MP 10-K & 10-Q changes, risk factors and insider trading

•Significant political, trade,trade and regulatory developments, and other circumstances beyond our control, could have a material adverse effect on our financial condition or results of operations.

•Our continued growth depends on our ability to reach anticipated production rates for the separation of REE as part of themidstream Stage II projectoperations at Mountain Pass, our only rare earth mining and processing facility.

•If we are unable to perform the obligations under our long-termcustomer supply agreement with GM,agreements, this could have a material adverse effect on our financial position and results of operations.

•We may not be able to convert current commercial discussions with customers for the sale of REOour products into contracts, which may have a material adverse effect on our financial position and results of operations.

•We are subject to a number of operational risks of our business, including power outages or shortages at Mountain Pass or Independence; increasing costs or limited access to raw materials; disruptions in transportation or other services; inability to process REO that meet individual customer specifications; diminished access to water; uncertainty in our estimates of REO reserves; labor matters/labor relations; information technology and cybersecurity breaches; and/or sustainabilityenvironmental matters.

However, while this DoW commitment provides a meaningful measure of certainty with respect to our medium- and longer-term NdPr-related cash flows, our business and financial results remain susceptible to the fluctuations in the demand for, and the realized prices of, REE and magnet materialmaterials, priceswhich may fluctuate and are affected by numerous factors beyond our control such as interest rates, exchange rates, taxes, inflation or deflation, changes in tariffs or trade restrictions, fluctuation in the relative value of the U.S. dollar against foreign currencies on the world market, shipping and other transportation and logistics costs, global and regional supply and demand for rare earth minerals and products, potential industry trends, such as competitor consolidation or other integration methodologies, and the political and economic conditions of countries that produce and procure REE and magnet materials. A change in the U.S. federal administration introduces uncertainty as to shifts in policies, tariffs, taxes, regulations, and priorities, all of which may have a detrimental impact on demand. Furthermore, supply side factors have a significant influence on price volatility for REE and magnet materials. Supply of REE and magnet materials is dominated by Chinese producers. The Chinese Central Government regulates production via quotas and environmental standards, and, to a lesser extent, regulation of imports, and has and may continue to change such production quotas, environmental standards, and import regulations. Over the past few years, there has been significant restructuring of the Chinese market in line with Chinese Central Government policy; however, periods of over-supply or speculative trading of REE and magnet materials can lead to significant fluctuations in the market price of such products.

Our strategy is to produce REE and magnet products that are used in critical existing and emerging technologies, such as hybridxEVs, advanced electronics, aerospace and electricdefense vehicles,systems, windenergy turbines,products, robotics, medicaland equipment, military equipment andmany other high-growth, advanced motion technologies. The success of our business depends on the continued growth of these end-markets and the successful commercialization of rare earth products, including NdPr, in such markets. If the market for these critical existing and emerging technologies does not grow as we expect, grows slower than we expect, or if the demand for our products in these markets decreases, then our business, prospects, financial condition and operating results could be harmed. In addition, the market for these technologies, particularly in the automotive industry, tends to be cyclical, which exposes us to increased volatility, and it is uncertain as to how such macroeconomic factors will impact our business. Any unexpected costs or delays in the manufacturing of separated REE products or rare earth magnets, or less than expected demand for the critical existing and emerging technologies that use rare earth products, could have a material adverse effect on our financial condition or results of operations.

Some of our competitors have made, or may make, acquisitions or enter into partnerships or other strategic relationships to achieve competitive advantages. In addition, new entrants not currently considered competitors may enter our market through acquisitions, partnerships, or strategic relationships. We expect these trends to continue as demand for rare earth materials increases. Industry consolidation may result in competitors with more compelling product offerings or greater pricing flexibility than we have, or business practices that make it more difficult for us to compete effectively, including on the basis of price, sales, technology or supply. For example, in December 2021,2025, China mergedtook threeadditional state entitiessteps to establishconsolidate control of the Chinaindustry Rareinto Earththe Grouptwo Co.major Ltdgroups (“Chinathrough Rareexport Earthand Group”),import that accounts for more than half of China’s heavy rare earths supplies. China Rare Earth Group has enhanced pricing power of key rare earths, suchlimitations, as dysprosiumwell andas terbium, which has brought changesadjustments to the globalproduction rarequota earthsystem. supplyOutside chain.of China, there are few producers operating at scale, with processing capabilities located in only one other major integrated operator across Australia and Malaysia. These competitive pressures could have a material adverse effect on our business.

Significant political, trade,trade and regulatory developments, and other circumstances beyond our control, could have a material adverse effect on our financial condition or results of operations.

We operate globally and sell our products in countries throughout the world with a primary focus on the Asian market.world. Significant political, trade, or regulatory developments in the jurisdictions in which we sell our products, suchincluding aschanges thosein stemmingtariff frompolicies by the change in U.S. federaladministration, administration,export controls, or other trade restrictions, are difficult to predict and may have a material adverse effect on us. Similarly, changes in U.S. federal policy that affect the geopolitical landscape could give rise to circumstances outside our control that could have negative impacts on our business operations. For example, during the priorcurrent TrumpU.S. administration,administration has increased tariffs were implemented on goods imported into the U.S., particularly from China, Canada, and Mexico. On February 1, 2025, the U.S. imposed a 25% tariff on imports from Canada and Mexico, which were subsequently suspended for a period of one month, and a 10% additional tariff on imports from China. Historically, tariffs have led to increased trade and political tensions, between not only the U.S. and China, but also between the U.S. and other countries in the international community. In response to tariffs, other countries have implemented retaliatory tariffs on U.S. goods. Political tensions as a result of trade policies or other geopolitical dynamics could reduce trade volume, investment, technological exchange, and other economic activities between major international economies, resulting in a material adverse effect on global economic conditions and the stability of global financial markets. We and/or our suppliers may also experience shortages of materials or increases in prices of materials as a result of these ongoing trade tensions, which could increase our costs or decrease our volume of production. Any changes in political, trade, regulatory, and economic conditions, including, but not limited to, U.S. and China trade policies, could have a material adverse effect on our financial condition or results of operations.

