REALLOYS INC.
For the period ended Mar 31, 2026. Filed May 20, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 20, 2026
ALOY$6.13+4.5%Stored close · as of Nov 6, 2026
What changed in Risk Factors?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-10-16.
0001437749-25-031175
Item 1A. Risk FactorsUnregistered Sales of Equity Securities and Use of ProceedsDefaults Upon Senior SecuritiesMine Safety DisclosuresCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-20.
0001628280-26-036966
Item 1A. Risk FactorsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
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Tables are not compared: 0 previous and 0 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (302)
Current report
The following description of risk factors includes any material changes to risk factors associated with our business, financial condition and results of operations previously disclosed in “Item 1A. Risk Factors” of our Annual Report. Our business, financial condition and operating results can be affected by a number of factors, whether currently known or unknown, including but not limited to those described below, any one or more of which could, directly or indirectly, cause our actual financial condition and operating results to vary materially from past, or from anticipated future, financial condition and operating results. Any of these factors, in whole or in part, could materially and adversely affect our business, financial condition, operating results, and stock price.
Current report
The following discussion of risk factors contains forward-looking statements. These risk factors may be important to understanding other statements in this Quarterly Report on Form 10-Q. The following information should be read in conjunction with the condensed consolidated financial statements and related notes in Part I, Item 1, “Financial Statements” and Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report on Form 10-Q.
Current report
Voting control of the Company is now concentrated in our Chief Executive Officer, whose interests may conflict with the interests of our other stockholders.
Current report
May 5, 2026, as a result of the closing of the 2025 Option Exercise Agreement with Mr. Gust Kepler and the separate sale by Mr. Kepler of additional shares of our Series A Convertible Preferred Stock to our Chief Executive Officer and director, Leonard Sternheim, Mr. Sternheim became the beneficial owner of all of the shares of our Series A Convertible Preferred Stock. Each share of our Series A Convertible Preferred Stock carries 100 votes per share and votes together with our Common Stock as a single class on all matters submitted to a vote of stockholders. Excluding the shares of our Common Stock that Mr. Sternheim directly or indirectly holds, Mr. Sternheim now controls a substantial majority of the aggregate voting power of our outstanding capital stock. As a consequence, the Company has become a "controlled company" within the meaning of Nasdaq Listing Rule 5615(c).
Current report
Because of the foregoing, Mr. Sternheim has the practical ability, acting alone and by written consent of stockholders and without the concurrence of any other stockholder, to determine the outcome of substantially all matters submitted to a vote of our stockholders, including the election and removal of all of our directors other than himself, amendments to our Articles of Incorporation and Bylaws, and the approval (or rejection) of any merger, consolidation, sale of substantially all of our assets, recapitalization, or other extraordinary corporate transaction, including transactions in which Mr. Sternheim or his affiliates may have an interest that differs from, or conflicts with, the interests of our other stockholders. Mr. Sternheim also serves as our Chief Executive Officer and as a member of our Board of Directors, and is party to a Professional Services Agreement previously disclosed in our Form 8-K dated February 25, 2026. The combination of his executive, board, and stockholder roles further concentrates influence over the day-to-day management of the Company, the Company's strategic direction, and the Company's relationships with related parties.
Current report
This concentration of voting and managerial power presents a number of risks to our other stockholders, including, among others, the following:
Current report
•Our other stockholders, including the holders of our publicly traded Common Stock, will have limited ability to influence matters submitted to a vote of stockholders, and the outcome of any such vote will, as a practical matter, be determined by Mr. Sternheim.
Current report
•Mr. Sternheim has the ability, acting by written consent and without prior notice to or approval of our other stockholders, to remove and replace directors (other than himself), to fill vacancies on the Board of Directors, and to adopt amendments to our Bylaws, in each case in a manner that could limit the independence of the Board of
Current report
Directors, alter the composition or authority of its standing committees, or otherwise reduce the protections currently available to our other stockholders.
