美國稀土公司（USAR）提交8-K，披露與SVRE合併及獲美國政府逾10億美元融資支持

EX-99.1
3
ea029675201ex99-1.htm
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS OF USAR AS OF AND FOR THE THREE MONTHS ENDED MARCH 31, 2026, AND FOR THE YEAR ENDED DECEMBER 31, 2025

 

Exhibit 99.1

 

UNAUDITED
PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

Introduction

 

The
following unaudited pro forma condensed combined financial information is derived from the historical consolidated financial statements
of USA Rare Earth, Inc. (“USAR” or the “Company”), and the historical consolidated financial statements of SVRE
Holdings Ltd. (“SVRE”), and gives effect to (i) the Merger (as defined below), (ii) the Private Placement (as defined
below), (iii) the Retained Finance Agreement (as defined below), (iv) the Offtake Agreement (as defined below), and (v) the issuance
of Earnout Shares (as defined below) (collectively, the “Pro Forma Transactions”).

 

On
August 21, 2024, Inflection Point Acquisition Corp. II, a Cayman Islands exempted company (“IPXX”) entered into
a Business Combination Agreement (as amended on November 11, 2024 and January 30, 2025, the “Business Combination Agreement”),
by and among IPXX, USA Rare Earth, LLC, a Delaware limited liability company, and IPXX Merger Sub, LLC, a Delaware limited liability
company and a direct wholly owned subsidiary of IPXX. Pursuant to the Business Combination Agreement, IPXX Merger Sub, LLC
merged with and into USA Rare Earth, LLC, with USA Rare Earth, LLC continuing as the surviving company, and IPXX changed its name to
USA Rare Earth, Inc. On March 13, 2025, USAR consummated the previously announced merger contemplated by the Business Combination
Agreement and USA Rare Earth, LLC became a direct wholly owned subsidiary of USAR. This transaction is already reflected in the
USAR historical audited consolidated balance sheet as of December 31, 2025 and the historical statement of operations of IPXX from
January 1, 2025 to March 12, 2025 is not material to the pro forma presentation of the Merger (as defined below) for the purpose
of unaudited pro forma condensed combined statement of operations.

 

Merger

 

On
April 19, 2026, USAR entered into a Merger Agreement by and among (i) USAR, (ii) Middlebury Merger Sub Ltd. (“Merger
Sub”), (iii) SVRE, and (iv) Serra Verde Rare Earths Ltd. The Merger Agreement provides for the merger of SVRE with and
into Merger Sub, with Merger Sub surviving such merger as an indirect, wholly owned subsidiary of USAR (the “Merger”), subject
to the satisfaction or waiver of the conditions precedent to such closing. In the Merger, USAR will issue 126,849,307 shares of USAR’s
common stock, par value $0.0001 per share (“Common Stock”) and pay an aggregate of $300 million of merger consideration.

 

Upon
closing, all outstanding warrants of SVRE will be automatically exercised and converted into SVRE ordinary shares immediately prior to
the Merger. All outstanding RSUs and SARs, whether vested or unvested, will accelerate in full and be cancelled in exchange for a pro
rata portion of the merger consideration. Stock options not subject to performance conditions will be similarly cancelled on a cashless
basis for merger consideration, while performance-vesting options held by continuing service providers will be substituted with USAR
RSUs subject to continued service vesting. SVRE’s equity incentive plan will be terminated at closing.

 

Private
Placement

 

On
January 26, 2026, USAR, entered into a securities purchase agreement, for the private placement of 69,767,442 shares of the USAR’s
Common Stock, for aggregate gross proceeds of approximately $1.5 billion, at a price per share of $21.50 (the “Private Placement”).
USAR closed the Private Placement and issued the shares of Common Stock on January 28, 2026.

 

Parent
Loan Agreement

 

Concurrently
with the execution of the Direct Funding Agreement and the Loan Guarantee Agreement, USAR entered into a Securities Issuance Agreement
with the DOC and issued to the DOC 16,132,790 shares of Common Stock (“the SIA Shares”) and a warrant to purchase 17,600,584
shares of Common Stock at an exercise price of $17.17 per share (the “DOC Warrant”).

 

Based
on preliminary conclusions, the SIA Shares were issued in exchange for access to the awards pursuant to the Direct Funding Agreement
and the warrant to purchase 17,600,584 shares of Common Stock was issued in exchange for obtaining the Loan Guarantee Agreement. The
Company has recorded deferred financing and other transaction costs for the issuance of the SIA Shares and warrant.

 

  

  

 

 

The
issuance of the SIA Shares has been reflected in the unaudited pro forma condensed combined balance sheet as of March 31, 2026 as an
increase in stockholders’ equity of $451.4 million which represents the fair value of the SIA Shares at the date of issuance,
an increase in other non-current assets of $277.0 million which represents a deferred financing cost related to the maximum award
amount of $277.0 million pursuant to the Direct Funding Agreement, and an increase in accumulated deficit of $174.4 million which
represents the cost of obtaining the Direct Funding Agreement which is equal to the difference between the fair value of the SIA
Shares at issuance and the maximum direct funding award. The deferred financing cost will commence amortization pro ratably upon
recognition of grant income under the Direct Funding Agreement, which is subject to the achievement of various project-specific
milestones, the making of cash equity contributions by USAR to its subsidiaries, the satisfaction of financial ratio and liquidity
thresholds, the receipt of required permits and approvals and other customary conditions, which have not yet been satisfied as of
the date of this filing. As such no amortization of the deferred financing cost has been reflected in the accompanying unaudited pro
forma condensed combined financial information.

