Core Insights - Westwater Resources is advancing the permitting process at the Coosa Deposit to support the Kellyton Plant and enhance the U.S. graphite supply chain [1] Group 1 - The Coosa Deposit is being developed to supply graphite for the Kellyton Plant [1] - This initiative aims to strengthen the domestic supply chain for graphite in the United States [1]

Group 1 - Westwater Resources (NYSE: WWR) is developing a plant for commercial-scale graphite production, with existing offtake agreements, including one with Stellantis (STLA) [2] - The company is also pursuing an offtake agreement for graphite fines, indicating a strategic focus on expanding its product offerings [2] - The Value Lab, an investment group, emphasizes long-only value ideas and aims for a portfolio yield of approximately 4%, highlighting its success in international markets over the past five years [1][2] Group 2 - The Valkyrie Trading Society consists of analysts who focus on high conviction, obscure developed market ideas that are expected to yield non-correlated and outsized returns in the current economic climate [3]

Core Viewpoint - Westwater Resources, Inc. has received a significant patent for innovative graphite purification methods, marking a milestone in its technological advancement in the energy technology and critical minerals sector [1]. Company Summary - Westwater Resources, Inc. is focused on developing battery-grade natural graphite, positioning itself as a key player in the energy technology and critical minerals industry [1]. - The company has been awarded U.S. Patent Number 12,415,731 by the U.S. Patent and Trademark Office, highlighting its commitment to innovation and technological development [1].

Financial Data and Key Metrics Changes - As of June 30, the company incurred approximately €124 million of the total expected €245 million cost for Phase one construction [5] - The company ended the quarter with €6.7 million in cash, which includes proceeds from a €5 million convertible note issuance in June [7] - Following the quarter, the company completed a follow-on transaction for an additional €5 million, resulting in over €12 million in cash on hand [8] Business Line Data and Key Metrics Changes - The qualification line at the Callantan graphite plant produced CSPG samples exceeding one metric ton for customer preproduction sales trials and testing [5] - Enhancements were implemented to improve cycle times and graphite flow rates, optimizing line performance [6] Market Data and Key Metrics Changes - The company is encouraged by the level of engagement from financing partners and believes the Callatin project aligns with U.S. policy priorities and growing market demand for domestic battery-grade graphite [7][10] Company Strategy and Development Direction - The company is focused on securing capital to complete the build of the Callantan graphite plant and is advancing multiple financing paths [7][10] - Long-term strategy includes vertical integration through the Coosa deposit while currently prioritizing flexibility and progress on the Callantan project [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to finance and produce the Callantan project, citing strong demand signals and federal policy support [12][13] - The company is committed to execution, transparency, and long-term value creation for shareholders [13] Other Important Information - The company has faced broader capital market volatility and trade policy shifts but remains optimistic about project financing and market conditions [7][10] Q&A Session Summary Question: Impact of potential interest rate cuts on financing - Management indicated that lower interest rates would be beneficial for project financing and long-term growth [17] Question: Future plans for convertible notes - Management stated that they would remain opportunistic regarding potential follow-on convertible note issuances [18] Question: Status of the project in Turkey - Management clarified that they are 100% focused on graphite and Phase one financing, with no current presence or claims in Turkey [22][24]

[DEFINITIONS](index=3&type=section&id=DEFINITIONS) This section defines key terms used throughout the Form 10-Q, covering financial instruments, company agreements, and industry-specific terminology - The report provides definitions for **key terms** used throughout the Form 10-Q, including **financial instruments**, **company agreements**, and **industry-specific terminology** related to graphite and critical minerals[7](index=7&type=chunk)[8](index=8&type=chunk)[9](index=9&type=chunk) [PART I — FINANCIAL INFORMATION](index=7&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) This part presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [ITEM 1. FINANCIAL STATEMENTS](index=7&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents unaudited condensed consolidated financial statements, including balance sheets, operations, cash flows, and equity, with notes on accounting policies and liquidity [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement provides a snapshot of the company's assets, liabilities, and stockholders' equity at specific points in time, reflecting its financial position | ASSETS (thousands of dollars) | June 30, 2025 | December 31, 2024 | | :------------------------------ | :------------ | :---------------- | | Cash and cash equivalents | $6,704 | $4,272 | | Total Current Assets | $7,324 | $4,863 | | Net property, plant and equipment | $139,225 | $137,868 | | Total Assets | $150,498 | $146,357 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Total Current Liabilities | $14,331 | $11,762 | | Total Liabilities | $15,728 | $13,235 | | Total Stockholders' Equity | $134,770 | $133,122 | | Total Liabilities and Stockholders' Equity | $150,498 | $146,357 | [Condensed Consolidated Statements of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This statement details the company's revenues, expenses, and net loss over specific periods, illustrating its operational performance | Operating Expenses (thousands of dollars) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Product development expenses | $(275) | $(281) | $(457) | $(596) | | General and administrative expenses | $(3,133) | $(2,489) | $(5,427) | $(5,094) | | Total operating expenses | $(3,575) | $(2,838) | $(6,210) | $(5,831) | | Other expense, net | $(294) | $(981) | $(335) | $(886) | | Net Loss | $(3,869) | $(3,819) | $(6,545) | $(6,717) | | BASIC AND DILUTED LOSS PER SHARE | $(0.05) | $(0.07) | $(0.09) | $(0.12) | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement reports the cash generated and used by the company across operating, investing, and financing activities over specific periods | Cash Flow Activities (thousands of dollars) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------- | :----------------------------- | :----------------------------- | | Net Cash Used In Operating Activities | $(4,673) | $(5,181) | | Net Cash Used In Investing Activities | $(4,800) | $(3,222) | | Net Cash Provided By Financing Activities | $11,905 | $715 | | Net increase (decrease) in Cash and Cash Equivalents | $2,432 | $(7,688) | | Cash and Cash Equivalents, End of Period | $6,704 | $3,164 | [Condensed Consolidated Statements of Stockholders' Equity](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This statement outlines changes in the company's equity accounts, including common stock, paid-in capital, and accumulated deficit, over specific periods Stockholders' Equity (thousands of dollars) | Stockholders' Equity (thousands of dollars) | Balances, December 31, 2024 | Balances, June 30, 2025 | | :---------------------------------------- | :-------------------------- | :---------------------- | | Common Stock (Shares) | 64,830,081 | 78,439,226 | | Common Stock (Amount) | $65 | $78 | | Paid-In Capital | $507,001 | $515,181 | | Accumulated Deficit | $(373,686) | $(380,231) | | Total Stockholders' Equity | $133,122 | $134,770 | Stockholders' Equity (thousands of dollars) | Stockholders' Equity (thousands of dollars) | Balances, December 31, 2023 | Balances, June 30, 2024 | | :---------------------------------------- | :-------------------------- | :---------------------- | | Common Stock (Shares) | 55,387,794 | 57,842,023 | | Common Stock (Amount) | $55 | $58 | | Paid-In Capital | $501,675 | $502,863 | | Accumulated Deficit | $(361,029) | $(367,746) | | Total Stockholders' Equity | $140,443 | $134,917 | [1. BASIS OF PRESENTATION](index=13&type=section&id=1.%20BASIS%20OF%20PRESENTATION) This section details the accounting principles and standards used in preparing the interim financial statements, including recent ASU adoptions and evaluations - The interim financial statements are prepared in accordance with **U.S. GAAP** for interim information and Form 10-Q instructions, and should be read with the annual report. Management considers all necessary adjustments for fair presentation to be included[23](index=23&type=chunk) - The Series A-1 Convertible Notes are classified as a **liability** and measured at **fair value** using the Fair Value Option, with changes in fair value recognized in the Condensed Consolidated Statement of Operations or Other Comprehensive Income[24](index=24&type=chunk)[25](index=25&type=chunk) - The Company adopted **ASU 2023-07 (Segment Reporting)** retrospectively, resulting in expanded segment disclosures. **ASU 2024-02 (Codification Improvements)** and **ASU 2024-01 (Stock Compensation)** did not materially impact the interim financial statements[27](index=27&type=chunk)[28](index=28&type=chunk)[30](index=30&type=chunk) - The Company is currently evaluating the potential impact of recently issued ASUs, including **2025-01 (Expense Disaggregation)**, **2024-04 (Convertible Debt)**, **2024-03 (Expense Disaggregation)**, **2023-09 (Income Tax Disclosures)**, and **2023-06 (Disclosure Improvements)**[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk) [2. LIQUIDITY AND GOING CONCERN](index=17&type=section&id=2.%20LIQUIDITY%20AND%20GOING%20CONCERN) This section addresses the company's ability to meet its financial obligations, highlighting substantial doubt about its going concern status and reliance on external financing - The Company's financial statements are prepared on a **'going concern' basis**, but events and conditions raise substantial doubt about its ability to continue within one year due to current liabilities exceeding current assets and ongoing cash losses from construction activities[36](index=36&type=chunk)[37](index=37&type=chunk)[43](index=43&type=chunk) - The Company has relied on **equity financings**, **debt financings**, and **asset sales** to fund operations since 2009. Construction activities at the Kellyton Graphite Plant have been significantly reduced due to insufficient funding[37](index=37&type=chunk)[38](index=38&type=chunk) Liquidity Metrics | Metric | Value (as of June 30, 2025) | | :----- | :-------------------------- | | Cash Balance | $6.7 million | | ATM Sales Agreement (6 months ended June 30, 2025) | 7.1 million shares sold for $4.4 million net proceeds | | 2024 Lincoln Park PA (6 months ended June 30, 2025) | 5.1 million shares sold for $3.2 million net proceeds | | Remaining ATM Sales Agreement availability | ~$47.3 million | | Remaining 2024 Lincoln Park PA availability | ~$26.3 million | - The Company issued Series A-1 Convertible Notes for **$5.0 million** on June 13, 2025. However, there is no assurance that additional financing will be available on acceptable terms, with market volatility, interest rates, and geopolitical conditions posing significant risks[40](index=40&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk) [3. PREPAID AND OTHER CURRENT ASSETS](index=19&type=section&id=3.%20PREPAID%20AND%20OTHER%20CURRENT%20ASSETS) This section details the composition of the company's prepaid expenses and other current assets, including inventory held for future sales or sample production Prepaid and Other Current Assets (thousands of dollars) | Prepaid and other current assets (thousands of dollars) | June 30, 2025 | December 31, 2024 | | :---------------------------------------------------- | :------------ | :---------------- | | Prepaid insurance | $307 | $90 | | Graphite flake inventory | $206 | $460 | | Other current assets | $107 | $41 | | Total prepaid and other current assets | $620 | $591 | - As of June 30, 2025, inventory represents raw material under contract for sale or for product sample production within the next twelve months[45](index=45&type=chunk) [4. INVENTORY](index=19&type=section&id=4.%20INVENTORY) This section describes the valuation and composition of the company's raw material inventory, noting no write-downs in the current period Inventory (raw material of natural flake graphite concentrate) | Inventory (raw material of natural flake graphite concentrate) | June 30, 2025 | December 31, 2024 | | :----------------------------------------------------------- | :------------ | :---------------- | | Value (thousands of dollars) | $200 | $500 | - Inventory is valued at the lower of cost or net realizable value. No write-downs were recognized for the three and six months ended June 30, 2025, compared to a **$0.7 million** write-down in the prior comparable periods of 2024[47](index=47&type=chunk) [5. PROPERTY, PLANT AND EQUIPMENT](index=20&type=section&id=5.%20PROPERTY,%20PLANT%20AND%20EQUIPMENT) This section details the company's long-lived assets, including mineral rights, buildings, and construction in progress for the Kellyton Graphite Plant Net Book Value of Property, Plant and Equipment (thousands of dollars) | Net Book Value of Property, Plant and Equipment (thousands of dollars) | June 30, 2025 | December 31, 2024 | | :------------------------------------------------------------------- | :------------ | :---------------- | | Mineral rights and properties | $8,972 | $8,972 | | Buildings | $3,183 | $3,243 | | Other property, plant and equipment | $3,995 | $2,377 | | Construction in progress | $123,075 | $123,276 | | Total | $139,225 | $137,868 | - Construction in progress primarily relates to the **Kellyton Graphite Plant**. The Company received **$0.3 million** and **$0.8 million** from asset sales during the six months ended June 30, 2025 and 2024, respectively, as part of design optimization[49](index=49&type=chunk)[50](index=50&type=chunk) - No impairment was deemed necessary for long-lived assets for the six months ended June 30, 2025. However, potential abandonment or alteration of Kellyton Graphite Plant plans could trigger an impairment evaluation[51](index=51&type=chunk) [6. SERIES A-1 CONVERTIBLE NOTES](index=20&type=section&id=6.