What changed in this filing

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Item 1. Business

2025-03-31 compared with 2024-04-02 · 856 added, 494 removed, 0 unchanged (100% of the section changed)

are a blank check company incorporated on March 6, 2023, as a Cayman Islands exempted company for the purpose of effecting a merger,

share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses.

neither engaged in any operations nor generated any revenue to date.

we may pursue an initial business combination in any industry, sector or geographic region, we intend to focus our search initially on

North American and European businesses in disruptive growth sectors, which complements the expertise of our management team.

Company combines the abilities of a diverse and founder-friendly management team.

We have assembled a management team with experience

across both public and private markets with deep roots in our target markets.

Our team combines decades of experience sourcing, researching,

and investing in complex transactions that create value for shareholders.

expect to seek an investment opportunity where each member of our management team can leverage their expertise and network to create

significant value.

We will seek fundamentally strong businesses in a broad range of disruptive growth sectors, with emphasis on one or

more of the following attributes, although we may decide to enter into a business combination with a target business that does not have

one or more of these attributes:

● Innovative,

technology-enabled company of scale focused on acquiring new customers with a large addressable market, legacy analogue competitors

and a differentiated path to market or superior product.

focused and deeply experienced team fueled by a shared connection and passion for the business.

a scale such that the profit contribution from existing business offsets fixed costs and is prepared to reinvest in high return on capital

opportunities.

to the rapidly changing business environment and major shift in demographics with the ability to generate shareholder value in any market

criteria are not intended to be exhaustive.

Any evaluation relating to the merits of a particular initial business combination may be

based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management

may deem relevant.

In the event that we decide to enter into a business combination with a target business that does not meet the above

criteria in our shareholder communications related to our initial business combination, which, as discussed in this Annual Report, would

be in the form of proxy solicitation or tender-offer materials, as applicable, that we would file with the Securities and Exchange Commission

management team has the necessary corporate, financial and investment experience to successfully pursue acquisitions with companies

via a myriad of potential transaction structures.

We envision a transaction may be derived from many different business inflection

points, which include, but are not limited to:

(i) corporate carve outs;

(ii) privately owned, fast-growing businesses seeking an efficient

path to becoming public;

(iii) venture capital and private equity owned businesses whose growth can be further accelerated;

businesses that would similarly benefit from a partnership with our management team.

Whether a carve-out or whole company acquisition,

we are proficient in identifying attractive opportunities and continuously adding value post deal execution.

have reviewed, and continue to review, a number of opportunities to enter into an initial business combination, but we are not able to

determine at this time whether we will complete an initial business combination with any of the target businesses that we have reviewed

or with any other target business.

We also have neither engaged in any operations nor generated any revenue to date.

Based on our business

activities, the Company is a “shell company” as defined under the Exchange Act of 1934 (the “ Exchange Act ”)

because we have no operations and nominal assets consisting almost entirely of cash.

March 8, 2023, the Sponsor made a capital contribution of $25,000, or approximately $0.004 per share, to cover certain of the Company’s

expenses, for which the Company issued 5,750,000 founders shares to the Sponsor.

On May 24, 2023, the Company effected a share capitalization

of 575,000 founder shares, resulting in the Sponsor holding 6,325,000 founder shares.

The founder shares included an aggregate of 825,000

shares that were subject to forfeiture by the Sponsor depending on the extent to which the underwriters’ over-allotment option

was exercised, so that the number of founder shares would collectively represent 20% of the Company’s issued and outstanding shares

upon the completion of the IPO.

As a result of the underwriters’ election to partially exercise their over-allotment option on

May 30, 2023, 75,000 founder shares were forfeited resulting in the Sponsor holding 6,250,000 founder shares.

May 30, 2023, we consummated our initial public offering of 25,000,000 units (the “ Units ”), which includes the partial

exercise by the underwriters of their over-allotment option in the amount of 3,000,000 Units, at $10.00 per Unit, generating gross proceeds

of $250,000,000 (the “ IPO ”).

Each Unit consists of one Class A ordinary share, par value $0.0001 per share (the “ Class

A ordinary shares ” or “ Public Shares ”) and one half of one redeemable warrant (the “ Public Warrants ”)

of the Company, with each whole Public Warrant entitling the holder to purchase one Class A ordinary share for $11.50 per share, subject

to adjustment.

Simultaneously

with the closing of the IPO, the Company consummated the sale of 7,650,000 private placement warrants (the “ Private Placement

Warrants ” and, together with the Public Warrants, the “ Warrants ”) to the Sponsor and Cantor Fitzgerald &

Co., the representative of the underwriters of the IPO, at a price of $1.00 per Private Placement Warrant, or $7,650,000 in the aggregate.

Of those 7,650,000 Private Placement Warrants, the Sponsor purchased 6,000,000 Private Placement Warrants and Cantor Fitzgerald &

purchased 1,650,000 Private Placement Warrants.

Each whole Private Placement Warrant entitles the holder to purchase one Class A

ordinary share at a price of $11.50 per share, subject to adjustment.

total of $251,250,000 of the proceeds from IPO and Private Placement, which

amount included $13,100,000 of the underwriter’s deferred discount, was placed in the trust account (the “ Trust Account ”).

The funds held in the Trust

Account are invested in U.S.

government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act

of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less or in money market funds meeting

certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S.

government treasury

Our Initial Business Combination

are not presently engaged in, and we will not engage in, any operations for an indefinite period of time.

We intend to effectuate our

initial business combination using cash held in the Trust Account, the proceeds of the sale of our shares in connection with our initial

business combination, shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, other

securities issuances or a combination of the foregoing.

We may seek to complete our initial business combination with a company or business

that may be financially unstable or in its early stages of development or growth, which would subject us to the numerous risks inherent

in such companies and businesses.

our initial business combination is paid for using equity or debt securities, or not all of the funds released from the Trust Account

are used for payment of the consideration in connection with our initial business combination or used for redemptions of our Class A

ordinary shares, we may use the balance of the cash released to us from the Trust Account for general corporate purposes, including for

maintenance or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred

in completing our initial business combination, to fund the purchase of other companies, or for working capital.

we are not limited to a particular industry or geographic region for purposes of consummating an initial business combination, we intend

to focus our search initially on North American and European businesses in disruptive growth sectors, which complements the expertise

of our management team.

Although our management will assess the risks inherent in a particular target business with which we may combine,

we cannot assure you that this assessment will result in our identifying all risks that a target business may encounter.

some of those risks may be outside of our control, meaning that we can do nothing to control or reduce the chances that those risks will

adversely affect a target business.

may seek to raise additional funds through a private offering of debt or equity securities in connection with the completion of our initial

business combination and we may effectuate our initial business combination using the proceeds of such offering rather than using the

amounts held in the Trust Account.

In addition, we may target businesses with enterprise values that are greater than we could acquire

with the net proceeds of the IPO and the sale of the Private Placement Warrants, and, as a result, if the cash portion of the purchase

price exceeds the amount available from the Trust Account, net of amounts needed to satisfy any redemptions by holders of our Public

Shares (the “ public shareholders ”), we may be required to seek additional financing to complete such proposed initial

business combination.

Subject to compliance with applicable securities laws, we would expect to complete such financing only simultaneously

with the completion of our initial business combination.

In the case of an initial business combination funded with assets other than

the Trust Account assets, our proxy materials or tender offer documents disclosing the initial business combination would disclose the

terms of the financing and, only if required by law, regulation or stock exchange rule we would seek shareholder approval of such financing.

There is no limitation on our ability to raise funds through the issuance of equity or equity-linked securities or through loans, advances

or other indebtedness in connection with our initial business combination, including pursuant to forward purchase agreements or backstop

agreements we may enter into following consummation of the IPO.

At this time, we are not a party to any arrangement or understanding

with any third party with respect to raising any additional funds through the sale of securities or otherwise.

None of our Sponsor, officers,

directors or shareholders is required to provide any financing to us in connection with or after our initial business combination.

of a Target Business and Structuring of Our Initial Business Combination

rules of The Nasdaq Stock Market LLC (“ Nasdaq ”) require that we must complete one or more business combinations having

an aggregate fair market value of at least 80% of the value of the assets held in the Trust Account (excluding the deferred underwriting

commissions and taxes payable on the interest earned on the Trust Account).

Our board of directors will make the determination as to

the fair market value of our initial business combination.

If our board of directors is not able to independently determine the fair

market value of our initial business combination (including with the assistance of financial advisors), we will obtain an opinion from

an independent investment banking firm which is a member of Financial Industry Regulatory Authority, Inc.

or a valuation or appraisal firm with respect to the satisfaction of such criteria.

While we consider it likely that our board of directors

will be able to make an independent determination of the fair market value of our initial business combination, it may be unable to do

so if it is less familiar or experienced with the business of a particular target or if there is a significant amount of uncertainty

as to the value of the target’s assets or prospects.

Additionally, pursuant to Nasdaq rules, any initial business combination must

be approved by a majority of our independent directors.

anticipate structuring our initial business combination so that the post transaction company in which our public shareholders own shares

will own or acquire 100% of the equity interests or assets of the target business or businesses.

We may, however, structure our initial

business combination such that the post transaction company owns or acquires less than 100% of such interests or assets of the target

business in order to meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete

such business combination if the post transaction company owns or acquires 50% or more of the outstanding voting securities of the target

or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company

under the Investment Company Act of 1940, as amended, or the Investment Company Act.

Even if the post transaction company owns or acquires

50% or more of the voting securities of the target, our shareholders prior to the business combination may collectively own a minority

interest in the post transaction company, depending on valuations ascribed to the target and us in the business combination.

we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock,

shares or other equity interests of a target.

In this case, we would acquire a 100% controlling interest in the target.

However, as a

result of the issuance of a substantial number of new shares, our shareholders immediately prior to our initial business combination

could own less than a majority of our issued and outstanding shares subsequent to our initial business combination.

If less than 100%

of the equity interests or assets of a target business or businesses are owned or acquired by the post transaction company, the portion

of such business or businesses that is owned or acquired is what will be taken into account for purposes of the 80% of net assets test

described above.

If the business combination involves more than one target business, the aggregate value of all of the target businesses,

will be taken into account for purposes of the 80% fair market value test.

evaluating a prospective target business, we expect to conduct a due diligence review which may encompass, among other things, meetings

with incumbent management and employees, document reviews, interviews of customers and suppliers, inspection of facilities, as applicable,

as well as a review of financial, operational, legal and other information which will be made available to us.

If we determine to move

forward with a particular target, we will proceed to structure and negotiate the terms of the business combination transaction.

time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs

associated with this process, are not currently ascertainable with any degree of certainty.

