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Item 2. Management’s Discussion and Analysis

2026-08-10 compared with 2026-05-14 · 208 added, 170 removed, 138 unchanged (73% of the section changed)

16 unchanged sentences

During 2025, we completed two transactions that materially affect the comparability of the results discussed below.

On March 13, 2025, we consummated our business combination with USA Rare Earth, LLC and became a publicly traded company on Nasdaq under the symbol “USAR.” On November 18, 2025, we acquired Less Common Metals Ltd.

On March 13, 2025, we consummated our business combination with USA Rare Earth, LLC and became a publicly traded company listed on Nasdaq under the symbol “USAR.” On November 18, 2025, we acquired Less Common Metals Ltd.

(“Less Common Metals”), a rare earth metal and alloy manufacturer based in Cheshire, United Kingdom.

As a result, the three months ended March 31, 2026 reflect a full quarter of Less Common Metals’ operations, while the prior-year period reflects none.

All of our revenue for the three months ended March 31, 2026 is attributable to Less Common Metals.

Accordingly, revenue, gross profit, and operating expenses for the three months ended March 31, 2026 are not comparable with the corresponding line items for the three months ended March 31, 2025.

For a complete description of both transactions, refer to Note 2 , “ Merger Transaction and Acquisition , ” in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10‑K for the fiscal year ended December 31, 2025 (the “2025 Annual Report”) filed with the SEC on March 30, 2026 .

USA Rare Earth, Inc.

| Q1'2026 Quarterly Report (Form 10-Q) | 24

As a result, the three and six months ended June 30, 2026 reflect Less Common Metals’ operations, while the prior-year period reflects none.

All of our revenue for the three and six months ended June 30, 2026 is attributable to Less Common Metals.

Accordingly, revenue, gross loss, and operating expenses for the three and six months ended June 30, 2026 are not comparable with the corresponding line items for the three and six months ended June 30, 2025.

Recent Developments, Key Trends, Opportunities and Uncertainties

We are an early-stage company with a limited operating history and intend to grow our global value chain though organic growth including capital and operational expenditures, as well as through strategic initiatives.

We are an early-stage company with a limited operating history and intend to grow our global value chain through capital and operational expenditures, as well as through strategic initiatives.

These investments may exceed our revenues over the next several years.

Our revenues for the three months ended March 31, 2026 were derived solely from our Less Common Metals operations following the acquisition of Less Common Metals in 2025, and we have not yet generated revenues from our neo magnet manufacturing or mineral production.

We incurred a net loss of $68.1 million for the three months ended March 31, 2026.

Our revenues for the three and six months ended June 30, 2026 were derived solely from our metal-making operations following the acquisition of Less Common Metals in 2025, and we have not yet generated revenues from our neo magnet manufacturing or mineral production.

We incurred a net loss of $80.0 million for the six months ended June 30, 2026.

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 and scaling of our integrated mine-to-magnet platform and our global value chain.

$1.50 Billion Private Investment In Public Equity (“PIPE”)

On January 27, 2026, we completed a private placement, structured as a PIPE with institutional investors, of 69.8 million shares of our common stock for gross proceeds of $1.50 billion (“$1.50B PIPE”).

The $1.50B PIPE financing provides the capital to invest in our value chain to accelerate our production capacity, expand our geographic footprint, and secure the equipment and feedstock necessary to achieve our strategic goals.

Expected U.S.

Government Transaction

On January 26, 2026, we announced two non-binding letters of intent with U.S.

government agencies representing a total of approximately $1.58 billion in potential funding and strategic support.

The first non-binding letter of intent with the U.S.

Department of Commerce (the “DOC Letter of Intent”) covers $277.0 million in direct funding awards under the CHIPS Act, and $1.30 billion in senior secured debt with each advance having a 15-year term and bearing a fixed or floating interest rate.

The second non-binding letter of intent with the U.S.

Department of Energy's National Energy Technology Laboratory (the “DOE Letter of Intent”), establishes a collaboration to advance heavy rare earth element (“HREE”) separation technologies at our Colorado Facility and Round Top Deposit, leveraging digital twin technology.

Together, these two letters of intent and their contemplated transactions are referred to as the “Expected U.S.

Government Transaction.” See Note 12, “Government Grants” of the Notes for more information about the terms of the Letters of Intent.

We believe that, if consummated on the terms described therein, the Expected U.S.

Government Transaction would represent a transformative source of capital that supports our strategic goals to further accelerate the growth of our integrated rare earth value chain and strengthens our positioning as a domestic supplier of rare earth elements (“REEs”) and NdFeB permanent magnets for both commercial and national security applications.

The transactions remain subject to the negotiation and execution of definitive agreements, the satisfaction of numerous conditions, and final government approvals, and there can be no assurance that they will be consummated on the anticipated terms or at all.

Proposed Acquisition of Texas Mineral Resources Corp.

On March 4, 2026, we entered into a definitive Agreement and Plan of Merger with Texas Mineral Resources Corp.

(“TMRC”), pursuant to which we expect to acquire 100% of the outstanding shares of TMRC in an all‑stock transaction.

The acquisition will eliminate TMRC’s minority ownership interests in RTMD and establish us as the sole operator and 100% economic beneficiary of the “Round Top Project,” which consists of our operations and rights related to Round Top Mountain and the Round Top Mountain HREE metals deposit (the “Round Top Deposit”).

The transaction is intended to secure full ownership control of the Round Top Project, and streamline operations, governance and decision-making.

The transaction is valued at approximately $72.3 million based on the closing price of the Company’s common stock on March 4, 2026.

The aggregate merger consideration consists of approximately 3.8 million shares of our common stock, with cash paid in lieu of fractional shares.

The ultimate value of the consideration will depend on our stock price at closing.

See Note 4, “Variable Interest Entity,” of the Notes for additional information regarding the TMRC acquisition.

USA Rare Earth, Inc.

| Q2'2026 Quarterly Report (Form 10-Q) | 27

The completion of the merger is subject to customary closing conditions, including the affirmative vote of TMRC stockholders and the effectiveness of a registration statement on Form S-4, and there can be no assurance that the merger will be completed or that the anticipated operational, strategic, or financial benefits will be realized.

