# EDGAR Filing Document

**Accession Number:** 0001970622
**File Stem:** 0001970622-25-000074
**Filing Date:** 2025-11
**Character Count:** 255031
**Document Hash:** 5ca487b1072359292c96864c5c7e5a40
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001970622-25-000074.hdr.sgml**: 20251106

**ACCESSION NUMBER**: 0001970622-25-000074

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 79

**CONFORMED PERIOD OF REPORT**: 20250930

**FILED AS OF DATE**: 20251106

**DATE AS OF CHANGE**: 20251106

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** USA Rare Earth, Inc.
- **CENTRAL INDEX KEY:** 0001970622
- **STANDARD INDUSTRIAL CLASSIFICATION:** METAL MINING [1000]
- **ORGANIZATION NAME:** 01 Energy & Transportation
- **EIN:** 981720278
- **STATE OF INCORPORATION:** E9
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-41711
- **FILM NUMBER:** 251458551

**BUSINESS ADDRESS:**
- **STREET 1:** 100 W AIRPORT ROAD
- **CITY:** STILLWATER
- **STATE:** OK
- **ZIP:** 74075
- **BUSINESS PHONE:** 813-867-6155

**MAIL ADDRESS:**
- **STREET 1:** 100 W AIRPORT ROAD
- **CITY:** STILLWATER
- **STATE:** OK
- **ZIP:** 74075

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Inflection Point Acquisition Corp. II
- **DATE OF NAME CHANGE:** 20230322

?xml version='1.0' encoding='ASCII'? usar-20250930

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549** 

**FORM 10-Q** 

(Mark One)

☑ **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the quarterly period ended September 30, 2025**

**OR**

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

**For the transition period from ____________ to __________**

**Commission File Number: 001-41711**

![USA Rare Earth Logo.jpg](usar-20250930_g1.jpg)

**USA Rare Earth, Inc.**

(Exact Name of Registrant as Specified in its Charter)

---

| | |
|:---|:---|
| **Delaware** | **98-1720278** |
| (State or Other Jurisdiction of Incorporation) | (I.R.S. Employer Identification No.) |

---

**100 W. Airport Road, Stillwater, OK 74075**

(Address of Principal Executive Offices and Zip Code)

**(813) 867-6155**

(Registrant's Telephone Number, Including Area Code)

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

---

| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol | Name of each exchange on which registered |
| Common Stock, par value $0.0001 | USAR | The Nasdaq Stock Market LLC |
| Warrants, each whole warrant exercisable for one share of Common Stock, at an exercise price of $11.50 per share | USARW | The Nasdaq Stock Market LLC |

---

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accelerated filer ☐&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-accelerated filer ☑

Smaller reporting company ☑ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Emerging growth company ☑

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2). Yes ☐ No ☑

As of October 31, 2025, there were 132,638,561 shares of the registrant's Common Stock outstanding, $0.0001 par value and 1,602,257 shares of 12% Series A Cumulative Convertible Preferred Stock, $0.0001 par value, .

------

**USA RARE EARTH, INC.**

**Table of Contents**

---

| | | |
|:---|:---|:---|
| | | **Page No.** |
| **[PART I](#i5f43db688c2c433f9d412b16efe97020_122)** | **[PART I](#i5f43db688c2c433f9d412b16efe97020_122)** | **[PART I](#i5f43db688c2c433f9d412b16efe97020_122)** |
| **[FINANCIAL INFORMATION](#i5f43db688c2c433f9d412b16efe97020_122)** | **[FINANCIAL INFORMATION](#i5f43db688c2c433f9d412b16efe97020_122)** | **[FINANCIAL INFORMATION](#i5f43db688c2c433f9d412b16efe97020_122)** |
| [Item 1](#i5f43db688c2c433f9d412b16efe97020_115) | F[inancial Statements (Unaudited)](#i5f43db688c2c433f9d412b16efe97020_115) | [1](#i5f43db688c2c433f9d412b16efe97020_115) |
|  | &nbsp;&nbsp;&nbsp;[Condensed Consolidated Balance Sheets](#i5f43db688c2c433f9d412b16efe97020_132) — September 30, 2025 and December 31, 2024 | [1](#i5f43db688c2c433f9d412b16efe97020_132) |
|  | &nbsp;&nbsp;&nbsp;[Condensed Consolidated Statements of Operations](#i5f43db688c2c433f9d412b16efe97020_549755814036) — Three and Nine Months Ended September 30, 2025 and 2024 | [2](#i5f43db688c2c433f9d412b16efe97020_549755814036) |
|  | &nbsp;&nbsp;&nbsp;[Condensed Consolidated Statements of](#i5f43db688c2c433f9d412b16efe97020_549755814043)[Mezzanine Equity](#i5f43db688c2c433f9d412b16efe97020_549755814043) — Three and Nine Months Ended September 30, 2025 | [3](#i5f43db688c2c433f9d412b16efe97020_549755814043) |
|  | &nbsp;&nbsp;&nbsp;[Condensed Consolidated Statements of](#i5f43db688c2c433f9d412b16efe97020_549755814972)[Stockholders'](#i5f43db688c2c433f9d412b16efe97020_549755814972)(Deficit) Equity — Three and Nine Months Ended September 30, 2025 and 2024 | [4](#i5f43db688c2c433f9d412b16efe97020_549755814972) |
|  | &nbsp;&nbsp;&nbsp;[Condensed Consolidated Statements of Cash Flows](#i5f43db688c2c433f9d412b16efe97020_549755814059) — Nine Months Ended September 30, 2025 and 2024 | [6](#i5f43db688c2c433f9d412b16efe97020_549755814059) |
|  | &nbsp;&nbsp;&nbsp;[Notes to Condensed Consolidated Financial Statements](#i5f43db688c2c433f9d412b16efe97020_178) | [7](#i5f43db688c2c433f9d412b16efe97020_178) |
| [Item 2](#i5f43db688c2c433f9d412b16efe97020_765) | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#i5f43db688c2c433f9d412b16efe97020_765) | [27](#i5f43db688c2c433f9d412b16efe97020_765) |
| [Item 3](#i5f43db688c2c433f9d412b16efe97020_929) | [Quantitative and Qualitative Disclosures About Market Risk](#i5f43db688c2c433f9d412b16efe97020_929) | [33](#i5f43db688c2c433f9d412b16efe97020_929) |
| [Item 4](#i5f43db688c2c433f9d412b16efe97020_937) | [Controls and Procedures](#i5f43db688c2c433f9d412b16efe97020_937) | [33](#i5f43db688c2c433f9d412b16efe97020_937) |
| **[PART II](#i5f43db688c2c433f9d412b16efe97020_958)** | **[PART II](#i5f43db688c2c433f9d412b16efe97020_958)** | **[PART II](#i5f43db688c2c433f9d412b16efe97020_958)** |
| **[OTHER INFORMATION](#i5f43db688c2c433f9d412b16efe97020_958)** | **[OTHER INFORMATION](#i5f43db688c2c433f9d412b16efe97020_958)** | **[OTHER INFORMATION](#i5f43db688c2c433f9d412b16efe97020_958)** |
| [Item 1](#i5f43db688c2c433f9d412b16efe97020_965) | [Legal Proceedings](#i5f43db688c2c433f9d412b16efe97020_965) | [34](#i5f43db688c2c433f9d412b16efe97020_965) |
| [Item 1A](#i5f43db688c2c433f9d412b16efe97020_974) | [Risk Factors](#i5f43db688c2c433f9d412b16efe97020_974) | [34](#i5f43db688c2c433f9d412b16efe97020_974) |
| [Item 2](#i5f43db688c2c433f9d412b16efe97020_989) | [Unregistered Sales of Equity Securities and Use of Proceeds](#i5f43db688c2c433f9d412b16efe97020_989) | [36](#i5f43db688c2c433f9d412b16efe97020_989) |
| [Item 3](#i5f43db688c2c433f9d412b16efe97020_995) | [Defaults Upon Senior Securities](#i5f43db688c2c433f9d412b16efe97020_995) | [36](#i5f43db688c2c433f9d412b16efe97020_995) |
| [Item 4](#i5f43db688c2c433f9d412b16efe97020_1001) | [Mine Safety Disclosures](#i5f43db688c2c433f9d412b16efe97020_1001) | [36](#i5f43db688c2c433f9d412b16efe97020_1001) |
| [Item 5](#i5f43db688c2c433f9d412b16efe97020_1007) | [Other Information](#i5f43db688c2c433f9d412b16efe97020_1007) | [36](#i5f43db688c2c433f9d412b16efe97020_1007) |
| [Item 6](#i5f43db688c2c433f9d412b16efe97020_1013) | [Exhibits](#i5f43db688c2c433f9d412b16efe97020_1013) | [37](#i5f43db688c2c433f9d412b16efe97020_1013) |
| [Signatures](#i5f43db688c2c433f9d412b16efe97020_1021) | [Signatures](#i5f43db688c2c433f9d412b16efe97020_1021) | [38](#i5f43db688c2c433f9d412b16efe97020_1021) |

---

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)**

------

**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:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• development of our magnet production facility, the timing of expected production milestones and associated costs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the expected timing and likelihood of completing the proposed acquisition (the "LCM Acquisition") of Indian Ocean Rare Metals Pte Ltd ("IORM") and its operating subsidiary, Less Common Metals Ltd. ("LCM");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the ability to realize the benefits expected from the LCM Acquisition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• proceeds that will be received as a result of the exercise of outstanding warrants to purchase common stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• demand for magnets from our production facility once it is operational;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• access to and ability to process raw materials for magnet production, including through swarf processing and development of the Round Top project;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• development of the Round Top project, including timing of key milestone and associated costs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the ability to raise financing in the future and to comply with restrictive covenants related to long-term indebtedness;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the future financial performance of USA Rare Earth, Inc. ("USAR");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the ability to retain or recruit key personnel;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• USAR's ability to comply with laws and regulations applicable to its business; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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 cash flows from its expected future business operations, and USAR's unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2025 and 2024 have been prepared on a going concern basis;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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;

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **i**

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• uncertainty in any mineral estimates, uncertainty in any geological, metallurgical, and geotechnical studies and opinions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• timing of future cash flows provided by operating activities, if any;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the magnet production business is subject to the availability of rare earth element ("REE") oxide and metal feedstock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the supply and demand for rare earth minerals, including fluctuations in demand for, and prices of, REE sintered Neodymium Iron Boron ("NdFeB" or "neo") magnets, magnet materials, and necessary feedstock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• inability to convert current commercial discussions and/or memorandums of understanding with customers into definitive contracts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• competition in the magnet manufacturing industry;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in China's or the United States' political environment and policies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reductions in the Company's stock price which may, among other things, reduce the number of warrants that are exercised prior to their redemption;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• inability to obtain sufficient capital or other resources necessary to provide for such production;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any failure by management to manage growth properly which could negatively impact our business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• power or other utility disruption or shortage and limited access to raw materials;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• fluctuations in transportation costs or disruptions in transportation services or damage or loss during transport;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to build or maintain relationships with customers and suppliers, including any inability to meet individual customer specifications;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• diminished access to water;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• work stoppages or similar difficulties, breakdown in labor relations, or a shortage of skilled technicians and engineers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• failure to retain key personnel or attract additional qualified personnel;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• failure to comply with certain agreements with government entities that have provided us with certain incentives and favorable financing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• inability to access debt or equity capital when necessary or advisable;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• impacts of force majeure events;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• failure to develop and maintain relationships with local communities and stakeholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• extensive and costly environmental requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the need to obtain and sustain governmental permits and approvals;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• failure to comply with applicable anti-corruption, anti-bribery, anti-money laundering and similar laws and regulations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• costs of compliance with environmental, health and safety regulations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the impacts of climate change;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• possible litigation risks, including permit disputes (including in respect of access and/or validity of tenure), environmental claims, occupational health and safety claims, employee claims and claims related to the LCM Acquisition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any infringement of the intellectual property rights of third parties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• failure to adequately protect intellectual property rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• issues with information technology systems, including cyber threats, disruption, damage and failure;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• use of resources and management attention related to the requirements of being a public company in the United States;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• inability to obtain regulatory approvals required for the LCM Acquisition (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the LCM Acquisition);

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **ii**

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• an event, change or other circumstance could give rise to the termination of the LCM Acquisition, including the inability to satisfy any of the closing conditions under the definitive agreement governing the LCM Acquisition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• delays in the completion of the LCM Acquisition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• failure to integrate LCM successfully, costs or difficulties associated with that integration, or failure to realize the expected benefits of the LCM Acquisition when anticipated or at all;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• diversion of management time from ongoing business operations and opportunities as a result of the LCM Acquisition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• adverse reactions or changes to business or employee relationships from the announcement or completion of the LCM Acquisition; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• LCM's ability to retain its customers and suppliers and the combined company's ability to build or maintain relationships with customers and suppliers.

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **iii**

------

*[**Table of Contents**](#i5f43db688c2c433f9d412b16efe97020_79)*

**PART I. FINANCIAL INFORMATION**

**ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)**

**USA Rare Earth, Inc.**

**Condensed Consolidated Balance Sheets**

---

| | | |
|:---|:---|:---|
| | **September 30,<br>2025** | **December 31,<br>2024\*** |
|  | *(In thousands)* | *(In thousands)* |
| **ASSETS** |  |  |
| Current assets |  |  |
| &nbsp;&nbsp;Cash and cash equivalents | $257609 | $16761 |
| &nbsp;&nbsp;Deferred offering costs |  | 5134 |
| &nbsp;&nbsp;Prepaid expenses and other current assets | 1268 | 378 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 258877 | 22273 |
| Property, plant and equipment, net | 40648 | 26529 |
| Mineral interests | 17339 | 17125 |
| Equipment deposits | 6073 | 3060 |
| Lease right-of-use assets | 355 | 30 |
| Other non-current assets | 33 | 52 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total assets | $323325 | $69069 |
| **LIABILITIES, MEZZANINE AND STOCKHOLDERS' (DEFICIT) EQUITY** |  |  |
| **Liabilities** |  |  |
| &nbsp;&nbsp;Current liabilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | $1829 | $1823 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities | 13424 | 3071 |
| &nbsp;&nbsp;&nbsp;&nbsp;Derivative liability |  | 1164 |
| &nbsp;&nbsp;&nbsp;&nbsp;Notes payable |  | 831 |
| &nbsp;&nbsp;&nbsp;&nbsp;Finance and operating leases, current | 426 | 23 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other |  | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 15679 | 6925 |
| &nbsp;&nbsp;Deferred grants | 8200 | 8200 |
| &nbsp;&nbsp;Finance and operating leases, non-current | 884 |  |
| &nbsp;&nbsp;Earnout liabilities | 166087 |  |
| &nbsp;&nbsp;Warrant liabilities | 177785 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 368635 | 15125 |
| Commitments and contingencies (Note 8) |  |  |
| **Mezzanine equity** |  |  |
| &nbsp;&nbsp;12% Series A Cumulative Convertible Preferred Stock subject to possible redemption | 13272 | 21173 |
| &nbsp;&nbsp;Subscription receivable |  | (1250) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total mezzanine equity | 13272 | 19923 |
| **Stockholders' (deficit) equity** |  |  |
| &nbsp;&nbsp;Common Stock | 11 | 6 |
| &nbsp;&nbsp;Additional paid-in-capital | 276615 | 104244 |
| &nbsp;&nbsp;Accumulated deficit | (337180) | (72872) |
| &nbsp;&nbsp;Non-controlling interest | 1972 | 2643 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' (deficit) equity | (58582) | 34021 |
| Total liabilities, mezzanine equity, and stockholders' (deficit) equity | $323325 | $69069 |

---

\* Recast

*See Accompanying Notes to Condensed Consolidated Financial Statements*

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **1**

------

*[**Table of Contents**](#i5f43db688c2c433f9d412b16efe97020_79)*

**USA Rare Earth, Inc.**

**Condensed Consolidated Statements of Operations**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| | **2025** | **2024\*** | **2025** | **2024\*** |
|  | *(in thousands, except per share)* | *(in thousands, except per share)* | *(in thousands, except per share)* | *(in thousands, except per share)* |
| Operating expenses: |  |  |  |  |
| &nbsp;&nbsp;Selling, general and administrative | $11410 | $797 | $24666 | $4730 |
| &nbsp;&nbsp;Research and development | 4451 | 1162 | 8717 | 4938 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 15861 | 1959 | 33383 | 9668 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss from operations | (15861) | (1959) | (33383) | (9668) |
| Other (expense) income, net: |  |  |  |  |
| &nbsp;&nbsp;Interest and dividend income | 1310 | 23 | 2262 | 177 |
| &nbsp;&nbsp;(Loss) gain on fair market value of financial instruments | (142426) | 135 | (216788) | 365 |
| &nbsp;&nbsp;Interest expense and other income (loss), net | (17) | (207) | (116) | (373) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total other (expense) income, net | (141133) | (49) | (214642) | 169 |
| Net loss | (156994) | (2008) | (248025) | (9499) |
| Net loss attributable to non-controlling interest | (314) | (139) | (671) | (561) |
| Net loss attributable to USA Rare Earth, Inc. | $(156680) | $(1869) | $(247354) | $(8938) |
| Net loss per share attributable to USA Rare Earth, Inc.: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic and diluted | $(1.64) | $(0.03) | $(2.83) | $(0.15) |
| Number of shares used in per share calculations: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic and diluted | 102589 | 59497 | 95609 | 59429 |

---

\* Recast

*See Accompanying Notes to Condensed Consolidated Financial Statements*

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **2**

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*[**Table of Contents**](#i5f43db688c2c433f9d412b16efe97020_79)*

**USA Rare Earth, Inc.**

**Condensed Consolidated Statements of Mezzanine Equity**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30, 2025** | **Three Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** |
| | **Shares** | **Amount** | **Shares** <sup>(1)</sup> | **Amount** <sup>(1)</sup> |
|  | *(In thousands)* | *(In thousands)* | *(In thousands)* | *(In thousands)* |
| **12% Series A Cumulative Convertible Preferred Stock** |  |  |  |  |
| &nbsp;&nbsp;Beginning balance | 3714 | $25242 | 2739 | $21173 |
| &nbsp;&nbsp;&nbsp;&nbsp;USARE LLC Convertible Preferred unit dividends |  |  | 84 | 1082 |
| &nbsp;&nbsp;&nbsp;&nbsp;Issuance of preferred stock and warrants, net of issuance costs |  |  | 2279 | 11745 |
| &nbsp;&nbsp;&nbsp;&nbsp;Forgiveness of related party promissory note |  |  | 131 | 1527 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred offering costs |  |  |  | (3237) |
| &nbsp;&nbsp;&nbsp;&nbsp;Deemed dividend and accretion to redemption value |  | 11397 |  | 23073 |
| &nbsp;&nbsp;&nbsp;&nbsp;Conversions | (1854) | (23367) | (3373) | (42091) |
| &nbsp;&nbsp;Ending balance | 1860 | $13272 | 1860 | $13272 |
| **Subscription Receivable** |  |  |  |  |
| &nbsp;&nbsp;Beginning balance  |  | $— |  | $(1250) |
| &nbsp;&nbsp;&nbsp;&nbsp;Forgiveness of related party promissory note |  |  |  | 1250 |
| &nbsp;&nbsp;Ending balance |  | $— |  | $— |
| **Total Mezzanine Equity** |  |  |  |  |
| &nbsp;&nbsp;Beginning balance  |  | $25242 |  | $19923 |
| &nbsp;&nbsp;Ending balance |  | 13272 |  | 13272 |

---

<sup>(1)</sup> Beginning balance amounts are recast as of January 1, 2025. The shares of the Company's preferred stock prior to the Merger have been retrospectively recast to reflect the change in the capital structure as a result of the Merger.

