UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended ~~September~~June 30, ~~2017~~

2020

oOr

◻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 ~~Issuer~~Registrant as Specified in Its Charter)


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

6950 S. Potomac Street, Suite 300, Centennial, Colorado 80112

(Address of Principal Executive Offices, Including Zip Code)

(303) ~~531-0518~~ 531-0516

(~~Issuer’s~~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

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. Yesx⌧ Noo◻

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ 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 ~~and post~~ such files). Yesx⌧ Noo◻

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 filero◻		Accelerated filero◻

Non-accelerated filero⌧		Smaller reporting companyx⌧
~~(Do not check if a smaller reporting company)~~
		Emerging growth companyo◻

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. o◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yeso◻ Nox⌧

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		~~27,612,624~~7,564,815 as of ~~November 9, 2017~~August 5, 2020

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	22

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	30

ITEM 4. CONTROLS AND PROCEDURES	31

PART II - OTHER INFORMATION	32

ITEM 1. LEGAL PROCEEDINGS	32

ITEM 1A. RISK FACTORS	32

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	32

ITEM 3. DEFAULTS UPON SENIOR SECURITIES	32

ITEM 4. MINE SAFETY DISCLOSURES	33

ITEM 5. OTHER INFORMATION	33

ITEM 6. EXHIBITS	34

SIGNATURES	34

Table of Contents

PART I — FINANCIAL INFORMATION

~~ITEM 1. FINANCIAL STATEMENTS~~

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

~~ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~

~~ITEM 4. CONTROLS AND PROCEDURES~~

~~PART II - OTHER INFORMATION~~

~~ITEM 1. LEGAL PROCEEDINGS~~

~~ITEM 1A. RISK FACTORS.~~

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

~~ITEM 3. DEFAULTS UPON SENIOR SECURITIES.~~

~~ITEM 4. MINE SAFETY DISCLOSURES.~~

~~ITEM 5. OTHER INFORMATION.~~

~~ITEM 6. EXHIBITS.~~

~~SIGNATURES~~

~~PART I — FINANCIAL INFORMATION~~

ITEM 1. FINANCIAL STATEMENTS
WESTWATER RESOURCES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(expressed in thousands of dollars, except share amounts)

WESTWATER RESOURCES, INC.
(formerly Uranium Resources, Inc.)
CONDENSED CONSOLIDATED BALANCE SHEETS
(expressed in thousands of dollars, except share amounts)
(unaudited)

September 30,

December 31,

Notes

2017

2016
ASSETS

Current Assets:

Cash and cash equivalents

$
7,200

$
3,309
Marketable securities

3

1,060

-
Notes receivable – current

3

1,500

-
Prepaid and other current assets

831

602
Total Current Assets

10,591

3,911

Property, plant and equipment, at cost:

Property, plant and equipment

112,560

112,964
Less accumulated depreciation, depletion and impairment

(65,677)

(66,048)
Net property, plant and equipment

5

46,883

46,916

Restricted cash

3,668

3,964
Notes receivable – non-current

3

2,554

-
Long-term assets held for sale

-

2,123
Total Assets

$
63,696

$
56,914

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:

Accounts payable

$
860

$
610
Accrued liabilities

1,450

1,981
Convertible loan, net of discount – related party

7

-

5,431
Current portion of asset retirement obligations

8

121

121
Total Current Liabilities

2,431

8,143

Asset retirement obligations, net of current portion

8

5,025

4,668
Other long-term liabilities and deferred credits

500

500
Long-term liabilities related to assets held for sale

-

555
Total Liabilities

7,956

13,866

Commitments and Contingencies

12

Stockholders' Equity:

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

Issued shares – 27,484,935 and 16,675,419, respectively

Outstanding shares – 27,476,910 and 16,667,394, respectively

9

28

17
Paid-in capital

9,10

296,937

280,191
Accumulated other comprehensive income

(287)

-
Accumulated deficit

(240,680)

(236,902)
Treasury stock (8,025 and 8,025 shares, respectively), at cost

(258)

(258)
Total Stockholders' Equity

55,740

43,048

Total Liabilities and Stockholders' Equity

$
63,696

$
56,914
~~The accompanying notes are an integral part of these condensed consolidated financial statements.~~(unaudited)




June 30,

December 31,

Notes

2020

2019
ASSETS







Current Assets:






Cash and cash equivalents

1

$
2,330

$
1,870
Prepaid and other current assets



639

491
Total Current Assets



2,969

2,361

Property, plant and equipment, at cost:






Property, plant and equipment



91,633

91,746
Less accumulated depreciation and depletion



(71,219)

(71,409)
Net property, plant and equipment

6

20,414

20,337
Operating lease right-of-use assets

13

424

484
Restricted cash

1,5

3,807

3,797
Total Assets



$
27,614

$
26,979






LIABILITIES AND STOCKHOLDERS’ EQUITY







Current Liabilities:






Accounts payable



$
1,141

$
852
Accrued liabilities

1,308

1,770
Asset retirement obligations - current

8

949

894
Operating lease liability - current

13

154

153
Notes payable - current

15

146

—
Total Current Liabilities



3,698

3,669

Asset retirement obligations, net of current

8

5,322

5,406
Other long-term liabilities

500

500
Operating lease liability, net of current

13

280

340
Notes payable, net of current

15

185

—
Total Liabilities



9,985

9,915

Commitments and Contingencies

12





Stockholders’ Equity:






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






Issued shares – 6,664,976 and 3,339,541 respectively






Outstanding shares - 6,664,815 and 3,339,380 respectively

9

7

3
Paid-in capital

9,10

326,073

319,758
Accumulated deficit



(308,193)

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



(258)

(258)
Total Stockholders’ Equity



17,629

17,064

Total Liabilities and Stockholders’ Equity



$
27,614

$
26,979

WESTWATER RESOURCES, INC.
(formerly Uranium Resources, Inc.)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(expressed in thousands of dollars, except share and per share amounts)
(unaudited)

For the Three Months Ended Sep 30,

For the Nine Months Ended Sep 30,

Notes

2017

2016

2017

2016

Operating Expenses:

Mineral property expenses

6

$
(1,316)

$
(1,039)

$
(3,637)

$
(2,908)
General and administrative

(1,700)

(1,883)

(4,976)

(6,035)
Accretion of asset retirement obligations

8

(132)

(120)

(395)

(360)
Depreciation and amortization

(27)

(56)

(104)

(188)
Impairment of uranium properties

-

-

-

(534)
        Total operating expenses

(3,175)

(3,098)

(9,112)

(10,025)

Non-Operating Income/(Expenses):

Loss on extinguishment of convertible debt

-

-

(39)

-
Interest income/(expense)

3,7

186

(671)

424

(2,194)
Commitment fees

-

-

-

(333)
Loss on sale of marketable securities

-

-

-

(116)
Gain on disposal of uranium properties

3

-

4,927

-
Other income, net

                    6

25

22

44
         Total other income/(expense)

192

(646)

5,334

(2,599)

Net Loss

$
(2,983)

$
(3,744)

$
(3,778)

$
(12,624)

Other Comprehensive Loss

Unrealized fair value decrease on marketable securities

$
(126)

$
-

$
(287)

$
(49)
Transfer to realized loss upon sale of available-for-sale securities

-

-

-

116
Comprehensive Loss

$
(3,109)

$
(3,744)

$
(4,065)

$
(12,557)

BASIC AND DILUTED LOSS PER SHARE

$
(0.12)

$
(0.38)

$
(0.16)

$
(1.81)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING

  25,037,203

     9,741,331

   23,763,842

    6,963,869

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 Six Months Ended

June 30,

June 30,


Notes

2020

2019

2020

2019


Operating Expenses:











Mineral property expenses

7

$
(576)

$
(808)

$
(1,178)

$
(1,426)

Product development expenses

(175)

(16)

(301)

(32)

General and administrative expenses



(1,659)

(1,700)

(3,438)

(3,405)

Arbitration costs

(28)

(354)

(697)

(485)

Accretion of asset retirement obligations

8

(32)

(30)

(138)

(156)

Depreciation and amortization



(17)

(25)

(30)

(48)

Total operating expenses



(2,487)

(2,933)

(5,782)

(5,552)











Non-Operating Income/(Expenses):











Loss on sale of marketable securities

3,5

—

—

—

(720)

Interest income

3

—

168

—

334

Other income (expense)



20

(10)

28

(11)

Total other income (expense)



20

158

28

(397)







Net Loss



$
(2,467)

$
(2,775)

$
(5,754)

$
(5,949)











Other Comprehensive Income



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



—

—

—

90

Comprehensive Loss



$
(2,467)

$
(2,775)

$
(5,754)

$
(5,859)











BASIC AND DILUTED LOSS PER SHARE



$
(0.43)

$
(1.81)

$
(1.18)

$
(3.95)

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING



5,786,117

1,532,802

4,895,533

1,505,668

WESTWATER RESOURCES, INC.
(formerly Uranium Resources, Inc.)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS AND SUPPLEMENTAL CASH FLOW INFORMATION
(expressed in thousands of dollars)
(unaudited)

Nine Months Ended Sep 30,

Notes

2017

2016

Operating Activities:

Net loss

$
(3,778)

$
(12,624)
Reconciliation of net loss to cash used in operations:

Accretion of asset retirement obligations

8

395

360
Amortization of debt discount

30

1,355
Amortization of convertible loan establishment fee

-

75
Amortization of notes receivable discount

(553)

-
Loss on extinguishment of convertible debt

7

39

-
Unrealized holding loss on securities

-

116
Common stock issued as payment for commitment fees

-

333
Costs incurred for restoration and reclamation activities

8

(37)

(54)
Depreciation and amortization

104

188
Stock compensation expense

10

62

545
Gain on disposal of uranium properties

3

(4,927)

-
Impairment of uranium properties

-

534
Amortization of non-cash investor relations fees

175

-
Effect of changes in operating working capital items:

(Increase)/decrease in receivables

(5)

47
(Increase)/decrease in prepaid and other current assets

(101)

101
Decrease in payables, accrued liabilities and deferred credits

(280)

(830)
Net Cash Used In Operating Activities

(8,876)

(9,854)

Cash Flows From Investing Activities:

Purchase of equipment

              (100)

                    -
Proceeds from the sale of investments

-

247
Net decrease in restricted cash and short-term investments

23

               57
Proceeds from disposal of property, plant and equipment

3

1,950

-
Net Cash Provided By Investing Activities

1,873

304

Cash Flows From Financing Activities:

Payments on borrowings

7

(5,500)

-
Issuance of common stock, net

9

16,395

12,511
Payment of minimum withholding taxes on net share settlements of equity awards

(1)

-
Net Cash Provided By Financing Activities

10,894

12,511

Net increase in cash and cash equivalents

3,891

2,961
Cash and cash equivalents, beginning of period

3,309

865
Cash and Cash Equivalents, End of Period

$
7,200

$
3,826

Cash paid during the period for:

Interest

$
227

$
486
Supplemental Non-Cash Information With Respect to Investing and Financing Activities:

Common stock issued for settlement of accounts payable

$
300

$
834
Common stock issued for payment of convertible loan interest and fees

$
-

$
242
Common stock issued for payment of commitment fees

$
1,214

$
523
~~The accompanying notes are an integral part of these condensed consolidated financial statements.~~

WESTWATER RESOURCES, INC.
(formerly Uranium Resources, Inc.)
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(expressed in thousands of dollars, except share amounts)
(unaudited)

Common Stock

Shares

Amount

Paid-In Capital
Accumulated Other Comprehensive Loss

Accumulated Deficit

Treasury Stock

Total
Balances, January 1, 2017
16,667,394

$
17

$
280,191
$
-

$
(236,902)

$
(258)

$
43,048
Net loss
-

-

-
-

(3,778)

-

(3,778)
Common stock issued, net of issuance costs
9,776,396

10

15,172

-

-

-

15,182
Common stock issued for commitment fees
880,000

1

1,213
-

-

-

1,214
Common stock issued for investor relations fees
150,000

-

300
-

-

-

300
Stock compensation expense and related share issuances, net of shares withheld for the payment of taxes
3,120

-

62
-

-

-

62
Minimum withholding taxes on net share settlements of equity awards
-

-

(1)
-

-

-

(1)
Unrealized holding loss on marketable securities
-

-

-
(287)

-

-

(287)
Balances, September 30, 2017
27,476,910

$
28

$
296,937
$
(287)

$
(240,680)

$
(258)

$
55,740

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

Table of Contents
WESTWATER RESOURCES, INC.
~~(formerly Uranium Resources, Inc.)~~CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS AND SUPPLEMENTAL CASH FLOW INFORMATION
(expressed in thousands of dollars)
(unaudited)

For the Six Months Ended June 30,


Notes

2020

2019
Operating Activities:






Net loss



$
(5,754)

$
(5,949)
Reconciliation of net loss to cash used in operations:





Non-cash lease expense



2

7
Accretion of asset retirement obligations

8

138

156
Costs incurred for restoration and reclamation activities

8

(167)

(333)
Amortization of note receivable discount

3

—

(299)
Depreciation and amortization



30

48
Stock compensation expense

10

28

15
Gain on disposal of fixed assets

(21)

—
Loss on sale of marketable securities

3

—

720
Effect of changes in operating working capital items:

Decrease/(Increase) in prepaids and other assets



(148)

234
(Decrease)/Increase in payables and accrued liabilities



(173)

1,077
Net Cash Used In Operating Activities



(6,065)

(4,324)

Cash Flows From Investing Activities






Proceeds from disposal of uranium assets, net

4

—

1,500
Proceeds from the sale of securities, net

3

—

536
Proceeds from note receivable

3

—

750
Capital expenditures

(87)

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



(87)

2,786

Cash Flows From Financing Activities:






Proceeds from note payable

15

331

—
Issuance of common stock, net

9

6,291

1,154
Payment of minimum withholding taxes on net share settlements of equity awards



—

(1)
Net Cash Provided By Financing Activities



6,622

1,153






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



470

(385)
Cash, Cash Equivalents and Restricted Cash, Beginning of Period



5,667

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



$
6,137

$
4,924
Cash Paid During the Period for:






Interest



$
1

$
1
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

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

5

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

Six months ended June 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

—

—

—

—

(5,754)

—

(5,754)
Common stock and common stock purchase warrants issued, net of issuance costs

3,324,924

4

6,287

—

—

—

6,291
Stock compensation expense and related share issuances, net of shares withheld for payment of taxes

511

—

28

—

—

—

28
Balances, June 30, 2020

6,664,976

$
7

$
326,073

$
-

$
(308,193)

$
(258)

$
17,629

Three months ended June 30, 2020

Balances, March 31, 2020

4,762,794

$
5

$
322,227

$
-

$
(305,726)

$
(258)

$
16,248
Net loss

—

—

—

—

(2,467)

—

(2,467)
Common stock issued, net of issuance costs

1,902,182

2

3,818

—

—

—

3,820
Stock compensation expense and related share issuances, net of shares withheld for payment of taxes

—

—

28

—

—

—

28
Balances, June 30, 2020

6,664,976

$
7

$
326,073

$
-

$
(308,193)

$
(258)

$
17,629

Accumulated

Other

Common Stock

Comprehensive

Accumulated

Six months ended June 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

—

—

—

—

(5,949)

—

(5,949)
Common stock issued, net of issuance costs

221,263

1

1,153

—

—

—

1,154
Stock compensation expense and related share issuances, net of shares withheld for the payment of taxes

393

—

15

—

—

—

15
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, June 30, 2019

1,658,211

$
2

$
314,179

$
—

$
(297,823)

$
(258)

$
16,100

Three months ended June 30, 2019

Balances, March 31, 2019

1,494,153

$
1

$
313,435

$
—

$
(295,048)

$
(258)

$
18,130
Net loss

—

(2,775)

—

(2,775)
Common stock issued, net of issuance costs

164,058

1

738

—

—

—

739
Stock compensation expense and related share issuances, net of shares withheld for the payment of taxes

—

—

7

—

—

—

7
Minimum withholding taxes on net share settlements of equity awards

—

—

(1)

—

—

—

(1)
Balances, June 30, 2019

1,658,211

$
2

$
314,179

$
—

$
(297,823)

$
(258)

$
16,100

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 ~~“WWR”~~“Westwater”)~~, formerly known as Uranium Resources, Inc.~~, 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 ~~2016~~2019 Annual Report on Form 10-K. 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~~six months ended ~~September~~June 30, ~~2017~~2020 are not necessarily indicative of the results that may be expected for any other period including the full year ending December 31, ~~2017.~~2020.

