Opening the filing
8-K
Critical materials, such as tungsten, are some of the most strategically important components in advanced technology systems spanning commercial, industrial, and defense applications.
However, global production of tungsten is highly concentrated in China. The Company intends to use this investment to build on its operational foundation to catalyze domestic production, strengthen U.S. supply chain resiliency, and secure critical supply chains for high-growth industries.
On September 11, 2026, the Company entered into the Investment Agreement (the transactions contemplated thereby, the “DoW Transactions”) with the Department of War. The Investment Agreement contemplates the concurrent execution of a number of additional agreements, and the Investment Agreement and the additional agreements entered into are each described herein (the “DoW Transaction Documents”). The DoW Transactions closed on September 14, 2026 (the “Initial Closing Date”).
The DoW Transaction Documents are contractual arrangements between the Company and the DoW. References in this filing to the DoW Transactions, the Department of War or other U.S. government entities are not intended to, and should not be construed to, imply that the DoW or any other U.S. Government entity endorses, recommends, sponsors, approves, certifies, guarantees, manages, or controls the Company, its affiliates, its securities, its products, its facilities, or any project described therein. Except for the express rights and obligations set forth in the applicable agreements, the DoW Transactions do not create a partnership, joint venture, agency, fiduciary, or similar relationship between the Company and the DoW, and do not obligate any U.S. Government entity to provide additional funding, assistance, permits, approvals, purchases, or other support.
Investment Agreement
Pursuant to the Investment Agreement, the Company has agreed to sell and issue, and the Department of War has agreed to purchase and acquire, up to an aggregate of $450 million of shares of Class A Preferred Stock (as defined below) in a private placement, which will consist of (i) an initial issuance of 200,000 shares of Class A Preferred Stock and Warrants (as defined below) to purchase up to 7,567,341 shares of the Company’s Common Stock, par value $0.001 per share (the “Common Stock”), for a purchase price of $200 million and (ii) additional issuances (each, a “Tranche”) of up to 50,000 shares of Class A Preferred Stock per Tranche at a purchase price of $1,000 per share of Class A Preferred Stock, respectively, for an additional aggregate of up to 250,000 shares of Class A Preferred Stock, at an aggregate purchase price of up to $250 million across all Tranches (the “Total Subsequent Funding Commitment Amount”). Beginning six months following the Initial Closing Date, each Tranche will be available for purchase by the DoW during a six-month commitment period, with successive Tranches becoming available at six-month intervals (each, a “Commitment Period”). The issuance of each Tranche shall be subject to (i) the delivery by the Company of at least thirty (30) days’ prior written notice to the DoW prior to the applicable funding date (a “Subsequent Issuance Notice”), (ii) a minimum funding amount of $25,000,000 per Subsequent Issuance Notice, (iii) specification of the number of
shares of Class A Preferred Stock to be issued and the intended use of the proceeds of such funding, and (iv) the satisfaction or waiver by the DoW in its sole discretion of certain closing conditions set forth in the Investment Agreement, including certain use-of-proceeds-specific conditions, and other customary closing conditions. If the Company does not exercise its right to draw the full amount of the Total Subsequent Funding Commitment Amount during the aggregate Commitment Period, any portion of the Total Subsequent Funding Commitment Amount not drawn shall be forfeited.
The Investment Agreement contains certain representations, warranties and covenants of each of the Company and the DoW, including covenants by the Company related to use of proceeds in connection with funding of specified projects agreed upon by the Company and the DoW (the “Projects”).
Description of Securities and Certain Related
Rights
Class A Redeemable Preferred Stock On September 14, 2026 (the “Effective Date”), pursuant to the terms of the Investment Agreement, the Company issued and sold to the Department of War 200,000 shares of the Company’s Class A Redeemable Preferred Stock, par value $0.001 per share (the “Class A Preferred Stock”), and filed the related Certificate of Designations (the “Class A Certificate of Designations”) with the Secretary of State of the State of Delaware to establish and fix the terms thereof. The Class A Preferred Stock has an initial stated value of $1,000 per share. Shares of Class A Preferred Stock accrue cumulative dividends at a rate of 5.5% per year (the “Dividend Rate”), compounding quarterly and payable solely in-kind through an increase to the stated value of each share of Class A Preferred Stock (each such dividend, a “PIK Dividend”). The terms of the Class A Preferred Stock do not restrict the payment of cash dividends by the Company; provided, however, that the Company is prohibited from paying cash dividends pursuant to the Investor Rights Agreement (as defined below). Additionally, the holders of Class A Preferred Stock shall be entitled to receive accruing PIK Dividends in preference to any dividend on the Common Stock or any other Junior Securities (as defined in the Class A Certificate of Designations) at the Dividend Rate on the then-current stated value of each outstanding share of Class A Preferred Stock.