Our ability to reach anticipated production rates as part of our Stagemidstream II projectoperations at Mountain Pass, the completion and expansion of Independence, the construction of the 10X Facility, as well as the execution of other capital projects such as the HREE Facility, chlor-alkali facility, and development of recycling capabilities at Mountain Pass, all require the commitment of substantial resources and capital expenditures. Our estimated expenses may increase for a variety of factors, including as a result of inflationary pressures in the U.S. The progress, the amounts and timing of expenditures and the success of these projects will depend in part on the following: (a) the Company and the DoW performing their respective obligations under the DoW Agreements; (b) the ability of the Stagemidstream IIoperating facilities to separate REO as designed and engineered; (bc) our ability to timely produce metal for magnets; (cd) our ability to timely procure new equipment and materials, certain of which may involve long lead-times, or to repair existing equipment; (de) the ability of service providers or vendors to meet contractually-negotiated delivery or completion deadlines or meet performance specifications or guarantees; (ef) maintaining, and procuring, as required, applicable federal, state and local permits; (fg) the incorporation of project change orders, due to engineering, process, health and safety, or other considerations; (gh) negotiating contracts for equipment, earthwork, construction, equipment installation, labor and completing infrastructure and construction work following commissioning; (hi) impact of planned and unplanned shut-downs and delays in our production; (ij) impact of stoppages or delays on construction projects; (jk) disputes with contractors or other third parties; (kl) negotiating sales and offtake contracts for our planned production; (lm) the execution of any joint venture agreements or similar arrangements with strategic partners; and (mn) other factors, many of which are beyond our control.

Our continued growth depends on our ability to reach anticipated production rates for the separation of REE as part of themidstream Stage II projectoperations at Mountain Pass, our only rare earth mining and processing facility.

There is a risk that we may infringe, or may be accused of infringing, the proprietary rights of third parties under patents and pending patent applications belonging to third parties that may exist in the U.S. and elsewhere in the world that relate to our rare earth products and processes, including our planned future production of magnets at Independence.Independence and the 10X Facility. Because the patent application process can take several years to complete, there may be currently pending applications that may later result in issued patents that cover our products and processes. In addition, our products and processes may infringe existing patents.

Defending ourselves against third-party claims would be costly and time consuming and would divert management’semployees’ attention from our business, which could lead to delays in our Stage III downstream expansion. If third parties are successful in their claims, we might have to pay substantial damages or take other actions that are adverse to our business. As a result of intellectual property infringement claims, or to avoid potential claims, we might:

If we are unable to perform the obligations under our long-termcustomer supply agreement with GM,agreements, this could have a material adverse effect on our financial position and results of operations.

We have entered into acustomer binding long-term supply agreementagreements with GM.the DoW, Apple, GM, and other strategic customers. Our ability to fulfill theour obligations under ourthese long-term agreement with GMagreements to supply themmagnets withand magnet materials to the DoW, Apple and GM, as examples, as well as any other future customers, is subject to a number of risks and contingencies. We are buildingcurrently continuing to ramp the production and sales of magnetic precursor products and commissioning our magnet manufacturing capabilities at our Independence Facility, the first scaledscaled, fully integrated rare earth magnet manufacturing facility in the U.S. in several decades. WhileUnder the DoW Transaction Agreements, we are relyingrequired onto begin planning and constructing a second rare earth magnet manufacturing facility, the 10X Facility. Despite benefiting from a number of experienced engineers and other third parties in the design, engineering and construction of the Independence Facility and the 10X Facility, we arewill makingbe required to make a number of judgments and assumptions on process design, equipment selection and design, and plant operations, that may or may not prove to be correct. Design, engineering or construction delays may impair our ability to perform under our long-term supply agreementagreements with GM.the DoW, Apple, GM, and others, as well as those made with any other future customers. We will also need to promptly assess the need for and to build out additional resources to support multiple novel construction projects in parallel. In addition, we need to procure the necessary equipment and materials to produce magnets and their precursor products, some of which may be difficult to obtain. There can be no assurance that such resources, equipment and materials will be procured on time or not be delayed due to both the finite time and resources of our management and employees to assess and respond to these increased demands, and to circumstances beyond our control.

Further, we need to hire a sufficient number of engineers, operators and other professionals to successfully design and operate the Independence Facility and the 10X Facility. It may be difficult for us to hire employees with the experience, education and skills needed to produce magnet materials, and we may need to hire employees from other countries if we cannot recruit employees in the U.S. We will also face competition for these employees. These challenges may be exacerbated by the need to develop multiple facilities at the same time.

There can be no assurance that we successfully produce magnet materials at the volumes and quality necessary to meet the requirements under our long-term supply agreementagreements with GM.the DoW, Apple, GM, and other customers. In the event that we are not able to mitigate these risks andor fail to comply with the terms of the agreementDoW Transaction Agreements, particularly the DoW Offtake Agreement, and in particular, our supply agreements with Apple and GM, thiswe couldmay have aexperience material adverse effecteffects on our financial position and results of operations.

