The following discussion and analysis of the financial condition and results of operations of REA includes information that REA’s management believes is relevant to an assessment and understanding of the Company’s historical operations. You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited financial statements for the three and six months ended June 30, 2026 and 2025 and the respective notes thereto, which are included elsewhere in this Quarterly Report on Form 10-Q, as well as our audited financial statements for the years ended December 31, 2025 and 2024 and the respective notes thereto previously filed with the SEC.
This discussion also contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 related to our current plans, estimates and assumptions, and events and financial trends that may affect our future operating results or financial position. We use terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “design,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “positioned,” “potential,” “predict,” “seek,” “should,” “target,” “will,” “would,” and other similar expressions to identify forward-looking statements. The forward-looking statements contained herein involve risks and uncertainties that could cause our actual results and the timing of events to differ materially from those expressed in these forward-looking statements due to a number of factors, including those discussed in “Special Note Regarding Forward-Looking Statements” appearing elsewhere in this Quarterly Report on Form 10-Q.
Any reference in this section to “we”, “us”, “our”, “REA”, or the “Company” refers to Rare Earths Americas, Inc. and our consolidated subsidiaries for the periods subsequent to the formation of Rare Earths Americas Ltd. on February 28, 2025 or, as the context requires, to the historical results of Alpha Minerals Brazil Participações Ltda “AMBPL.” Any reference to AMBPL refers to AMBPL prior to the consummation of the Acquisitions (as defined below). Refer to the discussion of “Our Corporate and Operating History and the Related Financial Information Reflected in Our Reported Results” for additional details regarding the operations that comprise REA for the reporting periods discussed in this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”).
Overview
Our Corporate and Operating History and the Related Financial Information Reflected in Our Reported Results
In February 2025, we were incorporated as Rare Earths Americas Ltd., under the laws of the Cayman Islands, for the purposes of acquiring AMBPL and Foothills Rare Earths Limited (“FRE Australia”) in two transactions that were contingent upon the completion of each other (the “Acquisitions”), as well as to raise the initial capital necessary to support the continued operations of the acquired and combined entities in a private placement transaction (“Private Placement”). The acquisition of AMBPL, a company organized under the laws of Brazil and with a history of exploration activities primarily conducted at two sites in Brazil, and the acquisition of FRE Australia, an Australian incorporated public unlisted Corporation that had performed limited exploration activities in the United States, were both completed on July 22, 2025 (the “Merger Date”). Consideration for the Acquisitions consisted of REA common shares issued to the former shareholders of each entity and, in the case of FRE Australia, the issuance of warrants exercisable for shares of REA’s common stock in exchange for FRE Australia’s previously outstanding options. The Private Placement, which resulted in the raise of $15.9 million after transaction costs, was completed on July 30, 2025. We subsequently completed a re-domestication through the filing of a certificate of conversion, becoming a Texas corporation on October 15, 2025. Following the redomestication, our name changed to Rare Earths Americas, Inc.
We determined that our acquisition of AMBPL is a transaction between entities under common control because the former sole shareholder of AMBPL, Rare Earths Americas Limited (“REA Australia”), retained control of AMBPL through its majority ownership in REA. Furthermore, as (1) our activities through the Merger Date were limited to administrative tasks supporting the Acquisitions and Private Placement and (2) we succeeded to substantially all of the operations of AMBPL, we determined that AMBPL is the predecessor entity to REA for financial statements purposes. As REA and AMBPL were determined to be entities under common control, the acquisition of AMBPL’s net assets were recorded at their historical carrying amounts and these financial statements reflect REA and AMBPL on a consolidated basis for periods following REA’s incorporation in February 2025. Periods prior to February 2025 relate solely to the predecessor operations of AMBPL. FRE Australia was determined to be a variable interest entity and its acquisition was an asset acquisition. See “Note 4 – Asset Acquisition and Variable Interest Entity” in our financial statements for the years ended December 31, 2025 and 2024 included in our final prospectus filed pursuant to Rule 424(b)(4) on May 7, 2026 (File No. 333-295032) (the “Prospectus”). The operating results and cash flows of FRE Australia are reflected in our consolidated results of operations and statement of financial condition for reporting periods subsequent to the Merger Date.