In the event of (i) a bankruptcy, liquidation, winding up or dissolution of the Company (ii) the sale, license, lease or transfer of substantially all of the Company’s assets, (iii) a consolidation or merger or (iv) a Change of Control (as defined in the Class A Certificate of Designations) (each of clauses (i)
through (iv), a “Liquidation Event”), holders of the Class 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 Class A Preferred Stock equal to the then-current stated value, plus any accrued and uncompounded dividends, to, but not including, the date of such Liquidation Event, subject to the rights of any senior securities of the Company (such amount, the “Liquidation Preference”). The Class A Preferred Stock shall rank senior to all classes of the Company’s common stock with respect to the distribution of assets upon such Liquidation Event.
(the “Redemption Price”). Additionally, the Company shall have the right to redeem the Class A Preferred Stock at any time and from time to time, in part or in whole, on a pro rata basis at a price per share equal to the then applicable Redemption Price.
The Class A Preferred Stock shall be entitled to vote together with the holders of Common Stock as a single class on all matters submitted to a vote of the holders of Common Stock.
The aggregate number of votes to which the Class A Preferred Stock shall be entitled as a class shall, as of the Initial Closing Date, equal 19.9% of the total voting power of all voting securities of the Company outstanding as of the Initial Closing Date (determined immediately after giving effect to the issuance of the Class A Preferred Stock and the Warrants (as defined below) as if such Warrants had been exercised in full for shares of Common Stock at the Initial Closing Date) (the “Voting Cap”). The aggregate voting power of the Class A Preferred Stock shall be adjusted (and reduced) proportionally, from time to time, to the extent any Warrants are exercised for shares of Common Stock, so that the aggregate voting power represented by the Class A Preferred Stock, together with the shares of Common Stock issued upon exercise of the Warrants, does not exceed the Voting Cap. Upon any redemption of the Class A Preferred Stock by the Company, the Company shall take all actions within its control necessary to grant the holders of Class A Preferred Stock equivalent voting rights to preserve the aggregate voting position of such holders immediately prior to such redemption, taking into account any Warrants (as defined below) then held by such holders.
For so long as the Department of War, or any permitted DoW transferee (collectively, the “DoW Investors”), beneficially own any shares of Class A Preferred Stock, the holders of outstanding shares of Class A Preferred Stock, voting separately as a single class, shall have the exclusive right to (i) appoint and elect one individual (the “Independent Director”) to the Company’s board of directors (the “Board of Directors”)
and (ii) separately designate one additional representative (the “DoW Board Observer”) to attend all meetings of the Board of Directors (and any committees thereof) in a non-voting observer capacity, subject to certain requirements and exceptions. For so long as the DoW Investors have a right to designate the Independent Director, the Board of Directors (or any committee thereof) shall appoint the Independent Director for membership on the Audit Committee and Compensation Committee of the Company in accordance with Nasdaq Stock Market (“Nasdaq”) rules and U.S. Securities and Exchange Commission (the “SEC”) rules and regulations. If the Independent Director is not permitted by Nasdaq rules and SEC rules and regulations to be a member of the Audit Committee or the Compensation Committee, the Independent Director shall attend all meetings of the Audit Committee or the Compensation Committee, as applicable, in a strictly non-voting observer capacity. The removal of the Independent Director or the DoW Board Observer shall be only upon the written request of the DoW.
