Exhibit 1 · NDAA Rare Earth Cascade

Demand vectors converging on Western NdFeB, 2026–2028

Four programs. One constrained supply pool. The qualification bottleneck binds before any of them can hedge.
Program
F-35 + Defense Programs
Patriot · THAAD · SM-6 · Virginia-class
Replicator + Drones
Altius-600 · Switchblade 600 · Ghost-X
Optimus + Humanoids
Tesla · Figure AI · AGIBOT
EV Traction Motors
Tesla · BMW · GM · BYD · global OEMs
Exposure 2026–28 Existing qualified demand. Sintered NdFeB w/ grain-boundary diffusion for thermal envelope.[1][2] Multi-thousand fleet target. Every BLDC motor contains NdFeB. ~3.5 kg NdFeB across 28+ BLDC motors per humanoid. Commercial, not defense.[15][16] Largest single demand pool. Up to 5 kg rare earth metals per passenger-car driveline.[21]
Sole-Source Yes — China grain-boundary diffusion[2] Yes — same NdFeB stack as F-35 actuators Yes — China rare-earth processing[16] Largely China-sourced. 70% US imports 2020-23.[34]
DFARS 7052 Yes — Jan 1 2027[3] Yes — DFARS 7052[2] No — commercial application No — commercial
Waiver Path Class non-availability requires USD(A&S) approval[33] Same as defense primes[33] None — DFARS doesn’t apply. Subject to MOFCOM licensing. Market mechanism (price)
Substitution None at qualified scale None None at unit price ZF I2SM (magnet-free, production-ready); Honda × Daido hot-deformed (HRE-free, shipping since 2016)[21][22]
Catalyst Pentagon halted F-35 deliveries over Chinese-origin magnet (Sep 2022)[1] Pentagon Replicator initiative targeting “multiple thousands” Musk confirmed Optimus production hit by China restrictions (Q1 2025 call); production start Jul-Aug 2026[15][16][36] MOFCOM Apr 2025 export curbs raised cost gradient on China-origin magnets[16]
FORCED ALPHA