 

The
Company has determined that the warrant issued to the DOC is liability-classified, with an initial fair value of $24.48 per common share,
or approximately $430.9 million in aggregate as of the issuance date of June 3, 2026. The DOC Warrant liability will be remeasured at
fair value at the end of each reporting period, with changes in fair value recognized as a gain or loss within other income (expense),
net in the Company’s condensed consolidated statements of operations and comprehensive income (loss). The DOC Warrant liability
was initially recorded at fair value with an offsetting entry recorded as a deferred loan commitment asset until the debt associated
with the Parent Loan Agreements is drawn. Upon each draw, the deferred loan commitment asset will be derecognized proportionately, and
recorded as a component of the related debt’s amortized cost basis, which will be amortized over the term of the debt using the
effective interest method. As of the date of this filing, no amounts associated with the Parent Loan Agreements had been drawn. Accordingly,
no reclassification of the deferred loan commitment asset to related debt’s amortized cost basis has been reflected on the Company’s
unaudited pro forma condensed combined balance sheet as of March 31, 2026, and no related amortization expense has been reflected in
the Company’s unaudited pro forma condensed combined statements of operations for the three months ended March 31, 2026 and for
the year ended December 31, 2025.

 

The
Company’s accounting for the Securities Issuance Agreement, including the issuance of the SIA Shares and the DOC Warrant is preliminary.
Accordingly, the treatment depicted in the unaudited pro forma condensed financial information may change as the Company completes its
accounting assessment.

 

The
Retained Finance Agreement

 

On
January 21, 2026, SVRE entered into a Finance Agreement with the United States International Development Finance Corporation
(the “DFC”), which was amended on March 5, 2026 (as further amended from time to time, the “Retained Finance Agreement”).
The Retained Finance Agreement provides SVRE with long-term debt financing to support its rare earth mining and processing operations
in an aggregate committed amount not to exceed $565 million, consisting of (i) an initial loan tranche with a principal amount
not to exceed $465 million (the “Initial Loan”), and (ii) a second loan tranche with a principal amount not to
exceed $100 million (the “Incremental Loan”). As of March 31, 2026, the aggregate outstanding principal amount
of indebtedness of SVRE and its subsidiaries under the Retained Finance Agreement was $325 million.

 

On
May 28, 2026, SVRE and the DFC entered into the Second Amendment to the Finance Agreement, which formalized the inclusion of a $100 million
Incremental Loan as a second tranche under the existing $465 million Initial Loan facility. The Second Amendment also extended the loan
term for both tranches from up to 12 years to up to 15 years from the first closing date, upon the execution of the Offtake Agreement
(see discussion below). In connection with the Incremental Loan, DFC was issued two warrants (the “DFC Warrants”) granting
a combined 12% fully diluted equity interest in the Company, which will automatically exercise upon the closing of the Merger, at which
point the Incremental Loan shall be deemed extinguished in full. The Incremental Loan was closed on June 4, 2026.

 

The
Initial Loan issuance was reflected in the historical unaudited condensed consolidated balance sheet of SVRE as of March 31, 2026, accordingly,
no adjustment has been reflected within the unaudited pro forma condensed combined balance sheet for such amounts. The Incremental Loan
and the DFC Warrants issuance on June 4, 2026, and the DFC Warrants exercise and extinguishment of the Incremental Loan upon the closing
of the Merger, have been included as an other material transaction adjustment within the unaudited pro forma condensed combined balance
sheet as of March 31, 2026. Adjustments for the Initial Loan have been included within the unaudited pro forma condensed combined statement
of operations for the three months ended March 31, 2026 and for the year ended December 31, 2025 assuming the Initial Loan was entered
and drawn down on January 1, 2025.

 

The
Offtake Agreement

 

On
or about the date of the Merger Agreement, SV Management Switzerland AG (“SV Management Switzerland”), a subsidiary of SVRE,
entered into an offtake agreement with a special purpose vehicle capitalized by the U.S. government, as well as private capital sources
(the “Counterparty”) (as amended from time to time, the “Offtake Agreement”) for the long-term supply of rare
earth materials produced by SVRE.

 

 2

  

 

 

The Offtake Agreement provides for the sale of 100% of the rare earth
products produced from phase one of the Pela Ema project, subject to limited carve-outs. The Incremental Loan was fully disbursed on June
4, 2026, and SVRE’s delivery obligation will be for 100% of phase one production. The agreement remains in effect until the earlier
of specified production-based volume delivery thresholds and the date that is 20 years after the date on which SVRE’s facility
becomes capable of producing the contemplated products (the “Commercial Operations Date”), unless extended with the consent
of the U.S. government. Pricing is based on annually escalated contractual floor prices, with amounts above the applicable floor price,
as well as certain cost savings and yield variances, allocated 70% to SV Management Switzerland and 30% to the Counterparty. Commencement
of deliveries is subject to the satisfaction or waiver of specified conditions precedent by the agreed long-stop date, June 12, 2026,
and either party may terminate the agreement without liability if such conditions are not satisfied or waived by that date. As the Offtake
Agreement has been executed subsequent to March 31, 2026, adjustments related to the Offtake agreement have been included within the unaudited
pro forma condensed combined financial statements. On June 29, 2026, SV Management Switzerland and the Counterparty entered into an amendment,
consent and waiver to the Offtake Agreement that extended the long-stop date from June 12, 2026 to August 14, 2026.

