Item 5. Market for Registrant’s Common Equity
Item 5. Market for Registrant’s Common Equity, Related Shareholder
Matters and Issuer Purchases of Equity Securities.
Market Information
Our common stock and warrants are listed on Nasdaq
under the symbols “USAR” and “USARW”, respectively.
Holders
As of March 27, 2025, there were 444 holders
of record of our Common Stock, 27 holders of record of our Series A Preferred Stock, and 2 holders
of our New USARE Warrants. The number of holders of record does not include a substantially greater number of “street name”
holders or beneficial holders whose Common Stock and New USARE Warrants are held of record by banks, brokers and other financial
institutions.
Pursuant to our bylaws, the former members of
USARE OpCo (excluding the former holders of the USARE Class A Convertible Preferred Units and the USARE Class A Preferred Investor Warrants,
solely with respect to securities received in exchange for such USARE OpCo securities) (together with their permitted transferees, the
“ USARE Lock-Up Holders ”) are not be permitted, prior to the date that is six months after the Closing Date (the “ Initial
Common Stock Lock-Up Period ”) to (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option
to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, any shares of Common Stock that were or will be issued
or were or will be issuable to such USARE Lock-Up Holders in connection with the transactions contemplated by the Business Combination
Agreement (the “ USARE Lock-Up Shares ”) (ii) enter into any swap or other transfer arrangement in respect
of the USARE Lock-Up Shares or (iii) take any other similar actions (the actions specified in the foregoing clauses (i) through
(iii), collectively, “ Transfer ”), without the prior written consent of our board of directors. Our bylaws further provide
that such USARE Lock-up Holders will not be permitted to, prior to the date that is one year after the Closing Date (the “ Second
Common Stock Lock-Up Period ”), Transfer more than 50% of the USARE Lock-Up Shares, without the prior written consent of our
board of directors. Our bylaws provide for certain permitted transfers, including but not limited to, transfers to certain affiliates
or family members, transfers of shares acquired on the open market after the consummation of the Business Combination, subject to certain
conditions, or the exercise of certain stock options and warrants.
Notwithstanding the foregoing, in connection with the Closing of the
Business Combination, our board of directors released specified USARE Lock-Up Holders, generally the USARE Lock-Up Holders who were expected
to own less than 0.2% of the Common Stock issued to all USARE Lock-Up Holders in the Business Combination, from the lock-up described above.
Dividends
We have not paid any cash dividends on our securities
to date. We do not intend to pay cash dividends for the foreseeable future. The payment of cash dividends in the future will be dependent
upon our revenues and earnings, if any, capital requirements and general financial condition. The payment of any cash dividends will be
within the discretion of our board of directors at such time. If we incur any indebtedness, our ability to declare dividends may be limited
by restrictive covenants we may agree to in connection therewith.
Securities Authorized for Issuance under Equity
Compensation Plans
As of December 31, 2024, we did not have any securities
authorized for issuance under equity compensation plans. On March 13, 2025, in connection with Closing of the Business Combination, our
shareholders approved the USA Rare Earth, Inc. 2024 Omnibus Incentive Plan (the “ USARE Incentive Plan ”). We have reserved
a total of 13,000,000 shares of our common stock for issuance pursuant to the USARE Incentive Plan, and the maximum number of shares that
may be issued pursuant to the exercise of incentive stock options granted under the USARE Incentive Plan is 13,000,000, in each case,
subject to certain adjustments set forth therein.
Recent Sales of Unregistered Securities; Use
of Proceeds from Registered Offerings
At the closing of the Business Combination, we
issued:
i. an aggregate of 784,315 shares of Series A Preferred Stock and Series A Preferred Investor Warrants exercisable for an aggregate of
784,315 shares of Common Stock, subject to adjustment, at an initial exercise price of $12.00 per share, subject to adjustment, pursuant
to the PIPE SPAs, for an aggregate consideration of $8,000,000;
ii. an aggregate of 131,048 shares of Series A Preferred Stock pursuant to the Blitzer Series A SPA (as defined below) in exchange for
Michael Blitzer’s forgiveness of the remaining 50% of the Convertible Promissory Note (as defined below); and
iii. an aggregate of 877,500 shares of Common Stock pursuant to USARE OpCo’s arrangements with Cohen & Company Capital Markets,
A Division of J.V.B. Financial Group, LLC (“ CCM ”).
These securities were issued pursuant to the exemption
from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended. Each acquiror is an accredited investor for
purposes of Rule 501 of Regulation D.
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Item 6. Reserved.