Earnout Share Conversion

In connection with the business combination between the Company and USA Rare Earth, LLC, the Company agreed to issue common stock of the Company (the “earnout shares”) to certain shareholders of USA Rare Earth, LLC in two tranches upon the occurrence of certain triggering events.

On April 15, 2026, our stock price met the requirement for the first tranche of earnout shares by trading at or above $15.00 per share for at least 20 out of 30 consecutive trading days.

As a result, we issued 5.0 million shares of common stock to certain former shareholders of USA Rare Earth, LLC.

The second tranche of 5.0 million earnout shares will become payable when our common stock price exceeds $20.00 per share for at least 20 out of 30 trading days.

Proposed Investment in Carester SAS

On April 9, 2026, we entered into a binding letter of intent (the “Carester LOI”) to acquire a 12.5% equity interest in Carester SAS (“Carester”), the parent company of Caremag SAS (“Caremag”), for cash and equity consideration amounting to approximately $46.4 million.

The initial proposed consideration consists of €28.3 million in cash, or approximately $32.9 million, and equity consideration of €11.7 million, or approximately $13.5 million, payable in shares of our common stock, in each case subject to customary adjustments, including the potential substitution of cash in lieu of our common stock.

This transaction is part of broader initiative, in partnership with Carester, the Government of France and InfraVia, to build an integrated value chain platform for rare earth processing, metal and alloy production and magnet making in Lacq, France.

The platform will unite the technological expertise, process innovation, and production capacity of our manufacturing operations and those of Carester to accelerate development and strengthen our capabilities across the rare earth value chain.

On April 9, 2026, we entered into a binding letter of intent, and subsequently on July 23, 2026, we entered into a definitive agreement to acquire a 13.6% equity interest in Carester SAS (“Carester”), the parent company of Caremag SAS (“Caremag”), for cash and equity consideration amounting to approximately $45.7 million.

The proposed consideration consists of €28.3 million in cash, or approximately $32.4 million, and equity consideration of €11.7 million, or approximately $13.3 million, payable in shares of our common stock, in each case subject to customary adjustments, including the potential substitution of cash in lieu of our common stock.

As of June 30, 2026, the transaction had not closed.

We expect to close the investment in the third quarter of 2026, subject to customary closing conditions and regulatory approvals.

This transaction is part of a broader initiative, in partnership with Carester, the Government of France and InfraVia, to build an integrated value chain platform for rare earth processing, metal and alloy production and magnet making in Lacq, France.

If the investment is completed, the platform will unite the technological expertise, process innovation, and production capacity of our manufacturing operations and those of Carester with the goal of accelerating development and strengthening our capabilities across the rare earth value chain.

In parallel, USA Rare Earth, through Less Common Metals – Europe, is developing a 3,750 metric tons per year (“MTPA”) metal and alloy production facility at the same location.

The partnership will create one of Europe’s most complete rare earth industrial ecosystems.

In addition, we have access to direct credits under the Government of France’s French C3IV program, which can potentially reimburse up to 45%, or a total of €130 million, of eligible equipment and real estate costs.

We are engaged in ongoing discussions with French governmental entities and Bpifrance regarding potential additional financing support for Less Common Metals – Europe’s metallization and alloy facility through available export credit and guarantee programs.

There can be no assurance that any such additional support will be obtained or on what terms it may be available.

We believe the partnership will create one of Europe’s most complete rare earth industrial ecosystems.

The proposed transaction is further subject to, among other things, the negotiation and execution of definitive agreements, receipt of applicable regulatory approvals, and the satisfaction of customary closing conditions and there can be no assurance that the transaction will be completed.

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The Pela Ema mine is unique as the only mine outside Asia currently capable of supplying all four magnetic REEs at scale, neodymium, praseodymium, dysprosium and terbium, together with other vital REEs, such as yttrium.

This transformative acquisition creates what we believe will be the only fully integrated mine-to-magnet platform outside China, with active capabilities across mining, processing, separation, metallization and magnet making across three continents.

This transformative acquisition, if completed, will create what we believe will be the only fully integrated mine-to-magnet platform outside China, with active capabilities across mining, processing, separation, metallization and magnet making across three continents.

Serra Verde's strategic importance is further evidenced by its 15-year offtake agreement with a special purpose vehicle capitalized by the U.S.

Government, which features contractual price floors covering 100% of Serra Verde's Phase 1 production of neodymium, praseodymium, dysprosium and terbium.

USA Rare Earth, Inc.

| Q1'2026 Quarterly Report (Form 10-Q) | 26

We believe this acquisition strengthens our U.S.

and allied government relationships and provides multiple embedded growth opportunities, including a potential Phase 2 doubling of Pela Ema’s production capacity.

The transaction also adds significant leadership depth through the expected appointment of Sir Mick Davis and Thrasyvoulos Moraitis to our Board upon closing, with Mr.

Moraitis also serving as President of the combined company.

The transaction also adds significant leadership depth through the expected appointment of Thrasyvoulos Moraitis and Sir Mick Davis to our Board upon closing, with Mr.

Moraitis initially serving as President of the combined company, and Chief Executive Officer (“CEO”) of the combined company after our current CEO retires on October 1, 2026.

On July 24, 2026, we filed a proxy statement on Schedule 14A with the SEC seeking shareholder approval of the Serra Verde acquisition at a special stockholder meeting scheduled for August 28, 2026.

The transaction remains subject to customary closing conditions, including shareholder approval, receipt of applicable regulatory approvals, and the absence of material adverse effects.

There can be no assurance that the transaction will be completed.

The transaction is subject to customary closing conditions, including receipt of shareholder approval and applicable regulatory approvals, and there can be no assurance that it will be completed.

USA Rare Earth, Inc.

| Q2'2026 Quarterly Report (Form 10-Q) | 28

Texas Semiconductor Innovation Fund

On May 11, 2026, we entered into a Grant Agreement with the Office of the Governor of the State of Texas (the “OOG”) pursuant to the Texas Semiconductor Innovation Fund (“TSIF”), Grant No.

