USAR 8-K
USA Rare Earth, Inc. (USAR)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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Item 1.01 Entry into a Material Definitive Agreement.
Agreement and Plan of Merger
As previously disclosed on April 19, 2026, USA Rare Earth, Inc. (“USAR”) entered into a definitive Agreement and Plan of Merger (as amended by Amendment No. 1, dated July 16, 2026 (“Amendment No. 1”), and Amendment No. 2, dated September 3, 2026 (“Amendment No. 2”), and as may be further modified, amended or supplemented from time to time, the “Merger Agreement”) by and among (i) USAR, (ii) Middlebury Merger Sub Ltd., a business company limited by shares incorporated under the laws of the British Virgin Islands and an indirect, wholly owned Subsidiary of USAR (“Merger Sub”), (iii) SVRE Holdings Ltd., a business company limited by shares incorporated under the laws of the British Virgin Islands (“SVRE”), and (iv) Serra Verde Rare Earths Ltd., a company incorporated and existing under the laws of the British Virgin Islands, solely in its capacity as the representative of the holders of Ordinary Shares, without par value, and Class A Ordinary Shares, without par value, of SVRE (collectively, “SVRE Shares” and such holders, the “SVRE Shareholders”) (the “Seller Representative”), providing for the merger of SVRE with and into Merger Sub, with Merger Sub surviving the merger as an indirect, wholly owned subsidiary of USAR (the “Merger” and, together with all other transactions contemplated by the Merger Agreement, the “Transactions”) subject to the terms and conditions contained therein. Each capitalized term used herein but not otherwise defined has the meaning given to it in the Merger Agreement.
On September 3, 2026 (the “Closing Date”), the parties closed the Merger, and the Merger became effective at the time when the Articles of Merger were registered by the Registrar of Corporate Affairs of the British Virgin Islands (the “Effective Time”). Pursuant to the Merger Agreement, the aggregate merger consideration (the “Merger Consideration”) consists of (i) an amount of cash equal to $300,000,000 (the “Aggregate Cash Merger Consideration”) and (ii) an aggregate of 126,849,307 shares of common stock, par value $0.0001 per share, of USAR (“USAR Shares”) (the “Aggregate Stock Merger Consideration”). The Merger Consideration will be payable to, among others (a) the holders of SVRE Shares issued and outstanding immediately prior to the Effective Time, (b) the United States International Development Finance Corporation ( “DFC”) pursuant to the cancellation and conversion of its warrants to purchase SVRE Shares, (c) OMF Fund III (F) Ltd., (d) certain SVRE Shareholders pursuant to the exercise of their warrants to purchase SVRE Shares and (e) certain current and former employees and consultants of SVRE and its subsidiaries.
The USAR Shares were issued in reliance on the exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Regulation S thereunder, and in reliance on similar exemptions under applicable state laws. The USAR Shares were offered and sold without any general solicitation by USAR, Merger Sub or their respective representatives. The USAR Shares have not been registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act.
The foregoing summary of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, including Amendment No. 1 and Amendment No. 2. The Merger Agreement, Amendment No. 1 and Amendment No. 2 are included as Exhibits 2.1, 2.2 and 2.3 hereto.
Registration Rights Agreement
In connection with the closing of the Merger, USAR, certain SVRE Shareholders, OMF Fund III (F) Ltd., certain employees and consultants of SVRE and the DFC entered into a registration rights agreement (the “Registration Rights Agreement”), pursuant to which USAR agreed to (a) file a registration statement on Form S-3 (or Form S-1 if not eligible for Form S-3) with the SEC on the first Business Day following the consummation of the Transactions for purposes of registering the resale or distribution of the Aggregate Stock Merger Consideration by the SVRE Shareholders and other recipients thereof (the “Registration Statement”), (b) use reasonable best efforts to have such Registration Statement declared effective within the time period set forth in the Registration Rights Agreement, and (c) keep the Registration Statement (or any new Registration Statement filed in connection with the Registration Rights Agreement) effective until the date that all registrable securities covered by the Registration Statement (or new Registration Statement, as applicable), subject to certain limitations, (i) have been disposed of in accordance with an effective Registration Statement relating thereto, (ii) have been sold thereunder or pursuant to Rule 144 under the Securities Act, or (iii) may be resold without volume or manner-of-sale restrictions pursuant to Rule 144.
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The foregoing summary of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the Registration Rights Agreement. The Registration Rights Agreement is included as Exhibit 10.1 hereto.
Board Appointment Agreement
In connection with the Merger, USAR and VB (Rare Earths) Limited (“Vision Blue”) entered into a Board Appointment Agreement, dated as of September 3, 2026 (the “Board Appointment Agreement”). Subject to the terms and conditions of the Board Appointment Agreement, Vision Blue has the right to designate one member to the board of directors of USAR (the “USAR Board”), for so long as Vision Blue and its affiliates beneficially own USAR Shares that represent, in the aggregate, at least 5% of the then outstanding amount of shares of USAR common stock; provided that such director shall be reasonably acceptable to USAR’s Nominating and Corporate Governance Committee.
The foregoing summary of the Board Appointment Agreement does not purport to be complete and is qualified in its entirety by reference to the Board Appointment Agreement. The Board Appointment Agreement is included as Exhibit 10.2 hereto.
Item 2.01. Completion of Acquisition or Disposition of Assets.
The information under Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
In connection with the closing of the Merger, Merger Sub assumed on the Closing Date all of the rights and obligations of SVRE under a Finance Agreement, dated as of January 21, 2026 (as amended, the “Finance Agreement”), pursuant to which DFC agreed to provide a loan to SVRE in an aggregate principal amount not to exceed $565,000,000, consisting of (i) a first tranche (the “Initial Loan”) with a principal amount not to exceed $465,000,000 and (ii) a second tranche (the “Incremental Loan”) with a principal amount not to exceed $100,000,000, and the other financing documents to which SVRE was a party. The Initial Loan bears interest at a rate per annum equal to a forward-looking term rate based on the secured overnight financing rate for the applicable interest period (“Term SOFR”), subject to a floor of 0.00%, plus 4.0%. The Initial Loan has a term not to exceed fifteen (15) years from the initial disbursement date and is repayable in up to forty-nine (49) quarterly sculpted installments. The obligations under the Finance Agreement are secured by a first priority lien on 100% of the shares in Merger Sub and substantially all assets of Merger Sub and its subsidiaries.
The Incremental Loan was funded prior to the closing of the Merger. In connection with the making of the Incremental Loan, DFC was issued warrants (the “DFC Warrants”) granting DFC the right to purchase newly issued SVRE Shares. Immediately prior to the closing of the Merger, the DFC Warrants were cancelled and converted on a cashless exercise basis into the right to receive Merger Consideration payable in respect of the DFC Warrants in accordance with the terms and conditions of the Merger Agreement. Upon payment of the Merger Consideration in respect of the DFC Warrants and payment of all outstanding unpaid fees and accrued but unpaid interest due to DFC in relation to the outstanding principal amount of the Incremental Loan, the outstanding principal amount of the Incremental Loan and all such amounts were deemed repaid in full and all obligations of Merger Sub in respect of the Incremental Loan were deemed irrevocably satisfied and discharged.
The foregoing summary of the Finance Agreement does not purport to be complete and is qualified in its entirety by reference to the Finance Agreement, which will be filed as an exhibit to USAR’s Quarterly Report on Form 10-Q for the fiscal quarter ending September 30, 2026.
Item 3.02. Unregistered Sales of Equity Securities
The information under Item 2.01 of this Current Report on Form 8-K related to the Aggregate Stock Merger Consideration is incorporated herein by reference.
This Current Report on Form 8-K does not constitute an offer to sell any securities or a solicitation of an offer to buy any securities, nor shall there be any sale of any securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
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Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers.
In connection with the closing of the Merger and pursuant to the Merger Agreement, the USAR Board appointed Thrasyvoulos Moraitis and Sir Michael Lawrence Davis to the USAR Board, effective as of the closing of the Merger and in accordance with USAR’s governing documents. Mr. Davis is also the initial appointee to the USAR Board under the Board Appointment Agreement as described in Item 1.01 of this Current Report on Form 8-K.
Mr. Moraitis has served as CEO of the Serra Verde Group since January 2023. Prior to joining Serra Verde, Mr. Moraitis was the co-founder of X2 Resources and served on the Executive Committee of Xstrata, led by CEO Mr. Davis, ultimately selling it to Glencore in 2013. At Xstrata he was responsible for strategic development, post-acquisition integration, leadership development, external affairs and investor relations as well as Xstrata’s technology business. While at Xstrata, he was involved in some 40 transactions. Mr. Moraitis began his career in the early 1980s as an engineer on the South African gold mines of General Mining Union Corporation (Gencor), followed by a series of entrepreneurial activities and, prior to joining Xstrata, was a global partner at the Monitor Group, a global advisory and merchant banking group. Mr. Moraitis was previously the Chief Development Officer and a member of the Executive Board of EuroChem Group AG, a global fertilizer company and, prior to this, an Executive Director at Brilliant Planet, a growth company developing a scalable method for producing microalgae for food solutions and carbon sequestration.
Mr. Davis is the founder and Managing Partner of Vision Blue which invests in metal and mineral resource companies that can meet the world’s evolving energy needs. Mr. Davis is a highly successful mining executive accredited with building Xstrata plc into one of the largest mining companies in the world prior to its acquisition by Glencore plc. Before listing Xstrata on the LSE as CEO he was CFO of Billiton plc and Chair of Billiton Coal which he joined from the position of Eskom CFO. During his career in mining, he has raised over $40 billion from global capital markets and successfully completed over $120 billion of corporate transactions, including the creation of the Ingwe Coal Corporation in South Africa; the listing of Billiton on the LSE; the merger of BHP and Billiton; as well as numerous transactions at Xstrata culminating in the sale to Glencore plc.
As a non-employee director, Mr. Davis will be entitled to a cash retainer and an equity award in the form of RSUs under USAR’s director compensation program consistent with the terms disclosed in USAR’s definitive proxy statement on Schedule 14A filed with the Securities and Exchange Commission on April 23, 2026.
As previously reported, in connection with the closing of the Merger, Mr. Moraitis assumed the function and responsibility of President of USAR through October 1, 2026, at which point he will serve as Chief Executive Officer of USAR. On July 19, 2026, USAR and Mr. Moraitis agreed to the terms of Mr. Moraitis’ compensation as Chief Executive Officer, which were disclosed in USAR’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 20, 2026. USAR and Mr. Moraitis executed a side letter on September 3, 2026 to memorialize these terms, save that his initial base salary has been changed to CHF 905,000 per annum.
The foregoing summary does not purport to be complete and is qualified in its entirety by reference to Mr. Moraitis’s employment letter agreement dated May 8, 2023, as amended on February 2, 2026, a letter agreement dated April 19, 2026, and the side letter dated September 3, 2026, copies of which will be filed as exhibits to USAR’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2026.
In connection with the appointments of Mr. Moraitis and Mr. Davis, each has entered into a customary indemnification agreement with the Company. None of Mr. Moraitis or Mr. Davis have a direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.
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Item 7.01. Regulation FD Disclosure
On September 4, 2026, USAR issued a press release announcing the closing of the Merger, a copy of which is being furnished as Exhibit 99.1 hereto and incorporated by reference herein.
The information provided under this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, is “furnished” and shall not be deemed “filed” with the Securities and Exchange Commission or incorporated by reference in any filing under the Securities Exchange Act of 1934, as amended, or the Securities Act.
Item 8.01. Other Events.
Lock-Up Agreements
In accordance with the Merger Agreement, at the closing of the Merger, each SVRE Shareholder and certain employees and consultants of SVRE and its subsidiaries entered into a lock-up agreement with USAR substantially in the form attached to the Merger Agreement (the “Lockup Agreement”) pursuant to which, among other things, such persons have agreed not to transfer a portion of the USAR Shares received as Merger Consideration pursuant to the Merger Agreement for a specified period following the closing of the Merger, or until USAR completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of USAR’s stockholders having the right to exchange their shares for cash, securities or other property, as applicable, following the closing of the Merger, and subject to certain customary transfer exceptions. Under the Lockup Agreement, one-third of the USAR Shares received by each such person are subject to a 90-day lock-up period following the closing of the Merger, one-third are subject to a 180-day lock-up period following the closing of the Merger, and one-third are not subject to any lock-up restrictions. The specific terms are set forth in the form of Lockup Agreement attached as Exhibit A to the Merger Agreement, a copy of which is attached as Annex A to the definitive proxy statement filed on Schedule 14A on July 24, 2026.
Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired. The financial statements of SVRE required by Item 9.01(a) of Form 8-K are filed as Exhibit 99.2.
(b) Pro forma financial information. The pro forma financial information required by Item 9.01(b) of Form 8-K is filed as Exhibit 99.3 hereto.
(d) Exhibits:
The following exhibits are attached with this current report on Form 8-K:
| * | The annexes schedules, and certain exhibits to this Exhibit have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Registrant hereby agrees to furnish supplementally a copy of any omitted annex, schedule or exhibit to the SEC upon request. |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| USA Rare Earth, Inc. | |||
| Date: September 4, 2026 | By: | /s/ Valerie Ford Jacob | |
| Name: | Valerie Ford Jacob | ||
| Title: | Chief Legal Officer | ||
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Exhibit 2.3
AMENDMENT NO. 2 TO
AGREEMENT AND PLAN OF MERGER
This Amendment No. 2 to Agreement and Plan of Merger (this “Amendment”), dated as of September 3, 2026, is entered into by and among (i) USA Rare Earth, Inc., a Delaware corporation (“Parent”), (ii) Middlebury Merger Sub Ltd., a business company limited by shares incorporated under the laws of the British Virgin Islands and an indirect, wholly owned Subsidiary of Parent (“Merger Sub”), (iii) SVRE Holdings Ltd., a business company limited by shares incorporated under the laws of British Virgin Islands (the “Company”), and (iv) Serra Verde Rare Earths Ltd., a company incorporated and existing under the laws of the British Virgin Islands, solely in its capacity as the representative of the Company Shareholders (the “Seller Representative”).
WHEREAS, the parties hereto are parties to that certain Agreement and Plan of Merger, dated as of April 19, 2026 (as amended, supplemented or otherwise modified from time to time, the “Merger Agreement”);
WHEREAS, pursuant to and in accordance with Section 10.11 of the Merger Agreement, the Merger Agreement may be amended or modified by a written instrument executed by Merger Sub, Parent, the Company and the Seller Representative; and
WHEREAS, the Parties desire to amend the Merger Agreement as set forth in this Amendment to clarify and adjust certain transactions and other matters related to Closing.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, the parties hereto agree as follows:
Section 1 Definitions. Capitalized terms used herein without definition shall have the meanings ascribed to such terms in the Merger Agreement unless otherwise indicated.
Section 2 Amendment to the Merger Agreement.
| A. | Amendment to Section 1.2(a) of the Merger Agreement. Section 1.2(a) of the Merger Agreement is hereby amended and restated in its entirety to read as follows: |
(a) Treatment of DFC Warrants. Immediately prior to the Closing, each DFC Warrant shall be cancelled and converted on a cashless exercise basis (i.e., net of any applicable exercise price for such DFC Warrants) into the right of such holder of such DFC Warrant to receive (A) the portion of Aggregate Cash Merger Consideration that such holder is entitled to receive in accordance with the Funds Flow, and (B) the portion of Aggregate Stock Merger Consideration that such holder is entitled to receive in respect of such DFC Warrants in accordance with the Funds Flow; provided that (x) in no event shall the portion of the Aggregate Cash Merger Consideration and the portion of the Aggregate Stock Merger Consideration to be received by DFC in accordance with the Funds Flow be less than the portion of the Aggregate Cash Merger Consideration and the portion of the Aggregate Stock Merger Consideration that would have been received by DFC had the DFC Warrants been exercised and converted into Shares immediately prior to the Closing, and (y) the cancellation of the DFC Warrants shall not adversely affect the non-economic rights that would have been received by DFC under this Agreement and the Warrant Documentation (as such term is defined under the Retained Finance Agreement) had the DFC Warrants been exercised and converted into Shares immediately prior to the Closing. The Parties intend for this conversion to be treated for U.S. federal income tax purposes as the exercise and conversion of the DFC Warrants into Shares immediately prior to the Closing, followed by the cancellation of such Shares in exchange for a right to receive Merger Consideration.
| B. | Amendment to Section 1.3(a) of the Merger Agreement. Section 1.3(a) of the Merger Agreement is
hereby amended by deleting the language indicated with |
(a) Conversion
of Shares. At the Effective Time, by virtue of the Merger and without any action on the part of Parent, Merger Sub, the Company or
the Company Shareholders, each Share issued and outstanding as of immediately prior to the Effective Time shall be canceled and extinguished
and, after giving effect to the Orion Payment, and the exercise cancellation
and conversion of the DFC Warrants contemplated by Section 1.2(a) and the exercise of the
Company Shareholder Warrants contemplated by Section 1.2(b), each holder of Shares shall be entitled to receive,
at the Closing, (A) a payment by wire transfer of immediately available funds to the account(s) designated by the Company in the Closing
Payment Certificate, of the portion of the Aggregate Cash Merger Consideration such holder is entitled to receive in accordance with the
Funds Flow, which amounts shall be calculated in accordance with the Charter, applicable Law and any Contracts or other agreements governing
or otherwise applicable to the preparation of the Funds Flow and (B) the portion of the Aggregate Stock Merger Consideration such holder
is entitled to receive in accordance with the Funds Flow, which amounts shall be calculated in accordance with the Charter, applicable
Law and any Contracts or other agreements governing or otherwise applicable to the preparation of the Funds Flow, in each case without
any deduction, offset or withholding except as expressly required pursuant to Section 1.7.
| C. | Amendment to Section 1.3(e)(i) of the Merger Agreement. Section 1.3(e)(i) of the Merger Agreement
is hereby amended by deleting the language indicated with |
| (e) | Treatment of Company Options. |
| (i) | At the Effective Time, each Company Option that is not a Performance-Vesting Option, shall automatically,
without any action by Parent, the Company or any holder of such Company Option, become fully-vested and then cancelled and converted on
a cashless exercise basis (i.e. net of any applicable exercise price for such Company Options) into the right of such holder of such Company
Option to receive (A) the portion of Aggregate Cash Merger Consideration that such holder is entitled to receive in accordance with the
Funds Flow, and (B) the portion of Aggregate Stock Merger Consideration that such holder is entitled to receive in respect of such Company
Options in accordance with the Funds Flow, in each case, subject to any applicable Tax withholdings and deductions in accordance with
Section 1.7. The consideration payable pursuant to clause (A) shall be |
| D. | Amendment to Section 1.3(f) of the Merger Agreement. Section 1.3(f) of the Merger Agreement is
hereby amended by deleting the language indicated with |
| (f) | Treatment of Company RSUs. At the Effective Time, each Company RSU, whether vested or unvested,
shall automatically, without any action by Parent, the Company or any holder of such Company RSU, become fully vested and then
cancelled and converted into the right of such holder of such Company RSU to receive (A) the portion of Aggregate Cash Merger Consideration
that such holder is entitled to receive in accordance with the Funds Flow, and (B) the portion of Aggregate Stock Merger Consideration
that such holder is entitled to receive in respect of such Company RSUs in accordance with the Funds Flow, in each case, subject to any
applicable Tax withholdings and deductions in accordance with Section 1.7. The consideration payable pursuant to clauses (A)
shall be |
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| E. | Amendment to Section 1.3(g) of the Merger Agreement. Section 1.3(g) of the Merger Agreement is
hereby amended by deleting the language indicated with |
| (g) | Treatment of Company SARs. At the Effective Time, each Company SAR, whether vested or unvested,
shall automatically, without any action by Parent, the Company or any holder of such Company SAR, become fully vested and then cancelled
and converted on a cashless exercise basis (i.e. net of the applicable reference price for such Company SARs) into the right of such holder
of such Company SAR to receive (A) the portion of Aggregate Cash Merger Consideration that such holder is entitled to receive in accordance
with the Funds Flow, and (B) the amount of Aggregate Stock Merger Consideration that such holder is entitled to receive in respect of
such Company SARs in accordance with the Funds Flow, in each case, subject to any applicable Tax withholdings and deductions in accordance
with Section 1.7. The consideration payable pursuant to clause (A) shall be |
| F. | Amendment to Section 1.4(a) of the Merger Agreement. Section 1.4(a)(iii) of the Merger Agreement
is hereby amended by deleting the language indicated with |
(a) Closing Payment Certificate.
