USA Rare Earth closes Serra Verde $300M takeover
USAR closes its Serra Verde acquisition, adding large Brazilian rare earth assets, major DFC project debt and significant equity dilution alongside sizable pro forma losses.
Rhea-AI Filing Summary
USA Rare Earth, Inc. (USAR) completed its acquisition of SVRE Holdings Ltd. (Serra Verde Group) on September 3, 2026, merging SVRE into a USAR subsidiary for total merger consideration of $300 million in cash plus 126,849,307 USAR shares. The deal is accounted for as a business combination, adding significant mining assets in Brazil, an offtake contract and creating goodwill of approximately $602.5 million on the pro forma balance sheet.
Through the transaction USAR assumes a long‑term DFC project finance facility of up to $565 million, of which $425 million was outstanding as of June 30, 2026, secured by Merger Sub and its assets, and a royalty obligation totaling about $226.9 million. Pro forma combined assets are about $6.7 billion, but pro forma net losses remain substantial at $115.5 million for the six months ended June 30, 2026 and $439.7 million for 2025. The filing also reflects prior capital raising, including a $1.5 billion private placement and equity/warrant issuances to the U.S. Department of Commerce, and details new board appointments of industry veterans Thras Moraitis and Sir Mick (Michael) Davis plus staged lock‑ups on Serra Verde shareholders.
Positive
- Completed Serra Verde acquisition adds a scaled Brazilian rare earth mine, an offtake-backed project and creates a fully integrated rare earth and magnet platform across the U.S., Brazil and the U.K.
- Long-term DFC financing of up to $565 million provides substantial committed project debt to support Serra Verde’s development and optimization program.
- $1.5 billion private placement at $21.50 per share significantly strengthens the equity base to fund growth and integration.
- Experienced new leadership with Thras Moraitis and Sir Mick Davis joining the USAR board, bringing extensive mining, M&A and capital markets background.
Negative
- High leverage from DFC facility with $425 million outstanding plus royalty liabilities of about $226.9 million increases fixed obligations and financial risk.
- Large pro forma net losses of $115.5 million for the first half of 2026 and $439.7 million for 2025 highlight that the combined business is not yet profitable.
- Significant equity dilution from 126.8 million merger shares, 69.8 million private placement shares and 16.1 million DOC shares, with additional DOC and earnout warrants outstanding.
Filing Explained
The merger is closed, but resale registration and Serra Verde’s undelivered phase-one output remain future steps under disclosed agreements.
The merger closed on
USAR agreed to file a resale registration statement on Form S-3, or Form S-1 if it is not eligible, on the first business day after closing and to seek its effectiveness. Registration would facilitate resales of the issued shares; it would not itself create another issuance.
The disclosed $565 million DFC facility is a maximum commitment rather than all current debt: the $100 million Incremental Loan was deemed repaid and its obligations discharged when the DFC warrants were converted at closing.
Serra Verde’s offtake agreement covers 100% of Pela Ema phase-one production, subject to limited carve-outs, and deliveries had not started as of the pro forma transaction date. The filing says the agreement can run for up to 20 years after commercial operations begin, while commercial operations are expected to commence in 2027.
8-K Event Classification
Key Figures
Key Terms
Merger Consideration financial
Registration Rights Agreement regulatory
Offtake Agreement financial
Term SOFR financial
deferred arrangement costs financial
FAQ
What did USAR (USA Rare Earth, Inc.) pay to acquire Serra Verde (SVRE)?
How much debt did USAR assume through the Serra Verde transaction?
What are USAR’s pro forma losses after the Serra Verde merger?
How was USAR’s balance sheet affected by the Serra Verde deal?
What major equity financings are reflected for USAR (USAR)?
What production targets does Serra Verde contribute to USAR?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Item 1.01 Entry into a Material Definitive Agreement.
Agreement and Plan of Merger
As previously disclosed on April 19, 2026, USA Rare Earth, Inc. (“USAR”) entered into a definitive Agreement and Plan of Merger (as amended by Amendment No. 1, dated July 16, 2026 (“Amendment No. 1”), and Amendment No. 2, dated September 3, 2026 (“Amendment No. 2”), and as may be further modified, amended or supplemented from time to time, the “Merger Agreement”) by and among (i) USAR, (ii) Middlebury Merger Sub Ltd., a business company limited by shares incorporated under the laws of the British Virgin Islands and an indirect, wholly owned Subsidiary of USAR (“Merger Sub”), (iii) SVRE Holdings Ltd., a business company limited by shares incorporated under the laws of the British Virgin Islands (“SVRE”), and (iv) Serra Verde Rare Earths Ltd., a company incorporated and existing under the laws of the British Virgin Islands, solely in its capacity as the representative of the holders of Ordinary Shares, without par value, and Class A Ordinary Shares, without par value, of SVRE (collectively, “SVRE Shares” and such holders, the “SVRE Shareholders”) (the “Seller Representative”), providing for the merger of SVRE with and into Merger Sub, with Merger Sub surviving the merger as an indirect, wholly owned subsidiary of USAR (the “Merger” and, together with all other transactions contemplated by the Merger Agreement, the “Transactions”) subject to the terms and conditions contained therein. Each capitalized term used herein but not otherwise defined has the meaning given to it in the Merger Agreement.
On September 3, 2026 (the “Closing Date”), the parties closed the Merger, and the Merger became effective at the time when the Articles of Merger were registered by the Registrar of Corporate Affairs of the British Virgin Islands (the “Effective Time”). Pursuant to the Merger Agreement, the aggregate merger consideration (the “Merger Consideration”) consists of (i) an amount of cash equal to $300,000,000 (the “Aggregate Cash Merger Consideration”) and (ii) an aggregate of 126,849,307 shares of common stock, par value $0.0001 per share, of USAR (“USAR Shares”) (the “Aggregate Stock Merger Consideration”). The Merger Consideration will be payable to, among others (a) the holders of SVRE Shares issued and outstanding immediately prior to the Effective Time, (b) the United States International Development Finance Corporation ( “DFC”) pursuant to the cancellation and conversion of its warrants to purchase SVRE Shares, (c) OMF Fund III (F) Ltd., (d) certain SVRE Shareholders pursuant to the exercise of their warrants to purchase SVRE Shares and (e) certain current and former employees and consultants of SVRE and its subsidiaries.
The USAR Shares were issued in reliance on the exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Regulation S thereunder, and in reliance on similar exemptions under applicable state laws. The USAR Shares were offered and sold without any general solicitation by USAR, Merger Sub or their respective representatives. The USAR Shares have not been registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act.
The foregoing summary of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, including Amendment No. 1 and Amendment No. 2. The Merger Agreement, Amendment No. 1 and Amendment No. 2 are included as Exhibits 2.1, 2.2 and 2.3 hereto.
Registration Rights Agreement
In connection with the closing of the Merger, USAR, certain SVRE Shareholders, OMF Fund III (F) Ltd., certain employees and consultants of SVRE and the DFC entered into a registration rights agreement (the “Registration Rights Agreement”), pursuant to which USAR agreed to (a) file a registration statement on Form S-3 (or Form S-1 if not eligible for Form S-3) with the SEC on the first Business Day following the consummation of the Transactions for purposes of registering the resale or distribution of the Aggregate Stock Merger Consideration by the SVRE Shareholders and other recipients thereof (the “Registration Statement”), (b) use reasonable best efforts to have such Registration Statement declared effective within the time period set forth in the Registration Rights Agreement, and (c) keep the Registration Statement (or any new Registration Statement filed in connection with the Registration Rights Agreement) effective until the date that all registrable securities covered by the Registration Statement (or new Registration Statement, as applicable), subject to certain limitations, (i) have been disposed of in accordance with an effective Registration Statement relating thereto, (ii) have been sold thereunder or pursuant to Rule 144 under the Securities Act, or (iii) may be resold without volume or manner-of-sale restrictions pursuant to Rule 144.
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The foregoing summary of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the Registration Rights Agreement. The Registration Rights Agreement is included as Exhibit 10.1 hereto.
Board Appointment Agreement
In connection with the Merger, USAR and VB (Rare Earths) Limited (“Vision Blue”) entered into a Board Appointment Agreement, dated as of September 3, 2026 (the “Board Appointment Agreement”). Subject to the terms and conditions of the Board Appointment Agreement, Vision Blue has the right to designate one member to the board of directors of USAR (the “USAR Board”), for so long as Vision Blue and its affiliates beneficially own USAR Shares that represent, in the aggregate, at least 5% of the then outstanding amount of shares of USAR common stock; provided that such director shall be reasonably acceptable to USAR’s Nominating and Corporate Governance Committee.