We may not be able to convert current commercial discussions with customers for the sale of REOour products into contracts, which may have a material adverse effect on our financial position and results of operations.

A power outage or shortage at Mountain Pass or Independence could temporarily delay miningmining, processing, and processingmanufacturing operations and increase costs, which may materially adversely impact our business.

Our facilities at Mountain Pass are currently powered by a natural gas-poweredgas-fired combined heat and power (“CHP”) plant that produces electricity and steam and eliminates reliance on the regional electric power grid. Operation of the CHP plant is necessary to support the entire energy demand of our upstream and midstream operations. While we believe that the CHP plant will provide sufficient electricity and steam to operate our existing facilities at Mountain Pass, there can be no assurance that there will not be intermittent interruptions in the ability to produce electricity and steam.steam, including due to equipment failure, maintenance issues or interruptions in the supply of natural gas. In addition, our Independence Facility is powered by electricity and natural gas. Instability in electrical supply could cause sporadic outages or brownouts.brownouts at Mountain Pass and the Independence Facility. Any such outages or brownouts could have a negative impact on our production. If the CHP plant is unable to provide sufficient energy for the operation of Mountain Pass or if additional growth projects require energy needs in excess of CHP capacity, we may be required to obtain electricity from a single utility company in Southern California. We could incur higher operating costs, remain subject to the effects of occasional grid power outages and brownouts, and could experience temporary interruptions of processing operations. As a result, our revenue could be adversely impacted and our relationships with our customers could suffer, adversely impacting our ability to generate future revenue and otherwise perform our contractual obligations.

At Mountain Pass, we use significant amounts of chemical reagents to process REE and expect to use a significant amount of raw materials in the production of magnets at Independence. Though we may enter into long-term purchase agreements, chemical reagents and other raw materials sourced from third parties may be subject to significant volatility in cost and availability. In addition, third parties may not honor their agreements with us and/or declare force majeure, and as a result, we may need to obtain such chemical reagents from other parties at higher costs and expense and there may be a delay in obtaining such chemical reagents. Further, supply chains reliant on sea vessels, train,trains, and/or trucktrucks may subject us to transportation delays in obtaining these chemical reagents. We also may not be able to store such chemical reagents or other raw materials without incurring substantial costs. We may not be able to pass increased costs for these chemical reagents or other raw materials through to our customers in the form of price increases. The Mountain Pass site includes a currently idle chlor-alkali facility that maywe beare restartedcommitted into recommissioning as part of our partnership with the futureDoW to produce hydrochloric acid, sodium hydroxide, and sodium hypochlorite. A significant increase in the price or decrease in the availability of these chemicals before we potentially restart our production of them on-site, or restrictions imposed by environmental regulations or law on chemical use, could materially increase our operating costs and adversely affect our profit margins and production volumes. There can be no assurance that we will be able to purchase the necessary chemical reagents or other raw materials from third parties on terms that are acceptable to us. In addition, there are risks associated with the recommissioning and construction of our chlor-alkali facility, including safety and operational risks. The failure to obtain chemical reagents or other raw materials as needed and the failure to safely operate the chlor-alkali facility will have an adverse effect on our financial condition and results of operations.

We currently transport our rare earth concentrate and NdPr oxide products via ocean freight to customers and tollers. In the past, there have been backlogs of container ships off the coast of Southern California that delayed shipments in and out of the ports of Los Angeles and Long Beach, the primary ports that we use to ship our rare earth concentrate product.products. While we managed to mitigate these intermittent delays in shipping rare earth concentrate productproducts through these ports, our ability to continue to maintain stable shipments may be impacted if port delays due to congestion return or worsen.

In addition, we may in the future need to transport our products to additional customers and other tollers wherever they may be located. Finding affordable and dependable transportation is necessary for us to be able to supply customers around the world. Labor disputes, embargoes, government restrictions, work stoppages, pandemics, derailments, accidents, damage or loss events, adverse weather conditions, other environmental events, seasonal changes in supply and demand for transportation, changes to railrail, highway, or ocean freight systems, domestic or international laws or regulations, permits or other approvals, or other events and activities beyond our control could interrupt or limit available transport services, which could result in customer dissatisfactiondissatisfaction, delays in meeting contractual delivery requirements, and loss of salessales, and could materially adversely affect our results of operations. Such events and conditions, including flooding and other natural disasters, could also impact the facilities of our customers which could have a material adverse effect on our ability to deliver our product to our customers.

You should read the following discussion and analysis of our financial condition and results of operations together with our Consolidated Financial Statements and related notes appearing elsewhere in this annual report on Form 10-K for the year ended December 31, 20242025 (this “Annual Report”). A discussion of changes in our consolidated and segment results of operations and/or cash flows between years ended December 31, 20232024 and 2022,2023, has been omitted from this Annual Report, but may be found in “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, Comparison of the Years Ended December 31, 2024, 2023, 2022, and 2021,2022,” of our annual report on Form 10-K for the year ended December 31, 2023,2024, filed with the U.S. Securities and Exchange Commission on February 28, 2024.2025. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. The actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those set forth under “Item 1A. Risk Factors” and elsewhere in this Annual Report. See also “Cautionary Note Regarding Forward-Looking Statements.”