*See Accompanying Notes to Condensed Consolidated Financial Statements*

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **3**

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*[**Table of Contents**](#i5f43db688c2c433f9d412b16efe97020_79)*

**USA Rare Earth, Inc.**

**Condensed Consolidated Statements of Stockholders' (Deficit) Equity**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30, 2025** | **Three Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** |
| | **Shares** | **Amount** | **Shares** <sup>(1)</sup> | **Amount** <sup>(1)</sup> |
|  | *(In thousands)* | *(In thousands)* | *(In thousands)* | *(In thousands)* |
| **Common Stock** |  |  |  |  |
| &nbsp;&nbsp;Beginning balance  | 96189 | $10 | 60091 | $6 |
| &nbsp;&nbsp;&nbsp;&nbsp;Transaction bonus |  |  | 78 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Extinguishment of note payable |  |  | 140 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;USARE LLC Convertible Preferred unit dividends |  |  | 182 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Reverse recapitalization merger |  |  | 21461 | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;Conversion of 12% Series A Cumulative Convertible Preferred Stock | 3338 |  | 5948 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Exercise of warrants | 5816 |  | 8867 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;PIPE financing | 8333 | 1 | 16883 | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other issuances | 157 |  | 183 |  |
| &nbsp;&nbsp;Ending balance | 113833 | $11 | 113833 | $11 |
| **Additional Paid-In Capital** |  |  |  |  |
| &nbsp;&nbsp;Beginning balance |  | $46270 |  | $104244 |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity-based compensation - incentive units |  | 3209 |  | 3450 |
| &nbsp;&nbsp;&nbsp;&nbsp;Transaction bonus |  |  |  | 841 |
| &nbsp;&nbsp;&nbsp;&nbsp;Extinguishment of note payable |  |  |  | 1506 |
| &nbsp;&nbsp;&nbsp;&nbsp;USARE LLC Convertible Preferred unit dividends |  |  |  | (1082) |
| &nbsp;&nbsp;&nbsp;&nbsp;Issuance of preferred stock and warrants, net of issuance costs |  |  |  | 5367 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred offering costs |  |  |  | (4234) |
| &nbsp;&nbsp;&nbsp;&nbsp;Deemed dividend - preferred accretion to redemption value |  | (11397) |  | (23073) |
| &nbsp;&nbsp;&nbsp;&nbsp;Reverse recapitalization merger |  |  |  | 27718 |
| &nbsp;&nbsp;&nbsp;&nbsp;Earnout liability |  |  |  | (99639) |
| &nbsp;&nbsp;&nbsp;&nbsp;Conversion of Series A warrants into liability-classified warrants |  |  |  | (34612) |
| &nbsp;&nbsp;&nbsp;&nbsp;Warrant exercises |  | 93161 |  | 131630 |
| &nbsp;&nbsp;&nbsp;&nbsp;Conversions of 12% Series A Cumulative Convertible Preferred Stock |  | 23367 |  | 42091 |
| &nbsp;&nbsp;&nbsp;&nbsp;Forward purchase agreements prepayment |  |  |  | (351) |
| &nbsp;&nbsp;&nbsp;&nbsp;Early termination of forward purchase agreements |  |  |  | 399 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accretion of forward purchase agreements |  |  |  | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;PIPE financing |  | 119904 |  | 119904 |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock issuance |  | 2101 |  | 2454 |
| &nbsp;&nbsp;Ending balance |  | $276615 |  | $276615 |
| **Subscription Receivable** |  |  |  |  |
| &nbsp;&nbsp;Beginning balance  |  | $— |  | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;Forward purchase agreements prepayment |  |  |  | (20389) |
| &nbsp;&nbsp;&nbsp;&nbsp;Early termination of forward purchase agreements |  |  |  | 20391 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accretion of forward purchase agreements |  |  |  | (2) |
| &nbsp;&nbsp;Ending balance |  | $— |  | $— |
| **Accumulated Deficit** |  |  |  |  |
| &nbsp;&nbsp;Beginning balance |  | $(180500) |  | $(72872) |
| &nbsp;&nbsp;&nbsp;&nbsp;Reverse recapitalization merger |  |  |  | (16954) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net loss attributable to USA Rare Earth, Inc. |  | (156680) |  | (247354) |
| &nbsp;&nbsp;Ending balance |  | $(337180) |  | $(337180) |
| **Non-Controlling Interest** |  |  |  |  |
| &nbsp;&nbsp;Beginning balance |  | $2286 |  | $2643 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net loss attributable to non-controlling interest |  | (314) |  | (671) |
| &nbsp;&nbsp;Ending balance |  | $1972 |  | $1972 |
| **Total Stockholders' (Deficit) Equity** |  |  |  |  |
| &nbsp;&nbsp;Beginning balance <sup>(1)</sup> |  | $(131934) |  | $34021 |
| &nbsp;&nbsp;Ending balance |  | (58582) |  | (58582) |

---

<sup>(1)</sup> Beginning balance amounts are recast as of January 1, 2025. 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.

*See Accompanying Notes to Condensed Consolidated Financial Statements*

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **4**

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*[**Table of Contents**](#i5f43db688c2c433f9d412b16efe97020_79)*

**USA Rare Earth, Inc.**

**Condensed Consolidated Statements of Stockholders' (Deficit) Equity**

**(cont'd)**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30, 2024** | **Three Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** |
| | **Units** <sup>(1)</sup> | **Amount** | **Units** <sup>(1)</sup> | **Amount** |
|  | *(In thousands)* | *(In thousands)* | *(In thousands)* | *(In thousands)* |
| **Common Stock** |  |  |  |  |
| &nbsp;&nbsp;Beginning balance (as previously reported) |  |  |  | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;Retroactive application of recapitalization |  |  | 59213 | 6 |
| &nbsp;&nbsp;Beginning balance (as adjusted) | 59640 | $6 | 59213 | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;USARE LLC Convertible Preferred Stock Class C and C-1 dividends | 224 |  | 651 |  |
| &nbsp;&nbsp;Ending balance | 59864 | $6 | 59864 | $6 |
| **Common Units Class A**  |  |  |  |  |
| &nbsp;&nbsp;Beginning balance (as previously reported) |  |  | 206520 | $3704 |
| &nbsp;&nbsp;&nbsp;&nbsp;Retroactive application of recapitalization |  |  | (206520) | (3704) |
| &nbsp;&nbsp;Beginning balance (as adjusted) and ending balance |  |  |  | $— |
| **Common Units Class B** |  |  |  |  |
| &nbsp;&nbsp;Beginning balance (as previously reported) |  |  | 20779 | $3189 |
| &nbsp;&nbsp;&nbsp;&nbsp;Retroactive application of recapitalization |  |  | (20779) | (3189) |
| &nbsp;&nbsp;Beginning balance (as adjusted) and ending balance |  |  |  | $— |
| **Convertible Preferred Units Class C** |  |  |  |  |
| &nbsp;&nbsp;Beginning balance (as previously reported) |  |  | 54592 | $73079 |
| &nbsp;&nbsp;&nbsp;&nbsp;Retroactive application of recapitalization |  |  | (54592) | (73079) |
| &nbsp;&nbsp;Beginning balance (as adjusted) and ending balance |  |  |  | $— |
| **Convertible Preferred Units Class C-1** |  |  |  |  |
| &nbsp;&nbsp;Beginning balance (as previously reported) |  |  | 7861 | $13404 |
| &nbsp;&nbsp;&nbsp;&nbsp;Retroactive application of recapitalization |  |  | (7861) | (13404) |
| &nbsp;&nbsp;Beginning balance (as adjusted) and ending balance |  |  |  | $— |
| **Additional Paid-In Capital** |  |  |  |  |
| &nbsp;&nbsp;Beginning balance (as previously reported) |  |  |  | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;Retroactive application of recapitalization |  |  |  | 93370 |
| &nbsp;&nbsp;Beginning balance (as adjusted) |  | $96991 |  | 93370 |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity-based compensation |  | 158 |  | 192 |
| &nbsp;&nbsp;&nbsp;&nbsp;Issuance of warrants |  | 6283 |  | 6897 |
| &nbsp;&nbsp;&nbsp;&nbsp;Convertible Preferred dividends |  | (446) |  | 2527 |
| &nbsp;&nbsp;Ending balance |  | $102986 |  | $102986 |
| **Accumulated deficit** |  |  |  |  |
| &nbsp;&nbsp;Beginning balance (as previously reported) |  |  |  | $(54223) |
| &nbsp;&nbsp;&nbsp;&nbsp;Retroactive application of recapitalization |  |  |  |  |
| &nbsp;&nbsp;Beginning balance (as adjusted) |  | $(64243) |  | (54223) |
| &nbsp;&nbsp;&nbsp;&nbsp;USARE LLC Convertible Preferred dividends |  | 28 |  | (2945) |
| &nbsp;&nbsp;&nbsp;&nbsp;Dilution of non-controlling interest |  | 9 |  | 31 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net loss |  | (1869) |  | (8938) |
| &nbsp;&nbsp;Ending balance |  | $(66075) |  | $(66075) |
| **Non-controlling interest** |  |  |  |  |
| &nbsp;&nbsp;Beginning balance (as previously reported) |  |  |  | $3331 |
| &nbsp;&nbsp;&nbsp;&nbsp;Retroactive application of recapitalization |  |  |  |  |
| &nbsp;&nbsp;Beginning balance (as adjusted) |  | $2887 |  | 3331 |
| &nbsp;&nbsp;&nbsp;&nbsp;Dilution of non-controlling interest |  | (9) |  | (31) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net loss |  | (139) |  | (561) |
| &nbsp;&nbsp;Ending balance |  | $2739 |  | $2739 |
| **Total stockholders' equity** |  |  |  |  |
| &nbsp;&nbsp;Beginning balance (as adjusted) |  | $35641 |  | $42484 |
| &nbsp;&nbsp;Ending balance |  | 39656 |  | 39656 |

---

<sup>(1)</sup> The shares of the Company's common stock, common stock units and preferred stock units prior to the Merger have been retrospectively recast to reflect the change in the capital structure as a result of the Merger.

*See Accompanying Notes to Condensed Consolidated Financial Statements*

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **5**

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*[**Table of Contents**](#i5f43db688c2c433f9d412b16efe97020_79)*

**USA Rare Earth, Inc.**

**Condensed Consolidated Statements of Cash Flows**

---

| | | |
|:---|:---|:---|
| | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| | **2025** | **2024\*** |
|  | *(In thousands)* | *(In thousands)* |
| Cash flows from operating activities: |  |  |
| &nbsp;&nbsp;Net loss | $(248025) | $(9499) |
| &nbsp;&nbsp;Adjustments to reconcile net loss to cash used in operating activities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity-based compensation | 4291 | 192 |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation | 243 | 229 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of right of use assets | 241 | 128 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of discount on note payable |  | 149 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss (gain) on fair market value of financial instruments | 216788 | (365) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other non-cash adjustments | 2491 | 39 |
| &nbsp;&nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid and other assets | (1097) | (87) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | (3403) | 944 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued and other liabilities | 7864 | (1100) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lease liability | (480) | (117) |
| Net cash used in operating activities | (21087) | (9487) |
| Cash flows from investing activities: |  |  |
| &nbsp;&nbsp;Capital expenditures and equipment deposits | (13398) | (2256) |
| &nbsp;&nbsp;Other |  | (213) |
| Net cash used in investing activities | (13398) | (2469) |
| Cash flows from financing activities: |  |  |
| &nbsp;&nbsp;Proceeds from issuance of USARE LLC Preferred Series A-1 and A-2 units, and warrants | 15250 | 25500 |
| &nbsp;&nbsp;Proceeds from issuance of USARE LLC Preferred Series A units, and warrants | 8000 |  |
| &nbsp;&nbsp;Payment of issuance cost for USARE LLC Preferred Series A, and warrants | (400) |  |
| &nbsp;&nbsp;Payment of issuance cost for USARE LLC Convertible Preferred Class C-1 units |  | (541) |
| &nbsp;&nbsp;IPXX contribution of capital through merger | 22867 |  |
| &nbsp;&nbsp;Prepayment of Forward Purchase Agreements | (20789) |  |
| &nbsp;&nbsp;Proceeds from termination of Forward Purchase Agreements | 20789 |  |
| &nbsp;&nbsp;Payment of securities issuance costs | (8281) | (3214) |
| &nbsp;&nbsp;Proceeds from issuance of common stock and warrants under PIPE financing, net | 190077 |  |
| &nbsp;&nbsp;Proceeds from exercise of warrants | 47531 |  |
| &nbsp;&nbsp;Financed leases | 289 |  |
| Net cash provided by financing activities | 275333 | 21745 |
| Net change in cash and cash equivalents | 240848 | 9789 |
| Cash and cash equivalents, beginning of year | 16761 | 13199 |
| Cash and cash equivalents, end of period | $257609 | $22988 |
| Supplemental disclosure of cash flow information: |  |  |
| &nbsp;&nbsp;Purchases of property and equipment in accounts payable, accrued expenses, and other liabilities | $1463 | $— |
| &nbsp;&nbsp;USARE LLC Convertible Preferred Class C and C-1 unit dividends | 1960 | 4842 |
| &nbsp;&nbsp;USARE LLC Convertible Preferred Class A-1 and A-2 unit dividends | 1082 | 438 |
| &nbsp;&nbsp;Finance right of use assets obtained in exchange for finance lease liabilities | 1233 |  |
| &nbsp;&nbsp;Non-cash lease liabilities arising from obtaining right of use assets | 427 |  |

---

\* Recast

*See Accompanying Notes to Condensed Consolidated Financial Statements*

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **6**

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*[**Table of Contents**](#i5f43db688c2c433f9d412b16efe97020_79)*

**USA Rare Earth, Inc.**

**Notes to Condensed Consolidated Financial Statements (Unaudited)**

**Note 1. Organization**

The mission of USA Rare Earth, Inc., collectively with its subsidiaries (the "Company," "USAR," "we," or "our") 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 of America ("U.S."). USAR is developing a rare earth element ("REE") sintered Neodymium Iron Boron ("NdFeB" or "neo") magnet 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, the Company believes as it scales up its manufacturing operations, support to the entire value chain. Rare earth magnets are critical to various business sectors and industries, including the defense, automotive, aviation, industrial, artificial intelligence with robotics (also referred to as "Physical AI"), 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 neo 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 (formerly known as Inflection Point Acquisition Corp. II or "IPXX") was a special purpose acquisition company incorporated as a Cayman Islands exempted company 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. On March 14, 2025, following the closing of the merger transactions, shares of USAR common stock ("Common Stock") and USAR warrants began trading on the Nasdaq Stock Market LLC ("Nasdaq") under the symbols "USAR" and "USARW," respectively.

**Going Concern**

The accompanying Condensed Consolidated Financial Statements have been prepared in conformity with U.S. generally accepted accounting principles ("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 increasing operational expenses, and has an accumulated deficit. For the nine months ended September 30, 2025, the Company had net loss of $248.0 million, which includes a non-cash fair value loss on financial instruments of $216.8 million. For the nine months ended September 30, 2025, net cash used for operating activities was $21.1 million.

As of September 30, 2025, the Company had cash and cash equivalents on its Condensed Consolidated Balance Sheet of $257.6 million and subsequent to the balance sheet date, the Company raised an additional approximately $163.3 million from exercises of outstanding warrants by certain investors. Despite the increase in cash during the quarter and subsequent to the end of the quarter, the Company will still need to raise additional capital to implement its current strategic plan, purchase of raw material inventory in advance of manufacturing due to long lead times, current and future business acquisitions to strategically acquire significant quantities of critical raw material inventory, and purchase of capital equipment to expand its production and finishing lines. Furthermore, the Company expects to increase its operational costs to accommodate the new production lines and incur higher infrastructure costs to handle the forecasted increase production and sales.

Based on the Company's need to raise additional capital as well as milestones required for its current strategic plan and increased operational costs 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.

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **7**

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*[**Table of Contents**](#i5f43db688c2c433f9d412b16efe97020_79)*

**USA Rare Earth, Inc.**

**Notes to Condensed Consolidated Financial Statements (Unaudited)**

**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.

The December 31, 2024 Condensed Consolidated Balance Sheet was derived from audited financial statements and may not include all disclosures required by GAAP; however, the Company believes that the disclosures are adequate to make the information presented not misleading and should be read in conjunction with the Company's audited [C](https://www.sec.gov/Archives/edgar/data/1970622/000121390025055427/ea024611801ex99-1_usarare.htm)[onsolidated](https://www.sec.gov/Archives/edgar/data/1970622/000121390025055427/ea024611801ex99-1_usarare.htm)[F](https://www.sec.gov/Archives/edgar/data/1970622/000121390025055427/ea024611801ex99-1_usarare.htm)[inancial](https://www.sec.gov/Archives/edgar/data/1970622/000121390025055427/ea024611801ex99-1_usarare.htm)[S](https://www.sec.gov/Archives/edgar/data/1970622/000121390025055427/ea024611801ex99-1_usarare.htm)[tatements](https://www.sec.gov/Archives/edgar/data/1970622/000121390025055427/ea024611801ex99-1_usarare.htm)[as of and for the years ended December](https://www.sec.gov/Archives/edgar/data/1970622/000121390025055427/ea024611801ex99-1_usarare.htm)[31, 2024 and 2023](https://www.sec.gov/Archives/edgar/data/1970622/000121390025055427/ea024611801ex99-1_usarare.htm) filed as [Exhibit](https://www.sec.gov/Archives/edgar/data/1970622/000121390025055427/ea024611801ex99-1_usarare.htm)[99.1 to the Current Report on Form](https://www.sec.gov/Archives/edgar/data/1970622/000121390025055427/ea024611801ex99-1_usarare.htm)[8-K](https://www.sec.gov/Archives/edgar/data/1970622/000121390025055427/ea024611801ex99-1_usarare.htm) filed by the Company with the SEC on June 18, 2025.

These Condensed Consolidated 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.

**Reclassifications**

Certain prior period amounts have been reclassified in certain notes to the Condensed Consolidated Financial Statements to conform to the current period presentation.

**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. The Company has elected not to opt out of such extended transition period which means that when a new standard is issued or revised and it has different application dates for public or private companies, the Company can adopt the new or revised standard at the same time private companies adopt the new or revised standard. This may make comparison of the Company's Condensed Consolidated Financial Statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

**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.

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **8**

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*[**Table of Contents**](#i5f43db688c2c433f9d412b16efe97020_79)*

**USA Rare Earth, Inc.**

**Notes to Condensed Consolidated Financial Statements (Unaudited)**

**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.

**Significant Accounting Policies**

For a detailed description of the Company's Significant Accounting Policies, please refer to the Company's audited [Consolidated Financial Statements as of and for the years ended December 31, 2024 and 2023](https://www.sec.gov/Archives/edgar/data/1970622/000121390025055427/ea024611801ex99-1_usarare.htm) filed as [Exhibit 99.1 to the Current Report on Form 8-K](https://www.sec.gov/Archives/edgar/data/1970622/000121390025055427/ea024611801ex99-1_usarare.htm) filed by the Company with the SEC on June 18, 2025.

***Recently Adopted Accounting Pronouncement***

In March 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") issued ASU 2024-01, *Compensation – Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards*, which improves current U.S. 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 was effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. The adoption of this ASU on January 1, 2025 did not have a material effect on the Company's Condensed Consolidated Financial Statements.

***Recently Issued Accounting Pronouncements Not Yet Adopted***

In January 2025, the FASB issued 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 ASU 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 ASU 2024-03, *Income Statement – Reporting Comprehensive Income (Topic 220): Disaggregation of Income Statement Expenses*. This 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. This 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.

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 annual periods beginning after December 15, 2024. Retrospective application is permitted for all prior periods presented in the financial statements. The Company is currently evaluating the impact of this standard on its disclosures.

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **9**

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*[**Table of Contents**](#i5f43db688c2c433f9d412b16efe97020_79)*

**USA Rare Earth, Inc.**

**Notes to Condensed Consolidated Financial Statements (Unaudited)**

**Note 3. Merger Transaction and Acquisition**

**Less Common Metals Ltd. Acquisition**

On September 26, 2025, Laconia Acquisition Sub Limited ("Laconia"), a wholly owned indirect subsidiary of the Company, entered into a Share Purchase Agreement (the "SPA") with Indian Ocean Rare Metals Pte. Ltd. ("IORM"), a Singapore private limited company. IORM's operating subsidiary is Less Common Metals Ltd. ("LCM"), a United Kingdom (U.K.)-based manufacturer of specialized rare earth metals and both cast and strip-cast alloys. LCM produces both light and heavy rare earth permanent magnet metals and alloys at scale in its facility in Cheshire, U.K. The Company believes the acquisition will provide:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• access to key commercial, industry and government relationships;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• access to critical rare earth metal and metal alloy production and high-quality rare-earth strip cast alloy, which is essential to magnet production;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• access to unique assets and competitive advantages which allows the Company to control its rare earth metal inputs, as well as ensure that investments are made to support the growth of its magnet business, as well as enabling the Company to deliver a lower risk and lower cost solution that is unique to the industry;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• important capability to process recycled rare earth oxides which will reuse end of life magnets, and allow for a more sustainable manufacturing process; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• access to alternative low-cost sources of feedstock.

Pursuant to the Laconia Acquisition Agreement, Laconia will purchase, acquire and accept from IORM's shareholders all rights, title and interest in and to all of the shares of IORM held by the IORM shareholders, amounting to all of the outstanding and issued shares in IORM (the "Acquisition"). Upon the terms and subject to the conditions of the Laconia Acquisition Agreement, at closing, Laconia shall pay to the IORM shareholders the aggregate consideration of $100.0 million in cash and 6.74 million shares of the Company's common stock, subject to the deposit of 1.0 million shares of the Company's common stock into escrow and customary deductions for net indebtedness, transaction expenses and working capital, as well as customary post-closing adjustments. Prior to the closing of the Acquisition, the Company will need to obtain a receipt of approval from (or a notification or final notification that no further action will be taken by) U.K. Secretary of State pursuant to the National Security and Investment Act 2021 ("NSIA") (including a notification by the U.K. Secretary of State that no further action will be taken in relation to the transaction, or final notification by the U.K. Secretary of State that no further action will be taken by the NSIA in relation to a call-in notice in respect of the transaction). The Company expects the Acquisition to close during the fourth quarter of 2025.

**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 USARE LLC, with 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").

In connection with the Merger, approximately $22.8 million of cash held in trust, net of redemptions by IPXX's public shareholders, became available for use by the Company as well as $8.0 million in proceeds received from the closing of the private investment in public equity ("PIPE") financing. In addition, the Company incurred certain earnout obligations discussed further below.

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **10**

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*[**Table of Contents**](#i5f43db688c2c433f9d412b16efe97020_79)*

**USA Rare Earth, Inc.**

**Notes to Condensed Consolidated Financial Statements (Unaudited)**

***Earnout Liabilities***

As part of the Merger transaction, the Company is required to issue up to 10.1 million additional shares of Common Stock in two (2) tranches (the "Earnout Shares") upon certain triggering events commencing on March 13, 2026 and ending on March 13, 2031 (the "Earnout Period"). The two triggering events are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The first tranche of 5.05 million Earnout Shares would be distributed if, during the time period beginning on the date of the first anniversary of the Closing Date and ending on the date of the sixth anniversary of the Closing Date (the "Earnout Period"), the market price of the Common Stock is greater than or equal to $15.00 per share and less than $20.00 per share for a period of at least twenty out of thirty consecutive trading days.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The second tranche of 5.05 million Earnout Shares would be distributed if, during the Earnout Period, the market price of the Common Stock is greater than or equal to $20.00 per share for a period of at least twenty out of thirty consecutive trading days.