 

Issuance
of Earnout Shares

 

In
connection with the business combination between the Company and USA Rare Earth, LLC, the Company agreed to issue common stock of the
Company (the “earnout shares”) to certain shareholders of USA Rare Earth, LLC in two tranches upon the occurrence of certain
triggering events. On April 15, 2026, the Company achieved the market-price condition for the first tranche of earnout shares, as the
Company’s common stock exceeded $15.00 per share for at least 20 out of 30 consecutive trading days. 5.05 million shares were issued
to USA Rare Earth, LLC shareholders. The second tranche of 5.05 million earnout shares were issued on May 15, 2026 when the Company achieved
the market-price condition for the second tranche, as the Company’s common stock exceeds $20.00 per share for at least 20 out of
30 consecutive trading days.

 

The
earnout shares were classified as liabilities and remeasured at fair value on a recurring basis prior to conversion. Upon issuance of
the two tranches of the earnout shares, the related earnout liability was reclassified to common stock and additional paid-in capital.
The effect of the conversion has been included within the unaudited pro forma condensed combined balance sheet as of March 31, 2026.

 

Presentation
Periods

 

The
unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X
and should be read in conjunction with the accompanying notes.

 

The
unaudited pro forma condensed combined balance sheet as of March 31, 2026 combines the unaudited condensed consolidated balance
sheet of USAR as of March 31, 2026 with the unaudited condensed consolidated balance sheet of SVRE as of March 31, 2026, giving
effect to the Pro Forma Transactions as if it had been consummated on March 31, 2026.

 

The
unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2026 combines the unaudited condensed
consolidated statement of operations of USAR for the three months ended March 31, 2026 with the unaudited condensed consolidated statement
of operations of SVRE for the three months ended March 31, 2026, giving effect to the Pro Forma Transactions as if it had been consummated
on January 1, 2025.

 

The
unaudited pro forma condensed combined statement of operations for the year ended December 31, 2025 combines the audited consolidated
statement of operations of USAR for the year ended December 31, 2025 with the audited consolidated statement of operations of SVRE
for the year ended December 31, 2025, giving effect to the Pro Forma Transactions as if it had been consummated on January 1,
2025.

 

The
unaudited pro forma condensed combined financial information was derived from, and should be read in conjunction with, the following
historical financial statements and the accompanying notes:

 

●The
 historical audited consolidated financial statements of USAR as of and for the year ended
 December 31, 2025, as included in the Company’s Annual Report on Form 10-K filed with
 the SEC on March 30, 2026;

 

●The
 historical unaudited condensed consolidated financial statements of USAR as of and for the
 three months ended March 31, 2026, as included in the Company’s Quarterly Report on
 Form 10-Q filed with the SEC on May 14, 2026;

 

●The
 historical audited financial statements of SVRE as of and for the year ended December 31,
 2025, included as Exhibit 99.3 in the Company’s Current Report on Form 8-K filed with
 the SEC on May 13, 2026.

 

 3

  

 

 

The
historical unaudited condensed consolidated balance sheet and statement of operations of SVRE as of and for the three months ended March
31, 2026 are derived from the books and records of SVRE. The unaudited pro forma condensed combined financial information should also
be read together with other financial information included elsewhere or filed with the SEC.

 

Accounting
for the Merger

 

The
unaudited pro forma condensed combined financial information has been prepared using the acquisition method of accounting in accordance
with accounting principles generally accepted in the United States (“U.S. GAAP”). USAR has been identified as an
accounting acquirer for accounting purposes, and thus accounts for the Merger as a business combination in accordance with Accounting
Standards Codification Topic 805, Business Combinations (“ASC 805”). Under the acquisition method of accounting,
SVRE’s assets and liabilities will be recorded at their respective fair values. Any difference between the purchase price for SVRE
and the fair value of the identifiable net assets acquired (including intangibles) will be recorded as goodwill. The assets and liabilities
of SVRE have been measured based on various preliminary estimates using assumptions that USAR’s management believes are reasonable
and based on currently available information. Accordingly, the pro forma adjustments are preliminary and have been made solely for the
purpose of providing this unaudited pro forma condensed combined financial information.

 

Differences
between these preliminary estimates and the final purchase accounting may occur, and the final purchase accounting could be materially
different from the preliminary estimates used to prepare the accompanying unaudited pro forma condensed combined financial information
and could have a material impact on the combined company’s future results of operations and financial position.

 

Basis
of Pro Forma Presentation

 

The
unaudited pro forma condensed combined financial information appearing below does not consider any potential effects of changes in market
conditions on revenues or expense efficiencies, among other factors. In addition, as explained in more detail in the accompanying notes,
the preliminary allocation of the pro forma purchase price reflected in the unaudited pro forma condensed combined financial information
is subject to adjustment and may vary significantly from what will be recorded upon completion of the final purchase price allocation.

 

The
unaudited pro forma condensed combined financial information has been prepared based on the aforementioned historical financial statements
and the assumptions and adjustments as described in the notes to the unaudited pro forma condensed combined financial information. The
pro forma adjustments reflect transaction accounting adjustments related to the Pro Forma Transactions, which are discussed in further
detail below. The unaudited pro forma condensed combined financial information is presented for illustrative purposes only and do not
purport to represent the combined company’s consolidated results of operations or the consolidated financial position that would
actually have occurred had the Pro Forma Transactions been consummated on the dates assumed or to project the combined company’s
consolidated results of operations or consolidated financial position for any future date or period.

 

The
accounting policies followed in preparing the unaudited pro forma condensed combined financial information are those used by USAR as
set forth in the audited historical financial statements. Based on the Company’s initial review and understanding of SVRE’s
significant accounting policies, there are no material adjustments required at this time to conform SVRE’s historical financial
information to USAR’s significant accounting policies. A more comprehensive comparison and assessment will occur, which may result
in additional differences being identified. Additionally, USAR has included certain preliminary presentation adjustments for consistency
in the financial statement presentation. See Notes 2 and 3 below for more information.

