UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

⌧☒Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, ~~2020~~2021

◻☐Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission file number 001-33404

WESTWATER RESOURCES, INC.

(Exact Name of Registrant as Specified in Its Charter)

~~DELAWARE~~Delaware		75-2212772
(State of Incorporation)		(I.R.S. Employer Identification No.)

6950 S. Potomac Street, Suite 300, Centennial, Colorado80112

(Address of Principal Executive Offices, Including Zip Code)

~~(303)~~ (303) 531-0516

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class		Trading Symbol(s)		Name of Each Exchange on Which Registered
Common Stock, $0.001 par value		WWR		~~Nasdaq Capital Market~~NYSE American

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧☒ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧☒ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated ~~filer~~ ◻Filer ☐		Accelerated ~~filer~~ ◻Filer ☐

Non-accelerated ~~filer~~ ⌧Filer ☒		Smaller reporting company ⌧☒

		Emerging growth company ◻☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ◻☐ No ⌧☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Title of Each Class of Common Stock		Number of Shares Outstanding
Common Stock, $0.001 par value		~~19,021,859~~35,273,263 as of November ~~12, 2020~~10, 2021

Table of Contents

WESTWATER RESOURCES, INC.

TABLE OF CONTENTS


PART I — FINANCIAL INFORMATION	3

ITEM 1. FINANCIAL STATEMENTS	3

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	2519

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	3626

ITEM 4. CONTROLS AND PROCEDURES	3626

PART II - OTHER INFORMATION	3727

ITEM 1. LEGAL PROCEEDINGS	3727

ITEM 1A. RISK FACTORS	3728

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	3728

ITEM 3. DEFAULTS UPON SENIOR SECURITIES	3728

ITEM 4. MINE SAFETY DISCLOSURES	3828

ITEM 5. OTHER INFORMATION	3828

ITEM 6. EXHIBITS	3928

SIGNATURES	3929

Table of Contents

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

WESTWATER RESOURCES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(expressed in thousands of dollars, except share amounts)

(unaudited)

September 30,

December 31,

Notes

2020

2019
ASSETS







Current Assets:






Cash and cash equivalents

1

$
5,480

$
1,870
Prepaid and other current assets



431

340
Current assets held for sale

8

9,306

151
Total Current Assets



15,217

2,361

Property, plant and equipment, at cost:






Property, plant and equipment



9,785

9,780
Less accumulated depreciation and depletion



(789)

(785)
Net property, plant and equipment

6

8,996

8,995
Operating lease right-of-use assets

14

383

470
Restricted cash

1,5

807

797
Assets held for sale, non-current

8

—

14,356
Total Assets



$
25,403

$
26,979






LIABILITIES AND STOCKHOLDERS’ EQUITY







Current Liabilities:






Accounts payable



$
1,205

$
827
Accrued liabilities

787

994
Operating lease liability - current

14

149

147
Current liabilities held for sale

8

7,758

1,701
Total Current Liabilities



9,899

3,669

Operating lease liability, net of current

14

245

332
Liabilities held for sale, non current

8

—

5,914
Total Liabilities



10,144

9,915

Commitments and Contingencies

13





Stockholders’ Equity:






Common stock, 100,000,000 shares authorized, $.001 par value;



Issued shares – 10,434,012 and 3,339,541 respectively

Outstanding shares - 10,433,851 and 3,339,380 respectively

11

10

3
Paid-in capital

10,11

333,451

319,758
Accumulated deficit



(317,944)

(302,439)
Less: Treasury stock (161 and 161 shares, respectively), at cost



(258)

(258)
Total Stockholders’ Equity



15,259

17,064

Total Liabilities and Stockholders’ Equity



$
25,403

$
26,979


	September 30,		December 31,
	2021		2020
ASSETS

Current Assets:
Cash and cash equivalents	$	118,969	$	50,315
Equity securities		3,438		1,520
Prepaid and other current assets		366		754
Total Current Assets		122,773		52,589

Property, plant and equipment, at cost:
Property, plant and equipment		10,577		9,080
Less accumulated depreciation and depletion		(97)		(95)
Net property, plant and equipment		10,480		8,985
Operating lease right-of-use assets		258		353
Restricted cash		—		10
Other long-term assets		245		—
Total Assets	$	133,756	$	61,937

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:
Accounts payable	$	3,002	$	1,734
Accrued liabilities		2,792		2,369
Operating lease liability - current		151		149
Total Current Liabilities		5,945		4,252

Operating lease liability, net of current		117		214
Other long-term liabilities		1,352		—
Total Liabilities		7,414		4,466

Commitments and Contingencies (see note 10)

Stockholders’ Equity:
Common stock, 100,000,000 shares authorized, $.001 par value;
Issued shares - 34,636,224 and 19,172,020 respectively
Outstanding shares - 34,636,063 and 19,171,859 respectively		34		19
Paid-in capital		466,017		383,723
Accumulated deficit		(339,451)		(326,013)
Less: Treasury stock (161 shares), at cost		(258)		(258)
Total Stockholders’ Equity		126,342		57,471

Total Liabilities and Stockholders’ Equity	$	133,756	$	61,937

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

WESTWATER RESOURCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(expressed in thousands of dollars, except share and per share amounts)

(unaudited)

For the Three Months Ended

For the Nine Months Ended

September 30,

September 30,

Notes

2020

2019

2020

2019


Operating Expenses:









Mineral property expenses

7

$
(12)

$
(12)

$
(18)

$
(77)

Product development expenses

(1,641)

(19)

(1,942)

(51)

General and administrative expenses

(1,536)

(1,003)

(4,106)

(3,583)

Arbitration costs

(171)

(146)

(868)

(631)

Depreciation and amortization

19

(3)

(5)

(5)

Total operating expenses

(3,341)

(1,183)

(6,939)

(4,347)









Non-Operating Income/(Expenses):









Loss on sale of marketable securities

3,5

—

—

—

(720)

Interest income

3

—

13

—

347

Gain on sale of fixed assets

1

—

22

—

Other income (expense)

(22)

—

(15)

(11)

Total other income (expense)

(21)

13

7

(384)





Net Loss from Continuing Operations

(3,362)

(1,170)

(6,932)

(4,731)









Net Loss from Discontinued Operations

8

(6,389)

(664)

(8,573)

(3,052)

Net Loss

$
(9,751)

$
(1,834)

$
(15,505)

$
(7,783)

Other Comprehensive Income



Transfer to realized loss upon sale of available-for-sale securities



—

—

—

90

Comprehensive Loss



$
(9,751)

$
(1,834)

$
(15,505)

$
(7,693)











BASIC AND DILUTED LOSS PER SHARE



$
(1.23)

$
(0.95)

$
(2.63)

$
(4.66)

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING



7,904,522

1,931,419

5,905,850

1,649,145


	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020

Operating Expenses:
Product development expenses	$	(1,834)	$	(1,641)	$	(5,766)	$	(1,942)
Exploration expenses		(348)		—		(877)		—
General and administrative expenses		(2,189)		(1,536)		(6,470)		(4,106)
Arbitration costs		(644)		(171)		(2,190)		(868)
Mineral property expenses		(94)		(12)		(94)		(18)
Depreciation and amortization		(1)		19		(3)		(5)
Total operating expenses		(5,110)		(3,341)		(15,400)		(6,939)

Non-Operating Income/(Expenses):
Unrealized investment gain		507		—		1,918		—
Other income (expense)		35		(21)		44		7
Total other income (expense)		542		(21)		1,962		7

Net Loss from continuing operations		(4,568)		(3,362)		(13,438)		(6,932)

Net Loss from discontinued operations		—		(6,389)		—		(8,573)

Net Loss	$	(4,568)	$	(9,751)	$	(13,438)	$	(15,505)

BASIC AND DILUTED LOSS PER SHARE
LOSS PER SHARE FROM CONTINUING OPERATIONS	$	(0.13)	$	(0.42)	$	(0.42)	$	(1.18)

LOSS PER SHARE FROM DISCONTINUED OPERATIONS	$	—	$	(0.81)	$	—	$	(1.45)

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING		34,331,778		7,904,522		31,808,215		5,905,850

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

WESTWATER RESOURCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ~~AND SUPPLEMENTAL CASH FLOW INFORMATION~~

(expressed in thousands of dollars)

(unaudited)

For the Nine Months Ended September 30,


Notes

2020

2019
Operating Activities:






Net loss



$
(15,505)

$
(7,783)
Reconciliation of net loss to cash used in operations:





Non-cash lease expense



2

8
Accretion of asset retirement obligations

9

170

353
Costs incurred for restoration and reclamation activities

9

(501)

(334)
Amortization of note receivable discount

3

—

(299)
Depreciation and amortization



41

71
Stock compensation expense

11

170

255
Impairment of uranium properties

5,200

—
Gain on disposal of uranium properties

3,4

—

(729)
Loss on sale of marketable securities

3

—

720
Effect of changes in operating working capital items:

(Increase)/Decrease in prepaids and other assets



(29)

105
Increase in payables and accrued liabilities



318

441
Net Cash Used In Operating Activities



(10,134)

(7,192)

Cash Flows From Investing Activities






Proceeds from disposal of uranium assets, net

4

—

2,470
Proceeds from the sale of securities, net

3

—

536
Proceeds from note receivable

3

—

750
Capital expenditures

(107)

—
Net Cash (Used In)/Provided By Investing Activities



(107)

3,756

Cash Flows From Financing Activities:






Proceeds from note payable

16

331

—
Issuance of common stock, net

11

13,530

2,628
Payment of minimum withholding taxes on net share settlements of equity awards



—

(1)
Net Cash Provided By Financing Activities



13,861

2,627






Net increase/(decrease) in cash, cash equivalents and restricted cash



3,620

(809)
Cash, Cash Equivalents and Restricted Cash, Beginning of Period



5,667

5,309
Cash, Cash Equivalents and Restricted Cash, End of Period



$
9,287

$
4,500
Cash Paid During the Period for:






Interest



$
5

$
4
Supplemental Non-Cash Information with Respect to Investing and Financing Activities:






Securities received for payment of notes receivable – Laramide



—

750
Total Non-Cash Investing and Financing Activities for the Period



$
—

$
750


	For the Nine Months Ended September 30,
	2021		2020
Operating Activities:
Net loss	$	(13,438)	$	(15,505)
Reconciliation of net loss to cash used in operations:
Non-cash lease expense		(1)		2
Accretion of asset retirement obligations		—		170
Costs incurred for restoration and reclamation activities		—		(501)
Depreciation and amortization		3		41
Stock compensation expense		594		170
Unrealized (gain) on equity securities		(1,918)		—
Impairment of uranium properties		—		5,200
Effect of changes in operating working capital items:
Decrease/(Increase) in prepaids and other assets		55		(29)
Increase/(Decrease) in payables and accrued liabilities		1,665		318
Net Cash Used In Operating Activities		(13,040)		(10,134)

Cash Flows From Investing Activities:
Proceeds from PPP loan escrow		333		—
Building deposit		(245)		—
Capital expenditures		(119)		(107)
Net Cash Used In Investing Activities		(31)		(107)

Cash Flows From Financing Activities:
Proceeds from note payable		—		331
Issuance of common stock, net		81,865		13,530
Payment of minimum withholding taxes on net share settlements of equity awards		(150)		—
Net Cash Provided By Financing Activities		81,715		13,861

Net increase in Cash, Cash Equivalents and Restricted Cash		68,644		3,620
Cash, Cash Equivalents and Restricted Cash, Beginning of Period		50,325		5,667
Cash, Cash Equivalents and Restricted Cash, End of Period	$	118,969	$	9,287

~~The accompanying notes are an integral part of these condensed consolidated financial statements~~.

~~Table of Contents~~

~~WESTWATER RESOURCES, INC.~~

~~CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY~~

~~(expressed in thousands of dollars, except share amounts)~~

~~(unaudited)~~

Accumulated

Other

Common Stock

Paid-In

Comprehensive

Accumulated

Treasury

Nine months ended September 30, 2020

Shares

Amount

Capital

Income (Loss)

Deficit

Stock

Total
Balances, January 1, 2020

3,339,541

$
3

$
319,758

$
—

$
(302,439)

$
(258)

$
17,064
Net loss

—

—

—

—

(15,505)

—

(15,505)
Common stock issued, net of issuance costs

7,093,960

7

13,523

—

—

—

13,530
Stock compensation expense and related share issuances, net of shares withheld for payment of taxes

511

—

170

—

—

—

170
Balances, September 30, 2020

10,434,012

$
10

$
333,451

$
—

$
(317,944)

$
(258)

$
15,259

Three months ended September 30, 2020

Balances, June 30, 2020

6,664,976

$
7

$
326,073

$
—

$
(308,193)

$
(258)

$
17,629
Net loss

—

—

—

—

(9,751)

—

(9,751)
Common stock issued, net of issuance costs

3,769,036

3

7,236

—

—

—

7,239
Stock compensation expense and related share issuances, net of shares withheld for payment of taxes

—

—

142

—

—

—

142
Balances, September 30, 2020

10,434,012

$
10

$
333,451

$
—

$
(317,944)

$
(258)

$
15,259

Accumulated

Other

Common Stock

Comprehensive

Accumulated

Nine months ended September 30, 2019

Shares

Amount

Paid-In Capital

Income (Loss)

Deficit

Treasury Stock

Total
Balances, January 1, 2019

1,436,555

$
1

$
313,012

$
(90)

$
(291,874)

$
(258)

$
20,791
Net loss

—

—

—

—

(7,783)

—

(7,783)
Common stock issued, net of issuance costs

688,208

1

2,628

—

—

—

2,629
Stock compensation expense and related share issuances, net of shares withheld for the payment of taxes

393

—

254

—

—

—

254
Minimum withholding taxes on net share settlements of equity awards

—

—

(1)

—

—

—

(1)
Transfer to realized loss upon sale of available for sale securities

—

—

—

90

—

—

90
Balances, September 30, 2019

2,125,156

$
2

$
315,893

$
—

$
(299,657)

$
(258)

$
15,980

Three months ended September 30, 2019

Balances, June 30, 2019

1,658,371

$
2

$
314,179

$
—

$
(297,823)

$
(258)

$
16,100
Net loss

—

—

—

—

(1,834)

—

(1,834)
Common stock issued, net of issuance costs

466,785

—

1,475

—

—

—

1,475
Stock compensation expense and related share issuances, net of shares withheld for the payment of taxes

—

—

239

—

—

—

239
Balances, September 30, 2019

2,125,156

$
2

$
315,893

$
—

$
(299,657)

$
(258)

$
15,980

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

WESTWATER RESOURCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(expressed in thousands of dollars, except share amounts)

(unaudited)




	Common Stock			Paid-In		Accumulated		Treasury
Nine months ended September 30, 2021	Shares	Amount		Capital		Deficit		Stock		Total
Balances, January 1, 2021	19,172,020	$	19	$	383,723	$	(326,013)	$	(258)	$	57,471
Net loss	—		—		—		(13,438)		—		(13,438)
Common stock issued, net of issuance costs	15,407,018		15		81,850		—		—		81,865
Stock compensation expense and related share issuances, net of shares withheld for payment of taxes	57,186		—		594		—		—		594
Minimum withholding taxes on net share settlements of equity awards	—		—		(150)		—		—		(150)
Balances, September 30, 2021	34,636,224	$	34	$	466,017	$	(339,451)	$	(258)	$	126,342


Three months ended September 30, 2021
Balances, June 30, 2021	33,536,476	$	33	$	461,717	$	(334,883)	$	(258)	$	126,609
Net loss	—		—		—		(4,568)		—		(4,568)
Common stock issued, net of issuance costs	1,099,748		1		4,001		—		—		4,002
Stock compensation expense and related share issuances, net of shares withheld for payment of taxes	—		—		299		—		—		299
Balances, September 30, 2021	34,636,224	$	34	$	466,017	$	(339,451)	$	(258)	$	126,342




	Common Stock			Paid-In		Accumulated		Treasury
Nine months ended September 30, 2020	Shares	Amount		Capital		Deficit		Stock		Total
Balances, January 1, 2020	3,339,541	$	3	$	319,758		(302,439)	$	(258)	$	17,064
Net loss	—		—		—		(15,505)		—		(15,505)
Common stock issued, net of issuance costs	7,093,960		7		13,523		—		—		13,530
Stock compensation expense and related share issuances, net of shares withheld for the payment of taxes	511		—		170		—		—		170
Balances, September 30, 2020	10,434,012	$	10	$	333,451	$	(317,944)	$	(258)	$	15,259


Three months ended September 30, 2020
Balances, June 30, 2020	6,664,976	$	7	$	326,073	$	(308,193)	$	(258)	$	17,629
Net loss							(9,751)		—		(9,751)
Common stock issued, net of issuance costs	3,769,036		3		7,236		—		—		7,239
Stock compensation expense and related share issuances, net of shares withheld for the payment of taxes	—		—		142		—		—		142
Balances, September 30, 2020	10,434,012	$	10	$	333,451	$	(317,944)	$	(258)	$	15,259

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

WESTWATER RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements for Westwater Resources, Inc. (the “Company,” “we,” “us,” “WWR” or “Westwater”), have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The accompanying statements should be read in conjunction with the audited financial statements included in Westwater Resources, Inc.’s ~~2019~~ Annual Report on Form ~~10-K.~~10-K for the year ended December 31, 2020 (“Annual Report”). In the opinion of management, all adjustments (which are of a normal, recurring nature) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, ~~2020~~2021 are not necessarily indicative of the results that may be expected for any other period including the full year ending December 31, ~~2020.~~2021.

Significant Accounting Policies

Our significant accounting policies are detailed in Note 1, Summary of Significant Accounting Policies, in the Notes to Consolidated Financial Statements within our Annual ~~Report on Form 10-K for the year ended December 31, 2019.~~Report.