MP Materials Corp., including its subsidiaries (“we,” “our,” “us” and the “usCompany”), is the largest producer of rare earth materials in the Western Hemisphere. We own and operate the Mountain Pass Rare Earth Mine and Processing Facility (“Mountain Pass”) located near Mountain Pass, San Bernardino County, California, the only rare earth mining and processing site of scale in North America. WeRare earth products are alsocritical developinginputs in hundreds of existing and emerging clean-tech applications including electric vehicles and wind turbines as well as robotics, drones, and defense applications. Additionally, we own and operate a rare earth metal, alloy and magnet manufacturing facility in Fort Worth, Texas (“Independence” or the “Independence Facility”).

During the fourth quarter of 2024, we modified our segment structure largely as a result of initial production of magnetic precursor products. Beginning with the fourth quarter of 2024, ourOur reportable segments, which are primarily based on our internal organizational structure and types of products, are our two operating segments—Materials and Magnetics. In conjunction with this change, where applicable, prior period amounts have been recast to conform to this new segment reporting structure.

The Materials segment operatesrepresents our upstream and midstream operations, which primarily consist of Mountain Pass, whicha producesfully integrated mining and refining facility producing refined rare earth productsoxides as well as rare earth concentrate(“REO”) and related products. The Materials segment primarily generates revenue from (i) sales of rare earth concentrate, primarily sold for further distribution to a single, principal customer in China, and (ii)from sales of neodymium-praseodymium (“NdPr”) oxide and metal, primarily sold to customers in Japan, South Korea, and broader Asia. The Materials segment historically generated the majority of its revenue from sales of rare earth concentrate primarily to a distributor that, in turn, typically sold that product to refiners in China.

Certain rare earth elements (“REE”) serve as critical inputs for the rare earth magnets inside the electric motors and generators powering carbon-reducing technologies such as hybrid and electric vehicles (referred to collectively as “xEVs”), advanced electronics, aerospace and wind turbines, as well as drones, defense systems, energy products, robotics and many other high-growth, advanced technologies. Our integrated operations combine low production costs with high environmental standards, thereby restoring American leadership to a critical industry with a strong commitment to sustainability.

•Commenced productionsales of magnetic precursor products and manufacturing of magnets at Independence in December 2024;

•Received athe totalfinal of $100.0$50.0 million in customer prepaymentsprepayment for magnetic precursor products pursuant to the long-term supply agreement with General Motors Company (NYSE: GM) (“GM”); and

•MaintainedContinued to maintain a strong balance sheet with cash, cash equivalents and short-term investments totaling $850.9$1.8 millionbillion as of December 31, 2024,2025, after incurring capital expenditures to advance constructionthe completion of the Independence Facility, as well as various projects at Mountain Pass, including the HREE Facility.Facility (as defined in Note 17, “Government Grants,” in the notes to the Consolidated Financial Statements), recycling facilities, and the chlor-alkali facilities.

NdPrPricing & Supply AgreementCommitments

The Magnetics segment represents our downstream magnet manufacturing and related operations, which currently consist of (i) the Independence Facility, a fully integrated metal, alloy, and magnet manufacturing plant.plant and (ii) the 10X Facility (discussed below). The Magnetics segment began generating revenue from sales of magnetic precursor products to a single customer in the U.S., in the first quarter of 2025, and commenced the manufacturing of neodymium-iron-boron (“NdFeB”) permanent magnets in December 2025.

In February 2026, we announced the selection of a 120‑acre site in Northlake, Texas, for our second domestic magnet manufacturing facility (the “10X Facility”), as discussed further below. We closed on the purchase of this land in April 2026 at a cost of approximately $80 million.million where construction of the 10X Facility is currently underway.

In the second half of 2026, we expect to begin refining HREE with initial production of terbium and dysprosium. As part of our partnership with the United States Department of War (the “DoW”), we have committed to further extend our HREE refining capabilities to include the separation of samarium oxide and to recommission the chlor-alkali facilities at Mountain Pass. Additionally, as part of our agreement with Apple Inc. (NASDAQ: AAPL) (“Apple”), we will develop and install scaled magnet recycling capabilities at Mountain Pass with dedicated capacity for both NdPr and heavy rare earth separation.

In the first quarter of 2025, we commenced sales of magnetic precursor products, primarily NdPr metal. We expect to continue selling magnetic precursor products ahead of fully commissioning our magnet manufacturing capabilities, which commissioning began in late 2025. After the Independence Facility is commissioned and scaled, we expect to primarily sell finishedpermanent magnets.

In July 2025, we entered into definitive agreements with the the DoW establishing a transformational public-private partnership with the DoW to accelerate the build-out of an end-to-end U.S. rare earth magnet supply chain. In connection with these agreements, the Company committed to construct the 10X Facility. We expect to invest more than $1.25 billion in this project, which is supported by approximately $200 million of state and local incentive packages, as well as a 10‑year magnet offtake agreement with the DoW. The 10X Facility is expected to begin commissioning in 2028, and once completed and scaled, it will produce an estimated 7,000 metric tons (“MTs”) of magnets per year. When combined with the Independence Facility’s 3,000 MTs per year of magnets, our overall U.S. rare earth magnet production capacity will expand to an estimated 10,000 MTs per year.