Any costs incurred with respect to the identification

and evaluation of, and negotiation with, a prospective target business with which our initial business combination is not ultimately

completed will result in our incurring losses and will reduce the funds we can use to complete another business combination.

are not prohibited from pursuing an initial business combination with a company that is affiliated with our Sponsor, officers or directors,

or completing the business combination through a joint venture or other form of shared ownership with our Sponsor, officers or directors.

In the event we seek to complete an initial business combination with a target that is affiliated (as defined in our amended and restated

memorandum and articles of association) with our Sponsor, officers or directors, we, or a committee of independent directors, would obtain

an opinion from an independent investment banking firm which is a member of FINRA or a valuation or appraisal firm stating that the consideration

to be paid by us in such an initial business combination is fair to our Company from a financial point of view.

We are not required to

obtain such an opinion in any other context.

of our management team and our independent directors indirectly own founder shares and/or Private Placement Warrants and, accordingly,

may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate

our initial business combination.

Further, each of our officers and directors may have a conflict of interest with respect to evaluating

a particular business combination if the retention or resignation of any such officers and directors was included by a target business

as a condition to any agreement with respect to our initial business combination.

of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations

to at least one other entity pursuant to which such officer or director is or will be required to present a business combination opportunity

to such entity.

Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable

for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or

contractual obligations to present such business combination opportunity to such other entity, subject to their fiduciary duties under

Cayman Islands law.

Our amended and restated memorandum and articles of association provides that, to the fullest extent permitted by

applicable law:

(i) no individual serving as a director or an officer shall have any duty, except and to the extent expressly assumed

by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us;

(ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter

which may be a corporate opportunity for any director or officer, on the one hand, and us, on the other.

We do not believe, however,

that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete our

initial business combination.

addition, our Sponsor and our officers and directors may sponsor or form other special purpose acquisition companies similar to ours

or may pursue other business or investment ventures during the period in which we are seeking an initial business combination.

our Sponsor, officers and directors could have conflicts of interest in determining whether to present business combination opportunities

to us or to any other special purpose acquisition company with which they may become involved.

Any such companies, businesses or investments

may present additional conflicts of interest in pursuing an initial business combination target.

However, we do not believe that any

such potential conflicts would materially affect our ability to complete our initial business combination.

Rights for Public Shareholders upon Completion of our Initial Business Combination

will provide our public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion

of our initial business combination either (i) in connection with a general meeting called to approve the business combination or (ii)

without a shareholder vote by means of a tender offer.

The decision as to whether we will seek shareholder approval of a proposed business

combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as

the timing of the transaction and whether the terms of the transaction would require us to seek shareholder approval under applicable

law or stock exchange listing requirement or whether we were deemed to be a foreign private issuer (which would require a tender offer

rather than seeking shareholder approval under SEC rules).

Asset acquisitions and share purchases would not typically require shareholder

approval while direct mergers with our Company where we do not survive and any transactions where we issue more than 20% of our issued

and outstanding ordinary shares or seek to amend our amended and restated memorandum and articles of association would require shareholder

So long as we obtain and maintain a listing for our securities on Nasdaq, we will be required to comply with Nasdaq’s

shareholder approval rules.

requirement that we provide our public shareholders with the opportunity to redeem their Public Shares by one of the two methods listed

above are contained in provisions of our amended and restated memorandum and articles of association and will apply whether or not we

maintain our registration under the Exchange Act or our listing on Nasdaq.

Such provisions may be amended if approved by a special resolution,

which requires the affirmative vote of at least two-thirds of the votes cast by the shareholders of the issued shares present in person

or represented by proxy and entitled to vote on such matter at a general meeting of the Company, so long as we offer redemption in connection

with such amendment.

we provide our public shareholders with the opportunity to redeem their Public Shares in connection with a general meeting, we will,

pursuant to our amended and restated memorandum and articles of association:

the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the

solicitation of proxies, and not pursuant to the tender offer rules, and

proxy materials with the SEC.

the event that we seek shareholder approval of our initial business combination, we will distribute proxy materials and, in connection

therewith, provide our public shareholders with the redemption rights described above upon completion of the initial business combination.

we seek shareholder approval, we will complete our initial business combination only if we receive an ordinary resolution under Cayman

Islands law, which requires the affirmative vote of at least a majority of the votes cast by the shareholders of the issued shares present

in person or represented by proxy and entitled to vote on such matter at a general meeting of the Company.

A quorum for such meeting

will be present if the holders of one third of issued and outstanding shares entitled to vote at the meeting are represented in person

Our Sponsor, officers and directors will count toward this quorum and, pursuant to a letter agreement (the “ Letter

Agreement ”), our Sponsor, officers and directors have agreed to vote their founder shares and any Public Shares purchased during

or after the IPO (including in open market and privately-negotiated transactions) in favor of our initial business combination.

For purposes of seeking approval of an ordinary resolution, non-votes will have no effect on the approval of our initial business

combination once a quorum is obtained.

As a result, in addition to our initial shareholders’ founder shares, we would need 9,375,001,

or 37.5%, of the 25,000,000 Public Shares sold in the IPO to be voted in favor of an initial business combination in order to have our

initial business combination approved, assuming all outstanding shares are voted and the parties to the Letter Agreement do not acquire

any Class A ordinary shares.

Assuming that only the holders of one-third of our issued and outstanding ordinary shares, representing

a quorum under our amended and restated memorandum and articles of association vote their shares at a general meeting of the Company,

we will not need any Public Shares in addition to our founder shares to be voted in favor of an initial business combination in order

to approve an initial business combination.

However, if our initial business combination is structured as a statutory merger or consolidation

with another company under Cayman Islands law, the approval of our initial business combination will require a special resolution, which

requires the affirmative vote of at least two-thirds of the votes cast by the shareholders of the issued shares present in person

or represented by proxy and entitled to vote on such matter at a general meeting of the Company.

These quorum and voting thresholds,

and the voting agreement of our Sponsor, officers and directors, may make it more likely that we will consummate our initial business

Each public shareholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed

transaction, or whether they do not vote or abstain from voting on the proposed transaction, or whether they were a public shareholder

on the record date for the general meeting held to approve the proposed transaction.

a shareholder vote is not required and we do not decide to hold a shareholder vote for business or other legal reasons, we will:

the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers,

tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial

and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the

Exchange Act, which regulates the solicitation of proxies.

the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business

days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business

combination until the expiration of the tender offer period.

In addition, the tender offer will be conditioned on public shareholders

not tendering more than the number of Public Shares we are permitted to redeem.

If public shareholders tender more shares than we have

offered to purchase, we will withdraw the tender offer and not complete the initial business combination.

the public announcement of our initial business combination, if we elect to conduct redemption pursuant to the tender offer rules, we

or our Sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase our Class A ordinary shares in the open

market, in order to comply with Rule 14e-5 under the Exchange Act.

intend to require our public shareholders seeking to exercise their redemption rights, whether they are record holders or hold their

shares in “street name,” to, at the holder’s option, either deliver their share certificates to our transfer agent

or deliver their shares to our transfer agent electronically using the Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian)

system, prior to the date set forth in the proxy materials or tender offer documents, as applicable.

In the case of proxy materials,

this date may be up to two business days prior to the scheduled vote on the proposal to approve the initial business combination.

addition, if we conduct redemptions in connection with a shareholder vote, we intend to require a public shareholder seeking redemption

of its Public Shares to also submit a written request for redemption to our transfer agent two business days prior to the scheduled vote

in which the name of the beneficial owner of such shares is included.

The proxy materials or tender offer documents, as applicable, that

we will furnish to holders of our Public Shares in connection with our initial business combination will indicate whether we are requiring

public shareholders to satisfy such delivery requirements.

We believe that this will allow our transfer agent to efficiently process

any redemptions without the need for further communication or action from the redeeming public shareholders, which could delay redemptions

and result in additional administrative cost.

If the proposed initial business combination is not approved and we continue to search

for a target company, we will promptly return any certificates or shares delivered by public shareholders who elected to redeem their

will provide our public shareholders with the opportunity to redeem their Public Shares for cash at a per share price equal to the aggregate

amount then on deposit in the Trust Account calculated as of two business days prior to the consummation of our initial business combination,

including interest earned on the funds held in the Trust Account (less taxes payable), divided by the number of then outstanding Public

Shares, upon the completion of our initial business combination, subject to the limitations and on the conditions described herein and

in the registration statement relating to the IPO.

The per share amount we will distribute to investors who properly redeem their shares

will not be reduced by the deferred underwriting commissions we will pay to the underwriters.

There will be no redemption rights upon

the completion of our initial business combination with respect to our Warrants.

The Sponsor, our officers and directors have entered

into the Letter Agreement, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares and

any Public Shares held by them in connection with the completion of our initial business combination.

proposed initial business combination may impose a minimum cash requirement for (i) cash consideration to be paid to the target or its

owners, (ii) cash for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions.

In the event the aggregate cash consideration we would be required to pay for all Class A ordinary shares that are validly submitted

for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed initial business combination

exceed the aggregate amount of cash available to us, we will not complete the initial business combination or redeem any shares, and

all Class A ordinary shares submitted for redemption will be returned to the holders thereof.

We may, however, raise funds through the

issuance of equity or equity-linked securities or through loans, advances or other indebtedness in connection with our initial business

combination, including pursuant to forward purchase agreements or backstop arrangements we may enter into following consummation of the

IPO, in order to, among other reasons, satisfy such net tangible assets or minimum cash requirements.

we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business

combination pursuant to the tender offer rules, our Sponsor, initial shareholders, directors, officers, advisors and their affiliates

may purchase Public Shares or Public Warrants in privately negotiated transactions or in the open market either prior to or following

the completion of our initial business combination, although they are under no obligation or duty to do so.

Any such price per share

may be different than the amount per share a public shareholder would receive if it elected to redeem its shares in connection with our

initial business combination.

Such a purchase may include a contractual acknowledgment that such shareholder, although still the record

holder of our shares is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights.

that our Sponsor, initial shareholders, directors, officers, advisors and their affiliates purchase shares in privately negotiated transactions

from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to

revoke their prior elections to redeem their shares.

It is intended that, if Rule 10b-18 would apply to purchases by our Sponsor, initial

shareholders, directors, officers, advisors and their affiliates, then such purchases will comply with Rule 10b-18 under the Exchange

Act, to the extent it applies, which provides a safe harbor for purchases made under certain conditions, including with respect to timing,

pricing and volume of purchases.

Additionally,

at any time at or prior to our initial business combination, subject to applicable securities laws (including with respect to material

nonpublic information), our Sponsor, initial shareholders, directors, officers, advisors and their affiliates may enter into transactions

with investors and others to provide them with incentives to acquire Public Shares, vote their Public Shares in favor of our initial

business combination or not redeem their Public Shares.

However, they have no current commitments, plans or intentions to engage in such

transactions and have not formulated any terms or conditions for any such transactions.