Penny Warrant and Strike Price Warrant
On the Initial Closing Date, as required under the Investment Agreement, the Company issued a warrant (the “Penny Warrant”) to the Department of War. The Penny Warrant is exercisable by the initial holder thereof at any time and from time to time after the date that is twelve (12) months after the Initial Closing Date for a period of ten (10) years from the Initial Closing Date for up to 5,675,506 shares of Common Stock, at an initial exercise price of $0.001 per share. The number of shares to be issued under the terms of the Penny Warrant is subject to adjustment in connection with certain transactions, including payments of stock dividends on the Common Stock, and stock splits and combinations of the Common Stock (each, an “Adjustment”).
Any exercise of the Penny Warrant (including any mandatory exercise) will reduce the Liquidation Preference of the Class A Preferred Stock as provided in the Class A Certificate of Designations and set forth above.
On the Initial Closing Date, the Company also issued an additional warrant (the “Strike Price Warrant” and together with the Penny Warrant, the “Warrants”)
to the Department of War. The Strike Price Warrant is exercisable by the initial holder thereof at any time and from time to time after the date that is twelve (12) months after the Initial Closing Date for a period of ten (10) years from the Initial Closing Date for up to 1,891,835 shares of Common Stock, at an initial exercise price of $15.92 per share, representing the last-reported sale price of the Common Stock on the last trading day prior to execution of the Investment Agreement and consistent with the Nasdaq “Minimum Price”
requirement. The exercise price of the Strike Price Warrant and the number of shares issuable under the Penny Warrants is subject to adjustment in connection with an Adjustment.
The Warrants are subject to mandatory exercise, on a cashless basis, upon expiration, a Liquidation Event, a Change of Control (as defined in the Class A Certificate of Designations), or, at the Company’s election, any time following September 14, 2029, if the Common Stock’s volume weighted average price (“VWAP”) exceeds 400% of the exercise price of the Strike Price Warrant for 20 consecutive trading days. The Company must provide 20 calendar days’ prior notice, allowing the holder to exercise for cash.
DLA Offtake Agreement
On September 11, 2026, the Company, through its wholly owned subsidiary, Elmet Technologies LLC, entered into an exclusive offtake agreement (the “DLA Offtake Agreement”)
with The United States Defense Logistics Agency (the “DLA”) relating to an exclusive offtake arrangement for tungsten ores and concentrates and sodium tungstate. Pursuant to the DLA Offtake Agreement, the Company shall sell, upon the DLA’s request, a minimum of $150 million worth of tungsten ore and concentrate and sodium tungstate (the “Minimum Offtake Amount”) over the course of a five-year base ordering period, subject to an additional two-year option period, with such option being exercised at the DLA’s discretion. Delivery orders will be submitted to the Company through a request-for-proposal process, with each order subject to the Company’s review and acceptance. Each order shall then be delivered to the DLA within 48 months of the issuance of each respective delivery order.
Upon the procurement of the Minimum Offtake Amount, the DLA, in its sole discretion, may purchase up to a maximum of $1.85 billion worth of additional tungsten ore and concentrate and sodium tungstate throughout the ordering period.
The DLA shall have the right to determine the source of the tungsten ore and concentrate and sodium tungstate, for which certain pre-determined sources have been agreed upon. The tungsten material supplied shall meet certain material and packaging specifications and will be subject to certain sampling and testing requirements prior to procurement of the tungsten material to the DLA.
The foregoing descriptions of the DLA Offtake Agreement and the transactions contemplated thereby are only summaries and do not purport to be complete and are qualified in their entirety by reference to the full text of the DLA Offtake Agreement, a copy of which is attached to this Current Report on Form 8-K as Exhibit 10.5, and which is incorporated herein by reference.
thereof. Any shares of Common Stock deliverable upon exercise of the Warrants 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 Class A Preferred Stock and the Warrants are included in, and are incorporated into this Item 3.02 by reference to, Item 1.01 above.
Item 3.03. Material Modification to Rights of Security Holders.
On the Initial Closing Date, the Company issued 200,000 shares of Class A Preferred Stock to the Department of War. Holders of the Class A Preferred Stock 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. Furthermore, pursuant to the Class A Certificate of Designations and the Investor Rights Agreement, the DoW Investors, for as long as they are holders of Class A Preferred Stock, shall have the exclusive right to elect, as a separate class, one of the nine directors of the Company. Accordingly, holders of Common Stock shall cease to have the right to vote for or elect such director and will vote for and elect only eight of the nine directors.
