MP Materials Corp. / DE

Item 1.01 Entry into a Material Definitive Agreement On July 9, 2025 (the “Effective Date”), the Company entered into a Transaction Agreement (the “Transaction Agreement,” and the transactions contemplated thereby, the “Transactions”) with the Department of Defense. The Transaction Agreement contemplates the concurrent execution of a number of additional agreements, and the Transaction Agreement and the additional agreements entered into are each described herein. Price Protection Agreement On the Effective Date, the Company entered into an NdPr price floor protection agreement (the “PPA”) with the Department of Defense. Pursuant to the terms of the PPA, the Department of Defense will pay to the Company at the end of each quarter a quarterly payment per kilogram (kg) of Neodymium-Praseodymium (“NdPr”) produced by the Company equal to the shortfall between $110 per kg and the Benchmark Quarterly Average Volume Weighted Price (as defined in the PPA). If, after the 10X Facility reaches full production capacity, the Benchmark Quarterly Average Volume Weighted Price for the prior quarter exceeds $110 per kg, the Department of Defense will be entitled to receive 30% of the NdPr sales price which exceeds $110 per kg. The term of the PPA will commence on the first day of the first full calendar quarter following closing (the “Start Date”) and will continue for 10 years and will apply to all of the Company’s products that contain NdPr (i.e., concentrate, oxide and metal). The PPA provides that the Company will prioritize the supply of NdPr first to magnet manufacturing, with excess volumes remaining available for sale to commercial customers, subject to a prohibition on sales to certain Restricted Buyers and certain other obligations. Offtake Agreement On the Effective Date, a special purpose vehicle (the “Project Company”), established to develop the 10X Facility, entered into a magnet offtake agreement (the “Offtake Agreement”) with the Department of Defense. Pursuant to the terms of the Offtake Agreement, the Project Company will sell and deliver to the Department of Defense the entire amount of magnets produced at the 10X Facility; provided however, that at the Department of Defense’s request, or the Project Company’s request, and with the Department of Defense’s consent, the Project Company may syndicate up to 100% of magnet production to commercial and other customers. The Offtake Agreement has a term of ten years following the Commercial Operation Date (as defined in the Offtake Agreement) of the 10X Facility. In accordance with the Offtake Agreement, the 10X Facility will generate at least $140,000,000 of EBITDA on an annual basis after reaching full production capacity, adjusted annually in each calendar year following 2025 for inflation at a rate equal to 2% (the “Threshold EBITDA Amount”). The Department of Defense will also acquire magnets from the Project Company at a price equal to the Project Company’s production costs incurred in connection with the production of magnets at the 10X Facility. Under the Offtake Agreement, the Department of Defense will make quarterly “magnet facilitation payments” to the Project Company in an amount equal to 25% of the applicable Threshold EBITDA Amount each quarter. Once the 10X Facility begins producing magnets at target levels, in the event that any portion of the magnet production from the 10X Facility in an applicable year is syndicated to third party purchasers, the Department of Defense will be entitled to receive, (i) the first $30,000,000 of EBITDA attributed to the 10X Facility magnet production that exceeds the Threshold EBITDA Amount (the “Initial Excess Amount”) and (ii) 50% of the EBITDA attributable to the 10X Facility magnet production that exceeds the Initial Excess Amount on an annual basis in that year. The Department of Defense will also make payments in respect of certain incremental costs incurred by Project Company including in connection with the engineering, development and start up of the Commercial Plant and for designing magnets to the Department of Defense’s specifications, with such payments being capped at $30,000,000 in any calendar year. The Offtake Agreement prohibits magnet sales to certain Restricted Buyers (as defined in the PPA) and imposes certain other obligations. Description of Securities and Certain Related Rights Series A Preferred Stock On July 11, 2025 (the “Closing Date”), pursuant to the terms of a subscription agreement (the “Subscription Agreement”) entered into with the Department of Defense on the Effective Date, the Company will issue and sell to the Department of Defense 400,000 shares of the Company’s Series A Cumulative Perpetual Convertible Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”), and file the related Certificate of Designations (the “Certificate of Designations”) with the Secretary of State of the State of Delaware to establish and fix the terms thereof. The Series A Preferred Stock has an initial stated value of $1,000 per share. Shares of Series A Preferred Stock accrue cumulative dividends at a rate of 7.0% per year (the “Dividend Rate”), compounding quarterly and payable solely in-kind through an increase to the stated value of each share of Series A Preferred Stock (each such Dividend, a “PIK Dividend”). The terms of the Series A Preferred Stock do not restrict the payment of cash dividends by the Company. However, within the first 15 business days of each new fiscal year, the Company will pay to the holder of each share of Series A Preferred Stock, on an as-converted basis, cash per share of Common Stock representing the amount, if any, by which the annual yield of the aggregate cash dividends paid by the Company on each share of Common Stock in the prior fiscal year exceeded the Dividend Rate. The