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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
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☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2026
OR
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☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from __________ to __________
Commission File Number: 001-43268
Rare Earths Americas, Inc.
(Exact Name of Registrant as Specified in its Charter)
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Texas |
39-4918133 |
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( State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.) |
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101 W. Main Street
Manchester, GA
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31816 |
(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (706) 846-5063
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
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Trading
Symbol(s)
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Name of each exchange on which registered |
Common stock, $ 0.0001 par value |
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REA |
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NYSE American LLC |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer |
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☐ |
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Accelerated filer |
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☐ |
Non-accelerated filer |
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☒ |
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Smaller reporting company |
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☒ |
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Emerging growth company |
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☒ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of August 10, 2026, the registrant had 19,953,892 shares of common stock, $0.0001 par value per share, outstanding.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements concerning our business, operations and financial performance, as well as our plans, objectives and expectations for our business operations and financial performance and condition. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “design,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “positioned,” “potential,” “predict,” “seek,” “should,” “target,” “will,” “would,” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology. In addition, statements that “we believe” or similar statements reflect our beliefs and opinions on the relevant subject. These forward-looking statements include, but are not limited to, statements about:
•our goals and strategies;
•our planned exploration activities;
•expectations regarding revenue, expenses and operations;
•risks related to our operating strategy;
•mineral exploration and exploration program cost estimates;
•expectations regarding the potential mineralization, geological merit and economic feasibility of our projects;
•competition for projects in our local markets;
•unfavorable economic conditions and restrictive financing markets;
•significant risk and hazards associated with mining operations;
•our Brazilian operations being subject to additional political, economic and other uncertainties not generally associated with domestic operations;
•expectations regarding any environmental issues that may affect planned or future exploration programs and the potential impact of complying with existing and proposed environmental laws and regulations;
•receipt and timing of exploration permits and other third-party approvals;
•government regulation of mineral exploration and development operations;
•developments relating to our competitors and our industry;
•expectations regarding any social or local community issues that may affect planned or future exploration and development programs;
•our ability to retain key personnel and maintain satisfactory labor relations; and
•other risks and uncertainties, including those described or incorporated by reference under the caption “Risk Factors” in our final prospectus filed pursuant to Rule 424(b)(4), which are incorporated herein by reference, as well as other factors described elsewhere in this report and the Company’s other reports filed with the SEC.
We have based these forward-looking statements largely on our current expectations, estimates, forecasts, and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, and financial needs. In light of the significant uncertainties in these forward-looking statements, you should not rely upon forward-looking statements as predictions of future events. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Quarterly Report on Form 10-Q, we cannot guarantee that the future results, levels of activity, performance, or events and circumstances reflected in the forward-looking statements will be achieved or occur at all. You should refer to this Quarterly Report on Form 10-Q for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. Except as required by law, we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
RARE EARTHS AMERICAS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands of U.S. Dollars, except share data) (unaudited)
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June 30, |
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December 31, |
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2026 |
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2025 |
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ASSETS |
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Current assets |
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Cash and cash equivalents |
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$ |
10,099 |
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$ |
22,841 |
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Short-term investments |
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66,640 |
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— |
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Prepaid expenses |
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1,201 |
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216 |
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Other current assets |
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72 |
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53 |
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Total current assets |
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78,012 |
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23,110 |
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Non-current assets |
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Property and equipment, net |
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739 |
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390 |
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Mineral interests (includes $2,275 and $2,275, respectively, related to consolidated VIEs) |
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23,421 |
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23,327 |
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Deferred offering costs |
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— |
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1,968 |
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Other non-current assets |
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210 |
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42 |
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Total non-current assets |
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24,370 |
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25,727 |
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Total assets |
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$ |
102,382 |
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$ |
48,837 |
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LIABILITIES |
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Current liabilities |
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Accounts payable (includes $841 and $362, respectively, related to consolidated VIEs) |
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$ |
1,574 |
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$ |
1,486 |
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Accrued expenses (includes $267 and $22, respectively, related to consolidated VIEs) |
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736 |
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1,211 |
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Convertible related party loan |
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— |
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1,123 |
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Other current liabilities (includes $133 and $34, respectively, related to consolidated VIEs) |
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143 |
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36 |
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Total current liabilities |
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2,453 |
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3,856 |
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Non-current liabilities |
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SAFE liability |
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— |
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11,715 |
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Warrant liability |
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11,675 |
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4,433 |
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Other non-current liabilities (includes $64 and $20, respectively, related to consolidated VIEs) |
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968 |
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370 |
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Total non-current liabilities |
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12,643 |
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16,518 |
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Total liabilities |
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15,096 |
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20,374 |
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Commitments and contingencies (Note 12) |
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STOCKHOLDERS' EQUITY |
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Preferred stock, $0.0001 par value, 1,000,000 shares authorized, zero shares issued and outstanding as of June 30, 2026 and December 31, 2025 |
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— |
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— |
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Common stock, $0.0001 par value, 500,000,000 shares authorized, 19,953,892 and 14,965,987 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively |
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2 |
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1 |
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Additional paid-in-capital |
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134,910 |
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46,292 |
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Accumulated other comprehensive loss |
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(492 |
) |
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(267 |
) |
Accumulated deficit |
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(49,409 |
) |
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(19,838 |
) |
Equity attributable to stockholders of the Company |
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85,011 |
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26,188 |
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Noncontrolling interest |
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2,275 |
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2,275 |
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Total stockholders' equity |
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87,286 |
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28,463 |
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Total liabilities and stockholders' equity |
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$ |
102,382 |
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$ |
48,837 |
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See accompanying notes to the condensed consolidated financial statements.
RARE EARTHS AMERICAS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands of U.S. Dollars, except share and per share data) (unaudited)
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For the Three Months Ended June 30, |
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For the Six Months Ended June 30, |
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2026 |
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2025 |
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2026 |
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2025 |
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Operating expenses: |
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Exploration and evaluation expenses |
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$ |
4,566 |
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$ |
115 |
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$ |
6,631 |
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$ |
165 |
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General and administrative expenses |
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8,174 |
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269 |
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10,890 |
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518 |
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Depreciation expense |
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36 |
|
|
|
2 |
|
|
|
59 |
|
|
|
3 |
|
Transaction costs |
|
|
— |
|
|
|
157 |
|
|
|
— |
|
|
|
157 |
|
Total operating expenses |
|
|
12,776 |
|
|
|
543 |
|
|
|
17,580 |
|
|
|
843 |
|
Operating loss |
|
|
(12,776 |
) |
|
|
(543 |
) |
|
|
(17,580 |
) |
|
|
(843 |
) |
Other income (expenses): |
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
503 |
|
|
|
— |
|
|
|
630 |
|
|
|
— |
|
Interest expense |
|
|
(29 |
) |
|
|
(58 |
) |
|
|
(74 |
) |
|
|
(59 |
) |
Foreign currency transaction gain/(loss) |
|
|
1 |
|
|
|
— |
|
|
|
(3 |
) |
|
|
— |
|
Change in fair value of SAFE |
|
|
(1,216 |
) |
|
|
— |
|
|
|
(4,625 |
) |
|
|
— |
|
Change in fair value of warrants |
|
|
727 |
|
|
|
— |
|
|
|
(7,919 |
) |
|
|
— |
|
Total other (expenses) income |
|
|
(14 |
) |
|
|
(58 |
) |
|
|
(11,991 |
) |
|
|
(59 |
) |
Loss before income taxes |
|
|
(12,790 |
) |
|
|
(601 |
) |
|
|
(29,571 |
) |
|
|
(902 |
) |
Provision for income taxes |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net loss |
|
|
(12,790 |
) |
|
|
(601 |
) |
|
|
(29,571 |
) |
|
|
(902 |
) |
Less: Net loss attributable to noncontrolling interest |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net loss attributable to Rare Earths Americas, Inc. |
|
$ |
(12,790 |
) |
|
$ |
(601 |
) |
|
$ |
(29,571 |
) |
|
$ |
(902 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per common share, basic and diluted |
|
$ |
(0.70 |
) |
|
$ |
(0.06 |
) |
|
$ |
(1.78 |
) |
|
$ |
(0.10 |
) |
Weighted average common shares outstanding, basic and diluted |
|
|
18,186,556 |
|
|
|
9,375,000 |
|
|
|
16,585,168 |
|
|
|
9,375,000 |
|
See accompanying notes to the condensed consolidated financial statements.
RARE EARTHS AMERICAS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands of U.S. Dollars) (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended June 30, |
|
|
For the Six Months Ended June 30, |
|
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
Net loss |
|
$ |
(12,790 |
) |
|
$ |
(601 |
) |
|
$ |
(29,571 |
) |
|
$ |
(902 |
) |
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments |
|
|
(150 |
) |
|
|
(28 |
) |
|
|
(225 |
) |
|
|
(43 |
) |
Total other comprehensive income (loss) |
|
|
(150 |
) |
|
|
(28 |
) |
|
|
(225 |
) |
|
|
(43 |
) |
Comprehensive loss |
|
|
(12,940 |
) |
|
|
(629 |
) |
|
|
(29,796 |
) |
|
|
(945 |
) |
Less: Comprehensive loss attributable to noncontrolling interest |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Comprehensive loss attributable to Rare Earths Americas, Inc. |
|
$ |
(12,940 |
) |
|
$ |
(629 |
) |
|
$ |
(29,796 |
) |
|
$ |
(945 |
) |
See accompanying notes to the condensed consolidated financial statements.
RARE EARTHS AMERICAS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS' DEFICIT AND STOCKHOLDERS' EQUITY
(in thousands of U.S. Dollars, except share data) (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Members' Equity |
|
|
Accumulated
Other
Comprehensive
Loss |
|
|
Accumulated
Deficit |
|
|
Total
Stockholders’
Equity (Deficit) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2024 |
|
|
|
|
|
|
|
|
|
|
$ |
9,982 |
|
|
$ |
(334 |
) |
|
$ |
(9,908 |
) |
|
$ |
(260 |
) |
Equity contribution from parent |
|
|
|
|
|
|
|
|
|
|
|
32 |
|
|
|
— |
|
|
|
— |
|
|
|
32 |
|
Change in foreign currency translation |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
(15 |
) |
|
|
— |
|
|
|
(15 |
) |
Net loss |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
(301 |
) |
|
|
(301 |
) |
Balance as of March 31, 2025 |
|
|
|
|
|
|
|
|
|
|
$ |
10,014 |
|
|
$ |
(349 |
) |
|
$ |
(10,209 |
) |
|
$ |
(544 |
) |
Equity contribution from parent |
|
|
|
|
|
|
|
|
|
|
|
31 |
|
|
|
— |
|
|
|
— |
|
|
|
31 |
|
Change in foreign currency translation |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
(28 |
) |
|
|
— |
|
|
|
(28 |
) |
Net loss |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
(601 |
) |
|
|
(601 |
) |
Balance as of June 30, 2025 |
|
|
|
|
|
|
|
|
|
|
$ |
10,045 |
|
|
$ |
(377 |
) |
|
$ |
(10,810 |
) |
|
$ |
(1,142 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
|
Additional Paid in Capital |
|
|
Accumulated
Other
Comprehensive
Loss |
|
|
Accumulated
Deficit |
|
|
Noncontrolling Interest |
|
|
Total
Stockholders’
Equity (Deficit) |
|
|
|
Shares |
|
|
Amount |
|
|
|
|
|
|
Balance as of December 31, 2025 |
|
|
14,965,987 |
|
|
$ |
1 |
|
|
$ |
46,292 |
|
|
$ |
(267 |
) |
|
$ |
(19,838 |
) |
|
$ |
2,275 |
|
|
$ |
28,463 |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
205 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
205 |
|
Change in foreign currency translation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(75 |
) |
|
|
— |
|
|
|
— |
|
|
|
(75 |
) |
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(16,781 |
) |
|
|
— |
|
|
|
(16,781 |
) |
Balance as of March 31, 2026 |
|
|
14,965,987 |
|
|
$ |
1 |
|
|
$ |
46,497 |
|
|
$ |
(342 |
) |
|
$ |
(36,619 |
) |
|
$ |
2,275 |
|
|
$ |
11,812 |
|
Initial public offering, net of underwriting discounts and commissions of ($4,832) and offering costs |
|
|
3,633,120 |
|
|
|
1 |
|
|
|
59,954 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
59,955 |
|
Conversion of SAFE into common stock |
|
|
1,037,100 |
|
|
|
— |
|
|
|
19,705 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
19,705 |
|
Conversion of related party convertible loan into common stock |
|
|
201,807 |
|
|
|
— |
|
|
|
1,322 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,322 |
|
Issuance of common stock in connection with the Greenfield Agreement |
|
|
19,052 |
|
|
|
— |
|
|
|
362 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
362 |
|
Exercise of warrants and reclassification of warrant liability |
|
|
46,610 |
|
|
|
— |
|
|
|
891 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
891 |
|
Vesting and settlement of restricted stock units |
|
|
57,370 |
|
|
|
— |
|
|
|
438 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
438 |
|
Shares withheld to satisfy tax withholding obligations |
|
|
(7,154 |
) |
|
|
— |
|
|
|
(162 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(162 |
) |
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
5,903 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,903 |
|
Change in foreign currency translation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(150 |
) |
|
|
— |
|
|
|
— |
|
|
|
(150 |
) |
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(12,790 |
) |
|
|
— |
|
|
|
(12,790 |
) |
Balance as of June 30, 2026 |
|
|
19,953,892 |
|
|
$ |
2 |
|
|
$ |
134,910 |
|
|
$ |
(492 |
) |
|
$ |
(49,409 |
) |
|
$ |
2,275 |
|
|
$ |
87,286 |
|
See accompanying notes to the condensed consolidated financial statements.
RARE EARTHS AMERICAS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of U.S. Dollars) (unaudited)
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended June 30, |
|
|
|
2026 |
|
|
2025 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
Net loss |
|
$ |
(29,571 |
) |
|
$ |
(902 |
) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: |
|
|
|
|
|
|
Depreciation expense |
|
|
59 |
|
|
|
3 |
|
Loss on foreign currency transaction |
|
|
3 |
|
|
|
— |
|
Stock-based compensation expense |
|
|
7,086 |
|
|
|
— |
|
Provision for labor claims |
|
|
15 |
|
|
|
13 |
|
Allocated expenses from parent |
|
|
— |
|
|
|
63 |
|
Change in fair value of warrants |
|
|
7,919 |
|
|
|
— |
|
Change in fair value of SAFE |
|
|
4,625 |
|
|
|
— |
|
Exploration option purchased with shares |
|
|
362 |
|
|
|
— |
|
Noncash interest expense |
|
|
58 |
|
|
|
— |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
Prepaid expenses |
|
|
(991 |
) |
|
|
(126 |
) |
Other assets |
|
|
(181 |
) |
|
|
9 |
|
Accounts payable |
|
|
442 |
|
|
|
(3 |
) |
Accrued expenses |
|
|
(240 |
) |
|
|
— |
|
Accounts payable to related parties |
|
|
— |
|
|
|
1,219 |
|
Other liabilities |
|
|
149 |
|
|
|
(20 |
) |
Net cash (used in) provided by operating activities |
|
$ |
(10,265 |
) |
|
$ |
256 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
Purchases of short-term investments |
|
|
(74,871 |
) |
|
|
— |
|
Proceeds from sales of short-term investments |
|
|
8,231 |
|
|
|
— |
|
Purchases of property and equipment |
|
|
(414 |
) |
|
|
(2 |
) |
Investment in mineral interests |
|
|
(94 |
) |
|
|
— |
|
Net cash used in investing activities |
|
|
(67,148 |
) |
|
|
(2 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
Proceeds from initial public offering, net of underwriting discounts and commissions ($4,832) |
|
|
64,197 |
|
|
|
— |
|
Payments for taxes related to net share settlement of equity awards |
|
|
(162 |
) |
|
|
— |
|
Payments of deferred offering costs |
|
|
(2,858 |
) |
|
|
(206 |
) |
Warrant exercises |
|
|
214 |
|
|
|
— |
|
SAFE proceeds |
|
|
3,365 |
|
|
|
— |
|
Net cash provided by (used in) financing activities |
|
|
64,756 |
|
|
|
(206 |
) |
Effect of exchange rates on cash and cash equivalents |
|
|
(85 |
) |
|
|
(43 |
) |
Net decrease in cash and cash equivalents |
|
|
(12,742 |
) |
|
|
5 |
|
Cash and cash equivalents at beginning of period |
|
|
22,841 |
|
|
|
6 |
|
Cash and cash equivalents at end of period |
|
$ |
10,099 |
|
|
$ |
11 |
|
|
|
|
|
|
|
|
Supplemental non-cash information: |
|
|
|
|
|
|
Non-cash contribution from REA Australia |
|
$ |
— |
|
|
$ |
63 |
|
Unpaid deferred offering costs |
|
$ |
180 |
|
|
$ |
— |
|
SAFE Liability conversion to common stock |
|
$ |
19,705 |
|
|
$ |
— |
|
Related party note conversion to common stock |
|
$ |
1,322 |
|
|
$ |
— |
|
Lease liabilities arising from obtaining right-of-use assets |
|
$ |
134 |
|
|
$ |
— |
|
See accompanying notes to the condensed consolidated financial statements.
RARE EARTHS AMERICAS, INC.
Notes to the CONDENSED CONSOLIDATED financial statements
(in thousands of U.S. Dollars, except share and per share data) (unaudited)
1.Organization and Business Operations
Rare Earths Americas, Inc. (“REA”, the “Company”, “we”, or “our”) was initially incorporated in February 2025 under the laws of the Cayman Islands as Rare Earths Americas Ltd. On October 15, 2025, the Company completed a redomestication, through the filing of a certificate of conversion in the state of Texas, resulting in the Company becoming a Texas corporation and the Company's name changed to Rare Earths Americas, Inc.
The Company is an exploration-stage mining company engaged in the acquisition, exploration, and development of mineral resource projects in the United States and Brazil. The Company's principal activities consist of advancing rare earth and mineral resource projects and evaluating related development opportunities. The Company has not generated revenues from mining operations.
The Company operates in two reportable segments, United States Mining Operations and Brazil Mining Operations, based on the geographic location of its operations and internal management reporting (See Note 13 – Segment Reporting).
Initial Public Offering
The Company completed its initial public offering (the “Offering”) of 3,333,331 shares of common stock at an initial public offering price of $19.00 per share, for gross proceeds of approximately $63,333. The Offering closed on May 7, 2026, and the Company received net proceeds of approximately $58,900 before offering expenses, after deducting underwriting discounts and commissions. In connection with the Offering, the Company’s common stock began trading on the NYSE American LLC under the symbol “REA.” The Company granted the underwriters a 30‑day option to purchase additional shares of common stock and the underwriters exercised a portion of the over‑allotment option to purchase 299,789 additional shares, which settled on May 14, 2026 for net proceeds of $5,297.
In connection with the Offering, all outstanding Simple Agreements for Future Equity ("SAFE") automatically converted into 1,037,100 shares of common stock, and the Company's convertible related-party loan with Brazil Royalty Corp Participacoes E Investments Ltda. (“BRC”) converted into 201,807 shares of common stock at a fixed conversion price of $6.55 per share, resulting in $19,705 and $1,322 respectively, recorded to additional paid-in capital. Refer to Note 10 – Debt for additional information. The Company also issued 19,052 shares of common stock to satisfy a share-settled installment under the Greenfield Agreement triggered by the Offering.
In connection with the Offering, the Company recognized $5,327 of stock-based compensation expense associated with RSUs subject to a liquidity-event performance-based vesting condition which was satisfied in connection with the Offering. Concurrently with the Offering, the Company issued 57,370 shares of common stock upon settlement of such RSUs. To meet the related tax withholding requirements for the net settlement of the vested RSUs, the Company withheld 7,154 shares underlying such equity awards, resulting in net issuance of 50,216 shares of common stock. Refer to Note 8 – Stock-Based Compensation for additional information.
Prior to the Offering, deferred offering costs, which consisted of accounting, legal and other fees directly associated with the Offering, were capitalized on the consolidated balance sheets. In connection with the Offering, $4,243 of deferred offering costs were reclassified to stockholders' equity as a reduction of net proceeds received from the offering.
2.Significant Accounting Policies
Summary of Significant Accounting Policies
Other than short-term investments below, there have been no material changes to our significant accounting policies, as disclosed in Note 2 – “Summary of Significant Accounting Policies,” to the audited consolidated financial statements for the fiscal year ended December 31, 2025 included in our final prospectus filed pursuant to Rule 424(b)(4) on May 7, 2026 (File No. 333-295032) (the "Prospectus").
Basis of Presentation and Principles of Consolidation
The accompanying condensed consolidated financial statements of Rare Earths Americas, Inc., its wholly-owned subsidiaries and consolidated variable interest entities, have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and pursuant to the rules and regulations of the United States Securities & Exchange Commission (“SEC”) for interim financial reporting. All intercompany balances and transactions have been eliminated in consolidation.
All dollar amounts presented in the accompanying footnotes are presented in thousands, with the exception of share and per share information.
As REA and Alpha Minerals Brazil Participações Ltda ("AMBPL") were determined to be entities under common control, the acquisition of AMBPL’s net assets were recorded at their historical carrying amounts, and these financial statements reflect REA and AMBPL on a consolidated basis for periods following REA’s incorporation in February 2025. Periods prior to February 2025 relate solely to the predecessor operations of AMBPL.