The foregoing summary of the Board Appointment Agreement does not purport to be complete and is qualified in its entirety by reference to the Board Appointment Agreement. The Board Appointment Agreement is included as Exhibit 10.2 hereto.
Item 2.01. Completion of Acquisition or Disposition of Assets.
The information under Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
In connection with the closing of the Merger, Merger Sub assumed on the Closing Date all of the rights and obligations of SVRE under a Finance Agreement, dated as of January 21, 2026 (as amended, the “Finance Agreement”), pursuant to which DFC agreed to provide a loan to SVRE in an aggregate principal amount not to exceed $565,000,000, consisting of (i) a first tranche (the “Initial Loan”) with a principal amount not to exceed $465,000,000 and (ii) a second tranche (the “Incremental Loan”) with a principal amount not to exceed $100,000,000, and the other financing documents to which SVRE was a party. The Initial Loan bears interest at a rate per annum equal to a forward-looking term rate based on the secured overnight financing rate for the applicable interest period (“Term SOFR”), subject to a floor of 0.00%, plus 4.0%. The Initial Loan has a term not to exceed fifteen (15) years from the initial disbursement date and is repayable in up to forty-nine (49) quarterly sculpted installments. The obligations under the Finance Agreement are secured by a first priority lien on 100% of the shares in Merger Sub and substantially all assets of Merger Sub and its subsidiaries.
The Incremental Loan was funded prior to the closing of the Merger. In connection with the making of the Incremental Loan, DFC was issued warrants (the “DFC Warrants”) granting DFC the right to purchase newly issued SVRE Shares. Immediately prior to the closing of the Merger, the DFC Warrants were cancelled and converted on a cashless exercise basis into the right to receive Merger Consideration payable in respect of the DFC Warrants in accordance with the terms and conditions of the Merger Agreement. Upon payment of the Merger Consideration in respect of the DFC Warrants and payment of all outstanding unpaid fees and accrued but unpaid interest due to DFC in relation to the outstanding principal amount of the Incremental Loan, the outstanding principal amount of the Incremental Loan and all such amounts were deemed repaid in full and all obligations of Merger Sub in respect of the Incremental Loan were deemed irrevocably satisfied and discharged.
The foregoing summary of the Finance Agreement does not purport to be complete and is qualified in its entirety by reference to the Finance Agreement, which will be filed as an exhibit to USAR’s Quarterly Report on Form 10-Q for the fiscal quarter ending September 30, 2026.
Item 3.02. Unregistered Sales of Equity Securities
The information under Item 2.01 of this Current Report on Form 8-K related to the Aggregate Stock Merger Consideration is incorporated herein by reference.
This Current Report on Form 8-K does not constitute an offer to sell any securities or a solicitation of an offer to buy any securities, nor shall there be any sale of any securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
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Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers.
In connection with the closing of the Merger and pursuant to the Merger Agreement, the USAR Board appointed Thrasyvoulos Moraitis and Sir Michael Lawrence Davis to the USAR Board, effective as of the closing of the Merger and in accordance with USAR’s governing documents. Mr. Davis is also the initial appointee to the USAR Board under the Board Appointment Agreement as described in Item 1.01 of this Current Report on Form 8-K.
Mr. Moraitis has served as CEO of the Serra Verde Group since January 2023. Prior to joining Serra Verde, Mr. Moraitis was the co-founder of X2 Resources and served on the Executive Committee of Xstrata, led by CEO Mr. Davis, ultimately selling it to Glencore in 2013. At Xstrata he was responsible for strategic development, post-acquisition integration, leadership development, external affairs and investor relations as well as Xstrata’s technology business. While at Xstrata, he was involved in some 40 transactions. Mr. Moraitis began his career in the early 1980s as an engineer on the South African gold mines of General Mining Union Corporation (Gencor), followed by a series of entrepreneurial activities and, prior to joining Xstrata, was a global partner at the Monitor Group, a global advisory and merchant banking group. Mr. Moraitis was previously the Chief Development Officer and a member of the Executive Board of EuroChem Group AG, a global fertilizer company and, prior to this, an Executive Director at Brilliant Planet, a growth company developing a scalable method for producing microalgae for food solutions and carbon sequestration.
Mr. Davis is the founder and Managing Partner of Vision Blue which invests in metal and mineral resource companies that can meet the world’s evolving energy needs. Mr. Davis is a highly successful mining executive accredited with building Xstrata plc into one of the largest mining companies in the world prior to its acquisition by Glencore plc. Before listing Xstrata on the LSE as CEO he was CFO of Billiton plc and Chair of Billiton Coal which he joined from the position of Eskom CFO. During his career in mining, he has raised over $40 billion from global capital markets and successfully completed over $120 billion of corporate transactions, including the creation of the Ingwe Coal Corporation in South Africa; the listing of Billiton on the LSE; the merger of BHP and Billiton; as well as numerous transactions at Xstrata culminating in the sale to Glencore plc.
As a non-employee director, Mr. Davis will be entitled to a cash retainer and an equity award in the form of RSUs under USAR’s director compensation program consistent with the terms disclosed in USAR’s definitive proxy statement on Schedule 14A filed with the Securities and Exchange Commission on April 23, 2026.
As previously reported, in connection with the closing of the Merger, Mr. Moraitis assumed the function and responsibility of President of USAR through October 1, 2026, at which point he will serve as Chief Executive Officer of USAR. On July 19, 2026, USAR and Mr. Moraitis agreed to the terms of Mr. Moraitis’ compensation as Chief Executive Officer, which were disclosed in USAR’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 20, 2026. USAR and Mr. Moraitis executed a side letter on September 3, 2026 to memorialize these terms, save that his initial base salary has been changed to CHF 905,000 per annum.
The foregoing summary does not purport to be complete and is qualified in its entirety by reference to Mr. Moraitis’s employment letter agreement dated May 8, 2023, as amended on February 2, 2026, a letter agreement dated April 19, 2026, and the side letter dated September 3, 2026, copies of which will be filed as exhibits to USAR’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2026.
In connection with the appointments of Mr. Moraitis and Mr. Davis, each has entered into a customary indemnification agreement with the Company. None of Mr. Moraitis or Mr. Davis have a direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.
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Item 7.01. Regulation FD Disclosure
On September 4, 2026, USAR issued a press release announcing the closing of the Merger, a copy of which is being furnished as Exhibit 99.1 hereto and incorporated by reference herein.
The information provided under this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, is “furnished” and shall not be deemed “filed” with the Securities and Exchange Commission or incorporated by reference in any filing under the Securities Exchange Act of 1934, as amended, or the Securities Act.
Item 8.01. Other Events.
Lock-Up Agreements
In accordance with the Merger Agreement, at the closing of the Merger, each SVRE Shareholder and certain employees and consultants of SVRE and its subsidiaries entered into a lock-up agreement with USAR substantially in the form attached to the Merger Agreement (the “Lockup Agreement”) pursuant to which, among other things, such persons have agreed not to transfer a portion of the USAR Shares received as Merger Consideration pursuant to the Merger Agreement for a specified period following the closing of the Merger, or until USAR completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of USAR’s stockholders having the right to exchange their shares for cash, securities or other property, as applicable, following the closing of the Merger, and subject to certain customary transfer exceptions. Under the Lockup Agreement, one-third of the USAR Shares received by each such person are subject to a 90-day lock-up period following the closing of the Merger, one-third are subject to a 180-day lock-up period following the closing of the Merger, and one-third are not subject to any lock-up restrictions. The specific terms are set forth in the form of Lockup Agreement attached as Exhibit A to the Merger Agreement, a copy of which is attached as Annex A to the definitive proxy statement filed on Schedule 14A on July 24, 2026.
Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired. The financial statements of SVRE required by Item 9.01(a) of Form 8-K are filed as Exhibit 99.2.
(b) Pro forma financial information. The pro forma financial information required by Item 9.01(b) of Form 8-K is filed as Exhibit 99.3 hereto.