The Earnout Shares are classified as liabilities and no additional analysis under ASC 815 is required. The Earnout Shares are recorded through the recapitalization of equity within additional paid-in capital upon recognition and are remeasured on a recurring basis. See Note 4, "Fair Value Measurements" for further information and valuation of the Earnout Shares.

As of September 30, 2025, none of the Triggering Events have occurred.

***Forward Purchase Agreements***

On March 11, 2025, IPXX entered into forward purchase agreements ("FPAs") with three (3) separate investors ("Sellers") pursuant to which the Sellers agreed to hold up to a total of approximately 1.89 million publicly held IPXX Class A ordinary shares ("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 a floor price of $4.00. For purposes of the FPAs, the Public Shares held by each of the Sellers are referred to as such Seller's "Maximum Shares." Each Seller, acting separately and solely for its own account, was permitted, if necessary, to (i) reverse its previous election to redeem its Public Shares in connection with the Merger Transactions pursuant to the redemption rights set forth in IPXX's amended and restated memorandum and articles of association or (ii) purchase Public Shares through a broker in the open market from holders of Public Shares (other than IPXX), including from holders who previously elected to redeem their Public Shares in connection with the Merger Transactions pursuant to the redemption rights set forth in IPXX's amended and restated memorandum and articles of association. The aggregate number of Public Shares subject to each FPA investor (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. Prior to the date that was 90 days after the Closing Date (the "Maturity Date"), each Seller was permitted to sell any, or all, of their FPA Shares.

On various dates between the Closing Date of the Merger and September 30, 2025, the Sellers exercised their early termination rights under the FPAs with respect to approximately 1.89 million FPA Shares. As of September 30, 2025, all FPAs have been terminated. Upon the early termination of the FPAs, the Sellers remitted cash to the Company at the initial price of $11.00, resulting in cash proceeds received in the amount of $20.8 million from the Sellers, which was recorded as a reduction of the subscription receivable at the fair value of the terminated shares on the date of termination with an offset to additional paid-in capital.

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **11**

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*[**Table of Contents**](#i5f43db688c2c433f9d412b16efe97020_79)*

**USA Rare Earth, Inc.**

**Notes to Condensed Consolidated Financial Statements (Unaudited)**

**Note 4. Fair Value Measurements**

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):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Level 1* — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *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.

**Level 1 and Level 2 Fair Value of Financial Instruments on a Recurring Basis**

The following table presents the financial assets measured on a recurring basis by contractual maturity, including pricing category, amortized cost, gross unrealized gains and losses, and fair value. The Company has no Level 1 and Level 2 financial liabilities measured on a recurring basis.

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | | **As of September 30, 2025** | **As of September 30, 2025** | **As of September 30, 2025** | **As of September 30, 2025** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** |
| | **Pricing Category** | **Amortized Cost** | **Gross Unrealized Gains** | **Gross Unrealized Losses** | **Fair Value** | **Amortized Cost** | **Gross Unrealized Gains** | **Gross Unrealized Losses** | **Fair Value** |
|  |  | *(In thousands)* | *(In thousands)* | *(In thousands)* | *(In thousands)* | *(In thousands)* | *(In thousands)* | *(In thousands)* | *(In thousands)* |
| Money market funds | Level 1 | $256826 | $— | $— | $256826 | $15709 | $— | $— | $15709 |

---

**Level 3 Fair Value of Financial Instruments on a Recurring Basis**

The following table presents the Level 3 financial liabilities measured on a recurring basis. The Company has no Level 3 financial assets measured on a recurring basis.

---

| | | |
|:---|:---|:---|
| | **September 30,<br>2025** | **December 31, 2024** |
|  | *(In thousands)* | *(In thousands)* |
| **Liabilities:** |  |  |
| &nbsp;&nbsp;Derivative liability | $— | $1164 |
| &nbsp;&nbsp;Earnout liabilities | 166087 |  |
| &nbsp;&nbsp;Warrant liabilities | 41024 |  |
| &nbsp;&nbsp;Common Stock warrant | 136761 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | $343872 | $1164 |

---

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **12**

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*[**Table of Contents**](#i5f43db688c2c433f9d412b16efe97020_79)*

**USA Rare Earth, Inc.**

**Notes to Condensed Consolidated Financial Statements (Unaudited)**

**Level 3 Valuation and Reconciliation**

***Earnout Liabilities***

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 September 30, 2025.

The following table summarizes the significant inputs to value the Earnout liability.

---

| | | |
|:---|:---|:---|
| | **September 30,<br>2025** | **March 13,<br>2025** |
| Share price | $17.19 | $10.79 |
| Expected volatility | 70.4% | 66.0% |
| Risk-free interest rate | 3.72% | 4.00% |
| Remaining term (in years) | 5.4 | 6.0 |

---

The following table presents the reconciliation of the Earnout liability measured at fair value on a recurring basis.

---

| | | |
|:---|:---|:---|
| | **Three Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** |
|  | *(In thousands)* | *(In thousands)* |
| Beginning balance | $100007 | $— |
| &nbsp;&nbsp;Establishment of liability at March 13, 2025 |  | 99639 |
| &nbsp;&nbsp;Change in estimated fair value <sup>(1)</sup> | 66080 | 66448 |
| Ending balance | $166087 | $166087 |

---

<sup>(1.)</sup>Change in estimated fair value is recognized in *(Loss) gain on fair market value of financial instruments* in the Company's Condensed Consolidated Statements of Operations.

***Warrant Liability***

On March 13, 2025, the Company issued Series A Investor Warrants in exchange for prior Class A Purchase Warrants in connection with the Merger and related transactions. The Company valued the liability classified Series A Investor Warrants using a Monte Carlo simulation, which includes Level 3 unobservable inputs on the initial valuation date (March 13, 2025) and September 30, 2025. On May 2, 2025, the exercise price was reset from $12.00 to $7.00 as a result of the warrant issuances under the $75M PIPE (as defined below). See the Common Stock Warrant Liability section in this footnote below, and Note 10, "Mezzanine and Stockholders' Equity" for further details related to the $75M PIPE.

The following table summarizes the significant inputs to value the Series A Investor Warrants liability.

---

| | | |
|:---|:---|:---|
| | **September 30,<br>2025** | **March 13,<br>2025** |
| Share price | $17.19 | $10.79 |
| Exercise price <sup>(1)</sup> | $7.00 | $12.00 |
| Expected volatility | 65.2% | 65.0% |
| Risk-free rate | 3.64% | 3.95% |
| Dividend yield | —% | —% |
| Put term (in years) | 4.4 | 4.4 |

---

<sup>(1)</sup> On May 2, 2025, the exercise price of this warrant was reset from $12.00 to $7.00.

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **13**

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*[**Table of Contents**](#i5f43db688c2c433f9d412b16efe97020_79)*

**USA Rare Earth, Inc.**

**Notes to Condensed Consolidated Financial Statements (Unaudited)**

The following table presents the reconciliation of the Series A Investor Warrants liability measured at fair value on a recurring basis.

---

| | | |
|:---|:---|:---|
| | **Three Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** |
|  | *(In thousands)* | *(In thousands)* |
| Beginning balance | $53715 | $— |
| &nbsp;&nbsp;Establishment of liability at March 13, 2025 |  | 40652 |
| &nbsp;&nbsp;Change in estimated fair value <sup>(1)</sup> | 11927 | 41508 |
| &nbsp;&nbsp;Warrant exercises | (24618) | (41136) |
| Ending balance | $41024 | $41024 |

---

<sup>(1)</sup> Change in estimated fair value is recognized in *(Loss) gain on fair market value of financial instruments* in the Company's Condensed Consolidated Statements of Operations.

***Private Investment in Public Entity Financing*** 

On May 2, 2025, the Company closed its $75.0 million private investment in public equity ("PIPE") financing agreement (the "$75M PIPE") with a single institutional investor. The $75M PIPE included issuance of Common Stock, Common Stock and Prefunded warrants. Both Common Stock and Prefunded warrants are treated as liabilities and are remeasured at each reporting date, with the corresponding gain or loss recognized in *(Loss) gain on fair market value of financial instruments* on the Company's Condensed Consolidated Statements of Operations.

See Note 10, "Mezzanine and Stockholders' Equity – Private Investment in Public Entity Financing" for further information regarding the issuances under the $75M PIPE.

*<u>Common Stock Warrant Liability Valuation</u>*

The Company valued the $75M PIPE Common Stock warrants, which include Level 3 unobservable inputs using a Monte Carlo simulation model at issuance and at reporting date.

The following table summarizes the significant inputs to value the Common Stock warrants liability.

---

| | | |
|:---|:---|:---|
| | **September 30,<br>2025** | **May 2,<br>2025** |
| Share price | $17.19 | $10.31 |
| Exercise price | $7.00 | $7.00 |
| Expected volatility | 72.5% | 140.0% |
| Risk-free rate | 3.74% | 4.21% |
| Dividend yield | —% | —% |
| Put term (in years) | 5.6 | 5.4 |

---

The following table presents the reconciliation of the Common Stock warrants liability measured at fair value on a recurring basis. Subsequent to the balance sheet date, all outstanding Common Stock warrants were exercised.

---

| | | |
|:---|:---|:---|
| | **Three months ended September 30, 2025** | **Nine Months Ended September 30, 2025** |
|  | *(In thousands)* | *(In thousands)* |
| Beginning balance | $91600 | $— |
| &nbsp;&nbsp;Establishment of liability at May 2, 2025 |  | 84807 |
| &nbsp;&nbsp;Change in estimated fair value <sup>(1)</sup> | 51345 | 58138 |
| &nbsp;&nbsp;Warrant exercises | (6184) | (6184) |
| Ending balance | $136761 | $136761 |

---

<sup>(1)</sup> Change in estimated fair value is recognized in *(Loss) gain on fair market value of financial instruments* in the Company's Condensed Consolidated Statements of Operations.

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **14**

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*[**Table of Contents**](#i5f43db688c2c433f9d412b16efe97020_79)*

**USA Rare Earth, Inc.**

**Notes to Condensed Consolidated Financial Statements (Unaudited)**

*<u>Prefunded Warrant Liability Valuation</u>*

The Company valued the $75M PIPE Prefunded warrants was based on the Company's share value of $10.31 at issuance. As of September 30, 2025, all Prefunded warrants were exercised.

The following table presents the reconciliation of the Prefunded warrants liability measured at fair value on a recurring basis.

---

| | | |
|:---|:---|:---|
| | **Three months ended September 30, 2025** | **Nine Months Ended September 30, 2025** |
|  | *(In thousands)* | *(In thousands)* |
| Beginning balance | $23705 | $— |
| &nbsp;&nbsp;Establishment of liability at May 2, 2025 |  | 22309 |
| &nbsp;&nbsp;Change in estimated fair value <sup>(1)</sup> |  | 1396 |
| &nbsp;&nbsp;Warrant exercises | (23705) | (23705) |
| Ending balance | $— | $— |

---

<sup>(1)</sup> Change in estimated fair value is recognized in *(Loss) gain on fair market value of financial instruments* in the Company's Condensed Consolidated Statements of Operations.

**Note 5. Property, Plant and Equipment, Net**

---

| | | |
|:---|:---|:---|
| | **September 30,<br>2025** | **December 31,<br>2024** |
|  | *(In thousands)* | *(In thousands)* |
| Land | $707 | $707 |
| Land improvements | 403 | 403 |
| Building improvements | 2566 |  |
| Lab equipment | 3263 | 500 |
| Leasehold improvements | 346 | 346 |
| Computer equipment | 13 |  |
| Construction in progress <sup>(1)</sup> | 33736 | 25775 |
| &nbsp;&nbsp;Property, plant and equipment, gross | 41034 | 27731 |
| Less: Accumulated depreciation | (1490) | (1202) |
| &nbsp;&nbsp;Property, plant and equipment, net | $39544 | $26529 |
| Finance lease right-of-use assets | $1233 | $— |
| Less: Accumulated amortization | (129) |  |
| &nbsp;&nbsp;Finance lease-right-of-use assets, net | $1104 | $— |
| Total property, plant and equipment, net | $40648 | $26529 |

---

<sup>(1)</sup> Construction in progress includes building construction costs for the Company's magnet processing plant of $25.8 million and equipment costs of $8.0 million. These assets will be placed in service and depreciated upon completion of construction, installation, and certification.

The following table presents the depreciation expense related to the Company's property, plant and equipment, and the amortization expense related to the Company's finance lease right-of-use assets.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| | **2025** | **2024** | **2025** | **2024** |
|  | *(In thousands)* | *(In thousands)* | *(In thousands)* | *(In thousands)* |
| Depreciation expense | $108 | $66 | $243 | $229 |
| Amortization expense | 62 |  | 129 |  |
| &nbsp;&nbsp;Total | $170 | $66 | $372 | $229 |

---

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **15**

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*[**Table of Contents**](#i5f43db688c2c433f9d412b16efe97020_79)*

**USA Rare Earth, Inc.**

**Notes to Condensed Consolidated Financial Statements (Unaudited)**

**Note 6. Variable Interest Entity**

**Round Top Mountain Development**

Round Top Mountain Development, LLC ("RTMD") is a variable interest entity ("VIE"), has mining rights at Round Top Mountain in the State of Texas, and is developing processing technology for where the rare earth minerals are to be mined.

On May 17, 2021, the Company completed the acquisition of 80% of the equity interests of RTMD, pursuant to a contribution agreement with the Company, Texas Mineral Resource Corp. ("TMRC"), and RTMD, whereby TMRC and the Company contributed their respective rights and interests to and in Round Top Mountain to RTMD. Concurrently, the Company, TMRC, and RTMD entered into a limited liability company agreement of RTMD which documented the governance of RTMD. This acquisition resulted in the consolidation of RTMD and the recording of a non-controlling interest for the remaining TMRC equity interest.

Effective and on June 26, 2023, RTMD, 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. TMRC's failure to fund its share of mandatory capital contributions called under the agreement has resulted in Company's ownership interest in RTMD to be increased to 80.57% and TMRC's interest in RTMD to be decreased to 19.43%

The following table presents the assets and liabilities associated with RTMD included in the Company's Condensed Consolidated Balance Sheets.

---

| | | |
|:---|:---|:---|
| | **September 30,<br>2025** | **December 31,<br>2024** |
|  | *(In thousands)* | *(In thousands)* |
| **ASSETS** |  |  |
| &nbsp;&nbsp;Cash and cash equivalents | $86 | $66 |
| &nbsp;&nbsp;Prepaid expenses and other current assets | 107 | 178 |
| &nbsp;&nbsp;Right-of-use asset | 355 | 30 |
| &nbsp;&nbsp;Mineral interests | 17339 | 17125 |
| &nbsp;&nbsp;Property, plant and equipment, net | 221 | 264 |
| &nbsp;&nbsp;Other assets | 19 | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;Consolidated assets | $18127 | $17683 |
| **LIABILITIES** |  |  |
| &nbsp;&nbsp;Accounts payable | $21 | $42 |
| &nbsp;&nbsp;Accrued liabilities | 210 | 141 |
| &nbsp;&nbsp;Lease liability | 354 | 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;Consolidated liabilities | $585 | $205 |

---

RTMD did not record depletion expense for the mineral interests for the three and nine months ended September 30, 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 September 30, 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.

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **16**

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*[**Table of Contents**](#i5f43db688c2c433f9d412b16efe97020_79)*

**USA Rare Earth, Inc.**

**Notes to Condensed Consolidated Financial Statements (Unaudited)**

**Note 7. Accrued Liabilities**

The following table presents a summary of the accrued liabilities by category.

---

| | | |
|:---|:---|:---|
| | **September 30,<br>2025** | **December 31,<br>2024** |
|  | *(In thousands)* | *(In thousands)* |
| Payroll and related employee taxes | $2181 | $1908 |
| Construction in progress | 2191 | 323 |
| Legal | 1990 | 99 |
| Financing costs | 5095 |  |
| Other | 1967 | 741 |
| &nbsp;&nbsp;Total accrued liabilities | $13424 | $3071 |

---

**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 September 30, 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, the Company 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.

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **17**

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*[**Table of Contents**](#i5f43db688c2c433f9d412b16efe97020_79)*

**USA Rare Earth, Inc.**

**Notes to Condensed Consolidated Financial Statements (Unaudited)**

***Ramco Complaint***

A complaint was filed in Delaware Chancery Court by Ramco Asset Management, LLC ("Ramco"), US Trading Company Metals RE, LLC ("TCM RE"), and DinSha Dynasty Trust ("DinSha") (collectively, the "Plaintiffs") on July 29, 2022 against USA Rare Earth, LLC ("USARE LLC"), 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 USARE 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. USARE LLC 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 the Company. On July 1, 2025, USARE LLC, Ramco, DinSha and Stewart Kleiner entered into a settlement agreement in full settlement of, amongst other things, the Complaint. See subsection "Ramco Complaint and Kleiner Notice Settlement" below. On September 5, 2025, TCM RE filed a notice of appeal (the "Appeal") to the Delaware Supreme Court appealing the complete dismissal of its claims. TCM RE filed its appellate brief on October 28, 2025. TCM RE asserts no claims against the Company, instead asserting claims solely against Morzev Pty Ltd. Mordechai Gutnick ATF the Morzev Trust, Pini Althaus (former officer of the Company), and Mordechai Gutnick (director of the Company) (collectively "Appellees"). Appellees' responding brief is due December 1, 2025. The Company will assist Appellees in vigorously contesting this baseless Appeal.

***Kleiner Notice***

On April 1, 2025, the Company received notice from Stewart Kleiner (Managing Member of Ramco and Grantor of DinSha) asserting that a milestone triggering payment of certain equity outlined in a May 10, 2019 advisory agreement (the "Milestone Payment Notice") had been achieved as a result of the Company's reverse merger with Inflection Point Acquisition Corp. II. 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. On July 1, 2025, the Company, USARE LLC, Ramco, DinSha and Mr. Kleiner entered into a settlement agreement in full settlement of, amongst other things, the Milestone Payment Notice and the guaranteed payment of equity by Mr. Gutnick was released. See subsection "Ramco Complaint and Kleiner Notice Settlement" below.

***Ramco Complaint and Kleiner Notice Settlement***

On July 1, 2025, Ramco, DinSha, Mr. Kleiner, the Company and USARE LLC entered into a settlement agreement and release pursuant to which, in full settlement of the Complaint and the Milestone Payment Notice, amongst other things, the Company agreed to issue 159 thousand shares of Common Stock to DinSha and agreed to pay $150 thousand to Ramco. The settlement agreement is expressly not to be construed as an admission of liability by the Company. During the second quarter of 2025, the Company determined that the consideration paid (both cash and the fair value of the Common Stock components) were both probable and estimable, and should be classified as settlement of litigation. During the quarter ended June 30, 2025, the Company recorded an estimated fair value charge of $1.8 million in its Condensed Consolidated Statements of Operations.

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **18**

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*[**Table of Contents**](#i5f43db688c2c433f9d412b16efe97020_79)*

**USA Rare Earth, Inc.**

**Notes to Condensed Consolidated Financial Statements (Unaudited)**

**Note 9. Leases**

**Balance Sheet Components and Lease Activity**

The following table presents the finance and operating leases on the Company's Condensed Consolidated Balance Sheets.

---

| | | |
|:---|:---|:---|
| | **September 30,<br>2025** | **December 31,<br>2024** |
|  | *(In thousands)* | *(In thousands)* |
| **Assets** |  |  |
| &nbsp;&nbsp;Finance leases, included in property plant and equipment, net | $1104 | $— |
| &nbsp;&nbsp;Operating leases, included in lease right-of-use assets, net | 355 | 30 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $1459 | $30 |
| **Liabilities** |  |  |
| &nbsp;&nbsp;Finance lease liability, current | $280 | $— |
| &nbsp;&nbsp;Finance lease liability, non-current | 664 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total finance lease liabilities | 944 |  |
| &nbsp;&nbsp;Operating lease liability, current <sup>(1)</sup> | 146 | 23 |
| &nbsp;&nbsp;Operating lease liability, non-current | 220 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total operating lease liabilities | 366 | 23 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total lease liabilities | $1310 | $23 |

---

<sup>(1)</sup> Includes sub-lease deposit of $13 thousand.

**Note 10. Mezzanine and Stockholders' Equity**

The total number of Common Stock and Preferred Stock shares outstanding as of September 30, 2025 and the total number of shares of all classes of stock that USAR has authority to issue is follows:

---

| | | | |
|:---|:---|:---|:---|
| **Class of Stock** | **Authorized** | **Par Value** | **Outstanding** |
|  | *(In thousands, except par value)* | *(In thousands, except par value)* | *(In thousands, except par value)* |
| Common stock | 750000 | $0.0001 | 113833 |
| Preferred stock |  |  |  |
| &nbsp;&nbsp;12% Series A Cumulative Convertible Preferred Stock <sup>(1)</sup> | 15000 | $0.0001 | 1860 |
| &nbsp;&nbsp;Undesignated preferred stock | 35000 | $0.0001 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total preferred stock | 50000 | $0.0001 | 1860 |
| Total authorized | 800000 |  |  |

---

<sup>(1)</sup> The Company designated 15.0 million shares as 12% Series A Cumulative Convertible Preferred Stock of which 5.23 million shares were issued.

