Western Uranium & Vanadium Corp. 10-K

ITEM 9A. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures As of the end of the period covered by this report, our principal executive officer and principal financial officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on their evaluation of our disclosure controls and procedures, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective as of December 31, 2022, to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is (a) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (b) accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate to allow for timely decisions regarding required disclosure. Description of Material Weakness Management has concluded that the Company’s disclosure controls and procedures were not effective as of December 31, 2022, due to the failure to report disclosures on a timely basis. Remediation of Material Weakness Management has developed a plan and related timeline for the Company to design a set of control procedures and the related required documentation thereof in order to address this material weakness. However, its implementation was delayed as a decline in commodity prices caused the Company to pursue aggressive cost cutting and de-staffing which has increasingly concentrated duties on the remaining staff. Until the Company has the proper staff in place, it likely will not be able to remediate its material weaknesses. Management’s Annual Report on Internal Control Over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements. This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to a provision under the Dodd-Frank Wall Street Reform and Consumer Protection Act that grants a permanent exemption for non-accelerated filers from complying with Section 404(b) of the Sarbanes-Oxley Act of 2002. Changes in Internal Control over Financial Reporting There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rules 13a-15 or 15d-15 under the Exchange Act that occurred during the Company’s fourth fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B. OTHER INFORMATION. None. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS. None. 52 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The following table sets forth information regarding the members of our board of directors (the “Board”) and our executive officers. Name Age Position(s) George Glasier 79 President, Chief Executive Officer and Director Robert Klein 57 Chief Financial Officer Bryan Murphy 54 Director, Chairman Andrew Wilder 52 Director Executive Officers George Glasier, J.D ., founded Western Uranium & Vanadium Corp. and has served as a Director and as President and Chief Executive Officer since 2014. He has over thirty years’ experience in the uranium industry in the United States, with extensive experience in sales and marketing; project development and permitting uranium processing facilities. He is the founder of Energy Fuels Inc. (Volcanic Metals Exploration Inc.) and served as its Chief Executive Officer and President from January 2006 to March 2010. He was responsible for assembling a first-class management team, acquiring a portfolio of uranium projects, and leading the successful permitting process that culminated in the licensing of the Piñon Ridge uranium mill; planned for construction in Western Montrose County, Colorado. He began his career in the uranium industry in the late 1970’s with Energy Fuels Nuclear, which built and operated the White Mesa Mill near Blanding, Utah, becoming the largest uranium producer in the United States. Robert Klein has served as Chief Financial Officer of Western Uranium & Vanadium Corp since 2016. He is in charge of accounting and finance, and is closely involved in capital markets activities, corporate transactions, investor relations, public relations, and legal, and compliance. Formerly, Mr. Klein served as Vice President Finance and had leading roles in reporting, corporate transactions, and Western’s public listings on the CSE and OTCQX. Mr. Klein was formerly the Chief Operating Officer of Cross River Group and began his association with Western on an Operating Partner basis after the formation of Western’s predecessor company, Pinon Ridge Mining, LLC. Previously, Mr. Klein was a Managing Director at Analytical Research, an alternative investments research firm. He has a broad financial background derived from senior operating and investment roles with asset managers and through Exeter Analytics, a consulting firm he founded. Mr. Klein was formerly the CFO of Five Points Capital, a hedge fund spin-out from Soros Fund Management. After having begun his career in public accounting, Mr. Klein worked for Lehman Brothers, an investment bank, and William E. Simon & Sons, a merchant bank and private investment firm. Rob earned the Chartered Financial Analyst designation, received an M.B.A. from the Robert H. Smith School of Business at the University of Maryland and a B.S. in Accounting from George Mason University. 53 Non-Employee Directors Andrew Wilder serves as a Director and the Chairman of the Audit Committee for Western Uranium & Vanadium Corporation, positions he has held since 2014. He is the Founder and the Chief Executive Officer of Cross River Infrastructure Partners, a platform designed to accelerate global sustainability through the development and construction of infrastructure projects deploying transformative industrial technologies. Areas of focus include capturing and sequestering carbon emissions, generating green hydrogen and ammonia, generating clean power with advanced small modular nuclear reactors, and upcycling biowaste into renewable natural gas. Mr. Wilder is also currently a Board Member for Bedford 2030, a community-based climate action non-profit organization for the Township of Bedford, New York. In 2011, prior to launching Cross River Infrastructure Partners, Mr. Wilder founded and managed the Cross River Group, an advisory business providing capital and business development services to alternative asset managers and institutions. In 2001, Mr. Wilder co-founded and served as Chief Operating and Chief Financial Officer for North Sound Capital LLC, an equity hedge fund manager with $3 billion peak assets under management. Mr. Wilder’s prior career included serving as a Manager in the audit group of Deloitte. Mr. Wilder received the Chartered Accountant (Canada) designation, holds the CFA designation, and received an MBA from the University of Toronto and a BA from the University of Western Ontario. Bryan Murphy has served as a Director of Western Uranium & Vanadium Corp. since 2018. He is the founder of Magellan Limited, an advisory firm focusing on providing strategic, M&A, and financial advisory services and currently serves as CFO and Head of Finance for Biome Renewables Inc., an early-stage renewable energy innovation and industrial design company. Formerly, Mr. Murphy was Co-Founder and Managing Partner of Quest Partners, a boutique investment bank that focuses on the provision of M&A, corporate finance, and business strategy services. In these capacities, Mr. Murphy has developed extensive international experience and relationships advising high-growth businesses across North America, Europe, and the Middle East. In the prior dozen years, Mr. Murphy held senior management roles at Canadian Tire Corporation overseeing divisions and business lines. Additionally, Mr. Murphy was formerly a board member of Covenant House Toronto, one of Canada’s largest homeless youth agencies. Bryan has an Honours Bachelor of Arts in Business Administration majoring in Finance and an MBA with Distinction from the University of Western Ontario Richard Ivey School of Business. Bryan earned the ICD.D designation from the Rotman School of Management at the University of Toronto and the Institute of Corporate Directors. Involvement of Officers and Directors in Certain Legal Proceedings During the past ten years, none of the persons serving as our executive officers and/or directors have been the subject of any of the following legal proceedings that are required to be disclosed pursuant to Item 401(f) of Regulation S-K, including: (a) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (b) any criminal convictions or any criminal proceedings in which the person is a named subject (excluding traffic violations and other minor offenses); (c) any order, judgment, or decree permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; (d) any finding by a court, the SEC or the CFTC to have