Current report
•Mr. Sternheim has the ability to approve, or to block, transactions in which he or his affiliates have a direct or indirect interest, even if such transactions are not favored by our other stockholders or by the independent members of our Board of Directors.
Current report
•Mr. Sternheim's voting power, together with provisions in our Articles of Incorporation,, may have the effect of delaying, deterring, or preventing a change of control of the Company, including a transaction that other stockholders might consider favorable, and may limit the price that investors are willing to pay in the future for shares of our Common Stock.
Current report
•The interests of Mr. Sternheim, may differ from the interests of holders of our Common Stock with respect to matters such as the declaration and timing of dividends, the issuance of additional equity securities, the incurrence of indebtedness, the pursuit of strategic transactions, and the timing and structure of liquidity events.
Current report
•Because we qualify as a "controlled company" under Nasdaq Listing Rule 5615(c), we are eligible to rely on exemptions from certain Nasdaq corporate governance requirements, including the requirements that a majority of our Board of Directors be independent and that our Compensation Committee and Nominating and Corporate Governance Committee be composed entirely of independent directors. Although we do not currently intend to rely on these exemptions and intend to continue to maintain a majority-independent Board and fully independent Audit, Compensation, and Nominating and Corporate Governance Committees, we may in the future elect to rely on some or all of the controlled company exemptions, in which case our other stockholders may not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaq corporate governance requirements.
Current report
•The concentration of voting power, the existence of a high-vote class of preferred stock, and our status as a controlled company may cause certain institutional investors, index providers, and proxy advisory firms to restrict or limit their investment in, or their support for management proposals relating to, our Common Stock, which could adversely affect the trading price, trading volume, and liquidity of our Common Stock.
Current report
The integration of Blackbox and its Blackbox.io subscription business may be more difficult, time-consuming or costly than expected, and we may not realize the anticipated benefits of the Merger
Current report
The February 24, 2026 Merger combined two businesses with different operating models, customer bases, regulatory profiles and financial-reporting cadences. The integration process — including the integration of accounting, treasury, equity-administration, billing, customer-support and IT general controls — is ongoing as of the date of this Quarterly Report and is subject to material weaknesses in our internal control environment described above. The May 5, 2026 Option Exercise, which will result in the anticipated deconsolidation of Blackbox.io in the second quarter of 2026, will further reduce the period over which the integration of the Blackbox.io business will benefit our consolidated results. The performance, recoverability or impairment of the EVTEC Holdings Group Limited investment acquired in the Merger remains subject to material uncertainty, as evidenced by the $6.4 million impairment recognized at the closing of the Merger. The anticipated benefits of the Merger may not be realized fully, or at all, if integration challenges, control deficiencies, or further write-downs of acquired assets materialize.
Current report
We are dependent on short term contract work and there are no guarantees that REalloys will receive any additional orders or contracts.
Current report
The Euclid Magnet Facility is currently producing rare earth metals and magnet materials for the DLA, the DOE’s AMES National Laboratory and NdFeB magnet industry clients. Contract works are short term in nature, often less than six months, and there are no guarantees that any additional orders will be receive by REalloys.
Current report
In addition to the short term limited rare earth metals and magnet materials contract works, the Euclid Magnet Facility is under development to significantly increase production of NdFeB magnet materials commencing in the fourth quarter of 2025 to expand to 500 metric tonnes per annum (“mtpa”) magnet materials and magnet production capacity by the second quarter of 2026 and 1,000 mtpa production of magnet materials and magnets by the second quarter of 2027. REalloys’ lack of commercial operating history at these forecasted volumes scale limits the accuracy of any forward-looking forecasts, prospects or business outlooks or plans.
Current report
REalloys may not be able to secure the necessary feedstock, offtake, or equipment in order to economically produce NdFeB magnet materials and magnets, including from the HLREE.