Recently Adopted Accounting Pronouncements

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (ASC 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement”. This update modifies the disclosure requirements for fair value measurements by removing, modifying or adding disclosures. The Company adopted this pronouncement effective January 1, 2020. The adoption of ASU 2018-13 has not had a material impact on the Company’s consolidated financial statements.

~~Recently Issued Accounting Pronouncements~~

In December 2019, the ~~FASB~~Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, “Income Taxes - Simplifying the Accounting for Income Taxes (Topic 740)” which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 ~~will be~~became effective for interim and annual periods beginning after December 15, 2020. The adoption of ASU 2019-12 did not result in a material impact to our condensed consolidated financial statements.

Recently Issued Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments”. ASU 2016-13 will change how companies account for credit losses for most financial assets and certain other instruments. For trade receivables, loans and held-to-maturity debt securities, companies will be required to estimate lifetime expected credit losses and recognize an allowance against the related instruments. For available for sale debt securities, companies will be required to recognize an allowance for credit losses rather than reducing the carrying value of the asset. The adoption of this update, if applicable, will result in earlier recognition of losses and impairments. ASU 2016-13 will be effective for interim and annual periods beginning after December 15, 2022.

In November 2018, the FASB issued ASU 2018-19, “Codification Improvements to ASC 326, Financial Instruments – Credit Losses.” ASU 2016-13 introduced an expected credit loss methodology for the impairment of financial assets measured at amortized cost basis. That methodology replaces the probable, incurred loss model for those assets. ASU 2018-19 is the final version of Proposed Accounting Standards Update 2018-270, which has been deleted. Additionally, the amendments clarify that receivables arising from operating leases are not within the scope of Subtopic 326-20. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with ASC 842, Leases. ASU 2018-19 will be effective for interim and annual periods beginning after December 15, 2022.

The Company is currently evaluating ASU 2016-13 and ASU 2018-19 for the potential impact of adopting this guidance on its financial reporting.

Table of Contents

WESTWATER RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

~~The Company is currently evaluating ASU 2016-13, ASU 2018-19 and ASU 2019-12 for the potential impact of adopting this guidance on its financial reporting.~~

Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash as reported within the ~~consolidated balance sheet~~Condensed Consolidated Balance Sheets that sum to the total of the same such amounts shown in the statement of cash flows.

As of September 30,
(thousands of dollars)

2020

2019
Cash and cash equivalents

$
5,480

$
716
Restricted cash included in assets held for sale (Note 8)

3,000

3,000
Restricted cash not included in assets held for sale

807

784
Cash, cash equivalents and restricted cash shown in the statement of cash flows

$
9,287

$
4,500


	As of September 30,
(thousands of dollars)	2021		2020
Cash and cash equivalents	$	118,969	$	5,480
Restricted cash - pledged deposits for performance bonds		—		3,807
Cash, cash equivalents and restricted cash shown in the statement of cash flows	$	118,969	$	9,287

The Company’s restricted cash ~~consists~~on September 30, 2020, consisted of funds held in money market accounts and used as collateral for performance obligation ~~bonds.~~bonds related to the restoration and reclamation of the Company’s South Texas uranium properties. With the divestiture of the Company’s uranium subsidiaries, all performance obligations and related restricted cash was transferred to enCore Energy Corp. (“enCore”) as of December 31, 2020. The funds ~~are~~were not available for the payment of general corporate expenses and ~~are~~were excluded from cash and cash ~~equivalents. The performance obligation bonds are required for future restoration and reclamation obligations for the Company’s South Texas uranium properties.~~equivalents as of September 30, 2020.

2. LIQUIDITY

The Company last recorded revenues from operations in 2009. Since 2009, the Company has relied on equity financings, debt financings and asset sales to fund its operations. The Company expects to rely on debt and equity ~~financing~~financings to fund its operations ~~into~~for the ~~near~~foreseeable future. ~~The Company will also continue its cost reduction initiatives to identify ways to reduce its cash expenditures.~~

In 2016, the Company began to ~~incorporate energy-related materials into~~expand its business ~~plan. Between~~plan into acquisition and development of energy-related materials. First, in 2016 ~~and 2020~~ the Company obtained lithium mineral leases in Nevada and Utah ~~and evaluated a green-fields~~as an exploration ~~program for lithium. In~~opportunity. Then, in 2018 the Company acquired Alabama Graphite Corp. and its Coosa Graphite Project in Alabama for the purpose of developing ~~the only~~a commercial sized graphite mineral deposit inand processing the ~~contiguous United States and production of~~flake graphite into advanced graphite products for use in batteries. In the third quarter of 2020, ~~as further discussed below and as further discussed in Note 8,~~ the Company ~~made~~executed the strategic decision to focus ~~most of~~ its resources on ~~its~~the graphite business ~~agreeing to the sale of its uranium business and~~in Alabama, discontinuing its investment in its lithium mineral ~~properties.~~

~~As of September 30, 2020, execution of the~~properties and selling its uranium business, plan for development of the Coosa Graphite Project was underway, with the commissioning of pilot plants for processing flake graphite into battery grade graphite products. The start-up of operations for those plants is expected to commence before the end of 2020 or shortly thereafter. The Company expects the pilot plant phase to last into mid-2021. The Company will use the data generated from the pilot plant operations to inform the requirements and specifications for building a commercial sized graphite processing facility. Pursuant to the Company’s Preliminary Economic Assessment of the Coosa Graphite Project as modified, financing required for the estimated capital expenditures to construct the commercial plant is approximately $120 million. Subject to financing, the Company expects the construction phase for the commercial plant to beginlocated in ~~the second half of 2021 and be completed in mid-2022. The Company expects to begin generating revenues from sales of advanced graphite products from the Coosa Graphite Project in 2023.~~

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~~WESTWATER RESOURCES, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

approximately $6.0 million for asset retirement obligations on its balance sheet (see Note 9). In addition to its South Texas uranium operations, the Company has spent about $0.5 million to $1.0 million annually to maintain its uranium mineral property holdings in New Mexico.

In furtherance of the Company’s strategic shift to graphite battery materials, on September 1, 2020 the Company entered into a Letter of Intent (“LOI”) to sell its U.S. uranium business, including its U.S. uranium exploration assets in New Mexico, ~~and idled production assets~~to enCore. As discussed in ~~Texas~~Note 3, the sale to enCore ~~Energy Corp. (“enCore”) (see Note 8). The pending sale includes~~closed on December 31, 2020, and included the elimination of ~~the~~a $9.3 million bonding liability, the elimination of ~~the $6.0~~$5.2 million in asset retirement obligations, and the elimination of more than $4.0 million in annual expenditures related to reclamation and compliance ~~costs at the Company’s Kingsville, Vasquez, and Rosita sites in South Texas and its New Mexico land holding~~ costs. The Company ~~anticipates that it will receive~~received approximately ~~US$2.0~~$1.8 million of enCore common stock and ~~retain~~retained royalty interests on the New Mexico uranium properties as consideration for the sale. ~~This transaction is expected to close on or before December 31, 2020.~~ The Company ~~will retain~~also retained its uranium interests in Turkey, which are subject to ongoing international arbitration ~~proceeding.~~proceedings, in which the Company is seeking damages.

During the first nine months of 2021, the Company focused on graphite process development activities including the operation of a pilot program for processing flake graphite into battery-grade graphite products and a Definitive Feasibility Study (“DFS”) on Phase I of the Coosa Graphite Project. The ~~Company’s strategic shift~~data generated and experience gained from the pilot program was used to ~~focus solely on its~~inform the Phase I DFS that was completed in October 2021 and will also inform the requirements and specifications for building a commercial graphite ~~business also resulted in its decision not to renew its lithium mineral leases in Nevada and Utah when the annual rentals of approximately $0.2 million came due in late August 2020.~~processing facility.

AtOn September 30, ~~2020~~2021, the Company’s cash ~~balances were $5.5~~balance was approximately $119.0 million. During the ~~month of October 2020,~~nine months ended September 30, 2021, the Company sold ~~8.5~~9.3 million shares of common stock for net proceeds of ~~$50.2~~$47.3 million pursuant to its Controlled Equity Offering^SM Sales Agreement with Cantor Fitzgerald & Co. (“Cantor”) and ~~its~~6.1 million shares of common stock for net proceeds of $34.6 million pursuant to the December 2020 Purchase Agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”) (see Note ~~17)~~7). ~~The funding provided by these~~As of September 30, 2021, the Company has $50.0 million available for future sales under the ATM Offering and has 9,700,252 of common stock available for future sales pursuant to the Lincoln Park December 2020 PA (as defined in Note 7).

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WESTWATER RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Subsequent to September 30, 2021, and through the date of this release, the Company has sold 637,200 common shares for net proceeds of $2.3 million pursuant to its financing ~~facilities has resulted in a~~facility with Cantor Fitzgerald & Co., and liquidated its holdings of enCore common stock for net cash ~~balance~~proceeds of approximately $53.3 million at October 31, 2020. Management believes the significant treasury balance has mitigated the Company’s capital risk through 2021 as the Company’s 2021 non-discretionary budget, budgeted graphite pilot plant program and the remaining budgeted product development initiatives are now fully funded. The Company is pursuing project financing to support primary funding of the capital expenditures for construction of the commercial plant set to occur in the second half of 2021.

$3.6 million.

Management believes the Company’s current cash balance is sufficient to fund its planned non-discretionary expenditures through 2022. ~~In addition to pursuing other project financing,~~The Company anticipates the ~~Company is evaluating the renewal~~continued use of the Cantor and Lincoln Park financing facilities ~~for use in funding any required contributions by the Company~~ to support ~~project financing for~~ construction of the commercial graphite processing facility. While the Company has been successful in the past in raising funds through equity and debt financings as well as through the sale of non-core assets, no assurance can be given that additional financing will be available ~~to it~~ in amounts sufficient to meet its needs, or on terms acceptable to the Company. Stock price volatility and uncertain economic conditions caused by the COVID-19 pandemic and the recent emergence of variant strains of the virus could significantly impact the Company’s ability to raise funds through equity financing. Market conditions, including but not limited to, inflation, labor shortages and supply chain disruptions could adversely impact the planned cost of the Company’s commercial graphite processing facility. Along with evaluating the continued use of the Cantor and Lincoln Park financing facilities, the Company may consider project financing to fund the construction of the commercial graphite processing facility. In the event funds are not available for project financing to complete construction of the commercial graphite processing facility in ~~2022,~~2023, the Company ~~will~~expects to be able to fund its non-discretionary expenditures, however, the Company may be required to change ~~our~~its planned business development strategies.

3. ~~NOTES RECEIVABLE~~ACQUISITIONS AND DISPOSALS

~~Laramide Note Receivable~~Sale of Uranium Business to enCore Energy

~~As part~~On December 31, 2020, Westwater, and its wholly owned subsidiary URI Neutron Holdings II, Inc. (“Neutron Holdings”), entered into a securities purchase agreement with enCore (the “Purchase Agreement”) to sell their subsidiaries engaged in the uranium business in Texas and New Mexico (the “Uranium Subsidiaries”) to enCore. The transaction closed on December 31, 2020.

At the closing of the ~~consideration~~transaction, enCore delivered $0.7 million in cash and issued $1.8 million worth of its common shares to Westwater, and Westwater and Neutron Holdings transferred all of the equity interests in the Uranium Subsidiaries to enCore along with a database relating to the Grants Mineral Belt located in New Mexico. In addition, enCore delivered to Westwater a 2% net smelter return royalty (“NSR Royalty”) on production from the uranium properties held by Uranco, Inc. in New Mexico, and a 2.5% net profits interest (“NPI”) in the profits from operations of Neutron Energy, Inc.’s Juan Tafoya and Cebolleta Projects. Pursuant to the terms of the Purchase Agreement, enCore has also agreed to replace the indemnification obligations of Westwater for certain reclamation surety bonds held in the ~~sale~~name of ~~Hydro Resources,~~URI, Inc. ~~(HRI)~~, and Westwater transferred to enCore all rights to $3.8 million in cash collateral held to secure such indemnity obligations.

Also, at closing, in accordance with the terms of the Side Letter executed by the parties to the Purchase Agreement, Westwater delivered $0.3 million in cash to enCore, which amount was delivered in escrow upon the request of the lender, Celtic Bank, under the loan made to URI, Inc. in May 2020 pursuant to the Small Business Administration (“SBA”) Paycheck Protection Program (the “PPP Loan”). The escrowed amount was to be released to Westwater upon, and subject to, forgiveness of the PPP Loan under the terms of the CARES Act. The PPP Loan forgiveness application was filed on January ~~2017, the Company~~25, 2021, and Westwater received a ~~promissory note~~notification from the SBA on March 31, 2021 that 100% of the loan had been forgiven. As a result, on March 31, 2021, the escrowed funds were returned to Westwater.

The divestiture of the uranium business was accounted for as an asset disposal and the non-cash consideration received from enCore was recorded at fair value. In accordance with the terms of the Purchase Agreement, non-cash consideration included the receipt of shares of enCore common stock valued in the amount of ~~$5.0 million, secured~~$1.8 million. The number of shares issued at closing was 2,571,598. The number of shares was determined by a ~~mortgage over~~pricing formula based on the Churchrock and Crownpoint properties owned by Laramide Resources Ltd. (“Laramide”). The note had a three-year term and carried an initial interest rate of 5%. The Company received the first two installment payments of $1.5 million each in January 2018 and January 2019. The final principal payment of $2.0 million was due and payable on January 5, 2020. Interest was payable on a quarterly basis during the final year. Laramide had the right to satisfy up to half of the principal payments by delivering shares of its common stock to the Company, which shares were valued by reference to the volume ~~weighted average price (“VWAP”) for Laramide’s common stock for the 20 trading days before their respective anniversaries of the initial issuance date in~~

Table of Contents

WESTWATER RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

~~January.~~weighted average price (“VWAP”) of enCore’s common shares for the ten trading days ending on and including December 30, 2020. The VWAP formula resulted in a price of $0.698 per share of enCore common stock.

Finally, due to the high degree of uncertainties surrounding future mine development and uranium prices, as well as limited marketability, the Company determined the fair value of ~~this note receivable was determined using~~ the ~~present value~~NSR Royalty and NPI to be of ~~the future cash receipts discounted at a market rate of 9.5%.~~NaN value.

On August 30, 2019, the Company sold the promissory note (Note 4). Prior to August 30, 2019, the Company had received three tranches of Laramide common shares as partial consideration for the sale, which had resulted in the receipt of 2,218,133, 1,982,483 and 2,483,034 Laramide common shares in January 2017, January 2018 and January 2019, respectively. These share payments represented the initial consideration from the January 2017 sale of HRI and two note installments in January 2018 and January 2019. The first note installment in the amount of $1.5 million in January 2018, consisted of $750,000 in cash and the issuance of 1,982,483 of Laramide’s common shares. The second note installment in the amount of $1.5 million in January 2019, consisted of $750,000 in cash and the issuance of 2,483,034 of Laramide’s common shares. Additionally, Laramide made interest payments in the amount of $96,022 in cash during the year ending December 31, 2019.

On March 25, 2019, the Company sold the third tranche of 2,483,034 Laramide common shares and 2,218,133 Laramide warrants resulting in net proceeds of $0.5 million and a net loss on sale of marketable securities of $0.7 million.

4. ~~SALE OF URANIUM ASSETS~~

On March 5, 2019, the Company entered into an Asset Purchase Agreement with Uranium Royalty (USA) Corp. and Uranium Royalty Corp. (together “URC”) for the sale of four of its royalty interests on future uranium production from mineral properties located in South Dakota, Wyoming and New Mexico, as well as the remaining amount of the Laramide promissory note in the amount of $2.0 million as discussed in Note 3 above, for $2.75 million, including $0.5 million paid at signing. On June 28, 2019, Westwater and URC entered into an Amendment to the Asset Purchase Agreement. The Amendment extended the date for closing from July 31, 2019 to August 30, 2019. URC delivered an additional $1.0 million as deposit to the Company upon signing the Amendment. The transaction closed on August 30, 2019 at which time the Company transferred ownership of the royalties and promissory note in exchange for the final payment of $1.25 million.

The sale of these uranium assets was accounted for as an asset disposal. The Company recorded a net gain of $0.7 million on disposal of uranium assets on its Consolidated Statements of Operations for the nine months ended September 30, 2019. At September 30, 2020, the gain has been reclassified to discontinued operations, which are reported as a separate component of Net Income/Loss for the prior periods on the Statement of Operations (see Note 8).

URC Transaction

(thousands of dollars)

Total cash consideration received, net of transaction costs

$
2,470
Carrying value of promissory note

(1,741)
Carrying value of royalty interests

—
Gain on disposal of uranium assets

$
729

A discussion on the Company’s current efforts to sell its remaining U.S. uranium business, including its uranium exploration assets in New Mexico and idled production assets in Texas to enCore Energy (see Note 8).

~~5. FINANCIAL INSTRUMENTS~~FAIR VALUE MEASUREMENTS

Applicable accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price) and establishes

~~Table of Contents~~

~~WESTWATER RESOURCES, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

a fair-value hierarchy that prioritizes the inputs used to measure fair value using the following definitions (from highest to lowest priority):

●

Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that are observable at the measurement date.

●

Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

●

Level 3 includes unobservable inputs that reflect management’s ~~assumptions~~assessment about what factors market participants would use in pricing the asset or liability. These inputs are developed based on the best information available, including internal data.

The Company believes that the fair value of its assets and liabilities approximates their reported carrying amounts. The following table presents information about assets that were recorded at fair value on a recurring and non-recurring basis as of September 30, ~~2020~~2021 and December 31, ~~2019~~2020 and indicates the fair value hierarchy.

