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

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 MarchJune 31,30, 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.

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 MarchJune 31,30, 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.

Comparison of three and six months ended MarchJune 31,30, 2026 and 2025

Exploration and evaluation expenses. Exploration and evaluation expenses increased by $2.0$4.5 million and $6.5 million in the three and six months ended MarchJune 31,30, 2026 as compared to the three and six months ended MarchJune 31,30, 2025. The increase was primarily attributable to 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 $2.5$7.9 million and $10.4 million in the three and six months ended MarchJune 31,30, 2026 as compared to the three and six months ended MarchJune 31,30, 2025. The increase was primarily driven by higher personnel‑relatedstock-based costscompensation andrecognized professionalin service fees associatedconnection 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’sCompany's operations following the acquisition of FRE Australia, including the expansion of management and administrative functions and increased public‑companypublic-company and regulatory compliance activities. General and administrative expenses in the prior‑year period were comparatively low due to the Company’s more limited operating activities.

Depreciation expense. Depreciation expense increased by $22$34 thousand and $56 thousand in the three and six months ended MarchJune 31,30, 2026 as compared to three and six months ended MarchJune 31,30, 2025. The increase was primarily attributable to depreciation of property and equipment placed in service during 2025 and the first quarterhalf of 2026, including vehicles, exploration and field equipment, and computer and office equipment, as the Company expanded its operations following recent acquisitions.

Interest income. Interest income increased by $127$503 thousand and $630 thousand in the three and six months ended MarchJune 31,30, 2026 as compared to three and six months ended MarchJune 31,30, 20252025. The increase was primarily due to higher balances held in moneyinterest marketbearing fundsaccounts during the quarter.

Interest expense. Interest expense decreased by $29 thousand and increased by $44$15 thousand in the three and six months ended MarchJune 31,30, 2026 as compared to three and six months ended MarchJune 31,30, 2025.2025, respectively. The increasefluctuations wasare due to the related party loan agreement with Brazil Royalty Corp Participacoes E Investments Ltda. (“BRC”), which was executed in 2025.2025 and converted to common shares in May 2026.

Foreign exchange gain.gain Gainor onloss. foreignThe exchangeCompany wasincurred $4an immaterial gain and a $3 thousand loss in the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to $0no gain or loss in three and six months ended MarchJune 31,30, 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 $3.4$1.2 million loss and $4.6 million loss in the three and six months ended MarchJune 31,30, 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 ana $8.6$727 thousand gain and $7.9 million loss in the three and six months ended MarchJune 31,30, 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 in during the transaction in July 2025.

Operating loss from our United States Mining Operations increased $1.9$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.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.

Operating loss from our Brazil Mining Operations increased $0.4$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 quarter.period. The increase in general and administrative costs isare 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.

We are an exploration stage company and, since our inception, we have not generated revenues. We incurred operating losses of $16.8$12.8 million and $0.3$17.6 million in three and six months ended MarchJune 31,30, 2026 and 2025,$0.5 million and $0.8 million in the prior year periods, respectively, and have reported an accumulated deficit of $36.6$49.4 million and $19.8 million as of MarchJune 31,30, 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 thoughthrough payables to related parties.

Our current assets exceeded our current liabilities by $17.7$75.6 million as of MarchJune 31,30, 2026, compared to current liabilities exceeding current assets by $19.3 million as of December 31, 2025. The decreaseincrease of $1.6$56.3 million was primarily attributable to cashthe usedcompletion of the IPO in operating activities and increased spending to support the advancementMay of our exploration and corporate activities, including higher prepaid and offering-related expenditures, partially offset by a reduction in current liabilities.2026.

As of MarchJune 31,30, 2026, we expect material cash requirementsexpenditures over the next twelve months to include the following:

approximately $7.0$20.0 million related to the Shiloh Project,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. We plan to prioritize advancement of the Shiloh Projectpreparation;

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 in our Private Placement, 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 12next 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.

During the threesix months ended MarchJune 31,30, 2026, our operating activities used $4.4$10.3 million of net cash, as compared to net cash provided of $0.1$256 millionthousand during the threesix months ended MarchJune 31,30, 2025. The $4.5$10.5 million increase in net cash used in operating activities was primarily due to a $16.5$28.8 million increase in net loss duedriven toby the expanded operational activities of the Company as a result of the acquisition of FRE Australia.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 ana $8.6$7.9 million increase in the fair value of warrant liabilities, a $3.4$4.6 million increase in the fair value of SAFE liabilities, and $0.8$7.1 million of stock-based compensation. Changes in operating assets and liabilities resulted in $0.5$0.8 million of net cash used from changes in working capital, primarily related to the Company's expanded operational activities.

Our investing activities used $0.2$67.1 million of cash in the threesix months ended MarchJune 31,30, 2026, as compared to $0$2 thousand during the threesix months ended MarchJune 31,30, 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 and investments in mineral interests.equipment.

During the threesix months ended MarchJune 31,30, 2026 and 2025, our financing activities provided $2.2$64.8 million and used $0.1$0.2 million of cash, respectively. Financing activities during the threesix months ended MarchJune 31,30, 2026 includedconsisted 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 occurringand in$0.2 bothmillion periods.of shares repurchased to satisfy employee tax withholding obligations.

See Note 2.2 – 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.

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 MarchJune 31,30, 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.

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 MarchJune 31,30, 2026.

Our stock-based compensation consists primarily of restricted stock units ("RSUs") granted under the Rare Earth Americas Ltd. 2025 Equity Incentive Plan.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.

As of MarchJune 31,30, 2026, the Company has outstanding warrants exercisable into shares of the Company's common stock and SAFE agreements that will convert into shares of the Company's common stock upon a qualifying equity financing.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. Both the warrants and SAFE were issued in 2025, and the SAFE were converted in connection with the completion of the Offering.

See Note 2.2 –Significant Accounting Policies of the notes to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.