Interim Financial Statement Presentation
Certain information and disclosures normally included in our audited annual financial statements have been condensed or omitted. We believe these condensed consolidated financial statements include all normal recurring adjustments necessary to fairly present the results for the interim periods. Interim results are not necessarily indicative of results for the entire year. These condensed consolidated financial statements and accompanying notes should be read in conjunction with the audited consolidated financial statements and accompanying notes as of December 31, 2025 and for the year then ended included in the Prospectus.
Short-Term Investments
Investments in equity securities are accounted for in accordance with ASC 321, Investments-Equity Securities. Equity securities with a readily determinable fair value are measured at fair value with changes in fair value recognized in earnings. For equity securities without a readily determinable fair value, the Company elects the measurement alternative, under which investments are recorded at cost, less impairment, and adjusted for observable price changes in orderly transactions for identical or similar investments of the same issuer.
The Company evaluates such investments each reporting period to determine whether impairment indicators are present. If an investment is determined to be impaired, the carrying amount is written down to its fair value, and the resulting loss is recognized in earnings.
The Company's short-term investments consist of exchange-traded funds, which are Level 1 investments valued at the closing price or last trade reported on the major market on which the individual securities are traded. Realized and unrealized gains and losses are included in interest income in the accompanying condensed consolidated statements of operations. Refer to Note 3 — Fair Value Measurements for additional information. Unrealized gains on equity securities still held at June 30, 2026 were not material for the three and six months ended June 30, 2026.
Use of Estimates
The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect (1) the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the balance sheet dates and (2) the reported amounts of expenses during the reporting periods.
Significant accounting estimates reflected in our condensed consolidated financial statements include, but are not limited to, fair value of warrant liability, and fair value of stock-based compensation awards granted prior to the initial public offering (the "IPO").
Net Loss per Common Share
Basic and diluted loss per share of common stock attributable to common stockholders have been retroactively adjusted to reflect the capital structure of REA for all periods presented and were calculated by dividing net loss attributable to common stockholders by the weighted-average shares of common stock outstanding for the period.
When applicable, diluted earnings per share would be calculated based upon the inclusion of additional dilutive and potentially dilutive shares that are determined not to be anti-dilutive. The following securities have been excluded from the calculation of diluted loss per share because the effect is anti-dilutive:
|
|
|
|
|
|
|
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
SAFE |
|
— |
|
|
|
2,195,500 |
|
Warrants |
|
923,781 |
|
|
|
970,391 |
|
Restricted stock units |
|
630,617 |
|
|
|
917,598 |
|
Convertible related party loan |
|
— |
|
|
|
171,474 |
|
Total |
|
1,554,398 |
|
|
|
4,254,963 |
|
Recently Adopted Accounting Standards
For the three and six months ended June 30, 2026, there were no newly adopted accounting standards that materially impacted the Company’s condensed consolidated financial statements. Refer to Note 2 – “Significant Accounting Policies,” in the audited consolidated financial statements for the fiscal year ended December 31, 2025, in the Company’s Prospectus.
Recently Issued Accounting Pronouncements Not Yet Adopted
In November 2024, the FASB issued ASU No. 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures” (“ASU 2024-03”). ASU 2024-03 amends ASC Topic 220, “Comprehensive Income,” to expand the disclosure of expense information in the notes to the financial statements. ASU 2024-03 requires public business entities to disaggregate specified income statement expenses, such as purchases of inventory, employee compensation, depreciation, amortization, and depletion into detailed categories presented in a tabular format. Additionally, ASU 2024-03 mandates (1) qualitative descriptions for expenses not separately disaggregated and (2) disclosure of the total amount of selling expenses including, in annual periods, disclosure of an entity's definition of selling expenses. ASU 2024-03 is effective for the Company’s fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027, and may be applied prospectively or retrospectively. Early adoption is also permitted. The Company is currently evaluating the effect of adopting ASU 2024-03 on its disclosures.
3.Fair Value Measurements
At times, the Company may hold (1) assets and liabilities that qualify as financial instruments under ASC 820, “Fair Value Measurement” (“ASC 820”) that are re-measured and reported at fair value at each reporting period, and (2) non-financial assets and liabilities that are re-measured and reported at fair value on a non-recurring basis.
Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the factors market participants would use in valuing the asset or liability.
The Company applies a three-level hierarchy to prioritize the inputs used in measuring fair value:
|
|
• Level 1: |
Quoted prices in active markets for identical assets or liabilities. |
• Level 2: |
Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets in active markets or inputs that are observable for the asset or liability. |
• Level 3: |
Unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use. |
As of June 30, 2026 and December 31, 2025, the Company's financial instruments consisted of cash and cash equivalents, short-term investments, accounts payable, warrants, the Simple Agreements for Future Equity (“SAFE”) liability and related party debt. The carrying amount of cash and cash equivalents, excluding money market funds measured at fair value, and accounts payable approximates fair value due to the short-term nature of these instruments. The carrying amount of the short-term investments, money market funds, warrants and SAFE liability is fair value, as further described below.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following table presents the financial instruments measured at fair value on a recurring basis:
|
|
|
|
|
|
|
|
|
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
Level 1 Financial assets: |
|
|
|
|
|
|
Equity securities (included as Short-term investments) |
|
$ |
66,640 |
|
|
$ |
— |
|
Money market funds (included in Cash and cash equivalents) |
|
|
7,139 |
|
|
|
— |
|
Level 2: |
|
|
— |
|
|
|
— |
|
Level 3 Financial liabilities: |
|
|
|
|
|
|
Warrant liability |
|
|
11,675 |
|
|
|
4,433 |
|
SAFE liability |
|
|
— |
|
|
|
11,715 |
|
Stock-based compensation warrant liability (included in Other non-current liabilities) |
|
|
842 |
|
|
|
303 |
|
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
There were no assets or liabilities measured at fair value on a nonrecurring basis during the three and six months ended June 30, 2026 and 2025.
Warrant Liability
On July 22, 2025, the Company issued immediately exercisable and fully vested warrants to purchase shares of its common stock as part of the Foothills transaction. The warrants are freestanding financial instruments and do not meet the criteria for equity classification because the exercise price is denominated in a currency other than the Company's functional currency. As a result, the warrants are not considered indexed to the Company's own stock and are classified as a warrant liability.
The Company estimates the fair value of the warrant liability using the Black-Scholes option-pricing model. The significant unobservable inputs used in the fair value measurement of the warrant liability are the fair value of the underlying stock at the valuation date and the estimated term of the warrants. The warrant liability is categorized as Level 3 because it is valued based on unobservable inputs and management's judgment due to the absence of quoted market prices, inherent lack of liquidity, and the long-term nature of such financial instruments.
The following table summarizes the assumptions used in the Black-Scholes option-pricing model to estimate the fair value of the warrant liability:
|
|
|
|
|
|
|
June 30, 2026 |
|
December 31, 2025 |
Expected term (in years) |
|
3.25 |
|
3.75 |
Expected volatility |
|
130% |
|
95% |
Risk-free interest rate |
|
4.16% |
|
3.58% |
Expected dividend yield |
|
0% |
|
0% |
Share price |
|
$15.28 |
|
$6.67 |
Changes to the expected term, expected volatility, or the price of the underlying stock could result in a change to the fair value measurement.
During the three and six months ended June 30, 2026, certain warrant holders exercised 46,610 warrants for shares of the Company's common stock, and as of June 30, 2026, 923,781 warrants remain outstanding. Upon exercise, the related portion of the warrant liability was reclassified to stockholders' equity.
The following table presents the reconciliation of the warrant liability accounted for under ASC 815 measured at fair value on a recurring basis:
|
|
|
|
|
Beginning balance – December 31, 2025 |
|
$ |
4,433 |
|
Change in estimated fair value |
|
|
7,919 |
|
Warrants exercised |
|
|
(677 |
) |
Ending balance – June 30, 2026 |
|
$ |
11,675 |
|
The following table presents the reconciliation of the stock compensation warrant liability accounted for under ASC 718 measured at fair value on a recurring basis:
|
|
|
|
|
Beginning balance – December 31, 2025 |
|
$ |
303 |
|
Change in estimated fair value |
|
|
539 |
|
Warrants exercised |
|
|
— |
|
Ending balance – June 30, 2026 |
|
$ |
842 |
|
SAFE Liability
In December 2025, the Company entered into SAFE agreements to raise $15,080, which are described in Note 10 – Debt. The SAFE agreements were issued to numerous investors, all of which had identical terms. $11,715 of the SAFE agreements were funded as of December 31, 2025. By January 21, 2026, the Company received the remaining proceeds of $3,365 related to the SAFE agreements issued in December 2025.
The fair value of the Company's SAFE liability was determined using a probability-weighted expected return methodology ("PWERM"), which considers multiple potential liquidity outcomes and their respective likelihoods. Under this framework, the valuation incorporates three primary scenarios: (i) an IPO, (ii) a corporate transaction, and (iii) dissolution. The expected economic outcome under each scenario was estimated and then probability-weighted based on management's assumptions to arrive at an overall
fair value as of the valuation date. The valuation also incorporates the impact of embedded optionality estimated using a Black-Scholes option pricing framework. The following table summarizes the assumptions used in the Black-Scholes option-pricing model to estimate the fair value of the SAFE Liability.
|
|
|
|
|
December 31, 2025 |
Expected term (in years) |
|
0.36 - 1.00 |
Expected volatility |
|
121% - 137% |
Risk-free interest rate |
|
3.45% - 3.60% |
Expected dividend yield |
|
0% |
Share price |
|
$6.67 - $11.73 |
On May 7, 2026, the Company completed its IPO. In connection with the closing of the IPO, all outstanding SAFE agreements automatically converted into 1,037,100 shares of the Company’s common stock in accordance with their terms. As a result, the SAFE liability was remeasured to fair value immediately prior to conversion, with the change in fair value recognized in the condensed consolidated statements of operations, and the carrying value of the SAFE liability was reclassified to additional paid-in capital within stockholders’ equity.
The Company recognized an increase in the fair value of the SAFE Liability of $1,216 during the three months ended June 30, 2026, and a cumulative increase in fair value of $4,625 during the six months ended June 30, 2026, which is reported as change in fair value of SAFE in the condensed consolidated statement of operations. The increase in the SAFE liability of $1,216 represented the final fair value adjustment prior to conversion.
Accordingly, there was no SAFE liability outstanding as of June 30, 2026.
The following table presents the reconciliation of the SAFE liability measured at fair value on a recurring basis:
|
|
|
|
|
Beginning balance – December 31, 2025 |
|
$ |
11,715 |
|
Proceeds received under SAFE agreements |
|
|
3,365 |
|
Change in estimated fair value |
|
|
4,625 |
|
Conversion to common stock |
|
|
(19,705 |
) |
Ending balance – June 30, 2026 |
|
$ |
— |
|
4.Variable Interest Entities
On July 22, 2025, the Company purchased 100% of the ordinary shares of Foothills Rare Earths Limited ("FRE Australia"), a holding company who, through its subsidiary Foothills Rare Earths, LLC, ("FRE US"), a North Carolina LLC, is a private exploration stage mining company with operations in the Harris and Talbot Counties of Georgia, United States (the “Shiloh Project”). The project area is secured through a combination of option agreements (see Note 6 – Mineral Interests). The Company accounted for the acquisition of FRE Australia as an asset acquisition that is a VIE. Substantially all of the fair value of the assets acquired was concentrated in a group of similar identifiable assets.
The Company has consolidated FRE Australia, including Southeast Metals LLC (“SEM”), which are variable interest entities, and the carrying amounts of consolidated FRE Australia’s (including SEM) assets and liabilities were as follows as of June 30, 2026 and December 31, 2025:
|
|
|
|
|
|
|
|
|
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
ASSETS |
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
1,202 |
|
|
$ |
10,922 |
|
Prepaid expenses |
|
|
200 |
|
|
|
118 |
|
Total current assets |
|
|
1,402 |
|
|
|
11,040 |
|
Non-current assets |
|
|
|
|
|
|
Property and equipment, net |
|
|
652 |
|
|
|
362 |
|
Mineral interests, which includes $2,275 related to SEM |
|
|
23,421 |
|
|
|
23,327 |
|
Other non-current assets |
|
|
160 |
|
|
|
42 |
|
Total non-current assets |
|
|
24,233 |
|
|
|
23,731 |
|
Total assets |
|
$ |
25,635 |
|
|
$ |
34,771 |
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
Accounts payable |
|
$ |
841 |
|
|
$ |
362 |
|
Accrued expenses |
|
|
267 |
|
|
|
22 |
|
Other current liabilities |
|
|
133 |
|
|
|
34 |
|
Total current liabilities |
|
|
1,241 |
|
|
|
418 |
|
Non-current liabilities |
|
|
|
|
|
|
Other non-current liabilities |
|
|
64 |
|
|
|
20 |
|
Total non-current liabilities |
|
|
64 |
|
|
|
20 |
|
Total liabilities |
|
$ |
1,305 |
|
|
$ |
438 |
|
Additionally, there was a noncontrolling interest of $2,275 related to SEM upon acquisition. SEM and FRE Australia’s creditors do not have recourse to the general credit of the primary beneficiary.
5.Property and Equipment, net
Property and equipment, net consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
Computer and office equipment |
|
$ |
175 |
|
|
$ |
50 |
|
Machinery equipment |
|
|
376 |
|
|
|
143 |
|
Vehicles |
|
|
276 |
|
|
|
228 |
|
Total property and equipment |
|
|
827 |
|
|
|
421 |
|
Less: accumulated depreciation |
|
|
(88 |
) |
|
|
(31 |
) |
Property and equipment, net |
|
$ |
739 |
|
|
$ |
390 |
|
Depreciation expense was $36 and $2 for the three months ended June 30, 2026 and 2025, respectively, and $59 and $3 for the six months ended June 30, 2026 and 2025, respectively.
Mineral interests consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
Beginning balance |
|
$ |
23,327 |
|
|
$ |
— |
|
Acquired mineral interests |
|
|
— |
|
|
|
23,223 |
|
Capitalized land option payments |
|
|
94 |
|
|
|
104 |
|
Ending balance |
|
$ |
23,421 |
|
|
$ |
23,327 |
|
Mineral interests include acquired interests in exploration stage properties, including the costs of options to acquire such properties. Exploration costs are expensed as incurred. Costs of rights or options to explore and lease properties are considered exploration costs
and expensed as incurred. As of June 30, 2026, the mineral interests capitalized are held by FRE Australia and SEM, whereas the costs of arrangements entered into by AMBPL have been expensed as incurred.
In connection with the Company’s Mineral Rights Assignment and Covenants Agreement (the “Greenfield Agreement”), and following the completion of the Offering, the Company issued 19,052 shares of its common stock to Greenfield Exploration Ltda. and Focus Capital Partners Pty Ltd. The issuance represents equity consideration in lieu of cash for a portion of the contractual payment obligations triggered by the Offering, consistent with the terms of the Greenfield Agreement.
In the event that the Company exercises its options under one or more option agreements and begins commercial exploration, it will be required to make royalty payments based on a percentage of production revenue as defined in the agreements.
Common Stock of REA Inc.
Holders of common stock are entitled to one vote per share. Holders of common stock are entitled to receive dividends that may be declared from time to time by the Board of Directors. The common stock is not redeemable at the option of the holder.
As of June 30, 2026, the Company had reserved shares of common stock for future issuance as follows:
|
|
|
|
|
|
|
June 30, 2026 |
|
Common stock warrants |
|
|
923,781 |
|
2025 Equity Incentive Plan: |
|
|
|
Unvested RSUs |
|
|
467,154 |
|
2026 Equity Incentive Plan: |
|
|
|
Unvested RSUs |
|
|
163,463 |
|
Shares available for future grants |
|
|
1,686,537 |
|
|
|
|
3,240,935 |
|
8.Stock-Based Compensation
On August 12, 2025, the Company's Board of Directors adopted the Rare Earth Americas Ltd. 2025 Equity Incentive Plan (the “2025 Plan”). The 2025 Plan provides for the grant of stock-based awards to employees, directors, and consultants. Under the 2025 Plan, 1,500,000 shares were reserved for stock-based compensation in the form of options, restricted stock units, or other stock-based awards. Shares issued under the 2025 Plan shall be drawn from authorized and unissued shares or reacquired common stock.
On April 10, 2026, the Company's stockholders approved the Rare Earths Americas, Inc. 2026 Equity Incentive Plan (the "2026 Plan"), which became effective in connection with the Company's IPO and superseded the 2025 Plan. The 2026 Plan provides for the grant of stock-based awards to employees, directors, and consultants, and 1,850,000 shares were reserved for issuance thereunder.
Through July 21, 2025, some Rare Earths Americas Limited (“REA Australia”) employees that provided services to Alpha were eligible to participate in equity-settled stock-based compensation plans that REA Australia operates for its employees and consultants. None of REA Australia's plans are cash-settled.
Restricted Stock Units (“RSUs”)
During the six months ended June 30, 2026, the Company granted RSUs to employees and directors, experienced forfeitures of outstanding RSUs, and, in connection with the completion of the IPO, recognized the vesting of RSUs subject to a liquidity-based performance vesting condition. The grant-date fair value of RSUs granted during the period was determined using the valuation methodologies described below.
The fair value of RSUs granted prior to the IPO was determined using a PWERM, assuming an (i) IPO and (ii) corporate transaction scenario. The expected economic outcome under each scenario was estimated and then probability-weighted based on management's assumptions to arrive at an overall fair value as of the valuation date. In the IPO scenario, the RSUs are valued based on an expected IPO price, which is discounted for the lack of marketability between the valuation date and the future expected IPO date. In a corporate transaction scenario, the total equity value was determined based on a market approach and allocated to the RSUs using the option pricing method ("OPM"). At issuance, the key assumptions used in pricing these RSUs were the expected timing of the Company's IPO, estimated IPO price, common stock price used in the change of control scenario, probability weighting of the change of control scenarios, and discount for lack of marketability.
Following the completion of the IPO on May 7, 2026, the Company's common stock became publicly traded on the NYSE American under the symbol "REA." The grant-date fair value of RSUs granted on or after the IPO is determined based on the closing price of
the Company's common stock on the date of grant, and the probability-weighted scenario methodology described above is no longer applied to such grants.
The following table summarizes the assumptions used in the IPO scenario to estimate the fair value of the RSUs granted prior to the IPO:
|
|
|
Expected IPO Date |
|
5/8/2026 |
Expected IPO Price per Share |
|
$19.00 |
Discount for Lack of Marketability |
|
7.0% |
Probability of Occurring |
|
85.0% |
The following table summarizes the assumptions used in the OPM to estimate the fair value of the RSUs granted prior to the IPO:
|
|
|
Expected term (in years) |
|
0.75 |
Expected Volatility |
|
129% |
Risk-free interest rate |
|
3.68% |
Expected dividend yield |
|
0% |
Discount for Lack of Marketability |
|
20.0% |
The discount for lack of marketability was determined considering quantitative models, empirical studies, and market data.
Activity during the six months ended June 30, 2026 in RSUs related to employees and directors was as follows:
|
|
|
|
|
|
|
|
|
|
|
Number of Shares |
|
|
Weighted-Average Grant Date
Fair Value |
|
Unvested Balance—December 31, 2025 |
|
|
736,610 |
|
|
$ |
6.48 |
|
Granted |
|
|
332,689 |
|
|
|
17.01 |
|
Vested |
|
|
(546,871 |
) |
|
|
6.61 |
|
Forfeited |
|
|
(28,061 |
) |
|
|
7.29 |
|
Unvested Balance—June 30, 2026 |
|
|
494,367 |
|
|
$ |
13.46 |
|
Vesting solely upon a service condition |
|
|
494,367 |
|
|
|
|
The total fair value of RSUs held by employees and directors that vested during the three and six months ended June 30, 2026 was $12.4 million, measured based on the fair value of the Company's common stock on the vesting date.
Activity during the six months ended June 30, 2026 in RSUs related to nonemployees was as follows:
|
|
|
|
|
|
|
|
|
|
|
Number of Shares |
|
|
Weighted-Average Grant Date Fair Value |
|
Unvested Balance—December 31, 2025 |
|
|
180,988 |
|
|
$ |
6.44 |
|
Granted |
|
|
5,000 |
|
|
|
14.70 |
|
Vested |
|
|
(34,738 |
) |
|
|
6.50 |
|
Forfeited |
|
|
(15,000 |
) |
|
|
6.42 |
|
Unvested Balance—June 30, 2026, of which: |
|
|
136,250 |
|
|
$ |
6.73 |
|
Vesting solely upon a service condition |
|
|
136,250 |
|
|
|
|
The total fair value of RSUs held by nonemployees that vested during the three and six months ended June 30, 2026 was $0.8 million, measured based on the fair value of the Company's common stock on the vesting date.
Warrants
In connection with the Company's acquisition of FRE Australia in July 2025, the Company granted warrants which are considered stock-based payments. The Company recognized stock-based compensation expense of ($53) and $539 for the warrants during the three and six months ended June 30, 2026, respectively. As of June 30, 2026 and December 31, 2025, the fair value of the warrants was $842 and $303, respectively, and all of the warrants granted remain outstanding.
