What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-03-30 compared with 2025-03-31 · 322 added, 504 removed, 2 unchanged (100% of the section changed)

Management’s Discussion and Analysis of Financial

Condition and Results of Operations.

Unless otherwise noted or the context otherwise

requires, references to the “Company,” “Inflection Point,” “Inflection Point Acquisition Corp.

“our,” “us” or “we” refer to Inflection Point Acquisition Corp.

The following discussion and analysis

of the Company’s financial condition and results of operations should be read in conjunction with our audited financial statements

and the notes related thereto which are included in “Item 8.

Financial Statements and Supplementary Data” of this Annual Report.

The term “USARE OpCo” refers to USA Rare Earth, LLC, and the term “New USARE” refers to USA Rare Earth, Inc.

the consummation of the Business Combination .

The financial information included in this Item

7 is that of Inflection Point prior to the Business Combination because the Business Combination was consummated subsequent to the period

covered by the audited financial statements included in this Annual Report.

Until March 13, 2025, we were a special purpose

acquisition company incorporated in the Cayman Islands on March 6, 2023, formed for the purpose of effecting a merger, share exchange,

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

Our intent was to

effectuate a business combination, including the Business Combination, using cash derived from the proceeds of the IPO and the

sale of the private placement warrants, our shares, debt or a combination of cash, our shares and debt.

We incurred significant costs in the pursuit of

our acquisition plans.

Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis is intended to help the reader understand our results of operations and financial condition.

It should be read in conjunction with the Consolidated Financial Statements and related Notes included in Part II, Item 8 , “Financial Statements and Supplementary Data,” in this Annual Report on Form 10-K.

The following discussion may contain forward-looking statements.

Forward-looking statements are not guarantees of performance.

Although we believe these forward-looking statements are reasonable when made, we cannot assure you that we will achieve or realize these plans or expectations.

Our actual results and the timing of events may differ materially from those expressed or implied as a result of various factors, including those set forth in the sections titled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements and Risk Factor Summary.”

We are building a leading global rare earth value chain, from mine to magnet and beyond.

We intend to secure, reshore, and grow the materials intelligence and production technologies required to stand up a resilient rare earth industry.

This advanced industrial operating system should strengthen supply-chain security for the national defense, manufacturing and technology of the U.S.

and its allies.

Our plan is to build an integrated platform to encompass the entire rare earth value chain:

extraction and separation of rare earth oxides;

conversion of oxides into metals, alloys and strip-cast;

and production of sintered NdFeB permanent magnets, which we refer to as neo magnets.

This capability should address the supply-chain vulnerabilities created by China’s current dominance of rare earth processing, metal and magnet manufacturing.

Recent Developments, Key Trends, Opportunities and Uncertainties

We are an early-stage company with a limited operating history.

We incurred a net loss of $298.5 million for the year ended December 31, 2025 and had an accumulated deficit of $387.4 million as of December 31, 2025.

Our 2025 revenues were derived solely from our Less Common Metals business for a portion of the year following the Less Common Metals Acquisition, and we have not yet generated revenues from neo magnet manufacturing or mineral production.

We expect to sustain substantial operating expenses without generating sufficient revenues to cover those expenditures for the foreseeable future.

Our historical results are not indicative of our future results, and our ability to generate sufficient revenue to achieve profitability will depend largely on the successful development of our integrated mine-to-magnet platform.

Accordingly, the drivers of our future financial results, as well as the components of such results, may not be comparable to our historical results of operations.

We believe that our performance and future success depend on several factors that present significant opportunities for us but also pose significant risks and challenges, including those discussed below and in Part I, Item 1A , “Risk Factors.”

Less Common Metals

In the fourth quarter of 2025, we completed the acquisition of Indian Ocean Rare Metals Pte.

Ltd., which includes Less Common Metals Ltd.

(“Less Common Metals”), its manufacturing subsidiary located in Cheshire, United Kingdom.

Less Common Metals is a leading scaled ex-China rare earth metal and alloy manufacturer.

The acquisition of Less Common Metals is the vital link in our end-to-end REE supply chain by adding value through processing of REE oxides, rare earth metals and transition metals into specialized and often complex alloys of close compositional control, low and consistent levels of impurities and controlled microstructures.

See Note 2, “Merger Transaction and Acquisition – Acquisition of Indian Ocean Rare Earth Metals Pte.

Ltd.” of the Notes to Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K (the “Notes”) for further information regarding the acquisition.

Private Investment in Public Entity Financing (“PIPE”)

On January 28, 2026, we completed a private placement of 69.8 million shares of our common stock for gross proceeds of $1.5 billion (“$1.5B PIPE”).

We intend to use the net proceeds from the $1.5B PIPE to accelerate the build-out of our mine-to-magnet value chain, including the development and expansion of mining, processing, metal-making and magnet manufacturing capabilities, as well as for working capital and general corporate purposes.

USA Rare Earth, Inc.

| 2025 Annual Report (Form 10-K) | 55

Expected U.S.

Government Transaction

On January 26, 2026, we announced that we had entered into a non-binding letter of intent (the “Letter of Intent”) with the U.S.

Department of Commerce covering a total of $1.6 billion, including $277.0 million in direct funding awards under the CHIPS Act, and $1.3 billion in senior secured debt with a 15-year term with an expected rate of Treasury plus 150 basis points (“bps”) (collectively, the “Expected U.S.

Government Transaction”).

As conditions to entry in definitive documentation for the Expected U.S.

Government Transaction (the “Definitive Agreements”), we must satisfy certain conditions, including, without limitation:

(i) raise at least $500 million from non-federal sources (which we satisfied with the $1.5B PIPE), (ii) obtain two memoranda of understanding from semiconductor end or midstream users, (iii) obtain neodymium praseodymium oxide and MREC feedstock supply agreements with a term at least through 2027, (iv) exercise a surface purchase option with the Texas GLO, (v) implement certain third-party recommendations and third-party validation of nuclear material licensing requirements at our Colorado Facility, and (vi) define a power infrastructure plan for our magnet manufacturing facility in Stillwater, Oklahoma.

In addition, the U.S.

government’s $277.0 million in direct funding awards includes a condition that we issue to the U.S.

government, $277.0 million of common stock (approximately 16.1 million shares issued at $17.17 per share).

The $1.3 billion in senior secured debt also requires the issuance of warrants to the government representing an additional 10% of the Company’s fully diluted shares outstanding prior to the $1.5B PIPE (approximately 17.5 million shares with an exercise price of $17.17 per share and a 10-year exercise period).

government’s ownership in the Company is expected to represent between 8% and 16% of the fully diluted shares outstanding prior to the $1.5B PIPE depending on whether the warrants are assumed to be exercised.

Issuance of both the direct funding awards and senior secured debt are dependent on our ability to meet certain key performance indicators.

The Letter of Intent for the Expected U.S.

Government Transaction provides, and the Definitive Agreements for such collaboration will provide, that the grant and debt financing from the government will be released to us in phases over time subject to our achievement of specified business milestones related to the development of the Round Top deposit, development and expansion of processing and separation facilities, development and expansion of metal making and strip casting facilities, development and expansion of the magnet manufacturing facility, and obtaining additional equity and debt financing.

There are four milestones related to Round Top with targeted achievement dates from December 2026 to December 2028:

design, scale-up and completion of a definitive feasibility study;

solvent extraction;

and completion of construction.

There are two milestones related to our metal making and strip casting facilities with targeted achievement dates from March 2027 to December 2027:

supply, technical feasibility, and construction;

and qualification for production and commercialization.

There are four milestones related to the development and expansion of our magnet manufacturing facilities with targeted achievement dates from June 2026 to March 2028:

initial production capability and demand validation;

and incremental production capability and demand validation.

In addition, to meet certain milestones to obtain funding awards and debt under the Expected U.S.

Government Transaction and execute on our current business plan, we will be required to i) raise at least $600 million of additional equity by December 31, 2027 to satisfy our estimated $4.1 billion of required long-term capital expenditures;

and ii) establish a $250 million revolving credit facility by December 31, 2026.

In addition to the Letter of Intent for the Expected U.S.

Government Transaction, we signed a non-binding letter of intent with the U.S.

Department of Energy’s National Energy Technology Laboratory to collaborate to advance HREE separation technologies at our Colorado Facility and Round Top deposit, leveraging digital twin technology.

The Expected U.S.

Government Transaction is expected to accelerate and de-risk our growth objectives across mining, processing, metal-making and magnet manufacturing, and is anticipated to support a business that by 2030 should:

• extract of up to 40,000 metric tons per day of rare earth and critical mineral feedstock from the Round Top deposit, which is expected to begin commercial production in 2028;

• process a combined 8,000 MTPA of third-party MREC and HREE and critical mineral oxides and concentrates at Round Top, which are and largely unavailable domestically;

• reshore 10,000 MTPA of HREE metal- and alloy-making and strip-casting capacity, capabilities that do not currently exist in the U.S., through the expertise of Less Common Metals;

USA Rare Earth, Inc.

| 2025 Annual Report (Form 10-K) | 56

• process 2,000 MTPA of swarf, which is a result of our magnet production.