(d) Exhibits:
The following exhibits are attached with this current report on Form 8-K:
| Exhibit No. | Description | |
| 2.1* | Agreement and Plan of Merger, dated April 19, 2026, by and among USAR, SVRE, Merger Sub and Serra Verde Rare Earths Ltd., as the Seller Representative (incorporated by reference to Exhibit 2.1 to USAR’s Current Report on Form 8-K filed on April 20, 2026) | |
| 2.2 | Amendment No. 1 to Agreement and Plan of Merger, dated July 16, 2026 (incorporated by reference to Exhibit 2.1 to USAR’s Current Report on Form 8-K filed on July 16, 2026) | |
| 2.3 | Amendment No. 2 to Agreement and Plan of Merger, dated September 3, 2026 | |
| 10.1 | Registration Rights Agreement, dated September 3, 2026, by and among USAR, Serra Verde Rare Earths Ltd., as the Seller Representative, and certain SVRE shareholders | |
| 10.2 | Board Appointment Agreement, dated September 3, 2026, by and between USAR and VB (Rare Earths) Limited | |
| 99.1 | Press Release, dated September 4, 2026, announcing the closing of the Merger | |
| 99.2 | Audited financial statements of SVRE Holdings Ltd. for the years ended December 31, 2025 and 2024 (incorporated by reference to Exhibit 99.3 to USAR’s Current Report on Form 8-K filed on May 13, 2026) | |
| 99.3 | Unaudited pro forma condensed combined financial information of USAR as of and for the six months ended June 30, 2026 and for the year ended December 31, 2025 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
| * | The annexes schedules, and certain exhibits to this Exhibit have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Registrant hereby agrees to furnish supplementally a copy of any omitted annex, schedule or exhibit to the SEC upon request. |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| USA Rare Earth, Inc. | |||
| Date: September 4, 2026 | By: | /s/ Valerie Ford Jacob | |
| Name: | Valerie Ford Jacob | ||
| Title: | Chief Legal Officer | ||
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Exhibit 99.1
USA Rare Earth Completes Combination with Serra Verde Group
Combines Serra Verde’s world-class upstream heavy-rare earth operation with USA Rare Earth’s processing, metallization, and magnet-making capabilities
Creates one of the only fully integrated rare earth and permanent magnet platforms outside Asia
Industry veterans Sir Mick Davis and Thras Moraitis join the USA Rare Earth Board
Stillwater, Okla. and Goiás, Brazil – September 4, 2026 – USA Rare Earth (Nasdaq: USAR) (“USAR”, “USA Rare Earth”, or the “Company”) today announced the completion of its combination with Serra Verde Group (“Serra Verde”) on September 3, 2026, creating a global rare earths leader and a partner of choice for the supply of advanced materials and products that underpin Western national security and technological innovation.
Serra Verde is the only scaled producer of all four magnetic and other critical heavy rare earth elements outside Asia. Its mining and processing operation in Goiás, Brazil began production in January 2024 and is currently completing an advanced-stage optimization and commissioning program, with ramp-up expected in the third quarter of 2026. The first stage of this program is expected to reach a run-rate of approximately 4,000 tons per annum (tpa) of total rare earth oxide (TREO) production by the end of 2026. Construction is underway on the second stage of the expansion, targeting average production of 6,400 tpa of TREO, with commissioning expected to begin within 12 months. Longer term, Serra Verde has the potential to double run of mine (ROM) production through a Phase 2 expansion.
Serra Verde joins USA Rare Earth’s existing and planned upstream, midstream and downstream assets in the United States, the United Kingdom and France to create a fully integrated rare earths platform positioned to deliver a reliable supply chain of vital rare earth elements and derivative products aimed at meeting commercial and public sector demand at each stage of the value chain.
Michael Blitzer, Executive Chairman of USA Rare Earth, stated: “Demand for rare earths and permanent magnets is accelerating globally due to demand from rapidly growing forward-facing technologies such as renewable energy, physical AI, semiconductors, aerospace and defense applications. At the same time, supply outside Asia remains weak as new sources, especially of heavy rare earths, take time to develop and produce. Over the past years we have assembled, built and integrated the key assets and capabilities at each step of the value chain, thereby positioning USA Rare Earth at the epicenter of that shift, building the affordable, dependable, and resilient supply chains of essential rare earth materials that underpin economic competitiveness and national security. With the Serra Verde combination complete, our focus now turns to execution, integrating operations, and moving efficiently toward steady-state and reliable supply. To this end, I’m confident we have the right team and platform to play a key role in meeting the needs of the crucial industries which depend on our products.”
Barbara Humpton, Chief Executive Officer of USA Rare Earth, stated: “Today marks a significant milestone for USA Rare Earth, and I am pleased to welcome the Serra Verde team to our platform. They are an exceptionally talented group that has built one of the most strategically important upstream operations in the critical minerals industry. Our teams have spent months preparing for this combination, and we are ready to move forward as one company with a clear focus on integration and execution. Together, we have the assets, the expertise, and the global footprint to manage the full rare earth value chain from the earth to the finished magnet and beyond, providing customers with a secure and resilient source of supply.”
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As previously announced, Thras Moraitis, formerly Chief Executive Officer of Serra Verde, has been appointed President of USA Rare Earth and is joining its Board of Directors. On October 1, 2026, Barbara Humpton will retire as CEO of USA Rare Earth and Mr. Moraitis will succeed her and lead the combined company. Sir Mick Davis, Chairman of Serra Verde and former CEO of Xstrata plc, is also joining the USA Rare Earth Board.
Thras Moraitis, President of USA Rare Earth, stated: “For our team in Brazil, this combination is the culmination of a 15-year journey to build a scaled, sustainable source of the vital rare earth materials that power the technologies of the future. The combination with USA Rare Earth accelerates our ambition to ensure our heavy rare earth elements reach end-use customers in the form of advanced materials, including permanent magnets, thereby becoming an important link in an integrated supply chain. Together, we are positioned to supply critical materials that shape our society’s future by promoting the prosperity of global industries whose ambitions would otherwise be constrained by a lack of reliable supply. I look forward to delivering on that promise for our shareholders, customers, employees, governments and communities across Brazil, the United States, the UK and France.”
Advisors
Moelis & Company LLC is acting as exclusive financial advisor and Latham & Watkins LLP is acting as legal counsel for USA Rare Earth. Goldman Sachs & Co. LLC is acting as exclusive financial advisor and White & Case LLP is acting as legal counsel for Serra Verde. Allen Overy Shearman Sterling US LLP is acting as legal counsel for the shareholders of Serra Verde.
About USA Rare Earth
USA Rare Earth, Inc. (Nasdaq: USAR) is building a fully integrated rare earth and permanent magnet value chain across the United States, Brazil and the United Kingdom. Through its ownership of Less Common Metals (LCM), one of the world’s leading producers of rare earth metals and alloys, its development of magnet manufacturing capacity in Stillwater, Oklahoma, the Pela Ema mine in Brazil and the Round Top deposit in Texas, USA Rare Earth operates across the entire value chain from mining to metal-making, alloy production and neodymium magnet manufacturing. USA Rare Earth is establishing a secure, Western-aligned supply of materials essential to the aerospace and defense, semiconductor, energy, data center, physical AI, mobility, healthcare and industrial sectors.
For more information, visit www.usare.com.
Forward Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include those relating to the timing of and expected TREO production resulting from the optimization and commissioning program at the Pela Ema facility, the expected ROM production through a Phase 2 expansion at the Pela Ema facility, the expected benefits of USA Rare Earth’s combination with Serra Verde and other statements regarding the combined company’s expectations for future development, operations, strategies, transactions and financial performance. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. Words such as “aim,” “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “growth,” “intend,” “may,” “might,” “plan,” “potential,” “project,” “propose,” “should,” “target,” “vision,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.
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Forward-looking statements are subject to risks and uncertainties and potentially inaccurate assumptions that could cause actual results to differ materially from our expectations, including without limitation: risks that we may not realize the anticipated benefits of USA Rare Earth’s combination with Serra Verde or our proposed and prior acquisitions, including expected synergies, financial performance, estimated earnings before interest, taxes, depreciation and amortization and, in the case of Serra Verde, integration of operations, on the anticipated timeline or at all; potential delays in the optimization and commissioning program and the Phase II expansion at the Pela Ema facility; political, economic, regulatory, tax, currency and other risks associated with Serra Verde’s operations in Brazil and Switzerland; physical climate risks related to the Pela Ema mine; the assumption of substantial indebtedness under Serra Verde’s Retained Finance Agreement, which contains restrictive covenants and other requirements that could adversely affect the combined company’s financial flexibility and operations; risks that the Offtake Agreement is terminated or ceases to be in full force and effect or that the counterparty to the Offtake Agreement is insufficiently capitalized, including as a result of a failure to finalize definitive debt financing arrangements within the timeframes contemplated by the Offtake Agreement; risks that the proposed transaction with Carester SAS may not be consummated on its anticipated timeline or at all; the ability of our Stillwater magnet manufacturing facility to generate revenue and the ability of our planned Blacksburg facility to commence commercial operations on the timing and with the production capacity anticipated or at all; our limited operating history; our ability to commercially extract minerals from the Round Top deposit on our anticipated timeline or at all; differences between planned and actual recovery and yield rates; risks that we may experience delays, unforeseen expenses, increased capital costs, and other complications while developing our projects; our ability to raise necessary capital on acceptable terms or at all; potential dilution to existing stockholders and adverse effect on our stock price if we issue additional common stock or equity-linked securities; the volatility of our stock price; the availability of rare earth oxide, metal feedstock and other materials, utilities (including power and water) and equipment in quantities and prices that allow us to develop and commercially operate our Stillwater facility and other facilities; our ability to meet individual customer specifications and produce a consistently high quality product; potential supply chain, logistics or product delivery disruptions; any delays in obtaining or renewing permits and licenses; any changes in royalty rates or the imposition of new royalties; risks associated with community relations; fluctuations in demand for and prices of neo magnets, rare earth elements and our other products, including without limitation as a result of dumping, predatory pricing and other tactics by our competitors or state actors or the overall competitive environment; our ability to achieve positive cash flow or profitability or the ability to access cash flow within our corporate structure due to restrictions contained in our financing agreements; our ability to convert current commercial discussions and/or memorandums of understanding with customers for the sale of our neo magnets and other products into definitive orders; our dependence, in part, on the growth of existing and emerging uses for neo magnets; the risk that additional manufacturing, refining and mining competitors could result in a reduction in revenue; geopolitical developments or disruptions, such as changes in the political environment, export/import or environmental policy of the People’s Republic of China, the United States or other countries in which we operate or sell products or otherwise; our designation on an export control list by China which has had and is expected to continue to have an adverse impact on our ability to source key raw materials and supplies from China; war, terrorism, natural disasters or public health emergencies; our ability to retain or recruit key personnel; environmental, health and safety regulations; the receipt of funding from the U.S. Department of Commerce is subject to the achievement of milestones which may not be achieved on the expected timeline or at all; and our ability to comply with requirements for federal, state and local government incentives and financing.