Stock-Based Compensation Expense
Stock-based compensation expense included in the condensed consolidated statements of operations was as follows:
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended June 30, |
|
|
|
2026 |
|
|
2025 |
|
General and administrative expenses: |
|
|
|
|
|
|
Stock-Based Compensation Expense — Directors |
|
$ |
1,266 |
|
|
$ |
— |
|
Stock-Based Compensation Expense — Employees |
|
|
4,055 |
|
|
|
— |
|
Stock-Based Compensation Expense — Consultants |
|
|
968 |
|
|
|
— |
|
Total stock-based compensation expense |
|
$ |
6,289 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended June 30, |
|
|
|
2026 |
|
|
2025 |
|
General and administrative expenses: |
|
|
|
|
|
|
Stock-Based Compensation Expense — Directors |
|
$ |
1,471 |
|
|
$ |
— |
|
Stock-Based Compensation Expense — Employees |
|
|
4,647 |
|
|
|
— |
|
Stock-Based Compensation Expense — Consultants |
|
|
968 |
|
|
|
— |
|
Total stock-based compensation expense |
|
$ |
7,086 |
|
|
$ |
— |
|
As of June 30, 2026, total stock-based compensation expense related to unvested units not yet recognized was $4,865, which is expected to be recognized over a weighted-average period of 1.9 years. The performance-based vesting condition of certain RSUs was satisfied upon the consummation of the Company's IPO on May 7, 2026 and $5,327 in stock-based compensation expense was immediately recognized. Remaining unrecognized compensation cost as of June 30, 2026 relates to awards subject to continued service requirements, including awards for which the liquidity-based performance condition has been satisfied and awards that vest upon the completion of specified service periods.
As of June 30, 2026, total stock-based compensation expense includes $6,109 for unvested and unsettled awards, $438 for vested and settled awards, and $539 related to warrants.
9.Accrued Expenses and Other Non-Current Liabilities
The Company's accrued expenses consist of the following as of June 30, 2026 and December 31, 2025:
|
|
|
|
|
|
|
|
|
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
Accrued compensation and payroll taxes |
|
$ |
378 |
|
|
$ |
825 |
|
Accrued exploration costs |
|
|
246 |
|
|
|
— |
|
Accrued professional fees |
|
|
112 |
|
|
|
44 |
|
Deferred offering costs |
|
|
— |
|
|
|
229 |
|
Accrued other |
|
|
— |
|
|
|
113 |
|
Total Accrued expenses |
|
$ |
736 |
|
|
$ |
1,211 |
|
The Company's other non-current liabilities consist of the following as of June 30, 2026 and December 31, 2025:
|
|
|
|
|
|
|
|
|
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
Stock-based compensation liability |
|
$ |
842 |
|
|
$ |
303 |
|
Lease liability - non-current |
|
|
64 |
|
|
|
20 |
|
Labor contingency |
|
|
62 |
|
|
|
47 |
|
Total Other Non-Current Liabilities |
|
$ |
968 |
|
|
$ |
370 |
|
SAFE
In late December 2025, the Company entered into SAFE agreements to raise $15,080. The SAFE automatically converted into shares of the Company's common stock upon the completion of the Company's IPO in accordance with their contractual terms. Upon conversion, the SAFE agreements converted into an aggregate of 1,037,100 shares of common stock at a conversion price of $14.54.
At the time of conversion, the SAFE liability had a carrying value of $19,705, which was determined based on the fair value of the shares issued upon conversion measured at the Company’s $19.00 initial public offering price per share, resulting in approximately $19,705 recorded to additional paid-in capital.
Convertible related party loan - BRC Loan Agreement
In June 2025 AMBPL entered into a loan agreement with BRC, a related party, whereby amounts previously paid by BRC on AMBPL's behalf were formalized into a note payable to BRC. At the inception of the loan agreement, the outstanding balance was $575. The loan was modified in November 2025 and determined to be an extinguishment. As of December 31, 2025, the loan had an outstanding principal and accrued interest balance of $1,123.
In connection with the completion of the Company's IPO, the outstanding balance under the BRC loan converted into 201,807 shares of the Company's common stock at a fixed conversion price of $6.55 per share. On the conversion date, the loan had a carrying value of $1,322, consisting of principal, accrued interest, and accrued Brazilian financial transaction tax (IOF). Upon conversion, the carrying value of the loan balance of approximately $1,322 was reclassified to additional paid-in capital. Accordingly, no gain or loss was recognized in the condensed consolidated statements of operations during the three and six months ended June 30, 2026. No amounts remained outstanding under the loan following its conversion.
During the three and six months ended June 30, 2026, we recorded interest expense of $19 and $58, respectively, through the date of conversion. As of June 30, 2026 and December 31, 2025, we had accrued interest payable of $0 and $152, respectively.
11.Related Party Transactions
REA Australia
REA Australia was the sole shareholder of AMBPL until July 22, 2025. Prior to this date, certain shared costs were allocated to the Company by REA Australia and reflected as expenses in the consolidated financial statements. These allocated shared costs were $31 and $63 for the three and six months ended June 30, 2025 and consisted primarily of executive remuneration and stock-based compensation, and to a lesser extent exploration costs. There are no similar costs in the period ended June 30, 2026.
Board of Directors
The Company paid Board compensation to entities controlled by certain members of the Board of Directors. Certain directors provide service through a limited liability company (“LLC”), which is wholly owned and controlled by the respective director. Director compensation was $79 and $158 for the three and six months ended June 30, 2026, respectively. The Company did not incur director compensation during the three and six months ended June 30, 2025. Amounts owed to these LLCs as of June 30, 2026 and December 31, 2025 were $0 and $13, respectively, which are included in accrued liabilities.
12.Commitments and Contingencies
Unasserted legal claim
The Company uses third-party labor providers to support certain operations. In connection with this model, there is an unasserted, labor-related contingency that could, under certain circumstances, give rise to secondary exposure for the Company if the applicable contractor were unable to satisfy any settlement or judgment. As of the reporting date, no claims have been filed or asserted directly against the Company, and the contractor has not indicated any unwillingness or inability to meet its legal obligations. The contractor remains the primary obligor with respect to any such obligations, and any potential exposure to the Company, if ultimately incurred, would be secondary to the contractor’s primary responsibility.
Based on management’s assessment of the information currently available, the Company determined that a loss related to this matter is probable and reasonably estimable. The Company's balance sheets as of June 30, 2026 and December 31, 2025, include other non-current liabilities of $62 and $47, respectively, for this matter.
The Company will continue to monitor developments and update its estimates as additional information becomes available.
Exercise of Mining Rights Option
On June 30, 2026, the Company, through its subsidiary AMBPL, delivered notice of intent to exercise its option to acquire certain mining concessions, exploration permits, and an exploration application held by the GMC Grantors in Brazil (“GMC Option”), as more fully described in the Prospectus. Under the terms of the GMC Option, the aggregate exercise price of approximately US$5.16 million is payable through the issuance of 271,579 REA Shares, based on the $19.00 per share offering price. The Company has not issued the shares required to settle the exercise price, pending execution of a definitive subscription agreement with the GMC Grantors.
Operating segments are defined as components of an entity engaged in business activities from which they may recognize revenues and incur expenses, and about which discrete financial information is available and evaluated regularly by the entity's chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance.
The Company has two reportable segments due to their geographical location: United States Mining Operations and Brazil Mining Operations. Our Brazil Mining Operation is comprised of AMBPL, which primarily operates three sites in Brazil. Our United States Mining Operation is comprised of FRE Australia (and its wholly owned subsidiary Foothills Rare Earths, LLC), a consolidated variable interest entity, which operates a site (Project Shiloh) in the state of Georgia located in the United States pursuant to two option agreements. Prior to the acquisition of FRE Australia, the Company had one reportable segment.
The Company’s CODM has been identified as the Chief Executive Officer, who focuses on segment operating loss as the measure of performance to evaluate different segments and to make decisions to allocate resources and evaluate exploration progress. Exploration and evaluation and general and administrative expenses are the significant segment expenses included in the measure of segment operating loss and used to monitor budget versus actual results.
The following table summarizes the Company's long-lived assets, which includes mineral interests by geographic region as of June 30, 2026 and December 31, 2025:
|
|
|
|
|
|
|
|
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
United States |
|
$ |
24,082 |
|
|
$ |
23,688 |
|
Brazil |
|
|
78 |
|
|
|
29 |
|
Total Long-lived assets |
|
$ |
24,160 |
|
|
$ |
23,717 |
|
Assets other than long-lived assets are not regularly reported to the CODM on the segment basis because they consist primarily of cash and assets not specific to a segment.
Significant segment expense included in the measure of segment profit or loss are shown below and reconciled to net loss before taxes for the three and six months ended June 30, 2026 and 2025:
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended June 30, 2026 |
|
United States Mining Operations |
|
|
Brazil Mining Operations |
|
|
Total |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
Exploration expenses |
|
$ |
3,751 |
|
|
$ |
815 |
|
|
$ |
4,566 |
|
General and administrative expenses |
|
|
16 |
|
|
|
211 |
|
|
|
227 |
|
Depreciation expense |
|
|
32 |
|
|
|
4 |
|
|
|
36 |
|
Segment operating loss |
|
$ |
(3,799 |
) |
|
$ |
(1,030 |
) |
|
$ |
(4,829 |
) |
Corporate and other expenses |
|
|
|
|
|
|
|
|
7,947 |
|
Interest income |
|
|
|
|
|
|
|
|
503 |
|
Interest expense |
|
|
|
|
|
|
|
|
29 |
|
Foreign exchange gain |
|
|
|
|
|
|
|
|
1 |
|
Change in fair value of SAFE |
|
|
|
|
|
|
|
|
(1,216 |
) |
Change in fair value of warrants |
|
|
|
|
|
|
|
|
727 |
|
Loss before income taxes |
|
|
|
|
|
|
|
$ |
(12,790 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six months ended June 30, 2026 |
|
United States Mining Operations |
|
|
Brazil Mining Operations |
|
|
Total |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
Exploration expenses |
|
$ |
5,616 |
|
|
$ |
1,015 |
|
|
$ |
6,631 |
|
General and administrative expenses |
|
|
29 |
|
|
|
534 |
|
|
|
563 |
|
Depreciation expense |
|
|
54 |
|
|
|
5 |
|
|
|
59 |
|
Segment operating loss |
|
$ |
(5,699 |
) |
|
$ |
(1,554 |
) |
|
$ |
(7,253 |
) |
Corporate and other expenses |
|
|
|
|
|
|
|
|
10,327 |
|
Interest income |
|
|
|
|
|
|
|
|
630 |
|
Interest expense |
|
|
|
|
|
|
|
|
74 |
|
Foreign exchange loss |
|
|
|
|
|
|
|
|
3 |
|
Change in fair value of SAFE |
|
|
|
|
|
|
|
|
(4,625 |
) |
Change in fair value of warrants |
|
|
|
|
|
|
|
|
(7,919 |
) |
Loss before income taxes |
|
|
|
|
|
|
|
$ |
(29,571 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended June 30, 2025 |
|
United States Mining Operations |
|
|
Brazil Mining Operations |
|
|
Total |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
Exploration expenses |
|
$ |
— |
|
|
$ |
115 |
|
|
$ |
115 |
|
General and administrative expenses |
|
|
— |
|
|
|
90 |
|
|
|
90 |
|
Depreciation expense |
|
|
— |
|
|
|
2 |
|
|
|
2 |
|
Segment operating loss |
|
$ |
— |
|
|
$ |
(207 |
) |
|
$ |
(207 |
) |
Corporate and other expenses |
|
|
|
|
|
|
|
|
179 |
|
Transaction costs |
|
|
|
|
|
|
|
|
157 |
|
Interest expense |
|
|
|
|
|
|
|
|
58 |
|
Loss before income taxes |
|
|
|
|
|
|
|
$ |
(601 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six months ended June 30, 2025 |
|
United States Mining Operations |
|
|
Brazil Mining Operations |
|
|
Total |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
Exploration expenses |
|
$ |
— |
|
|
$ |
165 |
|
|
$ |
165 |
|
General and administrative expenses |
|
|
— |
|
|
|
202 |
|
|
|
202 |
|
Depreciation expense |
|
|
— |
|
|
|
3 |
|
|
|
3 |
|
Segment operating loss |
|
$ |
— |
|
|
$ |
(370 |
) |
|
$ |
(370 |
) |
Corporate and other expenses |
|
|
|
|
|
|
|
|
316 |
|
Transaction costs |
|
|
|
|
|
|
|
|
157 |
|
Interest expense |
|
|
|
|
|
|
|
|
59 |
|
Loss before income taxes |
|
|
|
|
|
|
|
$ |
(902 |
) |
SEM Option
On July 31, 2026, FRE US and FRE Australia, subsidiaries of the Company, entered into a Third Amendment to the Option and Project Evaluation Agreement (the "Third Amendment") with SEM and its members. The Third Amendment modifies the original agreement dated December 11, 2020.
Under the Third Amendment, the option target was modified from acquiring 100% of the ownership interests of SEM to granting FRE US the option to acquire and assume the Weyerhaeuser Mining Lease between Weyerhaeuser Company and SEM, dated October 1, 2020.
FRE US exercised the option on July 31, 2026, the consideration payable at closing will consist of $375 in cash and $2,000 in shares of the Company's common stock. The common stock will be issued in a private placement exempt from registration under the Securities Act of 1933, as amended. The Third Amendment also provides SEM with certain piggyback registration rights if the
Company proposes filing a Form S-1 within three months following the closing date. The Company is obligated to cooperate with SEM to remove restrictive legends from the issued stock in reliance on Rule 144 following the six-month anniversary of the issuance.
The closing of the assignment is subject to customary conditions, including SEM obtaining all required approvals from Weyerhaeuser Company.
Adoption of Executive Severance Plan
On August 7, 2026, the Board approved the adoption of the Company's Executive Severance Plan (the "2026 Severance Plan"), which replaces and supersedes the Company's prior executive severance plan dated August 25, 2025. The 2026 Severance Plan applies to certain executive officers and provides severance benefits upon qualifying terminations of employment, including enhanced severance benefits following a change in control.
Adoption of Short-Term Incentive Plan
On August 7, 2026, the Board also approved the Company's 2026 Short-Term Incentive Plan (the "2026 STIP"), pursuant to which awards for 2026 will be based on achievement of corporate strategic objectives, as determined by the Compensation Committee.
Performance-Based Equity Plan
In addition, on August 7, 2026, the Board approved an equity grant pool of 420,000 performance stock units ("PSUs") and authorized grants under the Rare Earths Americas, Inc. 2026 Equity Incentive Plan. The PSUs have a grant date of August 12, 2026, are subject to a three-year performance period, and vest based on the achievement of specified stock price performance targets.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of the financial condition and results of operations of REA includes information that REA’s management believes is relevant to an assessment and understanding of the Company’s historical operations. You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited financial statements for the three and six months ended June 30, 2026 and 2025 and the respective notes thereto, which are included elsewhere in this Quarterly Report on Form 10-Q, as well as our audited financial statements for the years ended December 31, 2025 and 2024 and the respective notes thereto previously filed with the SEC.
This discussion also contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 related to our current plans, estimates and assumptions, and events and financial trends that may affect our future operating results or financial position. We use terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “design,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “positioned,” “potential,” “predict,” “seek,” “should,” “target,” “will,” “would,” and other similar expressions to identify forward-looking statements. The forward-looking statements contained herein involve risks and uncertainties that could cause our actual results and the timing of events to differ materially from those expressed in these forward-looking statements due to a number of factors, including those discussed in “Special Note Regarding Forward-Looking Statements” appearing elsewhere in this Quarterly Report on Form 10-Q.
Any reference in this section to “we”, “us”, “our”, “REA”, or the “Company” refers to Rare Earths Americas, Inc. and our consolidated subsidiaries for the periods subsequent to the formation of Rare Earths Americas Ltd. on February 28, 2025 or, as the context requires, to the historical results of Alpha Minerals Brazil Participações Ltda “AMBPL.” Any reference to AMBPL refers to AMBPL prior to the consummation of the Acquisitions (as defined below). Refer to the discussion of “Our Corporate and Operating History and the Related Financial Information Reflected in Our Reported Results” for additional details regarding the operations that comprise REA for the reporting periods discussed in this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”).
Overview
Our Corporate and Operating History and the Related Financial Information Reflected in Our Reported Results
In February 2025, we were incorporated as Rare Earths Americas Ltd., under the laws of the Cayman Islands, for the purposes of acquiring AMBPL and Foothills Rare Earths Limited (“FRE Australia”) in two transactions that were contingent upon the completion of each other (the “Acquisitions”), as well as to raise the initial capital necessary to support the continued operations of the acquired and combined entities in a private placement transaction (“Private Placement”). The acquisition of AMBPL, a company organized under the laws of Brazil and with a history of exploration activities primarily conducted at two sites in Brazil, and the acquisition of FRE Australia, an Australian incorporated public unlisted Corporation that had performed limited exploration activities in the United States, were both completed on July 22, 2025 (the “Merger Date”). Consideration for the Acquisitions consisted of REA common shares issued to the former shareholders of each entity and, in the case of FRE Australia, the issuance of warrants exercisable for shares of REA’s common stock in exchange for FRE Australia’s previously outstanding options. The Private Placement, which resulted in the raise of $15.9 million after transaction costs, was completed on July 30, 2025. We subsequently completed a re-domestication through the filing of a certificate of conversion, becoming a Texas corporation on October 15, 2025. Following the redomestication, our name changed to Rare Earths Americas, Inc.
We determined that our acquisition of AMBPL is a transaction between entities under common control because the former sole shareholder of AMBPL, Rare Earths Americas Limited (“REA Australia”), retained control of AMBPL through its majority ownership in REA. Furthermore, as (1) our activities through the Merger Date were limited to administrative tasks supporting the Acquisitions and Private Placement and (2) we succeeded to substantially all of the operations of AMBPL, we determined that AMBPL is the predecessor entity to REA for financial statements purposes. As REA and AMBPL were determined to be entities under common control, the acquisition of AMBPL’s net assets were recorded at their historical carrying amounts and these financial statements reflect REA and AMBPL on a consolidated basis for periods following REA’s incorporation in February 2025. Periods prior to February 2025 relate solely to the predecessor operations of AMBPL. FRE Australia was determined to be a variable interest entity and its acquisition was an asset acquisition. See “Note 4 – Asset Acquisition and Variable Interest Entity” in our financial statements for the years ended December 31, 2025 and 2024 included in our final prospectus filed pursuant to Rule 424(b)(4) on May 7, 2026 (File No. 333-295032) (the “Prospectus”). The operating results and cash flows of FRE Australia are reflected in our consolidated results of operations and statement of financial condition for reporting periods subsequent to the Merger Date.
Our Business and Our Strategy
We are an exploration-stage company focused on advancing a portfolio of critical mineral projects targeting high-grade heavy rare earth mineral assets. Our portfolio includes three material projects - Alpha, Constellation, and Shiloh, along with certain non-material early-stage exploration projects, most notably our Homer Project in Goiás, Brazil. All of our properties are currently in exploration stage, and we have not yet commenced mining operations or generated any revenue. Our current operations are focused on defining mineralization for our projects and increasing our understanding of the characteristics and economics of each project. We hold options to purchase or lease mining rights to all of the properties we are exploring. Those options are described in detail in "Note 6 – Mineral Interests" in our
financial statements for the years ended December 31, 2025 and 2024. Advancing these projects to development will require significant capital.
We intend to grow the value of our assets by: (1) advancing our project portfolio through land acquisition, drilling, exploration, land consolidation, process flowsheet development, resource definition, metallurgical test work, permitting, and engineering studies in accordance with S-K 1300; (2) pursuing strategic partnerships and financing to accelerate project development; and (3) developing a U.S.-aligned platform to strengthen critical mineral supply chains.
We have assembled a team with extensive mining sector-related experience, including exploration, development, permitting, operations and capital markets, to execute our strategy and pursue the market opportunity available to us.
During the second quarter of 2026, we completed our initial public offering. As of June 30, 2026, we had approximately $76.7 million of cash, cash equivalents and short-term investments. Based on our current operating plans, we believe these resources will be sufficient to fund our anticipated cash requirements for at least the next twelve months.
Our results of operations for the six months ended June 30, 2026 were affected by non-cash stock-based compensation expense and changes in the fair value of warrant and SAFE liabilities. Net cash used in operating activities was $10.3 million for the six months ended June 30, 2026, reflecting continued expenditures on exploration activities in the United States and Brazil, as well as costs associated with operating as a public company.
Recent Developments
North American Mining Segment
We are focused on exploration and development of a potential monazite-bearing sands resource across its Foothills Rare Earths District (the “District”) in Georgia, USA. Monazite is a mineral which hosts rare earths elements (REE), such as Neodymium (Nd), Praseodymium (Pr), Dysprosium (Dy) and Terbium (Tb). These elements are key materials used in high-performance permanent magnets, particularly neodymium-iron-boron (NdFeB) magnets, which enable high strength and efficiency in applications such as robotics, electric vehicles, defense systems, wind turbines, and consumer electronics. Dy and Tb are particularly valuable due to their ability to enhance magnet performance at high temperatures.
Monazite-bearing sands systems typically offer several advantages, including the ability to extract near-surface, free-dig material and utilize conventional mineral beneficiation processes; however, the applicability of these characteristics to the District has not yet been established and will require further technical evaluation. These characteristics may be favorable for future technical evaluation, subject to further study.
