USA Rare Earth shareholders approve issuance of up to 10.7 million shares

USA Rare Earth, Inc. (NASDAQ:USAR), currently valued at $1.04 billion, announced Tuesday that shareholders approved the issuance of up to 10,714,286 shares of common stock pursuant to a warrant issued to an institutional investor. The stock has experienced significant volatility, declining nearly 14% over the past week, according to InvestingPro data. The approval was granted at a special meeting of shareholders held the same day, according to a statement released through a SEC filing.

The warrant was issued in connection with a private placement transaction that closed on May 2, 2025. The proposal was approved in accordance with Nasdaq Listing Rule 5635(d). Holders of common stock and 12% Series A Cumulative Convertible Preferred Stock as of the record date, May 23, 2025, were eligible to vote as a single class. The shares of common stock issued to the warrant holder in the private placement were not permitted to vote on the proposal.

A quorum was present at the meeting, with 56.19% of all eligible votes represented. The results of the vote on the warrant share issuance proposal were 51,092,866 votes in favor, 191,705 against, and 15,599 abstentions. InvestingPro analysis shows the company maintains strong liquidity with a current ratio of 3.52, indicating robust ability to meet short-term obligations.

A second proposal to approve the adjournment of the special meeting was not acted upon, as sufficient votes were obtained to approve the main proposal.

Separately, the company disclosed that it has entered into a settlement agreement to resolve litigation with Ramco Asset Management, LLC and related parties. Under the agreement, USA Rare Earth will issue 159,000 shares of common stock to DinSha Dynasty Trust and its operating subsidiary will pay $150,000 to Ramco. The settlement resolves a complaint filed in Delaware Chancery Court and a milestone payment notice related to an advisory agreement. The settlement does not constitute an admission of liability by the company or its subsidiary.

All information is based on a statement from the company’s filing with the Securities and Exchange Commission.

In other recent news, USA Rare Earth, Inc. announced a memorandum of understanding with Moog Electric Motion Solutions to supply neodymium magnets for cooling pumps used in data centers. This agreement will see USA Rare Earth design and test these magnets, with production expected to commence in 2026 from its upcoming facility in Stillwater, Oklahoma. The company has also initiated a strategic partnership with PolarStar Magnetics to advance domestic magnet supply, aiming to support the defense sector with DFARS-compliant products. In corporate developments, USA Rare Earth appointed David Bushi as the Senior Vice President of Manufacturing, bringing his extensive experience to oversee operations at the Stillwater facility. Analyst firms have shown confidence in USA Rare Earth’s growth potential, with Canaccord Genuity initiating coverage with a Buy rating and a $17.00 price target, while Roth/MKM also assigned a Buy rating with a $15.00 target. These ratings reflect optimism about the company’s efforts to establish a vertically integrated supply chain for rare earth elements in the U.S. USA Rare Earth continues to control mining rights to the Round Top Mountain deposit, a crucial source of rare earths and critical minerals. The company’s initiatives are part of a broader strategy to reduce reliance on international suppliers and secure a stable domestic supply chain for critical industries.

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