violated a federal or state securities or commodities law, any law or regulation respecting financial institutions or insurance companies, or any law or regulation prohibiting mail or wire fraud in connection with any business entity; or (e) any sanction or order of any self-regulatory organization, any registered entity, or any equivalent exchange, association, entity or other organization that has disciplinary authority over its members or persons associated with a member. Further, no such legal proceedings are believed to be contemplated by governmental authorities against any director or executive officer. Family Relationships There are no family relationships among our directors and executive officers. Code of Ethics We have adopted a code of ethics that applies to our officers, directors, employees and consultants. A copy of the code of ethics will be sent, free of charge, to any person who sends a written request for a copy to Western Uranium & Vanadium Corp., 330 Bay Street, Toronto, Ontario, Canada M5H 2S8. Insider Trading Policy and Procedures We have adopted a Disclosure, Confidentiality and Insider Trading Policy that includes insider trading policies and procedures that we believe are reasonably designed to promote compliance with applicable insider trading laws, rules and regulations and the CSE’s continued listing standards. Audit Committee Western has established a separately designated audit committee of the board of directors (the “Board”) consisting of Andrew Wilder, George Glasier, and Bryan Murphy. Our audit committee is responsible for oversight of audits, corporate governance, board nominations, and executive compensation. The Board has determined that one of its members, Andrew Wilder, who has previously served as Western’s Chief Financial Officer, qualifies as an “audit committee financial expert”. We have also determined that Mr. Wilder and Mr. Murphy are independent directors as defined in Nasdaq Listing Rule 5605(a)(2). 54 ITEM 11. EXECUTIVE COMPENSATION Summary Compensation Table The following table sets forth information regarding compensation earned by our named executive officers: Name and Principal Position Year Salary ($) Bonus ($) Stock Awards ($) Option Awards ($) All Other Compensation ($) TOTAL($) George Glasier (1) 2022 $ 250,000 $ 50,000 $ - $ 364,190 $ - $ 664,190 President and Chief Executive Officer 2021 $ 220,000 $ - $ - $ - $ - $ 220,000 Robert Klein (2) 2022 $ 150,000 $ 15,000 $ - $ 364,190 $ - $ 529,190 Chief Financial Officer 2021 $ 150,000 $ 50,000 $ - $ - $ - $ 200,000 (1) On February 10, 2022, Mr. Glasier was granted an option to purchase 200,000 of our common shares at an exercise price of CAD $1.76 per share which expires five years from the date of issuance. This option vested in three installments: one-third on the date of grant, one-third on April 1, 2022 and one-third on July 1, 2022. On October 31, 2022, Mr. Glasier was granted an option to purchase 300,000 of our common shares at an exercise price of CAD $1.60 per share which expires five years from the date of issuance. This option vests in two installments: one-half on the date of grant and one-half on April 30, 2023. (2) On February 10, 2022, Mr. Klein was granted an option to purchase 200,000 of our common shares at an exercise price of CAD $1.76 per share which expires five years from the date of issuance. This option vested in three installments: one-third on the date of grant, one-third on April 1, 2022 and one-third on July 1, 2022. On October 31, 2022, Mr. Klein was granted an option to purchase 300,000 of our common shares at an exercise price of CAD $1.60 per share which expires five years from the date of issuance. This option vests in two installments: one-half on the date of grant and one-half on April 30, 2023. Employment Agreements George Glasier On February 8, 2017, the Company entered into an employment agreement with George Glasier, its Chief Executive Officer. The employment agreement automatically renews each year unless either party provides a 90-day advance written notice of their desire to not renew the agreement. The employment agreement provides for a base salary of $180,000 per year, the amount of which is subject to review by the board of directors at least annually. The agreement also provides for a discretionary annual cash bonus to be determined by the Board. On May 30, 2019, the Board approved an addendum to Mr. Glasier’s employment agreement, increasing his annual base salary from $180,000 to $220,000. In December 2021, the Board approved an increase to Mr. Glasier’s base salary from $220,000 to $250,000. Pursuant to the employment agreement, if the Company terminates the employment agreement without cause, or if a change of control occurs, the Company is required to pay to Mr. Glasier a lump sum payment equal to two and one-half times his annual base salary. Robert Klein On November 12, 2020, the Company entered into a new employment agreement with its Chief Financial Officer, Robert Klein. The agreement was effective as of October 1, 2020 and has an initial term that ends on September 30, 2021. The agreement will automatically renew for successive annual terms unless either party provides a 90-day advance written notice of their intention not to renew. The Agreement provides for a base salary of $150,000 per year, the amount of which is subject to review by the board of directors at least annually. Under the agreement, Mr. Klein is eligible to receive bonuses after the end of each calendar year or earlier in the discretion of the Board, and a bonus will also be considered upon the closing of a strategic transaction by the Company. The agreement provides that Mr. Klein is eligible to participate generally in any employee benefit plan of the Company or its affiliates and to receive annual stock option grants under the Company’s incentive stock option plan in amounts to be determined and approved by the Board. 55 Outstanding Equity Awards Table The following table sets forth unexercised options, unvested stock and equity incentive plan awards outstanding for our named executive officers as of December 31, 2022. Outstanding Option Awards at Fiscal Year-End for 2022 Name Number of securities underlying unexercised options (#) exercisable Number of securities underlying unexercised options (#) unexercisable Option exercise price ($CAD) Option expiration date George Glasier 66,667 - $ 1.60 03/31/2023 41,667 - $ 1.03 01/06/2025 41,666 - $ 1.03 01/31/2025 41,667 - $ 1.03 06/30/2025 66,667 - $ 1.76 02/09/2027 66,666 - $ 1.76 04/01/2027 66,667 - $ 1.76 07/01/2027 150,000 - $ 1.60 10/31/2027 - 150,000 $ 1.60 04/30/2028 Robert Klein 66,667 - $ 1.60 03/31/2023 83,333 - $ 2.15 09/24/2023 83,334 - $ 2.15 10/31/2023 83,333 - $ 2.15 03/31/2024 41,667 - $ 1.03 01/06/2025 41,666 - $ 1.03 01/31/2025 41,667 - $ 1.03 06/30/2025 66,667 - $ 1.76 02/09/2027 66,666 - $ 1.76 04/01/2027 66,667 - $ 1.76 07/01/2027 150,000 - $ 1.60 10/31/2027 - 150,000 $ 1.60 04/30/2028 Outstanding Stock Awards at Fiscal Year-End for 2022 None. Director Compensation The following table sets forth a summary of the compensation for the fiscal year ended December 31, 2022 earned by each director who is not a named executive officer and who served on the Board during the year. Name Fees Earned or Paid in Cash ($) Stock Awards ($) Option Awards ($) Total ($) Andrew Wilder (1) $ 17,696 $ - $ 364,190 $ 381,886 Bryan Murphy (2) $ 44,239 $ - $ 364,190 $ 408,429 (1) Mr. Wilder is paid a CAD $2,000 monthly fee for his services as a Director. During the year ended December 31, 2022, the Company incurred $17,696 in director fees for Mr. Wilder’s services. On February 10, 2022, Mr. Wilder was granted an option to purchase 200,000 of our common shares at an exercise price of CAD $1.76 per share which expires five years from the date of issuance. This option vested in three installments: one-third on the date of grant, one-third on April 1, 2022 and one-third on July 1, 2022.On October 31, 2022, Mr. Wilder was granted an option to purchase 300,000 of our common shares at an exercise price of CAD $1.60 per share which expires five years from the date of issuance. This option vests in two installments: one-half on the date of grant and one-half on April 30, 2023. (2) Mr. Murphy is paid a CAD$5,000 monthly fee for his services as Chairman and Director. During the year ended December 31, 2022, the Company incurred $44,239 in director fees for Mr. Murphy’s services. On February 10, 2022, Mr. Murphy was granted an option to purchase 200,000 of our common shares at an exercise price of CAD $1.76 per share which expires five years from the date of issuance. This option vested in three installments: one-third on the date of grant, one-third on April 1, 2022 and one-third on July 1, 2022. On October 31, 2022, Mr. Murphy was granted an option to purchase 300,000 of our common shares at an exercise price of CAD $1.60 per share which expires five years from the date of issuance. This option vests in two installments: one-half on the date of grant and one-half on April 30, 2023. 