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.

Recently ~~Issued~~Adopted Accounting Pronouncements

In ~~January 2017,~~August 2018, the FASB issued ~~Accounting Standards Update No. 2017-01 (ASU 2017-01), Business Combinations: Clarifying~~ASU 2018-13, “Fair Value Measurement (ASC 820): Disclosure Framework – Changes to the ~~Definition of a Business, which clarifies~~Disclosure Requirements for Fair Value Measurement”. This update modifies the ~~definition of a business when determining whether a company has acquired~~disclosure requirements for fair value measurements by removing, modifying or sold a business. The ASU applies to all entities and is effective for annual periods ending after December 15, 2017, and interim periods thereafter, with early adoption permitted under certain circumstances.adding disclosures. The Company ~~does not believe that the~~adopted this pronouncement effective January 1, 2020. The adoption of ~~this guidance will have~~ASU 2018-13 has not had a material impact on ~~our~~the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements

In ~~November~~December 2019, the 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 effective for interim and annual periods beginning after December 15, 2020.

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 January 1, 2023.

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 ~~No. 2016-18, Statement~~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 January 1, 2023.

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, ~~Flows:~~Cash Equivalents and Restricted Cash ~~which will require that~~

The following table provides a ~~statement of cash flows explain the change during period in the total~~reconciliation of cash, cash equivalents and ~~amounts generally described as~~ restricted cash ~~or restricted cash equivalents. As a result, amounts generally described~~ as ~~restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling~~reported within the ~~beginning-of-period and end-of-period~~consolidated balance sheet that sum to the total of the same such amounts shown onin the statement of cash flows.

As of June 30,
(thousands of dollars)

2020

2019
Cash and cash equivalents

$
2,330

$
1,156
Restricted cash - pledged deposits for performance bonds

3,807

3,768
Cash, cash equivalents and restricted cash shown in the statement of cash flows

$
6,137

$
4,924

Funds deposited by the Company for collateralization of performance obligations are not available for the payment of general corporate obligations and are not included in cash equivalents. Restricted cash consists of money market accounts. The ~~ASU applies~~bonds are collateralized performance bonds required for future restoration and reclamation obligations primarily related to ~~all entities~~the Company’s South Texas production properties.

2. LIQUIDITY AND GOING CONCERN

The interim Condensed Consolidated Financial Statements of the Company have been prepared on a “going concern” basis, which means that the continuation of the Company is presumed even though events and conditions exist that, when considered in the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern because it is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years beginning after December 15, 2019, with early adoption permitted. As a result, upon adoption,possible that the Company will ~~include~~be required to adversely change its current business plan or may be unable to meet its obligations as they become due within one year after the ~~restricted cash amount~~date that these financial statements were issued.

The Company last recorded revenues from operations in 2009 and expects to continue to incur losses as a result of costs and expenses related to maintaining its ~~beginning-of-period~~properties and ~~end-of-period reconciliations of cash on its statement of cash flows. For the nine months ended September 30, 2017, this would have resulted in~~general and administrative expenses. Since 2009, the Company ~~including an additional $4.0 million in~~has relied on equity financings, debt financings and asset sales to fund its ~~beginning-of-period cash balance~~operations and ~~an additional $3.7 million in~~the Company expects to rely on these forms of financing to fund its ~~end-of-period cash balance.~~operations into the near future. The Company will also ~~would not have recorded a release~~continue to identify ways to reduce its cash expenditures.

The Company’s current business plan requires working capital to fund non-discretionary expenditures for uranium reclamation activities, mineral property holding costs, early stage graphite battery-material product development costs and administrative costs. The Company is pursuing project financing to support execution of ~~restricted cash~~the graphite business plan, including discretionary capital expenditures associated with ongoing graphite battery-material product development costs, construction of ~~$0.3 million in the investing section~~pilot plant facilities and construction of ~~its statement of cash flows.~~

~~2. LIQUIDITY~~

~~At September 30, 2017,~~commercial production facilities. The Company’s current lithium business plan will be funded by working capital; however, the Company ~~had working capital of $8.2~~is pursuing project financing including possible joint venture partners to fund discretionary greenfield exploration activities.
At June 30, 2020 the Company’s cash balances were $2.3 million ~~which along with the anticipated funding from the financing agreements described below, is expected to provide it with the necessary liquidity through September 30, 2018. At December 31, 2016,~~and the Company had a working capital deficit balance of ~~$4.2~~$1.0 million. The ~~increase in working capital of $12.4 million for the nine months ended September 30, 2017 was primarily due~~Company’s cash balance at July 31, 2020 is $2.9 million. Subsequent to ~~the following:~~
•
the completion of three equity offerings in January 2017, February 2017 and September 2017 for net proceeds of $8.9 million, $4.5 million and $2.0 million respectively, as further described in Note 9, below;
•
~~the completion of the sale of the Company’s wholly-owned subsidiary Hydro Resources Inc. (“HRI”) to Laramide Resources Ltd. (“Laramide”) on January 5, 2017. Upon completion,~~July 31, 2020, the Company ~~received $2.2 million in cash, a $5.0 million promissory note,~~expects to fund operations as follows:
● The Purchase Agreement with Lincoln Park Capital, LLC (“Lincoln Park”) dated as of May 21, 2020 and as amended on May 29, 2020 (the “2020 Purchase Agreement”), the issuance of shares pursuant to which was approved by the Company’s shareholders at the annual shareholders meeting on April 28, 2020. Pursuant to the 2020 Purchase Agreement, the Company may place up to $12.0 million in the aggregate of the Company's

Table of which $1.5 million is due in January 2018, 2,218,333 shares of Laramide Resources Ltd.’s common stock which had a fair value of $0.5 million at September 30, 2017 and 2,218,333 common stock purchase warrants which had a fair value of $0.3 million at September 30, 2017. Details regarding this transaction are discussed in Note 3, below; and Contents

•

~~the repayment of the $5.5 million outstanding balance under the RCF Loan (defined in Note 7, below.)~~

~~Also during the nine months ending September 30, 2017, the Company entered into the following financing agreements and anticipates funding from these sources to sustain operations through 2018:~~

WESTWATER RESOURCES, INC.

~~(formerly Uranium Resources, Inc.)~~

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

•

~~Controlled Equity Offering Sales Agreement~~

On April 14, 2017, the Company entered into a Controlled Equity Offering Sales Agreement with Cantor Fitzgerald & Co. (“Cantor”) acting as sales agent, pursuant to which the Company has registered the offer and sale from time to time of shares of its common stock having an aggregate offering price of up to $30.0 million (the “ATM Offering”), of which approximately $28.9 million is available for future sales as of November 9, 2017. The Company is unable to sell shares of its common stock through the Controlled Equity Offering Sales Agreement on dates that it places shares with Aspire Capital through its CSPA, as discussed below.

•

~~Common Stock Purchase Agreement~~

On September 25, 2017, the Company entered into a Common Stock Purchase Agreement (“CSPA”) with Aspire Capital Fund, LLC (“Aspire Capital”) to place up to $22.0 million in the aggregate of its common stock over a term of 30 months. Upon execution of the CSPA, the Company issued 880,000 shares of common stock to Aspire Capital as a commitment fee. The Company cannot sell in excess of 5,033,677 shares of common stock, including the 880,000 commitment shares (“Exchange Cap”), unless (i) stockholder approval is obtained, or (ii) the average price paid for all shares issued under the Purchase Agreement (including the 880,000 commitment shares) is equal to or greater than $1.38. As of November 9, 2017, the Company has dollar capacity of $20.0 million of common stock available for future sales, limited to the current Exchange Cap of 2.7 million shares of common stock unless conditions (i) or (ii) above are met. See Note 9 below for further details.

The Company believes that the ATM Offering and the CSPA, along with its existing working capital balance, will provide it with the necessary liquidity to fund operations through 2018. The Company will also continue to explore additional opportunities to raise capital, further monetize its non-core assets and identify ways to reduce its cash expenditures.

common stock on an ongoing basis when required by the Company over a term of 24-months ending in May 2022. As of July 31, 2020, the Company has 722,279 registered shares for resale by Lincoln Park on a current Form S-1 and $9.7 million remaining sales capacity under the 2020 Purchase Agreement, subject to periodic registration of shares on Form S-1.

●

The Controlled Equity Offering Sales Agreement (the “ATM Offering Agreement”) with Cantor Fitzgerald & Co. (“Cantor”) which currently has $19.5 million remaining sales capacity, subject to periodic registration of shares on Form S-3. The Company is currently eligible to, and intends to, register the sale of additional shares under the agreement on Form S-3 pursuant to the SEC’s shelf registration rules.

●

Other possible debt and equity financings and asset sales.

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 ~~the Company’s~~its needs, or on terms acceptable to the Company. Stock price volatility and uncertain economic conditions caused by the recent Covid-19 pandemic could significantly impact the Company’s ability to raise funds through equity financing. In the event that we are unable to raise sufficient additional funds, ~~are not available, the Company~~we may be required to ~~materially change~~delay, reduce or severely curtail our operations or otherwise impede our on-going business efforts, which could have a material adverse effect on our business, operating results, financial condition, long-term prospects and ability to continue as a viable business. Considering all of the factors above, the Company believes there is substantial doubt regarding its ~~business plans.~~ability to continue as a going concern.

3. ~~DISPOSAL OF HYDRO RESOURCES, INC.~~NOTES RECEIVABLE

~~On January 5, 2017,~~ Laramide ~~and~~Note Receivable

As part of the ~~Company closed~~consideration for the sale of the Company’s wholly-owned subsidiary HRI, which holds the Churchrock and Crownpoint projects, pursuant to a Share Purchase Agreement (the “Laramide SPA”). Under the terms of the Laramide SPA, executed on April 7, 2016 and amended on December 5, 2016,Hydro Resources, Inc. (HRI) in January 2017, the Company received a promissory note in the ~~following consideration:~~

•
~~$2.5 million in cash,~~amount of ~~which $0.25 million was paid on October 21, 2016;~~
•
2,218,333 shares of Laramide common stock and 2,218,333 Laramide common stock purchase warrants. Each common stock purchase warrant entitles the Company to purchase one share of common stock of Laramide at a price of CDN$0.45 for a period of 60 months from the date of closing;
•
a $5.0 million, ~~promissory note,~~ secured by a mortgage over the ~~projects.~~Churchrock and Crownpoint properties owned by Laramide Resources Ltd. (“Laramide”). The note ~~has~~had a three-year term and ~~carries~~carried an initial interest rate of 5% ~~which then increases to 10% upon Laramide’s decision regarding commercial production at~~. The Company received the ~~Churchrock project. Principal~~first two installment payments of ~~approximately~~ $1.5 million ~~are due and payable on~~each in January ~~5 in each of~~ 2018 and ~~2019, with the balance~~January 2019. The final principal payment of $2.0 million was due and payable on January 5, 2020. Interest iswas payable on a quarterly basis ~~provided however that no interest will be payable until March 31, 2018.~~during the final year. Laramide ~~will have~~had the right to satisfy up to half of ~~each of these~~the principal payments by delivering shares of its common stock to the Company, which shares ~~will be~~were valued by reference to the volume weighted average price (“VWAP”) for Laramide’s common stock for the 20 trading days before ~~the~~their respective ~~anniversary of January 5, on which each payment is due;~~
•
~~a retained 4.0% Net Smelter Return Royalty (“NSR Royalty”) on the Churchrock project, which royalty may be repurchased by Laramide by January 5, 2018 for $4.95 million; and~~

~~WESTWATER RESOURCES, INC.~~
~~(formerly Uranium Resources, Inc.)~~
~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
~~(unaudited)~~

•
an option to purchase Laramide’s La Sal project for $3.0 million and an option to purchase its La Jara Mesa project for $5.0 million, both of which expire on January 5, 2018. Any such exercise by the Company will first result in a reductionanniversaries of the ~~principal amount due under the promissory note with any remaining portions of the purchase price to be paid~~initial issuance date in ~~cash by the Company.~~
~~The divestiture of HRI was accounted for as an asset disposal and the non-cash consideration received from Laramide was recorded at fair value.~~January. The fair value of the shares of Laramide common stock received was determined using the closing share price of Laramide’s stock on January 5, 2017. The fair value of the common stock purchase warrants was determined using the Black-Scholes method on April 27, 2017, which was the date that Laramide’s stockholders approved the issuance of the warrants. The fair value of the notesthis note receivable was determined using the present value of the future cash receipts discounted at a market rate of 9.5%. ~~The~~
On August 30, 2019, the Company ~~did not record a separate fair value~~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 ~~options as~~sale, which had resulted in the ~~exercise~~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 ~~options would reduce~~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 ~~outstanding under~~of $1.5 million in January 2018, consisted of $750,000 in cash and the ~~notes receivable. Due to~~issuance of 1,982,483 of Laramide’s common shares. The second note installment in the ~~high degree~~amount of ~~uncertainties surrounding~~$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.

Table of Contents

WESTWATER RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

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 ~~mine development~~uranium production from mineral properties located in South Dakota, Wyoming and ~~minerals prices,~~New Mexico, as well as ~~limited marketability,~~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 ~~determined~~upon signing the ~~fair value~~Amendment. The transaction closed on August 30, 2019 at which time the Company transferred ownership of the ~~NSR Royalty to be nil. The following fair value amounts were recorded as~~royalties and promissory note in exchange for the ~~purchase consideration:~~final payment of $1.25 million.


~~(thousands of dollars)~~		~~Fair Value~~
~~Cash, less transaction costs~~		$ ~~1,950~~
~~Laramide common stock~~		~~568~~
~~Laramide common stock purchase warrants~~		~~506~~
~~Notes receivable~~		~~3,501~~
~~Total consideration received~~		$ ~~6,525~~

The ~~fair value~~sale of ~~the shares of Laramide’s common stock and common stock purchase warrants received were valued using Level 1 inputs of the fair value hierarchy and the fair value of the notes receivable~~these uranium assets was ~~valued using Level 2 inputs,~~accounted for as ~~defined in Note 4 below.~~

an asset disposal. The Company recorded the following gain on disposal of uranium ~~properties within~~assets on its ~~Condensed~~ Consolidated ~~Statement~~Statements of ~~Operations:~~Operations for the year ended December 31, 2019:


~~(thousands of dollars)~~
~~Total consideration received~~		$ ~~6,525~~
~~Carrying value of Churchrock project~~		~~(2,123)~~
~~Carrying value of other plant and equipment~~		~~(31)~~
~~Accounts payable~~		1
~~Asset retirement obligation~~		~~105~~
~~Royalty payable on Churchrock project~~		~~450~~
~~Gain on disposal of HRI~~		$ ~~4,927~~

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

4.