%20SERIES%20A-1%20CONVERTIBLE%20NOTES) This section outlines the terms and accounting treatment of the Series A-1 Convertible Notes, including conversion features, interest rates, and beneficial ownership caps - On June 13, 2025, the Company issued Series A-1 Convertible Notes for an aggregate principal amount of **$5.0 million**, convertible into Common Stock, subject to a **9.99% Beneficial Ownership Cap**[52](index=52&type=chunk)[54](index=54&type=chunk) - The notes do not bear interest unless an event of default occurs, in which case the rate becomes **18% per annum**. They mature on the twenty-four month anniversary of issuance and require a minimum cash balance of **$2.25 million**[56](index=56&type=chunk) - The conversion price is **$0.63**, or the lower of **$0.63** or **92%** of the lowest VWAP during the five trading days prior to an Installment Date. As of June 30, 2025, approximately **$1.0 million** of notes were due but deferred[57](index=57&type=chunk) - The Company elected the **Fair Value Option** for these notes and will seek stockholder approval for conversion shares exceeding **19.99%** of outstanding Common Stock[59](index=59&type=chunk)[60](index=60&type=chunk) - Assuming conversion at **$0.63**, the Series A-1 Convertible Notes were convertible into approximately **9,126,984 shares** of Common Stock as of June 30, 2025, using the if-converted method[61](index=61&type=chunk) [7. FAIR VALUE MEASUREMENTS](index=22&type=section&id=7.%20FAIR%20VALUE%20MEASUREMENTS) This section explains the company's fair value measurement methodology and the classification of financial instruments within the fair value hierarchy - The Company follows **ASC 820** for fair value measurements, which defines fair value as an exit price and establishes a three-level hierarchy based on input observability[62](index=62&type=chunk)[68](index=68&type=chunk) Fair Value Measurements (thousands of dollars) | Fair Value Measurements (thousands of dollars) | Level 1 | Level 2 | Level 3 | Total | | :--------------------------------------------- | :------ | :------ | :------ | :---- | | Series A-1 Convertible Notes (June 30, 2025) | $— | $— | $(5,000)| $(5,000)| - The fair value of the Series A-1 Convertible Notes is classified as **Level 3** due to the use of unobservable inputs related to the probability of contingent redemption features. The change in fair value from inception to June 30, 2025, was immaterial[65](index=65&type=chunk)[67](index=67&type=chunk) [8. ACCRUED LIABILITIES](index=26&type=section&id=8.%20ACCRUED%20LIABILITIES) This section provides a breakdown of the company's accrued liabilities, including compensation, insurance, and legal fees Accrued Liabilities (thousands of dollars) | Accrued Liabilities (thousands of dollars) | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :---------------- | | Accrued compensation | $1,331 | $1,329 | | Liabilities related to Company insurance | $174 | $50 | | Accrued legal fees | $47 | $387 | | Other accrued liabilities | $383 | $339 | | Total accrued liabilities | $1,935 | $2,105 | [9. COMMON STOCK](index=26&type=section&id=9.%20COMMON%20STOCK) This section details the company's common stock activities, including sales under ATM agreements and the Lincoln Park Purchase Agreement, and related stockholder approvals - Under the ATM Sales Agreement with H.C. Wainwright, the Company sold **4.6 million shares** for **$2.4 million** net proceeds in Q2 2025, and **7.1 million shares** for **$4.4 million** net proceeds in H1 2025. Approximately **$47.3 million** remains available for future sales[71](index=71&type=chunk)[73](index=73&type=chunk) - The previous ATM Offering Agreement with Cantor Fitzgerald & Co. was terminated on August 29, 2024. Prior to termination, the Company sold **0.5 million shares** for **$0.2 million** net proceeds in Q2 2024, and **1.8 million shares** for **$0.8 million** net proceeds in H1 2024[75](index=75&type=chunk)[76](index=76&type=chunk) - Under the 2024 Lincoln Park PA, Lincoln Park committed to purchase up to **$30.0 million** of Common Stock. The Company sold **1.3 million shares** for **$0.6 million** net proceeds in Q2 2025, and **5.1 million shares** for **$3.2 million** net proceeds in H1 2025. Approximately **$26.3 million** remains available[77](index=77&type=chunk)[78](index=78&type=chunk)[83](index=83&type=chunk)[84](index=84&type=chunk) - Stockholder approval was obtained on May 27, 2025, for the issuance of more than **19.99%** of outstanding Common Stock under the 2024 Lincoln Park PA[80](index=80&type=chunk) [10. STOCK-BASED COMPENSATION](index=30&type=section&id=10.%20STOCK-BASED%20COMPENSATION) This section reports the company's stock-based compensation expense, equity incentive plans, and activity related to stock options and restricted stock units Stock-Based Compensation Expense (thousands of dollars) | Stock-Based Compensation Expense (thousands of dollars) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Expense | $0.8 | $0.3 | $0.9 | $0.5 | - The Company's equity incentive plans include the **2013 Plan** and the **Inducement Plan**. As of June 30, 2025, **48,281 shares** were available under the 2013 Plan and **114,429 shares** under the Inducement Plan[86](index=86&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk) Stock Options Activity (6 months ended June 30) | Stock Options Activity (6 months ended June 30) | 2025 (Number of Stock Options) | 2025 (Weighted Average Exercise Price) | 2024 (Number of Stock Options) | 2024 (Weighted Average Exercise Price) | | :---------------------------------------------- | :----------------------------- | :------------------------------------- | :----------------------------- | :------------------------------------- | | Outstanding at beginning of period | 649,345 | $1.91 | 424,826 | $2.66 | | Granted | 16,390 | $0.48 | 224,519 | $0.49 | | Outstanding at end of period | 665,735 | $1.88 | 649,345 | $1.91 | | Exercisable at end of period | 665,735 | $1.88 | 424,826 | $2.66 | RSU Activity (6 months ended June 30) | RSU Activity (6 months ended June 30) | 2025 (Number of RSUs) | 2025 (Weighted-Average Grant Date Fair Value) | 2024 (Number of RSUs) | 2024 (Weighted-Average Grant Date Fair Value) | | :------------------------------------ | :-------------------- | :-------------------------------------------- | :-------------------- | :-------------------------------------------- | | Unvested RSUs at beginning of period | 4,090,639 | $0.60 | 1,773,058 | $1.03 | | Granted | 20,101,991 | $0.48 | 3,235,731 | $0.49 | | Forfeited/Expired | (142,139) | $0.92 | (6,784) | $3.93 | | Vested | (1,826,582) | $0.51 | (884,817) | $1.03 | | Unvested RSUs at end of period | 22,223,909 | $0.49 | 4,117,188 | $0.60 | - As of June 30, 2025, the Company had **$6.1 million** of unrecognized compensation costs related to non-vested RSUs, to be recognized over approximately **2.5 years**[93](index=93&type=chunk) [11. OTHER EXPENSE, NET](index=32&type=section&id=11.%20OTHER%20EXPENSE,%20NET) This section details the components of other expense, net, including inventory sales, write-downs, interest income, and convertible note issuance costs Other Expense, Net (thousands of dollars) | Other Expense, Net (thousands of dollars) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Sales of raw material inventory | $28 | $982 | $266 | $1,124 | | Costs related to sales of raw material inventory | $(28) | $(1,336) | $(266) | $(1,506) | | Write-down of raw material inventory | $— | $(694) | $— | $(694) | | Interest income | $27 | $65 | $70 | $191 | | Other (expense) income | $(316) | $3 | $(401) | $2 | | Total other expense, net | $(294) | $(981) | $(335) | $(886) | - The Company recognized **$0.3 million** in issuance costs for the Series A-1 Convertible Notes, included in 'Other (expense) income' for the three and six months ended June 30, 2025[98](index=98&type=chunk) [12. EARNINGS PER SHARE](index=34&type=section&id=12.%20EARNINGS%20PER%20SHARE) This section explains the calculation of basic and diluted loss per share, noting the exclusion of anti-dilutive securities due to net loss - Basic and diluted loss per common share are calculated based on weighted-average shares outstanding. Potentially dilutive shares (unvested RSUs, stock options, convertible notes) totaling **32,016,628** were excluded as their effect would be anti-dilutive due to the net loss[99](index=99&type=chunk) [13. COMMITMENTS AND CONTINGENCIES](index=34&type=section&id=13.%20COMMITMENTS%20AND%20CONTINGENCIES) This section outlines the company's environmental compliance, legal proceedings, and future lease obligations for plant equipment - The Company believes its operations are materially compliant with current environmental regulations and does not expect material effects from legal proceedings. It has future lease obligations of approximately **$1.2 million** for Kellyton Graphite Plant equipment[100](index=100&type=chunk)[101](index=101&type=chunk)[102](index=102&type=chunk) [14. SEGMENT REPORTING](index=34&type=section&id=14.%20SEGMENT%20REPORTING) This section details the company's single operating segment, the battery-grade graphite business, including its Kellyton Graphite Plant and Coosa Graphite Deposit - The Company operates with one reporting segment: the **'battery-grade graphite business,'** which includes the Kellyton Graphite Plant and the Coosa Graphite Deposit, both in a pre-revenue stage[103](index=103&type=chunk)[105](index=105&type=chunk)[106](index=106&type=chunk) - The Kellyton Graphite Plant will process natural graphite concentrate using a proprietary purification process (caustic bake, acid leach, thermal treatment) to produce CSPG, with a patent application approved. The Coosa Graphite Deposit is being evaluated for future mining to provide in-house feedstock[105](index=105&type=chunk)[106](index=106&type=chunk) Segment Assets (thousands of dollars) | Segment Assets (thousands of dollars) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Battery-grade graphite business segment assets | $142,934 | $141,470 | | Corporate and other assets | $7,564 | $4,887 | | Consolidated total assets | $150,498 | $146,357 | Segment Expenditures (thousands of dollars) | Segment Expenditures (thousands of dollars) | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :------------------------------------------ | :------------------------------- | :----------------------------- | | Battery-grade graphite business segment assets | $2,200 | $5,100 | Segment Net Loss (thousands of dollars) | Segment Net Loss (thousands of dollars) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Battery-grade Graphite Segment | $(1,034) | $(1,873) | $(2,135) | $(2,906) | | Corporate and Other | $(2,835) | $(1,946) | $(4,410) | $(3,811) | | Consolidated Net Loss | $(3,869) | $(3,819) | $(6,545) | $(6,717) | [15. SUBSEQUENT EVENT](index=39&type=section&id=15.%20SUBSEQUENT%20EVENT) This section discloses the issuance of Series B-1 Convertible Notes after the reporting period, outlining their principal amount and conversion terms - On August 7, 2025, the Company issued Series B-1 Convertible Notes for an aggregate principal amount of **$5.0 million**, with similar terms to Series A-1 notes but a conversion price of **$0.83**[113](index=113&type=chunk)[114](index=114&type=chunk) - Stockholder approval will be sought for conversion shares from both Series A-1 and B-1 notes if they exceed **19.99%** of outstanding Common Stock[115](index=115&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=39&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses financial performance, condition, and operational developments, focusing on the Kellyton Graphite Plant, financing efforts, and critical minerals projects [INTRODUCTION](index=39&type=section&id=INTRODUCTION) This introduction outlines Westwater Resources' focus as an energy technology and critical minerals company developing battery-grade natural graphite materials - Westwater Resources is an **energy technology** and **critical minerals company** focused on developing **battery-grade natural graphite materials** through its Kellyton Graphite Plant and Coosa Graphite Deposit in Alabama[117](index=117&type=chunk) - The Kellyton Graphite Plant is expected to produce **12,500 metric tons per year** of CSPG in Phase I for lithium-ion batteries, with the Coosa Graphite Deposit anticipated to provide natural graphite flake concentrate[117](index=117&type=chunk) [RECENT DEVELOPMENTS](index=39&type=section&id=RECENT%20DEVELOPMENTS) This section highlights recent progress at the Kellyton Graphite Plant, customer interest, financing efforts, and the strategic implications of domestic graphite production - Westwater is experiencing increased customer interest in Phase II production due to tariffs and the desire for domestic CSPG supply, with samples meeting initial specifications for major battery suppliers and vehicle manufacturers[118](index=118&type=chunk)[119](index=119&type=chunk)[120](index=120&type=chunk) - Total expected costs for Phase I of the Kellyton Graphite Plant remain at **$245 million**, with approximately **$124.4 million** incurred to date. Construction activities have been at a measured pace, awaiting additional funding[121](index=121&type=chunk)[122](index=122&type=chunk) - The qualification line at the Kellyton Graphite Plant produced over **1 metric ton** of CSPG samples for customer trials and is being optimized for cycle times and graphite flow rates. Commissioning of micronizer and shaping mills has begun[123](index=123&type=chunk)[124](index=124&type=chunk) - The Company is progressing with syndication of a **$150 million** secured debt facility for Phase I completion and has submitted a loan application to EXIM under the 'Make More in America Initiative' and 'China and Transformational Exports Program'[125](index=125&type=chunk)[129](index=129&type=chunk) - A strategic financing review for the Coosa Graphite Deposit is underway, seeking investment sources and partners, with further advancement expected after Kellyton Graphite Plant Phase I financing closes[131](index=131&type=chunk)[132](index=132&type=chunk)[133](index=133&type=chunk) - The U.S. is nearly **100% dependent** on graphite imports, primarily from China. New executive orders, tariffs, and anti-dumping duties (**93.5%** proposed on Chinese graphite-based anode materials) highlight supply chain risks and potential opportunities for