September 30, 2020
(thousands of dollars)

Level 1

Level 2

Level 3

Total
Current Assets








Restricted cash included in assets held for sale

3,000

—

—

3,000
Total current assets recorded at fair value

$
3,000

$
—

$
—

$
3,000
Non-current Assets








Restricted cash not included in assets held for sale

$
807

$
—

$
—

$
807
Total non-current assets recorded at fair value

$
807

$
—

$
—

$
807

December 31, 2019
(thousands of dollars)

Level 1

Level 2

Level 3

Total
Non-current Assets








Restricted cash included in assets held for sale

$
3,000

$
—

$
—

$
3,000
Restricted cash not included in assets held for sale

797

—

—

797
Total non-current assets recorded at fair value

$
3,797

$
—

$
—

$
3,797


	September 30, 2021
(thousands of dollars)	Level 1		Level 2		Level 3		Total
Current Assets
Equity securities	$	3,438	$	—	$	—	$	3,438
Land grant		—		—		1,378		1,378
Total current assets recorded at fair value	$	3,438	$	—	$	1,378	$	4,816


	December 31, 2020
(thousands of dollars)	Level 1		Level 2		Level 3		Total
Current Assets
Equity securities	$	—	$	—	$	1,520	$	1,520
Total current assets recorded at fair value	$	—	$	—	$	1,520	$	1,520
Non-current Assets
Restricted cash	$	10	$	—		—	$	10
Total non-current assets recorded at fair value	$	10	$	—	$	—	$	10

Recurring Fair Value Measurements

Assets that are measured on a recurring basis include the Company’s marketable securities and restricted cash.

~~6. PROPERTY, PLANT AND EQUIPMENT~~

Net Book Value of Property, Plant and Equipment at September 30, 2020
(thousands of dollars)


Texas

Alabama

New Mexico

Corporate

Total
Uranium plant

$
1,855

$
0

$
-

$
-

$
1,855
Mineral rights and properties

-

8,972

3,900

-

12,872
Other property, plant and equipment

452

-

-

24

476
Total Property, Plant and Equipment

$
2,307

$
8,972

$
3,900

$
24

$
15,203
Property, Plant and Equipment included in assets held for sale

2,307

-

3,900

-

6,207
Property, Plant and Equipment from Continuing Operations

$
-

$
8,972

$
-

$
24

$
8,996

Equity securities on the balance sheet at December 31, 2020 and September 30, 2021 consist solely of shares of common

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WESTWATER RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Net Book Value of Property, Plant and Equipment at December 31, 2019
(thousands of dollars)


Texas

Alabama

New Mexico

Corporate

Total
Uranium plant

$
3,112

$
-

$
-

$
-

$
3,112
Mineral rights and properties

-

8,972

7,806

-

16,778
Other property, plant and equipment

424

-

-

23

447
Total Property, Plant and Equipment

$
3,536

$
8,972

$
7,806

$
23

$
20,337
Property, Plant and Equipment included in assets held for sale

3,536

-

7,806

-

11,342
Property, Plant and Equipment from Continuing Operations

$
-

$
8,972

$
-

$
23

$
8,995

~~Included~~stock received as partial consideration for the sale of uranium assets to enCore (see Note 3). Further, the sale of the enCore shares was restricted and resulted in the ~~Property, Plant~~Company applying a discount for the lack of marketability prior to May 1, 2021. As the restrictions on the sale of enCore stock have expired and ~~Equipment tables above~~the shares are currently available for sale, the ~~long-lived assets~~fair value of the securities now reflects the unadjusted market price of enCore shares as of September 30, 2021. With the lifting of restrictions and no anticipated lack of marketability, the measurement in equity securities is now considered Level 1 in the fair-value hierarchy. For the three and nine months ended September 30, 2021, the Company recognized unrealized gains of $0.5 million and $1.9 million, respectively, related to the ~~Company’s uranium business, which are reported~~increased fair value of the enCore shares.

Non-recurring Fair Value Measurements

As discussed in ~~discontinued operations (see~~ Note ~~8).~~5, on July 23, 2021, the Company received a land grant from local municipalities related to its planned graphite processing plant in Coosa County, Alabama. At inception, the Company estimated the fair value of the land to be approximately $1.4 million. The fair value was determined using Level 3 inputs using the market approach, by considering comparable sales in the area, adjusted for property specific items; such as lot size, location and access to major highways and distribution channels. The Company began amortization of the obligation over the 10-year lease term.

5. PROPERTY, PLANT AND EQUIPMENT


	Net Book Value of Property Plant and Equipment at September 30, 2021
(thousands of dollars)	Alabama		Corporate		Total
Mineral rights and properties	$	8,972	$	—	$	8,972
Other property, plant and equipment		1,378		30		1,408
Construction in progress		100		—		100
Total	$	10,450	$	30	$	10,480


	Net Book Value of Property Plant and Equipment at December 31, 2020
(thousands of dollars)	Alabama		Corporate		Total
Mineral rights and properties	$	8,972	$	—	$	8,972
Other property, plant and equipment		—		13		13
Total	$	8,972	$	13	$	8,985

Impairment of Property, Plant and Equipment

The Company reviews and evaluates its long-lived assets for impairment on an annual basis or more frequently when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. ~~As discussed~~For the nine months ended September 30, 2021 no events or changes in ~~Note 8, the Company has entered into a binding LOI~~circumstance are believed to ~~sell its uranium business. The proposed terms of the transaction are an indicator of impairment~~have impacted recoverability of the Company’s long-lived ~~uranium property, plant~~assets. Accordingly, it was determined that 0 interim impairment was necessary.

Land Addition

On June 22, 2021, Alabama Graphite Products, LLC (“AGP”), a wholly-owned subsidiary of Westwater entered into incentive agreements with the State of Alabama and ~~equipment. For purposes of determining~~local municipalities for the ~~amount of impairment, the Company has estimated that a loss in the amount of $5.2 million will be recorded upon closing~~siting of the ~~proposed transaction using~~Company’s planned graphite processing plant in Coosa County, Alabama. The incentive agreements provide certain tax credits and incentives under the ~~September 30, 2020 carrying values~~Alabama Jobs Act in connection with the construction of the ~~uranium assets~~processing facility. Additionally, in connection to, and ~~liabilities included~~ in ~~the transaction plus estimated costs to close the transaction.~~

~~As discussed in Note 8, at September 30, 2020, property, plant and equipment related to the Company’s U.S. uranium business in Texas and New Mexico, net~~contemplation of the ~~$5.2 million impairment charge, have been reclassified~~incentive agreements, on July 23, 2021, AGP entered into a land lease with the Lake Martin Area Industrial Development Authority. The lease provides AGP rights to ~~Held for Sale on the Condensed Consolidated Balance Sheet. Balances for prior year periods have also been reclassified.~~approximately 70 acres to construct and operate its commercial graphite processing facility in Coosa County, Alabama. The ~~$5.2 million impairment charge is included in discontinued operations on the Condensed Consolidated Statement~~lease has a term of ~~Operations for the period ended September 30, 2020.~~

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

~~7. MINERAL PROPERTY EXPENDITURES~~10-years, a nominal lease payment, and transfer of title to AGP at the end of the lease term. Further, the lease provides AGP the option to purchase the land for a nominal amount during the term of the lease.

~~Mineral property expenditures~~

The incentive agreements and the lease are accounted for by ~~geographical location for~~ the ~~three and nine months ended September 30, 2020 and 2019 are~~company as ~~follows:~~

For the Three Months Ended September 30,

For the Nine Months Ended September 30,


2020

2019

2020

2019

(thousands of dollars)
Kingsville Dome project, Texas

$
291

$
203

$
735

$
592
Rosita project, Texas

158

237

371

455
Vasquez project, Texas

95

85

456

397
Other projects, Texas

17

5

20

(4)
Total Texas projects

561

530

1,582

1,440

Cebolleta project, New Mexico

150

—

291

440
Juan Tafoya project, New Mexico

41

40

50

49
West Largo

—

13

—

13
Total New Mexico projects

191

53

341

502

Columbus Basin project, Nevada

—

126

—

127
Other projects, Nevada

—

—

—

—
Total Nevada projects

—

126

—

127

Sal Rica project, Utah

—

111

1

112
Total Utah projects

—

111

1

112

Coosa project, Alabama

12

12

18

77
Bama project, Alabama

—

—

—

—
Total Alabama projects

12

12

18

77

Total expense for the period

$
764

$
832

$
1,942

$
2,258
(Less) Mineral Property expenses attributable to Discontinued Operations

(752)

(820)

(1,924)

(2,181)
Mineral Property expenses for Continued Operations

$
12

$
12

$
18

$
77

~~Included in~~a government grant; whereby the ~~table above are mineral property expenses related~~Company realized the fair value of the land, subject to the ~~Company’s discontinued U.S. uranium~~lease, at inception with a corresponding obligation on the consolidated balance sheet. The land is included in property, plant, and ~~lithium operations (see Note 8). For the nine months ended September 30, 2020~~equipment, and ~~2019, $1.9 million was spent~~represents a non-depreciable asset on ~~mineral property expenses for~~ the Company’s ~~uranium properties~~consolidated balance sheet. The corresponding obligation is recorded in Texas and New Mexico. Expenditures included land-holding and maintenance, reclamation activities and standby costs. The Company also spent $0.2 million during the third quarter of 2019 for claim maintenance, permits and fees on its lithium holdings in Utah and Nevada acquired in 2016. These costs are included in the net loss from discontinued operationsother long-term liabilities on the ~~Condensed Consolidated Statements of Operations.~~consolidated balance sheet.

8.6. DISCONTINUED OPERATIONS

In the third quarter of 2020, the Company ~~made~~executed the strategic decision to focus ~~most of~~ its resources on its graphite business, ~~agreeing to the sale of its uranium business as further discussed below,~~ and ~~discontinuing~~discontinued its investment in its lithium ~~business.~~and uranium businesses. The Company’s lithium business included mineral leases and water rights in Nevada and Utah. The Company elected not to renew the annual lease rentals on the mineral properties, which also voids the water rights.

On ~~September 1,~~December 31, 2020, the Company ~~signed a binding LOI to sell~~sold its ~~U.S.~~subsidiaries engaged in its uranium ~~assets located in New Mexico and Texas~~business to enCore ~~Energy Corp., a corporation incorporated under~~(see Note 3).

In accordance with ASC 205-20 – “Discontinued Operations,” the ~~laws of British Columbia, Canada. The proposed~~enCore transaction ~~with enCore will be structured as a direct share purchase in which enCore acquires all issued and outstanding~~

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~~WESTWATER RESOURCES, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

equity securities of Westwater’s wholly-owned uranium subsidiaries, URI Inc., Neutron Energy Inc., and Uranco, Inc., as well as related subsidiaries, HRI-Churchrock, Inc., Hydro Restoration Corp., Belt Line Resources, Inc., and Uranium Resources, Inc. (f/k/a URI Minerals, Inc.). Westwater expects to receive enCore shares valued at approximately $2.0 million and retain royalties from future production from the New Mexico uranium properties. As part of the proposed transaction, enCore will receive $3.0 million of cash collateral currently pledged against reclamation performance obligation bonds totaling approximately $9.3 million upon the successful replacement of those performance obligation bonds. EnCore will also assume other liabilities related to the uranium properties including asset retirement obligations and outstanding royalties payable.

The sale is expected to close on or before December 31, 2020. The Company considers assets to be held for sale when management approves and commits to a formal plan to actively market the assets for sale at a price reasonable in relation to fair value, the asset is available for immediate sale in its present condition, an active program to locate a buyer and other actions required to complete the sale have been initiated, the sale of the asset is expected to be completed within one year and it is unlikely that significant changes will be made to the plan. Management has concluded that the sale of its U.S. uranium assets to enCore meets these criteria. As a result, the assets and liabilities in the disposal group are classified as held for sale for all periods presented on the Condensed Consolidated Balance Sheet as of September 30, 2020. This divestiture will allow the Company to devote most of its available resources to the development of high-performance battery graphite. This transaction representsrepresented a major strategic shift for Westwater and ~~is expected to significantly affect current and future operations and financial results. Due to this shift,~~resulted in the reclassification of the Company’s uranium ~~segment has been classified~~activities as discontinued operations and disclosure of the associated profit/loss of the Company’s uranium business as a ~~discontinued operation and is reported separately from continuing operations~~separate line-item on the Company’s Condensed Consolidated Statement of Operations for ~~all periods presented.~~

~~The carrying amounts of~~ the ~~major classes of assets~~three and ~~liabilities related to the Company’s discontinued uranium and lithium operations and classified as held for sale as of~~nine months ended September 30, ~~2020 and December 31, 2019 were as follows:~~2020.

~~Table of Contents~~

~~WESTWATER RESOURCES, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

September 30,

December 31,

2020

2019
(thousands of dollars)




Restricted Cash
$
3,000

$
—
Prepaid and other current assets

89

151
Net property, plant and equipment

6,207

—
Operating lease right-of-use assets

10

—
Current Assets Held for Sale

9,306

151

Net property, plant and equipment

—

11,342
Operating lease right-of-use assets

—

14
Restricted cash

—

3,000
Assets Held for Sale, non-current

—

14,356

Total Assets Held for Sale
$
9,306

$
14,507




Accounts payable
$
140

$
25
Accrued liabilities

808

776
Asset retirement obligations - current

5,969

894
Operating lease liability - current

10

6
Notes payable - current

331

—
Other current liabilities

500

—
Current Liabilities Held for Sale

7,758

1,701

Asset retirement obligations, net of current

—

5,406
Operating lease liability, net of current

—

8
Other long-term liabilities

—

500
Liabilities Held for Sale, non-current

—

5,914

Total Liabilities Held for Sale
$
7,758

$
7,615

The results of the Company’s uranium and lithium business segments included in discontinued operations for the three and nine months ended September 30, 2020 ~~and 2019~~ were as follows:


	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,				For the Three Months Ended		For the Nine Months Ended
(thousands of dollars)	2020		2019		2020		2019		September 30, 2020		September 30, 2020
Mineral property expenses	$	(752)	$	(820)	$	(1,924)	$	(2,181)	$	(752)	$	(1,924)
General and administrative expenses		(405)		(356)		(1,273)		(1,181)		(405)		(1,273)
Accretion of asset retirement obligations		(32)		(197)		(170)		(353)		(32)		(170)
Depreciation and amortization		(30)		(20)		(36)		(66)		(30)		(36)
Impairment of uranium properties		(5,200)		—		(5,200)		—		(5,200)		(5,200)
Gain on disposal of uranium assets		—		729		—		729
Other income (expense)		30		—		30		—		30		30
Net Loss from Discontinued Operations	$	(6,389)	$	(664)	$	(8,573)	$	(3,052)	$	(6,389)	$	(8,573)

Our cash flow information for the nine months ended September 30, 2020 ~~and 2019~~ included the following activities related to discontinued operations:


	For the Nine Months Ended
(thousands of dollars)		September 30, 2020
Depreciation and amortization	$	36
Capital Expenditures		(101)
Accretion of asset retirement obligations		170
Impairment of uranium properties		5,200

1512

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WESTWATER RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

For the Three Months Ended

For the Nine Months Ended

September 30,

September 30,

2020

2019

2020

2019
(thousands of dollars)

Depreciation and amortization
$
30
$
20

$
36
$
66
Capital Expenditures

-

-

(101)

-
Accretion of asset retirement obligations

32

197

170

353
Impairment of uranium properties

5,200

-

5,200

-

~~9. ASSET RETIREMENT OBLIGATIONS (“ARO”)~~

~~The following table summarizes the changes in the reserve for future restoration and reclamation costs on the balance sheet:~~

September 30,

December 31,
(thousands of dollars)

2020

2019
Balance, beginning of period

$
6,300

$
6,203
Liabilities settled

(501)

(293)
Accretion expense

170

390
Balance, end of period

5,969

6,300
Less: ARO included in current liabilities held for sale

(5,969)

(894)
ARO included in liabilities held for sale, non-current

$
—

$
5,406

Asset retirement obligations primarily consist of estimated reclamation costs for the Company’s ISR projects in South Texas. These obligations are fully secured by performance obligation bonds totaling approximately $9.3 million and partially collateralized by $3.8 million in restricted cash. In early September 2020, Westwater entered into an agreement with enCore Energy Corp to sell its U.S. uranium assets, including those properties in Texas that are subject to the restoration obligations above (see Note 8). These assets and related liabilities were classified as held for sale during the current period and are reported on the Company’s Condensed Consolidated Balance Sheet. The sale is expected to close by year-end 2020, at which time all bonding obligations and nearly $6.0 million in reclamation liabilities will be transferred to enCore. Until the transaction closes, the Company will continue to perform plugging and surface reclamation activities at its Rosita and Vasquez projects located in Duval County, Texas.

~~10.~~7. COMMON STOCK

Common Stock Issued, Net of Issuance Costs

December 2020 Purchase Agreement with Lincoln Park Capital Fund, LLC

On ~~May 21,~~December 4, 2020, the Company entered into a Purchase Agreement with Lincoln Park ~~as amended on May 29,~~(the “December 2020 ~~(the “2020 Purchase Agreement”~~PA”), to place up to ~~$12.0~~$100.0 million in the aggregate of the ~~Company’s~~Company's common stock on an ongoing basis ~~when required by the Company~~ over a term of 2436 months. AtThe Company controls the ~~Annual Shareholders Meeting conducted~~timing and amount of any sales to Lincoln Park, and Lincoln Park is obligated to make purchases in accordance with the December 2020 PA. Any common stock that is sold to Lincoln Park will occur at a purchase price that is based on ~~April 28, 2020,~~an agreed upon fixed discount to the Company's prevailing market prices at the time of each sale and with no upper limits to the price Lincoln Park may pay to purchase common stock. The agreement may be terminated by the Company ~~received shareholder approval to~~at any time, in its sole discretion, without any additional cost or penalty.