We believe that, if consummated on the terms described in our non-binding Letter of Intent with the U.S.

Department of Commerce, the Expected U.S.

Government Transaction would represent a transformative source of capital that accelerates the development of our integrated rare earth value chain and positioning as a domestic supplier of REE and neo magnets for both commercial and national security applications.

However, the transaction remains subject to the negotiation and execution of Definitive Agreements, the satisfaction of numerous conditions, and final government approvals, and there is no assurance it will be consummated on the anticipated terms or at all.

Even if Definitive Agreements are reached, funding is expected to be disbursed in tranches tied to the achievement of specified milestones, and failure to meet any milestone could result in a withholding or clawback of funding.

If the transaction is not completed, we would need to identify alternative sources of capital, which may not be available on acceptable terms, and our ability to execute our business plan could be materially impaired.

Development of the Stillwater Facility and Production of Neo Magnets

We believe that the successful commissioning and ramp-up of our Stillwater, Oklahoma magnet manufacturing facility represents one of our most significant near-term commercial opportunities.

If developed as planned, the Stillwater Facility would position us as one of the few domestic producers of sintered NdFeB permanent magnet, enabling us to serve customers across the defense, electric vehicle, and industrial sectors and to generate meaningful product revenues for the first time.

We believe domestic production of neo magnets addresses a critical gap in the U.S.

supply chain and that demand from both commercial and government customers for domestically sourced magnets should be substantial and grow over time.

However, we have no history of commercial magnet manufacturing, and the Stillwater Facility remains under development.

The facility requires substantial capital to be completed, and there may be unanticipated costs or delays associated with the construction.

Our plan for producing magnets is based on certain estimates and assumptions we have made about our business over the next few years, including the ability to obtain the equipment and materials needed to produce magnets on a timely basis from third party vendors.

Our ability to achieve our production timeline depends on our ability to obtain equipment and materials, the recruitment and retention of skilled personnel, and the timely sourcing of rare earth oxide and metal feedstock from third parties while the Round Top Project matures.

Any delays or cost overruns in commissioning the facility, challenges in securing feedstock at competitive prices, or difficulties in attracting and retaining personnel or customers could extend our path to profitability and materially and adversely affect our revenues and cash flows.

Further, the magnet technology industry is still in its infancy in the U.S., and thus the technology, processes, and capabilities are still being developed.

Due to rapidly rising demand, there is also a risk that substitute products will become available and reduce the need for our type of high-performance magnet.

Proposed Texas Mineral Resources Corporation Acquisition

On March 4, 2026, we entered into a TMRC Merger Agreement to acquire TMRC.

As of December 31, 2025, we held an 81.3% interest in RTMD, with TMRC holding the remaining 18.7% interest.

The TMRC Mergers are intended to consolidate our ownership of RTMD.

Subject to the terms and conditions set forth in the TMRC Merger Agreement, at the effective time of the first merger, each issued and outstanding share of TMRC common stock (subject to specified exclusions) will be converted into the right to receive a number of shares of our common stock equal to the quotient obtained by dividing 3.82 million shares by the aggregate number of TMRC shares outstanding on a fully diluted basis as of immediately prior to the effective time of the first merger, with cash paid in lieu of fractional shares.

The closing of the TMRC Mergers is subject to customary conditions, including, among others, the requisite approval of TMRC stockholders, required Nasdaq listing authorization (if applicable), the absence of any law or order prohibiting consummation of the TMRC Mergers, and the effectiveness of a registration statement on Form S-4, which will include a prospectus relating to our shares to be issued as merger consideration and a proxy statement relating to TMRC’s stockholder meeting to approve the proposed transactions.

We believe that consolidating 100% ownership of RTMD through the proposed TMRC Mergers could simplify our corporate structure, streamline our operations and strengthen our operational control over the Round Top Project.

USA Rare Earth, Inc.

| 2025 Annual Report (Form 10-K) | 57

However, completion of the TMRC Mergers is subject to a number of conditions.

Even if the TMRC Mergers are completed, there can be no assurance that owning 100% of RTMD will result in improved operating outcomes, accelerated development of the Round Top Project, or other anticipated strategic or financial benefits.

Completion of the transaction will also result in the issuance of shares of our common stock to TMRC stockholders, which will be dilutive to our existing stockholders.

Development of the Round Top Project into a Producing Mine

Round Top Mountain, which is an above-ground mineral deposit near Sierra Blanca, TX contains the Round Top Deposit, the mining and extraction of which comprises our Round Top Project.

In late 2025, we completed the first phase of the Round Top Project by submitting a review of our flow sheet to a third-party certification firm.

Upon acceptance and certification of this flow sheet, we will move into the pre-feasibility study phase.

This stage is expected to be completed during late 2026 or early 2027.

We believe that the long-term successful development of our Round Top Deposit into a producing mine represents a transformative long-term opportunity.

A producing Round Top mine would provide a domestic, integrated source of critical REE to supply our planned Stillwater Facility magnet manufacturing operations and potentially third-party customers, significantly reducing dependence on foreign supply chains and strengthening our competitive position.

Nevertheless, Round Top Mountain remains at the exploration stage.

We have not yet established that the Round Top Mountain deposit contains any commercially exploitable quantities of proven and probable mineral reserves, and we may not be able to do so.

Even if we establish commercially exploitable quantities of mineral reserves, the Round Top Mountain deposit may not be developed into a producing mine and we may not be able to extract those minerals economically.

The development of a mineral property into a producing mine is a lengthy, capital-intensive, and an uncertain process.

Throughout the process of commercializing the Round Top Mountain deposit, we will be required to complete feasibility studies, construct and commission significant infrastructure, obtain regulatory permits and approvals, and raise substantial additional capital, all before any commercial production can begin.

Both mineral exploration and development involve a high degree of risk, and few properties that are explored are ultimately developed into producing mines.

There is no assurance that Round Top Mountain will be developed into a producing mine on our anticipated timeline or at all, or that any production that is ultimately achieved will be commercially viable.

Failure to develop Round Top Mountain as planned would also impair the long-term feedstock strategy underlying our integrated business model.

Evaluation of Potential Manufacturing Capacity Expansion

We are evaluating opportunities to expand our rare earth magnet manufacturing capacity to support anticipated growth in demand across key sectors, including aerospace, defense, semiconductors, data centers, physical AI, energy, mobility, healthcare, and numerous industrial sectors.

As part of this process, we are assessing potential investments in additional production capabilities to enhance operational flexibility and support a more resilient and diversified manufacturing footprint.

These assessments include both expansion of existing facilities and development of new manufacturing sites and take into account a range of factors, including workforce availability and our ability to attract and retain qualified personnel, access to transportation infrastructure, availability of reliable and cost-effective utilities (including electrical power and water), site suitability and scalability, regulatory considerations, and community and stakeholder support.

Results of Operations

We have neither engaged in any operations nor

generated any revenues through December 31, 2024.

Our only activities from March 6, 2023 (inception) through December 31, 2024 were organizational

activities, those necessary to prepare for our IPO, described below, and subsequent to the IPO, identifying a target company for a business

combination and activities in connection with the Business Combination.

We did not generate any operating revenues from March 6, 2023

(inception) through December 31, 2024.

We generated non-operating income in the form of interest income on cash and cash equivalents and

dividend income on marketable securities held in the trust account established in connection with Inflection Point’s IPO (the “ Trust

We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing

compliance), as well as for due diligence expenses.

For the year ended December 31, 2024, we had net

income of $7,899,035, which consists of dividend income earned on marketable securities held in the Trust Account of $12,019,932, change

in fair value of Forward Purchase Agreement of $435,568 and interest income from bank of $5,755, partially offset by formation and operating

costs of $4,077,377 and loss on issuance of Forward Purchase Agreements of $484,843.

For the period from March 6, 2023 (inception)

through December 31, 2023, we had net income of $6,748,069, which consists of dividend income earned on marketable securities held in

the Trust Account of $7,721,518 and interest income from bank of $11,763, partially offset by formation and operating costs of $985,212.

Business Combination with USARE

August 21, 2024 (the “ Signing Date ”), Inflection Point entered into that certain Business Combination Agreement by

and among Inflection Point, USARE OpCo and Merger Sub (as amended on November 12, 2024 and January 30, 2025), pursuant to which, among

other things and subject to the terms and conditions contained therein, Merger Sub merged with and into USARE OpCo w ith

USARE continuing as the surviving company and a direct wholly owned subsidiary of Inflection Point.

In connection with the Closing of

the Business Combination, Inflection Point changed its name to “USA Rare Earth, Inc.”.

The Domestication

Inflection Point, after obtaining the required

shareholder approvals, completed the Domestication, changing its jurisdiction of incorporation by deregistering as a Cayman Islands exempted

company and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware.