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **19**

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*[**Table of Contents**](#i5f43db688c2c433f9d412b16efe97020_79)*

**USA Rare Earth, Inc.**

**Notes to Condensed Consolidated Financial Statements (Unaudited)**

**Warrants**

The following table presents the number of potential shares of Common Stock that outstanding warrant holders may acquire.

---

| | | | |
|:---|:---|:---|:---|
| | | | **Potential Common Stock Shares Issuable Upon Exercise at September 30, 2025** <sup>(1)</sup> |
| | **Balance Sheet Classification** | **Exercise Price** | **Potential Common Stock Shares Issuable Upon Exercise at September 30, 2025** <sup>(1)</sup> |
|  |  | *(In thousands, except for exercise price)* | *(In thousands, except for exercise price)* |
| Investor Warrants | Equity | $11.50 | 18365 |
| Series A Warrants <sup>(2) (3)</sup> | Liability | $7.00 | 3206 |
| Common Stock warrants <sup>(3)</sup> | Liability | $7.00 | 9991 |
| Prefunded warrants <sup>(3)</sup> | Liability | $0.0001 |  |
| &nbsp;&nbsp;Total Warrants |  |  | 31562 |

---

<sup>(1)</sup> Amount presented is net of exercises.

<sup>(2)</sup> On March 13, 2025, the Company granted warrants to acquire approximately 23.8 million shares of Common Stock. On May 3, 2025, the exercise price of the outstanding Series A warrants was reduced from $12.00 to $7.00 due to the $75M PIPE (as defined below). The number of shares of Common Stock issuable related to the outstanding Series A warrants on May 3, 2025 was subsequently increased by approximately 171%.

<sup>(3)</sup> [See](#i5f43db688c2c433f9d412b16efe97020_648)[the follow](#i5f43db688c2c433f9d412b16efe97020_648)[ing section](#i5f43db688c2c433f9d412b16efe97020_648)[entitled](#i5f43db688c2c433f9d412b16efe97020_648) "Private Investment in Public Entity Financing." Subsequent to the balance sheet date, all outstanding Common Stock warrants had been exercised.

**Private Investment in Public Entity Financing**

Under the PIPE financing agreements, the Company issued the following shares of Common Stock, Common Stock warrants, and Prefunded warrants.

---

| | | | |
|:---|:---|:---|:---|
| | **PIPE Agreement Closing Date** | **Common Stock Shares and Warrants Issued** | **Exercise Price** |
|  |  | *(In thousands, except for exercise price)* | *(In thousands, except for exercise price)* |
| Common Stock shares | 5/5/2025 | 8550 |  |
| Common Stock warrants <sup>(1)</sup> | 5/5/2025 | 10714 | $7.00 |
| Prefunded warrants <sup>(1)</sup> | 5/5/2025 | 2164 | $0.0001 |
| Common Stock shares | 9/29/2025 | 8333 |  |

---

<sup>(1)</sup> See Warrants section (above) for amount of warrants outstanding.

The following table presents the warrant exercise activity and cash received for the periods indicated.

---

| | |
|:---|:---|
| | **Three and Nine Months Ended September 30, 2025** |
|  | *(In thousands)* |
| Warrants exercised |  |
| &nbsp;&nbsp;Common Stock warrants | 723 |
| &nbsp;&nbsp;Prefunded warrants | 2164 |
| Total warrants exercised | 2887 |
| Cash received | $5063 |

---

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **20**

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*[**Table of Contents**](#i5f43db688c2c433f9d412b16efe97020_79)*

**USA Rare Earth, Inc.**

**Notes to Condensed Consolidated Financial Statements (Unaudited)**

On May 2, 2025, the Company closed its $75.0 million PIPE financing agreement (the "$75M PIPE") with a single institutional investor. Under the $75M PIPE, the Company issued shares of Common Stock, Common Stock warrants, and Prefunded warrants. In exchange for the issuances of Common Stock, Common Stock warrants, and Prefunded warrants, the Company received cash of $75.0 million. The $75M PIPE specified that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***•*** exercisability of the Common Stock and Prefunded warrants are contingent upon investor's beneficial ownership of the Company, which may not exceed 9.99% at time of exercise;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Common Stock warrants will expire six (6) years from the initial exercise date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Prefunded warrants do not expire;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• embedded put rights upon a Fundamental Transaction, as defined in the agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• can be exercised in whole or in part;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• can only be exercised as long as the warrant is still outstanding; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• other conditions and covenants as outlined in the agreement.

Upon closing of the $75M PIPE, the Company recognized a loss of $36.9 million on the value of the issued Common Stock shares, as the fair value of the related Common Stock and Prefunded warrants on the issuance date exceeded the value of the financing received. The recognized loss on the value of the issued shares of Common Stock was recognized in *(Loss) gain on fair market value of financial instruments* on the Company's Condensed Consolidated Statements of Operations. See Note 4, "Fair Value Measurements – Private Investment in Public Entity Financing" for further information regarding the valuation of the $75M PIPE Common Stock and Prefunded warrants.

On September 29, 2025 the Company closed its $125.0 million PIPE financing agreement (the "$125M PIPE") with a single institutional investor. Under the $125M PIPE, on September 29, 2025, the Company issued 8.33 million shares of Common Stock and received $125.0 million cash. The cash received under the $125M PIPE will be used for general corporate purposes.

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **21**

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*[**Table of Contents**](#i5f43db688c2c433f9d412b16efe97020_79)*

**USA Rare Earth, Inc.**

**Notes to Condensed Consolidated Financial Statements (Unaudited)**

**Note 11. Equity-Based Compensation**

**Incentive Plans**

**2024 Omnibus Incentive Plan**

The Company has reserved 13.0 million shares of Common Stock for issuance pursuant to the 2024 Omnibus Incentive Plan (the "2024 Incentive Plan"), and the maximum number of units that may be issued pursuant to the vesting of incentive awards under the 2024 Incentive Plan is 13.0 million units, subject to certain adjustments. Each unit represents the right to receive one share of Common Stock. The 2024 Incentive Plan authorizes the awards of several types of equity compensation including stock options, restricted stock units ("RSU"), stock appreciation rights, performance awards ("PRSU") and other stock-based compensation.

***Restricted Stock Units***

RSU outstanding at September 30, 2025 generally vest 33⅓% annually over the three years from date of grant and are dependent upon continued employment. Non-employee board of director grants generally vest one year after the date of grant or on the date of the annual stockholders' meeting following the date of grant, whichever date occurs first. As RSU vest, the units will be settled in shares of common stock based on a one-to-one ratio.

***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. In addition, no new grants will be awarded under this plan.

**Restricted Stock Unit Fair Value Assumption**

The fair value of RSU granted to employees are based on the Company's common stock price on the date of grant.

**Stock-based Compensation Expense**

The following table presents the stock-based compensation expense.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| | **Incentive Plan** | **2025** | **2024** | **2025** | **2024** |
| | | (In thousands) | (In thousands) | (In thousands) | (In thousands) |
| Restricted stock units <sup>(1)</sup> | 2024 Incentive Plan | $3209 | $— | $3209 | $— |
| Incentive units | Legacy Incentive Plan | (200) | 158 | 241 | 417 |
| Class A units <sup>(2)</sup> | Legacy Incentive Plan |  |  | 841 | (225) |
| &nbsp;&nbsp;Total |  | $3009 | $158 | $4291 | $192 |

---

<sup>(1)</sup> The Company recognized $1.6 million during the three and nine months ended September 30, 2025 related to the modification of an equity award of the Company's former Chief Executive Officer ("CEO").

<sup>(2)</sup> In the nine months ended September 30, 2024, USARE LLC recorded equity-based compensation for issuance of its Class A Units to certain consultants pursuant to existing bonus agreements. In the nine months ended September 30, 2024, USARE LLC recorded the forfeiture of equity-based compensation of the Company's former CEO.

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **22**

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*[**Table of Contents**](#i5f43db688c2c433f9d412b16efe97020_79)*

**USA Rare Earth, Inc.**

**Notes to Condensed Consolidated Financial Statements (Unaudited)**

**Restricted Stock Unit Activity**

The following table presents RSU activity under the 2024 Incentive Plan.

---

| | | |
|:---|:---|:---|
| | **Number of Shares** | **Weighted Average Grant Date Fair Value** |
|  | *(In thousands)* | *(Per share)* |
| Awarded | 1252 | $16.83 |
| Balance, September 30, 2025 | 1252 | 16.83 |

---

**Unamortized Stock-Based Compensation Costs**

Stock-based compensation costs related to unvested RSUs will generally be amortized on a straight-line basis over the remaining average service period of each award. The following table presents the unamortized compensation costs and weighted average service period as of September 30, 2025.

---

| | | |
|:---|:---|:---|
| | **Unamortized Compensation Costs** | **Weighted Average Service Period** |
|  | *(In thousands)* | *(In years)* |
| Restricted stock units | $18790 | 1.25 |

---

**Note 12. Government Grants**

**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 $7.0 million for the development of the Stillwater Facility (the "Upfront Assistance"). Additionally, entry into the TIF Agreement made USARE LLC eligible to receive a manufacturing and research and development Ad Valorem Tax Exemption for a period of five years and thereafter requires the Authority to disburse to the Company 90% of the incremental Ad Valorem taxes generated by the Ad Valorem taxes assessed against the Stillwater Facility and paid by the Company. Under the terms of the TIF Agreement, among other things, the Company is required to complete the Stillwater Facility and in doing so to make an investment of approximately $140.0 million and to employ a specified number of employees at specified levels of median compensation at various stages of the development. Subject to agreed extensions, USARE LLC is also required to commence certain phases of the development of the Stillwater Facility by no later than March 31, 2026 and complete that advanced development by no later than June 30, 2027. Should the Company default on its obligations under the Stillwater Redevelopment Agreement, the Authority may terminate the agreement and make demand for immediate repayment in full of the Upfront Assistance.

As of September 30, 2025 and December 31, 2024, the Company recorded $7.0 million of deferred grant income related to cash received to date as part of the TIF Agreement, all of which is noncurrent as a component of Deferred grants. As of September 30, 2025, the Company has not recognized any of the deferred grant income amounts in profit or loss related to the TIF Agreement as the associated long-lived assets requirement and employment obligations have not been met. The Company filed the Ad Valorem Tax Exemption application for the year ending December 31, 2023, in March of 2023. Approval was received November 14, 2023 from the Stillwater Economic Development Authority for the Five-Year Ad Valorem Tax Exemption. As such, the Company has not incurred any real and personal ad valorem taxes to date.

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **23**

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*[**Table of Contents**](#i5f43db688c2c433f9d412b16efe97020_79)*

**USA Rare Earth, Inc.**

**Notes to Condensed Consolidated Financial Statements (Unaudited)**

**Governor's Fund**

On April 15, 2022, the Company entered into an agreement with the Oklahoma Department of Commerce to receive a $1.2 million award to be used for the renovation of an existing building at the Stillwater Facility (the "Governor's Fund Agreement"), to be paid in $0.6 million increments when the Company had cumulatively spent $1.0 million and $2.0 million by March 31, 2023 and May 31, 2023, respectively, in qualifying costs related to developing the Stillwater Facility. Per the terms of the Governor's Fund Agreement, the award is subject to repayment if the Company does not comply with certain investment requirements and employee headcount and compensation standards.

During 2022, the Company incurred qualifying costs that exceeded the cumulative $2.0 million threshold specified in the contract. The total award of $1.2 million was requested and received by the Company on April 6, 2022 and was recorded as deferred grant income at the time, which will be recognized over the useful life of the related assets once placed in service.

**Jobs Program**

**Note 13. Income Taxes**

The Company is subject to taxation in the U.S. and various state jurisdictions. The Company's effective tax rate of zero percent is calculated quarterly based upon current assumptions relating to the full year's estimated operating results and various tax-related items. Each quarter, an estimate of the annual effective tax rate is updated should the Company revise its forecast of earnings based upon its operating results. If there is a change in the estimated effective annual tax rate, a cumulative adjustment is made.

The difference between the effective tax rate of zero percent and the U.S. federal statutory rate of 21.0% for the three and nine months ended September 30, 2025 and 2024 was due to changes in the valuation allowance, which entirely offsets the Company's net deferred tax assets. As of September 30, 2025, the Company determined that, based on an evaluation of the Company's history of net losses and all available evidence, both positive and negative, including the Company's latest forecasts and cumulative losses in recent years, it was more likely than not that none or substantially none of the Company's deferred tax assets would be realized and, therefore, the Company continued to record a valuation allowance.

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **24**

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*[**Table of Contents**](#i5f43db688c2c433f9d412b16efe97020_79)*

**USA Rare Earth, Inc.**

**Notes to Condensed Consolidated Financial Statements (Unaudited)**

**Note 14. Net Loss per Share**

The following table sets forth the computation of the numerator and denominator for net loss per share attributable to holders of Common Stock.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| | **2025** | **2024** | **2025** | **2024** |
|  | *(In thousands, except for per share amounts)* | *(In thousands, except for per share amounts)* | *(In thousands, except for per share amounts)* | *(In thousands, except for per share amounts)* |
| **Numerator** |  |  |  |  |
| Net loss attributable to USA Rare Earth, Inc.  | $(156680) | $(1869) | $(247354) | $(8938) |
| &nbsp;&nbsp;Declared and deemed dividends, and accretion | (11341) |  | (23060) |  |
| Undistributed net loss attributable to USA Rare Earth, Inc.  | $(168021) | $(1869) | $(270414) | $(8938) |
| **Denominator** |  |  |  |  |
| Weighted average shares outstanding - basic and diluted | 102589 | 59497 | 95609 | 59429 |
| **Net loss per share attributable to USA Rare Earth, Inc.** |  |  |  |  |
| Basic and diluted | $(1.64) | $(0.03) | $(2.83) | $(0.15) |

---

The following table presents categories of shares that are excluded from the diluted per share computation as their effect would be anti-dilutive.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| | **2025** | **2024** | **2025** | **2024** |
|  | *(Shares in thousands)* | *(Shares in thousands)* | *(Shares in thousands)* | *(Shares in thousands)* |
| 12% Series A Cumulative Convertible Preferred Stock <sup>(1)</sup> | 3402 | 2658 | 3402 | 2658 |
| Series A warrants | 3206 | 3000 | 3206 | 3000 |
| Earnout shares | 10100 |  | 10100 |  |
| Investor warrants | 18365 |  | 18365 |  |
| USARE LLC Class B Convertible warrants |  | 1699 |  | 1699 |
| USARE LLC Class C Convertible warrants |  | 393 |  | 393 |
| Common Stock warrants | 9991 |  | 9991 |  |
| Incentive units |  | 8035 |  | 8035 |
| &nbsp;&nbsp;Total | 45064 | 15785 | 45064 | 15785 |

---

<sup>(1)</sup> Represents the amount of potential common shares, if converted at each reported date.

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **25**

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*[**Table of Contents**](#i5f43db688c2c433f9d412b16efe97020_79)*

**USA Rare Earth, Inc.**

**Notes to Condensed Consolidated Financial Statements (Unaudited)**

**Note 15. 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 maker ("CODM") is its chief executive officer.

The CODM evaluates performance based on the consolidated net income (loss), which is also the measure of segment profit or loss. Performance is reviewed on a consolidated basis, and segment assets are consistent with total assets presented on the face of the accompanying Condensed Consolidated Balance Sheet. Capital expenditures and equipment deposits for the nine months ended September 30, 2025 totaled $13.4 million and are included in the consolidated assets.

Because the Company operates in a single segment and the CODM uses the consolidated net income (loss) and the total assets as the primary measures, no reconciliation is required between segment measures and the consolidated financial statement amounts. The Company has not identified any significant segment expenses outside of those presented in the accompanying Condensed Consolidated Statements of Operations.

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **26**

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*[**Table of Contents**](#i5f43db688c2c433f9d412b16efe97020_79)*

**ITEM 2.&nbsp;&nbsp;&nbsp;&nbsp;MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

**Overview**

USA Rare Earth, Inc. ("USAR"), is a company with a 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 our Stillwater Facility, located in Stillwater, Oklahoma, 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 at Stillwater and we believe, as we scale up our operations, support to the entire value chain. Rare earth magnets are critical to various business sectors and industries, including the defense, automotive, aviation, artificial intelligence with robotics (also referred to as "Physical AI"), industrial, medical and consumer electronics industries, among others. Our vertically integrated approach – from sourcing rare earth elements ("REE"), in addition to other critical minerals such as gallium, to producing finished sintered Neodymium Iron Boron ("NdFeB" or "neo") magnets – assists in strengthening the U.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 our planned operations.

**Our Business Model**

We acquired the land at Stillwater, Oklahoma, and other assets that together comprises our Stillwater Facility. Our Stillwater Facility will be used to research, develop and produce neo magnets of which we are currently in the process of completing our magnet production capabilities which is necessary for the initial production of neo magnets.

We control certain mining rights to Round Top Mountain, which is located near Sierra Blanca, Texas, that contains the Round Top Mountain deposit, the mining, and the extraction of rare earth minerals which comprises our Round Top Project. We have not yet begun to extract any minerals from the Round Top Mountain 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.

**Recent Developments**

***Private Investment in Public Entity Financing ("PIPE")***

On September 24, 2025, we entered into a securities purchase agreement with a purchaser for the private placement of 8.33 million shares of our common stock for gross proceeds of $125.0 million ("$125M PIPE"). The $125M PIPE offering closed on September 29, 2025.

The Company intends to use the net proceeds from the $125M PIPE for working capital and general corporate purposes. See [Note](#i5f43db688c2c433f9d412b16efe97020_1910) 10, "Mezzanine and Stockholders' Equity – Private Investment in Public Entity Financing" of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1, "Financial Statements (unaudited)," of this Quarterly Report on Form 10-Q (the "Notes") for further discussion on the specifics of the $125M PIPE.

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **27**

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*[**Table of Contents**](#i5f43db688c2c433f9d412b16efe97020_79)*

***Less Common Metals Ltd. Acquisition***

On September 26, 2025, we entered into a Share Purchase Agreement (the "SPA") with Indian Ocean Rare Metals Pte. Ltd. ("IORM"), a Singapore private limited company, the ultimate parent of Less Common Metals Ltd. ("LCM"), a United Kingdom (U.K.)-based manufacturer of specialized rare earth metals and both cast and strip cast alloys. LCM produces both light and heavy rare earth permanent magnet metals and alloys at scale in its facility in Cheshire, U.K. The Company believes the acquisition will provide:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• access to key commercial, industry and government relationships;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• access to critical rare earth metal and metal alloy production and high-quality rare-earth strip cast alloy, which is essential to magnet production;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• access to unique assets and competitive advantages which allows the Company to control its rare earth metal inputs, as well as ensure that investments are made to support the growth of its magnet business, as well as enabling the Company to deliver a lower risk and lower cost solution that is unique to the industry;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• important capability to process recycled rare earth oxides which will reuse end of life magnets, and allow for a more sustainable manufacturing process; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• access to alternative low-cost sources of feedstock.

As part of the SPA, we shall pay to the IORM shareholders the aggregate consideration of $100.0 million in cash and 6.74 million shares of the Company's common stock. Prior to the closing of the acquisition, we will need to obtain a receipt of approval from (or a notification or final notification that no further action will be taken by) U.K. Secretary of State pursuant to the National Security and Investment Act 2021 ("NSIA"). The Company expects the acquisition to close during the Company's fourth quarter of 2025.

***Warrant Activities***

The following table presents the number of warrants exercised and related cash received during the nine months ended September 30, 2025.

---

| | | |
|:---|:---|:---|
| | **Warrant Shares Exercised** | **Cash Received** |
|  | *(In thousands)* | *(In thousands)* |
| Investor Public Warrants | 135 | $1557 |
| Series A Warrants | 5844 | 40911 |
| Common Stock warrants | 723 | 5063 |
| Prefunded warrants | 2164 |  |
| &nbsp;&nbsp;Total | 8866 | $47531 |

---

Subsequent to the balance sheet date, certain investors exercised warrants, including the complete exercise of the outstanding Common Stock warrants, of which we received approximately $163.3 million.

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **28**

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*[**Table of Contents**](#i5f43db688c2c433f9d412b16efe97020_79)*

**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 table set forth our results of operations, the amount of change, and percent of change between the periods indicated. The period-to-period comparison of financial results is not necessarily indicative of future results.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Change** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Change** |
| | **2025** | **2024** | **Change** | **2025** | **2024** | **Change** |
|  | *(In thousands, except for percentages)* | *(In thousands, except for percentages)* | *(In thousands, except for percentages)* | *(In thousands, except for percentages)* | *(In thousands, except for percentages)* | *(In thousands, except for percentages)* |
| **Operating expenses:** |  |  |  |  |  |  |
| &nbsp;&nbsp;Selling, general and administrative | $11410 | $797 | $10613 | $24666 | $4730 | $19936 |
| &nbsp;&nbsp;Research and development | 4451 | 1162 | 3289 | 8717 | 4938 | 3779 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | $15861 | $1959 | $13902 | $33383 | $9668 | $23715 |
| **Other (expense) income, net:** |  |  |  |  |  |  |
| &nbsp;&nbsp;Interest and dividend income | $1310 | $23 | $1287 | $2262 | $177 | $2085 |
| &nbsp;&nbsp;(Loss) gain on fair market value of financial instruments | (142426) | 135 | (142561) | (216788) | 365 | (217153) |
| &nbsp;&nbsp;Interest expense and other income (loss), net | (17) | (207) | 190 | (116) | (373) | 257 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total other (expense) income, net | $(141133) | $(49) | $(141084) | $(214642) | $169 | $(214811) |

---

*Comparison of the three months ended September 30, 2025 and 2024*

*Selling, general and administrative.* The increase in SG&A expenses of $10.6 million was primarily due to an increase in legal services and consulting costs of $4.3 million, stock-based compensation of $2.7 million, which includes modification of stock-based compensation of $1.6 million related to the termination of our former Chief Executive Officer ("CEO"), employee-related expenses of $1.9 million related to an increase in headcount, recruiting fees of $0.8 million, and other costs of $0.9 million.

