UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
FORM
CURRENT REPORT
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EXPLANATORY NOTE
As previously reported in a Current Report on Form 8-K dated June 26, 2026 (the "VAC Announcing 8-K"), Energy Fuels Inc. (the "Company" or "Energy Fuels" or "we" or "us" or "our"), entered into an agreement and plan of merger on June 23, 2026 with the parties named in the VAC Announcing 8-K (the "Merger Agreement") pursuant to which Energy Fuels will acquire 100% of VAC Group B.V., Ara VAC TOPCO US LLC and their respective consolidated subsidiaries (collectively, "VAC") from Ara Partners (the "VAC Acquisition").
Consummation of the VAC Acquisition remains subject to the satisfaction or waiver of certain customary closing conditions specified in the Merger Agreement and as described in the VAC Announcing 8-K. If the VAC Acquisition is consummated, we will be required to disclose information regarding the consummation of the VAC Acquisition in a Current Report on Form 8-K as required by Item 2.01.
As previously reported in a Current Report on Form 8-K dated August 28, 2026 (the "ASM Closing 8-K"), a wholly owned subsidiary of Energy Fuels, EFR Critical Materials Pty Ltd. ("Energy Fuels Bidder"), completed the acquisition of all of the ordinary shares of Australian Strategic Materials Limited ("ASM") pursuant to a Scheme Implementation Deed dated January 21, 2026, as amended on March 13, 2026, by and among Energy Fuels, the Energy Fuels Bidder and ASM (the "ASM Acquisition").
The purpose of this Form 8-K is to (i) disclose the entry into the Merger Agreement Amendment (as defined below); (ii) supplement the Company’s material disclosure pertaining to the business and operations of ASM, post-ASM Acquisition; (iii) supplement the Company’s disclosure pertaining to the business and operations of VAC, which would be material to the Company if the VAC Acquisition closes as contemplated; (iv) disclose the planned departure of Energy Fuels’ Chief Legal Officer and Executive Vice President, Global Government Relations; (v) provide certain historical financial statements of VAC, which would be material to the Company if the VAC Acquisition closes as contemplated; and (vi) provide unaudited pro forma financial information of the Company giving effect to the VAC Acquisition and the completed acquisition of ASM, which would be material to the Company if the VAC Acquisition closes as contemplated, as described in the ASM Closing 8-K. The unaudited pro forma financial information included in Exhibit 99.3, as it pertains to ASM, is being provided on a voluntary basis and in conformity with Article 11 of Regulation S-X.
Energy Fuels (inclusive of ASM) and VAC, on the assumption the VAC Acquisition closes as contemplated, are together defined as the “Combined Company” in this Form 8-K.
Item 1.01. Entry into a Material Definitive Agreement.
On October 13, 2026 the parties to the Merger Agreement in connection with the VAC Acquisition entered into a First Amendment to Agreement and Plan of Merger (the "Merger Agreement Amendment"), for the purpose of amending and clarifying certain provisions of the Merger Agreement, including with respect to an ongoing dispute with a customer regarding a commercial supply agreement, the potential settlement of such dispute, repayment of certain indebtedness and potential purchase price adjustments related to the foregoing to reflect any loss in value related to such agreement or any debt so repaid.
The foregoing description of the Merger Agreement Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement Amendment, which is filed as Exhibit 2.1 to this Current Report on Form 8-K, and is incorporated herein by reference.
Item 8.01. Other Events.
Supplemental Disclosure
This Item 8.01 contains disclosure that has not previously been filed by the Company. This disclosure is intended to supplement rather than replace the Company's previous disclosures, except to the extent explicitly amended by this Form 8-K. Accordingly, the disclosure in this Item 8.01 should be read in conjunction with the Company's previous disclosures, including the disclosure contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2025 (the "FY25 Form 10-K") and the Company's quarterly reports for the quarters ended March 31, 2026 (the "Q1 Form 10-Q") and June 30, 2026 (the "Q2 Form 10-Q").
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Form 8-K contains “forward-looking statements” and “forward-looking information” within the meaning of applicable United States (“U.S.”) and Canadian securities laws (collectively, “forward-looking statements”), which may include, but are not limited to, statements with respect to Energy Fuels’: anticipated results and progress of our operations in future periods; planned exploration, development and operation of our mineral properties; plans related to our business, including continued uranium production and the expansion of our rare earth element (“REE”) and heavy mineral sands (“HMS”) initiatives; our continued development of capabilities for the commercial separation of REEs at our White Mesa Mill (the “White Mesa Mill” or the “Mill”) in Utah, U.S.; development activities at our Bahia HMS and REE Project in Brazil (the “Bahia Project”); our reclamation activities at our Kwale HMS Project in Kenya (the “Kwale Project”); development activities at our Vara Mada REE and HMS Project in Madagascar (the “Vara Mada Project”) and our newly acquired REE project located in New South Wales (“NSW”), Australia (the “Dubbo Project”); any expectations regarding the Company’s metal and alloy capabilities through its newly acquired Korean Metals Plant located in South Korea (“KMP”); any expectation that the Company will expand its metal and alloy-making capacity, as planned, through an American Metals Plant (“AMP”); any expectations with respect to the Company’s ability to successfully integrate its new metal and alloy capabilities and, on the assumption the VAC Acquisition completes, its new magnet-making capabilities, into its existing business, including any expectations as to future profitability or the potential for added margins resulting from further vertical integration; any expectation that the ASM Acquisition and/or pending VAC Acquisition will move the Company closer to offering a resilient full REE supply chain through a fully integrated mine-to-magnet rare earth business or platform; any expectation that the proposed acquisition of VAC will be completed as planned or at all; any expectation that the Company’s growth strategy will be realized; any expectation pertaining to the potential earn-in of up to a 49% joint venture interest in the Donald REE and HMS Project in Australia (the “Donald Project”); any expectation that positive final investment decisions (“FID” or “FIDs”) will be made for the Vara Mada Project, Donald Project, Dubbo Project and/or Bahia Project, or that any such projects will be developed or developed as planned; any expectations regarding the Company’s ability to acquire other feed sources for REE recoveries as may be needed to meet its production expectations; plans related to the potential recovery of radioisotopes at the Mill for use in targeted alpha therapy (“TAT”) medical treatments; any expectation that the planned expansions at the Mill to enable the large-scale production of separated light and heavy REE oxides will be completed as expected, or at all; any plans related to the acquisition of additional uranium, uranium/vanadium, REE or HMS mineral properties; any expectations with respect to the conditional U.S. Office of Strategic Capital loan commitment of up to $725 million of senior-secured debt with a 20-year tenor (the “OSC Conditional Loan”), as previously reported in the VAC Announcing 8-K; any expectations regarding production levels, costs, margins and timing; historic and estimated mineral resources and mineral reserves, as defined in 7 CFR Subparts 220.1300 and 228.601(b)(96) (collectively, “S-K 1300”) and in Canadian National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) (together, “Mineral Resources and Mineral Reserves”); the application, maintenance and renewal of material rights, licenses and permits; any expectations regarding political or government stability and regulatory conditions in jurisdictions in which we operate; any expectations regarding the formalization of fiscal and other terms applicable to the Vara Mada Project with the Government of Madagascar through an investment agreement, amendments to existing laws or other mechanisms on a timely basis or at all; and any expectations regarding the outcome(s) of any pending or future litigation, disputes and/or allegations. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management.
Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, schedules, assumptions, future events or performance (often, but not always, identified by words or phrases such as "expects," "does not expect," "is expected," "is likely," "budgets," "scheduled," "forecasts," "intends," "anticipates," "does not anticipate," "continues," "plans," "estimates," "believes," or similar expressions or variations of such words and phrases, or statements that certain actions, events or results "may," "could," "would" "might," or "will" be taken, occur or be achieved) are not statements of historical fact and are forward-looking statements.
Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made and involve known and unknown risks and uncertainties. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, no assurance can be given that such expectations will prove to be correct, and forward-looking statements included in, or incorporated by reference into, this Form 8-K should not be unduly relied upon.
Readers are cautioned that it would be unreasonable to rely on any forward-looking statements as creating any legal rights, that such forward-looking statements are not guarantees of future performance and involve known and unknown risks and uncertainties, and that actual results are likely to differ, and may differ materially, and objectives, plans and strategies may differ or change, from those expressed or implied by the forward-looking statements as a result of various factors. Such risks and uncertainties include, but are not limited to: global economic risks, including the occurrence of pandemics or other widespread health emergencies, political unrest or wars, or the imposition of tariffs or other trade restrictions that affect global markets; cybersecurity risks associated with critical and other highly sensitive minerals of international interest; litigation risks; risks associated with the restart, ramp-up and operation of our uranium, uranium/vanadium and REE and HMS mines and processing facilities; risks associated with our commercial production of separated REE oxides and the planned expansion of such production; risks associated with the exploration, permitting and development of the Vara Mada Project, the Donald Project, the Dubbo Project and/or the Bahia Project, in addition to the Company’s existing undeveloped uranium projects; risks associated with the reclamation and pending closure of the Kwale Project; risks associated with the KMP and planned AMP; risks associated with the potential recovery of radioisotopes for use in the Company’s TAT initiatives; risks associated with successfully completing and integrating business and mineral acquisitions; risks associated with joint ventures; international risks, including geopolitical and country risks; risks associated with negotiating and maintaining satisfactory fiscal and stability arrangements and obtaining foreign government approvals on a timely basis or at all, including expropriation risks; risks associated with the failure of the Government of Madagascar to formalize suitable fiscal and other terms applicable to the Vara Mada Project through an investment agreement, amendments to existing laws or other mechanisms, on a timely basis or at all; risks related to the Vara Mada Project associated with social unrest and political instability in Madagascar; risks associated with increased regulatory requirements applicable to our operations, including in new international jurisdictions; risks generally encountered in the exploration, development, operation, closure and reclamation of mineral properties and processing and recovery facilities; risks associated with the REE activities and the Company being able to obtain adequate supplies of monazite and/or mixed rare earth carbonate (“MREC”) feed materials for its existing and planned operations; risks associated with integrating and realizing benefits, including anticipated synergies from the ASM Acquisition and pending VAC Acquisition; risks associated with taxes in certain ASM and VAC operating jurisdictions; risks related with the results of operations which are affected by the market prices of REEs, HMS, uranium and vanadium; risks that some of the Company’s mineral properties may never be put into a state of production; risks that the Company will need to continuously add to its Mineral Reserve and Mineral Resource base and/or expand its uranium recycling program, which includes the processing of uranium from uranium‑bearing materials not derived from natural or native ores (“Alternate Feed Materials”); risks associated with new metals and alloys initiatives; risks associated with anticipated new magnets initiatives; risks associated with the ability to attract, develop and retain qualified management, Board members, skilled miners and other key personnel critical to the success of our business; and risks relating to the pro forma financial information of Energy Fuels (inclusive of ASM) and VAC not being indicative of the actual financial condition of the Combined Company.
The following information pertains to the outlook and conditions currently known to the Company that could have a material impact on its financial condition. Other factors may arise in the future that are currently not foreseen by management of the Company that may present additional risks, including risks that the Company currently believes are immaterial. Current and prospective shareholders of the Company should carefully consider these risk factors in conjunction with the risk factors contained in the FY25 Form 10-K, the Q1 Form 10-Q and the Q2 Form 10-Q when making investment decisions.
Our failure to successfully address any of the risks and uncertainties described below could have a material adverse effect on our business, financial condition and/or results of operations, and the trading price of our common shares (the "Common Shares") and CHESS Depositary Interests ("CDIs") may fluctuate widely. We cannot assure you that we have or will successfully or fully address these risks or other unknown risks that may affect our business.
Market, Industry and Other Data
This Form 8-K contains estimates, projections and other information concerning our industry, our business and the markets for our products. Information based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties, and actual events or circumstances may differ materially from events and circumstances that are assumed in this information. Unless otherwise expressly stated, we obtained this industry, business, market and other data from our own internal estimates and research, as well as from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry and general publications, government data, and similar reputable sources.
RISK FACTORS
In addition to the risk factors set out under the headings "Risk Factors" in our FY25 Form 10-K and "Risk Factors" in our Q2 Form 10-Q, the Combined Company is, or will be, as applicable, subject to the following risks:
Risks of entering into the Merger Agreement and VAC Acquisition
We may face new tax risks in certain VAC operating jurisdictions.
VAC has operations and conducts business in Germany, Slovakia, Malaysia, Finland, China, and other parts of the world, in which our subsidiaries do not currently operate or conduct business in. Taxation laws in these jurisdictions can be complex, subject to varying interpretations and applications by relevant tax authorities and are continuously subject to changes and revisions. In addition, following the VAC Acquisition, we may be subject to tax liabilities that may exist at VAC or that may arise in connection with the VAC Acquisition which are currently unknown. Any unexpected taxes imposed on us could have a material and adverse impact on our financial position.
Risks relating to the Company's business and operations following the ASM Acquisition
The Company's business and industry are subject to business and operation risks, including risks that are outside of its control, which could negatively impact the Company's actual results. These risks include, but are not limited to, those set out below:
a. The Company may fail to successfully integrate and fail to realize benefits, including synergies from the ASM Acquisition.
