UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2022

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

For the transition period from to

Commission file number 001-33404

WESTWATER RESOURCES, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware		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) 531-0516

(Registrant’s Telephone Number, Including Area Code)

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

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

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

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

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

Large accelerated Filer ☐		Accelerated Filer ☐

Non-accelerated Filer ☒		Smaller reporting company ☒

		Emerging growth company ☐

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

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

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

Title of Each Class of Common Stock		Number of Shares Outstanding
Common Stock, $0.001 par value		47,193,702 as of May 10, 2022

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WESTWATER RESOURCES, INC.

TABLE OF CONTENTS



DEFINITIONS	3

PART I — FINANCIAL INFORMATION	4

ITEM 1. FINANCIAL STATEMENTS	4

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	16

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	20

ITEM 4. CONTROLS AND PROCEDURES	20

PART II - OTHER INFORMATION	21

ITEM 1. LEGAL PROCEEDINGS	21

ITEM 1A. RISK FACTORS	21

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	21

ITEM 3. DEFAULTS UPON SENIOR SECURITIES	21

ITEM 4. MINE SAFETY DISCLOSURES	21

ITEM 5. OTHER INFORMATION	21

ITEM 6. EXHIBITS	21

SIGNATURES	22

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DEFINITIONS

When used in this Form 10-Q, the following terms have the meaning indicated.


Term	Meaning
Annual Report	Westwater Resources, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2021.
AGP	Alabama Graphite Products, LLC, an Alabama limited liability company and wholly-owned subsidiary of Westwater Resources.
ATM Offering Agreement	Controlled Equity Offering Sale Agreement between Westwater Resources and Cantor Fitzgerald & Co. dated April 14, 2017.
Cantor	Cantor Fitzgerald & Co.
Coosa Graphite Deposit	The Company’s graphite mineral deposit located near Rockford, Alabama.
EU Critical Raw Minerals List	The list of raw materials that are crucial to Europe’s economy published by the European Commission.
Kellyton Graphite Plant	The Company’s planned battery-grade graphite processing facility near Kellyton, Alabama.
Graphite	A naturally occurring carbon material with electrical properties that enhance the performance of electrical storage batteries, listed on the US Critical Minerals List as well as the EU Critical Raw Materials List.
Gross acres	Total acreage of land under which we have mineral rights. May include unleased fractional ownership.
Lincoln Park	Lincoln Park Capital Fund, LLC
U.S. Critical Minerals List	The list of critical minerals that are crucial to the United States of America economy published by the Department of Interior.
Vanadium	A rare-earth metal used as a strengthening alloy in steelmaking, and in certain types of batteries, listed on the US Critical Minerals List.
Westwater Resources	Westwater Resources, Inc.
2020 Lincoln Park PA	Purchase Agreement dated as of December 4, 2020 between Westwater Resources and Lincoln Park Capital Fund, LLC

USE OF NAMES

In this Quarterly Report on Form 10-Q, unless the context otherwise requires, the terms “we”, “us”, “our”, “WWR”, “Westwater”, “Corporation”, or the “Company” refer to Westwater Resources, Inc. and its subsidiaries.

CURRENCY

The accounts of the Company are maintained in U.S. dollars. All dollar amounts referenced in this Quarterly Report on Form 10-Q and the consolidated financial statements are stated in U.S. dollars.

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PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

WESTWATER RESOURCES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(expressed in thousands of dollars, except share amounts)

(unaudited)


	March 31,		December 31,
	2022		2021
ASSETS

Current Assets:
Cash and cash equivalents	$	115,993	$	115,293
Prepaid and other current assets		733		320
Total Current Assets		116,726		115,613

Property, plant and equipment, at cost:
Property, plant and equipment		31,799		14,593
Less accumulated depreciation		(136)		(114)
Net property, plant and equipment		31,663		14,479
Operating lease right-of-use assets		192		226
Other long-term assets		—		2,665
Total Assets	$	148,581	$	132,983

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:
Accounts payable	$	6,201	$	3,043
Accrued liabilities		1,823		2,129
Operating lease liability - current		152		152
Total Current Liabilities		8,176		5,324

