Westwater Resources(WWR)

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Westwater Resources(WWR) - 2021 Q4 - Annual Report
2022-02-11 21:32
Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 001-33404 WESTWATER RESOURCES, INC. (Exact name of Registrant as specified in its charter) | DELAWARE | | 75-2212772 | | --- | --- | --- | | (State of In ...
Westwater Resources(WWR) - 2021 Q3 - Earnings Call Transcript
2021-11-11 19:18
Westwater Resources, Inc. (NYSE:WWR) Q3 Earnings Conference Call November 11, 2021 10:00 AM ET Company Participants Chris Jones – President and CEO Jeff Vigil – CFO Conference Call Participants Debra Fiakas – Crystal Equity Research Dan Hubert – Aces Group Michael Porter – Porter La Vei En Rose Operator Thank you for standing by. This is the conference operator. Welcome to the Westwater Resources, Inc., Q3 2021 Results and Business Update Conference Call. As a reminder, all participants are in a listen-only ...
Westwater Resources(WWR) - 2021 Q3 - Earnings Call Presentation
2021-11-11 17:57
ENERGY MATERIALS FOR THE 21ST CENTURY CORPORATE PRESENTATION NOVEMBER 11, 2021 | --- | --- | |-------|----------------------| | | | | | (NYSE American: WWR) | CAUTIONARY STATEMENT CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements convey our current expectations or forecasts of future events. Forward-looking statements are subject to risks, uncer ...
Westwater Resources(WWR) - 2021 Q3 - Quarterly Report
2021-11-10 21:30
Table of Contents Or ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission file number 001-33404 WESTWATER RESOURCES, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2021 (Exact Name of Registrant as Specified in Its Charter) Delaware 75-2212772 (State of ...
Westwater Resources(WWR) - 2021 Q2 - Earnings Call Transcript
2021-08-12 20:45
Westwater Resources, Inc (NYSE:WWR) Q2 2021 Earnings Conference Call August 12, 2021 11:00 AM ET Company Participants Chris Jones – President and Chief Executive Officer Jeff Vigil – Chief Financial Officer Conference Call Participants Debra Fiakas – Crystal Equity Research Dan Murchison – Lake Mitchell Homeowners Association Barbara Cole – Hargrove Engineering Operator Thank you for standing by. This is the conference operator. Welcome to the Westwater Resources, Inc. Q2 2021 Results and Business Update Co ...
Westwater Resources(WWR) - 2021 Q2 - Earnings Call Presentation
2021-08-12 19:08
ENERGY MATERIALS FOR THE 21ST CENTURY Q2 2021 RESULTS AUGUST 12, 2021 | --- | --- | --- | |----------------------------------------------|---------------|-------| | | | | | | | | | Christopher M. Jones Chief Executive Officer | | | | Jeffrey L. Vigil Chief Financial Officer | | | | | | | | | (Nasdaq: WWR) | 1 | CAUTIONARY STATEMENT CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act ...
Westwater Resources(WWR) - 2021 Q2 - Quarterly Report
2021-08-11 20:16
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2021 Table of Contents Or ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission file number 001-33404 WESTWATER RESOURCES, INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 75-2212772 (State of Incor ...
Westwater Resources(WWR) - 2021 Q1 - Earnings Call Presentation
2021-05-14 06:54
ENERGY MATERIALS FOR THE 21ST CENTURY Q1 2021 RESULTS MAY 13, 2021 | --- | --- | |-------------------------|-------| | Christopher M. Jones | | | Chief Executive Officer | | CAUTIONARY STATEMENT CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements convey our current expectations or forecasts of future events. Forward-looking statements are subject ...
Westwater Resources(WWR) - 2021 Q1 - Quarterly Report
2021-05-12 20:09
[PART I — FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) This section presents Westwater Resources, Inc.'s unaudited condensed consolidated financial statements for Q1 2021, detailing financial position, performance, cash flows, and equity changes, supported by comprehensive accounting notes [ITEM 1. FINANCIAL STATEMENTS](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) Presents Westwater Resources, Inc.'s unaudited condensed consolidated financial statements for Q1 2021, detailing financial position, performance, cash flows, and equity changes, supported by comprehensive accounting notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) Provides a snapshot of the company's financial position, including assets, liabilities, and equity, as of March 31, 2021, and December 31, 2020 Condensed Consolidated Balance Sheets (thousands of dollars) | Metric | March 31, 2021 (thousands of dollars) | December 31, 2020 (thousands of dollars) | | :-------------------------------- | :------------------------------------ | :------------------------------------- | | Cash and cash equivalents | $117,861 | $50,315 | | Total Current Assets | $120,324 | $52,589 | | Total Assets | $129,629 | $61,937 | | Total Current Liabilities | $5,222 | $4,252 | | Total Liabilities | $5,404 | $4,466 | | Total Stockholders' Equity | $124,225 | $57,471 | - Cash and cash equivalents significantly increased from **$50.3 million** at December 31, 2020, to **$117.9 million** at March 31, 2021, primarily due to equity financings[10](index=10&type=chunk) - Total assets nearly doubled from **$61.9 million** to **$129.6 million**, driven by the increase in cash[10](index=10&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Details the company's financial performance, including revenues, expenses, and net loss, for the three months ended March 31, 2021, and 2020 Operating Expenses (thousands of dollars) | Operating Expenses (thousands of dollars) | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :---------------------------------------- | :-------------------------------- | :-------------------------------- | | Product development expenses | $(1,823) | $(126) | | Exploration expenses | $(145) | $0 | | General and administrative expenses | $(2,084) | $(1,362) | | Arbitration costs | $(1,532) | $(669) | | Total operating expenses | $(5,585) | $(2,159) | | Net Loss from continuing operations | $(5,390) | $(2,162) | | Net Loss from discontinued operations | $0 | $(1,125) | | Net Loss | $(5,390) | $(3,287) | | Basic and Diluted Loss Per Share | $(0.19) | $(0.82) | | Weighted Average Shares Outstanding | 28,597,938 | 4,004,948 | - Net loss increased to **$5.39 million** for Q1 2021 from **$3.29 million** in Q1 2020, primarily due to higher product development, arbitration, and general and administrative expenses, despite the elimination of discontinued operations costs[11](index=11&type=chunk)[101](index=101&type=chunk) - Product development expenses surged from **$(126) thousand** in Q1 2020 to **$(1,823) thousand** in Q1 2021, reflecting increased focus on graphite processing pilot programs[11](index=11&type=chunk)[102](index=102&type=chunk) - Arbitration costs more than doubled to **$(1,532) thousand** in Q1 2021 from **$(669) thousand** in Q1 2020, related to the ongoing arbitration against Turkey[11](index=11&type=chunk)[103](index=103&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Outlines the cash inflows and outflows from operating, investing, and financing activities for the three months ended March 31, 2021, and 2020 Cash Flow Activity (thousands of dollars) | Cash Flow Activity (thousands of dollars) | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :---------------------------------------- | :-------------------------------- | :-------------------------------- | | Net Cash Used In Operating Activities | $(4,850) | $(3,455) | | Net Cash Provided By Investing Activities | $333 | $0 | | Net Cash Provided By Financing Activities | $72,053 | $2,471 | | Net increase/(decrease) in cash, cash equivalents and restricted cash | $67,536 | $(984) | | Cash, Cash Equivalents and Restricted Cash, End of Period | $117,861 | $4,683 | - Net cash provided by financing activities dramatically increased to **$72.1 million** in Q1 2021 from **$2.5 million** in Q1 2020, primarily from common stock issuances[14](index=14&type=chunk)[109](index=109&type=chunk) - Net cash used in operating activities increased to **$4.9 million** in Q1 2021, up from **$3.5 million** in Q1 2020, driven by higher operating expenses[14](index=14&type=chunk)[105](index=105&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20STOCKHOLDERS%27%20EQUITY) Presents changes in stockholders' equity, including common stock issuances and net loss, for the period ended March 31, 2021 Stockholders' Equity (thousands of dollars) | Stockholders' Equity (thousands of dollars) | December 31, 2020 | March 31, 2021 | | :------------------------------------------ | :---------------- | :------------- | | Total Stockholders' Equity | $57,471 | $124,225 | | Common stock issued, net of issuance costs | | $72,203 | | Net loss | | $(5,390) | | Paid-in capital | $383,723 | $455,854 | | Accumulated deficit | $(326,013) | $(331,403) | - Total stockholders' equity increased significantly from **$57.47 million** at December 31, 2020, to **$124.23 million** at March 31, 2021, primarily due to **$72.2 million** from common stock issuances[16](index=16&type=chunk) [NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](index=8&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) Provides detailed explanations and disclosures for the accounting policies, significant transactions, and financial instrument valuations presented in the consolidated financial statements [1. BASIS OF PRESENTATION](index=8&type=section&id=1.%20BASIS%20OF%20PRESENTATION) This note outlines the basis for preparing the unaudited condensed consolidated financial statements in accordance with U.S. GAAP for interim reporting, emphasizing that they should be read with the annual 10-K. It also details significant accounting policies, recently issued accounting pronouncements, and a reconciliation of cash, cash equivalents, and restricted cash - The financial statements are unaudited and prepared in accordance with U.S. GAAP for interim financial information, and should be read in conjunction with the Annual Report on Form 10-K for the year ended December 31, 2020[18](index=18&type=chunk) - The Company is evaluating the potential impact of ASU 2016-13 and ASU 2018-19, related to credit losses on financial instruments, which become effective for interim and annual periods beginning after December 15, 2022[21](index=21&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk) Cash Reconciliation (thousands of dollars) | Cash Reconciliation (thousands of dollars) | March 31, 2021 | March 31, 2020 | | :----------------------------------------- | :------------- | :------------- | | Cash and cash equivalents | $117,861 | $877 | | Restricted cash | $0 | $3,806 | | Total cash, cash equivalents and restricted cash | $117,861 | $4,683 | - Restricted cash, previously held as collateral for performance bonds related to uranium properties, was transferred to enCore Energy as of December 31, 2020, following the divestiture of the uranium subsidiaries[25](index=25&type=chunk) [2. LIQUIDITY](index=9&type=section&id=2.%20LIQUIDITY) Westwater Resources, Inc. has historically relied on equity and debt financings and asset sales to fund operations, as it has not generated revenue since 2009. The company is now focused on its graphite business, having divested its uranium and lithium interests, and believes its current cash balance of $118 million (as of March 31, 2021) is sufficient to fund non-discretionary expenditures through 2022, with plans to evaluate further financing for its commercial graphite processing facility - The Company has not recorded revenues from operations since 2009 and relies on equity/debt financings and asset sales[26](index=26&type=chunk)[110](index=110&type=chunk) - Strategic shift in Q3 2020 to focus on graphite business, discontinuing lithium investments and selling uranium business to enCore Energy, eliminating significant liabilities and annual expenditures[27](index=27&type=chunk)[111](index=111&type=chunk) - During Q1 2021, the Company focused on graphite process development, including pilot programs and initiating a Definitive Feasibility Study (DFS) for the Coosa Graphite Project[28](index=28&type=chunk)[112](index=112&type=chunk) Financing Activity (Q1 2021) | Financing Activity (Q1 2021) | Shares Sold (millions) | Net Proceeds (millions of dollars) | | :--------------------------- | :--------------------- | :--------------------------------- | | Cantor Fitzgerald & Co. | 9.3 | $47.3 | | Lincoln Park Capital Fund | 3.8 | $24.9 | | **Total** | **13.1** | **$72.2** | - As of March 31, 2021, the Company's cash balance was approximately **$118 million**, believed to be sufficient to fund non-discretionary expenditures through 2022[29](index=29&type=chunk)[30](index=30&type=chunk)[113](index=113&type=chunk)[118](index=118&type=chunk) [3. ACQUISITIONS AND DISPOSALS](index=11&type=section&id=3.