 2025, and changes during the three months ended March 31, 2025 (units and intrinsic value in thousands):
| Units | Weighted Average Distribution Threshold(1) |
Intrinsic Value(2) |
||||||||||
| Outstanding at January 1, 2025 | $ | $ | ||||||||||
| Conversion to USARE LLC Class A units | ( |
) | ||||||||||
| Outstanding at March 31, 2025 | ||||||||||||
| (1) |
| (2) |
Conversion of Incentive Units – Upon
Closing of the Merger, all outstanding incentive units were considered fully vested and converted into approximately
Vesting Period of Incentive Units –
USARE LLC utilized different vesting periods, generally ranging from
30
Incentive Unit and Class A Common Compensation
Expense -
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Incentive units | $ | $ | ||||||
| Class A units | ||||||||
| Total | $ | $ | ||||||
In the three months ended March 31, 2025, USARE LLC recorded equity-based compensation for issuance of its Class A units to certain consultants immediately prior to the closing of the merger pursuant to existing bonus agreements. In the three months ended March 31, 2024, USARE LLC recorded equity-based compensation for the issuance of Class A units as part of the USARE LLC former CEO’s employment agreement.
NOTE 13. GOVERNMENT GRANTS
The Company has government grants for the purchase or construction of long-lived assets. The Company presents grants received related to long-lived assets as a non-current deferred grants liability on the condensed consolidated balance sheets and recognizes revenue through profit or loss over the useful life of the underlying assets.
Tax Incremental Financing
On June 6, 2022, the Company executed a Tax Increment
Financing Agreement (the “TIF Agreement”) with the Stillwater Economic Development Authority (the “Authority”),
a public trust having as its beneficiary the City of Stillwater, Oklahoma (the “City”), whereby the Authority will provide
upfront development financing assistance to the Company of up to $
As of March 31, 2025 and December 31, 2024, the
Company recorded $
31
Governor’s Fund
On April 15, 2022, the Company entered into an
agreement with the Oklahoma Department of Commerce to receive a $
During 2022, the Company incurred qualifying
costs that exceeded the cumulative $
Jobs Program
In 2022, the Company was accepted for the Oklahoma
Quality Jobs Program (“Jobs Program”), an incentive that provides qualifying companies quarterly cash rebates of up to
NOTE 14. INCOME TAXES
The Company is subject to taxation in the U.S.
and various state jurisdictions. The Company’s effective tax rate of
The difference between the effective tax rate
of
32
NOTE 15. NET INCOME (LOSS) PER SHARE
The following table sets forth the computation of the numerator and denominator for the net income (loss) per share attributable to holders of common stock for the three months ended March 31, 2025 and 2024 (in thousands, except per share data):
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Numerator: | ||||||||
| Net income (loss) attributable to common stockholders | $ | $ | ( | ) | ||||
| Declared dividends | ( | ) | ( | ) | ||||
| Undeclared cumulative dividends | ( | ) | ||||||
| Accretion of temporary equity to redemption value | ( | ) | ||||||
| Undistributed net income (loss) attributable to common stockholders | $ | $ | ( | ) | ||||
| Denominator: | ||||||||
| Basic: | ||||||||
| Weighted average shares outstanding - basic | ||||||||
| Diluted: | ||||||||
| Weighted average shares outstanding - basic | ||||||||
| Effect of potentially dilutive securities | ||||||||
| Preferred shares1 | ||||||||
| Incentive units outstanding prior to conversion to Common Stock at Merger2 | ||||||||
| Warrants outstanding prior to conversion to Common Stock at Merger2 | ||||||||
| Weighted average shares outstanding - diluted | ||||||||
| Net income (loss) per share attributable to common stockholders | ||||||||
| Basic | $ | $ | ( | ) | ||||
| Diluted | $ | $ | ( | ) | ||||
| 1 |
| 2 |
As of March 31, 2025, the Company has warrants
to acquire approximately
NOTE 16. SEGMENT REPORTING
The Company operates in a single reportable operating segment; that segment being the vertically integrated, domestic rare earth element magnet production supply chain. The Company’s chief operating decision makers review financial information on an aggregate basis for evaluating financial performance. Through December 16, 2024, the Company’s Board of Managers were the chief operating decision makers. As of December 17, 2024, the Company’s chief operating decision maker is its chief executive officer.
