On August 12, 2025, the Company's Board of Directors adopted the Rare Earth Americas Ltd. 2025 Equity Incentive Plan (the “Plan”). The Plan provides for the grant of stock-based awards to employees, directors, and consultants. Under the Plan, 1,500,000 shares were reserved for stock-based compensation in the form of options, restricted stock units, or other stock-based awards. Shares issued under the Plan shall be drawn from authorized and unissued shares or reacquired common stock.

Through July 21, 2025, some REA Australia employees that provided services to Alpha were eligible to participate in equity-settled stock-based compensation plans that REA Australia operates for its employees and consultants. None of REA Australia's plans are cash-settled.

Restricted Stock Units (“RSUs”)

During the three months ended March 31, 2026, the Company granted RSUs to employees and directors and experienced forfeitures of outstanding RSUs. The grant-date fair value of RSUs granted during the period was determined using valuation methodologies consistent with those applied in prior periods.

The fair value of the Company’s RSUs was determined using a PWERM, assuming an (i) IPO and (ii) corporate transaction scenarios. The expected economic outcome under each scenario was estimated and then probability-weighted based on management’s assumptions to arrive at an overall fair value as of the valuation date.

In the IPO scenario, the RSUs are valued based on an expected IPO price which is discounted for the lack of marketability between the valuation date and the future expected IPO date. In a corporate transaction scenario, the total equity value was determined based on a market approach and allocated to the RSUs using the option pricing method (“OPM”).

At issuance, the key assumptions used in pricing the RSUs were the expected timing of the Company's IPO, estimated IPO price, common stock price used in the change of control scenario, probability weighting of the change control scenarios and discount for lack of marketability.

The discount for lack of marketability was determined considering quantitative models, empirical studies, and market data.

Warrants

In connection with the Company's acquisition of FRE Australia in July 2025, the Company granted warrants which are considered stock-based payments. The Company recognized stock-based compensation expense of $592 for the warrants during the three months ended March 31, 2026. As of March 31, 2026 and December 31, 2025, the fair value of the warrants is $895 and $303, respectively, and all of the warrants granted remain outstanding.

Stock-Based Compensation Expense

As of March 31, 2026 and December 31, 2025, total stock-based compensation expense related to unvested awards not yet recognized was $7,441 and $5,936, respectively. Of the $7,441 unrecognized compensation cost as of March 31, 2026, approximately $6,591 is expected to be recognized upon and after consummation of the performance-based vesting condition, with the remainder primarily related to time-based awards that vest upon completion of specified service periods, irrespective of a liquidity event. As of December 31, 2025, all unrecognized stock-based compensation expense was subject to a performance-based vesting condition.

The consummation of performance-based vesting condition occurred on May 6, 2026 and $5,327 in stock-based compensation expense was immediately recognized. Refer to Note 14 — Subsequent Events for additional details.