56 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The following table sets forth information with respect to the beneficial ownership of our class of common shares as of April 17, 2023 by: ● each person, or group of affiliated persons, known to us to beneficially own more than 5% of our outstanding common shares; ● each of our directors and executive officers; and ● all of our directors and executive officers as a group. The amounts and percentages of common shares beneficially owned are reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities. The information relating to our 5% beneficial owners is based on information we received from such holders. Under the rules of the SEC, a person is deemed to be a “beneficial owner” of a security if that person has or shares voting power, which includes the power to vote or direct the voting of a security, or investment power, which includes the power to dispose of or to direct the disposition of a security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days. Securities that can be so acquired are deemed to be outstanding for purposes of computing such person’s ownership percentage, but not for purposes of computing any other person’s percentage. Under these rules, more than one person may be deemed a beneficial owner of the same securities and a person may be deemed to be a beneficial owner of securities as to which such person has no economic interest. Except as otherwise set forth in the footnotes to the table below, the address of persons listed below is c/o Western Uranium & Vanadium Corp., 330 Bay Street, Suite 1400, Toronto, Ontario, Canada M5H 2S8. Unless otherwise indicated in the footnotes, each of the beneficial owners listed has, to our knowledge, sole voting and investment power with respect to the indicated common shares. Name of Beneficial Owner Number of Common Shares Percentage of Outstanding Common Shares (1) 5% or Greater Shareholders: George Glasier 5,535,869 (2) 12.5 % Sahar Benenson 3,670,100 (3) 8.3 % Brooke Benenson 2,695,800 (4) 6.2 % Directors and Named Executive Officers: George Glasier 5,535,869 (2) 12.5 % Andrew Wilder 875,000 (5) 2.0 % Robert Klein 913,358 (6) 2.1 % Bryan Murphy 1,001,017 (7) 2.2 % All executive officers and directors as a group (4 persons) 8,325,244 17.7 % (1) Based on 43,602,565 common shares outstanding on April 14, 2023 and, with respect to each individual holder, rights to acquire our common shares exercisable within 60 days of April 14, 2023. (2) Consists of 4,810,869 common shares and 625,000 common shares issuable upon the exercise of stock options held by Mr. Glasier. Also includes 100,000 common shares issuable upon the exercise of stock options held by Mr. Glasier’s spouse, the beneficial ownership of which Mr. Glasier disclaims. (3) Consists of 2,545,800 common shares beneficially owned jointly by Mr. Benenson and by his spouse, Brooke Benenson, 474,300 common shares owned solely by Mr. Benenson and 650,000 common shares issuable upon the exercise of warrants beneficially owned by Mr. Benenson. See Note (4). (4) Consists of 2,545,800 common shares beneficially owned jointly by Ms. Benenson and by her spouse, Sahar Benenson, and 150,000 common shares issuable upon the exercise of warrants beneficially owned by Ms. Benenson. See Note (3). (5) Consists of 875,000 common shares issuable upon the exercise of stock options held by Mr. Wilder. (6) Consists of 38,358 common shares and 875,000 common shares issuable upon the exercise of stock options held by Mr. Klein. (7) Consists of 13,517 common shares beneficially owned directly, 31,250 common shares beneficially owned indirectly through Magellan Limited, 31,250 common shares issuable upon the exercise of warrants beneficially owned indirectly through Magellan Limited, and 925,000 common shares issuable upon the exercise of stock options held by Mr. Murphy. 57 Equity Compensation Plan Information The Company maintains an Incentive Stock Option Plan (the “Plan”) that permits the granting of stock options as incentive compensation. Shareholders of the Company approved the Plan on June 30, 2008 and amendments to the Plan on June 20, 2013, and the board of directors approved additional changes to the Plan on September 12, 2015 and as of October 1, 2021. The Plan was amended on October 1, 2021 to allow for the cashless exercise of stock options, among other things. The purpose of the Plan is to attract, retain and motivate directors, management, staff and consultants by providing them with the opportunity, through stock options, to acquire a proprietary interest in the Company and benefit from its growth. The Plan is to be administered by the Board in accordance with all applicable laws and regulations, including the policies of any stock exchange, over-the-counter marketplace, or quotation/system service upon which the Company’s securities are listed or traded. The Board is authorized, subject to the provisions of the Plan, to adopt such rules and regulations as it deems consistent with the Plan’s provisions and, in its sole discretion, to designate options to purchase shares of the Company pursuant to the Plan. The Board may delegate to a committee the authority to exercise any or all power and authority of the Board under the Plan, including the authority with respect to option grants and/or exercises, all to the extent stipulated by the Board when so delegated. The Board may authorize one or more individuals of the Company to execute, deliver and receive documents on behalf of the Board. At December 31, 2022, a total of 4,306,334 stock options issued under the Plan were outstanding. The Plan provides that the aggregate number of common shares for which stock options may be granted will not exceed 10% of the issued and outstanding common shares at the time stock options are granted. At December 31, 2022, a total of 43,602,565common shares were outstanding, and at that date the maximum number of stock options eligible for issue under the Plan was 4,360,257. A stock option exercise price shall not be less than the most recent share issuance price. The maximum term is five years. There are no specific vesting provisions under the Plan. Options are non-assignable and non-transferable. The Plan provides that if an optionee’s employment is terminated for any reason, or if the service of a director, senior executive or consultant of the Company who is an optionee is terminated, any vested stock option of such optionee may be exercised during a period of ninety (90) days following the date of termination of such employment or service, as the case may be. In the case of an optionee’s death, any vested stock option of such optionee at the time of death may be exercised by his or her personal representative, heirs or legatees or their liquidator during a period of one year following such optionee’s death. The total number of common shares issuable to any one person during a 12-month period may not exceed ten percent (10%) of the total number of common shares issued and outstanding. Also, in any 12-month period, no options exercisable for more than 2% of the Company’s issued and outstanding shares may be awarded to consultants. The Plan provides that where options are cancelled or lapse under the Plan, the associated common shares become available again and new options may be granted in respect thereof in accordance with the provisions of the Plan. The Board may make any amendment to the Plan, without shareholder approval, except an increase in the number of common shares reserved for issue under the Plan or a reduction of an option exercise price. The terms of any existing option may not be altered, suspended or discontinued without the consent in writing of the Optionee. 