5. FINANCIAL INSTRUMENTS

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 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 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.

•10

Table of Contents

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

•

WESTWATER RESOURCES, INC.

~~(formerly Uranium Resources, Inc.)~~

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

The Company believes that the fair ~~values~~value of ~~our~~its assets and liabilities approximate 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~~June 30, ~~2017~~2020 and December 31, ~~2016~~2019 and indicate the fair value ~~hierarchy:~~

September 30, 2017
(thousands of dollars)

Level 1
Level 2
Level 3
Total
Current Assets

Marketable securities and short term investments

$
1,060
$
-
$
-
$
1,060
Total current assets recorded at fair value

$
1,060
$
-
$
-
$
1,060
Non-Current Assets

Restricted cash

3,668
-
-
3,668
Total non-current assets recorded at fair value

$
3,668
$
-
$
-
$
3,668

December 31, 2016

Level 1
Level 2
Level 3
Total
Non-Current Assets

Restricted cash

$
3,964
$
-
$
-
$
3,964
Total non-current assets recorded at fair value

$
3,964
$
-
$
-
$
3,964

hierarchy.
5.

June 30, 2020
(thousands of dollars)

Level 1

Level 2

Level 3

Total
Non-current Assets








Restricted cash

$
3,807

$
—

—

$
3,807
Total non-current assets recorded at fair value

$
3,807

$
—

$
—

$
3,807

December 31, 2019
(thousands of dollars)

Level 1

Level 2

Level 3

Total
Non-current Assets








Restricted cash

$
3,797

$
—

—

$
3,797
Total non-current assets recorded at fair value

$
3,797

$
—

$
—

$
3,797

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, 2017
(thousands of dollars)

Turkey

Texas

New Mexico

Corporate

Total
Uranium plant

$
-

$
8,447

$
-

$
-

$
8,447
Mineral rights and properties

17,968

-

19,102

-

37,071
Other property, plant and equipment
20

1,132

-

214

1,366
     Total

$
17,988

$
9,579

$
19,102

$
214

$
46,883

Net Book Value of Property, Plant and Equipment at December 31, 2016
(thousands of dollars)

Turkey

Texas

New Mexico

Corporate

Total
Uranium plant

$
-

$
8,459

$
-

$
-

$
8,459
Mineral rights and properties

17,968

-

19,102

-

37,070
Other property, plant and equipment
22

1,224

-

141

1,387
     Total

$
17,990

$
9,683

$
19,102

$
141

$
46,916

Net Book Value of Property, Plant and Equipment at June 30, 2020
(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

422

—

—

102

524
Total

$
3,534

$
8,972

$
7,806

$
102

$
20,414

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

327

—

—

120

447
Total

$
3,439

$
8,972

$
7,806

$
120

$
20,337

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. For the six months ended June 30, 2020 no events or changes in circumstance, including any affects from the COVID-19 pandemic, are believed to have impacted recoverability of the Company’s long-lived assets. Accordingly, it was determined that no interim impairment was necessary.

Table of Contents

WESTWATER RESOURCES, INC.

~~(formerly Uranium Resources, Inc.)~~

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

6.7. MINERAL PROPERTY EXPENDITURES

Mineral property expenditures by geographical location for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016are~~2019 are as follows:


					For the Three Months Ended June 30,				For the Six Months Ended June 30,
					2020		2019		2020		2019

	For the Three Months Ended Sep 30,		For the Nine Months Ended Sep 30,
	2017	2016	2017	2016
	(thousands of dollars)
Temrezli project, Turkey	$ 63	$ 31	$ 186	$ 453
Total Turkey projects	63	31	186	453

					(thousands of dollars)
Kingsville Dome project, Texas	197	214	616	624	$	179	$	145	$	444	$	389
Rosita project, Texas	188	130	472	290		122		100		213		217
Vasquez project, Texas	117	105	399	365		121		126		362		312
Other projects, Texas	26	11	30	80		3		(8)		3		(8)
Total Texas projects	528	460	1,517	1,359		425		363		1,022		910


Cebolleta project, New Mexico	-	-	538	537		141		440		141		440
Juan Tafoya project, New Mexico	38	37	354	48		3		3		9		9
Other projects, New Mexico	-	32	2	32
Total New Mexico projects	38	69	894	617		144		443		150		449


Columbus Basin project, Nevada	481	113	667	113		1		1		(1)		1
Railroad Valley project, Nevada	80	-	238	-
Other projects, Nevada	8	14	11	14
Total Nevada projects	569	127	916	127		1		1		(1)		1


Sal Rica project, Utah	118	352	124	352		—		1		1		1
Total Utah projects	118	352	124	352		—		1		1		1


Coosa project, Alabama						6		—		6		65
Total Alabama projects						6		—		6		65

Total expense for the period	$ 1,316	1,039	$ 3,637	$ 2,908	$	576	$	808	$	1,178	$	1,426

~~On June 20, 2017, the Company acquired its third lithium exploration project through the staking of 9,270 acres of federal placer mining claims within the Railroad Valley of central Nevada.~~ 

On March 24, 2017, the Company’s wholly owned subsidiary Lithium Holdings Nevada LLC entered into an option agreement to purchase a block of unpatented placer mining claims covering an area of approximately 3,000 acres within the Columbus Salt Marsh area of Esmeralda County, Nevada. The claims adjoin a portion of the Company’s current property holdings at its Columbus Basin project, expanding the project area within the basin to approximately 14,200 acres. The Company has the right to conduct exploration activities on the claims during the one-year option period. Under the option agreement, the Company may acquire the mineral property claims on or before March 24, 2018 in exchange for 200,000 shares of its common stock and a 1% NSR Royalty on the claims. The Company paid $75,000 for this option, which has been included as exploration expense for the Columbus Basin project.

~~WESTWATER RESOURCES, INC.~~

~~(formerly Uranium Resources, Inc.)~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

~~7. CONVERTIBLE LOAN~~

On November 13, 2013, the Company entered into a loan agreement (the “RCF Loan”) with Resource Capital Fund V L.P. (“RCF”), whereby RCF agreed, subject to the terms and conditions set forth in the RCF Loan, to provide a secured convertible loan facility of up to $15.0 million to the Company, which was subsequently amended on April 29, 2014 to reduce the amount available thereunder from $15.0 million to $8.0 million. The Company exchanged $2.5 million in principal for shares of its common stock in December 2016 and repaid the $5.5 million outstanding balance under the RCF Loan on February 9, 2017. No further obligations remain under the RCF Loan following the repayment. In addition, on July 31, 2017, the Company and RCF terminated the Stockholders’ Agreement dated March 1, 2012, pursuant to which RCF had certain stock participation rights and Board rights.

As a result of the repayment, the Company recorded a loss of $39,000 on the extinguishment of debt which represented the difference between the principal amount of $5.5 million and the carrying value of the RCF Loan on the date of repayment.

8. ASSET RETIREMENT OBLIGATIONS

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

September 30,

December 31,

2017

2016
(thousands of dollars)

Balance, beginning of period

$
4,894

$
4,468
Liabilities settled

(37)

(54)
Liabilities disposed

(106)

Accretion expense

395

480
Balance, end of period

5,146

4,894
     Less: Current portion

(121)

(121)
     Less: Liabilities held for sale

-

(105)
Non-current portion

$
5,025

$
4,668


June 30,

December 31,
(thousands of dollars)

2020

2019
Balance, beginning of period

$
6,300

$
6,203
Liabilities settled

(167)

(293)
Accretion expense

138

390
Balance, end of period

6,271

6,300
Less: Current portion

(949)

(894)
Non-current portion

$
5,322

$
5,406

The Company is currently performing plugging and surface reclamation activities at its Rosita ~~project~~and Vasquez projects located in Duval County, Texas. The Company’s current liability of ~~$0.1~~$0.9 million consists of the estimated costs associated with current ~~surface~~ reclamation activities through ~~September 2018~~June 2021 at the Company’s Kingsville Dome, Rosita ~~project.~~ and Vasquez projects.

Table of Contents

WESTWATER RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

9. COMMON STOCK

Common Stock Issued, Net of Issuance Costs

~~Confidentially Marketed Public Offering~~2020 Purchase Agreement with Lincoln Park

On January 19, 2017, the Company completed a registered public offering for net proceeds of $8.9 million. The Company sold 1,399,140 shares of common stock at a price of $2.01 per share and 3,426,731 pre-funded warrants at a price of $2.00 per warrant. The warrants have an exercise price of $0.01. All of the pre-funded warrants have been exercised.

~~Registered Direct Offering~~

On February 16, 2017, the Company completed a registered direct offering for net proceeds of $4.5 million with Aspire Capital whereby Aspire Capital purchased 2,100,000 shares of common stock at a price of $1.58 and 748,101 pre-funded common stock purchase warrants at a price of $1.57. The warrants have an exercise price of $0.01 per share and a term of three years. All of the pre-funded warrants have been exercised.

~~WESTWATER RESOURCES, INC.~~

~~(formerly Uranium Resources, Inc.)~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

~~Controlled Equity Offering Sales Agreement~~

~~On April 14, 2017,~~May 21, 2020, the Company entered into the ATM Offering with Cantor acting as sales agent. Under the ATM Offering, the Company may from time to time sell shares of its common stock having an aggregate offering amount up to $30.0 million in “at-the-market” offerings, which shares are registered under a registration statement on Form S-3, which was declared effective on March 9, 2017. The Company pays Cantor a commission equal to 2.5% of the gross proceeds from the sale of any shares pursuant to the ATM Offering. As of November 9, 2017, the Company had sold 673,853 shares of common stock for net proceeds of $1.1 million under the ATM Offering. As a result, the Company had approximately $28.9 million remaining available for future sales under the ATM Offering.

~~Common Stock~~2020 Purchase Agreement, as amended on May 29, 2020, with ~~Aspire Capital~~

~~On September 25, 2017, the Company entered into the CSPA with Aspire Capital~~Lincoln Park to place up to ~~$22.0~~$12.0 million in the aggregate of the Company’s common stock on an ongoing basis when required by the Company over a term of 3024 months. ~~The Company~~Westwater will control the timing and amount of any sales to ~~Aspire Capital,~~Lincoln Park, and Lincoln Park is obligated to make purchases in accordance with the 2020 Purchase Agreement. Any common stock that is sold to Lincoln Park will occur at a purchase price that is based on an agreed upon fixed discount to the Company’s prevailing market prices at ~~that time. As consideration for Aspire Capital entering into~~ the time of each sale and with no upper limits to the price Lincoln Park may pay to purchase ~~agreement,~~common stock. The 2020 Purchase Agreement may be terminated by Westwater at any time, in its sole discretion, without any additional cost or penalty.

The 2020 Purchase Agreement specifically provides that the Company ~~issued 880,000~~may not issue or sell any shares of its common stock under the 2020 Purchase Agreement if such issuance or sale would breach any applicable rules of The Nasdaq Capital Market. In particular, Nasdaq Listing Rule 5635(d) provides that the Company may not issue or sell more than 19.99% of the shares of the Company’s common stock outstanding immediately prior to the execution of the 2020 Purchase Agreement without shareholder approval. The Company received such shareholder approval to sell up to 8.0 million shares of common stock under the 2020 Purchase Agreement at its Annual Shareholders Meeting conducted on April 28, 2020.

Lincoln Park has no right to require the Company to sell any shares of common stock to Lincoln Park, but Lincoln Park is obligated to make purchases as the Company directs, subject to certain conditions. In all instances, the Company may not sell shares of its common stock to ~~Aspire Capital.~~Lincoln Park under the 2020 Purchase Agreement if it would result in Lincoln Park beneficially owning more than 9.99% of its common stock. 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 stock subject~~Common Stock to Lincoln Park as consideration for its commitment to purchase shares of Common Stock under the ~~CSPA were registered~~2020 Purchase Agreement.

Also on May 21, 2020, the Company entered into a registration rights agreement with Lincoln Park pursuant to which the ~~Company’s effective shelf~~Company filed a registration statement on Form ~~S-3.~~

~~On September 27, 2017, pursuant~~S-1 with the Securities and Exchange Commission, which was declared effective on June 26, 2020 relating to the ~~CSPA and after satisfaction~~resale of ~~certain commencement conditions, Aspire Capital made~~ an initial ~~purchase~~tranche of ~~1,428,571~~1,971,000 shares subject to the 2020 Purchase Agreement. As of June 30, 2020, the Company has sold 192,471 shares of common stock for gross proceeds of $250,000 under the 2020 Purchase Agreement and through July 31, 2020, the Company has sold 1.1 million shares of common stock for gross proceeds of $2.3 million.

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 of the Company’s common stock on an ongoing basis when required by 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 shares of common stock under the 2019 Purchase Agreement. Following effectiveness of a registration statement on Form S-1 relating to the resale of the shares subject to the 2019 Purchase Agreement on June 18, 2019, the Company began selling shares of its common stock to Lincoln Park under the terms 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. During the quarter ended June 30, 2020 the Company sold 623,236 shares of common stock for gross proceeds of $593,356. The 2019

Table of Contents

WESTWATER RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Purchase Agreement was terminated in May 2020 with historical sales of 3.2 million shares of common stock for gross 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, pursuant to which the Company ~~received proceeds~~agreed to issue and sell to Lincoln Park, and Lincoln Park agreed to purchase from the Company (i) 104,294 shares of ~~$2.0 million. There were no other sales~~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 exercisable on November 30, 2019 and may be exercised at any time thereafter until November 30, 2024.

ATM Offering Agreement with Cantor

On April 14, 2017, the Company entered into 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 and $3.1 million of which shares were registered for sale under a registration statement on Form S-3, which was declared effective on April 13, 2020. The Company pays Cantor a commission of up to 2.5% of the gross proceeds from the sale of any shares pursuant to the ~~CSPA~~ATM Offering Agreement. As of June 30, 2020, the Company had sold 1,959,422 shares of common stock for net proceeds of $10.2 million under the ATM Offering Agreement, of which 930,225 shares of common stock and asnet proceeds of ~~November 9, 2017, $20.0~~$3.0 million ofwas sold in the ~~aggregate $22.0~~three months ended June 30, 2020. As a result, the Company has approximately $19.5 million ~~remained~~remaining available for future sales under the ~~CSPA.~~ATM Offering, but had no shares of common stock registered for sale under the ATM Offering Agreement as of June 30, 2020.

~~Common Stock Issued~~

Warrants

The following table summarizes warrants outstanding and changes for ~~Investor Relations Fees~~the three-month periods ending June 30, 2020 and 2019:

June 30, 2020

June 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 February 28, 2017, the Company issued 150,000 shares with a fair market value of $0.3 million or $2.00 per share as partial consideration for investor relations services that will be provided to the Company over the ensuing 12 months.

10. STOCK-BASED COMPENSATION

Stock-based compensation awards consist of stock options, restricted stock units ~~(“RSUs”)~~ and ~~restricted stock awards (“RSAs”)~~bonus shares issued under the Company’s equity incentive plans which include: the 2013 Omnibus Incentive Plan (the “2013 ~~Plan”~~Plan")~~; the 2007 Restricted Stock Plan (the “2007 Plan”);~~ and the Amended and Restated 2004 Directors’ Stock Option and Restricted Stock Plan (the “2004 Directors’ ~~Plan”); and the 2004 Stock Incentive Plan (the “2004 Plan”~~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, the Company’s stockholders approved ~~an amendment~~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 ~~1.0 million~~20,000 shares, 66,000 and to350,000 shares, respectively and in 2017 re-approve 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,

Table of Contents

WESTWATER RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

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”), 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 ~~plan.~~ other officers and employees of the Company as designated by the Committee and permitted by the 2013 Plan.