On May 11, 2026, we entered into a grant agreement with the Office of the Governor of the State of Texas (the “OOG”) pursuant to the Texas Semiconductor Innovation Fund (“TSIF”) (the “TSIF Grant Agreement”), Grant No.

TSIF 26-016P.

Under the grant agreement, the OOG has agreed to reimburse us for certain allowable costs directly allocable to the Round Top Project, up to a maximum amount of $14.2 million.

The grant proceeds are intended to support the development of Round Top Mountain as a domestic source of heavy rare earth elements and select technology metals, including dysprosium, hafnium, terbium, and other elements essential for high-performance permanent magnets used in the aerospace, defense, semiconductors, data centers, physical AI, energy, mobility, healthcare, and numerous industrial sectors.

Grant funds are disbursed on a cost reimbursement basis only, and payment is dependent upon our strict compliance with the terms and conditions of the Grant Agreement, including applicable reporting, audit, and performance requirements.

The Grant Agreement terminates upon the completion of the grant project, on December 31, 2028, or upon the depletion of grant funds, whichever occurs first.

First Quarter 2026 Business Highlights

Commissioned Phase 1A at our Stillwater Facility

We commissioned the Phase 1a magnet manufacturing line at our Stillwater, Oklahoma manufacturing facility (“Stillwater Facility”).

Commissioning of Phase 1a should enable us to begin fulfilling customer orders for sintered neodymium-iron-boron permanent magnets in the second quarter of 2026.

Phase 1a is expected to ramp to a run rate capacity of 600 MTPA by the end of the fourth quarter of 2026.

Phase 1a and Phase 1b magnet manufacturing lines at our Stillwater Facility are expected to bring the total capacity to 1,200 MTPA by the first quarter of 2027.

Commenced Expansion of Metal & Alloy Capacity to Meet Growing Demand

We expect to expand metal making and alloy capacity at our Less Common Metals facility to 3,000 MTPA by the end of 2026 due to increasing demand for higher internal magnet manufacturing capabilities and a widening third-party customer base.

We have seen a significant interest in our pipeline for samarium-cobalt, neodymium-iron-boron and specialty alloys, fueled by third-party magnet manufacturers largely serving the aerospace, semiconductor, mobility, and consumer electronics sectors.

Additionally, we are seeing heightened demand for specialized light rare earth elements (“LREE”), HREEs and other critical mineral metals, highlighting the broad product capabilities of our Less Common Metals facility.

Selection of Fluor Corporation and WSP Global Inc.

to Advance our Accelerated Mining Plan

Fluor Corporation (“Fluor”) and WSP Global Inc.

(“WSP”) were selected as engineering, procurement, and construction management (“EPCM”) partners for the build-out and commercialization of the Round Top Deposit.

The combination of Fluor and WSP brings significant expertise across deposit geology, mine design and planning, and processing design, engineering, and construction.

Fluor and WSP will also lead the authoring of the Round Top Preliminary Feasibility Study (“PFS”) that is expected to be published by the end of the third quarter of 2026, and the Definitive Feasibility Study (“DFS”) that is expected to be published in the first quarter of 2027.

The TSIF Grant Agreement proceeds are intended to support the development of Round Top Mountain as a domestic source of heavy rare earth elements and select technology metals, including dysprosium, hafnium, terbium, and other elements essential for high-performance permanent magnets used in the aerospace, defense, semiconductors, data center, physical AI, energy, mobility, healthcare, and numerous industrial sectors.

The TSIF Grant Agreement grant funds are disbursed on a cost reimbursement basis only, and payment is dependent upon our strict compliance with the terms and conditions of the TSIF Grant Agreement, including applicable reporting, audit, and performance requirements.

The TSIF Grant Agreement terminates upon the completion of the grant project, on December 31, 2028, or upon the depletion of grant funds, whichever occurs first.

Department of Energy

On May 21, 2026, we were selected by the U.S.

Department of Energy (the “Dept.

of Energy”) to receive up to $19.3 million in funding under the “Critical Materials Innovation, Efficiency and Alternatives” program to support development of a pilot-scale rare earth element separations project.

The total project value is approximately $50.5 million, including $19.3 million in the Dept.

of Energy funding and $31.2 million in the non-Dept.

of Energy funding.

Final award terms, project scope, budget, and timeline are subject to negotiation with the Dept.

As of June 30, 2026, we had not received funding or executed a final award agreement.

Selection for award negotiations does not constitute a binding commitment of federal funding.

Any award is subject to successful completion of negotiations with the Dept.

of Energy and the execution of a definitive funding agreement.

Department of Commerce

On June 3, 2026, we entered into a Direct Funding Agreement (“DFA”) of $277.0 million and a Loan Guarantee Agreement (“LGA”) of $1.30 billion with the U.S.

Department of Commerce (the “Dept.

of Commerce”).

We issued 16.1 million shares valued at $451.4 million and a warrant to acquire 17.6 million shares with an exercise price of $17.17 initially valued at $430.9 million as conditions precedent.

As of June 30, 2026, no disbursements or advances had been received;

initial funding is subject to milestone approval.

See Note 13, “Government Grants – U.S.

Department of Commerce CHIPS Act Awards,” of the Notes for additional information regarding the Dept.

of Commerce agreements.

Acquisition of Texas Mineral Resources Corp.

On March 4, 2026, we entered into a definitive Agreement and Plan of Merger with Texas Mineral Resources Corp.

On August 7, 2026, we closed the acquisition of TMRC, to which we acquired 100% of the outstanding shares of TMRC.

The transaction is valued at approximately $73.9 million based on the closing price of the Company’s common stock on August 7, 2026.

The aggregate merger consideration consists of approximately 3.8 million shares of our common stock, with cash paid in lieu of fractional shares.

See Note 4, “Variable Interest Entity,” of the Notes for additional information regarding the TMRC acquisition.

Subsequent to the closing, we will be the sole operator and 100% economic beneficiary of the “Round Top Project,” which consists of our operations and rights related to Round Top Mountain and the Round Top Mountain HREE metals deposit (the “Round Top Deposit”).

The transaction secures full ownership control of the Round Top Project, and streamline operations, governance and decision-making.