The December 2020 PA specifically provides that the Company may not issue or sell ~~up to 8.0 million~~any shares of its common stock under the ~~2020 Purchase Agreement. As an initial purchase on May 21, 2020, Lincoln Park bought $250,000 worth of Common Stock~~agreement if such issuance or sale would breach any applicable rules of the ~~Company at a price of $1.2989 per share. The Company issued 156,250 shares of Common~~NYSE American Stock ~~to Lincoln Park as consideration for its commitment to purchase shares of Common Stock under the 2020 Purchase Agreement.~~

~~On May 21, 2020,~~Exchange (“NYSE American”). In particular, NYSE American General Rule 713(a) provides that the Company entered into a registration rights agreement with Lincoln Park pursuant to which the Company filed a registration statement on Form S-1 with the Securities and Exchange Commission, which was declared effective on June 26, 2020 relating to the resale of an initial tranche of 1.97 million shares subject to the 2020 Purchase Agreement. As of September 30, 2020, the Company had sold 1.8 shares of common stock for gross proceeds of

~~Table of Contents~~

~~WESTWATER RESOURCES, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

$3.8 million, of which 1.6 million shares of common stock and gross proceeds of $3.5 million was sold in the three months ended September 30, 2020. The Company filed a second registration statement on Form S-1 relating to the resale of 3.2 million shares which was declared effective on October 2, 2020, and sold 1.1 million shares for gross proceeds of $8.2 million in October 2020. With the October 2020 sales, the $12.0 million sales capacitymay not issue or sell more than 19.99% of the ~~2020 Purchase Agreement has been reached.~~

~~2019 Purchase Agreement (“2019 Purchase Agreement”) with Lincoln Park~~

~~On June 6, 2019, the Company entered into the 2019 Purchase Agreement with Lincoln Park to place up to $10.0 million in the aggregate~~number of shares of the Company’s common stock that were outstanding immediately prior to the execution of the December 2020 PA unless (i) shareholder approval is obtained or (ii) the average price of all applicable sales of common stock to Lincoln Park under the December 2020 PA, equals or exceeds $6.15. The Company held its 2021 Annual Shareholders Meeting on ~~an ongoing basis when required by~~May 21, 2021 and obtained shareholder approval for the issuance of more than 19.99% of the shares of the Company’s common stock outstanding.

Lincoln Park has no right to require the Company ~~over a term of 24 months. On August 6, 2019 the Company conducted a Special Meeting of Shareholders whereby the Company received such approval~~ to sell ~~up to 3.2 million~~any shares of common stock ~~under~~to Lincoln Park, but Lincoln Park is obligated to make purchases as the ~~2019 Purchase Agreement. Following effectiveness of a registration statement on Form S-1 relating to the resale of the shares~~Company directs, subject to ~~the 2019 Purchase Agreement on June 18, 2019,~~certain conditions. In all instances, the Company ~~began selling~~may not sell shares of its common stock to Lincoln Park under the ~~terms~~December 2020 PA if it would result in Lincoln Park beneficially owning more than 9.99% of the 2019 Purchase Agreement. On September 11, 2019, October 28, 2019 and February 28, 2020 the Company filed subsequent registration statements on Form S-1, which were declared effective on September 20, 2019, November 7, 2019 and March 6, 2020, respectively, registering for resale additional shares under the 2019 Purchase Agreement. its common stock at any one point in time.

During the ~~quarter~~three and nine months ended ~~June~~September 30, 2021, pursuant to the December 2020 PA with Lincoln Park, the Company sold ~~623,236 shares of common stock for gross proceeds of $593,356. The 2019 Purchase Agreement was terminated in May 2020 with historical sales of 3.2~~1.1 million and 6.1 million shares of common stock for ~~gross~~net proceeds of ~~$7.7 million.~~

~~Securities Purchase Agreement with Lincoln Park~~

~~On May 24, 2019, Westwater entered into a Securities Purchase Agreement, as amended by Amendment No. 1 thereto dated as of May 30, 2019, with Lincoln Park,~~$4.0 million and $34.6 million, respectively. These shares were sold pursuant to a prospectus supplement filed on December 4, 2020, and in accordance with Rule 424(b)(5) as a takedown off the Company’s shelf registration statement, which had been declared effective by the ~~Company agreed to issue~~Securities and sell to Lincoln Park, and Lincoln Park agreed to purchase from the Company (i) 104,294 shares of the Company's common stock and (ii) warrants to initially purchase an aggregate of up to 182,515 shares of common stock, at an exercise price of $5.062 per share. On May 30, 2019, the Company issued and sold the common shares and the warrants to Lincoln Park and received aggregate gross proceeds before expenses of $550,751. The warrants became exercisableExchange Commission (the “Commission”) on ~~November 30, 2019 and were exercised on October 6,~~December 1, 2020.

ATM Offering Agreement with Cantor

On April 14, 2017, the Company entered into a Controlled Equity Offering^SM Sales Agreement (the “ATM Offering Agreement”) with Cantor acting as sales agent. Under the ATM Offering Agreement, the Company may from time to time sell shares of its common stock in “at-the-market” offerings. The Company pays Cantor a commission of up to 2.5% of the gross proceeds from the sale of any shares pursuant to the ATM Offering Agreement. ~~As of~~

During the nine months ended September 30, ~~2020,~~2021, the Company ~~had~~ sold ~~4.1~~9.3 million shares of common stock for net proceeds of ~~$13.9~~$47.3 million ~~under~~pursuant to the ATM Offering Agreement ofwith Cantor. These shares were sold pursuant to a prospectus supplement filed on December 4, 2020, and in accordance with Rule 424(b)(5) as a takedown off the Company’s shelf registration statement, which ~~2.1 million~~had been declared effective by the Commission on December 1, 2020. The Company did 0t sell any shares of common stock pursuant to the ATM Offering Agreement for ~~net proceeds of $3.7 million were sold in~~ the three months ended September 30, ~~2020. During the month of October 2020, the Company registered and sold 7.3 million shares of common stock for net proceeds of $42.0 million under the ATM Offering Agreement.~~ 2021.

As of ~~November 12, 2020,~~September 30, 2021, the Company has ~~no shares of common stock registered~~$50 million available for sale under the ATM Offering ~~Agreement.~~

~~Warrants~~

~~The following table summarizes warrants outstanding~~Agreement, pursuant to a prospectus supplement filed on August 20, 2021, and ~~changes for~~in accordance with Rule 424(b)(5) as a takedown off the ~~three-month periods ending September 30, 2020 and 2019:~~Company’s shelf registration statement on Form S-3, which was declared effective by the Commission on July 8, 2021.

1713

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WESTWATER RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

September 30, 2020

September 30, 2019

Number of

Number of

Warrants

Warrants
Warrants outstanding at beginning of period

186,182

197,621
Issued

—

—
Expired

—

—
Warrants outstanding at end of period

186,182

197,621

On October 6, 2020, Lincoln Park provided notice of its exercise of 182,515 warrants. Lincoln Park elected the cashless exercise method to convert the warrants to shares of common stock. Based on the cashless exercise formula, the Company issued Lincoln Park 118,799 shares of common stock.

Warrants

~~11.~~The following table summarizes warrants outstanding and changes for the nine months ended September 30, 2021 and 2020:


	September 30, 2021	September 30, 2020

	Number of	Number of
	Warrants	Warrants
Warrants outstanding at beginning of period	0	186,182
Issued	0	0
Expired	0	0
Warrants outstanding at end of period	0	186,182

On October 6, 2020, a warrant holder of 182,515 warrants provided notice of exercise. The warrant holder elected the cashless exercise method to convert the warrants to shares of common stock. Based on the cashless exercise formula, the Company issued the warrant holder 118,799 shares of common stock.

8. STOCK-BASED COMPENSATION

Stock-based compensation awards consist of stock options, restricted stock units and bonus shares issued under the Company’s equity incentive plans which ~~include:~~include the 2013 Omnibus Incentive Plan (the “2013 Plan”) and the Amended and Restated 2004 Directors’ Stock Option and Restricted Stock Plan (the “2004 Directors’ Plan”). Upon approval of the 2013 Plan by the Company’s stockholders on June 4, 2013, the Company’s authority to grant new awards under all plans other than the 2013 Plan was terminated. On July 18, 2017, April 18, 2019, ~~and~~ April 28, 2020, and May 21, 2021, the Company’s stockholders approved amendments to the 2013 Plan to increase the authorized number of shares of common stock available and reserved for issuance under the 2013 Plan by 20,000, ~~shares,~~ 66,000, 350,000, and ~~350,000~~1,500,000 shares, respectively, and in 2017 re-approved the material terms of the performance goals under the plan. Under the 2013 Plan, the Company may grant awards of stock options, stock appreciation rights, restricted stock awards, restricted stock units (“RSUs”), unrestricted stock, dividend equivalent rights, performance shares and other performance-based awards, other equity-based awards and cash bonus awards to eligible persons. ~~The maximum number of the Company’s common stock that may be reserved for issuance under the 2013 Plan is currently 416,278 shares of common stock, plus unissued shares under the prior plans.~~ Equity awards under the 2013 Plan are granted from time to time at the discretion of the Compensation Committee of the Board (the ~~“Committee��~~“Committee”), with vesting periods and other terms as determined by the Committee with a maximum term of 10 years. The 2013 Plan is administered by the Committee, which can delegate the administration to the Board, other Committees or to such other officers and employees of the Company as designated by the Committee and permitted by the 2013 Plan.

As of September 30, ~~2020, 58,586~~2021, 1,223,939 shares were available for future issuances under the 2013 Plan. For the three and nine months ~~ending~~ended September 30, ~~2020 and 2019,~~2021, the Company recorded stock-based compensation expense of ~~$169,700~~$0.3 million and ~~$255,000,~~$0.6 million, respectively. Stock compensation expense is recorded in general and administrative expenses.

In addition to the plans above, upon closing of the Company’s acquisition of Alabama Graphite in April 2018, the Company issued 50,168 replacement options and warrants to the option and warrant holders of Alabama Graphite. The number of replacement options and warrants shares was determined using the arrangement exchange rate of 0.0016. The exercise prices for the option and warrant shares were first converted for the exchange rate of 0.0016 and then converted to USD using the exchange rate on December 13, 2017 of 0.77809 (CAD to USD). The options and warrant shares were issued with the same terms and conditions as were applicable prior to the acquisition of Alabama Graphite. As of September 30, 2020, there were 2,840 replacement options outstanding but all replacement warrants have expired.

1814

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WESTWATER RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Stock Options

The following tables summarize stock options outstanding and changes for the ~~three and nine-month periods ending~~nine months ended September 30, ~~2020~~2021 and ~~2019:~~

Three months ended

Three months ended

September 30, 2020

September 30, 2019




Weighted



Weighted

Number of

Average

Number of

Average

Stock

Exercise

Stock

Exercise

Options

Price

Options

Price
Stock options outstanding at beginning of period

161,897

$
9.25

18,546

$
64.49
Granted

—

—

20,942

19.25
Expired

—

—

(1,040)

78.00
Canceled or forfeited

—

—

(550)

19.25
Stock options outstanding at end of period

161,897

$
9.25

37,898

$
39.78
Stock options exercisable at end of period

36,093

$
34.41

37,898

$
39.78

2020:


	Nine months ended			Nine months ended
	September 30, 2020			September 30, 2019			September 30, 2021			September 30, 2020
		Weighted			Weighted			Weighted			Weighted
	Number of	Average		Number of	Average		Number of	Average		Number of	Average
	Stock	Exercise		Stock	Exercise		Stock	Exercise		Stock	Exercise
	Options	Price		Options	Price		Options	Price		Options	Price
Stock options outstanding at beginning of period	37,786	$	37.42	19,170	$	80.00	185,054	$	7.99	37,786	$	37.42
Granted	125,804		1.59	20,942		19.25	94,522		3.91	125,804		1.59
Expired	(1,693)		101.64	(1,664)		78.00	(2,000)		73.54	(1,693)		101.64
Canceled or forfeited	—		—	(550)		19.25
Stock options outstanding at end of period	161,897	$	9.25	37,898	$	39.78	277,576		6.18	161,897		9.25
Stock options exercisable at end of period	36,093	$	34.41	37,898	$	39.78	183,054	$	7.35	36,093	$	34.41

The following table summarizes stock options outstanding and exercisable by stock option plan at September 30, ~~2020:~~2021:


	Outstanding Stock Options			Exercisable Stock Options			Outstanding Stock Options			Exercisable Stock Options
	Number of	Weighted		Number of	Weighted		Number of	Weighted		Number of	Weighted
	Outstanding	Average		Stock Options	Average		Outstanding	Average		Stock Options	Average
Stock Option Plan	Stock Options	Exercise Price		Exercisable	Exercise Price		Stock Options	Exercise Price		Exercisable	Exercise Price
2004 Plan	92	$	1,638.00	92	$	1,638.00	92	$	1,638.00	92	$	1,638.00
2004 Directors’ Plan	3		10,380.00	3		10,380.00	3		10,380.00	3		10,380.00
2013 Plan	158,962		6.92	33,158		25.47	277,481		5.53	182,959		6.36
Replacement Options-Alabama Graphite	2,840		75.94	2,840		75.94
	161,897	$	9.25	36,093	$	34.41	277,576	$	6.18	183,054	$	7.35

~~Table of Contents~~

~~WESTWATER RESOURCES, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

Restricted Stock Units

Time-based and performance-based RSUs are valued using the closing share price of the Company’s common stock on the date of grant. The final number of shares issued under performance-based RSUs is generally based on the Company’s prior year performance as determined by the ~~Compensation~~ Committee ~~of the Board of Directors~~ at each vesting date, and the valuation of such awards assumes full satisfaction of all performance criteria.

The following ~~tables~~table summarizes RSU activity for the ~~three and nine-month periods~~nine months ended September 30, ~~2020~~2021 and ~~2019:~~

Three months ended

Three months ended

September 30,

September 30,

2020

2019




Weighted-



Weighted-

Average

Average

Number of

Grant Date

Number of

Grant Date

RSUs

Fair Value

RSUs

Fair Value
Unvested RSUs at beginning of period

211,497

$
2.03

1,695

$
70.00
Granted

—

—

—

—
Forfeited

—

—

—

—
Vested

—

—

—

—
Unvested RSUs at end of period

211,497

$
2.03

1,695

$
70.00

Nine months ended

Nine months ended

September 30,

September 30,

2020

2019




Weighted-



Weighted-

Average

Average

Number of

Grant Date

Number of

Grant Date

RSUs

Fair Value

RSUs

Fair Value
Unvested RSUs at beginning of period

—

$
—

2,260

$
70.00
Granted

211,497

2.03

—

—
Forfeited

—

—

(565)

70.00
Vested

—

—

—

—
Unvested RSUs at end of period

211,497

$
2.03

1,695

$
70.00

2020:


	September 30,			September 30,
	2021			2020
		Weighted-			Weighted-
		Average			Average
	Number of	Grant Date		Number of	Grant Date
	RSUs	Fair Value		RSUs	Fair Value
Unvested RSUs at beginning of period	236,403	$	2.10	0	$	0
Granted	240,125		3.93	211,497		2.03
Forfeited	0		0	0		0
Vested	(78,801)		2.10	0		0
Unvested RSUs at end of period	397,727	$	3.20	211,497	$	2.03

~~12.~~

9. EARNINGS PER SHARE

Basic and diluted loss per common share have been calculated based on the weighted-average shares outstanding during the period. Additionally, potentially dilutive shares of ~~559,576~~675,303 were excluded from the calculation of earnings per ~~share because the effect on the basic income per share would be anti-dilutive for the nine months ended September 30, 2020.~~

~~13. COMMITMENTS AND CONTINGENCIES~~

The Company’s uranium recovery operations are subject to federal and state regulations for the protection of the environment, including water quality. Future closure and reclamation costs are provided for as each pound of uranium is produced on a unit-of-production basis. The Company reviews its reclamation obligations each year and determines the appropriate unit charge. The Company also evaluates the status of current environmental laws and their potential impact on their accrual for costs. The Company believes its operations are materially compliant with current environmental regulations.

2015

Table of Contents

WESTWATER RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

share because the effect on the basic income per share would be anti-dilutive, as the Company had a net loss for the three and nine months ended September 30, 2021.

10. COMMITMENTS AND CONTINGENCIES

Future operations on the Company’s properties are subject to federal and state regulations for the protection of the environment, including air and water quality. The Company evaluates the status of current environmental laws and their potential impact on current operating costs and accrual for future costs. The Company believes its operations are materially compliant with current environmental regulations.

At any given time, the Company may enter into negotiations to settle outstanding legal proceedings and any resulting accruals will be estimated based on the relevant facts and circumstances applicable at that time. We do not expect that such settlements will, individually or in the aggregate, have a material effect on our financial position, results of operations or cash flows.

~~14.~~11. LEASES

The Company’s lease portfolio consists of operating leases for corporate offices, storage space and equipment. The leases have remaining lease terms of ~~3 months~~1.1 years to 31.8 years, one of which includes an option to extend the corporate office lease for 3 years. Under our corporate office lease, we are required to reimburse the lessor each month for common use expenses such as maintenance and security services. Because these amounts are variable from year to year and not specifically set in the lease terms, they are not included in the measurement of the right-of-use asset and related lease liability, but rather expensed in the period incurred.