The Foothills Rare Earths District is at an exploration stage. No mineral resource or mineral reserve has been estimated for the District, and there is no guarantee that further exploration will result in the delineation of a mineral resource. The results presented herein represent exploration data and are insufficient to define a mineral resource. Additional drilling, sampling, and technical studies are required to evaluate the potential for mineral resource estimation.
Over the quarter the Company made significant progress on exploring and developing the District. At the Shiloh property (see Figure 1), over 4,600 meters (m) were drilled to identify and determine zones of rare earths mineralization. Across multiple drilling targets, assay showed geologic results similar with those of monazite-bearing sands system; reinforcing the Company’s exploration thesis that the potential for a rare earths deposit exists. In addition, early exploration results at Liberty Peak (see Figure 1), where drilling has intercepted monazite-bearing sands similar to those encountered at Shiloh more than 50 kilometers away, further supported the potential of the emerging Foothills Rare Earths District.
As of the end of the second quarter of 2026, the Company’s active land position under Exploration & Development Agreements ("EDAs"), mining leases and option agreements totaled 4,254 acres across the District, representing a 53% increase compared to the first quarter of 2026. In addition, REA has short-term access agreements and exploration agreements for initial assessments of prospective properties; total land position for these agreements totaled over 11,500 acres.
Figure 1 - Foothills Rare Earths District showing survey areas and existing exploration targets. NURE select radiometric data from the National Uranium Resource Evaluation survey. Areas shown include active land positions consistent with the presence of an alkaline-carbonatite system.
The Company expanded its 2026 Georgia exploration program to include over 8,000m of sonic and direct push drilling at Liberty Peak, in addition to a 20,000m drill program at Shiloh. Rare Earths Americas will also undertake airborne radiometric surveys, geological mapping, and soil sampling across Target Areas 1–3 (See Figure 1) to further define and advance high-priority drill targets across the District. In total, the Company expects to invest approximately $15 million over 2026 to unlock and define the District's rare earths potential. The Company will release additional assay results and exploration updates throughout the third quarter of 2026 and into year-end.
Brazilian Mining Segment
Alpha Project: During the second quarter of 2026, the Company commenced an Initial Assessment (IA) for its Alpha project in Bahia, Brazil. The IA is expected to evaluate an initial mine plan, metallurgical processing, infrastructure requirements, permitting considerations and project economics, and is currently anticipated to be completed in early 2027. Subject to the results of the IA, the Company may undertake additional engineering and economic studies, including a pre-feasibility study. The IA and any subsequent technical studies are important steps in the advancement of a mining project and are intended to provide information necessary to evaluate technical feasibility, economic viability and future development alternatives.
In parallel with the IA, the Company plans to advance activities that may support future technical studies, including an infill drilling program designed to further define the Alpha mineral resource and potentially support the conversion of portions of the current inferred resource classification to measured and indicated classifications. The Company currently plans to complete approximately 13,400m of drilling at the Alpha property in 2026. There can be no assurance that the IA, future technical studies or additional drilling will support the development of the project or result in the conversion of inferred resources to higher-confidence resource classifications. Approximately $5 million is expected to be spent on exploration for the project in 2026.
Homer Project: During the quarter, the Company announced exploration results from its 100%-owned Homer-A project in Goiás, Brazil. Results from multiple exploration programs, including airborne magnetic surveys, soil geochemistry, gamma-radiometric surveys, geological mapping and drilling, were consistent with the Company's interpretation of a prospective alkaline-carbonatite system containing REE and niobium (Nb) mineralization.
Exploration activities identified a magnetic anomaly covering more than 35 km² and extending over 6.5 kilometers along its major axis. Initial auger and reverse circulation drilling intersected REE and niobium mineralization across the target area, with several drill holes reporting increasing grades with depth and most holes terminating in mineralization.
Based on these results, the Company commenced an expanded 15,000m reverse circulation and diamond drilling program in June 2026 to further evaluate the scale, continuity and grade distribution of potential mineralization at Homer-A. Initial drill and assay results are expected to be released over the third quarter of 2026. Approximately $5 million is expected to be spent on exploration for the project in 2026.
Exploration at the project remains at an early stage, and additional drilling and technical studies are required to determine the extent, continuity and economic significance. No mineral resource or mineral reserve has been estimated for the Homer-A project, and there can be no assurance that further exploration will result in the delineation of a mineral resource or that any such resource would support future development.
Qualified Persons
The scientific and technical information contained in this Quarterly Report on Form 10-Q has been reviewed and approved by the qualified persons identified below, each of whom is a "qualified person" as defined in Item 1300 of Regulation S-K.
North American Mining Segment. The scientific and technical information relating to the Foothills Rare Earths District, including the Shiloh and Liberty Peak properties, has been reviewed and approved by Paul Dockweiler, Senior Geologist with Geosyntec Consultants, a Certified Professional Geologist (CPG-11379) and Registered Member of the Society for Mining, Metallurgy & Exploration. Mr. Dockweiler is not an employee or officer of the Company and provides services as an independent consultant through Geosyntec Consultants.
Brazilian Mining Segment — Alpha Project. The scientific and technical information relating to the Alpha and Constellation projects was prepared by McGarry Geoconsulting Corp. and Karst Geo Solutions LLC, each acting as a qualified person. Neither firm is an employee or affiliate of the Company, and each provides services as an independent consultant. The Alpha Project Technical Report Summary, prepared by McGarry Geoconsulting Corp. and Karst Geo Solutions LLC, is filed as Exhibit 96.3 to the Company's Registration Statement on Form S-1.
Brazilian Mining Segment — Homer-A Project. The scientific and technical information relating to the Homer-A project has been reviewed and approved by Leandro Coracini Ollita, a qualified person registered with the Brazilian Commission for Resources and Reserves (CBRR), Registration No. 023160. Mr. Ollita is an employee of the Company serving as Project Manager, Operations.
Summary of Historical Operations and Expected Trends
General
As an exploration-stage company, we have not begun to generate operating revenues, nor can we expect to generate operating revenues in the foreseeable future. Our financial results reported for the three and six months ended June 30, 2026 and 2025 are not reflective of our expectations for our ongoing operations, as further discussed in the sections titled “Factors that Will Impact Our Exploration Costs” and “Factors that Will Impact Our General and Administrative and Other Operating Costs” included in the Prospectus.
Results of Operations
Summary
We have no operating revenues. We are dependent on equity or other external financings to fund the execution of our business plans and operations, including mineral exploration and evaluation for economic viability; general and administrative (“G&A”) costs; interest expense and other costs. We expect to incur operating losses until such time that an economic mineral resource is identified, developed and put into profitable commercial production.
Comparison of three and six months ended June 30, 2026 and 2025
The following tables set forth our historical results for the periods indicated, and the variances in amounts reported for the comparable reporting periods (dollars in thousands), percent changes are not included as they are not meaningful in this comparison:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended June 30, |
|
|
Change |
|
|
|
2026 |
|
|
2025 |
|
|
$ |
|
Statements of Operations Data: |
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
Exploration expenses |
|
$ |
4,566 |
|
|
$ |
115 |
|
|
$ |
4,451 |
|
General and administrative expenses |
|
|
8,174 |
|
|
|
269 |
|
|
|
7,905 |
|
Depreciation expense |
|
|
36 |
|
|
|
2 |
|
|
|
34 |
|
Transaction costs |
|
|
— |
|
|
|
157 |
|
|
|
(157 |
) |
Total operating expenses |
|
|
12,776 |
|
|
|
543 |
|
|
|
12,233 |
|
Operating loss |
|
|
(12,776 |
) |
|
|
(543 |
) |
|
|
(12,233 |
) |
Other income (expense): |
|
|
|
|
|
|
|
|
|
Interest income |
|
|
503 |
|
|
|
— |
|
|
|
503 |
|
Interest expense |
|
|
(29 |
) |
|
|
(58 |
) |
|
|
29 |
|
Foreign exchange gain |
|
|
1 |
|
|
|
— |
|
|
|
1 |
|
Change in fair value of SAFE |
|
|
(1,216 |
) |
|
|
— |
|
|
|
(1,216 |
) |
Change in fair value of warrants |
|
|
727 |
|
|
|
— |
|
|
|
727 |
|
Total other (expenses) income |
|
|
(14 |
) |
|
|
(58 |
) |
|
|
44 |
|
Loss before income taxes |
|
|
(12,790 |
) |
|
|
(601 |
) |
|
|
(12,189 |
) |
Provision for income taxes |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net loss |
|
$ |
(12,790 |
) |
|
$ |
(601 |
) |
|
$ |
(12,189 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six months ended June 30, |
|
|
Change |
|
|
|
2026 |
|
|
2025 |
|
|
$ |
|
Statements of Operations Data: |
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
Exploration expenses |
|
$ |
6,631 |
|
|
$ |
165 |
|
|
$ |
6,466 |
|
General and administrative expenses |
|
|
10,890 |
|
|
|
518 |
|
|
|
10,372 |
|
Depreciation expense |
|
|
59 |
|
|
|
3 |
|
|
|
56 |
|
Transaction costs |
|
|
— |
|
|
|
157 |
|
|
|
(157 |
) |
Total operating expenses |
|
|
17,580 |
|
|
|
843 |
|
|
|
16,737 |
|
Operating loss |
|
|
(17,580 |
) |
|
|
(843 |
) |
|
|
(16,737 |
) |
Other income (expense): |
|
|
|
|
|
|
|
|
|
Interest income |
|
|
630 |
|
|
|
— |
|
|
|
630 |
|
Interest expense |
|
|
(74 |
) |
|
|
(59 |
) |
|
|
(15 |
) |
Foreign exchange loss |
|
|
(3 |
) |
|
|
— |
|
|
|
(3 |
) |
Change in fair value of SAFE |
|
|
(4,625 |
) |
|
|
— |
|
|
|
(4,625 |
) |
Change in fair value of warrants |
|
|
(7,919 |
) |
|
|
— |
|
|
|
(7,919 |
) |
Total other (expenses) income |
|
|
(11,991 |
) |
|
|
(59 |
) |
|
|
(11,932 |
) |
Loss before income taxes |
|
|
(29,571 |
) |
|
|
(902 |
) |
|
|
(28,669 |
) |
Provision for income taxes |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net loss |
|
$ |
(29,571 |
) |
|
$ |
(902 |
) |
|
$ |
(28,669 |
) |
Operating Costs and Expenses
Total operating expenses increased by $12.2 million and $16.7 million in the three and six months ended June 30, 2026, respectively, as compared to the three and six months ended June 30, 2025. The increases in both periods reflect the Company's expanded scale of operations following the acquisition of FRE Australia and the continued build-out of its organizational and exploration capabilities. The increase for the three months ended June 30, 2026 was further driven by stock-based compensation recognized in connection with the completion of the Company's IPO in May 2026, while the increase for the six-month period also reflects exploration and administrative activity in the first quarter of 2026 against a prior-year period in which the Company's operations were substantially more limited.
Exploration and evaluation expenses. Exploration and evaluation expenses increased by $4.5 million and $6.5 million in the three and six months ended June 30, 2026 as compared to the three and six months ended June 30, 2025. The increase was primarily attributable to
increased exploration activity following the acquisition of FRE Australia, which expanded the Company’s exploration portfolio and operational footprint. The increased exploration activity consisted of increased drilling costs, geological and technical consulting fees, exploration personnel compensation, and assay costs. Exploration and evaluation expenses during the prior‑year period were minimal, reflecting the Company’s more limited scope of operations at that time.
General and administrative expenses. General and administrative expenses increased by $7.9 million and $10.4 million in the three and six months ended June 30, 2026 as compared to the three and six months ended June 30, 2025. The increase was primarily driven by higher stock-based compensation recognized in connection with the completion of the Company's initial public offering, as well as increased personnel-related costs and professional service fees, reflecting the growth of the Company's operations following the acquisition of FRE Australia, including the expansion of management and administrative functions and increased public-company and regulatory compliance activities.
Depreciation expense. Depreciation expense increased by $34 thousand and $56 thousand in the three and six months ended June 30, 2026 as compared to three and six months ended June 30, 2025. The increase was primarily attributable to depreciation of property and equipment placed in service during 2025 and the first half of 2026, including vehicles, exploration and field equipment, and computer and office equipment, as the Company expanded its operations following recent acquisitions.
Transaction costs. Transaction costs decreased by $157 thousand in the three and six months ended June 30, 2026 as compared to the three and six months ended June 30, 2025. Transaction costs in the 2025 periods represent legal, advisory, due-diligence, and other professional fees incurred in connection with the Company's acquisitions of AMBPL and FRE Australia. No transaction costs were incurred in the three and six months ended June 30, 2026.
Other Income and Expense
Interest income. Interest income increased by $503 thousand and $630 thousand in the three and six months ended June 30, 2026 as compared to three and six months ended June 30, 2025. The increase was primarily due to higher balances held in interest bearing accounts during the quarter.
Interest expense. Interest expense decreased by $29 thousand and increased by $15 thousand in the three and six months ended June 30, 2026 as compared to three and six months ended June 30, 2025, respectively. The fluctuations are due to the related party loan agreement with Brazil Royalty Corp Participacoes E Investments Ltda. (“BRC”), which was executed in 2025 and converted to common shares in May 2026.
Foreign exchange gain or loss. The Company incurred an immaterial gain and a $3 thousand loss in the three and six months ended June 30, 2026, respectively, as compared to no gain or loss in three and six months ended June 30, 2025, due to remeasurement of cash accounts held at FRE Australia.
Change in fair value of SAFE. Change in fair value of Simple Agreement for Future Equity (“SAFE”) was a $1.2 million loss and $4.6 million loss in the three and six months ended June 30, 2026. The change was attributable to the remeasurement of the SAFE liability at fair value during the quarter, reflecting changes in valuation assumptions, primarily the share price assumptions, and including the passage of time. No change in fair value of SAFE was recognized in the prior‑year period as the SAFE was executed in December 2025.
Change in fair value of warrants. Change in fair value of warrants was a $727 thousand gain and $7.9 million loss in the three and six months ended June 30, 2026. The change was attributable to the remeasurement of warrant liabilities at fair value during the quarter, reflecting changes in valuation assumptions, primarily the share price assumptions, and including the passage of time. No change in fair value of warrants was recognized in the prior‑year period as the warrants were issued during the transaction in July 2025.
Supplemental Discussion of Performance by Reportable Segment
United States Mining Operations Segment
Segment Operating loss for the Company's United States Mining Operations was as follows (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended June 30, |
|
|
Change |
|
|
|
2026 |
|
|
2025 |
|
|
$ |
|
|
% |
|
Segment Operating loss |
|
$ |
(3,799 |
) |
|
$ |
— |
|
|
$ |
(3,799 |
) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six months ended June 30, |
|
|
Change |
|
|
|
2026 |
|
|
2025 |
|
|
$ |
|
|
% |
|
Segment Operating loss |
|
$ |
(5,699 |
) |
|
$ |
— |
|
|
$ |
(5,699 |
) |
|
|
— |
|
Operating loss from our United States Mining Operations increased $3.8 million and $5.7 million in the three and six months ended June 30, 2026 compared to the prior year period, driven primarily by the acquisition of FRE Australia and the related exploration activities and costs incurred related to the Shiloh project. Operating loss of our United States Mining Operations segment is expected to further increase in subsequent periods. Refer to the discussions of “Factors that Will Impact Our Exploration Costs” and “Acquisition of FRE Australia” included in the Prospectus.
Brazil Mining Operations Segment
Segment Operating loss for the Company's Brazil Mining Operations was as follows (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended June 30, |
|
|
Change |
|
|
|
2026 |
|
|
2025 |
|
|
$ |
|
|
% |
|
Segment Operating loss |
|
$ |
(1,030 |
) |
|
$ |
(207 |
) |
|
$ |
(823 |
) |
|
|
398 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six months ended June 30, |
|
|
Change |
|
|
|
2026 |
|
|
2025 |
|
|
$ |
|
|
% |
|
Segment Operating loss |
|
$ |
(1,554 |
) |
|
$ |
(370 |
) |
|
$ |
(1,184 |
) |
|
|
320 |
|
Operating loss from our Brazil Mining Operations increased $0.8 million and $1.2 million in the three and six months ended June 30, 2026 compared to the prior year period, primarily due to increases in general and administrative costs and exploration activities and exploration spend during the period. The increase in general and administrative costs are due to changes in the Company's operating structure and are expected to remain consistent at the segment level in future periods. Refer to the discussions of “Factors that Will Impact Our Exploration Costs” and “Acquisition of FRE Australia” included in the Prospectus.
Liquidity and Capital Resources
Sources and Uses of Liquidity
We consider highly liquid investments purchased with original maturities of three months or less to be cash equivalents. As of June 30, 2026 and December 31, 2025, we had $10.1 million and $22.8 million, respectively, in cash and cash equivalents. In connection with our initial public offering, we established short-term investment accounts to hold funds designated for land acquisition, mineral licenses and lease payments, option payments, drilling, metallurgical test work, permitting, exploration, evaluation, land consolidation, engineering studies, and working capital and general corporate purposes. These short-term investments are maintained in highly liquid securities to ensure we have adequate resources to fund planned exploration and development programs.
We are an exploration stage company and, since our inception, we have not generated revenues. We incurred operating losses of $12.8 million and $17.6 million in three and six months ended June 30, 2026 and $0.5 million and $0.8 million in the prior year periods, respectively, and have reported an accumulated deficit of $49.4 million and $19.8 million as of June 30, 2026 and December 31, 2025, respectively. We have primarily relied on equity financing to fund our operating and investing activities – including, development and pursuit of our business plan; our mineral exploration and evaluation activities; our general and administrative costs and our capital expenditures. In addition, in the future we will continue to rely on equity financing to meet obligations as they become due and for future purchases of exploration and evaluation assets.
Our predominant source of cash is from financing activities. In 2025, we raised cash through issuances of our common stock for the primary purpose of funding working capital associated with exploration expenses and general and administrative expenses, capital expenditures, and investments supporting our strategy for advancing our portfolio of critical mineral projects targeting high-grade heavy rare earths mineral assets. In 2024, we were primarily funded through payables to related parties.
In December 2025, we raised $11.7 million in proceeds through the issuance of SAFE agreements in a private placement, and in January 2026 we raised an additional $3.4 million through the issuance of SAFE agreements.
In May 2026, the Company completed its initial public offering ("IPO"), raising net proceeds of approximately $64.2 million comprised of $58.9 million from the initial offering and $5.3 million from the underwriters' exercise of the over-allotment option, net of underwriting discounts and commissions.
Our current assets exceeded our current liabilities by $75.6 million as of June 30, 2026, compared to $19.3 million as of December 31, 2025. The increase of $56.3 million was primarily attributable to the completion of the IPO in May of 2026.
The following table is a condensed schedule of cash flows provided as part of the discussion of liquidity and capital resources:
Cash flow Statement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six months ended June 30, |
|
|
Change |
|
|
|
2026 |
|
|
2025 |
|
|
$ |
|
Other Financial Data (in thousands): |
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by operating activities |
|
$ |
(10,265 |
) |
|
$ |
256 |
|
|
$ |
(10,521 |
) |
Net cash used in investing activities |
|
|
(67,148 |
) |
|
|
(2 |
) |
|
|
(67,146 |
) |
Net cash provided by (used in) financing activities |
|
|
64,756 |
|
|
|
(206 |
) |
|
|
64,962 |
|
Currently, we do not maintain a credit facility or have debt from financial institutions. Since inception, we have predominately relied on equity financing to fund our operations, land acquisitions, and capital expenditures.
As of June 30, 2026, we expect material cash expenditures over the next twelve months to include the following:
•approximately $20.0 million related to the Shiloh and other Georgia projects, including capital expenditures for land acquisition, mineral licenses and lease payments, option payments, drilling, metallurgical test work, permitting and S-K 1300 technical report summary preparation;
•approximately $15.0 million related to the Alpha, Constellation, and Homer Projects, including for exploration, evaluation, land option payments, land consolidation, metallurgy, engineering and permitting studies; and
•approximately $8.0 million for working capital and other general corporate purposes.
These are planned estimates based on our current exploration and development plans. Actual expenditures may differ materially depending on exploration results, permitting timelines, equipment and personnel availability, cost escalation, and our ability to raise additional capital. We may also reallocate spending among projects or defer planned activities. We believe that funds raised through issuance of SAFE agreements and the net proceeds from our initial public offering that closed on May 7, 2026 will be sufficient to fund our cash needs for the next twelve months. Historically, we have been successful in raising cash through equity financings; however, no assurances can be given that additional financing will be available in amounts sufficient to meet our needs or on terms that are acceptable to us.
Operating Activities
During the six months ended June 30, 2026, our operating activities used $10.3 million of net cash, as compared to net cash provided of $256 thousand during the six months ended June 30, 2025. The $10.5 million increase in net cash used in operating activities was primarily due to a $28.8 million increase in net loss driven by the expanded operational activities of the Company as a result of the acquisition of FRE Australia, as well as non-cash charges recognized on our SAFE and warrant liabilities. This increase in reported net loss is partially offset by non-cash items, including a $7.9 million increase in the fair value of warrant liabilities, a $4.6 million increase in the fair value of SAFE liabilities, and $7.1 million of stock-based compensation. Changes in operating assets and liabilities resulted in $0.8 million of net cash used from changes in working capital, primarily related to the Company's expanded operational activities.