On and from the closing date of the ASM Acquisition, the Company expects to pursue strategies, operational objectives and benefits, including synergies. There is a risk that the Company may not achieve its strategies, operational objectives and/or anticipated benefits (in whole or in part), or that they will be delayed. This may occur due to matters beyond the control of the Company or resulting from changes in circumstances or strategies. A failure to achieve these strategies, operational objectives and benefits could have an adverse impact on the Company's operations, financial performance and financial position.
b. The Company may face new tax risks in certain ASM operating jurisdictions
ASM has operations and conducts business in South Korea where Energy Fuels and its subsidiaries have previously not carried on business, which could now impact the Company’s tax circumstances. Taxation laws in South Korea are complex, subject to varying interpretations and applications by the relevant tax authorities and are continuously subject to changes and revisions. Having completed the ASM Acquisition, the Company is potentially subject to tax liabilities arising in connection therewith that are currently still being identified and understood. Any unexpected taxes imposed on the Company could have a material adverse impact on its financial position.
c. Results of operations are significantly affected by the market prices of REEs, HMS, uranium, vanadium, and metals and alloys and magnets, which are subject to substantial price fluctuations.
The Company’s earnings and operating cash flow are particularly sensitive to the long- and short-term changes in the market prices of REEs, uranium, vanadium, metals and alloys and HMS, and their components, including the prices for ilmenite, rutile and zircon, which could impact planned production levels or the feasibility of production of HMS and monazite from the Bahia Project, Vara Mada Project, Donald Project and any other HMS projects, or the feasibility of production of potential metal oxides and mixed REE intermediate products from the Dubbo Project, which could, in turn, impact supply for the Company’s planned integrated mine-to-magnet critical materials production. Among other factors, these prices also affect the value of the Company’s Mineral Resources, Mineral Reserves and inventories, as well as the market price of the Common Shares and CDIs.
Market prices are affected by numerous factors beyond the Company's control. With respect to uranium, such factors include, among others: demand for nuclear power; political and economic conditions in uranium producing and consuming countries; public and political response to a nuclear incident or fear of a nuclear incident and general anti-nuclear sentiment; reprocessing of used reactor fuel, the re-enrichment of depleted uranium tailings and the enricher practice of underfeeding; sales of excess civilian and military inventories (including from the dismantling of nuclear weapons, the premature decommissioning of nuclear power plants and from the build-up of Japanese utility uranium inventories as a result of the Fukushima incident) by governments and industry participants; uranium supply, including from other secondary sources; production levels and costs of production, and government actions such as any plans included in a U.S. president's fiscal budget and those taken pursuant to the U.S. Uranium Reserve Program.
With respect to vanadium, such factors include, among others: demand for steel; the potential for vanadium to be used in advanced battery technologies; political and economic conditions in vanadium producing and consuming countries; world production levels; and costs of production.
With respect to REEs, such factors include, among others: demand for REEs; political and economic conditions in REE producing and consuming countries; REE-bearing ore supply from secondary sources; interest in the international purchase of MREC, separated REE oxides and other REE products, absent a U.S.-based separation facility; public and political responses to REE initiatives at the Mill; governmental investment in domestic REE infrastructure; world production levels; costs of production; risks associated with foreign governmental actions, policies, laws, rules, regulations and foreign state-subsidized enterprises with respect to REE production and sales, which could impact a) REE prices available to the Company, b) its access to world and domestic markets for the supply of REE-bearing ores, and c) the sale of MREC, other separated REE products, metals, alloys, and upon the closing of the VAC Acquisition as contemplated, magnets, and services to world and domestic markets; and other government actions, including licensing and import/export requirements.
With respect to HMS, such factors include, among others: demand for titanium minerals and zircon; political and economic conditions in HMS producing and consuming countries; other government actions, including licensing and import requirements; geopolitical factors; world production levels; exploration, mining, processing, refining and other costs of production; grades of HMS ore bodies being mined; scale of mining method; growth in end-use demand for titanium minerals and zircon, including GDP growth in consuming countries; available mineable deposits and upgrading facilities; currency fluctuations; and other market demand and supply dynamics.
With respect to metals and alloys, such factors include, among others: commodity prices and price fluctuations; engineering, construction, processing and mining difficulties, upsets and delays; permitting and licensing requirements and delays; changes to regulatory requirements; legal challenges; competition from other producers; government and political actions or inactions; and risks associated with carrying on business in foreign jurisdictions, including the risk of expropriation; market factors, including future demand for metals and alloys products.
Other factors relating to the prices of uranium, vanadium, REEs, heavy mineral concentrate (“HMC”), HMS products and metals and alloys and, upon the completion of the VAC Acquisition as contemplated, magnets (collectively, the “Goods”) include: levels of supply and demand for a broad range of industrial products; substitution of new or different products in critical applications for the Company’s existing and planned products; expectations with respect to the rate of inflation; the relative strength of the U.S. dollar and of certain other currencies; tariffs, subsidies or other trade barriers; interest rates; global or regional political or economic crises; regional and global economic conditions; and sales of the Company’s Goods and services. If prices are below the Company’s cash costs of extraction or recovery and remain at such levels for any sustained period, or if adequate profit margins cannot be made, the Company may determine that it is not economically feasible or advisable to continue commercial extraction, recovery or processing at any or all of the Company’s projects or other facilities and may also be required to look for alternatives other than cash flow to maintain the Company’s liquidity until prices recover. The Company’s expected levels of uranium, vanadium, REEs, HMC and HMS product recovery, metals and alloys, and upon the closing of the VAC Acquisition as contemplated, magnet production and other business activities are dependent on its expectation and the industry’s expectations of the Company’s Goods, which may not be realized or may change. In the event the Company concludes that a significant deterioration in expected future Goods prices has occurred, it will assess whether an impairment allowance is necessary which, if required, could be material.
The Company's profitability is directly related to the market prices of Goods recovered. The Company may, from time to time and where available, undertake commodity and currency hedging programs with the intention of maintaining adequate cash flows and profitability to contribute to the long-term viability of the business. The Company anticipates selling forward in the ordinary course of business if, and when, it has sufficient assets and recovery to support forward sale arrangements and forward sale arrangements are available on suitable terms. There are, however, risks associated with forward sale programs. If the Company does not have sufficient recovered product to meet its forward sale commitments, it may have to buy or borrow (for later delivery back from recovered product) sufficient product in the spot market to deliver under the forward sales contracts, possibly at higher prices than provided for in the forward sales contracts or potentially default on such deliveries. In addition, under forward contracts, the Company may be forced to sell at prices that are lower than the prices that may be available on the spot market when such deliveries are completed. Although the Company may employ various pricing mechanisms within the Company's sales contracts to manage its exposure to price fluctuations, there can be no assurance that such mechanisms will be successful. There can also be no assurance that the Company will be able to enter into additional term contracts for future sales of Goods prices or in quantities that would allow the Company to successfully manage its exposure to price fluctuations.
d. Some of the Company's mineral properties may never be put into a state of production.
In addition to the Vara Mada Project, Donald Project, Bahia Project and Dubbo Project as described above, depending on REEs, HMS, uranium and vanadium prices, some of the Company’s mineral properties may never be put into a state of production. Only three of the Company’s properties – the Vara Mada, Pinyon Plain and Sheep Mountain Projects – contain Mineral Reserves as defined under S-K 1300 and NI 43-101, as well as the Donald Project, in which Energy Fuels owns a 15.3% interest as of the date of this Form 8-K. Because the probability of an individual prospect ever having Mineral Reserves is uncertain, the Company’s other properties may not contain any Mineral Reserves. Even if Mineral Reserves are identified, depending on commodity prices, the Company may not put a property into a state of production due to insufficient capital or for other reasons. Any funds spent on exploration, construction, development, extraction and recovery on any properties that are not put into production may be lost. The Company does not know with certainty that “economically recoverable” uranium, vanadium, REEs, HMC and/or HMS products exist on its properties. Further, although Energy Fuels is undertaking uranium extraction activities at the Mill and is mining at current commodity prices, the lack of established Mineral Reserves on a number of the properties means that it is uncertain as to the Company’s ability to continue to generate revenue from its operations. The Company may never discover additional uranium, vanadium, REEs, HMC or HMS products in commercially exploitable quantities and, depending on commodity prices, its identified deposits currently classified as Mineral Resources may never qualify as commercially mineable Mineral Reserves.
The exploration and, if warranted, construction or development of mineral deposits involve significant financial and other risks over an extended period, which even a combination of careful evaluation, experience and knowledge may not eliminate. Few properties that are explored are ultimately developed into producing mines. Major expenditures are required to establish Mineral Reserves by drilling and to construct mining and processing facilities at a site. The Company's operations and activities are subject to the hazards and risks normally incident to exploration and production of uranium, precious and base metals, HMC and HMS products, any of which could result in damage to life or property, environmental damage and possible legal liability for such damage. While the Company may obtain insurance against certain risks, the nature of these risks is such that liabilities could exceed policy limits or could be excluded from coverage. There are also risks against which the Company cannot insure or against which it may elect not to insure. The potential costs which could be associated with any liabilities not covered by insurance, or in excess of insurance coverage, or compliance with applicable laws and regulations may cause substantial delays and require significant capital outlays, adversely affecting the Company's future earnings and competitive position and, potentially, its financial viability.
e. The Company faces risks associated with its REE activities.
There are risks inherent to the Company's REE activities, which include the following:
- The risk of achieving and maintaining an adequate supply of monazite, MREC and/or other REE feed for processing at the Mill and for downstream production of metals, alloys and magnets. Energy Fuels’ Bahia Project is currently at the exploration and permitting stage and is not an operating mine. A similar risk applies to the Dubbo Project, which is currently in the development stage. There is no certainty that the Dubbo Project will be capable of producing REE feed or other mixed rare earth intermediate product capable of processing at the Mill. The same consideration applies to the Vara Mada Project and the Donald Project which are not yet operating mines. As a result, the Company does not currently own its own operating monazite-bearing mine(s) and is completely dependent on contractual arrangements for its REE feed sources at this time. There can be no guarantee that the Company will be able to secure adequate monazite or MREC supply or other REE feed sources over the long term at suitable prices or that the Bahia Project, Vara Mada Project, Donald Project or Dubbo Project will be developed into operating monazite-producing mines. In addition, the price the Company may be required to pay for monazite sands, MREC and other REE feedstocks is subject not only to commercial factors but also to the risk of influence by foreign policy and/or foreign state-owned enterprises. The Company will assess potential acquisitions of, and investments in, additional companies, businesses, mines or resource properties and joint ventures with mine or resource property owners, including opportunities at various stages of the supply chain that are complementary or adjacent to Energy Fuels’ current operations.
Energy Fuels is currently in various stages of considering, and in some cases discussing and negotiating with counterparties in relation to, such acquisition, investment and joint venture opportunities. As at the date hereof, Energy Fuels has not entered into any binding agreements with respect to any material transactions for the procurement of additional feedstock, and there is no certainty and no assurance can be given whether any definitive agreements will be entered into in relation to any material acquisition, investment or joint venture opportunities in the future. Further, even if any such definitive agreements are entered into in the future, no assurance can be provided as to whether any material transactions will ultimately be completed.
Any additional equity financing required for any future material acquisitions, investments or joint ventures (whether to fund cash consideration or issued directly as consideration under the relevant transaction), including in connection with the VAC Acquisition, may be dilutive to shareholders and any debt financing, if available, may involve restrictions on financing and operating activities. In addition, if any such acquisitions, investments or joint ventures are completed, the Company may be exposed to risks specific to the acquired business or asset, including risks relating to operations, regulatory compliance, technology, supply chains, markets, management, integration, or other factors that differ from, or are outside of, the Company's historical areas of experience, and such risks could adversely affect the Company's business, financial condition, results of operations and prospects;
- The risk that further exploration, permitting and development work on the Bahia Project, Vara Mada Project, Donald Project and Dubbo Project may result in a determination by the Company that developing a mine on any of those properties is not feasible;
- Increases in the supply of REEs through the addition of new mines and/or REE processing facilities could increase the global supply of REEs and reduce the price of REEs and REE products. Sustained reductions in the price of REEs would be expected to materially impact the Company's returns from its REE initiatives and could render them infeasible; and
- The risks associated with the Company’s ability to successfully develop and commercialize the Dubbo Project, expand the KMP as planned and permit and develop the planned AMP. These include technical risks, contractual risks associated with counterparties, access to funding, competition and market factors and access to services, infrastructure and government approval, amongst other relevant risks.
f. The Company may need additional financing in connection with the implementation of its business and strategic plans from time to time.