The Company is party to several leases that have terms that are ~~for under one~~less than a year in length. These include ~~such~~ leases ~~as those~~ for land used in exploration and mining activities, office equipment, machinery, office space, storage and other. The Company has elected the short-term lease ~~exemptions~~exemption allowed under the new leasing standards, whereby leases with initial terms of one year or less are not capitalized and instead expensed on a straight-line basis over the lease term. In addition, the Company holds ~~numerous~~several leases related to mineral exploration and production to which it has not applied the new leasing standard. Leases to explore or use minerals and similar nonregenerative resources are specifically excluded by ASC ~~842-10.~~842, “Leases.”

The right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities ~~are~~were recognized at the commencement date of the lease based on the present value of lease payments over the lease term using a discount rate of 9.5%. This rate is the Company’s ~~current~~ estimated incremental borrowing ~~rate.~~rate at the lease commencement date.

The components of lease expense are as follows:

Nine months

Nine months

ended

ended

September 30,

September 30,
(thousands of dollars)

2020

2019
Operating Lease Cost

Continuing Operations

$
112

$
112
Discontinued Operations

4

4

$
116

$
116

~~Supplemental cash flow information related to the Company’s operating leases is as follows:~~

Nine months

Nine months

ended

ended



September 30, 2020

September 30, 2019
(thousands of dollars)

Continuing Operations

Discontinued Operations

Continuing Operations

Discontinued Operations
Cash paid for amounts included in lease liabilities:

Cash flows from operating leases

$
115
$
4
$
113
$
4

Right-of-use assets obtained in exchange for lease obligations:





Operating leases

$
383
$
10
$
498
$
15

2116

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WESTWATER RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Supplemental cash flow information related to the Company’s operating leases is as follows:


	For the Nine Months Ended
	September 30,
(thousands of dollars)	2021		2020
Cash paid for amounts included in lease liabilities:
Operating cash flows from operating leases	$	115	$	115

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	258	$	383

Supplemental balance sheet information related to the Company’s operating leases is as follows:


	September 30,				December 31,
	2020				2019				September 30,		December 31,
(thousands of dollars, except lease term and discount rate)		Continuing Operations		Discontinued Operations		Continuing Operations		Discontinued Operations	2021		2020
Operating Leases
Operating lease right-of-use assets	$	383	$	10	$	470	$	14	$	258	$	353

Current portion of lease liabilities		149		10		147		6		151		149
Operating lease liabilities – long term portion		245		—		332		8		117		214
Total operating lease liabilities	$	394	$	10	$	479	$	14	$	268	$	363

Weighted-average remaining lease term and discount rate for the Company’s operating leases are as follows:


					For the Three Months Ended
	September 30,		September 30,		September 30,
	2020		2019		2021		2020
Weighted Average Remaining Lease Term (in years)	3.0		4.0		1.8		3.0

Discount Rate	9.5	%	9.5	%	9.5	%	9.5	%

Maturities of lease liabilities for the Company’s operating leases are as follows:


	September 30,
	2020
Lease payments by year (In thousands)		Continuing Operations		Discontinued Operations
2020 (remainder of year )	$	38	$	2
2021		155		6
Lease payments by year					September 30,
(in thousands)					2021
2021 (remainder of year)					$	39
2022		158		4		158
2023		92		—		92
Total lease payments		443		12		289
Less imputed interest		(49)		(2)		(21)
Total Operating Lease Liability	$	394	$	10
Total					$	268

As of September 30, ~~2020,~~2021, the Company has ~~$0.4~~$0.3 million in right-of-use assets and ~~$0.4~~$0.3 million in related lease liabilities ($~~0.1~~0.2 million of which is current). The most significant operating lease is for ~~its~~the Company’s corporate office in Centennial, Colorado, with ~~$0.4~~$0.3 million remaining in undiscounted cash payments through the end of the lease term in 2023. The total undiscounted cash payments remaining on operating leases through the end of their respective terms is ~~$0.4~~$0.3 million.

All but one operating lease are part of the company’s Continuing Operations. In May 2017 the Company’s wholly-owned subsidiary, URI, Inc. entered into an irrevocable 63 month equipment and servicing lease for a Toshiba copier used in its office in Kingsville, Texas. This lease is included in the disposal group that will be transferred to enCore in the sale of the Company’s U.S. uranium properties expected to close by year-end 2020. At September 30, 2020, there was 22 months left on the lease with a right-of-use asset balance of approximately $10,000 and a related lease liability for the same amount. These balances are included in assets held for sale and liabilities related to assets held for sale on the balance sheet. Monthly lease payments are included in the Income/Loss from Discontinued Operations.

2217

Table of Contents

WESTWATER RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

~~15. GEOGRAPHIC AND SEGMENT INFORMATION~~

In addition to its corporate operations, the Company currently operates a graphite battery-materials reportable segment. During the quarter ended September 30, 2020, the Company made the strategic decision to sell its uranium business and discontinue its lithium business, both of which conducted exploration, standby operations and restoration and reclamation activities (see Note 8). As a result of entering into the LOI to sell the uranium business and the Company’s decision to discontinue investment into its lithium business, the Company has reclassed all uranium and lithium business activities as discontinued operations.

The reportable segments are those operations whose operating results are reviewed by the Chief Executive Officer to make decisions about resources to be allocated to the segment and assess its performance provided those operations pass certain quantitative thresholds. Operations whose revenues, earnings or losses or assets exceed or are expected to exceed 10% of the total consolidated revenue, earnings or losses or assets are reportable segments. Information about current assets and liabilities of the segments has not been provided because the information is not used to assess performance.

~~The tables below provide a breakdown of the long-term assets by reportable segments as of September 30, 2020 and December 31, 2019:~~

September 30, 2020
(thousands of dollars)

Corporate

Graphite

Total

Net property, plant and equipment

$
24

$
8,972

$
8,996
Restricted cash

797

10

807
Operating lease right of use assets

383

—

383
Total long-term assets

$
1,204

$
8,982

$
10,186

December 31, 2019
(thousands of dollars)

Corporate

Graphite

Total

Net property, plant and equipment

$
23

$
8,972

$
8,995
Restricted cash

787

10

797
Operating lease right of use assets

470

—

470
Total long-term assets

$
1,280

$
8,982

$
10,262

The tables below provide a breakdown of the reportable segments for the three months ended September 30, 2020 and September 30, 2019. Non-mining activities and other administrative operations are reported in the Corporate column.

Three months Ended

September 30, 2020
(thousands of dollars)

Corporate

Graphite

Total
Statement of Operations




Mineral property expenses

$
—

$
12

$
12
Product development expenses

—

1,641

1,641
General and administrative expenses

1,347

189

1,536
Arbitration expenses

171

—

171
Depreciation and amortization

(19)

—

(19)

1,499

1,842

3,341
Loss from operations

(1,499)

(1,842)

(3,341)
Other income/(expense)

(21)

—

(21)
Loss before taxes

$
(1,520)

$
(1,842)

$
(3,362)

~~Table of Contents~~

~~WESTWATER RESOURCES, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

Three months Ended

September 30, 2019
(thousands of dollars)

Corporate

Graphite

Total
Statement of Operations






Mineral property expenses

$
—

$
12

$
12
Product development expenses

—

19

19
General and administrative

936

67

1,003
Arbitration expenses

146

—

146
Depreciation and amortization

3

—

3

1,085

98

1,183
Loss from operations

(1,085)

(98)

(1,183)
Other income

13

—

13
Loss before taxes

$
(1,072)

$
(98)

$
(1,170)

The tables below provide a breakdown of the reportable segments for the nine months ended September 30, 2020 and September 30, 2019. Non-mining activities and other administrative operations are reported in the Corporate column.

Nine months Ended

September 30, 2020
(thousands of dollars)

Corporate

Graphite

Total
Statement of Operations






Mineral property expenses

$
—

$
18

$
18
Product development expenses

—

1,942

1,942
General and administrative

3,630

476

4,106
Arbitration expenses

868

—

868
Accretion of asset retirement costs

—

—

—
Depreciation and amortization

5

—

5

4,503

2,436

6,939
Loss from continuing operations

(4,503)

(2,436)

(6,939)
Other income

(7)

—

(7)
Loss before taxes

$
(4,496)

$
(2,436)

$
(6,932)

Nine months Ended

September 30, 2019
(thousands of dollars)

Corporate

Graphite

Total
Statement of Operations







Mineral property expenses

$
—

$
77

$
77
Product development expenses

—

51

51
General and administrative

3,300

283

3,583
Arbitration expenses

631

—

631
Accretion of asset retirement costs

—

—

—
Depreciation and amortization

5

—

5

3,936

411

4,347
Loss from continuing operations

(3,936)

(411)

(4,347)
Other (expense)

(384)

—

(384)
Loss before taxes

$
(4,320)

$
(411)

$
(4,731)

~~Table of Contents~~

~~16. NOTES PAYABLE~~

~~Loan under the Paycheck Protection Program (PPP)~~12. SUBSEQUENT EVENTS

On ~~May 4, 2020, URI, Inc,~~October 13, 2021, Alabama Graphite Products, LLC (“AGP”), a ~~wholly owned~~wholly-owned subsidiary of Westwater, ~~received loan proceeds in~~completed the ~~amount~~purchase of $0.3 million under the Paycheck Protection Program (“PPP”) in accordance with the terms of a promissory note executed in favor of Celtic Bank Corporation, a Salt Lake City based Small Business Administration (“SBA”) Preferred Lender.2 buildings that total 90,000 sq. ft. for approximately $3.1 million. The ~~PPP, established as part~~purchase of the ~~Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for forgivable loans~~2 buildings supports the development of AGP’s Coosa Graphite Project, as both buildings are adjacent to ~~qualifying businesses for amounts up to 2.5 times~~the future site of the ~~average monthly payroll expenses~~planned processing plant, and will be used for administrative offices, laboratory, and warehousing space.

Table of the qualifying business. The loan and accrued interest are forgivable as long as the borrower uses the loan proceeds for eligible purposes, including payroll costs, rent and utilities. No more than 40% of the amount forgiven can be attributable to non-payroll costs. Any unforgiven portion of the PPP loan is payable over two years at an interest rate of 1%. The deadline to apply for loan forgiveness is the maturity date of the loan, which is April 30, 2022. As part of the Flexibility Act, the deferral period for loan payments increased from 6 months to 10 months after the end of the borrower’s loan forgiveness covered period. Our 24-week covered period began when loan proceeds were received May 4, 2020 and ended October 19, 2020. Based on the changes to the deferral period, the Company has until August 19, 2021 to apply for loan forgiveness before payments on the principal, interest and fees are due.Contents

The Company used the proceeds for funding its payroll and benefits costs for the restart of South Texas operations, purposes consistent with the PPP. The Company’s South Texas operations were shut down and employees furloughed in March 2020 due to the severe downturn in the capital markets and uncertainty about when economic conditions would return to normal. While the Company currently believes that its use of the loan proceeds will meet the conditions for forgiveness of the loan and is in the process of preparing the SBA’s forgiveness application, no assurance can be provided that the Company will obtain forgiveness of the loan, in whole or in part. At September 30, 2020, the loan proceeds are included in Current Liabilities Held for Sale on the Condensed Consolidated Balance Sheets. See also Note 8.

~~17. SUBSEQUENT EVENT – CAPITAL RAISE~~

During the month of October 2020, the Company sold 7.3 million shares of common stock for net proceeds of $42.0 million pursuant to the ATM Offering Agreement with Cantor Fitzgerald & Co. These shares were sold pursuant to a prospectus supplement filed on October 8, 2020 pursuant to Rule 424(b)(5) as a takedown off the Company’s shelf registration statement which had been declared effective by the Securities and Exchange Commission on April 13, 2020.

Also during the month of October 2020, the Company sold 1.1 million shares of common stock for net proceeds of $8.2 million pursuant to the 2020 Purchase Agreement with Lincoln Park. These shares were sold pursuant to a Form S-1 registration statement filed pursuant to Rule 424(b)(3) and declared effective by the Securities and Exchange Commission on October 2, 2020.

The receipt of combined net proceeds in the amount of $50.2 million from these financing facilities has resulted in a cash balance of approximately $53.3 million at October 31, 2020. The significant treasury balance has mitigated the Company’s capital risk through 2021 as the Company’s budgeted pilot plant program for processing battery-grade graphite and the remaining budgeted product development costs are now fully funded.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following management’s discussion and analysis of the consolidated financial results and condition of Westwater for the three and nine months ended September 30, ~~2020~~2021, has been prepared based on information available to

~~Table of Contents~~

us as of November ~~12, 2020.~~10, 2021. This discussion should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and notes thereto included herewith and the audited Consolidated Financial Statements of ~~WWR~~Westwater for the period ended December 31, ~~2019~~2020 and the related notes thereto filed with our Annual Report on Form 10-K, which have been prepared in accordance with U.S. GAAP. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including, but not limited to, those set forth elsewhere in this report. See “Cautionary Note Regarding Forward-Looking ~~Statements.”~~Statements” herein.

INTRODUCTION

Westwater Resources, Inc. is a ~~40-year-old~~44-year-old public company trading on the ~~Nasdaq Capital Market~~NYSE American Stock Exchange (“NYSE American”) focused on battery graphite development under the symbol ~~“WWR.~~“WWR.” Originally incorporated in 1977 as Uranium Resources, Inc. to mine uranium in Texas, our company ~~has been reborn as~~pivoted to an energy materials developer. Westwater ~~now~~ is focused on ~~battery-ready~~battery-grade graphite materials after its acquisition of Alabama Graphite Corp. (“Alabama Graphite”) and its Coosa Graphite Project (“Coosa Project”) in Alabama in April 2018. ~~Westwater recently discovered significant vanadium concentrations at~~Combined with the ~~Coosa Project and has developed~~anticipated construction of a battery graphite processing facility near Kellyton, Alabama, the Company is executing an exploration plan to further investigate the size and extent of ~~those concentrations.~~mineral concentrations at Coosa graphite deposit, located near Rockford, Alabama, to increase our knowledge of the deposit as a whole.

RECENT DEVELOPMENTS

~~Sale~~Graphite Processing Pilot Programs

During the quarter ended September 30, 2021, the Company continued, and in October 2021 substantially completed, its pilot program at Dorfner Anzaplan’s facilities near Amberg, Germany, as well as at facilities in Frankfurt, Germany, Chicago, Illinois and Buffalo, New York. The combined effort at these facilities produced approximately 13 metric tonnes of ~~Uranium Business~~

~~On September 1, 2020, Westwater signed~~Westwater’s three battery-grade graphite products: ULTRA-PMG™, ULTRA-CSPG™ and ULTRA-DEXDG™, which were previously produced at a binding letter of intent (“LOI”) to sell its U.S. uranium assets located in New Mexico and Texas to enCore Energy Corp. (“enCore”), a corporation incorporated under the laws of British Columbia, Canada, and a Toronto Venture Exchange-listed company (TSX.V:EU). Total compensation accruing to Westwater as part of the deal is expected to be in excess of $2.0 million in enCore shares and royalties from future production from Westwater’s New Mexico uranium properties. All remaining reclamation liabilities and bonding obligations for the Company’s Texas uranium properties will be transferred to enCore at the time of sale, with the transaction expected to close on or before December 31, 2020. The transaction is subject to further due diligence, the execution of a definitive agreement, and other customary conditions., and there can be no assurance that the transaction will be completed. The transaction does not include Westwater’s uranium interests in Turkey, which are subject to an ongoing international arbitration proceeding.bench scale.

As ~~a result~~ of September 30, Westwater had produced through the ~~estimated value of consideration received~~pilot program:

●

10.8 metric tonnes of ULTRA-PMG™ in six sizes (6, 8, 10, 15, 30 and 44 microns): Production is now complete, and samples will be packaged and shipped to a laboratory for testing.

●

2.0 metric tonnes of the precursor (Spherical Purified Graphite) for ULTRA-CSPG™ in three sizes (10, 18 and 24 microns): Production of this product is now complete and has been sent to a laboratory for pitch coating to make ULTRA-CSPG™, and test its electrical performance.

●

0.4 metric tonnes of ULTRA-DEXDG™: Production is now complete and samples were packaged and shipped to a laboratory for testing.

Westwater undertook its pilot program operations to inform and ~~carrying values of asset/liabilities transferred, the Company has recorded a $5.2 million impairment charge. However,~~enhance design work for its commercial production facility and importantly, the Company will continue its participation in the uranium sector as a significant shareholder of enCore and a royalty holder on the New Mexico uranium properties, while transferring responsibilityto produce products for remaining reclamation to enCore. At the same time, the Company expects to save over $4.0 million per year for the next several years in land payments, reclamation expenses and operating costs associated with the uranium properties, funds that can be invested in developing our graphite business.testing by potential customers. The successful closing of this transaction will complete the Company’s strategic shift to battery graphite materials, and will allow the Company to devote its full focus and attention on advancing its battery-grade graphite product business.

~~Graphite Business Developments~~

Westwater’s graphite business plan continues without pause. Westwater remains focused on the battery materials markets, the end markets for those products, and the role that can be played in supplying critical materials to serve them.

~~In June 2020, Westwater announced that independent testing of Westwater’s ULTRA-PMG~~^TM battery graphite material has shown outstanding resistivity values as a conductive additive. This milestone achievement is a critical step in developing Westwater’s battery graphite business. ULTRA-PMG^TM ~~is one of the key products in the Coosa Project business plan being produced at laboratory-scale using proprietary processes that Westwater intends to utilize in~~information from the pilot program ~~later this year. Successful performance testing demonstrates that Westwater can manufacture ULTRA-PMG~~^TM ~~as a premium-grade, conductive enhancement material for all types of batteries at larger scale.~~was incorporated into the Definitive Feasibility Study (“DFS”).