Westwater's domestic production[134](index=134&type=chunk)[135](index=135&type=chunk)[136](index=136&type=chunk)[137](index=137&type=chunk) [Equity Financings](index=45&type=section&id=Equity%20Financings) This section summarizes the company's equity financing activities, including shares sold and net proceeds from ATM sales agreements and the Lincoln Park Purchase Agreement Equity Financing Source | Equity Financing Source | Period | Shares Sold (millions) | Net Proceeds (millions of dollars) | | :---------------------- | :----- | :--------------------- | :--------------------------------- | | ATM Sales Agreement | Q2 2025 | 4.6 | $2.4 | | ATM Sales Agreement | H1 2025 | 7.1 | $4.4 | | 2024 Lincoln Park PA | Q2 2025 | 1.3 | $0.6 | | 2024 Lincoln Park PA | H1 2025 | 5.1 | $3.2 | [RESULTS OF OPERATIONS](index=47&type=section&id=RESULTS%20OF%20OPERATIONS) This section analyzes the company's net loss and loss per share, attributing changes to stock compensation, financing costs, depreciation, and inventory-related expenses Net Loss and Loss Per Share | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Loss | $(3.9) million | $(3.8) million | $(6.5) million | $(6.7) million | | Loss Per Share | $(0.05) | $(0.07) | $(0.09) | $(0.12) | - The increase in net loss for the three months ended June 30, 2025, was primarily due to increased stock compensation expense, Series A-1 Convertible Notes issuance costs, and higher depreciation, partially offset by lower prior-period inventory-related expenses[142](index=142&type=chunk) - The decrease in net loss for the six months ended June 30, 2025, was mainly due to lower prior-period inventory-related expenses and reduced product development expenses, partially offset by increased stock compensation, convertible note issuance costs, depreciation, and lower interest income[143](index=143&type=chunk) - General and administrative expenses increased by **$0.6 million** (QoQ) and **$0.3 million** (YoY) primarily due to higher stock compensation and reduced capitalized payroll costs, partially offset by cost-saving initiatives[146](index=146&type=chunk) - Other expense, net, decreased significantly due to prior-period losses on sales and write-downs of raw material inventory, partially offset by current period issuance costs for Series A-1 Convertible Notes[147](index=147&type=chunk) [FINANCIAL POSITION](index=48&type=section&id=FINANCIAL%20POSITION) This section reviews the company's cash flow activities, highlighting changes in operating, investing, and financing cash flows Cash Flow Activity (millions of dollars) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------- | :----------------------------- | :----------------------------- | | Net Cash Used In Operating Activities | $(4.7) million | $(5.2) million | | Net Cash Used In Investing Activities | $(4.8) million | $(3.2) million | | Net Cash Provided By Financing Activities | $11.2 million increase | $0.7 million | | Net increase (decrease) in Cash and Cash Equivalents | $2.4 million | $(7.7) million | | Cash and Cash Equivalents, End of Period | $6.7 million | $3.2 million | - The increase in cash provided by financing activities was primarily driven by net cash proceeds from Series A-1 Convertible Notes and increased Common Stock sales under the ATM Sales Agreement and 2024 Lincoln Park PA[150](index=150&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=48&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section discusses the company's liquidity challenges, going concern risk, and reliance on external financing, detailing available funds and market risks - The Company faces significant liquidity challenges and going concern risk due to ongoing cash losses, current liabilities exceeding current assets, and reliance on external financing to fund the Kellyton Graphite Plant construction[151](index=151&type=chunk)[152](index=152&type=chunk) Liquidity and Capital Resources Metrics | Metric | Value | | :----- | :---- | | Cash balance (June 30, 2025) | $6.7 million | | Cash balance (August 11, 2025) | $12.5 million | | Net proceeds from ATM Sales Agreement (H1 2025) | $4.4 million | | Net proceeds from 2024 Lincoln Park PA (H1 2025) | $3.2 million | | Remaining ATM Sales Agreement availability | ~$47.3 million | | Remaining 2024 Lincoln Park PA availability | ~$26.3 million | | Series A-1 Convertible Notes (June 13, 2025) | $5.0 million | | Series B-1 Convertible Notes (August 7, 2025) | $5.0 million | - The Company's ability to raise additional funds is subject to market volatility, interest rates, inflation, EV production rates, economic conditions, and geopolitical factors, which could significantly impact access to necessary funding[156](index=156&type=chunk) [OFF-BALANCE SHEET ARRANGEMENTS](index=50&type=section&id=OFF-BALANCE%20SHEET%20ARRANGEMENTS) This section confirms the absence of any off-balance sheet arrangements for the company - The Company has no off-balance sheet arrangements[157](index=157&type=chunk) [CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS](index=50&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section advises on the inherent risks and uncertainties associated with forward-looking statements, including funding, economic conditions, and regulatory changes - The report contains forward-looking statements subject to risks and uncertainties, including funding adequacy, liquidity, access to capital, economic conditions, development costs, and regulatory changes[158](index=158&type=chunk)[159](index=159&type=chunk)[161](index=161&type=chunk) - Factors that could cause actual results to differ materially include graphite and vanadium prices, competition, customer contracts, cost control, supply chain disruptions, interest rates, and geopolitical conditions[158](index=158&type=chunk)[161](index=161&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=52&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) As a smaller reporting company, Westwater Resources is exempt from providing quantitative and qualitative disclosures about market risk in its quarterly reports - The Company is not required to provide quantitative and qualitative disclosures about market risk in its Quarterly Reports as it is a smaller reporting company[160](index=160&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=54&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management confirmed the effectiveness of disclosure controls and procedures as of June 30, 2025, with no material changes to internal control over financial reporting - The Company's disclosure controls and procedures were evaluated and concluded to be effective at a reasonable assurance level as of June 30, 2025[162](index=162&type=chunk)[163](index=163&type=chunk) - There were no changes in internal control over financial reporting during the three months ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[164](index=164&type=chunk) [PART II - OTHER INFORMATION](index=54&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This part includes disclosures on legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and a list of exhibits [ITEM 1. LEGAL PROCEEDINGS](index=54&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) There have been no material changes to the legal proceedings previously disclosed in the Company's Annual Report - No material changes to legal proceedings previously disclosed in the Annual Report[165](index=165&type=chunk) [ITEM 1A. RISK FACTORS](index=54&type=section&id=ITEM%201A.%20RISK%20FACTORS) Investors are directed to the 'Risk Factors' section in the Annual Report for a comprehensive discussion of investment risks - Investors should refer to the **'Risk Factors'** section in the Annual Report for a comprehensive understanding of investment risks[166](index=166&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES](index=54&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES,%20USE%20OF%20PROCEEDS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) The Company reports no unregistered sales of equity securities, use of proceeds, or issuer purchases of equity securities during the period - None reported for unregistered sales of equity securities, use of proceeds, or issuer purchases of equity securities[167](index=167&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=54&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) The Company reports no defaults upon senior securities during the period - None reported for defaults upon senior securities[168](index=168&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=54&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) Mine safety disclosures are not applicable to the Company - Mine safety disclosures are not applicable[169](index=169&type=chunk) [ITEM 5. OTHER INFORMATION](index=54&type=section&id=ITEM%205.%20OTHER%20INFORMATION) The Company reports no other information required to be disclosed - No other information required to be disclosed[170](index=170&type=chunk) [ITEM 6. EXHIBITS](index=56&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents, securities agreements, and certifications - The exhibits include the **Restated Certificate of Incorporation**, **Certificate of Amendment**, **Amended and Restated Bylaws**, **Securities Purchase Agreement**, **Form of Series A-1 Convertible Note**, **Form of Voting Agreement**, and various certifications (CEO, CFO) under Sarbanes-Oxley Act[171](index=171&type=chunk) [SIGNATURES](index=58&type=section&id=SIGNATURES) This section confirms the official signing of the report by the company's President, CEO, CFO, and Senior Vice President of Finance - The report is duly signed on behalf of Westwater Resources, Inc. by **Frank Bakker, President and Chief Executive Officer**, and **Steven M. Cates, Chief Financial Officer and Senior Vice President - Finance**, as of August 13, 2025[173](index=173&type=chunk)[174](index=174&type=chunk)[175](index=175&type=chunk)[176](index=176&type=chunk)

[Introduction to the Note](index=1&type=section&id=Introduction%20to%20the%20Note) [Payments of Principal](index=1&type=section&id=1.%20PAYMENTS%20OF%20PRINCIPAL) The Company must pay principal and installment amounts on due dates, with prepayment generally restricted, and payments prioritized towards charges, interest, then principal pro rata - The Company must pay the **Outstanding Principal Value** on the Maturity Date and **Installment Amounts** on Installment Dates[3](index=3&type=chunk) - Prepayment of **Outstanding Value** is generally restricted[3](index=3&type=chunk) - Payment priority: **Late Charges**, other Transaction Document amounts, accrued Interest, then **Outstanding Principal Value**, allocated pro rata[3](index=3&type=chunk) [Interest; Interest Rate](index=2&type=section&id=2.%20INTEREST%3B%20INTEREST%20RATE) Interest accrues only upon an Event of Default at the Default Rate, compounding monthly and payable in arrears, with accrued interest remaining due even if the default is cured - Interest accrues only upon an **Event of Default**[4](index=4&type=chunk) - Interest is computed at the **Default Rate (18% per annum)**, compounds monthly, and is payable in arrears on the first Trading Day of each month[4](index=4&type=chunk)[165](index=165&type=chunk) - Curing an **Event of Default** stops future default interest but does not relieve the Company of accrued default interest[4](index=4&type=chunk) [Conversion of Notes](index=2&type=section&id=3.%20CONVERSION%20OF%20NOTES) [Conversion Right](index=2&type=section&id=3%28a%29%20Conversion%20Right) The Holder can convert any portion of the outstanding Conversion Amount into Common Stock at the Conversion Rate, with the Company covering associated taxes and rounding up fractional shares - Holder can convert any portion of the **Conversion Amount** into Common Stock after the Issuance Date[6](index=6&type=chunk) - Fractional shares are rounded up to the nearest whole share[6](index=6&type=chunk) - Company is responsible for all transfer, stamp, issuance, and similar taxes and expenses related to the issuance of Common Stock upon conversion[6](index=6&type=chunk) [Conversion Rate](index=3&type=section&id=3%28b%29%20Conversion%20Rate) The Conversion Rate is calculated by dividing the Conversion Amount by the Conversion Price, where the Conversion Amount includes principal, accrued interest, late charges, and other unpaid amounts - Conversion Rate = **Conversion Amount** / **Conversion Price**[8](index=8&type=chunk) Components of Conversion Amount | Component | Description | | :---------- | :---------- | | **Outstanding Principal Value** | Portion of the Note's principal to be converted | | **Accrued and Unpaid Interest** | Interest on the principal, if any | | **Accrued and Unpaid Late Charges** | Late charges on principal and interest, if any | | **Other Unpaid Amounts** | Any other unpaid amounts pursuant to Transaction Documents | [Mechanics of Conversion](index=3&type=section&id=3%28c%29%20Mechanics%20of%20Conversion) This section details the procedures for converting the Note, including optional conversion by the Holder, consequences for the Company's failure to timely deliver shares, requirements for registration and book-entry, and rules for pro rata conversions and dispute resolution [Optional Conversion](index=3&type=section&id=3%28c%29%28i%29%20Optional%20Conversion) The Holder initiates conversion by notice, requiring the Company to process and deliver shares by the Share Delivery Deadline, either to a DTC account or via certificate - Holder initiates conversion by delivering a **Conversion Notice** to the Company by 11:59 p.m. New York time on the Conversion Date[12](index=12&type=chunk) - Company must acknowledge receipt and instruct the Transfer Agent to process the conversion by the first Trading Day after receiving the notice[12](index=12&type=chunk) - Shares must be credited to the Holder's DTC account (if FAST participant) or delivered via certificate by the **Share Delivery Deadline** (first Trading Day after notice receipt)[12](index=12&type=chunk) [Company's Failure to Timely Convert](index=4&type=section&id=3%28c%29%28ii%29%20Company%27s%20Failure%20to%20Timely%20Convert) Failure by the Company to timely deliver shares results in penalties, allows the Holder to void the conversion, and may trigger a "Buy-In" obligation for the Company - If the Company fails to timely issue and deliver shares (**Conversion Failure**), it must pay the Holder **2%** of the product of unissued shares and VWAP for each day of failure[14](index=14&type=chunk) - Holder may void the **Conversion