The exploration, construction, development and acquisition of mineral properties and the ongoing operation of mines and other facilities, including the Vara Mada Project, Donald Project, Bahia Project, Dubbo Project, and the planned AMP and/or a potential expansion of the KMP, and the ongoing construction of the Phase 1 Circuit expansion and the proposed Phase 2 Circuit at the Mill, requires a substantial amount of capital and may depend on the Company’s ability to obtain financing through joint ventures, debt financing, equity financing and/or other means. The Company may accordingly need further capital to take advantage of further opportunities or acquisitions. The Company’s financial condition, general market conditions, volatile REE, HMC, HMS product, uranium, vanadium and metals, alloys and magnet markets, volatile interest rates, legal claims against the Company, a significant disruption to the Company’s business or operations, or other factors may make it difficult to secure financing necessary for the expansion of mining activities or to take advantage of opportunities for acquisitions. Further, volatility in the credit markets may increase costs associated with debt instruments due to increased spreads over relevant interest rate benchmarks, or may affect the Company’s ability, or the ability of third parties it seeks to do business with, to access those markets. Continued volatility in equity markets, specifically including energy and commodity markets, may increase the costs associated with equity financings due to a low share price and may create the potential need for the Company to offer higher discounts and other forms of value (e.g., warrants). There can be no assurance that the Company will be successful in obtaining required financing as and when needed on acceptable terms, if at all, or that the Company will be successful in meeting its loan repayment obligations.
g. The Company will need to continuously add to its Mineral Reserve and Mineral Resource base and expand its sources of Alternate Feed Materials.
Most of Energy Fuels' mineral properties do not contain any Mineral Reserves under S-K 1300 and NI 43-101.
Energy Fuels' material uranium Mineral Resources are located at the Nichols Ranch in-situ recovery ("ISR") Project, the Pinyon Plain Project, the Roca Honda Project, the Sheep Mountain Project, the Bullfrog Project and the La Sal Project. These projects will be the Company's primary sources (and potential sources) of current and expected future uranium concentrates. Unless other Mineral Resources or Mineral Reserves are discovered or extensions to existing resource bodies are found, sources of extraction, production and recovery for uranium concentrates will decrease over time as the current Mineral Resources and Mineral Reserves contained at the Pinyon Plain and Sheep Mountain mines are depleted. There can be no assurance that the Company's future exploration, construction, development and acquisition efforts will be successful in replenishing the Mineral Resources or finding or developing Mineral Reserves.
In addition, while Energy Fuels believes that many of the Company’s properties will eventually engage in extraction or mining activities, such as the Roca Honda, Bullfrog, Sheep Mountain, Bahia Project, the Vara Mada Project, the Donald Project and the Dubbo Project, there can be no assurance that they will be placed into such activities, or that they will be able to replace current extraction or mining activities. Energy Fuels also recovers uranium by processing Alternate Feed Materials at the Mill. There can be no assurance that additional sources of Alternate Feed Materials will be forthcoming in the future on commercially acceptable terms or otherwise, or that the Company will be successful in receiving all required regulatory approvals, licenses and permits on a timely basis to allow for the receipt and processing of any such Equivalent Feed Materials or Alternate Feed Materials.
In addition, Energy Fuels relies, or will rely, on monazite for the Phase 1 Circuit and proposed Phase 2 Circuit production at the Mill. There can be no assurance that additional sources of monazite or other REE sources, such as MREC, will be forthcoming in the future on commercially acceptable terms or otherwise, or that the Bahia Project, the Vara Mada Project, the Donald Project and/or the Dubbo Project, which are currently in various phases of exploration, permitting and development, will be commercially profitable for the Company.
h. The Company Faces Risks Associated with New Metals and Alloys Initiatives.
There are risks related to our newly acquired metals and alloys initiatives, including:
- The risk that the Mill proves incapable of separating monazite, MREC or other feed materials into REE oxides for use in ASM’s metallization facilities, as required to meet production expectations or at all;
- The risk that the Company is not capable of producing neodymium/praseodymium (“NdPr”) metal, dysprosium (“Dy”) metal terbium (“Tb”) metal samarium (“Sm”) metal or other metals on a commercial basis, or at all;
- The risk that raw materials, including fluorinated materials, necessary for making REE metals are not readily available or are not available at a reasonable cost as required for the commercial production of REE metals;
- The risk that the Company is not capable of producing neodymium/iron/boron (“NdFeB”) alloys, ferro-dysprosium (“Fe-Dy”) alloys, samarium/cobalt (“SmCo”) alloys or other alloys required for REE magnet-making on a commercial basis or at all;
- The risk that raw materials necessary for making REE alloys are not readily available or are not available at a reasonable cost as required for the commercial production of REE alloys;
- The risk that equipment required for the production of REE metals and alloys is not readily available at reasonable cost and on a timely basis as required for the planned expansion of the KMP or the planned AMP or otherwise for the commercial production of REE metals and alloys;
- The risk that the Company will be unable to make REE metals and alloys on a cost-effective basis;
- The risk of competition from other existing and new global REE metal and alloy makers;
- The risk of technical developments that makes the Company’s operations less competitive;
- The risk that potential purchasers of the Company’s metals and/or alloys, such as other magnet makers, will develop or acquire their own metal and/or alloy-making capability, thereby reducing the demand from third parties for the Company’s metals and alloys;
- The risk that the Company is unable to sell REE products to end-users at multiple stages at reasonable commercial prices that generate margins for the Company;
- The risk that the Company is unable to expand metal and alloy making in South Korea as planned and/or into the U.S. with the planned AMP, including the risks that the Company is unable to obtain relevant and timely government permits;
- The risk that the planned expansions to the KMP will not be constructed on a timely basis or at all, or if constructed will not operate on a cost-effective, commercial basis;
- The risk that the planned AMP will not be constructed on a timely basis or at all, or, if constructed, will not operate on a cost-effective, commercial basis;
- The risk that the Company’s metal and alloy making actions will not translate into increased margins, cash flows, or market share for the Company and its shareholders;
- The risk that the Company is unable to enhance vertical integration, margin capture, and/or market share across the REE value chain; and
- The risk that, for the foregoing reasons, the Company is unable to close a critical strategic gap in western/western-allied global supply chains for magnet applications.
i. The Company Faces Risks Associated with New Magnet-Making Initiatives, if the VAC Acquisition Closes as Contemplated
There are risks related to our new magnet-making initiatives, if the VAC Acquisition closes as contemplated, including:
- The risk that the KMP and/or planned AMP proves incapable of producing REE metals and alloys for use in VAC’s magnet-making facilities, as required to meet production expectations or at all;
- The risk that raw materials, including NdPr metal, Dy metal, terbium (“Tb”) metal, samarium metal, other metals and resulting NdFeB, Fe-Dy and other alloys, necessary for making REE magnets are not readily available or are not available at a reasonable cost as required for the commercial production of REE magnets at VAC’s existing and planned facilities at the volumes anticipated, or at all;
- The risk that equipment required for the production of REE magnets is not readily available at reasonable cost and on a timely basis as required for the planned expansion of VAC’s magnet making facilities or otherwise for the commercial production of REE magnets;
- The risk that the Company will be unable to make REE magnets on a cost-effective basis or to sell magnets to end-users at reasonable commercial prices that generate sufficient margins for the Company on a fully integrated mines-to-magnets basis;
- The risk that the Company will be unable to successfully obtain new magnet-making contracts;
- The risk that the demand from REE magnet end-users desiring a resilient supply chain is less than expected, resulting in the inability of the Company to sell a sufficient number of REE magnets at sufficient margins to meet the Company’s expectations or to otherwise result in a viable integrated REE supply chain;
- The risk of competition from other existing and new global and domestic REE magnet makers, resulting in VAC not being able to fill its existing magnet-making capacity and planned future magnet-making capacity;
- The risk of technical developments that makes the Company’s operations less competitive;
- The risk that demand for REE magnets decreases, including as a result of changes in consumer preferences, or technical innovation resulting in new competitive products that can satisfy consumer needs at less cost;
- The risk that geopolitical forces and foreign and domestic government actions can adversely impact the market for REE magnets, including through oversupply of magnets reducing magnet prices or otherwise impacting the demand for the Company’s magnet products;
- The risk that the Company’s magnet-making actions do not translate into increased margins, cash flows, or market share for the Company and its shareholders;
- The risk that the Company is unable to enhance vertical integration, margin capture, and/or market share across the REE value chain;
- The risk of government-imposed restrictions or conditions on magnet sales arising from foreign investment reviews or other regulatory approvals, which could limit market access, reduce revenues, and diminish anticipated benefits of the transaction.
- The risk that, for the foregoing reasons, the Company is unable to close a critical strategic gap in western/western-allied global supply chains for magnet applications; and
- The risk that VAC’s existing crystalline and rapid solidification soft magnetic business lines do not continue to expand as expected and/or generate sufficient margins.
Risks relating to the unaudited condensed combined pro forma financial information of the Combined Company's business and operations
a) The unaudited condensed combined pro forma financial information of Energy Fuels (now inclusive of ASM) and VAC may not be indicative of the actual financial condition of Energy Fuels upon a successful VAC Acquisition.
The unaudited condensed combined pro forma financial information of Energy Fuels, following the ASM Acquisition and pending a successful VAC Acquisition, is presented for illustrative purposes only to show the effects of the ASM Acquisition and pending VAC Acquisition on a combined basis and should not be considered to be an indication of the financial condition or results of operations of Energy Fuels upon a successful VAC Acquisition. For example, the unaudited condensed combined pro forma financial information has been derived from the historical consolidated financial statements of Energy Fuels and certain adjustments and assumptions have been made regarding Energy Fuels after giving effect to the ASM Acquisition and pending the VAC Acquisition. The information upon which these adjustments and assumptions have been made is preliminary, and these types of adjustments and assumptions are difficult to make with complete accuracy, as other factors may affect the results of operations or financial condition of Energy Fuels following a successful VAC Acquisition. In addition, the unaudited condensed combined pro forma financial information does not reflect all costs expected to be incurred in connection with the ASM Acquisition and upon a successful VAC Acquisition. For example, the incremental costs incurred in integrating ASM and VAC are not reflected in the pro forma financial information.
The unaudited condensed combined pro forma financial information is based on assumptions regarding Energy Fuels and VAC’s circumstances prior to the VAC Acquisition, and actual events occurring before the successful closing of the VAC Acquisition (the “Closing”) which may differ from those assumptions. The unaudited condensed combined pro forma financial information reflects certain assumptions regarding the terms of the pending VAC Acquisition and the financial, contractual, operational and other circumstances of Energy Fuels, ASM and VAC. There can be no assurance that those assumptions will remain accurate prior to Closing. In particular, prior to Closing, the Merger Agreement may be amended, supplemented, waived or terminated, including with respect to the consideration payable, transaction structure, closing conditions, representations, covenants or other material terms. In addition, Energy Fuels or VAC’s capital structure, indebtedness, financing arrangements, interest rates, liquidity, cash balances or other sources and uses of funds may change before Closing, including as a result of additional borrowings, repayments, refinancings, amendments or defaults.
VAC’s existing contracts, may change, terminate, expire, be renegotiated or become subject to different terms before Closing. Energy Fuels and/ or VAC may further incur transaction-related, financing, restructuring, integration, litigation or other costs that are not reflected in the unaudited condensed combined pro forma financial information and the Closing as a result of changes in market conditions, economic conditions, interest rates, foreign exchange rates, regulation, competition, customer demand, supply chain or other factors. e-VAC Magnetics LLC is involved in a dispute with a customer regarding a commercial supply agreement. Energy Fuels’ estimate of purchase consideration and preliminary purchase price allocation under Accounting Standards Codification Topic 805, Business Combinations (“ASC 805”) has made certain assumptions regarding the expected outcomes of this dispute including a reasonable settlement amount, which has been reflected in a purchase price adjustment for the VAC Acquisition in the event this settlement amount is not achieved. If the outcome of the dispute is less than such assumptions, then the difference will be compensated for via this price adjustment, and if the outcome of the dispute exceeds expectations, the difference will accrue to VAC, which would be for the benefit of the Company upon completion of the VAC Acquisition.
As a result, the actual financial condition and results of operations of the Company following the VAC Acquisition may not be consistent with, or evident from, the Company’s financial information. The assumptions used in preparing the pro forma financial information may not prove to be accurate, and other factors may affect Energy Fuels’ financial condition or results of operations following implementation of the VAC Acquisition.
DESCRIPTION OF BUSINESS
The ASM Acquisition (Implemented August 28, 2026)
As previously reported in the ASM Closing 8-K, a wholly owned subsidiary of Energy Fuels (the "Energy Fuels Bidder") completed the acquisition of all of the ordinary shares of ASM pursuant to a Scheme Implementation Deed dated January 21, 2026, as amended on March 13, 2026, by and among Energy Fuels, the Energy Fuels Bidder and ASM.
Overview of ASM
ASM was, and remains under Energy Fuels, an Australian emerging vertically integrated producer of rare earth metals and alloys for use in advanced and clean energy technologies. ASM is developing the Dubbo Project in central western NSW, Australia, as well as expanding the KMP in Ochang, South Korea, both of which are described in further detail below.
Dubbo Project
The Dubbo Project is expected to provide a long-term, secure resource of REEs and potentially other critical minerals. Located in NSW, Australia, the Dubbo Project is a globally significant resource of Nd, Pr, Dy, Tb, and other critical minerals including zirconium (“Zr”), niobium (“Nb”) and hafnium (“Hf”).