Not more than ten (10) Business Days (but at least five (5) Business Days) prior to the Closing Date, the Company shall prepare in good
faith and deliver to Parent a certificate (the “Closing Payment Certificate”), setting forth (i) the Company’s
calculation of (A) the Merger Consideration, (B) the Aggregate Cash Merger Consideration, (C) the Aggregate Stock Merger Consideration,
and (D) the Orion Payment; and (ii) a funds flow memorandum setting forth payment instructions and call back information with respect
to each payment to be made pursuant to this Agreement or otherwise by or for the benefit of the Company on the Closing Date, together
with a signed letter on each payment recipient’s letterhead which references the applicable wire instructions set forth in the Funds
Flow and includes a call-back person (other than the signatory of such letter) which letter, in respect of any recipient of transaction
expenses, provides that upon payment of such amount, all amounts due to such payee by the Company for services rendered in connection
with this Agreement and the other Transaction Documents and the transactions contemplated hereby and thereby (whether rendered prior to
or after the Closing) shall be paid in full; (iii) the aggregate amount (including of the Aggregate Cash Merger Consideration
and the Aggregate Stock Merger Consideration) to be paid to Orion, the holder(s) of DFC Warrants, each
Company Shareholder and each Company Equity Award Holder at Closing in accordance with this Agreement, and
the amount of any Amounts Due (as defined in that certain Warrant Acknowledgment and Cancellation Agreement to be entered into among Parent,
the Company and DFC (the “Warrant Acknowledgment and Cancellation Agreement”)); (iv) with respect to each Company
Option, the number of Shares subject thereto, the number of Shares subject thereto that are vested and unvested (including the number
of unvested shares underlying the Performance-Vesting Option (assuming 100% achievement of the Balanced Performance Index (as defined
in the award agreement evidence such Performance-Vesting Option), the vesting schedule, the exercise price, the Tax status of such Company
Option, and whether the holder thereof is an Accredited Investor; (v) with respect to each Company RSU, the number of Shares subject thereto,
the number of Shares subject thereto that are vested and unvested, the vesting schedule; (vi) with respect to each Company SAR, the number
of stock appreciation rights granted thereto, the number of stock appreciation rights that are vested and unvested, the vesting schedule,
the reference price, and the Tax status of such Company SAR; and (vii) each Company Shareholder’s Pro Rata Share. The Company shall
deliver supporting calculations and documentation of such calculations concurrently with the delivery of such Closing Payment Certificate
(the foregoing clauses (ii) through (vii), the “Funds Flow”). The Funds Flow shall be prepared in accordance with this
Agreement, the Charter, the Orion Agreement, the DFC Warrants, the Warrant Acknowledgment and Cancellation Agreement,
applicable Law and any Contracts or other agreements governing or otherwise applicable to the preparation of the Funds Flow, and shall
be in form and substance consistent with Exhibit G (as adjusted for any changes to the information therein occurring between the
date of this Agreement and the Closing Date permitted by this Agreement). Parent shall have the right to review and comment on the Closing
Payment Certificate and Funds Flow, and the Company shall consider in good faith any such comments and shall incorporate any comments
that correctly identify any inconsistency between the Closing Payment Certificate or the Funds Flow and this Agreement, the Charter, or
the Orion Agreement or the DFC Warrants or the Warrant Acknowledgment and Cancellation Agreement. The
Company shall consult with Parent and its accountants with respect to the preparation of the Closing Payment Certificate. Notwithstanding
anything to the contrary set forth herein, in no event shall the aggregate Merger Consideration paid at the Effective Time exceed an amount
equal to the Merger Consideration. An illustrative Funds Flow is attached here to as Exhibit G. Not more than ten (10) Business
Days (but at least five (5) Business Days) prior to the Closing Date, the Company shall deliver to Parent a written notice setting forth
good faith estimates of (1) the amount of Cash held by the Company and its Subsidiaries as of the Closing and (2) the amount of outstanding
Indebtedness incurred by the Company and its Subsidiaries as of the Closing
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| G. | Amendment to Section 1.6(b) of the Merger Agreement. Section 1.6(b) of the Merger Agreement is
hereby amended by deleting the language indicated with |
(b) Payment
of Merger Consideration. At the Closing, Parent shall: (A) (i) deposit with the Paying Agent
an amount equal to the portion of the Aggregate Cash Merger Consideration payable to Company Shareholders,
holder(s) of the DFC Warrants, Orion and Company Equity Award Holders who are not employees or former employees of the Company or any
Company Subsidiarywith the Paying Agent, and (ii) deposit with the Paying Agent the portion of
the Aggregate Stock Merger Consideration issuable to Company Shareholders, holder(s) of the DFC Warrants, Orion and Company Equity
Award Holders who are not employees or former employees of the Company or any Company Subsidiarywith the Paying Agent,
in each case, which Parent shall cause the Paying Agent to pay to the Company Shareholders, Company Equity Award Holders who
are not employees or former employees of the Company or any Company Subsidiary, holder(s) of the DFC Warrants and Orion, in
accordance with the Funds Flow, this Agreement and the Paying Agent Agreement and (B) (i) pay, or cause to be paid through the
payroll system of the Surviving Company or a Company Subsidiary, as applicable, with the first payroll payments processed after ten (10)
Business Days following the later of the date the holder delivers an executed Equity Award Acknowledgment to the Company and the Effective
Time, the portion of the Aggregate Cash Merger Consideration payable to the Company Equity Award Holders who are employees or former employees
of the Company or any Company Subsidiary in accordance with Section 1.3, including subject to any applicable Tax withholdings and deductions
in accordance with Section 1.7, and (ii) instruct its transfer agent to issue and hold for the benefit of the Company Equity Award Holders
who are employees or former employees of the Company or any Company Subsidiary the portion of the Aggregate Stock Merger Consideration
issuable to the Company Equity Award Holders in accordance with Section 1.3, including subject to any applicable Tax withholdings and
deductions in accordance with Section 1.7, no later than ten (10) Business Days following the later of the date the holder delivers an
executed Equity Award Acknowledgment to the Company and the Effective Time, in each case in accordance with the Funds Flow, this Agreement
and the Paying Agent Agreement.
| H. | Amendment to Section 4.1(vii) of the Merger Agreement. Section 4.1(vii) of the Merger Agreement
is hereby amended by deleting the language indicated with |
(vii) (A) issue, sell, pledge, dispose of, encumber or transfer any equity securities, securities convertible, exchangeable or exercisable into equity securities, or warrants, options or other rights to acquire equity securities, of the Company or any Company Subsidiary, (B) amend any term of any such equity security, or (C) issue, sell, grant, amend, modify or accelerate the vesting of, any Company Equity Award or any other option, warrant, right, restricted stock unit or other equity award, in each case, except for the initial issuance of the DFC Warrants and the cancellation and conversion of the same in accordance with Section 1.2(a);
| I. | Amendment to Section 4.17 of the Merger Agreement. Section 4.17 of the Merger Agreement is hereby amended by adding the following new subsection (c): |
(c) The Parties acknowledge and agree that the Incremental Loan (as defined in the Retained Finance Agreement) will not be transferred to, or assumed by, Merger Sub in connection with, or as a result of, the Merger or any of the other transactions contemplated by this Agreement, and the Incremental Loan shall not, at any time, constitute an obligation or instrument of Merger Sub. In connection with the foregoing, prior to the Closing and in accordance with, and subject to the terms of, the Warrant Acknowledgment and Cancellation Agreement, (i) all Amounts Due (as defined in the Warrant Acknowledgment and Cancellation Agreement) shall be paid in cash by the Company and (ii) the outstanding principal amount of the Incremental Loan shall be deemed repaid in full and all obligations of the Company in respect thereof shall be deemed irrevocably satisfied and discharged.
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| J. | Amendment to Section 10.1 of the Merger Agreement. Section 10.1 of the Merger Agreement is hereby amended by adding the language indicated with bold, italic, underlining as follows: |
10.1 No Third-Party Beneficiaries. This Agreement shall be binding upon and inure solely to the benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement; provided, that (a) any Person that is not a party to this Agreement but, by the terms of Section 5.2, Section 9.3, or Section 9.4 is entitled to indemnification, release or waiver, as applicable, shall be considered a third party beneficiary of this Agreement, with full rights of enforcement as though such Person was a signatory to this Agreement and (b) with respect to Section 1.2(a), DFC shall be considered a third party beneficiary, with full rights of enforcement as though DFC was a signatory to this Agreement. Notwithstanding anything herein to the contrary, in the event this Agreement is validly terminated pursuant to Article VII, the rights granted pursuant to this Section 10.1 and the provisions of Section 7.2 with respect to the recovery of damages based on the losses suffered by the holders of Shares (including the loss of the economic benefit of the transactions contemplated by this Agreement to the holders of Shares) shall only be enforceable on behalf of the holders of Shares by the Company in its sole and absolute discretion, as agent for the holders of Shares, it being understood and agreed that any and all interests in the recovery of such losses or any such claim shall attach to the Shares and subsequently be transferable therewith and, consequently, any damages, settlements, awards or other amounts recovered or received by the Company with respect to such losses or claims (net of expenses incurred by the Company in connection therewith or in connection with the entry into and negotiation of this Agreement or any of the transactions contemplated by this Agreement) may, among other things, and in the Company’s sole and absolute discretion: (i) be distributed, in whole or in part, by the Company to the record holders of the Shares as of any date determined by the Company in its sole and absolute discretion or (ii) be retained by the Company for the use and benefit of the Company on behalf of holders of Shares in any manner the Company deems fit in its sole and absolute discretion.
Section 3 No Other Amendments; Ratification. Except as expressly provided in this Amendment, all of the terms and provisions of the Merger Agreement are and shall remain in full force and effect and are hereby ratified and confirmed by the parties hereto. The amendments contained herein shall not be construed as an amendment to or waiver of any other provision of the Merger Agreement or as a waiver of or consent to any further or future action on the part of any party that would require the waiver or consent of any other party.
Section 4 Effect of Amendment. On and after the date of this Amendment, each reference in the Merger Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of like import referring to the Merger Agreement shall mean and be a reference to the Merger Agreement as amended by this Amendment. In the event of any inconsistency between the terms of this Amendment and the terms of the Merger Agreement, the terms of this Amendment shall control.
Section 5 Incorporation by Reference. The provisions of Article X (Miscellaneous) of the Merger Agreement shall, to the extent not already set forth in this Amendment, apply mutatis mutandis to this Amendment, and to the Merger Agreement as modified by this Amendment, taken together as a single agreement, reflecting the terms as modified hereby.
Section 6 Counterparts. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Amendment by electronic transmission shall be effective as delivery of a manually executed counterpart of this Amendment.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first above written.
| PARENT: | ||
| USA RARE EARTH, INC. | ||
| By: | /s/ William Robert Steele, Jr. | |
| Name: | William Robert Steele, Jr. | |
| Title: | Chief Financial Officer | |
| MERGER SUB: | ||
| MIDDLEBURY MERGER SUB LTD. | ||
| By: | /s/ William Robert Steele, Jr. | |
| Name: | William Robert Steele, Jr. | |
| Title: | Chief Financial Officer | |
[Signature Page to Amendment No. 2 to Agreement and Plan of Merger]
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first above written.
| THE COMPANY: | ||
| SVRE HOLDINGS LTD. | ||
| By: | /s/ Justin Stewart Machin | |
| Name: | Justin Stewart Machin | |
| Title: | Director | |
| THE SELLER REPRESENTATIVE: | ||
| SERRA VERDE RARE EARTHS LTD., | ||
| solely in its capacity as the Seller Representative hereunder | ||
| By: | /s/ Justin Machin | |
| Name: | Justin Machin | |
| Title: | Authorized Person | |
[Signature Page to Amendment No. 2 to Agreement and Plan of Merger]
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Exhibit 10.1
REGISTRATION RIGHTS AGREEMENT
BY AND AMONG
USA RARE EARTH, INC.,
AND
THE STOCKHOLDERS PARTY HERETO
Dated as of September 3, 2026
TABLE OF CONTENTS
| Page | |||
| Article I Resale Registration | 1 | ||
| Section 1.1 | Resale Registration Statement | 1 | |
| Section 1.2 | Sufficient Number of Shares Registered | 2 | |
| Section 1.3 | Effectiveness Period | 2 | |
| Section 1.4 | Subsequent Shelf Registration | 2 | |
| Section 1.5 | Supplements and Amendments | 3 | |
| Section 1.6 | Subsequent Holder Notice | 3 | |
| Section 1.7 | Allowable Delays | 4 | |
| Section 1.8 | Rule 415; Cutback | 4 | |
| Section 1.9 | Requests for Underwritten Shelf Registration Takedowns | 5 | |
| Section 1.10 | Reduction in Underwritten Offering | 5 | |
| Section 1.11 | Withdrawal | 5 | |
| Section 1.12 | Block Trade | 6 | |
| Section 1.13 | Aggregate Yearly Limit | 6 | |
| Article II Company Registration | 6 | ||
| Section 2.1 | Notice of Registration | 6 | |
| Section 2.2 | Underwriting | 7 | |
| Section 2.3 | Right to Terminate Registration | 8 | |
| Article III Additional Provisions Regarding Registration Rights | 8 | ||
| Section 3.1 | Registration Procedures | 8 | |
| Section 3.2 | Limitation on Subsequent Registration Rights | 10 | |
| Section 3.3 | Expenses of Registration | 10 | |
| Section 3.4 | Information by Holders | 10 | |
| Section 3.5 | Rule 144 Reporting | 11 | |
| Section 3.6 | “Market Stand-Off” Agreement | 12 | |
| Section 3.7 | Insider Trading Policy | 12 | |
| Section 3.8 | Removal of Legends. | 12 | |
| Article IV Indemnification | 13 | ||
| Section 4.1 | Indemnification by Company | 13 | |
| Section 4.2 | Indemnification by Holders | 13 | |
| Section 4.3 | Notification | 14 | |
| Section 4.4 | Contribution | 14 | |
| Article V Termination of Registration Rights | 14 | ||
| Section 5.1 | Termination of Registration Rights | 14 | |
| Article VI Miscellaneous | 14 | ||
| Section 6.1 | Counterparts | 14 | |
| Section 6.2 | Governing Law; Waiver of Jury Trial. | 15 | |
| Section 6.3 | Entire Agreement; No Third Party Beneficiary | 15 | |
| Section 6.4 | Expenses | 16 | |
| Section 6.5 | Notices | 16 | |
| Section 6.6 | Successors and Assigns | 16 | |
| Section 6.7 | Headings | 17 | |
| Section 6.8 | Amendments and Waivers | 17 | |
| Section 6.9 | Interpretation; Absence of Presumption | 17 | |
| Section 6.10 | Severability | 17 | |
i
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as of September 3, 2026, by and among USA Rare Earth, Inc., a Delaware corporation (“Company”), and the stockholders listed on Schedule A hereto (collectively, the “Holders” and each individually, a “Holder”). Capitalized terms used but not defined elsewhere herein are defined in Exhibit A.
WHEREAS, the Company is a party to that certain Agreement and Plan of Merger, dated as of April 19, 2026 (as amended, supplemented or otherwise modified from time to time, the “Merger Agreement”), by and among the Company, Middlebury Merger Sub Ltd., a business company limited by shares incorporated under the laws of the British Virgin Islands and an indirect, wholly owned subsidiary of the Company (“Merger Sub”), SVRE Holdings Ltd., a business company limited by shares incorporated under the laws of British Virgin Islands (“SVRE”), and the Seller Representative, pursuant to which, among other things, on the date hereof, Merger Sub merged with and into SVRE, with SVRE continuing on as the surviving entity and an indirect, wholly owned subsidiary of the Company, on the terms and conditions set forth therein (the “Transactions”);
WHEREAS, on or about the date hereof, pursuant to the Merger Agreement, the Holders are receiving common stock, par value $0.0001 per share, of the Company (the “Transaction Shares”); and
WHEREAS, in connection with the consummation of the Transactions and as a condition to each of the parties’ obligations under the Merger Agreement, the parties hereto desire to enter into this Agreement for the purpose of granting certain registration and other rights to the Holders on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
Article
I
Resale Registration
Section 1.1 Resale Registration Statement. The Company shall file on the first (1st) Business Day after the date hereof (the “Filing Deadline”) a Shelf Registration Statement covering the sale or distribution from time to time by the Holders, on a delayed or continuous basis pursuant to Rule 415 of the Securities Act of all of the Registrable Securities on Form S-3 (except if the Company is not then eligible to register for resale the Registrable Securities on Form S-3, then such registration shall be on Form S-1 or another appropriate form and shall provide for the registration of such Registrable Securities for resale by such Holders in accordance with any reasonable method of distribution elected by the Qualified Holders) (the “Resale Registration Statement” and, such registration, the “Resale Registration”), and the Company shall use its reasonable best efforts to cause such Resale Registration Statement to be declared effective by the Commission as promptly as reasonably practicable after the filing thereof, but in any event no later than the earlier of (a) the date that is seventy five (75) days after the filing of such Resale Registration Statement if the Commission notifies the Company that it will “review” the Resale Registration Statement and (b) the tenth (10th) Business Day after the date the Company is notified (orally or in writing, whichever is earlier) by the Commission that the Registration Statement will not be “reviewed” or will not be subject to further review (the earlier of such dates, the “Effectiveness Deadline”). Such Registration Statement shall not include any shares of Common Stock or other securities for the account of any other holder of securities of the Company without the prior written consent of the Qualified Holders.