Our Business and Our Strategy
We are an exploration-stage company focused on advancing a portfolio of critical mineral projects targeting high-grade heavy rare earth mineral assets. Our portfolio includes three material projects - Alpha, Constellation, and Shiloh, along with certain non-material early-stage exploration projects, most notably our Homer Project in Goiás, Brazil. All of our properties are currently in exploration stage, and we have not yet commenced mining operations or generated any revenue. Our current operations are focused on defining mineralization for our projects and increasing our understanding of the characteristics and economics of each project. We hold options to purchase or lease mining rights to all of the properties we are exploring. Those options are described in detail in "Note 6 – Mineral Interests" in our
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financial statements for the years ended December 31, 2025 and 2024. Advancing these projects to development will require significant capital.
We intend to grow the value of our assets by: (1) advancing our project portfolio through land acquisition, drilling, exploration, land consolidation, process flowsheet development, resource definition, metallurgical test work, permitting, and engineering studies in accordance with S-K 1300; (2) pursuing strategic partnerships and financing to accelerate project development; and (3) developing a U.S.-aligned platform to strengthen critical mineral supply chains.
We have assembled a team with extensive mining sector-related experience, including exploration, development, permitting, operations and capital markets, to execute our strategy and pursue the market opportunity available to us.
During the second quarter of 2026, we completed our initial public offering. As of June 30, 2026, we had approximately $76.7 million of cash, cash equivalents and short-term investments. Based on our current operating plans, we believe these resources will be sufficient to fund our anticipated cash requirements for at least the next twelve months.
Our results of operations for the six months ended June 30, 2026 were affected by non-cash stock-based compensation expense and changes in the fair value of warrant and SAFE liabilities. Net cash used in operating activities was $10.3 million for the six months ended June 30, 2026, reflecting continued expenditures on exploration activities in the United States and Brazil, as well as costs associated with operating as a public company.
Recent Developments
North American Mining Segment
We are focused on exploration and development of a potential monazite-bearing sands resource across its Foothills Rare Earths District (the “District”) in Georgia, USA. Monazite is a mineral which hosts rare earths elements (REE), such as Neodymium (Nd), Praseodymium (Pr), Dysprosium (Dy) and Terbium (Tb). These elements are key materials used in high-performance permanent magnets, particularly neodymium-iron-boron (NdFeB) magnets, which enable high strength and efficiency in applications such as robotics, electric vehicles, defense systems, wind turbines, and consumer electronics. Dy and Tb are particularly valuable due to their ability to enhance magnet performance at high temperatures.
Monazite-bearing sands systems typically offer several advantages, including the ability to extract near-surface, free-dig material and utilize conventional mineral beneficiation processes; however, the applicability of these characteristics to the District has not yet been established and will require further technical evaluation. These characteristics may be favorable for future technical evaluation, subject to further study.
The Foothills Rare Earths District is at an exploration stage. No mineral resource or mineral reserve has been estimated for the District, and there is no guarantee that further exploration will result in the delineation of a mineral resource. The results presented herein represent exploration data and are insufficient to define a mineral resource. Additional drilling, sampling, and technical studies are required to evaluate the potential for mineral resource estimation.
Over the quarter the Company made significant progress on exploring and developing the District. At the Shiloh property (see Figure 1), over 4,600 meters (m) were drilled to identify and determine zones of rare earths mineralization. Across multiple drilling targets, assay showed geologic results similar with those of monazite-bearing sands system; reinforcing the Company’s exploration thesis that the potential for a rare earths deposit exists. In addition, early exploration results at Liberty Peak (see Figure 1), where drilling has intercepted monazite-bearing sands similar to those encountered at Shiloh more than 50 kilometers away, further supported the potential of the emerging Foothills Rare Earths District.
As of the end of the second quarter of 2026, the Company’s active land position under Exploration & Development Agreements ("EDAs"), mining leases and option agreements totaled 4,254 acres across the District, representing a 53% increase compared to the first quarter of 2026. In addition, REA has short-term access agreements and exploration agreements for initial assessments of prospective properties; total land position for these agreements totaled over 11,500 acres.