Pending its successful development, the Company expects resources from the Dubbo Project to be mined, separated and refined onsite to initially produce a mixed REE intermediate product. Once operational, the Company plans to evaluate the opportunity to produce a range of critical metal oxides and mixed chlorides. The mixed REE intermediate product from the Dubbo Project is expected to be separated into rare earth oxides at the Mill and further processed into metals and alloys at the KMP, and potentially an AMP, and, upon closing of the VAC Acquisition as contemplated, into REE magnets at VAC’s existing and/or planned expanded facilities. In addition, any mixed REE intermediate product not required for the Company’s internal use could be sold directly to western/western-allied global customers.
The mining lease for the Dubbo Project was granted to a wholly owned subsidiary of ASM on December 18, 2015 and expires on December 18, 2036. Through its newly acquired, wholly owned subsidiary Toongi Pastoral Company, the Company owns 3,456 hectares of land where Mining Lease 1724 is located. The entirety of the Dubbo Project Measured Mineral Resource Estimate, mine and required processing facilities are expected to all be located within the boundaries of the mining lease. A depiction of the geographical area of the Dubbo Project is set out below:
It is intended that the Dubbo Project will use water for construction and operations sourced from the Macquarie River and the Upper Macquarie River Alluvial Aquifer. ASM holds sufficient river and groundwater licenses (including some high-security licenses) for approximately two GL per annum in the Cudgegong-Macquarie Water Sharing Plan to develop the Dubbo Project as a one-million tonnes per annum (“Mtpa”) operation. The results of the Australian Joint Ore Reserves Committee (“JORC”)-compliant Heap Leach Scoping Study released to the Australian Stock Exchange by ASM on July 11, 2025 disclosed average production targets for years 3-15, totalling 1,242 tonnes per annum (“tpa”) of REE oxides comprising:
- NdPr oxide: 1,157 tpa;
- Tb oxide: 13 tpa; and
- Dy oxide: 72 tpa.
The above numbers are historical in nature and should not be considered current Mineral Resources as defined under S-K 1300 or NI 43-101. The Company is currently preparing a Pre-Feasibility Study on the Dubbo Project compliant with both S-K 1300 and NI 43-101.
(i) History
The Dubbo Project was first initiated by Alkane, which secured an exploration license over the Toongi deposit in 1987. Subsequent drilling and metallurgical test work between 1999 and 2002 confirmed the deposit's uniform grade and demonstrated that a sulfuric acid roast and leach process could effectively treat the ore - an important breakthrough given the silica-related challenges encountered in comparable deposits. Although the project was temporarily deferred in 2003, Alkane continued advancing the technical foundations of the project, including construction of a pilot-scale demonstration plant at ANSTO in 2008. This work enabled the development of a flowsheet capable of producing discrete products across light and heavy REEs, Zr, Hf and Nb.
Building on these results, a series of technical and economic studies were undertaken over the following decade. A Definitive Feasibility Study (the "DFS") was completed in 2013 by TZ Minerals International, building on earlier studies by TZMI (2011) and SNC Lavalin (2002). Further engineering input was provided by Hatch in 2015 and GHD Ltd. in 2017, culminating in the Maiden Ore Reserves Report released in 2017. These studies collectively confirmed the project's technical viability and established the basis for future development.
To accelerate development, ASM was subsequently demerged from Alkane and assumed responsibility for progressing the Dubbo Project. ASM completed an Optimisation Feasibility Study (the "OFS") in 2021, resulting in an updated Ore Reserves Estimate later that year. The OFS incorporated significant enhancements to the flowsheet following extensive collaboration with ANSTO, improving overall recoveries and process efficiency. It also assessed a processing circuit designed to produce a comprehensive suite of high-value oxides across the REEs (both heavy and light) as well as Zr, Nb and Hf and incorporated infrastructure upgrades to strengthen ESG performance, including a chlor-alkali plant, brine concentrator and rail refurbishment.
(ii) Project studies
In 2024, ASM launched the Rare Earth Options Assessment (the "REOA") to evaluate alternative pathways for developing the Dubbo Project. The goal of the REOA is to identify lower-capital, shorter implementation options for recovering both light rare earths (Nd, Pr) and heavy rare earths (Dy, Tb) as high-purity, separated oxides.
A key opportunity emerging from this work is the potential to deliver the Dubbo Project in phases - beginning with a first phase focused on REE recovery and a second phase to target the broader suite of critical minerals in the Dubbo Project deposit.
The REOA identified several technically viable options, particularly heap and atmospheric tank leaching. These methods have the potential to remove the need for a capital- and energy-intensive acid bake in the initial development phase, significantly simplifying the process flowsheet.
To assess these options, ASM conducted extensive metallurgical test work, including scoping variability tank leach and bottle roll tests across different zones of the Dubbo Project deposit. In July 2025, ASM successfully completed and released the Heap Leach Scoping Study as part of the REOA work program. The Heap Leach Scoping Study provides a high-level economic evaluation (+/- 50%) of a heap leach, REE-focused first phase implementation of the Dubbo Project and represents a transformative shift in the Dubbo Project's development approach. The heap leach approach eliminates complex initial processing stages, simplifying construction and accelerating the pathway to cash flow generation. This approach offers a more agile and targeted entry point, aligning with current market priorities while potentially reducing initial capital requirements.
Since the release of the Heap Leach Scoping Study, ASM made substantial progress across multiple technical workstreams in support of delivering a Pre-Feasibility Study (the "PFS") specific to the heap leach process. Completion of the PFS is being accelerated by leveraging ASM's extensive prior technical and engineering work.
Korean Metals Plant and potential American Metals Plant
The KMP, located in South Korea, is the Company’s current REE metals and alloys metallization facility. Since opening in 2022 under ASM, the KMP has established itself as a strategically important, independent source of western/western-allied based REE metallization and alloying capacity. The buildings and equipment at KMP are owned by ASM, while the underlying land is leased. Certain equipment at KMP is subject to retention requirements and restrictions on disposal. As well, certain KMP assets are subject to approval from the government of South Korea prior to being transferred, exchanged, leased, pledged, or used outside of certain approved business purposes.
The plant has twelve total installed furnaces (including the eight installed in 1H 2026) and one strip caster with an installed alloy nameplate production capacity of approximately 1,300 tpa neodymium-iron-boron (“NdFeB”) alloy. The facility is designed for a full nameplate capacity of 3,600 tpa of NdFeB alloy, which is expected to be enabled through a Phase 2 ramp‑up involving installation of additional furnaces (eight of which were installed in H1 2026) and a second strip caster, which was purchased and is currently being installed at KMP.
Demand continues to grow for KMP products amid heightened geopolitical uncertainty and global efforts to diversify critical material supply chains, particularly from global magnet manufacturers and original equipment manufacturers (the "OEMs"), reflecting the growing importance of secure, western/western-allied supply alternatives. This has translated into ongoing and new customer discussions globally for the Company. In parallel with this rising demand, operational performance at the KMP has strengthened, with steadily increasing alloy output and consistent sales growth demonstrating the facility's maturing capability and market traction. This rising demand is expected to provide an outlet for any metal and/or alloy making capacity not required for the Company’s internal needs once the VAC Acquisition closes as contemplated.
To support growing customer demand, ASM initiated a phased expansion of the KMP. Phase 2 ramp‑up activities are progressing, including the installation of eight additional furnaces in H1 2026 that will maximise output of NdPr metal. A second strip caster with 2,000 tpa capacity was ordered and is currently being installed at the KMP. The second strip caster along with the existing operational strip caster will raise the total strip cast capacity at the KMP to 3,600 tpa. Funding of the Phase 2 expansion was fully funded from ASM’s recent successful capital raise. Early planning has also commenced for a potential Phase 3 expansion, which could lift total nameplate capacity to around 5,600 tpa, positioning the KMP as a cornerstone asset in global rare earth supply chains and a key enabler of the energy transition and advanced manufacturing markets. The Phase 3 expansion will be conditional on internal and external demand for metals and alloys, taking into consideration additional capacity that would be available at an AMP if developed as planned.
The KMP achieved a significant milestone in ASM’s heavy rare earth strategy with the first commercial sales of Tb and Dy – two of the most technically challenging and strategically important REEs. These initial shipments, delivered to Neo Performance Materials’ new permanent magnet facility in Narva, Estonia, validate ASM’s technical capability and have contributed to a surge in enquiries from global manufacturers seeking reliable heavy rare earth supply partners. To meet this demand, and to satisfy the Company’s internal demands upon closing of the VAC Acquisition as contemplated, ASM is actively expanding its heavy REE production capacity and is targeting commencement of commercial-scale heavy REE metal production in 2027.
Further to the operational success of the KMP, ASM has explored the strategic expansion of its metallization capability and the extension of its vertically integrated strategy through the proposed AMP. The AMP is expected to leverage U.S. government focus on supply chain vulnerability and domestic production capabilities in the rare earth and metallization market to position the Company to address critical U.S. supply chain needs and strengthen the enduring partnership between the U.S. and Australia. The AMP is expected to replicate proprietary alloy production processes, NdPr metallization and advanced heavy rare earth metallization techniques to focus on NdFeB alloy production from separated rare earths (NdPr, Dy, Tb), which are critical to defense and clean energy applications and represent acute supply chain vulnerabilities in the U.S. The proposed AMP has an initial nameplate production capacity of 2,000 tpa (with the ability to expand to 4,000 tpa) of alloy. The Company remains engaged with U.S. and state government agencies and funding bodies to meet relevant permitting and funding requirements, to identify and select the optimal location for the AMP, and to negotiate and understand state incentives available for such facility. If the VAC Acquisition closes as contemplated, the AMP could potentially be located in Sumter, South Carolina, adjacent to VAC’s existing REE magnet-making facility.
Implications of the ASM Acquisition for Energy Fuels
Strategic Rationale and Plans
With the ASM Acquisition, the Company aims to further establish itself as a first tier, globally competitive critical materials company focused on REE, HMS, uranium, vanadium, and metals and alloys and, upon the successful closing of the VAC Acquisition as contemplated, magnet production, thereby supporting western/western-allied supply chain resilience for defense, clean energy and advanced manufacturing sectors, in part by closing a critical strategic gap in global supply chains for magnet applications, including automotive, robotic, energy and defense technologies.
By integrating REE mining and REE separation with downstream REE metal and alloy conversion, the Company has established a vertically integrated supply chain, expected to capture value across multiple stages of the REE value chain by potentially enhancing margin capture, reducing supply chain friction and exposure to third-party processing bottlenecks and improving the Company's ability to respond to market demand.
Through the ASM Acquisition, Energy Fuels sees an opportunity to expand the range of REE products available to both customer bases by combining Energy Fuels’ U.S.-based REE oxide production capabilities at its Mill with the KMP’s downstream metal and alloy manufacturing capability, being one of the few operating western/western ally facilities currently producing REE metals and alloys, including NdPr, Dy and Tb metals and NdFeB and Dy-Fe alloys.
The ASM team’s proven skills and intellectual property also allow the Company to potentially expand its REE metal and alloy capacity into the U.S. through the permitting and development of a planned AMP intended to have initial nameplate production capacity of 2,000 tpa of alloy with the ability to expand up to 4,000 tpa of alloy. The Mill, as the only U.S. facility capable of separating monazite into both light and heavy REE oxides, is expected to produce and supply REE oxides to both the KMP and, potentially, an AMP.
The Company expects to advance pre-feasibility work at the newly acquired Dubbo Project in NSW, Australia. The Dubbo Project’s REE JORC-compliant mineral resource estimates, particularly NdPr, Dy and Tb, complement Energy Fuels’ existing REE feedstock strategy and provide an important long-term supply of REEs required for advanced permanent magnet applications. As a part of this work, the Company expects to evaluate the production of a mixed REE intermediate product at the Dubbo Project for subsequent processing into separated NdPr, Dy and Tb oxides at the Mill. Leveraging the Mill’s existing separation capability has the potential to significantly simplify the processing flowsheet of the Dubbo Project. If production of an intermediary mixed REE product at the Dubbo Project is determined to be feasible, based on evaluations the Company expects to perform, the Dubbo Project is expected to strengthen the Company’s pipeline of potential REE development projects. This pipeline currently includes the Donald Project, Vara Mada Project and Bahia Project, which, upon their respective development, subject to successful permitting and commissioning, are intended to supply feed materials to support the planned Phase 2 Circuit expansion of the Mill’s REE oxide separation capacity. If production of such an intermediary product at the Dubbo Project is determined not to be feasible, then the Company intends to continue evaluating the feasibility of other means of bringing the Dubbo Project into production.
Subject to permitting and financing, the Company plans to expand its current nameplate capability at the Mill to process up to approximately 10,000 tonnes of monazite/xenotime per year into the production of approximately 1,000 tpa of NdPr oxide (in its existing Phase 1 facility), to a further expanded nameplate capability of approximately 60,000 tpa of monazite/xenotime (or the equivalent amount of MREC or the equivalent) per year into approximately 6,000 tpa of NdPr, 200 tpa of Dy and 60 tpa of Tb (in its existing Phase 1 facility and future Phase 2 facility). On going expansions at the KMP from its existing 1,300 tpa REE installed NdFeB alloy-making nameplate capacity to 3,600 tpa NdFeB alloy-making nameplate capacity would allow the facility to accept REE oxides produced at the Mill from monazite/xenotime mined from the Donald Project, subject to a positive FID on that project, for conversion into REE metals and alloys for sale to third-party purchasers, or, upon closing of the VAC Acquisition as contemplated, for use at VAC’s existing and planned magnet-making capacity for the production of REE magnets by the Company.