%20ACQUISITIONS%20AND%20DISPOSALS) Westwater completed the sale of its uranium business to enCore Energy on December 31, 2020, receiving cash, enCore common stock, and royalty interests. This divestiture eliminated significant bonding and asset retirement liabilities. The fair value of the enCore shares was adjusted for a lack of marketability discount, and royalty interests were valued at nil due to uncertainties - On December 31, 2020, Westwater sold its uranium business subsidiaries in Texas and New Mexico to enCore Energy[31](index=31&type=chunk) - Consideration for the sale included **$742,642** in cash, **$1,795,000** worth of enCore common shares, a **2%** net smelter return royalty (NSR Royalty) on New Mexico uranium properties, and a **2.5%** net profits interest (NPI) in Juan Tafoya and Cebolleta Projects[32](index=32&type=chunk) - The sale eliminated a **$9.3 million** bonding liability, **$5.2 million** in asset retirement obligations, and over **$4.0 million** in annual reclamation and compliance costs[27](index=27&type=chunk)[111](index=111&type=chunk) - The fair value of the enCore common stock received was adjusted to **$1,520,000** after applying a **21%** discount for lack of marketability[36](index=36&type=chunk) - The NSR Royalty and NPI were determined to have nil value due to high uncertainties surrounding future mine development, uranium prices, and limited marketability[37](index=37&type=chunk) Disposal of Uranium Properties (thousands of dollars) | Disposal of Uranium Properties (thousands of dollars) | Amount | | :---------------------------------------------------- | :----- | | Total consideration received | $2,038 | | Carrying value of uranium property, plant and equipment | $(6,204) | | Restricted Cash | $(3,797) | | Other assets | $(579) | | Asset retirement obligation | $5,239 | | Note Payable (PPP loan) | $333 | | Other liabilities | $305 | | **Loss on disposal of uranium entities** | **$(2,665)** | [4. FINANCIAL INSTRUMENTS](index=13&type=section&id=4.%20FINANCIAL%20INSTRUMENTS) This note defines the fair value hierarchy (Level 1, 2, 3) used for financial instruments. The Company's equity securities, consisting of enCore common stock, are classified as Level 3 due to unobservable inputs and a lack of marketability discount. The fair value of these equity securities increased by $0.2 million during Q1 2021 - Fair value is defined as the price received to sell an asset or paid to transfer a liability in an orderly transaction, categorized into Level 1 (quoted prices in active markets), Level 2 (observable inputs other than quoted prices), and Level 3 (unobservable inputs reflecting management's assessment)[38](index=38&type=chunk)[39](index=39&type=chunk) Fair Value of Equity Securities (thousands of dollars) | Fair Value of Equity Securities (thousands of dollars) | March 31, 2021 | December 31, 2020 | | :----------------------------------------------------- | :------------- | :---------------- | | Equity securities (Level 3) | $1,713 | $1,520 | - Equity securities, consisting of enCore common stock, are measured at fair value using Level 3 inputs due to restrictions on sale and a first right of refusal for enCore[34](index=34&type=chunk)[40](index=40&type=chunk) - A **$0.2 million** unrealized gain on equity securities was recognized in net income for the three months ended March 31, 2021[11](index=11&type=chunk)[40](index=40&type=chunk) [5. PROPERTY, PLANT AND EQUIPMENT](index=14&type=section&id=5.%20PROPERTY%2C%20PLANT%20AND%20EQUIPMENT) This note details the net book value of property, plant, and equipment, primarily consisting of mineral rights and properties in Alabama. The Company did not identify any impairment indicators for its long-lived assets during the three months ended March 31, 2021 Property, Plant and Equipment (thousands of dollars) | Property, Plant and Equipment (thousands of dollars) | March 31, 2021 | December 31, 2020 | | :--------------------------------------------------- | :------------- | :---------------- | | Mineral rights and properties (Alabama) | $8,972 | $8,972 | | Other property, plant and equipment (Corporate) | $11 | $13 | | **Total Net Property, Plant and Equipment** | **$8,983** | **$8,985** | - No events or changes in circumstances indicated impairment of the Company's long-lived assets for the three months ended March 31, 2021[43](index=43&type=chunk) [6. DISCONTINUED OPERATIONS](index=16&type=section&id=6.%20DISCONTINUED%20OPERATIONS) Westwater strategically shifted its focus to graphite in Q3 2020, leading to the divestiture of its uranium business to enCore Energy and the discontinuation of its lithium business. These activities are reclassified as discontinued operations, with a net loss of $1.125 million reported for the three months ended March 31, 2020 - In Q3 2020, the Company decided to focus on its graphite business, discontinuing its lithium investment and selling its uranium business to enCore Energy on December 31, 2020[44](index=44&type=chunk) - The enCore transaction represented a major strategic shift, resulting in the reclassification of uranium activities as discontinued operations[45](index=45&type=chunk) Discontinued Operations (thousands of dollars) | Discontinued Operations (thousands of dollars) | Three Months Ended March 31, 2020 | | :--------------------------------------------- | :-------------------------------- | | Mineral property expenses | $(602) | | General and administrative expenses | $(417) | | Accretion of asset retirement obligations | $(106) | | Depreciation and amortization | $(11) | | Other income (expense) | $11 | | **Net Loss from Discontinued Operations** | **$(1,125)** | [7. COMMON STOCK](index=16&type=section&id=7.