Definitive Feasibility Study on the Coosa Graphite Project

~~Table of Contents~~

~~In July 2020, Westwater~~On October 11, 2021, the Company announced ~~that independent performance testing of Westwater’s ULTRA-CSPG~~^TM (Coated Spherical Purified Graphite "CSPG”) material produced in a laboratory setting shows that it performs as well or better than benchmark commercially available natural flake and synthetic materials. ULTRA-CSPG^TM ~~is Westwater’s anode material which is utilized in lithium ion batteries, which are used in~~ the ~~fast-growing electric vehicle market. Current estimates~~results of the ~~savings in CO2 emissions once our projected plant reaches full production range above 322,000 metric tons per year through~~DFS pertaining to Phase I of its Coosa Graphite Processing Facility (the “Project”). The Company intends to develop the ~~use of our ULTRA-CSPG~~^TM~~U product in electric vehicles her in the United States.~~

~~In August 20, 2020, Westwater announced it had engaged Dorfner Anzaplan of Hirschau, Germany~~Project to ~~execute its pilot plant that will advance the development of processes needed to~~ purify natural graphite concentrates and to produce ~~Westwater’s~~ battery ~~grade products: ULTRA-PMG~~^TM~~, ULTRA-CSPG~~^TM ~~and ULTRA-DEXDG~~^TM~~. Dorfner Anzaplan is an internationally recognized and highly regarded organization that specializes~~ready graphite products in high-purity industrial and strategic metals businesses. Dorfner Anzaplan will employ state-of-the-art analytical methods and facilities and use innovative processing technologies to provide effective solutions tailored to Westwater’s requirements. Planning and constructiontwo phases. The capital costs of ~~an operational pilot plant is underway, and operation~~Phase I of the ~~pilot plant~~Project are

Table of Contents

estimated at $202 million. Beginning in early 2023, the Project is ~~anticipated by~~expected to begin producing from purchased feedstock from outside sources until at least 2028, after which the Company expects to produce graphite feedstock from its Coosa Project. After processing and purification, the Company expects approximately 7,500 mt per year of two products to be commercially available in the following quantities:

●

CSPG: 3,700 mt per year

●

Fine Products from SPG milling: 3,800 mt per year

●

Project Duration: 35 years

●

Pre-Tax NPV-8 percent: $119 million

●

IRR: 15%

●

Annual Pre-Tax Cash Flow (After the year 2024): $24 million per year

●

Project Pre-Tax Cash Flow: $656 million.

Also on October 11, 2021, the Company announced a plan and design for Phase II of the project at a pre-feasibility level (“PFS”). The PFS for Phase II of the Project estimates capital costs of $464 million, and after processing and purification, the Company expects approximately 32,400 mt per year of two products will be available in the following quantities:

●

CSPG: 15,800 mt per year

●

Fine Products from SPG milling: 16,600 mt per year

●

Project Duration: 35 years

●

Pre-Tax NPV-8 percent: $767 million

●

IRR: 20.5%

●

Average Annual Pre-Tax Cash Flow (After the year 2024): $129 million

●

Project Pre-Tax Cash Flow: $3.7 billion

The Company intends to initiate a DFS for Phase II upon completion and commissioning of Phase I of the Project.

Approval of Construction of Phase I and Purchase of Industrial Space

On October 11, 2021,the Company’s Board of Directors approved estimated expenditures of $202 million to execute the construction and commissioning plan for Phase I of the Project. Construction related activities are expected to begin before the end of 2021.

In addition, on October 13, 2021 the ~~year.~~Company completed the purchase of two buildings by its subsidiary, Alabama Graphite Products, LLC, that total 90,000 sq. ft. in size, to support the development of the Project. These buildings will be used for administrative offices, a laboratory, and warehousing space, and each are adjacent to the planned processing plant. The purchase of these two buildings avoids the need for certain construction activities.

Vanadium Target Identification

In late November 2018, Westwater ~~has developed proprietary processes~~announced the discovery of a concentration of vanadium mineralization at several locations in the graphitic schists at the Coosa Project. Westwater subsequently commenced the first of a four-phase exploration program designed to determine the extent, character and quality of the vanadium mineralization at the Coosa Project. The first phase demonstrated widespread positive values for vanadium that extended beyond the graphite deposit, as defined in the 2015 Preliminary Economic Assessment for the production of battery grade graphite from non-Chinese sources that are designed to manufacture high performing products while ensuring a sustainable environmental footprint and low production costs. Test work on the products from these processes has been performed already in laboratories in Germany and the United States, and those results show that the performancesite.

The second phase of the ~~Coosa Project’s graphite~~vanadium exploration project began in April 2021 and is ~~on par with or exceeds that of currently available battery products. The next step in Westwater’s development process is~~expected to continue throughout the ~~operation of a pilot plant that is designed to process approximately 30-tonnes of graphite concentrate and to produce more than ten metric tons of ULTRA-PMG~~^TM~~, ULTRA-CSPG~~^TM ~~and ULTRA-DEXDG~~^TM ~~products, now scheduled for the fourth quarter of this year and the first quarter of 2021.~~

Westwater has filed a provisional patent application with the U.S. Patent and Trademark Office for its proprietary graphite purification technology. This proprietary process, which does not utilize hydrofluoric acid, is a purification methodology that has a more environmentally sustainable footprint than those processes currently used in China and elsewhere. Our purification process is an integral component in our pilot plant program, which we announced on August 8, 2020. Westwater also announced the filingremainder of the ~~Provisional Patent application on September 8, 2020.~~

~~The invention claimed in~~year. Scope for this effort includes drilling various targets to expand the provisional patent application relates to a method of obtaining highly purified graphite – having a graphitic carbon (Cg) grade of at least 99.95% – from a natural flake graphite concentrate sample. The method consists of three steps: (1) caustic roastingCompany’s knowledge of the ~~graphite concentrate sample; (2) acid leaching~~geology, examining the core and/or cuttings for mineral constituents, and adding to the existing geologic model. In addition, vanadium mineralization is expected to be evaluated using extractive metallurgy techniques to ascertain any economic potential.

Table of the roasted sample; and (3) thermal treatment of the sample. Additional steps involving water washing and drying are included in some methods. The methods provided in the application may further include any combination of varying the weight percentage of the caustic solution, varying the temperature of and time for the caustic roasting, varying the temperature of and time for the acid leaching, and/or varying the temperature of, time for, and the atmosphere used in the thermal treatment.Contents

~~Sales and Marketing Executive~~

Westwater hired Jay Wago as Vice President – Sales and Marketing on July 1, 2020. Mr. Wago is a proven sales leader, whose unique skills and experience will be instrumental in leading Westwater’s sales and marketing efforts for our battery graphite materials business. The addition of Mr. Wago will help position Westwater to scale its marketing efforts to generate greater awareness of our American-made battery graphite materials to end-users throughout the world.

Graphite and Vanadium Listed as Critical Materials

On ~~September 30, 2020,~~February 24, 2021, the President signed an Executive Order ~~(the “Order”)~~ that ~~addresses~~seeks to provide for more resilient supply chains to revitalize and rebuild domestic manufacturing capacity and maintain America’s competitive edge in research and development. Graphite and vanadium are specifically named as critical minerals in which the ~~threat~~United States is heavily dependent on China for its supply.

The President’s declaration asked the Secretary of Energy, as part of larger study involving several branches of the United States government, to submit a report identifying risks to the ~~U.S.~~supply chain for high-capacity batteries including those that power electric vehicles. On June 8, 2021, the White House released a response to the findings of this study in support of securing an end-to-end domestic supply chain ~~from reliance~~for advanced batteries, including investment in domestic production and processing of critical minerals. Key recommendations in the June 8, 2021 release include, among other things, providing funding and financial incentives to encourage consumer adoption of electric vehicles, providing financing to support advanced battery production, and investing in the development of next generation batteries. The February 2021 Executive Order and the key recommendations in the June 8, 2021 White House release, builds upon the prior Administration’s Executive Order issued on September 30, 2020, related to critical minerals, ~~from foreign adversaries. The critical minerals referred~~and could be important to ~~in the Order were previously identified by the Department of Interior in May 2018, and include both natural graphite and vanadium.~~

~~Table of Contents~~

~~The President’s declaration that the United States' heavy reliance on foreign nations for critical minerals is a national emergency, highlights the importance of the~~ Westwater’s plans to develop ~~the Coosa Graphite Deposit in east-central Alabama. Westwater’s~~its battery graphite business ~~plan for the Coosa Graphite Project over the next two and a half years is to develop a U.S. domestic supply for natural graphite for use in all types of batteries~~ in the United States. ~~During recent exploration activities along~~

Presently, the ~~Roscoe Ridge at the mine site, Westwater has also discovered wide spread and significant levels of vanadium mineralization.~~

~~The U.S.~~United States is almost 100% dependent on imports for battery-grade graphite, which is currently the primary anode material in ~~lithium-ion~~the Lithium-Ion batteries that power smartphones, laptops, electric vehicles, and ~~stores~~store power generated from intermittent renewable energy sources. ~~Graphite, was specifically named as one~~Westwater intends to develop the Coosa Project to supply natural flake graphite for beneficiation into battery-grade graphite for all types of the critical minerals in which the U.S. is heavily dependent on China for its supply. Also, vanadium is an essential component in the manufacture of high-strength steel, is used as a catalyst in chemical manufacturing, and is also used as a component in the manufacturing of some ceramic, glass and pigment products. The U.S. imports virtually all of its industrial vanadium requirements from mines located in South Africa, China and Russia.

In the Order the President says, "a strong America cannot be dependent on imports from foreign adversaries for the critical minerals that are increasingly necessary to maintain our economic and military strength in the 21st century." The President said the heavy dependence on imports for critical minerals makes the U.S. vulnerable to adverse foreign government action, natural disaster, or other supply disruptions.

"I therefore determine that our nation's undue reliance on critical minerals, in processed or unprocessed form, from foreign adversaries constitutes an unusual and extraordinary threat, which has its source in substantial part outside the United States, to the national security, foreign policy, and economy of the United States. I hereby declare a national emergency to deal with that threat," President Trump penned in the Executive Order.batteries.

Further details on ~~President Trump's critical mineral~~the Executive Order on America’s Supply Chains can be ~~read at:~~ found at https://www.whitehouse.gov/briefing-room/presidential-actions/~~executive-order-addressing-threat-domestic-supply-chain-reliance-critical-minerals-foreign-adversaries~~2021/02/24/executive-order-on-americas-supply-chains/.

Further details on the June 8, 2021 White House press release can be found at https://www.whitehouse.gov/briefing-room/statements-releases/2021/06/08/fact-sheet-biden-harris-administration-announces-supply-chain-disruptions-task-force-to-address-short-term-supply-chain-discontinuities/

Westwater ~~is uniquely positioned~~intends to ~~benefit from~~support the ~~action~~efforts by the ~~U.S. government is taking~~relevant United States governmental agencies to ensure that ~~the United States and its technology manufacturers can rely on a safe and secure source~~they remain aware of graphite to drive our next generation of power and technology needs and possibly to meet needs for vanadium as well. The action by the President orders the Office of Science and Technology, the Secretary of Defense, the Secretary of Energy and the Secretary of the Interior to provide guidance to clarify which minerals and projects are eligible for government support, which can include loans or grants, under Title XVII of the Energy Policy Act of 2005. Furthermore, these agencies are directed along with the Secretary of Commerce, the Administrator for the Environmental Protection Agency and the Secretary of the Army, to use all available authorities to accelerate the issuance of permits in connection with expanding and protecting the U.S. domestic supply chain for minerals such as graphite.

~~Westwater is evaluating the Order and how best to approach the relevant agencies in the U.S. Government to emphasize~~ the importance of ~~battery~~battery-grade graphite, its importance to the nation’s security, and how the Coosa Graphite Project ~~in Alabama~~ fits into the ~~enactment of~~ critical ~~minerals policy.~~minerals-equation.

~~Global~~The COVID-19 Pandemic and our Actions to Ensure Safety

On March 11, 2020, the World Health Organization designated COVID-19 as a global pandemic. The pandemic spread outside of China during the first quarter of 2020 and has impacted businesses and economies throughout the world. In the U.S., many state and local governments have, based on local conditions, either recommended or mandated actions to slow the transmission of COVID-19. These measures range from limitations on crowd size ~~together with closures of bars and dine-in restaurants,~~to masking to mandatory orders for non-essential citizens to ~~“shelter in place” or “stay at home” until further direction.~~test and quarantine. Borders between many countries have been closed to contain the spread of COVID-19. Uncertainty with respect to the economic effects of the pandemic has introduced significant volatility in the financial markets.

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This pandemic, and the resultant uncertain economic conditions it has created, could adversely affect our operations, major facilities, or employees’ health. Westwater has the following priorities while managing business activities during this period of volatility and uncertainty:

●

~~First, to ensure the health and safety of employees and the communities where they work.~~

●

~~Second, to work with business partners to maintain the advanced graphite product development schedule.~~

●

~~Third, to ensure adequate financial liquidity to support key operations and business activities.~~

Westwater’s corporate business activities are largely unaffected at this time. Even though Westwater has reduced utilization of its offices, remote working arrangements were instituted to ensure that employees were able to work remotely using systems that already were in place. Westwater’s continued focus on the health and safety of employees, the safety of operations, and the safety of the communities in which our employees live and work remains paramount. To that end, Westwater eliminated unnecessary travel, instituted health protocols for working together, and ensured that employees are permitted to take time off due to illness or the illness of those around them without penalty. As a result, our corporate business activities will continue on as before, without interruption.

During this quarter, our South Texas employees continued to perform normal reclamation and compliance work activities without incident, while utilizing protocols enacted by Westwater management earlier in the year.

To the extent that the ~~COVID-19~~COVID 19 pandemic continues or worsens, including by reason of the emergence of variant strains of the virus, local governments or governmental agencies may impose additional restrictions. The result of ~~COVID-19~~COVID 19 and those restrictions could result in a number of adverse impacts to Westwater’s business, including but not limited to additional disruption to the economy, additional work restrictions, and supply chains being interrupted, slowed, or rendered inoperable. As a result, it may be challenging to obtain and process raw materials to support business needs, and individuals could become ill, quarantined, or otherwise unable to work and/or travel due to health reasons or governmental restrictions. ~~Also, governments~~Governments may also impose other laws, regulations or taxes which could adversely impact Westwater’s business, financial condition or results of operations. The potential effects of ~~COVID-19~~COVID 19 could also impact Westwater in a number of other ways including, but not limited to, laws and regulations affecting business, the availability of future borrowings, the cost of borrowings, and potential impairment of the carrying value of long-lived tangible assets.

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~~Payroll Protection Loan~~This pandemic, and the uncertain economic conditions it has created, could adversely affect our operations, major facilities, or employees’ health. Westwater has the following priorities while managing business activities during this period of volatility and uncertainty:

●

First, to ensure the health and safety of our employees and the communities where they work.

●

Second, to work with our business partners to maintain the advanced graphite product development schedule in a safe and measured manner.

●

Third, to ensure the Company has access to adequate financial liquidity to support key operations and business activities.

Westwater’s corporate business activities are largely unaffected at this time by the COVID-19 pandemic. Prior to March 1, 2021, Westwater reduced utilization of its offices and remote working arrangements were instituted to ensure that some employees were able to work remotely using systems that already were in place. On ~~May 4, 2020, URI, Inc, a wholly owned subsidiary~~March 1, 2021, Westwater reopened its Centennial corporate facility and allowed employees to return to the office to work together with appropriate health protocols in place. Westwater’s continued focus on the health and safety of ~~Westwater, received loan proceeds in~~employees, the ~~amount~~safety of ~~$0.3 million under~~operations, and the Paycheck Protection Program in accordance with the terms of a promissory note executed in favor of Celtic Bank Corporation, a Salt Lake City based SBA Preferred Lender. The loan and accrued interest are forgivable as long as the loan proceeds are used for eligible purposes, including payroll and benefits costs, rent and utilities. Any unforgiven portionsafety of the ~~PPP loan is payable over two years at an interest rate~~communities in which our employees live and work remains paramount. To that end, Westwater has continued to restrict unnecessary travel, and ensured that employees are permitted to take time off due to illness or the illness of 1%. Payments of principal and interest are deferred until 10 months after the end of the 24-week covered period beginning on the day loan proceeds were received. URI’s covered period ended on October 19, 2020 making the first payment of any unforgiven amount due August 19, 2021.those around them without penalty.

The Company used the loan proceeds for funding its payroll and benefits costs for its South Texas operations over 10 weeks during the months of May, June and July, purposes consistent with the PPP. The deadline to apply for loan forgiveness is the maturity date of the loan, April 30, 2022. Celtic Bank is currently developing an online forgiveness application for its borrowers in order to streamline the process. The Company plans to apply for loan forgiveness as soon as the lender makes the electronic application available. While the Company currently believes that its use of the loan proceeds meets the conditions for forgiveness of the loan, no assurance can be provided that the Company will obtain forgiveness of the Loan, in whole or in part.

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Equity Financings

~~Significant~~ Capital ~~Raise in October Pursuant to Sales Agreement with Cantor Fitzgerald~~Raises during three and nine months ended September 30, 2021

~~Between~~During the three months ended September ~~9, 2020 and October 26, 2020,~~30, 2021, the Company sold ~~9.5~~1.1 million shares of common stock for ~~gross proceeds of $46.9 million and~~ net proceeds of ~~$45.7~~$4.0 million pursuant to ~~its Controlled Equity Offering Sales Agreement (”ATM Offering Agreement”)~~the December 2020 PA entered into with ~~Cantor Fitzgerald & Co. (“Cantor”). These shares were sold pursuant to two prospectus supplements filed pursuant to Rule 424(b)(5) as takedowns off~~Lincoln Park.