33
ITEM 2. MANAGEMENT’S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS OF USAR
Overview
USA Rare Earth, Inc. (“USAR”), is a company with the mission to establish a vertically integrated, domestic rare earth magnet supply chain that supports the future state of energy, mobility, and national security in the United States (“U.S.”). We are developing the Stillwater Facility and, via our Round Top Project, intend to establish domestic rare earth and critical minerals supply, extraction, and processing capabilities to both supply our magnet manufacturing plant and market surplus materials to third parties. Rare earth magnets are critical to various business sectors and industries, including the defense, automotive, aviation, AI robotics, industrial, medical and consumer electronics industries, among others. Our vertically integrated approach — from sourcing REE’s, in addition to other critical minerals such as gallium, to producing finished NdFeB magnets — assists in strengthening the U.S.’s control over critical supply chains such as the supply of rare earth minerals and magnets and thus reduce domestic reliance on foreign, particularly Chinese, imports. We believe our focus on developing domestic rare earth production aligns with national priorities, offering the future potential of a sustainable and secure domestic supply of materials critical to key industries. We have been in the exploration and research stages since our formation and have not yet realized any revenues from its planned operations.
Our Business Model
We acquired the land and other assets comprised of a facility at Stillwater, Oklahoma (“Stillwater Facility”) to develop it into a magnet production facility and we are in the process of completing our magnet production capabilities at the Stillwater Facility necessary for the initial production of NdFeB magnets.
We control certain mining rights to Round Top Mountain, which is an above-ground mineral deposit near Sierra Blanca, Texas that contains the Round Top Deposit, the mining and extraction of which comprises our Round Top Project. We have not yet begun to extract any minerals from the Round Top Deposit. The development of the Round Top Project involves a high degree of financial risk and uncertainty.
We have not yet commenced production in connection with either our Round Top Project or our Stillwater Facility and, consequently, we do not currently have any operating income or cash flows. Accordingly, we do not currently generate, nor have we realized to date, any revenues.
Facilities
Our facilities are comprised of the Stillwater, Oklahoma facility, the Wheat Ridge, Colorado facility and the Round Top Mountain Project, in Sierra Blanca, Texas.
Recent Developments
Securities Purchase Agreement; Pre-Funded PIPE Warrant; PIPE Warrant
As previously disclosed and further described in our Current Report on Form 8-K filed on May 5, 2025, we entered into an amended and restated securities purchase agreement, dated as of April 29, 2025 (the “Purchase Agreement”), with a purchaser (the “Purchaser”) for the private placement (the “Private Placement”) of (i) 8.55 million shares of the Company’s common stock, par value $0.0001 per share (the “PIPE Shares”), (ii) a pre-funded warrant (the “Pre-Funded PIPE Warrant”) to purchase an aggregate of 2.16 million shares of Common Stock (the “Pre-Funded PIPE Warrant Shares”) and (iii) a warrant (the “PIPE Warrant”) to purchase an aggregate of 10.71 million shares of Common Stock (the “PIPE Warrant Shares,” and together with the Shares, the Pre-Funded PIPE Warrant, the Pre-Funded PIPE Warrant Shares and the PIPE Warrant, the “Securities”), at an exercise price of $7.00 per share, for aggregate gross proceeds of $75.00 million. On May 2, 2025, the Company closed the Private Placement and issued the Securities. The Company intends to use the net proceeds from the Private Placement for working capital and general corporate purposes.
Merger and Related Transactions
We were formerly known as Inflection Point Acquisition Corp. II (“IPXX”), which was a special purpose acquisition company incorporated as a Cayman Islands exempted corporation on March 6, 2023. We were incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. Shares of USAR common stock (“Common Stock”) and USAR warrants (“Warrants”) began trading on the Nasdaq Stock Market LLC (“Nasdaq”) under the symbols “USAR” and “USARW”, respectively, on March 14, 2025.
On March 13, 2025, we consummated the previously announced Business Combination and other related transactions (the “Merger”) as further described in Note 1, “Organization” and Note 3, “Merger Transaction” to our condensed consolidated financial statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q. The Merger was accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”). The Merger and other related transactions had several significant impacts on our reported financial position and results, due to the reverse recapitalization treatment.