%20COMMON%20STOCK) Westwater raised significant capital through common stock issuances in Q1 2021, selling 9.3 million shares for $47.3 million via its ATM Offering Agreement with Cantor and 3.8 million shares for $24.9 million through a purchase agreement with Lincoln Park. The Company is seeking shareholder approval to issue more than 19.99% of outstanding shares under the Lincoln Park agreement. All warrants outstanding at the beginning of the period were exercised or expired - During Q1 2021, the Company sold **9.3 million** shares of common stock for net proceeds of **$47.3 million** through its ATM Offering Agreement with Cantor Fitzgerald & Co[53](index=53&type=chunk) - The Company also sold **3.8 million** shares of common stock for net proceeds of **$24.9 million** under the December 2020 Purchase Agreement with Lincoln Park Capital Fund, LLC[51](index=51&type=chunk) - As of March 31, 2021, the Company had sold approximately **19.9%** of the outstanding shares under the Lincoln Park agreement and is seeking shareholder approval to exceed the **19.99%** threshold[51](index=51&type=chunk)[114](index=114&type=chunk) Warrants Outstanding | Warrants Outstanding | March 31, 2021 | March 31, 2020 | | :------------------- | :------------- | :------------- | | Beginning of period | 0 | 197,622 | | End of period | 0 | 197,622 | - All **182,515** warrants outstanding as of October 6, 2020, were exercised via a cashless method, resulting in the issuance of **118,799** common shares[55](index=55&type=chunk) [8. STOCK-BASED COMPENSATION](index=20&type=section&id=8.%20STOCK-BASED%20COMPENSATION) Westwater's stock-based compensation includes stock options and restricted stock units (RSUs) granted under its equity incentive plans, primarily the 2013 Omnibus Incentive Plan. For Q1 2021, the Company recorded $91,000 in stock-based compensation expense, an increase from $0 in Q1 2020. The number of outstanding stock options decreased, while unvested RSUs saw a reduction due to vesting - Stock-based compensation expense for the three months ended March 31, 2021, was **$91,000**, compared to **$0** for the same period in 2020[57](index=57&type=chunk) Stock Options Activity | Stock Options Activity | March 31, 2021 | March 31, 2020 | | :--------------------- | :------------- | :------------- | | Outstanding (beginning) | 185,054 | 37,786 | | Expired | (800) | (1,217) | | Outstanding (end) | 184,254 | 36,569 | | Exercisable (end) | 34,453 | 36,569 | Restricted Stock Units (RSUs) Activity | Restricted Stock Units (RSUs) Activity | March 31, 2021 | March 31, 2020 | | :------------------------------------- | :------------- | :------------- | | Unvested RSUs (beginning) | 236,403 | 0 | | Vested | (78,801) | 0 | | Unvested RSUs (end) | 157,602 | 0 | - As of March 31, 2021, **58,586** shares were available for future issuances under the 2013 Plan[57](index=57&type=chunk) [9. EARNINGS PER SHARE](index=23&type=section&id=9.%20EARNINGS%20PER%20SHARE) Basic and diluted loss per common share are calculated based on weighted-average shares outstanding. Potentially dilutive shares were excluded from the calculation for Q1 2021 because their effect would be anti-dilutive - Basic and diluted loss per common share for the three months ended March 31, 2021, was **$(0.19)**[11](index=11&type=chunk) - Potentially dilutive shares of **341,856** were excluded from the EPS calculation for Q1 2021 as their effect would be anti-dilutive[63](index=63&type=chunk) [10. COMMITMENTS AND CONTINGENCIES](index=23&type=section&id=10.%20COMMITMENTS%20AND%20CONTINGENCIES) The Company's operations are subject to federal and state environmental regulations, with management believing current operations are materially compliant. While the Company may engage in legal settlement negotiations, it does not anticipate that such settlements will materially impact its financial position, results of operations, or cash flows - The Company's operations are subject to federal and state environmental regulations, and it believes its operations are materially compliant[64](index=64&type=chunk) - The Company does not expect legal settlements to have a material effect on its financial position, results of operations, or cash flows[65](index=65&type=chunk) [11. LEASES](index=23&type=section&id=11.%20LEASES) Westwater's lease portfolio includes operating leases for corporate offices, storage, and equipment, with remaining terms of 1.6 to 2.3 years. The Company applies short-term lease exemptions and excludes mineral exploration leases from new leasing standards. As of March 31, 2021, the Company reported $0.3 million in right-of-use assets and related lease liabilities - The Company's lease portfolio consists of operating leases for corporate offices, storage space, and equipment, with remaining terms of **1.6 to 2.3 years**[66](index=66&type=chunk) - Short-term leases (under one year) are expensed on a straight-line basis, and leases for mineral exploration are excluded from ASC 842-10[67](index=67&type=chunk) Lease Information (thousands of dollars) | Lease Information (thousands of dollars) | March 31, 2021 | December 31, 2020 | | :--------------------------------------- | :------------- | :---------------- | | Operating lease right-of-use assets | $322 | $353 | | Current portion of lease liabilities | $150 | $149 | | Operating lease liabilities – long term | $182 | $214 | | **Total operating lease liabilities** | **$332** | **$363** | | Weighted Average Remaining Lease Term (years) | 2.6 | 3.5 | | Discount Rate | 9.5% | 9.5% | Lease Payments by Year (thousands of dollars) | Lease Payments by Year (thousands of dollars) | March 31, 2021 | | :-------------------------------------------- | :------------- | | 2021 (remainder of year) | $117 | | 2022 | $158 | | 2023 | $92 | | **Total lease payments** | **$367** | [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=18&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's discussion and analysis of Westwater