Prior to, but on the same

day as, the Domestication, Inflection Point provided its public shareholders the opportunity to redeem their public shares on the terms

and conditions set forth in the Business Combination Agreement and Inflection Point’s governing documents (the “ Redemption ”).

The Company redeemed 128,140 public shares in the Redemption.

By virtue of the Domestication and subject to

the satisfaction or waiver of the conditions of the Business Combination Agreement, including approval of Inflection Point’s shareholders:

(i) immediately prior to the Domestication, pursuant to the Sponsor Support Agreement (as defined below) each of the then issued and outstanding

Class B ordinary shares of Inflection Point converted automatically, on a one-for-one basis, into one (1) Class A ordinary share, par

value of $0.0001 per share, of Inflection Point (the “ Sponsor Share Conversion ”);

and (ii) in connection with the Domestication,

(x) each then issued and outstanding Class A ordinary share (that was not redeemed pursuant to the Redemption) converted automatically,

on a one-for-one basis, into one (1) share of Common Stock;

(y) each of the then issued and outstanding warrants representing the right

to purchase one Class A ordinary share converted automatically into a New USARE Warrant to acquire one (1) share of Common Stock;

(z) each of the then issued and outstanding units of Inflection Point was cancelled and each holder thereof became entitled to one share

of Common Stock and one-half (1/2) of one New USARE Warrant.

The Merger and Consideration

Subject to, and in accordance with the terms and

conditions of the Business Combination Agreement, immediately prior to the effective time of the Merger (the “ Effective Time ”),

(i) each warrant to purchase Class C convertible preferred units of USARE OpCo (the “ USARE Class C Convertible Preferred Units ”)

or Class C-1 convertible preferred units of USARE OpCo (the “ USARE Class C-1 Convertible Preferred Units ”) was automatically

exercised on a cashless basis in full in accordance with its terms and (ii) immediately thereafter, each then-issued and outstanding USARE

Class C Convertible Preferred Unit and each then-issued and outstanding USARE Class C-1 Convertible Preferred Unit (including each USARE

Class C Convertible Preferred Unit and USARE Class C-1 Convertible Preferred Unit issued upon the automatic exercise described in the

preceding clause (i)) was automatically converted into such number of Class B units of USARE OpCo (the “ USARE Class B Units ”)

into which such USARE Class C Convertible Preferred Unit or USARE Class C-1 Convertible Preferred Unit, as applicable, was convertible

in connection with the Merger pursuant to USARE OpCo’s Sixth Amended and Restated Operating Agreement, as amended (the “ Pre-Closing

USARE OpCo OA ”).

Subject to, and in accordance with the terms and

conditions of the Business Combination Agreement, at the Effective Time:

each unit of USARE OpCo that was owned by Inflection Point, Merger Sub or USARE OpCo (in treasury or otherwise) immediately prior to the Effective Time (each an “ Excluded Unit ”) was cancelled and ceased to exist and no consideration was delivered in exchange therefore;

each incentive unit

(the “ USARE Incentive Units ”) that was issued and outstanding immediately prior to the Effective Time (other than

Excluded Units), by virtue of the occurrence of the Merger, (x) to the extent the holder of such USARE Incentive Unit was

continuously employed by or providing services to USARE OpCo from the Signing Date through the Effective Time, was automatically

deemed to be fully vested, (y) regardless of such employment or service status, was automatically deemed exchanged or converted (on

a cashless basis) into a fraction of one Class A unit of USARE OpCo (the “ USARE Class A Units ”) in accordance

with the terms of such USARE Incentive Unit, the Pre-Closing USARE OpCo OA and the Second Amended and Restated USA Rare Earth, LLC

Incentive Plan and each USARE Class A Unit issued or issuable upon such deemed exchange or conversion was treated as being issued

and outstanding immediately prior to the Effective Time;

each warrant to purchase units of USARE OpCo (excluding the USARE Class A Preferred Investor Warrants (as defined below)) (the “ USARE Warrants ”) that was outstanding and unexercised immediately prior to the Effective Time was, by virtue of the occurrence of the Merger, automatically exercised or deemed exercised on a cashless basis in full in accordance with its terms immediately prior to the Effective Time, and each USARE Class A Unit or USARE Class B Unit issued or issuable upon such exercise was treated as being issued and outstanding immediately prior to the Effective Time;

each USARE Class A Unit that was issued and outstanding immediately prior to the Effective Time (including all USARE Class A Units outstanding or deemed outstanding (a) upon the deemed exchange or conversion of the USARE Incentive Units and (b) upon the deemed exercise of the USARE Warrants, but excluding the Excluded Units) was cancelled and converted into the right to receive a number of shares of Common Stock equal to the Exchange Ratio (as defined below) (the “ Per Unit Base Consideration ”) and the right to receive, subject to the vesting conditions described below, a number of shares of Common Stock equal to the Earn-out Exchange Ratio (as defined below) (the “ Per Unit Earn-out Consideration ”);

each USARE Class B Unit that was issued and outstanding immediately prior to the Effective Time (including all USARE Class B Units outstanding or deemed outstanding upon the deemed exercise of the USARE Warrants, but excluding the Excluded Units) was cancelled and converted into the right to receive the Per Unit Base Consideration and the Per Unit Earn-out Consideration;

each Class A-1 convertible preferred unit of USARE OpCo (the “ USARE Class A-1 Convertible Preferred Units ”) and each Class A-2 convertible preferred unit of USARE OpCo (the “ USARE Class A-2 Convertible Preferred Units ,” and together with the USARE Class A-1 Convertible Preferred Units, the “ USARE Class A Convertible Preferred Units ”) that was issued and outstanding immediately prior to the Effective Time (other than Excluded Units) was cancelled and converted into the right to receive one share of Series A Preferred Stock (as defined below);

each warrant to purchase USARE Class A Units at an initial exercise price of $12.00 per USARE Class A Unit, subject to adjustment, and initially issued to a holder of USARE Class A Convertible Preferred Units (each such warrant, a “ USARE Class A Preferred Investor Warrant ”) was cancelled and converted into the right to receive a Series A Preferred Investor Warrant (as defined below) exercisable for a number of shares of Common Stock equal to the aggregate number of USARE Class A Units that would be issued upon full exercise of such USARE Class A Preferred Investor Warrant

Pursuant to the Business Combination Agreement,

the aggregate consideration paid in, or in connection with, the Merger in respect of the outstanding equity securities of USARE OpCo (excluding

the USARE Class A Convertible Preferred Units and the USARE Class A Preferred Investor Warrants) was 72,747,711 shares of Common Stock

(the “ Aggregate Base Consideration ”).

The Aggregate Base Consideration was calculated as (i) the number of shares of

Common Stock equal to the quotient of (a) $800,000,000 divided by (b) the redemption price of $10.99687276.

The “ Exchange Ratio ”

was equal to 0.2043578.

The Exchange Ratio was calculated as the Aggregate Base Consideration divided by the sum (without duplication)

of the aggregate number of (i) USARE Class A Units that were issued and outstanding immediately prior to the Effective Time, (ii) USARE

Class B Units that were issued and outstanding immediately prior to the Effective Time (including all USARE Class B Units issued upon conversion

of all outstanding USARE Class C Convertible Preferred Units and USARE Class C-1 Convertible Preferred Units), (iii) all USARE Class A

Units and USARE Class B Units issuable upon full exercise of all issued and outstanding USARE Warrants (calculated using the treasury

method of accounting on a cashless exercise basis), and (iv) all USARE Class A Units and USARE Class B Units issuable upon full exercise,

exchange or conversion of all issued and outstanding USARE Incentive Units (calculated using the treasury method of accounting on a cashless

exercise basis) (such sum, the “ USARE Fully Diluted Capital ”).

At the Effective Time, the USARE Fully Diluted Capital

was 355,983,292 units, consisting of (i) 207,585,648 Class A common units, (ii) 20,778,672 Class B common units, (iii) 22,274,921 common

units deemed issued upon full exercise, exchange or conversion of all issued and outstanding USARE Incentive Units (calculated using the

treasury method of accounting on a cashless exercise basis), (iv) 96,049,828 Class B common units deemed issued upon conversion of all

outstanding USARE Class C Convertible Preferred Units and USARE Class C-1 Convertible Preferred Units, (v) 7,440,828 Class B common units

deemed issued upon full exercise of all issued and outstanding Class B common warrants (calculated using the treasury method of accounting

on a cashless exercise basis), and (vi) 1,853,395 Class B common units deemed issued upon full exercise of all issued and outstanding

Class C common warrants and Class C-1 common warrants (calculated using the treasury method of accounting on a cashless exercise basis).

The “ Earn-out Exchange

Ratio ” was 0.028091206.

The Earn-out Exchange Ratio was calculated as 10,000,000 shares of Common Stock (the

“ Aggregate Earn-out Consideration ”) divided by the USARE Fully Diluted Capital.