In connection with the adoption of the Restricted Entity Compliance Plan, the Board of Directors approved the Class B Certificate of Designations designating 540,000 shares of Class B Preferred Stock. Pursuant to the Class B Certificate of Designations, the Board of Directors authorized the issuance of one Right with respect to each share of Common Stock outstanding on the Record Date. The Rights will initially trade with, and will be inseparable from, the Common Stock. The Rights will accompany any new shares of Common Stock issued after the Record Date until the earlier of the Distribution Date, the redemption date or the expiration date of the Rights, as described in Item 1.01 above. Each Right will allow its holder to purchase from the Company one one-thousandth of a share of Class B Preferred Stock, for $86.00, subject to adjustment under certain conditions, once the Rights become exercisable.
More detailed descriptions of the Class A Preferred Stock and the Class B Preferred Stock are included in, and are incorporated into, this Item 3.03 by reference to Item 1.01.
Those representations were made solely for purposes of the Investment Agreement and should not be construed as a legal opinion, a representation by any other U.S. Government entity, or an endorsement of the Company, its securities, or its projects. The Parties’ respective obligations under the DoW Transaction Documents are subject to the terms of those agreements and applicable law. A dispute or legal or administrative challenge concerning the interpretation, validity, enforceability, or performance of the DoW Transaction Documents could materially adversely affect our business, prospects, financial condition and results of operations. No U.S. Government entity other than the DoW is a party to, or assumes obligations under, the DoW Transaction Documents. The DoW Transaction Documents contain affirmative covenants requiring the Company to take certain actions and negative covenants restricting the Company from taking certain actions. A failure by the Company to comply with those covenants could constitute an event of default under the DoW Transaction Documents. In that event, subject to the applicable terms of the DoW Transaction Documents, the DoW may exercise the remedies provided therein, which may include termination of one or more of the DoW Transaction Documents and redemption of the Class A Preferred Stock, any of which could materially adversely affect the Company’s business, results of operations and financial position.
The DoW Transaction Documents require the Company to make substantial investments in and commitments to specific aspects of our business, including, among others, the Springer Transactions.
The Company received $200 million at the Initial Closing and expects to rely in part on the additional funding commitment provided for in the Investment Agreement to implement certain planned projects and its related business strategy. The Investment Agreement contemplates up to $250 million of additional preferred stock purchases during specified funding periods following the Initial Closing, subject to the Company’s exercise of its funding rights and the satisfaction or waiver of applicable closing conditions. Those conditions include, among other things, continuing congressional authorization or reauthorization for the contemplated investments and the availability of appropriations. If the subsequent closing does not occur when expected, including because applicable conditions are not satisfied or waived, the Company may need to seek alternate financing or modify the timing, scope, or sequencing of its planned projects. There can be no assurance that alternative financing would be available on acceptable terms, in a timely manner or at all. If the Company cannot obtain alternate financing when needed, it may be required to reduce costs, or delay, cancel, or scale back development projects. Further, historically, market prices for critical materials, such as tungsten, and their downstream products have been subject to a high degree of volatility.
Because many of our products may be designed to satisfy DoW specifications and requirements, our products may not find customers in the commercial marketplace, and our profitability may be materially adversely impacted if we are unable to identify alternative sales channels, which could have a material adverse impact on our business, prospects, financial condition and results of operations.
Our operations are subject to extensive federal, state, local and other regulatory requirements. If applicable laws or regulations are interpreted or enforced in a manner adverse to us, we may be subject to enforcement actions, penalties, exclusion, and other material limitations on our operations. Our obligations under, and the performance or termination of, the DoW Transaction Documents may affect our operations and strategic plans. The DoW Transaction Documents do not assure us of access to sources of supply, the receipt of permits and approvals, or action or assistance by any government entity except as expressly provided therein. We remain responsible for obtaining all permits, approvals, supply arrangements, and authorizations required for our operations and projects. A modification, termination or failure of performance under one or more of the DoW Transaction Documents could adversely affect our business, financial condition, and results of operations, and any remedies available to us would be subject to the applicable agreements and applicable law.