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Section 1.2 Sufficient Number of Shares Registered. In the event the number of shares available under the Shelf Registration Statement at any time is insufficient to cover all of the Registrable Securities, the Company shall, to the extent necessary and permissible, promptly amend the Shelf Registration Statement or file a new registration statement (together with any prospectuses or prospectus supplements thereunder, a “New Registration Statement”), so as to cover all of such Registrable Securities as soon as reasonably practicable, but in any event not later than ten (10) Business Days after the necessity therefor arises (the “New Registration Filing Deadline”). The Company shall use its reasonable best efforts to have such amendment and/or New Registration Statement become effective as soon as reasonably practicable following the filing thereof but no later than the earlier of (a) the seventy fifth (75th) calendar day following the initial filing date of the New Registration Statement if the SEC notifies the Company that it will “review” the New Registration Statement and (b) the tenth (10th) Business Day after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that the New Registration Statement will not be “reviewed” or will not be subject to further review (the earlier of such dates, the “New Registration Effectiveness Deadline”).
Section 1.3 Effectiveness Period. Once declared effective, the Company shall, subject to the other applicable provisions of this Agreement, use its reasonable best efforts to cause the Resale Registration Statement and any New Registration Statement to be continuously effective and usable until such time as there are no longer any Registrable Securities (the “Effectiveness Period”).
Section 1.4 Subsequent Shelf Registration. If any Shelf Registration ceases to be effective under the Securities Act for any reason at any time during the Effectiveness Period, the Company shall use its reasonable best efforts to promptly cause such Shelf Registration to again become effective under the Securities Act (including obtaining the prompt withdrawal of any order suspending the effectiveness of such Shelf Registration), and in any event shall within thirty (30) days of such cessation of effectiveness, amend such Shelf Registration in a manner reasonably expected to obtain the withdrawal of any order suspending the effectiveness of such Shelf Registration or, file an additional registration statement (a “Subsequent Shelf Registration”) for an offering to be made on a delayed or continuous basis pursuant to Rule 415 of the Securities Act registering the resale from time to time by Holders thereof of all securities that are Registrable Securities as of the time of such filing. If a Subsequent Shelf Registration is filed, the Company shall use its reasonable best efforts to (a) cause such Subsequent Shelf Registration to become effective under the Securities Act as promptly as is reasonably practicable after such filing, but in no event later than the date that is seventy five (75) days after such Subsequent Shelf Registration is filed and (b) keep such Subsequent Shelf Registration (or another Subsequent Shelf Registration) continuously effective until the end of the Effectiveness Period. Any such Subsequent Shelf Registration shall be a Registration Statement on Form S-3 to the extent that the Company is eligible to use such form, and otherwise on Form S-1, and if the Company is a WKSI as of the filing date, such Registration Statement shall be an Automatic Shelf Registration Statement. Otherwise, such Subsequent Shelf Registration shall be on another appropriate form and shall provide for the registration of such Registrable Securities for resale by such Holders in accordance with any reasonable method of distribution elected by the Qualified Holders.
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Section 1.5 Supplements and Amendments. The Company shall supplement and amend any Shelf Registration if required by the rules, regulations or instructions applicable to the registration form used by the Company for such Shelf Registration if required by the Securities Act or as reasonably requested by the Qualified Holders covered by such Shelf Registration.
Section 1.6 Subsequent Holder Notice. If a Person becomes a Holder of Registrable Securities after a Shelf Registration becomes effective under the Securities Act, the Company shall, as promptly as is reasonably practicable following delivery of written notice to the Company of such Person becoming a Holder and requesting for its name to be included as a selling securityholder in the prospectus related to the Shelf Registration (a “Subsequent Holder Notice”):
(a) if required and permitted by applicable law, file with the Commission a supplement to the related prospectus or a post-effective amendment to the Shelf Registration so that such Holder is named as a selling securityholder in the Shelf Registration and the related prospectus in such a manner as to permit such Holder to deliver a prospectus to purchasers of the Registrable Securities in accordance with applicable law, provided, however, that the Company shall not be required to file more than one post-effective amendment or a supplement to the related prospectus for such purpose in any forty-five (45) day period;
(b) if, pursuant to Section 1.6(a), the Company shall have filed a post-effective amendment to the Shelf Registration that is not automatically effective, use its reasonable best efforts to cause such post-effective amendment to become effective under the Securities Act as promptly as is reasonably practicable, but in any event by the date that is seventy five (75) days after the date such post-effective amendment is required by Section 1.6(a) to be filed; and
(c) notify such Holder as promptly as is reasonably practicable after the effectiveness under the Securities Act of any post-effective amendment filed pursuant to Section 1.6(a).
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Section 1.7 Allowable Delays. On no more than two occasions and for not more than thirty (30) consecutive days or for a total of not more than sixty (60) days in any twelve (12) month period, the Company may suspend the use of any prospectus included in any Registration Statement, in the event that the Company determines in good faith and upon advice of legal counsel that such suspension is necessary to (A) delay the disclosure of material non-public information concerning the Company, the disclosure of which at the time is not, in the good faith opinion of the Company, in the best interests of the Company or (B) amend or supplement the affected Registration Statement or the related prospectus so that such Registration Statement or prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the case of the prospectus in light of the circumstances under which they were made, not misleading (an “Allowed Delay”); provided, that the Company shall promptly (a) notify each Holder in writing of the commencement of an Allowed Delay, but shall not (without the prior written consent of a Holder) disclose to such Holder any material non-public information giving rise to an Allowed Delay, (b) advise the Holders in writing to cease all sales under the Registration Statement until the end of the Allowed Delay and (c) use commercially reasonable efforts to terminate an Allowed Delay as promptly as practicable. Each Holder may deliver written notice (an “Opt-Out Notice”) to the Company requesting that such Holder not receive notices from the Company otherwise required by this Section 1.8; provided, however, that such Holder may later revoke any such Opt-Out Notice in writing, which shall be effective five (5) Business Days after the receipt thereof. Following receipt of an Opt-Out Notice from a Holder (unless subsequently revoked), the Company shall not deliver any notices pursuant to Section 3.1 to such Holder and such Holder shall no longer be entitled to the rights associated with any such notice.
Section 1.8 Rule 415; Cutback. If at any time the SEC takes the position that the offering of some or all of the Registrable Securities in any Registration Statement is not eligible to be made on a delayed or continuous basis under the provisions of Rule 415 under the Securities Act (provided, however, the Company shall be obligated to use reasonable best efforts to advocate with the SEC for the registration of all of the Registrable Securities) or requires any Holder to be named as an “underwriter,” the Company shall (i) promptly notify each holder of Registrable Securities thereof and (ii) make commercially reasonable efforts to persuade the SEC that the offering contemplated by such Registration Statement is a valid secondary offering and not an offering “by or on behalf of the issuer” as defined in Rule 415 and that none of the Holders is an “underwriter.” The Holders shall have the right to select one legal counsel designated by the Holders, at such Holders’ expense, to review and oversee any registration or matters pursuant to this Section 1.9, including participation in any meetings or discussions with the SEC regarding the SEC’s position and to comment on any written submission made to the SEC with respect thereto. No such written submission with respect to this matter shall be made to the SEC to which such Holders’ counsel reasonably objects. In the event that, despite the Company’s reasonable best efforts and compliance with the terms of this Section 1.9, the SEC refuses to alter its position, the Company shall (i) remove from such Registration Statement such portion of the Registrable Securities (the “Cut Back Shares”) and/or (ii) agree to such restrictions and limitations on the registration and resale of the Registrable Securities as the SEC may require to assure the Company’s compliance with the requirements of Rule 415 (collectively, the “SEC Restrictions”); provided, however, that the Company shall not name any Holder as an “underwriter” in such Registration Statement without the prior written consent of such Holder (provided that, in the event a Holder withholds such consent, the Company shall have no obligation hereunder to include any Registrable Securities of such Holder in any Registration Statement covering the resale thereof until such time as the SEC no longer requires such Holder to be named as an “underwriter” in such Registration Statement or such Holder otherwise consents in writing to being so named). Any cut-back imposed on the Holders pursuant to this Section 1.9 shall be allocated among the Holders on a pro rata basis and shall be applied first to any of the Registrable Securities of such Holder as such Holder shall designate, unless the SEC Restrictions otherwise require or provide or the Holders otherwise agree. The Company’s obligations under this Article I with respect to any Cut Back Shares shall be suspended until such date as the Company is able to effect the registration of such Cut Back Shares in accordance with any SEC Restrictions applicable to such Cut Back Shares (such date, the “Restriction Termination Date”); from and after such Restriction Termination Date, all of the provisions of this Article I (including the Company’s obligations with respect to the filing of a Registration Statement and its obligations to use reasonable efforts to have such Registration Statement declared effective within the time periods set forth herein) shall again be applicable to such Cut Back Shares; provided, however, that the date by which the Company is required to file the Registration Statement with respect to such Cut Back Shares shall be the tenth (10th) day following the Restriction Termination Date and the date by which the Company is required to have the Registration Statement effective with respect to such Cut Back Shares shall be the seventy fifth (75th) calendar day immediately after the Restriction Termination Date.
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Section 1.9 Requests for Underwritten Shelf Registration Takedowns. At any time and from time to time when an effective Shelf Registration is on file with the Commission, Qualified Holders holding a Demanding Percentage (in each such case, the “Demanding Holders”) may request to sell all or any portion of their Registrable Securities in an Underwritten Offering that is registered pursuant to the Shelf Registration (each, an “Underwritten Shelf Takedown”); provided that the Company shall only be obligated to effect an Underwritten Shelf Takedown if such offering shall include Registrable Securities proposed to be sold by the Demanding Holder, either individually or together with other Demanding Holders, with a total offering price reasonably expected to exceed, in the aggregate, $100 million (the “Minimum Takedown Threshold”). All requests for Underwritten Shelf Takedowns shall be made by giving written notice to the Company, specifying the approximate number of Registrable Securities proposed to be sold in the Underwritten Shelf Takedown. The Company shall give written notice of the proposed filing of such Underwritten Shelf Takedown to all of the Qualified Holders of Registrable Securities as soon as practicable but not less than ten (10) days before the anticipated filing date of such Underwritten Shelf Takedown, which notice shall offer to all of the Qualified Holders of Registrable Securities the opportunity to include in such registered offering such number of Registrable Securities as such Qualified Holders may request in writing within five (5) days after receipt of such written notice (with each Qualified Holder requesting inclusion in such Shelf Takedown, a “Requesting Holder”). The Demanding Holders shall have the right to select the lead managing Underwriter for such offering (which shall consist of one or more reputable nationally recognized investment banks), subject to the Company’s prior approval (which shall not be unreasonably withheld, conditioned or delayed). The Company shall have the right to select any co-managing Underwriters for such offering, subject to the Demanding Holders’ prior approval (which shall not be unreasonably withheld, conditioned or delayed). Subject to Section 1.12, the Qualified Holders may demand not more than three (3) Underwritten Shelf Takedowns pursuant to this Section 1.9 in any twelve (12) month period (the “Yearly Limit”); provided, however, that (i) any Underwritten Shelf Takedown that is not consummated for any reason other than the voluntary withdrawal by the Demanding Holders (without cause attributable to the Company or its underwriters) shall not count against the Yearly Limit, (ii) if the Holders are unable to sell at least 75% of the Registrable Securities requested to be included in an Underwritten Shelf Takedown due to a cutback pursuant to Section 1.10, such Underwritten Shelf Takedown shall not count against the Yearly Limit, and (iii) no individual Qualified Holder (or its Affiliates) may demand more than one Underwritten Shelf Takedown pursuant to this Section 1.9 in any twelve (12) month period.
Section 1.10 Reduction in Underwritten Offering. If the managing Underwriter or Underwriters in an Underwritten Shelf Takedown, in good faith, advises the Company, the Demanding Holders, the Requesting Holders (if any) that the dollar amount or number of Registrable Securities that the Demanding Holders and the Requesting Holders (if any) desire to sell, taken together with all other shares of Common Stock or other equity securities that the Company desires to sell and all other shares of Common Stock or other equity securities, if any, that have been requested to be sold in such Underwritten Offering pursuant to separate written contractual piggy-back registration rights held by any other stockholders, exceeds the maximum dollar amount or maximum number of equity securities that can be sold in the Underwritten Offering without adversely affecting the proposed offering price, the timing, the distribution method, or the probability of success of such offering (such maximum dollar amount or maximum number of such securities, as applicable, the “Maximum Number of Securities”), then the Company shall include in such Underwritten Offering, before including any shares of Common Stock or other equity securities proposed to be sold by Company or by other holders of shares of Common Stock or other equity securities, the Registrable Securities of the Demanding Holders and Requesting Holders (pro rata based on the respective number of Registrable Securities that each such Holder has requested be included in such Underwritten Shelf Takedown) that can be sold without exceeding the Maximum Number of Securities.
Section 1.11 Withdrawal. Prior to the filing of the applicable “red herring” Prospectus or Prospectus supplement used for marketing such Underwritten Shelf Takedown, any Demanding Holder initiating an Underwritten Shelf Takedown shall have the right to withdraw from such Underwritten Shelf Takedown for any or no reason whatsoever upon written notification (a “Withdrawal Notice”) to the Company and the Underwriter or Underwriters (if any) of their intention to withdraw from such Underwritten Shelf Takedown provided that the Requesting Holders may elect to have the Company continue an Underwritten Shelf Takedown if the Minimum Takedown Threshold would still be satisfied by the Registrable Securities proposed to be sold in the Underwritten Shelf Takedown by the Requesting Holders. If withdrawn, a demand for an Underwritten Shelf Takedown shall constitute a demand for an Underwritten Shelf Takedown by the withdrawing Demanding Holder for purposes of Section 1.10, unless (x) such Demanding Holder reimburses the Company for all Registration Expenses with respect to such Underwritten Shelf Takedown (or, if there is more than one Demanding Holder, a pro rata portion of such Registration Expenses based on the respective number of Registrable Securities that each Demanding Holder has requested be included in such Underwritten Shelf Takedown) or (y) such withdrawal is the result of a suspension notice as contemplated by Section 3.1(m) or (n). Following the receipt of any Withdrawal Notice, the Company shall promptly forward such Withdrawal Notice to any other Qualified Holders that had elected to participate in such Shelf Takedown. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with a Shelf Takedown prior to its withdrawal under this Section 1.12, other than if a Demanding Holder elects to pay such Registration Expenses.
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Section 1.12 Block Trade. Notwithstanding any other provision of this Article I, at any time and from time to time when an effective Shelf Registration Statement is on file with the Commission, if a Demanding Holder wishes to engage in an underwritten registered offering not involving a “roadshow,” an offer commonly known as a “block trade” (a “Block Trade”), with a total offering price reasonably expected to exceed, in the aggregate, either (x) $100 million or (y) all remaining Registrable Securities held by the Demanding Holder, then such Demanding Holder only needs to notify the Company of the Block Trade at least five (5) business days prior to the day such offering is to commence and the Company shall as expeditiously as possible use its commercially reasonable efforts to facilitate such Block Trade; provided that the Demanding Holders representing a majority of the Registrable Securities wishing to engage in the Block Trade shall use commercially reasonable efforts to work with the Company and any Underwriters prior to making such request in order to facilitate preparation of the Registration Statement, Prospectus and other offering documentation related to the Block Trade. The Company shall give written notice of the proposed Block Trade to all of the Qualified Holders as soon as practicable but not less than four (4) days before the anticipated filing date of such Block Trade, which notice shall offer to all of the Qualified Holders the opportunity to include in such Block Trade such number of Registrable Securities as such Qualified Holders may request in writing within two (2) days after receipt of such written notice (with each Qualified Holder requesting inclusion in such Block Trade, a “Requesting Holder” and with any reductions in such number of securities to be included in such Block Trade to be governed by Section 1.10). Prior to the filing of the applicable “red herring” Prospectus or Prospectus supplement used in connection with a Block Trade, any Demanding Holder initiating such Block Trade shall have the right to submit a Withdrawal Notice to the Company and the Underwriter or Underwriters (if any) of their intention to withdraw from such Block Trade. The Demanding Holder in a Block Trade shall have the right to select the Underwriters for such Block Trade (which shall consist of one or more reputable nationally recognized investment banks). For the avoidance of doubt, any Block Trade effected pursuant to this Section 1.12 shall not be counted as a demand for an Underwritten Shelf Takedown pursuant to Section 1.9 and shall not count toward the Yearly Limit.
Section 1.13 Aggregate Yearly Limit. Notwithstanding anything to the contrary in this Agreement, (i) in no event may the number of Block Trades demanded pursuant to Section 1.12 plus the number of Underwritten Shelf Takedowns demanded pursuant to Section 1.9 exceed a total of three (3) demands in any twelve (12) month period and (ii) in no event may the number of Block Trades demanded pursuant to Section 1.12 plus the number of Underwritten Shelf Takedowns demanded pursuant to Section 1.9 by any individual Qualified Holder (or its Affiliates) exceed one (1) demand in any twelve (12) month period.
Article
II
Company Registration
Section 2.1 Notice of Registration. If at any time or from time to time the Company shall determine to file a registration statement with respect to an offering (or to make an underwritten public offering pursuant to a previously filed registration statement) of its Common Stock, whether or not for its own account (other than a registration statement on Form S-4, Form S-8 or any successor forms, an Underwritten Shelf Takedown or a Block Trade), the Company will:
(a) promptly give to the Holders written notice thereof, which notice shall be given, to the extent reasonably practicable, no less than five (5) Business Days prior to the filing or launch date (except in the case of an offering that is an “overnight offering”, in which case such notice must be given no later than one (1) Business Day prior to the filing or launch date); and
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(b) subject to Section 2.2, include in such registration or underwritten offering (and any related qualification under blue sky laws or other compliance) all the Registrable Securities specified in a written request or requests made within ten (10) days after receipt of such written notice from the Company by the Holders.
Each Holder may deliver written notice (an “Opt-Out Notice”) to the Company requesting that such Holder not receive notices from the Company otherwise required by this Section 2.1; provided, however, that such Holder may later revoke any such Opt-Out Notice in writing, which shall be effective five (5) Business Days after the receipt thereof. Following receipt of an Opt-Out Notice from a Holder (unless subsequently revoked), the Company shall not deliver any notices pursuant to Section 3.1 to such Holder and such Holder shall no longer be entitled to the rights associated with any such notice.
Section 2.2 Underwriting. The right of any Holder to registration pursuant to this Article II shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of Registrable Securities in the underwriting to the extent provided herein. Each Holder proposing to distribute its securities through such underwriting shall (together with the Company and the other holders distributing their securities through such underwriting) enter into and perform such Holder’s obligations under an underwriting agreement with the managing underwriter selected for such underwriting by the Company or by the stockholders of the Company who have the right to select the underwriters (such underwriting agreement to be in the form negotiated by the Company or such stockholders, as the case may be). Notwithstanding any other provision of this Article II, if the managing underwriter or underwriters of a proposed underwritten offering with respect to which Holders of Registrable Securities have exercised their piggyback registration rights advise the Board of Directors of the Company that in its or their opinion the number of Registrable Securities requested to be included in the offering thereby and all other securities proposed to be sold in the offering exceeds the number which can be sold in such underwritten offering in light of market conditions, the Registrable Securities and such other securities to be included in such underwritten offering shall be allocated, (a) first, (i) in the event such offering was initiated by the Company, up to the total number of securities that the Company has requested to be included in such registration, (ii) in the event such offering was initiated by the holders of securities (other than the Holders) who have exercised their demand registration rights, up to the total number of securities that such holders of such securities have requested to be included in such offering, and (iii) in the event such offering was initiated by the Holders who have exercised their demand registration rights, up to the total number of securities that such Holders of such securities have requested to be included in such offering, (b) second, and only if all the securities referred to in clause (a) have been included, up to the total number of securities that the Holders and other holders of securities that have contractual rights to be included in such registration have requested to be included in such offering (pro rata based upon the number of securities that each of them shall have requested to be included in such offering) and (c) third, and only if all the securities referred to in clause (b) have been included, all other securities proposed to be included in such offering that, in the opinion of the managing underwriter or underwriters can be sold without having such adverse effect. If any Holder disapproves of the terms of any such underwriting, such Holder may elect to withdraw therefrom by written notice to the Company and the managing underwriter or underwriters. Any securities excluded or withdrawn from such underwriting shall be withdrawn from such registration.