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Additional risks and detailed information regarding factors that may cause actual results to differ materially has been and will be included in our filings with the SEC, including our most recently filed Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q and subsequent filings. Any forward-looking statements speak only as of the date of this press release (or such other date as is specified in such statements), and we undertake no obligation to update any forward-looking statements as a result of new information or future events or developments.
Investor Relations Contact
J.B. Lowe, CFA
VP, Head of Investor Relations
ir@USARE.com
Media Relations Contact
Collected Strategies
Dan Moore / Scott Bisang
USAR-CS@collectedstrategies.com
Aura Financial
Michael Oke/ Andy Mills
serraverde@aura-financial.com
+44 207 321 0000
Page 4 of 4
Exhibit 99.3
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Introduction
The following unaudited pro forma condensed combined financial information is derived from the historical consolidated financial statements of USA Rare Earth, Inc. (“USAR” or the “Company”), and the historical consolidated financial statements of SVRE Holdings Ltd. (“SVRE”), and gives effect to (i) the Merger (as defined below), (ii) the Private Placement (as defined below), (iii) the Retained Finance Agreement (as defined below), and (iv) the Offtake Agreement (as defined below) (collectively, the “Pro Forma Transactions”).
On August 21, 2024, Inflection Point Acquisition Corp. II, a Cayman Islands exempted company (“IPXX”) entered into a Business Combination Agreement (as amended on November 11, 2024 and January 30, 2025, the “Business Combination Agreement”), by and among IPXX, USA Rare Earth, LLC, a Delaware limited liability company, and IPXX Merger Sub, LLC, a Delaware limited liability company and a direct wholly owned subsidiary of IPXX. Pursuant to the Business Combination Agreement, IPXX Merger Sub, LLC merged with and into USA Rare Earth, LLC, with USA Rare Earth, LLC continuing as the surviving company, and IPXX changed its name to USA Rare Earth, Inc. On March 13, 2025, USAR consummated the previously announced merger contemplated by the Business Combination Agreement and USA Rare Earth, LLC became a direct wholly owned subsidiary of USAR. This transaction is already reflected in the USAR historical audited consolidated balance sheet as of December 31, 2025 and the historical statement of operations of IPXX from January 1, 2025 to March 12, 2025 is not material to the pro forma presentation of the Merger (as defined below) for the purpose of unaudited pro forma condensed combined statement of operations.
Merger
On April 19, 2026, USAR entered into a Merger Agreement by and among (i) USAR, (ii) Middlebury Merger Sub Ltd. (“Merger Sub”), (iii) SVRE, and (iv) Serra Verde Rare Earths Ltd. The Merger Agreement provides for the merger of SVRE with and into Merger Sub, with Merger Sub surviving such merger as an indirect, wholly owned subsidiary of USAR (the “Merger”), subject to the satisfaction or waiver of the conditions precedent to such closing. On September 3, 2026 (“Closing Date”), USAR completed the Merger through issuance of 126,849,307 shares of USAR’s common stock, par value $0.0001 per share (“Common Stock”) and paid an aggregate of $300.0 million of Merger consideration.
On the Closing Date, all outstanding warrants of SVRE, including the DFC Warrants, were automatically exercised and converted into SVRE ordinary shares immediately prior to the Merger. All outstanding RSUs and SARs, whether vested or unvested, were accelerated in full and cancelled in exchange for a pro rata portion of the Merger consideration. Stock options not subject to performance conditions were similarly cancelled on a cashless basis for Merger consideration, while performance-vesting options held by continuing service providers were substituted with USAR RSUs subject to continued service vesting.
Private Placement
On January 26, 2026, USAR, entered into a securities purchase agreement, for the private placement of 69,767,442 shares of the USAR’s Common Stock, for aggregate gross proceeds of approximately $1.5 billion, at a price per share of $21.50 (the “Private Placement”). USAR closed the Private Placement and issued the shares of Common Stock on January 28, 2026.
Parent Loan Agreement
Concurrently with the execution of the Direct Funding Agreement (“DFA”) and the Loan Guarantee Agreement (“LGA”), USAR entered into a Securities Issuance Agreement with the DOC and issued to the DOC 16,132,790 shares of Common Stock (the “SIA Shares”) and a warrant to purchase 17,600,584 shares of Common Stock at an exercise price of $17.17 per share (the “DOC Warrants”). The SIA Shares were issued in exchange for access to the awards pursuant to the Direct Funding Agreement, and the DOC Warrants were issued in exchange for obtaining the Loan Guarantee Agreement.
On June 3, 2026 (the “Award Date”), USAR issued the SIA Shares and DOC Warrants to the DOC. The SIA Shares were measured at fair value based on USAR’s closing stock price of $27.98 per share on the Award Date, resulting in an aggregate fair value of $451.4 million, treated as a deferred equity cost. the DOC Warrants were initially measured at fair value of $430.9 million ($24.48 per warrant share) on the Award Date based on an independent third-party valuation. The combined fair values for the SIA Shares and DOC Warrants were treated as the total cost incurred to obtain access to the funding arrangement under the DFA and LGA, and along with other financing costs, were recognized as deferred arrangement costs in the condensed consolidated balance sheets as of June 30, 2026.
The deferred equity cost associated with the SIA Shares under the DFA arrangement will remain on the balance sheet until DFA disbursements are received. Upon receipt of approved cash disbursements, the Company will reduce a proportionate share of the deferred equity cost with an offset to additional paid in capital. The disbursement of the DFA is subject to the achievement of various project-specific milestones, the making of cash equity contributions by USAR to its subsidiaries, the satisfaction of financial ratio and liquidity thresholds, the receipt of required permits and approvals and other customary conditions, which have not yet been satisfied as of the date of this filing. No amortization of the deferred arrangement costs have been reflected in the accompanying unaudited pro forma condensed combined financial information.
The Company has determined that the DOC warrant is liability-classified, with an initial fair value of $24.48 per common share, or $430.9 million in aggregate as of the Award Date. The DOC Warrant liability will be remeasured at fair value at the end of each reporting period, with changes in fair value recognized as a gain or loss within other income (expense), net in the Company’s condensed consolidated statements of operations and comprehensive income (loss). The DOC Warrant liability was initially recorded at fair value with an offsetting entry recorded as a deferred arrangement costs until the debt associated with the Parent Loan Agreements is drawn. Upon each draw, the deferred arrangement cost will be derecognized proportionately, and recorded as a component of the related debt’s amortized cost basis, which will be amortized over the term of the debt using the effective interest method. As of the date of this filing, no amounts associated with the Parent Loan Agreements had been drawn. Accordingly, no reclassification of the deferred arrangement cost to related debt’s amortized cost basis has been reflected on the Company’s unaudited pro forma condensed combined balance sheet as of June 30, 2026, and no related amortization expense has been reflected in the Company’s unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2026 and for the year ended December 31, 2025.
