REalloys Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net revenues for the three months ended September 30, 2026, were $0.4 million, compared to $0.2 million in the third quarter of 2025.
• Net loss for the three months ended September 30, 2026, was $30.5 million ($0.44 per diluted share), compared to a net loss of $25.6 million ($0.58 per diluted share) in the prior-year quarter.
• Net loss for the nine months ended September 30, 2026, was $174.1 million ($2.83 per diluted share), compared to a net loss of $29.5 million ($0.75 per diluted share) in the prior-year period.
• The nine-month net loss included $158.2 million in non-cash charges, primarily $139.2 million in stock-based compensation, $9.2 million in preferred share accretion, a $6.4 million impairment related to assets acquired through the Blackboxstocks merger, and a $3.4 million change in the fair value of settled derivatives.
• Gross margin for Euclid facility sales was approximately 36%.
• General and administrative expense for the quarter was $30.3 million (GAAP), which included $25.3 million in non-cash stock-based compensation; excluding this, adjusted G&A was approximately $4.9 million.
• Cash balance as of September 30, 2026, was $116.2 million.
• The company maintained a virtually debt-free balance sheet with $197.4 million in total assets and $123.4 million in working capital.
• Net cash used in operating activities for the nine months ended September 30, 2026, was $23.4 million, while net cash provided by financing activities was $145.3 million.

Guidance and Future Outlook:

• The company targets initial U.S. magnet production of approximately 3,000 tonnes per year of sintered NdFeB magnets no later than 2030.
• The Heavy Rare Earth Metallization Facility is targeted for commissioning in the first quarter of 2028, with initial operations expected in the first half of 2028 and a capacity of approximately 50 tonnes of annual dysprosium and terbium oxide.
• Access to NdPr metallization capability at SRC is expected beginning in the first quarter of 2027, with dysprosium and terbium metal output expected in the first half of 2028.
• Initial separated oxide production from the SRC facility is expected in the second half of 2027, with commercial intake of NdPr metal and dysprosium and terbium oxides commencing in the third quarter of 2027.
• The company plans to spend approximately $10 million through 2027 on research and development, piloting, and product qualification, centered at the Euclid facility.
• Remaining commitments under SRC development agreements were approximately $56.0 million as of September 30, 2026, expected to be incurred through 2028.
• The company expects to fund all committed programs, R&D, and general corporate costs from existing cash without reliance on specific future financing transactions.

Business Segments and Product Lines:

• The company is advancing the Heavy Rare Earth Metallization Facility and the Rare Earth Processing Facility upgrade at SRC.
• The SRC upgrade is intended to increase annual production capacity to approximately 525 tonnes of NdPr metal, 30 tonnes of dysprosium oxide, and 15 tonnes of terbium oxide.
• REalloys has secured supply rights to approximately 80% of the SRC facility's output and holds a Right of First Refusal on the remaining uncommitted output.
• Approximately $16.5 million was deployed to SRC programs during the first nine months of 2026, including $11.6 million for the Heavy Rare Earth Metallization Facility, $3.7 million for the Rare Earth Processing Facility upgrade, and $1.2 million for process development.
• Processing and separation trials using recycled mixed rare earth oxide and mixed rare earth carbonate feedstock are being advanced through the first half of 2027.

Market and Competitive Landscape:

• The company is targeting North American rare earth metal production to address limited domestic supply.
• Demand for secure, non-Chinese supplies of NdPr, dysprosium, and terbium is expected to grow due to U.S. Department of War sourcing restrictions taking effect on January 1, 2027.
• The company serves the U.S. Department of War, U.S. Department of Energy, NASA, the U.S. Defense Industrial Base, and the broader U.S. Organic Industrial Base.

Risks and Challenges:

• Forward-looking statements regarding facility capacity, commissioning timing, funding, and strategic execution involve significant risks and uncertainties that could cause actual results to differ materially.
• The development of future separation, metallization, and magnet facilities requires significant additional financing, the terms of which have not been determined.
• The term sheet for the Tooele Army Depot facility is non-binding, and execution of a definitive lease is subject to conditions including agreement on rent, environmental reviews, permit capacity, project financing, and Board/Army approvals.
• The timing of separation trials at SRC shifted from 2026 to the first half of 2027 primarily due to feedstock alignment and procurement lead times.

Management Commentary and Tone:

• CEO Leonard Sternheim stated the company moved "further from planning into execution" with the execution of the U.S. Army term sheet and funding of expanded NdPr metallization capacity.
• Management emphasized managing capital with discipline, sequencing spending to technical and commercial milestones, and funding committed programs from existing cash.
• The tone reflects confidence in the path toward North American rare earth metal production starting in 2027 and U.S. magnet production by 2030.

Other Key Points:

• On November 3, 2026, REalloys executed a non-binding term sheet with the U.S. Department of the Army for an Enhanced Use Lease to build a heavy rare earth processing facility on approximately 200 acres at Tooele Army Depot, Utah.
• The indicative terms for the Tooele facility include an initial 50-year term with one 25-year renewal, fair market value base rent plus participation rent, and a right of first offer to the Army on facility output.
• The company executed a transition to a Nasdaq-listed public company in February 2026, which resulted in significant stock-based compensation charges.
• The company is evaluating the Euclid facility as a potential location for a future pilot-scale magnet manufacturing facility.
• The company is also evaluating alternative sites to the Tooele Army Depot for the planned integrated U.S. separation, metallization, and magnet platform, as the Tooele facility may initially focus only on dysprosium and terbium.