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Section 2.3 Right to Terminate Registration. The Company or the holders of securities who have caused a registration statement to be filed as contemplated by this Article II, as the case may be, shall have the right to have any registration initiated by it or them under this Article II terminated or withdrawn prior to the effectiveness thereof, whether or not any Holder has elected to include securities in such registration.
Article
III
Additional Provisions Regarding Registration Rights
Section 3.1 Registration Procedures. In the case of each registration effected by the Company pursuant to Article I or Article II, the Company will keep each Holder participating in such registration reasonably informed as to the status thereof and, at its expense, the Company will:
(a) prepare and file with the Commission a registration statement with respect to such securities in accordance with the applicable provisions of this Agreement;
(b) prepare and file with the Commission such amendments, including post-effective amendments, and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement (including to permit the intended method of distribution thereof) and as may be necessary to keep the registration statement continuously effective for the period set forth in this Agreement;
(c) furnish to the Holders and to the legal counsel of the Holders participating in such registration copies of the registration statement proposed to be filed, and provide the Holders and such legal counsel the reasonable opportunity to review and comment on such registration statement;
(d) furnish to the Holders and to the underwriters of the securities being registered such reasonable number of copies of the registration statement, preliminary prospectus and final prospectus as such underwriters may reasonably request in order to facilitate the public offering of such securities;
(e) use reasonable best efforts to notify the Holders of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the Company’s knowledge of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading or incomplete in the light of the circumstances then existing, and, subject to Section 3.1(n), at the request of the Holders, prepare promptly and furnish to the Holders a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchaser of such shares, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading or incomplete in the light of the circumstances then existing;
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(f) use reasonable best efforts to register and qualify the securities covered by such registration statement under such other securities or blue sky laws of such jurisdictions as shall be reasonably requested by the Holders; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions;
(g) in the event that the Registrable Securities are being offered in an underwritten public offering, enter into and perform its obligations under an underwriting agreement on customary terms and in accordance with the applicable provisions of this Agreement;
(h) in connection with an underwritten public offering, cause its officers to use their reasonable best efforts to support the marketing of the Registrable Securities covered by such offering (including participation in “road shows” or other similar marketing efforts);
(i) if such securities are being sold through underwriters, (i) furnish, on the date that such Registrable Securities are delivered to the underwriters, an opinion, dated as of such date, of the legal counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters, if any, and a “negative assurance letter,” dated as of such date, of the legal counsel representing the Company for purposes of such registration, in form and substance as is customarily given to underwriters and (ii) furnish, on the date of the underwriting agreement and on the date that the Registrable Securities are delivered to the underwriters, a letter dated as of such date, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the underwriters; and
(j) use reasonable best efforts to list the Registrable Securities covered by such registration statement with any securities exchange on which the Common Stock is then listed;
(k) in connection with a customary due diligence review, make available for inspection by the Holders, any underwriter participating in any such disposition of Registrable Securities, if any, and any counsel or accountants retained by the Holders or underwriter (collectively, the “Offering Persons”), all financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries, and cause the officers, directors and employees of the Company and its subsidiaries to supply all information and participate in customary due diligence sessions in each case reasonably requested by any such representative, underwriter, counsel or accountant in connection with such registration statement, subject to customary confidentiality obligations to be agreed with the Offering Persons;
(l) cooperate with the Holders and each underwriter or agent participating in the disposition of Registrable Securities and their respective counsel in connection with any filings required to be made with FINRA;
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(m) as promptly as is reasonably practicable notify the Holders (i) when the prospectus or any prospectus supplement or post-effective amendment has been filed and, with respect to such registration statement or any post-effective amendment, when the same has become effective, (ii) of any request by the Commission or other federal or state governmental authority for amendments or supplements to such registration statement or related prospectus or to amend or to supplement such prospectus or for additional information, (iii) of the issuance by the Commission of any stop order suspending the effectiveness of such registration statement or the initiation of any proceedings for such purpose, (iv) if at any time the Company has reason to believe that the representations and warranties of the Company or any of its subsidiaries contained in any agreement (including any underwriting agreement contemplated by Section 3.1(g) above) cease to be true and correct or (v) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose; and
(n) Each Holder agrees not to use the prospectus or registration statement during any Allowed Delay.
Section 3.2 Limitation on Subsequent Registration Rights. From and after the date hereof, the Company shall not enter into any agreement granting any holder or prospective holder of any securities of the Company registration rights with respect to such securities that conflict with the rights granted to the Holders herein, without the prior written consent of the Holders. It is agreed that the granting of pro rata registration rights to any other investor in the Company shall not be considered to conflict with the rights granted to the Holders herein.
Section 3.3 Expenses of Registration. All Registration Expenses incurred in connection with any registration pursuant to Article I or Article II shall be borne by the Company. All Selling Expenses relating to securities registered on behalf of the Holders shall be borne by the Holders of the registered securities included in such registration.
Section 3.4 Information by Holders. The Holder or Holders of Registrable Securities included in any registration shall furnish to the Company such information regarding such Holder or Holders and their Affiliates, the Registrable Securities held by them and the distribution proposed by such Holder or Holders and their Affiliates as the Company may reasonably request in writing and as shall be required in connection with any registration, qualification or compliance referred to in this Agreement. It is understood and agreed that the obligations of the Company under Article I or Article II are conditioned on the timely provisions of the foregoing information by such Holder or Holders and, without limitation of the foregoing, will be conditioned on compliance by such Holder or Holders with the following:
(a) such Holder or Holders will, and will cause their respective Affiliates to, cooperate with the Company in connection with the preparation of the applicable registration statement, and for so long as the Company is obligated to keep such registration statement effective, such Holder or Holders will and will cause their respective Affiliates to, provide to the Company, in writing and in a timely manner, for use in such registration statement (and expressly identified in writing as such), all information regarding themselves and their respective Affiliates and such other information as may be required by applicable law to enable the Company to prepare such registration statement and the related prospectus covering the applicable Registrable Securities owned by such Holder or Holders and to maintain the currency and effectiveness thereof;
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(b) during such time as such Holder or Holders and their respective Affiliates may be engaged in a distribution of the Registrable Securities, such Holder or Holders will, and they will cause their Affiliates to, comply with all laws applicable to such distribution, including Regulation M promulgated under the Exchange Act, and, to the extent required by such laws, will, and will cause their Affiliates to, among other things: (i) not engage in any stabilization activity in connection with the securities of the Company in contravention of such laws; (ii) distribute the Registrable Securities acquired by it solely in the manner described in the applicable registration statement; and (iii) if required by applicable law, cause to be furnished to each agent or broker-dealer to or through whom such Registrable Securities may be offered, or to the offeree if an offer is made directly by such Holder or Holders or their respective Affiliates, such copies of the applicable prospectus (as amended and supplemented to such date) and documents incorporated by reference therein as may be required by such agent, broker-dealer or offeree;
(c) such Holder or Holders shall, and they shall cause their respective Affiliates to, permit the Company and its representatives and agents to examine such documents and records and will supply in a timely manner any information as they may be reasonably requested to provide in connection with the offering or other distribution of Registrable Securities by such Holder or Holders; and
(d) on receipt of written notice from the Company of the happening of any of the events specified in Section 3.1(m) or Section 3.1(n), or that requires the suspension by such Holder or Holders and their respective Affiliates of the distribution of any of the Registrable Securities owned by such Holder or Holders, then such Holders shall, and they shall cause their respective Affiliates to, cease offering or distributing the Registrable Securities owned by such Holder or Holders until the offering and distribution of the Registrable Securities owned by such Holder or Holders may recommence in accordance with the terms hereof and applicable law.
Section 3.5 Rule 144 Reporting. With a view to making available the benefits of Rule 144 to the Holders, the Company agrees that, for so long as a Holder owns Registrable Securities, the Company will use reasonable best efforts to:
(a) make and keep public information available, as those terms are understood and defined in Rule 144;
(b) file with the Commission in a timely manner all reports and other documents required of the Company under the Exchange Act; and
(c) so long as a Holder owns any Restricted Securities, furnish to the Holder forthwith upon written request a written statement by the Company as to its compliance with the reporting requirements of the Exchange Act.
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Section 3.6 “Market Stand-Off” Agreement. In connection with any underwritten offering of equity securities of the Company, the Company shall cause each executive officer or director of the Company to agree that it shall not Transfer any shares of Common Stock or other equity securities of the Company (other than those included in such offering pursuant to this Agreement), without the prior written consent of the Company, during the ninety (90) day period (or such shorter time agreed to by the managing underwriters) beginning on the date of pricing of such offering, except (i) to Permitted Transferees, (ii) as expressly permitted in writing by the Company or (iii) in the event the underwriters managing the offering otherwise consent in writing. Each such Holder agrees to execute a customary lock-up agreement in favor of the underwriters to such effect (in each case on substantially the same terms and conditions as all other Holders).
Section 3.7 Insider Trading Policy. So long as any designee or nominee of any Holder or its Affiliate sits on the Board of Directors of the Company, such Holder shall, and shall cause its Affiliates, to comply with the Company’s insider trading policy, including by not trading in the Company’s securities during any “black-out” or “closed window” imposed thereunder.
Section 3.8 Removal of Legends.
(a) The Company agrees that following the Unrestricted Date, it will, no later than five (5) trading days following the delivery by a Holder to the Company or the transfer agent (with a copy to the Company) of certificates representing Registrable Securities with a Securities Act restrictive legend, together with a written request for the removal of such Securities Act restrictive legend (or if the Registrable Securities are uncertificated, just a written request for the removal of such Securities Act restrictive legend), use reasonable best efforts to deliver or cause to be delivered to such Holder one or more certificates representing such Registrable Securities that are free from all Securities Act restrictive legends. The Company shall use reasonable best efforts to cause its counsel to issue a legal opinion to the Company’s transfer agent promptly after the Unrestricted Date if required by the transfer agent to effect the removal of the Securities Act restrictive legend. No Holder shall be required to pay for or deliver any such legal opinion, and shall only be required to deliver a standard representation letter in connection with a sale or proposed sale under Rule 144. The Company shall be responsible for the fees of the applicable transfer agent, its legal counsel and all DTC fees associated with such issuance, including the fees for causing its counsel to deliver a legal opinion, if any, to the transfer agent and Holder shall be responsible for all other fees and expenses (including any applicable broker fees or transfer taxes). Certificates for Registrable Securities subject to removal of the Securities Act restrictive legend shall, at the written request of the Holder, be transmitted by the transfer agent to the Holder by crediting the account of the Holder’s prime broker with the Depository Trust Company System as directed by such Holder.
(b) While any Registrable Securities are issued and outstanding, the Company shall maintain a transfer agent that participates in the DTC Fast Automated Securities Transfer Program.
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Article
IV
Indemnification
Section 4.1 Indemnification by Company. To the extent permitted by applicable law, the Company will, with respect to any Registrable Securities as to which registration or qualification or compliance under applicable “blue sky” laws has been effected pursuant to this Agreement, indemnify each Holder, each Holder’s current and former officers, directors, partners and members, and each Person controlling such Holder within the meaning of Section fifteen (15) of the Securities Act, and each underwriter thereof, if any, and each Person who controls any such underwriter within the meaning of Section fifteen (15) of the Securities Act (collectively, the “Company Indemnified Parties”), against all expenses, claims, losses, damages and liabilities, joint or several, (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any registration statement, prospectus, preliminary prospectus, offering circular or other document, or any amendment or supplement thereto incident to any such registration, qualification or compliance or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, or any violation by the Company of any rule or regulation promulgated under the Securities Act, Exchange Act or state securities laws applicable to the Company in connection with any such registration, and the Company will reimburse each of the Company Indemnified Parties for any reasonable legal and any other expenses reasonably incurred in connection with investigating, preparing or defending any such claim, loss, damage, liability or action, as such expenses are incurred. The indemnity agreement contained in this Section 4.1 shall not apply to amounts paid in settlement of any loss, claim, damage, liability or action if such settlement is effected without the prior written consent of the Company (which consent shall not be unreasonably withheld or delayed), nor shall the Company be liable to a Holder in any such case for any such loss, claim, damage, liability or action (a) to the extent that it arises out of or is based upon a violation or alleged violation of any state or federal law (including any claim arising out of or based on any untrue statement or alleged untrue statement or omission or alleged omission in the registration statement or prospectus) which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by or on behalf of any Holder or (b) in the case of a sale directly by a Holder of Registrable Securities (including a sale of such Registrable Securities through any underwriter retained by such Holder engaging in a distribution solely on behalf of such Holder), such untrue statement or alleged untrue statement or omission or alleged omission was corrected in a final or amended prospectus, and such Holder failed to deliver a copy of the final or amended prospectus at or prior to the confirmation of the sale of the Registrable Securities to the Person asserting any such loss, claim, damage or liability in any case in which such delivery is required by the Securities Act.
Section 4.2 Indemnification by Holders. To the extent permitted by applicable law, each Holder will, if Registrable Securities held by such Holder are included in the securities as to which such registration or qualification or compliance under applicable “blue sky” laws is being effected, indemnify, severally and not jointly, the Company, each of its directors, officers, partners and members, each underwriter, if any, of the Company’s securities covered by such a registration, each Person who controls the Company or such underwriter within the meaning of Section fifteen (15) of the Securities Act, and each other Holder and each of such Holder’s officers, directors, partners and members and each Person controlling such Holder within the meaning of Section fifteen (15) of the Securities Act (collectively, the “Holder Indemnified Parties”), against all expenses, claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any registration statement, prospectus, preliminary prospectus, offering circular or other document, or any amendment or supplement thereto incident to any such registration, qualification or compliance or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, or any violation by such Holder of any rule or regulation promulgated under the Securities Act, Exchange Act or state securities law applicable to such Holder, and will reimburse each of the Holder Indemnified Parties for any reasonable legal or any other expenses reasonably incurred in connection with investigating, preparing or defending any such claim, loss, damage, liability or action, as such expenses are incurred, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular or other document in reliance upon and in conformity with written information furnished to the Company by such Holder and stated to be specifically for use therein, provided, however, that in no event shall any indemnity under this Section 4.2 payable by a Holder exceed the amount by which the net proceeds actually received by such Holder from the sale of Registrable Securities included in such registration exceeds the amount of any other losses, expenses, settlements, damages, claims and liabilities that such Holder has been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission or violation. The indemnity agreement contained in this Section 4.2 shall not apply to amounts paid in settlement of any loss, claim, damage, liability or action if such settlement is effected without the prior written consent of the applicable Holder (which consent shall not be unreasonably withheld or delayed), nor shall the Holder be liable for any such loss, claim, damage, liability or action where such untrue statement or alleged untrue statement or omission or alleged omission was corrected in a final or amended prospectus, and the Company or the underwriters failed to deliver a copy of the final or amended prospectus at or prior to the confirmation of the sale of the Registrable Securities to the Person asserting any such loss, claim, damage or liability in any case in which such delivery is required by the Securities Act
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Section 4.3 Notification. Each party entitled to indemnification under this Article IV (the “Indemnified Party”) shall give notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom, provided, however, that counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation, shall be approved by the Indemnified Party (whose approval shall not unreasonably be withheld or delayed), and the Indemnified Party may participate in such defense at such party’s expense; provided, further, however, that an Indemnified Party (together with all other Indemnified Parties) shall have the right to retain one (1) separate counsel, with the reasonable fees and expenses to be paid by the Indemnifying Party, if representation of such Indemnified Party by the counsel retained by the Indemnifying Party would be inappropriate due to conflicting interests between such Indemnified Party and any other party represented by such counsel in such proceeding. The failure of any Indemnified Party to give notice as provided herein shall relieve the Indemnifying Party of its obligations under this Article IV, only to the extent that, the failure to give such notice is materially prejudicial or harmful to an Indemnifying Party’s ability to defend such action. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the prior written consent of each Indemnified Party (which consent shall not be unreasonably withheld or delayed), consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation. The indemnity agreements contained in this Article IV shall not apply to amounts paid in settlement of any loss, claim, damage, liability or action if such settlement is effected without the prior written consent of the Indemnifying Party, which consent shall not be unreasonably withheld or delayed. The indemnification set forth in this Article IV shall be in addition to any other indemnification rights or agreements that an Indemnified Party may have.
Section 4.4 Contribution. If the indemnification provided for in this Article IV is held by a court of competent jurisdiction to be unavailable to an Indemnified Party, other than pursuant to its terms, with respect to any claim, loss, damage, liability or action referred to therein, then, subject to the limitations contained in Article IV, the Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, shall contribute to the amount paid or payable by such Indemnified Party as a result of such claim, loss, damage, liability or action in such proportion as is appropriate to reflect (i) the relative benefits to the Indemnified Party, on the one hand, and Indemnifying Party, on the other hand, of the registration giving rise to such action and (ii) the relative fault of the Indemnifying Party on the one hand and the Indemnified Party on the other in connection with the actions that resulted in such claims, loss, damage, liability or action, as well as any other relevant equitable considerations. The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact related to information supplied by the Indemnifying Party or by the Indemnified Party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Holders agree that it would not be just and equitable if contribution pursuant to this Section 4.4 were based solely upon the number of entities from whom contribution was requested or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 4.4. In no event shall any Holder’s contribution obligation under this Section 4.4 exceed the amount by which the net proceeds actually received by such Holder from the sale of Registrable Securities included in such registration exceeds the amount of any other losses, expenses, settlements, damages, claims and liabilities that such Holder has been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission or violation. No Person guilty of fraudulent misrepresentation (within the meaning of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.
Article
V
Termination of Registration Rights
Section 5.1 Termination of Registration Rights. The rights of any particular Holder to cause the Company to register securities under Article I and Article II shall terminate with respect to such Holder upon the date upon which such Holder no longer holds any Registrable Securities.
Article
VI
Miscellaneous.
Section 6.1 Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and will become effective when one or more counterparts have been signed by a party and delivered to the other parties. Copies of executed counterparts transmitted by telecopy, telefax or other electronic transmission service shall be considered original executed counterparts for purposes of this Section 6.1, provided that receipt of copies of such counterparts is confirmed.
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Section 6.2 Governing Law; Waiver of Jury Trial.
(a) This Agreement shall be governed by, and construed in accordance with, the laws of the state of New York, without giving effect to any choice of law or conflict of law rules or provisions (whether of the state of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the state of New York.