Resources, Inc.'s financial condition and results of operations for the three months ended March 31, 2021. It highlights the company's transformation into a battery graphite developer, recent operational developments in graphite processing, significant equity financings, and the ongoing arbitration with Turkey. The discussion also covers the impact of the COVID-19 pandemic and forward-looking statements regarding future operations and risks [INTRODUCTION](index=26&type=section&id=INTRODUCTION) Introduces Westwater Resources, Inc. as a transformed battery graphite developer, highlighting its focus on battery-grade graphite and vanadium discoveries at the Coosa Project - Westwater Resources, Inc. (WWR) is a **44-year-old** public company, originally focused on uranium, now transformed into a battery graphite developer listed on the NYSE American Stock Exchange[73](index=73&type=chunk) - The Company's primary focus is on battery-grade graphite materials, following the acquisition of Alabama Graphite Corp. and its Coosa Graphite Project in 2018[73](index=73&type=chunk) - Significant vanadium concentrations were discovered at the Coosa Project, leading to an exploration plan to investigate their extent[73](index=73&type=chunk) [RECENT DEVELOPMENTS](index=26&type=section&id=RECENT%20DEVELOPMENTS) Details key operational and strategic advancements, including graphite processing, project feasibility studies, critical material designations, and equity financings [Graphite Processing Pilot Programs](index=26&type=section&id=Graphite%20Processing%20Pilot%20Programs) During Q1 2021, Westwater continued its pilot plant operations across multiple facilities, producing over 11 metric tonnes of three battery-grade graphite products (ULTRA-PMG™, ULTRA-CSPG™, and ULTRA-DEXDG™). The data and experience gained are informing the Definitive Feasibility Study and future commercial facility design - In Q1 2021, pilot plant operations produced over **11 metric tonnes** of battery-grade graphite products: ULTRA-PMG™, ULTRA-CSPG™ (precursor), and ULTRA-DEXDG™[74](index=74&type=chunk)[75](index=75&type=chunk)[77](index=77&type=chunk) - Production included **9.7 metric tonnes** of ULTRA-PMG™ in six sizes, **1.5 metric tonnes** of ULTRA-CSPG™ precursor in three sizes, and **0.2 metric tonnes** of ULTRA-DEXDG™[77](index=77&type=chunk) - Information from pilot programs is being incorporated into the Definitive Feasibility Study (DFS) to inform commercial production facility design and specifications[75](index=75&type=chunk)[112](index=112&type=chunk) [Definitive Feasibility Study on the Coosa Graphite Project](index=26&type=section&id=Definitive%20Feasibility%20Study%20on%20the%20Coosa%20Graphite%20Project) Westwater initiated a Definitive Feasibility Study (DFS) for the Coosa Graphite Project with Samuel Engineering, Inc. in February 2021. The DFS, expected to be completed by the end of Q2 2021, will provide cost estimates for Phases I and II, identify long-lead items, and prepare designs for construction, with Phase I completion anticipated by the end of 2022 and production in 2023 - Westwater entered a Master Services Agreement with Samuel Engineering, Inc. on February 4, 2021, to conduct a Definitive Feasibility Study (DFS) for the Coosa Graphite Project[76](index=76&type=chunk) - The DFS will provide cost estimates for Phases I and II of the Coosa Project, identify long-lead items, and prepare detailed engineering designs[79](index=79&type=chunk) - The DFS is expected to be completed by the end of Q2 2021, with plant construction anticipated to begin around the end of 2021, Phase I completion by end of 2022, and production in 2023[80](index=80&type=chunk) [Vanadium Target Identification](index=28&type=section&id=Vanadium%20Target%20Identification) Following the discovery of significant vanadium mineralization at the Coosa Project in late 2018, Westwater commenced a four-phase exploration program. The first phase confirmed widespread vanadium values, and the second phase, starting in April 2021, involves drilling and extractive metallurgy to assess economic potential - Significant concentrations of vanadium mineralization were discovered at the Coosa Project in November 2018[81](index=81&type=chunk) - A four-phase exploration program was initiated, with the first phase demonstrating widespread positive vanadium values[81](index=81&type=chunk) - The second phase, beginning in April 2021, includes drilling, geological examination, and evaluation of vanadium mineralization using extractive metallurgy techniques[82](index=82&type=chunk) [Graphite and Vanadium Listed as Critical Materials](index=28&type=section&id=Graphite%20and%20Vanadium%20Listed%20as%20Critical%20Materials) Graphite and vanadium were designated as critical minerals in a February 2021 Executive Order aimed at strengthening U.S. supply chains and domestic manufacturing. The U.S. is 100% import-dependent for battery-grade graphite, and Westwater aims to supply this critical material from its Coosa Graphite Project - On February 24, 2021, an Executive Order identified graphite and vanadium as critical minerals for which the U.S. is heavily dependent on China[83](index=83&type=chunk) - The order requests a report within **100 days** identifying risks to the supply chain for high-capacity batteries, which could benefit Westwater's battery graphite business[84](index=84&type=chunk) - The U.S. is **100%** dependent on imports for battery-grade graphite, and Westwater intends to develop the Coosa Graphite Project to supply this material[85](index=85&type=chunk) [The COVID-19 Pandemic and our Actions to Ensure Safety](index=28&type=section&id=The%20COVID-19%20Pandemic%20and%20our%20Actions%20to%20Ensure%20Safety) Westwater prioritized employee health and safety, maintaining business continuity, and ensuring financial liquidity during the COVID-19 pandemic. The company implemented remote work arrangements, reopened its corporate facility with health protocols in March 2021, and continues to restrict unnecessary travel. Potential adverse impacts include supply chain disruptions and further work restrictions - Westwater's priorities