 

The
unaudited pro forma condensed combined financial information is presented for illustrative purposes only and does not reflect the
costs of any integration activities or cost savings or synergies that may be achieved because of the Merger.

 

USAR
and SVRE have not had any historical material relationship prior to the Merger. Accordingly, no pro forma adjustments were required to
eliminate activities between the companies.

 

 4

  

 

 

Unaudited
Pro Forma Condensed Combined Balance Sheet
As of March 31, 2026
(in thousands)

 

 
   
 USAR Historical  
 SVRE Historical  
 Presentation Adjustments  
 Transaction Accounting Adjustments  
 Other Material Transactions  
 Pro Forma Combined 

 
 ASSETS 
     
     
     
     
     
    

 
 Current assets 
     
     
     
     
     
    

 
 Cash and cash equivalents 
 $1,749,644  
 $110,417  
     
 $(300,000)(B) 
 $99,000(E) 
 $1,659,061 

 
 Accounts receivables 
  5,691  
  31  
     
     
     
  5,722 

 
 Other receivables 
  —  
  241  
  (241)(A) 
     
     
  — 

 
 Inventories 
  28,430  
  21,231  
     
     
     
  49,661 

 
 Prepaid expenses and other current assets 
  6,621  
  3,760  
  241(A) 
     
     
  10,622 

 
 Total current assets 
  1,790,386  
  135,680  
  —  
  (300,000) 
  99,000  
  1,725,066 

 
 Property, plant and equipment, net 
  118,967  
  611,588  
  1,000(A) 
  2,510,291(B) 
     
  3,227,041 

 
   
     
     
  (14,805)(A) 
     
     
    

 
 Mineral interests 
  17,339  
  —  
  14,805(A) 
     
     
  32,144 

 
 Goodwill 
  134,848  
  —  
     
  1,090,843(B) 
  (99,000) 
  1,126,691 

 
 Other intangible assets, net 
  67,255  
  —  
     
  246,691(B) 
     
  313,946 

 
 Equipment deposits 
  5,364  
  —  
     
     
     
  5,364 

 
 Operating lease right-of-use assets 
  473  
  —  
     
     
     
  473 

 
 Other non-current assets 
  207  
  1,193  
  (1,000)(A) 
     
  277,000(F) 
  708,262 

 
   
     
     
     
     
  430,862(G) 
    

 
 Total assets 
 $2,134,839  
 $748,461  
 $—  
 $3,547,825  
 $707,862  
 $7,138,987 

 
   
     
     
     
     
     
    

 
 LIABILITIES, MEZZANINE AND STOCKHOLDER’S EQUITY 
     
     
     
     
     
    

 
 Liabilities 
     
     
     
     
     
    

 
 Current liabilities 
     
     
     
     
     
    

 
 Accounts payable 
 $17,084  
 $15,647  
 $(6,702)(A) 
     
     
 $26,029 

 
 Accrued liabilities 
  21,360  
  —  
  13,190(A) 
  113,000(C) 
     
  147,995 

 
   
     
     
  445(A) 
     
     
    

 
 Contract liabilities 
  10,377  
  —  
     
     
     
  10,377 

 
 Salaries and social charges 
  —  
  6,488  
  (6,488)(A) 
     
     
  — 

 
 Taxes payable 
  —  
  414  
     
     
     
  414 

 
 Other current liabilities 
  —  
  445  
  (445)(A) 
     
     
  — 

 
 Royalty agreement 
  —  
  11,443  
     
     
     
  11,443 

 
 DFC Loan 
  —  
  2,232  
     
     
     
  2,232 

 
 Finance leases, current 
  286  
  933  
     
     
     
  1,219 

 
 Operating leases, current 
  232  
  —  
     
     
     
  232 

 
 Total current liabilities 
  49,339  
  37,602  
  —  
  113,000  
  —  
  199,941 

 
 Royalty agreement 
  —  
  65,534  
     
  149,881(B) 
     
  215,415 

 
 DFC Loan 
  —  
  297,009  
     
     
     
  297,009 

 

 

Please
refer to the notes to the unaudited pro forma condensed combined financial information.

 

 5

  

 

 

Unaudited
Pro Forma Condensed Combined Balance Sheet
As of March 31, 2026 — (Continued)
(in thousands)

 

 
   
 USAR Historical  
 SVRE Historical  
 Presentation Adjustments  
 Transaction Accounting Adjustments  
 Other Material Transactions  
 Pro Forma Combined 

 
 Asset retirement obligations 
  —  
  4,738  
     
     
     
  4,738 

 
 Deferred grant income 
  8,414  
  —  
     
     
     
  8,414 

 
 Finance leases, non-current 
  519  
  180  
     
     
     
  699 

 
 Operating leases, non-current 
  244  
  —  
     
     
     
  244 

 
 Other liabilities 
  —  
  1,564  
     
     
     
  1,564 

 
 Earnout liability 
  145,080  
  —  
     
     
  (145,080)(D) 
  — 

 
 Warrant liability 
  26,491  
  14,841  
     
  (14,841)(B) 
  430,862(G) 
  457,353 

 
 Deferred tax liability 
  16,179  
  —  
     
  886,414(B) 
     
  902,593 

 
 Total liabilities 
  246,266  
  421,468  
  —  
  1,134,454  
  285,782  
  2,087,970 

 
 Commitments and contingencies 
     
     
     
     
     
    

 
 Mezzanine equity 
     
     
     
     
     
    

 
 12% Series A Cumulative Convertible Preferred Stock 
  9,614  
  —  
     
     
     