USA Rare Earth, Inc.

| Q2'2026 Quarterly Report (Form 10-Q) | 29

Plan to Build a 3,750 MTPA Plant in Lacq, France

As mentioned above, we plan to produce metal and alloy in Lacq, France, co-located with Carester’s Caremag oxide and recycling facility.

Together, we believe this platform is intended to establish a comprehensive supply chain for rare earth processing, and metal and alloy production in Europe, and enhance our globally integrated rare earth value chain, from mine to magnet.

Mutual Sales and Distribution Agreement with Arnold Magnetic Technologies Corp.

We signed a mutual sales and distribution agreement with Arnold Magnetic Technologies Corp., a subsidiary of Compass Diversified (“Arnold”).

Under this non-exclusive partnership, we will offer Arnold’s finished permanent magnets produced from samarium-cobalt and neodymium-iron-boron, and Arnold will offer to us processed and refined neodymium-iron-boron feedstock and finished magnets.

We believe this agreement strengthens the domestic supply chain for mission-critical applications by expanding availability of U.S.-manufactured rare earth magnets.

Commercial Yttrium Metal Production

In April 2026, we announced the first commercial pour of 2N–2N5 (99%–99.5% purity) yttrium metal through our Less Common Metals facility in Cheshire, United Kingdom.

This milestone places us among a limited number of producers of commercial-grade yttrium metal operating outside of China.

Yttrium is a key material in thermal barrier coatings used on turbine blades and other high-temperature aerospace components, where it enhances oxidation resistance and improves adhesion, helping extend component life under intense thermal and mechanical stress.

Yttrium is also used in electronics, energy systems, lasers, superconductors, and advanced ceramics, where its chemical stability and high-temperature performance are essential.

Second Quarter 2026 Business Highlights

Less Common Metals Yttrium Metal Production

On April 15, 2026, we announced the first commercial production of 2N–2N5 (99%–99.5% purity) yttrium metal through our wholly-owned subsidiary, Less Common Metals, at its facility in Cheshire, United Kingdom.

This milestone positions us among a limited number of commercial-grade yttrium metal producers outside China.

Yttrium production advances our integrated value chain strategy and supports aerospace, defense, and advanced manufacturing customers requiring reliable supply sources outside China.

Blacksburg Magnet Manufacturing Facility

On June 2, 2026, the Company announced the selection of Cherokee County, South Carolina, as the site of a new magnet manufacturing and refined metals operation in Bailey Industrial Park, Blacksburg, South Carolina (the “Blacksburg Facility”).

The state-of-the-art facility is expected to produce 6,400 metric tons per annum (tpa) of sintered neodymium-iron-boron (NdFeB) rare earth magnets and 5,000 tpa of strip-cast metals and alloys.

When combined with the planned expansion of our Stillwater Facility, total domestic capacity is expected to reach approximately 10,000 tpa of NdFeB magnets and 10,000 tpa of strip-cast metals and alloys.

Engineering work and equipment procurement are underway, with site work anticipated to commence in the coming months and commissioning targeted to begin in 2028.

Wheat Ridge Hydrometallurgical Facility

On June 15, 2026, we commenced operations of our hydrometallurgical demonstration facility in Wheat Ridge, Colorado (the “Wheat Ridge Facility”), to validate processing flowsheets for feedstocks from the Round Top Project, third-party sources, and rare earth magnet scrap (swarf) recycling.

Initial production results are expected to support development of the Round Top Definitive Feasibility Study.

Wheat Ridge Magnet Swarf Recycling Production

On July 14, 2026, we announced that our Wheat Ridge Facility, produced commercial-grade dysprosium oxide and neodymium-praseodymium oxide samples from recycled swarf sourced from our magnet manufacturing facility at Stillwater, Oklahoma (the “Stillwater Facility”).

The oxides are expected to be sent to Less Common Metals for qualification and conversion into rare earth metals and strip cast for supply to our magnet manufacturing facilities.

This production validates our magnet swarf recycling flowsheet and positions us as one of the few Western producers capable of separating commercial-grade heavy rare earth oxides outside Asia.

Results of Operations

A discussion regarding our financial condition and results of operations for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, is presented below.

Our operating revenues and gross margins have been derived solely from our ownership of Less Common Metals since November 18, 2025, and we had no operating revenues or gross margin prior to November 18, 2025.

We currently rely on equity and other external financing to fund our business plans, including our magnet manufacturing facility located in Stillwater, Oklahoma (the “Stillwater Facility”);

A discussion regarding our financial condition and results of operations for the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025, is presented below.

Our operating revenues and gross margins have been derived solely from our acquisition of Less Common Metals on November 18, 2025, and the parent company had no operating revenues or gross margin prior to November 18, 2025.

We currently rely on equity and other external financing to fund our business plans, including our Stillwater Facility;

mineral exploration, evaluation, and development activities at the Round Top Project (collectively, “R&D” costs);

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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.

Three Months Ended March 31, 2026

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

Three Months Ended June 30, 2026

Six Months Ended June 30, 2026

(In thousands, except for percentage)

1 unchanged sentence

Cost of revenue 7,404 12,996

Gross profit $ 106

Gross loss $ (1,583) $ (1,477)

Gross margin (27.2) % (12.8) %

USA Rare Earth, Inc.

| Q1'2026 Quarterly Report (Form 10-Q) | 28

Comparison of the three months ended March 31, 2026 to the three months ended March 31, 2025

Revenue was $5.7 million for the three months ended March 31, 2026, all of which was generated by Less Common Metals.

Cost of revenue for the period was $5.6 million, resulting in gross profit of $0.1 million and a gross margin of 1.9%.

The gross margin reflects the under‑absorption of fixed indirect manufacturing costs, including labor and facility‑related expenses, due to lower production volumes during the period.

Comparison of the three months ended June 30, 2026 and 2025

Revenue was $5.8 million for the three months ended June 30, 2026, all generated by Less Common Metals, which was acquired in November 2025.

Cost of revenue for Q2’2026 was $7.4 million, resulting in a gross loss of $1.6 million and a negative gross margin of 27.2%.