Investing Activities
Our investing activities used $67.1 million of cash in the six months ended June 30, 2026, as compared to $2 thousand during the six months ended June 30, 2025. Cash used by investing activities increased primarily due to $66.6 million of net purchases of short-term investments funded with proceeds from our initial public offering, as well as $0.4 million of purchases of property and equipment.
Financing Activities
During the six months ended June 30, 2026 and 2025, our financing activities provided $64.8 million and used $0.2 million of cash, respectively. Financing activities during the six months ended June 30, 2026 consisted primarily of $64.2 million of net proceeds from the issuance of common stock in our IPO, including the exercise of the underwriters' over-allotment option and net of commissions, $3.4 million of SAFE proceeds, and $0.2 million of proceeds from warrant exercises, offset partially by $2.9 million of payments of deferred offering costs and $0.2 million of shares repurchased to satisfy employee tax withholding obligations.
Off-Balance Sheet Arrangements
Other than as otherwise described in the Prospectus, we do not have any off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on our financial condition, changes in financial condition, revenues, expenses, results of operations, liquidity, capital expenditures or capital resources.
Risks and Uncertainties Associated with Future Results of Operations
We operate in an industry that is subject to intense competition, development risk, and changes in U.S. governmental policies related to green energy, defense spending and dependence on foreign suppliers. Our operations are subject to significant risks and uncertainties including financial and operational risks, as well as the potential risk of business failure.
We have not yet established that our projects contain any commercially exploitable quantities of proven and probable mineral reserves, and we may not be able to do so. Even if we eventually establish commercially exploitable quantities of mineral reserves, we may not be able to extract those minerals economically. Both mineral exploration and development involve a high degree of risk, and few properties that are explored are ultimately developed into producing mines. The commercial viability of an established mineral deposit will depend on several factors including the size, grade, and other attributes of the mineral deposit, as well as proximity of the deposit to infrastructure, government regulation, and market prices, among other things. Most of these factors will be beyond our control, and any of them could increase costs and make extraction of any identified mineral deposit unprofitable.
Our ability to advance projects depends on successfully completing studies to verify resources, reserves, and commercial viability, securing sufficient financing for exploration, permitting, and infrastructure development, and managing potential cost increases in exploration, construction, and operations due to fluctuations in fuel, power, materials, and other supplies.
For additional information see the section entitled “Risk Factors — Risks Related to Our Business” included in the Prospectus.
Critical Accounting Estimates
See Note 2 – Significant Accounting Policies to our audited consolidated financial statements as of and for the years ended December 31, 2025 and 2024, included in the Prospectus for a description of our significant accounting policies. We consider the following accounting estimates critical to understanding and evaluating our consolidated financial condition and the results of our operations.
Exploration Costs and Mineral Interests
General
Mineral interests consist of options to acquire mineral properties with rights to explore during the option period. Capitalized costs of the options were either asset purchases or payments to option counterparties. Mineral interests will not be amortized until the underlying property is converted to the production stage. As of June 30, 2026, none of the Company's properties were in the production stage and, therefore, the carrying values of the associated mineral interests are not being amortized. Exploration costs are being expensed as incurred until it is determined that a mining deposit can be economically and legally extracted or produced based upon established proven or probable reserves.
Assessments for Recoverability and Impairment
We assess the carrying values of our mineral interests for recoverability as of the end of each quarterly reporting period and whenever information or circumstances indicate the potential for impairment. There were no circumstances indicating the potential for impairment as of June 30, 2026.
To assess recoverability, we would compare estimated undiscounted future net cash flows attributable to a mineral interest (when determinable) with our carrying costs and future obligations related to the mineral interest. If it is determined that the estimated future undiscounted cash flows related to a mineral interest are less than the carrying value of the mineral interest, an impairment loss is required to be measured and recorded.
Future net cash flow estimates are dependent upon economic reserves being discovered or developed on the related property; the costs of permitting, financing, start-up, and commercial production related to a mineral interest; and commodity prices. When estimates of future net cash flows are not determinable and other conditions indicate the potential for impairment, management uses available market information and/or third-party valuation experts to assess if the carrying value of a mineral interest can be recovered and to estimate fair value.
Stock-Based Compensation
Our stock-based compensation consists primarily of restricted stock units ("RSUs") granted under the Rare Earth Americas Ltd. 2025 Equity Incentive Plan and the Rare Earths Americas, Inc. 2026 Equity Incentive Plan (the "Plans"). We account for stock-based compensation awards based on the fair value of the award as of the grant date, which for RSUs was based on the fair value of the underlying common stock at the time of the grant.
The Company recognizes stock-based compensation expense on a straight-line basis over the awards' requisite service period. Prior to the Company's initial public offering in May 2026, certain RSUs were subject to a performance-based vesting condition tied to a liquidity event. In connection with the completion of the IPO on May 7, 2026, the performance-based vesting condition was satisfied and 581,609 RSUs vested. The Company recognized $3.8 million in stock-based compensation expense upon vesting of these performance-based RSUs and an additional $1.5 million related to awards subject to time-based vesting conditions.
As of June 30, 2026, the Company has $4.9 million of unrecognized compensation cost related to unvested RSUs, which is expected to be recognized over a weighted-average period of 1.9 years. Following the completion of the Company's IPO on May 7, 2026, all liquidity-event vesting conditions were satisfied, and the remaining unrecognized compensation cost relates solely to service-based vesting conditions.
Instruments with Characteristics of Liabilities and Equity
As of June 30, 2026, the Company has outstanding warrants exercisable into shares of the Company's common stock. The Company accounts for these instruments as liability-classified based on an assessment of their specific terms and applicable authoritative guidance. The instruments are required to be recorded at their initial fair value on the date of issuance, and are remeasured to their fair value on each balance sheet date thereafter, with any change in fair value recognized in the Company’s condensed consolidated statements of operations.
Recently Adopted Accounting Standards
See Note 2 –Significant Accounting Policies of the notes to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.
Emerging Growth Company Status
In April 2012, the JOBS Act was enacted. Section 107(b) of the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the extended transition period to comply with new or revised accounting standards and to adopt certain of the reduced disclosure requirements available to emerging growth companies. As a result of the accounting standards election, we will not be subject to the same implementation timing for new or revised accounting standards as other public companies that are not emerging growth companies which may make comparison of our financials to those of other public companies more difficult.
We expect to retain our emerging growth company status until the earliest of:
•The end of the fiscal year in which our annual revenues exceed $1.235 billion;
•The end of the fiscal year in which the fifth anniversary of this offering has occurred;
•The date on which we have issued more than $1.0 billion in non-convertible debt during the previous three-year period; or
•The date on which we qualify as a large accelerated filer.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Management, including our principal executive officer and principal financial and accounting officer, must evaluate the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended June 30, 2026 as defined in Exchange Act Rules 13a-15(e) and 15d-15(e). Due to the material weakness described below, our disclosure controls and procedures were not effective as of June 30, 2026.
Description of Material Weakness
The material weaknesses we identified include:
•a lack of sufficient qualified resources to ensure adequate oversight and accountability over the performance of controls, including retention of control evidence, while maintaining segregation of duties;
•inadequate design and implementation of controls in business process cycles such as payroll, treasury, procure to pay, and period end financial reporting and close, including controls over journal entries, reconciliations, SAFE valuation and account analyses; and
•ineffective general controls over information technology systems that support the financial reporting process, specifically related to privileged access, user provisioning, and de-provisioning, periodic user access reviews, authentication settings, data processing and change management were not maintained
Remediation Plan
We have taken and will continue to take action to improve our internal control over financial reporting and remediate these material weaknesses, including:
•consulting with experts on evaluation of technical accounting matters;
•performing a risk assessment over the organization and information technology systems used as part of financial reporting, and identifying control activities to be implemented in response to the identified risks, which will include improving IT general controls, period end financial reporting controls including journal entries, reconciliations, fair value analysis, account analysis, and evaluation of technical accounting matters;
•engaging a third-party provider to help us assess and improve our internal control over financial reporting in preparation for compliance with Section 404; and
•hiring additional qualified accounting and financial reporting personnel to support our accounting processes and procedures and supplement our internal resources in our computation processes.
While management is making improvements to our control environment and business processes to support and scale with our growing operations, the identified material weaknesses remain un-remediated. We may not be able to fully remediate these material weaknesses until these steps have been completed and the internal controls have been operating effectively for a sufficient period of time. This evaluation process, including testing the effectiveness of the remediation efforts, may be concluded prior to December 31, 2026, but may extend into 2027. Additionally, as stated above, we have not performed an evaluation of our internal control over financial reporting; accordingly, we cannot ensure that we have identified all, or that we will not in the future have additional, material weaknesses. Material weaknesses may still exist when we report on the effectiveness of our internal control over financial reporting as required under Section 404 of the Sarbanes-Oxley Act, beginning with our second annual report.
Changes in Internal Control over Financial Reporting
In connection with the preparation and audit of our financial statements as of and for the fiscal year ended December 31, 2025, material weaknesses have been identified in our internal control over financial reporting. While we have begun the remediation of certain controls we have not fully remediated the material weakness. Thus, there was no change in our internal control over financial reporting that occurred during the fiscal quarter of 2026 covered by this Quarterly Report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. We are not currently a party to any material proceedings. Regardless of outcome, such proceedings or claims could have an adverse impact on us because of defense and settlement costs, diversion of resources and other factors, and the possibility of unfavorable outcomes.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Unregistered Sales of Equity Securities
During the six months ended June 30, 2026, in connection with the completion of the Company's initial public offering, all outstanding SAFE agreements automatically converted into 1,037,100 shares of the Company's common stock in accordance with their terms. The Company also issued 201,807 shares of common stock upon conversion of the related-party convertible loan at a fixed conversion price of $6.55 per share, 19,052 shares of common stock pursuant to the Greenfield Agreement, and an aggregate of 46,610 shares of common stock upon the exercise of previously issued warrants.
The securities described above were issued in reliance upon exemptions from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, and/or Regulation S promulgated thereunder. No underwriting discounts or commissions were paid in connection with any of the foregoing transactions.
Use of Proceeds
On May 7, 2026, the Company completed its initial public offering of 3,333,331 shares of common stock at a public offering price of $19.00 per share. The Company received net proceeds of approximately $58.9 million, after deducting underwriting discounts and commissions but before payment of offering expenses. On May 14, 2026, the underwriters exercised a portion of their over-allotment option and purchased an additional 299,789 shares of common stock, resulting in additional net proceeds of approximately $5.3 million.
There has been no material change in the planned use of proceeds from the initial public offering as described in the Company's final prospectus filed with the SEC pursuant to Rule 424(b)(4) on May 7, 2026. The Company expects to continue using the remaining proceeds principally to fund exploration, evaluation and development activities at the Shiloh, Alpha, Constellation and Homer projects, as well as for working capital and general corporate purposes. Pending such uses, the Company invests the remaining net proceeds in cash, cash equivalents and short-term investments.
Issuer Purchases of Equity Securities
The following table contains information about shares withheld to satisfy tax withholding obligations in connection with the vesting of restricted stock units granted under the Company's equity incentive plans. These shares were not repurchased pursuant to a publicly announced share repurchase program:
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|
|
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|
|
|
|
Period |
Total Number of Shares Purchased |
|
Average Price Paid Per Share |
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Shares Purchased as Part of Publicly Announced Program |
|
Maximum Number of Shares Remaining Under the Program |
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April 1 – April 30, 2026 |
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— |
|
$ |
— |
|
|
— |
|
|
— |
|
May 1 – May 31, 2026 |
|
7,154 |
|
$ |
22.69 |
|
|
— |
|
|
— |
|
June 1 – June 30, 2026 |
|
— |
|
$ |
— |
|
|
— |
|
|
— |
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Total |
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7,154 |
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|
|
|
— |
|
— |
|
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
Board Structural Changes
On August 7, 2026, the Board of Directors (the “Board”) of Rare Earths Americas, Inc. (the “Company”), upon the recommendation of the Nominating and Corporate Governance Committee, appointed Daniel Shribman as Executive Chairman of the Board effective as of August 12, 2026. In connection with this appointment, the Nominating and Corporate Governance Committee determined that Mr. Shribman no longer satisfies the independence requirements under applicable securities laws and the listing standards of the NYSE Exchange due to his increased involvement in the Company’s strategic corporate and capital markets activities. As a result, Mr. Shribman was removed from the Audit Committee and the Compensation Committee of the Board.
As a result of Mr. Shribman’s loss of independence, the Audit Committee will be reconstituted as of August 12, 2026 to consist of Hugo Schumann (Chair), Ivy Estabrooke, and Keith Phillips. The Compensation Committee will be reconstituted as of August 12, 2026 to consist of Keith Phillips (Chair), Reta Jo Lewis, and Ivy Estabrooke.
Adoption of Executive Severance Plan
On August 7, 2026, the Board approved the adoption of the Company’s Executive Severance Plan (the “2026 Plan”), which replaces and supersedes the Company’s prior executive severance plan dated August 25, 2025. The 2026 Plan applies to the following executive officers: Donald Swartz, Chief Executive Officer; Jennifer Grafton, Chief Operating Officer, General Counsel and Secretary; Cheryl Kerr, Chief Accounting Officer and Treasurer; Kevin McCarty, Vice President of Exploration; and Eric Schrimsher, Director of Exploration.
Under the 2026 Plan, the applicable severance multiplier is 1.0x base salary prior to a Change in Control and 2.0x base salary following a Change in Control for Ms. Grafton, Ms. Kerr, Mr. McCarty, and Mr. Schrimsher. Mr. Swartz is entitled to a severance multiplier of 1.5x base salary prior to a Change in Control and 2.5x base salary following a Change in Control.
The foregoing description of the 2026 Plan does not purport to be complete and is qualified in its entirety by reference to the full text of the 2026 Plan, a copy of which is attached hereto as Exhibit 10.2 and is incorporated herein by reference.
Adoption of 2026 Short-Term Incentive Plan
On August 7, 2026, the Board approved the Company’s 2026 Short-Term Incentive Plan (the “2026 STIP”). Given the mid-year IPO of the Company, the 2026 STIP for the named executive officers will be based on achievement of key corporate strategic objectives, which determination of achievement and payout will be at the sole discretion of the Compensation Committee. The 2026 STIP includes a safety override provision that could reduce payout to zero in the event of a workplace fatality or other material workplace safety issue during the performance period. The plan also contains a clawback provision applicable in the event of a material financial restatement or a material breach of the Company’s Code of Conduct.
Performance-Based Equity Plan
On August 7, 2026, the Board approved an equity grant pool of 420,000 performance stock units (“PSUs”) and authorized the following equity awards, all with a grant date of August 12, 2026:
•Donald Swartz, Chief Executive Officer, was granted 200,000 PSUs;
•Daniel Shribman, Executive Chairman, was granted 100,000 PSUs; and
•PSUs were granted to six designated executives, including Jennifer Grafton (40,000 shares) and Cheryl Kerr (20,000 shares).
The PSUs granted to the executives are subject to a three-year performance period commencing on the grant date. The number of PSUs that may be earned ranges from 0% to 100% of the target number of PSUs, contingent upon the performance of the Company’s stock price. Except in the case of certain special vesting events, an executive must remain in continuous service with the Company from the grant date through the applicable vesting date to earn any PSUs during the performance period.
The PSUs are divided into four equal tranches, each representing 25% of the target PSUs. Each tranche vests independently if the Company's common stock achieves a specified volume-weighted average price over twenty (20) consecutive trading days (the “20-Day VWAP”) at any time during the performance period.
The 20-Day VWAP stock price hurdles for each tranche are as follows:
•Tranche 1 (25% of Target PSUs): $22.50
•Tranche 2 (25% of Target PSUs): $25.00
•Tranche 3 (25% of Target PSUs): $27.50
•Tranche 4 (25% of Target PSUs): $30.00
All equity awards granted under the plan are subject to a “double-trigger” change in control provision. Under this provision, the accelerated vesting of the PSUs requires both the occurrence of a change in control of the Company and a subsequent qualifying termination of the executive's employment.
The foregoing description of the Performance Share Agreement Under the Rare Earths Americas, Inc. 2026 Equity Incentive Plan does not purport to be complete and is qualified in its entirety by reference to the full text of the Performance Share Agreement, a copy of which is attached hereto as Exhibit 10.3 and is incorporated herein by reference.
Rule 10b5-1 Trading Arrangements
During the three months ended June 30, 2026, no officer or director of the Company adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements.
Item 6. Exhibits.
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Exhibit
Number
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|
Description |
10.1* |
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Third Amendment to Option and Project Evaluation Agreement, dated July 31, 2026, by and among Foothills Rare Earths, LLC, Foothills Rare Earths Limited, Southeast Metals LLC, and the members of Southeast Metals LLC. |
10.2* |
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Rare Earths Americas, Inc. Executive Severance and Change in Control Plan |
10.3* |
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Performance Share Agreement Under the Rare Earths Americas, Inc. 2026 Equity Incentive Plan |
31.1* |
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Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2* |
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Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1* |
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Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2* |
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Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS |
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Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. |
101.SCH |
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Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents |
104 |
|
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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Rare Earths Americas, Inc. |
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Date: August 11, 2026 |
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By: |
/s/ Donald Swartz |
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Donald Swartz |
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Chief Executive Officer and President
(Principal Executive Officer)
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Date: August 11, 2026 |
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By: |
/s/ Cheryl Kerr |
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Cheryl Kerr |
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Chief Accounting Officer
(Principal Financial Officer and Principal Accounting Officer)
|
EX-10.1
2
rea-ex10_1.htm
EX-10.1
EX-10.1
Exhibit 10.1
THIRD AMENDMENT TO OPTION AND PROJECT EVALUATION AGREEMENT
THIS THIRD AMENDMENT TO THE OPTION AND PROJECT EVALUATION AGREEMENT (the "Third Amendment") is entered into effective July 31, 2026 (the "Amendment Effective Date"), by and among Foothills Rare Earths, LLC, a North Carolina limited liability company ("FRE US"), Foothills Rare Earths Limited, an Australian limited liability company ("FRE"), Southeast Metals LLC, a Virginia limited liability company ("SEM"), Robert B. Cook, James E. Bond, Richard B. Gilliam, and H. Ross Arnold (each a "Member" and collectively, the "Members"). The parties to this Agreement are each referred to as a "Party" and collective the "Parties".
WITNESSETH:
WHEREAS, the Parties entered into that certain Option and Project Evaluation Agreement (the "Option") effective as of December 11, 2020; and
WHEREAS, the Parties entered into that First Amendment to the Option and Project Evaluation Agreement (the "First Amendment") effective as of December 11, 2023; and
WHEREAS, the Parties entered into that Second Amendment to the Option and Project Evaluation Agreement (the "Second Amendment") effective as of July 17, 2025; and
WHEREAS, the Parties desire to change the terms of the Option, as amended, to grant an option to acquire and assume the Weyerhaeuser Mining Lease between Weyerhaeuser Company and Southeast Metals LLC dated effective October 1, 2020 (“Property Agreement”) as listed in Exhibit B of the Option instead of the option to acquire 100% of the ownership interests of SEM; and
WHEREAS, in order for FRE and FRE US to timely exercise the option by July 31, 2026, the Parties agree to replace all terms of the Option, as amended (the “Agreement”) which are inconsistent with the below new terms of exercise.
NOW THEREFORE, pursuant to the provisions of Section 12(c) of the Option, the Parties hereto, intending to be legally bound, hereby agree as follows:
1.Replacement of Certain Terms of the Option, as Amended
1.1.In order to effectuate the transition from an option to acquire the ownership interests of SEM to an option to acquire and assume the Property Agreement, the Parties agree that the terms of the Agreement which are inconsistent with the terms hereof are hereby replaced in their entirety. From and after the date hereof, all prior terms and conditions inconsistent with the terms hereof are superseded by the new terms of exercise set forth below.
2.Grant and Exercise of Purchase Option
2.1.Subject to and upon the terms and conditions of this amendment, SEM hereby grants to FRE US the exclusive and continuing option (but not obligation) up to and through August 1, 2026 (the “Option Period”) to acquire and assume (the "Purchase Option") all of SEM's right, title, and interest in, and obligations under, the Property Agreement.
2.2.FRE US may exercise the Purchase Option at any time during the Option Period. In the event FRE US, in its sole and absolute discretion, desires to exercise the Purchase Option, FRE US shall exercise the Purchase Option by delivering written notice of such exercise (the "Option Notice") to SEM. The date on which FRE US issues the Option Notice shall be the "Exercise Date".
3.1.If FRE US exercises its Purchase Option, at Closing, FRE US and FRE (as applicable) shall pay consideration for the assignment of the Property Agreement in two tranches: (1) $600,000 less the $225,000 in total option payments previously paid by FRE to SEM, totaling $375,000 in cash (the “Cash Purchase Price”) and (2) $2,000,000 of Stock as defined below (the "Stock Purchase Price").
3.2.The Stock Purchase Price shall be paid in fully paid and non-assessable shares of common stock, par value $0.0001 per share, of Rare Earths Americas, Inc. (NYSE: REA) (the “Stock”). The Stock will be issued in a private placement exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"), and will bear customary restrictive legends. Notwithstanding the foregoing, if at any time within three (3) months following the Closing Date, the Company proposes filing a registration statement on Form S-1 under the Securities Act with respect to an offering of its equity securities or on behalf of existing unregistered shareholders, the Company shall promptly provide written notice to SEM. Upon the written request of SEM delivered within ten (10) days after receipt of such notice, the Company shall include the Stock in such registration statement. The Company agrees that, following the six-month anniversary of the issuance of the Stock, it will cooperate with the Seller to immediately remove the restrictive legends in reliance on Rule 144 under the Securities Act; provided, however, that the Company's obligation to remove such legends is subject to the Seller’s provision of a customary representation letter required by the Company and its transfer agent. The Company shall promptly provide SEM the DRS book entry statement without legends and shall use reasonable efforts to assist SEM in the movement of shares from the transfer agent to its brokerage account.