50% of the Aggregate Earn-out

Consideration will vest and be issued if, during the five year period beginning on the first anniversary of the Closing Date, the

closing sale price of one share of Common Stock as reported on the national securities exchange on which such shares are then listed

is greater than or equal to $15.00 for a period of at least twenty out of thirty consecutive days on which shares of Common Stock

are actually traded on the principal securities exchange or securities market on which shares of Common Stock are then traded (each

a “Trading Day”).

The remaining 50% of the Aggregate Earn-out Consideration shall vest and be issued if, during the

period beginning on the first anniversary of the Closing Date and ending on the sixth anniversary of the Closing Date, the closing

sale price of one share of Common Stock as reported on the national securities exchange on which such shares are then listed is

greater than or equal to $20.00 for a period of at least twenty out of thirty consecutive Trading Days.

The Aggregate Earn-out

Consideration may also vest upon a transaction or series of transactions the result of which is (a) the acquisition by any person or

“group” (as defined in the Exchange Act of 1934, as amended (the “ Exchange Act ”)) of persons of

direct or indirect beneficial ownership of securities representing 50% or more of the combined voting power of the then outstanding

securities of New USARE, (b) a merger, consolidation, reorganization or other business combination, however effected, resulting in

any person or “group” (as defined in the Exchange Act) acquiring at least 50% of the combined voting power of the then

outstanding securities of New USARE or the surviving person outstanding immediately after such combination;

or (c) a sale of all or

substantially all of the assets of New USARE (“ Change of Control ”), pursuant to which New USARE or its

shareholders have the right to receive consideration if the implied value per share of Common Stock is equal to or above such price

targets, with the amount of such consideration dependent upon the implied per share value reaching the thresholds discussed above.

Should the implied value per share of Common Stock pursuant to a Change of Control be less than $15.00, then the vesting conditions

discussed above shall no longer apply and no further shares of Common Stock will be issued as Aggregate Earn-out Consideration.

In connection with the Closing:

USARE OpCo and New USARE entered into the A&R Operating Agreement, to, among other things, admit New USARE as the manager of USARE OpCo;

Inflection Point filed with the Secretary of State of the State of Delaware a Certificate of Designations of Preferences, Rights and Limitations of 12% Series A Cumulative Convertible Preferred Stock Series A Preferred Stock (the “ Series A Preferred Stock Certificate of Designation ”) which sets forth the rights, preferences and privileges of the Series A Preferred Stock (as defined below).

Series A Preferred Stock Investment

In connection with the transactions contemplated

by the Business Combination Agreement, on the Signing Date, Inflection Point, USARE OpCo and Inflection Point Fund I, LP (“ Inflection

Point Fund ”), an accredited investor that is an affiliate of Inflection Point and Inflection Point Holdings II LLC (the “ Sponsor ”)

entered into a Securities Purchase Agreement (the “ Series A SPA ”).

Pursuant to the Series A SPA, Inflection Point Fund

agreed, among other things, to purchase, at Closing, shares of New USARE’s 12% Series A Cumulative Convertible Preferred Stock,

par value $0.0001 per share, having the rights, preferences and privileges set forth in the Series A Preferred Stock Certificate of Designation

(such stock the “ Series A Preferred Stock ”) and a warrant to purchase a number of shares of Common Stock equal to the

amount of shares into which such shares of Common Stock underlying the Series A Preferred Stock are initially convertible (a “ Series

A Preferred Investor Warrant ”), for an aggregate purchase price of $9,117,648 (the “ Series A Preferred Stock Investment ”).

Each share of Series A Preferred Stock has a stated value of $12.00 (the “ Stated Value ”).

Subsequently, on February

3, 2025, Inflection Point Fund pre-funded the Series A Preferred Stock Investment by purchasing an aggregate of 833,333 additional USARE

Class A-2 Convertible Preferred Units and a USARE Class A Preferred Investor Warrant exercisable for an aggregate of 833,333 USARE Class

A Units for an aggregate purchase price of approximately $8.5 million as part of an additional investment into USARE Class A-2 Convertible

Preferred Units.

Pursuant to a termination agreement, dated as of January 31, 2025, by and among Inflection Point, USARE and Inflection

Point Fund (the “ Series A SPA Termination Agreement ”), upon the pre-funding of the Series A Preferred Stock Investment,

the Series A SPA was terminated.

In addition, pursuant to a Securities

Purchase Agreement, dated as of August 21, 2024, as amended on January 22, 2025, by and among Inflection Point, Michael Blitzer (the

Company’s Chairman and then-Chief Executive Officer) and USARE OpCo, Inflection Point agreed to issue at Closing, a number of

shares of Series A Preferred Stock equal to the number of Blitzer Conversion Preferred Shares (as defined in the Proxy

Statement/Prospectus) of Series A Preferred Stock to Mr.

Blitzer exchange for his forgiveness of 50% of the then-outstanding balance

of the convertible promissory note issued to him by the Company on August 13, 2024 (the “ Convertible Promissory

This Securities Purchase was Agreement was in substantially the form of the Series A SPA, subject to appropriate

changes to reflect that (i) the consideration to be paid by Mr.

Blitzer was his forgiveness of 50% of the then-outstanding balance

of the Convertible Promissory Note and (ii) Mr.

Blitzer did not receive a Series A Preferred Investor Warrant for such

On March 11, 2025, Inflection Point and USARE

OpCo entered into additional securities purchase agreements with Inflection Point Fund and another accredited investor,

Alto Opportunity Master Fund, SPC – Segregated Master Portfolio B (together with Inflection Point Fund, the “ Additional

Series A Cumulative Convertible Preferred Stock Investors ”), pursuant to which the Additional Series A Cumulative Convertible

Preferred Stock Investors agreed to purchase an aggregate of (i) 784,314 shares of Series A Preferred Stock and (ii) Series A Preferred

Investor Warrants exercisable for an aggregate of 784,314 shares of Common Stock, subject to adjustment, for an aggregate purchase price

of $8.0 million.

This transaction closed as part of the Business Combination on March 13, 2025.

Sponsor Support Agreement

Concurrently with the execution of the Business

Combination Agreement, the Sponsor, Inflection Point and USARE OpCo entered into a sponsor support agreement (the “ Sponsor Support

Agreement ”), pursuant to which, among other things, the Sponsor agreed to (i) vote to adopt and approve the Business Combination

Agreement and the other documents contemplated therein and the transactions contemplated therein and (ii) forfeit 60,000 New USARE Warrants

for every $1,000,000 by which (x) the gross proceeds at the Closing from the Trust Account (after giving effect to the Redemption plus

(y) the gross proceeds from the Class A Preferred Unit Investment (as defined in the UASRE Business Combination Agreement), the Series

A Preferred Stock Investment and any PIPE Investment (as defined in the Business Combination Agreement) are below $50,000,000, up to a

maximum of 1,500,000 New USARE Warrants forfeited.

On January 31, 2025, the Sponsor, Inflection Point and USARE OpCo entered into an amendment

to the Sponsor Support Agreement to eliminate the potential forfeiture of New USARE Warrants by the Sponsor.

Member Support Agreement

Concurrently with the execution of the Business

Combination Agreement, Inflection Point entered into a member support agreement (the “ Member Support Agreement ”) with

USARE OpCo and certain members of USARE OpCo (the “ Supporting USARE Members ”) pursuant to which each such Supporting

USARE Members agreed to, among other things, support and vote in favor of the Business Combination Agreement, and the transactions contemplated

therein (including the Merger).

Fee Reduction Agreement

Pursuant to that certain underwriting agreement

between Inflection Point and Cantor Fitzgerald & Co., as representative of the several underwriters (“ CF&CO ”),

dated May 24, 2023 (as it may be amended from time to time, the “ Underwriting Agreement ”), Inflection Point previously

agreed to pay to CF&CO an aggregate cash amount of $13,100,000 as “deferred underwriting commissions” (the “ Original

Deferred Fee ”) upon the consummation of an initial business combination, as contemplated by the final prospectus of Inflection

Point, filed with the SEC (File No.

333- 271128), and dated May 24, 2024.

Solely in connection with the Business Combination, Inflection

Point, CF&CO and USARE OpCo entered into that certain fee reduction agreement, dated as of August 20, 2024 (the “ Fee Reduction

Agreement ”), pursuant to which, upon consummation of the Business Combination, CF&CO accepted, in lieu of such Original

Deferred Fee:

(i) either (at Inflection Point’s option) (A) a cash fee of $4,000,000 or (B) (1) a cash fee of $2,000,000 plus (2)

400,000 shares of Common Stock, plus (ii) 2.0% of the amount by which the Total Capital Raised (as defined in the Fee Reduction Agreement)

exceeded $50,000,000.

Additionally, solely if Inflection Point elected to pay the all-cash fee discussed above, CF&CO would forfeit

1,650,000 private placement warrants.

In connection with the Closing of the Business Combination, Inflection Point elected to pay, and

paid the all-cash fee discussed above, and CF&CO forfeited 1,650,000 warrants.

Amendment No.

1 to Business Combination Agreement

On November 12, 2024, Inflection Point and USARE

OpCo entered into that certain Amendment No.