*Research and development*. The increase in R&D expenses of $3.3 million was primarily due to an increase in employee-related expenses of $1.8 million related to an increase in headcount, and other costs of $1.5 million.

*Other income and expense.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Interest and dividend income*. The increase in interest and dividend income was primarily due to higher balances in our money market funds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Change in fair market value of financial instruments*. The change in fair market value of financial instruments was primarily due to the increase in fair value of the Common Stock warrant, Series A warrant and Earnout liabilities, resulting in a net loss on the fair market value of financial instruments.

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **29**

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*[**Table of Contents**](#i5f43db688c2c433f9d412b16efe97020_79)*

*Comparison of the nine months ended September 30, 2025 and 2024*

*Selling, general and administrative.* The increase in SG&A expenses of $19.9 million was primarily due to an increase in legal services and consulting costs of $9.8 million, primarily due to merger and acquisition-related costs, stock-based compensation of $3.7 million, which includes modification of stock-based compensation of $1.6 million related to the termination of our former CEO, litigation settlement of $1.8 million, marketing costs of $1.3 million, recruiting fees of $1.2 million related to hiring of key personnel, employee-related costs of $1.1 million related to increase headcount, and other costs of $1.0 million.

*Research and development*. The increase in R&D expenses of $3.8 million was primarily due to an increase in employee-related costs of $2.0 million due to an increase in headcount, employee severance costs and stock-based compensation costs, and other costs of $1.8 million.

*Other income and expense.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Interest and dividend income*. The increase in interest and dividend income was primarily due to higher balances in our money market funds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Change in fair market value of financial instruments*. The change in fair market value of financial instruments was primarily due to the day one loss of the Common Stock warrant, and the increase in fair value of the Common Stock warrant, Series A warrant and Earnout liabilities, resulting in a net loss on the fair market value of financial instruments.

**Liquidity and Capital Resources**

**Sources and Uses of Liquidity**

The 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. The 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.

We have generated no revenues since inception, continue to incur losses from operations, and have an accumulated deficit. Although there is sufficient cash to cover our operating needs for the next 12 months, in order to achieve our current plan to manufacture and sell commercial products, we are dependent upon our ability to raise additional capital and to control operating expenses.

For the nine months ended September 30, 2025, we had a net loss of $248.0 million, which included a non-cash fair value loss on financial instruments of $216.8 million. For the nine months ended September 30, 2025, net cash used in operating activities was $21.1 million.

We consider cash equivalents to be highly liquid investments purchased with original maturities of three months or less. As of September 30, 2025, we had $257.6 million in cash and cash equivalents. During the nine months ended September 30, 2025, we received cash of $200.0 million from private investment in public equity investor financing and certain investors exercised 8.87 million warrants, of which we received cash of $47.5 million. During this same period, we recognized interest and dividend income of approximately $2.3 million related to higher cash balances. Furthermore, subsequent to the balance sheet date, we have received from certain investors approximately $163.3 million from exercise of warrants.

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **30**

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*[**Table of Contents**](#i5f43db688c2c433f9d412b16efe97020_79)*

Although we have sufficient cash on our balance sheet and sufficient cash flow from the PIPE financings, exercise of warrants, and interest income on our cash balances to handle our operations over the next 12 months, we believe we will still need to raise additional capital to implement our current strategic plan, including current and future acquisitions, installation of manufacturing equipment, purchasing of raw material inventory in advance of production due to long lead times, and to achieve our revenue projections and positive cash flows. In addition, we expect to increase operational costs as we build our infrastructure to handle the forecasted increase production and sales.

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.

**Cash Flows**

---

| | | | |
|:---|:---|:---|:---|
| | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | |
| | **2025** | **2024** | **Change** |
|  | *(In thousands)* | *(In thousands)* | *(In thousands)* |
| Net cash used in operating activities | $(21087) | $(9487) | $(11600) |
| Net cash used in investing activities | (13398) | (2469) | (10929) |
| Net cash provided by financing activities | 275333 | 21745 | 253588 |

---

*Operating Activities*.*** The $11.6 million increase in net cash used in operating activities, as compared to the comparable period of the prior year, was primarily due to an increase of $14.9 million net loss adjusted for non-cash items, such as the non-cash loss of $217.2 million related to the day one loss under the valuation of the $75.0 million PIPE financing arrangement (the "$75M PIPE") and the change in fair value of outstanding financial instruments, stock-based compensation of $4.3 million and a non-cash litigation settlement of approximately $1.7 million, and an increase in cash used for vendor payments and prepayment of insurance, partially offset by an increase in accrued liabilities related to financing, acquisition and payroll costs.

*Investing Activities.* The $10.9 million increase in cash used in investing activities, as compared to the comparable period of the prior year, was primarily due to additional investments made for plant improvements and equipment purchases as we execute our strategic business plan and continue to build the manufacturing process at our Stillwater Facility.

*Financing Activities.* The $253.6 million increase in cash provided by financing activities, as compared to the comparable period of the prior year, is primarily due to the $75M PIPE and $125M PIPE financing activities, contributions from the Merger as defined in Note 3, "Merger Transaction and Acquisition – Business Combination Agreement" of the Notes.

**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.

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **31**

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**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 U.S., 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. Our plan 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 Mountain 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 Mountain 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 1, "Organization" and Note 2, "Summary of Significant Accounting Policies" of the Notes for a discussion of our going concern assessment and a description of our critical and other significant accounting policies, respectively.

**Recently Adopted Accounting Standards**

See Note 2, "Summary of Significant Accounting Policies" of the Notes.

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **32**

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**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 $1.235 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 DISCLOSURES 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) 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 September 30, 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 September 30, 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 September 30, 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.

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **33**

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*[**Table of Contents**](#i5f43db688c2c433f9d412b16efe97020_79)*

**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–Litigation" of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1, "Financial Statements (unaudited)," of this Quarterly Report on Form 10-Q and is incorporated by reference into this Item 1.

**ITEM 1A. RISK FACTORS**

Factors that could cause the Company's actual results to differ materially from those in this report include the risk factors described in the Company's [2024](https://www.sec.gov/ix?doc=/Archives/edgar/data/1970622/000121390025026445/ea0236222-10k_usarare.htm)[Annual Report on Form](https://www.sec.gov/ix?doc=/Archives/edgar/data/1970622/000121390025026445/ea0236222-10k_usarare.htm)[10-K](https://www.sec.gov/ix?doc=/Archives/edgar/data/1970622/000121390025026445/ea0236222-10k_usarare.htm), filed with the Securities and Exchange Commission ("SEC") on March 31, 2025, as supplemented by the risk factors described in the Company's [Quarterly Report on Form](https://www.sec.gov/ix?doc=/Archives/edgar/data/1970622/000121390025043743/ea0239624-10q_usarare.htm) [10-Q](https://www.sec.gov/ix?doc=/Archives/edgar/data/1970622/000121390025043743/ea0239624-10q_usarare.htm) for the quarter ended March 31, 2025, filed with the SEC on May 15, 2025, and in the Company's [Quarterly Report on Form](https://www.sec.gov/ix?doc=/Archives/edgar/data/1970622/000197062225000017/usar-20250630.htm) [10-Q](https://www.sec.gov/ix?doc=/Archives/edgar/data/1970622/000197062225000017/usar-20250630.htm) for the quarter ended June 30, 2025, filed with the SEC on August 11, 2025.

As of the date of this Quarterly Report on Form 10-Q, there have been no material changes to the risk factors disclosed in the Company's [2024 Annual Report on Form 10-K](https://www.sec.gov/ix?doc=/Archives/edgar/data/1970622/000121390025026445/ea0236222-10k_usarare.htm) and as supplemented by the risk factors described in the Company's Quarterly Report on Form 10-Q for the quarters ended March 31, 2025 and June 30, 2025, except as described in the below risk factors.

***The Company is or may be subject to risks associated with strategic alliances and acquisitions.***

The Company has entered into and may in the future enter into strategic alliances, including joint ventures or minority equity investments, with various third parties to further the Company's business purpose from time-to-time. These alliances could subject the Company to a number of risks, including risks associated with sharing proprietary information, non-performance by the third party and increased expenses in establishing new strategic alliances, any of which may materially and adversely affect its business. The Company may have limited ability to monitor or control the actions of these third parties and, to the extent any of these strategic third parties suffer negative publicity or harm to their reputation from events relating to their business, the Company may also suffer negative publicity or harm to its reputation by virtue of its association with any such third party.

In addition, the Company may acquire additional assets, products, technologies or businesses that are complementary to its existing business, if appropriate opportunities arise. In addition to a potential requirement for shareholder approval, the Company may also have to obtain approvals and licenses from relevant government authorities for the acquisitions and to comply with any applicable laws and regulations, which could result in increased delay and costs, and may derail its business strategy if the Company fails to do so. For example, the Company's recent announcement of its proposed acquisition of Indian Ocean Rare Metals Pte. Ltd. ("IORM") requires approval from the United Kingdom ("U.K.") Secretary of State under the National Security and Investment Act 2021 ("NSIA"). If the U.K. Secretary of State denies the Company the right to acquire IORM or requires the Company to provide additional information in order to approve the acquisition of IORM, the Company may not close the Acquisition in a timely manner or at all, which could cause it to incur additional costs and delays to its strategic plans.

Further, future acquisitions and the subsequent integration of new assets and businesses into the Company (including the pending upcoming Business Combination) may require significant attention from the Company's management and could result in a diversion of resources from its existing business, which in turn could have an adverse effect on the Company's business operations. Acquired assets or businesses may not generate the expected financial results and may require additional investments in the acquired business after closing. Acquisitions could result in the use of substantial amounts of cash, potentially dilutive issuances of equity securities, the occurrence of significant goodwill impairment charges, amortization expenses for other intangible assets and exposure to potential unknown liabilities of the acquired business. Moreover, the costs of identifying and consummating acquisitions may be significant.

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **34**

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*[**Table of Contents**](#i5f43db688c2c433f9d412b16efe97020_79)*

***Completion of the LCM Acquisition is subject to conditions, including regulatory approval, and if these conditions are not satisfied or waived, the LCM Acquisition will not be completed within the expected timeframe, or at all.***

Completion of the LCM Acquisition is subject to the satisfaction or waiver of a number of conditions set forth in the SPA. These conditions include, among others, (i) the absence of any legal impediments to the consummation of the LCM Acquisition, (ii) the parties' performance, in all material respect, of their respective obligations under the SPA, (iii) the satisfaction or waiver of the closing conditions specified in the SPA, including entry into certain ancillary agreements, forms of which have been included as exhibits to the SPA, (iv) subject to specified materiality standards, the accuracy of the parties' respective representations and warranties as of the closing of the transactions contemplated by the SPA, (v) receipt of certain regulatory or government approvals and (vi) the absence of a Company Material Adverse Effect and Buyer Material Adverse Effect (each as defined in the SPA). We may be unable to obtain regulatory approval under the United Kingdom's National Security and Investment Act 2021 on the timing we anticipate, or at all, and the failure to obtain such approval or to otherwise satisfy or waive all of the other conditions to the closing of the LCM Acquisition as expected could delay the completion of the LCM Acquisition or prevent the LCM Acquisition from occurring. Any delay in completing the LCM Acquisition could cause us not to realize some or all of the benefits that we expect to achieve if the LCM Acquisition is successfully completed within the expected time frame. There can be no assurance that the conditions to the closing of the LCM Acquisition will be satisfied or waived or that the LCM Acquisition will be completed, or as to whether the LCM Acquisition will be completed on terms other than those set forth in the SPA as in effect as of the date of this report.

***The Company may fail to realize all of the anticipated benefits of the acquisitions of LCM, including the anticipated acceleration of our mine-to-magnet strategy, on the anticipated timeline or at all.***

The Company believes that there are significant benefits and synergies that may be realized through combining its existing business and the business of LCM, including accelerating its mine-to-magnet strategy and securing its access to high-quality rare-earth metal and strip cast alloy. However, the efforts to realize these benefits and synergies will be a complex process and may disrupt both companies' existing operations if not implemented in a timely and efficient manner. The full benefits of the acquisition of LCM, if completed, including the anticipated synergies, growth opportunities and supply-chain benefits, may not be achieved within the time frame the Company anticipates or at all. Failure to achieve the anticipated benefits of the LCM Acquisition or to identify all the risks associated with the LCM Acquisition could adversely affect the Company's results of operations or cash flows, decrease or delay any accretive effect of the LCM Acquisition, and negatively impact the price of the Company's Common Stock and the long-term value of the Company.

In addition, the Company will be required to devote significant attention and resources to successfully align the Company and LCM's respective business practices and operations. This process and other integration challenges may disrupt the Company's business and limit the anticipated benefits of the LCM Acquisition.

***The Company's success following completion of the LCM Acquisition will depend on the ability to retain LCM's existing customers and supplies, as well as the Company's ability to build relationships with new customers and suppliers.***

The Company's success following completion of the LCM Acquisition will depend on the ability to retain LCM's existing customers and supplies, as well as the Company's ability to build relationships with new customers and suppliers. The announcement or completion of the LCM Acquisition may create uncertainty among the LCM's customers and suppliers, leading them to re-evaluate their business relationships. Customers may be concerned about potential changes in product offerings, pricing, service quality, or the combined company's ability to meet their needs. Suppliers may have concerns about changes in purchasing volumes, payment terms, or the combined company's financial stability.

If LCM's customers decide to reduce or discontinue their business with the combined company, it could result in a significant loss of revenue. Similarly, if suppliers decide to terminate or renegotiate their agreements, it could lead to increased costs or disruptions in the supply chain. Furthermore, following the closing of the LCM Acquisition, the Company may face challenges in integrating and harmonizing customer service and supplier management processes, which could impact the quality of relationships and the ability to achieve operational efficiencies.

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **35**

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The Company and LCM's ability to build or maintain strong relationships with customers and suppliers is critical to long-term success. Any failure to retain LCM's customers and suppliers, or to establish and maintain effective relationships with new and existing customers and suppliers, could adversely affect the Company's business, results of operations and financial condition.

***The exercise of the Company's management discretion in agreeing to changes or waivers in the terms of the LCM Acquisition may result in a conflict of interest when determining whether such changes to the terms of the LCM Acquisition or waivers of conditions are appropriate and in the Company's stockholders best interest.***

In the period leading up to the closing of the LCM Acquisition, events may occur that may require the Company to agree to amend the SPA, to consent to certain actions taken by LCM, or to waive rights that we are entitled to under the LCM Acquisition Agreement. Such events could arise because of changes in the course of LCM's business, a request by LCM to undertake actions that would otherwise be prohibited by the terms of the SPA, or the occurrence of other events that would have a material adverse effect on LCM's business. In any of such circumstances, it would be at the Company's discretion, acting through the board of directors, to grant its consent or waive those rights. The existence of financial and personal interests of one or more of the directors may result in a conflict of interest on the part of such director(s) between what he or she or they may believe is best for the Company and our stockholders and what he or she or they may believe is best for himself or herself or themselves in determining whether or not to take the requested action.

**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**

***Rule 10b5-1 Trading Arrangements***

During the quarter ended September 30, 2025, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K).

***Lock-Up Release***

In connection with the closing of the Merger pursuant to the Business Combination Agreement, on March 13, 2025, Inflection Point Holdings II LLC ("IPH") entered into a lock-up agreement, that, among other things, restricted IPH from selling 3,125,000 shares of Common Stock it holds until March 13, 2026. The Company elected to release such lock-up early, effective as of the first trading day after the current Quarterly Blackout Period under the Company's Insider Trading Policy.

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **36**

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**ITEM 6. EXHIBITS**

**Exhibit Index**

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Exhibit Number** | **Exhibit Description** | **Incorporated by Reference** | **Incorporated by Reference** | **Incorporated by Reference** | **Incorporated by Reference** |
| **Exhibit Number** | **Exhibit Description** | **Form** | **File No.** | **Exhibit** | **Filing Date** |
| [2](https://www.sec.gov/Archives/edgar/data/1970622/000121390025092611/ea025909801ex2-1_usarare.htm)[.1](https://www.sec.gov/Archives/edgar/data/1970622/000121390025092611/ea025909801ex2-1_usarare.htm) | [Share Purchase Agreement, dated as of September 26, 2025, by and among USA Rare Earth, Inc., Laconia Acquisition Sub Limited, Indian Ocean Rare Metals Pte Ltd, the shareholders of Indian Ocean Rare Metals Pte Ltd and Grant Smith, solely in his capacity as the sellers' representative.](https://www.sec.gov/Archives/edgar/data/1970622/000121390025092611/ea025909801ex2-1_usarare.htm) | 8-K | 001-41711 | 2.1 | 9/29/2025 |
| [10.1](https://www.sec.gov/Archives/edgar/data/1970622/000121390025062345/ea024843501ex10-1_usarare.htm) | [Separation Agreement between USA Rare Earth, Inc. and Steve Ridge, dated July 5, 2025.](https://www.sec.gov/Archives/edgar/data/1970622/000121390025062345/ea024843501ex10-1_usarare.htm) | 8-K | 001-41711 | 10.1 | 7/9/2025 |
| [10.](https://www.sec.gov/Archives/edgar/data/1970622/000121390025092611/ea025909801ex10-1_usarare.htm)2<sup>†</sup> | [Securities Purchase Agreement, dated as of September 24, 2025,](https://www.sec.gov/Archives/edgar/data/1970622/000121390025092611/ea025909801ex10-1_usarare.htm)[by and between USA Rare Earth, Inc. and the investor named therein.](https://www.sec.gov/Archives/edgar/data/1970622/000121390025092611/ea025909801ex10-1_usarare.htm) | 8-K | 001-41711 | 10.1 | 9/29/2025 |
| [10.](https://www.sec.gov/Archives/edgar/data/1970622/000121390025092611/ea025909801ex10-2_usarare.htm)[3](https://www.sec.gov/Archives/edgar/data/1970622/000121390025092611/ea025909801ex10-2_usarare.htm) | [Registration Rights Agreement, dated as of September](https://www.sec.gov/Archives/edgar/data/1970622/000121390025092611/ea025909801ex10-2_usarare.htm)[29](https://www.sec.gov/Archives/edgar/data/1970622/000121390025092611/ea025909801ex10-2_usarare.htm)[, 2025, by and between USA Rare Earth, Inc. and the investor named therein.](https://www.sec.gov/Archives/edgar/data/1970622/000121390025092611/ea025909801ex10-2_usarare.htm) | 8-K | 001-41711 | 10.2 | 9/29/2025 |
| [10.](https://www.sec.gov/Archives/edgar/data/1970622/000121390025092611/ea025909801ex10-3_usarare.htm)[4](https://www.sec.gov/Archives/edgar/data/1970622/000121390025092611/ea025909801ex10-3_usarare.htm) | [Form of Registration Rights Agreement, by and among](https://www.sec.gov/Archives/edgar/data/1970622/000121390025092611/ea025909801ex10-3_usarare.htm)[USA Rare Earth, Inc., Laconia Acquisition Sub Limited, Indian Ocean Rare Metals Pte Ltd, the shareholders of Indian Ocean Rare Metals Pte Ltd and Grant Smith, solely in his capacity as the sellers' representativ](https://www.sec.gov/Archives/edgar/data/1970622/000121390025092611/ea025909801ex10-3_usarare.htm)[e](https://www.sec.gov/Archives/edgar/data/1970622/000121390025092611/ea025909801ex10-3_usarare.htm)[.](https://www.sec.gov/Archives/edgar/data/1970622/000121390025092611/ea025909801ex10-3_usarare.htm) | 8-K | 001-41711 | 10.3 | 9/29/2025 |
| [1](ex105ceohumptonemploymenta.htm)[0.5](ex105ceohumptonemploymenta.htm)<sup>\*†</sup> | [Employment Agreement, dated as of](ex105ceohumptonemploymenta.htm)[September 28, 2025](ex105ceohumptonemploymenta.htm)[, by and between](ex105ceohumptonemploymenta.htm)[USA Rare Earth, Inc.](ex105ceohumptonemploymenta.htm)[and Barbara Humpton.](ex105ceohumptonemploymenta.htm) |  |  |  |  |
| [1](ex106ceoballardseparationa.htm)[0.6](ex106ceoballardseparationa.htm)\* | [S](ex106ceoballardseparationa.htm)[eparation Agreement between USA Rare Earth, Inc. and Joshua Ballard,](ex106ceoballardseparationa.htm)[effective October 1](ex106ceoballardseparationa.htm)[, 2025.](ex106ceoballardseparationa.htm) |  |  |  |  |
| [31.1](ex311-302ceocertification2.htm)<sup>\*</sup> | [Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](ex311-302ceocertification2.htm) |  |  |  |  |
| [31.2](ex312-302cfocertification2.htm)<sup>\*</sup> | [Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ex312-302cfocertification2.htm)[.](ex312-302cfocertification2.htm) |  |  |  |  |
| [32.1](ex321-906ceoandcfocertific.htm)<sup>\*\*</sup> | [Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](ex321-906ceoandcfocertific.htm) |  |  |  |  |
| 101 | Inline XBRL Document Set for the consolidated financial statements and accompanying notes in Part I, "Financial Information" of this Quarterly Report on Form 10-Q. |  |  |  |  |
| 104 | Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set. |  |  |  |  |

---

<sup>\*&nbsp;&nbsp;&nbsp;&nbsp;</sup>Filed herewith.