34
Forward Purchase Agreements
On March 11, 2025, IPXX entered into FPA with three separate investors (“Sellers”) pursuant to which the investors agreed to hold up to a total of approximately 1.89 million publicly held Class A ordinary shares of IPXX (“Public Shares”) in connection with the Closing of the Merger. Each FPA amended, restated and superseded in its entirety a separate FPA with each of the Sellers, dated March 10, 2025, which had identical terms to those described herein, except that the Reset Price (as defined in the FPAs) was not subject to the floor price described below. For purposes of the FPAs, the Public Shares held by each Seller are referred to as such Seller’s “Maximum Shares.” The aggregate number of Public Shares subject to each FPA (the “FPA Shares”) was the aggregate number of Public Shares as notified to the Company by the applicable Seller, but in no event more than such Seller’s Maximum Shares set forth above. Each Seller notified the Company that it would subject the Maximum Shares to their respective FPAs. The FPA Shares are subject to reduction following the full or partial optional early termination of the FPAs as described below.
Each FPA provided that in connection with Closing, the Company would pay to the Seller under such FPA, out of the funds held in IPXX’s trust account, an amount (the “Prepayment Amount”) equal to the product of (i) the FPA Shares and (ii) an amount (the “Initial Price”) equal to the redemption price per share payable to investors who elected to redeem in connection with the Merger Transactions, which Initial Price was approximately $11.00. The Company prepaid approximately $20.8 million to the trust account at the closing of the Merger to secure its purchase obligation to repurchase for any outstanding FPA Shares at the Initial Price per share of $11.00 on the date that is 90 days after the closing of the merger (the “Maturity Date”). On any day the Nasdaq is open for trading following the Closing of the Merger through the Maturity Date, the Sellers may sell any, or all, of their FPA Shares (the “Terminated Shares”). For any Terminated Shares, the Seller must remit the Initial Price to the Company but retains any profit over that price. At the Maturity Date, the Company is obligated to purchase any outstanding FPA Shares at a price per share equal to the Initial Price.
Class A Convertible Preferred Investment
On August 21, 2024, in connection with the signing of the Business Combination Agreement, we completed the pre-funded private investment in public equity (“PIPE”) financing pursuant to which USARE LLC and certain accredited investors entered into the Class A Convertible Preferred SPAs, for 2.50 million USARE LLC Class A Convertible Preferred Units and USARE LLC Class A Preferred Investor Warrants exercisable for an aggregate of approximately 2.97 million USARE LLC Class A Units, for an aggregate purchase price of approximately $25.5 million. In addition, USARE LLC issued approximately 0.12 million USARE LLC Class A-2 Convertible Preferred Units and a USARE LLC Class A Preferred Investor Warrant to purchase up to approximately 0.03 million USARE LLC Class A Units in exchange for Mr. Micheal Blitzer’s promise to forgive, at Closing, 50% of the then-outstanding balance of a convertible promissory note.
IPXX and certain accredited investors including Mr. Blitzer, and Collective Capital Management entered into Securities Purchase Agreements on January 31, 2025 to purchase (i) USARE LLC Class A-2 Convertible Preferred Units and (ii) USARE LLC Class A Investor Warrants for an aggregate purchase price of approximately $15.3 million which closed on February 3, 2025.
On March 11, 2025, IPXX entered into a securities purchase agreement for Series A Preferred Stock and Series A Preferred Investor Warrants for total gross proceeds of $8.0 million.
Public Company Costs
Following the consummation of the Merger, USA Rare Earth, Inc. is an SEC-reporting and NASDAQ-listed company, which require us to hire additional staff and implement procedures and processes to address public company regulatory requirements and customary practices both before and after the consummation of the Merger. We expect to incur significant additional annual expenses for, among other things, directors’ and officers’ liability insurance, director fees and additional internal and external accounting, legal and administrative resources and fees.
Results of Operations
We have no operating revenues. We are dependent on equity or other external financings to fund our pursuit and development of our consolidated business plans (including magnet production at our Stillwater Facility), to fund our mineral exploration and evaluation operations, our evaluation and intended development of the Round Top Project (collectively, our “R&D” costs), selling, general and administrative (“SG&A”) costs, interest expense and other costs. As a result, we expect to incur operating losses until such time as either: (i) the Stillwater Facility is fully completed and operational to the extent that it generates net profits, or (ii) an economic mineral resource is identified, developed and put into profitable commercial production at the Round Top Project.