(b) Any dispute relating hereto shall be heard first in any New York State court, or Federal court of the United States of America, sitting in New York, and if applicable, any appellate court from any thereof under the laws of the State of New York (each a “Chosen Court” and collectively, the “Chosen Courts”), and the parties agree to the exclusive jurisdiction and venue of the Chosen Courts. Such Persons further agree that any proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby or by any matters related to the foregoing (the “Applicable Matters”) shall be brought exclusively in a Chosen Court, and that any proceeding arising out of this Agreement or any other Applicable Matter shall be deemed to have arisen from a transaction of business in the state of New York, and each of the foregoing Persons hereby irrevocably consents to the jurisdiction of such Chosen Courts in any such proceeding and irrevocably and unconditionally waives, to the fullest extent permitted by law, any objection that such Person may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such Chosen Court or that any such proceeding brought in any such Chosen Court has been brought in an inconvenient forum.
(c) Such Persons further covenant not to bring a proceeding with respect to the Applicable Matters (or that could affect any Applicable Matter) other than in such Chosen Court and not to challenge or enforce in another jurisdiction a judgment of such Chosen Court.
(d) Process in any such proceeding may be served on any Person with respect to such Applicable Matters anywhere in the world, whether within or without the jurisdiction of any such Chosen Court. Without limiting the foregoing, each such Person agrees that service of process on such party as provided in Section 6.5 shall be deemed effective service of process on such Person.
(e) Waiver of Jury Trial. EACH PARTY HERETO, FOR ITSELF AND ITS AFFILIATES, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR OTHER PROCEEDING (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THE ACTIONS OF THE PARTIES HERETO OR THEIR RESPECTIVE AFFILIATES PURSUANT TO THIS AGREEMENT OR IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.
Section 6.3 Entire Agreement; No Third Party Beneficiary. This Agreement, including the exhibits hereto and the other Transaction Documents (as defined in the Merger Agreement), contains the entire agreement by and among the parties with respect to the subject matter hereof and all prior negotiations, writings and understandings relating to the subject matter of this Agreement. Except as provided in Article IV, this Agreement is not intended to confer upon any Person not a party hereto (or their successors and permitted assigns) any rights or remedies hereunder.
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Section 6.4 Expenses. Except as provided in Section 3.3, all fees, costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby, including accounting and legal fees shall be paid by the party incurring such expenses.
Section 6.5 Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given or made as follows: (a) if sent by registered or certified mail in the United States return receipt requested, upon receipt; (b) if sent by nationally recognized overnight air courier, one (1) Business Day after mailing; (c) if sent by e-mail transmission, with a copy sent on the same day in the manner provided in Section 6.5(a) or (b), when transmitted and receipt is confirmed; and (d) if otherwise actually personally delivered, when delivered, provided, that such notices, requests, demands and other communications are delivered to the address set forth below, or to such other address as any party shall provide by like notice to the other parties to this Agreement:
If to the Company, to:
USA Rare Earth, Inc.
100 W. Airport Road
Stillwater, OK 74075
Attention: Valerie Jacob
Email: [email protected]
with a copy (which shall not constitute notice) to:
Latham & Watkins LLP
10250 Constellation Blvd., Suite 1100
Los Angeles, California 90067
Attention: Steven Stokdyk; David Zaheer
Email: [email protected]; [email protected]
if to the Holders: to the address set forth opposite such Holder’s name on the signature page hereto:
with a copy to (which shall not constitute notice):
Allen Overy Shearman Sterling US LLP
2601 Olive Street, 17th Floor
Dallas, Texas 75201
Attention: Michael Walraven
Email: [email protected]
Section 6.6 Successors and Assigns. This Agreement will be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. No assignment of this Agreement or of any rights or obligations hereunder may be made by any party hereto without the prior written consent of the other parties hereto, provided that each Holder hereunder may assign its rights hereunder to any Permitted Transferee. Any purported assignment or delegation in violation of this Agreement shall be null and void ab initio.
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Section 6.7 Headings. The Section, Article and other headings contained in this Agreement are inserted for convenience of reference only and will not affect the meaning or interpretation of this Agreement.
Section 6.8 Amendments and Waivers. This Agreement may not be modified or amended except by an instrument or instruments in writing signed by the Company and each of the Qualified Holders; provided that, to the extent any such modification or amendment effected by the Company and the Qualified Holders has a material and disparate impact on any Holder, then such modification or amendment may not be affected without the written consent of such Holder. Any party hereto may, only by an instrument in writing, waive compliance by any other party or parties hereto with any term or provision hereof on the part of such other party or parties hereto to be performed or complied with. No failure or delay of any party in exercising any right or remedy hereunder shall operate as a waiver thereof, nor will any single or partial exercise of any right or power, or any abandonment or discontinuance of steps to enforce such right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The waiver by any party hereto of a breach of any term or provision hereof shall not be construed as a waiver of any subsequent breach. The rights and remedies of the parties hereunder are cumulative and are not exclusive of any rights or remedies that they would otherwise have hereunder.
Section 6.9 Interpretation; Absence of Presumption.
(a) For the purposes hereof: (i) words in the singular shall be held to include the plural and vice versa and words of one gender shall be held to include the other gender as the context requires; (ii) the terms “hereof,” “herein,” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section and paragraph references are to the Sections and paragraphs in this Agreement unless otherwise specified; (iii) the word “including” and words of similar import when used in this Agreement shall mean “including, without limitation,” unless the context otherwise requires or unless otherwise specified; and (iv) the word “or” shall not be exclusive.
(b) With regard to each and every term and condition of this Agreement, the parties hereto understand and agree that the same have or has been mutually negotiated, prepared and drafted, and if at any time the parties hereto desire or are required to interpret or construe any such term or condition, no consideration will be given to the issue of which party hereto actually prepared, drafted or requested any term or condition of this Agreement.
Section 6.10 Severability. Any provision hereof that is held to be invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, shall be ineffective only to the extent of such invalidity, illegality or unenforceability, without affecting in any way the remaining provisions hereof, provided, however, that the parties will attempt in good faith to reform this Agreement in a manner consistent with the intent of any such ineffective provision for the purpose of carrying out such intent.
(Signature pages follow.)
17
IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first above written.
| USA RARE EARTH, INC. | |||
| By: | /s/ William Robert Steele, Jr. | ||
| Name: | William Robert Steele, Jr. | ||
| Title: | Chief Financial Officer | ||
[Signature Page to Registration Rights Agreement]
| STOCKHOLDERS | |||
| Serra Verde Rare Earths Ltd. | |||
| By: | /s/ Justin Machin | ||
| Name: | Justin Machin | ||
| Title: | Director, Serra Verde Rare Earths Ltd. | ||
| EMG Fund V SVRE Holdings, LLC | |||
| By: | /s/ John Calvert | ||
| Name: | John Calvert | ||
| Title: | Co-CEO | ||
| VB (Rare Earths) Limited | |||
| By: | /s/ Harry Alexander Rouillard | ||
| Name: | Harry Alexander Rouillard | ||
| Title: | Director | ||
| MVB Investment Holdings LLC | |||
| By: | /s/ Anthony T. Fiore | ||
| Name: | Anthony T. Fiore | ||
| Title: | President & Secretary of MVB Investment Holdings LLC | ||
[Signature Page to Registration Rights Agreement]
| OMF Fund III (F) Ltd. | |||
| By: | /s/ Istvan Zollei | ||
| Name: | Istvan Zollei | ||
| Title: | Authorized Signatory | ||
| United States International Development Finance Corporation | |||
| By: | /s/ Danielle Montgomery | ||
| Name: | Danielle Montgomery | ||
| Title: | Vice President | ||
| /s/ Thrasyvoulos Moraitis | |||
| Thrasyvoulos Moraitis | |||
| /s/ Scott Lewis | |||
| Scott Lewis | |||
| /s/ David Ovejero Cienfuegos | |||
| David Ovejero Cienfuegos | |||
| /s/ Natasa Bircher | |||
| Natasa Bircher | |||
| /s/ Kevin Thomas-McPhee | |||
| Kevin Thomas-McPhee | |||
[Signature Page to Registration Rights Agreement]
| Risk Academy Ltd. | |||
| By: | /s/ Alexei Sidorenko | ||
| Name: | Alexei Sidorenko | ||
| Title: | Director | ||
| ByrneIT Ltd. | |||
| By: | /s/ Patrick Matthew Byrne | ||
| Name: | Patrick Matthew Byrne | ||
| Title: | Director | ||
| Enemco GmbH | |||
| By: | /s/ Markus Noethiger | ||
| Name: | Markus Noethiger | ||
| Title: | ENEMCO Director | ||
| /s/ Juan Manuel Pastor Piccardo | |||
| Juan Manuel Pastor Piccardo | |||
| /s/ Joe Norville | |||
| Joe Norville | |||
| /s/ Ian Pearce | |||
| Ian Pearce | |||
[Signature Page to Registration Rights Agreement]
EXHIBIT A
DEFINED TERMS
1. The following capitalized terms have the meanings indicated:
“Affiliate” of any Person means any Person, directly or indirectly, controlling, controlled by or under common control with such Person.
“Automatic Shelf Registration Statement” means an “automatic shelf registration statement” as defined under Rule 405.
“Business Day” means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by law to be closed in the City of New York, and on which the Commission is open for business.
“Commission” means the Securities and Exchange Commission.
“Common Stock” means the Company’s common stock, par value $0.0001 per share.
“Demanding Percentage” shall mean at least 10% of the Registrable Securities held by all Holders.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any similar successor federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect from time to time.
“Holder” means any holder holding Registrable Securities.
“Permitted Transferees” means persons to whom a holder of Registrable Securities is permitted to transfer such Registrable Securities prior to the expiration of the applicable lock-up period pursuant to the applicable Lockup Agreement (as defined in the Merger Agreement).
“Person” means an individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization, other legal entity, or any government or governmental agency or authority.
“Qualified Holder” means each of Serra Verde Rare Earths Ltd., EMG Fund V SVRE Holdings, LLC and VB Rare Earths Limited, including Affiliates of each of them.
“register”, “registered” and “registration” refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of the effectiveness of such registration statement.
A-1
“Registrable Securities” means (a) the Aggregate Stock Merger Consideration (including any shares of Common Stock hereafter acquired pursuant to any share holdback or similar arrangement), and (b) any Common Stock or other securities actually issued in respect of the securities described in clause (a) above or this clause (b) upon any stock split, stock dividend, recapitalization, reclassification, merger, consolidation or similar event; provided, however, that the securities described in clauses (a) and (b) above shall only be treated as Registrable Securities until the earliest of: (i) the date on which such security has been registered under the Securities Act and disposed of in accordance with an effective registration statement relating thereto; (ii) the date on which such security has been sold pursuant to Rule 144 and the security is no longer a Restricted Security; or (iii) the date on which all Registrable Securities owned by the Holder thereof may be resold without any volume or manner of sale restrictions pursuant to Rule 144.
“Registration Expenses” means all expenses incurred by the Company in complying with Article I and Article II, including, without limitation, all registration, qualification, listing and filing fees, printing expenses, escrow fees, fees and disbursements of counsel for the Company, blue sky fees and expenses, and the expense of any special audits incident to or required by any such registration.
“Registration Statement” means any registration statement of the Company under the Securities Act that covers the resale of any of the Registrable Securities pursuant to the provisions of this Agreement, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all material incorporated by reference in such Registration Statement.
“Restricted Securities” means any Common Stock required to bear any of the Securities Act restrictive legends set forth in Section 5.7 of the Merger Agreement.
“Rule 144” means Rule 144 promulgated under the Securities Act and any successor provision.
“Rule 405” means Rule 405 promulgated under the Securities Act and any successor provision.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder or any similar federal statute and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time.
“Selling Expenses” means all underwriting discounts, selling commissions and stock transfer taxes applicable to the securities registered by the Holders.
“Shelf Registration” means the Resale Registration or a Subsequent Shelf Registration, as applicable.
“Transfer” shall mean the (i) sale or assignment of, offer to sell, contract or agreement to sell, hypothecation, pledge, grant of any option to purchase or otherwise dispose of or agreement to dispose of, directly or indirectly, or establishment or increase of a put equivalent position or liquidation with respect to or decrease of a call equivalent position within the meaning of Section 16 of the Exchange Act with respect to, any security, (ii) entry into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any security, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (iii) public announcement of any intention to effect any transaction specified in clause (i) or (ii).
A-2
“Underwriter” shall mean a securities dealer who purchases any Registrable Securities as principal in an Underwritten Offering and not as part of such dealer’s market-making activities.
“Underwritten Offering” shall mean a Registration Statement in which securities of the Company are sold to an Underwriter in a firm commitment underwriting for distribution to the public.
“Unrestricted Date” means, with respect to any Registrable Securities, the earliest of the date that (a) a Registration Statement registering the sale of such Registrable Securities has been declared effective by the Commission, (b) all of the Registrable Securities have been sold pursuant to Rule 144 or may be sold pursuant to Rule 144 without the requirement for the Company to be in compliance with the current public information required under Rule 144 and without volume or manner-of-sale restrictions or (c) following the one (1) year anniversary of the Closing Date (as defined in the Merger Agreement), provided that (i) the Holder holding such Registrable Securities is not an Affiliate of the Company, (ii) all of the Registrable Securities may be sold pursuant to an exemption from registration under Section 4(a)(1) of the Securities Act without volume or manner-of-sale restrictions and (iii) the Company’s legal counsel has delivered to such Holder a standing written unqualified opinion that resales of such Registrable Securities may then be made by such Holder pursuant to such exemption, which opinion shall be in form and substance reasonably acceptable to such Holder.
“WKSI” means a “well known seasoned issuer” as defined under Rule 405.
2. The following terms are defined in the Sections of this Agreement indicated:
INDEX OF TERMS
| Term | Section | |
| Agreement | Preamble | |
| Applicable Matters | Section 6.2(b) | |
| Chosen Court | Section 6.2(b) | |
| Company | Preamble | |
| Company Indemnified Parties | Section 4.1 | |
| Effectiveness Period | Section 1.3 | |
| Filing Deadline | Section 1.1 | |
| Holder | Preamble | |
| Holder Indemnified Parties | Section 4.2 | |
| Indemnified Party | Section 4.3 | |
| Indemnifying Party | Section 4.3 | |
| Merger Agreement | Recitals | |
| Merger Sub | Recitals | |
| Offering Persons | Section 3.1(k) | |
| Resale Registration | Section 1.1 | |
| Resale Registration Statement | Section 1.1 | |
| Subsequent Holder Notice | Section 1.6 | |
| Subsequent Shelf Registration | Section 1.4 | |
| SVRE | Preamble | |
| Transaction Shares | Recitals |
A-3
SCHEDULE A
STOCKHOLDERS
| 1. | Serra Verde Rare Earths Ltd. |
| 2. | EMG Fund V SVRE Holdings, LLC |
| 3. | VB Rare Earths Limited |
| 4. | MVB Investment Holdings LLC |
| 5. | OMF Fund III (F) Ltd. |
| 6. | United Stated Developmental Finance Corporation |
| 7. | Thrasyvoulos Moraitis |
| 8. | Scott Lewis |
| 9. | David Ovejero Cienfuegos |
| 10. | Natasa Bircher |
| 11. | Kevin Thomas-McPhee |
| 12. | Risk Academy Ltd., Alexei Sidorenko |
| 13. | ByrneIT Ltd. |
| 14. | Enemco GmbH |
| 15. | Juan Manuel Pastor Piccardo |
| 16. | Joe Norville |
| 17. | Ian Pearce |
Exhibit 10.2
BOARD APPOINTMENT AGREEMENT
This BOARD APPOINTMENT AGREEMENT (this “Agreement”), dated as of September 3, 2026, by and among USA Rare Earth, Inc., a Delaware corporation (the “Parent”) and VB (Rare Earths) Limited, a limited company incorporated under the Laws of Guernsey (the “Investor”).
| 1. | Board Appointment Rights. |
(a) Following the Closing and subject to the terms and conditions contained herein, as long as the 5% Beneficial Ownership Requirement is met the Investor shall have the right to (i) designate one (1) Investor Designee for appointment or election to the Board of Directors of Parent (the “Board”) and (ii) remove a duly elected or appointed Investor Director as a member of the Board (but only to the extent the Parent has the right to cause such removal). For the avoidance of doubt, from and after such time as the Investor first ceases to satisfy the 5% Beneficial Ownership Requirement, the designation and removal rights under immediately foregoing clauses (i) and (ii), respectively, shall terminate, and, at the Board’s request, the Investor shall take all actions within its control to cause the Investor Director to resign from the Board.
(b) Subject to the terms and conditions contained herein, the Parent shall include the Investor Designee designated by the Investor in the Parent’s slate of nominees for the applicable annual meeting of the Parent’s stockholders and shall recommend that the Parent’s stockholders vote in favor of such Investor Designee and shall support the Investor Designee in a manner no less rigorous and favorable than the manner in which the Parent supports its other nominees (taking into consideration applicable Securities Laws and fiduciary duties). Without the prior written consent of the Investor, subject to the terms and conditions contained herein, so long as the Investor is entitled to designate an Investor Designee for election to the Board, the Board shall (i) not remove any Investor Director from his or her directorship, (ii) not recommend voting against such Investor Designee and (iii) recommend voting against any action or proposal to remove such Investor Designee. In the event that the 5% Beneficial Ownership Requirement ceases to be satisfied during the term of an Investor Designee as a director, the Investor Designee shall not be required to resign solely as a result thereof and may continue the remainder of his or her term in office in accordance with the terms of this Agreement.
(c) In the event of the death, disability, resignation or removal of any Investor Director as a member of the Board or an Investor Designee is not elected at any annual meeting of Parent’s stockholders, the Investor, if it is entitled to designate an Investor Designee pursuant to this Agreement, may designate an Investor Designee to replace such Investor Director or Investor Designee (if such Investor Designee’s board seat is vacant), as applicable, and the Parent shall promptly cause such Investor Designee to fill such resulting vacancy for the remainder of the term of the replaced Investor Designee and until such replacement’s successor shall have been elected and qualified.
(d) The Investor shall not designate an individual for election or appointment to the Board, (i) unless such individual is reasonably acceptable to the Nominating Committee, (ii) where such individual is to be included in the slate of nominees for the applicable annual meeting of the Parent’s stockholders, the Parent must receive notice of such designation at least 120 days prior to the date of the annual meeting, (iii) the individual must complete and submit to the Board any questionnaires that the Parent requires of its directors generally and submit any other information that the Parent or the Nominating Committee reasonably requests in connection with the Parent’s obligations under the Securities Laws or in connection with the satisfaction of the Nominating Committee’s fiduciary duties.
(e) The Parent shall indemnify the Investor Director and provide the Investor Director with director and officer insurance to the same extent as it indemnifies and provides such insurance to other members of the Board. The Parent acknowledges and agrees that it (i) is the indemnitor of first resort (i.e., its obligations to the Investor Director are primary and any obligation of the Investor Parties to advance expenses or to provide indemnification for the same expenses or liabilities incurred by the Investor Director are secondary), and (ii) shall be required to advance the amount of expenses incurred by the Investor Director and shall be liable for the amount of all expenses and liabilities incurred by the Investor Director, in each case to the same extent as it indemnifies, insures and provides such advancement of expenses to other members of the Board, without regard to any rights the Investor Director may have against any Investor Parties or their Affiliates.