Current ASM Employees
ASM's workforce continued their pre-acquisition roles following the ASM Acquisition. Key members of ASM’s senior leadership team remain employed with the Company following the ASM Acquisition. Rowena Smith, former Managing Director and Chief Executive Officer of ASM, continues to be employed by the Company following the ASM Acquisition and is entitled to receive certain retention incentive arrangements.
Headquarters
Post-ASM Acquisition, the Company’s head office continues to be in Lakewood, Colorado, U.S. ASM’s team in West Perth, Australia is now operating on a combined basis with Energy Fuels’ Perth-based HMSRE division out of the Company’s existing office in Perth.
The Pending Acquisition of VAC
As previously reported in the VAC Announcing 8-K, Energy Fuels entered into a Merger Agreement pursuant to which Energy Fuels expects to acquire 100% of VAC. Consummation of the VAC Acquisition remains subject to the satisfaction or waiver of certain customary closing conditions specified in the Merger Agreement and as described in the VAC Announcing 8-K. As noted above, the parties to the Merger Agreement entered into that certain Merger Agreement Amendment dated October 13, 2026, which is filed as Exhibit 2.1 to this Current Report on Form 8-K.
Overview of VAC
VAC is a manufacturer of magnetic materials and product solutions, headquartered in Hanau, Germany. Founded in 1923, VAC develops, manufactures, and sells specialized alloys, materials, parts, components, permanent magnets, and applied magnetic solutions. VAC has undergone several ownership transitions, including and most recently by Ara Partners in October 2023. Through these transitions, VAC has maintained its position as one of the largest Western manufacturers of advanced magnetic materials. VAC's products are used across a range of end markets, including automotive and electrified mobility, industrial automation, defense and aerospace, renewable energy and power electronics.
VAC's business is organised into three divisions:
Rapid Solidification - designs and manufactures soft-magnetic alloys (amorphous and nanocrystalline) on an industrial scale. The product portfolio consists of magnetic cores, inductive components, and current sensors through to complete assemblies, serving customers in industrial power electronics, automotive, solar technology, charging infrastructure for electric vehicles, and aerospace and defense applications; In FY2025, the Rapid Solidification division generated revenue of approximately €156 million (approximately US$176 million, based on an average exchange rate of 1.1518 euros per U.S. dollar for FY2025), representing approximately 48% of VAC’s total revenue. The division’s gross margin was approximately 21.5% in FY2025.
Crystalline – designs and manufactures soft-magnetic alloys (NiFe, CoFe) used across industries including automotive, industrial, defense and aerospace, and renewable-energy applications. Alloys are melted in vacuum induction furnaces at the Hanau plant and manufactured in the form of strips, wires, and further processed products, including stamped parts, rotor and stator assemblies, and precision sensor components. In FY2025, the Crystalline division generated revenue of approximately €91 million (approximately US$104 million, based on an average exchange rate of 1.1518 euros per U.S. dollar for FY2025), representing approximately 28% of VAC’s total revenue. The division’s gross margin was approximately 18.5% in FY2025.
Permanent Magnets – develops and manufactures high-performance sintered REE permanent magnets, including NdFeB (VACODYM®) and samarium-cobalt (“SmCo”) (VACOMAX®) magnets, as well as magnet assemblies. These products are used primarily in automotive (including electric vehicle (“EV”) traction motors), industrial, defense and aerospace applications. VAC is one of a limited number of manufacturers producing sintered REE permanent magnets at scale outside of Asia. In FY2025, the Permanent Magnets division generated revenue of approximately €79 million (approximately US$89 million, based on an average exchange rate of 1.1518 euros per U.S. dollar for FY2025), representing approximately 24% of VAC’s total revenue. The division’s gross margin was approximately 10.4% in FY2025.
Implications of the VAC Acquisition for Energy Fuels
VAC is a magnetics company with over 100 years of production expertise, more than 400 patents, upwards of 1,000 customers, and operating magnet production facilities in North America, Europe and Asia, including a magnet facility in Sumter, South Carolina, U.S. with capacity to produce 2,000 tpa of permanent magnets, scalable to 12,000 tpa. Over the last decade, VAC has produced and shipped more than one billion rare earth permanent magnets. VAC’s product portfolio spans both permanent magnets (sintered NdFeB and SmCo) and soft magnetics (amorphous and nanocrystalline alloys, cobalt-iron and nickel-iron products), enabling integrated cross-selling among electrification and industrial applications. Approximately 85% of VAC’s output is produced to customer specifications, reflecting deep design-in relationships built over decades, including customer partnerships averaging over 30 years with their largest accounts.
Corporate Structure
Upon Closing, VAC will become a wholly owned subsidiary of Energy Fuels and will cease to be a privately held company.
Strategy
Following Closing, the Company’s strategy will be to bring together Energy Fuels’ upstream REE assets, including REE mining projects and existing separation and metal and alloy-making capacity, with VAC’s downstream REE magnet manufacturing expertise. The acquisition of VAC is intended to add the downstream magnet-manufacturing component to the Company's planned mine-to-magnet platform. This represents the last stage of mine-to-magnet vertical integration for Energy Fuels, which, together with the recently completed ASM Acquisition, would complete a fully western/western-allied-origin rare earth supply chain from its prospective feedstock projects through to finished permanent magnets. By internalizing magnet manufacturing, the Combined Company expects to capture additional margins on each kilogram of rare earth material processed.
The Combined Company aims to serve western/western-allied customers globally in the automotive, aerospace and defense, robotics, data centers, electronics and industrial automation sectors.
The combined platform includes: feedstock supply from the “shovel ready” Donald Project in Australia (subject to a FID, which is now targeted for Q4 2026) and from Energy Fuels’ other prospective feedstock projects, including the Vara Mada Project and Bahia Project, which are intended to supply additional feed materials to the Mill upon development; processing and separation at the Mill; metals and alloy production at the KMP and planned AMP; and permanent magnet manufacturing and assembly at VAC’s European facilities and Sumter plant.
VAC serves a diversified range of end markets. Based on FY2025 revenue, VAC’s end-market exposure, from its three divisions, was approximately as follows:
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Industrial: Largest end market, including industrial automation, drives, power electronics, and installation technology.
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Automotive (General): Nearly a quarter of VAC's revenue is from the production of components for internal combustion engine vehicles and general automotive electronics.
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Automotive (EV): Growing segment, including EV traction motors, charging infrastructure, and battery management systems.
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Aerospace & defense: Growing segment, particularly in the permanent magnets division, supported by increasing western defense spending.
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Alternative Energy: Includes solar/PV inverters and renewable energy applications.
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Other: Includes consumer electronics, luxury watches, medical equipment, and other specialty applications.
Dividend Framework
Energy Fuels has not declared cash dividends on its Common Shares to date. Energy Fuels anticipates that it will retain any earnings to support operations and to finance the growth of the Company's business. Therefore, the Company does not expect to pay cash dividends in the foreseeable future. Any future determination to pay cash dividends will be at the discretion of the Company's Board of Directors (the "Board") and will be dependent on the financial condition, operating results and capital requirements of the Company, and other factors that the Company's Board deems relevant.
Current VAC Employees
VAC’s workforce is expected to continue in their existing roles following the Closing, with no currently anticipated changes that would be material to the business.
Headquarters
After Closing, the Company’s head office will continue to be its existing corporate offices in Lakewood, Colorado, U.S. VAC’s existing office in Hanau, Germany will continue to operate and is currently intended to be the principal office of the Company’s magnet division.
Expected Synergies Resulting from the Acquisition of VAC
Following completion of the VAC Acquisition, the Combined Company is intended to be vertically integrated across the full REE value chain - from mining projects and separation (Energy Fuels' White Mesa Mill and Donald Project) through metals and alloys production (ASM's KMP and planned AMP) to finished permanent magnet manufacturing (VAC's European facilities and Sumter magnet plant). This vertical integration is intended to enable the Combined Company to:
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capture value at each conversion step in the supply chain – from ore to separated oxide, oxide to metal/alloy, and metal/alloy to finished magnet – rather than participating only in one or a subset of the manufacturing steps;
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internalize the upstream margin on REE feedstock currently paid to third-party suppliers by sourcing separated REE oxides and metals from within the Combined Company's own operations rather than purchasing them at market prices;
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reduce exposure to third-party supply chain disruptions and pricing volatility, particularly given recent foreign export restrictions on certain REE alloy forms that have required VAC to restructure its procurement arrangements (including sourcing REE oxides from European and U.S.-based suppliers and engaging intermediary processors for alloy refinement); and
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strengthen pricing power with end customers by creating a fully traceable, western/western-allied-origin, mine-to-magnet supply chain applicable to the aerospace, defense and automotive sectors, as suggested by western pricing.
Key Manufacturing Operations
VAC's manufacturing operations are spread across multiple facilities, with approximately 3,500 full-time employees as of December 31, 2025. The principal manufacturing facilities comprise:
(a) Hanau, Germany.
The Hanau site serves as VAC's headquarters and primary production hub. Founded in 1923, the facility covers all three divisions (Rapid Solidification, Crystalline, and Permanent Magnets) and serves as a supplier of base material to downstream facilities in Slovakia, China and Malaysia. The Hanau site also houses VAC's principal research and development ("R&D") capabilities. Approximately 85% of VAC's inventory is held at the Hanau site. The facility includes vacuum induction furnaces for alloy melting and a vertically integrated manufacturing chain from raw material processing through to finished components and assemblies.
(i) Production Capacity
1. Melt Shop: 8,000 tpa
2. Cold Rolling: 6,000 tpa
3. Rapid Solidification: 3,950 tpa
4. Permanent Magnets: 1,000 tpa
(b) Sumter, South Carolina, U.S.
The Sumter facility is a purpose-built manufacturing facility situated on an approximately 80-acre site in Sumter, South Carolina, which VAC is currently in the process of expanding to 224 acres through an additional land purchase. Initial production commenced in the fourth quarter of 2025. The facility has been designed to support potential phased expansion of capacity across subsequent phases. The Sumter facility has received U.S. government financial support, including federal investment tax credits under Section 48C of the Internal Revenue Code. The facility, operated through wholly owned subsidiary e-VAC Magnetics LLC, has current capacity to produce 2,000 tonnes per annum of permanent magnets, scalable to 12,000 tonnes per annum.
The facility can increase capacity to 4,000 tonnes per annum and does not require any additional infrastructure to accommodate this expanded capacity. To expand to 12,000 tonnes per annum, VAC would be required to invest additional capital, which would only be invested if additional contracts for increased magnet offtakes by third parties were secured to justify the expansion.
The Sumter facility was constructed in connection with an offtake agreement that is currently the subject of a contractual dispute (see Management's Discussion and Analysis of Financial Condition and Results of Operations of Ara VAC IE Aggregator, LP - Recent Developments - Customer Contract Dispute, below). Energy Fuels was aware of this dispute during the negotiation of the Merger Agreement, and the parties incorporated a purchase price adjustment to account for the matter.
The Sumter facility currently has available production capacity to support the existing offtake agreement in full; to the extent such offtake agreement does not remain in place on its existing terms, the Sumter facility will have capacity to onboard new customer contracts. Depending on customer-specific technical specifications and operational requirements, any new contracts may require significant incremental capital expenditures by the Company, which would be taken into account in contract negotiations with any such new customers.
(c) Ulvila, Finland
The Ulvila facility specializes in the production of permanent magnets and magnet assemblies, including both SmCo and NdFeB magnets. The facility was acquired through the acquisition of Neorem Magnets Oy in 2007 and contributed approximately 3.3% of VAC's total FY2025 revenue, with most sales relating to locally manufactured products.
(i) Production Capacity
1. Permanent Magnets: 500 tons
(d) Horna Streda, Slovakia
The Horna Streda facility is a multi-purpose production site supporting all three divisions. The site produces cores, components, magnets and soft-magnetic parts, including downstream processing and component assembly. The facility was founded in 1998 and has recently undergone expansion, with growth capital expenditure in FY2025 primarily directed toward the acquisition of adjacent buildings to secure optionality for future capacity expansion.
(i) Production Capacity
1. Rapid Solidification: Slitting (633 tpa)
2. Crystalline: 230,000 hours
3. Permanent Magnets: PCU26 (23,500 hours), PCU32 (32,300 hours)
(e) Pekan, Malaysia
The Malaysian facility manufactures cores, current sensors and components primarily for automotive and electrical safety applications within the Rapid Solidification division. The facility was established in 1984 and provides toll manufacturing services, with raw materials and work-in-progress remaining owned by VAC's German entity Vacuumschmelze GmbH & Co. KG.