None of the funds in the Trust Account will be

used to purchase Public Shares or Public Warrants in such transactions.

purpose of any such transactions could be to (1) increase the likelihood of obtaining shareholder approval of the business combination,

(2) reduce the number of Public Warrants outstanding and/or increase the likelihood of approval on any matters submitted to the public

warrant holders for approval in connection with our initial business combination or (3) satisfy a closing condition in an agreement with

a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination,

where it appears that such requirement would otherwise not be met.

Any such purchases of our securities may result in the completion

of our initial business combination that may not otherwise have been possible.

addition, if such purchases are made, the public “float” of our securities may be reduced and the number of beneficial holders

of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities

on a national securities exchange.

Sponsor, initial shareholders, directors, officers, advisors and their affiliates anticipate that they may identify the shareholders

with whom our Sponsor, initial shareholders, directors, officers, advisors and their affiliates may pursue privately negotiated transactions

by either the shareholders contacting us directly or by our receipt of redemption requests submitted by shareholders (in the case of

Class A ordinary shares) following our mailing of proxy materials in connection with our initial business combination.

To the extent

that our Sponsor, initial shareholders, directors, officers, advisors and their affiliates enter into a private transaction, they would

identify and contact only potential selling or redeeming shareholders who have expressed their election to redeem their shares for a

pro rata share of the Trust Account or vote against our initial business combination, whether or not such shareholder has already submitted

a proxy with respect to our initial business combination but only if such shares have not already been voted at the general meeting related

to our initial business combination.

Our Sponsor, initial shareholders, directors, officers, advisors and their affiliates will select

which shareholders to purchase shares from based on the negotiated price and number of shares and any other factors that they may deem

relevant, and will be restricted from purchasing shares if such purchases do not comply with Regulation M under the Exchange Act

and the other federal securities laws.

Sponsor, initial shareholders, directors, officers, advisors and their affiliates will be restricted from making purchases of shares

if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act.

Any such purchases will be

reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements.

Additionally, in the event our Sponsor, initial shareholders, directors, officers, advisors and their affiliates were to purchase Public

Shares or Public Warrants from public shareholders, such purchases would be structured in compliance with the requirements of Rule 14e-5

under the Exchange Act including, in pertinent part, through adherence to the following:

registration statement/proxy statement filed for our business combination transaction would disclose the possibility that our Sponsor,

initial shareholders, directors, officers, advisors and their affiliates may purchase Public Shares or Public Warrants from public shareholders

outside the redemption process, along with the purpose of such purchases;

our Sponsor, initial shareholders, directors, officers, advisors and their affiliates were to purchase Public Shares or Public Warrants

from public shareholders, they would do so at a price no higher than the price offered through our redemption process;

registration statement/proxy statement filed for our business combination transaction would include a representation that any of our

securities purchased by our Sponsor, initial shareholders, directors, officers, advisors and their affiliates would not be voted in favor

of approving the business combination transaction;

Sponsor, initial shareholders, directors, officers, advisors and their affiliates would not possess any redemption rights with respect

to our securities or, if they do acquire and possess redemption rights, they would waive such rights;

would disclose in a Form 8-K, before our security holder meeting to approve the business combination transaction, the following material

amount of our securities purchased outside of the redemption offer by our Sponsor, initial shareholders, directors, officers, advisors

and their affiliates, along with the purchase price;

purpose of the purchases by our Sponsor, initial shareholders, directors, officers, advisors and their affiliates;

impact, if any, of the purchases by our Sponsor, initial shareholders, directors, officers, advisors and their affiliates on the likelihood

that the business combination transaction will be approved;

identities of our security holders who sold to our Sponsor, initial shareholders, directors, officers, advisors and their affiliates

(if not purchased on the open market) or the nature of our security holders (e.g., 5% security holders) who sold to our Sponsor, initial

shareholders, directors, officers, advisors and their affiliates;

number of our securities for which we have received redemption requests pursuant to our redemption offer.

of Public Shares and Liquidation if No Initial Business Combination

amended and restated memorandum and articles of association provide that we will have only 18 months from the closing of the IPO or by

such earlier liquidation date as the Company’s board of directors may approve (the “ completion window ”) to complete

our initial business combination.

If we are unable to complete our initial business combination within such completion window, we will

as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable

in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust

Account (less taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public

Shares, which redemption will constitute full and complete payment for the Public Shares and completely extinguish public shareholders’

rights as shareholders (including the right to receive further liquidation or other distributions, if any) subject to our obligations

under Cayman Islands law to provide for claims of creditors and subject to the other requirements of applicable law.

There will be no

redemption rights or liquidating distributions with respect to our Warrants, which will expire worthless if we fail to complete our initial

business combination within the completion window.

Sponsor, officers and directors have entered into the Letter Agreement, pursuant to which they have waived their rights to liquidating

distributions from the Trust Account with respect to any founder shares held by them if we fail to complete our initial business combination

within the completion window, although they will entitled to liquidating distributions from assets outside the Trust Account.

if our Sponsor or management team acquire Public Shares in or after the IPO, they will be entitled to liquidating distributions from

the Trust Account with respect to such Public Shares if we fail to complete our initial business combination within the allotted completion

Sponsor, officers, and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our

amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to allow redemption

in connection with our initial business combination or to redeem 100% of our Public Shares if we do not complete our initial business

combination within the completion window or (B) with respect to any other material provisions relating to shareholders’ rights

or pre-initial business combination activity, unless we provide our public shareholders with the opportunity to redeem their Public Shares

upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust

Account, including interest earned on the funds held in the Trust Account (less taxes payable), divided by the number of then outstanding

Public Shares.

identifying, evaluating and selecting a target business for our initial business combination, we may encounter competition from other

entities having a business objective similar to ours, including other special purpose acquisition companies, private equity groups and

leveraged buyout funds, public companies and operating businesses seeking strategic acquisitions.

Many of these entities are well established

and have extensive experience identifying and effecting business combinations directly or through affiliates.

Moreover, many of these

competitors possess similar or greater financial, technical, human and other resources than us.

Our ability to acquire larger target

businesses will be limited by our available financial resources.

This inherent limitation gives others an advantage in pursuing the acquisition

of a target business.

Furthermore, our obligation to pay cash in connection with our public shareholders who exercise their redemption

rights may reduce the resources available to us for our initial business combination and our issued and outstanding Warrants, and the

future dilution they potentially represent, may not be viewed favorably by certain target businesses.

Either of these factors may place

us at a competitive disadvantage in successfully negotiating and completing an initial business combination.

and Human Capital Resources

currently have two officers:

Michael Blitzer and Peter Ondishin.

Kevin Shannon acts as our Chief of Staff.

These individuals are not

obligated to devote any specific number of hours to our matters but they intend to devote as much of their time as they deem necessary

to our affairs until we have completed our initial business combination.

The amount of time they will devote in any time period will

vary based on whether a target business has been selected for our initial business combination and the stage of the business combination

process we are in.

We do not intend to have any full time employees prior to the completion of our initial business combination.

Reporting and Financial Information

are required to file Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q with the SEC on a regular basis, and are required

to disclose certain material events in a Current Report on Form 8-K.

The SEC maintains an Internet website that contains reports, proxy

and information statements and other information regarding issuers that file electronically with the SEC.

The SEC’s Internet website

is located at www.sec.gov.

In addition, the Company will provide copies of these documents without charge upon request from us in writing

at 167 Madison Avenue Suite 205 #1017, New York, NY 10016 or by telephone at (212) 476-6908.

will provide shareholders with audited financial statements of the prospective target business as part of the proxy solicitation materials

or tender offer documents sent to shareholders to assist them in assessing the target business.

In all likelihood, these financial statements

will need to be prepared in accordance with, or reconciled to, accounting principles generally accepted in the United States of America

(“ GAAP ”) or international financial reporting standards as issued by the International Accounting Standards Board

(“ IFRS ”), depending on the circumstances, and the historical financial statements may be required to be audited in

accordance with the standards of the Public Company Accounting Oversight Board (United States) (“ PCAOB ”).

These financial

statement requirements may limit the pool of potential target businesses we may conduct an initial business combination with because

some targets may be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy rules

and complete our initial business combination within the prescribed time frame.

We cannot assure you that any particular target business

identified by us as a potential business combination candidate will have financial statements prepared in accordance with the requirements

outlined above, or that the potential target business will be able to prepare its financial statements in accordance with the requirements

outlined above.

To the extent that these requirements cannot be met, we may not be able to acquire the proposed target business.

this may limit the pool of potential business combination candidates, we do not believe that this limitation will be material.

will not be required to evaluate our internal control procedures until our annual report for the fiscal year ending December 31,

2024 as required by the Sarbanes-Oxley Act.

Only in the event we are deemed to be a large accelerated filer or an accelerated filer,

and no longer qualify as an emerging growth company, will we be required to have our internal control procedures audited.

A target business

may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls.

The development

of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary

to complete any such business combination.

are a Cayman Islands exempted company.

Exempted companies are Cayman Islands companies conducting business mainly outside the Cayman

Islands and, as such, are exempted from complying with certain provisions of the Companies Act (As Revised) of the Cayman Islands as

the same may be amended from time to time (the “ Companies Act ”).

As an exempted company, we have applied for and received

a tax exemption undertaking from the Cayman Islands government that, in accordance with Section 6 of the Tax Concessions Act (As Revised)

of the Cayman Islands, for a period of 20 years from the date of the undertaking, no law which is enacted in the Cayman Islands imposing

any tax to be levied on profits, income, gains or appreciations will apply to us or our operations and, in addition, that no tax to be

levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax will be payable (i) on

or in respect of our shares, debentures or other obligations or (ii) by way of the withholding in whole or in part of a payment of dividend

or other distribution of income or capital by us to our shareholders or a payment of principal or interest or other sums due under a

debenture or other obligation of us.

USARE is a company whose mission is to establish

a domestic rare earth magnet supply chain that supports the future state of energy, mobility, and national security in the United States.

USARE is developing a rare earth sintered neo magnet (“ neo magnet ”) manufacturing plant in Stillwater, Oklahoma, and

intends to establish domestic rare earth and critical minerals supply, extraction, and processing capabilities to both supply its magnet

manufacturing plant and market surplus materials to third-parties.

Rare earth magnets are critical to various business sectors and industries,

including the defense, automotive, aviation, industrial, medical and consumer electronics industries, among others.

USARE is planning

to take a broad approach to the industries it serves with the intention of providing high quality sintered neo magnets to a variety of

industries and customers.

The Company’s intention is to take a structured approach to building out its supply chain to supply feedstock

to its magnet facility.

While our vision is to ultimately vertically integrate our operations, we will be evaluating each stage of the

magnet supply chain to find the optimal approach to maximizing value from mine to magnet.