Notice** and retain the unconverted Note portion, without affecting accrued payments[14](index=14&type=chunk) - In case of a 'Buy-In' by the Holder due to **Conversion Failure**, the Company must either pay the **Buy-In Price** or deliver shares and pay the **Buy-In Payment Amount**[14](index=14&type=chunk) [Registration; Book-Entry](index=5&type=section&id=3%28c%29%28iii%29%20Registration%3B%20Book-Entry) The Company maintains a conclusive Register for Note holders, with assignments effective upon registration, and physical surrender of the Note generally not required for conversion - The Company maintains a **Register** for recording Note holders and principal amounts, which is conclusive for all purposes[16](index=16&type=chunk) - Assignments or sales of Registered Notes are effective upon registration in the Register, or automatically deemed updated if not recorded within two Business Days[16](index=16&type=chunk) - Physical surrender of the Note is generally not required for conversion unless the full **Conversion Amount** is converted or the Holder requests reissuance[16](index=16&type=chunk) [Pro Rata Conversion; Disputes](index=6&type=section&id=3%28c%29%28iv%29%20Pro%20Rata%20Conversion%3B%20Disputes) If the Company cannot convert all submitted notices, conversions are pro rata, disputes are resolved per Section 25, and conversions breaching beneficial ownership limits are held in abeyance - If multiple holders submit conversion notices for the same date and the Company cannot convert all, conversions will be pro rata based on principal amounts submitted[18](index=18&type=chunk) - In case of a dispute regarding the number of shares issuable, the Company issues undisputed shares and resolves the dispute per Section 25[18](index=18&type=chunk) - **Conversion Notices** that would breach beneficial ownership limitations (Section 3(d)(i)) are held in abeyance until they can be satisfied without violation[18](index=18&type=chunk) [Limitations on Conversions](index=6&type=section&id=3%28d%29%20Limitations%20on%20Conversions) Conversions are subject to limitations, primarily concerning beneficial ownership to prevent the Holder and Attribution Parties from exceeding a specified Maximum Percentage of outstanding Common Stock, and compliance with Principal Market regulations regarding share issuances [Beneficial Ownership](index=6&type=section&id=3%28d%29%28i%29%20Beneficial%20Ownership) Conversions are void if they would cause the Holder and Attribution Parties to beneficially own more than 9.99% of outstanding Common Stock, with calculations based on Section 13(d) of the 1934 Act - Conversions are null and void to the extent that the Holder and Attribution Parties would beneficially own in excess of **9.99% (Maximum Percentage)** of outstanding Common Stock[20](index=20&type=chunk) - Beneficial ownership is calculated per Section 13(d) of the 1934 Act, excluding non-converted portions of the Note and other securities subject to similar limitations[20](index=20&type=chunk) - The Holder can rely on the Company's **Reported Outstanding Share Number**, and the Company must confirm outstanding shares upon request[20](index=20&type=chunk) [Principal Market Regulation](index=8&type=section&id=3%28d%29%28ii%29%20Principal%20Market%20Regulation) The Company cannot issue shares upon conversion if it exceeds the "Exchange Cap" without stockholder approval, with each Buyer's issuance limited by their pro rata allocation - The Company cannot issue shares upon conversion if it would exceed the **'Exchange Cap'** under Principal Market rules, unless stockholder approval is obtained[22](index=22&type=chunk) - Until stockholder approval, each Buyer's issuance is limited by their **'Exchange Cap Allocation'**, a pro rata portion of the total **Exchange Cap**[22](index=22&type=chunk) - Upon full conversion by a holder, any unused **Exchange Cap Allocation** is reallocated pro rata to remaining holders[22](index=22&type=chunk) [Right of Alternate Conversion Upon an Event of Default](index=8&type=section&id=3%28e%29%20Right%20of%20Alternate%20Conversion%20Upon%20an%20Event%20of%20Default) During an Event of Default Redemption Right Period, the Holder may convert the Conversion Amount into Common Stock at the Alternate Conversion Price, regardless of the default's status - Holder may elect an **'Alternate Conversion'** during an **Event of Default Redemption Right Period**[24](index=24&type=chunk) - The conversion uses the **'Alternate Conversion Price'**, which is the lowest of the current Conversion Price and 90% of the lowest VWAP during a 7-Trading Day measuring period[24](index=24&type=chunk)[26](index=26&type=chunk)[148](index=148&type=chunk) - Until shares are delivered, the **Alternate Conversion Amount** can still be converted under standard Section 3(c) terms[26](index=26&type=chunk) [Mandatory Conversion](index=9&type=section&id=3%28f%29%20Mandatory%20Conversion) The Company can mandate conversion of the Note into Common Stock under specific VWAP and Equity Conditions, subject to volume limitations and cancellation if conditions fail or an Event of Default occurs - Company can mandate conversion if VWAP exceeds the **Mandatory Conversion Minimum Price** for 20 consecutive Trading Days and no **Equity Conditions Failure** exists[28](index=28&type=chunk) - Mandatory Conversion is limited by the **Holder Pro Rata Amount** of the **Mandatory Conversion Volume Limitation** (12.5% of aggregate dollar trading volume over 20 days)[28](index=28&type=chunk)[183](index=183&type=chunk) - Mandatory Conversion can be cancelled if a **'Mandatory Conversion Price Failure'** or **'Equity Conditions Failure'** occurs before the conversion date, or if an **Event of Default** exists[28](index=28&type=chunk) [Rights Upon Event of Default](index=10&type=section&id=4.%20RIGHTS%20UPON%20EVENT%20OF%20DEFAULT) [Event of Default Definition](index=10&type=section&id=4%28a%29%20Event%20of%20Default) An "Event of Default" includes trading suspensions, conversion failures, insufficient authorized shares, payment defaults, bankruptcy, significant judgments, and material breaches of agreements or covenants - **Events of Default** include: trading suspension for 5 consecutive days, failure to cure a **Conversion Failure** within 5 Trading Days, insufficient **Authorized Share Allocation** for 10 consecutive days, failure to pay **Outstanding Value** (2-5 Trading Day cure periods for interest/late charges and other amounts respectively)[31](index=31&type=chunk)[32](index=32&type=chunk) - **Bankruptcy Events of Default** include: institution of bankruptcy proceedings not dismissed within 60 days, voluntary bankruptcy filings, or court decrees of bankruptcy unstayed for 60 days[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) - Other **Events of Default**: judgments exceeding **$500,000** not bonded/discharged within 30 days, failure to pay other indebtedness over **$500,000**, material breaches of Transaction Documents (6 Trading Day cure period), false certifications, **Material Adverse Effect**, challenges to Transaction Document validity, insufficient shares for at-the-market offerings, **Financial Covenant Failure** (10-day grace period if **Available Cash** > **$1.75 million**), and any **Event of Default** under Other Notes[32](index=32&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk)[102](index=102&type=chunk) [Notice of an Event of Default; Redemption Right](index=14&type=section&id=4%28b%29%20Notice%20of%20an%20Event%20of%20Default%3B%20Redemption%20Right) Upon an Event of Default, the Company must notify the Holder, who, with Required Holders' consent, may demand redemption at the Event of Default Redemption Price - Company must deliver an **'Event of Default Notice'** within one Business Day of an **Event of Default**[37](index=37&type=chunk) - Holder, with **Required Holders'** consent, can demand redemption during the **'Event of Default Redemption Right Period'** (20 Trading Days after notice/cure)[37](index=37&type=chunk) Event of Default Redemption Price Calculation | Calculation Method | Description | | :----------------- | :---------- | | **Method (i)** | Conversion Amount to be redeemed × Redemption Premium (115%) | | **Method (ii)** | (Conversion Amount to be redeemed / Alternate Conversion Price) × (Redemption Premium (115%) × Greatest Closing Sale Price during default period) | [Mandatory Redemption upon Bankruptcy Event of Default](index=15&type=section&id=4%28c%29%20Mandatory%20Redemption%20upon%20Bankruptcy%20Event%20of%20Default) Upon a Bankruptcy Event of Default, the Company must immediately pay the Holder cash equal to the Outstanding Value multiplied by the Redemption Premium, unless waived by the Holder - Upon a **Bankruptcy Event of Default**, the Company must immediately pay the Holder cash[39](index=39&type=chunk) - Payment amount is the **Outstanding Value** of the Note multiplied by the **Redemption Premium (115%)**[39](index=39&type=chunk)[201](index=201&type=chunk) - Holder has the sole discretion to waive this mandatory redemption right[39](index=39&type=chunk) [Rights Upon Fundamental Transaction](index=15&type=section&id=5.%20RIGHTS%20UPON%20FUNDAMENTAL%20TRANSACTION) [Assumption](index=15&type=section&id=5%28a%29%20Assumption) The Company cannot engage in a Fundamental Transaction unless the Successor Entity assumes all Note obligations and issues a substantially similar security, a requirement the Holder may waive - Company must ensure **Successor Entity** assumes all Note obligations in a **Fundamental Transaction**[40](index=40&type=chunk) - **Successor Entity** must issue a security substantially similar to the Note, maintaining principal, interest, conversion rights, ranking, and security[40](index=40&type=chunk) - Holder has the option to waive the assumption requirement[40](index=40&type=chunk) [Notice of a Change of Control; Redemption Right](index=16&type=section&id=5%28b%29%20Notice%20of%20a%20Change%20of%20Control%3B%20Redemption%20Right) The Company must provide notice of a Change of Control, after which the Holder can demand redemption of the Note at the Change of Control Redemption Price - Company must deliver a **'Change of Control Notice'** 10-20 Trading Days prior to the **Change of Control Date**[42](index=42&type=chunk) - Holder can demand redemption during a 20-Trading Day period after receiving notice or becoming aware of the **Change of Control**[42](index=42&type=chunk) Change of Control Redemption Price Calculation | Calculation Method | Description | | :----------------- | :---------- | | **Method (i)** | Change of Control Redemption Premium (115%) × Conversion Amount being redeemed | | **Method (ii)** | Change of Control Redemption Premium (115%) × (Conversion Amount being redeemed × (Greatest Closing Sale Price / Conversion Price)) | | **Method (iii)** | Change of Control Redemption Premium (115%) × (Conversion Amount being redeemed × (Aggregate cash/non-cash consideration per share / Conversion Price)) | [Rights Upon Issuance of Purchase Rights and Other Corporate Events](index=17&type=section&id=6.%20RIGHTS%20UPON%20ISSUANCE%20OF%20PURCHASE%20RIGHTS%20AND%20OTHER%20CORPORATE%20EVENTS) [Purchase Rights](index=17&type=section&id=6%28a%29%20Purchase%20Rights) If the Company issues Purchase Rights, the Holder is entitled to equivalent rights as if the Note were fully converted, subject to beneficial ownership limitations - Holder is entitled to **Purchase Rights** as if the Note was fully converted, assuming conversion at the **Alternate Conversion Price**[43](index=43&type=chunk) - Participation in **Purchase Rights** is limited by the **Maximum Percentage** beneficial ownership restriction[43](index=43&type=chunk) - Excess **Purchase Rights** are held in abeyance until they would not cause the Holder to exceed the **Maximum Percentage**[43](index=43&type=chunk) [Other Corporate Events](index=17&type=section&id=6%28b%29%20Other%20Corporate%20Events) For Corporate Events where Common Stock holders receive securities or assets, the Company must ensure the Holder can receive equivalent value upon conversion, either as Common Stock plus assets or directly as assets - Upon a **Corporate Event**, the Company must ensure the Holder can receive equivalent securities or assets upon conversion[44](index=44&type=chunk) - Holder has the option to receive either Common Stock plus additional assets, or the assets directly, at a conversion rate commensurate with the original **Conversion Rate**[44](index=44&type=chunk) - These provisions apply to successive **Corporate Events** and disregard conversion limitations[44](index=44&type=chunk) [Rights Upon Issuance of Other Securities](index=18&type=section&id=7.