The gross loss reflects substantially increased raw material costs in Q2’2026 that were not fully offset by increases in selling prices.

Additionally, we recorded in Q2’2026 inventory adjustments.

Comparison of the six months ended June 30, 2026 and 2025

Revenue was $11.5 million for six months ended June 30, 2026, all generated by Less Common Metals.

Cost of revenue for the first half of 2026 was $13.0 million, resulting in a gross loss of $1.5 million and a negative gross margin of 12.8%.

The first half of 2026 results reflect significant variation between quarters.

Q1’2026 achieved a gross margin of 1.9%, while Q2'2026 recorded a gross loss with a negative gross margin of 27.2%.

The Q2’2026 deterioration was driven by higher raw material costs which increased substantially in Q2’2026 over Q1’2026;

however, selling price increases partially offset this cost inflation.

The gross margin decline was further compounded by inventory adjustments.

Concentration of Revenue

Revenue Attributable to Primary Geographical Markets

Region Three Months Ended March 31, 2026

Three Months Ended June 30, 2026

Six Months Ended June 30, 2026

(In thousands)

United States $ 1,742 $ 2,702

Europe 3,982 8,501

Total revenue $ 5,821 $ 11,519

USA Rare Earth, Inc.

| Q2'2026 Quarterly Report (Form 10-Q) | 31

Operating Expenses

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

Three Months Ended March 31, Change

Three Months Ended June 30, Change Six Months Ended June 30, Change

2026 2025 2026 2025

(In thousands, except for percentages)

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Selling, general and administrative $ 32,607 $ 6,227 $ 26,380 423.6% $ 53,782 $ 13,256 $ 40,526 305.7%

Research and development 14,249 1,689 12,560 NM

Amortization of intangible assets 1,357 — 1,357 NM

Research and development 10,768 2,577 8,191 317.9% 25,017 4,266 20,751 486.4%

Amortization of intangible assets 1,356 — 1,356 NM 2,713 — 2,713 NM

Total operating expenses $ 44,731 $ 8,804 $ 35,927 408.1% $ 81,512 $ 17,522 $ 63,990 365.2%

Other (expense) income, net

Interest and dividend income $ 11,970 $ 187 $ 11,783 NM

Grant income 206 — 206 NM

(Loss) gain on fair market value of financial instruments, net (43,553) 60,300 (103,853) (172.2)%

Interest expense and other loss, net (593) (87) (506) NM

Total other (expense) income, net $ (31,970) $ 60,400 $ (92,370) (152.9)%

NM Not meaningful.

Comparison of the three months ended June 30, 2026 and 2025

Selling, general and administrative.

SG&A expenses increased by $14.1 million, primarily due to higher legal and consulting costs of $4.7 million related to merger and acquisition activities, increased stock‑based compensation of $4.2 million, and higher employee‑related costs of $3.1 million associated with increased headcount as we expanded our organizational infrastructure.

The increase in SG&A expenses of $26.4 million was primarily due to an increase in consulting and legal costs of $9.9 million and $6.1 million, respectively, related to business acquisitions and completion of the Dept.

of Commerce’s DFA and LGA, an increase in stock-based compensation and employee compensation and benefits of $5.1 million and $4.1 million, respectively, associated with increased headcount as we expanded our organizational infrastructure, and other costs of $1.2 million.

Research and development .

The increase in R&D expenses of $8.2 million was primarily due to an increase in development costs of $2.6 million, facility costs of $2.4 million, employee compensation, benefits and stock-based compensation of $1.6 million related to an increase in headcount, and other costs of $1.6 million.

Amortization of intangible assets increased by $1.4 million due to intangible assets acquired in connection with the acquisition of Less Common Metals.

Comparison of the six months ended June 30, 2026 and 2025

Selling, general and administrative.

SG&A expenses increased by $40.5 million, primarily due to higher legal and consulting costs of $11.1 million and $9.1 million, respectively, related to merger and acquisition activities, and completion of the Dept.

of Commerce’s DFA and LGA, and an increase in stock‑based compensation and employee compensation and benefits of $9.4 million and $7.2 million, respectively, both associated with an increase in headcount as we expanded our organizational infrastructure.

The increase was further driven by other costs of $3.7 million.

Research and development.

R&D expenses increased by $12.6 million, primarily due to higher development costs of $5.4 million and increased employee‑related costs of $3.7 million, reflecting higher headcount and stock‑based compensation.

The increase was further driven by legal costs of $1.8 million, facility and insurance costs of $0.6 million, and other costs of $1.1 million.

R&D expenses increased by $20.8 million, primarily due to higher development costs of $8.0 million and an increase in employee‑related costs of $5.3 million, reflecting higher headcount and stock‑based compensation.

The increase was further driven by consulting costs of $2.7 million, facility and insurance costs of $3.1 million, and other costs of $1.7 million.

Amortization of intangible assets increased by $2.7 million due to intangible assets acquired in connection with the acquisition of Less Common Metals.

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| Q2'2026 Quarterly Report (Form 10-Q) | 32

Three Months Ended June 30, Change Six Months Ended June 30, Change

2026 2025 2026 2025

(In thousands, except for percentages)

Other income (expense), net

Interest income $ 370 $ 765 $ (395) (52)% $ 472 $ 952 $ (480) (50)%

Dividend income 14,581 — 14,581 NM 26,449 — 26,449 NM

Grant income 240 — 240 NM 446 — 446 NM

(Loss) gain on fair market value of financial instruments, net 22,418 (134,662) 157,080 (116.6)% (21,135) (74,362) 53,227 (71.6)%

Interest expense and other expense, net (3,771) (12) (3,759) NM (4,364) (99) (4,265) NM

Total other income (expense), net $ 33,838 $ (133,909) $ 167,747 (125.3)% $ 1,868 $ (73,509) $ 75,377 (102.5)%

NM Not meaningful.

Other (expense) income, net.

• Interest and dividend income increased by $11.8 million, primarily due to higher average balances in our investments in money market and government funds.

• Grant income increased by $0.2 million, reflecting grant revenue generated by Less Common Metals, which was acquired on November 18, 2025.