Operating lease liability, net of current		48		83
Other long-term liabilities		1,378		1,378
Total Liabilities		9,602		6,785

Commitments and Contingencies (see note 7)

Stockholders’ Equity:
Common stock, 100,000,000 shares authorized, $.001 par value;
Issued shares - 42,817,584 and 35,279,724 respectively
Outstanding shares - 42,817,423 and 35,279,563 respectively		43		35
Paid-in capital		484,160		468,578
Accumulated deficit		(344,966)		(342,157)
Less: Treasury stock (161 shares), at cost		(258)		(258)
Total Stockholders’ Equity		138,979		126,198

Total Liabilities and Stockholders’ Equity	$	148,581	$	132,983

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

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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
	March 31,
	2022		2021
Operating Expenses:
Product development expenses	$	(233)	$	(1,823)
Exploration expenses		(208)		(145)
General and administrative expenses		(2,211)		(2,084)
Arbitration costs		(142)		(1,532)
Depreciation and amortization		(22)		(1)
Total operating expenses		(2,816)		(5,585)

Non-Operating Income:
Unrealized gain on equity securities		—		193
Other income		7		2
Total other income		7		195

Net Loss	$	(2,809)	$	(5,390)

BASIC AND DILUTED LOSS PER SHARE	$	(0.08)	$	(0.19)

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING		36,757,352		28,597,938

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

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WESTWATER RESOURCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(expressed in thousands of dollars)

(unaudited)


	For the Three Months Ended March 31,
	2022		2021
Operating Activities:
Net loss	$	(2,809)	$	(5,390)
Reconciliation of net loss to cash used in operations:
Non-cash lease expense		(1)		—
Depreciation and amortization		22		1
Stock compensation expense		66		91
Unrealized gain on equity securities		—		(193)
Effect of changes in operating working capital items:
Increase in prepaids and other assets		(413)		(328)
Increase in payables and accrued liabilities		434		969
Net Cash Used In Operating Activities		(2,701)		(4,850)

Cash Flows From Investing Activities:
Proceeds from PPP loan escrow		—		333
Capital expenditures		(12,123)		—
Net Cash (Used In)/Provided By Investing Activities		(12,123)		333

Cash Flows From Financing Activities:
Issuance of common stock, net		15,556		72,203
Payment of minimum withholding taxes on net share settlements of equity awards		(32)		(150)
Net Cash Provided By Financing Activities		15,524		72,053

Net increase in Cash, Cash Equivalents and Restricted Cash		700		67,536
Cash, Cash Equivalents and Restricted Cash, Beginning of Period		115,293		50,325
Cash, Cash Equivalents and Restricted Cash, End of Period	$	115,993	$	117,861

Supplemental Non-Cash Information with Respect to Investing and Financing Activities:
Accrued capital expenditures (at end of period)		3,200		—
Total Non-Cash Investing and Financing Activities for the Period	$	3,200	$	—

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

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WESTWATER RESOURCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(expressed in thousands of dollars, except share amounts)

(unaudited)


Three months ended March 31, 2022	Common Stock			Paid-In		Accumulated		Treasury
	Shares	Amount		Capital		Deficit		Stock		Total
Balances, January 1, 2022	35,279,724	$	35	$	468,578	$	(342,157)	$	(258)	$	126,198
Net loss	—		—		—		(2,809)		—		(2,809)
Common stock issued, net of issuance costs	7,446,087		8		15,548		—		—		15,556
Stock compensation expense and related share issuances, net of shares withheld for payment of taxes	91,773		—		66		—		—		66
Minimum withholding taxes on net share settlements of equity awards	—		—		(32)		—		—		(32)
Balances, March 31, 2022	42,817,584	$	43	$	484,160	$	(344,966)	$	(258)	$	138,979


Three months ended March 31, 2021	Common Stock			Paid-In		Accumulated		Treasury
	Shares	Amount		Capital		Deficit		Stock		Total
Balances, January 1, 2021	19,172,020	$	19	$	383,723	$	(326,013)	$	(258)	$	57,471
Net loss	—		—		—		(5,390)		—		(5,390)
Common stock issued, net of issuance costs	13,107,270		13		72,190		—		—		72,203
Stock compensation expense and related share issuances, net of shares withheld for payment of taxes	57,186		—		91		—		—		91
Minimum withholding taxes on net share settlements of equity awards	—		—		(150)		—		—		(150)
Balances, March 31, 2021	32,336,476	$	32	$	455,854	$	(331,403)	$	(258)	$	124,225

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

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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. 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 Annual Report. In the opinion of management, all adjustments (which are of a normal, recurring nature) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for any other period including the full year ending December 31, 2022.