USARE controls rights to a deposit of rare earths,

the Round Top Deposit (as defined below), in West Texas.

While this deposit could potentially provide significant value to USARE and its

operations over the long term, USARE initially will be focused on partnering with ex-China suppliers and building or buying the capabilities

we need to profitably manufacture high quality neo magnets in the United States.

USARE’s long-term approach — from

sourcing rare earths, in addition to other critical minerals such as gallium, to producing finished neo magnets — assists

in strengthening the United States’ control over critical supply chains such as the supply of rare earth minerals and magnets

and thus reducing domestic reliance on foreign, particularly Chinese, imports.

USARE’s focus on developing domestic rare earth production

aligns with national priorities, offering the future potential of a sustainable and secure domestic supply of materials critical to key

History of USARE

USA Rare Earth, LLC, a Delaware limited liability

company, was organized in Delaware in 2019.

In connection with the Company’s organization a member of the Company contributed its

rights related to Round Top to the Company.

In May 2021 the Company completed the acquisition

of 80% of the equity interests of Round Top Mountain Development LLC (“ RTMD ”) pursuant to a contribution agreement

with the Company, Texas Mineral Resource Corp.

(“ TMRC ”) and RTMD whereby TMRC and the Company contributed their respective

rights and interests in and to Round Top to RTMD.

Concurrently, the Company, TMRC and RTMD entered into a limited liability company

agreement of RTMD.

As of December 31, 2024, USA Rare Earth, LLC is the owner of approximately 81% of the equity interests in

On the Closing Date, we consummated the Business

Combination and Inflection Point Acquisition Corp.

II was renamed “USA Rare Earth, Inc.” As a result of the Business Combination,

we are a holding company, all of whose assets are held directly or indirectly by, and all of whose operations are conducted through, USARE

OpCo and whose only direct asset consists of equity ownership of USARE OpCo.

As the manager of USARE OpCo, we have all management powers

over, and full control of, the business of USARE OpCo, including the power to take all action we deem necessary, appropriate, advisable,

incidental, or convenient to accomplish the purposes of USARE OpCo set forth in its A&R Operating Agreement

USARE OpCo is the sole owner of USARE Rare Earth

Magnets, LLC, a Delaware limited liability company (“ Magnet Sub ”), which owns, directly or indirectly, the Company’s

magnet equipment and real estate in Stillwater, Oklahoma comprising the Stillwater Facility.

USARE’s Facilities

Stillwater, Oklahoma Magnet Manufacturing

Magnet Production .

Company’s magnet production facility is located in Stillwater, Oklahoma (the “ Stillwater Facility ”).

The Stillwater Facility is an industrial facility of approximately 310,000 square feet that was built in 1984, with an addition being

added in 1988.

The Stillwater Facility sits on an approximately 40-acre parcel that is serviced by municipal utilities.

The facility,

as currently constructed, will allow for the buildout of up to 4,800 tpa nameplate capacity within the current facility.

The large lot

surrounding the facility can also provide the space to build on new manufacturing capacity or capabilities in the future.

USARE purchased

the Stillwater Facility in 2022 and has contributed significant capital into the facility to date, including initial acquisition costs,

structural improvements, renovations, the purchase of magnet production equipment, and purchase and installation of lab equipment for

the Company’s in-house Innovations Lab (the “ Lab ”).

The Stillwater Facility contains magnet production

equipment, which the Company owns outright.

The Company engaged a third-party team with experience utilizing the equipment as independent

consultants to assist in the initial installation and testing of the equipment.

The Company believes that this equipment, supported by

a third-party team who has run it successfully in the past, could help the Company rapidly commission the facility once completed.

The Company has ordered the remaining finishing equipment and has begun to build out the infrastructure it needs at the facility to support

commercial production with the intention of commissioning the facility in 2026

In connection with the completion of the Stillwater

Facility, the Company is developing its Lab to support the Company’s magnet production capabilities and accompanying required assessment

of finished product for satisfaction of customer specifications and requirements.

On March 31, 2025 the Company announced it has commissioned

its Lab and will begin prototyping permanent neo magnets for its customers in the second quarter of 2025.

The Lab will further support

our objective of completing the first phase of the Stillwater Facility to allow for the initial commercial production of neo magnets in

For phase 1, we are targeting 1,200 tpa of nameplate capacity, which will require significant additional expenditures.

to add future capacity in multiple phases over the next few years to ultimately achieve 4,800 tpa nameplate capacity.

The speed of that

buildout will be based on future customer demand and market conditions.

Our plan to sell to a diverse set of customers across a variety

of industries is expected to be a differentiator in the market.

We also believe that our focus in developing strong, in-house lab

capabilities to develop new intellectual property ourselves, as well as together with our customers, to potentially improve magnet technology,

will provide a powerful incentive for customers to work with us in the coming years.

Corporate Offices .

Company’s corporate offices are also located at the Stillwater Facility at 100 W Airport Road, Stillwater, Oklahoma 74075.

this location, the Company manages its overarching business strategy, investor relations, and the development of partnerships with key

stakeholders in both the public and private sectors.

Oklahoma provides access to a skilled workforce and a business-friendly environment.

Colorado Mining Research Facility

The Company’s Wheat Ridge, Colorado facility

(the “ Colorado Facility ”) is the central hub for the Company’s research activities focused on rare earth and

critical minerals extraction and separation as well as advanced processing technologies.

The Colorado Facility is not a production facility,

but rather develops and refines the technologies that, with success, would be applied at the Company’s Round Top Project.

focus of the Colorado Facility’s research is the development of separation processes to minimize the use of organic solvents, intended

to result in a lower waste profile as compared to alternative separation methods.

The Colorado Facility’s work is critical

in creating new methods for separating and processing rare earths in a way that is both cost-effective and environmentally sustainable.

These efforts have been ongoing, and the facility has successfully separated a number of rare earths, including dysprosium and terbium,

among others, from its Round Top Deposit to date.

These efforts support the Company’s commitment to domestic rare earth production

and the long-term stability of the United States’ rare earth supply chain.

The Colorado Facility comprises two leased buildings

adjacent to each other.

The Company renewed its leases on both buildings in February 2025 with both leases expiring in the first quarter

As further discussed below, the Company holds a radioactive equipment registration issued for the benefit of its Colorado Facility.

Round Top Mountain

controls the mining rights to Round Top Mountain, which is an above-ground mineral deposit near Sierra Blanca, Texas that contains a large

deposit of rare earths, including both light and heavy rare earths, such as neodymium, dysprosium, and terbium, as well as other critical

minerals such as gallium, beryllium and lithium among others (such deposits, collectively, the “ Round Top Deposit ”,

and USARE’s development there, the “ Round Top Project ,” and together with the Stillwater Facility, the “ Projects ”).

One of the most significant aspects of the Round Top Deposit is its deposit of heavy rare earths, which are particularly scarce but critical

for the production of high-performance neo magnets.

The presence of heavy rare earths in great quantities could become a significant competitive

advantage to USARE, and value creator, as heavy rare earths such as dysprosium and terbium are critical to magnet production and tend

to be of much higher value in commodity markets due to their rare nature.

In contrast to light rare earths, such as those found at Mountain

Top in California, heavy rare earths are, in general, significantly harder to source and are primarily mined in China, underscoring the

importance of establishing Round Top Deposit as a critical domestic supply of rare earth and critical mineral feedstock.

In addition to

rare earths, the Round Top Deposit also contains a large deposit of gallium, a critical mineral for semiconductor, computer chip and some

military technologies, among others, that were recently banned for export to the United States by China.

China is the source of approximately

98% of primary gallium according to a January 2023 USGS Mineral Commodity Summary on gallium.

In addition, the deposit holds beryllium,

which is used in a variety of technologies from x-rays and MRIs to military radar and nuclear power.

Finally, the Round Top Deposit holds

lithium, a critical material for battery production, making it a dual-source project that supports the electrification of vehicles, production

of renewable energy technologies, and defense technologies, among other critical industries.

Rare earth oxide is a necessary component

in producing NdFeB alloy used to produce neo magnets.

Round Top Mountain is approximately eight miles

southeast of Sierra Blanca, Texas.

Sierra Blanca, the county seat of Hudspeth County, is itself approximately 85 miles southeast of El

The Round Top Project’s approximate center is located at 31.2766º N, 105.4742º W.

Round Top Mountain’s

location allows access to nearby Interstate 10 and Ranch Road 1111, and potential access to the nearby Union Pacific Railroad which has

two main branches approximately three miles from Round Top Mountain.

The Company expects Interstate 10 and the Union Pacific Railroad

to aid in the future distribution of rare earth and critical minerals once the Company’s Round Top Project is fully operational

and producing.

Although not critical to scaling up its magnet production, the Company intends for its Round Top Project to serve as a

long-term additional source of feedstock for its magnet production at the Stillwater Facility, which would help the Company achieve

its goals of providing domestic, virgin feedstock for its magnet production.

The Company believes that the integration of the

Round Top Project’s mine into its operations would not only help it meet growing demand for both domestic rare earth magnets and

battery materials, but also importantly allow it to achieve greater supply chain security, cost control, and independence from foreign

For more information about the Round Top Project,

see the section entitled “— Description of the Round Top Project ”.

Market Opportunity and Growth

Science and Construction of Neo Magnets

Neo magnets are one of the most powerful

types of permanent magnets commercially available, as noted in a February 2023 report by the U.S.

Department of Commerce, Bureau of Industry

and Security.

Neo magnets exhibit strong magnetic properties due to the atomic structure of neodymium, a rare earth, which permits a dense

concentration of magnetic field lines.

This allows for the production of neo magnets that can produce powerful magnetic fields relative

to their size and weight and may be resistant to demagnetization, making them ideal for applications that require both high efficiency

and compactness, such as electric vehicle motors, wind turbines, and advanced electronics.

The production of neo magnets involves a sophisticated

process that includes the alloying of neodymium with iron and boron, followed by additional processing techniques to form the desired

magnetic shape and performance.

The properties of the magnets can be further enhanced by adding heavy rare earths such as dysprosium and

terbium through additional post-sintering processing in a process called “Grain Boundary Diffusion” which can increase

the magnets’ resistance to heat — a critical factor for high-performance applications.

This technological complexity,

coupled with the limited availability of key rare earth materials, has made the development and production of neo magnets a highly specialized

and strategically important industry.

The Rare Earth Magnet Industry:

and Growth Opportunities

The global rare earth magnet industry has experienced

rapid growth over the past decade according to the 2024 Statistical Review of World Energy by the Energy Institute, driven by the rise

of electric vehicles, renewable energy technologies, and advanced electronics.

Neo magnets are crucial to these technologies due to their

high magnetic strength and resistance to demagnetization.