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Figure 1 - Foothills Rare Earths District showing survey areas and existing exploration targets. NURE select radiometric data from the National Uranium Resource Evaluation survey. Areas shown include active land positions consistent with the presence of an alkaline-carbonatite system.
The Company expanded its 2026 Georgia exploration program to include over 8,000m of sonic and direct push drilling at Liberty Peak, in addition to a 20,000m drill program at Shiloh. Rare Earths Americas will also undertake airborne radiometric surveys, geological mapping, and soil sampling across Target Areas 1–3 (See Figure 1) to further define and advance high-priority drill targets across the District. In total, the Company expects to invest approximately $15 million over 2026 to unlock and define the District's rare earths potential. The Company will release additional assay results and exploration updates throughout the third quarter of 2026 and into year-end.
Brazilian Mining Segment
Alpha Project: During the second quarter of 2026, the Company commenced an Initial Assessment (IA) for its Alpha project in Bahia, Brazil. The IA is expected to evaluate an initial mine plan, metallurgical processing, infrastructure requirements, permitting considerations and project economics, and is currently anticipated to be completed in early 2027. Subject to the results of the IA, the Company may undertake additional engineering and economic studies, including a pre-feasibility study. The IA and any subsequent technical studies are important steps in the advancement of a mining project and are intended to provide information necessary to evaluate technical feasibility, economic viability and future development alternatives.
In parallel with the IA, the Company plans to advance activities that may support future technical studies, including an infill drilling program designed to further define the Alpha mineral resource and potentially support the conversion of portions of the current inferred resource classification to measured and indicated classifications. The Company currently plans to complete approximately 13,400m of drilling at the Alpha property in 2026. There can be no assurance that the IA, future technical studies or additional drilling will support the development of the project or result in the conversion of inferred resources to higher-confidence resource classifications. Approximately $5 million is expected to be spent on exploration for the project in 2026.
Homer Project: During the quarter, the Company announced exploration results from its 100%-owned Homer-A project in Goiás, Brazil. Results from multiple exploration programs, including airborne magnetic surveys, soil geochemistry, gamma-radiometric surveys, geological mapping and drilling, were consistent with the Company's interpretation of a prospective alkaline-carbonatite system containing REE and niobium (Nb) mineralization.
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Exploration activities identified a magnetic anomaly covering more than 35 km² and extending over 6.5 kilometers along its major axis. Initial auger and reverse circulation drilling intersected REE and niobium mineralization across the target area, with several drill holes reporting increasing grades with depth and most holes terminating in mineralization.
Based on these results, the Company commenced an expanded 15,000m reverse circulation and diamond drilling program in June 2026 to further evaluate the scale, continuity and grade distribution of potential mineralization at Homer-A. Initial drill and assay results are expected to be released over the third quarter of 2026. Approximately $5 million is expected to be spent on exploration for the project in 2026.
Exploration at the project remains at an early stage, and additional drilling and technical studies are required to determine the extent, continuity and economic significance. No mineral resource or mineral reserve has been estimated for the Homer-A project, and there can be no assurance that further exploration will result in the delineation of a mineral resource or that any such resource would support future development.
Qualified Persons
The scientific and technical information contained in this Quarterly Report on Form 10-Q has been reviewed and approved by the qualified persons identified below, each of whom is a "qualified person" as defined in Item 1300 of Regulation S-K.
North American Mining Segment. The scientific and technical information relating to the Foothills Rare Earths District, including the Shiloh and Liberty Peak properties, has been reviewed and approved by Paul Dockweiler, Senior Geologist with Geosyntec Consultants, a Certified Professional Geologist (CPG-11379) and Registered Member of the Society for Mining, Metallurgy & Exploration. Mr. Dockweiler is not an employee or officer of the Company and provides services as an independent consultant through Geosyntec Consultants.
Brazilian Mining Segment — Alpha Project. The scientific and technical information relating to the Alpha and Constellation projects was prepared by McGarry Geoconsulting Corp. and Karst Geo Solutions LLC, each acting as a qualified person. Neither firm is an employee or affiliate of the Company, and each provides services as an independent consultant. The Alpha Project Technical Report Summary, prepared by McGarry Geoconsulting Corp. and Karst Geo Solutions LLC, is filed as Exhibit 96.3 to the Company's Registration Statement on Form S-1.