58 Equity Compensation Plan Information As of December 31, 2022 Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted- average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (a) (b) (c) Equity compensation plans approved by shareholders 4,306,334 $ 1.24 53,923 Equity compensation plans not approved by shareholders - n/a - Total 4,306,334 $ 1.24 53,923 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Transactions with Related Persons Prior to the acquisition of Black Range, Mr. George Glasier, the Company’s CEO, who is also a director (“Seller”), transferred his interest in a former joint venture with Ablation Technologies, LLC to Black Range. In connection with the transfer, Black Range issued 25 million shares of Black Range common stock to Seller and committed to pay AUD $500,000 (USD $340,252 as of December 31, 2022) to Seller within 60 days of the first commercial application of the Kinetic Separation technology. Western assumed this contingent payment obligation in connection with the acquisition of Black Range. At the date of the acquisition of Black Range, this contingent obligation was determined to be probable. Since the deferred contingent consideration obligation is probable and the amount is estimable, the Company recorded the deferred contingent consideration as an assumed liability in the amount of $340,252 and $362,794 as of December 31, 2022 and 2021, respectively. The Company has multiple lease arrangements with Silver Hawk Ltd., an entity which is owned by George Glasier and his wife Kathleen Glasier. These leases, which are all on a month-to-month basis, are for the Company’s rental of office, workshop, warehouse and employee housing facilities The Company incurred rent expense of $55,198 and $34,427 in connection with these arrangement for the years ended December 31, 2022 and 2021, respectively. Director Independence The board of directors facilitates its exercise of independent supervision over management by ensuring representation on the Board by directors who are independent of management and by promoting frequent interaction and feedback. Directors are considered to be independent if they have no direct or indirect material relationship with the Company. A “material relationship” is a relationship which could, in the view of the Board, be reasonably expected to interfere with the exercise of a director’s independent judgment. The Company’s Board currently consists of three directors. Currently, Andrew Wilder and Bryan Murphy are independent directors based upon the tests for independence set forth in National Instrument 52-110 Audit Committees . SEC rules require a separate determination of independence of the Company’s directors based on the definition of independence of a U.S. national securities exchange or inter-dealer quotation system which has requirements that a majority of the board of directors be independent. Because the Company’s common shares are not currently listed on a national securities exchange, it currently uses the definition in Nasdaq Listing Rule 5605(a)(2) for determining director independence. Under that definition, Andrew Wilder and Bryan Murphy would be considered independent directors. Mr. Wilder and Mr. Murphy would also be considered independent directors under Rule 5605(c)(2)’s provisions relating to audit committee composition. 59 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The following table sets forth the aggregate fees billed by MNP LLP (“MNP”), our independent registered accounting firm for the fiscal years ended December 31, 2022 and December 31, 2021. These fees are categorized as audit fees, audit-related fees, tax fees, and all other fees. The nature of the services provided in each category is described in the table below. 2022 2021 Audit fees $ 86,841 $ 71,804 Audit-related fees - 15,158 Tax fees 12,665 12,446 All other fees - - Total fees $ 99,506 $ 99,408 Audit fees: Consist of fees billed for professional services rendered for the audit of the consolidated financial statements and review of the quarterly interim consolidated financial statements. These fees also include the review of registration statements and the delivery of consents in connection with registration statements. Audit-related fees: In 2022, MNP billed audit-related fees for preparation and review of an SEC Form S-1 filing and a comment letter. There were no fees billed by MNP for professional services rendered for audit-related services for the years ended December 31, 2022. Tax fees: Consists of fees incurred for the Company’s U.S. and Canadian tax preparation fees and tax consulting fees. All other fees: There were no fees billed by MNP for professional services rendered for other compliance purposes for the years ended December 31, 2022 and 2021. The Company’s board of directors has established pre-approval policies and procedures, pursuant to which the Board approved the foregoing audit and tax services provided by MNP in 2022 and 2021 consistent with the Board’s responsibility for engaging Western’s independent auditors. The Board also considered whether the non-audit services rendered by our independent registered public accounting firm are compatible with an auditor maintaining independence. The Board has determined that the rendering of such services is compatible with MNP maintaining its independence. 60 PART IV – OTHER INFORMATION ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES Documents Filed as Part of This Report. (a) The following financial statements are being filed as part of this Annual Report. Consolidated Financial Statements of Western Uranium & Vanadium Corp. and Subsidiaries Page No. Report of Independent Registered Public Accounting Firm (PCAOB ID: 1930) F-2 Consolidated Balance Sheets as of December 31, 2022 and 2021 F-3 Consolidated Statements of Operations and Other Comprehensive Loss for the years ended December 31, 2022 and December 2021 F-4 Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2022 and 2021 F-5 Consolidated Statements of Cash Flows for the years ended December 31, 2022 and 2021 F-6 Notes to Consolidated Financial Statements F-7 (b) The following exhibits are being provided as required by Item 601 of Regulation S-K. Exhibit No. Description 2.1 (1) Share Exchange Agreement between Pinon Ridge Mining LLC, Homeland Uranium Inc., Homeland Uranium (Utah), et al., dated November 6, 2014. 2.2 (1) Merger Implementation Agreement between Black Range Minerals Limited and Western Uranium Corporation, dated March 20, 2015. 2.3 (1) Credit Facility between Western Uranium Corporation and Black Range Minerals Limited, dated March 20, 2015. 2.4 (2) Termination and Liquidation Agreement between Ablation Technologies LLC, Black Range Minerals Ablation Holdings Inc. and Mineral Ablation, LLC dated March 17, 2015 3.1 (1) Certificate of Incorporation, as amended. 3.2 (1) Amended and Restated By-laws. 4.1 (8) Description of Capital Stock 10.1 (3) Call Option Agreement 10.2 (2) Technology License Agreement between Ablation Technologies LLC and Black Range Mineral Ablation Holdings Inc. dated as of March 17, 2015 10.3 (8) Incentive Stock Option Plan (Rolling 10%), as amended 10.4 (4) Employment Agreement between George Glasier and Western Uranium & Vanadium Corporation dated February 8, 2017 10.5 (4) Employment Agreement between Robert Klein and Western Uranium & Vanadium Corporation dated May 12, 2017 10.6 (5) Employment Agreement between Robert Klein and Western Uranium & Vanadium Corporation dated November 13, 2017 61 10.7 (6) Addendum to Employment Agreement between George Glasier and Western Uranium & Vanadium Corporation dated May 30, 2019 10.8 (7) Employment Agreement, dated November 12, 2020, by and between Robert Klein and Western Uranium and Vanadium Corp. 19.1* Disclosure, confidentiality and Insider Trading Policy 21.1 * List of Subsidiaries 31.1* Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer 31.2* Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer 32.1* Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer 95* Mine Safety Disclosure Exhibit 101.INS Inline XBRL Instance Document.* 101.SCH Inline XBRL Taxonomy Extension Schema Document.* 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document.* 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document.* 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document.* 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document.* 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).