As nations push globally for cleaner energy solutions and decarbonization, the

demand for neo magnets is expected to continue growing significantly as noted by the U.S.

Department of Energy in its 2022 supply chain

deep dive assessment “Rare Earth Permanent Magnets” (the “ DOE Report ”).

However, the industry faces notable challenges.

China currently dominates the global supply chain of the world’s rare earth production.

This creates supply chain vulnerability

for other nations, particularly the United States, as geopolitical tensions and export restrictions (such as China’s December 2023

rare earth technology export ban) could disrupt access to these critical materials.

Additionally, rare earth extraction and processing

is generally environmentally challenging, requiring the development of more sustainable and efficient technologies to meet global demand

while minimizing potential environmental impact.

Despite these challenges, USARE believes that

both the domestic and global rare earth magnet industries are poised for substantial growth.

The global shift toward electrification of

transportation, the rise of wind energy, and the ongoing demand for advanced electronics create significant opportunities for manufacturers

that can establish stable and sustainable supply chains.

The automotive industry is a major purchaser of neo magnets, particularly in

connection with the production of electric vehicles that require neo magnets for traction motors, which are crucial components to the

performance and efficiency of electric cars.

As countries set aggressive targets for electric vehicle adoption in an effort to combat

climate change, the demand for neo magnets is expected to surge over the next decade, as noted in the DOE Report.

Even in a potential

scenario of slower growth for electric cars that is now possible in the United States due to the anticipated changing policies of the

Trump administration, there are significant growth opportunities for domestic supply of neo magnets in the existing domestic market due

to potential instability in supply of rare earth magnets from China.

In addition, growth in EV sales globally outside of China and the

United States remains robust.

Similarly, wind turbines rely on neo magnets for their generators, which convert wind energy into electricity.

As governments worldwide set ambitious targets for increasing the share of renewable energy in their power grids, the installation of

new wind turbines is expected to rise, further driving the need for neo magnets as noted in the DOE Report.

While the recent Trump administration

executive order to stop the building of wind turbines on federal lands and offshore may slow down the growth of this industry in the United

States, we believe that global growth in wind power outside of China will continue to increase, and existing infrastructure projects in

the United States will need to be maintained and have their parts replaced in the coming years.

In addition, the use of magnets includes

a wide variety of other industries, including industries as diverse as robotics, medicine, semiconductors, computing, power tools, among

Importantly, the defense industry is a critical consumer of neo magnets, which uses them in precision-guided munitions, radar

systems, aerospace technology, and naval craft.

As nations invest in not only modernizing their defense capabilities, but also in purchasing

from safer domestic supply the demand for domestic neo magnets in defense technologies is expected to continue to grow as noted in the

The Company believes it is well-positioned to

capitalize both on existing domestic demand, which is currently sourcing magnets from China, as well as on the anticipated growth in the

demand for neo magnets and reduce United States reliance on foreign suppliers.

Business Plan

Feedstock Relationships

and Initial Neo Magnet Production

The first stage of the Company’s business

plan is focused on laying the groundwork for its neo magnet production by predominantly securing essential raw material feedstock through

strategic business relationships and launching initial production of neo magnets at its Stillwater Facility.

While ultimately the Company

intends to satisfy its feedstock needs through the future development of its Round Top Project, the Company does not believe it is critical

to success and in the near term the Company intends to source its feedstock needs from third-party suppliers.

Feedstock Sources

The Company has established a business relationship

with a supplier of feedstock to supply a portion of its raw material feedstock to USARE for use in the initial production of the Company’s

The supplier is a vertically integrated, producer of critical metals and NdFeB alloy (also known as “ strip cast ”)

produced from rare earth oxides, with the ability to source rare earth oxides from sources other than China.

USARE has entered into a

long-term Metal Sales and Tolling Framework Agreement with the supplier, whereby USARE has agreed to purchase 60% of its NdFeB feedstock

for phase 1 and 2 of its magnet production capacity from the supplier.

The agreement is effective through December 31, 2028,

subject to earlier termination by the parties.

The purchase price for the strip cast feedstock that USARE purchases from the supplier

will be determined in accordance with a set schedule, which ties the purchase price to a relevant index and certain chemical specifications.

The Company intends to establish relationships

with additional companies to assist in meeting its planned future feedstock requirements to continue to build out and strengthen its domestic

and global supply of rare earths from third-parties until such time that the Round Top Project is able to substantially augment its

current supply of light and heavy rare earths needed for production, and such activities may include rare earth oxide supply agreements

once the Company is able to utilize rare earth oxide feedstock for in-house alloy production.

Initial Neo Magnet Production

Stage I of the Company’s business plan

includes the completion of the Stillwater Facility, its magnet production facility in Stillwater, Oklahoma.

Upon completion of the facility

and the initial production of neo magnets, the Company expects its Stillwater Facility to be one of the first United States-based producers

of neo magnets.

Magnet production at the Stillwater Facility is currently planned in three phases, starting with 1,200 tpa nameplate capacity

in phase 1 and potentially doubling in each subsequent phase to a total planned production of 4,800 tpa nameplate capacity.

The Stillwater

Facility is expected to initially have a production line with 600 tpa nameplate capacity utilizing currently owned equipment, with a goal

to complete the remaining phase 1 capacity (representing a total of 1,200 tpa nameplate capacity in phase 1) in 2026.

The Company believes

this will make the Stillwater Facility one of the most significant sources of neo magnets outside of China, once complete.

competitors, the Company is not building its initial lines for a single customer and is instead focused on building a manufacturing facility

and capability that is flexible enough) to serve a variety of customers in diverse industries.

It is the Company’s belief that such an approach will allow it to reach its early revenue targets sooner than it might otherwise

would be able to through due to the long qualification process with large automotive clients.

The Company is in the process of engaging potential

customers for offtake agreements.

Scaling Magnet Production

and Expanding Business Partnerships

Stage II of the Company’s

business plan is focused on scaling magnet production at its Stillwater Facility and expanding the Company’s business

relationships, both with feedstock suppliers and customers.

The Company intends to scale magnet production at its Stillwater

Facility from 1,200 tpa nameplate capacity in phase 1 through phases 2 and 3 of magnet production capacity, potentially doubling the

production of the prior phase, with a target total nameplate capacity of 4,800 tpa.

How rapidly the Company will scale is dependent

on demand and access to the capital to do so.

To support the increased production, the Company intends to (i) expand its

partnerships and supply agreements with key industry players, and (ii) develop in-house metal making and strip casting

capabilities to support its magnet production, to help provide for the continued and reliable flow of feedstock into the

Company’s production lines at the Stillwater Facility until its Round Top Project is capable of satisfying the Company’s

feedstock needs.

These expanded partnerships will help the Company diversify its feedstock supply sources, reduce potential supply

chain risks and assist in further securing the Company’s position in the neo magnet market.

Additionally, the Company is working to strike

a balance between obtaining a sufficiently broad customer base and securing offtake that can jumpstart production, which could come from

large manufacturers over time.

Over time, the Company will be engaged in discussions with potential customers for offtake agreements.

The Company’s target customers for offtake could include key players in the automotive, energy, and defense industries, each of

which requires a reliable and long-term supply of neo magnets.

By seeking to secure multi-year offtake agreements, the Company

aims to lock-in demand for its products, minimize market volatility risks and provide for a consistent revenue stream.

Mining Development

at Round Top Mountain

Stage III of the Company’s business

plan represents the full realization of the Company’s longer-term strategy.

In this stage, the Company intends to focus on

developing the mining operations at its Round Top Project.

While the Company does not believe the development of the Round Top Deposit

is critical to our success in our magnet business, once operational, the Round Top Project’s mine is expected to provide a domestic

source of rare earths, feeding directly into the Company’s Stillwater magnet production facility, as well as selling to the broader

rare earth commodity markets.

By developing the Round Top Project into an economically producing mine, the Company aims to be able to

self-sustain magnet production operations without relying on external sources for rare earth feedstock.

This development is expected

to enable the Company to maintain cost efficiencies and quality control over the entire production process.

As part of its long-term growth

strategy, the Company aims to expand the production capacity of both the Round Top Project and its Stillwater Facility, solidifying the

Company’s efforts as it seeks to position itself as a key player in the domestic and global rare earth markets.

Through the development

of the Round Top Project into an economically producing mine, the Company intends to enhance its capacity to meet the rapidly growing

demand for rare earth and critical minerals, positioning itself as a leader in the transition to a more secure energy future.

If successful,

this stage will mark the full vertical integration of the Company’s operations from mine to magnet and is expected to open up new

markets and revenue streams for the Company.

The Company acknowledges that investing in mining

deposits such as Round Top holds inherent risks.

It is our intention to take a structured and measured approach to the development of

We are planning a five phased approach:

(1) flow sheet development, (2) prefeasibility study, (3) pilot plant, (4) definitive

feasibility study, and (5) detailed engineering, construction, and commissioning of the mine.

At each stage of this phased approach, investment

requirements are expected to increase as we define the economic and operational basis for the future mine.

Today, we are investing in

research to establish a technically sound flow sheet.

Once we have established an economically viable execution strategy in our prefeasibility

study following this flow sheet, we intend to construct pilot facilities to validate the Round Top process and provide data for detailed

By moving to a pilot phase, we can minimize investments while further reducing the execution risk inherent in the building

of a full-scale producing mine.

The results of each stage of this approach allow us the opportunity to pause or stop development,

if results are negative, or increase our commitment if results are positive;

thereby reducing our risk.

This measured and focused approach

will allow us to both manage cash in these early years, as well as pause or stop development if it looks like the mine may not be viable

over the long term, either due to operational constraints or changes in the rare earth market itself.

Patents, Trademarks, and Licenses

USARE has applied for a United States patent

in connection with its methods for metal extraction.

This patent application is currently pending.

Additionally, the Company utilizes

trade secret protection and non-disclosure agreements to protect its proprietary rare earth technology.

USARE holds a trademark for

Generally, the Company relies on a combination of trade secret protection, non-disclosure and licensing agreements, patents

and trademarks to establish and protect its proprietary intellectual property rights.

Government Programs and Grants

Tax Incremental Financing

On June 6, 2022, USARE executed a redevelopment

agreement providing for tax increment financing (the “ TIF Agreement ”) with the Stillwater Economic Development

Authority (the “ Authority ”), a public trust having as its beneficiary the City of Stillwater, Oklahoma, whereby the

Authority has provided upfront development financing assistance to USARE of $7.0 million for the development of the Stillwater Facility

(the “ Upfront Assistance ”).

Additionally, entry into the TIF Agreement made the Company eligible to receive a manufacturing

and research and development ad valorem tax emption for a period of five years.

The Company applied and received approval for the

ad valorem tax exemption for the year ending December 31, 2023.