Series A Preferred Stock is convertible by the initial holder thereof at any time and from time to time after the date that is 45 days after the Closing Date (subject to certain extensions) into shares of Common Stock. The number of shares of Common Stock issuable upon conversion of each share of Preferred Stock is equal to the initial stated value of the share of Preferred Stock (without giving effect to any PIK Dividends added thereto) divided by the initial conversion price of $30.03 per share (the “Conversion Price”), representing the last-reported sale price of the Common Stock on the last trading day prior to execution of the Subscription Agreement and consistent with the New York Stock Exchange “Minimum Price” requirement. The Conversion Price is subject to adjustment in connection with certain transactions, including payments of stock dividends on its Common Stock, stock splits and combinations of the Common Stock. At any time after the five year anniversary of the Closing Date, if the closing price per share of Common Stock exceeds 150% of the then-current Conversion Price for at least 20 trading days in any period of 30 consecutive trading days, the Company will have the option to require all or any portion of the then-outstanding shares of Series A Preferred Stock be converted into Common Stock at the then-current Conversion Price, subject to certain liquidity and other conditions. In the event of a bankruptcy, liquidation, winding up or dissolution of the Company, holders of the Series A Preferred Stock will be entitled to be paid out of the Company’s assets legally available therefor and to the extent permitted by Delaware law, a cash amount per share of Series A Preferred Stock equal to the then-current stated value, plus any accrued and unpaid dividends, to, but not including, the date of such liquidation, winding up or dissolution. Warrant On the Closing Date, as required under the Transaction Agreement, the Company will issue a warrant (the “Warrant”) to the Department of Defense. The Warrant is exercisable by the initial holder thereof at any time and from time to time after the date that is 45 days after the Closing Date (subject to certain extensions) for a period of 10 years from the Closing Date for up to 11,201,659 shares of Common Stock, at an initial exercise price of $30.03 per share, representing the last-reported sale price of the Common Stock on the last trading day prior to execution of the Subscription Agreement and consistent with the New York Stock Exchange “Minimum Price” requirement. The ultimate number of shares of Common Stock to be issued under the terms of the Warrant, and the exercise price of the Warrant, are subject to adjustment in connection with certain transactions, including payments of stock dividends on the Common Stock, stock splits and combinations of the Common Stock. Common Stock Underlying Series A Preferred Stock and Warrant Pursuant to the terms of the Transaction Agreement, the Subscription Agreement, the Certificate of Designations and the Warrant, the Company will not effect any conversion of Series A Preferred Stock or exercise of the Warrant to the extent the delivery of the underlying Common Stock would cause a holder’s beneficial ownership of Common Stock to exceed 19.9%. This limitation does not apply in connection with certain events relating to a change of control of the Company. Additionally, the DOD shall take commercially reasonable efforts not to sell the shares of Common Stock issued upon conversion of the Series A Preferred Stock or exercise of the Warrant to a person or group who would, after giving effect to such sale, beneficially own greater than 9.9% of the Company’s Common Stock. In the aggregate, the Common Stock into which the Series A Preferred Stock is initially convertible and for which the Warrant is initially exercisable collectively represent fifteen percent (15%) of the Company’s issued and outstanding shares of Common Stock as of the Closing Date, without giving effect to the issuance of such shares. Registration Rights Agreement On the Closing Date, as required under the Transaction Agreement, the Company will enter into the Registration Rights Agreement”) with the Department of Defense. The Registration Rights Agreement provides that the Company will, among other things, prepare and file with the Securities and Exchange Commission (the “SEC”) a resale registration statement (a “Shelf Registration Statement”) on Form S-3, or if not available to the Company, on another appropriate form, including Form S-1, or an amendment or supplement to an existing registration statement on Form S-3, for the shares of Common Stock into which the Series A Preferred Stock is convertible and for which the Warrant is exercisable. The deadline for the Company to file the Shelf Registration Statement with the SEC is 45 days after the Closing Date (subject to certain extensions). Under the Registration Rights Agreement, the Department of Defense will have certain “demand” and “piggyback” registration rights and indemnification rights customary for transactions of this type, and the Company will under certain circumstances have the right to defer the registration and/or suspend the use of a registration statement or prospectus. Transaction Agreement The Transaction Agreement provides for the entry into the PPA, Offtake Agreement, Subscription Agreement, Registration Rights Agreement and Warrant. The Transaction Agreement also provides for the entry into the Promissory Note (as defined below) at the time the DoD extends the Samarium Project Loan (as defined below) to the Company in accordance with the Transaction Agreement. The Transaction Agreement further provides for the Company to use reasonable best efforts to build the 10X Facility to produce sintered Neodymium-iron boron (NdFeB) permanent magnet blocks and / or other finished magnets. Under the terms of the Transaction Agreement, the Company has agreed to use reasonable best efforts to (i) expand heavy rare earth elements (“HREE”) refining capacity at the Mountain Pass Rare Earth Mine and Processing Facility located near Mountain Pass, San Bernardino County, California (“Mountain Pass Facility”), which, after the Department of Defense extends the Samarium Project Loan to the Company in accordance with the Transaction Agreement, will include separation of samarium oxide, (ii) recommission hydrochloric acid facilities at the Mountain Pass Facility and (iii) expand capacity at the Company’s “Independence” magnet facility (the “Independence Facility”) to a projected 3,000 tons of magnets annually. The Company has also agreed to use up to $600,000,000 of its existing cash to fund the above projects. In connection with the Transactions, JPMorgan and Goldman Sachs have agreed to provide committed secured financing, subject to customary terms and conditions, in an amount equal to, in the aggregate, at least $1,000,000,000 (the “10X Facility Funding”), $650,000,000 of which will, pursuant to the terms of the committed secured financing, be specifically allocated to the construction of the 10X Facility; provided that such $1,000,000,000 may be reduced on a dollar for dollar basis for certain equity and/or debt raises and certain unrestricted cash that is not segregated or otherwise earmarked for use as contemplated by the Transaction Documents (as defined below). So long as (i) the Department of Defense owns more than 75% of the Series A Preferred Stock or the Warrant or any Common Stock resulting from the conversion or exercise thereof as of the Closing Date, (ii) the Offtake Agreement or PPA (as described below) remains in place, or (iii) the Promissory Note (if entered into in connection with the extension of the Samarium Project Loan by the DoD) has not been repaid in full (clauses (i), (ii) and (iii), the “Specified Period”), the Company’s Nominating and Corporate Governance Committee will not nominate individuals to the Company’s Board of Directors (the “Company Board”) who are not U.S. citizens without the Department of Defense’s consent, and will oppose the election of any shareholder nominee who is not a U.S. citizen. Furthermore, during the Specified Period, the Company is not permitted to, without the Department of Defense’s consent, (i) consummate a Fundamental Event (i.e., a transaction involving the sale of 15% or more of the Company’s voting stock, the sale of all or a material portion of the equity or assets of the Project Company (defined below) (or any other subsidiary of the Company to which the 10X Facility is assigned) or all or substantially all of the consolidated assets of the Company and its subsidiaries (other than to a wholly owned subsidiary of the Company)) other than to person(s) from certain permitted jurisdictions, (ii) sell any equity or material assets of Project Company, (iii) sell assets or products identified by the Department of Defense as a priority to U.S. national security interests, (iv) knowingly issue more than 14.9% of the Common Stock to person(s) from foreign jurisdictions other than certain permitted jurisdictions or (v) consummate a Fundamental Event subject to the jurisdiction of the Committee on Foreign Investment in the United States (“CFIUS”) without obtaining CFIUS clearance prior to consummation. So long as the Department of Defense holds any Series A Preferred Stock, Warrant or Common Stock, the Department of Defense will be subject to a customary standstill (in its capacity as an equity holder). The Department of Defense must vote any shares of Common Stock held by it in favor of the Company Board’s nominees and any proposals recommended by the Company Board so long as the Department of Defense holds any Common Stock, except with respect to any vote (i) regarding the Company or its subsidiaries taking actions in violation of any Transaction Document (as defined below), (ii) seeking to reject, disclaim, unwind, terminate or otherwise materially and adversely impact the Company’s or its subsidiaries’ relationship with the Department of Defense, (iii) which would materially and adversely impact the ability of the Company or any of its subsidiaries to comply with its obligations under any Transaction Document or (iv) which is inconsistent with applicable laws. Pursuant to the Company’s obligations under the Transaction Agreement, the Company has agreed to (i) terminate its existing share repurchase program and (ii) cease making sales under the Offtake Agreement, dated as of March 4, 2022, between MP Mine Operations LLC and Shenghe Resources (Singapore) International Trading PTE LTD, which expires in January 2026, and will not be renewed. The Transaction Agreement also provides that the Company shall select and fund from available alternatives on or prior to the date that is 45 days after the Closing Date, additional financing with net proceeds of at least $350,000,000 (the “Funding Allocation”) in addition to the initial proceeds to be received on the Closing Date and the 10X Facility Funding (as described below), with the Company’s alternatives including having a right to fund up to the full $350,000,000 of such additional proceeds by selling to DoD additional shares of Series A Preferred Stock on the same terms as the initial purchase or otherwise electing to obtain $350,000,000 under the terms and conditions of the committed financing provided by JPMorgan and Goldman Sachs. The Transaction Agreement also provides that, no later than 30 days after the Effective Date (subject to extension if mutually agreed between the Department of Defense and the Company), the Department of Defense will extend a loan to the Company