As of ~~November 9, 2017, the Company had 561,232~~June 30, 2020, 58,586 shares were available for future issuances under the 2013 Plan.

For the ~~three~~six months ending ~~September~~June 30, ~~2017~~2020 and ~~2016,~~2019, the Company recorded stock-based compensation expense of ~~$24,279~~$27,771 and ~~$75,495,~~$15,424, respectively. ~~For the nine months ending September 30, 2017 and 2016, the Company recorded stock-based~~Stock compensation expense ~~of $62,356 and $545,166, respectively. Stock-based compensation expense has been included~~is recorded in general and administrative ~~expense.~~expenses.

In addition to the plans above, upon closing of the Company’s acquisition of ~~Anatolia Energy Limited~~Alabama Graphite in ~~November 2015,~~April 2018, the Company issued ~~374,749~~50,168 replacement options and ~~performance shares~~warrants to the option and warrant holders ~~and performance shareholders~~ of ~~Anatolia Energy Limited.~~Alabama Graphite. The number of replacement options and ~~performance~~warrants shares was ~~based upon~~determined using the ~~Black-Scholes value with the~~arrangement exchange rate of 0.0016. The exercise prices for the option and warrant shares were first converted for the exchange rate of ~~the replacement options~~0.0016 and ~~performance shares determined~~then converted to USD using the exchange rate on December 13, 2017 of ~~0.00548.~~0.77809 (CAD to USD). The options and ~~performance~~warrant shares were issued with the same terms and conditions as were applicable prior to the acquisition of ~~Anatolia Energy Limited.~~Alabama Graphite. As of ~~September~~June 30, ~~2017, 98,646~~2020, there were 2,840 replacement options ~~remain outstanding.~~outstanding but all replacement warrants have expired.

~~WESTWATER RESOURCES, INC.~~

~~(formerly Uranium Resources, Inc.)~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

Stock Options

The following table summarizes stock options outstanding and changes for the ~~nine-month~~six-month periods ending ~~September~~June 30, ~~2017~~2020 and ~~2016:~~2019:

Sep 30,

Sep 30,

2017

2016

Number of Stock Options

Weighted Average Exercise Price

Number of Stock Options

Weighted Average Exercise Price
Stock options outstanding at beginning of period

110,828

$
18.24

326,424

$
24.90
Granted

189,164

1.40

-

-
Expired

(6,001)

104.67

(215,346)

27.64
Stock options outstanding at end of period

293,991

$
5.64

111,078

$
19.60
Stock options exercisable at end of period

104,722

$
13.26

110,869

$
19.57

June 30, 2020

June 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

37,786

$
37.42

19,170

$
79.78
Granted

125,804

1.59

—

—
Expired

(1,693)

101.64

(624)

80.58
Canceled or forfeited

—

—

—

—
Stock options outstanding at end of period

161,897

$
8.91

18,546

$
78.21
Stock options exercisable at end of period

36,093

$
34.41

18,546

$
78.21

The following table summarizes stock options outstanding and exercisable by stock option plan at ~~September~~June 30, ~~2017:~~2020:

Outstanding Stock Options

Exercisable Stock Options
Stock Option Plan

Number of Outstanding Stock Options

Weighted Average Exercise Price

Number of
Exercisable
Stock Options

Weighted Average Exercise Price
2004 Plan

4,792

$
35.14

4,792

$
35.14
2004 Directors’ Plan

973

317.14

973

317.14
2013 Plan

189,581

1.48

312

35.88
Replacement Stock Options

98,645

9.13

98,645

9.13

293,991

$
5.64

104,722

$
13.26

Outstanding Stock Options

Exercisable Stock Options


Number of

Weighted

Number of

Weighted

Outstanding

Average

Stock Options

Average
Stock Option Plan

Stock Options

Exercise Price

Exercisable

Exercise Price
2004 Plan

92

$
1,638.00

92

$
1,638.00
2004 Directors’ Plan

3

10,380.00

3

10,380.00
2013 Plan

158,962

6.57

33,158

25.47
Replacement Options-Alabama Graphite

2,840

75.94

2,840

75.94

161,897

$
8.91

36,093

$
34.41

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 table summarizes RSU activity for the ~~nine-month~~three-month periods ended ~~September~~June 30, ~~2017~~2020 and ~~2016:~~2019:

Sep 30,

Sep 30,

2017

2016

Number of RSUs

Weighted-Average Grant Date Fair Value

Number of RSUs

Weighted-Average Grant Date Fair Value
Unvested RSUs at beginning of period

8,649

$
43.71

32,699

$
34.25
Granted

304,064

1.40

-

-
Forfeited

-

-

(3,334)

32.21
Vested

(39,340)

4.16

(7,698)

29.45
Unvested RSUs at end of period

273,373

$
1.95

21,667

$
36.27

June 30,

June 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
~~WESTWATER RESOURCES, INC.~~
~~(formerly Uranium Resources, Inc.)~~
~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
~~(unaudited)~~

11. EARNINGS PER SHARE
Basic and diluted loss per ~~share of~~ common ~~stock~~share have been calculated based on the weighted-average shares outstanding during the period. ~~Potentially~~Additionally, potentially dilutive shares of ~~750,698~~559,576 were excluded from the calculation of earnings per share because the effect on the basic income per share would be anti-dilutive for the ~~three and nine~~six months ended ~~September~~June 30, ~~2017.~~2020.

12. 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 ~~uranium~~ 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.
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.

13. LEASES
The Company’s lease portfolio consists of operating leases for corporate offices, storage space and equipment. The leases have remaining lease terms of 1 to 3.5 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.

Table of Contents

WESTWATER RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

The Company is party to several leases that are for under one 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 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 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.

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 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.

The components of lease expense are as follows:

Six months

Six months

ended

ended

June 30,

June 30,
(thousands of dollars)

2020

2019
Operating lease cost

$
81

$
81

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

Six months

Six months

ended

ended
(thousands of dollars)

June 30, 2020

June 30, 2019
Cash paid for amounts included in lease liabilities:





Operating cash flows from operating leases

$
79

$
77

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




Operating leases

$
424

$
541

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

June 30,

December 31,
(thousands of dollars, except lease term and discount rate)

2020

2019
Operating Leases




Operating lease right-of-use assets

$
424

$
484

Current portion of lease liabilities

$
154

$
153
Operating lease liabilities – long term portion

280

340
Total operating lease liabilities

$
434

$
493

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

Table of Contents

WESTWATER RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

June 30,

June 30,

2020

2019
Weighted Average Remaining Lease Term (in years)

3.2

4.2

Discount Rate

9.5
%

9.5
%

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

June 30,
Lease payments by year (In thousands)

2020
2020 (remainder of year )

$
81
2021

161
2022

162
2023

92
Total lease payments

496
Less imputed interest

(62)
Total

$
434

As of June 30, 2020, the Company has $0.4 million in right-of-use assets and $0.4 million in related lease liabilities ($0.2 million of which is current). The most significant operating lease is for its corporate office in Centennial, Colorado, with $0.5 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 $0.5 million.

14. GEOGRAPHIC AND SEGMENT INFORMATION

In addition to its corporate operations, the Company currently operates in three reportable segments, which are uranium, lithium and graphite mining activities, including exploration, standby operations and restoration and reclamation activities. As a part of these activities, the Company explores, evaluates and, if warranted, develops uranium, lithium and graphite properties. The ~~Company has one reportable operating segment, consisting~~Company’s long-term assets were $24.6 million as of both June 30, 2020 and December 31, 2019. 100% of the ~~exploration and development of lithium and uranium projects. These activities~~long-term assets are ~~focused principally~~located in the United ~~States and the Republic of Turkey. We~~States. The Company reported no revenues during the ~~three-~~six months ended June 30, 2020 and ~~nine-month periods~~June 30, 2019.

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.

Table of Contents

WESTWATER RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

The table below provides a breakdown of the long-term assets by reportable segments as of June 30, 2020 and December 31, 2019:

June 30, 2020
(thousands of dollars)

Corporate

Uranium

Lithium

Graphite

Total

Net property, plant and equipment

$
102

$
11,340

$
—

$
8,972

$
20,414
Restricted cash

—

3,797

—

10

3,807
Operating lease right of use assets

407

17

—

—

424
Total long-term assets

$
509

$
15,154

$
—

$
8,982

$
24,645

December 31, 2019
(thousands of dollars)

Corporate

Uranium

Lithium

Graphite

Total

Net property, plant and equipment

$
114

$
11,251

$
—

$
8,972

$
20,337
Restricted cash

—

3,787

—

10

3,797
Operating lease right of use assets

463

21

—

—

484
Total long-term assets

$
577

$
15,059

$
—

$
8,982

$
24,618

The table below provides a breakdown of the reportable segments for the three months ended ~~September~~June 30, ~~2017~~2020 and ~~2016. Geographic location~~June 30, 2019. Non-mining activities and other administrative operations are reported in the Corporate column.

Three months Ended

June 30, 2020
(thousands of dollars)

Corporate

Uranium

Lithium

Graphite

Total
Statement of Operations






Mineral property expenses

$
—

$
570

$
—

$
6

$
576
Product development expenses

—

—

—

175

175
General and administrative expenses

1,094

442

—

123

1,659
Arbitration expenses

28

—

—

—

28
Accretion of asset retirement costs

—

32

—

—

32
Depreciation and amortization

12

5

—

—

17

1,134

1,049

—

304

2,487
Loss from operations

(1,134)

(1,049)

—

(304)

(2,487)
Other income/(expense)

28

(8)

—

—

20
Loss before taxes

$
(1,106)

$
(1,057)

$
—

$
(304)

$
(2,467)

Three months Ended

June 30, 2019
(thousands of dollars)

Corporate

Uranium

Lithium

Graphite

Total
Statement of Operations










Mineral property expenses

$
—

$
805

$
2

$
1

$
808
Product development expenses

—

—

—

16

16
General and administrative

1,216

433

—

51

1,700
Arbitration expenses

354

—

—

—

354
Accretion of asset retirement costs

—

30

—

—

30
Depreciation and amortization

1

24

—

—

25

1,571

1,292

2

68

2,933

Table of ~~property, plant~~Contents

WESTWATER RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Loss from operations

(1,571)

(1,292)

(2)

(68)

(2,933)
Other income

158

—

—

—

158
Loss before taxes

$
(1,413)

$
(1,292)

$
(2)

$
(68)

$
(2,775)

The table below provides a breakdown of the reportable segments for the six months ended June 30, 2020 and ~~equipment,~~June 30, 2019. Non-mining activities and other administrative operations are reported in the Corporate column.

Six months Ended

June 30, 2020
(thousands of dollars)

Corporate

Uranium

Lithium

Graphite

Total
Statement of Operations










Mineral property expenses

$
—

$
1,172

$
—

$
6

$
1,178
Product development expenses

—

—

—

301

301
General and administrative

2,283

868

—

287

3,438
Arbitration expenses

697

—

—

—

697
Accretion of asset retirement costs

—

138

—

—

138
Depreciation and amortization

24

6

—

—

30

3,004

2,184

—

594

5,782
Loss from operations

(3,004)

(2,184)

—

(594)

(5,782)
Other income

28

—

—

—

28
Loss before taxes

$
(2,976)

$
(2,184)

$
—

$
(594)

$
(5,754)

Six months Ended

June 30, 2019
(thousands of dollars)

Corporate

Uranium

Lithium

Graphite

Total
Statement of Operations











Mineral property expenses

$
—

$
1,358

$
3

$
65

$
1,426
Product development expenses

—

—

—

32

32
General and administrative

2,364

825

—

216

3,405
Arbitration expenses

485

—

—

—

485
Accretion of asset retirement costs

—

156

—

—

156
Depreciation and amortization

2

46

—

—

48

2,851

2,385

3

313

5,552
Loss from operations

(2,851)

(2,385)

(3)

(313)

(5,552)
Other (expense)

(397)

—

—

—

(397)
Loss before taxes

$
(3,248)

$
(2,385)

$
(3)

$
(313)

$
(5,949)

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15. NOTES PAYABLE

Loan under the Paycheck Protection Program (PPP)

On May 4, 2020, URI, Inc, a wholly owned subsidiary of Westwater, received loan proceeds in the amount 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. The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for forgivable loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loan and accrued interest are forgivable as long as the borrower uses the loan proceeds for eligible purposes, including ~~mineral rights,~~payroll costs, rent and ~~mineral property expenses,~~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%, with a deferral of payments for the first six months. According to terms of the promissory note from Celtic Bank, the first payment of principal and interest is due November 30, 2020, with subsequent payments due at the end of each month through the loan maturity date of April 30, 2022.

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 ~~Notes 5~~whole or in part. At June 30, 2020 the loan proceeds are presented on the balance sheet as current and ~~6, above.~~long-term debt based on the schedule of repayments and excluding any possible forgiveness of the loans.

The following table summarizes notes payable related to the PPP loan on the balance sheet as of June 30, 2020:

June 30,
(thousands of dollars)

2020
Notes payable

$
331
Less: current maturities

(146)
Notes payable, net of current

$
185

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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 ~~WWR~~Westwater for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 has been prepared based on information available to us as of ~~November 9, 2017.~~August 5, 2020. 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 for the period ended December 31, ~~2016~~2019 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.”

~~Introduction~~INTRODUCTION

~~WWR~~Westwater Resources, Inc. is ana 40-year-old public company trading on the Nasdaq Capital Market under the symbol “WWR.” Originally incorporated in 1977 as Uranium Resources, Inc. to mine uranium in Texas, our company has been reborn as a diversified energy ~~metals~~materials developer. Westwater now has a presence in uranium, lithium exploration, and battery-ready graphite materials after its acquisition of Alabama Graphite Corp. (“Alabama Graphite”) in April 2018. In addition, Westwater recently discovered significant vanadium concentrations at the Coosa Graphite Project (the “Coosa Project”) in Alabama and has an exploration plan available to further investigate the size and extent of those concentrations.

Westwater holds battery-ready graphite development ~~company. We are focused on expanding our energy metals strategy, which includes developing our~~properties in Alabama, properties with lithium ~~business while maintaining optionality on the future rising~~exploration potential in Nevada and Utah, two idled uranium ~~price with our significant~~production properties in Texas and several uranium ~~property holdings~~properties in ~~the Republic of Turkey,~~ Texas and New Mexico. ~~Incorporated~~Westwater ceased uranium production in ~~1977, WWR also owns an extensive information database~~2009 due to reductions in the price of ~~historic drill-hole logs, assay certificates, maps and technical reports for~~uranium, although Westwater’s uranium properties ~~located~~and facilities in Texas can be restarted once the ~~western United States.~~price of uranium recovers to acceptable levels.

~~We established our lithium~~RECENT DEVELOPMENTS

Graphite Business Developments

Westwater’s graphite business plan continues without pause. The Company and its consultants continue to produce results that inform pilot plant operations, which are presently scheduled for the fourth quarter of 2020. Westwater remains focused on the battery materials markets, the end markets for those products, and the role that can be played in ~~2016 and currently control mineral rights encompassing approximately 36,730 acres across three prospective lithium brine basins~~supplying critical materials to serve them.