(f) The parties hereto agree that the Investor Director shall be entitled to the same cash and/or equity compensation (if any) from the Parent and reimbursement from the Parent for the reasonable out-of-pocket fees or expenses incurred in connection with their service as a director in a manner consistent with the Parent’s practices with respect to compensation and reimbursement for other members of the Board, including reimbursement pursuant to customary indemnification arrangements.
| 2. | Defined Terms. |
As used in this Agreement, the following terms shall have the following meanings:
(a) “5% Beneficial Ownership Requirement” means that the Investor Parties continue to beneficially own shares of Parent Common Stock that represent, in the aggregate, at least 5% of the then outstanding Parent Common Stock.
(b) “Affiliate” means, as to any person or entity, any other person or entity that, directly or indirectly, controls, or is controlled by, or is under common control with, such person or entity; provided, however, that the Parent and its Subsidiaries shall not be deemed to be Affiliates of any Investor Party or any of its Affiliates; provided, further, that Vision Blue Capital Limited and Vision Blue Advisors UK LLP shall be considered Affiliates of the Investor. For this purpose, “control” (including, with its correlative meanings, “controlled by” and “under common control with”) shall mean the possession, directly or indirectly, of the power to direct or cause the direction of management or policies of a person or entity, whether through the ownership of securities or partnership or other ownership interests, by contract or otherwise.
(c) “Bylaws” means the Bylaws of the Parent as amended or modified from time to time.
(d) “Closing” has the meaning set forth in the Merger Agreement.
(e) “Investor Designee” means an individual designated in writing by the Investor to be appointed, or nominated by the Parent for election, to the Board pursuant to this Agreement.
(f) “Investor Director” means a member of the Board who was elected to the Board as an Investor Designee.
(g) “Investor Parties” means the Investor and its controlled Affiliates.
(h) “Nominating Committee” means the Nominating and Corporate Governance Committee of the Parent.
2
(i) “Merger Agreement” means the Agreement and Plan of Merger made as of April 19, 2026, by and among (i) Parent, (ii) Middlebury Merger Sub, Ltd., a business company limited by shares incorporated under the laws of the British Virgin Islands and an indirect, wholly owned subsidiary of Parent, (iii) SVRE Holdings, Ltd., a business company limited by shares incorporated under the laws of British Virgin Islands and (iv) the Seller Representative (as defined therein), as amended by that certain Amendment No. 1 to Agreement and Plan of Merger, dated as of July 16, 2026, by and among (i) Parent, (ii) Middlebury Merger Sub, Ltd., a business company limited by shares incorporated under the laws of the British Virgin Islands and an indirect, wholly owned subsidiary of Parent, (iii) SVRE Holdings, Ltd., a business company limited by shares incorporated under the laws of British Virgin Islands and (iv) the Seller Representative (as defined therein), and as further amended by that certain Amendment No. 2 to Agreement and Plan of Merger, dated as of September 3, 2026, by and among (i) Parent, (ii) Middlebury Merger Sub, Ltd., a business company limited by shares incorporated under the laws of the British Virgin Islands and an indirect, wholly owned subsidiary of Parent, (iii) SVRE Holdings, Ltd., a business company limited by shares incorporated under the laws of British Virgin Islands and (iv) the Seller Representative (as defined therein).
(j) “Parent Common Stock” means the common stock, par value $0.0001 per share, of Parent.
(k) “Securities Laws” means the Securities Act, the Exchange Act and the rules of any exchange on which the Parent Common Stock is trading.
| 3. | Effectiveness; Termination. |
Notwithstanding anything to the contrary contained herein, this Agreement shall become effective upon the Closing. In the event that the Merger Agreement is terminated prior to the Closing, then this Agreement shall automatically terminate upon termination of the Merger Agreement.
| 4. | Miscellaneous. |
(a) No Third-Party Beneficiaries. This Agreement shall be binding upon and inure solely to the benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.
(b) Entire Agreement. This Agreement, including the annexes, exhibits and schedules hereto, constitute the entire agreement between the parties hereto and supersede any prior understandings, agreements or representations by or between such parties, written or oral, that may have related in any way to the subject matter hereof.
(c) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, successors and permitted assigns, but neither this Agreement nor any of the rights or obligations hereunder may be assigned (whether by operation of Law, through a change in control or otherwise) without the prior written consent of the other party hereto.
(d) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.
(e) Titles. The titles, captions or headings of the Articles and Sections herein are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.
(f) Governing Law. This Agreement (and any claim or controversy arising out of or relating to this Agreement) shall be governed by and construed in accordance with the domestic laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any jurisdiction other than the State of Delaware.
3
(g) Consent to Jurisdiction. Each party hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of any Delaware State court, or Federal court of the United States of America, sitting in Delaware, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby or for recognition or enforcement of any judgment relating thereto, and each party hereto hereby irrevocably and unconditionally (i) agrees not to commence any such action or proceeding except in such courts; (ii) agrees that any claim in respect of any such action or proceeding may be heard and determined in such Delaware State court or, to the extent permitted by law, in such Federal court; (iii) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any such action or proceeding in any such Delaware State or Federal court; and (iv) waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such Delaware State or Federal court. Each party hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
(h) Waiver of Trial by Jury. EACH PARTY TO THIS AGREEMENT ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH WAIVERS; (II) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS; (III) IT MAKES SUCH WAIVERS VOLUNTARILY; AND (IV) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 4(h).
(i) Amendment or Modification. This Agreement may not be amended except in a written instrument executed by the Parent and the Investor. No amendment, supplement, modification or waiver of this Agreement shall be binding unless executed in writing by the party hereto to be bound thereby.
(j) Waivers. Except where a specific period for action or inaction is provided herein, neither the failure nor any delay on the part of any party hereto in exercising any right, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any waiver on the part of any party hereto of any such right, power or privilege, nor any single or partial exercise of any such right, power or privilege, preclude any other or further exercise thereof or the exercise of any other such right, power or privilege. The failure of a party hereto to exercise any right conferred herein within the time required shall cause such right to terminate with respect to the transaction or circumstances giving rise to such right, but not to any such right arising as a result of any other transactions or circumstances.
(k) Specific Performance. The parties agree that irreparable damage, for which monetary damages (even if available) would not be an adequate remedy, may occur in the event that the parties do not perform their obligations under the provisions of this Agreement in accordance with its specified terms or otherwise breach such provisions. Subject to the following sentence, the parties acknowledge and agree that each of the Parent and the Investor shall be entitled to seek an injunction, specific performance or other equitable relief, to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, in addition to any other remedy available at law or in equity.
(l) Severability of Provisions. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced as a result of any rule of law or public policy, all other terms and other provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated by this Agreement are fulfilled to the greatest extent possible.
[Remainder of page intentionally blank]
4
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date and year first written above.
| USA RARE EARTH, INC. | |||
| By: | /s/ William Robert Steele, Jr. | ||
| Name: | William Robert Steele, Jr. | ||
| Title: | Chief Financial Officer | ||
| VB (RARE EARTHS) LIMITED | ||
| /s/ Harry Rouillard | ||
| Name: | Harry Rouillard | |
| Title: | Director | |
[Signature page to Board Appointment Agreement]
Exhibit 99.1
USA Rare Earth Completes Combination with Serra Verde Group
Combines Serra Verde’s world-class upstream heavy-rare earth operation with USA Rare Earth’s processing, metallization, and magnet-making capabilities
Creates one of the only fully integrated rare earth and permanent magnet platforms outside Asia
Industry veterans Sir Mick Davis and Thras Moraitis join the USA Rare Earth Board
Stillwater, Okla. and Goiás, Brazil – September 4, 2026 – USA Rare Earth (Nasdaq: USAR) (“USAR”, “USA Rare Earth”, or the “Company”) today announced the completion of its combination with Serra Verde Group (“Serra Verde”) on September 3, 2026, creating a global rare earths leader and a partner of choice for the supply of advanced materials and products that underpin Western national security and technological innovation.
Serra Verde is the only scaled producer of all four magnetic and other critical heavy rare earth elements outside Asia. Its mining and processing operation in Goiás, Brazil began production in January 2024 and is currently completing an advanced-stage optimization and commissioning program, with ramp-up expected in the third quarter of 2026. The first stage of this program is expected to reach a run-rate of approximately 4,000 tons per annum (tpa) of total rare earth oxide (TREO) production by the end of 2026. Construction is underway on the second stage of the expansion, targeting average production of 6,400 tpa of TREO, with commissioning expected to begin within 12 months. Longer term, Serra Verde has the potential to double run of mine (ROM) production through a Phase 2 expansion.
Serra Verde joins USA Rare Earth’s existing and planned upstream, midstream and downstream assets in the United States, the United Kingdom and France to create a fully integrated rare earths platform positioned to deliver a reliable supply chain of vital rare earth elements and derivative products aimed at meeting commercial and public sector demand at each stage of the value chain.
Michael Blitzer, Executive Chairman of USA Rare Earth, stated: “Demand for rare earths and permanent magnets is accelerating globally due to demand from rapidly growing forward-facing technologies such as renewable energy, physical AI, semiconductors, aerospace and defense applications. At the same time, supply outside Asia remains weak as new sources, especially of heavy rare earths, take time to develop and produce. Over the past years we have assembled, built and integrated the key assets and capabilities at each step of the value chain, thereby positioning USA Rare Earth at the epicenter of that shift, building the affordable, dependable, and resilient supply chains of essential rare earth materials that underpin economic competitiveness and national security. With the Serra Verde combination complete, our focus now turns to execution, integrating operations, and moving efficiently toward steady-state and reliable supply. To this end, I’m confident we have the right team and platform to play a key role in meeting the needs of the crucial industries which depend on our products.”
Barbara Humpton, Chief Executive Officer of USA Rare Earth, stated: “Today marks a significant milestone for USA Rare Earth, and I am pleased to welcome the Serra Verde team to our platform. They are an exceptionally talented group that has built one of the most strategically important upstream operations in the critical minerals industry. Our teams have spent months preparing for this combination, and we are ready to move forward as one company with a clear focus on integration and execution. Together, we have the assets, the expertise, and the global footprint to manage the full rare earth value chain from the earth to the finished magnet and beyond, providing customers with a secure and resilient source of supply.”
Page 1 of 4
As previously announced, Thras Moraitis, formerly Chief Executive Officer of Serra Verde, has been appointed President of USA Rare Earth and is joining its Board of Directors. On October 1, 2026, Barbara Humpton will retire as CEO of USA Rare Earth and Mr. Moraitis will succeed her and lead the combined company. Sir Mick Davis, Chairman of Serra Verde and former CEO of Xstrata plc, is also joining the USA Rare Earth Board.
Thras Moraitis, President of USA Rare Earth, stated: “For our team in Brazil, this combination is the culmination of a 15-year journey to build a scaled, sustainable source of the vital rare earth materials that power the technologies of the future. The combination with USA Rare Earth accelerates our ambition to ensure our heavy rare earth elements reach end-use customers in the form of advanced materials, including permanent magnets, thereby becoming an important link in an integrated supply chain. Together, we are positioned to supply critical materials that shape our society’s future by promoting the prosperity of global industries whose ambitions would otherwise be constrained by a lack of reliable supply. I look forward to delivering on that promise for our shareholders, customers, employees, governments and communities across Brazil, the United States, the UK and France.”
Advisors
Moelis & Company LLC is acting as exclusive financial advisor and Latham & Watkins LLP is acting as legal counsel for USA Rare Earth. Goldman Sachs & Co. LLC is acting as exclusive financial advisor and White & Case LLP is acting as legal counsel for Serra Verde. Allen Overy Shearman Sterling US LLP is acting as legal counsel for the shareholders of Serra Verde.
About USA Rare Earth
USA Rare Earth, Inc. (Nasdaq: USAR) is building a fully integrated rare earth and permanent magnet value chain across the United States, Brazil and the United Kingdom. Through its ownership of Less Common Metals (LCM), one of the world’s leading producers of rare earth metals and alloys, its development of magnet manufacturing capacity in Stillwater, Oklahoma, the Pela Ema mine in Brazil and the Round Top deposit in Texas, USA Rare Earth operates across the entire value chain from mining to metal-making, alloy production and neodymium magnet manufacturing. USA Rare Earth is establishing a secure, Western-aligned supply of materials essential to the aerospace and defense, semiconductor, energy, data center, physical AI, mobility, healthcare and industrial sectors.
For more information, visit www.usare.com.
Forward Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include those relating to the timing of and expected TREO production resulting from the optimization and commissioning program at the Pela Ema facility, the expected ROM production through a Phase 2 expansion at the Pela Ema facility, the expected benefits of USA Rare Earth’s combination with Serra Verde and other statements regarding the combined company’s expectations for future development, operations, strategies, transactions and financial performance. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. Words such as “aim,” “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “growth,” “intend,” “may,” “might,” “plan,” “potential,” “project,” “propose,” “should,” “target,” “vision,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.
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Forward-looking statements are subject to risks and uncertainties and potentially inaccurate assumptions that could cause actual results to differ materially from our expectations, including without limitation: risks that we may not realize the anticipated benefits of USA Rare Earth’s combination with Serra Verde or our proposed and prior acquisitions, including expected synergies, financial performance, estimated earnings before interest, taxes, depreciation and amortization and, in the case of Serra Verde, integration of operations, on the anticipated timeline or at all; potential delays in the optimization and commissioning program and the Phase II expansion at the Pela Ema facility; political, economic, regulatory, tax, currency and other risks associated with Serra Verde’s operations in Brazil and Switzerland; physical climate risks related to the Pela Ema mine; the assumption of substantial indebtedness under Serra Verde’s Retained Finance Agreement, which contains restrictive covenants and other requirements that could adversely affect the combined company’s financial flexibility and operations; risks that the Offtake Agreement is terminated or ceases to be in full force and effect or that the counterparty to the Offtake Agreement is insufficiently capitalized, including as a result of a failure to finalize definitive debt financing arrangements within the timeframes contemplated by the Offtake Agreement; risks that the proposed transaction with Carester SAS may not be consummated on its anticipated timeline or at all; the ability of our Stillwater magnet manufacturing facility to generate revenue and the ability of our planned Blacksburg facility to commence commercial operations on the timing and with the production capacity anticipated or at all; our limited operating history; our ability to commercially extract minerals from the Round Top deposit on our anticipated timeline or at all; differences between planned and actual recovery and yield rates; risks that we may experience delays, unforeseen expenses, increased capital costs, and other complications while developing our projects; our ability to raise necessary capital on acceptable terms or at all; potential dilution to existing stockholders and adverse effect on our stock price if we issue additional common stock or equity-linked securities; the volatility of our stock price; the availability of rare earth oxide, metal feedstock and other materials, utilities (including power and water) and equipment in quantities and prices that allow us to develop and commercially operate our Stillwater facility and other facilities; our ability to meet individual customer specifications and produce a consistently high quality product; potential supply chain, logistics or product delivery disruptions; any delays in obtaining or renewing permits and licenses; any changes in royalty rates or the imposition of new royalties; risks associated with community relations; fluctuations in demand for and prices of neo magnets, rare earth elements and our other products, including without limitation as a result of dumping, predatory pricing and other tactics by our competitors or state actors or the overall competitive environment; our ability to achieve positive cash flow or profitability or the ability to access cash flow within our corporate structure due to restrictions contained in our financing agreements; our ability to convert current commercial discussions and/or memorandums of understanding with customers for the sale of our neo magnets and other products into definitive orders; our dependence, in part, on the growth of existing and emerging uses for neo magnets; the risk that additional manufacturing, refining and mining competitors could result in a reduction in revenue; geopolitical developments or disruptions, such as changes in the political environment, export/import or environmental policy of the People’s Republic of China, the United States or other countries in which we operate or sell products or otherwise; our designation on an export control list by China which has had and is expected to continue to have an adverse impact on our ability to source key raw materials and supplies from China; war, terrorism, natural disasters or public health emergencies; our ability to retain or recruit key personnel; environmental, health and safety regulations; the receipt of funding from the U.S. Department of Commerce is subject to the achievement of milestones which may not be achieved on the expected timeline or at all; and our ability to comply with requirements for federal, state and local government incentives and financing.
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Additional risks and detailed information regarding factors that may cause actual results to differ materially has been and will be included in our filings with the SEC, including our most recently filed Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q and subsequent filings. Any forward-looking statements speak only as of the date of this press release (or such other date as is specified in such statements), and we undertake no obligation to update any forward-looking statements as a result of new information or future events or developments.
Investor Relations Contact
J.B. Lowe, CFA
VP, Head of Investor Relations
[email protected]
Media Relations Contact
Collected Strategies
Dan Moore / Scott Bisang
[email protected]
Aura Financial
Michael Oke/ Andy Mills
+44 207 321 0000
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Exhibit 99.3
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Introduction
The following unaudited pro forma condensed combined financial information is derived from the historical consolidated financial statements of USA Rare Earth, Inc. (“USAR” or the “Company”), and the historical consolidated financial statements of SVRE Holdings Ltd. (“SVRE”), and gives effect to (i) the Merger (as defined below), (ii) the Private Placement (as defined below), (iii) the Retained Finance Agreement (as defined below), and (iv) the Offtake Agreement (as defined below) (collectively, the “Pro Forma Transactions”).
On August 21, 2024, Inflection Point Acquisition Corp. II, a Cayman Islands exempted company (“IPXX”) entered into a Business Combination Agreement (as amended on November 11, 2024 and January 30, 2025, the “Business Combination Agreement”), by and among IPXX, USA Rare Earth, LLC, a Delaware limited liability company, and IPXX Merger Sub, LLC, a Delaware limited liability company and a direct wholly owned subsidiary of IPXX. Pursuant to the Business Combination Agreement, IPXX Merger Sub, LLC merged with and into USA Rare Earth, LLC, with USA Rare Earth, LLC continuing as the surviving company, and IPXX changed its name to USA Rare Earth, Inc. On March 13, 2025, USAR consummated the previously announced merger contemplated by the Business Combination Agreement and USA Rare Earth, LLC became a direct wholly owned subsidiary of USAR. This transaction is already reflected in the USAR historical audited consolidated balance sheet as of December 31, 2025 and the historical statement of operations of IPXX from January 1, 2025 to March 12, 2025 is not material to the pro forma presentation of the Merger (as defined below) for the purpose of unaudited pro forma condensed combined statement of operations.
Merger
On April 19, 2026, USAR entered into a Merger Agreement by and among (i) USAR, (ii) Middlebury Merger Sub Ltd. (“Merger Sub”), (iii) SVRE, and (iv) Serra Verde Rare Earths Ltd. The Merger Agreement provides for the merger of SVRE with and into Merger Sub, with Merger Sub surviving such merger as an indirect, wholly owned subsidiary of USAR (the “Merger”), subject to the satisfaction or waiver of the conditions precedent to such closing. On September 3, 2026 (“Closing Date”), USAR completed the Merger through issuance of 126,849,307 shares of USAR’s common stock, par value $0.0001 per share (“Common Stock”) and paid an aggregate of $300.0 million of Merger consideration.