\*\*&nbsp;&nbsp;&nbsp;&nbsp;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.

†&nbsp;&nbsp;&nbsp;&nbsp;The annexes schedules, and certain exhibits to this Exhibit have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company hereby agrees to furnish supplementally a copy of any omitted annex, schedule or exhibit to the SEC upon request.

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **37**

------

*[**Table of Contents**](#i5f43db688c2c433f9d412b16efe97020_79)*

**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.** | **USA Rare Earth, Inc.** |
| Date: | November 6, 2025 | By: | /s/ BARBARA HUMPTON |
|  |  |  | Barbara Humpton |
|  |  |  | Chief Executive Officer |
|  |  |  | (Principal Executive Officer) |
| Date: | November 6, 2025 | By: | /s/ WILLIAM ROBERT STEELE JR. |
|  |  |  | William Robert Steele Jr. |
|  |  |  | Chief Financial Officer |
|  |  |  | (Principal Financial and Accounting Officer) |

---

**USA Rare Earth, Inc. \| Q3'2025 Quarterly Report (Form 10-Q)** \| **38**

## Exhibit 10.5

**Exhibit 10.5**

**EMPLOYMENT AGREEMENT**

This Employment Agreement (this "<u>Agreement</u>") is entered into as of the 28th day of September 2025, by and between Barbara Humpton (the "<u>Executive</u>") and USA Rare Earth, Inc., a Delaware corporation (the "<u>Company</u>"). This Agreement shall be effective as of October 1, 2025 (the "<u>Effective Date</u>").

**RECITALS**

**WHEREAS**, effective as of the Effective Date, the Company desires to employ the Executive and the Executive desires to be employed by the Company on the terms and conditions contained herein; and

**WHEREAS**, on and following the Effective Date, the Executive shall be eligible to receive the compensation and benefits provided pursuant to this Agreement in connection with the Executive's services hereunder.

**NOW, THEREFORE**, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

**1. Employment.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>Terms; At-Will Employment</u>. The Company shall employ the Executive, and the Executive shall be employed by the Company, pursuant to the terms of this Agreement commencing as of the Effective Date. The Executive's employment with the Company shall be "at will," meaning that the Executive's employment may be terminated by the Company or the Executive at any time and for any reason, subject to the terms of this Agreement and the Company's Severance and Change of Control Protection Plan (the "<u>Plan</u>") attached as Exhibit A hereto, as may be amended from time to time. In addition, subject to the terms of this Agreement and the Plan, the Company reserves the right to modify the Executive's compensation, duties or reporting relationship at any time to meet business needs. The Executive acknowledges that nothing in this Agreement, or in any written or unwritten policies of the Company, including the Company's employee handbook, changes the at-will status of the Executive's employment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Position and Duties</u>. The Executive shall serve as the Chief Executive Officer of the Company and shall have such powers and duties as may from time to time be prescribed by the Company's Board of Directors (the "<u>Board</u>"). The Executive shall devote the Executive's full working time and efforts to the business and affairs of the Company. The Executive may only serve on other corporate boards of directors with the approval of the Board and for so long as such other corporations are not competitors of the Company. In addition, the Executive may engage in religious, charitable or other community activities as long as such services and activities are disclosed to the Board and do not interfere with the Executive's performance of her duties to the Company. Notwithstanding the foregoing, the Executive may continue to engage in the activities set forth on Exhibit B hereto, which have been pre-approved by the Board as part of the approval of this Agreement. The Executive's principal place of work shall be Washington, D.C., or as otherwise determined in consultation between the Executive and the Board, subject to business travel as may be required by the needs of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)<u>Board Service</u>. In connection with the commencement of the Executive's employment with the Company, the Board shall nominate (and, as applicable, renominate from time to time, provided such renomination is consistent with the Board's fiduciary duties under applicable law) the Executive for election as a member of the Board so long as the Executive is serving as the Company's Chief Executive Officer.

------

**2. Compensation.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>Base Salary</u>. The Executive's base salary shall be $750,000 per year. The Executive's base salary shall be subject to annual review by the Board or the Compensation Committee of the Board (the "<u>Committee</u>"). The base salary in effect at any given time is referred to herein as "<u>Base Salary</u>." The Base Salary shall be payable in a manner that is consistent with the Company's usual payroll practices for executive officers. The Executive acknowledges and agrees that she shall also serve as a member of the Board and, to the extent requested by the Board, provide services to one or more of the Company's direct or indirect parent companies, subsidiaries or affiliates (whether as a director, officer or otherwise), in each case, without additional compensation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Annual Cash Incentive Compensation</u>. The Executive shall be eligible to receive a cash incentive bonus annually, subject to the terms adopted by the Board based on performance targets established by the Board (or the Committee) (the "<u>Annual Bonus</u>"). The Executive's target bonus opportunity for 2026 will be 100% of Base Salary. The Annual Bonus will be paid in the fiscal year following the fiscal year for which it is earned, but not later than March 31 of such fiscal year, subject to the Executive's continued employment on the payment date (except as otherwise provided in <u>Section 3</u>).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)<u>Equity Incentive Compensation</u>. The Executive shall be eligible to receive equity incentive awards under the USA Rare Earth, Inc. 2024 Omnibus Incentive Plan, as amended from time to time (the "<u>Equity Plan</u>"), based on the Board's assessment of market-competitive conditions and the Executive's overall individual performance. The design and delivery of any such equity incentive awards, and the grant of such equity incentive awards, will be determined by and subject to the approval of the Board following recommendation by the Committee.

In connection with the Executive's appointment as Chief Executive Officer pursuant to this Agreement, as of the Effective Date, the Executive shall be granted the following equity incentive awards pursuant to the Equity Plan and the Company's standard form of award agreement thereunder, in each case, subject to Board approval:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)For the 2026 fiscal year, a one-time equity incentive grant of restricted stock units ("RSUs") with a grant date value of $4,000,000, which will vest in one-third (1/3) increments on the first three anniversaries of the grant date (or, if later, the first open trading window following the applicable vesting date).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)A one-time special equity incentive grant of RSUs with a grant date value of $5,000,000 that will vest in one-third (1/3) increments on the first three anniversaries of the grant date (or, if later, the first open trading window following the applicable vesting date).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)A one-time sign-on equity incentive grant of RSUs with a grant date value of $1,000,000 that will vest in one-half (1/2) increments on the first two anniversaries of the grant date (or, if later, the first open trading window following the applicable vesting date).

The awards set forth in (ii) and (iii) above will be approved by the Board and granted in connection with the execution of this Agreement. Future long-term equity incentive grants will be structured by the Committee in accordance with the Company's corporate objectives and performance goals, with an anticipated annual target value of $4,000,000.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)<u>Employee Benefits</u>. The Executive will be entitled to participate in the Company's employee benefit plans and programs in effect from time to time and available to all full time U.S.-based employees, including those with respect to paid time off, subject to the terms of such plans and programs; provided, that the Executive shall be entitled to five weeks of paid time off (pro-rated for partial years), subject to the Company's paid time off policy as in effect from time to time. Notwithstanding the foregoing, the Company may modify and/or terminate its employee benefit plans and programs offered to full time U.S.-based employees at any time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)<u>Expenses</u>. The Executive shall be entitled to receive reimbursement for all reasonable, documented business expenses incurred by the Executive in performing services hereunder, in accordance with the policies and procedures then in effect and established by the Company for its executive officers.

------

**3. Termination of Employment.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>Termination</u>. The Executive's employment shall terminate on the first of the following to occur:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Automatically upon the date of the death of the Executive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Upon ten (10) days' prior written notice by the Company to the Executive of termination due to Disability. For purposes of this Agreement, "Disability" shall mean that (A) the Executive qualifies to receive long-term disability payments under the Company's long-term disability insurance program, as it may be amended from time to time, covering employees of the Company or any affiliate to which the Executive provides services; or (B) the Executive is determined to be totally disabled by the Social Security Administration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)Immediately upon written notice by the Company to the Executive of a termination for Cause. For purposes of this Agreement, "Cause" shall have the meaning set forth in the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)Immediately upon written notice by the Company to the Executive of an involuntary termination of employment without Cause (other than due to death or Disability).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)Upon sixty (60) days' prior written notice by the Executive to the Company of the Executive's voluntary termination of employment without Good Reason (as defined in the Plan) (which the Company may, in its sole discretion, make effective earlier than any notice date).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)In accordance with the terms of the Plan for any resignation by the Executive for Good Reason.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Accrued Obligations</u>. Subject to the terms of the Plan, if the Executive's employment with the Company is terminated for any reason, the Company shall pay or provide to the Executive (or to the Executive's authorized representative or estate) (i) accrued but unpaid base salary through the date of termination, which shall be paid within the time required by applicable law, but no later than thirty (30) days following the date of termination, (ii) reimbursement for all incurred but unreimbursed expenses for which the Executive is entitled to reimbursement in accordance with this Agreement, (iii) vested benefits to which the Executive may be entitled pursuant to the terms of any plan or policy sponsored by the Company and (iv) any other amounts required by applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)<u>Plan Participation</u>. The Executive shall be eligible to participate in the Plan, subject to and in accordance with the terms and conditions of the Plan, which shall among other things govern cash and equity-related severance benefits in both "change of control" and "non-change of control" situations, including the terms and conditions of such payments and benefits, as further detailed in the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)<u>Other Obligations</u>. Upon any termination of the Executive's employment with the Company, the Executive shall promptly resign from any position as an officer, director or fiduciary of the Company and any Company-related entity.

**4. Section 409A.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Anything in this Agreement to the contrary notwithstanding, if at the time of the Executive's separation from service within the meaning of Section 409A of the U.S. Internal Revenue Code of 1986, as amended, (the "<u>Code</u>"), the Company determines that the Executive is a "specified employee" within the meaning of Section 409A(a)(2)(B)(i) of the Code, then to the extent any payment or benefit that the Executive becomes entitled to under this Agreement or otherwise on account of the Executive's separation from service would be considered deferred compensation otherwise subject to the 20% additional tax imposed pursuant to Section 409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, such payment shall not be payable and such benefit shall not be provided until the date that is the earlier of (i) six months and one day after the Executive's separation from service, or (ii) the Executive's death. If any such delayed cash payment is otherwise payable on an installment basis, the first payment shall include a catch-up payment covering amounts that would otherwise have been paid during the six-month period but for the application of this provision, and the balance of the installments shall be payable in accordance with their original schedule.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)All in-kind benefits provided and expenses eligible for reimbursement under this Agreement shall be provided by the Company or incurred by the Executive during the time periods set forth in this Agreement. All reimbursements shall be paid as soon as administratively practicable, but in no event shall any reimbursement be paid after the last day of the taxable year following the taxable year in which the expense was incurred. The amount of in-kind benefits provided or reimbursable expenses incurred in one taxable year shall not affect the in-kind benefits to be provided or the expenses eligible for reimbursement in any other taxable year (except for any lifetime or other aggregate limitation applicable to medical expenses). Such right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)To the extent that any payment or benefit described in this Agreement constitutes "non-qualified deferred compensation" under Section 409A of the Code, and to the extent that such payment or benefit is payable upon the Executive's termination of employment, then such payments or benefits shall be payable only upon the Executive's "separation from service." The determination of whether and when a separation from service has occurred shall be made in accordance with the presumptions set forth in Treasury Regulation Section 1.409A-1(h).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)The parties intend that this Agreement shall be administered in accordance with Section 409A of the Code. To the extent that any provision of this Agreement is ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in such a manner so that all payments hereunder comply with Section 409A of the Code. Each payment pursuant to this Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2). The parties agree that this Agreement may be amended, as reasonably requested by either party, and as may be necessary to fully comply with Section 409A of the Code and all related rules and regulations in order to preserve the payments and benefits provided hereunder without additional cost to either party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)The Company makes no representation or warranty and shall have no liability to the Executive or any other person if any provisions of this Agreement are determined to constitute deferred compensation subject to Section 409A of the Code but do not satisfy an exemption from, or the conditions of, such section.

**5. Restrictive Covenants.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>Confidentiality</u>. During the course of the Executive's employment with the Company, the Executive will have access to <u>Confidential Information</u>. For purposes of this Agreement, "Confidential Information" means all data, information, ideas, concepts, discoveries, trade secrets, inventions (whether or not patentable or reduced to practice), innovations, improvements, know-how, developments, techniques, methods, processes, treatments, drawings, sketches, specifications, designs, plans, patterns, models, plans and strategies, and all other confidential or proprietary information or trade secrets in any form or medium (whether merely remembered or embodied in a tangible or intangible form or medium) whether now or hereafter existing, relating to or arising from the past, current or potential business, activities and/or operations of the Company or any of its affiliates, including, without limitation, any such information relating to or concerning finances, sales, marketing, advertising, transition, promotions, pricing, personnel, customers, suppliers, vendors, and/or competitors. Subject to <u>Sections 5(l)</u> and <u>5(m)</u> below, the Executive agrees that the Executive shall not, directly or indirectly, use, make available, sell, disclose or otherwise communicate to any person, other than in the course of the Executive's assigned duties and for the benefit of the Company, either during employment or at any time thereafter, any Confidential Information or other confidential or proprietary information received from third parties subject to a duty on the Company's and its subsidiaries' and affiliates' part to maintain the confidentiality of such information, and to use such information only for certain limited purposes, in each case, which shall have been obtained by the Executive during the Executive's employment by the Company (or any predecessor). The foregoing shall not apply to information that (i) was known to the public prior to its disclosure to the Executive; (ii) becomes generally known to the public subsequent to disclosure to the Executive through no wrongful act of the Executive or any representative of the Executive; or (iii) the Executive is required to disclose by applicable law, regulation or legal process (provided that the Executive provides the Company with prior notice of the contemplated disclosure and cooperates with the Company at its expense in seeking a protective order or other appropriate protection of such information).