%20RIGHTS%20UPON%20ISSUANCE%20OF%20OTHER%20SECURITIES) [Adjustment of Conversion Price upon Issuance of Common Stock](index=18&type=section&id=7%28a%29%20Adjustment%20of%20Conversion%20Price%20upon%20Issuance%20of%20Common%20Stock) The Conversion Price is adjusted downward if the Company issues Common Stock, Options, or Convertible Securities at a price lower than the current Conversion Price, with specific rules for calculating deemed issuance prices - **Conversion Price** is reduced to the **New Issuance Price** if the Company issues Common Stock, Options, or Convertible Securities at a price lower than the current **Conversion Price (Dilutive Issuance)**[46](index=46&type=chunk) - For Options, the lowest price per share issuable upon exercise or conversion of related Convertible Securities determines the deemed issuance price[46](index=46&type=chunk) - For Convertible Securities, the lowest price per share issuable upon conversion, exercise, or exchange determines the deemed issuance price[48](index=48&type=chunk) - In integrated transactions involving Primary and Secondary Securities, the aggregate consideration per share is calculated by subtracting the **Black Scholes Consideration Value** or fair market value of Secondary Securities from the lowest price of the Primary Security[51](index=51&type=chunk) [Adjustment of Conversion Price upon Subdivision or Combination of Common Stock](index=21&type=section&id=7%28b%29%20Adjustment%20of%20Conversion%20Price%20upon%20Subdivision%20or%20Combination%20of%20Common%20Stock) The Conversion Price is proportionately adjusted for stock subdivisions (reduced) or combinations (increased), with adjustments effective immediately after the transaction date - **Conversion Price** is proportionately reduced upon a stock subdivision (e.g., stock split, stock dividend)[54](index=54&type=chunk) - **Conversion Price** is proportionately increased upon a stock combination[54](index=54&type=chunk) - Adjustments become effective immediately after the effective date of the subdivision or combination[54](index=54&type=chunk) [Holder's Right of Adjusted Conversion Price](index=21&type=section&id=7%28c%29%20Holder%27s%20Right%20of%20Adjusted%20Conversion%20Price) If the Company issues Variable Price Securities, the Holder can elect to use the Variable Price instead of the Conversion Price for any conversion, at their sole discretion - If the Company issues **'Variable Price Securities'**, the Holder can elect to use the **'Variable Price'** instead of the **Conversion Price** for conversion[55](index=55&type=chunk) - This election is made by designating it in the **Conversion Notice** and is at the Holder's sole discretion for each conversion[55](index=55&type=chunk) [Stock Combination Event Adjustments](index=22&type=section&id=7%28d%29%20Stock%20Combination%20Event%20Adjustments) Following a Stock Combination Event, if the Event Market Price is less than the Conversion Price, the Conversion Price will be reduced to the Event Market Price on the sixteenth Trading Day, with no adjustments resulting in an increase - After a **Stock Combination Event**, if the **Event Market Price** is lower than the **Conversion Price**, the **Conversion Price** is reduced to the **Event Market Price**[57](index=57&type=chunk) - This adjustment occurs on the sixteenth Trading Day following the **Stock Combination Event Date**[57](index=57&type=chunk) - No adjustment will be made if it would increase the **Conversion Price**[57](index=57&type=chunk) [Other Events](index=22&type=section&id=7%28e%29%20Other%20Events) For unaddressed dilutive corporate actions, the Company's board will adjust the Conversion Price to protect Holder rights, with an independent investment bank making final determinations if disputed - Company's board will determine appropriate **Conversion Price** adjustments for unaddressed dilutive events to protect Holder's rights[58](index=58&type=chunk) - No adjustment under this section will increase the **Conversion Price**[58](index=58&type=chunk) - If Holder disputes the adjustment, an independent investment bank will make a final and binding determination, with fees paid by the Company[58](index=58&type=chunk) [Calculations](index=22&type=section&id=7%28f%29%20Calculations) All calculations under Section 7 are rounded to the nearest cent or 1/100 of a share, excluding Company-held shares from outstanding Common Stock counts, and treating their disposition as an issuance - All calculations are rounded to the nearest cent or **1/100 of a share**[59](index=59&type=chunk) - Shares held by the Company are not included in the number of outstanding Common Stock[59](index=59&type=chunk) - Disposition of Company-held shares is considered an issuance or sale of Common Stock[59](index=59&type=chunk) [Voluntary Adjustment by Company](index=22&type=section&id=7%28g%29%20Voluntary%20Adjustment%20by%20Company) The Company may voluntarily reduce the Conversion Price of the Notes at any time, subject to Principal Market rules and the prior written consent of the Required Holders - Company may voluntarily reduce the **Conversion Price** of the Notes[60](index=60&type=chunk) - This requires prior written consent of the **Required Holders** and compliance with Principal Market rules[60](index=60&type=chunk) [Installment Conversion or Redemption](index=23&type=section&id=8.%20INSTALLMENT%20CONVERSION%20OR%20REDEMPTION) [General](index=23&type=section&id=8%28a%29%20General) On each Installment Date, the Company must pay the Installment Amount via conversion or cash redemption, or a combination, provided no Equity Conditions Failure exists, and must deliver an irrevocable Installment Notice - Company pays **Installment Amounts** via **Installment Conversion**, **Installment Redemption**, or a combination, provided no **Equity Conditions Failure**[62](index=62&type=chunk) - Company must deliver an irrevocable **'Installment Notice'** by the 8th Trading Day prior to each **Installment Date**[62](index=62&type=chunk) - Failure to deliver an **Installment Notice** results in a deemed **Installment Conversion** of the entire **Installment Amount**[62](index=62&type=chunk) [Mechanics of Installment Conversion](index=24&type=section&id=8%28b%29%20Mechanics%20of%20Installment%20Conversion) If the Company elects or is deemed to elect Installment Conversion, the amount converts to Common Stock at the Installment Conversion Price, subject to Equity Conditions, with Holder options for cash redemption or voiding if conditions fail - **Installment Conversion Amount** is converted on the **Installment Date** at the **Installment Conversion Price**, subject to **Equity Conditions**[64](index=64&type=chunk) - If **Equity Conditions** fail between the **Installment Notice Date** and **Installment Date**, the Holder can demand cash redemption of the **'Designated Redemption Amount'** or void the conversion[64](index=64&type=chunk) - If conversion is voided, the **Conversion Price** for that amount is adjusted to the lesser of the original **Installment Conversion Price** or the price on a future conversion date[64](index=64&type=chunk) [Mechanics of Installment Redemption](index=25&type=section&id=8%28c%29%20Mechanics%20of%20Installment%20Redemption) If the Company elects or is required to redeem, the Installment Redemption Amount is paid in cash at 100% on the Installment Date, with the Holder having conversion options if payment fails or prior to the date - **Installment Redemption Amount** is paid in cash on the **Installment Date** at **100%** of the amount (**Installment Redemption Price**)[66](index=66&type=chunk) - If the Company fails to pay, the Holder can convert the **Installment Redemption Amount** at the **Installment Conversion Price**[66](index=66&type=chunk) - Holder can convert the **Installment Redemption Amount** into Common Stock prior to the **Installment Date**[66](index=66&type=chunk) [Deferred Installment Amount](index=25&type=section&id=8%28d%29%20Deferred%20Installment%20Amount) The Holder may defer payment of any Installment Amount to a subsequent Installment Date by providing written notice to the Company - Holder can defer payment of an **Installment Amount** to a subsequent **Installment Date**[67](index=67&type=chunk) - Deferral requires written notice to the Company by the Trading Day immediately prior to the applicable **Installment Date**[67](index=67&type=chunk) [Acceleration of Installment Amounts](index=25&type=section&id=8%28e%29%20Acceleration%20of%20Installment%20Amounts) During any Installment Period, the Holder can accelerate and convert deferred amounts, in whole or in part, at the Acceleration Conversion Price - Holder can accelerate and convert deferred **Installment Amounts** during an **Installment Period**[68](index=68&type=chunk) - Conversion is at the **'Acceleration Conversion Price'**, which is the lower of the **Installment Conversion Price** or 92% of the lowest VWAP during the 5-Trading Day period ending on the **Acceleration Date**[68](index=68&type=chunk)[143](index=143&type=chunk) [Reallocation of Installment Amounts](index=26&type=section&id=8%28f%29%20Reallocation%20of%20Installment%20Amounts) The Holder can reallocate Installment Amounts to another date within the same Installment Period, with the reallocated amount automatically converting into Common Stock at the Reallocation Conversion Price - Holder can reallocate **Installment Amounts** to another date within the same **Installment Period**[70](index=70&type=chunk) - Reallocated amounts automatically convert on the **'Reallocation Date'** at the **'Reallocation Conversion Price'**[70](index=70&type=chunk) - **Reallocation Conversion Price** is the lower of the current **Conversion Price** or the lower of the **Installment Conversion Price** for the period and 92% of the lowest VWAP during the 5-Trading Day period ending on the **Reallocation Date**[70](index=70&type=chunk)[199](index=199&type=chunk) [Redemptions at the Company's Election](index=26&type=section&id=9.%20REDEMPTIONS%20AT%20THE%20COMPANY%27S%20ELECTION) [Company Optional Redemption](index=26&type=section&id=9%28a%29%20Company%20Optional%20Redemption) The Company has a limited, conditional right to redeem all outstanding Conversion Amount at 115% of the Conversion Amount, subject to market conditions and absence of default - Company can redeem all outstanding **Conversion Amount** at **115%** of the **Conversion Amount (Company Optional Redemption Price)**[71](index=71&type=chunk) - Conditions for redemption: VWAP < **Conversion Price**, no material non-public information, no trading suspension, and no **Event of Default** during the **'Company Optional Redemption Notice Period'** (20-30 Trading Days)[71](index=71&type=chunk) - The Company can only deliver one irrevocable **'Company Optional Redemption Notice'**, which is null and void if any **'Company Optional Redemption Condition Failure'** occurs[71](index=71&type=chunk) [Pro Rata Redemption Requirement](index=28&type=section&id=9%28b%29%20Pro%20Rata%20Redemption%20Requirement) If the Company elects a Company Optional Redemption for this Note, it must apply the same action pro rata to all Other Notes simultaneously - **Company Optional Redemption** must be applied pro rata to all **Other Notes** simultaneously[73](index=73&type=chunk) [Subsequent Placement Optional Redemption](index=28&type=section&id=10.%20SUBSEQUENT%20PLACEMENT%20OPTIONAL%20REDEMPTION) [General](index=28&type=section&id=10%28a%29%20General) The Holder can require the Company to redeem a portion of the Note upon an Eligible Subsequent Placement, limited to their pro rata share of 30% of the net proceeds - Holder can demand **'Subsequent Placement Optional Redemption'** upon an **'Eligible Subsequent Placement'**[74](index=74&type=chunk) - Redemption amount is limited to the Holder's pro rata share of **30%** of the net proceeds of the **Eligible Subsequent Placement**[74](index=74&type=chunk) [Mechanics](index=28&type=section&id=10%28b%29%20Mechanics) The Holder initiates redemption by notice, with the redemption date being the later of five Business Days after notice or the placement's consummation, and the price paid in cash - Holder delivers a **'Subsequent Placement Optional Redemption Notice'** to initiate redemption[75](index=75&type=chunk) - The **'Subsequent Placement Optional Redemption Date'** is the later of 5 Business Days after notice or the **Eligible Subsequent Placement** consummation[75](index=75&type=chunk) - The redemption price is the **'Subsequent Placement Optional Redemption Amount'** paid in cash[75](index=75&type=chunk) [Project Financing Optional Conversion or Redemption](index=28&type=section&id=11.%20PROJECT%20FINANCING%20OPTIONAL%20CONVERSION%20OR%20REDEMPTION) [Mechanics of Project Financing Conversion](index=28&type=section&id=11%28a%29%20Mechanics%20of%20Project%20Financing%20Conversion) Following a public announcement of Permitted Project Financing, the Holder can convert all or part of the Note's Outstanding Value into Common Stock at the Acceleration Conversion Price - Holder can convert **Outstanding Value** into Common Stock after public announcement of **'Permitted Project Financing'**[76](index=76&type=chunk) - Conversion uses the **'Acceleration Conversion Price'**[76](index=76&type=chunk) - This right expires on the fifteenth Trading Day after the consummation of the **Permitted Project Financing**[76](index=76&type=chunk) [Mechanics of Project Financing Redemption](index=29&type=section&id=11%28b%29%20Mechanics%20of%20Project%20Financing%20Redemption) On the Trading Day after the Project Finance Conversion Right Expiration Date, the Holder may demand cash redemption of the Note's Outstanding Value, which has priority over stockholder payments - Holder can demand redemption of **Outstanding Value** on the Trading Day after the **'Project Finance Conversion Right Expiration Date'**[78](index=78&type=chunk) - The **'Project Finance Redemption Price'** is the **Outstanding Value** being redeemed, paid in cash[78](index=78&type=chunk) - These redemptions have priority over payments to stockholders related to the **Permitted Project Financing**[78](index=78&type=chunk) [Noncircumvention](index=29&type=section&id=12.%20NONCIRCUMVENTION) The Company covenants not to take actions that would circumvent Holder's rights, must ensure valid share issuance, and promptly remedy any conversion failures after 60 days - Company covenants not to circumvent Holder's rights under the Note through corporate actions[79](index=79&type=chunk) - Company must ensure valid and legal issuance of fully paid, nonassessable Common Stock upon conversion[79](index=79&type=chunk) - If Holder cannot convert in full after 60 days (excluding Section 3(d) limits), Company must use best efforts to remedy the failure[79](index=79&type=chunk) [Reservation of Authorized Shares](index=29&type=section&id=13.%20RESERVATION%20OF%20AUTHORIZED%20SHARES) [Reservation](index=29&type=section&id=13%28a%29%20Reservation) The Company must always reserve at least 150% of the maximum Common Stock shares issuable upon conversion of all outstanding Notes, allocated pro rata among holders - Company must reserve at least **150%** of the maximum Common Stock shares issuable upon conversion of all outstanding Notes[80](index=80&type=chunk) - The **'Required Reserve Amount'** is calculated assuming conversion at the **Alternate Conversion Price** and without regard to conversion limitations[80](index=80&type=chunk) - The reserve is allocated pro rata among Note holders based on original principal amount[80](index=80&type=chunk) [Insufficient Authorized Shares](index=30&type=section&id=13%28b%29%20Insufficient%20Authorized%20Shares) If the Company lacks sufficient authorized shares, it must immediately act to increase them, including holding a stockholder meeting, and pay cash redemption plus Buy-In costs if shares cannot be issued - In case of **'Authorized Share Failure'**, Company must immediately act to increase authorized shares[82](index=82&type=chunk) - Company must hold a stockholder meeting within 60 days to approve an increase in authorized shares[82](index=82&type=chunk) - If shares cannot be issued due to **Authorized Share Failure**, Company must pay cash for redemption of the affected **Conversion Amount**, plus Holder's **Buy-In** costs[82](index=82&type=chunk) [Redemptions](index=31&type=section&id=14.