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.

Recently Issued Accounting Pronouncements

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

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

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

2. LIQUIDITY

The Company last recorded revenues from operations in 2009. Since 2009, the Company has relied on equity financings, debt financings and asset sales to fund its operations. The Company expects to rely on debt and equity financings to fund its operations for the foreseeable future.

During the first three months of 2022, the Company continued construction activities related to the Kellyton Graphite Plant and began civil and earthwork in March 2022, with expected completion in the second quarter of 2023. The Company also continued its exploration project to investigate the size and extent of both graphite and vanadium mineral concentrations at the Coosa Graphite Deposit. Drilling was completed in April 2022 and the Company expects to complete a technical study by the end of the year.

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WESTWATER RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

On March 31, 2022, the Company’s cash balance was approximately $116.0 million. During the three months ended March 31, 2022, the Company sold 7.4 million shares of common stock for net proceeds of $15.6 million pursuant to the ATM Offering Agreement (see Note 4).

Subsequent to March 31, 2022, and through the date of this release, the Company has sold another 4.4 million shares of common stock for additional net proceeds of $9.0 million pursuant to the ATM Offering Agreement.

Management believes the Company’s current cash balance is sufficient to fund its planned non-discretionary expenditures through 2022. The Company has in place the ATM Offering Agreement and the 2020 Lincoln Park PA, which could be used to support construction of Phase I of the Kellyton Graphite Plant. 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 in amounts sufficient to meet its needs, or on terms acceptable to the Company. Stock price volatility and uncertain economic conditions caused in part by the COVID-19 pandemic and the emergence of variant strains of the virus could significantly impact the Company’s ability to raise funds through equity financing. Market conditions, including but not limited to, inflation, labor shortages and supply chain disruptions could adversely impact the planned cost of Phase I of the Kellyton Graphite Plant.

Along with evaluating the continued use of the ATM Offering Agreement and the 2020 Lincoln Park PA, the Company is considering other forms of project financing to fund the construction of the Kellyton Graphite Plant, including both Phase I and Phase II. The alternative sources of project financing could include, but are not limited to, project debt, convertible debt, government loans or grants, or pursuing a partnership or joint venture. In the event funds are not available under the Company’s financing facilities or alternative financing arrangements to fund the construction of Phase I of the Kellyton Graphite Plant in 2023, the Company expects to be able to fund its non-discretionary expenditures, however, the Company may be required to change its planned business development strategies.

3. PROPERTY, PLANT AND EQUIPMENT


	Net Book Value of Property Plant and Equipment at March 31, 2022
(thousands of dollars)	Alabama		Corporate		Total
Mineral rights and properties	$	8,972	$	—	$	8,972
Other property, plant and equipment		4,525		28		4,553
Construction in progress		18,138		—		18,138
Total	$	31,635	$	28	$	31,663


	Net Book Value of Property Plant and Equipment at December 31, 2021
(thousands of dollars)	Alabama		Corporate		Total
Mineral rights and properties	$	8,972	$	—	$	8,972
Other property, plant and equipment		4,462		28		4,490
Construction in progress		1,017		—		1,017
Total	$	14,451	$	28	$	14,479

Construction in Progress

Construction in progress represents assets that are not ready for service or are in the construction stage. Assets are depreciated once they are placed in service.

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WESTWATER RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

During the three months ended March 31, 2022, the manufacturing of equipment, for which the Company made cash deposits of $2.7 million as of December 31, 2022, began. As such, the deposit as of December 31, 2021 is now reflected as construction in progress as of March 31, 2022.

Impairment of Property, Plant and Equipment

The Company reviews and evaluates its long-lived assets for impairment on an annual basis or more frequently when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. For the three months ended March 31, 2022 and March 31, 2021, no events or changes in circumstance are believed to have impacted recoverability of the Company’s long-lived assets. Accordingly, it was determined that no interim impairment was necessary.