• Dividend income increased by $14.6 million and $26.4 million for the three and six months ended June 30, 2026, respectively, over the comparable periods in the prior year, primarily due to returns on money market funds, such as our investments in a prime money market fund and a U.S.

Government money market fund.

• Grant income increased by $0.2 million and $0.4 million for the three and six months ended June 30, 2026, respectively, over the comparable periods in the prior year, reflecting grant revenue generated by Less Common Metals, which was acquired on November 18, 2025.

Grant income for the current period includes only post‑acquisition activity, whereas the prior period did not include any grant income from this business.

• (Loss) gain on fair market value of financial instruments, net change was a loss of $103.9 million, primarily driven by higher share prices, which increased the fair value losses related to the earnout shares and Series A Warrants issued in connection with the business combination with USA Rare Earth, LLC by $89.8 million and $13.2 million, respectively, partially offset by warrant exercises.

See Note 2, “Fair Value Measurements,” of the Notes for additional information.

• Interest expense and other loss, net primarily reflects unrealized loss on money market funds, unrealized foreign exchange losses, and interest expense on the Barclays Bank PLC trade cycle loan facility previously entered into by Less Common Metals, which was repaid in full, including accrued interest, and cancelled during the first quarter of 2026.

Three Months Ended March 31,

2026 2025 Change

• (Loss) gain on fair market value of financial instruments, net reflected a loss of $157.1 million and $53.2 million for the three and six months ended June 30, 2026, respectively, over the comparable periods in the prior year, primarily driven by the following:

◦ Earnout Liability .

The fair value loss on the earnout increased $17.0 million in Q2'2026 ($70.7 million versus $53.8 million in the prior year).

Year-to-date, the earnout increased $106.8 million ($107.2 million in 2026 versus $0.4 million in the prior year).

The earnout shares were fully vested during the six months ended June 30, 2026 and the earnout was no longer outstanding at the end of the period.

◦ Series A Warrants .

Outstanding Series A Warrants generated a loss of $14.2 million in Q2’2026, an $11.5 million improvement versus the prior-year loss of $25.7 million, driven by our lower stock price at the quarter end.

Year-to-date, Series A Warrant activity resulted in a loss of $21.3 million in 2026 versus $29.6 million in the prior year.

◦ Government Grant Warrant .

We issued Government Grant Warrants under the Dept.

of Commerce LGA in Q2’2026 with an initial fair value of $430.9 million.

The warrant was remeasured to $323.5 million at June 30, 2026, resulting in a fair value gain of $107.4 million.

The fair value methodology and assumptions and details of the Government Grant Warrants are detailed in Note 2, “Fair Value Measurements,” of the Notes.

◦ Other items .

Remaining activity includes settlement of prior-period derivative liabilities and rounding differences account for the variance between the detailed instrument calculations and reported amounts.

USA Rare Earth, Inc.

| Q2'2026 Quarterly Report (Form 10-Q) | 33

• Interest expense and other expense, net primarily reflects $4.5 million of liquidated damages recorded under the Registration Rights Agreement during the second quarter of 2026.

The liquidated damages were triggered by the suspension of the Company’s Form S-1 (File No.

333-293172), originally filed on February 3, 2026, from March 30 through June 5, 2026.

In addition, we incurred unrealized losses from our investment in a prime money market fund, and interest expense on the Barclays Bank PLC trade cycle loan facility previously entered into by Less Common Metals, which was repaid in full in the first quarter of 2026.

These losses were partially offset by unrealized foreign exchange gains.

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 Change 2026 2025 Change

(In thousands, except percentages and basis points)

(Loss) income before income taxes $ (68,645) $ 51,682 $ (120,327) 232.8%

Benefit from income taxes (577) — (577) NM

Loss before income taxes $ (12,476) $ (142,713) $ 130,237 (91.3)% $ (81,121) $ (91,031) $ 9,910 (10.9)%

Benefit from income taxes (513) — (513) NM (1,090) — (1,090) NM

Effective tax rate 1.3 % — % 130 bps

1 unchanged sentence

Benefit from income taxes .

The change of $577 thousand was primarily attributable to the forecasted taxable activities of our Less Common Metals subsidiary following the acquisition on November 18, 2025.

The increase of benefits from income taxes of $0.5 million and $1.1 million for the three and six months ended June 30, 2026, compared to the comparable periods of the prior year, respectively, was primarily attributable to the forecasted taxable activities of our Less Common Metals subsidiary following the acquisition on November 18, 2025.

Effective tax rate.

Our effective tax rate of 0.8% for the three months ended March 31, 2026 was affected by changes in valuation allowances, recurring permanent differences and discrete items that may occur in any given year, but are not necessarily consistent from year to year.

Our effective tax rate of 1.3% for the six months ended June 30, 2026, was affected by changes in valuation allowances, recurring permanent differences and discrete items that may occur in any given year, but are not necessarily consistent from year to year.

Liquidity and Capital Resources

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

Our 2026 revenues were derived solely from our Less Common Metals operations following the acquisition of Less Common Metals Ltd.

on November 18, 2025, and we have not yet generated revenues from neo magnet manufacturing or mineral production at the Stillwater Facility.

Our 2026 revenues were derived solely from our metal-making operations following the acquisition of Less Common Metals on November 18, 2025, and we have not yet generated revenues from our neo magnet manufacturing or mineral production at the Stillwater Facility.

As we expand our production capacity, we expect to incur significant operating expenses without generating sufficient revenues to cover these expenditures.

We believe that our existing cash and cash equivalents will be sufficient to fund our planned near‑term operating and capital expenditure requirements for at least the next twelve months.

However, our long‑term capital requirements, particularly those associated with the full development of the Round Top Project, the build‑out of the Stillwater Facility, and the build-out of the Less Common Metals – Europe manufacturing facility are expected to exceed our current resources, and we will require additional capital to fund these long‑term initiatives.

However, our long‑term capital requirements, particularly those associated with the full development of the Round Top Project, the build‑out of the Stillwater Facility, the build-out of the Blacksburg Facility, and the build-out of the Less Common Metals – Europe manufacturing facility are expected to exceed our current resources, and we will require additional capital to fund these long‑term initiatives.

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 center, 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.