The following tables set forth components of our results of operations for the periods presented. The period-to-period comparison of financial results is not necessarily indicative of future results.
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Comparison of three months ended March 31, 2025 and 2024
The following tables set forth our results for the periods indicated, and the changes between periods (in thousands, except for percentages):
| Three Months Ended March 31, | Change | |||||||||||||||
| 2025 | 2024 | $ | % | |||||||||||||
| Operating costs and expenses | ||||||||||||||||
| Selling, general and administrative | $ | 7,029 | $ | 2,647 | $ | 4,382 | 166 | % | ||||||||
| Research and development | 1,689 | 2,051 | (362 | ) | (18 | )% | ||||||||||
| Total operating costs and expenses | 8,718 | 4,698 | 4,020 | 86 | % | |||||||||||
| Operating loss | (8,718 | ) | (4,698 | ) | (4,020 | ) | 86 | % | ||||||||
| Other income (expense) | ||||||||||||||||
| Interest and dividend income | 187 | 109 | 78 | 72 | % | |||||||||||
| Gain on fair market value of financial instruments | 60,300 | 1 | 60,299 | * | ||||||||||||
| Interest and other expense | (87 | ) | (84 | ) | (3 | ) | 4 | % | ||||||||
| Total other income | 60,400 | 26 | 60,374 | * | ||||||||||||
| Net income (loss) | 51,682 | (4,672 | ) | 56,354 | * | |||||||||||
| Net income (loss) attributable to non-controlling interest | (150 | ) | (200 | ) | 50 | (25 | )% | |||||||||
| Net income (loss) attributable to common | $ | 51,832 | $ | (4,472 | ) | $ | 56,304 | * | ||||||||
| * | Not meaningful |
Operating Costs and Expenses
Selling, general and administrative (“SG&A”). The increase in SG&A expenses was primarily due to a $3.7 million increase in financial consulting, legal and other professional fees and an increase of $0.9 million equity-based compensation expense associated with the Merger, partially offset by lower payroll expenses.
Research and development (“R&D”). The decrease in R&D was primarily due to lower consulting fees related to feasibility studies.
Other Income and Expense
Interest and dividend income. The increase in interest and dividend income was primarily due to higher balances in our money market funds.
Gain on fair market value of financial instruments. The gain on fair market value of financial instruments in the first quarter of 2025 relates to the remeasurement of our earnout liability of $53.4 million, warrant liability of $6.2 million and derivative liability of $0.7 million.
Interest and other expense. Our interest expense was consistent in the three months ended March 31, 2025 compared to the same period in the prior year.
Liquidity and Capital Resources; Going Concern
Sources and Uses of Liquidity
Our condensed consolidated financial statements have been prepared contemplating the continuation of the Company as a going concern and the continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. Management is aware, in making its assessment, of material uncertainties related to events or conditions that may cast significant doubt upon our ability to continue as a going concern. While our management believes in the viability of its strategy to generate future revenues, control costs and the ability to raise additional funds, our strategy may not be successful. Our condensed consolidated financial statements do not include any adjustments that might be necessary were we unable to continue as a going concern. If the going concern basis was not appropriate for the condensed consolidated financial statements, then adjustments would be necessary to the carrying value of assets and liabilities, the reported revenues and expenses, and the statement of financial position classifications used.
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We have generated no revenues since inception, continue to incur losses from operations, and have an accumulated deficit. Our ability to continue as a going concern is dependent upon our ability to raise capital, to implement our business plan, generate sufficient revenues, and to control operating expenses.
For the quarter ended March 31, 2025, we had net income of $51.7 million, which included a non-cash fair value gain on financial instruments of $60.3 million. For the quarter ended March 31, 2025, we used $10.3 million cash in operating activities.
Subsequent to March 31, 2025, we received additional cash proceeds of $11.5 million in connection with early terminations of the Forward Purchase Agreements (“FPA”) from the Sellers. In addition, on May 5, 2025, we announced the closing of PIPE financing for $75 million with a single institutional investor.
Although, as of March 31, 2025 we had cash on our balance sheet of $23.4 million and have subsequently raised additional proceeds from the exercises of the FPA and financing from the PIPE, we will need to raise additional capital to implement our strategic plan.