The Retained Finance Agreement
On January 21, 2026, SVRE entered into a Finance Agreement with the United States International Development Finance Corporation (the “DFC”), which was amended on March 5, 2026 (as further amended from time to time, the “Retained Finance Agreement”). The Retained Finance Agreement provides SVRE with long-term debt financing to support its rare earth mining and processing operations in an aggregate committed amount not to exceed $565.0 million, consisting of (i) an initial loan tranche with a principal amount not to exceed $465.0 million (the “Initial Loan”), and (ii) a second loan tranche with a principal amount not to exceed $100.0 million (the “Incremental Loan”).
On May 28, 2026, SVRE and the DFC entered into the Second Amendment to the Finance Agreement, and extended the loan term for both tranches from up to 12 years to up to 15 years from the first closing date, upon the execution of the Offtake Agreement (see discussion below). In connection with the Incremental Loan, DFC was issued two warrants (the “DFC Warrants”) granting a combined 12% fully diluted equity interest in the Company, which will automatically exercise upon the closing of the Merger, at which point the Incremental Loan shall be deemed extinguished in full. The Incremental Loan was closed on June 4, 2026. As of June 30, 2026, the aggregate outstanding principal amount of indebtedness of SVRE and its subsidiaries under the Retained Finance Agreement was $425.0 million. On the Closing Date, the DFC Warrants were exercised and the Incremental Loan was extinguished in full.
The Initial Loan, Incremental Loan and DFC Warrants were reflected in the historical unaudited condensed consolidated balance sheet of SVRE as of June 30, 2026, and accordingly, no adjustment has been reflected within the unaudited pro forma condensed combined balance sheet for such amounts. Adjustments for the Initial Loan within the unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2026 and for the year ended December 31, 2025 were included assuming the Initial Loan was executed and drawn down on January 1, 2025. The DFC Warrants exercise and the extinguishment of the Incremental Loan upon closing of the Merger, have been included as purchase price adjustment as part of the purchase consideration. Adjustments related to accrued interest, interest expense and issuance cost for DFC Incremental Loan have been included as transaction adjustments within the unaudited proforma condensed combined financial statements as of and for the six months ended June 30, 2026.
The Offtake Agreement
On or about the date of the Merger Agreement, SV Management Switzerland AG (“SV Management Switzerland”), a subsidiary of SVRE, entered into an offtake agreement with a special purpose vehicle capitalized by the U.S. government, as well as private capital sources (the “Counterparty”) (as amended from time to time, the “Offtake Agreement”) for the long-term supply of rare earth materials produced by SVRE.
The Offtake Agreement provides for the sale of 100% of the rare earth products produced from phase one of the Pela Ema project, subject to limited carve-outs. The Incremental Loan was fully disbursed on June 4, 2026, and SVRE’s delivery obligation will be for 100% of phase one production. The agreement remains in effect until the earlier of specified production-based volume delivery thresholds and the date that is 20 years after the date on which SVRE’s facility becomes capable of producing the contemplated products (the “Commercial Operations Date”), unless extended with the consent of the U.S. government. Pricing is based on annually escalated contractual floor prices, with amounts above the applicable floor price, as well as certain cost savings and yield variances, allocated 70% to SV Management Switzerland and 30% to the Counterparty. Commencement of deliveries is subject to the satisfaction or waiver of specified conditions precedent by the agreed long-stop date, June 12, 2026, and either party may terminate the agreement without liability if such conditions were not satisfied or waived by that date. On June 29, 2026, SV Management Switzerland and the Counterparty entered into an amendment, consent and waiver to the Offtake Agreement that extended the long-stop date from June 12, 2026 to August 14, 2026. The long-stop date was further extended to August 21, 2026 and all conditions were satisfied on this day. SVRE has not recorded any accounting entries related to the Offtake Agreement in their unaudited condensed consolidated financial statements as of June 30, 2026. Adjustments related to the Offtake agreement have been included within the unaudited pro forma condensed combined balance sheet as of June 30, 2026.
2
Issuance of Earnout Shares
In connection with the business combination between the Company and USA Rare Earth, LLC, the Company agreed to issue common stock of the Company (the “earnout shares”) to certain shareholders of USA Rare Earth, LLC in two tranches upon the occurrence of certain triggering events. On April 15, 2026, the Company achieved the market-price condition for the first tranche of earnout shares, as the Company’s common stock exceeded $15.00 per share for at least 20 out of 30 consecutive trading days. 5.05 million shares were issued to USA Rare Earth, LLC shareholders. The second tranche of 5.05 million earnout shares were issued on May 15, 2026 when the Company achieved the market-price condition for the second tranche, as the Company’s common stock exceeds $20.00 per share for at least 20 out of 30 consecutive trading days.
The earnout shares were classified as liabilities and remeasured at fair value on a recurring basis prior to conversion. Upon issuance of the two tranches of the earnout shares, the related earnout liability was reclassified to common stock and additional paid-in capital. The effect of the conversion has been included within the Company’s unaudited condensed consolidated balance sheets as of June 30, 2026.
Presentation Periods
The unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X and should be read in conjunction with the accompanying notes.
The unaudited pro forma condensed combined balance sheet as of June 30, 2026 combines the unaudited condensed consolidated balance sheet of USAR as of June 30, 2026 with the unaudited condensed consolidated balance sheet of SVRE as of June 30, 2026, giving effect to the Pro Forma Transactions as if it had been consummated on June 30, 2026.
The unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2026 combines the unaudited condensed consolidated statement of operations of USAR for the six months ended June 30, 2026 with the unaudited condensed consolidated statement of operations of SVRE for the six months ended June 30, 2026, giving effect to the Pro Forma Transactions as if it had been consummated on January 1, 2025.
The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2025 combines the audited consolidated statement of operations of USAR for the year ended December 31, 2025 with the audited consolidated statement of operations of SVRE for the year ended December 31, 2025, giving effect to the Pro Forma Transactions as if it had been consummated on January 1, 2025.
The unaudited pro forma condensed combined financial information was derived from, and should be read in conjunction with, the following historical financial statements and the accompanying notes:
| ● | The historical audited consolidated financial statements of USAR as of and for the year ended December 31, 2025, as included in the Company’s Annual Report on Form 10-K filed with the SEC on March 30, 2026; |
| ● | The historical unaudited condensed consolidated financial statements of USAR as of and for the six months ended June 30, 2026, as included in the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 10, 2026; |
| ● | The historical audited financial statements of SVRE as of and for the year ended December 31, 2025, included as Exhibit 99.3 in the Company’s Current Report on Form 8-K filed with the SEC on May 13, 2026. |
The historical unaudited condensed consolidated balance sheet and statement of operations of SVRE as of and for the six months ended June 30, 2026 are derived from the books and records of SVRE. The unaudited pro forma condensed combined financial information should also be read together with other financial information included elsewhere or filed with the SEC.
3
Accounting for the Merger
The unaudited pro forma condensed combined financial information has been prepared using the acquisition method of accounting in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). USAR has been identified as an accounting acquirer for accounting purposes, and thus accounts for the Merger as a business combination in accordance with Accounting Standards Codification Topic 805, Business Combinations (“ASC 805”). Under the acquisition method of accounting, SVRE’s assets and liabilities are recorded at their respective fair values. Any difference between the purchase price for SVRE and the fair value of the identifiable net assets acquired (including intangibles) is recorded as goodwill. The assets and liabilities of SVRE have been measured based on various preliminary estimates using assumptions that USAR’s management believes were reasonable and based on currently available information. Accordingly, the pro forma adjustments are preliminary and have been made solely for the purpose of providing this unaudited pro forma condensed combined financial information.
Differences between these preliminary estimates and the final purchase accounting may occur, and the final purchase accounting could be materially different from the preliminary estimates used to prepare the accompanying unaudited pro forma condensed combined financial information and could have a material impact on the combined company’s future results of operations and financial position.
Basis of Pro Forma Presentation
The unaudited pro forma condensed combined financial information appearing below does not consider any potential effects of changes in market conditions on revenues or expense efficiencies, among other factors. In addition, as explained in more detail in the accompanying notes, the preliminary allocation of the pro forma purchase price reflected in the unaudited pro forma condensed combined financial information is subject to adjustment and may vary significantly from what will be recorded upon completion of the final purchase price allocation.
The unaudited pro forma condensed combined financial information has been prepared based on the aforementioned historical financial statements and the assumptions and adjustments as described in the notes to the unaudited pro forma condensed combined financial information. The pro forma adjustments reflect transaction accounting adjustments related to the Pro Forma Transactions, which are discussed in further detail below. The unaudited pro forma condensed combined financial information is presented for illustrative purposes only and do not purport to represent the combined company’s consolidated results of operations or the consolidated financial position that would actually have occurred had the Pro Forma Transactions been consummated on the dates assumed or to project the combined company’s consolidated results of operations or consolidated financial position for any future date or period.