In June 2020, Westwater announced that independent testing of Westwater’s ULTRA-PMG™ battery graphite material has shown outstanding resistivity values as a conductive additive. This milestone achievement is a critical step in ~~Nevada and Utah. We are conducting exploration and geological evaluation of these properties in 2017 and 2018 for potential development of any lithium resources that may be discovered there.~~

The focus of our uranium business continues to be on advancing the Temrezli in-situ recovery (“ISR”) uranium project in central Turkey when uranium prices permit economic development of this project. We control extensive exploration properties in Turkey under eight exploration and operating licenses covering approximately 39,000 acres. In Texas, we have two licensed and currently idled uranium processing facilities and approximately 11,000 acres of prospective ISR uranium projects. In New Mexico, the Company controls mineral rights encompassing approximately 186,000 acres in the prolific Grants Mineral Belt, whichdeveloping Westwater’s battery graphite business. PMG is one of the ~~largest concentrations of sandstone-hosted uranium deposits~~key products in the Coosa Project business plan being produced at laboratory-scale using proprietary processes that Westwater intends to utilize in the pilot program later this year. Successful performance testing demonstrates that Westwater can manufacture ULTRA-PMG™ as a premium-grade, conductive enhancement material for all types of batteries at larger scale.

In July 2020, Westwater announced that independent performance testing of Westwater’s ULTRA-CSPG™ (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.

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Sales and Marketing Executive

After a comprehensive search process that yielded many highly qualified candidates, 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.

~~Recent Developments~~

~~Change~~Graphite, Lithium, Uranium, and Vanadium Listed as Critical Materials

A Presidential Executive Order on a Federal Strategy to Ensure Secure and Reliable Supplies of Critical Minerals was issued on December 20, 2017, which we believe will result in ~~Corporate Name~~

~~Effective August 21, 2017,~~important energy related mineral development in the ~~Company changed its name from “Uranium Resources, Inc.”~~United States. In conjunction with Professional Paper 1802, published by the US Geological Service (“USGS”), where 23 minerals are identified as critical to ~~“Westwater Resources, Inc.” The name change was made pursuant to Section 242~~the Country’s security and economy, WWR believes these actions are important steps in support of domestic minerals development. One of the ~~Delaware General Corporation Law and did not affect~~important steps outlined in the ~~rights~~Executive Order required a list of critical minerals to be provided by the US Secretary of the ~~Company’s security holders.~~Interior. This list was subsequently provided and included all of WWR’s contemplated portfolio products consisting of graphite, lithium and uranium. The discovery of vanadium on our Alabama property adds an additional element to Westwater’s portfolio of critical elements. Graphite and lithium, in particular, are critical to the development of batteries and other energy storage systems essential to the electric vehicle, solar and wind power industries, while vanadium is a lightweight metal used in the construction industry, in high strength steel alloys, and in large grid storage batteries.

~~Lithium Business Expansion~~Creation of The President’s Nuclear Fuels Working Group

On ~~June 20,~~July 1, 2019, President Trump ordered a review of the domestic nuclear supply chain (uranium production, conversion, enrichment and fabrication) in the context of the 2017 White House initiative to revive, revitalize and expand the ~~Company acquired its third lithium exploration project, through~~nuclear energy sector.

Accordingly, to address concerns regarding the ~~staking~~production of ~~9,270 acres~~domestic uranium and ensure a comprehensive review of ~~federal placer mining claims within~~ the ~~Railroad Valley~~domestic nuclear supply chain, the President directed that a Nuclear Fuel Working Group (“NFWG”) be established. The NFWG includes the Secretary of ~~central Nevada. The Railroad Valley project is located approximately 75 miles west~~State, Secretary of ~~Ely, Nevada.~~

~~Columbus Basin Data Review~~Energy and ~~Exploration Drilling~~Secretary of Defense, among other key officials.

On April ~~5, 2017,~~23, 2020, the ~~Company~~U.S. Department of Energy (“DOE”) announced ~~that its independent geophysical consultant has completed~~ the ~~review, integration and reinterpretation of historical geophysical survey data acquired by~~NFWG’s strategy to revive the ~~Company and covering its Columbus Basin lithium brine exploration project~~U.S. uranium industry in Nevada. Among other things, the results of the work indicated that the depth of the Columbus Salt Marsh basin is greater than previously anticipated and identified certain targets for lithium brine exploration. In July 2017, the Company began a ~~Phase-1 exploration drilling program at the Columbus Basin Project.~~

~~On October 31, 2017,~~report entitled “Strategy to Restore American Nuclear Energy Leadership.” The ~~Company announced that it has completed the Phase 1 exploration project at this project and reported the following results:~~

•

~~Three core holes were completed for a total of 3,870 ft. of drilling.~~

~~The maximum drilled depth was 1,680 ft.~~

~~Fluids with high total dissolved solids (TDS) were identified in all three holes.~~

•

~~In-house laboratory work performed at its Kingsville, Texas facility returned lithium concentrations of up to 43 parts per million (ppm) and boron concentrations of up to 173 ppm.~~

~~Planning is underway for a Phase 2 exploration program at the Project. As part of the Phase 2 program, Westwater has filed a Notice of Intent to drill~~most important recommendations in the ~~Nina claim block~~report for the uranium mining sector are:

●

U.S. purchases of 17-19 million pounds of U3O8 for a strategic uranium reserve, beginning in 2020 from domestic producers using a competitive bidding process.

●

DOE will end the uranium bartering program and reevaluate DOE’s Excess Uranium Inventory Management Policy.

●

Streamline regulatory reform and land access for uranium extraction.

●

Support Department of Commerce efforts to extend the Russian Suspension Agreement to protect against future uranium dumping in the U.S. market.

●

Enable the Nuclear Regulatory Commission to deny imports of nuclear fuel fabricated in Russia or China for national security purposes.

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●

Fund advanced water treatment technology for uranium mining and in-situ recovery.

●

Increase efficiencies in the export processes and the adoption of 123 Agreements to open new markets for exports of U.S. civil nuclear technology, materials and fuel.

Global Pandemic and ~~is evaluating the Phase 1 results and the results of drilling by Caeneus Minerals Ltd.~~

~~Sal Rica Exploration Planning~~

~~A brine sampling program at the Sal Rica Project was designed and implemented~~our Actions to infill previous shallow aquifer sampling completed by Mesa Exploration Corp. in 2016. The resultant combination of the new Westwater data and the existing Mesa Exploration Corp. data now provide shallow aquifer lithium concentration data on variable 1 to 2 mile centers, depending on site accessibility, across the entirety of the 13,260 acre project area.

In addition to the recent groundwater sampling event, Westwater has also completed new geophysical interpretations of the Sal Rica Project area. This data is being integrated into a conceptual model of the exploration target, and will guide the ongoing planning of a drilling and hydrogeologic characterization program to further expand and define the shallow, lithium bearing, brine aquifer. So far this work has outlined a strong lithium brine anomaly that covers an area of over twenty (20) square miles, with lithium values up to 100 ppm, all at shallow depths.

Westwater has commenced the permitting process with the Bureau of Land Management (“BLM”), and the State of Utah, to field an exploration program that optimizes project access and limits environmental disturbance, minimizes cost, and maximizes overall data quality.

~~Option Agreement for Lithium Brine Claims~~Ensure Safety

On March ~~24, 2017,~~11, 2020, the ~~Company’s~~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 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 mandatory orders for non-essential citizens to “shelter in place” or “stay at home” until further direction. 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.

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 closed 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.

In South Texas, due to tumultuous capital markets and uncertain economic conditions created by the pandemic, Westwater shut down restoration and reclamation operations and furloughed employees in March 2020. Westwater complied with stay at home orders issued by county and state jurisdictions. After consultation with the Texas Commission on Environmental Quality, Westwater maintained certain critical permit compliance activities with a limited workforce. Upon receipt of the PPP loan proceeds, Westwater reinstated employees and restarted restoration and reclamation activities on May 4, 2020.

To the extent that the COVID-19 pandemic continues or worsens, local governments or governmental agencies may impose additional restrictions. The result of 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 may 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 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

The Paycheck Protection Program (or “PPP”) was established under the congressionally-approved Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and is administered by the U.S. Small Business Administration (“SBA”). The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. On May 4, 2020, URI, Inc, a wholly owned subsidiary ~~Lithium Holdings Nevada LLC entered into an option agreement to purchase~~of Westwater, received loan proceeds in the amount of $0.3 million under the Paycheck Protection Program in accordance with the terms of a ~~block~~promissory note executed in favor of ~~unpatented placer mining claims covering an area of approximately 3,000 acres within~~Celtic Bank Corporation, a Salt Lake City based SBA Preferred Lender. The loan and accrued interest are forgivable after eight weeks as long as the ~~Columbus Salt Marsh area of Esmeralda County, Nevada. The claims adjoin a~~loan proceeds are used for eligible purposes, including payroll and benefits costs, rent and utilities. Any unforgiven portion of the PPP loan is payable over two years at an interest rate of 1%, with a deferral of payments for the first six months and the first payment of principal and interest due on November 30, 2020.

Between February 14, 2020 and March 16, 2020, the Company’s ~~current property holdings at its Columbus Basin Project, expanding~~share price decreased 63% due to turmoil in the ~~project area within~~equity capital markets from the ~~basin~~COVID-19 pandemic discussed above. This significantly impacted the Company’s financing facilities because registered share capacity was exhausted faster than anticipated due to ~~approximately 14,200 acres. The Company has~~ the ~~right to conduct exploration activities on~~significant decrease in share price. For instance, the ~~claims during the one-year option period. Under the option agreement, the Company may acquire the mineral property claims on or before March 24, 2018 in exchange for 200,000~~number of registered shares ~~of WWR common stock and a 1% net smelter return royalty on the claims.~~

~~Retirement of the RCF Loan~~

~~On February 9, 2017, the Company paid $5.5 million in cash, plus accrued and unpaid interest, to RCF to retire all of the obligations remaining~~approved by shareholders available under the RCF Loan, and thereafter, the loan agreement itself terminated pursuant to its terms. In addition, on July 31, 2017, the Company and RCF terminated the Stockholders’ Agreement dated March 1, 2012, pursuant to which RCF had certain stock participation rights and Board rights.

~~Common Stock~~Company’s 2019 Purchase Agreement with ~~Aspire~~Lincoln Park 2019 was exhausted in April 2020 with $2.3 million of remaining usable capacity lost. As a result of the severe downturn in the capital markets and uncertainty about when economic conditions would return to normal, the Company shut down its South Texas operations and implemented other cost reduction initiatives. When the CARES Act was passed and PPP loan eligibility rules were promulgated, the Company’s interpretation of the rules were that the loan proceeds could be used for payroll and benefits of URI’s furloughed employees which would allow restart of operations in South Texas. Accordingly, the Company used the proceeds for funding its payroll and benefits costs for its South Texas operations over a 10-week period during the months of May, June and July, purposes consistent with the PPP. While the Company currently believes that its use of the loan proceeds will meet 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.

Equity Financings

2020 Purchase Agreement (“2020 Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”)

On ~~September 25, 2017,~~May 21, 2020, the Company entered into the ~~CSPA~~2020 Purchase Agreement, as amended on May 29, 2020, with ~~Aspire Capital~~Lincoln Park to place up to ~~$22.0~~$12.0 million in the aggregate of the Company’s common stock on an ongoing basis when required by the Company over a term of 3024 months. ~~The Company~~Westwater will control the timing and amount of any sales to ~~Aspire Capital,~~Lincoln Park, and Lincoln Park is obligated to make purchases in accordance with the 2020 Purchase Agreement. Any common stock that is sold to Lincoln Park will occur at a purchase price that is based on an agreed upon fixed discount to the Company’s prevailing market prices at ~~that time. As consideration for Aspire Capital entering into~~ the time of each sale and with no upper limits to the price Lincoln Park may pay to purchase ~~agreement,~~common stock. The 2020 Purchase Agreement may be terminated by Westwater at any time, in its sole discretion, without any additional cost or penalty.

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shares of ~~common stock subject~~Common Stock to Lincoln Park as consideration for its commitment to purchase shares of Common Stock under the ~~CSPA were registered~~2020 Purchase Agreement.

Also, on May 21, 2020, the Company entered into a registration rights agreement with Lincoln Park pursuant to which the ~~Company’s effective shelf~~Company filed a registration statement on Form ~~S-3.~~

~~On September 27, 2017, as a provision~~S-1 with the SEC, which was declared effective on June 26, 2020 relating to the resale of ~~the CSPA and after satisfaction of certain commencement conditions, Aspire Capital made~~ an initial ~~purchase~~tranche of ~~1,428,571~~1,971,000 shares subject to the 2020 Purchase Agreement. As of June 30, 2020, the Company has sold 192,471 shares of common stock for ~~which~~gross proceeds of $250,000 under the 2020 Purchase Agreement and through July 31, 2020, the Company ~~received proceeds of $2.0 million. There were no other sales of common stock pursuant to the CSPA and as of November 9, 2017, $20.0~~has sold 1.1 million ~~of the aggregate $22.0 million remained available for future sales under the CSPA.~~

~~Controlled Equity Offering Sales Agreement~~

On April 14, 2017, the Company entered into the ATM Offering with Cantor acting as sales agent. Under the ATM Offering, the Company may from time to time sell shares of its common stock having an aggregate offering amount up to $30.0 million in “at-the-market” offerings, which shares are registered under a registration statement on Form S-3, which was declared effective on March 9, 2017. The Company pays Cantor a commission equal to 2.5% of the gross proceeds from the sale of any shares pursuant to the ATM Offering. As of November 9, 2017, the Company had sold 673,853 shares of common stock for ~~net~~gross proceeds of ~~$1.1 million~~$2.3 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 ~~ATM Offering.~~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 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 ~~Company~~tribunal, Turkey must file its Counter-Memorial on or before September 14, 2020, and the hearing on the substantive issues and damages is scheduled for September 13-17, 2021. Overall, the filing on May 13, 2020 had ~~approximately $28.9 million remaining available for future sales under~~no effect on the ~~ATM Offering.~~

~~Other Offerings~~

On January 19, 2017, the Company raised $8.9 million in net proceeds through the registered sale of approximately 1.4 million shares of common stock and pre-funded warrants to purchase approximately 3.4 million shares of common stock at $0.01 per share. Also, on February 16, 2017, the Company raised approximately $4.5 million in additional net proceeds through the registered sale of 2.1 million shares of common stock and pre-funded warrants to purchase approximately 0.7 million shares of common stock at $0.01 per share. Alltiming of the ~~pre-funded warrants were subsequently exercised.~~hearing in 2021.

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

~~Closing of Sale of HRI~~RESULTS OF OPERATIONS

On January 5, 2017, the Company completed the sale of its wholly owned subsidiary HRI, which held the Company’s Crownpoint and Churchrock properties, to Laramide for $2.5 million in cash, common stock and warrants from Laramide valued at $0.5 million, and a three-year installment promissory note in the amount of $5.0 million. The Company also retained a 4% NSR Royalty on the Churchrock project, which Laramide may purchase for $4.95 million during the first year following the closing of the transaction. In addition, the Company has an option to purchase Laramide’s La Sal project for $3.0 million and an option to purchase Laramide’s La Jara Mesa project in Cibola County, New Mexico for $5.0 million, both of which options expire in January 2018.

~~Results of Operations~~

Summary

Our consolidated net loss for the three months ended ~~September~~June 30, ~~2017~~2020 was ~~$3.0~~$2.5 million, or ~~$0.12~~$0.43 per share, as compared with ~~$3.7 million, or $0.38 per share for the same period in 2016. For the three months ended September 30, 2017, the decrease in our~~a consolidated net loss of ~~$0.7 million from the respective prior period was mostly the result of a decrease in interest expense of $0.7 million.~~

~~Our consolidated net loss for the nine months ended September 30, 2017 was $3.8 million, or $0.16 per share, as compared with $12.6~~$2.8 million, or $1.81 per share for the same period in ~~2016. For the nine months ended September 30, 2017, the~~2019. The $0.3 million decrease in our consolidated net loss ~~of $8.8 million~~ from the respective prior period was the result of a ~~gain on~~decrease in mineral property expenses in the ~~disposal of our Churchrock~~current year in an effort to conserve cash during the economic uncertainties arising from the COVID-19 pandemic and ~~Crownpoint projects of $4.9 million,~~ a decrease in ~~interest expense~~arbitration costs due to minimal scheduled proceedings during the current quarter.