Brazilian Mining Segment — Homer-A Project. The scientific and technical information relating to the Homer-A project has been reviewed and approved by Leandro Coracini Ollita, a qualified person registered with the Brazilian Commission for Resources and Reserves (CBRR), Registration No. 023160. Mr. Ollita is an employee of the Company serving as Project Manager, Operations.
Summary of Historical Operations and Expected Trends
General
As an exploration-stage company, we have not begun to generate operating revenues, nor can we expect to generate operating revenues in the foreseeable future. Our financial results reported for the three and six months ended June 30, 2026 and 2025 are not reflective of our expectations for our ongoing operations, as further discussed in the sections titled “Factors that Will Impact Our Exploration Costs” and “Factors that Will Impact Our General and Administrative and Other Operating Costs” included in the Prospectus.
Results of Operations
Summary
We have no operating revenues. We are dependent on equity or other external financings to fund the execution of our business plans and operations, including mineral exploration and evaluation for economic viability; general and administrative (“G&A”) costs; interest expense and other costs. We expect to incur operating losses until such time that an economic mineral resource is identified, developed and put into profitable commercial production.
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Comparison of three and six months ended June 30, 2026 and 2025
The following tables set forth our historical results for the periods indicated, and the variances in amounts reported for the comparable reporting periods (dollars in thousands), percent changes are not included as they are not meaningful in this comparison:
For the three months ended June 30, Change
2026 2025 $
Statements of Operations Data:
Operating expenses:
Exploration expenses $ 4,566 $ 115 $ 4,451
General and administrative expenses 8,174 269 7,905
Depreciation expense 36 2 34
Transaction costs — 157 (157 )
Total operating expenses 12,776 543 12,233
Operating loss (12,776 ) (543 ) (12,233 )
Other income (expense):
Interest income 503 — 503
Interest expense (29 ) (58 ) 29
Foreign exchange gain 1 — 1
Change in fair value of SAFE (1,216 ) — (1,216 )
Change in fair value of warrants 727 — 727
Total other (expenses) income (14 ) (58 ) 44
Loss before income taxes (12,790 ) (601 ) (12,189 )
Provision for income taxes — — —
Net loss $ (12,790 ) $ (601 ) $ (12,189 )
For the six months ended June 30, Change
2026 2025 $
Statements of Operations Data:
Operating expenses:
Exploration expenses $ 6,631 $ 165 $ 6,466
General and administrative expenses 10,890 518 10,372
Depreciation expense 59 3 56
Transaction costs — 157 (157 )
Total operating expenses 17,580 843 16,737
Operating loss (17,580 ) (843 ) (16,737 )
Other income (expense):
Interest income 630 — 630
Interest expense (74 ) (59 ) (15 )
Foreign exchange loss (3 ) — (3 )
Change in fair value of SAFE (4,625 ) — (4,625 )
Change in fair value of warrants (7,919 ) — (7,919 )
Total other (expenses) income (11,991 ) (59 ) (11,932 )
Loss before income taxes (29,571 ) (902 ) (28,669 )
Provision for income taxes — — —
Net loss $ (29,571 ) $ (902 ) $ (28,669 )
Operating Costs and Expenses
Total operating expenses increased by $12.2 million and $16.7 million in the three and six months ended June 30, 2026, respectively, as compared to the three and six months ended June 30, 2025. The increases in both periods reflect the Company's expanded scale of operations following the acquisition of FRE Australia and the continued build-out of its organizational and exploration capabilities. The increase for the three months ended June 30, 2026 was further driven by stock-based compensation recognized in connection with the completion of the Company's IPO in May 2026, while the increase for the six-month period also reflects exploration and administrative activity in the first quarter of 2026 against a prior-year period in which the Company's operations were substantially more limited.