The accounting policies followed in preparing the unaudited pro forma condensed combined financial information are those used by USAR as set forth in the audited historical financial statements. Based on the Company’s initial review and understanding of SVRE’s significant accounting policies, there are no material adjustments required at this time to conform SVRE’s historical financial information to USAR’s significant accounting policies. A more comprehensive comparison and assessment will occur, which may result in additional differences being identified. Additionally, USAR has included certain preliminary presentation adjustments for consistency in the financial statement presentation. See Notes 2 and 3 below for more information.
The unaudited pro forma condensed combined financial information is presented for illustrative purposes only and does not reflect the costs of any integration activities or cost savings or synergies that may be achieved because of the Merger.
USAR and SVRE have not had any historical material relationship prior to the Merger. Accordingly, no pro forma adjustments were required to eliminate activities between the companies.
4
Unaudited Pro Forma Condensed Combined Balance
Sheet
As of June 30, 2026
(in thousands)
| USAR Historical | SVRE Historical | Presentation Adjustments | Transaction Accounting Adjustments | Pro Forma Combined | ||||||||||||||||||||||
| ASSETS | ||||||||||||||||||||||||||
| Current assets | ||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 1,530,147 | $ | 162,413 | $ | (300,000 | ) | (B) | $ | 1,392,007 | ||||||||||||||||
| $ | (553 | ) | (D) | |||||||||||||||||||||||
| Accounts receivables | 6,270 | 31 | 6,301 | |||||||||||||||||||||||
| Inventories | 50,138 | 24,667 | 74,805 | |||||||||||||||||||||||
| Prepaid expenses | 12,347 | 12,347 | ||||||||||||||||||||||||
| Other assets, current | 73,687 | 4,217 | - | - | 77,904 | |||||||||||||||||||||
| Total current assets | 1,672,589 | 191,328 | - | (300,553 | ) | 1,563,364 | ||||||||||||||||||||
| Property, plant and equipment, net | 146,751 | 736,964 | 766 | (A) | 2,385,149 | (B) | 3,254,507 | |||||||||||||||||||
| (15,123 | ) | (A) | ||||||||||||||||||||||||
| Mineral interests | 17,339 | - | 15,123 | (A) | 32,462 | |||||||||||||||||||||
| Goodwill | 134,848 | - | 467,679 | (B) | 602,527 | |||||||||||||||||||||
| Other intangible assets, net | 65,899 | - | 246,691 | (B) | 312,590 | |||||||||||||||||||||
| Equipment deposits | 46,904 | - | 46,904 | |||||||||||||||||||||||
| Operating lease right-of-use assets | 2,151 | - | 2,151 | |||||||||||||||||||||||
| Deferred arrangement costs | 912,091 | - | 912,091 | |||||||||||||||||||||||
| Other non-current assets | 255 | 984 | (766 | ) | (A) | 473 | ||||||||||||||||||||
| Total assets | $ | 2,998,827 | $ | 929,276 | $ | - | $ | 2,798,966 | $ | 6,727,069 | ||||||||||||||||
| LIABILITIES, MEZZANINE AND STOCKHOLDER’S EQUITY | ||||||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||
| Current liabilities | ||||||||||||||||||||||||||
| Accounts payable | $ | 17,367 | $ | 37,080 | $ | (21,382 | ) | (A) | $ | 33,065 | ||||||||||||||||
| Accrued liabilities | 31,679 | - | 28,726 | (A) | 96,372 | (C) | 156,224 | |||||||||||||||||||
| (553 | ) | (D) | ||||||||||||||||||||||||
| Contract liabilities, current | 1,328 | - | 1,328 | |||||||||||||||||||||||
| Salaries and social charges | - | 5,985 | (5,985 | ) | (A) | - | ||||||||||||||||||||
| Taxes payable | - | 532 | 532 | |||||||||||||||||||||||
| Other current liabilities | - | 1,359 | (1,359 | ) | (A) | - | ||||||||||||||||||||
| Royalty agreement, current | - | 19,429 | 19,429 | |||||||||||||||||||||||
| DFC loan, current | - | 6,107 | 6,107 | |||||||||||||||||||||||
| Finance leases, current | 290 | 717 | 1,007 | |||||||||||||||||||||||
| Operating leases, current | 350 | - | 350 | |||||||||||||||||||||||
| Total current liabilities | 51,014 | 71,209 | - | 95,819 | 218,042 | |||||||||||||||||||||
| Non-current liabilitites | ||||||||||||||||||||||||||
| Accounts payable and accrued expnese, non-current | - | 162 | 162 | |||||||||||||||||||||||
| Royalty agreement, non-current | - | 139,227 | 68,202 | (B) | 207,429 | |||||||||||||||||||||
| DFC loan, non-current | - | 297,993 | 297,993 | |||||||||||||||||||||||
| Asset retirement obligations | - | 4,854 | 4,854 | |||||||||||||||||||||||
| Deferred grant income | 8,482 | - | 8,482 | |||||||||||||||||||||||
| Finance leases, non-current | 445 | 147 | 592 | |||||||||||||||||||||||
| Operating leases, non-current | 2,111 | - | 2,111 | |||||||||||||||||||||||
| Other liabilities | - | 1,471 | 1,471 | |||||||||||||||||||||||
| Warrant liability | 364,189 | 14,775 | (14,775 | ) | (B) | 364,189 | ||||||||||||||||||||
| DFC warrants | - | 215,062 | (215,062 | ) | (B) | - | ||||||||||||||||||||
| Deferred tax liability | 15,665 | - | 871,637 | (B) | 887,302 | |||||||||||||||||||||
| Contract liabilities, non-current | 9,602 | - | 9,602 | |||||||||||||||||||||||
| Total liabilities | 451,508 | 744,900 | - | 805,821 | 2,002,229 | |||||||||||||||||||||
| Commitments and contingencies | ||||||||||||||||||||||||||
| Mezzanine equity | ||||||||||||||||||||||||||
| 12% Series A Cumulative Convertible Preferred Stock | 10,347 | - | 10,347 | |||||||||||||||||||||||
| Total mezzanine equity | 10,347 | - | - | - | 10,347 | |||||||||||||||||||||
| Stockholders’ equity | ||||||||||||||||||||||||||
| Common stock | 24 | - | 127 | (B) | 151 | |||||||||||||||||||||
| Accumulated other comprehensive income (loss) | (927 | ) | (13,928 | ) | 13,928 | (B) | (927 | ) | ||||||||||||||||||
| Additional paid-in capital | 3,003,612 | 617,647 | (617,647 | ) | (B) | 5,277,378 | ||||||||||||||||||||
| 2,273,766 | (B) | |||||||||||||||||||||||||
| Accumulated deficit | (464,681 | ) | (419,343 | ) | 419,343 | (B) | (561,053 | ) | ||||||||||||||||||
| (96,372 | ) | (C) | ||||||||||||||||||||||||
| Non-controlling interest | (1,056 | ) | - | (1,056 | ) | |||||||||||||||||||||
| Total stockholders’ equity | 2,536,972 | 184,376 | - | 1,993,145 | 4,714,493 | |||||||||||||||||||||
| Total liabilities, mezzanine equity, and stockholder’s equity | $ | 2,998,827 | $ | 929,276 | $ | - | $ | 2,798,966 | $ | 6,727,069 | ||||||||||||||||
Please refer to the notes to the unaudited pro forma condensed combined financial information.