during the pandemic include ensuring employee health and safety, maintaining the advanced graphite product development schedule, and securing adequate financial liquidity[90](index=90&type=chunk)[94](index=94&type=chunk) - Remote work arrangements were instituted, and the Centennial corporate facility reopened on March 1, 2021, with appropriate health protocols[90](index=90&type=chunk) - Potential adverse impacts from the pandemic include disruptions to the economy, work restrictions, supply chain interruptions, and challenges in obtaining raw materials[91](index=91&type=chunk) [Equity Financings](index=30&type=section&id=Equity%20Financings) Westwater successfully raised $72.2 million in net proceeds during Q1 2021 through common stock sales via its ATM Offering Agreement with Cantor Fitzgerald & Co. ($47.3 million) and a Purchase Agreement with Lincoln Park Capital Fund, LLC ($24.9 million). These financings have fully funded the pilot program, DFS, and remaining product development costs, and will support initial investments in the commercial graphite processing facility - In January 2021, the Company sold **9.3 million** shares for **$47.3 million** via the ATM Offering Agreement with Cantor[92](index=92&type=chunk) - In February and March 2021, the Company sold **3.8 million** shares for **$24.9 million** via the Purchase Agreement with Lincoln Park[93](index=93&type=chunk) - The combined **$72.2 million** in net proceeds resulted in a cash balance of approximately **$118 million** as of March 31, 2021[94](index=94&type=chunk) - These financings fully fund the pilot program, DFS, and remaining product development costs, and will enable substantial initial investment in the commercial graphite processing facility in H2 2021[95](index=95&type=chunk)[96](index=96&type=chunk) [Transfer of Common Stock Listing to the NYSE American Stock Exchange](index=32&type=section&id=Transfer%20of%20Common%20Stock%20Listing%20to%20the%20NYSE%20American%20Stock%20Exchange) Effective March 19, 2021, Westwater voluntarily transferred its common stock listing from The Nasdaq Capital Market to the NYSE American Stock Exchange, continuing to trade under the ticker symbol "WWR" - On March 8, 2021, Westwater decided to voluntarily withdraw its common stock listing from Nasdaq and transfer it to the NYSE American[97](index=97&type=chunk) - Trading of the Company's common stock on the NYSE American began on March 19, 2021, under the ticker symbol "WWR"[97](index=97&type=chunk) [Turkish Government Taking of Temrezli and Sefaatli Licenses and Westwater's Arbitration Filing and Proceedings](index=32&type=section&id=Turkish%20Government%20Taking%20of%20Temrezli%20and%20Sefaatli%20Licenses%20and%20Westwater%27s%20Arbitration%20Filing%20and%20Proceedings) Westwater is engaged in an ongoing arbitration proceeding against the Republic of Turkey before ICSID, seeking no less than $36.5 million plus costs for Turkey's unlawful cancellation of its uranium project licenses. Westwater filed its reply to Turkey's Counter-Memorial in March 2021, with the hearing on substantive issues and damages scheduled for September 2021 - Westwater filed a Claimant's Memorial in its arbitration proceeding against the Republic of Turkey in January 2020, seeking no less than **$36.5 million** plus costs and interest for the unlawful taking of its Temrezli and Sefaatli uranium project licenses[98](index=98&type=chunk)[99](index=99&type=chunk) - The arbitral tribunal denied Turkey's request to bifurcate the proceeding in April 2020[100](index=100&type=chunk) - Westwater filed its reply to Turkey's Counter-Memorial on March 17, 2021, and the hearing on substantive issues and damages is scheduled for September 13-17, 2021[100](index=100&type=chunk)[131](index=131&type=chunk) [RESULTS OF OPERATIONS](index=32&type=section&id=RESULTS%20OF%20OPERATIONS) Analyzes the company's financial performance for Q1 2021, detailing changes in net loss and key operating expenses compared to the prior year [Summary](index=32&type=section&id=Summary) Westwater's consolidated net loss for the three months ended March 31, 2021, increased to $5.4 million ($0.190 per share) from $3.3 million ($0.82 per share) in the prior year. This increase was primarily driven by higher product development, arbitration, and general and administrative costs, partially offset by the elimination of discontinued operations expenses Metric | Metric | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :----- | :-------------------------------- | :-------------------------------- | | Net Loss | $(5.4) million | $(3.3) million | | Loss Per Share | $(0.190) | $(0.82) | - The **$2.1 million** increase in net loss was primarily due to increased product development, arbitration, and general and administrative costs, offset by the elimination of discontinued operations costs[101](index=101&type=chunk) [Product development expenses](index=34&type=section&id=Product%20development%20expenses) Product development expenses for Q1 2021 totaled $1.8 million, with $1.2 million allocated to the graphite processing pilot program and the remainder covering product testing, lab work, shipping, and other auxiliary costs for the Coosa Project - Product development expenses for Q1 2021 were **$1.8 million**, with approximately **$1.2 million** related to the graphite processing pilot program[102](index=102&type=chunk) - The remaining expenses covered product testing, lab work, shipping, travel, and other auxiliary costs associated with the Coosa Project[102](index=102&type=chunk) [Arbitration Costs](index=34&type=section&id=Arbitration%20Costs) Arbitration-related legal and expert consulting costs for Q1 2021 amounted to $1.5 million, representing a 114% ($0.8 million) increase since December 31, 2020, due to the ongoing arbitration against the Republic of Turkey - Arbitration costs in Q1 2021 were **$1.5 million**, a **114%** (**$0.8 million**) increase from December 31, 2020[103](index=103&type=chunk) - These costs are associated with the Request for Arbitration against The Republic of Turkey[103](index=103&type=chunk) [General and Administrative