Based on our need to raise additional capital, as well as milestones required for our current strategic plan to generate sustainable commercial revenues, there is substantial doubt regarding our ability to continue as a going concern for the twelve months following the issuance of these condensed consolidated financial statements.
We consider cash equivalents to be highly liquid investments purchased with original maturities of three months or less. As of March 31, 2025, we had $23.4 million in cash and cash equivalents.
For the three months ended March 31, 2025, we recognized Interest and dividend income of approximately $0.2 million.
Cash Flows
| Three Months Ended March 31, | ||||||||||||
| 2025 | 2024 | Change | ||||||||||
| (in thousands) | ||||||||||||
| Net cash used in operating activities | $ | (10,329 | ) | $ | (4,233 | ) | $ | (6,096 | ) | |||
| Cash used in investing activities | (3,050 | ) | (1,019 | ) | (2,031 | ) | ||||||
| Net cash provided by (used in) financing activities | 19,969 | (405 | ) | 20,374 | ||||||||
The following presents management’s discussion of cash flows for the three months ended March 31, 2025 to the three months ended March 31, 2024.
Operating Activities
The $6.1 million increase in net cash used in operating activities was primarily due to an increase of $3.1 million net loss adjusted for non-cash related expenses and an increase in cash used for prepaid insurance as well as accounts payable and accrued liabilities, net related to payments for professional services partially offset by lower cash expenditures on payroll-related expenses.
Investing Activities
The increase was primarily due to additional investments made for property plant and equipment as we execute our strategic business plans.
Financing Activities
The increase in cash provided by financing activities is primarily due to net financing activities and contributions from the Merger. See Note 3, “Merger Transaction” of the notes to the condensed consolidated financial statements in Part I, Item 1 of this Form 10-Q, for further discussion of amounts received from financing activities and Merger transactions.
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Hatch Senior Convertible Promissory Note
On July 28, 2023, USA Rare Earth, LLC and Hatch LTD entered into an unsecured $1.0 million Senior Convertible Promissory Note agreement (the “Hatch Note”) with a 10% interest rate with a maturity date of July 28, 2025. The interest was to be payable at maturity. See Note 10, “Note Payable” to our condensed consolidated financial statements in Part I, Item 1 of this Form 10-Q for additional information related to the Hatch Note. The Hatch Note was converted at Closing into Common Stock.
Off-Balance Sheet Arrangements
Other than as otherwise described in this Form 10-Q, we do not have any off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on our financial condition, changes in financial condition, revenues, expenses, results of operations, liquidity, capital expenditures or capital resources.
Risks and Uncertainties Associated with Future Results of Operations
We operate in two industries that are both subject to intense competition, development risk, and changes in U.S. governmental policies related to green energy, defense spending and dependence on foreign suppliers. Our operations are subject to significant risks and uncertainties including financial and operational risks, as well as the potential risk of business failure.
The magnet technology industry is still in its infancy in the United States, and thus the technology, processes, and capabilities are still being developed. The magnet facility requires substantial capital commitment to complete and there may be unanticipated costs or delays associated with the construction. The Company’s plans for producing magnets are based on certain estimates and assumptions we have made about our business over the next few years, including the ability to obtain the equipment and materials needed to produce magnets on a timely basis from third party vendors. Due to rapidly rising demand, there is also a risk that substitute products will become available and reduce the need for our type of high-performance magnet.
We have not yet established that the Round Top Deposit contains any commercially exploitable quantities of proven and probable mineral reserves, and we may not be able to do so. Even if the Company does eventually establish commercially exploitable quantities of mineral reserves, the Round Top Deposit may not be developed into a producing mine and the Company may not be able to extract those minerals economically. Both mineral exploration and development involve a high degree of risk, and few properties that are explored are ultimately developed into producing mines. The commercial viability of an established mineral deposit will depend on several factors including the size, grade, and other attributes of the mineral deposit, as well as proximity of the deposit to infrastructure, government regulation, and market prices, among other things. Most of these factors will be beyond the Company’s control, and any of them could increase costs and make extraction of any identified mineral deposit unprofitable.