3.3.The number of REA Shares to be issued to SEM shall be determined using the volume weighted average of the shares on the NYSE for the 15 trading days immediately prior to (and excluding) the Closing Date, rounded up to next whole share.
4.Closing of Purchase Option
4.1.The closing of the assignment of the Property Agreement (the "Closing") shall be held on or before three (3) days after the satisfaction or waiver of the Conditions Precedent in Section 5 hereof, but in no event more than thirty (30) days following the Exercise Date (the "Closing Date").
4.2.Should the Parties be unable to close due to failure to satisfy the conditions precedent in Section 5(a), the Parties agree to extend the outside Closing Date by an additional thirty (30) days while SEM pursues approval, utilizing best efforts.
4.3.Unless otherwise agreed, Closing shall take place by the exchange of signatures by facsimile, electronic mail or other electronic transmission.
5.
Conditions Precedent. Closing is conditioned on the satisfaction or waiver of the following:
5.1.SEM must use commercially reasonable efforts to obtain all approvals required under Section 18.1 of the Property Agreement; and
5.2.all necessary governmental approvals and consents, if any, for Closing shall have been obtained.
6.1.On the Closing Date, FRE US and REA must deliver to SEM:
6.1.1.the Cash Purchase Price and issue SEM the Stock Purchase Price in REA Shares and register SEM as the holder of the relevant number of REA Shares with its transfer agent. Evidence of execution and transmittal of the transfer agent instructions to issue the REA Shares to SEM shall be conclusive proof of satisfaction of payment of the Stock Purchase Price; and
6.1.2.FRE US must deliver a fully executed Assignment and Assumption of Lease agreement, in a form reasonably acceptable to SEM, assuming all of SEM's obligations under the Property Agreement as of the Closing Date.
6.2.On the Closing Date, SEM must deliver to FRE US:
6.2.1.A fully executed Assignment and Assumption of Lease agreement, in a form reasonably acceptable to FRE US, transferring all of SEM's rights, title, and obligations under the Property Agreement to FRE US as of the Closing Date;
6.2.2.Written documentation evidencing the consent of Weyerhaeuser Company to the full assignment of the Property Agreement to FRE US, including all rights and extension terms;
6.2.3.Written documentation from Weyerhaeuser Company confirming that the Property Agreement is valid, in effect and that no grounds for declaring a default under Section 13 of the Property Agreement exist on behalf of Weyerhaeuser as Lessor;
6.2.4.Possession of all information and other documents held by SEM in connection with the Property Agreement;
6.2.5.A Section 4(a)(2) Investor Certificate signed by SEM; and
6.2.6.A Seller’s Closing Statement shall be executed and provided to FRE US and FRE as to the following:
6.2.6.1.That SEM has complied, and the Members have caused SEM to comply, in all material respects with the Property Agreement, including without limitation, as it may be amended, modified, or supplemented from time to time;
6.2.6.2.That no uncured breach of warranty or the other terms and provisions of the Option, as amended, by SEM or the Members shall have occurred and be ongoing;
6.2.6.3.That, to the knowledge of SEM and its members, there has been no material change in zoning or environmental regulations affecting the real property underlying the Property Agreement; and
6.2.6.4.No law, regulation or order exists that renders it impossible or impracticable, to the knowledge of SEM and its Members, to commercially exploit and mine rare earths metals on the real property underlying the Property Agreement.
7.
Rights of FRE RE Following Exercise Date. During the period following the Exercise Date and before Closing, FRE US shall retain all of the rights and benefits granted to FRE US under Section 4 of the Option Agreement and continue to pay all obligations related to the Covered Property (as defined in the Option Agreement).
8.
Amendment Effective Date. This Third Amendment shall be effective upon the Amendment Effective Date.
9.
Conflict of Terms. In the event of any conflict between the terms of the Option and the terms hereof, the terms of this Third Amendment shall control.
10.
No Further Amendment. Except as amended hereby and in the First Amendment and Second Amendment, the Option has not been further amended or modified, and remains in full force and effect, including but not limited to the obligations of FRE in Section 5(b)(c). This Third Amendment shall constitute an amendment of the Option and shall be fully incorporated into and subject to the terms and provisions thereof.
11.
Counterparts. This Third Amendment may be executed in any number of counterparts and by the different
parties hereto in separate counterparts, each of which when so executed shall be deemed an original, but all of which shall constitute one and the same instrument.
12.
Electronic Signatures. Any counterpart of this Third Amendment which is delivered by facsimile transmission or electronic mail shall be deemed the equivalent of an originally signed counterpart and shall be fully admissible in any enforcement proceedings related to this Third Amendment.
13.
Mutual Representation as to Authority. Each individual whose signature appears below warrants and represents to all parties hereto that such individual has full right and authority to execute this Third Amendment in the capacity designated, and further warrants and represents that such signatures are sufficient to bind the party on whose behalf this Third Amendment is being executed to the terms and provisions hereof.
IN WITNESS WHEREOF, the Parties have executed this Third Amendment by their duly authorized representatives as of the Amendment Effective Date.
FRE US:
Foothills Rare Earths, LLC
By: /s/ Donald Swartz ___________
Name: Donald Swartz
Title: Manager
FRE:
Foothills Rare Earths Limited
By: /s/ Donald Swartz ___________
Name: Donald Swartz
Title: Manager
SEM:
Southeast Metals LLC
By: /s/ Bart L Graham _
Name: Bart L Graham
Title: Assistant Manager
MEMBERS:
/s/ Robert B. Cook ____________
Robert B. Cook
/s/ James E. Bond
James E. Bond
By: Richard Gilliam under Power of Attorney.
/s/ Richard Gilliam
Richard Gilliam
/s/ H. Ross Arnold
H. Ross Arnold
EX-10.2
3
rea-ex10_2.htm
EX-10.2
EX-10.2
Exhibit 10.2
Rare Earths Americas, Inc.
Executive Severance and Change in Control Plan
ARTICLE I - PURPOSE
This Executive Severance and Change in Control Plan has been established by Rare Earths Americas, Inc. (the “Company”) on August 12, 2026 (the "Effective Date") to provide Participants with the opportunity to receive severance benefits in the event of certain terminations of employment. The purpose of the Plan is to attract and retain qualified executives. The Plan is intended to be a top hat welfare benefit plan under ERISA.
Capitalized terms used but not otherwise defined herein have the meanings set forth in ARTICLE II.
ARTICLE II - DEFINITIONS
"ACA" has the meaning set forth in Section 4.01(c).
"Administrator" means the Compensation Committee.
"Applicable Severance Multiplier" means the multiplier contained in a Participant's Participation Agreement that is used to determine the amount of severance the Participant may receive if a Qualifying Termination occurs as set out in Article IV hereof.
"Benefit Continuation" has the meaning set forth in Section 4.01(c).
"Benefit Continuation Period" means the period beginning on the Participant's termination date and ending on the earliest of: (a) the end of the time period specified in a Participant's Participation Agreement during which the Participant may receive continued health coverage following a Qualifying Termination; (b) the date on which the Participant becomes eligible to receive substantially similar coverage from another employer; and (c) the date the Participant is no longer eligible to receive COBRA continuation coverage.
"Board" means the Board of Directors of the Company.
"Cause" means:
(a) the Participant's willful failure to perform their duties (other than any such failure resulting from incapacity due to physical or mental illness);
(b) the Participant's failure to comply with any valid and legal directive of the Board or the person to whom the Participant reports;
(c) the Participant's engagement in dishonesty, illegal conduct or misconduct, which is, in each case, materially injurious to the Company or its affiliates;
(d) the Participant's embezzlement, misappropriation or fraud, whether or not related to the Participant's employment with the Company;
(e) the Participant's conviction of or plea of guilty or nolo contendere to a crime that constitutes a felony (or state law equivalent) or a crime that constitutes a misdemeanor involving moral turpitude, if such felony or other crime is work-related, materially impairs the Participant's ability to
perform services for the Company or results in material reputational or financial harm to the Company or its affiliates;
(f) the Participant's material violation of the Company's written policies or codes ofconduct, including written policies related to discrimination, harassment, performance of illegal or unethical activities, and ethical misconduct; or
(g) the Participant's engagement in conduct that brings or is reasonably likely to bring the Company negative publicity or into public disgrace, embarrassment, or disrepute.
For purposes of this definition, no act or failure to act on the part of the Participant shall be considered "willful" unless it is done, or omitted to be done, by the Participant in bad faith or without reasonable belief that the Participant'saction or omission was in the best interests of the Company.
“Change in Control” means the occurrence of any one of the following events:
(a) Merger or Consolidation: The consummation of a merger or consolidation of the Company with or into another entity, or any other corporate reorganization, if persons who were not stockholders of the Company immediately prior to such transaction own more than 50% of the combined voting power of the resulting entity’s voting securities immediately after the transaction;
(b) Sale of Assets: A sale, lease, exchange, or other disposition of all or substantially all of the Company’s assets;
(c) Change in Board Composition: During any 12-month period, individuals who, as of the beginning of such period, constitute the Board of Directors of the Company (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to the start of such period whose election or nomination was approved by a vote of at least a majority of the Incumbent Board shall be considered a member of the Incumbent Board;
(d) Acquisition of Voting Securities: Any person or group (as defined under Section 13(d) or 14(d) of the Securities Exchange Act of 1934), other than the Company or any of its affiliates, becomes the beneficial owner, directly or indirectly, of more than 50% of the combined voting power of the Company’s then outstanding voting securities; or
(e) Liquidation or Dissolution: The Company’s complete liquidation or dissolution.
To the extent required for Section 409A, Change in Control shall be interpreted consistent with Treas. Reg. §1.409A-3(i)(5).
"COBRA" meansthe Consolidated Omnibus Budget Reconciliation Act of 1985.
"Code" means the Internal Revenue Code of 1986, as amended. Any reference to a section of the Code shall be deemed to include a reference to any regulations promulgated thereunder.
"Company" means Rare Earths Americas, Inc. And its subsidiaries (collectively, the “Company”), a Texas corporation, and any successor thereto.
"Compensation Committee" means the Compensation Committee of the Board.
"Effective Date" has the meaning set forth in ARTICLE I.
"Eligible Employee" means any full-time employee of the Company who is recommended by the chief executive officer to the Administrator to be a key employee who should be eligible to participate in the Plan. Eligible Employees shall be limited to a select group of management or highly compensated employees within the meaning of Sections 201, 301, and 404 of ERISA.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.
"Exchange Act" means the Securities and Exchange Act of 1934, as amended.
"Good Reason" means:
(a) a material reduction in the Participant's base salary other than a general reduction in base salary that affects all similarly situated executivesin substantially the same proportions;
(b) a material reduction in the Participant's target annual bonus opportunity;
(c) the Company's failure to obtain an agreement from any successor to the Company to assume and agree to perform the obligations under the Plan in the same manner and to the same extent that the Company would be required to perform, except where such assumption occurs by operation of law; or
(d) a material, adverse change in the Participant's title, reporting relationship, authority, duties or responsibilities (other than temporarily while the Participant is physically ormentally incapacitated or as required by applicable law).
The Participant cannot terminate their employment for Good Reason unless they have provided written notice to the Company of the existence of the circumstances providing grounds for termination for Good Reason within 30 business days of the initial existence of such grounds and the Company has had at least 30 business days from the date on which such notice is provided to cure such circumstances, if curable. If the Participant does not terminate their employment for Good Reason within 90 business days after the first occurrence of the applicable grounds, then the Participant will be deemed to have waived their right to terminate for Good Reason with respect to such grounds.
"Participant" has the meaning set forth in Section 3.
"Participation Agreement" means the latest participation agreement delivered by the Company to a Participant informing the Eligible Employee of the Eligible Employee'sparticipation in the Plan.
"Person" hasthemeaning ascribed to it in Section 13(d)(3) of the Exchange Act.
"Plan" means this Rare Earths Americas, Inc. Executive Severance and Change in Control Plan, as may be amended and/or restated from time to time.
"Pro-Rata Bonus" has the meaning set forth in Section 4.01(b).
"Qualifying Termination" means the termination of a Participant's employment either (a) by the Company without Cause; or (b) by the Participant for Good Reason.
"Release" has the meaning set forth in Section 6(c).
"Severance" has the meaning set forth in Section 4.01(a).
"Specified Employee Payment Date" has the meaning set forth in Section 9.13(b).
ARTICLE III- PARTICIPATION
The Administrator shall designate and provide written notice to each Eligible Employee chosen by the Administrator to participate in the Plan (each, a "Participant"). Appendix A of the Plan, as it may be updated from time to timeby the Administrator, shall at all times contain a current list of Participants.
ARTICLE IV - SEVERANCE
Section 4.01 Severance. If a Participant experiences a Qualifying Termination, then, subject to ARTICLE VI, the Company will provide the Participant with the following:
(a) Severance in an amount equal to the product of the Participant's Applicable Severance Multiplier times the sum of the Participant's base salary in effect immediately prior to the date of the Qualifying Termination plus the Participant's target annual cash bonusforthe year in which the Qualifying Termination occurs ("Severance"). Severance payable due to a Qualifying Termination prior to a Change in Control shall be paid (subject to Section 9.13) in substantially equal installments over the 12-month period following the Qualifying Termination, payable in accordance with the Company's normal payroll practices, but no less frequently than monthly, which payments in the aggregate are equal to the Severance and which shall begin on the 61st day following the Qualifying Termination. Severance payable due to a Qualifying Termination on or after a Change in Control shall be paid (subject to Section 9.13) in a single lump-sum on the Company's next payroll date after the 61st day following the Qualifying Termination;
(b) A prorated annual bonus equal to the product of (i) the annual bonus, if any, that the Participant would have earned for the entire fiscal year in which the Qualifying Termination occurs at target level; and (ii) a fraction, the numerator of which is the number of days the Participant was employed by the Company during the fiscal year in which the Qualifying Termination occurs and the denominator of which is the number of days in such year (a "Pro-Rata Bonus"). Subject to Section 9.13, a Participant's Pro-Rata Bonus shall be paid on the 61st day following the Qualifying Termination; and
(c) During the Participant's Benefit Continuation Period, reimbursement for the monthly COBRA premium paid by the Participant for themself and their eligible dependents/the difference between the monthly COBRA premium paid by the Participant for themself and their eligible dependents and the monthly premium amount paid by similarly situated active executives ("Benefit Continuation"). Notwithstanding the foregoing, if the Company's providing Benefit Continuation under this Section 4.01(c) would violate the nondiscrimination rules applicable to non-grandfathered plans, or would result in the imposition of penalties under the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010, and the related regulations and guidance promulgated thereunder (the "ACA"), the Company shall reform this Section 4.01(c) in a manner as is necessary to comply with the ACA. Subject to Section 9.13, Benefit Continuation reimbursement shall be paid to the Participant on the 15th of the month immediately following the month in which the Participant timely remits the premium payment.
ARTICLE V - EQUITY AWARDS
The Plan does not affect the terms of any outstanding equity awards. The treatment of any outstanding equity awards shall be determined in accordance with the terms of the Company equity plan or plans under which they were granted and any applicable award agreements.
ARTICLE VI - CONDITIONS
Participant’s entitlement to any severance benefits under ARTICLE IV and ARTICLE V will be subject to:
(a) the Participant executing and delivering to the Company their Participation Agreement in accordance and compliance with the termsthereof;
(b) the Participant experiencing a Qualifying Termination;
(c) the Participant executing a release of claims in favor of the Company, its affiliates and their respective officers and directors in a form provided by the Company (the "Release") and such Release becoming effective and irrevocable within 60 days following the Participant's Qualifying Termination; and
(d) with respect to Benefit Continuation only, the Participant timely and properly electing continuation coverage under COBRA.
ARTICLE VII - CLAIMS PROCEDURE
Section 7.01 Initial Claims. A Participant who believes that they are entitled to a payment under the Plan that has not been received may submit a written claim for benefits to the Plan within 60 days after the Participant's Qualifying Termination. Claims should be addressed and sent to:
Chairman of the Compensation Committee C/O Corporate Secretary legal@rareearthsamericas.com
If the Participant's claim is denied, in whole or in part, the Participant will be furnished with written notice of the denial within 90 days after the Administrator's receipt of the Participant's written claim, unless special circumstances require an extension of time for processing the claim, in which case a period not to exceed 180 days will apply. If such an extension of time is required, written notice of the extension will be furnished to the Participant before the termination of the initial 90-day period and will describe the special circumstances requiring the extension, and the date on which a decision is expected to be rendered. Written notice of the denial of the Participant's claim will contain the following information:
(a) the specific reason or reasons for the denial of the Participant's claim;
(b) references to the specific Plan provisions on which the denial of the Participant's claim was based;
(c) a description of any additional information or material required by the Administrator to reconsider the Participant's claim (to the extent applicable) and an explanation of why such material or information is necessary; and
(d) a description of the Plan's review procedures and time limits applicable to such procedures, including a statement of the Participant's right to bring a civil action under Section 502(a) of ERISA following a benefit claim denial on review.
Section 7.02 Appeal of Denied Claims. If the Participant's claim is denied and they wish to submit a request for a review of the denied claim, the Participant or their authorized representative must follow the procedures described below:
(a) Upon receipt of the denied claim, the Participant (or their authorized representative) may file a request for review of the claim in writing with the Administrator. This request for review must be filed no later than 60 days after the Participant has received written notification of the denial.
(b) The Participant has the right to submit in writing to the Administrator any comments, documents, records or other information relating to their claim for benefits.
(c) The Participant has the right to be provided with, upon request and free of charge, reasonable access to and copies of all pertinent documents, records and other information that is relevant to their claim for benefits.
(d) The review of the denied claim will take into account all comments, documents, records and other information that the Participant submitted relating to their claim, without regard to whether such information was submitted or considered in the initial denial of their claim.
Section 7.03 Administrator's Response to Appeal. The Administrator will provide the Participant with written notice of its decision within 60 days after the Administrator's receipt of the Participant's written claim for review. There may be special circumstances which require an extension of this 60-day period. In any such case, the Administrator will notify the Participant in writing within the 60-day period and the final decision will be made no later than 120 days after the Administrator's receipt of the Participant's written claim for review. The Administrator's decision on the Participant's claim for review will be communicated to the Participant in writing and will clearly state:
(a) the specific reason or reasons for the denial of the Participant's claim;
(b) reference to the specific Plan provisions on which the denial of the Participant's claim is based;
(c) a statement that the Participant is entitled to receive, upon request and free ofcharge, reasonable access to, and copies of, the Plan and all documents, records, and otherinformation relevant to their claim for benefits; and
(d) a statement describing the Participant's right to bring an action under Section 502(a) of ERISA.
Section 7.04 Exhaustion of Administrative Remedies. The exhaustion of these claims procedures is mandatory for resolving every claim and dispute arising under the Plan. As to such claims and disputes:
(a) no claimant shall be permitted to commence any legal action to recover benefits or to enforce or clarify rights under the Plan under Section 502 or Section 510 of ERISA orunder any other provision of law, whether or not statutory, until these claims procedures have been exhausted in their entirety; and
(b) in any such legal action, all explicit and implicit determinations by the Administrator (including, but not limited to, determinations as to whether the claim, or a request for a review of a denied claim, was timely filed) shall be afforded the maximum deference permitted by law.
Section 7.05 Arbitration. Subject to Section 7.04, any dispute, controversy or claim arising out of or related to the Plan shall be submitted to and decided by binding arbitration. Arbitration shall be administered exclusively by the American Arbitration Association and shall be conducted consistent with the rules, regulations and requirements thereof as well as any require. The court or arbitrator will decide who will pay court or arbitration costs and fees. If the Participant is successful, the court orarbitrator may order the person or entity the Participant sued to pay these costs and fees. If the Participant loses, the court or arbitrator may order
the Participant to pay these costs and fees.
ARTICLE 8 - ADMINISTRATION, AMENDEMENT AND TERMINATION
Section 8.01 Administration. The Administrator has the exclusive right, power and authority, in its sole and absolute discretion, to administer and interpret the Plan. The Administrator has all powers reasonably necessary to carry out its responsibilities under the Plan including (but not limited to) the sole and absolute discretionary authority to:
(a) administer the Plan according to its termsand to interpret Plan provisions;
(b) resolve and clarify inconsistencies, ambiguities, and omissions in the Plan and among and between the Plan and other related documents;
(c) take all actions and make all decisions regarding questions of eligibility and entitlement to benefits, and benefit amounts;
(d) make, amend, interpret, and enforce all appropriate rules and regulations for the administration of the Plan;
(e) processand approve or deny all [initial] claims for benefits; and
(f) decide or resolve any and all questions, including benefit entitlement determinations and interpretations of the Plan, as may arise in connection with the Plan.
The decision of the Administrator on any disputes arising under the Plan, including (but not limited to)questions of construction, interpretation and administration shall be final, conclusive and binding on all persons having an interest in or under the Plan. Any determination made by the Administrator shall be given deference in the event the determination is subject to judicial review and shall be overturned by a court of law only if it is arbitrary and capricious.