(f) Shenyang, China
VAC holds 100% in Vacuumschmelze China Magnetics (Shenyang) Co. Ltd. (CN), which produces components and current sensors for power-electronics and electrical safety applications within the Rapid Solidification division. VAC has operated production facilities in Shenyang, China, since 1994 - initially in cooperation with a local partner and, since 2001, as an independent company under the name of VACUUMSCHMELZE China Magnetics (Shenyang) Co., Ltd.
(i) Production Capacity
1. Current Sensors (26,000,000 pcs)
2. Components (2,830,000 hrs)
VAC also holds a 49% equity interest in SANVAC (Beijing) Magnetics Co. Ltd., a joint venture with Beijing Zhong Ke San Huan High-Tech Co., Ltd., which produces NdFeB permanent magnets and magnetic assemblies. The joint venture was established pursuant to a Joint Venture Contract dated January 17, 2005.
Research and Development
VAC’s principal R&D capabilities are housed at the Hanau, Germany headquarters. Total capitalized R&D costs amounted to approximately €8.9 million, €6.3 million and €3.5 million in FY2023, FY2024 and FY2025, respectively. The decline in capitalized R&D in FY2024 and FY2025 reflects the partial reallocation of engineering and development capacity to support the build-up of the e-VAC facility in Sumter South Carolina. rather than a structural reduction in underlying R&D capability.
VAC holds more than 400 patents across its product portfolio. The company’s R&D activities focus on the development of advanced magnetic materials, manufacturing processes and application-specific solutions across its three divisions.
Senior Management
As of the date of this Current Report on Form 8-K, the senior management personnel of VAC are:
|
Senior Management Personnel |
|
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Dr. Erik Eschen Chief Executive Officer |
Dr. Eschen brings extensive professional experience in management to VAC. Prior to joining VAC, Dr. Eschen held leadership positions in international industrial organizations, including serving as CFO of the EMEA Division of Keller Group and holding roles at Bilfinger Berger and Deutsche Bahn. Eschen holds a PhD in Strategic Management and Diploma in Business Management from the Freie Universität Berlin. |
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Jürgen Wössner Chief Financial Officer |
Mr. Wössner has extensive experience in finance and executive leadership roles across the automotive and industrial sectors. Prior to joining VAC, Mr. Wössner served as Group CFO for Allgaier Automotive GmbH and as CFO and Chairman of the Management Board at Felss Group. Mr. Wössner holds a Diploma in Business Management from the University of Stuttgart. |
|
Gregor Eipert Chief Operating Officer |
Mr. Eipert has extensive experience in industrial engineering and operational leadership roles. Prior to joining VAC, Mr. Eipert served as Head of Business Unit Stamping and Managing Director for Feintool, and as COO & CSO of Kienle + Spiess. Mr. Eipert holds a Master of Science in Industrial Engineering from the Berlin University of Applied Sciences and Technology. |
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF ARA VAC IE
AGGREGATOR, LP
The following discussion and analysis of the financial condition and results of operations of Ara VAC IE Aggregator, LP (“the Group”, or “IE Aggregator”) should be read together with the annual consolidated financial statements and the unaudited interim condensed consolidated financial statements, included elsewhere in this Form 8-K, and “Risk Factors.”
Overview
The Group is a global manufacturer of magnetic materials and product solutions, headquartered in Hanau, Germany, with operations across Europe, Asia and North America. The Group specializes in engineered magnetic materials used in automotive and electrified mobility, industrial automation, defense and aerospace, renewable energy, power electronics and medical applications. The Group consists of Ara VAC TopCo GmbH and its subsidiaries and Ara VAC TopCo US LLC and its subsidiaries, each directly and indirectly controlled by IE Aggregator. The Group’s ultimate parent is Ara Fund III GP, Ltd., Cayman Islands, which exercises control through Ara VAC Holdings, Ltd. and Ara VAC Blocker, SLP.
The Group has more than one hundred years of experience in the field of materials science. Product development within the Group is highly specialized and focused on meeting individual customer requirements.
The Group is active in a wide variety of growth markets and technology segments and develops, manufactures, and sells specialized alloys, materials, parts, components, permanent magnets and applied magnetic solutions. The Group’s product range includes a wide range of advanced semi-finished products and components. These are used in a variety of areas and industries, such as automotive systems, industrial automation and robotics, alternative energy as well as aerospace, defense, and logistics, tracking and medical technology. The Group is a global group of companies with numerous production sites in Europe and Asia and a research and development center in Germany.
The Group operates in three business divisions, which follow the value-added approach and depict the actual production and value-added processes contained in the respective end products:
Rapid Solidification - designs and manufactures soft-magnetic alloys (amorphous and nanocrystalline) on an industrial scale. The product portfolio consists of magnetic cores, inductive components, and current sensors through to complete assemblies, serving customers in industrial power electronics, automotive, solar technology, charging infrastructure for electric vehicles, and aerospace and defense applications;
Crystalline - designs and manufactures soft-magnetic alloys (NiFe, CoFe) used across industries including automotive, industrial, defense and aerospace, and renewable energy applications. Alloys are melted in vacuum induction furnaces at the Hanau plant and manufactured in the form of strips, wires, and further processed products, including stamped parts, rotor and stator assemblies, and precision sensor components; and
Permanent Magnets - develops and manufactures high-performance sintered rare-earth permanent magnets, including neodymium-iron-boron (VACODYM®) and samarium-cobalt (VACOMAX®) magnets, as well as magnet assemblies. These products are used primarily in automotive (including EV traction motors), industrial, defense, and aerospace applications. VAC is one of a limited number of manufacturers producing sintered rare-earth permanent magnets at scale outside of Asia.
Recent Developments
On June 23, 2026, IE Aggregator, together with Ara VAC Holdings, Ltd. and Ara VAC Blocker, SLP, entered into an Agreement and Plan of Merger (the “Agreement”) with Energy Fuels Inc. (“Energy Fuels”) pursuant to which Energy Fuels will acquire 100% of the equity interests in Ara VAC TopCo GmbH (“German TopCo”) and Ara VAC TopCo US LLC (“US TopCo”) through a series of merger transactions for total cash and equity consideration with an implied equity value of approximately $1.9 billion. The transaction remains subject to customary closing conditions, including regulatory approvals, and is expected to close in the next 12 months.
The Group’s management believes the proposed transaction represents a significant strategic milestone for the Group and its stakeholders. Until the transaction closes, the Group will continue to operate its business in the ordinary course while working to satisfy the conditions necessary to complete the transaction.
Upon completion of the transaction, IE Aggregator is expected to remain in existence and retain the equity consideration received from Energy Fuels. As a result, the transaction is expected to represent the disposition of IE Aggregator’s operating business in exchange for cash and equity interests in Energy Fuels rather than liquidation of IE Aggregator. The Group’s management will continue to monitor developments related to the transaction and evaluate any resulting impacts on its operations, financial position, liquidity and capital resources.
Customer contract dispute
During the six months ended June 30, 2026, e-VAC Magnetics LLC, a subsidiary of the Group, became involved in a dispute with a customer regarding a commercial supply agreement. The dispute first arose in April 2026. The customer purported to provide official notice of termination of the commercial supply agreement on July 1, 2026. On July 7, 2026, e-VAC Magnetics LLC commenced arbitration proceedings, seeking a declaration that the termination was wrongful under the express terms of the commercial supply agreement, together with an award of the payments the customer is obligated to make to e-VAC Magnetics LLC over the remaining life of the commercial supply agreement. Management continues to evaluate the matter and its potential implications for e-VAC Magnetics LLC's future operations including in its liquidity and scenario planning processes. Given the early stage and ongoing nature of the proceedings, the ultimate outcome remains uncertain. Refer to Note 2, The Group's ability to continue as a going concern to the unaudited interim condensed consolidated financial statements for additional information.
Trends and Key Factors Affecting Performance
The Group’s results of operations, financial condition and liquidity have been, and may continue to be, affected by a number of factors, including demand across the end markets served by the Group’s business divisions, the ramp-up and operating performance of e‑VAC Magnetics, LLC’s permanent magnet production facility in the United States, fluctuations in rare earth raw material costs, energy, freight and labor costs, foreign currency exchange rates, the Group’s indebtedness, changes in the Group’s supply chain, and general economic, geopolitical and trade conditions. The Group’s future performance may also be affected by the outcome of the customer contract dispute described above and by the proposed transaction with Energy Fuels, including the timing and satisfaction of the conditions to closing and the effect of the transaction and integration process on the Group’s business, customers, suppliers and employees. For additional information regarding the proposed transaction and factors that may affect the combined business following completion of the transaction, see the sections entitled “Recent Developments” and “Risk Factors” included elsewhere in this Form 8-K.
Components of Results of Operations
Revenues
The Group generates revenue through the development, manufacture and sale of high-end magnetic materials, alloys, and applied products. The Group operates in three business divisions: Rapid Solidification, Crystalline and Permanent Magnets. Products for each of these divisions are sold to multiple markets, including automotive, energy conversion and distribution, installations, automation and drives, communication, aerospace and transportation, and to customers across multiple geographies. The Group’s products are often designed and manufactured in development cycles with highly integrated customer-built processes, mainly with large customers. The Group’s sources of revenue are divided into five geographic locations (Germany, Europe excluding Germany, North America, Asia Pacific and Rest of World). Revenue from the sale of goods is recognized generally at the point in time when control transfers to the customer, usually upon delivery. For customer contracts that require the Group to deliver a series of goods, revenue is recognized over time, generally in the amount to which the Group has a right to invoice.
Cost of sales
Cost of sales primarily consists of personnel expenses, direct materials and services, royalties, utilities, consumables and maintenance, freight, IT services and communication costs allocated to production and manufacturing activities, professional fees, bad debt allowances, depreciation and amortization and other production related costs.
Distribution expenses
Distribution expenses primarily consist of personnel expenses, professional fees, sales commissions and advertising expenses, depreciation and amortization, IT services and communication costs allocated to distribution activities, and travel expenses.
Administrative Expenses
Administrative expenses primarily consist of personnel expenses, professional fees, depreciation and amortization, training and recruitment expenses, travel expenses, IT services and communication costs allocated to administrative functions, insurance expenses, and other administrative expenses.
Research and development expenses
Research and development expenses primarily consist of personnel expenses, depreciation and amortization, travel expenses, IT services and communication costs allocated to research and development activities, utilities, consumables and maintenance, and other R&D expenses. Research and development expenses are presented net of government grants recognized as a reduction of qualifying research expenses.
Other income
Other income consists mainly of foreign exchange gains from operating activities.
Other expenses
Other expenses consist mainly of losses from the disposal of fixed assets, foreign exchange losses from operating activities, and one-time structuring fees associated with the sale of a §48C tax credit.
Finance income
Finance income consists primarily of financing foreign exchange gains, interest income, income from amortization of interest-bearing loans, and fair value changes of embedded derivatives.
Finance expenses
Finance expenses primarily consist of interest expense on third-party borrowings, financing fees, expenses from modification of interest-bearing loans, amortization expenses from interest-bearing loans, expenses from fair value changes of embedded derivatives, interest expense on employee benefit obligations, amortization of deferred assets, lease-related interest expenses and financing foreign exchange losses.
Income taxes
Income taxes consist of current and deferred income taxes recognized in profit or loss. Deferred taxes related to items recognized in other comprehensive income are recognized in other comprehensive income.
Comparison of the six months ended June 30, 2026 to June 30, 2025
Consolidated Results of Operations
The following table sets forth a summary of the Group's consolidated results of operations for the periods indicated, and the changes between periods.
| For the six months ended June 30, |
2026 vs. 2025 Change | |||||||||||
| 2026 | 2025 | Change | Change | |||||||||
| kEUR | kEUR | kEUR | % | |||||||||
| Revenue | 211,489 | 156,863 | 54,626 | 34.8% | ||||||||
| Cost of sales | (194,704 | ) | (165,722 | ) | (28,982 | ) | 17.5% | |||||
| Gross profit / (loss) | 16,785 | (8,859 | ) | 25,644 | 289.5% | |||||||
| Distribution expenses | (9,323 | ) | (8,444 | ) | (879 | ) | 10.4% | |||||
| Administrative expenses | (35,238 | ) | (10,946 | ) | (24,292 | ) | 221.9% | |||||
| Research and development expenses | (3,459 | ) | (2,523 | ) | (936 | ) | 37.1% | |||||
| Other income | 6,310 | 8,978 | (2,668 | ) | (29.7%) | |||||||
| Other expense | (9,544 | ) | (3,658 | ) | (5,886 | ) | 160.9% | |||||
| Operating loss | (34,469 | ) | (25,452 | ) | (9,017 | ) | 35.4% | |||||
| Finance income | 3,627 | 1,411 | 2,216 | 157.1% | ||||||||
| Finance expenses | (34,326 | ) | (37,896 | ) | 3,570 | (9.4%) | ||||||
| Loss before tax | (65,168 | ) | (61,937 | ) | (3,231 | ) | 5.2% | |||||
| Income taxes | 7,744 | 17,122 | (9,378 | ) | (54.8%) | |||||||
| Loss after tax | (57,424 | ) | (44,815 | ) | (12,609 | ) | 28.1% | |||||
| Supplemental depreciation and amortization information | ||||||||||||
| Depreciation and amortization expense | 31,681 | 26,503 | 5,178 | 19.5% | ||||||||
Revenues
Revenues for the six months ended June 30, 2026 increased by kEUR 54,626, or 34.8%, compared to the six months ended June 30, 2025. The increase was primarily driven by the commencement of commercial operations at e‑VAC Magnetics, LLC’s new production facility, which contributed additional Permanent Magnet revenue of kEUR 38,050, primarily in North America during the period. Revenue from the Group’s existing Permanent Magnets operations also increased by kEUR 10,225 compared to the prior-year period, reflecting continued growth in demand across Europe, North America and other global markets. Revenues in the Crystalline division also increased by kEUR 5,694, primarily driven by an increase in demand, while revenues in the Rapid Solidification division remained relatively consistent with the prior-year period.