Our consolidated net loss for the six months ended June 30, 2020 was $5.8 million, or $1.18 per share, as compared with a consolidated net loss of ~~$2.2~~$5.9 million, aor $3.95 per share for the same period in 2019. The $0.1 million decrease in our consolidated net loss from the ~~impairment~~respective prior period was partially the result of ~~uranium properties of $0.5~~a $0.7 million ~~a decrease general administrative expenses of $1.1 million, a decrease in commitment fees of $0.3 million and a decrease of $0.1 million due to a~~ loss on the sale of ~~marketable~~ securities comprised of Laramide shares and warrants in ~~2016. Offsetting these amounts~~the first half of 2019 offset by interest income from the Laramide promissory note. No such losses or interest income was ~~an increase~~recorded for the same period in ~~mineral property expenses~~2020.

Table of ~~$0.7 million.~~Contents

Mineral Property Expenses

The following table details our mineral property expenses for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016:~~

For the Three Months Ended
Sep 30,

For the Nine Months Ended
Sep 30,

2017

2016

2017

2016

(thousands of dollars)
Restoration/Recovery expenses

     Rosita Project
$            71

$           18

$
160

$
6
          Total restoration/recovery expenses
71

18

160

6

Standby care and maintenance expenses

     Kingsville Dome Project
153

166

477

467

2019:

For the Three months Ended

For the Six months ended

June 30,

June 30,
��

2020

2019

2020

2019

(thousands of dollars)
Restoration/Recovery expenses








Kingsville Dome project

$
1

$
—

$
2

$
—
Rosita project

1

11

1

(8)
Vasquez project

5

40

5

77
Total restoration/recovery expenses

7

51

8

69

Standby care and maintenance expenses








Kingsville Dome project

162

133

334

286
Rosita project

116

84

203

201
Vasquez project

99

69

182

143
Total standby care and maintenance expenses

377

286

719

630

Exploration and evaluation costs

—

(4)

—

60

Land maintenance and holding costs

192

475

451

667

Total mineral property expenses

$
576

$
808

$
1,178

$
1,426

     Rosita Project
74

73

258

233
     Vasquez Project
117

105

308

275
     Temrezli Project
41

31

164

453
          Total standby care and maintenance expenses
385

375

1,207

1,428

Exploration and evaluation costs
423

86

609

92

Land maintenance and holding costs
437

560

1,661

1,382

Total mineral property expenses
$
1,316

$
1,039

$
3,637

$
2,908
For the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2020, mineral property expenses ~~increased~~decreased by ~~$0.3~~$0.2 million ~~and $0.7 million, respectively,~~ from the corresponding periods during ~~2016. For~~2019. The decreases were primarily due to the ~~three month period, exploration costs increased by $0.3 million, which was partially offset by~~timing of the annual lease rental for a ~~decrease~~uranium property in ~~land and maintenance costs~~New Mexico. The full amount of ~~$0.1 million. For~~lease rental is normally paid during the nine month period, exploration costs increased by $0.5 million, Rosita restoration costs increased by $0.2 million and land and maintenance costs increased by $0.3 million, and Temrezli standby costs decreased by $0.3 million.second quarter of the year but for the current year the leaseholder agreed to payments in seven monthly installments from May to November. At June 30, 2020 five monthly payments remained.
General and Administrative Expenses
Significant expenditures for general and administrative expenses for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016~~2019 were:

For the Three months ended

For the Six months ended

June 30,

June 30,


2020

2019

2020

2019

(thousands of dollars)

Stock compensation expense

$
28

$
8

$
28

$
15
Salaries and payroll burden

766

725

1,533

1,410
Legal, accounting, and public company expenses

470

761

1,123

1,482
Insurance and bank fees

167

109

334

235
Consulting and professional services

74

43

104

56
Office expenses

110

58

201

162
Sales and marketing

41

(7)

99

11
Other expenses

3

3

16

34
Total

$
1,659

$
1,700

$
3,438

$
3,405

General and administrative expenses for the three and six months ended June 30, 2020 and 2019 remained relatively constant at $1.7 million and $3.4 million respectively.

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Arbitration Costs

The majority of costs associated with the Request for Arbitration against the Republic of Turkey in 2020 occurred in the first quarter and slowed significantly in the second quarter resulting in a $0.3 million decrease for the three months ended June 30, 2020 compared with the same period in 2019. During the six months ended June 30, 2020, the Company incurred arbitration related legal and expert consulting costs of $0.7 million, a $0.2 million increase over the $0.5 million of costs incurred during the same period in 2019. The increase was due 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. 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 Three Months Ended Sep 30,

For the Nine Months Ended Sep 30,

2017

2016

2017

2016

(thousands of dollars)

Stock compensation expense

$
24

$
75

$
62

$
545
Salaries and payroll burden

614

846

1,796

2,144
Legal, accounting, public company expenses
718

648

2,251

2,266
Insurance and bank fees

149

127

370

405
Consulting and professional services

21

28

44

190
Office expenses

148

126

364

392
Other expenses

26

33

89

93
Total

$
1,700

$
1,883

$
4,976

$
6,035
For the three months ended ~~September~~June 30, ~~2017, general and administrative charges decreased by $0.2~~2020, the $0.1 million asdecrease in other income compared ~~with~~to the ~~corresponding period in 2016. This decrease~~three months ended June 30, 2019 was primarily due to ~~decreases~~interest income from the Laramide promissory note recorded in ~~salaries expense and stock compensation expense of $0.3 million, which was partially offset by an increase in legal, accounting and public company expenses of $0.1 million.~~2019.
For the ~~nine~~six months ended ~~September~~June 30, ~~2017, general and administrative charges decreased by $1.1~~2020, the $0.4 million asincrease in other income compared ~~with~~to the ~~corresponding period in 2016. This decrease~~six months ended June 30, 2019 was primarily due to ~~decreases in stock compensation expense and salaries and payroll burden of $0.8~~the $0.7 million ~~and consulting and professional services of $0.1 million.~~
~~Other Income and Expenses~~
~~Loss~~loss on ~~Sale of Marketable Securities~~
~~On February 22, 2016, we received proceeds of $0.2 million from~~ the sale of our 76,455 shares of Energy Fuels Inc. common stock that we received as partial consideration for the sale of our Roca Honda assets during 2015. We recorded a loss of $0.1 million as the difference between the fair value on the date we received the shares of $0.3 million and the proceeds received of $0.2 million.
~~Gain on Disposal of Uranium Properties~~
On January 5, 2017, we completed the sale of our wholly-owned subsidiary HRI, which holds the Churchrock and Crownpoint projects, to Laramide pursuant to the Laramide SPA. Under the terms of the Laramide SPA, executed on April 7, 2016 and amended on December 5, 2016, we received the following consideration:

•
~~$2.5 million in cash, of which $0.25 million was paid on October 21, 2016;~~

•
~~2,218,333 shares~~securities comprised of Laramide ~~common stock~~shares and ~~2,218,333 Laramide common stock purchase warrants. Each common stock purchase warrant entitles~~warrants in the ~~Company to purchase one share of common stock of Laramide at a price of CDN$0.45 for a period of 60 months from the date of closing;~~
•
a $5.0 million promissory note, secured by a mortgage over the projects. The note has a three-year term and carries an initial interest rate of 5% which then increases to 10% upon Laramide’s decision regarding commercial production at the Churchrock project. Principal payments of $1.5 million are due and payable on January 5 in each of 2018 and 2019, with the balance of $2.0 million due and payable on January 5, 2020. Interest is payable on a quarterly basis, provided however that no interest will be payable until March 31, 2018. Laramide will have the right to satisfy up tofirst half of each of these payments by delivering shares of its common stock to the Company, which shares will be valued by reference to the VWAP for Laramide’s common stock for the 20 trading days before the respective anniversary of January 5, on which each payment is due;
•
~~a retained 4.0% NSR Royalty on the Churchrock project, which royalty may be repurchased by Laramide by January 5, 2018 for $4.95 million; and~~

•
an option to purchase Laramide’s La Sal project for $3.0 million and an option to purchase its La Jara Mesa project for $5.0 million, both of which expire on January 5, 2018. Any such exercise by the Company will first result in a reduction of the principal amount due under the promissory note with any remaining portions of the purchase to be paid in cash by the Company.
The divestiture of HRI was accounted for as an asset disposal and the non-cash consideration received from Laramide was recorded at fair value. The fair value of the shares of Laramide common stock received was determined using the closing share price of Laramide’s stock on January 5, 2017. The fair value of the common stock purchase warrants was determined using the Black-Scholes method on April 27, 2017, which was the date that Laramide’s stockholders approved the issuance of the warrants. The fair value of the notes receivable was determined using the present value of the future cash receipts discounted at a market rate of 9.5%. We did not record a separate fair value for the options as the exercise of the options would reduce the amount outstanding under the notes receivable. Due to the high degree of uncertainties surrounding future mine development and minerals prices, as well as limited marketability, the Company determined the fair value of the NSR Royalty to be nil. We recorded the following gain on disposal of uranium properties within our Condensed Consolidated Statement of Operations:
~~(thousands of dollars)~~
~~Total consideration received~~
$
~~6,525~~
~~Carrying value of Churchrock project~~
~~(2,123)~~
~~Carrying value of other plant and equipment~~
~~(31)~~
~~Accounts payable~~
1
~~Asset retirement obligation~~
~~105~~
~~Royalty payable on Churchrock project~~
~~450~~
~~Gain on disposal of HRI~~
$
~~4,927~~

~~Loss on Extinguishment of Convertible Debt~~
On February 9, 2017, we repaid $5.5 million outstanding under the RCF Loan. Upon repayment, we recognized a loss of $39,000, which represented the difference between the $5.5 million principal amount and the carrying value of the RCF Loan on the date of repayment.
~~Interest Income/(Expense)~~
Interest income of $0.2 million for the three months ended September 30, 2017 consisted of accrued interest receivable of $0.1 million on the Laramide Notes and amortization of $0.1 million on the discount on the Laramide Notes.
Interest income of $0.4 million for the nine months ended September 30, 2017 consisted of accrued interest receivable of $0.2 million on the Laramide Notes and amortization of $0.4 million on the discount on the Laramide Notes. These amounts were partially2019 offset by interest ~~expense of $0.2 million associated with~~income from the ~~RCF Loan prior to repayment.~~
~~Interest expense of $0.7 million for~~Laramide promissory note. No such losses or interest income was recorded over the ~~three months ended September 30, 2016 consisted of interest of $0.2 million payable to RCF, and amortization of the debt discount of $0.5 million.~~

Interest expense of $2.2 million for the nine months ended September 30, 2016 consisted of interest of $0.7 million payable to RCF, amortization of the debt discount of $1.4 million and amortization of the establishment fee of $0.1 million.
~~Commitment Fees~~
Commitment fees expense of $0.3 million for the nine-months ended September 30, 2016 was the result of the issuance of 75,000 shares of our common stock to Aspire Capital on February 4, 2016 as consideration for Aspire Capital entering into an option agreement with us. The shares had a fair value of $4.44 per share.
~~Financial Position~~same period in 2020.
FINANCIAL POSITION

Operating Activities

Net cash used in operating activities was ~~$8.9~~$6.0 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2020, as compared with ~~$9.8~~$4.3 million for the same period in ~~2016.~~2019. The ~~decrease of $0.9~~$1.7 million increase in cash used ~~is mostly~~was primarily due to an increase in prepaid assets and a decrease in ~~interest expense~~accounts payable and accrued liabilities in 2020.

Investing Activities

Net cash used for investing activities for the six months ended June 30, 2020 was $0.1 million for the purchase of ~~$0.3~~equipment, as compared with $2.8 million ~~an increase in interest income~~ of ~~$0.4 million and an aggregated decrease in operating expenses of $0.3 million.~~

~~Investing Activities~~

~~Net~~ cash provided by investing activities ~~was $1.9 million~~ for the ~~nine~~six months ended ~~September~~June 30, ~~2017, as compared with $0.3 million for the same period in 2016.~~2019. For the ~~2017~~2019 period, wethe Company received ~~$2.0~~note payments on the Laramide note in the amount of $0.8 million in cash. Additionally, the Company received net proceeds of ~~expenses, from the sale of our wholly-owned subsidiary, HRI to Laramide which closed on January 5, 2017. For the 2016 period, we received $0.2~~$0.5 million from the sale of ~~short-term investments.~~Laramide securities and $1.5 million from URC as a deposit in accordance with the terms of the Asset Purchase Agreement signed on March 5, 2019. See Note 4 to our unaudited Condensed Consolidated Financial Statements included herewith for more information.

Financing Activities

Net cash provided by financing activities was ~~$10.9~~$6.6 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017. For~~2020, resulting primarily from the ~~nine months ended September 30, 2017, net cash~~ proceeds of ~~$15.4 million were received upon equity financings completed in January, February~~sales of common stock through the Company’s ATM Offering Agreement and ~~September 2017, respectively.~~the Lincoln Park 2019 Purchase Agreement and 2020 Purchase Agreement. Additionally, ~~$1.0~~$0.3 million was received from the ~~sale of common stock sold through the Company’s ATM Offering. This increase was offset by the repayment of $5.5 million outstanding under the RCF Loan.~~

PPP loan in May 2020. Net cash provided by financing activities ~~was $12.5 million~~ for the ~~nine~~same period in 2019 was $1.1 million. The $5.5 million increase was due to better financing capacity under the Company’s financing agreements with Cantor and Lincoln Park in the first six months ~~ended September 30, 2016. For~~of 2020 compared to the ~~nine months ended September 30, 2016, net cash proceeds~~same period in 2019.

LIQUIDITY AND CAPITAL RESOURCES

The interim Condensed Consolidated Financial Statements of ~~$0.8 million~~the Company have been prepared on a “going concern” basis, which means that the continuation of the Company is presumed even though events and ~~$1.2 million~~conditions exist that, when considered in the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern because it is possible that the Company will be required to adversely change its current business plan or may be unable to meet its obligations as they become due within one year after the date that these financial statements were ~~received upon~~issued.

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The Company last recorded revenues from operations in 2009 and expects to continue to incur losses as a result of costs and expenses related to maintaining its properties and general and administrative expenses. Since 2009, the Company has relied on equity financings, ~~completed~~debt financings and asset sales to fund its operations and the Company expects to rely on ~~February 4, 2016~~these forms of financing to fund its operations into the near future. The Company will also continue to identify ways to reduce its cash expenditures.

The Company’s current business plan requires working capital to fund non-discretionary expenditures for uranium reclamation activities, mineral property holding costs, early stage graphite battery-material product development costs and ~~April 4, 2016, respectively. $4.7 million in net proceeds were received from the sale of common stock~~administrative costs. The Company intends to ~~Aspire Capital under the terms~~pursue project financing to support execution of the ~~2016 Common Stock Purchase Agreement~~graphite business plan, including discretionary capital expenditures associated with ongoing graphite battery-material product development costs, construction of pilot plant facilities and ~~$5.8 million in net proceeds were received from~~construction of commercial production facilities. The Company’s current lithium business plan will be funded by working capital; however, the ~~sale of common stock sold through~~Company is pursuing project financing including possible joint venture partners to fund discretionary greenfield exploration activities.