5
Unaudited Pro Forma Condensed Combined Statement
of Operations
For the Six Months Ended June 30, 2026
(in thousands except per share amounts)
| USAR Historical | SVRE Historical | Presentation Adjustments | Transaction Accounting Adjustments | Other Material Transactions | Pro Forma Combined | ||||||||||||||||||||||||||||
| Revenue | $ | 11,519 | $ | 588 | $ | 12,107 | |||||||||||||||||||||||||||
| Cost of revenue | 12,996 | 5,312 | 18,308 | ||||||||||||||||||||||||||||||
| Gross profit | (1,477 | ) | (4,724 | ) | - | - | - | (6,201 | ) | ||||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||||||
| Selling, general and administrative | 53,782 | 20,261 | 449 | (AA) | 1,380 | (DD) | 75,872 | ||||||||||||||||||||||||||
| Research and development | 25,017 | - | 25,017 | ||||||||||||||||||||||||||||||
| Amortization of intangible assets | 2,713 | - | 2,713 | ||||||||||||||||||||||||||||||
| Other expenses, net | - | 14,789 | 14,789 | ||||||||||||||||||||||||||||||
| Total operating expenses | 81,512 | 35,050 | 449 | 2,813 | - | 118,391 | |||||||||||||||||||||||||||
| Loss from operations | (82,989 | ) | (39,774 | ) | (449 | ) | (2,813 | ) | - | (124,592 | ) | ||||||||||||||||||||||
| Other (expense) income, net: | |||||||||||||||||||||||||||||||||
| Interest income | 472 | 1,007 | (370 | ) | (AA) | 1,109 | |||||||||||||||||||||||||||
| Dividend Income | 26,449 | - | 370 | (AA) | 26,819 | ||||||||||||||||||||||||||||
| Loss on fair market value of financial instruments, net | (21,135 | ) | - | (125,756 | ) | (AA) | 125,756 | (EE) | (21,135 | ) | |||||||||||||||||||||||
| Interest expense and other expense, net | (4,364 | ) | (136,972 | ) | 126,205 | (AA) | (553 | ) | (II) | 2,276 | (FF) | (17,918 | ) | ||||||||||||||||||||
| (5,964 | ) | (GG) | |||||||||||||||||||||||||||||||
| 1,454 | (HH) | ||||||||||||||||||||||||||||||||
| Grant income | 446 | - | 446 | ||||||||||||||||||||||||||||||
| Foreign currency exchange, net | - | 15,978 | 15,978 | ||||||||||||||||||||||||||||||
| Total other expense, net | 1,868 | (119,987 | ) | 449 | (553 | ) | 123,522 | 5,299 | |||||||||||||||||||||||||
| Loss before income taxes | (81,121 | ) | (159,761 | ) | - | (1,933 | ) | 123,522 | (119,293 | ) | |||||||||||||||||||||||
| Benefit from income taxes | (1,090 | ) | - | (1,090 | ) | ||||||||||||||||||||||||||||
| Net loss | (80,031 | ) | (159,761 | ) | - | (1,933 | ) | 123,522 | (118,203 | ) | |||||||||||||||||||||||
| Net loss attributable to non-controlling interest | (2,709 | ) | - | (2,709 | ) | ||||||||||||||||||||||||||||
| Net loss attributable to USA Rare Earth, Inc. | $ | (77,322 | ) | $ | (159,761 | ) | $ | - | $ | (1,933 | ) | $ | 123,522 | $ | (115,494 | ) | |||||||||||||||||
| Net loss per share attributable to USA Rare Earth, Inc.: | |||||||||||||||||||||||||||||||||
| Basic and diluted | $ | (0.37 | ) | $ | (0.83 | ) | $ | (0.34 | ) | ||||||||||||||||||||||||
| Number of shares used in per share calculations: | |||||||||||||||||||||||||||||||||
| Basic and diluted | 213,347 | 193,429 | 340,196 | ||||||||||||||||||||||||||||||
Please refer to the notes to the unaudited pro forma condensed combined financial information.
6
Unaudited Pro Forma Condensed Combined Statement
of Operations
For the Year Ended December 31, 2025
(in thousands except per share amounts)
| USAR Historical | SVRE Historical | Presentation Adjustments | Transaction Accounting Adjustments | Other Material Transactions | Pro Forma Combined | ||||||||||||||||||||||||||||
| Revenue | $ | 1,643 | $ | 2,486 | $ | 4,129 | |||||||||||||||||||||||||||
| Cost of revenue | 1,448 | 36,105 | 37,553 | ||||||||||||||||||||||||||||||
| Gross profit | 195 | (33,619 | ) | - | - | - | (33,424 | ) | |||||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||||||
| Selling, general and administrative | 43,135 | 25,803 | 278 | (AA) | 96,372 | (CC) | 173,976 | ||||||||||||||||||||||||||
| 8,388 | (DD) | ||||||||||||||||||||||||||||||||
| Research and development | 15,885 | - | 15,885 | ||||||||||||||||||||||||||||||
| Amortization of intangible assets | 678 | - | 678 | ||||||||||||||||||||||||||||||
| Other expenses, net | - | 1,440 | 1,440 | ||||||||||||||||||||||||||||||
| Total operating expenses | 59,698 | 27,243 | 278 | 104,760 | - | 191,979 | |||||||||||||||||||||||||||
| Loss from operations | (59,503 | ) | (60,862 | ) | (278 | ) | (104,760 | ) | - | (225,403 | ) | ||||||||||||||||||||||
| Other (expense) income, net: | |||||||||||||||||||||||||||||||||
| Interest and dividend income | 5,446 | 2,671 | 8,117 | ||||||||||||||||||||||||||||||
| Loss on fair market value of financial instruments, net | (244,488 | ) | - | (7,652 | ) | (AA) | 7,652 | (EE) | (244,488 | ) | |||||||||||||||||||||||
| Interest expense and other expense, net | (139 | ) | (9,873 | ) | 7,930 | (AA) | 4,268 | (FF) | (28,615 | ) | |||||||||||||||||||||||
| (31,501 | ) | (GG) | |||||||||||||||||||||||||||||||
| 700 | (HH) | ||||||||||||||||||||||||||||||||
| Foreign currency exchange, net | - | 49,532 | 49,532 | ||||||||||||||||||||||||||||||
| Total other expense, net | (239,181 | ) | 42,330 | 278 | - | (18,881 | ) | (215,454 | ) | ||||||||||||||||||||||||
| Loss before income taxes | (298,684 | ) | (18,532 | ) | - | (104,760 | ) | (18,881 | ) | (440,857 | ) | ||||||||||||||||||||||
| Benefit from income taxes | (160 | ) | - | (160 | ) | ||||||||||||||||||||||||||||
| Net loss | (298,524 | ) | (18,532 | ) | - | (104,760 | ) | (18,881 | ) | (440,697 | ) | ||||||||||||||||||||||
| Net loss attributable to non-controlling interest | (965 | ) | - | (965 | ) | ||||||||||||||||||||||||||||
| Net loss attributable to USA Rare Earth, Inc. | $ | (297,559 | ) | $ | (18,532 | ) | $ | - | $ | (104,760 | ) | $ | (18,881 | ) | $ | (439,732 | ) | ||||||||||||||||
| Net loss per share attributable to USA Rare Earth, Inc.: | |||||||||||||||||||||||||||||||||
| Basic and diluted | $ | (3.31 | ) | $ | (0.10 | ) | $ | (1.50 | ) | ||||||||||||||||||||||||
| Number of shares used in per share calculations: | |||||||||||||||||||||||||||||||||
| Basic and diluted | 98,021 | 193,429 | 310,770 | ||||||||||||||||||||||||||||||
Please refer to the notes to the unaudited pro forma condensed combined financial information.
7
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
1. Basis of Presentation
The pro forma adjustments have been prepared as if the Pro Forma Transactions had been consummated on June 30, 2026, in the case of the unaudited pro forma condensed combined balance sheet, and, in the case of the unaudited pro forma condensed combined statements of operations, as if the Pro Forma Transactions had been consummated on January 1, 2025, the beginning of the earliest period presented in the unaudited pro forma condensed combined statements of operations.
The unaudited pro forma condensed combined financial information has been prepared assuming the acquisition method of accounting in accordance with U.S. GAAP. Under this method, SVRE’s assets and liabilities are recorded at their respective fair values. Any difference between the purchase price for SVRE and the fair value of the identifiable net assets acquired (including intangibles) is recorded as goodwill. The assets and liabilities of SVRE have been measured based on various preliminary estimates using assumptions that USAR’s management believes are reasonable and based on currently available information. Accordingly, the pro forma adjustments are preliminary and have been made solely for the purpose of providing this unaudited pro forma condensed combined financial information.
The pro forma adjustments represent management’s estimates based on information available as of the date of the Form 8-K and are subject to change as additional information becomes available and additional analyses are performed.
USAR has performed a preliminary review to identify any accounting policy differences between the accounting policies used in SVRE’s financial statements and those of the Company, where the impact was potentially material and could be reasonably estimated, with the Company identifying no such differences.
2. Adjustments to the Unaudited Pro Forma Condensed Combined Balance Sheet as of June 30, 2026
The adjustments included in the unaudited pro forma condensed combined balance sheet as of June 30, 2026 are as follows:
| (A) | Reflects reclassification adjustments to conform SVRE’s historical balances to the financial statement presentation of USAR. |
| (B) | Reflects the purchase price allocation adjustments to record SVRE’s identifiable assets acquired and liabilities assumed at their estimated fair values as of the acquisition date. This adjustment reflects the recording of the preliminary estimate of goodwill and the elimination of the historical equity balances of SVRE. Additionally, the adjustment removes SVRE’s outstanding warrant liability, to reflect the conversion of all warrants into SVRE’s ordinary shares immediately prior to the Merger. |
Pursuant to ASC 805, the preliminary purchase price was allocated among the identified net assets acquired, based on a preliminary analysis. Goodwill is recognized as a result of the Merger, which represents the excess fair value of consideration over the fair value of the underlying net assets of SVRE. The deferred income taxes represent the deferred tax impact associated with the incremental differences in book and tax basis created from the preliminary purchase price allocation. Deferred taxes associated with estimated fair value adjustments were calculated using the statutory corporate tax rate in Brazil of 34%. The estimates of fair value are based upon preliminary valuation assumptions, and are believed to be reasonable, but are inherently uncertain and unpredictable. As a result, actual results may differ from estimates, and the difference may be material.