1 to the Business Combination Agreement (the “ BCA Amendment ”).

(i) amends Section 2.02(b) and Section 2.03(b)(iii)

to provide that in connection with the Business Combination, each USARE Class A Preferred Investor Warrant shall be cancelled and converted

into the right to receive a Domesticated Purchaser Series A Preferred Investor Warrant (as defined in the Business Combination Agreement)

exercisable for a number of shares of Common Stock of New USARE equal to the aggregate number of Class A units of USARE OpCo that would

be issued upon full exercise of such USARE Class A Preferred Investor Warrant;

(ii) amends Article X to define the term “Expiration

Time” with respect to the Member Support Agreement (as defined in the Business Combination Agreement) to mean the earlier of the

Closing or the termination of the Business Combination Agreement.

Amendment No.

2 to the Business Combination

On January 30, 2025, Inflection Point and USARE

OpCo entered into that certain Amendment No.

2 to the Business Combination Agreement to, among other matters, set out the directors of

the New USARE, address certain other governance matters and modify certain document delivery conditions.

Forward Purchase Agreements

On March 11, 2025, Inflection Point and USARE

OpCo entered into (i) a forward purchase agreement with Harraden Circle Investors LP, Harraden Circle Special Opportunities LP and Harraden

Circle Strategic Investments LP (collectively, “ Harraden ,” and such agreement, the “ Harraden Forward Purchase

Agreement ”), (ii) a forward purchase agreement with Newtyn TE Partners, LP and Newtyn Partners, LP (collectively, “ Newtyn ,”

and such agreement, the “ Newtyn Forward Purchase Agreement ”), and (iii) a forward purchase agreement with L1 Capital

Global Opportunities Master Fund (“ L1 ,” and such agreement, the “ L1 Forward Purchase Agreement ,”

and together with the Harraden Forward Purchase Agreement and the Newtyn Forward Purchase Agreement, the “ Forward Purchase Agreements ”),

each for over-the-counter Equity Prepaid Forward Transactions (each, a “ Forward Purchase Transaction ” and, together,

the “ Forward Purchase Transactions ”).

Each Forward Purchase Agreement amended, restated and superseded in its entirety

a separate forward purchase agreements with each of the sellers, dated March 10, 2025, which had identical terms to those described herein,

except that the Reset Price (as defined in the Forward Purchase Agreements) was not subject to the floor price described below.

of the Forward Purchase Agreements, each of Harraden, Newtyn and L1 are referred to, individually, as a “ Seller ” and,

collectively, as the “ Sellers ”).

For purposes of the Forward Purchase Agreements, Inflection Point and USARE OpCo are

referred to as the “Counterparty” prior to and after the Business Combination, respectively.

Pursuant to the terms of the Forward Purchase

Agreements, (i) Harraden agreed to hold up to 892,825 public shares, (ii) Newtyn agreed to hold up to 700,000 public shares, and (iii)

L1 agreed to hold up to 297,669 public shares in connection with the Closing.

For purposes of the Forward Purchase Agreements, the public

shares held by each Seller are referred to as such Seller’s “ FPA Shares .

” Each Seller, acting separately

and solely for its own account, was permitted, if necessary, to (i) reverse its previous election to redeem its public shares in connection

with the Business Combination pursuant to the redemption rights set forth in Inflection Point’s amended and restated memorandum

and articles of association or (ii) purchase public shares through a broker in the open market from holders of public shares (other than

Inflection Point), including from holders who previously elected to redeem their public shares in connection with the Business Combination

pursuant to the redemption rights set forth in Inflection Point’s amended and restated memorandum and articles of association.

aggregate number of shares subject to each Forward Purchase Agreement (the “ Number of Shares ”) was the aggregate number

of FPA Shares as notified to Counterparty by the applicable Seller, but in no event more than such Seller’s number of FPA Shares

set forth above.

Each Seller notified the Counterparty that it would subject the maximum Number of Shares to their respective Forward

Purchase Agreements.

The Number of Shares was subject to reduction following the full or partial optional early termination of the Forward

Purchase Agreements as described below.

Each Forward Purchase Agreement provides that

no later than the earlier of (a) one business day after the Closing and (b) the date any assets from Inflection Point’s trust account

are disbursed in connection with the Business Combination, the Seller under such Forward Purchase Agreement was paid directly, out of

the funds held in Inflection Point’s trust account, an amount (the “ Prepayment Amount ”) equal to the product

of (i) the Number of Shares and (ii) an amount (the “ Initial Price ”) equal to the redemption price per share payable

to investors who elected to redeem in connection with the Business Combination.

From time to time on any day the Nasdaq is open

for trading following the date of the Closing (any such date, an “ OET Date ”), each Seller may, in its absolute discretion,

elect to sell any and all FPA Shares it owns.

Any such sale shall automatically terminate such Seller’s Forward Purchaser Transaction

in whole or in part with respect to any such number of sold shares.

Seller shall, on any day of such OET Date, give written notice to

the Counterparty of such termination and specify the number of sold FPA Shares (such quantity, the “ Terminated Shares ”).

As of each OET Date, the Counterparty shall be entitled from Seller, and the Seller shall pay to the Counterparty, an amount equal to

the product of (a) the then in effect Reset Price (as defined in the Forward Purchase Agreement and subject to a floor of $4.00) and (b)

the number of Terminated Shares.

Each Forward Purchase Agreement’s maturity

date is the date 90 days after the Closing (the “ Maturity Date ”).

Upon the occurrence of the Maturity Date, in exchange

for delivery of the then Number of Shares under each Forward Purchase Transaction, the Counterparty shall pay each Seller an amount (the

“ Maturity Consideration ”) equal to (i) the number of FPA Shares less the number of Terminated Shares multiplied by

(ii) the Initial Price.

The Seller will retain the Maturity Consideration from the Prepayment Amount paid by the Counterparty to the Seller.

Each of the Forward Purchase Agreements could

be terminated by any of the parties thereto if any of the following events occur:

(a) it being, or, as a consequence of a change in law,

regulation or interpretation, it becomes or will become, unlawful for the Seller to perform any of its obligations contemplated by a Forward

Purchase Agreement, or (b) upon the occurrence of any Material Adverse Change (as defined in the Forward Purchase Agreements) of the Counterparty.

Upon any termination that occurs following the Closing due to clauses (a) or (b) above, Counterparty shall be obligated to promptly accept

for redemption all of Seller’s shares in exchange for the Initial Price.

Closing of the Business Combination

The Business Combination closed on March 13, 2025.

For additional information regarding the USARE Business Combination see the Company’s Current Report on Form 8-K (File No.

filed by New USARE on March 19, 2025, and the Proxy Statement/Prospectus.

Liquidity, Capital Resources and Going Concern

Until the consummation of the IPO, our only source

of liquidity was an initial purchase of shares of Class B ordinary shares, par value $0.0001 per share, by the Sponsor and loans from

On May 30, 2023, we consummated the IPO of 25,000,000

Units, which included 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.

Simultaneously with the closing of the IPO, we consummated the sale of 7,650,000

private placement warrants to the Sponsor and CF&CO, the representative of the underwriters of the IPO, at a price of $1.00 per private

placement warrant, generating gross proceeds of $7,650,000.

Following the IPO and the private placements,

a total of $251,250,000 ($10.05 per Unit) was placed in the Trust Account.

We incurred transaction costs of $18,361,877 consisting of

$4,400,000 of cash underwriting discount, $13,100,000 of deferred underwriting fees, and $861,877 of other offering costs.

For the year ended December 31, 2024, cash used

in operating activities was $1,398,564.

Net income of $7,899,035 was affected by dividend income earned on marketable securities held

in the Trust Account of $12,019,932, change in fair value of Forward Purchase Agreement of $435,568 and loss on issuance of Forward Purchase

Agreements of $484,843.

Changes in operating assets and liabilities used $2,673,058 of cash for operating activities.

As of December 31, 2024, we had marketable securities

held in the Trust Account of $24,075,435 consisting of U.S.

government treasury obligations with maturity of 185 days or less or interests

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

treasury obligations.

We were permitted withdraw interest from the Trust Account to pay taxes, if any.

We intended to use substantially

all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less deferred underwriting

commissions and taxes payable), to complete our initial business combination.

As of December 31, 2024, we had cash of $2,101.

Prior to the Business Combination, our intent was to use the funds held outside the Trust Account primarily to identify and evaluate

target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar

locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective

target businesses, structure, negotiate and complete a business combination, to pay for directors and officers liability insurance premiums

and to pay an aggregate of $27,083 per month (the “ Monthly Fee ”) to The Venture Collective LLC (“ TVC ”),

an affiliate of one of our directors, Nicholas Shekerdemian, for the services of Peter Ondishin, Chief Financial Officer, and Kevin Shannon,

Chief of Staff.