Cost of sales
Cost of sales for the six months ended June 30, 2026 increased by kEUR 28,982, or 17.5%, compared to the six months ended June 30, 2025. The increase was primarily attributable to higher production and sales volumes, particularly within the Permanent Magnets division, and a customer-specific expected credit loss allowance related to the ongoing customer dispute. Cost of sales increased at a lower rate than revenue, resulting in an improvement in gross margin from negative 5.6% to positive 7.9%. The increase in the margin is primarily driven by the commencement of commercial operations at e-VAC Magnetics, LLC's new production facility.
Distribution expenses
Distribution expenses increased by kEUR 879, or 10.4%, for the six months ended June 30, 2026 compared with the six months ended June 30, 2025. The increase was primarily attributable to higher personnel and sales-related costs associated with the growth in revenues during the period.
Administrative expenses
Administrative expenses for the six months ended June 30, 2026 increased by kEUR 24,292, or 221.9%, compared to the six months ended June 30, 2025. The increase was primarily driven by higher professional fees associated with strategic and transaction-related initiatives, including legal, audit, accounting and tax services. Legal expenses incurred during the period were primarily related to an ongoing customer dispute discussed in the Recent Developments section above. Administrative expenses also increased due to higher share-based payment expense related to the equity incentive plan and salary and wages costs resulting from the commencement of commercial operations at e-VAC Magnetics, LLC's new production facility.
Research and development expenses
Research and development expenses increased by kEUR 936, or 37.1%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was primarily attributable to higher personnel costs and depreciation and amortization associated with the Group’s research and development activities.
Other income and other expenses
Other income for the six months ended June 30, 2026 decreased by kEUR 2,668, or 29.7%, compared to the six months ended June 30, 2025, while other expenses for the six months ended June 30, 2026 increased by kEUR 5,886, or 160.9%, compared to the six months ended June 30, 2025. The movements were primarily driven by operating foreign exchange gains and losses, as well as a one-time structuring fee of kEUR 2,340 recorded in other expenses in connection with the sale of a §48C tax credit.
Finance income
Finance income for the six months ended June 30, 2026 increased by kEUR 2,216, or 157.1%, compared to the six months ended June 30, 2025. The increase was primarily driven by income from amortization of interest-bearing loans and higher foreign exchange gains on financing activities during the period. This favorable impact was partially offset by a decrease in the fair value changes of embedded derivatives.
Finance expenses
Finance expenses for the six months ended June 30, 2026 decreased by kEUR 3,570, or 9.4%, compared to the six months ended June 30, 2025. The decrease was primarily driven by a one-time kEUR 11,538 debt modification loss recorded in the prior period. The decrease was partially offset by higher interest expenses on third-party loans as additional drawings were made during the current period and a higher expense resulting from the fair value changes of embedded derivatives.
Income taxes
Income tax benefit for the six months ended June 30, 2026 decreased by kEUR 9,378, or 54.8%, compared to the six months ended June 30, 2025. The lower tax benefit was primarily attributable to a less favorable effective tax rate in the current period, largely resulting from a change in the amount of unrecognized tax losses.
Comparison of the Years Ended December 31, 2025 and 2024
Consolidated Results of Operations
The following table sets forth a summary of the Group's consolidated results of operations for the periods indicated, and the changes between periods.
| 2025 | 2024 | Change | Change | |||||||||
| kEUR | kEUR | kEUR | % | |||||||||
| Revenue | 325,052 | 353,539 | (28,487 | ) | (8.1%) | |||||||
| Cost of sales | (347,089 | ) | (392,757 | ) | 45,668 | (11.6%) | ||||||
| Gross profit / (loss) | (22,037 | ) | (39,218 | ) | 17,181 | (43.8%) | ||||||
| Distribution expenses | (17,789 | ) | (17,130 | ) | (659 | ) | 3.8% | |||||
| Administrative expenses | (23,218 | ) | (24,170 | ) | 952 | (3.9%) | ||||||
| Research and development expenses | (7,158 | ) | (8,483 | ) | 1,325 | (15.6%) | ||||||
| Other income | 11,633 | 3,930 | 7,703 | 196.0% | ||||||||
| Other expense | (7,315 | ) | (6,524 | ) | (791 | ) | 12.1% | |||||
| Operating loss | (65,884 | ) | (91,595 | ) | 25,711 | (28.1%) |
| Finance income | 3,009 | 8,434 | (5,425 | ) | (64.3%) | |||||||
| Finance expenses | (58,545 | ) | (31,719 | ) | (26,826 | ) | 84.6% | |||||
| Loss before tax | (121,420 | ) | (114,880 | ) | (6,540 | ) | 5.7% | |||||
| - | ||||||||||||
| Income taxes | 33,566 | 18,122 | 15,444 | 85.2% | ||||||||
| Loss after tax | (87,854 | ) | (96,758 | ) | 8,904 | (9.2%) | ||||||
| Supplemental depreciation and amortization information | ||||||||||||
| Depreciation and amortization expense | 54,792 | 58,860 | (4,068 | ) | (6.9%) |
Revenues
Revenues for the year ended December 31, 2025 decreased by kEUR 28,487, or 8.1%, compared to the year ended December 31, 2024. The decrease was primarily driven by the geopolitical environment of the U.S.-China trade conflicts, related uncertainty for the European Union, and a weakening global economy. The decline was concentrated in two divisions: Rapid Solidification revenues fell by approximately 8%, mainly reflecting lower electronic article surveillance volumes; and Crystalline revenues decreased by kEUR 13,330, or 12.8%, driven by weaker demand in consumer and automotive semi-finished products and in current sensors for both solar applications and electric vehicle charging infrastructure. Permanent Magnets revenues remained broadly stable and declined by kEUR 1,488, or 1.9%, year over year.
Cost of sales
Cost of sales for the year ended December 31, 2025 decreased by kEUR 45,668, or 11.6%, compared to the year ended December 31, 2024. The decrease was primarily driven by the sell-through of inventory in 2024 recorded at fair value as part of purchase accounting in 2023, resulting in a non-recurring recognition of approximately kEUR 34,474. The year-over-year decrease was further influenced by lower revenue and corresponding reductions in variable costs, partially offset by improved gross margins due to favorable raw material pricing and lower personnel costs following workforce reductions in manufacturing operations.
Distribution expenses
Distribution expenses for the year ended December 31, 2025 increased by kEUR 659, or 3.8%, compared to the year ended December 31, 2024. The increase was primarily driven by higher social security costs, professional fees, increased travel expenses related to the North American expansion initiative, and one-time IT transition costs. These increases were partially offset by lower personnel costs and reduced sales commissions and advertising expenses.
Administrative expenses
Administrative expenses for the year ended December 31, 2025 decreased by kEUR 952, or 3.9%, compared to the year ended December 31, 2024. The decrease was primarily driven by lower personnel costs and professional fees resulting from the non-recurrence of strategic advisory costs incurred in the prior year, partially offset by higher insurance expense and slightly higher IT service and communications costs related to one-time IT transition activities.
Research and development expenses
Research and development expenses for the year ended December 31, 2025 decreased by kEUR 1,325, or 15.6%, compared to the year ended December 31, 2024. The decrease was primarily driven by increased government grant income recognized as a reduction to R&D expenses, which increased to kEUR 3,252 in 2025 from kEUR 218 in 2024. As a result, R&D expenses decreased despite the Group’s continued investment in research and development activities during the year.
Other income and other expenses
Other income for the year ended December 31, 2025 increased by kEUR 7,703, or 196.0%, compared to the year ended December 31, 2024, while other expenses for the year ended December 31, 2025 increased by kEUR 791, or 12.1%, compared to the year ended December 31, 2024. The movements were primarily driven by operating foreign exchange gains and losses.
Finance income
Finance income for the year ended December 31, 2025 decreased by kEUR 5,425, or 64.3%, compared to the year ended December 31, 2024. The decrease was primarily attributable to fair value movements in embedded derivatives associated with the Group's term loans. In 2024, these instruments generated a fair value gain of kEUR 5,779 that was recognized within finance income, whereas in 2025, their fair value declined, resulting in a loss recognized within finance expenses.
Finance expenses
Finance expenses for the year ended December 31, 2025 increased by kEUR 26,826, or 84.6%, compared to the year ended December 31, 2024. The increase was primarily driven by a kEUR 11,538 modification loss recognized in connection with the August 2025 amendment of the Group's credit agreement, which was contractually deemed effective as of June 30, 2025. The increase was also attributable to unfavorable fair value movements on embedded derivatives associated with the Group's term loans, which resulted in higher finance expenses in 2025 compared to the prior year, as well as increased financing foreign exchange losses resulting from currency movements on the Group's foreign-currency borrowings.
Income taxes
Income tax benefit for the year ended December 31, 2025 increased by kEUR 15,444, or 85.2%, compared to the year ended December 31, 2024. The increase was mainly attributable to favorable movements in temporary differences and the remeasurement of deferred tax balances following enacted tax law changes in Germany, partially offset by current income tax expense and certain tax losses and interest carryforwards for which no tax benefit was recognized.
Liquidity and Capital Resources
The Group’s principal liquidity requirements include funding working capital, capital expenditures, debt service, and other operating obligations. The Group has historically funded these requirements through cash generated from operations, cash on hand, borrowings under our financing arrangements and contributions from our shareholders.
As of June 30, 2026, the Group had available liquidity of EUR 69.5 million, consisting of EUR 43.7 million of cash and cash equivalents and approximately EUR 25.8 million of undrawn commitments under the Group’s third-party revolving credit facilities. The undrawn commitments consisted of EUR 10.0 million available under the EUR 35.0 million German revolving credit facility and approximately EUR 15.8 million available under the USD 18.0 million US revolving credit facility.
Management regularly evaluates the Group's liquidity position, projected cash flows, covenant compliance and available sources of funding under a range of operating scenarios. This assessment includes reasonably possible downside scenarios and available mitigating actions, including working-capital initiatives, liquidity-management measures, shareholder support and other actions available under the Group's financing arrangements.
Taking into account available liquidity, the letters of comfort provided by the Ara Funds, related party loan financing received prior to issuance of the interim condensed consolidated financial statements and other mitigating actions available to management, management concluded that the Group has adequate resources to continue its operations for at least twelve months from the date of issuance of the interim condensed consolidated financial statements. See Note 2, The Group’s ability to continue as a going concern to our unaudited interim condensed consolidated financial statements for additional information regarding management’s going-concern assessment.
Interest-Bearing Loans and Borrowings
The Group’s principal borrowing arrangements consist of the German term loan and revolving credit facility, the US term loan and revolving credit facility, and a related-party short term loan arrangement. See Note 24, Financial assets and liabilities to the Group’s audited consolidated financial statements and Note 12, Financial assets and liabilities to the Group’s unaudited interim condensed consolidated financial statements for additional information.
German Debt Facilities
On October 5, 2023, the Group entered into a syndicated lending arrangement which included a term loan (the “Term Loan”) and a revolving credit facility (the “Revolving Credit Facility”). The Term Loan principal of kEUR 165,000 has a maturity date of October 5, 2028. The Revolving Credit Facility carries a total commitment of kEUR 50,000, with a maturity date of April 5, 2028, and can be drawn with cash or bank guarantee utilizations. The Term Loan carries a variable interest rate of three-month EURIBOR, subject to a 3% floor plus a margin of 8% per annum, while the Revolving Credit Facility carries a variable interest rate of three-month EURIBOR plus a margin of 4% per annum. In August 2025, the Group amended the syndicated lending arrangement, effective as of June 30, 2025, and reduced the total commitment of the Revolving Credit Facility to kEUR 35,000 maturing on April 5, 2028. In addition, it was amended to capitalize paid-in-kind (PIK) interest of 2.5% per annum on the term loan until maturity.
During the six months ended June 30, 2026, the Group made a EUR 16.0 million repayment on the term loan using a portion of the proceeds from the monetization of the §48C tax credits, consisting of EUR 14.4 million of principal, EUR 1.0 million of PIK interest, EUR 0.4 million of accrued interest and EUR 0.2 million of prepayment fees. As of June 30, 2026, the carrying amount of the term loan was EUR 164.7 million.