On the Closing Date, all outstanding warrants of SVRE, including the DFC Warrants, were automatically exercised and converted into SVRE ordinary shares immediately prior to the Merger. All outstanding RSUs and SARs, whether vested or unvested, were accelerated in full and cancelled in exchange for a pro rata portion of the Merger consideration. Stock options not subject to performance conditions were similarly cancelled on a cashless basis for Merger consideration, while performance-vesting options held by continuing service providers were substituted with USAR RSUs subject to continued service vesting.
Private Placement
On January 26, 2026, USAR, entered into a securities purchase agreement, for the private placement of 69,767,442 shares of the USAR’s Common Stock, for aggregate gross proceeds of approximately $1.5 billion, at a price per share of $21.50 (the “Private Placement”). USAR closed the Private Placement and issued the shares of Common Stock on January 28, 2026.
Parent Loan Agreement
Concurrently with the execution of the Direct Funding Agreement (“DFA”) and the Loan Guarantee Agreement (“LGA”), USAR entered into a Securities Issuance Agreement with the DOC and issued to the DOC 16,132,790 shares of Common Stock (the “SIA Shares”) and a warrant to purchase 17,600,584 shares of Common Stock at an exercise price of $17.17 per share (the “DOC Warrants”). The SIA Shares were issued in exchange for access to the awards pursuant to the Direct Funding Agreement, and the DOC Warrants were issued in exchange for obtaining the Loan Guarantee Agreement.
On June 3, 2026 (the “Award Date”), USAR issued the SIA Shares and DOC Warrants to the DOC. The SIA Shares were measured at fair value based on USAR’s closing stock price of $27.98 per share on the Award Date, resulting in an aggregate fair value of $451.4 million, treated as a deferred equity cost. the DOC Warrants were initially measured at fair value of $430.9 million ($24.48 per warrant share) on the Award Date based on an independent third-party valuation. The combined fair values for the SIA Shares and DOC Warrants were treated as the total cost incurred to obtain access to the funding arrangement under the DFA and LGA, and along with other financing costs, were recognized as deferred arrangement costs in the condensed consolidated balance sheets as of June 30, 2026.
The deferred equity cost associated with the SIA Shares under the DFA arrangement will remain on the balance sheet until DFA disbursements are received. Upon receipt of approved cash disbursements, the Company will reduce a proportionate share of the deferred equity cost with an offset to additional paid in capital. The disbursement of the DFA is subject to the achievement of various project-specific milestones, the making of cash equity contributions by USAR to its subsidiaries, the satisfaction of financial ratio and liquidity thresholds, the receipt of required permits and approvals and other customary conditions, which have not yet been satisfied as of the date of this filing. No amortization of the deferred arrangement costs have been reflected in the accompanying unaudited pro forma condensed combined financial information.
The Company has determined that the DOC warrant is liability-classified, with an initial fair value of $24.48 per common share, or $430.9 million in aggregate as of the Award Date. The DOC Warrant liability will be remeasured at fair value at the end of each reporting period, with changes in fair value recognized as a gain or loss within other income (expense), net in the Company’s condensed consolidated statements of operations and comprehensive income (loss). The DOC Warrant liability was initially recorded at fair value with an offsetting entry recorded as a deferred arrangement costs until the debt associated with the Parent Loan Agreements is drawn. Upon each draw, the deferred arrangement cost will be derecognized proportionately, and recorded as a component of the related debt’s amortized cost basis, which will be amortized over the term of the debt using the effective interest method. As of the date of this filing, no amounts associated with the Parent Loan Agreements had been drawn. Accordingly, no reclassification of the deferred arrangement cost to related debt’s amortized cost basis has been reflected on the Company’s unaudited pro forma condensed combined balance sheet as of June 30, 2026, and no related amortization expense has been reflected in the Company’s unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2026 and for the year ended December 31, 2025.
The Retained Finance Agreement
On January 21, 2026, SVRE entered into a Finance Agreement with the United States International Development Finance Corporation (the “DFC”), which was amended on March 5, 2026 (as further amended from time to time, the “Retained Finance Agreement”). The Retained Finance Agreement provides SVRE with long-term debt financing to support its rare earth mining and processing operations in an aggregate committed amount not to exceed $565.0 million, consisting of (i) an initial loan tranche with a principal amount not to exceed $465.0 million (the “Initial Loan”), and (ii) a second loan tranche with a principal amount not to exceed $100.0 million (the “Incremental Loan”).
On May 28, 2026, SVRE and the DFC entered into the Second Amendment to the Finance Agreement, and extended the loan term for both tranches from up to 12 years to up to 15 years from the first closing date, upon the execution of the Offtake Agreement (see discussion below). In connection with the Incremental Loan, DFC was issued two warrants (the “DFC Warrants”) granting a combined 12% fully diluted equity interest in the Company, which will automatically exercise upon the closing of the Merger, at which point the Incremental Loan shall be deemed extinguished in full. The Incremental Loan was closed on June 4, 2026. As of June 30, 2026, the aggregate outstanding principal amount of indebtedness of SVRE and its subsidiaries under the Retained Finance Agreement was $425.0 million. On the Closing Date, the DFC Warrants were exercised and the Incremental Loan was extinguished in full.
The Initial Loan, Incremental Loan and DFC Warrants were reflected in the historical unaudited condensed consolidated balance sheet of SVRE as of June 30, 2026, and accordingly, no adjustment has been reflected within the unaudited pro forma condensed combined balance sheet for such amounts. Adjustments for the Initial Loan within the unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2026 and for the year ended December 31, 2025 were included assuming the Initial Loan was executed and drawn down on January 1, 2025. The DFC Warrants exercise and the extinguishment of the Incremental Loan upon closing of the Merger, have been included as purchase price adjustment as part of the purchase consideration. Adjustments related to accrued interest, interest expense and issuance cost for DFC Incremental Loan have been included as transaction adjustments within the unaudited proforma condensed combined financial statements as of and for the six months ended June 30, 2026.
The Offtake Agreement
On or about the date of the Merger Agreement, SV Management Switzerland AG (“SV Management Switzerland”), a subsidiary of SVRE, entered into an offtake agreement with a special purpose vehicle capitalized by the U.S. government, as well as private capital sources (the “Counterparty”) (as amended from time to time, the “Offtake Agreement”) for the long-term supply of rare earth materials produced by SVRE.
The Offtake Agreement provides for the sale of 100% of the rare earth products produced from phase one of the Pela Ema project, subject to limited carve-outs. The Incremental Loan was fully disbursed on June 4, 2026, and SVRE’s delivery obligation will be for 100% of phase one production. The agreement remains in effect until the earlier of specified production-based volume delivery thresholds and the date that is 20 years after the date on which SVRE’s facility becomes capable of producing the contemplated products (the “Commercial Operations Date”), unless extended with the consent of the U.S. government. Pricing is based on annually escalated contractual floor prices, with amounts above the applicable floor price, as well as certain cost savings and yield variances, allocated 70% to SV Management Switzerland and 30% to the Counterparty. Commencement of deliveries is subject to the satisfaction or waiver of specified conditions precedent by the agreed long-stop date, June 12, 2026, and either party may terminate the agreement without liability if such conditions were not satisfied or waived by that date. On June 29, 2026, SV Management Switzerland and the Counterparty entered into an amendment, consent and waiver to the Offtake Agreement that extended the long-stop date from June 12, 2026 to August 14, 2026. The long-stop date was further extended to August 21, 2026 and all conditions were satisfied on this day. SVRE has not recorded any accounting entries related to the Offtake Agreement in their unaudited condensed consolidated financial statements as of June 30, 2026. Adjustments related to the Offtake agreement have been included within the unaudited pro forma condensed combined balance sheet as of June 30, 2026.
2
Issuance of Earnout Shares
In connection with the business combination between the Company and USA Rare Earth, LLC, the Company agreed to issue common stock of the Company (the “earnout shares”) to certain shareholders of USA Rare Earth, LLC in two tranches upon the occurrence of certain triggering events. On April 15, 2026, the Company achieved the market-price condition for the first tranche of earnout shares, as the Company’s common stock exceeded $15.00 per share for at least 20 out of 30 consecutive trading days. 5.05 million shares were issued to USA Rare Earth, LLC shareholders. The second tranche of 5.05 million earnout shares were issued on May 15, 2026 when the Company achieved the market-price condition for the second tranche, as the Company’s common stock exceeds $20.00 per share for at least 20 out of 30 consecutive trading days.
The earnout shares were classified as liabilities and remeasured at fair value on a recurring basis prior to conversion. Upon issuance of the two tranches of the earnout shares, the related earnout liability was reclassified to common stock and additional paid-in capital. The effect of the conversion has been included within the Company’s unaudited condensed consolidated balance sheets as of June 30, 2026.
Presentation Periods
The unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X and should be read in conjunction with the accompanying notes.
The unaudited pro forma condensed combined balance sheet as of June 30, 2026 combines the unaudited condensed consolidated balance sheet of USAR as of June 30, 2026 with the unaudited condensed consolidated balance sheet of SVRE as of June 30, 2026, giving effect to the Pro Forma Transactions as if it had been consummated on June 30, 2026.
The unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2026 combines the unaudited condensed consolidated statement of operations of USAR for the six months ended June 30, 2026 with the unaudited condensed consolidated statement of operations of SVRE for the six months ended June 30, 2026, giving effect to the Pro Forma Transactions as if it had been consummated on January 1, 2025.
The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2025 combines the audited consolidated statement of operations of USAR for the year ended December 31, 2025 with the audited consolidated statement of operations of SVRE for the year ended December 31, 2025, giving effect to the Pro Forma Transactions as if it had been consummated on January 1, 2025.
The unaudited pro forma condensed combined financial information was derived from, and should be read in conjunction with, the following historical financial statements and the accompanying notes:
| ● | The historical audited consolidated financial statements of USAR as of and for the year ended December 31, 2025, as included in the Company’s Annual Report on Form 10-K filed with the SEC on March 30, 2026; |
| ● | The historical unaudited condensed consolidated financial statements of USAR as of and for the six months ended June 30, 2026, as included in the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 10, 2026; |
| ● | The historical audited financial statements of SVRE as of and for the year ended December 31, 2025, included as Exhibit 99.3 in the Company’s Current Report on Form 8-K filed with the SEC on May 13, 2026. |
The historical unaudited condensed consolidated balance sheet and statement of operations of SVRE as of and for the six months ended June 30, 2026 are derived from the books and records of SVRE. The unaudited pro forma condensed combined financial information should also be read together with other financial information included elsewhere or filed with the SEC.
3
Accounting for the Merger
The unaudited pro forma condensed combined financial information has been prepared using the acquisition method of accounting in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). USAR has been identified as an accounting acquirer for accounting purposes, and thus accounts for the Merger as a business combination in accordance with Accounting Standards Codification Topic 805, Business Combinations (“ASC 805”). Under the acquisition method of accounting, SVRE’s assets and liabilities are recorded at their respective fair values. Any difference between the purchase price for SVRE and the fair value of the identifiable net assets acquired (including intangibles) is recorded as goodwill. The assets and liabilities of SVRE have been measured based on various preliminary estimates using assumptions that USAR’s management believes were reasonable and based on currently available information. Accordingly, the pro forma adjustments are preliminary and have been made solely for the purpose of providing this unaudited pro forma condensed combined financial information.
Differences between these preliminary estimates and the final purchase accounting may occur, and the final purchase accounting could be materially different from the preliminary estimates used to prepare the accompanying unaudited pro forma condensed combined financial information and could have a material impact on the combined company’s future results of operations and financial position.
Basis of Pro Forma Presentation
The unaudited pro forma condensed combined financial information appearing below does not consider any potential effects of changes in market conditions on revenues or expense efficiencies, among other factors. In addition, as explained in more detail in the accompanying notes, the preliminary allocation of the pro forma purchase price reflected in the unaudited pro forma condensed combined financial information is subject to adjustment and may vary significantly from what will be recorded upon completion of the final purchase price allocation.
The unaudited pro forma condensed combined financial information has been prepared based on the aforementioned historical financial statements and the assumptions and adjustments as described in the notes to the unaudited pro forma condensed combined financial information. The pro forma adjustments reflect transaction accounting adjustments related to the Pro Forma Transactions, which are discussed in further detail below. The unaudited pro forma condensed combined financial information is presented for illustrative purposes only and do not purport to represent the combined company’s consolidated results of operations or the consolidated financial position that would actually have occurred had the Pro Forma Transactions been consummated on the dates assumed or to project the combined company’s consolidated results of operations or consolidated financial position for any future date or period.
The accounting policies followed in preparing the unaudited pro forma condensed combined financial information are those used by USAR as set forth in the audited historical financial statements. Based on the Company’s initial review and understanding of SVRE’s significant accounting policies, there are no material adjustments required at this time to conform SVRE’s historical financial information to USAR’s significant accounting policies. A more comprehensive comparison and assessment will occur, which may result in additional differences being identified. Additionally, USAR has included certain preliminary presentation adjustments for consistency in the financial statement presentation. See Notes 2 and 3 below for more information.
The unaudited pro forma condensed combined financial information is presented for illustrative purposes only and does not reflect the costs of any integration activities or cost savings or synergies that may be achieved because of the Merger.
USAR and SVRE have not had any historical material relationship prior to the Merger. Accordingly, no pro forma adjustments were required to eliminate activities between the companies.
4
Unaudited Pro Forma Condensed Combined Balance
Sheet
As of June 30, 2026
(in thousands)
| USAR Historical | SVRE Historical | Presentation Adjustments | Transaction Accounting Adjustments | Pro Forma Combined | ||||||||||||||||||||||
| ASSETS | ||||||||||||||||||||||||||
| Current assets | ||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 1,530,147 | $ | 162,413 | $ | (300,000 | ) | (B) | $ | 1,392,007 | ||||||||||||||||
| $ | (553 | ) | (D) | |||||||||||||||||||||||
| Accounts receivables | 6,270 | 31 | 6,301 | |||||||||||||||||||||||
| Inventories | 50,138 | 24,667 | 74,805 | |||||||||||||||||||||||
| Prepaid expenses | 12,347 | 12,347 | ||||||||||||||||||||||||
| Other assets, current | 73,687 | 4,217 | - | - | 77,904 | |||||||||||||||||||||
| Total current assets | 1,672,589 | 191,328 | - | (300,553 | ) | 1,563,364 | ||||||||||||||||||||
| Property, plant and equipment, net | 146,751 | 736,964 | 766 | (A) | 2,385,149 | (B) | 3,254,507 | |||||||||||||||||||
| (15,123 | ) | (A) | ||||||||||||||||||||||||
| Mineral interests | 17,339 | - | 15,123 | (A) | 32,462 | |||||||||||||||||||||
| Goodwill | 134,848 | - | 467,679 | (B) | 602,527 | |||||||||||||||||||||
| Other intangible assets, net | 65,899 | - | 246,691 | (B) | 312,590 | |||||||||||||||||||||
| Equipment deposits | 46,904 | - | 46,904 | |||||||||||||||||||||||
| Operating lease right-of-use assets | 2,151 | - | 2,151 | |||||||||||||||||||||||
| Deferred arrangement costs | 912,091 | - | 912,091 | |||||||||||||||||||||||
| Other non-current assets | 255 | 984 | (766 | ) | (A) | 473 | ||||||||||||||||||||
| Total assets | $ | 2,998,827 | $ | 929,276 | $ | - | $ | 2,798,966 | $ | 6,727,069 | ||||||||||||||||
| LIABILITIES, MEZZANINE AND STOCKHOLDER’S EQUITY | ||||||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||
| Current liabilities | ||||||||||||||||||||||||||
| Accounts payable | $ | 17,367 | $ | 37,080 | $ | (21,382 | ) | (A) | $ | 33,065 | ||||||||||||||||
| Accrued liabilities | 31,679 | - | 28,726 | (A) | 96,372 | (C) | 156,224 | |||||||||||||||||||
| (553 | ) | (D) | ||||||||||||||||||||||||
| Contract liabilities, current | 1,328 | - | 1,328 | |||||||||||||||||||||||
| Salaries and social charges | - | 5,985 | (5,985 | ) | (A) | - | ||||||||||||||||||||
| Taxes payable | - | 532 | 532 | |||||||||||||||||||||||
| Other current liabilities | - | 1,359 | (1,359 | ) | (A) | - | ||||||||||||||||||||
| Royalty agreement, current | - | 19,429 | 19,429 | |||||||||||||||||||||||
| DFC loan, current | - | 6,107 | 6,107 | |||||||||||||||||||||||
| Finance leases, current | 290 | 717 | 1,007 | |||||||||||||||||||||||
| Operating leases, current | 350 | - | 350 | |||||||||||||||||||||||
| Total current liabilities | 51,014 | 71,209 | - | 95,819 | 218,042 | |||||||||||||||||||||
| Non-current liabilitites | ||||||||||||||||||||||||||
| Accounts payable and accrued expnese, non-current | - | 162 | 162 | |||||||||||||||||||||||
| Royalty agreement, non-current | - | 139,227 | 68,202 | (B) | 207,429 | |||||||||||||||||||||
| DFC loan, non-current | - | 297,993 | 297,993 | |||||||||||||||||||||||
| Asset retirement obligations | - | 4,854 | 4,854 | |||||||||||||||||||||||
| Deferred grant income | 8,482 | - | 8,482 | |||||||||||||||||||||||
| Finance leases, non-current | 445 | 147 | 592 | |||||||||||||||||||||||
| Operating leases, non-current | 2,111 | - | 2,111 | |||||||||||||||||||||||
| Other liabilities | - | 1,471 | 1,471 | |||||||||||||||||||||||
| Warrant liability | 364,189 | 14,775 | (14,775 | ) | (B) | 364,189 | ||||||||||||||||||||
| DFC warrants | - | 215,062 | (215,062 | ) | (B) | - | ||||||||||||||||||||
| Deferred tax liability | 15,665 | - | 871,637 | (B) | 887,302 | |||||||||||||||||||||
| Contract liabilities, non-current | 9,602 | - | 9,602 | |||||||||||||||||||||||
| Total liabilities | 451,508 | 744,900 | - | 805,821 | 2,002,229 | |||||||||||||||||||||
| Commitments and contingencies | ||||||||||||||||||||||||||
| Mezzanine equity | ||||||||||||||||||||||||||
| 12% Series A Cumulative Convertible Preferred Stock | 10,347 | - | 10,347 | |||||||||||||||||||||||
| Total mezzanine equity | 10,347 | - | - | - | 10,347 | |||||||||||||||||||||
| Stockholders’ equity | ||||||||||||||||||||||||||
| Common stock | 24 | - | 127 | (B) | 151 | |||||||||||||||||||||
| Accumulated other comprehensive income (loss) | (927 | ) | (13,928 | ) | 13,928 | (B) | (927 | ) | ||||||||||||||||||
| Additional paid-in capital | 3,003,612 | 617,647 | (617,647 | ) | (B) | 5,277,378 | ||||||||||||||||||||
| 2,273,766 | (B) | |||||||||||||||||||||||||
| Accumulated deficit | (464,681 | ) | (419,343 | ) | 419,343 | (B) | (561,053 | ) | ||||||||||||||||||
| (96,372 | ) | (C) | ||||||||||||||||||||||||
| Non-controlling interest | (1,056 | ) | - | (1,056 | ) | |||||||||||||||||||||
| Total stockholders’ equity | 2,536,972 | 184,376 | - | 1,993,145 | 4,714,493 | |||||||||||||||||||||
| Total liabilities, mezzanine equity, and stockholder’s equity | $ | 2,998,827 | $ | 929,276 | $ | - | $ | 2,798,966 | $ | 6,727,069 | ||||||||||||||||
Please refer to the notes to the unaudited pro forma condensed combined financial information.