After the expiration of the exemption period, the TIF Agreement requires

the Authority to disburse to the Company 90% of the incremental ad valorem taxes generated by the ad valorem taxes assessed against the

Stillwater Facility and paid by the Company.

Under the terms of the TIF Agreement, among other things, the Company is required to complete

the Stillwater Facility and in doing so to make an investment of approximately $140 million, including $9.9 million in building

and land acquisition costs, $17 million in immediate building improvement construction costs and $113 million in additional

building improvements and new equipment purchases, and to employ a specified number of employees at specified levels of median compensation

at various stages of the development.

Subject to agreed extensions, the Company agreed to commence certain phases of the development of

the Stillwater Facility by no later than March 31, 2026, and complete that advanced development by no later than June 30, 2027,

subject to certain exceptions.

Should the Company default on its obligations under the TIF Agreement and after certain notice, cure periods

and possible exceptions, the Authority may terminate the TIF Agreement and could make demand for immediate repayment in full of the Upfront

Governor’s Fund

On April 15, 2022, as restated on July 1,

2024, USARE entered into an agreement with the Oklahoma Department of Commerce to receive a $1.2 million award to be used for the

renovation of an existing building at the Stillwater Facility (the “ Governor’s Fund Agreement ”), to be paid in

$0.6 million increments when the Company had cumulatively spent $1.0 million and $2.0 million, respectively, in qualifying

costs related to developing the Stillwater Facility by March 31, 2023, and May 31, 2023, respectively.

As of December 31,

2023, the Company incurred qualifying costs that exceeded the cumulative $2.0 million threshold specified in the Governor’s

Fund Agreement.

The total award of $1.2 million was requested and received by the Company on April 6, 2023.

Per the terms of

the Governor’s Fund Agreement, the award is subject to repayment if the Company does not invest over $50 million in project,

real and personal property improvements (as described in the Governor’s Fund Agreement) at the Stillwater Facility as well as comply

with employment requirements of creating and fulfilling at least 100 new direct jobs at the Stillwater Facility at specified compensation

levels and certain other limited circumstances.

The Company is currently seeking to comply with such requirements.

In 2022, USARE was accepted for participation

in the Oklahoma Quality Jobs Program (“ Jobs Program ”), an incentive program that provides qualifying companies quarterly

cash rebates of up to 5% of the wages paid for new direct jobs created for a period of up to 10 years, with, in the case of the Company,

a maximum payout of approximately $2.8 million, if it makes a qualifying claim for payment under the Jobs Program prior to January 1,

2026 and fulfills certain conditions pursuant to an agreement between Magnet Sub and the State of Oklahoma, dated December 19, 2022 (the

“ Jobs Program Agreement ”).

Under the Jobs Program Agreement, the Company must meet or exceed applicable payroll and

employee headcount requirements and maintain operations in Oklahoma for a specified period.

To date, the Company has not become eligible

to make any claims under the Jobs Program.

The Company faces, or is expected to face, significant

competition both domestically and globally in the rare earth market, particularly in the production of sintered rare earth neo magnets.

The most prominent global competitor is China, which controls a substantial majority of the world’s rare earth magnet production

and has established dominance in the neo magnet supply chain and magnet production.

China’s rare earth and magnet industries benefit

from extensive government support, allowing Chinese companies to offer rare earths and magnets at subsidized prices, often undercutting

other producers.

Moreover, Chinese companies have invested heavily in improving their processing capabilities, giving them a technological

and cost advantage in the global market.

Since December 2023, China has banned the export of such technologies and capabilities.

This dominant stronghold poses a challenge for the Company as it seeks to build a vertically integrated domestic supply chain.

Domestically, the Company competes with a small

number of companies, including MP Materials Corp.

which is operating the only major rare earth mine in the United States and recently

began commissioning a 1,000 tpa magnet facility in Fort Worth, Texas.

Additionally, there is growing competition from emerging players

that are developing innovative technologies for rare earth separation and processing, as well as magnet production.

As the demand for

rare earth materials and neo magnets grows, the Company will need to not only navigate price competition but also innovate in separation

and processing techniques while simultaneously securing long-term customer offtake agreements.

Seasonality and Business Cycles

The Company’s operations in magnet production,

and its planned future operations in mining, are both subject to certain seasonality and business cycles that can affect production output

and market demand.

These cycles are influenced by external factors such as weather conditions, regulatory changes, fluctuations in raw

material prices whether due to changes in supply, demand, or inflation, and market demand for end products such as electric vehicles,

renewable energy, and defense applications.

The demand for neo magnets can be cyclical.

demand is often driven by customer sentiment and demand, which may align with government policy changes, incentive programs, and general

economic cycles.

How this cyclicality may or may not affect USA Rare Earth will depend on the concentration of our customers in specific

industries as we scale.

With our planned strategy of serving a wide range of industries, we believe this cyclicality may be offset by

a diverse set of customers in differing industries.

Human Capital

The Company’s workforce spans multiple

states, with employees located in Texas, Oklahoma, Missouri, California, Colorado, Ohio, and Florida, and encompasses a diverse range of

professionals, including engineers, scientists, mining specialists, and manufacturing experts.

The Company’s leadership is

focused on attracting, developing, and retaining top talent across these areas to support its mission in building a vertically

integrated domestic supply chain for rare earths and rare earth neo magnets.

As of December 31, 2024, the Company had 29 employees.

We have not experienced any work stoppages.

None of our employees are represented by a labor union or are parties to a collective

bargaining agreement.

A significant challenge for the Company and the

broader rare earth industry is the shortage of experienced magnet production and mining professionals.

The specialized nature of magnet

production and rare earth mining, processing, and refining requires expertise that has been in decline, particularly in the United States,

where magnet production and rare earth mining has been limited for decades.

This shortage could present significant obstacles for companies

like USARE that are working to establish a vertically integrated, domestic rare earth supply chain.

The lack of skilled professionals

with the necessary expertise can slow down project timelines, increase operational costs, and foster reliance on international talent.

Environmental, Health and Safety Matters

The Company is, or may become, subject to numerous

and extensive federal, state and local laws, regulations, permits and other legal requirements applicable to the magnet production, mining

and mineral processing industries, including those pertaining to employee health and safety, air emissions, water usage, wastewater and

stormwater discharges, air quality standards, greenhouse gas (“ GHG ”) emissions, waste management, plant and wildlife

protection, handling and disposal of hazardous and radioactive substances, remediation of soil and groundwater contamination, land use,

reclamation and restoration of properties, the discharge of materials into the environment and groundwater quality and availability.

laws, regulations, permits and legal requirements have had, and will continue to have, a significant effect on our results of operations,

earnings and competitive position.

Environmental laws and regulations, as well as stakeholder expectations, continue to evolve, which

may require us to meet stricter standards and give rise to greater enforcement, result in increased fines and penalties for non-compliance,

and result in a heightened degree of responsibility for companies and their officers, directors and employees.

Future laws, regulations,

permits or legal requirements, as well as the interpretation or enforcement of existing requirements, may require substantial increases

in capital or operating costs to achieve and maintain compliance or otherwise delay, limit or prohibit operations, or other restrictions

upon, our current or future operations or result in the imposition of fines and penalties for failure to comply.

Complying with this panoply

of regulations is complicated and requires significant attention and resources.

The Company’s employees have a significant amount

of experience working with various federal, state and local authorities to address compliance with such laws, regulations and permits;

however, we cannot assure you that at all times we have been or will be in compliance with such requirements.

The Company expects to continue to incur significant

sums for ongoing operating environmental expenditures, including salaries, and the costs for monitoring, compliance, reporting, pollution

control equipment and permitting.

In addition, the Company plans to invest significant capital to maintain and upgrade certain infrastructure

related to environmental sustainability and safety.

At the Stillwater Facility, the Company currently

holds and is implementing a Spill Prevention and Countermeasures Control (“ SPCC ”) Plan.

At the Round Top Project, the

Company has obtained coverage under the Texas Commission on Environmental Quality (“ TCEQ ”) Construction Stormwater

Permit TXR150000 and maintains the associated Storm Water Pollution Prevention Plan.

At one or both sites, the Company currently expects

that it may need to obtain many or all of the following permits in the future to conduct its business as currently planned:

● Radioactive equipment registration

● Petroleum storage tank registration

● Industrial stormwater permit (or coverage under a general stormwater

● Industrial waste registration

● Air emissions permit

● Industrial waste water on-site sewage and/or process water

discharge permit

● Other building and/or construction permits

Environmental, Health & Safety

Laws and Regulations

The numerous and extensive federal, state and

local environmental, health and safety laws and regulations to which the Company is or may be subject include the laws and regulations

listed below.

Violation of such laws and associated regulatory programs can result in civil, criminal and administrative penalties and

substantial liability for the costs of correcting violations and remediating any environmental damage caused by the violations.

certain statutes, private citizens may bring enforcement suits.

We expect to maintain regular communication with regulatory bodies to

stay updated on any changes or additional requirements.

Mine Health and Safety Laws .

fully adhere to the safety standards enforced by the Mine Safety and Health Administration (“ MSHA ” ) under the

Federal Mine Safety and Health Act of 1977, we plan to develop comprehensive mine safety and health programs in connection with

the commissioning of the Round Top Project’s mine if and when such commissioning occurs including, but not limited to, regular MSHA

inspections and reporting protocols, mandatory MSHA training programs (Part 46/48) for all personnel, implementation of emergency

response and hazard mitigation plans, and continuous monitoring of air quality, dust, noise, and other environmental health factors.

Surface Mining Control and Reclamation .

may in the future, if and when the Round Top Project is a producing mine, be subject to applicable mining controls and land reclamation

requirements.

These controls and requirements generally establish operational, reclamation, and closure standards for surface mining operations.

It is likely that we will need to meet comprehensive environmental protection and reclamation standards during the course of, and upon

completion of, mining activities, and any failure to meet such standards may subject us to fines, penalties, or other sanctions.

Endangered Species Act .

Endangered Species Act (“ ESA ”) and comparable state statutes regulate activities that could have an adverse effect

on threatened and endangered species, including the habitat and ecosystems upon which they depend.

Compliance with ESA requirements can

significantly delay, limit, or even prevent the development of projects, including the development of mining claims, and can also result

in increased development costs.

In addition, the ESA authorizes both civil and criminal penalties for ESA violations and authorizes citizen

suits against any person alleged to be in violation of the ESA.

National Environmental Policy Act .

National Environmental Policy Act (“ NEPA ”) require agencies to integrate environmental considerations into their decision-making processes

by evaluating the environmental impacts of their proposed actions, including issuance of permits to mining facilities, and assessing alternatives

to those actions.

If a proposed federal action could significantly affect the environment, the agency must prepare a detailed statement

known as an Environmental Impact Statement (“ EIS ”).