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Noncompetition</u>. The Executive acknowledges that (i) the Executive performs services of a unique nature for the Company that are irreplaceable, and that the Executive's performance of such services to a competing business will result in irreparable harm to the Company, (ii) the Executive has had and will continue to have access to trade secrets and other confidential information of the Company and its subsidiaries, which, if disclosed, would unfairly and inappropriately assist in competition against the Company or any of its subsidiaries, (iii) in the course of the Executive's employment by a competitor, the Executive would inevitably use or disclose such trade secrets and confidential information, (iv) the Company and its affiliates have substantial relationships with their customers and the Executive has had and will continue to have access to these customers, (v) the Executive has received and will receive specialized training from the Company and its subsidiaries, and (vi) the Executive has generated and will continue to generate goodwill for the Company and its subsidiaries in the course of the Executive's employment. Accordingly, during employment, the Executive agrees that the Executive will not, directly or indirectly, own, manage, operate, control, be employed by (whether as an employee, consultant, independent contractor or otherwise, and whether or not for compensation) or render services to any person, firm, corporation or other entity, in whatever form, engaged in competition with the Company or any of its subsidiaries or in any other material business in which the Company or any of its subsidiaries is engaged or in which they have planned to be engaged. Notwithstanding the foregoing, nothing herein shall prohibit the Executive from being a passive owner of not more than one percent (1%) of the equity securities of a publicly traded corporation engaged in a business that is in competition with the Company or any of its subsidiaries, so long as the Executive has no active participation in the business of such corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)<u>Non-solicitation</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)During employment and for a period of twelve (12) months thereafter, the Executive agrees that the Executive shall not, except in the furtherance of the Executive's duties hereunder, directly or indirectly, individually or on behalf of any other person, firm, corporation or other entity, solicit, aid or induce any individual or entity that is an established customer or supplier of the Company or any of its subsidiaries with whom the Executive had material contact or about whom the Executive obtained Confidential Information during the twelve (12)-month period immediately prior to the termination of Executive's employment for any reason, to purchase goods or services then sold by the Company or any of its subsidiaries from another person, firm, corporation or other entity, or stop supplying or purchasing, as applicable, or decrease the amount of goods, materials or services being supplied to or purchased from the Company or any of its subsidiaries, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)During employment and for a period of twelve (12) months thereafter, the Executive agrees that the Executive shall not, except in the furtherance of the Executive's duties hereunder, directly or indirectly, individually or on behalf of any other person, firm, corporation or other entity, solicit, aid or induce any employee, consultant or individual independent contractor of the Company or any of its subsidiaries to leave such employment or retention or to accept employment with or render services to or with any other person, firm, corporation or other entity or hire or retain any such employee, consultant or individual independent contractor, or take any action to materially assist or aid any other person, firm, corporation or other entity in identifying, hiring or soliciting any such employee, consultant or individual independent contractor. Any person described in this Section 5(c)(ii) shall be deemed covered by this Section 5(c)(ii) while so employed or retained and for a period of six (6) months thereafter. For the avoidance of doubt, nothing in this Section 5(c)(ii) shall impair the Executive from providing letters of recommendation from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)<u>Non-disparagement</u>. Subject to <u>Sections 5(l)</u> and <u>5(m)</u> below, the Executive agrees not to make or publish negative comments or otherwise disparage the Company or any of its affiliates or any of their officers, directors, employees, shareholders, agents or products other than in the good faith performance of the Executive's duties to the Company while the Executive is employed by the Company, and the Company agrees that the Company shall direct its executive officers and directors not to make or publish negative comments or otherwise disparage the Executive other than in the good faith performance of their duties to the Company while employed thereby, and upon issuing such directive, the Company shall have satisfied its non-disparagement obligation. The foregoing will not be violated by truthful statements in response to legal process, required governmental testimony or filings, or administrative or arbitral proceedings (including, without limitation, depositions in connection with such proceedings).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)<u>Inventions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)The Executive acknowledges and agrees that all ideas, methods, inventions, discoveries, improvements, work products, developments or works of authorship ("Inventions"), whether patentable or unpatentable, (A) that relate to the Executive's work with the Company or any of its affiliates, made or conceived by the Executive, solely or jointly with others, during the Employment Term, or (B) suggested by any work that the Executive performs in connection with the Company or its affiliates, either while performing the Executive's duties with the Company or its affiliates or on the Executive's own time, shall belong exclusively to the Company (or its designee), whether or not patent applications are filed thereon. The Executive will keep full and complete written records (the "Records"), in the manner prescribed by the Company, of all Inventions, and will promptly disclose all Inventions completely and in writing to the Company. The Records shall be the sole and exclusive property of the Company, and the Executive will surrender them upon the termination of employment, or upon the Company's request. The Executive hereby irrevocably conveys, transfers and assigns to the Company the Inventions and all patents that may issue thereon in any and all countries, whether during or subsequent to employment, together with the right to file, in the Executive's name or in the name of the Company (or its designee), applications for patents and equivalent rights (the "Applications"). Executive will, at any time during and subsequent to employment, make such applications, sign such papers, take all rightful oaths, and perform all acts as may be requested from time to time by the Company with respect to the Inventions. The Executive will also execute assignments to the Company (or its designee) of the Applications, and give the Company and its attorneys all reasonable assistance (including the giving of testimony) to obtain the Inventions for the Company's benefit, all without additional compensation to the Executive from the Company, but entirely at the Company's expense. If the Company is unable for any other reason to secure the Executive's signature on any document for this purpose, then the Executive hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as the Executive's agent and attorney in fact, to act for and in the Executive's behalf and stead to execute any documents and to do all other lawfully permitted acts in connection with the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)In addition, the Inventions will be deemed Work for Hire, as such term is defined under the copyright laws of the United States, on behalf of the Company and the Executive agrees that the Company will be the sole owner of the Inventions, and all underlying rights therein, in all media now known or hereinafter devised, throughout the universe and in perpetuity without any further obligations to Executive. If the Inventions, or any portion thereof, are deemed not to be Work for Hire, Executive hereby irrevocably conveys, transfers and assigns to the Company, all rights, in all media now known or hereinafter devised, throughout the universe and in perpetuity, in and to the Inventions, including, without limitation, all of the Executive's right, title and interest in the copyrights (and all renewals, revivals and extensions thereof) to the Inventions, including, without limitation, all rights of any kind or any nature now or hereafter recognized, including, without limitation, the unrestricted right to make modifications, adaptations and revisions to the Inventions, to exploit and allow others to exploit the Inventions and all rights to sue at law or in equity for any infringement, or other unauthorized use or conduct in derogation of the Inventions, known or unknown, prior to the date hereof, including, without limitation, the right to receive all proceeds and damages therefrom. In addition, the Executive hereby waives any so-called "moral rights" with respect to the Inventions. To the extent that the Executive has any rights in the results and proceeds of the Executive's service to the Company or its affiliates that cannot be assigned in the manner described herein, the Executive agrees to unconditionally waive the enforcement of such rights. The Executive hereby waives any and all currently existing and future monetary rights in and to the Inventions and all patents that may issue thereon, including, without limitation, any rights that would otherwise accrue to the Executive's benefit by virtue of the Executive being an employee of or other service provider to the Company.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)The Executive shall not improperly use for the benefit of, bring to any premises of, divulge, disclose, communicate, reveal, transferor provide access to, or share with the Company any confidential, proprietary or non-public information or intellectual property relating to a former employer or other third party without the prior written permission of such third party. The Executive represents and warrants that she does not possess or own any rights in or to any confidential, proprietary or non-public information or intellectual property related to the business of the Company. The Executive shall comply with all relevant policies and guidelines of the Company regarding the protection of confidential information and intellectual property and potential conflicts of interest, provided same are consistent with the terms of this Agreement. The Executive acknowledges that the Company may amend any such policies and guidelines from time to time, and that the Executive remains at all times bound by their most current version.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)<u>Return of Company Property</u>. On the date of the Executive's termination of employment with the Company for any reason (or at any time prior thereto at the Company's request), the Executive shall return all property belonging to the Company or its affiliates (including, but not limited to, any Company-provided laptops, computers, cell phones, wireless electronic mail devices or other equipment, or documents and property belonging to the Company).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)<u>Reasonableness Of Covenants</u>. In signing this Agreement, the Executive gives the Company assurance that the Executive has carefully read and considered all of the terms and conditions of this Agreement, including the restraints imposed under this <u>Section 5</u>. Executive agrees that these restraints are necessary for the reasonable and proper protection of the Company and its affiliates and their trade secrets and confidential information and that each and every one of the restraints is reasonable in respect to subject matter, length of time and geographic area, and that these restraints, individually or in the aggregate, will not prevent the Executive from obtaining other suitable employment during the period in which the Executive is bound by the restraints. The Executive agrees that, before providing services, whether as an employee or consultant, to any entity during the period of time that the Executive is subject to the constraints in <u>Section 5</u> hereof, the Executive will provide a copy of this Agreement (including, without limitation, this <u>Section 5</u>) to such entity, and the Company shall be entitled to share a copy of this Agreement (including, without limitation, this <u>Section 5</u>) with such entity or any other entity to which the Executive performs services, and such entity shall acknowledge to the Company in writing that it has read this Agreement. The Executive acknowledges that each of these covenants has a unique, very substantial and immeasurable value to the Company and its affiliates and that the Executive has sufficient assets and skills to provide a livelihood while such covenants remain in force. The Executive further covenants that the Executive will not challenge the reasonableness or enforceability of any of the covenants set forth in this <u>Section 5</u>. It is also agreed that each of the Company's affiliates will have the right to enforce all of the Executive's obligations to that affiliate under this Agreement and shall be third party beneficiaries hereunder, including without limitation pursuant to this <u>Section 5</u>.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)<u>Cooperation</u>. Upon the receipt of reasonable notice from the Company (including outside counsel), the Executive agrees that during employment and, with respect to any matter in which the Executive seeks indemnification pursuant to <u>Section 16</u>, thereafter, the Executive will respond and provide information with regard to matters in which the Executive has knowledge as a result of the Executive's employment with the Company, and will provide reasonable assistance to the Company, its affiliates and their respective representatives in defense of any claims that may be made against the Company or its affiliates, and will provide reasonable assistance to the Company and its affiliates in the prosecution of any claims that may be made by the Company or its affiliates, to the extent that such claims may relate to the period of the Executive's employment with the Company (collectively, the "<u>Claims</u>"). The Company shall reimburse the Executive for all reasonable, out-of-pocket expenses incurred by the Executive in connection with any cooperation provided pursuant to this <u>Section 5(h)</u>. Executive agrees that while employed by the Company and, with respect to any matter in which Executive seeks indemnification pursuant to <u>Section 16</u>, thereafter, Executive will promptly inform the Company if the Executive becomes aware of any lawsuits involving Claims that may be filed or threatened against the Company or its affiliates. The Executive also agrees to promptly inform the Company (to the extent that the Executive is legally permitted to do so) if the Executive is asked to assist in any investigation of the Company or its affiliates (or their actions) or another party attempts to obtain information or documents from the Executive (other than in connection with any litigation or other proceeding in which the Executive is a party-in-opposition) with respect to matters the Executive believes in good faith to relate to any investigation of the Company or its affiliates, in each case, regardless of whether a lawsuit or other proceeding has then been filed against the Company or its affiliates with respect to such investigation, and shall not do so unless legally required. During the pendency of any litigation or other proceeding involving Claims, the Executive shall not communicate with anyone (other than the Executive's attorneys and tax and/or financial advisors and except to the extent that the Executive determines in good faith is necessary in connection with the performance of the Executive's duties hereunder) with respect to the facts or subject matter of any pending or potential litigation or regulatory or administrative proceeding involving the Company or any of its affiliates without giving prior written notice to the Company or the Company's counsel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)<u>Reformation</u>. If it is determined by a court of competent jurisdiction in any state that any restriction in this <u>Section 5</u> is excessive induration or scope or is unreasonable or unenforceable under applicable law, it is the intention of the parties that such restriction may be modified or amended by the court to render it enforceable to the maximum extent permitted by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)<u>Tolling</u>. In the event of any violation of the provisions of this <u>Section 5</u>, Executive acknowledges and agrees that the post-termination restrictions contained in this <u>Section 5</u> shall, to the maximum extent permitted by applicable law, be extended by a period of time equal to the period of such violation, it being the intention of the parties hereto that the running of the applicable post-termination restriction period shall be tolled during any period of such violation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)<u>Survival Of Provisions</u>. The obligations contained in <u>Section 5</u> shall survive the termination of the Executive's employment and the Executive's employment with the Company and shall be fully enforceable thereafter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)<u>DTSA</u>. 18 U.S.C. § 1833(b) provides: "An individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that—(A) is made—(i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal." Nothing in this Agreement is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by 18 U.S.C. § 1833(b). Accordingly, the parties to this Agreement have the right to disclose in confidence trade secrets to federal, state, and local government officials, or to an attorney, for the sole purpose of reporting or investigating a suspected violation of law. The parties also have the right to disclose trade secrets in a document filed in a lawsuit or other proceeding, but only if the filing is made under seal and protected from public disclosure.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)<u>Employee Protections</u>. Notwithstanding anything to the contrary contained herein, no provision of this Agreement will be interpreted so as to impede the Executive (or any other individual) from (i) making any disclosure of relevant and necessary information or documents in any action, investigation, or proceeding relating to this Agreement, or as required by law or legal process, including with respect to possible violations of law, (ii) filing a complaint or charge with any governmental agency, such as the U.S. Equal Employment Opportunity Commission or a state or local fair employment practices agency, (iii) participating, cooperating, or testifying in any action, investigation, or proceeding with, or providing information to, any governmental agency, legislative body or any self-regulatory organization, including, but not limited to, the Department of Justice, the U.S. Securities and Exchange Commission, Congress, and any agency Inspector General, (iv) accepting any U.S. Securities and Exchange Commission Awards, or (v) making other disclosures under the whistleblower provisions of federal law or regulation. In addition, nothing in this Agreement or any other agreement or Company policy prohibits or restricts the Executive from initiating communications with, or responding to any inquiry from, any administrative, governmental, regulatory or supervisory authority regarding any good faith concerns about possible violations of law or regulation. The Executive does not need the prior authorization of the Company to make any such reports or disclosures and the Executive will not be required to notify the Company that such reports or disclosures have been made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)<u>Equitable Relief And Other Remedies</u>. The Executive acknowledges and agrees that the Company's remedies at law for a breach or threatened breach of any of the provisions of <u>Section 5</u> would be inadequate and, in recognition of this fact, the Executive agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law, the Company, without posting any bond, shall be entitled to obtain equitable relief in the form of specific performance, a temporary restraining order, a temporary or permanent injunction or any other equitable remedy which may then be available, without the necessity of showing actual monetary damages or the posting of a bond or other security.

**6. Third-Party Agreements and Rights**. The Executive hereby confirms that the Executive is not bound by the terms of any agreement with any previous employer or other party which restricts in any way the Executive's use or disclosure of information (other than confidentiality restrictions (if any)) or the Executive's engagement in any business. The Executive represents to the Company that the Executive's execution of this Agreement, the Executive's employment with the Company and the performance of the Executive's proposed duties for the Company shall not violate any obligations the Executive may have to any such previous employer or other party. In the Executive's work for the Company, the Executive shall not disclose or make use of any information in violation of any agreements with or rights of any such previous employer or other party, and the Executive shall not bring to the premises of the Company any copies or other tangible embodiments of non-public information belonging to or obtained from any such previous employment or other party.

**7. No Conflicts**. The Executive agrees that during the course of employment with the Company, the Executive shall not, without the prior written consent of the Company, either directly or indirectly, through an affiliated or controlled entity or person, or as an employee, partner, consultant, proprietor, principal, agent, or otherwise in any other capacity, work for, render services to, own, manage, operate, engage in any business anywhere in the world which is in competition with the business of the Company.

**8. Withholding; Tax Effect**. All payments made to the Executive under this Agreement shall be subject to all applicable tax and other withholding requirements and shall be subject to all authorized deductions. Nothing in this Agreement shall be construed to require the Company to make any payments to compensate the Executive for the tax impact associated with any payments or benefits made hereunder.

**9. Assignment**. The Company may assign its rights and obligations under this Agreement without the Executive's consent to any successor in interest. This Agreement shall inure to the benefit of and be binding upon the Executive and the Company, and each of the Executive's and the Company's respective successors, executors, administrators, heirs and permitted assigns; provided that the services provided by the Executive are of a personal nature and the Executive cannot sell, convey, assign, delegate, transfer or otherwise dispose of, directly or indirectly, any of the Executive's rights or obligations under this Agreement (and any such purported action by the Executive shall be null and void).

**10. Severability**. If any portion or provision of this Agreement (including, without limitation, any portion or provision of any section of this Agreement) shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

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**11. Surviva**l. The provisions of this Agreement shall survive the termination of this Agreement and/or the termination of the Executive's employment to the extent necessary to effectuate the terms contained herein.

**12. Waive**r. No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party. The failure of any party to require the performance of any term or obligation of this Agreement, or the waiver by any party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.

**13. Notices**. Any notices, requests, demands and other communications provided for by this Agreement shall be sufficient if in writing and delivered in person or sent by a nationally recognized overnight courier service or by registered or certified mail, postage prepaid, return receipt requested, to the Executive at the last address the Executive has filed in writing with the Company or, in the case of the Company, at its main offices, attention of the Company's Chief Legal Officer, with a copy to legal@usare.com.

**14. Amendment**. This Agreement may be amended or modified only by a written instrument signed by the Executive and by a duly authorized representative of the Company upon approval of the full Board.

**15. Governing Law; Arbitration; Service of Process; Waiver of Jury Trial**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)This Agreement, and all claims or causes of action (whether in contract, tort or statute) that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement (including any claim or cause of action based upon, arising out of or related to any representation or warranty made in or in connection with this Agreement or as an inducement to enter into this Agreement), shall be governed by, and enforced exclusively in accordance with, the internal laws of the State of Delaware, including its statutes of limitations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)The Executive and the Company agree that all claims arising out of or relating to her employment, including its termination and the interpretation of this Agreement, and including any claims or disputes related to discrimination or harassment (to the extent permitted by applicable law), shall be resolved exclusively by binding arbitration pursuant to the Federal Arbitration Act ("<u>FAA</u>"). The dispute will be arbitrated in accordance with the rules of the American Arbitration Association ("<u>AAA</u>") under its existing Employment Arbitration Rules which may be found at http://www.adr.org, and will be held in the State of Delaware. The Company shall bear the cost of the arbitrator's fee and the arbitration expenses, and each party in the arbitration shall bear her/its own attorneys' fees and legal costs; provided, however, that if any party prevails on a statutory claim which affords the prevailing party attorneys' fees and costs, the arbitrator may award reasonable attorneys' fees and costs to the prevailing party to the extent permissible by applicable law. The parties agree to file any demand for arbitration within the time limit established by the applicable statute of limitations for the asserted claims. Failure to demand arbitration within the prescribed time period shall result in waiver of said claims. For the avoidance of doubt, any claim or dispute of sexual assault or sexual harassment may be pursued by the Executive in arbitration pursuant to this <u>Section 15</u> or in an appropriate state or federal court having jurisdiction over the claim.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Each party may be served with process in any manner permitted under Delaware law, or by United States registered or certified mail, return receipt requested.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)BY EXECUTION OF THIS AGREEMENT, THE PARTIES ARE WAIVING ANY RIGHT TO TRIAL BY JURY IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED ON THIS AGREEMENT.

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**16. Indemnification**. To the fullest extent permitted by applicable law and as provided in the Company's bylaws, during the term of this Agreement and for such period thereafter as may be necessary to continue to indemnify the Executive for the Executive's acts while an officer or director of the Company in accordance with this Section 16, the Company agrees to defend and indemnify the Executive against and to hold the Executive harmless from any and all claims and liabilities expenses (but excluding disputes arising under this Agreement, and claims asserted by the Company, the Board, of any of the Company's affiliates) asserted against the Executive for actions taken or omitted to be taken by the Executive in good faith and within the scope of the Executive's responsibilities as an officer or employee of the Company and its affiliates during the term of this Agreement. The Company shall cause the Executive to be provided coverage under any D&O liability insurance policies that are maintained by the Company from time to time in the same manner as other executive officers and directors of the Company are covered.

**17. No Third-Party Beneficiaries**. This Agreement is intended solely for the benefit of the parties and the Company's respective successors and permitted assigns and shall not confer upon any other person any remedy, claim, liability, reimbursement, or other right. The Agreement is not intended and shall not be construed to create any third-party beneficiaries or to provide to any third parties with any remedy, claim, liability, reimbursement, cause of action, or other right or privilege.

**18. Entire Agreement**. This Agreement (together with all Exhibits attached hereto) constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior written and/or oral understandings between the parties with regard to the subject matter hereof. For the avoidance of doubt, all Exhibits attached hereto shall be incorporated into and form a part of this Agreement.

**19. Legal Counsel**. The Executive expressly acknowledges that the Company has advised the Executive to consult with independent legal counsel of her choosing to review and explain to the Executive the legal effect of the terms and conditions of this Agreement prior to Executive's signing this Agreement. The Company shall pay directly or reimburse Executive for the reasonable attorneys' fees incurred by the Executive in negotiating this Agreement, up to $7,500, upon the Company's receipt of such appropriate documentation thereof as the Company may require.

**20. Counterparts**. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be taken to be an original; but such counterparts shall together constitute one and the same document. Any counterpart may be executed by facsimile or electronic signature and such facsimile or electronic signature shall be deemed an original.

[*SIGNATURE PAGE FOLLOWS*]

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IN WITNESS WHEREOF, the parties have executed this Agreement effective on the date and year indicated above.

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| | |
|:---|:---|
| **USA RARE EARTH, INC.** | **USA RARE EARTH, INC.** |
| By: | /s/ Michael Blitzer |
|  | Michael Blitzer |
|  | Chairman of the Board |
| By: | /s/ Barbara Humpton |
|  | **BARBARA HUMPTON** |

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**Exhibit A**

**USA Rare Earth, Inc. Severance and Change of Control Protection Plan**

[*See attached.*]

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**Exhibit B**

**Permitted Activities**

[*See attached.*]

## Exhibit 10.6

**GENERAL SEPARATION AND RELEASE OF CLAIMS AGREEMENT**

This General Separation and Release of Claims Agreement (this "<u>Release</u>") is entered into by Joshua Ballard ("<u>Participant</u>") and USA Rare Earth, Inc. (the "<u>Company</u>") and is the Release, as referenced (and defined) in the USA Rare Earth, Inc. Severance and Change of Control Protection Plan (the "<u>Plan</u>"). Capitalized terms not defined herein have the meanings given to them in the Plan.

WHEREAS, pursuant to that certain Employment Agreement entered into between Participant and the Company as of December 16, 2024 (the "<u>Employment Agreement</u>"), Participant was engaged as the Chief Executive Officer of the Company;

WHEREAS, Participant's employment as Chief Executive Officer of the Company ended as of October 1, 2025 (the "<u>Transition Date</u>");

WHEREAS, notwithstanding the foregoing, Participant remains employed as an executive of the Company from the Transition Date through October 31, 2025 (the "<u>Garden Leave Period,</u>" with October 31, 2025 being the "<u>Termination Date</u>") and will provide transition services to the Company during the Garden Leave Period in accordance with this Release; and

WHEREAS, in accordance with Section 7 of the Plan and Section 4(b)(iii) of the Employment Agreement, in connection with Participant's separation from the Company, Participant shall be entitled to the severance benefits set forth in the Plan in lieu of being entitled to the severance benefits set forth in the Employment Agreement.

NOW, THEREFORE, in consideration of the mutual promises made herein, the Company and Participant hereby agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.<u>Participant's Separation</u>. As of the Transition Date, Participant was no longer employed as Chief Executive Officer of the Company. In addition, Participant acknowledges and agrees that, as of the Transition Date, Participant shall be deemed to have resigned from each position Participant held as a manager, director or officer of the Company or of any of its subsidiaries or affiliates, including from Participant's position as a member of the Board of Directors of the Company (the "Board"), in all cases, without any further action required. During the Garden Leave Period, Participant shall provide transition services to the Company at the reasonable direction of the Board and shall make himself fully available to provide such services during normal business hours and at the request of the Board or its designee. Participant's employment with the Company will automatically end as of the Termination Date with no further action required on the part of Participant or the Company. After the Termination Date, Participant is not, nor will Participant represent that Participant is, an employee, contractor, officer, attorney, agent, or representative of the Company in any capacity or for any purpose. Regardless of whether Participant executes this Release, the Company acknowledges Participant's continued rights (to the extent not already paid or provided) to (a) any unpaid base salary earned through the Termination Date, payable on the next normally scheduled payroll date (or earlier if required by applicable law); (b) reimbursement for any unreimbursed expenses incurred through the Termination Date, payable in accordance with Section 3(f) of the Employment Agreement; (c) any accrued but unused paid time off determined as of the Termination Date; and (d) all other vested benefits to which Participant is entitled under the terms of any applicable compensation or employee benefit plan or program, payable in accordance with the terms of such plan or program as then in effect (collectively, the "<u>Accrued Benefits</u>").

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.<u>Severance Payments & Benefits; Garden Leave Payments & Benefits</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Provided that Participant (i) executes this Release on or after the Termination Date and returns a copy of this signed Release to the Company so that it is received by the Company at 100 W Airport Road, Stillwater, Oklahoma 74075, Attn: Chief Legal Officer, no later than the Release Expiration Date, (ii) does not revoke Participant's acceptance of this Release pursuant to Section 7 below, and (iii) satisfies any applicable Restrictive Covenant Conditions in all material respects (clauses, (i) through (iii), the "<u>Severance Conditions</u>"), then the Company shall provide Participant with the payments and benefits as set forth in the Plan and such additional payments and benefits as agreed between the Company and Participant in connection with the preparation of this Release, all of which are described on <u>Attachment A</u> to this Release.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Subject to Participant's satisfaction of the Severance Conditions, in consideration for Participant's services to the Company during the Garden Leave Period, Participant shall receive a one-time lump sum cash payment equal to $37,500 (i.e., 1/12 of Participant's annual base salary as of the Transition Date), less all applicable tax withholdings and deductions, on the next payroll period immediately following the Termination Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)From the Termination Date through January 1, 2026 (the "<u>Consulting Period</u>"), Participant will provide services to the Company as a consultant on a part-time basis, with due regard to Participant's personal and professional commitments following the Termination Date, which services will include advice and guidance related to the position Participant held with the Company prior to the Termination Date. During the Consulting Period, Participant will be compensated at a rate of $225 per hour (for any time actually spent performing duties) following Participant's submission of detailed invoices to the Company. For the sake of clarity, the Company reserves the right to terminate the Consulting Period at any time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Participant acknowledges and agrees that Participant is not eligible for or due any payments, equity, benefits, or notice other than as provided in this Release.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.<u>Release of Claims</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)As consideration for (and as a condition of) the payment to Participant of the consideration referenced in Section 2 (and any portion thereof), Participant, on behalf of Participant and Participant's successors and anyone purporting to claim through or on behalf of Participant, hereby forever, fully and finally releases, acquits, and discharges the Company, each other member of the Company Group, and each of their respective parents, subsidiaries, and other affiliates and each of the foregoing entities' respective past, present and future affiliates and subsidiaries and each of the foregoing entities' respective predecessors, successors, shareholders, members, partners, officers, managers, directors, fiduciaries, employees, representatives, agents, and benefit plans (and the fiduciaries of such plans), in their personal and representative capacities (collectively, the "<u>Released Parties</u>" and each a "<u>Released Party</u>"), from liability for - and does hereby covenant and agree never to institute or cause to be instituted any lawsuit, arbitration or similar proceeding against any of the Released Parties based upon - claims, demands, losses, indebtedness, agreements, promises, causes of action, obligations, damages and liabilities of any nature whatsoever, in law or in equity, whether or not known, suspected or claimed, that Participant has ever had, has claimed to have, now has, or could have against any Released Party by reason of any act, event, occurrence, or thing existing or occurring on or before the date that Participant signs this Release (the "<u>Signing Date</u>"), including any and all claims, demands, losses, indebtedness, agreements, promises, causes of action, obligations, damages and liabilities relating to Participant's ownership of any interest in any Released Party, Participant's employment with or engagement by any Released Party, Participant's awards under any compensation or bonus plan or arrangement sponsored or maintained by any Released Party, or any other acts or omissions related to any matter existing or occurring on or prior to the Signing Date, including: (i) any alleged violation of any federal, state or local labor or employment law, including those relating to anti-discrimination and anti-retaliation, or any other local, state or federal law, regulation or ordinance, including, for the avoidance of