%20REDEMPTIONS) [Mechanics](index=31&type=section&id=14%28a%29%20Mechanics) This section outlines payment timelines for various redemptions; if the Company fails to pay, the Holder can void the notice, have the Note returned with increased principal, and adjust the Conversion Price - Redemption payments are due within specific timeframes depending on the type of redemption (e.g., **Event of Default**: 5 Business Days; **Change of Control**: concurrently or 5 Business Days)[84](index=84&type=chunk) - Holder can elect to increase the **Redemption Price** by any cash payment owed under other Transaction Documents[84](index=84&type=chunk) - If Company fails to pay **Redemption Price**, Holder can void the redemption, have the Note returned (with increased principal), and the **Conversion Price** will be adjusted to a lower rate[84](index=84&type=chunk) [Redemption by Other Holders](index=32&type=section&id=14%28b%29%20Redemption%20by%20Other%20Holders) If the Company receives multiple redemption notices within a five-Business Day window and cannot redeem all, it must redeem a pro rata amount from each holder - Company must forward **'Other Redemption Notices'** to the Holder within one Business Day[86](index=86&type=chunk) - If multiple redemption notices are received within a 5-Business Day period and the Company cannot redeem all, redemptions will be pro rata among all holders[86](index=86&type=chunk) [Voting Rights](index=32&type=section&id=15.%20VOTING%20RIGHTS) The Holder of this Note generally has no voting rights, except as required by law or explicitly provided within the Note itself - Holder has no voting rights as a Note holder, except as required by law or expressly provided in the Note[87](index=87&type=chunk) [Covenants](index=32&type=section&id=16.%20COVENANTS) [Rank](index=32&type=section&id=16%28a%29%20Rank) Payments under this Note rank pari passu with Other Notes and June 2025 Notes, and are senior to all other Indebtedness except for Permitted Indebtedness secured by Permitted Liens and Permitted Project Financing - Payments under this Note rank pari passu with **Other Notes** and **June 2025 Notes**[87](index=87&type=chunk) - Payments are senior to all other Indebtedness, except **Permitted Indebtedness** secured by **Permitted Liens** and **Permitted Project Financing**[87](index=87&type=chunk) [Incurrence of Indebtedness](index=32&type=section&id=16%28b%29%20Incurrence%20of%20Indebtedness) The Company and its Subsidiaries are restricted from incurring or guaranteeing any Indebtedness, with exceptions for this Note, Other Notes, Permitted Indebtedness, and Permitted Project Financing - Company and Subsidiaries are restricted from incurring new Indebtedness[88](index=88&type=chunk) - Exceptions include this Note, **Other Notes**, **Permitted Indebtedness**, and **Permitted Project Financing**[88](index=88&type=chunk) [Existence of Liens](index=32&type=section&id=16%28c%29%20Existence%20of%20Liens) The Company and its Subsidiaries are prohibited from allowing any Liens on their property or assets, other than Permitted Liens - Company and Subsidiaries are prohibited from creating or allowing Liens on their assets[89](index=89&type=chunk) - This restriction does not apply to **Permitted Liens**[89](index=89&type=chunk) [Restricted Payments and Investments](index=32&type=section&id=16%28d%29%20Restricted%20Payments%20and%20Investments) The Company and its Subsidiaries cannot make payments on Indebtedness (other than the Notes and June 2025 Notes) or Investments if an Event of Default exists or would result - Company and Subsidiaries cannot make payments on Indebtedness (other than Notes/June 2025 Notes) or Investments if an **Event of Default** exists or would result[90](index=90&type=chunk) [Restriction on Redemption and Cash Dividends](index=33&type=section&id=16%28e%29%20Restriction%20on%20Redemption%20and%20Cash%20Dividends) The Company and its Subsidiaries are prohibited from redeeming or repurchasing capital stock (except for June 2025 Notes) and from declaring or paying cash dividends or distributions - Company and Subsidiaries cannot redeem or repurchase capital stock (except for **June 2025 Notes**)[92](index=92&type=chunk) - Company and Subsidiaries cannot declare or pay cash dividends or distributions on capital stock[92](index=92&type=chunk) [Restriction on Transfer of Assets](index=33&type=section&id=16%28f%29%20Restriction%20on%20Transfer%20of%20Assets) The Company and its Subsidiaries are restricted from disposing of assets or rights, with exceptions for ordinary course of business transactions and sales of inventory/product - Company and Subsidiaries are restricted from disposing of assets or rights[93](index=93&type=chunk) - Exceptions include dispositions in the ordinary course of business and sales of inventory/product[93](index=93&type=chunk) [Maturity of Indebtedness](index=33&type=section&id=16%28g%29%20Maturity%20of%20Indebtedness) The Company and its Subsidiaries are prohibited from allowing any Indebtedness (other than the June 2025 Notes) to mature or accelerate prior to the Maturity Date of this Note - Company and Subsidiaries cannot permit any Indebtedness (except **June 2025 Notes**) to mature or accelerate before the Note's **Maturity Date**[94](index=94&type=chunk) [Change in Nature of Business](index=33&type=section&id=16%28h%29%20Change%20in%20Nature%20of%20Business) The Company and its Subsidiaries cannot materially change their lines of business from those on the Subscription Date, nor can they modify their corporate structure or purpose - Company and Subsidiaries cannot materially change their lines of business from those on the **Subscription Date**[95](index=95&type=chunk) - Company and Subsidiaries cannot modify their corporate structure or purpose[95](index=95&type=chunk) [Preservation of Existence, Etc.](index=33&type=section&id=16%28i%29%20Preservation%20of%20Existence%2C%20Etc.) The Company and its Subsidiaries must maintain their existence, rights, and privileges, and remain duly qualified and in good standing in all necessary jurisdictions - Company and Subsidiaries must maintain their existence, rights, privileges, and good standing in all relevant jurisdictions[96](index=96&type=chunk) [Maintenance of Intellectual Property](index=33&type=section&id=16%28j%29%20Maintenance%20of%20Intellectual%20Property) The Company and its Subsidiaries must take all necessary actions to maintain their material Intellectual Property Rights in full force and effect - Company and Subsidiaries must maintain all material **Intellectual Property Rights** in full force and effect[97](index=97&type=chunk) [Maintenance of Insurance](index=33&type=section&id=16%28k%29%20Maintenance%20of%20Insurance) The Company and its Subsidiaries must maintain adequate insurance coverage for their properties and business, meeting governmental requirements or sound business practice standards - Company and Subsidiaries must maintain adequate insurance coverage for properties and business[98](index=98&type=chunk) - Coverage must meet governmental requirements or sound business practice standards[98](index=98&type=chunk) [Transactions with Affiliates](index=34&type=section&id=16%28l%29%20Transactions%20with%20Affiliates) Transactions with Affiliates are restricted unless they are in the ordinary course of business, consistent with past practice, for fair consideration, and on arm's length terms - Transactions with Affiliates are restricted[99](index=99&type=chunk) - Permitted if in ordinary course of business, consistent with past practice, for fair consideration, and on arm's length terms[99](index=99&type=chunk) [Restricted Issuances](index=34&type=section&id=16%28m%29%20Restricted%20Issuances) The Company cannot issue any Notes (other than as contemplated by existing agreements) or other securities that would cause an Event of Default without prior written consent from a majority of outstanding Note holders - Company cannot issue Notes (except as agreed) or other securities that would cause an **Event of Default**[100](index=100&type=chunk) - Requires prior written consent from holders of a majority of outstanding Notes[100](index=100&type=chunk) [Financial Covenants; Announcement of Operating Results](index=34&type=section&id=16%28n%29%20Financial%20Covenants%3B%20Announcement%20of%20Operating%20Results) The Company must maintain an Available Cash balance of at least $2.25 million, and upon a Financial Covenant Failure, must notify the Holder and publicly disclose the failure if elected Financial Test Requirement | Metric | Requirement | | :----- | :---------- | | **Available Cash** | ≥ $2.25 million at all times | - Upon a **'Financial Covenant Failure'**, Company must notify Holder and, if elected, disclose material non-public information and the **Event of Default** publicly[103](index=103&type=chunk) [PCAOB Registered Auditor](index=34&type=section&id=16%28o%29%20PCAOB%20Registered%20Auditor) While Notes are outstanding, the Company must engage an independent auditor registered with and compliant with the Public Company Accounting Oversight Board (PCAOB) to audit its financial statements - Company must engage a **PCAOB-registered** independent auditor for its financial statements while Notes are outstanding[104](index=104&type=chunk) [Stay, Extension and Usury Laws](index=34&type=section&id=16%28p%29%20Stay%2C%20Extension%20and%20Usury%20Laws) The Company irrevocably waives the benefit of any stay, extension, or usury law that might affect the Note's covenants or performance, agreeing not to use such laws to hinder the Holder's rights - Company irrevocably waives the benefit of any stay, extension, or usury law[105](index=105&type=chunk) - Company agrees not to use such laws to impede the Holder's rights under the Note[105](index=105&type=chunk) [Taxes](index=35&type=section&id=16%28q%29%20Taxes) The Company and its Subsidiaries must pay all due taxes and file personal property tax returns on time, with good faith contests permitted if adequate GAAP reserves are maintained - Company and Subsidiaries must pay all due taxes, fees, and charges, unless failure is not material[107](index=107&type=chunk) - Company and Subsidiaries must file personal property tax returns on time[107](index=107&type=chunk) - Taxes can be contested in good faith with adequate GAAP reserves[107](index=107&type=chunk) [Independent Investigation](index=35&type=section&id=16%28r%29%20Independent%20Investigation) Upon Holder's request due to a suspected breach or Event of Default, the Company must hire an independent investment bank to investigate, whose determination is binding and fees are borne by the Company - Company must hire an **'Independent Investigator'** upon Holder's request if an **Event of Default** exists or is suspected[108](index=108&type=chunk) - **Independent Investigator** has broad access to Company records, personnel, and financial data[108](index=108&type=chunk) - The investigator's determination of a breach is binding, and the Company bears the fees and expenses[108](index=108&type=chunk) [Distribution of Assets](index=36&type=section&id=17.%20DISTRIBUTION%20OF%20ASSETS) If the Company distributes assets to Common Stock holders, the Holder is entitled to equivalent distributions as if the Note were fully converted, subject to beneficial ownership limits - Holder is entitled to distributions of assets as if the Note was fully converted, assuming conversion at the **Alternate Conversion Price**[110](index=110&type=chunk) - Participation in distributions is limited by the **Maximum Percentage** beneficial ownership restriction[110](index=110&type=chunk) - Excess distributions are held in abeyance until they would not cause the Holder to exceed the **Maximum Percentage**[110](index=110&type=chunk) [Amending the Terms of This Note](index=36&type=section&id=18.%20AMENDING%20THE%20TERMS%20OF%20THIS%20NOTE) Sections 3(d)(i) and 18 are unamendable, while other changes require prior written consent of the Required Holders and must not disproportionately affect any holder without their specific consent - Sections 3(d)(i) and 18 are unamendable, unmodifiable, and unwaivable[111](index=111&type=chunk) - Other amendments require prior written consent of the **Required Holders**[111](index=111&type=chunk) - Amendments are binding on all holders but cannot disproportionately and adversely affect a holder without their specific consent[111](index=111&type=chunk) [Transfer](index=36&type=section&id=19.%20TRANSFER) This Note and any Common Stock shares issued upon its conversion are transferable by the Holder without the Company's consent, subject only to Section 9(g) of the Securities Purchase Agreement - Note and conversion shares are transferable by the Holder without Company consent[112](index=112&type=chunk) - Transfer is subject only to Section 9(g) of the **Securities Purchase Agreement**[112](index=112&type=chunk) [Reissuance of This Note](index=36&type=section&id=20.%20REISSUANCE%20OF%20THIS%20NOTE) [Transfer](index=36&type=section&id=20%28a%29%20Transfer) Upon transfer, the Holder surrenders the Note, and the Company issues new Notes to the transferee and original Holder (if partial transfer), acknowledging that outstanding principal may be less than the face amount - Holder surrenders Note upon transfer; Company issues new Notes to transferee and original Holder (if partial transfer)[113](index=113&type=chunk) - Holders acknowledge that outstanding principal may be less than the face amount due to prior conversions/redemptions[113](index=113&type=chunk) [Lost, Stolen or Mutilated Note](index=37&type=section&id=20%28b%29%20Lost%2C%20Stolen%20or%20Mutilated%20Note) If the Note is lost, stolen, destroyed, or mutilated, the Company will issue a new Note upon satisfactory evidence and, for mutilation, surrender of the old Note - Company issues a new Note if the original is lost, stolen, destroyed, or mutilated[115](index=115&type=chunk) - Requires satisfactory evidence (e.g., written certification, indemnification) and, for mutilation, surrender of the old Note[115](index=115&type=chunk) [Note Exchangeable for Different Denominations](index=37&type=section&id=20%28c%29%20Note%20Exchangeable%20for%20Different%20Denominations) The Holder can exchange this Note for new Notes in different principal amounts (at least $1,000 each) by surrendering the original Note at the Company's principal office - Holder can exchange the Note for new Notes in different denominations (minimum **$1,000**)[116](index=116&type=chunk) - Exchange requires surrender of the original Note[116](index=116&type=chunk) [Issuance of New Notes](index=37&type=section&id=20%28d%29%20Issuance%20of%20New%20Notes) Any new Note issued must be of like tenor, represent the remaining outstanding principal, have the same Issuance Date, possess the same rights and conditions, and include accrued and unpaid Interest and Late Charges from the original Issuance Date - New Notes must be of like tenor, represent outstanding principal, and have the same **Issuance Date**[117](index=117&type=chunk) - New Notes must have the same rights and conditions as the original Note[117](index=117&type=chunk) - New Notes include accrued and unpaid Interest and Late Charges from the original **Issuance Date**[117](index=117&type=chunk) [Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief](index=37&type=section&id=21.