The revolving credit facility was undrawn as of December 31, 2025. During the six months ended June 30, 2026, we drew EUR 17.0 million in January 2026 and EUR 8.0 million in May 2026. As of June 30, 2026, EUR 25.0 million was outstanding and EUR 10.0 million remained available under the facility.
U.S. Debt Facilities
In September 2024, e-VAC Magnetics, LLC entered into a syndicated credit agreement providing for a USD 300.0 million construction facility, a USD 18.0 million revolving credit facility and a USD 17.0 million debt-service-reserve letter-of-credit facility. The construction facility was established to fund eligible costs associated with the development of the Group's permanent magnet production facility in Sumter, South Carolina and converts into a term loan with increasing nominal amount upon satisfaction of specified project-completion and operational conditions. During the six months ended June 30, 2026, the construction facility was converted into a term loan requiring quarterly repayments of 4.0% per annum. Borrowings bear interest at variable rates based on daily simple secured overnight financing rate ("SOFR") or an alternate base rate, plus a fixed margin of 3%. The term loan has a maturity date of March 31, 2031.
As of December 31, 2025, the USD 300.0 million term loan was fully drawn, with a euro-equivalent principal balance of EUR 255.3 million. As of June 30, 2026, the term loan remained fully drawn, with a euro-equivalent principal balance of EUR 263.3 million. As of June 30, 2026, the USD 18.0 million revolving credit facility under the US Credit Agreement was fully available, representing approximately EUR 15.8 million (in equivalent of USD 18.0 million) of undrawn borrowing capacity.
Related-Party Loan Agreement
During the six months ended June 30, 2026, the Group entered into a related-party loan arrangement with an affiliate of its indirect shareholders and received principal advances totaling USD 7.5 million. Borrowings bear interest at 8.0% per annum and mature 363 calendar days from the date of each advance. The loan is repayable in cash, including accrued interest, on the final repayment date through the distribution waterfall prior to distributions to holders of ordinary and preference equity interests. If the loan remains unpaid by maturity, the outstanding principal and accrued interest automatically convert into equity interests at fair value split between ordinary and preference interests using the same proportions as the contributing lender's existing interests.
As of June 30, 2026, EUR 6.6 million (in equivalent of USD 7.5 million) was outstanding.
Covenant Compliance
The German and U.S. financing arrangements contain customary affirmative and negative covenants and events of default. The German facilities include a leverage-ratio covenant and a minimum-liquidity covenant of EUR 10.0 million. As of June 30, 2026, Ara VAC BidCo GmbH and e-VAC Magnetics, LLC were in compliance with the applicable covenants under their respective financing arrangements.
Shareholder Commitments
Subsequent to June 30, 2026 and prior to the issuance of the interim condensed consolidated financial statements, the Ara Funds, as indirect shareholders of the Group, advanced an additional USD 28.4 million in loans to the Group. Furthermore, in June 2026, Ara Fund III, LP, Ara Fund III-B, LP, Ara Fund III-AIV, LP, Ara Fund III-A, SCSp and Ara Fund III-C, SCSp (together the “Ara Funds”) provided two letters of comfort, both covering the period through September 30, 2027:
- a letter of comfort in favor of Ara VAC TopCo GmbH, under which the Ara Funds undertake to provide sufficient financial means to enable the Group to fulfil its payment obligations as they fall due and to maintain compliance with the financial covenants under the Senior Facilities Agreement, limited to an aggregate maximum amount of EUR 43.5 million; and
- a letter of comfort in favor of e-VAC Magnetics, LLC, under which the Ara Funds undertake to provide sufficient financial means to enable e-VAC Magnetics, LLC to fulfil its payment obligations as they fall due, without any monetary limitation.
Such financial support may be provided by way of equity contributions, shareholder loans, or contributions to the capital reserve.
Derivatives
Certain of the Group’s financing arrangements contain contractual features that are accounted for separately from the related host debt instruments as embedded derivatives. These embedded derivatives are measured at fair value through profit or loss and are classified within Level 3 of the fair value hierarchy because their valuation incorporates significant unobservable inputs, including credit spreads, volatility and the probability and timing of potential exit events. Changes in the fair value of these instruments have resulted in and may continue to result in material finance income or finance expenses.
The Groups also enters into interest-rate swaps, foreign exchange forward contracts and commodity derivative contracts to manage its exposure to fluctuations in interest rates, foreign currency exchange rates and commodity prices. The interest-rate swaps are designated as hedging instruments within a cash flow hedge accounting, while the foreign exchange forward contracts and commodity derivatives are not designated for hedge-accounting purposes. The Group uses derivative instruments for risk-management purposes and not for speculative or trading purposes. See Note 24, Financial assets and liabilities to the Group’s audited consolidated financial statements and Note 12, Financial assets and liabilities to its unaudited interim condensed consolidated financial statements for additional information.
Material Cash Requirements
The Group's material cash requirements primarily consist of debt-service obligations, lease liabilities, capital expenditure and working-capital requirements. As of June 30, 2026, the Group had commitments of EUR 1.3 million for the acquisition of property, plant and equipment, compared with EUR 1.3 million as of December 31, 2025. The Group expects to fund its material cash requirements through cash generated from operations, available cash, borrowings under our financing arrangements and shareholder support. See Note 12, Financial assets and liabilities and Note 15, Commitments and contingencies to the Group's unaudited interim condensed consolidated financial statements for additional information regarding our borrowings, capital commitments and contingencies.
Cash Flows
The following table summarizes the Group's cash flows and cash and cash equivalents for the periods indicated:
| Six months ended June 30, | Year Ended December 31, | |||||||||||
| 2026 | 2025 | 2025 | 2024 | |||||||||
| kEUR | kEUR | kEUR | kEUR | |||||||||
| Net cash provided by (used in) operating activities | 30,103 | (19,386 | ) | 3,884 | 19,685 | |||||||
| Net cash used in investing activities | (35,703 | ) | (91,591 | ) | (183,667 | ) | (174,124 | ) | ||||
| Net cash provided by financing activities | 33,431 | 120,085 | 162,859 | 110,617 | ||||||||
| Net increase (decrease) in cash and cash equivalents | 27,831 | 9,108 | (16,924 | ) | (43,822 | ) | ||||||
Cash Provided by Operating Activities
Net cash provided by operating activities increased to kEUR 30,103 for the six months ended June 30, 2026, compared with net cash used in operating activities of kEUR 19,386 for the six months ended June 30, 2025. This change was primarily attributable to proceeds from the sale of the transferable tax credit resulting in net proceeds of kEUR 81,546 offset by an increase in trade receivables.
Net cash provided by operating activities decreased to kEUR 3,884 for the year ended December 31, 2025 from kEUR 19,685 for the year ended December 31, 2024. The decrease was primarily attributable to unfavorable working-capital movements, as the prior year benefited from a significant reduction in inventories, primarily due to the sell-through of previously acquired inventory in 2023 that was originally recorded at fair value as part of purchase accounting, which carries a higher cost basis than inventory acquired through normal operations. This overall decrease was partially offset by improved operating results.
Cash Used in Investing Activities
Net cash used in investing activities decreased by kEUR 55,888, from net cash used in investing activities of kEUR 91,591 for the six months ended June 30, 2025 to kEUR 35,703 for the six months ended June 30, 2026. This improvement was primarily driven by lower capital expenditures for property, plant and equipment, which decreased by kEUR 68,793 compared to the prior period, as construction of the Sumter production facility neared completion during the first half of 2026. In contrast, capital expenditures in the prior-year period were elevated due to the continued build-out of the facility and related equipment.
Net cash used in investing activities increased by kEUR 9,543 from kEUR 174,124 during the year ended December 31, 2024 to kEUR 183,667 during the year ended December 31, 2025. The increase was primarily driven by higher capital expenditures related to the continued expansion of the Group's permanent magnet production facility in Sumter County, South Carolina. In addition, government grant proceeds declined compared to the prior year.
Cash Provided by Financing Activities
Net cash provided by financing activities decreased by kEUR 86,654 from kEUR 120,085 for the six months ended June 30, 2025 to kEUR 33,431 for the six months ended June 30, 2026. The change was primarily driven by lower proceeds from borrowings, which changed by kEUR 88,011 due to an additional draw on the USD term loan in 2025 compared to smaller draws related to a revolving credit facility and a related party loan in 2026. The Group also made higher principal payments in the first half of 2026 compared to the first half of 2025, as the Group made a principal repayment of kEUR 14,384 related to a payment on the German debt facility, as well as principal payment on the US revolving credit facility equivalent to approximately kEUR 8,652. In addition, interest and financing fees paid increased by kEUR 4,723 due to the higher outstanding debt as of June 2026 compared to June 2025. These cash outflows were partially offset by higher equity contributions in the current period.
Net cash provided by financing activities increased by kEUR 52,242 from kEUR 110,617 during the year ended December 31, 2024 to kEUR 162,859 during the year ended December 31, 2025. The increase was primarily driven by higher borrowings to support the continued expansion of the Group's permanent magnet manufacturing facility in Sumter County, South Carolina. This was partially offset by lower equity contributions from shareholders and higher payments of interest and financing fees.
Critical Accounting Estimates
The Group’s consolidated financial statements have been prepared in accordance with IFRS as issued by the IASB. Preparation of the consolidated financial statements requires the Group’s management to make judgments, estimates and assumptions that impact the reported amount of net sales and expenses, assets and liabilities and the disclosure of contingent assets and liabilities. The Group considers an accounting judgment, estimate or assumption to be critical when the estimate or assumption is complex in nature or requires a high degree of judgment and the use of different judgments, estimates and assumptions could have a material impact on our consolidated financial statements. The Group’s management believes that significant estimates, judgments, and assumptions are used in the assessment of impairment of non-financial assets, employee benefit obligations, the fair value of embedded derivatives, income taxes and deferred tax assets, transferrable investment tax credits, and the capitalization of development costs. The Group’s management periodically reviews the Group’s estimates and makes adjustments when facts and circumstances dictate. To the extent that there are material differences between these estimates and actual results, the Group’s financial condition or results of operations will be affected. Additional information regarding the Group’s significant accounting policies, estimates, judgments, and assumptions is included in Note 4, Significant accounting judgments, estimates and assumptions of our audited consolidated financial statements.
Recently Issued and Adopted Accounting Standards
Recently issued and adopted accounting pronouncements are described in Note 3, Summary of significant accounting policies to the Group’s audited consolidated financial statements and Note 1.4, New standards, interpretations and amendments to our unaudited interim condensed consolidated financial statements included elsewhere in this Form 8-K.
Quantitative and Qualitative Disclosures About Market Risk
The Group's future income, cash flows, and fair values relevant to financial instruments are dependent upon prevailing market interest rates. Market risk refers to the risk of loss from adverse changes in market prices and interest rates. The primary market risks the Group is exposed to include foreign currency risk, interest rate risk and commodity price risk. For more information, see Note 24.3, Financial instruments risk management objectives and policies to the Group's audited consolidated financial statements.
The Group uses derivative financial instruments, such as forward currency contracts and interest rate swaps, to manage its foreign currency risks and interest rate risks, respectively. Interest rate swaps are designated as cash-flow hedging instruments, while forward currency contracts and commodity derivatives are not designated as hedging instruments.
Departure of Chief Legal Officer and Executive Vice President, Global Government Relations
On September 28, 2026, Nathan Longenecker informed the Company of his decision to depart the Company following a transition period expected to conclude on December 15, 2026, or such earlier date as may be mutually agreed by the parties. Mr. Longenecker will continue to serve as Chief Legal Officer and Executive Vice President, Global Government Relations during the transition period and assist with the orderly transition of his responsibilities.
Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Business or Funds Acquired.
The audited consolidated financial statements of Ara VAC IE Aggregator, LP and its subsidiaries as of December 31, 2025 and 2024 and January 1, 2024, and for the years ended December 31, 2025 and December 31, 2024 and the notes thereto are filed as Exhibit 99.1 hereto and incorporated by reference herein, as required by Rule 3-05 of Regulation S-X.
The unaudited interim condensed consolidated financial statements of Ara VAC IE Aggregator, LP and its subsidiaries for the six months ended June 30, 2026 and June 30, 2025 and the notes thereto are filed as Exhibit 99.2 hereto and incorporated by reference herein, as required by Rule 3-05 of Regulation S-X.
(b) Pro Forma Financial Information.
The unaudited pro forma condensed combined balance sheet as of June 30, 2026 and the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2025 and the six months ended June 30, 2026 and the notes thereto are filed as Exhibit 99.3 hereto and incorporated by reference herein, as required by Article 11 of Regulation S-X.
The information included in Exhibit 99.3, as it pertains to ASM, is being provided on a voluntary basis and in conformity with Article 11 of Regulation S-X.
(d) Exhibits.
† The annexes to the First Amendment to Agreement and Plan of Merger have been omitted pursuant to Item 601(a)(5) of Regulation S-K. Energy Fuels agrees to furnish supplementally copies of the omitted annexes to the U.S. Securities and Exchange Commission or its staff upon request.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Corporation has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ENERGY FUELS INC. (Registrant) |
|
| Dated: October 13, 2026 | By: /s/ Nathan Bennett |
| Nathan Bennett | |
| Chief Financial Officer |