Current report
REalloys’ commercial framework agreements with the Saskatchewan Research Counsel (“SRC”), located in Saskatoon, Saskatchewan Province, Canada, outlines the rare earth oxide and metal products the SRC will provide to the REalloys, in return for REalloys providing funding towards SRC’s contemplated expanded processing capabilities. The expanded processing would allow SRC to process the oxide and metal products it intends to provide REalloys. Under the framework agreements REalloys is entitled to priority offtake rights, including rights of first refusal on future volumes to be processed at SRC’s expanded Separation Facilities. There can be no assurances that the conditions required for REalloys to fund toward the SRC’s expansion, including agreement of detailed scope and budget, over which REalloys has unilateral and sole discretion of the approval, will occur. If we are unable to and maintain the agreements or enter into an alternative arrangement with another processing facility and/or satisfy the conditions therein, or if we are only able to do so on terms that are unfavorable to us, this will have a negative effect on our supply chain, strategy and current projections, including projections related to future production capabilities. If this happens, our results of operations and financial condition could be materially and adversely affected. Additionally, there are no assurances that the framework agreements will lead to suitable and verified third party sources of rare earth concentrates and/or light rare earth oxides and/or re-cycled magnets and/or heavy rare earth oxides available for process at the SRC Separation Facilities prior to or after HLREE concentrate becomes available. Currently, the SRC Separation Facilities’ expansion to meet the forecasted feedstock requirements of the Euclid Magnet Facility is not scheduled to be commissioned until the second quarter of 2026 and any delays in completion, any capital and operating cost overruns and any quality issues will have an adverse impact on REalloys’ forecasted second quarter 2026 production schedules and financial viability.
Current report
REalloys realizes revenue at the Euclid Magnet Facility from contract works, which include the production of a limited amount rare earth metals and magnet materials for and on behalf of its clients. To date, REalloys has yet to realize any revenues from the direct production and/or sale of NdFeB magnet materials and magnet or critical minerals, or rare earth minerals, and its operating and capital investment and cash flow needs have been financed through the issuances of debt and equity raises and not through cash flows derived from its operations. As a result, REalloys has little historical financial and operating information available to help potential investors evaluate its performance. Any profitability in the future from our business will be dependent upon the development of the projects, the award of additional contract works beyond July 2025, and the production of NdFeB magnet materials and magnets, which is subject to numerous risk factors. Accordingly, REalloys may not realize profits, including in the medium to long term. Additional expenditures may be required for working capital purposes, including but not limited to meeting minimum expenditure commitments at the HLREE, constructing, completing and installing additional NdFeB magnet materials and magnet production equipment. Additionally, REalloys’ magnet materials and magnet production capabilities might not be able to fully utilize the nameplate capacity of the equipment.
Current report
REalloys also has limited operating history upon which to base estimates of future operating costs and capital requirements. Actual operating costs and economic returns of any and all of REalloys’ projects may materially differ from the costs and returns estimated, and accordingly our financial condition, results of operations and cash flows may be negatively affected. Further, REalloys has no history in operating a business, except for the Euclid Magnet Facility’s contract works, other than pursuing a business combination. In the near term, REalloys’ development and growth depends on its ability to: (i) to extend and source new contract works, (ii) successfully produce magnet materials and magnets at the Euclid Magnet Facility; (iii) secure additional reliable sources of Light Rare Earth Elements (“LREE”) and Heavy Rare Earth Elements (“HREE”) feedstock at prices that are acceptable and attractive to REalloys, (iv) receive processed LREE and HREE materials from the SRC Separation Facilities on acceptable commercial terms and conditions; and (v) secure additional NdFeB magnet materials and magnet customers that are willing and able to purchase REalloys’ magnet materials and magnets at prices that are expected to be profitable for REalloys. Delays in the completion of the expansion of the Euclid Magnet Facility could have a material adverse effect on our business, results of operations and financial condition as well as any delays to the completion and commissioning of the expansion at the SRC Separation Facilities, currently anticipated for the second quarter of 2025.
Current report
We may not be able to generate positive cash flows from our expected future business operations. Our long-term success will depend on implementing the business strategy and operational plan of REalloys, as well as our ability to generate revenues, achieve and maintain profitability and develop positive cash flows from our magnet materials and magnet production.