Exploration and evaluation expenses. Exploration and evaluation expenses increased by $4.5 million and $6.5 million in the three and six months ended June 30, 2026 as compared to the three and six months ended June 30, 2025. The increase was primarily attributable to
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increased exploration activity following the acquisition of FRE Australia, which expanded the Company’s exploration portfolio and operational footprint. The increased exploration activity consisted of increased drilling costs, geological and technical consulting fees, exploration personnel compensation, and assay costs. Exploration and evaluation expenses during the prior‑year period were minimal, reflecting the Company’s more limited scope of operations at that time.
General and administrative expenses. General and administrative expenses increased by $7.9 million and $10.4 million in the three and six months ended June 30, 2026 as compared to the three and six months ended June 30, 2025. The increase was primarily driven by higher stock-based compensation recognized in connection with the completion of the Company's initial public offering, as well as increased personnel-related costs and professional service fees, reflecting the growth of the Company's operations following the acquisition of FRE Australia, including the expansion of management and administrative functions and increased public-company and regulatory compliance activities.
Depreciation expense. Depreciation expense increased by $34 thousand and $56 thousand in the three and six months ended June 30, 2026 as compared to three and six months ended June 30, 2025. The increase was primarily attributable to depreciation of property and equipment placed in service during 2025 and the first half of 2026, including vehicles, exploration and field equipment, and computer and office equipment, as the Company expanded its operations following recent acquisitions.
Transaction costs. Transaction costs decreased by $157 thousand in the three and six months ended June 30, 2026 as compared to the three and six months ended June 30, 2025. Transaction costs in the 2025 periods represent legal, advisory, due-diligence, and other professional fees incurred in connection with the Company's acquisitions of AMBPL and FRE Australia. No transaction costs were incurred in the three and six months ended June 30, 2026.
Other Income and Expense
Interest income. Interest income increased by $503 thousand and $630 thousand in the three and six months ended June 30, 2026 as compared to three and six months ended June 30, 2025. The increase was primarily due to higher balances held in interest bearing accounts during the quarter.
Interest expense. Interest expense decreased by $29 thousand and increased by $15 thousand in the three and six months ended June 30, 2026 as compared to three and six months ended June 30, 2025, respectively. The fluctuations are due to the related party loan agreement with Brazil Royalty Corp Participacoes E Investments Ltda. (“BRC”), which was executed in 2025 and converted to common shares in May 2026.
Foreign exchange gain or loss. The Company incurred an immaterial gain and a $3 thousand loss in the three and six months ended June 30, 2026, respectively, as compared to no gain or loss in three and six months ended June 30, 2025, due to remeasurement of cash accounts held at FRE Australia.
Change in fair value of SAFE. Change in fair value of Simple Agreement for Future Equity (“SAFE”) was a $1.2 million loss and $4.6 million loss in the three and six months ended June 30, 2026. The change was attributable to the remeasurement of the SAFE liability at fair value during the quarter, reflecting changes in valuation assumptions, primarily the share price assumptions, and including the passage of time. No change in fair value of SAFE was recognized in the prior‑year period as the SAFE was executed in December 2025.
Change in fair value of warrants. Change in fair value of warrants was a $727 thousand gain and $7.9 million loss in the three and six months ended June 30, 2026. The change was attributable to the remeasurement of warrant liabilities at fair value during the quarter, reflecting changes in valuation assumptions, primarily the share price assumptions, and including the passage of time. No change in fair value of warrants was recognized in the prior‑year period as the warrants were issued during the transaction in July 2025.
Supplemental Discussion of Performance by Reportable Segment
United States Mining Operations Segment
Segment Operating loss for the Company's United States Mining Operations was as follows (dollars in thousands):
For the three months ended June 30, Change
2026 2025 $ %
Segment Operating loss $ (3,799 ) $ — $ (3,799 ) —
For the six months ended June 30, Change
2026 2025 $ %
Segment Operating loss $ (5,699 ) $ — $ (5,699 ) —
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Operating loss from our United States Mining Operations increased $3.8 million and $5.7 million in the three and six months ended June 30, 2026 compared to the prior year period, driven primarily by the acquisition of FRE Australia and the related exploration activities and costs incurred related to the Shiloh project. Operating loss of our United States Mining Operations segment is expected to further increase in subsequent periods. Refer to the discussions of “Factors that Will Impact Our Exploration Costs” and “Acquisition of FRE Australia” included in the Prospectus.