Our ore body has proven over more than 70 years of operations to be one of the world’s largest and highest-grade rare earth resources. As of December 31, 2025, SRK Consulting (U.S.), Inc., an independent consulting firm that we retained to assess our reserves, estimated total proven and probable reserves of 1.96 million short tons of REO contained in 28.96 million short tons of ore at Mountain Pass, with an average ore grade of 5.89%. These estimates use an estimated economical cut-off grade of 2.50% total rare earth oxide. Based on these estimated reserves and our expected annual production rate of REO upon production ramp-up of our midstream operations, our expected mine life was approximately 28 years as of December 31, 2025. Over time, we expect to be able to continue to grow our expected mine life through additional exploratory drilling and improved processing capabilities, which may result in changes to various assumptions underlying our mineral reserve estimate.

Comparison of the Three and Six Months Ended MarchJune 31,30, 2026 and 2025

TotalConsolidated total revenue increased for the three and six months ended MarchJune 31,30, 2026, as compared to the respective prior year period,periods, driven by higher salesrevenue volumesin ofthe NdPrMaterials oxideSegment, anddue metal, reflectingto the continued ramping of production and sales of separated products, as well as higher market prices. Revenue from magnetic precursor products also increased year over year. These increases wereprices, partially offset by the cessation of our concentrate sales beginning in July 2025. Additionally, consolidated total revenue for the six months ended June 30, 2026, benefited from an increase in revenue from magnetic precursor products associated with the ramp in production year over year in our Magnetics Segment. See the “Segment Results” section below for further discussion of changes in revenue.

Our Price Protection Agreement with the DoW (“PPA”) for our NdPr products (e.g., concentrate, oxide and metal) (collectively, “NdPr Products”) commenced on October 1, 2025;2025. givenGiven market prices for NdPr Products induring the firstperiods quarterpresented of 2026,below, we recognized price protection agreement income (“PPA Income”) based on the right to receive cash from the DoW for the difference between $110 per kilogram equivalent of NdPr included in the NdPr Products and the Benchmark Quarterly Average Volume Weighted Price (as defined in the PPA) for the NdPr Products produced at Mountain Pass that were sold or produced and stockpiled during the firstthree quarterand ofsix months ended June 30, 2026. A substantial majority of the PPA Income recognized during the firstthree quarterand ofsix 2026months ended June 30, 2026, pertained to sales to third parties.

The increaseincreases in COS for the three and six months ended MarchJune 31,30, 2026, waswere driven by higher sales of bothNdPr oxide and metal during the current year periods as NdPr Sales Volumes for these periods increased by 127% and 122%, respectively, over the prior year’s respective periods. Furthermore, NdPr oxide and metal and magnetic precursor products in the current year period, as discussed above. Notwithstanding, per-unit production costs of separated products are necessarily higher than those of rare earth concentrate due to the additional processing required. Such costs pertain primarily to chemical reagents, employee labor, maintenance expenses, and consumables. COS for the three and six months ended MarchJune 31,30, 2026, also benefited from a higher Section 45X Advanced Manufacturing Production Credit (the “45X Credit”), which resulted in lower COS year over year of $4.3$3.5 million and $7.9 million, respectively, for the three and six months ended MarchJune 31,30, 2026.

As we produce and sell more separated products at Mountain Pass, we expect that COS may continue to increase throughout 2026 even as certain per-unit production efficiencies and economies of scale are expected to be achieved. Accordingly, in future periods, any further increaseincreases in sales of NdPr oxideoxide, metal, and/or metalheavy rare earths may result in higher year-over-year COS. Additionally, should we further ramp the production of magnetic precursor products as well as magnets at Independence, COS may also increase.

The increaseincreases in SG&A expenses for the three and six months ended MarchJune 31,30, 2026, as compared to the respective prior year period,periods, waswere driven primarily by higher personnel costs, which increased by $7.2$7.1 million and $14.3 million, respectively, primarily due to the continued growth in our employee headcount to support our downstream expansion.expansion, as well as higher stock-based compensation expense, which was impacted by the increased headcount and performance-based stock awards recently granted.

The year-over-year increaseincreases in DD&A for the three and six months ended MarchJune 31,30, 2026, primarily reflectsreflect $11.2$10.9 million and $22.1 million, respectively, of amortization related to the price protection agreement upfront asset, with no comparable expense in the respective prior year period.periods.

Start-up costs relate to costs associated with restarting an existing facility or commissioning a new facility, circuit or process of our production, manufacturing, or separations facilities prior to the achievement of commercial production, that do not qualify for capitalization. Such costs, which are expensed as incurred, include certain salaries and wages, outside services, parts, raw materials, training, and utilities, among other items, used or consumed directly in these start-up activities.

The year-over-year increaseincreases in start-up costs for the three and six months ended MarchJune 31,30, 2026, waswere attributable primarily to the ramp-up of start-up activities related tofor magnet production and chlor-alkali facilities. More specifically, a significant portion of the start-up costs for the three and six months ended June 30, 2026, pertained to non-inventoriable labor and material costs associated with initial production of magnets at Independence. As we continue to ramp up start-up activities related to these and other initiatives, including those associated with our HREE Facility, we expect that start-up costs may continue to increase in future periods.periods before declining once we reach commercial production for these capabilities.

The year-over-year increasedecrease in advanced projects and development for the three months ended MarchJune 31,30, 2026, was primarily due to higherthe transaction costs incurred forin legal,the consulting,prior andyear advisoryperiod servicesassociated towith supportthe growthestablishment initiatives,of suchour aspartnership potentialwith acquisitions,the mergers, or other investments.DoW.