%20REMEDIES%2C%20CHARACTERIZATIONS%2C%20OTHER%20OBLIGATIONS%2C%20BREACHES%20AND%20INJUNCTIVE%20RELIEF) The Note's remedies are cumulative, a breach causes irreparable harm entitling the Holder to specific performance and injunctive relief without bond, and the Company must provide compliance information - Remedies are cumulative and in addition to all other legal/equitable remedies[118](index=118&type=chunk) - Company acknowledges breach causes irreparable harm, entitling Holder to specific performance and injunctive relief without proving damages or posting bond[118](index=118&type=chunk) - Company must provide information to Holder to confirm compliance with Note terms[118](index=118&type=chunk) [Payment of Collection, Enforcement and Other Costs](index=38&type=section&id=22.%20PAYMENT%20OF%20COLLECTION%2C%20ENFORCEMENT%20AND%20OTHER%20COSTS) The Company must pay all costs incurred by the Holder for collection, enforcement, or bankruptcy proceedings related to the Note, including attorneys' fees, and amounts due are not limited by the Note's purchase price - Company must pay Holder's costs for collection, enforcement, or bankruptcy proceedings related to the Note, including attorneys' fees[120](index=120&type=chunk) - Amounts due are not affected or limited by the Note's purchase price being less than its original principal[120](index=120&type=chunk) [Construction; Headings](index=38&type=section&id=23.%20CONSTRUCTION%3B%20HEADINGS) This Note is jointly drafted and not construed against any party, with headings for convenience only, and terms like "including" construed broadly - Note is jointly drafted; not construed against any drafter[121](index=121&type=chunk) - Headings are for convenience and do not affect interpretation[121](index=121&type=chunk) - Terms like 'including' are construed broadly; 'herein' refers to the entire Note[121](index=121&type=chunk) [Failure or Indulgence Not Waiver](index=38&type=section&id=24.%20FAILURE%20OR%20INDULGENCE%20NOT%20WAIVER) No failure or delay by the Holder in exercising any right constitutes a waiver, which is only effective if in writing and signed by an authorized representative, and Section 3(d) cannot be waived - No failure or delay by Holder in exercising rights constitutes a waiver[122](index=122&type=chunk) - Waivers must be in writing and signed by an authorized representative[122](index=122&type=chunk) - Section 3(d) (**Limitations on Conversions**) cannot be waived[122](index=122&type=chunk) [Dispute Resolution](index=39&type=section&id=25.%20DISPUTE%20RESOLUTION) [Submission to Dispute Resolution](index=39&type=section&id=25%28a%29%20Submission%20to%20Dispute%20Resolution) Disputes regarding prices, rates, values, or calculations are submitted via email, and if unresolved, an independent investment bank's binding resolution is sought, with fees borne by the Company - Disputes regarding prices, rates, values, or arithmetic calculations are submitted via electronic mail[125](index=125&type=chunk) - If unresolved within two Business Days, Holder may select an independent investment bank for resolution[125](index=125&type=chunk) - Investment bank's resolution is final and binding, with fees borne by the Company[127](index=127&type=chunk) [Miscellaneous](index=40&type=section&id=25%28b%29%20Miscellaneous) This section confirms the dispute resolution process as an arbitration agreement under Delaware law, allowing either party to submit disputes to Delaware courts and seek injunctive relief - Section 25 constitutes an arbitration agreement under the **Delaware Uniform Arbitration Act**[128](index=128&type=chunk) - Either party can submit disputes to state or federal courts in Wilmington, Delaware, instead of using the arbitration procedures[128](index=128&type=chunk) - Nothing limits the Holder or Company from obtaining injunctive relief or other equitable remedies[128](index=128&type=chunk) [Notices; Currency; Payments](index=40&type=section&id=26.%20NOTICES%3B%20CURRENCY%3B%20PAYMENTS) [Notices](index=40&type=section&id=26%28a%29%20Notices) Notices must follow the Securities Purchase Agreement, and the Company must promptly notify of all actions, including Conversion Price adjustments and record dates, ensuring public disclosure of such information - Notices must be given in accordance with Section 9(f) of the **Securities Purchase Agreement**[129](index=129&type=chunk) - Company must provide prompt written notice of all actions, including **Conversion Price** adjustments and record dates for corporate events[129](index=129&type=chunk) - Information in notices must be publicly disclosed prior to or concurrently with notice to Holder[129](index=129&type=chunk) [Currency](index=40&type=section&id=26%28b%29%20Currency) All dollar amounts and payments in the Note are in U.S. Dollars, with other currencies converted using the Wall Street Journal Exchange Rate on the calculation date - All dollar amounts and payments are in **U.S. Dollars**[130](index=130&type=chunk) - Other currencies are converted using the **Wall Street Journal Exchange Rate** on the calculation date[130](index=130&type=chunk) [Payments](index=41&type=section&id=26%28c%29%20Payments) Cash payments are made via certified check or wire transfer, due on the next Business Day if the due date falls on a non-Business Day, and unpaid amounts incur an 18% per annum Late Charge - Cash payments are made via certified check or, if elected by Holder, wire transfer[132](index=132&type=chunk) - Payments due on non-Business Days are due on the next Business Day[132](index=132&type=chunk) - Unpaid amounts (not accruing default interest) incur an **18% per annum 'Late Charge'**[132](index=132&type=chunk) [Cancellation](index=41&type=section&id=27.%20CANCELLATION) This Note is automatically canceled, surrendered, and not reissued once all Outstanding Value and other owed amounts have been paid in full - Note is automatically canceled and surrendered upon full payment of all **Outstanding Value** and other owed amounts[133](index=133&type=chunk) - Canceled Note will not be reissued[133](index=133&type=chunk) [Waiver of Notice](index=41&type=section&id=28.%20WAIVER%20OF%20NOTICE) To the extent permitted by law, the Company irrevocably waives various demands and notices related to the delivery, acceptance, performance, default, or enforcement of this Note and the Securities Purchase Agreement - Company irrevocably waives various demands and notices related to the Note and **Securities Purchase Agreement**, to the extent permitted by law[134](index=134&type=chunk) [Governing Law](index=41&type=section&id=29.%20GOVERNING%20LAW) This Note is governed by Delaware law, and the Company irrevocably submits to the exclusive jurisdiction of Delaware courts for disputes, waiving claims of inconvenient forum and the right to a jury trial - Note is governed by the internal laws of the **State of Delaware**[135](index=135&type=chunk) - Company irrevocably submits to the exclusive jurisdiction of Delaware state and federal courts for disputes[135](index=135&type=chunk) - Company irrevocably waives any right to a jury trial for disputes related to this Note[135](index=135&type=chunk) [Judgment Currency](index=42&type=section&id=30.%20JUDGMENT%20CURRENCY) Conversion of U.S. dollar amounts to a Judgment Currency for enforcement depends on the jurisdiction, using the Exchange Rate on the payment date for Delaware courts or the Judgment Conversion Date with adjustments for other jurisdictions - Conversion of U.S. dollar amounts to **'Judgment Currency'** for judgment enforcement depends on the jurisdiction[137](index=137&type=chunk) - For Delaware courts, conversion uses the **Exchange Rate** on the actual payment date[137](index=137&type=chunk) - For other jurisdictions, conversion uses the rate on the **'Judgment Conversion Date'**, with adjustments for subsequent rate changes to ensure the original U.S. dollar amount is received[138](index=138&type=chunk) [Severability](index=42&type=section&id=31.%20SEVERABILITY) If any Note provision is invalid, it will be amended to the broadest valid extent, and its invalidity will not affect other provisions if original intentions are maintained, with parties negotiating replacements - Prohibited, invalid, or unenforceable provisions will be amended to the broadest valid extent[140](index=140&type=chunk) - Invalidity of one provision does not affect the validity of remaining provisions, provided original intent and obligations are maintained[140](index=140&type=chunk) - Parties will negotiate to replace invalid provisions with valid ones that closely match the original effect[140](index=140&type=chunk) [Maximum Payments](index=43&type=section&id=32.%20MAXIMUM%20PAYMENTS) Nothing in the Note requires interest or charges exceeding legal maximums, and any excess payments will be credited against amounts owed to the Company - Note does not establish or require interest or charges exceeding legal maximums[142](index=142&type=chunk) - Excess payments will be credited against amounts owed, effectively refunded to the Company[142](index=142&type=chunk) [Certain Definitions](index=43&type=section&id=33.%20CERTAIN%20DEFINITIONS) This section provides definitions for key terms used throughout the Note, ensuring consistent interpretation of the agreement's provisions Key Definitions | Term | Definition | | :--- | :--- | | **Acceleration Conversion Price** | Lower of (i) Installment Conversion Price for Current Installment Date and (ii) 92% of lowest VWAP during 5 consecutive Trading Days ending on Acceleration Date | | **Adjustment Excluded Securities** | Common Stock/options issued to directors/employees (up to 20% of outstanding shares, with conditions), or shares from conversion/exercise of pre-Subscription Date securities (with conditions), or shares from Notes (with conditions) | | **Alternate Conversion Price** | Lowest of (i) Conversion Price on Alternate Conversion Date and (ii) 90% of lowest VWAP during 7 consecutive Trading Days ending on Conversion Notice delivery or immediately prior to Event of Default | | **Available Cash** | Aggregate unrestricted cash of Company and Subsidiaries in US bank accounts | | **Black Scholes Consideration Value** | Value of Option/Convertible Security/Adjustment Right calculated using Black Scholes Option Pricing Model | | **Change of Control** | Fundamental Transaction excluding certain mergers, reorganizations, or acquisitions below 20% market cap, and specifically including 'Going-Private Change of Control' | | **Change of Control Redemption Premium** | 115% | | **Closing Bid Price / Closing Sale Price** | Last closing bid/trade price on Principal Market (or other market), or average of market maker bids/asks if not reported | | **Conversion Amount** | Sum of Outstanding Principal Value to be converted, accrued unpaid Interest, accrued unpaid Late Charges, and other unpaid Transaction Document amounts | | **Default Rate** | 18% per annum | | **Eligible Market** | NYSE, NYSE American, Nasdaq Global Select, Nasdaq Global, or Nasdaq Capital Market | | **Equity Conditions** | A set of conditions related to Common Stock listing, timely share delivery, beneficial ownership limits, exchange cap compliance, absence of Fundamental Transactions, public information, non-public information, Company compliance, volume/price failures, authorized shares, and dispute absence | | **Equity Conditions Failure** | Equity Conditions not satisfied on any day during the 20 Trading Day period prior to determination date | | **Event Market Price** | Quotient of sum of 5 lowest VWAPs during 15 consecutive Trading Days ending immediately preceding 16th Trading Day after Stock Combination Event Date, divided by five | | **Financial Test** | Maintain Available Cash ≥ $2.25 million | | **Fundamental Transaction** | Broad definition covering mergers, asset sales, tender offers, stock purchases, reorganizations, or any transaction circumventing this definition, leading to a Subject Entity owning ≥ 50% of Common Stock or voting power | | **Going-Private Change of Control** | Transaction resulting in Company/Successor Entity not having Common Stock registered under 1934 Act and listed on an Eligible Market | | **Holder Pro Rata Amount** | Fraction of original Principal amount of this Note divided by aggregate original principal of all Notes issued on Initial Closing Date | | **Installment Amount** | Sum of (i) lesser of fixed amount or Outstanding Principal Value (or full Outstanding Principal Value on Maturity Date), (ii) Deferred Amounts, (iii) Acceleration Amounts, (iv) other unpaid Transaction Document amounts, and (v) accrued unpaid Interest and Late Charges | | **Installment Conversion Price** | Lower of (i) Conversion Price then in effect and (ii) 92% of lowest VWAP during 5 consecutive Trading Days ending on Installment Date | | **Maturity Date** | [______], subject to extensions under certain conditions | | **Outstanding Principal Value** | 115% of all outstanding Principal of this Note | | **Outstanding Value** | Sum of Outstanding Principal Value, accrued unpaid Interest, accrued unpaid Late Charges, and other unpaid Transaction Document amounts | | **Permitted Indebtedness** | Specific categories of debt including this Note, Other Notes, June 2025 Notes, capital leases, letters of credit, performance bonds, deferred purchase price, and other unsecured debt (up to $750,000 with subordination/maturity conditions) | | **Permitted Liens** | Specific categories of liens including taxes not due, statutory liens, purchase money liens, customs liens, judgment liens (not Event of Default), and Permitted Project Financing liens | | **Permitted Project Financing** | Debt/equity financing (min. $125 million) for development/operation of a Project, with recourse to Project assets | | **Price Failure** | VWAP of Common Stock on any Trading Day during 20 Trading Day period fails to exceed $0.20 | | **Principal Market** | The NYSE American | | **Project** | Battery-grade natural graphite material production through Company's Kellyton Graphite Plant or similar customer-commissioned project | | **Reallocation Conversion Price** | Lower of (i) Conversion Price then in effect and (ii) lower of (x) Installment Conversion Price for applicable Installment Period and (y) 92% of lowest VWAP during 5 consecutive Trading Days ending on Reallocation Date | | **Redemption Premium** | 115% | | **Redemption Value** | 115% | | **Subscription Date** | August 7, 2025 | | **Trading Day** | Day Common Stock is traded on Principal Market (or other market) for at least 4.5 hours, or not suspended during final hour, or any day NYSE is open for trading (for non-price determinations) | | **Volume Failure** | Aggregate daily dollar trading volume of Common Stock on Principal Market on any Trading Day during 20 Trading Day period is less than $150,000.00 | | **VWAP** | Dollar volume-weighted average price for security on Principal Market (or other market) during 9:30 a.m. to 4:00 p.m. New York time | [Disclosure](index=56&type=section&id=34.%20DISCLOSURE) If any notice contains material non-public information, the Company must publicly disclose it by 9:00 am New York time on the next Business D