5
Unaudited Pro Forma Condensed Combined Statement
of Operations
For the Six Months Ended June 30, 2026
(in thousands except per share amounts)
| USAR Historical | SVRE Historical | Presentation Adjustments | Transaction Accounting Adjustments | Other Material Transactions | Pro Forma Combined | ||||||||||||||||||||||||||||
| Revenue | $ | 11,519 | $ | 588 | $ | 12,107 | |||||||||||||||||||||||||||
| Cost of revenue | 12,996 | 5,312 | 18,308 | ||||||||||||||||||||||||||||||
| Gross profit | (1,477 | ) | (4,724 | ) | - | - | - | (6,201 | ) | ||||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||||||
| Selling, general and administrative | 53,782 | 20,261 | 449 | (AA) | 1,380 | (DD) | 75,872 | ||||||||||||||||||||||||||
| Research and development | 25,017 | - | 25,017 | ||||||||||||||||||||||||||||||
| Amortization of intangible assets | 2,713 | - | 2,713 | ||||||||||||||||||||||||||||||
| Other expenses, net | - | 14,789 | 14,789 | ||||||||||||||||||||||||||||||
| Total operating expenses | 81,512 | 35,050 | 449 | 2,813 | - | 118,391 | |||||||||||||||||||||||||||
| Loss from operations | (82,989 | ) | (39,774 | ) | (449 | ) | (2,813 | ) | - | (124,592 | ) | ||||||||||||||||||||||
| Other (expense) income, net: | |||||||||||||||||||||||||||||||||
| Interest income | 472 | 1,007 | (370 | ) | (AA) | 1,109 | |||||||||||||||||||||||||||
| Dividend Income | 26,449 | - | 370 | (AA) | 26,819 | ||||||||||||||||||||||||||||
| Loss on fair market value of financial instruments, net | (21,135 | ) | - | (125,756 | ) | (AA) | 125,756 | (EE) | (21,135 | ) | |||||||||||||||||||||||
| Interest expense and other expense, net | (4,364 | ) | (136,972 | ) | 126,205 | (AA) | (553 | ) | (II) | 2,276 | (FF) | (17,918 | ) | ||||||||||||||||||||
| (5,964 | ) | (GG) | |||||||||||||||||||||||||||||||
| 1,454 | (HH) | ||||||||||||||||||||||||||||||||
| Grant income | 446 | - | 446 | ||||||||||||||||||||||||||||||
| Foreign currency exchange, net | - | 15,978 | 15,978 | ||||||||||||||||||||||||||||||
| Total other expense, net | 1,868 | (119,987 | ) | 449 | (553 | ) | 123,522 | 5,299 | |||||||||||||||||||||||||
| Loss before income taxes | (81,121 | ) | (159,761 | ) | - | (1,933 | ) | 123,522 | (119,293 | ) | |||||||||||||||||||||||
| Benefit from income taxes | (1,090 | ) | - | (1,090 | ) | ||||||||||||||||||||||||||||
| Net loss | (80,031 | ) | (159,761 | ) | - | (1,933 | ) | 123,522 | (118,203 | ) | |||||||||||||||||||||||
| Net loss attributable to non-controlling interest | (2,709 | ) | - | (2,709 | ) | ||||||||||||||||||||||||||||
| Net loss attributable to USA Rare Earth, Inc. | $ | (77,322 | ) | $ | (159,761 | ) | $ | - | $ | (1,933 | ) | $ | 123,522 | $ | (115,494 | ) | |||||||||||||||||
| Net loss per share attributable to USA Rare Earth, Inc.: | |||||||||||||||||||||||||||||||||
| Basic and diluted | $ | (0.37 | ) | $ | (0.83 | ) | $ | (0.34 | ) | ||||||||||||||||||||||||
| Number of shares used in per share calculations: | |||||||||||||||||||||||||||||||||
| Basic and diluted | 213,347 | 193,429 | 340,196 | ||||||||||||||||||||||||||||||
Please refer to the notes to the unaudited pro forma condensed combined financial information.
6
Unaudited Pro Forma Condensed Combined Statement
of Operations
For the Year Ended December 31, 2025
(in thousands except per share amounts)
| USAR Historical | SVRE Historical | Presentation Adjustments | Transaction Accounting Adjustments | Other Material Transactions | Pro Forma Combined | ||||||||||||||||||||||||||||
| Revenue | $ | 1,643 | $ | 2,486 | $ | 4,129 | |||||||||||||||||||||||||||
| Cost of revenue | 1,448 | 36,105 | 37,553 | ||||||||||||||||||||||||||||||
| Gross profit | 195 | (33,619 | ) | - | - | - | (33,424 | ) | |||||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||||||
| Selling, general and administrative | 43,135 | 25,803 | 278 | (AA) | 96,372 | (CC) | 173,976 | ||||||||||||||||||||||||||
| 8,388 | (DD) | ||||||||||||||||||||||||||||||||
| Research and development | 15,885 | - | 15,885 | ||||||||||||||||||||||||||||||
| Amortization of intangible assets | 678 | - | 678 | ||||||||||||||||||||||||||||||
| Other expenses, net | - | 1,440 | 1,440 | ||||||||||||||||||||||||||||||
| Total operating expenses | 59,698 | 27,243 | 278 | 104,760 | - | 191,979 | |||||||||||||||||||||||||||
| Loss from operations | (59,503 | ) | (60,862 | ) | (278 | ) | (104,760 | ) | - | (225,403 | ) | ||||||||||||||||||||||
| Other (expense) income, net: | |||||||||||||||||||||||||||||||||
| Interest and dividend income | 5,446 | 2,671 | 8,117 | ||||||||||||||||||||||||||||||
| Loss on fair market value of financial instruments, net | (244,488 | ) | - | (7,652 | ) | (AA) | 7,652 | (EE) | (244,488 | ) | |||||||||||||||||||||||
| Interest expense and other expense, net | (139 | ) | (9,873 | ) | 7,930 | (AA) | 4,268 | (FF) | (28,615 | ) | |||||||||||||||||||||||
| (31,501 | ) | (GG) | |||||||||||||||||||||||||||||||
| 700 | (HH) | ||||||||||||||||||||||||||||||||
| Foreign currency exchange, net | - | 49,532 | 49,532 | ||||||||||||||||||||||||||||||
| Total other expense, net | (239,181 | ) | 42,330 | 278 | - | (18,881 | ) | (215,454 | ) | ||||||||||||||||||||||||
| Loss before income taxes | (298,684 | ) | (18,532 | ) | - | (104,760 | ) | (18,881 | ) | (440,857 | ) | ||||||||||||||||||||||
| Benefit from income taxes | (160 | ) | - | (160 | ) | ||||||||||||||||||||||||||||
| Net loss | (298,524 | ) | (18,532 | ) | - | (104,760 | ) | (18,881 | ) | (440,697 | ) | ||||||||||||||||||||||
| Net loss attributable to non-controlling interest | (965 | ) | - | (965 | ) | ||||||||||||||||||||||||||||
| Net loss attributable to USA Rare Earth, Inc. | $ | (297,559 | ) | $ | (18,532 | ) | $ | - | $ | (104,760 | ) | $ | (18,881 | ) | $ | (439,732 | ) | ||||||||||||||||
| Net loss per share attributable to USA Rare Earth, Inc.: | |||||||||||||||||||||||||||||||||
| Basic and diluted | $ | (3.31 | ) | $ | (0.10 | ) | $ | (1.50 | ) | ||||||||||||||||||||||||
| Number of shares used in per share calculations: | |||||||||||||||||||||||||||||||||
| Basic and diluted | 98,021 | 193,429 | 310,770 | ||||||||||||||||||||||||||||||
Please refer to the notes to the unaudited pro forma condensed combined financial information.
7
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
1. Basis of Presentation
The pro forma adjustments have been prepared as if the Pro Forma Transactions had been consummated on June 30, 2026, in the case of the unaudited pro forma condensed combined balance sheet, and, in the case of the unaudited pro forma condensed combined statements of operations, as if the Pro Forma Transactions had been consummated on January 1, 2025, the beginning of the earliest period presented in the unaudited pro forma condensed combined statements of operations.
The unaudited pro forma condensed combined financial information has been prepared assuming the acquisition method of accounting in accordance with U.S. GAAP. Under this method, SVRE’s assets and liabilities are recorded at their respective fair values. Any difference between the purchase price for SVRE and the fair value of the identifiable net assets acquired (including intangibles) is recorded as goodwill. The assets and liabilities of SVRE have been measured based on various preliminary estimates using assumptions that USAR’s management believes are reasonable and based on currently available information. Accordingly, the pro forma adjustments are preliminary and have been made solely for the purpose of providing this unaudited pro forma condensed combined financial information.
The pro forma adjustments represent management’s estimates based on information available as of the date of the Form 8-K and are subject to change as additional information becomes available and additional analyses are performed.
USAR has performed a preliminary review to identify any accounting policy differences between the accounting policies used in SVRE’s financial statements and those of the Company, where the impact was potentially material and could be reasonably estimated, with the Company identifying no such differences.
2. Adjustments to the Unaudited Pro Forma Condensed Combined Balance Sheet as of June 30, 2026
The adjustments included in the unaudited pro forma condensed combined balance sheet as of June 30, 2026 are as follows:
| (A) | Reflects reclassification adjustments to conform SVRE’s historical balances to the financial statement presentation of USAR. |
| (B) | Reflects the purchase price allocation adjustments to record SVRE’s identifiable assets acquired and liabilities assumed at their estimated fair values as of the acquisition date. This adjustment reflects the recording of the preliminary estimate of goodwill and the elimination of the historical equity balances of SVRE. Additionally, the adjustment removes SVRE’s outstanding warrant liability, to reflect the conversion of all warrants into SVRE’s ordinary shares immediately prior to the Merger. |
Pursuant to ASC 805, the preliminary purchase price was allocated among the identified net assets acquired, based on a preliminary analysis. Goodwill is recognized as a result of the Merger, which represents the excess fair value of consideration over the fair value of the underlying net assets of SVRE. The deferred income taxes represent the deferred tax impact associated with the incremental differences in book and tax basis created from the preliminary purchase price allocation. Deferred taxes associated with estimated fair value adjustments were calculated using the statutory corporate tax rate in Brazil of 34%. The estimates of fair value are based upon preliminary valuation assumptions, and are believed to be reasonable, but are inherently uncertain and unpredictable. As a result, actual results may differ from estimates, and the difference may be material.
8
The following is a preliminary estimate of fair value of the assets acquired and the liabilities assumed by USAR in the Merger, reconciled to the estimated purchase consideration (in thousands):
| Net Assets Identified | Preliminary Estimate of Fair Value | |||
| Cash and cash equivalents | $ | 162,413 | ||
| Accounts receivable | 31 | |||
| Inventories | 24,667 | |||
| Prepaid expenses and other current assets | 4,217 | |||
| Property, plant and equipment, net (incl. mineral interests)(1) | 3,122,879 | |||
| Other intangible assets, net(2) | 246,691 | |||
| Other non-current assets | 218 | |||
| Accounts payable | (15,698 | ) | ||
| Accrued liabilities | (28,726 | ) | ||
| Tax payable | (532 | ) | ||
| Royalty agreement – current(3) | (19,429 | ) | ||
| DFC loan, current | (6,107 | ) | ||
| Finance lease, current | (717 | ) | ||
| Royalty agreement – noncurrent(3) | (207,429 | ) | ||
| DFC loan, noncurrent(4) | (297,993 | ) | ||
| Asset retirement obligations | (4,854 | ) | ||
| Accounts payable and accrued expense, non-current | (162 | ) | ||
| Finance leases, non-current | (147 | ) | ||
| Other liabilities | (1,471 | ) | ||
| Deferred tax liabilities | (871,637 | ) | ||
| Total net assets identified | $ | 2,106,214 | ||
| Goodwill | 467,679 | |||
| Total purchase consideration | $ | 2,573,893 | ||
| Value Conveyed | ||||
| Cash consideration(5) | $ | 300,000 | ||
| Equity consideration(6) | 2,264,259 | |||
| Pre-combination expense for vested performance stock options(7) | 9,634 | |||
| Total purchase consideration | $ | 2,573,893 | ||
| (1) | The $3.1 billion allocated to property, plant and equipment, net, is related to development stage properties. Upon the closing of the Merger, the mine will continue to be designated as a development stage property, and related development costs will continue to be capitalized until the milestones necessary to be considered operational are achieved. An expansion and optimization project is currently being implemented that is expected to result in higher production capacity, a sustained lower operating cost profile and enhanced product quality. Construction is expected to be completed, and commercial operations are expected to commence in 2027. |
| (2) | Other intangible assets is comprised of an Offtake Agreement. The Offtake Agreement asset is expected to be amortized on a systematic basic using the units of production method. As of the date of this Form 8-K, delivery pursuant to the Offtake Agreement has not started. Accordingly, amortization of the Offtake Agreement had not commenced as of the pro forma transaction date and no related amortization expense has been reflected in the unaudited pro forma condensed combined statement of operations. |
9
| (3) | This reflects an increase in the fair value of the liability for royalty payments due to an increase in estimated future cash payments. The increase in estimated future cash payments is primarily related to the anticipated impact of the Offtake Agreement. |
| (4) | The $100.0 million Incremental Loan was deemed forgiven upon exercise of the DFC Warrants at closing of the Merger. |
| (5) | This amount represents cash consideration paid to SVRE’s shareholders. |
| (6) | Equity consideration is provided in the form of Common Stock of USAR and is calculated as 126,849,307 shares of USAR Common Stock to be issued to SVRE shareholders, multiplied by $17.85, the closing share price of USAR on September 2, 2026. |
| (7) | This reflects the pre-combination expense pertaining to options to purchase SVRE shares subject to performance-vesting conditions (the “Performance-Vesting Options”) which will be substituted with USAR time-vesting restricted stock units. |
| (C) | Reflects the impact of nonrecurring expenses related to transaction costs, primarily comprised of investment banking fees, legal fees, issuance costs, accounting and audit fees, and other related advisory costs. $0.2 million was incurred and accrued on the balance sheet as of June 30, 2026. The related income statement adjustment is reflected in adjustment (CC). |
| (D) | Reflects the impact of payment of accrued interest and the write-off of unamortized debt issuance costs on the Incremental Loan into additional paid-in capital. The Incremental Loan was deemed forgiven upon exercise of the DFC warrants at closing of the Merger. |
3. Adjustments to the Unaudited Pro Forma Condensed Combined Statement of Operations for the six months ended June 30, 2026 and for the year ended December 31, 2025
The adjustments included in the unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2026 and for the year ended December 31, 2025 are as follows:
| (AA) | Reflects a reclassification adjustment to conform SVRE’s historical expenses to the financial statement presentation of USAR. |
| (CC) | Reflects the recognition of nonrecurring expenses related to estimated transaction costs in the amount of $96.4 million, which are primarily comprised of investment banking fees, legal fees, issuance costs, accounting and audit fees, and other related advisory costs. The related balance sheet adjustment is reflected at adjustment (C). |
| (DD) | Reflects the recognition of post-combination stock-based compensation expense in the amount of $1.4 million for the six months ended June 30, 2026 and $8.4 million for the year ended December 31, 2025 related to Performance-Vesting Options which were substituted with USAR time-vesting restricted stock units. |
| (EE) | Reflects the elimination of the recognized loss due to the change in fair value of warrant liability in an amount equal to $125.8 million for the six months ended June 30, 2026 and $7.7 million for the year ended December 31, 2025 related to the private placement warrants issued by SVRE to its investors. These warrants were settled through equity consideration to the holders pursuant to the Merger. The related balance sheet adjustment is reflected in adjustment (B). |
| (FF) | Reflects the elimination of interest related to Class A Preferred Shares in an amount equal to $2.3 million for the six months ended June 30, 2026 and $4.3 million for the year ended December 31, 2025 due to their redemption pursuant to the side letter agreement, dated March 5, 2026, between SVRE and Orion. |
10
| (GG) | Reflects interest expense related to long-term debt financing of SVRE pursuant to the Retained Finance Agreement, calculated using an estimated interest rate of Term SOFR plus 4%. This adjustment also includes the amortization of estimated debt discount and debt issuance costs of $0.9 million for the six months ended June 30, 2026 and $1.9 million for the year ended December 31, 2025. An increase or decrease of one-eighth of a percent in the interest rate would not result in a significant change in interest expense for the six months ended June 30, 2026 and for the year ended December 31, 2025. |
| (HH) | Reflects the elimination of interest related to the OMF Credit Agreement in an amount equal to $1.5 million for the six months ended June 30, 2026 and $0.7 million for the year ended December 31, 2025 due to their repayment. |
| (II) | Reflects the elimination of interest expense and issuance cost amortization of $0.6 million related to the Incremental Loan for the six months ended June 30, 2026. |
4. Unaudited Pro Forma Net Loss Per Share
The pro forma net loss per share calculations have been performed for the six months ended June 30, 2026 and for the year ended December 31, 2025, assuming the Pro Forma Transactions had been consummated on January 1, 2025.
| (in thousands except per share amounts) | For the Six Months Ended June 30, 2026 | For the Year Ended December 31, 2025 | ||||||
| Numerator | ||||||||
| Pro forma net loss attributable to USA Rare Earth, Inc. | $ | (115,494 | ) | $ | (439,732 | ) | ||
| Declared and deemed dividends, and interest accretion | (1,442 | ) | (26,954 | ) | ||||
| Pro forma undistributed net loss attributable to USA Rare Earth, Inc. | $ | (116,936 | ) | $ | (466,686 | ) | ||
| Denominator | ||||||||
| USAR weighted average number of common shares outstanding-basic | 213,347 | 98,021 | ||||||
| Add: Shares issued to SVRE shareholders in a Merger | 126,849 | 126,849 | ||||||
| Add: Shares issued in a private placement(*) | — | 69,767 | ||||||
| Add: Shares issued to DOC(*) | — | 16,133 | ||||||
| Pro forma weighted average shares of common stock outstanding – basic & diluted | 340,196 | 310,770 | ||||||
| Pro forma net loss per share – basic & diluted | $ | (0.34 | ) | $ | (1.50 | ) | ||
| * | Shares issued in a private placement, and issued to DOC for the six months ended June 30, 2026 are already reflected in the historical unaudited condensed consolidated financial statements of USAR and therefore are not reflected separately. |
The Company’s potentially dilutive outstanding securities, including DOC Warrant to purchase 17,600,584 shares of USAR Common Stock were excluded from the computation of pro forma diluted net loss per share because their effect would have been anti-dilutive.
11