During the ~~Company’s base shelf registration statement which had been declared effective by~~nine months ended September 30, 2021, the ~~Securities and Exchange Commission on April 13, 2020.~~

~~The receipt of~~Company received net proceeds ~~in the amount~~ of ~~$45.7~~$81.9 million from ~~the ATM Offering Agreement combined with the receipt of net proceeds in the amount of $11.7 million from sales of common stock to Lincoln Park, as noted below, has resulted~~its equity facilities, resulting in a cash balance of approximately ~~$53.3~~$119.0 million at ~~October 31, 2020.~~September 30, 2021. The significant treasury balance has mitigated the Company’s capital risk through 2021 and 2022 as the Company’s budgeted pilot ~~plant~~ program for processing battery-grade graphite and the remaining budgeted product development costs are now fully ~~funded, and the~~funded. The Company ~~will be able to make~~anticipates making a substantial initial investment in the ~~commercial graphite plant~~Project in the ~~latter half~~fourth quarter of 2021.

~~2020 Purchase Agreement (“2020 Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”)~~Transfer of Common Stock Listing to the NYSE American Stock Exchange

~~At the Annual Shareholders Meeting conducted on April 28, 2020,~~

On March 8, 2021, the Company, ~~received shareholder approval~~acting pursuant to ~~sell up~~authorization from its Board of Directors, determined to ~~8.0 million shares~~voluntarily withdraw the listing of the Company's common stock, ~~under~~par value $0.001 per share, from The Nasdaq Capital Market (“Nasdaq”) and transfer the ~~2020 Purchase Agreement. On May 21, 2020,~~listing to the NYSE American. The Company ~~entered into~~informed Nasdaq on March 8, 2021, of its intent to transfer the ~~2020 Purchase Agreement, as amended~~listing of its common stock to the NYSE American. The Company’s listing and trading of its common stock on ~~May 29, 2020, with Lincoln Park to place up to $12.0 million in~~Nasdaq ended at market close on March 18, 2021, and trading began on the ~~aggregate of the~~NYSE American on March 19, 2021. The Company’s common stock on an ongoing basis when required by the Company over a term of 24 months. As an initial purchase on May 21, 2020, Lincoln Park bought $250,000 worth of Common Stock of the Company at a price of $1.2989 per share. The Company issued 156,250 shares of Common Stockcontinues to ~~Lincoln Park as consideration for its commitment to purchase shares of Common Stock~~trade under the ~~2020 Purchase Agreement.~~

The Company entered into a registration rights agreement with Lincoln Park pursuant to which the Company filed registration statements on Form S-1 with the SEC, which were declared effective on June 26, 2020 relating to the resale of an initial tranche of 1,971,000 shares and October 4, 2020 relating to the resale of 3,243,000 shares. During the period from July 8, 2020 to October 6, 2020, the Company sold 2.8 million shares of common stock for net proceeds of $11.7 million.

~~Turkish Government Taking of Temrezli and Sefaatli Licenses and Westwater’s Arbitration Filing and Proceedings~~

On January 27, 2020, Westwater filed a Claimant’s Memorial (the “Memorial”) in its arbitration proceeding against the Republic of Turkey (“Turkey”). The Memorial relates to Westwater’s request for arbitration submitted to the International Centre for the Settlement of Investment Disputes (“ICSID”) in December 2018 as a result of Turkey’s unlawful actions against Westwater’s investments at the Temrezli and Sefaatli uranium projects owned by Westwater’s Turkish subsidiary Adur Madencilik Limited Sirketi.

The Memorial sets forth the basis for Westwater’s claims under the treaty between the United States and Turkey concerning the reciprocal encouragement and protection of investments and international law generally, as well as the basis for the jurisdiction of the tribunal constituted on May 1, 2019 following ICSID’s registration of Westwater’s request for arbitration. The Memorial also establishes the reparations owed by Turkey for breach of its international obligations towards Westwater, consisting of no less than $36.5 million, plus costs and post-award interest, as compensation for Westwater’s resulting loss of its investment. Accompanying the Memorial is an expert report regarding the reparations owed to Westwater. In determining the amount of Westwater’s loss, the expert report considered (i) the projected future cash flows from the expropriated projects, discounted to present value by a risk-adjusted discount rate, (ii) valuations from transactions for similar projects, and (iii) in the case of the Sefaatli project, the amounts invested in the project.

On March 11, 2020, Turkey filed a request to bifurcate the arbitration proceeding, and on March 30, 2020, Westwater filed a response in opposition to Turkey’s request for bifurcation. On April 28, 2020, the arbitral tribunal denied Turkey’s bifurcation request. On May 13, 2020, Turkey filed with the arbitral tribunal a request, which Westwater elected not to oppose, to extend the date on which their Counter-Memorial must be filed (and to change dates for subsequent

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pleadings as well as document production and witness identification deadlines), which the tribunal approved on June 3, 2020. As a result of these decisions by the tribunal, Turkey filed its Counter-Memorial on September 14, 2020. The hearingticker symbol “WWR” on the ~~substantive issues and damages is scheduled for September 13-17, 2021.~~

~~Additional information regarding the ICSID arbitration proceeding is presented in Part II, Item 1 below.~~NYSE American.

RESULTS OF OPERATIONS

Summary

Our consolidated net loss for the three months ended September 30, 2020 was $9.8 million, or $1.23 per share, as compared with a consolidated net loss of $1.8 million, or $0.95 per share for the same period in 2019. The $8.0 million increase in our consolidated net loss from the respective prior period in 2019 was largely due to the $6.4 million net loss from discontinued operations. During the third quarter of 2020, the Company entered into an agreement to sell its U.S. uranium assets to enCore in order to focus its efforts on the development of battery-grade graphite. Management believes this major strategic shift in its business model qualifies its uranium and lithium segments for treatment as discontinued operations. Accordingly, the assets and related liabilities of these segments were classified as held for sale. Upon initial held for sale recognition, the carrying value of the long-lived assets belonging to these segments was compared to the assets’ fair value less costs to sell. Following this evaluation, it was determined that the $11.4 million carrying value of the property, plant and equipment belonging to the uranium segment was greater than its estimated fair value less disposal costs. As a result, an impairment loss of $5.2 million was recognized for the quarter and is included in the net loss from discontinued operations for the period. In addition to impairment, product development expenses related to our graphite projects has increased by $1.6 million from the same period in 2019.

The factors identified above that led to the increased net loss for the third quarter of 2020 also contributed to the $7.8 million increase in our consolidated net loss for the nine months ended September 30, 2020 from the respective prior year period. The Company’s enhanced focus on developing its graphite business and dedication of resources to that pursuit is reflective of the $1.9 million increase in product development spending year to date 2020 compared with 2019. Likewise, the $5.5 million increase to net loss from discontinuedcontinuing operations for the three months ended September 30, ~~2020 is mostly comprised~~2021, was $4.6 million, or $0.13 per share, as compared with a net loss from continuing operations of $3.4 million, or $0.42 per share for the ~~$5.2~~same period in 2020. The $1.2 million ~~write down on Texas uranium property, plant~~increase in our net loss from continuing operations was due primarily to increases in general and ~~equipment recognized in September, 2020.~~administrative, arbitration, exploration, and product development expenses; offset partially by an unrealized gain related to the enCore common stock of $0.5 million.

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~~Mineral Property Expenses~~For the nine months ended September 30, 2021, our net loss from continuing operations was $13.4 million, or $0.42 per share, as compared with a net loss from continuing operations of $6.9 million, or $1.18 per share for the same period in 2020. The $6.5 million increase in our net loss from continuing operations was due primarily to increases in product development, arbitration, general and administrative, and exploration expenses; offset partially by an unrealized gain related to the enCore common stock of $1.9 million.

~~The following table details our mineral property~~Product development expenses

Product development expenses for the three and nine months ended September 30, ~~2020~~2021, were $1.8 million and ~~2019:~~

For the Three months Ended

For the Nine months ended

September 30,

September 30,


2020

2019

2020

2019

(thousands of dollars)
Restoration/Recovery expenses








Kingsville Dome project

$
—

$
—

$
3

$
—
Rosita project

—

7

—

—
Vasquez project

2

(8)

8

69
Total restoration/recovery expenses

2

(1)

11

69

Standby care and maintenance expenses








Kingsville Dome project

249

158

583

444
Rosita project

118

97

321

298
Vasquez project

92

93

274

236
Total standby care and maintenance expenses

459

348

1,178

978

Exploration and evaluation costs

Coosa project

—

—

—

58
Other projects

—

1

—

3
Total exploration and evaluation costs

—

1

—

61

Land maintenance and holding costs

303

484

753

1,150

Total mineral property expenses

764

832

1,942

2,258
(Less) Mineral Property expenses attributable to Discontinued Operations

(752)

(820)

-
(1,924)

(2,181)
Mineral Property expenses for Continued Operations

$
12

$
12

$
18

$
77

$5.8 million, respectfully, an increase of $0.2 million and $3.8 million compared to the same periods in 2020. Product development costs were primarily comprised of expenses for our DFS, which began in February 2021 and was completed in October 2021, and our product development program continued through the first nine months of 2021. The product development program includes costs incurred to collaborate with outside experts for lab work, product testing and other auxiliary costs associated with the Coosa Project.

~~For~~Arbitration Costs

During the first nine months of 2021, Westwater incurred legal and expert consulting costs of $2.2 million associated with the Request for Arbitration against the Republic of Turkey. This represents an increase of 152%, or $1.3 million in costs compared to the nine months ended September 30, ~~2020,~~2020. For further reference, see discussion below in Part II, Item 1.

Mineral property expenses

Mineral property expenses were $0.1 million for both the three and nine months ended September 30, 2021, an increase of $0.1 million compared to the same periods in 2020. The increase in mineral property expenses ~~decreased by $0.3 million from the corresponding period in 2019. The decrease~~ was ~~primarily~~ due to ~~the decision not~~higher payments to ~~renew the leases~~land and surface owners for ~~the lithium mineral properties in Nevada and Utah that were due in August 2020.~~increased activities related to our exploration program.

General and Administrative Expenses

Significant expenditures for general and administrative expenses for the three and nine months ended September 30, 2021 and 2020 ~~and 2019~~ were:


	For the Three months ended				For the Nine months ended				For the Three months ended				For the Nine months ended
	September 30,				September 30,				September 30,				September 30,
	2020		2019		2020		2019		2021		2020		2021		2020

	(thousands of dollars)								(thousands of dollars)
Stock compensation expense	$	142	$	239	$	170	$	255	$	299	$	142	$	594	$	170
Salaries and payroll burden		811		197		2,344		1,619		748		811		2,007		2,344
Legal, accounting, and public company expenses		558		635		1,681		2,105
Legal, accounting, public company expenses										575		558		2,090		1,681
Insurance and bank fees		160		171		494		355		146		160		490		494
Consulting and professional services		46		1		149		52		106		46		491		149
Office expenses		128		107		329		235		145		128		352		329
Sales and marketing		97		6		196		17		157		97		393		196
Other expenses		(1)		3		16		126		13		(1)		53		16
Total General and Administrative Expenses	$	1,941	$	1,359	$	5,379	$	4,764
(Less) General and Administrative Expenses attributable to Discontinued Operations		(405)		(356)		(1,273)		(1,181)
General and Administrative Expenses for Continued Operations	$	1,536	$	1,003	$	4,106	$	3,583
Total general and administrative expenses									$	2,189	$	1,941	$	6,470	$	5,379

(Less) General and administrative expenses from discontinued operations										—		(405)		—		(1,273)

General and administrative expenses from continuing operations									$	2,189	$	1,536	$	6,470	$	4,106

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General and administrative expenses for the three and nine months ended September 30, ~~2020~~2021, increased by ~~$0.5~~$0.3 million and ~~$0.6~~$1.1 million from ~~their respective~~the same periods in ~~2019.~~2020. The increase ~~was~~quarter over quarter is due primarily to ~~a reversal~~higher costs

Table of ~~executive bonuses of approximately $0.4 million~~Contents

related to an increase in ~~2019.~~

~~Arbitration Costs~~

~~The majority of cost~~stock compensation, and higher costs related to the Company’s sales and marketing efforts that began in the third quarter ~~associated with~~of 2020. The increase for the ~~Request for Arbitration against~~first nine months of 2021 compared to the ~~Republic of Turkey was~~same period in 2020 is due primarily to higher costs related to ~~review~~an increase in stock compensation, higher public company expenses related to the annual shareholder meeting and ~~evaluation~~moving to the NYSE American from the NASDAQ, and higher costs related to the Company’s sales and marketing efforts that began in the third quarter of 2020. These increases for the ~~Republic~~three and nine month periods were offset partially by lower personnel costs due to the sale of ~~Turkey’s Counter-Memorial which~~our uranium business at December 31, 2020.

Net Loss from Discontinued Operations

Westwater sold its uranium business on December 31, 2020. As a result, the net loss from discontinued operations was ~~filed with ICSID on September 14, 2020. During~~$6.4 million and $8.6 million for the three and nine months ended September 30, 2020, the Company incurred arbitration related legal and expert consulting costs of $0.9 million, a $0.3 million increase over the $0.6 million of costs incurred during the same period in 2019. The increase was duerespectively. See Note 3 to the significant activity in January 2020 leading up to and following the filing of the Company’s Memorial with ICSID on January 27, 2020 and costs in September 2020 to review and evaluate the Republic of Turkey’s Counter-Memorial. For further reference, see discussion in the Recent Developments section of this Part I and below at Part II, Item 1.

~~Other Income and Expenses~~

For the nine months ended September 30, 2020, the $0.4 million increase in other income compared to the nine months ended September 30, 2019 was primarily due to the $0.7 million loss on the sale of securities comprised of Laramide shares and warrants in the first half of 2019 offset by $0.3 million of interest income from the Laramide promissory note. No such losses or interest income was recorded over the same period in 2020.financial statements for additional information.

FINANCIAL POSITION

Operating Activities

Net cash used in operating activities was ~~$10.1~~$13.0 million for the nine months ended September 30, ~~2020,~~2021, as compared with ~~$7.2~~cash used in operating activities of $10.1 million for the same period in ~~2019.~~2020. The $2.9 million increase in cash used in operating activities was due primarily ~~due~~ to increased graphite product development, ~~expenses,~~exploration, general and administrative, ~~expenses~~ and arbitration ~~costs in 2020 compared to 2019.~~costs.

Investing Activities

Net cash used ~~for~~in investing activities decreased by $0.1 million for the nine months ended September 30, ~~2020~~2021, as compared to the same period in 2020. The decrease was ~~$0.1~~a result of cash deposits related to the two buildings that were purchased on October 13, 2021, offset by the receipt of $0.3 million held in escrow for the purchase of equipment, as compared with $3.8 million of cash provided by investing activities for the nine months ended September 30, 2019. For the 2019 period, the Company received installment payments on the Laramide note in the amount of $0.8 million in cash. Additionally, the Company received net proceeds of $0.5 million from the sale of Laramide securities and $2.5 million from Uranium Royalty (USA) Corp. and Uranium Royalty Corp. (together “URC”) in accordance with the termsbalance of the ~~Asset Purchase Agreement signed~~outstanding Paycheck Protection Program. The loan was officially forgiven in full by the Small Business Administration on March ~~5, 2019. See Note 3 to our unaudited Condensed Consolidated Financial Statements included herewith for more information on the URC transaction~~31, 2021, and the ~~Laramide note and securities.~~entire balance of the escrow fund was transferred to the Company.

Financing Activities

Net cash provided by financing activities was ~~$13.9~~$81.7 million for the nine months ended September 30, ~~2020, resulting primarily from the proceeds of~~2021, due to sales of common stock through the Company’s ATM Offering Agreement with Cantor ~~Fitzgerald~~ and the Company’s ~~2019 Purchase Agreement and~~December 2020 ~~Purchase Agreement~~PA with Lincoln Park. ~~Additionally, $0.3 million was received from the PPP loan in May 2020.~~ Net cash provided by financing activities for the same period in ~~2019~~2020 was ~~$2.6~~$13.9 million. The ~~$11.3~~$67.8 million increase was due to greater shelf registration capacity with which to offer registered shares under the Company’s financing agreement with Cantor and increased sales activity under the Company’s financing ~~agreements~~agreement with Lincoln Park induring the first nine months of ~~2020~~2021 compared to the same period in ~~2019.~~2020.

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LIQUIDITY AND CAPITAL RESOURCES

The Company last recorded revenues from operations in 2009. Since 2009, the Company has relied on equity financings, debt financings and asset sales to fund its operations. The Company expects to rely on debt and equity financing to fund its operations ~~into~~for the ~~near~~foreseeable future. ~~The Company will also continue its cost reduction initiatives to identify ways to reduce its cash expenditures.~~

While executing on its graphite business plan, the Company has continued to fulfill its obligation to restore and reclaim its legacy uranium properties in South Texas. These activities have resulted in expenditures of approximately $3.5 million per year, and these reclamation activities are expected to continue for an additional 4-5 years before completion. The Company has provided $9.3 million in performance obligation bonds to the Texas Commission for Environment Quality as financial assurance related to its permits and licenses in South Texas and has a recorded liability of approximately $6.0 million for asset retirement obligations on its balance sheet (see Note 9). In addition to its South Texas uranium operations, the Company has spent about $0.5 million to $1.0 million annually to maintain its uranium mineral property holdings in New Mexico.

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costs. The Company ~~anticipates that it will receive~~received approximately ~~US$2.0~~$1.8 million of enCore common stock and ~~retain~~retained royalty interests on the New Mexico uranium properties as consideration for the sale. ~~This transaction is expected to close on or before December 31, 2020.~~ The Company ~~will retain~~retained its uranium interests in Turkey, which are subject to ongoing international arbitration ~~proceeding.~~proceedings, in which the Company is seeking damages.