Other operating costs and expenses (income), net consists primarily of legal settlements, accretion of asset retirement and environmental obligations, legal settlements, gains or losses on disposals of long-lived assets, including demolition costs, and other operating expenses.

The year-over-year increase for the six months ended June 30, 2026, was primarily attributable to an $8.8 million settlement of a construction-related litigation matter. See Note 11, “Commitments and Contingencies,” in the notes to the unaudited Condensed Consolidated Financial Statements for additional details.

Interest expense, net principally consists of the expense associated with the 3.00% per annum coupon interest ratesrate and amortization of the debt issuance costs on our 2030 Notes (as defined below), as well as interest expense associated with the Samarium Project Loan,Loan (as defined below), offset by interest capitalized to property, plant and equipment.

Interest expense, net for the three and six months ended MarchJune 31,30, 2026, increased year over year primarily due to the interest expense associated with the issuance of the Samarium Project Loan in August 2025, partially offset by higher capitalized interest in the current year periodperiods, which has increased as we continue to constructcommissioning our magnet manufacturing capabilities at the Independence Facility, ashave wellbegun asconstruction of our 10X Facility, and continue progressing on various projects at Mountain Pass.

Other income, net for the three and six months ended MarchJune 31,30, 2026, increased year over year primarily as a result of $7.4$5.5 million and $12.9 million, respectively, of higher interest and investment income earned on our short-term investments and interest-bearing demand deposit accounts, driven by the increase in our short-term investments balance as a result of the funds received as part of our partnership with the DoW (the “DoW Transactions”) as well as an offering of shares of our common stock in 2025. Additionally, Other income, net was impacted by the changes in the fair value of the derivative instrument related to the redemption feature included in the portion of the 2030 Notes issued in December 2024, which decreased by $2.9 million for the three months ended March 31, 2026 as compared to the prior year period.

The effective tax rate for the three and six months ended MarchJune 31,30, 2026, differed from the statutory tax rate of 21% primarily due to the 45X Credit, percentage depletion,Credit and excess tax benefits associated with stock-based compensation, offset by a deduction limitation on officers’ compensation. The effective tax rate for the three and six months ended MarchJune 31,30, 2025, differed from the statutory tax rate of 21% primarily due to the 45X Credit, percentage depletion, and state income tax benefit, offset by a deduction limitation on officers’ compensation and a valuation allowance on California Competes Tax Credits. For additional information on the 45X Credit, see Note 15, “Government Grants,” in the notes to the unaudited Condensed Consolidated Financial Statements.

The increaseincreases in NdPr oxide and metal revenue for the three and six months ended MarchJune 31,30, 2026, as compared to the respective prior year period,periods, waswere primarily driven by higher market prices, as well as higher NdPr Sales VolumeVolume, which increased by 127% and 122%, respectively, as a result of continuing to ramp our production of separated products,products. asThe wellyear-over-year asdecreases higherin marketrare prices.earth concentrate revenue for the three and six months ended June 30, 2026, were driven by the July 2025 cessation of all sales to customers in China.

The increaseincreases in Materials Segment Adjusted EBITDA for the three and six months ended MarchJune 31,30, 2026, when compared to the respective prior year period,periods, waswere driven primarily by the increaseincreases in total revenue, as discussed above, as well as the PPA Income. These increases were netted against higher segment cost of sales (excluding depreciation, depletion and amortization and stock-based compensation expense), which increased year over year by $22.3$29.1 million and $51.4 million, respectively, driven primarily by the 117%year-over-year increaseincreases in NdPr Sales Volume.

The Magnetics segment operatesincludes (i) the Independence Facility, where we produce and sell magnetic precursor products and commenced manufacturing NdFeB permanent magnets in December 2025.2025 and (ii) the 10X Facility, which is currently under construction.

The increase in the production of magnetic precursor products at the Independence Facility for the threesix months ended MarchJune 31,30, 2026 drove both the higher sales of magnetic precursor products recognized in the current period under the long-term supply agreement with GM, as well as the year-over-year increase in Magnetics Segment Adjusted EBITDA. Revenue from magnetic precursor products decreased for the three months ended June 30, 2026, primarily due to the start-up of magnet production and its impact on the pricing mechanism for those products, which resulted in a proportionally lower amount of costs being allocated to magnetic precursor products rather than initial magnet products. We continue to expect that the historical trend of Magnetics revenue and Segment Adjusted EBITDA will be impacted by the volumes of precursor products produced and sold, and in the future, permanent magnets.

Under our long-term supply agreement with GM, as of MarchJune 31,30, 2026, we collected all required prepayments for the sale of magnetic precursor products (i.e., NdPr metal) totaling $150.0 million. As of this same date, we had sold $87.9$104.5 million of magnetic precursor products to GM and remain obligated to transfer the remaining $62.1$45.5 million, which we anticipate will be satisfied within one year after MarchJune 31,30, 2026. Upon fulfilling our remaining commitment, we do not anticipate additional sales of magnetic precursor products to GM. However, we currently anticipate that we will begin sales of finished magnets to GM in 2026, prior to fulfilling our remaining commitment regarding magnetic precursor products.

The increaseincreases in corporate expenses and other for the three and six months ended MarchJune 31,30, 2026, as compared to the respective prior year period,periods, waswere driven primarily by expenses related to corporate travel and professional service costs, as well as higher personnel costs (other than stock-based compensation expense) related to administrative personnel.personnel, professional service fees, as well as expenses related to corporate travel.