  9,614 

 
 Total mezzanine equity 
  9,614  
  —  
  —  
  —  
  —  
  9,614 

 
 Stockholders’ equity 
     
     
     
     
     
    

 
 Common stock 
  22  
  —  
     
  16(B) 
  1(D) 
  41 

 
   
     
     
     
     
  2(F) 
    

 
 Accumulated other comprehensive income (loss) 
  (200) 
  (18,126) 
     
  18,126(B) 
     
  (200)

 
 Additional paid-in capital 
  2,332,912  
  615,756  
     
  (615,756)(B) 
  215,826(D) 
  5,853,479 

 
   
     
     
     
  2,853,348(B) 
  451,393(F) 
    

 
 Accumulated deficit 
  (454,349) 
  (270,637) 
     
  270,637(B) 
  (70,747)(D) 
  (812,491)

 
   
     
     
     
  (113,000)(C) 
  (174,395)(F) 
    

 
 Non-controlling interest 
  574  
  —  
     
     
     
  574 

 
 Total stockholders’ equity 
  1,878,959  
  326,993  
  —  
  2,413,371  
  422,080  
  5,041,403 

 
 Total liabilities, mezzanine equity, and stockholder’s equity 
 $2,134,839  
 $748,461  
 $—  
 $3,547,825  
 $707,862  
 $7,138,987 

 

 

Please
refer to the notes to the unaudited pro forma condensed combined financial information.

 

 6

  

 

 

Unaudited
Pro Forma Condensed Combined Statement of Operations
For the Three Months Ended March 31, 2026
(in thousands except per share amounts)

 

 
   
 USAR Historical  
 SVRE Historical  
 Presentation Adjustments  
 Transaction Accounting Adjustments  
 Other Material Transactions  
 Pro Forma Combined 

 
 Revenue 
 $5,698  
 $588  
     
     
     
 $6,286 

 
 Cost of revenue 
  5,592  
  5,009  
     
     
     
  10,601 

 
 Gross profit 
  106  
  (4,421) 
  —  
  —  
  —  
  (4,315)

 
 Operating expenses: 
     
     
     
     
     
    

 
 Selling, general and administrative 
  21,175  
  8,026  
  346(AA) 
  1,219(DD) 
     
  30,766 

 
 Research and development 
  14,249  
  —  
     
     
     
  14,249 

 
 Amortization of intangible assets 
  1,357  
  —  
     
     
     
  1,357 

 
 Other expenses, net 
  —  
  2,365  
     
     
     
  2,365 

 
 Total operating expenses 
  36,781  
  10,391  
  346  
  1,219  
  —  
  48,737 

 
 Loss from operations 
  (36,675) 
  (14,812) 
  (346) 
  (1,219) 
  —  
  (53,052)

 
 Other (expense) income, net: 
     
     
     
     
     
    

 
 Interest and dividend income 
  11,970  
  175  
     
     
     
  12,145 

 
 Loss on fair market value of financial instruments, net 
  (43,553) 
  —  
  (6,216)(AA) 
     
  6,216(EE) 
  (43,553)

 
 Interest expense and other loss, net 
  (593) 
  (12,218) 
  6,562(AA) 
     
  2,276(FF) 
  (6,547)

 
   
     
     
     
     
  (4,028)(GG) 
    

 
   
     
     
     
     
  1,454(HH) 
    

 
 Grant income 
  206  
  —  
     
     
     
  206 

 
 Foreign currency exchange, net 
  —  
  15,800  
     
     
     
  15,800 

 
 Total other expense, net 
  (31,970) 
  3,757  
  346  
  —  
  5,918  
  (21,949)

 
 Loss before taxes 
  (68,645) 
  (11,055) 
  —  
  (1,219) 
  5,918  
  (75,001)

 
 Benefit from income taxes 
  (577) 
  —  
     
     
     
  (577)

 
 Net loss 
  (68,068) 
  (11,055) 
  —  
  (1,219) 
  5,918  
  (74,424)

 
 Net loss attributable to non-controlling interest 
  (1,079) 
  —  
     
     
     
  (1,079)

 
 Net loss attributable to USA Rare Earth, Inc. 
 $(66,989) 
 $(11,055) 
 $—  
 $(1,219) 
 $5,918  
 $(73,345)

 
   
     
     
     
     
     
    

 
 Net loss per share attributable to USA Rare Earth, Inc.: 
     
     
     
     
     
    

 
 Basic and diluted 
 $(0.34) 
 $(0.06) 
     
     
     
 $(0.21)

 
   
     
     
     
     
     
    

 
 Number of shares used in per share calculations: 
     
     
     
     
     
    

 
 Basic and diluted 
  196,479  
  193,429  
     
     
     
  349,561 

 

 

Please
refer to the notes to the unaudited pro forma condensed combined financial information.