During the first nine months of 2021, the Company focused on graphite process development activities including operation of a pilot program for processing flake graphite into battery-grade graphite products and a DFS on Phase I of the Coosa Graphite Project. The ~~Company’s strategic shift~~data generated and experience gained from the pilot program was used to ~~focus solely on its~~inform the Phase I DFS that was completed in October 2021 and will also inform the requirements and specifications for building a commercial graphite ~~business also resulted in its decision not to renew its lithium mineral leases in Nevada and Utah when the annual rentals of approximately $0.2 million came due in late August 2020.~~processing facility.

AtOn September 30, ~~2020~~2021, the Company’s cash ~~balances were $5.5~~balance was approximately $119.0 million. During the ~~month of October 2020,~~nine months ended September 30, 2021, the Company sold ~~8.5~~9.3 million shares of common stock for net proceeds of ~~$50.2~~$47.3 million pursuant to its Controlled Equity Offering^SM Sales Agreement with Cantor and 6.1 million shares of common stock for net proceeds of $34.6 million pursuant to the Lincoln Park December 2020 PA. As of September 30, 2021, the Company has $50.0 million remaining available for future sales under the ATM Offering and has 9,700,252 of common stock available for future sales pursuant to the Lincoln Park December 2020 PA.

Subsequent to September 30, 2021, and through the date of this release, the Company has sold 637,200 common shares for net proceeds of $2.3 million pursuant to its financing facility with Cantor Fitzgerald & Co. ~~(“Cantor”)~~, and liquidated its ~~Purchase Agreement with Lincoln Park Capital LLC (“Lincoln Park”) (see Note 17). The funding provided by these financing facilities has resulted in a~~holdings of enCore common stock for net cash ~~balance~~proceeds of approximately $53.3 million at October 31, 2020. Management believes the significant treasury balance has mitigated the Company’s capital risk through 2021 as the Company’s 2021 non-discretionary budget, budgeted graphite pilot plant program and the remaining budgeted product development initiatives are now fully funded. The Company is

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~~pursuing project financing to support primary funding of the capital expenditures for construction of the commercial plant set to occur in the second half of 2021.~~

$3.6 million.

Management believes the Company’s current cash balance is sufficient to fund its planned non-discretionary expenditures through 2022. ~~In addition to pursuing other project financing,~~The Company anticipates the ~~Company is evaluating the renewal~~continued use of the Cantor and Lincoln Park financing facilities ~~for use in funding any required contributions by the Company~~ to support ~~project financing for~~ construction of the commercial graphite processing facility. While the Company has been successful in the past in raising funds through equity and debt financings as well as through the sale of non-core assets, no assurance can be given that additional financing will be available ~~to it~~ in amounts sufficient to meet its needs, or on terms acceptable to the Company. Stock price volatility and uncertain economic conditions caused by the COVID-19 pandemic, including the recent emergence of variant strains of the virus, could significantly impact the Company’s ability to raise funds through equity financing. Market conditions, including but not limited to, inflation and supply chain disruptions could adversely impact the planned cost of the Company’s commercial graphite processing facility. Along with evaluating the continued use of the Cantor and Lincoln Park financing facilities, the Company may consider project financing to fund the construction of the Project. The alternative sources of project financing could include, but are not limited to, convertible debt or pursuing a partnership or joint venture. In the event funds are not available for project financing to complete construction of the ~~commercial facility~~Project in ~~2022,~~2023, the Company ~~will~~expects to be able to fund its non-discretionary expenditures, however, the Company may be required to change ~~our~~its planned business development strategies.

OFF-BALANCE SHEET ARRANGEMENTS

We have no off-balance sheet arrangements.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

With the exception of historical matters, the matters discussed in this report are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from projections or estimates contained herein. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, without limitation, statements regarding the adequacy of funding, liquidity, access to capital, financing activities, the timing or occurrence of any future drilling or production from the Company’s properties, ~~the ability~~potential effects of the ~~Company to acquire additional properties or partner with other companies,~~COVID-19 pandemic, the ~~construction~~strategic goals of ~~pilot plant facilities~~the business, arbitration matters, costs of Phase I of the Project and ~~construction~~estimated completion date, expected production quantities for Phase I of ~~commercial production facilities,~~the Project , the realization of expected benefits from recent business combinations and the Company’s anticipated cash burn rate and capital requirements. Words such as “may,” “could,” “should,” “would,” “believe,” “estimate,” “expect,” “anticipate,” “plan,” “forecast,” “potential,” “intend,” “continue,” “project” and variations of these words, comparable words and similar expressions generally indicate forward-looking statements. You are cautioned not to place undue reliance on forward-looking statements. Actual results may differ

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materially from those expressed or implied by these forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include, among others:

●

the spot price and long-term contract price of graphite (both flake graphite feedstock and purified graphite products) and vanadium, and the world-wide supply and demand of graphite and vanadium;

●

the ~~ability~~effects, extent and timing of the ~~Company to enter into and successfully close acquisitions, dispositions or other material transactions;~~entry of additional competition in the markets in which we operate;

●

the ~~Company’s~~ ability to ~~raise capital in the future;~~obtain contracts with customers;

●

~~government regulation~~available sources and transportation of ~~the mining industry in the United States and a new federal administration;~~graphite feedstock;

●

government regulation of the mining and processing industries in the United States;

●

our ability to maintain and timely receive mining and other permits from regulatory agencies;

●

the ability to control costs and avoid cost and schedule overruns during the development, construction and operation of the Project;

●

risks associated with our operations and the operations of our partners, including the impact of ~~COVID-19;~~COVID-19 and supply chain disruptions;

●

~~our expectations regarding the use of funds from the Company’s PPP Loan and the potential for loan forgiveness under the terms of the PPP Loan;~~

●

~~operating conditions at our projects;~~

●

~~the world-wide supply and demand of graphite and vanadium;~~

~~Table of Contents~~

●

~~weather conditions;~~

●

unanticipated geological, processing, regulatory and legal or other problems we may encounter;

●

the results of our exploration activities, and the possibility that future exploration results may be materially less promising than initial exploration results;

●

any graphite or vanadium discoveries not being in high enough concentration to make it economic to extract the metals;

●

our ability to finance growth plans; and

●

currently pending or new litigation or ~~arbitration;~~

●

~~our ability to continue to satisfy the listing requirements of the Nasdaq Capital Market;~~

●

~~our ability to maintain and timely receive mining and other permits from regulatory agencies.~~arbitration.

~~as well as~~In addition, other factors are described ~~elsewhere~~ in ~~this Quarterly Report on Form 10-Q,~~ our ~~2019~~ Annual Report on Form 10-K for the year ended December 31, 2020, and the other reports we file with the SEC. Most of these factors are beyond our ability to predict or control. Future events and actual results could differ materially from those set forth herein, contemplated by or underlying the forward-looking statements. Forward-looking statements speak only as of the date on which they are made. We disclaim any obligation to update any forward-looking statements made herein, except as required by law.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, we are not required to provide this information in our Quarterly Reports.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its filings with the Securities and Exchange Commission (“SEC”) is recorded, processed, summarized and reported within the time period specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls

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and procedures, management has recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply judgment in evaluating the Company’s controls and procedures.

During the fiscal period covered by this report, the Company’s management, with the participation of the Chief Executive Officer and Chief Financial Officer of the Company, carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of September 30, ~~2020.~~2021.

Changes in Internal Controls

There were no changes in our internal control over financial reporting during the ~~quarter~~nine months ended September 30, ~~2020~~2021 that materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Information regarding reportable legal proceedings is contained in Part I, Item 3, “Legal Proceedings,” in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020. There have been no material changes to the legal proceedings previously disclosed in the Annual Report on Form 10-K, other than as set forth below.

On December 13, 2018, Westwater filed a Request for Arbitration against the Republic of Turkey before the International Centre for the Settlement of Investment Disputes (“ICSID”), pursuant to the Treaty between the United States of America and the Republic of Turkey concerning the Reciprocal Encouragement and Protection of Investments. The Request for Arbitration was filed as a result of the Republic of Turkey’s unlawful actions against the Company’s licenses for the Temrezli and Sefaatli uranium projects owned by Westwater’s Turkish subsidiary Adur Madencilik Limited Sirketi (“Adur”). Specifically, in June 2018, the Turkish government cancelled all of Adur’s exploration and operating licenses with retroactive effect, rendering Westwater’s investment in Adur effectively worthless. While the Turkish authorities had variously issued, renewed and overseen these licenses for more than a decade, in June 2018 they asserted that those licenses were issued by mistake and that the Turkish government has a governmental monopoly over all uranium mining activities in Turkey, in violation of Westwater’s rights under both Turkish and international law. Westwater reached out on numerous occasions to the Turkish government to resolve this dispute amicably, to reinstate the licenses and to remedy Turkey’s unlawful actions, but to no avail.

As a result, on December 13, 2018, Westwater filed before ICSID its arbitration request against the Republic of Turkey. On December 21, 2018, ICSID registered Westwater’s Request for Arbitration. On May 1, 2019, the three-member ICSID Panel for the arbitration was established – one of the panel members was selected by Westwater, another was selected by Turkey, and the third panel member (serving as the Chair) was selected by the two party-appointed arbitrators. On September 9, 2019, the ICSID Panel issued Procedural Order #1, which places the locale for the proceeding in Washington, DC, and sets numerous dates for both parties to make various filings.

On January 27, 2020, Westwater filed its Memorial, which is a document that sets out Westwater’s case. On March 11, 2020, Turkey filed a request to bifurcate the arbitration proceeding, and on March 30, 2020, Westwater filed a response in opposition to Turkey's request for bifurcation. In Procedural Order #2 issued on April 28, 2020, the arbitral tribunal denied Turkey’s bifurcation request. On May 13, 2020, Turkey filed with the arbitral tribunal a request which Westwater elected not to oppose, to extend the date on which their Counter-Memorial must be filed (and to change dates for subsequent pleadings as well as document production and witness identification deadlines), which the arbitral tribunal approved on June 3, 2020. As a result of these decisions by the tribunal, Turkey filed its Counter-Memorial on September 14, ~~2020, and~~2020. Westwater filed its reply to the Counter-Memorial on March 17, 2021. The hearing on the substantive issues ~~and damages is scheduled for~~was conducted during the week of September 13-17, 2021. The Company does not expect a formal ruling on the matter until the second half of 2022.

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ITEM 1A. RISK FACTORS.

~~There have been no material changes from those risk factors set forth~~See RISK FACTORS in ~~our Annual Report on~~Item 1A of the Form 10-K for the year ended December 31, ~~2019, as updated by~~2020 (“Form 10-K”) for a discussion of the risk ~~factor set forth~~factors of the Company. Except as described below, there have been no material changes to these risk factors from those previously disclosed in ~~our~~ ~~Quarterly Report on~~the Form ~~10-Q~~10-K.

The Company may incur unexpected costs or delays in the construction of the Coosa Graphite Project production facility.

The Company is in the process of developing and anticipates commencing construction of the Coosa Graphite Project’s production facility in the fourth quarter 2021. The completion of the Coosa Graphite Project’s production facility without delays or significant cost overruns involves substantial risks that may occur, including the accuracy of the estimates and findings in the Definitive Feasibility Study; successful negotiation of construction contracts; challenges with managing contractors and vendors; subcontractor performance; adverse weather conditions and natural disasters; contractor and/or vendor delays; increased costs, shortages, or inconsistent quality of equipment, materials, and labor; delays due to judicial or regulatory action; nonperformance under construction or other agreements; engineering or design problems; negative impacts of the COVID-19 pandemic or future pandemic health events; work stoppages; continued public and policymaker support for the ~~quarter ended March 31, 2020, each~~project; environmental and geological conditions; and challenges with start-up activities and operational performance. Additionally, the Coosa Graphite Project’s production facility includes the Company’s improved method for purification of ~~which~~graphite concentrate and is ~~incorporated herein by reference.~~a design process that has not previously been constructed.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

~~Table of Contents~~

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

None.

~~Table of Contents~~

ITEM 6. EXHIBITS.


Exhibit Number		Description

10.1		Westwater Resources, Inc. 2013 Omnibus Incentive Plan, as amended (incorporated by reference to Appendix B to the Company’s Definitive Proxy Statement on Schedule 14A filed on March 26, 2021).

31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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101.INS:		Inline XBRL Instance Document

101.SCH:		Inline XBRL Taxonomy Extension Schema Document

101.CAL:		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF:		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB:		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE:		XBRL Taxonomy Extension Presentation Linkbase Document

101.PRE:		XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	WESTWATER RESOURCES, INC.

Dated: November ~~12, 2020~~10, 2021	By:	/s/ Christopher M. Jones
		Christopher M. Jones
		President and Chief Executive Officer (Principal Executive Officer)

Dated: November ~~12, 2020~~10, 2021	By:	/s/ Jeffrey L. Vigil
		Jeffrey L. Vigil
		Vice President - Finance and Chief Financial Officer (Principal Financial ~~Officer and Principal Accounting~~ Officer)

3929


		September 30,		December 31,
	Notes	2020		2019
ASSETS

Current Assets:
Cash and cash equivalents	1	$	5,480	$	1,870
Prepaid and other current assets			431		340
Current assets held for sale	8		9,306		151
Total Current Assets			15,217		2,361

Property, plant and equipment, at cost:
Property, plant and equipment			9,785		9,780
Less accumulated depreciation and depletion			(789)		(785)
Net property, plant and equipment	6		8,996		8,995
Operating lease right-of-use assets	14		383		470
Restricted cash	1,5		807		797
Assets held for sale, non-current	8		—		14,356
Total Assets		$	25,403	$	26,979

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:
Accounts payable		$	1,205	$	827
Accrued liabilities			787		994
Operating lease liability - current	14		149		147
Current liabilities held for sale	8		7,758		1,701
Total Current Liabilities			9,899		3,669

Operating lease liability, net of current	14		245		332
Liabilities held for sale, non current	8		—		5,914
Total Liabilities			10,144		9,915

Commitments and Contingencies	13

Stockholders’ Equity:
Common stock, 100,000,000 shares authorized, $.001 par value;
Issued shares – 10,434,012 and 3,339,541 respectively
Outstanding shares - 10,433,851 and 3,339,380 respectively	11		10		3
Paid-in capital	10,11		333,451		319,758
Accumulated deficit			(317,944)		(302,439)
Less: Treasury stock (161 and 161 shares, respectively), at cost			(258)		(258)
Total Stockholders’ Equity			15,259		17,064

Total Liabilities and Stockholders’ Equity		$	25,403	$	26,979


						Accumulated
						Other
	Common Stock			Paid-In		Comprehensive		Accumulated		Treasury
Nine months ended September 30, 2020	Shares	Amount		Capital		Income (Loss)		Deficit		Stock		Total
Balances, January 1, 2020	3,339,541	$	3	$	319,758	$	—	$	(302,439)	$	(258)	$	17,064
Net loss	—		—		—		—		(15,505)		—		(15,505)
Common stock issued, net of issuance costs	7,093,960		7		13,523		—		—		—		13,530
Stock compensation expense and related share issuances, net of shares withheld for payment of taxes	511		—		170		—		—		—		170
Balances, September 30, 2020	10,434,012	$	10	$	333,451	$	—	$	(317,944)	$	(258)	$	15,259


Three months ended September 30, 2020
Balances, June 30, 2020	6,664,976	$	7	$	326,073	$	—	$	(308,193)	$	(258)	$	17,629
Net loss	—		—		—		—		(9,751)		—		(9,751)
Common stock issued, net of issuance costs	3,769,036		3		7,236		—		—		—		7,239
Stock compensation expense and related share issuances, net of shares withheld for payment of taxes	—		—		142		—		—		—		142
Balances, September 30, 2020	10,434,012	$	10	$	333,451	$	—	$	(317,944)	$	(258)	$	15,259


URC Transaction
(thousands of dollars)
Total cash consideration received, net of transaction costs	$	2,470
Carrying value of promissory note		(1,741)
Carrying value of royalty interests		—
Gain on disposal of uranium assets	$	729


	December 31, 2019
(thousands of dollars)	Level 1		Level 2		Level 3		Total
Non-current Assets
Restricted cash included in assets held for sale	$	3,000	$	—	$	—	$	3,000
Restricted cash not included in assets held for sale		797		—		—		797
Total non-current assets recorded at fair value	$	3,797	$	—	$	—	$	3,797


	Net Book Value of Property, Plant and Equipment at September 30, 2020
(thousands of dollars)	Texas		Alabama		New Mexico		Corporate		Total
Uranium plant	$	1,855	$	0	$	-	$	-	$	1,855
Mineral rights and properties		-		8,972		3,900		-		12,872
Other property, plant and equipment		452		-		-		24		476
Total Property, Plant and Equipment	$	2,307	$	8,972	$	3,900	$	24	$	15,203
Property, Plant and Equipment included in assets held for sale		2,307		-		3,900		-		6,207
Property, Plant and Equipment from Continuing Operations	$	-	$	8,972	$	-	$	24	$	8,996


	Three months ended			Three months ended
	September 30, 2020			September 30, 2019
		Weighted			Weighted
	Number of	Average		Number of	Average
	Stock	Exercise		Stock	Exercise
	Options	Price		Options	Price
Stock options outstanding at beginning of period	161,897	$	9.25	18,546	$	64.49
Granted	—		—	20,942		19.25
Expired	—		—	(1,040)		78.00
Canceled or forfeited	—		—	(550)		19.25
Stock options outstanding at end of period	161,897	$	9.25	37,898	$	39.78
Stock options exercisable at end of period	36,093	$	34.41	37,898	$	39.78


	Nine months		Nine months
	ended		ended
		September 30,		September 30,
(thousands of dollars)	2020		2019
Operating Lease Cost
Continuing Operations	$	112	$	112
Discontinued Operations		4		4
	$	116	$	116

For the Nine Months Ended

September 30,

(thousands of dollars)

Operating lease cost