Expenses](index=34&type=section&id=General%20and%20Administrative%20Expenses) General and administrative expenses from continuing operations increased by $0.3 million to $2.084 million in Q1 2021 compared to $1.362 million in Q1 2020. This rise was primarily due to increased legal and consulting expenses related to the Coosa Graphite Project General and Administrative Expenses (thousands of dollars) | General and Administrative Expenses (thousands of dollars) | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--------------------------------------------------------- | :-------------------------------- | :-------------------------------- | | Stock compensation expense | $91 | $0 | | Salaries and payroll burden | $666 | $767 | | Legal, accounting, public company expenses | $750 | $653 | | Consulting and professional services | $204 | $30 | | **Total general and administrative expenses from continuing operations** | **$2,084** | **$1,362** | - General and administrative expenses from continuing operations increased by **$0.3 million** in Q1 2021, primarily due to increased legal and consulting expenses related to the Coosa Graphite Project[104](index=104&type=chunk) [FINANCIAL POSITION](index=34&type=section&id=FINANCIAL%20POSITION) Examines the company's cash flow activities from operations, investing, and financing for the three months ended March 31, 2021 [Operating Activities](index=34&type=section&id=Operating%20Activities) Net cash used in operating activities increased by $1.4 million to $4.9 million for Q1 2021, compared to $3.5 million in Q1 2020. This increase was mainly due to higher graphite product development expenses, general and administrative expenses, and arbitration costs Cash Flow from Operating Activities (thousands of dollars) | Cash Flow from Operating Activities (thousands of dollars) | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--------------------------------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(4,850) | $(3,455) | - The **$1.4 million** increase in cash used in operating activities was primarily due to increased graphite product development expenses, general and administrative expenses, and arbitration costs[105](index=105&type=chunk) [Investing Activities](index=34&type=section&id=Investing%20Activities) Net cash provided by investing activities was $0.3 million for Q1 2021, compared to no investing cash flows in Q1 2020. This was solely due to the receipt of $333,120 from the PPP loan escrow after the loan was forgiven by the SBA Cash Flow from Investing Activities (thousands of dollars) | Cash Flow from Investing Activities (thousands of dollars) | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--------------------------------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash provided by investing activities | $333 | $0 | - The sole investing activity was the receipt of **$333,120** from the PPP loan escrow, which was forgiven by the SBA on March 31, 2021[108](index=108&type=chunk) [Financing Activities](index=36&type=section&id=Financing%20Activities) Net cash provided by financing activities surged to $72.1 million for Q1 2021, a $69.6 million increase from $2.5 million in Q1 2020. This significant rise was driven by increased common stock sales through the Company's ATM Offering Agreement with Cantor and the 2020 Purchase Agreement with Lincoln Park Cash Flow from Financing Activities (thousands of dollars) | Cash Flow from Financing Activities (thousands of dollars) | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--------------------------------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash provided by financing activities | $72,053 | $2,471 | - The **$69.6 million** increase was due to greater shelf registration capacity and increased sales activity under financing agreements with Cantor and Lincoln Park[109](index=109&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=36&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Westwater continues to rely on equity and debt financings and asset sales to fund operations, with a strategic focus on its graphite business after divesting uranium and lithium assets. The Company's $118 million cash balance as of March 31, 2021, is expected to fund non-discretionary expenditures through 2022. Westwater is exploring project financing options, including convertible debt or joint ventures, for its commercial graphite processing facility, while also evaluating continued use of existing equity financing facilities - The Company has relied on equity financings, debt financings, and asset sales since 2009 and expects this to continue[110](index=110&type=chunk) - The strategic decision in Q3 2020 to focus on the graphite business involved discontinuing lithium investments and selling the uranium business, eliminating significant liabilities and annual expenditures[111](index=111&type=chunk) - As of March 31, 2021, the Company's cash balance was approximately **$118 million**, which management believes is sufficient to fund non-discretionary expenditures through 2022[113](index=113&type=chunk)[118](index=118&type=chunk) - The Company is considering project financing (e.g., convertible debt, partnership, joint venture) for the construction of the commercial graphite plant, in addition to evaluating continued use of the Cantor and Lincoln Park financing facilities[117](index=117&type=chunk)[118](index=118&type=chunk) - Stock price volatility and uncertain economic conditions due to COVID-19 could impact the Company's ability to raise funds through equity financing[118](index=118&type=chunk) [OFF-BALANCE SHEET ARRANGEMENTS](index=38&type=section&id=OFF-BALANCE%20SHEET%20ARRANGEMENTS) Confirms the absence of any off-balance sheet arrangements for the reporting period - The Company has no off-balance sheet arrangements[119](index=119&type=chunk) [CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS](index=38&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) Highlights that the report contains forward-looking statements subject to various risks and uncertainties that could cause actual results to differ materially - This section contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from projections[120](index=120&type=chunk) - Key risk factors include spot and long-term prices of graphite and vanadium, government regulation, operational risks (including COVID-19 impact), geological issues, financing ability, litigation, and permitting[120](index=120&type=chunk)[121](index=121&type=chunk)[127](index=127&type=chunk) - The Company disclaims any obligation to update forward-looking statements except as required by law[123](index=123&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=40&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) As a smaller reporting company, Westwater Resources, Inc. is not required to provide quantitative and qualitative disclosures about market risk in its Quarterly Reports - As a smaller reporting company, Westwater Resources, Inc. is not required to provide quantitative and qualitative disclosures about market risk in its Quarterly Reports[124](index=124&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=40&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Westwater's management, including the CEO and CFO, evaluated the effectiveness of its disclosure controls and procedures as of March 31, 2021, concluding they were effective. There were no material changes in internal control over financial reporting during the quarter - Management, with CEO and CFO participation, concluded that disclosure controls and procedures were effective as of March 31, 2021[126](index=126&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended March 31, 2021[127](index=127&type=chunk) [Evaluation of Disclosure Controls and Procedures](index=40&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Details management's assessment of the effectiveness of the company's disclosure controls and procedures as of March 31, 2021 - Disclosure controls and procedures are designed to ensure timely and accurate reporting of information to the SEC[125](index=125&type=chunk) - Management concluded that the Company's disclosure controls and procedures were effective as of March 31, 2021[126](index=126&type=chunk) [Changes in Internal Controls](index=40&type=section&id=Changes%20in%20Internal%20Controls) Reports on the absence of any material changes to internal control over financial reporting during the first quarter of 2021 - There were no changes in internal control over financial reporting during Q1 2021 that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[127](index=127&type=chunk) [PART II - OTHER INFORMATION](index=26&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) Presents additional required information not covered in the financial statements, including legal proceedings, risk factors, and exhibits [ITEM 1. LEGAL PROCEEDINGS](index=26&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Westwater is actively pursuing an arbitration claim against the Republic of Turkey before ICSID, initiated in December 2018, due to Turkey's unlawful cancellation of licenses for the Temrezli and Sefaatli uranium projects. The Company filed its reply to Turkey's Counter-Memorial in March 2021, with the substantive hearing scheduled for September 2021 - Westwater filed a Request for Arbitration against the Republic of Turkey before ICSID in December 2018[129](index=129&type=chunk) - The arbitration stems from Turkey's unlawful cancellation of licenses for Westwater's Temrezli and Sefaatli uranium projects in June 2018[129](index=129&type=chunk) - Westwater filed its Memorial in January 2020 and its reply to Turkey's Counter-Memorial on March 17, 2021. The hearing on substantive issues and damages is scheduled for September 13-17, 2021[131](index=131&type=chunk) [ITEM 1A. RISK FACTORS](index=26&type=section&id=ITEM%201A.%20RISK%20FACTORS) There have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2020 - No material changes to risk factors from the Annual Report on Form 10-K for the year ended December 31, 2020[132](index=132&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=26&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) There were no unregistered sales of equity securities or use of proceeds to report for the period - None to report[133](index=133&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=26&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) There were no defaults upon senior securities to report for the period - None to report[133](index=133&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=26&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) Mine safety disclosures are not applicable to the Company for this reporting period - Not applicable[135](index=135&type=chunk) [ITEM 5. OTHER INFORMATION](index=27&type=section&id=ITEM%205.%20OTHER%20INFORMATION) There is no other information to report for the period - None to report[137](index=137&type=chunk) [ITEM 6. EXHIBITS](index=27&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed with the Form 10-Q, including amended bylaws, a Master Services Agreement, CEO and CFO certifications under Sarbanes-Oxley, and XBRL-related documents - Exhibits include Amended and Restated Bylaws, Master Services Agreement with Samuel Engineering, Inc., CEO and CFO certifications (Sections 302 and 906 of Sarbanes-Oxley Act), and XBRL Instance and Taxonomy Extension Documents[138](index=138&type=chunk) [SIGNATURES](index=27&type=section&id=SIGNATURES) The Form 10-Q report is duly signed on May 12, 2021, by Christopher M. Jones, President and Chief Executive Officer, and Jeffrey L. Vigil, Vice President - Finance and Chief Financial Officer - The report was signed on May 12, 2021, by Christopher M. Jones (President and CEO) and Jeffrey L. Vigil (VP - Finance and CFO)[142](index=142&type=chunk)
Westwater Resources (WWR) Investor Presentation - Slideshow
2021-04-20 19:29
ENERGY MATERIALS FOR THE 21ST CENTURY CORPORATE PRESENTATION APRIL 7, 2021 | --- | --- | |----------------------------------------------|-------| | | | | Christopher M. Jones Chief Executive Officer | | | | | | (NYSE American: WWR) | 1 | CAUTIONARY STATEMENT CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements convey our current expectations or for ...