USA Rare Earth, Inc.

| Q2'2026 Quarterly Report (Form 10-Q) | 34

In addition, we expect to incur significant future cash outflows related to strategic investments, acquisitions, and the continued development of our operating and manufacturing assets.

These cash requirements may include consideration payable in connection with potential acquisitions or investments, transaction‑related costs, and capital expenditures associated with the development of the Round Top Project, the development of the Stillwater Facility, and the development of the Less Common Metals – Europe facility.

We expect to incur significant future cash outflows related to strategic investments, acquisitions, and the continued development of our operating and manufacturing assets.

These cash requirements may include consideration payable in connection with potential acquisitions or investments, transaction‑related costs, and capital expenditures associated with the development of the Round Top Project, the development of the Stillwater Facility, the development of the Blacksburg Facility, and the development of the Less Common Metals – Europe facility.

The timing and amount of such expenditures will depend on the progression of these transactions and projects and the satisfaction of applicable conditions.

We also intend to pursue potential sources of financing to support these initiatives, including equity financings and debt financings.

As discussed elsewhere in this Quarterly Report on Form 10-Q, as part of the Expected U.S.

Government Transaction, we have entered into a non‑binding letter of intent with the U.S.

Department of Commerce relating to potential equity funding under the CHIPS Act and related debt financing and a non-binding letter of intent with the U.S.

Department of Energy;

however, any such funding remains subject to the negotiation and execution of definitive agreements, final government approvals and the satisfaction of numerous conditions and milestones.

In addition, to meet certain milestones to obtain funding awards and debt financing to reimburse us for our capital expenditures under the Expected U.S.

Government Transaction, and to execute on our current business plan, including the acquisition of Serra Verde and the expansion of facilities for our operations, we will be required to raise a significant amount of capital during 2026 and 2027 and establish a $250.0 million revolving credit facility by December 31, 2026.

We intend to pursue potential sources of financing to support these initiatives, including equity financings and debt financings.

To meet certain milestones to obtain the funding awards and debt financing under the Dept.

of Commerce DFA and LGA, respectively (the “Funding Agreements”), to reimburse us for our capital expenditures, and to execute on our current business plan, including the acquisition of Serra Verde and the expansion of facilities for our operations, we will be required to raise a significant amount of capital during 2027.

Under the Funding Agreements, we are required to raise equity (which could include, at our option, up to $300.0 million of convertible loan notes) in the following amounts by the corresponding dates:

• On or prior to March 31, 2027, we are required to raise an additional aggregate amount of equity equal to $375.0 million plus the total cash acquisition costs for the announced proposed acquisition of Serra Verde.

• On or prior to December 31, 2027, we are required to raise an additional aggregate amount of equity equal to $875.0 million.

Under the Funding Agreements, we are also required to establish a revolving credit facility in an aggregate principal amount not to exceed $250.0 million by June 30, 2027.

In addition to the equity raise requirements described above, we are required to raise an aggregate amount of equity that is sufficient to satisfy the cash collateral required under such working capital facility.

There can be no assurance that any government funding or other funding will be obtained, or as to the timing or amount of any proceeds.

Our ability to raise additional capital on acceptable terms, whether through equity or government funding, is subject to market conditions, our operational progress, and our ability to satisfy applicable milestones and conditions, and there can be no assurance that such additional capital will be available on acceptable terms or at all.

In addition, if the Expected U.S.

Government Transaction is consummated, we would be precluded from issuing additional debt to raise capital, other than the government senior secured loan contemplated thereunder.

Debt financings may impose additional operational limits on our business and increase our interest expense, and equity or equity-linked financings could result in additional dilution to our shareholders.

Our ability to raise additional capital on acceptable terms is subject to market conditions, our operational progress, and our ability to satisfy applicable milestones and conditions, and there can be no assurance that such additional capital will be available on acceptable terms or at all.

Sources and Uses of Cash

Our primary sources of liquidity have consisted of equity financing.

For the three months ended March 31, 2026, we had a net loss of $68.1 million, which included a non-cash fair value loss on financial instruments of $43.6 million.

For the six months ended June 30, 2026, we had a net loss of $80.0 million, which included a non-cash fair value loss on financial instruments of $21.1 million.

Net cash used in operating activities during the period was $75.3 million.

As of March 31, 2026, we had $1.75 billion in cash and cash equivalents.

Outside of revenue generated from our Less Common Metals subsidiary, our operations in the United States have not yet generated revenues from neo magnet manufacturing or critical mineral production, and we expect to continue to use cash in our consolidated operating activities for the foreseeable future as we invest in commercializing our integrated mine-to-magnet platform.

As of June 30, 2026, we had $1.53 billion in unrestricted cash and cash equivalents.

Outside of revenue generated from our metal-making operations in the United Kingdom, our operations in the U.S.

have not yet generated revenues from neo-magnet manufacturing or critical mineral production, and we expect to continue to use cash in our consolidated 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 – completing the installation and qualification of sintered NdFeB permanent magnet production lines, procuring feedstock, and ramping toward initial commercial production;

• Stillwater Facility development – completing the qualification of sintered NdFeB permanent magnet production, procuring feedstock, and ramping toward initial commercial production;

• Less Common Metals expansion – expanding the current manufacturing site in Cheshire, United Kingdom and expanding the Less Common Metals – Europe manufacturing site in Lacq, France.

• 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;

a portion of these costs are expected to be funded through the TSIF Grant Agreement described below;

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

a portion of these costs are expected to be funded through the TSIF Grant Agreement;

USA Rare Earth, Inc.

| Q2'2026 Quarterly Report (Form 10-Q) | 35

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 such expenditures, as they depend on the outcomes of ongoing feasibility studies at Round Top Mountain and the negotiation and execution of agreements with the U.S.

Department of Commerce as part of the Expected U.S.

Government Transaction.

Accordingly, we expect total capital requirements to be significant, and our ability to fund these initiatives will depend on continued access to additional financing, primarily through equity or government funding sources.

$1.50 Billion Private Investment In Public Equity.

On January 28, 2026, we completed the $1.50 billion PIPE financing.