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The following is a preliminary estimate of fair value of the assets acquired and the liabilities assumed by USAR in the Merger, reconciled to the estimated purchase consideration (in thousands):
| Net Assets Identified | Preliminary Estimate of Fair Value | |||
| Cash and cash equivalents | $ | 162,413 | ||
| Accounts receivable | 31 | |||
| Inventories | 24,667 | |||
| Prepaid expenses and other current assets | 4,217 | |||
| Property, plant and equipment, net (incl. mineral interests)(1) | 3,122,879 | |||
| Other intangible assets, net(2) | 246,691 | |||
| Other non-current assets | 218 | |||
| Accounts payable | (15,698 | ) | ||
| Accrued liabilities | (28,726 | ) | ||
| Tax payable | (532 | ) | ||
| Royalty agreement – current(3) | (19,429 | ) | ||
| DFC loan, current | (6,107 | ) | ||
| Finance lease, current | (717 | ) | ||
| Royalty agreement – noncurrent(3) | (207,429 | ) | ||
| DFC loan, noncurrent(4) | (297,993 | ) | ||
| Asset retirement obligations | (4,854 | ) | ||
| Accounts payable and accrued expense, non-current | (162 | ) | ||
| Finance leases, non-current | (147 | ) | ||
| Other liabilities | (1,471 | ) | ||
| Deferred tax liabilities | (871,637 | ) | ||
| Total net assets identified | $ | 2,106,214 | ||
| Goodwill | 467,679 | |||
| Total purchase consideration | $ | 2,573,893 | ||
| Value Conveyed | ||||
| Cash consideration(5) | $ | 300,000 | ||
| Equity consideration(6) | 2,264,259 | |||
| Pre-combination expense for vested performance stock options(7) | 9,634 | |||
| Total purchase consideration | $ | 2,573,893 | ||
| (1) | The $3.1 billion allocated to property, plant and equipment, net, is related to development stage properties. Upon the closing of the Merger, the mine will continue to be designated as a development stage property, and related development costs will continue to be capitalized until the milestones necessary to be considered operational are achieved. An expansion and optimization project is currently being implemented that is expected to result in higher production capacity, a sustained lower operating cost profile and enhanced product quality. Construction is expected to be completed, and commercial operations are expected to commence in 2027. |
| (2) | Other intangible assets is comprised of an Offtake Agreement. The Offtake Agreement asset is expected to be amortized on a systematic basic using the units of production method. As of the date of this Form 8-K, delivery pursuant to the Offtake Agreement has not started. Accordingly, amortization of the Offtake Agreement had not commenced as of the pro forma transaction date and no related amortization expense has been reflected in the unaudited pro forma condensed combined statement of operations. |
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| (3) | This reflects an increase in the fair value of the liability for royalty payments due to an increase in estimated future cash payments. The increase in estimated future cash payments is primarily related to the anticipated impact of the Offtake Agreement. |
| (4) | The $100.0 million Incremental Loan was deemed forgiven upon exercise of the DFC Warrants at closing of the Merger. |
| (5) | This amount represents cash consideration paid to SVRE’s shareholders. |
| (6) | Equity consideration is provided in the form of Common Stock of USAR and is calculated as 126,849,307 shares of USAR Common Stock to be issued to SVRE shareholders, multiplied by $17.85, the closing share price of USAR on September 2, 2026. |
| (7) | This reflects the pre-combination expense pertaining to options to purchase SVRE shares subject to performance-vesting conditions (the “Performance-Vesting Options”) which will be substituted with USAR time-vesting restricted stock units. |
| (C) | Reflects the impact of nonrecurring expenses related to transaction costs, primarily comprised of investment banking fees, legal fees, issuance costs, accounting and audit fees, and other related advisory costs. $0.2 million was incurred and accrued on the balance sheet as of June 30, 2026. The related income statement adjustment is reflected in adjustment (CC). |
| (D) | Reflects the impact of payment of accrued interest and the write-off of unamortized debt issuance costs on the Incremental Loan into additional paid-in capital. The Incremental Loan was deemed forgiven upon exercise of the DFC warrants at closing of the Merger. |
3. Adjustments to the Unaudited Pro Forma Condensed Combined Statement of Operations for the six months ended June 30, 2026 and for the year ended December 31, 2025
The adjustments included in the unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2026 and for the year ended December 31, 2025 are as follows:
| (AA) | Reflects a reclassification adjustment to conform SVRE’s historical expenses to the financial statement presentation of USAR. |
| (CC) | Reflects the recognition of nonrecurring expenses related to estimated transaction costs in the amount of $96.4 million, which are primarily comprised of investment banking fees, legal fees, issuance costs, accounting and audit fees, and other related advisory costs. The related balance sheet adjustment is reflected at adjustment (C). |
| (DD) | Reflects the recognition of post-combination stock-based compensation expense in the amount of $1.4 million for the six months ended June 30, 2026 and $8.4 million for the year ended December 31, 2025 related to Performance-Vesting Options which were substituted with USAR time-vesting restricted stock units. |
| (EE) | Reflects the elimination of the recognized loss due to the change in fair value of warrant liability in an amount equal to $125.8 million for the six months ended June 30, 2026 and $7.7 million for the year ended December 31, 2025 related to the private placement warrants issued by SVRE to its investors. These warrants were settled through equity consideration to the holders pursuant to the Merger. The related balance sheet adjustment is reflected in adjustment (B). |
| (FF) | Reflects the elimination of interest related to Class A Preferred Shares in an amount equal to $2.3 million for the six months ended June 30, 2026 and $4.3 million for the year ended December 31, 2025 due to their redemption pursuant to the side letter agreement, dated March 5, 2026, between SVRE and Orion. |
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| (GG) | Reflects interest expense related to long-term debt financing of SVRE pursuant to the Retained Finance Agreement, calculated using an estimated interest rate of Term SOFR plus 4%. This adjustment also includes the amortization of estimated debt discount and debt issuance costs of $0.9 million for the six months ended June 30, 2026 and $1.9 million for the year ended December 31, 2025. An increase or decrease of one-eighth of a percent in the interest rate would not result in a significant change in interest expense for the six months ended June 30, 2026 and for the year ended December 31, 2025. |
| (HH) | Reflects the elimination of interest related to the OMF Credit Agreement in an amount equal to $1.5 million for the six months ended June 30, 2026 and $0.7 million for the year ended December 31, 2025 due to their repayment. |
| (II) | Reflects the elimination of interest expense and issuance cost amortization of $0.6 million related to the Incremental Loan for the six months ended June 30, 2026. |
4. Unaudited Pro Forma Net Loss Per Share
The pro forma net loss per share calculations have been performed for the six months ended June 30, 2026 and for the year ended December 31, 2025, assuming the Pro Forma Transactions had been consummated on January 1, 2025.
| (in thousands except per share amounts) | For the Six Months Ended June 30, 2026 | For the Year Ended December 31, 2025 | ||||||
| Numerator | ||||||||
| Pro forma net loss attributable to USA Rare Earth, Inc. | $ | (115,494 | ) | $ | (439,732 | ) | ||
| Declared and deemed dividends, and interest accretion | (1,442 | ) | (26,954 | ) | ||||
| Pro forma undistributed net loss attributable to USA Rare Earth, Inc. | $ | (116,936 | ) | $ | (466,686 | ) | ||
| Denominator | ||||||||
| USAR weighted average number of common shares outstanding-basic | 213,347 | 98,021 | ||||||
| Add: Shares issued to SVRE shareholders in a Merger | 126,849 | 126,849 | ||||||
| Add: Shares issued in a private placement(*) | — | 69,767 | ||||||
| Add: Shares issued to DOC(*) | — | 16,133 | ||||||
| Pro forma weighted average shares of common stock outstanding – basic & diluted | 340,196 | 310,770 | ||||||
| Pro forma net loss per share – basic & diluted | $ | (0.34 | ) | $ | (1.50 | ) | ||
| * | Shares issued in a private placement, and issued to DOC for the six months ended June 30, 2026 are already reflected in the historical unaudited condensed consolidated financial statements of USAR and therefore are not reflected separately. |
The Company’s potentially dilutive outstanding securities, including DOC Warrant to purchase 17,600,584 shares of USAR Common Stock were excluded from the computation of pro forma diluted net loss per share because their effect would have been anti-dilutive.
11