 

 7

  

 

 

Unaudited
Pro Forma Condensed Combined Statement of Operations
For the Year Ended December 31, 2025
(in thousands except per share amounts)

 

 
   
 USAR Historical  
 SVRE Historical  
 Presentation Adjustments  
 Transaction Accounting Adjustments  
 Other Material Transactions  
 Pro Forma Combined 

 
 Revenue 
 $1,643  
 $2,486  
     
     
     
 $4,129 

 
 Cost of revenue 
  1,448  
  36,105  
     
     
     
  37,553 

 
 Gross profit 
  195  
  (33,619) 
  —  
  —  
  —  
  (33,424)

 
 Operating expenses: 
     
     
     
     
     
    

 
 Selling, general and administrative 
  43,135  
  25,803  
  278(AA) 
  113,000(CC) 
     
  192,609 

 
   
     
     
     
  10,393(DD) 
     
    

 
 Research and development 
  15,885  
  —  
     
     
     
  15,885 

 
 Amortization of intangible assets 
  678  
  —  
     
     
     
  678 

 
 Other expenses, net 
  —  
  1,440  
     
     
     
  1,440 

 
 Total operating expenses 
  59,698  
  27,243  
  278  
  123,393  
  —  
  210,612 

 
 Loss from operations 
  (59,503) 
  (60,862) 
  (278) 
  (123,393) 
  —  
  (244,036)

 
 Other (expense) income, net: 
     
     
     
     
     
    

 
 Interest and dividend income 
  5,446  
  2,671  
     
     
     
  8,117 

 
 Loss on fair market value of financial instruments, net 
  (244,488) 
  —  
  (7,652)(AA) 
     
  7,652(EE) 
  (244,488)

 
 Interest expense and other income (loss), net 
  (139) 
  (9,873) 
  7,930(AA) 
     
  4,268(FF) 
  (23,320)

 
   
     
     
     
     
  (26,206)(GG) 
    

 
   
     
     
     
     
  700(HH) 
    

 
 Foreign currency exchange, net 
  —  
  49,532  
     
     
     
  49,532 

 
 Total other expense, net 
  (239,181) 
  42,330  
  278  
  —  
  (13,586) 
  (210,159)

 
 Loss before taxes 
  (298,684) 
  (18,532) 
  —  
  (123,393) 
  (13,586) 
  (454,195)

 
 Benefit from income taxes 
  (160) 
  —  
     
     
     
  (160)

 
 Net loss 
  (298,524) 
  (18,532) 
  —  
  (123,393) 
  (13,586) 
  (454,035)

 
 Net loss attributable to non-controlling interest 
  (965) 
  —  
     
     
     
  (965)

 
 Net loss attributable to USA Rare Earth, Inc. 
 $(297,559) 
 $(18,532) 
 $—  
 $(123,393) 
 $(13,586) 
 $(453,070)

 
   
     
     
     
     
     
    

 
 Net loss per share attributable to USA Rare Earth, Inc.: 
     
     
     
     
     
    

 
 Basic and diluted 
 $(3.31) 
 $(0.10) 
     
     
     
 $(1.54)

 
   
     
     
     
     
     
    

 
 Number of shares used in per share calculations: 
     
     
     
     
     
    

 
 Basic and diluted 
  98,021  
  193,429  
     
     
     
  310,771 

 

 

Please
refer to the notes to the unaudited pro forma condensed combined financial information.

 

 8

  

 

 

NOTES
TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

1.
Basis of Presentation

 

The
pro forma adjustments have been prepared as if the Pro Forma Transactions had been consummated on March 31, 2026, in the case of
the unaudited pro forma condensed combined balance sheet, and, in the case of the unaudited pro forma condensed combined statements of
operations, as if the Pro Forma Transactions had been consummated on January 1, 2025, the beginning of the earliest period presented
in the unaudited pro forma condensed combined statements of operations.

 

The
unaudited pro forma condensed combined financial information has been prepared assuming the acquisition method of accounting in accordance
with U.S. GAAP. Under this method, SVRE’s assets and liabilities will be recorded at their respective fair values. Any
difference between the purchase price for SVRE and the fair value of the identifiable net assets acquired (including intangibles) will
be recorded as goodwill. The assets and liabilities of SVRE have been measured based on various preliminary estimates using assumptions
that USAR’s management believes are reasonable and based on currently available information. Accordingly, the pro forma adjustments
are preliminary and have been made solely for the purpose of providing this unaudited pro forma condensed combined financial information.

 

The
pro forma adjustments represent management’s estimates based on information available as of the date of the Form 8-K in which these
pro forma financial statements are included and are subject to change as additional information becomes available and additional analyses
are performed.

 

USAR
has performed a preliminary review to identify any accounting policy differences between the accounting policies used in SVRE’s
financial statements and those of the Company, where the impact was potentially material and could be reasonably estimated, with the
Company identifying no such differences.

 

2.
Adjustments to the Unaudited Pro Forma Condensed Combined Balance Sheet as of March 31, 2026

 

The
adjustments included in the unaudited pro forma condensed combined balance sheet as of March 31, 2026 are as follows:

 

(A)Reflects
reclassification adjustments to conform SVRE’s historical balances to the financial statement presentation of USAR.

 

(B)Reflects
the purchase price allocation adjustments to record SVRE’s identifiable assets acquired and liabilities assumed at their estimated
fair values as of the acquisition date. The related statement of operations adjustments are reflected at adjustment (BB). This adjustment
reflects the recording of the preliminary estimate of goodwill and the elimination of the historical equity balances of SVRE. Additionally,
the adjustment removes SVRE’s outstanding warrant liability, to reflect the conversion of all warrants into SVRE’s ordinary
shares immediately prior to the Merger.

 

Pursuant
to ASC 805, the preliminary purchase price was allocated among the identified net assets to be acquired, based on a preliminary
analysis. Goodwill is expected to be recognized as a result of the Merger, which represents the excess fair value of consideration over
the fair value of the underlying net assets of SVRE. The deferred income taxes represent the deferred tax impact associated with
the incremental differences in book and tax basis created from the preliminary purchase price allocation. Deferred taxes associated with
estimated fair value adjustments were calculated using the statutory corporate tax rate in Brazil of 34%. The estimates of fair value
are based upon preliminary valuation assumptions, and are believed to be reasonable, but are inherently uncertain and unpredictable.
As a result, actual results may differ from estimates, and the difference may be material.