Critical Accounting Policies and Estimates
We consider Fair Value, Long-Lived Assets and Equity-based Compensation the most critical accounting policies to aid in fully understanding and evaluating our consolidated financial condition and results of our operations. We also consider our Going Concern assessment to be subject to critical accounting estimates. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from our estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows will be affected.
See Note 2, “Summary of Significant Accounting Policies” of the notes to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for a description of our critical and other significant accounting policies. See Note 1, “Organization” of the notes to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for a discussion of our going concern assessment.
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Recently Adopted Accounting Standards
See Note 2, “Summary of Significant Accounting Policies” of the notes to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.
Emerging Growth Company Status
Section 107(b) of the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the extended transition period to comply with new or revised accounting standards and to adopt certain of the reduced disclosure requirements available to emerging growth companies. As a result of the accounting standards election, we will not be subject to the same implementation timing for new or revised accounting standards as other public companies that are not emerging growth companies which may make comparison of our financials to those of other public companies more difficult.
We expect to retain our emerging growth company status until the earliest of:
| ● | The end of the fiscal year in which our annual revenues exceed $1.2 billion; |
| ● | The end of the fiscal year in which the fifth anniversary of our public company registration has occurred; |
| ● | The date on which we have issued more than $1.0 billion in non-convertible debt during the previous three-year period; or |
| ● | The date on which we qualify as a large accelerated filer. |
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCOSURES ABOUT MARKET RISK
Not required under Regulation S-K for “smaller reporting companies”.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures as defined under Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Our disclosure controls and procedures have been designed to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Our disclosure controls and procedures include controls and procedures designed to provide reasonable assurance that information required to be disclosed in reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure.
Our management, with the participation of our CEO and CFO, evaluated the effectiveness of our disclosure controls and procedures as defined in Exchange Act Rule 13a-15(e) as of March 31, 2025. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of March 31, 2025.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
The effectiveness of any system of controls and procedures is subject to certain limitations, and, as a result, there can be no assurance our controls and procedures will detect all errors or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that objectives of the control system will be attained.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The information required with respect to this item can be found in Note 8. Commitments and Contingencies—Legal Proceedings of the notes to the unaudited consolidated financial statements contained in this quarterly report and is incorporated by reference into this Item 1.
ITEM 1A. RISK FACTORS
Factors that could cause our actual results to differ materially from those in this report include the risk factors described in our 2024 Annual Report on Form 10-K. As of the date of this Quarterly Report on 10-Q, there have been no material changes to the risk factors disclosed in our 2024 Annual Report on Form 10-K except as described in the below risk factors.
Tariffs by the United States, counter-tariffs by other countries and future changes in tariff policies could adversely affect our results of operations.
The U.S. has imposed, and could impose in the future, broad-ranging tariffs on imports from some of its largest trading partners. In retaliation, many countries have imposed, and could impose in the future, counter-tariffs on U.S.-produced items. Tariffs have spurred, and could continue to spur, additional retaliatory moves by affected countries, including by China and the European Union member states.
Tariffs present both positive and negative impacts across our business, but, in the aggregate, based on limited information to date, which may change, we expect that they may produce a net positive impact in light of our U.S. focused manufacturing strategy. However, we also face material risks with respect to tariff policies and the uncertainties and potential changes in such policies. For example, if tariffs are modified or changed in the future or our preliminary information is incorrect, our consolidated results of operations could be materially negatively impacted. In addition, for purposes of our operations, we seek to acquire various materials, supplies and components imported into the U.S., including certain equipment utilized in metal-making, magnet making, and magnet finishing and as a result, we have been adversely impacted by the imposition of trade restrictions on such goods. We may also be adversely impacted if tariffs significantly hurt the economic outlook and negatively impact consumer demand and our ability to raise capital in the future.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
None.
ITEM 5. OTHER INFORMATION
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ITEM 6. EXHIBITS
Exhibit Index
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| * | Filed herewith. |
| ** | The certification furnished in Exhibit 32.1 is not deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall they be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act. |
| + | Management contract or compensatory plan or arrangement. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| USA Rare Earth, Inc. | ||
| Date: May 15, 2025 | By: | /s/ Joshua Ballard |
| Joshua Ballard | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| Date: May 15, 2025 | By: | /s/ William Robert Steele Jr. |
| William Robert Steele Jr. | ||
| Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) | ||
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