Financial Data and Key Metrics Changes - The company reported a strong start to the year, focusing on advancing and derisking projects, with a successful commissioning of the qualification line at the Calythen graphite processing plant producing over 800 kilograms of CHPG sample [4] - The estimated total cost of Phase one remains at €245,000,000, with approximately 85% of the necessary equipment secured [5][21] - The company anticipates commercial production at Callenton to begin in 2026 [5] Business Line Data and Key Metrics Changes - The qualification line at the Calythen facility is capable of processing approximately one metric ton of CFPG battery anode material each day, which will inform operations of the main line expected to produce 12,500 metric tons per day upon Phase one completion [4] - The company envisions the Callentan facility reaching 50,000 metric tons per year of CHPG battery anode production upon completion of both Phase one and two [5] Market Data and Key Metrics Changes - Customer interest in Westwater's ability to supply domestically produced battery anode materials to the North American market remains strong, with 100% of Phase one production capacity already committed under existing offtake agreements [7] - The company is currently in discussions with multiple customers interested in the Phase two output of 37,500 metric tons per year [8] Company Strategy and Development Direction - The company is committed to vertical integration through the development of the Coosa deposit and is actively engaging with customers while fulfilling sample material requests [12] - The company is closely monitoring the evolving tariff landscape that may impact Phase I costs [5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in securing financing for Phase one of the Kellyton plant, despite recent protests at the current feedstock supplier temporarily slowing the syndication process [11][12] - The management highlighted the importance of diversifying the supply chain and is at an advanced stage in securing a backup feedstock supply [12] Other Important Information - The company announced the successful completion of the U.S. Patent and Trademark Office review of its patent application, marking another important milestone for its business plan [6] - The company is exploring additional funding opportunities, including a letter of interest from the Export Import Bank, which could provide further financial support for advancing its business [38] Q&A Session Summary Question: What components of entering production could go right or wrong? - Management highlighted the qualification line as a key milestone, providing invaluable experience for the operating team ahead of full operations [18] Question: What are the current trends in construction costs and equipment? - Management noted that 85% of the equipment is already purchased, and they are somewhat shielded from inflation and tariffs, maintaining confidence in the $245,000,000 construction budget [21][22] Question: Can you provide more details on the backup supply from non-Chinese suppliers? - Management stated they are close to securing a backup supply agreement but could not disclose further details due to NDA constraints [28] Question: What is the status of the loan and timing for financing? - Management indicated that the loan process has taken longer than expected but expressed confidence in the current syndicate and their ability to close financing [35][42] Question: What is the potential size of funding from the Export Import Bank? - Management mentioned that they are working through the sizing and approval processes with the Export Import Bank, which could serve as additional funding for the business [40]

Financial Data and Key Metrics Changes - The company reported a strong start to the year, focusing on advancing and derisking projects, with a successful commissioning of the qualification line at the Calythen graphite processing plant producing over 800 kilograms of CHPG sample [4] - The estimated total cost of Phase one remains at €245 million, with approximately 85% of the necessary equipment secured [5][11] - The company anticipates commercial production at Callenton to begin in 2026 [5] Business Line Data and Key Metrics Changes - The qualification line at the Calythen facility is capable of processing approximately one metric ton of CFPG battery anode material each day, which will inform operations of the main line expected to produce 12,500 metric tons per day upon Phase one completion [4] - The company envisions the Callentan facility reaching 50,000 metric tons per year of CHPG battery anode production upon completion of both Phase one and two [5] Market Data and Key Metrics Changes - Customer interest in domestically produced battery anode materials remains strong, with 100% of Phase one production capacity already committed under existing offtake agreements [7] - The company is in discussions with multiple customers interested in the Phase two output of 37,500 metric tons per year [8] Company Strategy and Development Direction - The company is well-positioned to meet the growing demand for sustainable and secure battery-grade anode materials in the U.S., aligning with U.S. policy goals to onshore sourcing and manufacturing of critical minerals [6][7] - The company is committed to vertical integration through the development of the Coosa deposit and is actively engaging with customers and fulfilling sample material requests [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in securing financing for Phase one of the Kellyton plant despite recent market uncertainties and supplier protests [12][13] - The company remains focused on executing its strategy, delivering value to shareholders, and navigating opportunities and challenges in the upcoming quarters [14] Other Important Information - The company announced the successful completion of the U.S. Patent and Trademark Office review of its patent application, marking another important milestone [6] - The company is evaluating several non-Chinese feedstock sources to diversify its supply chain and mitigate future risks [13] Q&A Session Summary Question: What components of entering production could go right or wrong? - Management highlighted the qualification line as a key milestone, providing invaluable experience for the operating team ahead of full operations [18] Question: What are the current trends in construction costs and equipment pricing? - Management noted that 85% of equipment is already purchased, and they remain within the $245 million construction budget despite tariff uncertainties [21][22] Question: Can you provide more details on the backup supply from non-Chinese suppliers? - Management stated they are close to securing a backup supply agreement but could not disclose further details due to NDA constraints [27] Question: What is the status of the loan and timing for financing? - Management indicated that the loan process has taken longer than expected but remains confident in closing financing soon, with a focus on the current syndicate [32][39] Question: What is the potential opportunity with the Export-Import Bank? - Management explained that the letter of interest from the Export-Import Bank is a preliminary step and could provide additional funding for advancing the business beyond Phase one [35][36]

Summary of Westwater Resources (WWR) Conference Call - May 27, 2025 Company Overview - **Company**: Westwater Resources Inc. (WWR) - **Industry**: Graphite production, specifically for battery anode materials Key Points and Arguments Project Updates - The qualification line at the Kelantan graphite processing plant has been successfully commissioned, producing over 800 kilograms of CHPG sample [3][4] - The qualification line can process approximately one metric ton of CFGB battery material daily, with the mainline expected to produce 12,500 metric tons per day upon Phase one completion [4] - The total cost for Phase one is estimated at CHF $245 million, with 85% of the necessary equipment already secured [4][21] - Commercial production at the Callenton facility is anticipated to begin in 2026 [4] Market Position and Demand - 100% of Phase one production capacity is already committed through existing offtake agreements, with strong demand for Phase two output of 37,500 metric tons per year [7] - Customer interest in domestically produced battery anode materials remains strong, aligning with U.S. policy goals to onshore sourcing and manufacturing of critical minerals [5][6] Financing and Supply Chain - The company is working on securing a secured debt facility to cover the remaining costs of Phase one, with a strategic priority on financing reflecting market demand [10] - Recent protests at the current feedstock supplier have temporarily slowed processes, but operations are expected to resume in June [11][12] - Westwater is diversifying its supply chain by evaluating non-Chinese feedstock sources and is close to securing a backup supply agreement [12][27] Challenges and Risks - The unexpected withdrawal of an offshore institutional investor from the financing syndication has caused delays, but the company is now working with multiple lenders [10][11] - The evolving tariff landscape may impact Phase one costs, although the company believes it is somewhat shielded from inflation due to the majority of equipment already purchased [21][22] Future Opportunities - The company received a letter of interest from the Export-Import Bank, which could provide additional funding for advancing its business beyond Phase one [36][38] - The potential for additional funding from the Export-Import Bank is being explored, although it is not currently needed to complete Phase one financing [36][41] Additional Important Information - The qualification line's operation is critical for gaining experience ahead of full operations, which is seen as a game changer for the company [18][19] - The company remains committed to transparency and operational discipline while navigating opportunities and challenges in the market [13][43]

Production and Capacity - Westwater expects the Kellyton Graphite Plant to produce 12,500 metric tons of CSPG per year in Phase I, primarily for lithium-ion batteries[87] - Westwater has secured offtake agreements for 100% of its anticipated Phase I production capacity and a portion of anticipated Phase II production capacity[89] - The company produced over an 800 kg sample of CSPG for pre-production cell trials during the first quarter of 2025[94] Financial Performance - Net loss for the three months ended March 31, 2025, was $2.7 million, a decrease from a net loss of $2.9 million for the same period in 2024[113] - Net cash used in operating activities was $2.3 million for the three months ended March 31, 2025, a decrease of $0.5 million compared to the same period in 2024[118] - Net cash provided by financing activities increased by $3.7 million for the three months ended March 31, 2025, due to increased shares sold under the ATM Sales Agreement and 2024 Lincoln Park PA[122] Funding and Financial Challenges - The company is working to complete a secured debt facility for approximately $150 million to finance the completion of Phase I of the Kellyton Graphite Plant[96] - The Company's planned non-discretionary expenditures for one year exceed the cash on hand as of the date of the Interim Financial Statements[124] - The Company has faced challenges in securing additional financing due to market volatility, higher interest rates, and uncertain economic conditions[126] - The ability to raise additional funds under the ATM Sales Agreement may be limited by the Company's market capitalization, share price, and trading volume[126] - Construction activities related to the Kellyton Graphite Plant have been significantly reduced until additional funding is secured[124] Cash Position - As of March 31, 2025, the Company's cash balance was approximately $3.3 million[125] - During the three months ended March 31, 2025, the Company sold 2.5 million shares of Common Stock for net proceeds of $2.0 million and approximately 3.8 million shares for net proceeds of $2.6 million[125] - The Company has approximately $49.9 million remaining available for future sales under the ATM Sales Agreement[125] Supply Chain and Geopolitical Risks - The U.S. is almost 100% dependent on imports for battery-grade graphite, highlighting the geopolitical risks and supply-chain vulnerabilities[105][107] - Westwater is at an advanced stage in securing a backup feedstock supplier due to recent protests affecting its primary supplier[97] Forward-Looking Statements and Risks - Forward-looking statements regarding funding adequacy and operational timelines are subject to various risks and uncertainties[129] - The Company cautions that actual results may differ materially from forward-looking statements due to factors such as inflation, supply chain disruptions, and geopolitical issues[130] - The Company has no off-balance sheet arrangements[128]