 

 9

  

 

 

The
following is a preliminary estimate of fair value of the assets acquired and the liabilities assumed by USAR in the Merger, reconciled
to the estimated purchase consideration (in thousands):

 

 
 Net Assets Identified 
 Preliminary Estimate of Fair Value 

 
 Cash and cash equivalents 
 $209,417 

 
 Accounts receivable 
  31 

 
 Inventories 
  21,231 

 
 Prepaid expenses and other current assets 
  4,001 

 
 Property, plant and equipment, net (incl. mineral interests)(1) 
  3,122,879 

 
 Other intangible assets, net(2) 
  246,691 

 
 Other non-current assets 
  193 

 
 Accounts payable 
  (8,945)

 
 Accrued liabilities 
  (13,635)

 
 Tax payable 
  (414)

 
 Royalty agreement – current(3) 
  (11,443)

 
 DFC loan, current 
  (2,232)

 
 Finance lease, current 
  (933)

 
 Royalty agreement – noncurrent(3) 
  (215,415)

 
 DFC loan, noncurrent 
  (297,009)

 
 Asset retirement obligations 
  (4,738)

 
 Finance leases, non-current 
  (180)

 
 Other liabilities 
  (1,564)

 
 Deferred tax liabilities 
  (886,414)

 
 Total net assets identified 
 $2,161,521 

 
 Goodwill 
  991,843 

 
 Total purchase consideration 
 $3,153,364 

 

 

 
 Value Conveyed 
   

 
 Cash consideration(4) 
 $300,000 

 
 Equity consideration(5) 
  2,850,304 

 
 Pre-combination expense for vested performance stock options(6) 
  3,060 

 
 Total purchase consideration 
 $3,153,364 

 

 

 

(1)The
$3.1 billion allocated to property, plant and equipment, net, is related to development stage properties. Upon the closing of the Merger,
the mine will continue to be designated as a development stage property, and related development costs will continue to be capitalized
until the milestones necessary to be considered operational are achieved. An expansion and optimization project is currently being implemented
that is expected to result in higher production capacity, a sustained lower operating cost profile and enhanced product quality. Construction
is expected to be completed, and commercial operations are expected to commence in 2027.

(2)Other
intangible assets is comprised of an Offtake Agreement. The Offtake Agreement asset is expected to be amortized on a systematic basic
using the units of production method. As of the date of the Form 8-K in which these pro forma financial statements are included, delivery
pursuant to the Offtake Agreement has not started. Accordingly, amortization of the Offtake Agreement had not commenced as of the pro
forma transaction date and no related amortization expense has been reflected in the unaudited pro forma condensed combined statement
of operations.

(3)This
reflects an increase in the fair value of the liability for royalty payments due to an increase in estimated future cash payments. The
increase in estimated future cash payments is primarily related to the anticipated impact of the Offtake Agreement.

(4)This
amount represents cash consideration paid to SVRE’s shareholders.

(5)Equity
consideration is provided in the form of Common Stock of USAR and is calculated as 126,849,307 shares of USAR Common Stock to be issued
to SVRE shareholders, multiplied by $22.47, the closing share price of USAR on June 5, 2026.

 

 10

  

 

 

 The
following table shows the effect of changes in USAR’s share price and the resulting impact on the estimated purchase consideration,
and estimated goodwill:

 

 
 Change in Share Price of USAR 
 Share Price  
 Estimated Purchase Consideration (in thousands)  
 Estimated Goodwill (in thousands) 

 
 Increase of 25% 
 $28.09  
 $3,865,939  
 $1,704,419 

 
 Decrease of 25% 
  16.85  
  2,440,787  
  279,267 

 

 

(6)This
reflects the pre-combination expense pertaining to options to purchase SVRE shares subject to performance-vesting conditions (the “Performance-Vesting
Options”) which will be substituted with USAR time-vesting restricted stock units.

 

(C)Reflects
the impact of nonrecurring expenses related to estimated transaction costs, primarily comprised of investment banking fees, legal fees,
issuance costs, accounting and audit fees, and other related advisory costs. No amount was incurred and accrued on the balance sheet
as of March 31, 2026. The related income statement adjustment is reflected at adjustment (CC).

 

(D)Reflects
the issuance of USAR’s common stock in an amount of $216 million upon conversion of earnout liabilities of $145 million. The $71
million increase in fair value of the earnout liability between March 31, 2026 and the conversion dates will be recorded as loss on fair
market value of financial instruments, net in the Company’s unaudited condensed consolidated statement of operations and comprehensive
income (loss) for the three and six months ended June 30, 2026.

 

(E)Reflects
i) the issuance of the Incremental Loan pursuant to the Retained Finance Agreement in an amount of $100 million, net of estimated debt
issuance costs of $1 million; ii) the reduction to goodwill due to the increase of the SVRE’s net assets of $99 million. The warrant
liability upon the issuance of the DFC Warrants will be eliminated upon the closing of the Merger, at which point the DFC Warrants will
be exercised. The Incremental Loan will be deemed to be extinguished upon the exercise of the DFC Warrants, pursuant to which the outstanding
principal amount of the Incremental Loan shall be deemed repaid in full, and unpaid accrued interest will be settled in cash. The amount
of the interest accrual will be determined upon the closing of the Merger. As both the DFC Warrant and the Incremental Loan are assumed
to be exercised and extinguished, respectively, upon the closing of the Merger, no adjustment has been reflected in the unaudited pro
forma condensed combined statement of operations. The recognition of the Incremental Loan and DFC Warrant liability will be recorded
in SVRE’s unaudited condensed financial statements as of and for the six months ended June 30, 2026.