Liquidity refers to our ability to generate sufficient cash flows to meet the cash requirements of our business operations, including working capital and capital expenditure needs, contractual obligations, debt service and other commitments. In addition to net cash from operating activities, which includes advanced payments from customers for future goods and services, our principal sources of liquidity have been issuances of long-term debt and offerings of shares of our common stock, most recently in July 2025, and the Series A Cumulative Perpetual Convertible Preferred Stock (the “Series A Preferred Stock”) issued in July 2025 as part of the DoW Transactions. As of MarchJune 31,30, 2026, we had $1.7$1.5 billion of cash, cash equivalents and short-term investments and $1.1$1.0 billion of principal amount of long-term debt and equipment notes, including $72.5$5.1 million classified as current.

The completion of our mission to become a fully integrated domestic magnetics producer is expected to be capital intensive. Our principal capital expenditure requirements relate mainly to further investing in Mountain Pass, including the development of our facility to process HREE at Mountain Pass (the “HREE Facility”), recommissioning the chlor-alkali facilities, development of recycling capabilities, Upstream 60K, and other growth and investment projects, completing the commissioning of our magnet manufacturing capabilities at Independence, and in the future, construction of the 10X Facility, as well as periodic repairs and maintenance costs. We expect to spend between $500 million and $600 million of capital costs in 2026 (net of any proceeds from government awards received). Our future capital requirements will also depend on several other factors, including market conditions, de-bottlenecking initiatives, decisions regarding downstream production capability, and potential acquisitions.

Revolving Credit Facility: In August 2025, we entered into a credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, and various other lenders, providing a $275.0 million revolving credit facility (the “Revolving Credit Facility”), maturing on August 25, 2030, with a $200.0 million letter of credit facility sublimit (the “Credit Agreement”). As of MarchJune 31,30, 2026, we had no outstanding borrowings under the Revolving Credit Facility, $128.0 million of unused letter of credit capacity, and $203.0 million of remaining borrowing capacity under the Revolving Credit Facility.

Interest rates under the Revolving Credit Facility are variable based on the Secured Overnight Financing Rate (“SOFR”), or at our option, at a base reference rate equal to the highest of (i) the federal funds rate plus 0.50%, (ii) the rate of interest last quoted by The Wall Street Journal as the “prime rate” in the U.S., (iii) the one-month SOFR rate plus 1.00% oor (iv) 1.00% (the “Base Rate”), plus, as applicable, a margin ranging from 1.75% to 2.50% per annum for SOFR-based loans and ranging from 0.75% to 1.50% per annum for Base Rate-based loans, in each case, depending on our total leverage ratio.

The Credit Agreement is guaranteed by us and our subsidiaries, subject to certain customary exceptions. Failure to comply with any of the covenants associated with the Credit Agreement could result in a default under its terms. Such a default would permit lenders to accelerate the maturity of the debt and to foreclose upon any collateral securing such debt. We are in compliance with the applicable financial covenant contained in the Credit Agreement as of MarchJune 31,30, 2026.

2026 Notes: In March 2021, we issued $690.0 million in aggregate principal amount of 0.25% unsecured convertible senior notes (the “2026 Notes”) at a price of par. Interest on the 2026 Notes iswas payable on April 1st and October 1st of each year, beginning on October 1, 2021.

In March 2024, we provided a written notice to the trustee and the holders of the 2026 Notes that we have irrevocably elected to fix the settlement method for all conversions thatof maythe occur2026 Notes subsequent to the election date, to a combination of cash and shares of our common stock with the specified dollar amount per $1,000 principal amount of the 2026 Notes of $1,000.stock. As a result, for any conversions of 2026 Notes occurring after the election date, a converting holder willwould receive (i) up to $1,000 in cash per $1,000 principal amount of the 2026 Notes and (ii) shares of our common stock for any conversion consideration in excess of $1,000 per $1,000 principal amount of the 2026 Notes converted. Prior to the election being made, we could have elected to settle the 2026 Notes in cash, shares of our common stock or a combination thereof.

OnThe 2026 Notes became convertible at the option of the holders beginning on January 1, 2026, through the business day immediately preceding the maturity date, and on April 1, 2026, at the election of their holders, the 2026 Notes were converted upon maturity pursuant to their terms and settled in full. We paid the principal amount of $67.5 million in cash and issued 337,741 shares of our common stock for the conversion consideration in excess of the principal amount.

During the quarter ended MarchJune 31,30, 2026, the Stock Price Condition was met. Therefore, the 2030 Notes may be converted at the option of their holders during the three months ending JuneSeptember 30, 2026.

Samarium Project Loan: In August 2025, we issued a $150.0 million unsecured promissory note to the DoW with a 12-year term, maturing on August 1, 2037 (the “Samarium Project Loan”), which bears interest at a fixed rate of 5.38% per annum, calculated as the 10-year U.S. Treasury constant maturity rate plus 1.00%.1.00% at the time of funding. Interest on the Samarium Project Loan is payable in cash quarterly in arrears on the 15th day of each calendar quarter, beginning on October 15, 2025.

Equipment Notes: In December 2024, we and Caterpillar Financial Services Corporation entered into an uncommitted credit facility (the “Uncommitted Credit Facility”) with a principal amount of up to $25.0 million, which was subsequently increased to $40.0 million in December 2025. We executed promissory notes under the Uncommitted Credit Facility to finance new equipment, including trucks and wheel loaders, for use at Mountain Pass. As of MarchJune 31,30, 2026, we had $9.7$10.9 million of remaining borrowing capacity under the Uncommitted Credit Facility. Our equipment notes, which are secured by the purchased equipment, had $30.3$29.1 million in principal (and accrued interest) outstanding as of MarchJune 31,30, 2026.