Brazil Mining Operations Segment
Segment Operating loss for the Company's Brazil Mining Operations was as follows (dollars in thousands):
For the three months ended June 30, Change
2026 2025 $ %
Segment Operating loss $ (1,030 ) $ (207 ) $ (823 ) 398
For the six months ended June 30, Change
2026 2025 $ %
Segment Operating loss $ (1,554 ) $ (370 ) $ (1,184 ) 320
Operating loss from our Brazil Mining Operations increased $0.8 million and $1.2 million in the three and six months ended June 30, 2026 compared to the prior year period, primarily due to increases in general and administrative costs and exploration activities and exploration spend during the period. The increase in general and administrative costs are due to changes in the Company's operating structure and are expected to remain consistent at the segment level in future periods. Refer to the discussions of “Factors that Will Impact Our Exploration Costs” and “Acquisition of FRE Australia” included in the Prospectus.
Liquidity and Capital Resources
Sources and Uses of Liquidity
We consider highly liquid investments purchased with original maturities of three months or less to be cash equivalents. As of June 30, 2026 and December 31, 2025, we had $10.1 million and $22.8 million, respectively, in cash and cash equivalents. In connection with our initial public offering, we established short-term investment accounts to hold funds designated for land acquisition, mineral licenses and lease payments, option payments, drilling, metallurgical test work, permitting, exploration, evaluation, land consolidation, engineering studies, and working capital and general corporate purposes. These short-term investments are maintained in highly liquid securities to ensure we have adequate resources to fund planned exploration and development programs.
We are an exploration stage company and, since our inception, we have not generated revenues. We incurred operating losses of $12.8 million and $17.6 million in three and six months ended June 30, 2026 and $0.5 million and $0.8 million in the prior year periods, respectively, and have reported an accumulated deficit of $49.4 million and $19.8 million as of June 30, 2026 and December 31, 2025, respectively. We have primarily relied on equity financing to fund our operating and investing activities – including, development and pursuit of our business plan; our mineral exploration and evaluation activities; our general and administrative costs and our capital expenditures. In addition, in the future we will continue to rely on equity financing to meet obligations as they become due and for future purchases of exploration and evaluation assets.
Our predominant source of cash is from financing activities. In 2025, we raised cash through issuances of our common stock for the primary purpose of funding working capital associated with exploration expenses and general and administrative expenses, capital expenditures, and investments supporting our strategy for advancing our portfolio of critical mineral projects targeting high-grade heavy rare earths mineral assets. In 2024, we were primarily funded through payables to related parties.
In December 2025, we raised $11.7 million in proceeds through the issuance of SAFE agreements in a private placement, and in January 2026 we raised an additional $3.4 million through the issuance of SAFE agreements.
In May 2026, the Company completed its initial public offering ("IPO"), raising net proceeds of approximately $64.2 million comprised of $58.9 million from the initial offering and $5.3 million from the underwriters' exercise of the over-allotment option, net of underwriting discounts and commissions.
Our current assets exceeded our current liabilities by $75.6 million as of June 30, 2026, compared to $19.3 million as of December 31, 2025. The increase of $56.3 million was primarily attributable to the completion of the IPO in May of 2026.
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The following table is a condensed schedule of cash flows provided as part of the discussion of liquidity and capital resources:
Cash flow Statement
For the six months ended June 30, Change
2026 2025 $
Other Financial Data (in thousands):
Net cash (used in) provided by operating activities $ (10,265 ) $ 256 $ (10,521 )
Net cash used in investing activities (67,148 ) (2 ) (67,146 )
Net cash provided by (used in) financing activities 64,756 (206 ) 64,962
Currently, we do not maintain a credit facility or have debt from financial institutions. Since inception, we have predominately relied on equity financing to fund our operations, land acquisitions, and capital expenditures.
As of June 30, 2026, we expect material cash expenditures over the next twelve months to include the following:
•approximately $20.0 million related to the Shiloh and other Georgia projects, including capital expenditures for land acquisition, mineral licenses and lease payments, option payments, drilling, metallurgical test work, permitting and S-K 1300 technical report summary preparation;
•approximately $15.0 million related to the Alpha, Constellation, and Homer Projects, including for exploration, evaluation, land option payments, land consolidation, metallurgy, engineering and permitting studies; and
•approximately $8.0 million for working capital and other general corporate purposes.