Section 8.02 Amendment and Termination. The Company reserves the right to amend or terminate the Plan at any time, by providing at least 90 days advance written notice to each Participant; provided that no such amendment or termination that has the effect of reducing or diminishing the right of any Participant will be effective without the written consent of such Participant.
ARTICLE IX - GENERAL PROVISIONS
Section 9.01 At-Will Employment. The Plan does not alter the status of each Participant as an at-will employee of the Company. Nothing contained herein shall be deemed to give any Participant the right to remain employed by the Company or to interfere with the rights of the Company to terminate the employment of any Participant at any time, with or without Cause.
Section 9.02 Effect onOther Plans, Agreements, and Benefits.
(a) Any severance benefits payable to a Participant under the Plan will be: (i) in lieu of and not in addition to any severance benefits to which the Participant would otherwise be entitled under any general severance policy or severance plan maintained by the Company or any agreement between the Participant and the Company that provides for severance benefits (unless the policy, plan, or agreement expressly provides for severance benefits to be in addition to those provided under the Plan); and (ii) any severance benefits payable to a Participant under the Plan will be reduced by any severance benefits to which the Participant is entitled by operation of a statute or government
regulations. Notwithstanding the foregoing, payments made hereunder shall not reduce benefits payable to Participant that are accrued and unrelated to severance policies and benefits.
(b) Any severance benefits payable to a Participant under the Plan will not be counted as compensation for purposes of determining benefits under any other benefit policies or plans ofthe Company, except to the extent expressly provided therein.
Section 9.03 Mitigation and Offset. If a Participant obtains other employment after a Qualifying Termination, such other employment will not affect the Participant's rights or the Company's obligations under the Plan.
Section 9.04 Severability. The invalidity or unenforceability of any provision of the Plan shall not affect the validity or enforceability of any other provision of the Plan. If any provision of the Plan is held by a court of competent jurisdiction to be illegal, invalid, void or unenforceable, such provision shall be deemed modified, amended and narrowed to the extent necessary to render such provision legal, valid, and enforceable, and the other remaining provisions of the Plan shall not be affected but shall remain in full force and effect.
Section 9.05 Headings and Subheadings. Headings and subheadings contained in the Plan are intended solely for convenience and no provision of the Plan is to be construed by reference to the heading or subheading of any section or paragraph.
Section 9.06 Unfunded Obligations. The amounts to be paid to Participants under the Plan are unfunded obligations of the Company. The Company is not required to segregate any monies or other assets from its general funds with respect to these obligations. Participants shall not have any preference or security interest in any assetsof the Company other than as a general unsecured creditor.
Section 9.07 Successors. The Plan will be binding upon any successor to the Company, its assets, its businesses or its interest, in the same manner and to the same extent that the Company would be obligated under the Plan if no succession had taken place. In the case of any transaction in which a successor would not by the foregoing provision or by operation of law be bound by the Plan, the Company shall require any successor to the Company to expressly and unconditionally assume the Plan in writing and honor the obligations of the Company hereunder, in the same manner and to the same extent that the Company would be required to perform if no succession had taken place. All payments and benefits that become due to a Participant under the Plan will inure to the benefit of his or her heirs, assigns, designees, or legal representatives.
Section 9.08 Transfer and Assignment. Neither a Participant nor any other person shall have any right to sell, assign, transfer, pledge, anticipate or otherwise encumber, transfer, hypothecate or convey any amounts payable under the Plan prior to the date that such amounts are paid, except that, in the case of a Participant's death, such amounts shall be paid to the Participant'sbeneficiaries.
Section 9.09 Waiver. Any party's failure to enforce any provision or provisions of the Plan will not in any way be construed as a waiver of any such provision or provisions, nor prevent any party from thereafter enforcing each and every other provision of the Plan.
Section 9.10 Governing Law. To the extent not pre-empted by federal law, the Plan shall be construed in accordance with and governed by the laws of Texas without regard to conflicts of law principles. Subject to Section 7.05, any action or proceeding to enforce the provisions of the Plan will be brought only in a state or federal court located in the state of Texas, and each party consents to the venue and jurisdiction of such court. The parties hereby irrevocably submit to the non-exclusive jurisdiction of such courts and waive the defense of inconvenient forum to the maintenance of any such action orproceeding in such venue.
Section 9.11 Clawback. Any amounts payable under the Plan are subject to any policy (whether in existence as of the Effective Date or later adopted) established by the Company providing for clawback or recovery of amounts that were paid to the Participant, in addition to provisions of Annex B of the Participation Agreement. The Company will make any determination for clawback or recovery in its sole discretion and in accordance with any applicable law or regulation.
Section 9.12 Withholding. The Company shall have the right to withhold from any amount payable hereunder any Federal, state, and local taxes in order for the Company to satisfy any withholding tax obligation it may have under any applicable law or regulation.
Section 9.13 Section 409A.
(a) The Plan is intended to comply with Section 409A of the Code or an exemption thereunder and shall be construed and administered in accordance with Section 409A of the Code. Notwithstanding any other provision of the Plan, payments provided under the Plan may only be made upon an event and in a manner that complies with Section 409A of the Code or an applicable exemption. Any payments under the Plan that may be excluded from Section 409A of the Code either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section 409A of the Code to the maximum extent possible. For purposes of Section 409A of the Code, each installment payment provided under the Plan shall betreated as a separate payment. Any payments to be made under the Plan upon a termination of employment shall only be made upon a "separation from service" under Section 409A of the Code. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under the Plan comply with Section 409A of the Code and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest, or otherexpenses that may be incurred by a Participant on account of non-compliance with Section 409A of the Code.
(b) Notwithstanding any other provision of the Plan, if any payment or benefit provided to a Participant in connection with his or her Qualifying Termination is determined to constitute "nonqualified deferred compensation" within the meaning of Section 409A of the Code and the Participant is determined to be a "specified employee" as defined in Section 409A(a)(2)(b)(i) of the Code, then such payment or benefit shall not be paid until the first payroll date to occur following the six-month anniversary of the Qualifying Termination or, if earlier, on the Participant's death (the "Specified Employee Payment Date"). The aggregate of any payments that would otherwise have been paid before the Specified Employee Payment Date and interest on such amounts calculated based on the applicable federal rate published by the Internal Revenue Service for the month in which the Participant's separation from service occurs shall be paid to the Participant in a lump sum on the Specified Employee Payment Date and thereafter, any remaining payments shall be paid without delay in accordance with their original schedule. Notwithstanding any other provision of the Plan, if any payment or benefit is conditioned on the Participant's execution of a Release, the first payment shall include all amounts that would otherwise have been paid to the Participant during the period beginning on the date of the Qualifying Termination and ending on the payment date if no delay had been imposed.
(c) To the extent required by Section 409A of the Code, each reimbursement or in-kind benefit provided under the Plan shall be provided in accordance with the following: (i) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during each calendar year cannot affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year; and (ii) any right to reimbursements or in-kind benefits under the Plan shall not be subject to liquidation or exchange for another benefit.
Section 9.14 Compliance with Code Section 280G. Unless a more favorable treatment is otherwise provided in an individual agreement with a Participant, if any of the payments or benefits provided or to be provided by
the Company to a Participant or for the benefit of the Participant pursuant to this Plan orotherwise (“Covered Payments”) constitute parachute payments within the meaning of Section 280G of the Code and would, but for this section, be subject to the excise tax imposed under Section 4999 of the Code (or any successor provision thereto) or any similar tax imposed by state or local law or any interest or penalties with respect to such taxes (collectively, the “Excise Tax”), then the Covered Payments shall be payable either (a) in full or (b) reduced to the minimum extent necessary to ensure that no portion of the Covered Payments is subject to the Excise Tax, whichever of the foregoing (a) or (b) results in the Participant’s receipt on an after-tax basis of the greatest amount of benefits after taking into account the applicable federal, state, local and foreign income, employment and excise taxes (including the Excise Tax). If a reduction in payments or benefits (or a cancellation of the acceleration of vesting of equity awards) constituting “parachute payments” is necessary hereunder so that no portion of the Covered Payments is subject to the Excise Tax, such reduction and/or cancellation of acceleration shall occur in the order that provides the maximum economic benefit to the Participant. In the event that acceleration of vesting of an equity award is to be reduced, such acceleration of vesting also shall be canceled in the order that provides the maximum economic benefit to the Participant.
APPENDIX A – PARTICIPANTS
Donald Swartz
Jennifer Grafton
Cheryl Kerr
Kevin McCarty
Eric Schrimsher
EX-10.3
4
rea-ex10_3.htm
EX-10.3
EX-10.3
Exhibit 10.3
PERFORMANCE SHARE AGREEMENT UNDER THE RARE EARTHS AMERICAS, INC. 2026 EQUITY INCENTIVE PLAN
Pursuant to Rare Earths Americas, Inc.’s (the “Company”) 2026 Equity Incentive Plan (the “Plan”), the Company made the following award of performance share units to you (the “PSUs”). The grant is subject to and governed by the Plan generally, and all capitalized terms not defined herein shall have the meanings given to such terms in the Plan.
Notice of Performance Share Award
Participant ______________________________
Grant Date _____________________________
Target Number of PSUs (“Target PSUs”): ______________
Pursuant to the terms and conditions set forth below, you may earn between 0% - 100% of the Target PSUs based on the price of the Company’s shares during the Performance Period. Except as set forth below under “Special Vesting Events,” you must be in Continuous Service (as defined below) from the Grant Date through the vesting of the PSUs in order to earn any PSUs during such Performance Period.
Performance Period = 3 years from Grant Date
Tranche-Based Vesting and Performance Goals
The PSUs are divided into separate tranches. Each tranche will independently vest if the Company’s stock price achieves the specified 20-Day VWAP (Volume-Weighted Average Price) hurdle for that tranche at any time during the Performance Period.
To earn the PSUs in a given tranche, the 20-Day VWAP must equal or exceed the corresponding Stock Price Hurdle for twenty (20) consecutive trading days.
|
|
|
Tranche |
Number of PSUs in Tranche (or % of Total) |
20-Day VWAP Stock Price Hurdle |
Tranche 1 |
25% of Target PSUs |
$22.50 |
Tranche 2 |
25% of Target PSUs |
$25.00 |
Tranche 3 |
25% of Target PSUs |
$27.50 |
Tranche 4 |
25% of Target PSUs |
$30.00 |
Vesting Mechanics:
• Once a specific 20-Day VWAP Stock Price Hurdle is achieved, all Target PSUs allocated to that specific tranche are immediately earned and vested.
• Tranches may be achieved sequentially or simultaneously. For example, if the 20-Day VWAP rapidly increases and clears the Hurdle for Tranche 2 before Tranche 1 has been certified, both Tranche 1 and Tranche 2 will be deemed earned.
• Once a tranche is earned, it is not subject to forfeiture if the stock price subsequently drops below the hurdle.
Definitions
• “VWAP” means the daily volume-weighted average price of the Company’s Common Stock on the principal national securities exchange on which the Common Stock is listed or admitted to trading.
• “20-Day VWAP” means the average of the daily VWAP fortwenty (20) consecutive trading days. Data for calculating the VWAP will be sourced from Bloomberg L.P., or another mutually agreed-upon reporting service.
Award Determination and Settlement
Except as set forth below under the heading “Special Vesting Events,” the number of PSUs earned during the Performance Period shall be determined following Compensation Committee certification.
Each vested PSU represents the right to receive one (1) share of the Company’s Common Stock. Settlement of any earned tranche of PSUs will occur within thirty (30) days following the date the Compensation Committee certifies that the applicable 20-Day VWAP hurdle for that tranche has been achieved. However, following such vesting and settlement, the Participant shall be subject to an 18-month lock-up on such shares.
Special Vesting Events
In the event of a Participant's termination of employment, any unvested PSUs shall be treated as follows:
• Voluntary Resignation or Termination for Cause: Immediate forfeiture of all unvested awards. Any earned, vested awards shall remain earned and continue subject to the 18-month lock-up period if not yet satisfied.
• Death or Disability: The treatment of outstanding PSUs shall be subject to the subsequent determination and discretion of the Board. Any earned, vested awards shall remain earned and no longer subject to any lock-up period.
• Termination Without Cause or for Good Reason: Any PSUs that have vested prior to termination shall no longer be subject to the 18-month lock-up period and will be eligible for immediate restriction removal. The treatment of outstanding, unvested awards shall be subject to the subsequent determination and discretion of the Board.
• Change in Control: Upon termination following a Change in Control (“CIC”), all PSUs granted hereunder shall be subject to a "double-trigger" CIC provision, meaning that in the event of a CIC, the awards will not automatically vest unless there is a subsequent qualifying termination of the participant's employment. Upon a qualifying termination following a CIC, the Participants’ outstanding PSUs shall vest in full and not be subject to a lock-up period.
Continuous Service - The term “Continuous Service” shall mean your uninterrupted service to the Company or an Affiliate as an employee, non-employee director, or consultant. The Committee shall determine in its discretion whether and when your Continuous Service has ended (including as a result of any leave of absence); provided, however, that Continuous Service shall not be deemed to have ended in the event you retire or otherwise terminate as an employee but continue to perform services for the Company as a non-employee director or consultant.
Stockholder Rights - You shall have no stockholder rights with respect to the PSUs until vested. Once vested and the underlying shares are issued, the Participant shall have full stockholder rights to vote and receive dividends, if and when declared, during the lock-up period.
Other Terms and Conditions are set forth in the accompanying Performance Shares Terms and Conditions and the Plan.
By your signature and the signature of the Company’s representative, you and the Company agree that the PSUs granted hereby are granted under and governed by the terms and conditions of the Plan and of this Performance Share Agreement (including this Notice of Performance Share Award and the accompanying Performance Share Terms and Conditions) (the “Grant Documents”). You hereby represent and acknowledge that you been provided the opportunity to review the Plan and the Grant Documents in their entirety, and you hereby agree to accept as binding, conclusive, and final all decisions or interpretations of the Administrator upon any questions relating to the Plan and the Grant Documents.
RARE EARTHS AMERICAS, INC.
__________________________________ __________________________________
PARTICIPANT NAME TITLE
PERFORMANCE SHARES TERMS AND CONDITIONS RARE EARTHS AMERICAS, INC. 2026 EQUITY INCENTIVE PLAN
1. Terminology. Unless otherwise provided in this Agreement, capitalized terms used herein are defined in the Glossary at the end of this Agreement.
2. Vesting. All of the PSUs are nonvested and forfeitable as of the Grant Date. So long as your Service is continuous from the Grant Date through the applicable date upon which vesting is scheduled to occur, the PSUs will become vested and nonforfeitable in accordance with the vesting schedule set forth in the Notice. Except for the circumstances, if any, described in the Notice, none of the PSUs will become vested and nonforfeitable after your Service ceases.
3. Termination of Service. Unless otherwise provided in the Notice, all PSUs that are not then vested and nonforfeitable upon a Termination of Service for any reason will be forfeited to the Company immediately and automatically upon such Termination of Service without payment of any consideration therefor, your right to vest in the PSUs under the Plan (if any) shall terminate as of such date of Termination of Service and will not be extended by any notice period (e.g., your period of Service will not include any contractual notice period or any period of “garden leave” or similar period mandated under employment laws in the jurisdiction where you are providing Service or the terms of your employment or service agreement, if any) and you will have no further right, title or interest in or to such PSUs or the underlying shares of Common Stock. The Administrator shall have the exclusive discretion to determine whether you have experienced a Termination of Service (including whether you may still be considered to be providing Service while on a leave of absence).
4. Restrictions on Transfer. Neither this Agreement nor any of the PSUs may be assigned, transferred, pledged, hypothecated or disposed of in any way, whether by operation of law or otherwise, and the PSUs shall not be subject to execution, attachment or similar process. All rights with respect to this Agreement and the PSUs shall be exercisable during your lifetime only by you or your guardian or legal representative. Notwithstanding the foregoing, the PSUs may be transferred upon your death by last will and testament or under the laws of descent and distribution, subject to compliance with applicable law.
5. Settlement of PSUs.
(a) Manner of Settlement. You are not required to make any monetary payment (other than to satisfy any applicable withholding obligations with respect to Tax-Related Items related to the PSUs, if required) as a condition to settlement of the PSUs. The Company will issue to you, in settlement of your PSUs and subject to the provisions of Section 6 below, the number of whole shares of Common Stock that equals the number of whole PSUs that become vested, and such vested PSUs will terminate and cease to be outstanding upon such issuance of the shares. Upon issuance of such shares, the Company will determine the form of delivery (e.g., a stock certificate or electronic entry evidencing such shares) and may deliver such shares on your behalf electronically to the Company’s designated stock plan administrator or such other broker-dealer as the Company may choose at its sole discretion, within reason.
(b) Timing of Settlement. Your PSUs will be settled by the Company, via the issuance of Common Stock as described herein, on the date that the PSUs become vested and nonforfeitable. However, if a scheduled issuance date falls on a Saturday, Sunday or federal holiday, such issuance date shall instead fall on the next following day that the principal executive offices of the Company are open for business. Notwithstanding the foregoing, in the event that (i) you are subject to the Company’s policy permitting officers and directors to sell shares only during certain “window” periods, in effect from time to time, or you are otherwise prohibited from selling shares of the Company’s Common Stock in the public market and any shares covered by your PSUs are scheduled to be issued on a day (the “Original Distribution Date”) that does not occur during an open “window period” applicable to you, as determined by the Company in accordance with such policy, or does not occur on a date when you are otherwise permitted to sell shares of the Company’s Common Stock in the open market, and (ii) the Company elects not to satisfy any applicable withholding obligations with respect to Tax-Related Items related to the PSUs by withholding shares from your distribution, then such shares shall not be issued and delivered on such Original Distribution Date and shall instead be issued and delivered on the first business day of the next occurring open “window period” applicable to you pursuant to such policy (regardless of whether you are still providing continuous Service at such time) or the next business day when you are not prohibited from selling shares of the Company’s Common Stock in the open market, but in no event later than the fifteenth day of the third calendar month of the calendar year following the calendar year in which the Original Distribution Date occurs. In all cases, the issuance and delivery of shares under this Agreement is intended to comply with Treasury Regulation 1.409A-1(b)(4) and shall be construed and administered in such a manner.
6. Tax Withholding.
(a) Responsibility for Taxes. You acknowledge that, regardless of any action taken by the Company or, if different, your employer or any Affiliate of the Company to which you provide Service (the “Service Recipient”), the ultimate liability for all Tax-Related Items related your participation in the Plan and legally applicable to you are and remains your responsibility and may exceed the amount actually withheld (if any) by the Company or the Service Recipient. You acknowledge that the Company is not making representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the PSUs, including, but not limited to, the grant, vesting or settlement of the PSUs, the subsequent sale of shares of Common Stock acquired pursuant to such settlement and the receipt of any dividends. Further, you acknowledge that the Company does not have any duty or
obligation to minimize your liability for Tax-Related Items arising from the PSUs or to achieve any particular tax result and will not be liable to you for any Tax-Related Items arising in connection with the PSUs. If you become subject to taxation in more than one jurisdiction, the Company and/or the Service Recipient (or former service recipient, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction. The Company may refuse to issue or deliver the shares or the proceeds of the sale of shares of Common Stock if you fail to comply with your obligations in connection with the Tax-Related Items.
(b) Withholding Methods. Prior to any relevant taxable or tax withholding event, or at any time thereafter as requested by the Company, you hereby authorize any required withholding from the Common Stock issuable to you and/or otherwise agree to make adequate provision in cash for any sums required to satisfy any applicable tax withholding obligations of the Company or the Service Recipientrelated to yourPSUs.Additionally, the Company may, in its sole discretion, satisfy all or any applicable tax withholding obligations with respect to all Tax-Related Items relating to your PSUs by any of the following means or by a combination of such means: (i) withholding from any compensation otherwise payable to you by the Company or the Service Recipient; (ii) causing you to tender a cash payment; (iii) withholding from proceeds of the sale of shares of Common Stock acquired upon settlement of the PSUs either through a voluntary sale or through a mandatory sale arranged by the Company (on your behalf pursuant to this authorization without further consent); (iv) withholding shares of Common Stock from the shares of Common Stock issued or otherwise issuable to you in connection with the PSUs; or (v) any other method of withholding determined by the Company and, to the extent required by applicable law or the Plan, approved the Compensation Committee.
(c) Withholding Rates. The Company may withhold or account for Tax-Related Items by considering statutory or other withholding rates, including minimum or maximum rates applicable in your jurisdiction(s). In the event of over-withholding, you may receive a refund of any over-withheld amount in cash (with no entitlement to the equivalent in shares of Common Stock), or if not refunded, you may seek a refund from the local tax authorities to the extent you wish to recover any over-withheld amounts in the form of a refund. In the event of under-withholding, you may be required to pay any additional Tax-Related Items directly to the applicable tax authority or to the Company and/or the Service Recipient, and you agree to indemnify and hold the Company and the Service Recipient, as applicable, harmless from any failure to withhold the proper amount. If the obligation for Tax-Related Items is satisfied by withholding a number of shares of Common Stock, for tax purposes, you will be deemed to have been issued the full number of shares of Common Stock subject to the settled PSUs, notwithstanding that a number of the shares of Common Stock is held back solely for the purpose of paying the Tax-Related Items.