 

(F)Reflects
the issuance of 16,132,790 shares of USAR common stock, with a fair value of approximately $451.4 million to the DOC pursuant to the
Securities Issuance Agreement dated June 3, 2026, as a condition precedent to the Direct Funding Agreement under the CHIPS Act. The deferred
financing cost represents the deferred asset recoverable through the maximum direct funding award which is $277.0 million, and will commence
amortization upon recognition of grant income under the Direct Funding Agreement. The $174.4 million difference between the fair value
of the SIA shares and the deferred financing cost represents the cost of obtaining the Direct Funding Agreement which is presented as
an increase to accumulated deficit.

 

(G)Reflects
the issuance of the warrant to the DOC to purchase 17,600,584 shares of USAR common stock pursuant to the Warrant to Purchase Common
Shares of USA Rare Earth, Inc Agreement dated June 3, 2026, as a condition precedent to the Loan Guarantee Agreement. The DOC Warrant’s
initial fair value approximates $430.9 million. The corresponding deferred loan commitment asset recorded upon the issuance of the warrant
to the DOC will be derecognized proportionately as a component of the related debt’s amortized cost basis as the debt is drawn,
and will be amortized over the term of the debt using the effective interest method. The changes in fair value of the warrant liability
will be recognized as a gain or loss within other income (expense), net in the Company’s condensed consolidated statements of operations
and comprehensive income (loss).

 

3.
Adjustments to the Unaudited Pro Forma Condensed Combined Statement of Operations for the three months ended March 31, 2026 and for the
year ended December 31, 2025

 

The
adjustments included in the unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2026
and for the year ended December 31, 2025 are as follows:

 

(AA)Reflects
a reclassification adjustment to conform SVRE’s historical expenses to the financial statement presentation of USAR.

 

 11

  

 

 

 

(CC)Reflects
the recognition of nonrecurring expenses related to estimated transaction costs in the amount of $113 million, which are primarily comprised
of investment banking fees, legal fees, issuance costs, accounting and audit fees, and other related advisory costs. The related balance
sheet adjustment is reflected at adjustment (C).

 

(DD)Reflects
the recognition of post-combination stock-based compensation expense in the amount of $1.2 million for the three months ended March 31,
2026 and $10.4 million for the year ended December 31, 2025 related to Performance-Vesting Options which will be substituted with USAR
time-vesting restricted stock units.

 

(EE)Reflects
the elimination of the recognized loss due to the change in fair value of warrant liability in an amount equal to $6.2 million for the
three months ended March 31, 2026 and $7.7 million for the year ended December 31, 2025 related to the private placement warrants issued
by SVRE to its investors. These warrants will be settled through equity consideration to the holders pursuant to the Merger. The related
balance sheet adjustment is reflected in adjustment (B).

 

(FF)Reflects
the elimination of interest related to Class A Preferred Shares in an amount equal to $2.3 million for the three months ended March 31,
2026 and $4.3 million for the year ended December 31, 2025 due to their redemption pursuant to the side letter agreement, dated March
5, 2026, between SVRE and Orion.

 

(GG)Reflects
estimated interest expense related to long-term debt financing of SVRE pursuant to the Retained Finance Agreement, calculated using an
estimated interest rate of Term SOFR plus 4%. This adjustment also includes the amortization of estimated debt discount and debt issuance
costs of $0.5 million for the three months ended March 31, 2026 and $1.9 million for the year ended December 31, 2025. An increase or
decrease of one-eighth of a percent in the interest rate would not result in a significant change in interest expense for the three months
ended March 31, 2026 and for the year ended December 31, 2025.

 

(HH)Reflects
the elimination of interest related to the OMF Credit Agreement in an amount equal to $1.5 million for the three months ended March 31,
2026 and $0.7 million for the year ended December 31, 2025 due to their repayment.

 

4.
Unaudited Pro Forma Net Loss Per Share

 

The
pro forma net loss per share calculations have been performed for the three months ended March 31, 2026 and for the year ended December 31,
2025, assuming the Pro Forma Transactions had been consummated on January 1, 2025.

 

 
 (in thousands except per share amounts) 
 For the Three Months Ended
 March 31, 2026  
 For the Year Ended December 31, 2025 

 
 Numerator 
     
    

 
 Pro forma net loss attributable to USA Rare Earth, Inc. 
 $(73,345) 
 $(453,070)

 
 Declared and deemed dividends, and interest accretion 
  (709) 
  (26,594)

 
 Pro forma undistributed net loss attributable to USA Rare Earth, Inc. 
 $(74,054) 
 $(479,664)

 
   
     
    

 
 Denominator 
     
    

 
 USAR weighted average number of common shares outstanding-basic 
  196,479  
  98,021 

 
 Add: Shares issued to SVRE shareholders in a Merger 
  126,849  
  126,849 

 
 Add: Shares issued in a private placement(*) 
  —  
  69,767 

 
 Add: Shares issued for earnout payments 
  10,100  
  — 

 
 Add: Shares issued to DOC 
  16,133  
  16,133 

 
 Pro forma weighted average shares of common stock outstanding – basic & diluted 
  349,561  
  310,771 

 
 Pro forma net loss per share – basic & diluted 
 $(0.21) 
 $(1.54)

 

 

*Shares
to be issued in a private placement for the three months ended March 31, 2026 are already reflected in the historical unaudited condensed
consolidated financial statements of USAR and therefore are not reflected separately.

 

The
Company’s potentially dilutive outstanding securities, including DOC Warrant to purchase 17,600,584 shares of USAR Common Stock
were excluded from the computation of pro forma diluted net loss per share because their effect would have been anti-dilutive.

 

 12