Current report
Our ability to continue with development of our business plan to produce and sell NdFeB magnet materials and magnets, to receive LREE and HREE products from the SRC Separation Facilities, and our plans regarding the Euclid Magnet Facility and the HLREE, ultimately depends on our ability to generate revenues, achieve and maintain profitability, and generate positive cash flow from our operations. We cannot assure you that our projects will result in achieving and maintaining profitability and developing positive cash flows. The economic viability of REalloys’ future business activities has many risks and uncertainties including, but not limited to:
Current report
•a significant, prolonged decrease in the price of NdFeB magnet materials and magnets;
Current report
•difficulty in marketing and/or selling NdFeB magnet materials and magnets;
Current report
•significantly higher than expected capital costs and delays in constructing and commission our projects;
Current report
•delays to the commissioning of the expansion at the SRC Separation Facilities, currently schedule for the second quarter of 2026;
Current report
•significantly higher than expected feedstock costs and/or source and secure suitable feedstock to support magnet materials and magnet production in the near term until HLREE is capable of satisfying our feedstock needs;
Current report
• significant delays, reductions or stoppages of production activities;
Current report
•secure additional contract works at the Euclid Magnet Facility;
Current report
•implementation of any trade restrictions and tariffs on the movement of LREE and HREE from the SRC Separation Facilities to the Euclid Magnet Facility;
Current report
•the introduction of significantly more stringent regulatory laws and regulations and associated delays in permitting including but not limited to further access to explore and develop, as applicable, the HLREE, the SRC Separation Facilities, and the Euclid Magnet Facility;
Current report
•delays in the availability of necessary equipment, including construction or production equipment; and
Current report
•adverse impacts from tariffs and trade restrictions by U.S.A. and/or Canada and/or other countries
Current report
REalloys’ future business activities may change because of any one or more of these risks and uncertainties.
Current report
We may experience time delays, unforeseen expenses, increased capital costs, and other complications while developing our projects, these could delay the start of revenue-generating activities and increase development costs.
Current report
The production of LREE and HREE materials, NdFeB magnet materials and magnets and mineral exploration and mining by nature involve significant risks and hazards, including environmental hazards, as well as industrial and mining accidents. These include, for example, occupational hazards, leaks, ruptures, explosions, chemical spills, seismic events, fires, cave-ins and blockages, flooding, discharges of gasses and toxic substances, contamination of water, air or soil resources, unusual and unexpected rock formation affecting mineralization or wall rock characteristics, ground or slope failures, rock bursts, wildfires, radioactivity and other accidents, incidents, or conditions resulting from mining or manufacturing activities, including, among others, blasting and the transport, storage and handling of hazardous materials. In particular, the production of LREE and HREE materials, NdFeB magnet materials and magnets involves the use of heavy equipment, operations at high temperatures and the use of dangerous chemicals, among others. These operations can be dangerous and safety incidents in these operations may cause damage to and loss of equipment, injury or death, monetary losses and potential legal liabilities. Any such incident could have a material adverse effect on our business, operating results and financial condition.
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Removed paragraphs (7)
Previous report
Important risk factors that could affect our operations and financial performance, or that could cause results or events to differ from current expectations, are described in Part I, Item 1A, "Risk Factors” of our Annual Report on Form 10-K filed with the SEC on March 21, 2025 for the year ended December 31, 2024, as supplemented by the "Risk Factors" sections in our registration statement on Form S-4 filed with the SEC on April 14, 2025, as amended on June 3, 2025, July 2, 2025, August 25, 2025 and October 2, 2025, our registration statements on Form S-3 filed with the SEC on January 31, 2025 and April 15, 2025 (as amended on May 1, 2025), and the information contained elsewhere in this Report. The risks and uncertainties described within our Form 10-K for the year ended December 31, 2024 and the registration statements, as amended, are not the only risks we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business or results of operations.
Previous report
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Previous report
Item 3.** ** Defaults Upon Senior Securities**