On March 28, 2024, we entered into the Amendment to the Services and Indemnification Agreement, pursuant to which, the

Monthly Fee paid to TVC, effective as of January 1, 2024, was reduced from $27,083 to (i) $17,708 for the period from January 1, 2024

to January 31, 2024 and (ii) $24,091 for the period starting February 1, 2024.

On August 9, 2024, the Company entered into the Amendment

to the Services and Indemnification Agreement pursuant to which, the Monthly Fee paid to TVC, effective as of April 1, 2024, was reduced

from $24,091 to $18,882 for the period starting April 1, 2024.

The Monthly Fee was further reduced from $18,882 to $14,746 for the period

starting September 1, 2024.

On November 8, 2024, the Company entered into the Third Amendment to the Services and Indemnification Agreement

pursuant to which, the Monthly Fee paid to TVC, effective as of November 1, 2024, was reduced from $14,746 to $7,373 for the period starting

October 1, 2024.

Upon completion of the Business Combination, the Company ceased paying the Monthly Fee.

ended December 31, 2024 and for the period from March 6, 2023 (inception) through December 31, 2023, the Company incurred $204,541 and

$196,806 for these services, respectively.

In order to finance working capital or to finance

transaction costs in connection with an intended initial business combination, the Sponsor or an affiliate of the Sponsor or certain of

the Company’s officers and directors was permitted, but not obligated to, loan the Company funds as may be required (the “ Working

Capital Loans ”).

In the event that the initial Business Combination did not close, the Company was permitted to use a portion

of the working capital held outside the Trust Account to repay the Working Capital Loans but no proceeds from the Trust Account would

have been used to repay the Working Capital Loans.

Up to $1,500,000 of the Working Capital Loans was convertible into private placement

warrants of the post Business Combination entity at a price of $1.00 per private placement warrant at the option of the lender.

Such warrants

would have been identical to the private placement warrants.

On August 13, 2024, to document existing and future

Working Capital Loans, the Company issued the Convertible Promissory Note to Michael Blitzer, the Company’s Chairman and then-Chief Executive Officer,

pursuant to which the Company was permitted to borrow up to $2,500,000 from Mr.

Blitzer, related to ongoing expenses reasonably related to the business

of the Company and the consummation of an initial business combination.

All unpaid principal under the Convertible Promissory

Note was due and payable in full on the earlier of (i) August 21, 2025, or such later date by which the Company must consummate a Business

Combination pursuant to its governing documents (as may be amended by a shareholder vote) and (ii) the effective date of an initial business combination,

unless accelerated upon the occurrence of an event of default as set forth in the Convertible Promissory Note.

Blitzer had the option,

at any time on or prior to the repayment of amounts owed under the Convertible Promissory Note, to convert up to $1,500,000 outstanding

under the Convertible Promissory Note into warrants to purchase Class A ordinary shares at a conversion price of $1.00 per warrant, with

each warrant entitling the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to the same adjustments

applicable to the private placement warrants.

As of December 31, 2024, we had an outstanding borrowing of $1,200,000 under the Convertible

Promissory Note.

Pursuant to a Securities Purchase Agreement, dated

as of August 21, 2024, as amended on January 22, 2025, by and among Inflection Point, Michael Blitzer and USARE OpCo, Inflection Point

agreed to issue at Closing, a number of shares of Series A Preferred Stock equal to the number of Blitzer Conversion Preferred Shares

(as defined in below) to Mr.

Blitzer exchange for his forgiveness of 50% of the then-outstanding balance of the

Convertible Promissory Note.

In addition, pursuant to a Securities Purchase Agreement, dated as of August 21, 2024, by and between USARE

Blitzer, USARE OpCo issued 122,549 USARE Class A-2 Convertible Preferred Units and a warrant to purchase up to 31,250 USARE

Class A Units in exchange for Mr.

Blitzer’s promise to forgive, at the closing of the Proposed Business Combination, the other 50%

of the then-outstanding balance of the Convertible Promissory Note.

Such amounts were forgiven upon the Closing for the consideration

described above.

As of December 31, 2024, we believed that amounts

not held in trust were not sufficient to pay the costs and expenses that are payable prior to the

closing of our initial business combination.

Our costs were primarily expected to be incurred in connection with identifying a target

business, undertaking in-depth due diligence and negotiating a business combination.

As of December 31, 2024, our officers, directors

and our Sponsor were permitted, but not obligated to, loan us funds as may be required.

Accordingly, we may not be able to obtain additional

If we are unable to raise additional capital, we may be required to take additional measures to conserve liquidity, which could

include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead

We cannot provide any assurance that new financing will be available to us on commercially acceptable terms, if at all.

conditions raise substantial doubt about our ability to continue as a going concern for a reasonable period of time which is considered

to be one year from the date of the issuance of the financial statements, or, if earlier, the date that we would have been required to

cease all operations, except for the purpose of winding up, if a business combination was not consummated.

The financial statements do

not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary

should we be unable to continue as a going concern.

On March 13, 2025, Inflection Point consummated

the Business Combination with USARE OpCo and substantially all of the assets and the business of the combined company are held and

operated by New USARE and its subsidiaries.

New USARE has generated no revenues since inception, continues to incur losses from operations,

and has an accumulated deficit.

Following the Closing, New USARE’s ability to continue as a going concern is dependent upon its

ability to raise capital, to implement its business plan, generate sufficient revenues, and to control operating expenses.

28, 2025, New USARE had cash of approximately $23.4 million.

Our operating revenues and gross margins have been derived solely from our ownership of Less Common Metals subsidiary for the period of November 18, 2025 through December 31, 2025, following the acquisition of IORM.

We had no operating revenues or gross margins prior to November 18, 2025.

In addition, we are dependent on equity or other external financings to fund our pursuit and development of our consolidated business plans (including magnet production at our Stillwater Facility), to fund our mineral exploration and evaluation operations, our evaluation and intended development of the Round Top Project (collectively, our “R&D” costs), selling, general and administrative (“SG&A”) costs, interest expense and other costs.

As a result, we expect to incur operating losses until such time as either (i) the Stillwater Facility is fully completed and operational to the extent that it generates net profits, or (ii) an economic mineral resource is identified, developed and put into profitable commercial production at the Round Top Project.

USA Rare Earth, Inc.

| 2025 Annual Report (Form 10-K) | 58

Revenue, Gross Profit and Gross Margin

The following table sets forth our revenue, cost of sales, gross profit and gross margin for the period indicated.

Year Ended December 31, 2025

(In thousands, except for percentage)

Revenue $ 1,643

Cost of revenue 1,448

Gross profit $ 195

Gross margin 11.9 %

Comparison of the year ended December 31, 2025 to the year ended December 31, 2024

We acquired IORM, the parent of Less Common Metals on November 18, 2025, and therefore our revenue, cost of revenue, gross profit and margin for year ended December 31, 2025 is confined to the period between November 18, 2025 through December 31, 2025 from our Less Common Metals subsidiary.

Other than the activities reported for Less Common Metals, we had no revenues or gross profit for years ended December 31, 2025 and 2024.

Concentration of Revenue

Revenue Attributable to Primary Geographical Markets

Year Ended December 31, 2025

(In thousands)

United States $ 99

Total revenue $ 1,643

Revenue Attributable to Domestic and International Sales

Revenue attributable to domestic and international sales as a percentage of total revenue are presented in the following table.

See Note 13, “Concentrations – Disaggregation of Revenue,” of the Notes for further discussion regarding our concentration of revenue by geographic location.

Year Ended December 31, 2025

United States 6 %

International 94 %

Total revenue 100 %

USA Rare Earth, Inc.

| 2025 Annual Report (Form 10-K) | 59

Customers Accounting for 10% or More of Revenues

The following table presents the customers that account for 10% or more of our revenue.

Although certain customers might account for greater than 10% of our revenues at any one point in time, the concentration of revenue between a limited number of large customers shifts regularly, depending on timing of shipments and orders.

The percentages by customer reflect specific relationships or contracts that would concentrate our revenue for the periods presented and do not indicate a trend specific to any one customer.

See Note 13, “Concentrations – Major Customers,” of the Notes for further discussion regarding customer concentration.

Year Ended December 31, 2025

Customer 1 73 %

Customer 2 18 %

The following table sets forth our results of operations and the amount of change between the periods indicated.

The period-to-period comparison of financial results is not necessarily indicative of future results.

Year Ended December 31, Change

(In thousands, except for percentages)

Operating expenses:

Selling, general and administrative $ 43,135 $ 9,244 $ 33,891 370.0 %

Research and development 15,885 6,341 9,544 150.0 %

Amortization of intangible assets 678 — 678 NM

Total operating expenses $ 59,698 $ 15,585 $ 44,113 NM

Other expense, net:

Interest and dividend income $ 5,446 $ 292 $ 5,154 NM

Loss on fair market value of financial instruments, net (244,488) (379) (244,109) NM

Impairment of equity investment — (405) 405 (100.0) %

Interest expense and other income (loss), net (139) (315) 176 (60.0) %

Total other expense, net $ (239,181) $ (807) $ (238,374) NM

Benefit from taxes:

Benefit from taxes $ (160) $ — $ (160) NM

NM Not meaningful.