7. Adjustments for Corporate Transactions and Other Events.
(a) Stock Dividend, Stock Split and Reverse Stock Split. Upon a stock dividend of, or stock split or reverse stock split affecting, the Common Stock, the number of outstanding PSUs shall, without further action of the Administrator, be adjusted to reflect such event; provided, however, that any fractional PSUs resulting from any such adjustment shall be eliminated. Adjustments under this paragraph will be made by the Administrator, whose determination as to what adjustments, if any, will be made and the extent thereof will be final, binding and conclusive.
(b) Merger, Consolidation and Other Events. If the Company shall be the surviving or resulting corporation in any merger or consolidation and the Common Stock shall be converted into other securities, the PSUs shall pertain to and apply to the securities to which a holder of the number of shares of Common Stock subject to the PSUs would have been entitled. If the stockholders of the Company receive by reason of any distribution in total or partial liquidation or pursuant to any merger of the Company or acquisition of its assets, securities of another entity or other property (including cash), then the rights of the Company under this Agreement shall inure to the benefit of the Company’s successor, and this Agreement shall apply to the securities or other property (including cash) to which a holder of the number of shares of Common Stock subject to the PSUs would have been entitled, in the same manner and to the same extent as the PSUs.
8. Non-Guarantee of Employment or Service Relationship. Nothing in the Plan or this Agreement shall alter your employment status or other service relationship with the Company or the Service Recipient, nor be construed as forming or amending a contract of employment or service relationship between the Company or the Service Recipient and you, or as a contractual right of you to continue in the employ of, or in a service relationship with, the Company or the Service Recipient for any period of time, or as a limitation of the right of the Company or the Service Recipient to discharge you at any time with or without cause or notice and whether or not such discharge results in the forfeiture of any nonvested and forfeitable PSUs or any other adverse effect on your interests under the Plan.
9. Rights as Stockholder. You shall not have any of the rights of a stockholder with respect to any shares of Common Stock that may be issued in settlement of the PSUs until such shares of Common Stock have been issued to you.
10. The Company’s Rights. The existence of the PSUs shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations, or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or other stocks with preference ahead of or convertible into, or otherwise affecting the Common Stock or the rights thereof, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of the Company’s assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.
11. Restrictions on Issuance of Shares. The issuance of shares of Common Stock upon settlement of the PSUs shall be subject to and in compliance with all applicable requirements of federal, state, or foreign law with respect to such securities. No shares of Common Stock may be issued hereunder if the issuance of such shares would constitute a violation of any applicable federal, state, or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Common Stock may then be listed. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance of any shares subject to the PSUs shall relieve the Company of any liability in respect of the failure to issue such shares as to which such requisite authority shall not have been obtained. As a condition to the settlement of the PSUs, the Company may require you to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation, and to make any representation or warranty with respect thereto as may be requested by the Company. Notwithstanding the foregoing, the Company is under no obligation to register or qualify the shares of Common stock with the U.S. Securities and Exchange Commission or any state or foreign securities commission or to seek approval or clearance from any governmental authority for the issuance or sale of the shares of Common Stock.
12. Notices. All notices and other communications made or given pursuant to this Agreement shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company, or in the case of notices delivered to the Company by you, addressed to the Administrator, care of the Company for the attention of its Secretary at its principal executive office or, in either case, if the receiving party consents in advance, transmitted and received via telecopy or via such other electronic transmission mechanism as may be available to the parties. Notwithstanding the foregoing, the Company may, in its sole discretion, decide to deliver any documents related to participation in the Plan and this award of PSUs by electronic means or to request your consent to participate in the Plan or accept this award of PSUs by electronic means. You hereby consent to receive such documents by electronic delivery and agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.
13. Entire Agreement. This Agreement, together with the relevant Notice and the Plan, contain the entire agreement between the parties with respect to the PSUs granted hereunder. Any oral or written agreements, representations, warranties, written inducements, or other communications made prior to the execution of this Agreement with respect to the PSUs granted hereunder shall be void and ineffective for all purposes.
14. Amendment. This Agreement may be amended from time to time by the Administrator in its discretion; provided, however, that this Agreement may not be modified in a manner that would have a materially adverse effect on the PSUs as determined in the discretion of the Administrator, except as provided in the Plan or in a written document signed by each of the parties hereto.
15. 409A Savings Clause. This Agreement and the PSUs granted hereunder are intended to fit within the “short-term deferral” exemption from Section 409A of the Code as set forth in Treasury Regulation Section 1.409A-1(b) (4). In administering this Agreement, the Company shall interpret this Agreement in a manner consistent with such exemption.
Notwithstanding the foregoing, if it is determined that the PSUs fail to satisfy the requirements of the short-term deferral rule and are otherwise deferred compensation subject to Section 409A, and if you are a “Specified Employee” (within the meaning set forth Section 409A(a)(2)(B)(i) of the Code) as of the date of your separation from service (within the meaning of Treasury Regulation Section 1.409A-1(h)), then the issuance of any shares that would otherwise be made upon the date of the separation from service or within the first six (6) months thereafter will not be made on the originally scheduled date(s) and will instead be issued in a lump sum on the date that is six (6) months and one day after the date of the separation from service, but if and only if such delay in the issuance of the shares is necessary to avoid the imposition of additional taxation on you in respect of the shares under Section 409A of the Code. Each installment of shares that vests is intended to constitute a “separate payment” for purposes of Section 409A of the Code and Treasury Regulation Section 1.409A-2(b)(2).
16. No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding your participation in the Plan, or your acquisition or sale of the shares of Common Stock underlying the PSUs. You are hereby advised to consult with your own personal tax, financial and/or legal advisors regarding your participation in the Plan and by signing the Notice, you have agreed that you have done so or knowingly and voluntarily declined to do so.
17. Conformity with Plan. This Agreement is intended to conform in all respects with, and is subject to all applicable provisions of, the Plan. Inconsistencies between this Agreement and the Plan shall be resolved in accordance with the terms of the Plan. In the event of any ambiguity in this Agreement or any matters as to which this Agreement is silent, the Plan shall govern. A copy of the Plan is available upon request to the Administrator.
18. No Funding. This Agreement constitutes an unfunded and unsecured promise by the Company to issue shares of Common Stock in the future in accordance with its terms. You have the status of a general unsecured creditor of the Company as a result of receiving the grant of PSUs.
19. Effect on Other Employee Benefit Plans. The value of the PSUs subject to this Agreement shall not be included as compensation, earnings, salaries, or other similar terms used when calculating your benefits under any employee benefit plan sponsored by the Company orany Affiliate, except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company’s or any Affiliate’s employee benefit plans.
20. Governing Law. The validity, construction and effect of this Agreement, and of any determinations or decisions made by the Administrator relating to this Agreement, and the rights of any and all persons having or claiming to have any interest under this Agreement, shall be determined exclusively in accordance with the laws of the State of Texas, without regard to its provisions concerning the applicability of laws of other jurisdictions. As a condition of this Agreement, you agree that you will not bring any action arising under, as a result of, pursuant to or relating to, this Agreement in any court other than a federal or state court in the districts which include Texas, and you hereby agree and submit to the personal jurisdiction of any federal court located in the district which includes Texas or any state court in the district which includes Texas. You further agree that you will not deny or attempt to defeat such personal jurisdiction or object to venue by motion or other request for leave from any such court.
21. Resolution of Disputes. Any dispute ordisagreement which shall arise under, or as a resultof, or pursuant to orrelating to, this Agreement shall be determined by the Administrator in good faith in its absolute and uncontrolled discretion, and any such determination or any other determination by the Administrator under or pursuant to this Agreement and any interpretation by the Administrator of the terms of this Agreement, will be final, binding and conclusive on all persons affected thereby. You agree that before you may bring any legal action arising under, as a result of, pursuant to or relating to, this Agreement you will first exhaust your administrative remedies before the Administrator. You further agree that in the event that the Administrator does not resolve any dispute or disagreement arising under, as a result of, pursuant to or relating to, this Agreement to your satisfaction, no legal action may be commenced or maintained relating to this Agreement more than twenty-four (24) months after the Administrator’s decision.
22. Headings. The headings in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.
23. Electronic Delivery of Documents. By your signing the Notice, you (a) consent to the electronic delivery of this Agreement, all information with respect to the Plan and the PSUs, and any reports of the Company provided generally to the Company’s stockholders; (b) acknowledge that you may receive from the Company a paper copy of any documents delivered electronically at no cost to you by contacting the Company by telephone or in writing; (c) acknowledge that you may revoke your consent to the electronic delivery of documents at any time by notifying the Company of such revoked consent by telephone, postal service or electronic mail; and (d) further acknowledge thatyou understand that you arenot required to further consent to electronic delivery of documents.
24. Nature of Award. By your signing the Notice, you acknowledge and agree that: (a) the grantof the PSUs is exceptional and occasional and does not create any contractual or other right to receive future grants of restricted stock units, or compensation in lieu of restricted stock units, even if restricted stock units have been granted in the past; (b) all determinations with respect to any future grants of restricted stock units and the terms thereof will be at the sole discretion of the Compensation Committee; (c) the PSUs and the shares of Common Stock subject to the PSUs, and the income from and value of same, are extraordinary items which are outside the scope of your employment or service contract, if any; (d) the PSUs and the shares of Common Stock subject to the PSUs, and the income from and value of same, are not part of normal or expected compensation or salary for any purpose, including, but not limited to, calculating any termination, severance, resignation, termination, redundancy, dismissal, end of service payments or similar payments, or bonuses, long-service awards, holiday pay, pension or retirement or welfare benefits; (e) the future value of the shares of Common Stock subject to the PSUs is unknown, indeterminable, and cannot be predicted with certainty; (f) no claim or entitlement to compensation or damages shall arise from forfeiture of the PSUs resulting from a Termination of Service (for any reason whatsoever, whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are providing Service or the terms of your employment or service contract, if any) or if the PSUs decrease or do not increase in value, and you irrevocably release the Company and the Service Recipient from any such claim that does arise; (g) unless otherwise agreed with the Company, the PSUs and the shares of Common Stock underlying the PSUs, and the income from and value of same, are not granted as consideration for, or in connection with, any service you may provide as a director of a Subsidiary of the Company; (h) the PSUs and the shares of Common Stock subject to the PSUs, and the income from and value of same, are not intended to replace any pension rights or compensation and (i) neither the Company, the Service Recipient nor any Affiliate of the Company shall be liable for any foreign exchange rate fluctuation between your local currency and the United States Dollar that may affect the value of the PSUs or the subsequent sale of any shares of Common Stock acquired upon settlement.
25. Appendix. Notwithstanding any provisions in this Agreement, the PSUs shall be subject to any special terms and conditions for your country set forth in the Appendix. Moreover, if you relocate to one of the countries included in the Appendix, the special terms and conditions for such country will apply to you, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. The Appendix constitutes part of this Agreement.
26. Foreign Asset/Account, Exchange Control and Tax Reporting. There may be certain exchange control, tax, and/or foreign asset/account reporting requirements that may affect your ability to acquire or hold shares of Common Stock or cash received from participating in the Plan (including the proceeds from the sale of shares of Common Stock and the receipt of any dividendspaid on
the shares) in abrokerage or bank accountoutside your country. You may berequired to report such accounts, assets or related transactions to the tax or other authorities in your country. You also may be required to repatriate sale proceeds or other funds received as a result of participating in the Plan to your country within a certain time after receipt. You acknowledge that it is your responsibility to comply with such regulations, and you should speak to a personal advisor on this matter.
27. Insider Trading/Market Abuse. You acknowledge that, depending on your or your broker’s country or where the Company shares are listed, you may be subject to insider trading restrictions and/or market abuse laws that may affect your ability to accept, acquire, sell or otherwise dispose of Company shares, rights to shares (e.g., the PSUs) or rights linked to the value of shares during such times you are considered to have “inside information” regarding the Company as defined in the laws or regulations in the applicable jurisdictions). Local insider trading laws and regulations may prohibit the cancellation or amendment of orders you placed before you possessed inside information. Furthermore, you could be prohibited from (a) disclosing the inside information to any third party and (b) “tipping” third parties or causing them otherwise to buy or sell securities. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any Company insider trading policy. You are responsible for complying with any restrictions and should speak to your personal advisor on this matter.
28. Language. You acknowledge that you are proficient in the English language, or have consulted with an advisor who is proficient in the English language, so as to enable you to understand the provisions of this Agreement and the Plan. If you have received this Agreement or any other document related to the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.
29. Imposition of Other Requirements.The Companyreserves the right to impose otherrequirements on your participation in the Plan, on the PSUs and on any shares of Common Stock acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.
30. Waiver. You acknowledge that a waiver by the Company of breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement or of any subsequent breach by you or any other Participant.
31. Severability. If any part of this Agreement or the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity will not invalidate any portion of this Agreement or the Plan not declared to be unlawful or invalid. Any Section of this Agreement (or part of such a Section) so declared to be unlawful or invalid will, if possible, be construed in a manner that will give effect to the terms of such Section or part of such a Section to the fullest extent possible while remaining lawful and valid.
32. Personal Data. For purposes of the implementation, administration and management of the restricted stock units or the effectuation of any acquisition, equity or debt financing, joint venture, merger, reorganization, consolidation, recapitalization, business combination, liquidation, dissolution, share exchange, sale of stock, sale of material assets or other similar corporate transaction involving the Company (a “Corporate Transaction”), you consent, by execution of the Notice, to the collection, receipt, use, retention and transfer, in electronic or other form, of your personal data by and among the Company and its third party vendors or any potential party to a potential Corporate Transaction. You understand that personal data (including but not limited to, name, home address, telephone number, employee number, employment status, passport number, social security number, tax identification number, date of birth, nationality, job and payroll location, data for tax withholding purposes and shares awarded, cancelled, vested and unvested) may be transferred to third parties assisting in the implementation, administration and management of the restricted stock units or the effectuation of a Corporate Transaction and you expressly authorize such transfers (presently and in the future) as well as the retention, use, and the subsequent transfer of the data by the recipient(s). You understand that these recipients may be located in your country or elsewhere, and that the recipient’s country may have different data privacy laws and protections than your country. You understand that data will be held only as long as is necessary to implement, administer and manage the restricted stock units or effect a Corporate Transaction. You understand that you may, at any time, request a list with the names and addresses of any potential recipients of the personal data, view data, request additional information about the storage and processing of data, require any necessary amendments to data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing the Company’s Secretary. If you do not consent or if you later seek to revoke your consent, your engagement as a service provider with the Company or the Service Recipient will not be adversely affected; the only consequence of refusing or withdrawing consent is that the Company will not be able to grant the PSUs or other equity awards to you under the Plan or administer or maintain such awards. You understand, however, that refusing or withdrawing your consent may affect your ability to participate in the Plan, including the right (if any) to retain the PSUs.
GLOSSARY
“Administrator” means the Board of Directors of RARE EARTHS AMERICAS, INC. or such committee or committees appointed by the Board to administer the Plan.
“Affiliate” shall have the meaning set forth in the Plan.
“Agreement” means this document, as amended from time to time, together with the Plan which is incorporated herein by reference.
“Change in Control” shall have the meaning set forth in the Plan.
“Code” means the Internal Revenue Code of 1986, as amended, and the Treasury regulations and other guidance promulgated thereunder.
“Common Stock” means the common stock, US$0.0001 par value per share, of REA.
“Company” means REA and its Affiliates, except where the context otherwise requires. For purposes of determining whether a Change in Control has occurred, Company shall mean only RARE EARTHS AMERICAS, INC.
“Fair Market Value” has the meaning set forth in the Plan.
“Grant Date” means the effective date of a grant of PSUs made to you as set forth in the relevant Notice.
“Notice” means the statement, letter or other written notification provided to you by the Company setting forth the terms of a grant of PSUs made to you.
“Plan” means the RARE EARTHS AMERICAS, INC. 2026 Equity Incentive Plan, as amended from time to time.
“PSU” means the Company’s commitment to issue one share of Common Stock at a future date, subject to the terms of the Agreement and the Plan.
“Service” means your employment, service as a non-executive director, or other service relationship with the Company and its Affiliates. Your Service will be considered to have ceased with the Company and its Affiliates upon a Termination of Service (as defined in the Plan) or if, immediately after a sale, merger, or other corporate transaction, the trade, business, or entity with which you are employed or otherwise have a service relationship is not RARE EARTHS AMERICAS, INC. or its successor or an Affiliate of RARE EARTHS AMERICAS, INC. or its successor.
“You” or “Your” means the recipient of the PSUs as reflected on the applicable Notice. Whenever the word “you” or “your” is used in any provision of this Agreement under circumstances where the provision should logically be construed, as determined by the Administrator, to apply to the estate, personal representative, or beneficiary to whom the PSUs may be transferred by will or by the laws of descent and distribution, the words “you” and “your” shall be deemed to include such person.
APPENDIX
Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Plan, the Notice or the Performance Share UnitsAgreement to which thisAppendix is attached.
Terms and Conditions
ThisAppendix includes additional terms and conditions thatgovern the PSUs granted to you under the Plan if you reside and/or work in one of the countries listed below. If you are a citizen or resident of a country other than the one in which you are currently working and/or residing, transfer to another country after the Grant Date, or are considered a resident of another country for local law purposes, the Company shall, in its discretion, determine the extent to which the special terms and conditions contained herein shall be applicable to you.
Notifications
This Appendix also includes information regarding securities laws, exchange controls, and certain other issues of which you should be aware with respect to your participation in the Plan. Such laws are often complex and change frequently.As a result, you should not rely on the information contained herein as the only source of information relating to the consequences of your participation in the Plan because the information may be out of date by the time you vest in the PSUs or sell any shares of Common Stock.
In addition, the information contained in thisAppendix is general in nature and may not apply to your particular situation, and the Company is not in a position to assure you of any particular result. Accordingly, you should seek appropriate professional advice as to how the applicable laws in your country may apply to your situation.
Finally, you understand that if you are a citizen or resident of a country other than the one in which you are currently residing and/or working, transfer to another country after the Grant Date, or are considered a resident of another country for local law purposes, the notifications contained herein may not be applicable to you in the same manner.
BRAZIL
Terms and Conditions
Nature of Award. The following provision supplements Section 24 of this Agreement:
By accepting the PSUs granted under this Agreement, you acknowledge and agree that (a) you are making an investment decision and (b) the value of any shares of Common Stock acquired under the Plan is not fixed and may increase or decrease without compensation to you.
Compliance with Law. By accepting the PSUs granted under the Plan, you acknowledge and agree to comply with applicable Brazilian laws and to pay any and all applicable taxes associated with the acquisition of shares of Common Stock, the receipt of any dividends, and the sale of shares of Common Stock acquired under the Plan. You agree that, for all legal purposes: (a) the benefits provided under the Plan are the result of commercial transactions unrelated to your employment; (b) the Plan is not a part of the terms and conditions of your Service; and (c) the income realized from participating in the Plan, if any, is not part of your remuneration from employment.
Notifications
Exchange Control Notification. A declaration of assets and rights held outside Brazil may need to be filed once a year with the CentralBank of Brazil if assets or rights with an aggregate value exceeding a certain thresholdare held onDecember 31 of each year. Shares acquired underthe Plan thatare held outside Brazil (e.g.,in a non-Brazilian brokerage account) are among theassets and rights that must be reported.If the aggregate value exceeds a certain threshold at the end of each quarter, the declaration has to be filed on the month following the end of each quarter.
Tax on Financial Transaction. If you repatriate the proceeds from the sale of shares of Common Stock or receipt of any cash dividends and convert the funds into local currency, you may be subject to the Tax on Financial Transactions. It is your responsibility to pay any applicable Tax on Financial Transactions arising from participation in the Plan. You should consult with your personal tax advisor for additional details.
{End of Agreement}
EX-31.1
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EX-31.1
EX-31.1
Exhibit 31.1
CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Donald Swartz, certify that:
1.I have reviewed this quarterly report on Form 10-Q for the quarterly period ended June 30, 2026 of Rare Earths Americas, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date: August 11, 2026 |
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By: |
/s/ Donald Swartz |
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Donald Swartz |
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Chief Executive Officer, President and Director |
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(Principal Executive Officer) |
EX-31.2
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EX-31.2
EX-31.2
Exhibit 31.2
CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Cheryl Kerr, certify that:
1.I have reviewed this quarterly report on Form 10-Q for the quarterly period ended June 30, 2026 of Rare Earths Americas, Inc;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date: August 11, 2026 |
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By: |
/s/ Cheryl Kerr |
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Cheryl Kerr |
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Chief Accounting Officer |
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(Principal Financial Officer and Principal Accounting Officer) |
EX-32.1
7
rea-ex32_1.htm
EX-32.1
EX-32.1
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Rare Earths Americas, Inc. (the “Company”) on Form 10-Q for the period ending June 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
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Date: August 11, 2026 |
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By: |
/s/ Donald Swartz |
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Donald Swartz |
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Chief Executive Officer, President and Director |
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(Principal Executive Officer) |
EX-32.2
8
rea-ex32_2.htm
EX-32.2
EX-32.2
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Rare Earths Americas, Inc. (the “Company”) on Form 10-Q for the period ending June 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
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Date: August 11, 2026 |
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By: |
/s/ Cheryl Kerr |
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Cheryl Kerr |
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Chief Accounting Officer |
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(Principal Financial Officer and Principal Accounting Officer) |