The United States Environmental Protection Agency (the “ EPA ”),

other agencies, and any interested third parties may review and comment on the scoping of the EIS and the adequacy of and findings set

forth in the draft and final EIS.

This process can cause delays in issuance of required permits or result in changes to a project

to mitigate its potential environmental impacts, which can in turn impact the economic feasibility of a proposed project.

Clean Water Act .

Clean Water Act (“ CWA ”) and comparable state statutes impose restrictions and controls on the discharge of pollutants

into waters of the United States (or state waters under state laws).

The CWA can regulate storm water from mining facilities and

require a storm water discharge permit for certain activities.

The CWA and regulations implemented thereunder also prohibit discharges

of dredged and fill material in wetlands and other waters of the United States unless authorized by an appropriately issued permit.

CWA regulations and controls generally have become more stringent over time, and it is possible that additional restrictions will be imposed

in the future.

Safe Drinking Water Act .

Safe Drinking Water Act (“ SDWA ”) and comparable state statutes, the Underground Injection Control (“ UIC ”)

program, and related state-administered programs regulate the drilling and operation of subsurface injection wells.

Clean Air Act .

Clean Air Act (“ CAA ”) and comparable state statutes govern the emission of air pollutants from many stationary and

mobile sources, including mining, beneficiation, and processing activities.

Our operations may produce air emissions, including fugitive

dust and other air pollutants, from stationary equipment, storage facilities, and the use of mobile sources, such as trucks and heavy

construction equipment, that are subject to review, monitoring, control requirements and emission limits under the CAA and state air quality

New sources, equipment or process enhancements, including with respect to the growth of our operations and Stage II optimization

projects, may require additional permits, and existing sources may be required to incur capital costs to remain in compliance.

permitting rules and issued permits or licenses may impose conditions or other limitations on production levels or result in additional

capital or other expenditures to comply with such rules or permits.

Comprehensive Environmental, Response, Compensation,

and Liability Act (“CERCLA”) .

CERCLA and comparable state laws impose strict, joint and several

liability on current and former owners and operators of sites and on persons who disposed of or arranged for the disposal of hazardous

substances found at such sites, regardless of the lawfulness of the original activities that led to the contamination.

Moreover, current

owners or operators of sites can be held liable for contamination caused by others, including former owners or operators, even if the

current owners or operators did not contribute to the contamination.

CERCLA authorizes the EPA and, in some cases, third parties to take

actions in response to threats to public health or the environment and to seek to recover from the potentially responsible parties the

costs of such actions.

Resource Conservation and Recovery Act (“RCRA”) .

and comparable state statutes govern the generation and disposal of solid waste and hazardous waste.

Although certain mining, beneficiation,

and mineral processing wastes currently are exempt from regulation as hazardous wastes under RCRA, EPA has limited the disposal options

for certain wastes designated as hazardous wastes under RCRA.

It is possible that wastes generated by our operations may in the future

be designated as hazardous wastes and may therefore become subject to more rigorous and costly management, disposal, and clean-up requirements.

Atomic Energy Act .

Nuclear Regulatory Commission (“ NRC ”), pursuant to its authority under the Atomic Energy Act of 1954, as

amended, oversees the regulatory framework governing the control of radioactive materials, including beneficiation and processing of rare

earths that contain radioactive source materials such as uranium and thorium.

The NRC is responsible for issuing licenses that govern

the handling of source material involving certain concentrations of radioactive material.

Our Round Top Project operations, once the Round

Top Project mine is operational, including waste generation, may be subject to NRC regulations in order to receive title to, possess,

use, transfer, deliver or export source and byproduct materials.

Workers’ Compensation Laws .

compensation laws in the states in which we operate govern our compensation of employees for work-related injuries.

Agencies in those

states consider changes in workers’ compensation laws from time to time.

Our costs will vary based on the number and severity of

accidents that may occur at our facilities and our costs of addressing these claims.

We are insured under various workers’ compensation

programs for our operations at our facilities.

From time to time, we may become involved in legal

proceedings or be subject to claims that arise in the ordinary course of our business, the outcomes of which are subject to uncertainty.

Any claims against us, whether meritorious or not, can be time-consuming, result in costly litigation, require significant management

time, create a negative perception of the company with communities, stakeholders, and government agencies and result in the diversion

of significant operational resources.

See Item 3 — Legal Proceedings for information regarding legal proceedings.

Description of the Round Top Project

Round Top Deposit, located in Hudspeth County, Texas near the city of Sierra Blanca, Texas, was initially identified as a potential source

of minerals in the mid-20 th century and has long been recognized for its minerology, particularly its rare earths including

heavy rare earths that are critical for a variety of advanced technologies.

However, despite its potential, the Round Top Deposit remained

largely untapped for many years due to the lower global demand for rare earths and the dominance of cheaper feedstock from foreign

markets, particularly from China.

Interest in the Round Top Deposit resumed in the

early 21 st century as geopolitical concerns and technological advancements led to a renewed focus on securing domestic

supplies of critical materials such as rare earths.

The Round Top Deposit is considered exceptional in its geological composition, as

it contains gallium, lithium, and at least 15 of the 17 rare earths, including a particularly high estimated concentration of heavy

rare earths like dysprosium and terbium.

Documented exploration began in Sierra Blanca

in the 1970s when W.N.

McAnulty initiated trenching and limited drilling of fluorite deposits in the vicinity of Sierra Blanca, Texas.

McAnulty recognized and identified beryllium mineralization associated with the massive fluorite.

Adverse economic conditions for fluorite

precluded development.

In the 1970s, several uranium companies identified anomalous radiation and associated mineralization associated

with the beryllium-fluorite deposit.

During the 1980s, Cabot Corporation (“ Cabot ”),

a large chemical company with a beryllium fabrication division, initiated exploration at Round Top Mountain for beryllium.

In 1987, Cyprus

Metals Company (“ Cyprus ”) entered into a joint venture with Cabot and took over the project.

The Cyprus exploration

program drilled Sierra Blanca, Round Top Mountain and Little Round Top.

Eventually, Cyprus focused on Round Top, specifically the “west

end ore zone”.

Extensive development drilling (82,000 feet), underground exploration drift (1,115 feet) and trial mining resulted

in the completion of an internal feasibility study in June 1988 (Cyprus Sierra Blanca, Inc., 1988), which study would not be sufficient

for Item 1300 purposes.

During the Cabot-Cyprus development project,

the Texas Bureau of Economic Geology (“ BEG ”) conducted extensive research at Round Top and the surrounding area.

study identified beryllium mineralization and rare earth mineralization in the rhyolite.

The research resulted in the three publications,

one in 1987 on the mineralogy of the rhyolite (Rubin, et al., 1987), another in 1988 on the beryllium mineralization (Rubin et al., 1988),

and another in 1990 on the detailed mineralogy and geochemistry of the rhyolite (Price et al., 1990).

The 1990 Price, et al., publication,

Geological Society of America Special Paper 246, is generally considered the most complete publication to date on Round Top.

In late 2007, Standard Silver Corporation, later

to be renamed TRER in 2010, and then TMRC in 2013, acquired prospecting permits for Round Top from the Texas General Land Office (“ GLO ”).

Accessibility .

Round Top Project is located approximately eight miles northwest of the town of Sierra Blanca, Texas, which is the nearest town to Round

Top Mountain and has a small population.

The site is accessed from Interstate 10 through a series of paved and unimproved dirt roads.

The property is not traversed by county roads and consists of a series of graded and primitive jeep roads.

The nearest major airport is

located in El Paso, Texas, 88 miles to the northwest.

The site is approximately three miles north of Interstate 10.

A railroad line is

located near the Round Top Project and a spur line stops at a stone quarry within three miles of the Round Top Project.

Skilled mining

labor and support could potentially be found in the El Paso area and in the mining areas of New Mexico and Arizona.

Land and Water Leases .

RTMD is a limited liability company majority owned

and controlled by USARE for the purpose of developing the Round Top Deposit.

TMRC (a mining exploration company) is the minority owner

In May 2021, the Company completed the acquisition of 80% of RTMD, which controls the Company’s Round Top Project,

including 100% of the mining rights to the Round Top Deposit, by entering into a Contribution Agreement and Operating Agreement with TMRC.

acquisition resulted in the consolidation of RTMD with USARE, and the recording of a “non-controlling interest” for the

remaining 20%.

Since May 2021, TMRC has elected to forfeit some of its ownership in RTMD in exchange for USARE meeting TMRC’s

capital call obligations.

As of December 31, 2024, USARE owns 81% of

the equity interests in RTMD, with TMRC owning the remaining approximately 19%.

Pursuant to RTMD’s governing documents, in the event

that TMRC does not fund its share of mandatory capital contributions called for by USARE as managing member, USARE is obligated to cover

the shortfall by making additional capital contributions to RTMD.

In the event that USARE does not cover the shortfall, the capital

call will be withdrawn.

If the capital call is funded by USARE, additional equity interests in RTMD will be issued to USARE and TMRC will

be proportionally diluted in accordance with the amended and restated limited liability company agreement.

The Round Top Deposit is located on state property

owned by the GLO.

RTMD is party to a 19-year initial term, renewable Mining Lease Agreement (M-113117) with the GLO, dated September 2,

2011, and amended on January 26, 2012, March 29, 2012, and September 14, 2022.

M-113117 will expire on September 1,

2030 unless extended.

RTMD has also entered into an additional 19-year renewable Mining Lease Agreement (M-113629), dated November 1,

2011, with the GLO.

Leases M-113117 and M-113629 (each a “ Mineral Lease ” and together, the “ Mineral

Leases ”) represent approximately 860 and 90 acres, respectively, for a total of 950 leases acres in the Round Top Project area.

M-113629 will expire on October 31, 2030 unless extended.

The Mineral Leases provide RTMD with the use of the property identified,

including certain rights with respect to the surface and subsurface, together with the corresponding rights of ingress and egress, for

the purposes of mineral exploration, development, and exploitation of minerals.

As the Round Top Project is still in its exploration stage,

the Company is currently paying delay rental payments on an annual basis to the GLO as follows:

Anniversary Date 2024

Anniversary Date 2025-2029

Anniversary Date 2024

Anniversary Date 2025-2029

If and when the Round Top Project begins producing,

the Mineral Leases would be converted into producing leases upon the satisfaction of certain conditions, which includes:

(i) a minimum

advance annual royalty of $500,000 for lease M-113117 and $50,000 for lease M-113629, due promptly following sales of leased minerals

or the removal of leased minerals in commercial quantities from the leased premises and (ii) a production royalty equal to 8% of

the market value of uranium and other fissionable minerals and 6.25% of the market value of all other leased minerals.