These are planned estimates based on our current exploration and development plans. Actual expenditures may differ materially depending on exploration results, permitting timelines, equipment and personnel availability, cost escalation, and our ability to raise additional capital. We may also reallocate spending among projects or defer planned activities. We believe that funds raised through issuance of SAFE agreements and the net proceeds from our initial public offering that closed on May 7, 2026 will be sufficient to fund our cash needs for the next twelve months. Historically, we have been successful in raising cash through equity financings; however, no assurances can be given that additional financing will be available in amounts sufficient to meet our needs or on terms that are acceptable to us.
Operating Activities
During the six months ended June 30, 2026, our operating activities used $10.3 million of net cash, as compared to net cash provided of $256 thousand during the six months ended June 30, 2025. The $10.5 million increase in net cash used in operating activities was primarily due to a $28.8 million increase in net loss driven by the expanded operational activities of the Company as a result of the acquisition of FRE Australia, as well as non-cash charges recognized on our SAFE and warrant liabilities. This increase in reported net loss is partially offset by non-cash items, including a $7.9 million increase in the fair value of warrant liabilities, a $4.6 million increase in the fair value of SAFE liabilities, and $7.1 million of stock-based compensation. Changes in operating assets and liabilities resulted in $0.8 million of net cash used from changes in working capital, primarily related to the Company's expanded operational activities.
Investing Activities
Our investing activities used $67.1 million of cash in the six months ended June 30, 2026, as compared to $2 thousand during the six months ended June 30, 2025. Cash used by investing activities increased primarily due to $66.6 million of net purchases of short-term investments funded with proceeds from our initial public offering, as well as $0.4 million of purchases of property and equipment.
Financing Activities
During the six months ended June 30, 2026 and 2025, our financing activities provided $64.8 million and used $0.2 million of cash, respectively. Financing activities during the six months ended June 30, 2026 consisted primarily of $64.2 million of net proceeds from the issuance of common stock in our IPO, including the exercise of the underwriters' over-allotment option and net of commissions, $3.4 million of SAFE proceeds, and $0.2 million of proceeds from warrant exercises, offset partially by $2.9 million of payments of deferred offering costs and $0.2 million of shares repurchased to satisfy employee tax withholding obligations.
Off-Balance Sheet Arrangements
Other than as otherwise described in the Prospectus, we do not have any off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on our financial condition, changes in financial condition, revenues, expenses, results of operations, liquidity, capital expenditures or capital resources.
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Risks and Uncertainties Associated with Future Results of Operations
We operate in an industry that is subject to intense competition, development risk, and changes in U.S. governmental policies related to green energy, defense spending and dependence on foreign suppliers. Our operations are subject to significant risks and uncertainties including financial and operational risks, as well as the potential risk of business failure.
We have not yet established that our projects contain any commercially exploitable quantities of proven and probable mineral reserves, and we may not be able to do so. Even if we eventually establish commercially exploitable quantities of mineral reserves, we may not be able to extract those minerals economically. Both mineral exploration and development involve a high degree of risk, and few properties that are explored are ultimately developed into producing mines. The commercial viability of an established mineral deposit will depend on several factors including the size, grade, and other attributes of the mineral deposit, as well as proximity of the deposit to infrastructure, government regulation, and market prices, among other things. Most of these factors will be beyond our control, and any of them could increase costs and make extraction of any identified mineral deposit unprofitable.
Our ability to advance projects depends on successfully completing studies to verify resources, reserves, and commercial viability, securing sufficient financing for exploration, permitting, and infrastructure development, and managing potential cost increases in exploration, construction, and operations due to fluctuations in fuel, power, materials, and other supplies.
For additional information see the section entitled “Risk Factors — Risks Related to Our Business” included in the Prospectus.
Critical Accounting Estimates
See Note 2 – Significant Accounting Policies to our audited consolidated financial statements as of and for the years ended December 31, 2025 and 2024, included in the Prospectus for a description of our significant accounting policies. We consider the following accounting estimates critical to understanding and evaluating our consolidated financial condition and the results of our operations.