At June 30, 2020 the Company’s ~~prior ATM program with BTIG.~~

~~Liquidity~~cash balances were $2.3 million and ~~Capital Resources~~

At September 30, 2017, the Company had working capital of $8.2 million, which along with the anticipated funding from the financing agreements described below is expected to provide it with the necessary liquidity through September 30, 2018. At December 31, 2016, the Company had a working capital deficit balance of ~~$4.2~~$1.0 million. The ~~increase in working capital of $12.4 million for the nine months ended September 30, 2017 was primarily due~~Company’s cash balance at July 31, 2020 is $2.9 million. Subsequent to ~~the following:~~

•

the completion of three equity offerings in January 2017, February 2017 and September 2017 for net proceeds of $8.9 million, $4.5 million and $2.0 million respectively, as further described under “Recent Developments”;

•

~~the completion of the sale of the Company’s wholly-owned subsidiary HRI to Laramide on January 5, 2017. Upon completion,~~July 31, 2020, the Company received $2.2 million in cash, a $5.0 million promissory note, of which $1.5 million is due in January 2018, 2,218,333 shares of Laramide’s common stock which had a fair value of $0.5 million at September 30, 2017 and 2,218,333 common stock purchase warrants which had a fair value of $0.3 million at September 30, 2017. Details regarding this transaction are discussed in Note 3 to the accompanying condensed consolidated financial statements; and

•

~~the repayment of the $5.5 million outstanding balance under the RCF Loan (defined in Note 7 to the accompanying condensed consolidated financial statements.)~~

~~Also during the nine months ending September 30, 2017, the Company entered into the following financing agreements and anticipates funding from these sources to sustain operations through 2018:~~

•

~~Controlled Equity Offering Sales Agreement~~

On April 14, 2017, the Company entered into the ATM Offering with Cantor acting as sales agent, pursuant to which the Company has registered the offer and sale from time to time of shares of its common stock having an aggregate offering price of up to $30.0 million of which approximately $28.9 million is available for future sales as of November 9, 2017. The Company is unable to sell shares of its common stock through the ATM Offering on dates that it places shares with Aspire Capital through its CSPA, as discussed below.

•

~~Common Stock Purchase Agreement~~

On September 25, 2017, the Company entered into a CSPA with Aspire Capital to place up to $22.0 million in the aggregate of its common stock over a term of 30 months. Upon execution of the CSPA, the Company issued 880,000 shares of common stock to Aspire Capital as a commitment fee. The Company cannot sell in excess of 5,033,677 shares of common stock, the Exchange Cap, including the 880,000 commitment shares, unless (i) stockholder approval is obtained, or (ii) the average price paid for all shares issued under the CSPA (including the 880,000 commitment shares) is equal to or greater than $1.38. As of November 9, 2017, the Company has dollar capacity of $20.0 million of common stock available for future sales, limited to the current Exchange Cap of 2.7 million shares of common stock unless conditions (i) or (ii) above are met. See Note 9 to the accompanying condensed consolidated financial statements for further details.

~~The Company believes that the ATM Offering and the CSPA, along with its existing working capital balance, will provide it with the necessary liquidity~~expects to fund operations ~~through 2018. The Company will also continue to explore additional opportunities to raise capital, further monetize its non-core assets and identify ways to reduce its cash expenditures.~~as follows:

●

The Purchase Agreement with Lincoln Park Capital, LLC (“Lincoln Park”) dated as of May 21, 2020 and as amended on May 29, 2020 (the “2020 Purchase Agreement”), the issuance of shares pursuant to which was approved by the Company’s shareholders at the annual shareholders meeting on April 28, 2020. Pursuant to the 2020 Purchase Agreement, the Company may place up to $12.0 million in the aggregate of the Company's common stock on an ongoing basis when required by the Company over a term of 24-months ending in May 2022. As of July 31, 2020, the Company has 722,279 registered shares for resale by Lincoln Park on a current Form S-1 and $9.7 million remaining sales capacity under the 2020 Purchase Agreement, subject to periodic registration of shares on Form S-1.

●

Other possible debt and equity financings and asset sales.

~~Off- Balance Sheet Arrangements~~

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, the timing or occurrence of any future

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drilling or production from the Company’s properties, ~~the timing or establishment of lithium resources,~~ the ability of the Company to acquire additional properties or partner with other companies, the construction of pilot plant facilities and construction of commercial production facilities, 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 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 availability of capital to WWR;~~

•
~~the spot price and long-term contract price of uranium and lithium;~~

•
~~risks associated with our foreign operations;~~

•
~~the ability of WWR to enter into and successfully close acquisitions, dispositions or other material transactions;~~

•
~~government regulation of the mining industry and the nuclear power industry in the United States and the Republic of Turkey;~~

•
~~operating conditions at our mining projects;~~

•
~~the world-wide supply and demand of uranium and lithium;~~

•
~~weather conditions;~~

● the spot price and long-term contract price of graphite, vanadium, lithium and uranium;
● the ability of the Company to enter into and successfully close acquisitions, dispositions or other material transactions;
● the Company’s ability to raise capital in the future;
● government regulation of the mining industry and the nuclear power industry in the United States;
● risks associated with our operations and the operations of our partners, including the impact of COVID-19;
● 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, vanadium, lithium and uranium;
● 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, vanadium, lithium or uranium discoveries not being in high enough concentration to make it economic to extract the metals;
● 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.

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

•
~~currently pending or new litigation; and~~

•
~~our ability to maintain and timely receive mining and other permits from regulatory agencies.~~
as well as other factors described elsewhere in this Quarterly Report on Form 10-Q, our ~~2016~~2019 Annual Report on Form 10-K 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.

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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 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~~June 30, ~~2017.~~2020.

Changes in Internal Controls

~~During the three months ended September 30, 2017,~~There were no changes ~~have been made~~ in our internal control over financial reporting during the quarter ended June 30, 2020 that ~~have~~ 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.,~~3, “Legal Proceedings,” in our Annual Report on Form 10-K for the year ended December 31, ~~2016. The following disclosure updates~~2019. There have been no material changes to the legal ~~proceeding~~proceedings previously disclosed in the Annual Report on Form 10-K, other than as set forth ~~under~~below.

On December 13, 2018, Westwater filed a Request for Arbitration against the ~~headings “Dispute Over Kleberg Settlement Agreement” and “TCEQ Adjudicatory Proceeding~~Republic of Turkey before the International Centre for the ~~Kingsville Facility”~~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 ~~2016 Form 10-K~~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 ~~reflect developments during~~ the ~~nine months ended~~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, ~~2017 and should be read together~~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 ~~corresponding disclosure in~~arbitral tribunal a request which Westwater elected not to oppose, to extend the ~~2016 Form 10-K.~~

~~Dispute Over Kleberg Settlement Agreement~~

~~Following~~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 ~~submittal of all the briefs by both parties,~~arbitral tribunal approved on June ~~23, 2017,~~3, 2020. As a result of these decisions by the ~~Texas Supreme Court granted~~tribunal, Turkey must file its Counter-Memorial on or before September 14, 2020, and the ~~Petition for Review. On October 12, 2017 the Texas Supreme Court held an oral argument. The Company has no indication as to when or how the Texas Supreme Court will rule~~hearing on the ~~matter.~~substantive issues and damages is scheduled for September 13-17, 2021.

~~TCEQ Adjudicatory Proceeding for the Kingsville Facility~~

On April 12, 2017, the TCEQ held a hearing and granted the request of URI, Inc., a wholly-owned subsidiary of the Company, to withdraw the permit application without prejudice, and ordered URI, Inc. to pay Kleberg County $15,716 and to pay another named individual $967. URI, Inc. has made those payments and the matter is fully resolved.

ITEM 1A. RISK FACTORS.

~~Other than as set forth below, there~~There have been no material changes from those risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~

Our foreign operations subject us to a number of significant regulatory, legal and political risks that may have a material adverse impact on our prospects, projects, financial condition and results of operations.

Our acquisition of Anatolia Energy significantly increased the importance of foreign operations to our future prospects and growth, and our foreign operations expose us to a number of risks. These risks include such things as:

•
~~enforcement of unfamiliar or uncertain foreign real estate, mineral tenure, contract, water use, mine safety and environmental laws and policies;~~

•
~~challenges to mining, processing and related permits and licenses, or to applications for permits and licenses,~~2019, as updated by ~~or on behalf of regulatory authorities, indigenous populations, non-governmental organizations or other third parties;~~

•
~~war, crime, terrorism, sabotage, civil unrest and uncertain political and economic environments;~~

•
~~deterioration in relations between the United States and the foreign jurisdictions in which we operate;~~

•
~~renegotiation, nullification or forced modification of existing contracts, licenses, permits, approvals, concessions or the like;~~

•
~~corruption;~~

•
~~challenges in overseeing employees and contractors, including~~ the risk ~~that~~factor set forth in our ~~employees and independent contractors may engage in unauthorized or illegal activity;~~Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, each of which is incorporated herein by reference.
•
~~exchange and currency controls and fluctuations;~~

•
~~limitations on foreign exchange and repatriation of earnings;~~

•
~~restrictions on mineral production and price controls;~~

•
~~seizure of mineral production and expropriation or nationalization of property;~~

•
~~changes in legislation, including changes related to taxation, new or increased mining royalty interests, import and export regulations, foreign ownership, foreign trade and foreign investment;~~

•
~~high rates of inflation; and~~

•
~~labor practices and disputes.~~
For example, during October 2017, the United States and the Republic of Turkey each suspended all non-immigrant visa services for travel between the two countries following the arrest of U.S. consular staff in Turkey. The uncertainty surrounding the political and economic relationship between the United States and Turkey and the suspension of non-immigrant visas between the two countries could adversely affect our ability to operate in Turkey.
In addition, we face the numerous risks as a new acquirer that our expectations may not be realized and that we may encounter unexpected problems. We continue to review Anatolia Energy’s operations in Turkey, including compliance with local laws and applicable permitting requirements. In the event we determine material noncompliance, we could face fines or restrictions on our ability to develop our projects in Turkey, which could have a material adverse effect on our prospects, projects, financial condition and results of operations.
Further, regulatory, permitting and business arrangements in foreign jurisdictions are subject to extensive laws and regulations intended to prevent improper payments, fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of business arrangements that are commonplace in such foreign jurisdictions, and violations of such laws and regulations could result in regulatory sanctions and serious harm to our reputation. We have adopted a code of business conduct and ethics, but it is not always possible to identify and deter misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves, those actions could have a significant impact on our business, including the imposition of significant civil, criminal and administrative penalties.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF ~~PROCEEDS~~PROCEEDS.
~~None.~~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 Index~~


Exhibit Number		Description

~~3.1~~		~~Restated Certificate of Incorporation of Westwater Resources, Inc., as amended through August 21, 2017.~~

~~3.2~~		~~Amended and Restated Bylaws of Westwater Resources, Inc., effective August 21, 2017.~~

~~4.1~~		~~Registration Rights Agreement dated September 25, 2017 between Westwater Resources, Inc. and Aspire Capital Fund, LLC~~ ~~(incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on September 27, 2017.~~

10.1		~~Common Stock~~ Purchase Agreement, dated ~~September 25, 2017~~May 21, 2020, by and between ~~Westwater Resources, Inc.~~the Company and ~~Aspire~~Lincoln Park Capital Fund, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on ~~September 27, 2017.~~May 22, 2020).

10.2		Registration Rights Agreement, dated May 21, 2020, by and between the Company and Lincoln Park Capital Fund, LLC (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on May 22, 2020).

10.3		Amendment No. 1 to Purchase Agreement, dated May 29, 2020, by and between the Company and Lincoln Park Capital Fund, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 1, 2020).

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.

101.INS:		XBRL Instance Document

101.SCH:		XBRL Taxonomy Extension Schema Document

101.CAL:		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF:		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB:		XBRL Taxonomy Extension Label Linkbase Document

101.PRE:		XBRL Taxonomy Extension Presentation Linkbase Document

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 9, 2017~~August 5, 2020	By:	/s/ Christopher M. Jones
		Christopher M. Jones
		President and Chief Executive Officer (Principal Executive Officer)

Dated: ~~November 9, 2017~~August 5, 2020	By:	/s/ Jeffrey L. Vigil
		Jeffrey L. Vigil
		Vice President - Finance and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)


WESTWATER RESOURCES, INC. (formerly Uranium Resources, Inc.)
CONDENSED CONSOLIDATED BALANCE SHEETS
(expressed in thousands of dollars, except share amounts)
(unaudited)
		September 30,	December 31,
	Notes	2017	2016
ASSETS

Current Assets:
Cash and cash equivalents		$ 7,200	$ 3,309
Marketable securities	3	1,060	-
Notes receivable – current	3	1,500	-
Prepaid and other current assets		831	602
Total Current Assets		10,591	3,911

Property, plant and equipment, at cost:
Property, plant and equipment		112,560	112,964
Less accumulated depreciation, depletion and impairment		(65,677)	(66,048)
Net property, plant and equipment	5	46,883	46,916

Restricted cash		3,668	3,964
Notes receivable – non-current	3	2,554	-
Long-term assets held for sale		-	2,123
Total Assets		$ 63,696	$ 56,914

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
Accounts payable		$ 860	$ 610
Accrued liabilities		1,450	1,981
Convertible loan, net of discount – related party	7	-	5,431
Current portion of asset retirement obligations	8	121	121
Total Current Liabilities		2,431	8,143

Asset retirement obligations, net of current portion	8	5,025	4,668
Other long-term liabilities and deferred credits		500	500
Long-term liabilities related to assets held for sale		-	555
Total Liabilities		7,956	13,866

Commitments and Contingencies	12

Stockholders' Equity:
Common stock, 100,000,000 shares authorized, $.001 par value;
Issued shares – 27,484,935 and 16,675,419, respectively
Outstanding shares – 27,476,910 and 16,667,394, respectively	9	28	17
Paid-in capital	9,10	296,937	280,191
Accumulated other comprehensive income		(287)	-
Accumulated deficit		(240,680)	(236,902)
Treasury stock (8,025 and 8,025 shares, respectively), at cost		(258)	(258)
Total Stockholders' Equity		55,740	43,048

Total Liabilities and Stockholders' Equity		$ 63,696	$ 56,914


		June 30,		December 31,
	Notes	2020		2019
ASSETS

Current Assets:
Cash and cash equivalents	1	$	2,330	$	1,870
Prepaid and other current assets			639		491
Total Current Assets			2,969		2,361

Property, plant and equipment, at cost:
Property, plant and equipment			91,633		91,746
Less accumulated depreciation and depletion			(71,219)		(71,409)
Net property, plant and equipment	6		20,414		20,337
Operating lease right-of-use assets	13		424		484
Restricted cash	1,5		3,807		3,797
Total Assets		$	27,614	$	26,979

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:
Accounts payable		$	1,141	$	852
Accrued liabilities			1,308		1,770
Asset retirement obligations - current	8		949		894
Operating lease liability - current	13		154		153
Notes payable - current	15		146		—
Total Current Liabilities			3,698		3,669

Asset retirement obligations, net of current	8		5,322		5,406
Other long-term liabilities			500		500
Operating lease liability, net of current	13		280		340
Notes payable, net of current	15		185		—
Total Liabilities			9,985		9,915

Commitments and Contingencies	12

Stockholders’ Equity:
Common stock, 100,000,000 shares authorized, $.001 par value;
Issued shares – 6,664,976 and 3,339,541 respectively
Outstanding shares - 6,664,815 and 3,339,380 respectively	9		7		3
Paid-in capital	9,10		326,073		319,758
Accumulated deficit			(308,193)		(302,439)
Less: Treasury stock (161 and 161 shares, respectively), at cost			(258)		(258)
Total Stockholders’ Equity			17,629		17,064