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doubt, Title VII of the Civil Rights Act of 1967, the Civil Rights Act of 1991, Sections 1981 through 1988 of Title 42 of the United States Code, the Employee Retirement Income Security Act of 1974 (with respect to unvested benefits), the Fair Labor Standards Act of 1938 (with respect to rights and claims that may be legally waived and released by private agreement), the Equal Pay Act of 1963, the Lilly Ledbetter Fair Pay Act of 2009, the Family and Medical Leave Act of 1993, the Americans with Disabilities Act of 1990, the Age Discrimination in Employment Act of 1967 ("<u>ADEA</u>"), the Older Worker Benefit Protection Act ("<u>OWBPA</u>"), the Genetic Information Nondiscrimination Act of 2008, the Rehabilitation Act of 1973, the Worker Adjustment and Retraining Notification Act of 1988, the Sarbanes-Oxley Act of 2002, the Equal Pay Act of 1963, the Immigration Reform and Control Act of 1986, the Occupational Safety and Health Act of 1970, the Fair Credit Reporting Act of 1970, the Oklahoma Anti-Discrimination Act, the Oklahoma Minimum Wage Act, retaliation claims under the Oklahoma Administrative Workers' Compensation Act, retaliation claims under the Oklahoma Workers' Compensation Act, and the Texas Labor Code, including the Texas Payday Act, the Texas Anti-Retaliation Act, Chapter 21 of the Texas Labor Code, and the Texas Whistleblower Act, all including any amendments and their respective implementing regulations; and any federal, state or local wage and hour law; (ii) any public policy, contract, tort, or common law claim, including any claim for defamation, emotional distress, fraud or misrepresentation of any kind, promissory estoppel, breach of any implied duty of good faith and fair dealing, breach of implied or express contract, breach of fiduciary duty or wrongful discharge; (iii) any allegation for costs, fees, or other expenses including attorneys' fees incurred in, or with respect to, any Released Claims (as defined below); (iv) any claim, whether direct or derivative, arising from, or relating to, Participant's status as a holder of any shares or interests in any Released Party; (v) any and all rights, benefits or claims Participant may have under (A) the Employment Agreement, the Plan, any incentive plan, bonus agreement, or award agreement, or otherwise with respect to any amount owed on or before the Signing Date or (B) any other agreement, plan or arrangement with, or sponsored or maintained by, any Released Party; and (vii) any claim for compensation or benefits of any kind through the Signing Date (collectively, the "<u>Released Claims</u>"). THIS RELEASE INCLUDES MATTERS ATTRIBUTABLE TO THE SOLE OR PARTIAL NEGLIGENCE (WHETHER GROSS OR SIMPLE) OR OTHER FAULT, INCLUDING STRICT LIABILITY, OF ANY OF THE RELEASED PARTIES.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)The parties intend for this Release to be interpreted and construed as broadly as it appears on its face and to the broadest and fullest extent permitted under applicable laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)This Release requires Participant to abandon all claims or proceedings Participant has against the Released Parties, including those on appeal, if any. If Participant has previously filed a claim against any of the Released Parties in a court of law or initiated a claim or proceeding against or about any of the Released Parties, Participant hereby agrees and covenants to take all steps necessary to cause such claims or proceedings to be dismissed with prejudice within three (3) business days of executing this Release.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Notwithstanding anything to the contrary herein, the foregoing release does not release or impair (i) any rights to vested benefits under an employee benefit plan of any Released Party that is subject to ERISA and that cannot be released pursuant to ERISA; (ii) any claims first arising after the Signing Date; (iii) Participant's ability to file a claim for unemployment insurance or workers' compensation benefits; (iv) Participant's interest in the Founders Shares identified on <u>Attachment A</u> (and any rights thereunder); or (v) the Accrued Benefits (in each case to the extent not already paid or provided).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)<u>KNOWN AND UNKNOWN CLAIMS</u>. PARTICIPANT UNDERSTANDS THAT THIS RELEASE WAIVES AND RELEASES ALL CLAIMS, WHETHER KNOWN OR UNKNOWN, BASED ON FACTS OR OMISSIONS OCCURRING ON OR BEFORE THE DATE THAT PARTICIPANT SIGNS THIS RELEASE, EVEN IF PARTICIPANT DOES NOT HAVE KNOWLEDGE OF THOSE FACTS OR OMISSIONS AT THE TIME PARTICIPANT SIGNS THIS RELEASE. Participant acknowledges that Participant may later discover claims or facts in addition to or different from those which Participant now knows or believes to exist with regards to the subject matter of this Release, and which if known or suspected at the time of executing this Release, may have materially affected its terms. Nevertheless, Participant waives any and all claims that might arise as a result of such different or additional claims or facts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)<u>Protected Rights and Disclosures</u>. Further, nothing in this Release prevents Participant from filing any non-legally waivable claim, including a challenge to the validity of this Release, with the Equal Employment Opportunity Commission, the Securities and Exchange Commission, or other federal, state or local governmental agency or commission (collectively "<u>Governmental Agencies</u>") or participating in (or cooperating with) any investigation or proceeding conducted by any Governmental Agency; however, Participant understands and agrees that, to the extent permitted by law, Participant is waiving any and all rights to recover any monetary or personal relief or recovery from the Released Parties as a result of such Governmental Agency proceeding or subsequent legal actions. Nothing herein waives (and the Released Claims shall not include) Participant's right to receive an award for information provided to a Governmental Agency (including, for the avoidance of doubt, any monetary award or bounty from any governmental agency or regulatory or law enforcement authority in connection with any protected "whistleblower" activity), and nothing herein or in any other agreement between Participant and any Released Party shall prohibit or restrict Participant from (A) initiating communications directly with, cooperating with, providing information or making statements to, causing information to be provided to, or otherwise assisting in an investigation by, any Governmental Agency; (B) responding to any inquiry or legal process directed to Participant from any Governmental Agency; (C) testifying, participating or otherwise assisting in any action or proceeding by any Governmental Agency; or (D) making any disclosures that are protected under the whistleblower provisions of any applicable law. Nothing in this Release requires Participant to obtain prior authorization before engaging in any conduct described in the previous sentence or to notify any Released Party that Participant engaged in any such conduct.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.<u>Acceptance of this Release; Consideration Period for Waiver of ADEA Rights</u>. Participant understands that Participant may take twenty-one (21) calendar days from the Termination Date (such deadline, the "<u>Release Expiration Date</u>") to consider whether to sign and accept this Release, subject to the additional terms and conditions described below. For Participant's acceptance to be effective, Participant shall return Participant's signed Release to the Company so that it is received by the Company at 100 W Airport Road, Stillwater, Oklahoma 74075, Attn: Chief Legal Officer. By signing this Release, Participant acknowledges and agrees that Participant has been advised of and understands the following: (a) Participant has carefully read and fully understands all terms and conditions of this Release; (b) Participant is receiving valid consideration for this Release that is in addition to anything of value to which Participant is already entitled; (c) this Release does not waive rights or claims that may arise after it is executed; (d) by signing this Release, Participant is waiving and releasing rights and claims under the ADEA (as amended by the OWBPA); (e) Participant has been given the opportunity to consult with an attorney of Participant's choice before signing this Release; (f) Participant will be provided twenty-one (21) calendar days following the Termination Date to consider this Release before accepting it (the "<u>Consideration Period</u>"), or Participant has freely and knowingly waived the right to consider this Release for the full Consideration Period by executing the Release before the expiration of the Consideration Period. Changes to this Release, whether material or immaterial, do not restart the Consideration Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.<u>No Admission of Wrongdoing</u>. Participant acknowledges that neither this Release, nor the furnishing of the consideration for this Release, shall be deemed or construed at any time to be an admission by any Released Party of any improper or unlawful conduct.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.<u>Continuing Obligations</u>. Participant acknowledges that Participant's continued compliance with any confidentiality, non-solicitation, non-competition, non-disparagement, non-hire or similar covenants to which Participant is subject pursuant to any written agreement with any entity in the Company Group (if any), including the perpetual confidentiality obligations set forth in Section 5(a) of the Employment Agreement (collectively, "<u>Continuing Obligations</u>"), survive the termination of Participant's employment in accordance with their terms and are reasonable and necessary to protect the legitimate business interests of the Company. Participant agrees Participant remains bound by such Continuing Obligations. Participant further represents and warrants that Participant has not divulged any confidential information of the Company without the Company's consent. Subject to Participant's protected rights set forth in Section 3(f) above, Participant further agrees not to defame or disparage the Company Group or their current or former officers, directors, employees, shareholders, members, agents or products. For the avoidance of doubt, the foregoing shall not be violated by truthful statements made in response to legal process, required governmental testimony or filings, or administrative or arbitral proceedings (including, without limitation, depositions in connection with such proceedings).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.<u>Effective Date and Revocation of this Release</u>. Participant shall have an additional seven (7) calendar days after signing and agreeing to this Release to revoke it (the "<u>Revocation Period</u>"). Participant may revoke Participant's acceptance of this Release by delivering a written statement during the Revocation Period to the Company's Chief Legal Officer and Head of Human Resources, which clearly and unequivocally states that Participant is revoking Participant's acceptance of this Release and does not want to be bound by it. This Release shall not become effective until 12:01 AM Central Standard Time on the eighth (8th) calendar day after the date on which Participant executes (and does not revoke) this Release (the "<u>Effective Date</u>"). If a notice of revocation is not received prior to the expiration of the Revocation Period, this Release will take effect and will become irrevocable and binding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.<u>Return of Company Property</u>. Participant will return all property belonging to the Company, including but not limited to: computers, computer equipment, and/or software; telephones or personal data assistants; other equipment; keys and/or access cards or devices; credit cards; books or other publications; board materials; current or prospective client, and/or customer lists or information; all Company-related emails, files, or folders on Participant's personal computers or communication devices; and other business records such as memoranda, letters, email communications, lists of fees, personnel data, employee lists, salary and benefits information (other than relating to Participant), lists of suppliers and vendors, financial data, training materials, marketing plans, notes, records, reports, manuals, handbooks, forms, formulas, contracts, catalogs, instructions, and all other documentation (whether in draft or final and electronic or hard copy form) relating to the Company's business, and any and all other documents containing proprietary information furnished to Participant by any representative of the Company or otherwise acquired or developed by Participant in connection with his employment with the Company, regardless of the manner in which Participant acquired possession of the documents or property (collectively, "<u>Company Materials</u>"). The Company Materials shall at all times be the property of the Company. By 5:01 PM Central Standard Time on the Termination Date, Participant shall return to the Company and shall confirm to the Company that Participant has returned any and all Company Materials and any and all copies thereof which are in Participant's possession, custody, or control, including Company Materials retained by Participant in Participant's office, automobile, personal electronic devices, or at Participant's home, provided, however, that Participant acknowledges and agrees that the Board may require Participant to return any and all Company Materials (and all copies thereof) prior to the Termination Date, and Participant agrees to return any and all such Company Materials (and copies thereof) promptly upon the request of the Board and in no event later than two (2) days thereafter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.<u>Cooperation</u>. During the one (1) year period following the Termination Date, Participant agrees to cooperate fully and in good faith with the Company and/or the Released Parties and their respective legal counsel in any matters that have or may result in a legal claim against the Company and/or in any investigation or other government action. This requires Participant, without limitation, to (a) make himself available upon reasonable request to provide information and assistance to the Company on such matters without additional compensation, except for Participant's pre-approved out-of-pocket costs, and

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(b) notify the Company within three (3) business days of any requests to Participant for information related to any pending or potential legal claim, investigation, or litigation involving the Company, reviewing any such request with a designated representative of the Company prior to disclosing any such information, and permitting the representative of the Company to be present during any communication of such information. Participant's duty of cooperation will include, but not be limited to (i) meeting with the Company's legal counsel by telephone or in person at mutually convenient times and places in order to state truthfully Participant's knowledge of matters at issue and recollection of events; (ii) appearing at the Company's and/or its legal counsel's request (and, to the extent possible, at a time convenient to Participant that does not conflict with the needs or requirements of Participant's then-current employer) as a witness at depositions or trials, without necessity of a subpoena, in order to state truthfully Participant's knowledge of matters at issue; and (iii) signing at the Company's and/or its legal counsel's request any declarations or affidavits that truthfully state matters of which Participant has knowledge. Furthermore, Participant and the Company will work cooperatively as needed on internal and external communications and notifications in support of a smooth transition, including without limitation communications with staff and on external and social media platforms, and other communications to business partners, Board members, officers, employees and other stakeholders regarding the transition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.<u>Participant Acknowledgments; Advice to Consult with Legal Counsel</u>. *This is an important legal document. Participant is advised to consult with legal counsel of Participant's choosing before signing this Release*. The Company shall pay directly or reimburse Participant for the reasonable attorney's fees incurred by Participant in such consultation, up to $5,000, upon the Company's receipt of such appropriate documentation thereof as the Company may require.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Participant acknowledges that Participant's entry into this Release (and non-revocation thereof) is a condition to Participant's receipt of the consideration set forth in Section 2, and that, in the absence of timely executing, returning, and not revoking this Release and complying with its terms, Participant would not be entitled to receive such consideration (or any portion thereof).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)In entering into this Release, Participant fully understands the binding effect of this Release; the only promises made to Participant to sign this Release are those stated in this Release and the Plan; Participant is signing this Release knowingly, voluntarily and of Participant's own free will; Participant relies on Participant's own judgment in entering into this Release and Participant has not relied on any representation or statement, written or oral, of any Released Party or Released Party's agent that is not set forth in this Release or the Plan; and Participant understands and agrees to each of the terms of this Release.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)This Release and the releases and covenants contained herein shall be binding upon Participant, Participant's heirs, executors, administrators, beneficiaries, trustees, successors, assigns, agents, and anyone purporting to claim through or on behalf of Participant. This Release and the releases and covenants contained herein shall inure to the benefit of all Released Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.<u>Governing Law and Forum Selection</u>. The parties agree that this Release shall be governed by and construed in accordance with the laws of the State of Oklahoma, without reference to its conflict or choice of laws principles. The parties further agree that the exclusive forum for resolution of any dispute arising out of or in connection with this Release, Participant's employment with the Company, and/or the separation of Participant's employment from the Company will be in a state or federal court of appropriate jurisdiction in Oklahoma.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.<u>Compliance with Federal Securities Laws</u>. Participant agrees to comply with all applicable federal securities laws, including any restrictions imposed by any broker or financial institution, including during the period that Participant is considered an "affiliate" as defined in Rule 144 under the Securities Act of 1933, as amended. This compliance period shall extend for ninety (90) days following the end of the Consulting Period.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.<u>Counterparts</u>. This Release may be executed in one or more counterparts (including portable document format (.pdf) counterparts), each of which shall be deemed to be an original, but all of which together will constitute one and the same Release. Notwithstanding anything to the contrary in Sections 2(a) or 4, execution via DocuSign or a similar service, or of a facsimile copy or scanned image shall have the same force and effect as execution of an original, and an electronic or facsimile signature or scanned image of a signature shall be deemed an original and valid signature.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.<u>Severability</u>. To the extent permitted by applicable law, the Company and Participant hereby agree that any term or provision of this Release that renders such term or provision or any other term or provision hereof invalid or unenforceable in any respect shall be severable and shall be modified or severed to the extent necessary to avoid rendering such term or provision invalid or unenforceable, and such modification or severance shall be accomplished in the manner that most nearly preserves the benefit of the parties' bargain hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.<u>Headings; References; Interpretations</u>. Section headings have been inserted for purposes of convenience and shall not be used for interpretive purposes. The words "hereof," "herein" and "hereunder" and other compounds of the word "here" shall refer to the entire Release and not to any particular provision hereof. The use herein of the word "including" following any general statement, term or matter shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as "without limitation", "but not limited to", or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that could reasonably fall within the broadest possible scope of such general statement, term or matter. The word "or" as used herein is not exclusive and is deemed to have the meaning "and/or." All references herein to a law, agreement, instrument or other document shall be deemed to refer to such law, agreement, instrument or other document as amended, supplemented, modified and restated from time to time to the extent permitted by the provisions thereof. Neither this Release nor any uncertainty or ambiguity herein shall be construed against any party, whether under any rule of construction or otherwise. This Release has been reviewed by each of the parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to fairly accomplish the purposes and intentions of the parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.<u>Entire Agreement</u>. This Release is the complete understanding between Participant and the Company. It replaces any other agreements, representations or promises, written or oral.

[*Signature page follows; remainder of page intentionally left blank*]

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**IN WITNESS WHEREOF**, the parties hereto have executed this Release with the intent to be legally bound.

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| | |
|:---|:---|
| **Accepted by:** | **Accepted by:** |
| **USA RARE EARTH, INC.** | **USA RARE EARTH, INC.** |
| Signature: | /s/ Mike Blitzer |
| Name: | Mike Blitzer |
| Title: | Chairman of the Board |
| **PARTICIPANT** | |
| Signature: | /s/ Joshua Ballard |
| Name: | Joshua Ballard |

---

[*Signature Page to General Separation and Release of Claims Agreement*]

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<u>Attachment A</u>

Severance Benefits

Participant is entitled to the following severance benefits, consistent with a termination without Cause at any time for purposes of the Plan and including such additional payments and benefits as agreed between the Company and Participant:

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| | |
|:---|:---|
| **Benefit** | **Details** |
| Cash Severance | <br>$450,000, which represents 1x Base Salary, payable in a lump sum within 60 days following the Termination Date, provided, however, that if such 60-day period straddles two calendar years, such severance will be paid as soon as practicable in the second of the two calendar years |
| COBRA Coverage | <br>12 months of COBRA Coverage (i.e., payment of the Company's portion of the premium for such coverage for Participant (and, if applicable, Participant's dependents)), paid by the Company on a monthly basis for the 12-month COBRA Period \* |
| Equity Acceleration | 90,992 time-vesting restricted stock units ("<u>RSUs</u>") (i.e., the "Founders Shares") will automatically accelerate and vest upon the conclusion of the Consulting Period and be settled in accordance with the terms of the award agreement pursuant to which such RSUs were granted; provided, however, that if such settlement period straddles two calendar years, such RSUs will be settled as soon as practicable in the second of the two calendar years |

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\* Participant shall only be eligible to receive such COBRA Coverage until the earliest of: (a) the last day of the applicable COBRA Period; (b) the date Participant is no longer eligible to receive COBRA continuation coverage; and (c) the date on which Participant begins employment with another company or business entity which provides comparable health insurance coverage to Participant. Each monthly payment of the COBRA Coverage shall be paid directly to the health plan providers on behalf of Participant; provided, however, if the Company determines that the COBRA Coverage cannot be provided in the manner described herein (and in the Plan) without penalty, tax or other adverse impact on the Company, then the Company shall pay directly to Participant a taxable lump-sum cash amount equal to the then-unpaid amount of COBRA Coverage on the first payroll date on or next following the date such determination is made.

**For the avoidance of doubt, the severance benefits set forth on this Attachment A are subject to all terms and conditions of the Release corresponding to this Attachment A and the Plan.** 

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER**

**PURSUANT TO EXCHANGE ACT RULE 13a-14(a) OR 15d-14(a), AS ADOPTED PURSUANT TO**

**SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Barbara Humpton, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.I have reviewed this Quarterly Report on Form 10-Q of USA Rare Earth, Inc. for the period ended September 30, 2025;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Based on my knowledge, the financial statements, and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

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| | | | |
|:---|:---|:---|:---|
| Date: | November 6, 2025 | | /s/ BARBARA HUMPTON |
| | | Name: | Barbara Humpton |
| | | Title: | Chief Executive Officer |
| | | | (Principal Executive Officer |

---

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION OF PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER**

**PURSUANT TO EXCHANGE ACT RULE 13a-14(a) OR 15d-14(a), AS ADOPTED PURSUANT TO**

**SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, William Robert Steele Jr., certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.I have reviewed this Quarterly Report on Form 10-Q of USA Rare Earth, Inc. for the period ended September 30, 2025;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Based on my knowledge, the financial statements, and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | | |
|:---|:---|:---|:---|
| Date: | November 6, 2025 | | /s/ WILLIAM ROBERT STEELE JR. |
| | | Name: | William Robert Steele Jr. |
| | | Title: | Chief Financial Officer |
| | | | (Principal Financial and Accounting Officer) |

---

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER, PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE**

**SARBANES-OXLEY ACT OF 2002\***

Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), and Section 1350 of Chapter 63 of Title 18 of the United States Code, Barbara Humpton, Chief Executive Officer of USA Rare Earth, Inc., and William Robert Steele Jr., Chief Financial Officer of USA Rare Earth, Inc., each hereby certify that, to the best of his knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.The Company's Quarterly Report on Form 10-Q for the period ended September 30, 2025, to which this Certification is attached as Exhibit 32.1 (the "Quarterly Report"), fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition of the Company at the end of the period covered by the Quarterly Report and results of operations of the Company for the period covered by the Quarterly Report.

IN WITNESS WHEREOF, the undersigned has set his hand hereto:

---

| | | | |
|:---|:---|:---|:---|
| Date: | November 6, 2025 |  | /s/ BARBARA HUMPTON |
|  |  | Name: | Barbara Humpton |
|  |  | Title: | Chief Executive Officer |
|  |  |  | (Principal Executive Officer |
| Date: | November 6, 2025 |  | /s/ WILLIAM ROBERT STEELE JR. |
|  |  | Name: | William Robert Steele Jr. |
|  |  | Title: | Chief Financial Officer |
|  |  |  | (Principal Financial and Accounting Officer) |

---

\*&nbsp;&nbsp;&nbsp;&nbsp;This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of USA Rare Earth, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing

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