The financing significantly strengthened our liquidity position and provides additional capital to support our operations, strategic initiatives, and general corporate purposes.

Expected U.S.

Government Transaction .

If consummated, the Expected U.S.

Government Transaction would represent a significant new source of long-term capital.

However, the addition of $1.30 billion in long-term senior secured debt would introduce substantial debt service obligations and leverage into our capital structure.

Additionally, consummation of the transaction would require us to issue approximately 16.1 million shares of common stock and warrants representing approximately 17.5 million additional shares at an exercise price of $17.17 per share, each resulting in dilution to existing stockholders.

Funding to reimburse us for our capital expenditures would be disbursed in tranches tied to specified milestones, and there can be no assurance that any funding will be received.

Investment in Carester SAS.

The proposed Carester investment has an aggregate estimated value of €40.0 million, or approximately $46.4 million.

Upon consummation of the transaction, the proposed investment would require a cash payment of €28.3 million, representing a near‑term cash outflow with an estimated U.S.

dollar value of approximately $32.9 million based on an assumed exchange rate, which may fluctuate prior to closing.

The remaining consideration consists of equity consideration of €11.7 million, with an estimated U.S.

dollar value of approximately $13.5 million, to be settled through the issuance of shares of our common stock, subject to customary adjustments, including the potential substitution of cash in lieu of our common stock.

• Blacksburg Facility development – developing our new magnet manufacturing and refined metals operation in Bailey Industrial Park, Blacksburg;

• SVRE Holdings Ltd.

acquisition – completion of the acquisition of SVRE Holdings Ltd.

strengthens our U.S.

and allied government relationships and provides multiple embedded growth opportunities, including a potential Phase 2 doubling of Pela Ema’s production capacity;

• Carester SAS – to build an integrated value chain platform for rare earth processing, metal and alloy production and magnet making in Lacq, France;

• Texas Mineral Resources Corp.

– to secure full ownership control of the Round Top Project, and streamline operations, governance and decision-making;

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

Acquisition of SVRE Holdings Ltd.

The Serra Verde acquisition, when completed, would require payment of $300.0 million in cash consideration, representing a significant near-term cash obligation.

In addition, we expect to incur approximately $16.6 million of employer payroll taxes related to the settlement of cash and equity incentive awards held by certain Serra Verde employees and other service providers.

The remaining approximately $2.53 billion in consideration would be settled through the issuance of 126.8 million shares of our common stock, resulting in substantial dilution to existing stockholders.

Investment in Carester SAS.

The Carester investment, when completed, has an aggregate estimated value of €40.0 million, or approximately $45.7 million.

Upon consummation of the transaction, the proposed investment would require a cash payment of €28.3 million, or approximately $32.4 million.

The remaining consideration consists of equity consideration of €11.7 million, or approximately $13.3 million, to be settled through the issuance of shares of our common stock, subject to customary adjustments, including the potential substitution of cash in lieu of our common stock.

Acquisition of Texas Mineral Resources Corp.

The TMRC merger consideration consists solely of 3.8 million shares of our common stock and will not result in a material cash outlay.

The transaction will result in dilution to our existing stockholders and we will bear transaction-related costs.

Department of Energy Critical Materials Innovation, Efficiency and Alternatives Program .

of Energy grant provides reimbursement of up to a maximum amount of $19.3 million on certain allowable costs to support development of a pilot-scale rare earth element separations project.

Final award terms, project scope, budget, and timeline are subject to negotiation with the Dept.

Any award is subject to successful completion of negotiations with the Dept.

of Energy and the execution of a definitive funding agreement.

Texas Semiconductor Innovation Fund .

The TSIF Grant Agreement provides for reimbursement of certain allowable costs directly allocable to the Round Top Project up to a maximum amount of $14.2 million.

Grant funds are disbursed on a cost reimbursement basis only and are subject to our strict compliance with the terms and conditions of the Grant Agreement.

The TSIF Grant Agreement grant funds are disbursed on a cost reimbursement basis only and are subject to our strict compliance with the terms and conditions of the TSIF Grant Agreement.

Facility and Equipment Leases.

3 unchanged sentences

| Q2'2026 Quarterly Report (Form 10-Q) | 36

Three Months Ended March 31,

Six Months Ended June 30,

2026 2025 Change

6 unchanged sentences

The changes in non-cash adjustments were primarily driven by:

• a $103.9 million non-cash loss related to the increase in the fair value of our earnout and warrant liabilities;

• a $53.2 million non-cash loss related to the increase in the fair value of our Earnout Share conversion and Series A Warrant liabilities, partially offset by the fair value gain of the Government Grant Warrant liability;

• a $9.7 million increase in stock‑based compensation;

2 unchanged sentences

• an increase in accounts receivable and inventory, due primarily to the addition of Less Common Metals’ receivables and inventory balances following the acquisition of Less Common Metals on November 18, 2025;

• an increase in accounts payable, due primarily to capital expenditures associated with the build-out of the Stillwater Facility and the timing of vendor payments;

• an increase in prepaid and other assets, due primarily to prepaid rent and advanced payments to suppliers for future inventory deliveries;

• an increase in accounts payable, due primarily to capital expenditures associated with the build-out of the Stillwater Facility and our development of the Round Top Project, and the timing of vendor payments;

• an increase in accrued expenses, due primarily to higher acquisition‑related legal and consulting costs and asset retirement obligation costs associated with the Less Common Metals leased property in Cheshire, United Kingdom.

8 unchanged sentences

In the normal course of business, we enter into purchase orders with vendors for manufacturing and research and development equipment and with suppliers for inventory used in the manufacture of our products.

Capital equipment purchase orders are generally non-cancelable due to long lead times and generally relate to forecasted equipment needs for our Phase 1a and 2a manufacturing line expansions and facility construction, and research and development activities at RTMD.

Capital equipment purchase orders are generally non-cancelable due to long lead times and generally relate to forecasted equipment needs for our Phase 1b and 2a manufacturing line expansions and facility construction, and research and development activities at RTMD.

Inventory purchase orders are generally fulfilled within one year of the order date.

12 unchanged sentences

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-Q

Item 2. Management’s Discussion and Analysis