Total Liabilities and Stockholders’ Equity		$	27,614	$	26,979


WESTWATER RESOURCES, INC. (formerly Uranium Resources, Inc.)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(expressed in thousands of dollars, except share and per share amounts)
(unaudited)
		For the Three Months Ended Sep 30,		For the Nine Months Ended Sep 30,
	Notes	2017	2016	2017	2016

Operating Expenses:
Mineral property expenses	6	$ (1,316)	$ (1,039)	$ (3,637)	$ (2,908)
General and administrative		(1,700)	(1,883)	(4,976)	(6,035)
Accretion of asset retirement obligations	8	(132)	(120)	(395)	(360)
Depreciation and amortization		(27)	(56)	(104)	(188)
Impairment of uranium properties		-	-	-	(534)
Total operating expenses		(3,175)	(3,098)	(9,112)	(10,025)

Non-Operating Income/(Expenses):
Loss on extinguishment of convertible debt		-	-	(39)	-
Interest income/(expense)	3,7	186	(671)	424	(2,194)
Commitment fees		-	-	-	(333)
Loss on sale of marketable securities		-	-	-	(116)
Gain on disposal of uranium properties	3	-		4,927	-
Other income, net		6	25	22	44
Total other income/(expense)		192	(646)	5,334	(2,599)

Net Loss		$ (2,983)	$ (3,744)	$ (3,778)	$ (12,624)

Other Comprehensive Loss
Unrealized fair value decrease on marketable securities		$ (126)	$ -	$ (287)	$ (49)
Transfer to realized loss upon sale of available-for-sale securities		-	-	-	116
Comprehensive Loss		$ (3,109)	$ (3,744)	$ (4,065)	$ (12,557)

BASIC AND DILUTED LOSS PER SHARE		$ (0.12)	$ (0.38)	$ (0.16)	$ (1.81)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING		25,037,203	9,741,331	23,763,842	6,963,869


		For the Three Months Ended				For the Six Months Ended
		June 30,				June 30,
	Notes	2020		2019		2020		2019

Operating Expenses:
Mineral property expenses	7	$	(576)	$	(808)	$	(1,178)	$	(1,426)
Product development expenses			(175)		(16)		(301)		(32)
General and administrative expenses			(1,659)		(1,700)		(3,438)		(3,405)
Arbitration costs			(28)		(354)		(697)		(485)
Accretion of asset retirement obligations	8		(32)		(30)		(138)		(156)
Depreciation and amortization			(17)		(25)		(30)		(48)
Total operating expenses			(2,487)		(2,933)		(5,782)		(5,552)

Non-Operating Income/(Expenses):
Loss on sale of marketable securities	3,5		—		—		—		(720)
Interest income	3		—		168		—		334
Other income (expense)			20		(10)		28		(11)
Total other income (expense)			20		158		28		(397)

Net Loss		$	(2,467)	$	(2,775)	$	(5,754)	$	(5,949)

Other Comprehensive Income
Transfer to realized loss upon sale of available-for-sale securities			—		—		—		90
Comprehensive Loss		$	(2,467)	$	(2,775)	$	(5,754)	$	(5,859)

BASIC AND DILUTED LOSS PER SHARE		$	(0.43)	$	(1.81)	$	(1.18)	$	(3.95)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING			5,786,117		1,532,802		4,895,533		1,505,668


WESTWATER RESOURCES, INC. (formerly Uranium Resources, Inc.)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS AND SUPPLEMENTAL CASH FLOW INFORMATION
(expressed in thousands of dollars)
(unaudited)
		Nine Months Ended Sep 30,
	Notes	2017	2016

Operating Activities:
Net loss		$ (3,778)	$ (12,624)
Reconciliation of net loss to cash used in operations:
Accretion of asset retirement obligations	8	395	360
Amortization of debt discount		30	1,355
Amortization of convertible loan establishment fee		-	75
Amortization of notes receivable discount		(553)	-
Loss on extinguishment of convertible debt	7	39	-
Unrealized holding loss on securities		-	116
Common stock issued as payment for commitment fees		-	333
Costs incurred for restoration and reclamation activities	8	(37)	(54)
Depreciation and amortization		104	188
Stock compensation expense	10	62	545
Gain on disposal of uranium properties	3	(4,927)	-
Impairment of uranium properties		-	534
Amortization of non-cash investor relations fees		175	-
Effect of changes in operating working capital items:
(Increase)/decrease in receivables		(5)	47
(Increase)/decrease in prepaid and other current assets		(101)	101
Decrease in payables, accrued liabilities and deferred credits		(280)	(830)
Net Cash Used In Operating Activities		(8,876)	(9,854)

Cash Flows From Investing Activities:
Purchase of equipment		(100)	-
Proceeds from the sale of investments		-	247
Net decrease in restricted cash and short-term investments		23	57
Proceeds from disposal of property, plant and equipment	3	1,950	-
Net Cash Provided By Investing Activities		1,873	304

Cash Flows From Financing Activities:
Payments on borrowings	7	(5,500)	-
Issuance of common stock, net	9	16,395	12,511
Payment of minimum withholding taxes on net share settlements of equity awards		(1)	-
Net Cash Provided By Financing Activities		10,894	12,511

Net increase in cash and cash equivalents		3,891	2,961
Cash and cash equivalents, beginning of period		3,309	865
Cash and Cash Equivalents, End of Period		$ 7,200	$ 3,826

Cash paid during the period for:
Interest		$ 227	$ 486
Supplemental Non-Cash Information With Respect to Investing and Financing Activities:
Common stock issued for settlement of accounts payable		$ 300	$ 834
Common stock issued for payment of convertible loan interest and fees		$ -	$ 242
Common stock issued for payment of commitment fees		$ 1,214	$ 523


WESTWATER RESOURCES, INC. (formerly Uranium Resources, Inc.)
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(expressed in thousands of dollars, except share amounts)
(unaudited)

	Common Stock
	Shares	Amount	Paid-In Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit	Treasury Stock	Total
Balances, January 1, 2017	16,667,394	$ 17	$ 280,191	$ -	$ (236,902)	$ (258)	$ 43,048
Net loss	-	-	-	-	(3,778)	-	(3,778)
Common stock issued, net of issuance costs	9,776,396	10	15,172	-	-	-	15,182
Common stock issued for commitment fees	880,000	1	1,213	-	-	-	1,214
Common stock issued for investor relations fees	150,000	-	300	-	-	-	300
Stock compensation expense and related share issuances, net of shares withheld for the payment of taxes	3,120	-	62	-	-	-	62
Minimum withholding taxes on net share settlements of equity awards	-	-	(1)	-	-	-	(1)
Unrealized holding loss on marketable securities	-	-	-	(287)	-	-	(287)
Balances, September 30, 2017	27,476,910	$ 28	$ 296,937	$ (287)	$ (240,680)	$ (258)	$ 55,740


							Accumulated
						Other
	Common Stock			Paid-In		Comprehensive		Accumulated		Treasury
Six months ended June 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	—		—		—		—		(5,754)		—		(5,754)
Common stock and common stock purchase warrants issued, net of issuance costs	3,324,924		4		6,287		—		—		—		6,291
Stock compensation expense and related share issuances, net of shares withheld for payment of taxes	511		—		28		—		—		—		28
Balances, June 30, 2020	6,664,976	$	7	$	326,073	$	-	$	(308,193)	$	(258)	$	17,629


Three months ended June 30, 2020
Balances, March 31, 2020	4,762,794	$	5	$	322,227	$	-	$	(305,726)	$	(258)	$	16,248
Net loss	—		—		—		—		(2,467)		—		(2,467)
Common stock issued, net of issuance costs	1,902,182		2		3,818		—		—		—		3,820
Stock compensation expense and related share issuances, net of shares withheld for payment of taxes	—		—		28		—		—		—		28
Balances, June 30, 2020	6,664,976	$	7	$	326,073	$	-	$	(308,193)	$	(258)	$	17,629


	As of June 30,
(thousands of dollars)	2020		2019
Cash and cash equivalents	$	2,330	$	1,156
Restricted cash - pledged deposits for performance bonds		3,807		3,768
Cash, cash equivalents and restricted cash shown in the statement of cash flows	$	6,137	$	4,924


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


	September 30, 2017
(thousands of dollars)	Level 1	Level 2	Level 3	Total
Current Assets
Marketable securities and short term investments	$ 1,060	$ -	$ -	$ 1,060
Total current assets recorded at fair value	$ 1,060	$ -	$ -	$ 1,060
Non-Current Assets
Restricted cash	3,668	-	-	3,668
Total non-current assets recorded at fair value	$ 3,668	$ -	$ -	$ 3,668

	December 31, 2016
	Level 1	Level 2	Level 3	Total
Non-Current Assets
Restricted cash	$ 3,964	$ -	$ -	$ 3,964
Total non-current assets recorded at fair value	$ 3,964	$ -	$ -	$ 3,964


	June 30, 2020
(thousands of dollars)	Level 1		Level 2		Level 3		Total
Non-current Assets
Restricted cash	$	3,807	$	—		—	$	3,807
Total non-current assets recorded at fair value	$	3,807	$	—	$	—	$	3,807


	December 31, 2019
(thousands of dollars)	Level 1		Level 2		Level 3		Total
Non-current Assets
Restricted cash	$	3,797	$	—		—	$	3,797
Total non-current assets recorded at fair value	$	3,797	$	—	$	—	$	3,797


	Net Book Value of Property, Plant and Equipment at September 30, 2017
(thousands of dollars)	Turkey	Texas	New Mexico	Corporate	Total
Uranium plant	$ -	$ 8,447	$ -	$ -	$ 8,447
Mineral rights and properties	17,968	-	19,102	-	37,071
Other property, plant and equipment	20	1,132	-	214	1,366
Total	$ 17,988	$ 9,579	$ 19,102	$ 214	$ 46,883

	Net Book Value of Property, Plant and Equipment at December 31, 2016
(thousands of dollars)	Turkey	Texas	New Mexico	Corporate	Total
Uranium plant	$ -	$ 8,459	$ -	$ -	$ 8,459
Mineral rights and properties	17,968	-	19,102	-	37,070
Other property, plant and equipment	22	1,224	-	141	1,387
Total	$ 17,990	$ 9,683	$ 19,102	$ 141	$ 46,916


	Net Book Value of Property, Plant and Equipment at June 30, 2020
(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		422		—		—		102		524
Total	$	3,534	$	8,972	$	7,806	$	102	$	20,414


	June 30, 2020	June 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


	Sep 30,		Sep 30,
	2017		2016
	Number of Stock Options	Weighted Average Exercise Price	Number of Stock Options	Weighted Average Exercise Price
Stock options outstanding at beginning of period	110,828	$ 18.24	326,424	$ 24.90
Granted	189,164	1.40	-	-
Expired	(6,001)	104.67	(215,346)	27.64
Stock options outstanding at end of period	293,991	$ 5.64	111,078	$ 19.60
Stock options exercisable at end of period	104,722	$ 13.26	110,869	$ 19.57


	June 30, 2020			June 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	37,786	$	37.42	19,170	$	79.78
Granted	125,804		1.59	—		—
Expired	(1,693)		101.64	(624)		80.58
Canceled or forfeited	—		—	—		—
Stock options outstanding at end of period	161,897	$	8.91	18,546	$	78.21
Stock options exercisable at end of period	36,093	$	34.41	18,546	$	78.21


	Outstanding Stock Options		Exercisable Stock Options
Stock Option Plan	Number of Outstanding Stock Options	Weighted Average Exercise Price	Number of Exercisable Stock Options	Weighted Average Exercise Price
2004 Plan	4,792	$ 35.14	4,792	$ 35.14
2004 Directors’ Plan	973	317.14	973	317.14
2013 Plan	189,581	1.48	312	35.88
Replacement Stock Options	98,645	9.13	98,645	9.13
	293,991	$ 5.64	104,722	$ 13.26


	Outstanding Stock Options			Exercisable Stock Options
	Number of	Weighted		Number of	Weighted
	Outstanding	Average		Stock Options	Average
Stock Option Plan	Stock Options	Exercise Price		Exercisable	Exercise Price
2004 Plan	92	$	1,638.00	92	$	1,638.00
2004 Directors’ Plan	3		10,380.00	3		10,380.00
2013 Plan	158,962		6.57	33,158		25.47
Replacement Options-Alabama Graphite	2,840		75.94	2,840		75.94
	161,897	$	8.91	36,093	$	34.41


	June 30,		December 31,
(thousands of dollars, except lease term and discount rate)	2020		2019
Operating Leases
Operating lease right-of-use assets	$	424	$	484

Current portion of lease liabilities	$	154	$	153
Operating lease liabilities – long term portion		280		340
Total operating lease liabilities	$	434	$	493


	June 30,
Lease payments by year (In thousands)	2020
2020 (remainder of year )	$	81
2021		161
2022		162
2023		92
Total lease payments		496
Less imputed interest		(62)
Total	$	434


	Three months Ended
	June 30, 2020
(thousands of dollars)	Corporate		Uranium		Lithium		Graphite		Total
Statement of Operations
Mineral property expenses	$	—	$	570	$	—	$	6	$	576
Product development expenses		—		—		—		175		175
General and administrative expenses		1,094		442		—		123		1,659
Arbitration expenses		28		—		—		—		28
Accretion of asset retirement costs		—		32		—		—		32
Depreciation and amortization		12		5		—		—		17
		1,134		1,049		—		304		2,487
Loss from operations		(1,134)		(1,049)		—		(304)		(2,487)
Other income/(expense)		28		(8)		—		—		20
Loss before taxes	$	(1,106)	$	(1,057)	$	—	$	(304)	$	(2,467)

Loss from operations		(1,571)		(1,292)		(2)		(68)		(2,933)
Other income		158		—		—		—		158
Loss before taxes	$	(1,413)	$	(1,292)	$	(2)	$	(68)	$	(2,775)


	Six months Ended
	June 30, 2020
(thousands of dollars)	Corporate		Uranium		Lithium		Graphite		Total
Statement of Operations
Mineral property expenses	$	—	$	1,172	$	—	$	6	$	1,178
Product development expenses		—		—		—		301		301
General and administrative		2,283		868		—		287		3,438
Arbitration expenses		697		—		—		—		697
Accretion of asset retirement costs		—		138		—		—		138
Depreciation and amortization		24		6		—		—		30
		3,004		2,184		—		594		5,782
Loss from operations		(3,004)		(2,184)		—		(594)		(5,782)
Other income		28		—		—		—		28
Loss before taxes	$	(2,976)	$	(2,184)	$	—	$	(594)	$	(5,754)


	For the Three Months Ended Sep 30,		For the Nine Months Ended Sep 30,
	2017	2016	2017	2016
	(thousands of dollars)
Restoration/Recovery expenses
Rosita Project	$ 71	$ 18	$ 160	$ 6
Total restoration/recovery expenses	71	18	160	6

Standby care and maintenance expenses
Kingsville Dome Project	153	166	477	467


Rosita Project	74	73	258	233
Vasquez Project	117	105	308	275
Temrezli Project	41	31	164	453
Total standby care and maintenance expenses	385	375	1,207	1,428

Exploration and evaluation costs	423	86	609	92

Land maintenance and holding costs	437	560	1,661	1,382

Total mineral property expenses	$ 1,316	$ 1,039	$ 3,637	$ 2,908

Six months

Six months

June 30,

June 30,

(thousands of dollars)

Operating lease cost