4. COMMON STOCK

Common Stock Issued, Net of Issuance Costs

December 2020 Purchase Agreement with Lincoln Park Capital Fund, LLC

On December 4, 2020, the Company entered into the 2020 Lincoln Park PA Purchase Agreement with Lincoln Park to place up to $100.0 million in the aggregate of the Company's common stock on an ongoing basis over a term of 36 months. The Company controls the timing and amount of any sales to Lincoln Park, and Lincoln Park is obligated to make purchases in accordance with the December 2020 PA. Any common stock that is sold to Lincoln Park will occur at a purchase price that is based on an agreed upon fixed discount to the Company's prevailing market prices at the time of each sale and with no upper limits to the price Lincoln Park may pay to purchase common stock. The agreement may be terminated by the Company at any time, in its sole discretion, without any additional cost or penalty.

The December 2020 PA specifically provides that the Company may not issue or sell any shares of its common stock under the agreement if such issuance or sale would breach any applicable rules of the NYSE American Stock Exchange (“NYSE American”). In particular, NYSE American General Rule 713(a) provides that the Company may not issue or sell more than 19.99% of the number of shares of the Company’s common stock that were outstanding immediately prior to the execution of the December 2020 PA unless (i) shareholder approval is obtained or (ii) the average price of all applicable sales of common stock to Lincoln Park under the December 2020 PA, equals or exceeds $6.15. The Company held its 2021 Annual Shareholders Meeting on May 21, 2021 and obtained shareholder approval for the issuance of more than 19.99% of the shares of the Company’s common stock outstanding under the December 2020 PA.

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 Lincoln Park under the 2020 Lincoln Park PA if it would result in Lincoln Park beneficially owning more than 9.99% of its common stock at any one point in time.

During the three months ended March 31, 2022, the Company did not sell any shares of common stock pursuant to the 2020 Lincoln Park PA compared to 3.8 million shares for net proceeds of $24.9 million for the three months ended March 31, 2021.

Controlled Equity Offering Sales Agreement with Cantor Fitzgerald & Co.

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

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WESTWATER RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

During the three months ended March 31, 2022, the Company sold 7.4 million shares of common stock for net proceeds of $15.6 million pursuant to the ATM Offering Agreement. The Company sold 9.3 million shares of common stock for net proceeds of $47.3 million pursuant to the ATM Offering Agreement for the three months ended March 31, 2021.

As of March 31, 2022, the Company has received total gross proceeds of $18.4 million since inception under the ATM Offering Agreement, pursuant to a prospectus supplement for a total of $50 million in aggregate sales, filed on August 20, 2021, and in accordance with Rule 424(b)(5) as a takedown off the Company’s shelf registration statement on Form S-3, which was declared effective by the Commission on July 8, 2021.

5. STOCK-BASED COMPENSATION

Stock-based compensation awards consist of stock options, restricted stock units and bonus shares issued under the Company’s equity incentive plans which include the 2013 Omnibus Incentive Plan (the “2013 Plan”) and the Amended and Restated 2004 Directors’ Stock Option and Restricted Stock Plan (the “2004 Directors’ Plan”). Upon approval of the 2013 Plan by the Company’s stockholders on June 4, 2013, the Company’s authority to grant new awards under all plans other than the 2013 Plan was terminated. On July 18, 2017, April 18, 2019, April 28, 2020, and May 21, 2021, the Company’s stockholders approved amendments to the 2013 Plan to increase the authorized number of shares of common stock available and reserved for issuance under the 2013 Plan by 20,000, 66,000, 350,000, and 1,500,000 shares, respectively, and in 2017 re-approved the material terms of the performance goals under the plan. Under the 2013 Plan, the Company may grant awards of stock options, stock appreciation rights, restricted stock awards, restricted stock units (“RSUs”), unrestricted stock, dividend equivalent rights, performance shares and other performance-based awards, other equity-based awards and cash bonus awards to eligible persons. 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 other officers and employees of the Company as designated by the Committee and permitted by the 2013 Plan.