In addition to the Mineral Leases, the Company

currently owns approximately 2037 acres of mine processing land and holds a current purchase option on 5,670 acres of which 950 acres

are authorized for mining and the remainder (4,720 acres) is contemplated for future use as mine processing land (e.g., for use to assist

in mine development, as leach fields, and/or as plant site) (the “ Purchase Option ”).

Unless exercised prior, the Purchase

Option will expire upon the expiration of Mining Lease M-113117 (September 2, 2030).

As consideration for the Purchase Option,

the Company is required to pay $10,000 to the GLO on each annual anniversary of the Effective Date of the Purchase Option (as defined

in the Purchase Option) during the option term.

If the Company fails to make a timely payment of the option fee, the Purchase Option will

On August 26, 2022, the Company submitted to the GLO a Notice of Intent to exercise the Purchase Option.

In February 2023,

the GLO sent its appraisal of the value of the property associated with the Purchase Option to the Company.

The Company and GLO are negotiating

the exercise of the Purchase Option.

The Company is lessee under GLO Surface Lease

SL2004002 (Grazing/Agricultural), which lease is for a term commencing on November 24, 2003 and expiring on November 23, 2028,

for approximately 55,000 acres of surface rights in proximity to the Company’s Round Top Project (the “ Surface Lease ”).

The Surface Lease is a pre-paid lease with a pro rata credit schedule and a “preference right agreement” to purchase

all or part of the land.

The Surface Lease grants the Company the right to use the leased premises for hunting, grazing, range and wildlife

research, and any other purpose ancillary thereto, and allows, with GLO approval, the Company to commercially develop groundwater and

to use the land for electric generation by wind power.

Pursuant to the Surface Lease, the Company has the right to purchase all or part

of the leased premises during the term of the lease in accordance with the terms set forth in the preference right agreement, an exhibit

to the Surface Lease, provided that any purchase of tracts of land must be contiguous.

The Surface Lease contains certain additional obligations,

such as an obligation to maintain stated insurance coverages in certain situations, and to post certain deposits or bonds prior to commencing

construction of any wind turbine, tower, buildings, or substations.

The Company has the right to early terminate the lease, in which case

the Company would be entitled to receive a refund of the prepayments made under the lease.

There is no Company renewal option under the

Surface Lease and any renewal of the Surface Lease is at the sole discretion of the GLO.

The Company is lessee under GLO Groundwater Lease

SL20150003, dated August 1, 2014, as amended, for approximately 8,828 acres of water rights (the “ Groundwater Lease ”).

The Groundwater Lease grants USARE rights in the land, including rights of ingress and egress, for the purpose of exploring, evaluating,

drilling for, producing, developing, and extracting groundwater from the leased land for industrial and potable water use in connection

with USARE’s Round Top Project (including, without limitation, mineral processing and metal extraction/processing).

The Groundwater

Lease will expire concurrently with the M-113117 Mineral Lease.

The Company has not commenced water production and is currently obligated

to pay annual delay rentals in the amount of $6,500 on or before each anniversary of the effective date of the Groundwater Lease.

first anniversary of the Effective Date that immediately follows the Company’s commencement of water production from the leased

premises the Company shall make a production payment equal to the greater of (1) $1,667.67 multiplied times the number of months

of production of water during the 12-month period ending 60 days before the production payment is due, or (2) $0.95 per

1,000 gallons of the gross volume of water produced by the leased premises covered by the lease during the 12-month period ending

60 days before the production payment is due.

On each anniversary of the effective date of the Groundwater Lease thereafter during

the remaining term of the Groundwater Lease, the Company will be required to make a production payment equal to the greater of (1) $20,000,

or (2) $0.95 per 1,000 gallons of the gross volume of water produced from the leased premises during the 12-month period ending

60 days before the production payment is due.

There is no Company renewal option under the Groundwater Lease and any renewal of the

Groundwater Lease is at the sole discretion of the GLO.

The premises leased under the Groundwater Lease

has two existing water wells.

Prior to commencing production of rare earth minerals at the Round Top Project, the Company will need to

establish that the existing wells are functioning water wells producing enough water to support production or potentially drill additional

wells, which would entail additional expense for production.

If the Company determines that the groundwater supply is not suitable for

the Company’s Round Top Project, then the Company has the right to terminate the Groundwater Lease.

Upon expiration or earlier termination

of the Groundwater Lease, the Company will be required to restore the leased premises to its original topographical condition that existed

as of the Effective Date, to the extent the topographical condition has been altered.

The Company has entered into four easements with

GLO that affect the Round Top Project.

The first easement is Miscellaneous Easement ME20210085 (“ ME20210085 ”), which

commenced on April 1, 2021 and expires on March 31, 2031 unless extended by the Company pursuant to the terms of ME20210085.

ME20210085 is a nonexclusive easement for a right of way to construct, maintain, operate, inspect and repair one roadway in a location

set forth on the easement.

The second easement is Miscellaneous Easement

(Pipelines) ME20210086 (“ ME20210086 ”), which commenced on April 1, 2021 and expires on March 31, 2031 unless

extended by the Company pursuant to the terms of ME20210086.

ME20210086 is a nonexclusive easement for a right of way to construct, maintain,

operate, inspect, repair, change the size of, and replace one 4.5-inch O.D.

pipeline for the purpose of transporting fresh water

in a location set forth on the easement.

The third easement is Miscellaneous Easement ME20210087

(“ ME20210087 ”), which commenced on April 1, 2021 and expires on March 31, 2031 unless extended by the Company

pursuant to the terms of ME20210087.

ME20210087 is a nonexclusive easement for a right of way to construct, maintain, operate, inspect

and repair one 24-kV electric line in a location set forth on the easement.

The fourth easement is Miscellaneous Easement

ME20220142 (“ ME20220142 ”), which commenced on September 1, 2022 and expires on August 31, 2032 unless extended

by the Company pursuant to the terms of ME20220142.

ME20220142 is a nonexclusive easement for a right of way to construct, maintain, operate,

inspect and repair one roadway in a location set forth on the easement.

Historical Non-Item 1300 Resource

Feasibility Studies .

Cyprus established certain non-reported resources in conjunction with

a 1988 internal feasibility study, which historical resource estimate would not qualify as a resource by either historical 43-101 standards

nor current Item 1300 of Regulation S-K (“ Item 1300 ”) standards.

In 2012, TMRC completed a PEA prepared by

a mining consulting firm on the Round Top Deposit (NI 43-101 Preliminary Economic Assessment — Round Top Project,

June 22, 2012).

The resource model in that PEA was updated in early 2013 with additional drilling and assay data and was documented

in a resource statement by a mining consulting firm (Resource Estimate and Statistical Summary — Round Top Project, September 30,

The 2013 PEA was an update of the 2012 PEA and utilized the resource estimate from the September 2013 study.

was then superseded in 2019 when USARE and TMRC engaged a mining consulting firm to prepare its resource statement (NI 43-101 Preliminary

Economic Assessment — Round Top Project, August 16, 2019).

Neither the 2012 PEA, the 2013 PEA, nor the 2019 PEA were

prepared on the basis of compliance with Item 1300 and are not resource estimates of USARE under Item 1300.

The 2019 PEA provided an initial overview of the

Round Top Deposit’s minerology, confirming that the site contains both heavy rare earths and lithium.

While the 2019 PEA set the

stage for further detailed studies, in light of the rapid global economic changes, technological changes that have occurred since 2019,

and changes in economic environment and pricing, including with respect to extraction costs and economic returns, the Company is not relying

on the 2019 PEA for the purpose of reporting mineral resources.

The Company does not currently intend to update the 2019 PEA and is instead

working toward conducting a pre-feasibility study (“ PFS ”).

The Company intends to update the “flow sheet”

used as a key input in such estimates to reflect the Company’s expected separation and processing methodologies at that time.

does not make any representation that any historical estimate is a current mineral resource estimate for the Round Top Project.

is no known significant production reported from previous operators.

Accordingly, following the 2019 PEA, USARE has

been actively working on advancing the project through the next stages of the project, focusing on the subsequent PFS, which the Company

intends to eventually progress to a Definitive Feasibility Study (“ DFS ”).

The PFS would provide an updated and more

detailed analysis of the technical and economic feasibility of the Round Top Project, including resource modeling, mine design, and processing

methodologies.

This step is critical in defining and refining the operational and financial plans for the Round Top Project.

stage, the DFS, would provide the most definitive plan for the full-scale development of the mine, including final cost estimates,

engineering plans, and potential environmental impacts, all necessary for securing financing and moving toward full production.

Exploration Status .

is the Company’s view that the Round Top Project is considered an “exploration stage property” under Item 1300,

in that the Round Top Project is a property that has no mineral reserves disclosed.

Mineral resources that are not mineral reserves have

no demonstrated economic viability.

USARE has not itself conducted any exploration activities at the Round Top Project and does not have

any current determination as to a proposed program of exploration or development.

However, as discussed above in the section entitled

“— History ”, various other parties have historically performed exploration activities at the site, including

TMRC from whom USARE acquired its rights in the Round Top Project through the Company’s subsidiary RTMD.

Between January 2010

and August 2019, TMRC conducted the following exploration activities:

surface sampling, logging cuttings from historical reverse

circulation drilling, aeromagnetic surveying, anaeroradiometric survey, stream sediment surveying, gravity surveying, and exploratory

To date, 173 historical drill holes have been located, and, between 2011 and 2019, TMRC drilled 84 reverse circulation holes

and 2 core holes and analyzed 3,081 drill samples.

In early 2019, TMRC assayed previously collected RC samples to collect geochemical

data for some additional elements from existing drill holes to expand the knowledge of lithium, zircon, and other elements which metallurgical

test work had indicated might impact project economics.

The Round Top Project’s equipment and facilities

and related infrastructure are in generally good condition and are not material to the Company’s business as currently conducted.

For information regarding current and expected

future permitting requirements and associated timelines and information regarding such permits, see the section entitled “— Permits

and Approvals ”.

Environmental Impact .

Round Top Project has been envisioned with an emphasis on minimizing environmental impact, particularly in comparison to traditional mining

One of the key environmental advantages of the Round Top Project’s site is its location in an arid, sparsely populated

area of Texas, which reduces the likelihood of significant impacts on local communities or ecosystems.

Due to the above-ground nature

of the deposit, the project is currently expected to predominantly utilize in-situ leaching for rare earth extraction, which is generally

considered less environmentally disruptive than traditional mining techniques.

This process involves dissolving minerals using solutions

and extracting them without large-scale surface disruption, reducing the need for large open-pit mining operations that could

potentially lead to undesirable environmental impacts.

Additionally, USARE endeavors to use sustainable

practices by focusing on using closed-loop recycling systems to minimize waste and reduce water usage in its operations.

is exploring the possibility of using renewable energy sources to power its projects.

However, like all mining operations, in the future,

the Company will likely need to manage concerns related to chemical use, water management and contamination, and waste management.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business