Leases: We have lease arrangements for certain equipment and facilities, including office space, warehouses, and equipment used in our operations. As of MarchJune 31,30, 2026, we had future expected lease payment obligations totaling $21.4$22.2 million, with $4.8$4.9 million due within the next 12 months. Our finance leases were not material. See Note 9, “Operating Leases,” in the notes to the unaudited Condensed Consolidated Financial Statements for further information.

Net Cash Provided by (Used in) Operating Activities: Net cash provided by operating activities was $4.9 million for the six months ended June 30, 2026, as compared to the net cash used in operating activities decreasedof by $61.3$66.9 million for the three months ended March 31, 2026, as compared toin the prior year period, driven primarily by the increase in product sales, as well as the $51.0$93.3 million received from the DoW for the PPA Income recognized in the fourth quarter of 2025,2025 and the first quarter of 2026, with no comparable cash inflow in the prior year period. Additionally, we received $19.0 million related to the 45X Credit claimed on our 2024 federal tax return.return during the six months ended June 30, 2026. Offsetting these items was the recognition of $50.0 million of deferred revenue related to a prepayment for magnetic precursor products in the prior year period, with no comparable cash inflows in the current year period.

Net Cash Provided by (Used Inin) Investing Activities: Net cash used in investing activities increasedwas by $244.1$654.8 million for the threesix months ended MarchJune 31,30, 2026, as compared to the net cash provided by investing activities of $54.0 million in the prior year period, driven primarily by higher purchases of short-term investments in the current year period, offset partially by higher cash receipts from sales and maturities of short-term investments in the current year period, resulting in a net increase of cash used in investing activities of $211.9$434.6 million. Furthermore, additions to property, plant and equipment increased for the threesix months ended MarchJune 31,30, 2026, by $46.9$248.2 million when compared to the prior year period, and related primarily to (i) an increase in construction spend on certain projects, such as the separationsHREE facility for heavy rare earth elements,Facility, the expansion of the Independence Facility, (ii) a portion of an arbitration award payment that was made in the second quarter of 2026 that pertained directly to the cost of the constructed assets, and (iii) initial purchases for the 10X Facility.Facility, including a purchase of land for approximately $80 million in April 2026.

Net Cash Used in Financing Activities: Net cash used in financing activities increased by $13.5$80.2 million for the threesix months ended MarchJune 31,30, 2026, as compared to the prior year period, driven primarily by the principal repayment to settle in full our 2026 Notes in the second quarter of 2026, as well as tax withholding on stock-based awards.

(3)Pertains to legal, consulting, and advisory services, and other costs associated with specific matters or transactions, including litigation matters, potential acquisitions, mergers, or other investments. For the three and six months ended MarchJune 31,30, 2026, amount is principally included in “Other operating costs and expenses (income), net” within our unaudited Condensed Consolidated Statements of OperationsOperations. andThe six months ended June 30, 2026, includes $8.8 million related to the settlement of a construction-related litigation matter. For the three and six months ended MarchJune 31,30, 2025, amount is principally included in “Selling, general and administrative” within our unaudited Condensed Consolidated Statements of Operations. The three and six months ended June 30, 2025, include $1.8 million of transaction costs to establish our partnership with the DoW.

(3)Pertains to legal, consulting, and advisory services, and other costs associated with specific matters or transactions, including litigation matters, potential acquisitions, mergers, or other investments. For the three and six months ended MarchJune 31,30, 2026, amount is principally included in “Other operating costs and expenses (income), net” within our unaudited Condensed Consolidated Statements of OperationsOperations. andThe six months ended June 30, 2026, includes $8.8 million related to the settlement of a construction-related litigation matter. For the three and six months ended MarchJune 31,30, 2025, amount is principally included in “Selling, general and administrative” within our unaudited Condensed Consolidated Statements of Operations. The three and six months ended June 30, 2025, include $1.8 million of transaction costs to establish our partnership with the DoW.

(6)Tax impact of adjustments is calculated using an adjusted effective tax rate, which excludes the impact of discrete tax costs and benefits, applied to each adjustment. The adjusted effective tax rates were 39.4%29.9%, 34.5%, 25.4% and 17.4%23.7% for the three and six months ended MarchJune 31,30, 2026 and 2025, respectively.

(1)Tax impact of adjustments is calculated using an adjusted effective tax rate, which excludes the impact of discrete tax costs and benefits, applied to each adjustment. The adjusted effective tax rates were 39.4%29.9%, 34.5%, 25.4% and 17.4%23.7% for the three and six months ended MarchJune 31,30, 2026 and 2025, respectively.

(2)For the threesix months ended MarchJune 31,30, 2026, these shares were antidilutive for GAAP purposes. For purposes of calculating Adjusted Diluted EPS, we have added back the assumed conversion of these shares since they would not be antidilutive when using Adjusted Net Income as the numerator in the calculation of Adjusted Diluted EPS.

The following table presents a reconciliation of our Free Cash Flow, which is a non-GAAP financial measure, to our net cash provided by (used in) operating activities, which is determined in accordance with GAAP:

A complete discussion of our critical accounting estimates is included in our Form 10-K for the year ended December 31, 2025. There have been no significant changes in our critical accounting estimates during the three months ended MarchJune 31,30, 2026.