Selling, general and administrative.

The increase in SG&A expenses of $33.9 million was primarily due to an increase in legal services and consulting costs of $16.0 million, primarily due to merger and acquisition-related costs, and financing cost, stock-based compensation of $6.8 million, which includes modification of stock-based compensation of $1.6 million related to the termination of our former CEO, payroll and employee-related costs of $5.2 million related to an increase in headcount as we build our infrastructure, including recruiting fees of $1.7 million related to hiring of key personnel to handle certain areas of our operations, marketing, litigation settlement of $2.3 million, and other costs of $3.7 million, including travel costs of $0.9 million and marketing costs of $0.8 million.

Research and development.

The increase in R&D expenses of $9.5 million was primarily due to an increase in employee-related costs of $4.4 million due to an increase in headcount, employee severance costs and stock-based compensation costs, development costs of $2.2 million, legal costs of $1.5 million, facility costs of $0.5 million, and other costs of $0.9 million.

Amortization of Other Intangible Assets.

The increase of $0.7 million was due to the intangible assets acquired through our acquisition of Less Common Metals.

USA Rare Earth, Inc.

| 2025 Annual Report (Form 10-K) | 60

Other expense, net:.

• Interest and dividend income .

The increase of $5.2 million in interest and dividend income was primarily due to higher balances in our money market funds.

• Loss on fair market value of financial instruments, net .

The change in fair market value of financial instruments of $(244.1) million was primarily due to the day one loss of the Common Stock warrant, the increase in fair value of the Common Stock warrant at exercise, increase in fair value of the Series A warrant exercised, the increase in fair value of the outstanding Series A warrants, and the increase in fair value of the Earnout liabilities at conversion, resulting in a net loss on the fair market value of financial instruments.

See Note 3, “Fair Value Measurements,” of the Notes for additional information.

• Impairment of equity investment .

We recorded an impairment of $0.4 million in our equity investment in a minerals company in the fourth quarter of 2024.

No impairments were recorded in 2025.

Benefit from taxes .

The change in the benefit from taxes of $0.2 million is primarily driven by the amortization of the identifiable intangible assets accounted for in purchase accounting and net operating loss our operations in the United Kingdom.

Our effective tax rate was zero percent for each of the years ended December 31, 2025 and 2024.

Our effective tax rate is affected by changes in valuation allowances, recurring permanent differences and discrete items that may occur in any given year, but are not consistent from year to year.

For further discussion of our valuation allowance, see Note 10, “Income Taxes – Changes in Valuation Allowances,” of the Notes to Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K.

Liquidity and Capital Resources

We are an early-stage company with a limited operating history.

Further, we expect to sustain substantial operating expenses without generating sufficient revenues to cover those expenditures for the foreseeable future.

However, we believe that our existing cash and cash equivalents should be sufficient to fund our near-term operational and capital expenditure requirements.

On the other hand, our long-term capital needs, particularly those associated with the full development of the Round Top Project and the full build-out of the Stillwater Facility, are expected to exceed our current resources, and we will need to raise additional capital.

In addition, to meet certain milestones to obtain funding awards and debt under the Expected U.S.

and ii) establish a $250 million revolving credit facility by December 31, 2026.

Our ability to raise capital in the future on acceptable terms, whether through equity, debt, or government funding, is not assured and will depend on market conditions, our operational progress, and our ability to satisfy applicable milestones and conditions.

Sources and Uses of Cash

Our primary sources of liquidity have historically consisted of debt and equity financing.

For the year ended December 31, 2025, we had a net loss of $298.5 million, which included a non-cash fair value loss on financial instruments of $244.5 million, and net cash used in operating activities was $49.0 million.

As of December 31, 2025, we had $359.9 million in cash and cash equivalents.

On January 28, 2026, we completed a private placement of 69.77 million shares of our common stock for gross proceeds of $1.5 billion, which substantially strengthened our liquidity position and is expected to fund our near-term operational and capital expenditure requirements, including the continued development of the Stillwater Facility and the advancement of the Round Top Project.

USA Rare Earth, Inc.

| 2025 Annual Report (Form 10-K) | 61

We have not yet generated revenues from neo magnet manufacturing or critical mineral production, and we expect to continue to use cash in operating activities for the foreseeable future as we invest in commercializing our integrated mine-to-magnet platform.

Our primary near-term uses of cash include:

• Stillwater Facility development and commissioning — completing the installation and qualification of our sintered NdFeB permanent magnet production lines, procuring feedstock, and ramping toward initial commercial production;

• Round Top Project advancement — funding the ongoing Preliminary Feasibility Study, constructing and operating the demonstration facility, and advancing toward a Definitive Feasibility Study and, ultimately, mine construction;

• General corporate and administrative expenses — supporting our growing operations, including personnel, legal, regulatory, and compliance costs.

Over the longer term, we expect that developing the Round Top Project into a producing mine and expanding the Stillwater Facility to its full planned capacity will require substantial additional capital expenditures beyond our current cash on hand.

We have not yet determined the full scope or timing of those expenditures with precision, as they are dependent on the outcomes of our ongoing feasibility studies.

However, we expect total capital requirements to be significant, and our ability to fund them will depend on our ability to access additional financing from debt and equity sources.

Trends in Capital Resources

Expected U.S.

Government Transaction

The Letter of Intent with the U.S.

Department of Commerce covers a total proposed commitment of $1.6 billion.

If consummated on the terms described in the Letter of Intent, this transaction would represent a significant new long-term source of capital to fund the development of our integrated rare earth value chain.

The direct funding awards and senior secured debt are each subject to our achievement of specified business milestones and are expected to be released in phases over time.

Accordingly, the timing and magnitude of any cash inflows from the Expected U.S.

Government Transaction will depend on our ability to satisfy those milestones on the anticipated schedule.

There is no assurance that the Definitive Agreements will be entered into or that any funding will be received.

If we are unable to satisfy the required milestones or if the Definitive Agreements are not executed, we may not receive any or all of the anticipated government funding, and we would need to identify alternative sources of capital to fund our long-term development plans.

Consummation of the Expected U.S.

Government Transaction would also change the mix of our capital resources materially.

The addition of $1.3 billion in long-term senior secured debt would introduce significant debt service obligations and leverage into our capital structure, which we currently do not have.

Additionally, the direct funding awards require us to issue approximately 16.1 million shares of our common stock to the U.S.

government and the senior secured debt requires us to issue warrants representing approximately 17.5 million additional shares at an exercise price of $17.17 per share with a 10-year exercise period, in each case resulting in dilution to our existing stockholders.

Proposed Acquisition of TMRC

On March 4, 2026, we entered into the TMRC Merger Agreement.

The merger consideration consists solely of shares of our common stock such that the transaction will not result in a material cash outlay.

However, we will bear transaction-related costs, and completion of the transaction will result in dilution to our existing stockholders through the issuance of approximately 3.8 million shares of our common stock to TMRC stockholders.

USA Rare Earth, Inc.

| 2025 Annual Report (Form 10-K) | 62

Year Ended December 31,

2025 2024 Change

(In thousands)

Net cash used in operating activities $ (48,985) $ (12,991) $ (35,994)

Net cash used in investing activities (139,566) (3,285) (136,281)

Net cash provided by financing activities 531,715 19,838 511,877

Operating Activities.

The $36.0 million increase in net cash used in operating activities, as compared to the comparable period of the prior year, was primarily due to an increase of $27.5 million net loss adjusted for non-cash items, such as the non-cash loss of $244.2 million related to the day one loss under the valuation of our May 2025 $75.0 million financing with a single institutional investor, which included the issuance of our common stock, common stock warrants and prefunded warrants (the “$75M PIPE”) and the change in fair value of outstanding financial instruments, stock-based compensation of $8.8 million and a non-cash litigation settlement of approximately $1.7 million, and an increase in cash used for vendor payments and prepayment of insurance, partially offset by an increase in accrued liabilities related to financing, acquisition and payroll costs.

Investing Activities.

The $136.3 million increase in cash used in investing activities, as compared to the comparable period of the prior year, was primarily due to additional investments made for plant improvements and equipment purchases as we execute our strategic business plan and continue to build the manufacturing process at our Stillwater Facility.

Financing Activities.

The $511.9 million increase in cash provided by financing activities, as compared to the comparable period of the prior year, primarily due to $303.8 million from proceeds related to the exercise of warrants and $190.1 million in proceeds from the issuance of common stock and warrants related to private investments, including the $75M PIPE.

For additional information, see Note 7, “Mezzanine and Stockholders' Equity” of the Notes.

Off-Balance Sheet Arrangements

We have no obligations, assets or liabilities,

which would be considered off-balance sheet arrangements as of December 31, 2024.

We do not participate in transactions that create relationships

with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established

for the purpose of facilitating off-balance sheet arrangements.