in the aggregate principal amount of $150,000,000 (the “Samarium Project Loan”), pursuant to an unsecured promissory note (the “Promissory Note”) to be entered into by the Company with the Department of Defense and maturing 12 years after issuance of the Promissory Note. Interest will accrue on the Samarium Project Loan at a rate equal to the 10-year U.S. Treasury constant maturity rate (as determined two U.S. government securities business days before issuance of the Promissory Note) plus 1.00% and will be payable in cash quarterly in arrears. The Company’s obligations with respect to expanding HREE refining capacity at its Mountain Pass Facility to include separation of samarium oxide are contingent upon the DoD extending the Samarium Project Loan in accordance with the Transaction Agreement. The foregoing descriptions of the Certificate of Designations, the Transaction Agreement, the Subscription Agreement, the Warrant, the Registration Rights Agreement, the Offtake Agreement, the PPA and the Promissory Note, the transactions contemplated thereby and the securities issued or issuable pursuant thereto are only summaries and do not purport to be complete and are qualified in their entirety by reference to the full text of the relevant agreements, copies of which are attached to this Current Report on Form 8-K as Exhibit 3.1 and Exhibits 10.1-10.7 (collectively, the “Transaction Documents”), respectively, and which are incorporated herein by reference.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. On the Closing Date, the Department of Defense agreed to extend the Samarium Project Loan to the Company and the Company agreed to accept such loan no later than 30 days after the Effective Date (subject to extension if mutually agreed between the Department of Defense and the Company). The Samarium Project Loan will be in the aggregate principal amount of $150,000,000, pursuant to an unsecured Promissory Note to be entered into by the Company with the Department of Defense. The applicable interest rate upon incurrence will be based on the 10-year treasury bond yield plus 1.0%, payable on the first calendar day of each quarter. The Company may repay the Samarium Project Loan at any time, and the term of the Promissory Note is 12 years. A detailed description of the Samarium Project Loan is included in, and incorporated into this Item 2.03 by reference to, Item 1.01.

Item 3.02 Unregistered Sale of Equity Securities. On the Closing Date, the Company will issue 400,000 shares of Series A Preferred Stock and the Warrant to the Department of Defense. The offer and sale of the shares of Series A Preferred Stock pursuant to the Subscription Agreement, and the issuance of the Warrant pursuant to the Transaction Agreement, will each be made in reliance upon an exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) thereof. Any shares of Common Stock deliverable upon conversion of the Series A Preferred Stock or upon exercise of the Warrant will be issued in reliance upon the exemption from registration in Section 3(a)(9) or Section 4(a)(2) of the Securities Act, respectively. Detailed descriptions of the Series A Preferred Stock and the Warrant are included in, and are incorporated into this Item 3.02 by reference to, Item 1.01.

Item 3.03. Material Modification to Rights of Security Holders. On the Closing Date, the Company will issue 400,000 shares of Series A Preferred Stock to the Department of Defense. Holders of the Series A Preferred Stock will have preferential rights on the distribution of the Company’s assets upon any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company over holders of Common Stock and any other series of preferred stock issued by the Company in the future. A more detailed description of the Series A Preferred Stock is included in, and is incorporated into this Item 3.03 by reference to, Item 1.01.

Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. On the Closing Date, the Company will file the Certificate of Designations with the Secretary of State of the State of Delaware to establish and fix the terms of the Series A Preferred Stock. The Certificate of Designations will become effective upon filing. A more detailed description of the terms of the Series A Preferred Stock as set forth in the Certificate of Designations is included in, and is incorporated into this Item 3.02 by reference to, Item 1.01.

Item 7.01. Regulation FD Information. Press Release and Investor Presentation On July 10, 2025, the Company issued a press release announcing the Transactions. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated by reference herein. Attached hereto as Exhibit 99.2 and incorporated by reference herein is an investor presentation. The information contained in the investor presentation is summary information that is intended to be considered in the context of the Company’s Securities and Exchange Commission (“SEC”) filings and other public announcements that the Company may make, by press release or otherwise, from time to time. The Company undertakes no duty or obligation to publicly update or revise the information contained in this report, although it may do so from time to time as its management believes is warranted. Any such updating may be made through the filing of other reports or documents with the SEC, through press releases or through other public disclosure. The information furnished in Item 7.01 of this Current Report on Form 8-K under the heading “Press Release and Investor Presentation,” as well as Exhibits 99.1 and 99.2, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, unless the Company specifically states that the information is to be considered “filed” under the Exchange Act or specifically incorporates it by reference into a filing under the Securities Act or the Exchange Act.