As of March 31, 2022, 1,268,108 shares were available for future issuances under the 2013 Plan. For the three months ended March 31, 2022 and 2021, the Company recorded stock-based compensation expense of $0.1 million and $0.1 million, respectively. Stock compensation expense is recorded in general and administrative expenses.

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WESTWATER RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Stock Options

Stock options are valued using the Black-Scholes option pricing model on the date of grant. The Company accounts for forfeitures upon occurrence.

The following tables summarize stock options outstanding and changes for the three months ended March 31, 2022 and 2021:


	March 31, 2022			March 31, 2021
		Weighted			Weighted
	Number of	Average		Number of	Average
	Stock	Exercise		Stock	Exercise
	Options	Price		Options	Price
Stock options outstanding at beginning of period	277,576	$	6.18	185,054	$	7.99
Granted	—		—	—		—
Expired	—		—	(800)		71.63
Stock options outstanding at end of period	277,576		6.18	184,254		7.72
Stock options exercisable at end of period	183,054	$	7.35	34,453	$	32.40

The weighted average remaining term for stock options outstanding as of March 31, 2022, is approximately 8.3 years.

The following table summarizes stock options outstanding and exercisable by stock option plan at March 31, 2022:


	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	277,481		5.53	182,959		6.36
	277,576	$	6.18	183,054	$	7.35

As of March 31, 2022, the Company had less than $0.1 million of unrecognized compensation costs related to non-vested stock options that will be recognized over a period of approximately 3 months.

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 Committee at each vesting date, and the valuation of such awards assumes full satisfaction of all performance criteria.

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WESTWATER RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

The following table summarizes RSU activity for the three months ended March 31, 2022 and 2021:


	March 31,			March 31,
	2022			2021
		Weighted-			Weighted-
		Average			Average
	Number of	Grant Date		Number of	Grant Date
	RSUs	Fair Value		RSUs	Fair Value
Unvested RSUs at beginning of period	385,004	$	3.18	236,403	$	2.10
Granted	91,241		1.97	—		—
Forfeited/Expired	(122,692)		3.09	—		—
Vested	(105,793)		2.97	(78,801)		2.10
Unvested RSUs at end of period	247,760	$	2.87	157,602	$	2.10

As of March 31, 2022, the Company had $0.3 million of unrecognized compensation costs related to non-vested restricted stock units that will be recognized over a period of approximately 2 years.

6. EARNINGS PER SHARE

Basic and diluted loss per common share have been calculated based on the weighted-average shares outstanding during the period. Additionally, potentially dilutive shares of 525,336 were excluded from the calculation of earnings per share because the effect on the basic income per share would be anti-dilutive, as the Company had a net loss for the three months ended March 31, 2022.

7. COMMITMENTS AND CONTINGENCIES

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

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

8. LEASES

The Company’s lease portfolio consists of operating leases for corporate offices, storage space and equipment. The leases have remaining lease terms of 0.5 years to 1.3 years, one of which includes an option to extend the corporate office lease for 3 years. Under our corporate office lease, we are required to reimburse the lessor each month for common use expenses such as maintenance and security services. Because these amounts are variable from year to year and not specifically set in the lease terms, they are not included in the measurement of the right-of-use asset and related lease liability, but rather expensed in the period incurred.

The Company is party to several leases that have terms that are less than a year in length. These include leases for land used in exploration activities, office equipment, machinery, office space, storage and other. The Company has elected the short-term lease exemption allowed under the new leasing standards, whereby leases with initial terms of one year or less are not capitalized and instead expensed on a straight-line basis over the lease term. In addition, the

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WESTWATER RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Company holds several leases related to mineral exploration and production to which it has not applied the new leasing standard. Leases to explore or use minerals and similar nonregenerative resources are specifically excluded by ASC 842, “Leases.”

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

The components of lease expense are as follows:

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


	For the Three Months Ended
	March 31,
(thousands of dollars)	2022		2021
Cash paid for amounts included in lease liabilities:
Operating cash flows from operating leases	$	39	$	39

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	192	$	322

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


	March 31,	December 31,
(thousands of dollars)

For the Three Months Ended

March 31,

(thousands of dollars)

Operating lease cost

SEC Form 10-Q filed by Westwater Resources Inc.