We have not entered into any off-balance sheet financing arrangements,

established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

Contractual obligations

As of December 31, 2024, we did not have any long-term debt, capital lease

obligations, operating lease obligations or long-term liabilities, other than an agreement to pay an aggregate of $27,083 per month to

TVC, for the services of Peter Ondishin, Chief Financial Officer, and Kevin Shannon, Chief of Staff.

We began incurring such fees on May

24, 2023, and no longer incur these fees monthly as of the consummation of the Business Combination.

On March 28, 2024, Inflection Point

entered into the Amendment to the Services and Indemnification Agreement pursuant to which, the Monthly Fee paid to TVC, effective as

of January 1, 2024, was reduced from $27,083 to (i) $17,708 for the period from January 1, 2024 to January 31, 2024 and (ii) $24,091 for

the period starting February 1, 2024.

On August 9, 2024, Inflection Point entered into the Amendment to the Services and Indemnification

Agreement pursuant to which, the Monthly Fee paid to TVC, effective as of April 1, 2024, was reduced from $24,091 to $18,882 for the period

starting April 1, 2024.

The Monthly Fee was further reduced from $18,882 to $14,746 for the period starting September 1, 2024.

8, 2024, Inflection Point entered into the Third Amendment to the Services and Indemnification Agreement pursuant to which, the Monthly

Fee paid to TVC, effective as of November 1, 2024, was reduced from $14,746 to $7,373 for the period starting October 1, 2024.

Upon consummation

of the Business Combination, the Company ceased paying the Monthly Fee.

The underwriters were entitled to a deferred underwriting

commission of 5.0% on the base deal and an additional 7.0% on the Units sold pursuant to the underwriters’ option to purchase additional

Units, or $13,100,000 in the aggregate, of the gross proceeds of the IPO held in the Trust Account upon the completion of Inflection Point’s

initial business combination subject to the terms of the underwriting commission.

Pursuant to the Fee Reduction Agreement, solely

in connection with the Business Combination, upon consummation of the Business Combination, CF&CO accepted, in lieu of such Original

Deferred Fee:

(i) either (at Inflection Point’s option) (A) a cash fee of $4,000,000 or (B) (1) a cash fee of $2,000,000 plus (2)

400,000 shares of Common Stock, plus (ii) 2.0% of the amount by which the Total Capital Raised (as defined in the Fee Reduction Agreement)

exceeded $50,000,000.

Additionally, solely if Inflection Point elected to pay the all-cash fee discussed above, CF&CO agreed to forfeit

1,650,000 private placement warrants.

We elected to pay the all-cash fee discussed above and such payment was made and such private placement

warrants were forfeited in connection with the Closing of the Business Combination.

Critical Accounting Policies

The preparation of financial statements and related

disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates

and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date

of the financial statements, and income and expenses during the periods reported.

Actual results could materially differ from those estimates.

We have identified the following critical accounting policies:

Net Income per Share

Net income per share is computed by dividing net

income by the weighted average number of ordinary shares outstanding during the period, excluding ordinary shares subject to forfeiture.

Weighted average shares were reduced for the effect of an aggregate of 825,000 Class B ordinary shares that were subject to forfeiture

if the over-allotment option was not exercised by the underwriters.

At December 31, 2024 and 2023, Inflection Point did not have any dilutive

securities and other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings

of Inflection Point.

As a result, diluted income per share is the same as basic income per share for the periods presented.

Recent Accounting Standards

In November 2023, the FASB issued ASU 2023-07,

Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

The amendments in this ASU require disclosures, on an annual

and interim basis, of significant segment expenses that are regularly provided to the chief operating officer decision maker (“ CODM ”),

as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss.

The ASU requires that

a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment

profit or loss in assessing segment performance and deciding how to allocate resources.

Public entities will be required to provide all

annual disclosures currently required by Topic 280 in interim periods, and entities with a single reportable segment are required to provide

all the disclosures required by the amendments in this ASU and existing segment disclosures in Topic 280.

This ASU is effective for fiscal

years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption

Management does not believe that any recently

issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on Inflection Point’s financial

Quantitative and Qualitative Disclosures about Market Risk

We are a smaller reporting company as defined

by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.

Other than as described in this Annual Report, we do not have any off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on our financial condition, changes in financial condition, revenues, expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts.

The more significant estimates include goodwill and other intangible assets, and liability valuations.

We have incorporated historical data into the determination of each of these estimates and we have not experienced significant adjustments.

We review these assumptions at least annually with the Audit Committee of the Board of Directors.

Following are the methods and assumptions used in determining our estimates and an indication of the risks inherent in each.

USA Rare Earth, Inc.

| 2025 Annual Report (Form 10-K) | 63

Business Combination

The accounting for business combinations is considered a critical accounting estimate because it requires management to make significant judgments in determining the fair values of assets acquired and liabilities assumed, including identifiable intangible assets and goodwill, in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations .

These estimates involve the use of complex valuation techniques and assumptions that are inherently uncertain, and changes in these assumptions could have a material impact on the Company’s consolidated financial statements.

The purchase price allocation required management to estimate the fair values of acquired tangible and intangible assets and assumed liabilities as of the acquisition date.

Significant assumptions used in these valuations included projected future cash flows, discount rates, and growth rates.

Management believes these assumptions were reasonable based on information available at the time;

however, actual results may differ from these estimates.

Changes in key assumptions could affect the recorded amounts of acquired assets and liabilities and future results of operations through amortization expense, remeasurement of contingent consideration, or impairment charges.

Goodwill arising from business combinations is not amortized but is tested for impairment at least annually or upon the occurrence of triggering events, and adverse changes in market conditions, integration results, or operating performance could increase the likelihood of a future goodwill impairment that could be material to the Company’s financial position and results of operations.

Goodwill and Other Intangible Assets

Goodwill is tested for impairment at least annually, or more frequently if events or changes in circumstances indicate that the carrying value may not be recoverable.

We may first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

If the qualitative assessment indicates that impairment may exist, or if we elect to bypass the qualitative assessment, a quantitative impairment test is performed.

An impairment loss is recognized for the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of goodwill.

Intangible assets with definite useful lives are amortized over their estimated useful lives and are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable.

Recoverability is assessed by comparing the carrying amount of the asset to the undiscounted future cash flows expected to be generated by the asset.

If the carrying amount exceeds the undiscounted cash flows, an impairment loss is recognized for the excess of the carrying amount over the asset’s fair value.

The impairment evaluation for goodwill and indefinite-lived intangible assets requires significant judgment, including the determination of reporting units and the estimation of the fair value of those reporting units or assets.

Estimates of fair value are based on assumptions about future operating performance, including projected revenues, operating margins, long-term growth rates, and discount rates.

Changes in these assumptions, market conditions, or our operating performance could result in future impairment charges.

See Note 4, “Other Financial Information – Goodwill and Other Intangible Assets” of the Notes for more details concerning our goodwill and other intangible assets, as well as the result of its impairment testing.

Warrant and Earnout Shares Liability Valuations

The valuation of certain warrant liabilities, including the Series A Warrant, and Earnout Share liabilities requires the use of significant estimates and assumptions.

We engage third-party valuation specialists to assist in determining the fair value of these instruments.

The fair values of the warrant and Earnout Share liabilities are estimated using stochastic valuation techniques, including the Black-Scholes option pricing model and Monte Carlo simulation models.

These models incorporate significant assumptions, including expected stock price volatility and other relevant inputs.

Because the valuation models incorporate unobservable inputs and assumptions regarding future events, the resulting fair value measurements are subject to variability and may differ materially if underlying assumptions change.

Changes in these assumptions may result in significant changes in the fair value of these liabilities in future periods.

USA Rare Earth, Inc.

| 2025 Annual Report (Form 10-K) | 64

See Note 1, “Organization – Summary of Significant Accounting Policies” of the Notes for a description of our critical and other significant accounting policies.

Recently Adopted Accounting Standards

For information on recently adopted accounting pronouncements, see Note 1, “Organization – Recently Adopted Accounting Pronouncement” of the Notes.

Emerging Growth Company Status

Section 107(b) of the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards.

Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.

We have elected to take advantage of the extended transition period to comply with new or revised accounting standards and to adopt certain of the reduced disclosure requirements available to emerging growth companies.

As a result of the accounting standards election, we will not be subject to the same implementation timing for new or revised accounting standards as other public companies that are not emerging growth companies which may make comparison of our financials to those of other public companies more difficult.

We expect to retain our emerging growth company status until the earliest of:

• the end of the fiscal year in which our annual revenues exceed $1.235 billion;

• the end of the fiscal year in which the fifth anniversary of our public company registration has occurred;

• the date on which we have issued more than $1.0 billion in non-convertible debt during the previous three-year period;

• the date on which we qualify as a large accelerated filer.

Item 7A — Quantitative and Qualitative Disclosures About Market Risk

This item is not required under Regulation S-K for “smaller reporting companies”.

USA Rare Earth, Inc.

| 2025 Annual Report (Form 10-K) | 65

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 7. Management’s Discussion and Analysis