Exploration Costs and Mineral Interests
General
Mineral interests consist of options to acquire mineral properties with rights to explore during the option period. Capitalized costs of the options were either asset purchases or payments to option counterparties. Mineral interests will not be amortized until the underlying property is converted to the production stage. As of June 30, 2026, none of the Company's properties were in the production stage and, therefore, the carrying values of the associated mineral interests are not being amortized. Exploration costs are being expensed as incurred until it is determined that a mining deposit can be economically and legally extracted or produced based upon established proven or probable reserves.
Assessments for Recoverability and Impairment
We assess the carrying values of our mineral interests for recoverability as of the end of each quarterly reporting period and whenever information or circumstances indicate the potential for impairment. There were no circumstances indicating the potential for impairment as of June 30, 2026.
To assess recoverability, we would compare estimated undiscounted future net cash flows attributable to a mineral interest (when determinable) with our carrying costs and future obligations related to the mineral interest. If it is determined that the estimated future undiscounted cash flows related to a mineral interest are less than the carrying value of the mineral interest, an impairment loss is required to be measured and recorded.
Future net cash flow estimates are dependent upon economic reserves being discovered or developed on the related property; the costs of permitting, financing, start-up, and commercial production related to a mineral interest; and commodity prices. When estimates of future net cash flows are not determinable and other conditions indicate the potential for impairment, management uses available market information and/or third-party valuation experts to assess if the carrying value of a mineral interest can be recovered and to estimate fair value.
Stock-Based Compensation
Our stock-based compensation consists primarily of restricted stock units ("RSUs") granted under the Rare Earth Americas Ltd. 2025 Equity Incentive Plan and the Rare Earths Americas, Inc. 2026 Equity Incentive Plan (the "Plans"). We account for stock-based compensation awards based on the fair value of the award as of the grant date, which for RSUs was based on the fair value of the underlying common stock at the time of the grant.
The Company recognizes stock-based compensation expense on a straight-line basis over the awards' requisite service period. Prior to the Company's initial public offering in May 2026, certain RSUs were subject to a performance-based vesting condition tied to a liquidity event. In connection with the completion of the IPO on May 7, 2026, the performance-based vesting condition was satisfied and 581,609 RSUs vested. The Company recognized $3.8 million in stock-based compensation expense upon vesting of these performance-based RSUs and an additional $1.5 million related to awards subject to time-based vesting conditions.
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As of June 30, 2026, the Company has $4.9 million of unrecognized compensation cost related to unvested RSUs, which is expected to be recognized over a weighted-average period of 1.9 years. Following the completion of the Company's IPO on May 7, 2026, all liquidity-event vesting conditions were satisfied, and the remaining unrecognized compensation cost relates solely to service-based vesting conditions.
Instruments with Characteristics of Liabilities and Equity
As of June 30, 2026, the Company has outstanding warrants exercisable into shares of the Company's common stock. The Company accounts for these instruments as liability-classified based on an assessment of their specific terms and applicable authoritative guidance. The instruments are required to be recorded at their initial fair value on the date of issuance, and are remeasured to their fair value on each balance sheet date thereafter, with any change in fair value recognized in the Company’s condensed consolidated statements of operations.
Recently Adopted Accounting Standards
See Note 2 –Significant Accounting Policies of the notes to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.
Emerging Growth Company Status
In April 2012, the JOBS Act was enacted. Section 107(b) of the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the extended transition period to comply with new or revised accounting standards and to adopt certain of the reduced disclosure requirements available to emerging growth companies. As a result of the accounting standards election, we will not be subject to the same implementation timing for new or revised accounting standards as other public companies that are not emerging growth companies which may make comparison of our financials to those of other public companies more difficult.
We expect to retain our emerging growth company status until the earliest of:
•The end of the fiscal year in which our annual revenues exceed $1.235 billion;
•The end of the fiscal year in which the fifth anniversary of this offering has occurred;
•The date on which we have issued more than $1.0 billion in non-convertible debt during the previous three-year period; or
•The date on which we qualify as a large accelerated filer.
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