* + Schedules and exhibits omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish a copy of the omitted schedules and exhibits to the SEC upon request. * Filed herewith (1) Previously filed as an exhibit to the Company’s Form 10 filed on April 29, 2016 (2) Previously filed as an exhibit with Amendment No. 2 to the Company’s Form 10 filed on July 22, 2016 (3) Previously filed as an exhibit with Amendment No. 1 to the Company’s Form 10 filed on June 22, 2016 (4) Previously filed as an exhibit to the Company’s Form 10-Q filed on May 15, 2017 (5) Previously filed as an exhibit to the Company’s Form 10-K filed on April 2, 2018 (6) Previously filed as an exhibit to the Company’s Form 10-Q filed on August 14, 2019 (7) Previously filed as an exhibit to the Company’s Form 10-Q filed on November 16, 2020 (8) Previously filed as an exhibit to the Company’s Form 10-K filed on April 15, 2022 ITEM 16. FORM 10-K SUMMARY None 62 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. WESTERN URANIUM & VANADIUM CORP. Date: April 17, 2023 By: /s/ George Glasier Chief Executive Officer and President Date: April 17, 2023 By: /s/ Robert Klein Robert Klein Chief Financial Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Dated: April 17, 2023 By: /s/ George Glasier George Glasier Chief Executive Officer, President and Director (Principal Executive Officer) Dated: April 17, 2023 By: /s/ Robert Klein Robert Klein Chief Financial Officer (Principal Financial and Accounting Officer) Dated: April 17, 2023 By: /s/ Bryan Murphy Bryan Murphy Director Dated: April 17, 2023 By: /s/ Andrew Wilder Andrew Wilder Director 63 Western Uranium & Vanadium Corp. and Subsidiaries Index to Consolidated Financial Statements Page No. Report of Independent Registered Public Accounting Firm (PCAOB ID: 1930 ) F-2 Consolidated Balance Sheets as of December 31, 2022 and 2021 F-3 Consolidated Statements of Operations and Other Comprehensive Loss for the Years Ended December 31, 2022 and 2021 F-4 Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended December 31, 2022 and 2021 F-5 Consolidated Statements of Cash Flows for the Years Ended December 31, 2022 and 2021 F-6 Notes to Consolidated Financial Statements F-7 F- 1 Report of Independent Registered Public Accounting Firm To the Board of Directors and Shareholders of Western Uranium & Vanadium Corp. Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Western Uranium & Vanadium Corp. (the Company) as of December 31, 2022 and 2021, and the related consolidated statements of operations and other comprehensive loss, changes in shareholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2022 and 2021, and the results of its consolidated operations and its consolidated cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. Material Uncertainty Related to Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has incurred continuing losses and negative cash flows from operations and is dependent upon future sources of equity or debt financing in order to fund its operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ MNP LLP Chartered Professional Accountants Licensed Public Accountants We have served as the Company’s auditor since 2015. Mississauga, Canada April 17, 2023 F- 2 WESTERN URANIUM & VANADIUM CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Stated in USD) As of December 31, 2022 2021 Assets Current assets: Cash $ 9,682,133 $ 880,821 Restricted cash, current portion 75,057 75,057 Prepaid uranium concentrate inventory - 4,085,723 Prepaid expenses 254,105 153,701 Marketable securities 612 2,120 Other current assets 227,588 264,039 Total current assets 10,239,495 5,461,461 Restricted cash, net of current portion 676,348 665,389 Mineral properties and equipment, net 12,798,904 11,780,142 Kinetic separation intellectual property 9,488,051 9,488,051 Total assets $ 33,202,798 $ 27,395,043 Liabilities and Shareholders’ Equity Liabilities Current liabilities: Accounts payable and accrued liabilities $ 551,615 $ 699,593 Reclamation liability, current portion 75,057 75,057 Subscription payable - 146,177 Deferred revenue, current portion 43,860 48,465 Total current liabilities 670,532 969,292 Reclamation liability, net of current portion 225,219 196,563 Deferred tax liability 2,708,887 2,708,887 Deferred contingent consideration 340,252 362,794 Deferred revenue, net of current portion - 60,015 Total liabilities 3,944,890 4,297,551 Commitments and Contingencies (Note 6) Shareholders’ Equity Common shares, no par value, unlimited authorized shares, 43,602,871 and 39,073,428 shares issued as of December 31, 2022 and 2021, respectively, and 43,602,565 and 39,073,122 shares outstanding as of December 31, 2022 and 2021, respectively 43,394,303 36,195,510 Treasury shares, 306 shares held in treasury as of December 31, 2022 and 2021 - - Accumulated deficit ( 13,875,263 ) ( 13,161,496 ) Accumulated other comprehensive (loss) income ( 261,132 ) 63,478 Total shareholders’ equity 29,257,908 23,097,492 Total liabilities and shareholders’ equity $ 33,202,798 $ 27,395,043 The accompanying notes are an integral part of these consolidated financial statements. F- 3 WESTERN URANIUM & VANADIUM CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE LOSS (Stated in USD) For the Years Ended December 31, 2022 2021 Revenues $ 7,858,972 $ 272,142 Cost of revenues 4,044,083 - Gross profit 3,814,889 272,142 Expenses Mining expenditures 762,333 717,657 Professional fees 493,940 365,302 General and administrative 3,246,171 1,172,585 Consulting fees 91,626 29,543 Total operating expenses 4,594,070 2,285,087 Operating loss ( 779,181 ) ( 2,012,945 ) Accretion and interest ( 61,414 ) ( 16,960 ) Settlement expense - 78,052 Other income ( 4,000 ) - Net loss ( 713,767 ) ( 2,074,037 ) Other comprehensive loss Foreign exchange (loss) gain ( 324,610 ) 89,020 Comprehensive loss $ ( 1,038,377 ) $ ( 1,985,017 ) Net loss per share - basic and diluted $ ( 0.02 ) $ ( 0.06 ) Weighted average shares outstanding - basic and diluted 42,815,086 36,838,441 The accompanying notes are an integral part of these consolidated financial statements. F- 4 WESTERN URANIUM & VANADIUM CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Stated in USD) Common Shares Treasury Shares Accumulated Accumulated Other Comprehensive (Loss) Shares Amount Shares Amount Deficit Income Total Balance as of January 1, 2021 30,083,747 $ 29,886,367 306 $ - $ ( 11,087,459 ) $ ( 25,542 ) $ 18,773,366 Private placement - February 16, 2021, net of offering costs 3,250,000 1,950,509 - - - - 1,950,509 Private placement - March 1, 2021, net of offering costs 3,125,000 1,918,797 - - - - 1,918,797 Private placement - December 17, 2021, net of offering costs 372,966 434,973 - - - - 434,973 Proceeds from the exercise of warrants 2,066,693 2,004,864 - - - - 2,004,864 Cashless exercise of stock options 174,716 - - - - - - Foreign exchange gain - - - - - 89,020 89,020 Net loss - - - - ( 2,074,037 ) - ( 2,074,037 ) Balance as of December 31, 2021 39,073,122 $ 36,195,510 306 $ - $ ( 13,161,496 ) $ 63,478 $ 23,097,492 Private placement - January 20, 2022, net of offering costs 2,495,575 3,011,878 - - - - 3,011,878 Proceeds from the exercise of warrants 2,020,351 2,620,395 - - - - 2,620,395 Cashless exercise of stock options 13,517 - - - - - - Stock based compensation - stock options - 1,566,520 - - - - 1,566,520 Foreign exchange loss - - - - - ( 324,610 ) ( 324,610 ) Net loss - - - - ( 713,767 ) - ( 713,767 ) Balance as of December 31, 2022 43,602,565 $ 43,394,303 306 $ - $ ( 13,875,263 ) $ ( 261,132 ) $ 29,257,908 The accompanying notes are an integral part of these consolidated financial statements. F- 5 WESTERN URANIUM & VANADIUM CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Stated in USD) For the Years Ended December 31, 2022 2021 Cash Flows From (Used in) Operating Activities: Net loss $ ( 713,767 ) $ ( 2,074,037 ) Reconciliation of net loss to cash provided by (used in) operating activities: Depreciation 26,877 20,380 Accretion of reclamation liability 28,656 9,142 Stock based compensation 1,566,520 - Change in marketable securities 1,508 285 Change in operating assets and liabilities: Prepaid uranium concentrate inventory 4,085,723 ( 4,085,723 ) Prepaid expenses and other current assets ( 63,953 ) ( 269,606 ) Accounts payable and accrued liabilities ( 147,979 ) 356,976 Subscription payable ( 146,177 ) - Reclamation liability - ( 47,462 ) Deferred revenue ( 64,620 ) ( 64,620 ) Contingent consideration ( 22,542 ) - Net cash provided by (used in) operating activities 4,550,246 ( 6,154,665 ) Cash Flows Used In Investing Activities Purchase of mineral properties and equipment ( 1,045,638 ) ( 65,000 ) Net cash used in investing activities ( 1,045,638 ) ( 65,000 ) Cash Flows From Financing Activities Proceeds from warrant exercises 2,620,395 2,004,864 Issuances of common shares, net of offering costs 3,011,878 4,304,279 Net cash provided by financing activities 5,632,273 6,309,143 Effect of foreign exchange rate on cash ( 324,610 ) 59,728 Net increase in cash and restricted cash 8,812,271 149,206 Cash and restricted cash - beginning 1,621,267 1,472,061 Cash and restricted cash - ending $ 10,433,538 $ 1,621,267 Cash $ 9,682,133 $ 880,821 Restricted cash, current portion 75,057 75,057 Restricted cash, noncurrent 676,348 665,389 Total $ 10,433,538 $ 1,621,267 Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $ - $ - Income taxes $ - $ - The accompanying notes are an integral part of these consolidated financial statements. F- 6 WESTERN URANIUM & VANADIUM CORP. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Stated in USD) NOTE 1 – BUSINESS Nature of operations Western Uranium & Vanadium Corp. (“Western” or the “Company”) was incorporated in December 2006 under the Ontario Business Corporations Act. On November 20, 2014, the Company completed a listing process on the Canadian Securities Exchange (“CSE”). As part of that process, the Company acquired 100 % of the members’ interests of Pinon Ridge Mining LLC (“PRM”), a Delaware limited liability company. The transaction constituted a reverse takeover (“RTO”) of Western by PRM. Subsequent to obtaining appropriate shareholder approvals, the Company reconstituted its Board of Directors and senior management team. Effective September 16, 2015, Western completed its acquisition of Black Range Minerals Limited (“Black Range”). The Company’s registered office is located at 330 Bay Street, Suite 1400, Toronto, Ontario, Canada, M5H 2S8, and its common shares are listed on the CSE under the symbol “WUC.” On April 22, 2016, the Company’s common shares began trading on the OTC Pink Open Market, and on May 23, 2016, the Company’s common shares were approved for trading on the OTCQX Best Market. The Company’s principal business activity is the acquisition and development of uranium and vanadium resource properties in the states of Utah and Colorado in the United States of America (“United States”). On June 28, 2016, the Company’s registration statement became effective and Western became a United States reporting issuer. Thereafter, the Company was approved for Depository Trust Company eligibility through the Depository Trust and Clearing Corporation, which facilitates electronic book-entry delivery, settlement, and depository services for shares in the United States. Note 2 – Liquidity and going concern With the exception of the quarter ended June 30, 2022, the Company had incurred losses from its operations. During the year ended December 31, 2022, the Company generated a comprehensive loss of $ 1,038,377 . The Company expects to generate operating losses for the foreseeable future as it incurs expenses to bring its mining operations online. As of December 31, 2022, the Company had an accumulated deficit of $ 13,875,263 and working capital of $ 9,568,963 . Since inception, the Company has met its liquidity requirements principally through the issuance of notes and the sale of its common shares. On January 20, 2022, the Company closed a non-brokered private placement of 2,495,575 units at a price of CAD $ 1.60 per unit. The aggregate gross proceeds raised in the private placement amounted to CAD $ 3,992,920 (USD $ 3,011,878 in net proceeds). During the year ended December 31, 2022, the Company received $ 2,620,395 in proceeds from the exercise of warrants. The Company’s ability to continue its planned operations and to pay its obligations when they become due is contingent upon the Company obtaining additional financing. Management’s plans include seeking to procure additional funds through debt and equity financing, to secure regulatory approval to fully utilize its kinetic separation (“Kinetic Separation”) technology, and to initiate the processing of ore to generate operating cash flows. There are no assurances that the Company will be able to raise capital on terms acceptable to the Company or at all, or that cash flows generated from its operations will be sufficient to meet its current operating costs. If the Company is unable to obtain sufficient amounts of additional capital, it may be required to reduce the scope of its planned product development, which could harm its financial condition and operating results, or it may not be able to continue to fund its ongoing operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern to sustain operations for at least one year from the issuance of these consolidated financial statements. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. F- 7 WESTERN URANIUM & VANADIUM CORP. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Stated in USD) Note 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation These consolidated financial statements are presented in United States dollars and have been prepared in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”). The accompanying consolidated financial statements include the accounts of Western and its wholly-owned subsidiaries, Western Uranium Corp. (Utah), PRM, Black Range, Black Range Copper Inc., Ranger Resources Inc., Black Range Minerals Inc., Black Range Minerals Colorado LLC, Black Range Minerals Wyoming LLC, Haggerty Resources LLC, Ranger Alaska LLC, Black Range Minerals Utah LLC, Black Range Minerals Ablation Holdings Inc., and Black Range Development Utah LLC. All inter-company transactions and balances have been eliminated upon consolidation. The Company has established the existence of mineralized materials for certain uranium projects. The Company has not established proven or probable reserves, as defined by the United States Securities and Exchange Commission (the “SEC”), through the completion of a “final” or “bankable” feasibility study for any of its uranium projects. Exploration Stage and Mineral Properties In accordance with U.S. GAAP, expenditures relating to the acquisition of mineral rights are initially capitalized as incurred while exploration and pre-extraction expenditures are expensed as incurred until such time the Company exits the exploration stage by establishing proven or probable reserves. Expenditures relating to exploration activities, such as drill programs to search for additional mineralized materials, are expensed as incurred. Expenditures relating to pre-extraction activities, such as the construction of mine wellfields, ion exchange facilities, disposal wells, and mine development, are expensed as incurred until such time proven or probable reserves are established for that uranium project, after which subsequent expenditures relating to development activities for that particular project are capitalized as incurred. Expenditures relating to mining and ore production while the Company is in the exploration stage and while the ore is stockpiled underground are expensed as incurred. Production stage issuers, as defined in subpart 1300 of Regulation S-K, having engaged in material extraction of established mineral reserves on at least one material property, typically capitalize expenditures relating to ongoing development activities, with corresponding depletion calculated over proven and probable reserves using the units-of-production method and allocated to future reporting periods to inventory and, as that inventory is sold, to cost of goods sold. The Company is an exploration stage issuer, which has resulted in the Company reporting larger losses than if it had been in the production stage due to the expensing, instead of capitalizing, of expenditures relating to ongoing mine development and extraction activities. Additionally, there would be no corresponding amortization allocated to future reporting periods of the Company since those costs would have been expensed previously, resulting in both lower inventory costs and cost of goods sold and results of operations with higher gross profits and lower losses than if the Company had been in the production stage. Any capitalized costs, such as expenditures relating to the acquisition of mineral rights, are depleted over the estimated extraction life using the straight-line method. As a result, the Company’s consolidated financial statements may not be directly comparable to the financial statements of companies in the production stage. Western will not be eligible to become a production stage issuer, and will remain an exploration stage issuer, until such time as mineral reserves are established on at least one material property. F- 8 WESTERN URANIUM & VANADIUM CORP. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Stated in USD) Note 3 – SUMMARY OF Significant Accounting Policies, CONTINUED Use of Estimates The preparation of these consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements and revenues and expenses during the periods reported. By their nature, these estimates are subject to measurement uncertainty, and the effects on the consolidated financial statements of changes in such estimates in future periods could be significant. Significant areas requiring management’s estimates and assumptions include the determination of the fair value of transactions involving common shares, assessment of the useful life and evaluation for impairment of Kinetic Separation intellectual property, valuation and impairment assessments of mineral properties and equipment, valuation of deferred contingent consideration, valuation of the reclamation liability, valuation of stock-based compensation, and valuation of available-for-sale securities. Other areas requiring estimates include allocations of expenditures, depletion, and amortization of mineral rights and properties. Actual results could differ from those estimates. Foreign Currency Translation The reporting currency of the Company, including its subsidiaries, is the United States dollar. The financial statements of subsidiaries located outside of the U.S. are measured in their functional currency, which is the local currency. The functional currency of the parent (Western Uranium & Vanadium Corp. (Ontario)) is the Canadian dollar. The functional currencies of the subsidiaries is the United States dollar. Monetary assets and liabilities of these subsidiaries are translated at the exchange rates at the balance sheet date. Transactions denominated in currencies other than the functional currency are recorded based on the exchange rates at the time of the transaction. Income and expense items are translated using average monthly exchange rates. Non-monetary assets are translated at their historical exchange rates. Translation adjustments are included in “Accumulated other comprehensive (loss) income” in the consolidated balance sheets. Segment Information The Company determines its reporting units in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 280, Segment Reporting . The Company evaluates a reporting unit by first identifying its operating segments under ASC 280. The Company then evaluates each operating segment to determine if it includes one or more components that constitute a business. If there are components within an operating segment that meet the definition of a business, the Company evaluates those components to determine if they must be aggregated into one or more reporting units. If applicable, when determining if it is appropriate to aggregate different operating segments, the Company determines if the segments are economically similar and, if so, the operating segments are aggregated. The Company has one operating segment and reporting unit. The Company operates in one reportable business segment; the Company is in the business of exploring, developing, mining, and the production of its uranium and vanadium resource properties, including the utilization of the Company’s Kinetic Separation technology in its mining processes. The Company is organized and operated as one business. Management reviews its business as a single operating segment, using financial and other information rendered meaningful only by the fact that such information is presented and reviewed in the aggregate. Cash The Company considers all highly-liquid instruments with an original maturity of three months or less at the time of issuance to be cash equivalents. As of December 31, 2022 and 2021, the Company had no cash equivalents. Marketable Securities The Company classifies its marketable securities as available-for-sale securities, which are carried at their fair value based on the quoted market prices of the securities with unrealized gains and losses reported as accumulated other comprehensive (loss) income, a separate component of shareholders’ equity. Realized gains and losses on available-for-sale securities are included in net earnings in the period earned or incurred. F- 9 WESTERN URANIUM & VANADIUM CORP. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Stated in USD) Note 3 – SUMMARY OF Significant Accounting Policies, CONTINUED Restricted Cash Certain cash balances are restricted as they relate to deposits with banks that have been assigned to state reclamation authorities in the United States to secure various reclamation guarantees with respect to mineral properties in Utah, Wyoming, and Colorado. As these funds are not available for general corporate purposes and secure the long term reclamation liability (see Note 4), they have been separately disclosed and classified as long-term for the majority of the Company’s mines. As of December 31, 2022 and 2021, the Company has determined that the Van 4 Mine is now considered to be in reclamation. The Company recognized the Van 4 Mine’s reclamation liability and its restricted cash in full on the Company’s consolidated balance sheets as current. Property and equipment Property and equipment is stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method, based upon the following estimated useful lives: Asset Classification Estimated Useful Life Equipment 5 years Computer and related equipment 3 years Software 7 years Vehicles 5 years For the years ended December 31, 2022 and 2021, the Company recorded depreciation expense of $ 26,877 and $ 20,380 , respectively. Revenue Recognition The Company purchased prepaid uranium concentrate contracts for future delivery of uranium concentrate pursuant to a supply agreement. The Company recognizes revenue upon the delivery of the uranium contract to the counterparty and charges to cost of revenues the purchase cost of the uranium concentrate contract upon such delivery. The Company leases certain of its mineral properties for the exploration and production of oil and gas reserves. The Company accounts for lease revenue in accordance with the FASB ASC 842, Leases . Lease payments received in advance are deferred and recognized on a straight-line basis over the related lease term associated with the prepayment. Royalty payments are recognized as revenues based upon production. Fair Values of Financial Instruments The carrying amounts of cash, restricted cash, accounts payable, subscription payable, reclamation liability, contingent consideration and accrued liabilities approximate their fair value due to the short-term nature of these instruments. Marketable securities are adjusted to fair value at each balance sheet date based on quoted prices which are considered level 1 inputs. The Company’s operating and financing activities are conducted primarily in Canadian dollars, and as a result, the Company is subject to exposure to market risks from changes in foreign currency rates. The Company is exposed to credit risk through its cash and restricted cash but mitigates this risk by keeping these deposits at major financial institutions. The FASB ASC 820, Fair Value Measurements and Disclosures , provides the framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). F- 10 WESTERN URANIUM & VANADIUM CORP. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Stated in USD) Note 3 – SUMMARY OF Significant Accounting Policies, continued Fair Values of Financial Instruments (continued) Fair value is defined as an exit price, representing the amount that would be received upon the sale of an asset or payment to transfer a liability in an orderly transaction between market participants. Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. A three-tier fair value hierarchy is used to prioritize the inputs in measuring fair value as follows: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable, either directly or indirectly. Level 3- Significant unobservable inputs that cannot be corroborated by market data and inputs that are derived principally from or corroborated by observable market data or correlation by other means. The fair value of the Company’s financial instruments are as follows: Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) Quoted Prices for Similar Assets or Liabilities in Active Markets (Level 2) Significant Unobservable Inputs (Level 3) Marketable securities as of December 31, 2022 $ 612 $ - $ - Marketable securities as of December 31, 2021 $ 2,120 $ - $ - Impairment of Long-Lived Assets The Company reviews and evaluates its long-lived assets and Kinetic Separation technology for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Impairment is considered to exist if the total estimated future cash flows on an undiscounted basis are less than the carrying amount of the assets. An impairment loss is measured and recorded based on discounted estimated future cash flows or upon an estimate of fair value that may be received in an exchange transaction. Future cash flows are estimated based on estimated quantities of recoverable minerals, expected uranium prices (considering current and historical prices, trends, and related factors), production levels, operating costs of production, and capital, restoration and reclamation costs, based upon the projected remaining future uranium production from each project. The Company’s long-lived assets (which include its mineral assets and Kinetic Separation intellectual property) were acquired during the end of 2014 and in 2015 in arms-length transactions. As of December 31, 2022, the Company evaluated the total estimated future cash flows on an undiscounted basis for its mineral properties and Kinetic Separation intellectual property and determined that no impairment was deemed to exist. Estimates and assumptions used to assess recoverability of the Company’s long-lived assets and to measure fair value of the Company’s uranium properties are subject to risk uncertainty. Changes in these estimates and assumptions could result in the impairment of the Company’s long-lived assets. In estimating future cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of future cash flows from other asset groups. F- 11 WESTERN URANIUM & VANADIUM CORP. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Stated in USD) Note 3 – SUMMARY OF Significant Accounting Policies, continued Income Taxes The Company utilizes an asset and liability approach for financial accounting and reporting for income taxes. The provision for income taxes is based upon income or loss after adjustment for those permanent items that are not considered in the determination of taxable income. Deferred income taxes represent the tax effects of differences between the financial reporting and tax basis of the Company’s assets and liabilities at the enacted tax rates in effect for the years in which the differences are expected to reverse. The Company evaluates the recoverability of deferred tax assets and establishes a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Management makes judgments as to the interpretation of the tax laws that might be challenged in an audit and cause changes to previous estimates of tax liability. In management’s opinion, adequate provisions for income taxes have been made. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. Tax benefits are recognized only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is more than 50 percent likely to be realized upon settlement. A liability for unrecognized tax benefits is recorded for any tax benefits claimed in the Company’s tax returns that do not meet these recognition and measurement standards. As of December 31, 2022 and December 31, 2021, no liability for unrecognized tax benefits was required to be reported. The Company’s policy for recording interest and penalties associated with tax audits is to record such items as a component of general and administrative expense. There were no amounts accrued for penalties and interest for the years ended December 31, 2022 and 2021. The Company does not expect its uncertain tax position to change during the next twelve months. Management is currently unaware of any issues under review that could result in significant payments, accruals, or material deviations from its position. The Company has identified its federal Canadian and United States tax jurisdictions and its state tax jurisdictions in Colorado and Utah as its “major” tax jurisdictions, and such returns for the years 2017 through 2022 remain subject to examination. Restoration and Remediation Costs (Asset Retirement Obligations) Various federal and state mining laws and regulations require the Company to reclaim the surface areas and restore underground water quality for its mine projects to the pre-existing mine area average quality after the completion of mining. Future reclamation and remediation costs, which include extraction equipment removal and environmental remediation, are accrued at the end of each period based on management’s best estimate of the costs expected to be incurred for each project. Such estimates are determined by the Company’s engineering studies which consider the costs of future surface and groundwater activities, current regulations, actual expenses incurred, and technology and industry standards. In accordance with the FASB ASC 410, Asset Retirement and Environmental Obligations , the Company capitalizes the measured fair value of asset retirement obligations to mineral properties. The asset retirement obligations are accreted to an undiscounted value until the time at which they are expected to be settled. The accretion expense is charged to earnings and the actual retirement costs are recorded against the asset retirement obligations when incurred. Any difference between the recorded asset retirement obligations and the actual retirement costs incurred will be recorded as a gain or loss in the period of settlement. At each reporting period, the Company reviews the assumptions used to estimate the expected cash flows required to settle the asset retirement obligations, including changes in estimated probabilities, amounts and timing of the settlement of the asset retirement obligations, as well as changes in the legal obligation requirements at each of its mineral properties. Changes in any one or more of these assumptions may cause revision of asset retirement obligations for the corresponding assets. F- 12 WESTERN URANIUM & VANADIUM CORP. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Stated in USD) Note 3 – SUMMARY OF Significant Accounting Policies, continued Stock-Based Compensation The Company follows the FASB ASC 718, Compensation - Stock Compensation , which addresses the accounting for stock-based payment transactions, requiring such transactions to be accounted for using the fair value method. Awards of shares for property or services are recorded at the fair value of the stock or the fair value of the service, whichever is more readily measurable. The Company uses the Black-Scholes option-pricing model to determine the grant date fair value of stock-based awards under ASC 718. The fair value is charged to earnings depending on the terms and conditions of the award, and the nature of the relationship of the recipient of the award to the Company. The Company records the grant date fair value in line with the period over which it was earned. For employees and consultants, this is typically considered to be the vesting period of the award. Net Loss per Share Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the exercise of stock options and warrants (using the treasury stock method). The computation of net loss per share for each of the years ended December 31, 2022 and 2021 is the same for both basic and fully diluted. Potentially dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share because the effect of their inclusion would have been anti-dilutive. For the Years Ended December 31, 2022 2021 Warrants to purchase common shares 9,362,076 9,735,948 Options to purchase common shares 4,306,334 2,324,670 Total potentially dilutive securities 13,668,410 12,060,618 Recent Accounting Standards Management does not believe that any recently issued, but not yet effective accounting standards, when adopted, will have a material effect on the accompanying consolidated financial statements. F- 13 WESTERN URANIUM & VANADIUM CORP. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Stated in USD) NOTE 4 – MINERAL ASSETS equipment, Kinetic separation INTELLECTUAL PROPERTY, AND OTHER PROPERTY The Company’s mining properties acquired on August 18, 2014 that the Company retains as of December 31, 2022 include: The San Rafael Uranium Project located in Emery County, Utah; The Sunday Mine Complex located in western San Miguel County, Colorado; The Van 4 Mine located in western Montrose County, Colorado; The Sage Mine located in San Juan County, Utah, and San Miguel County, Colorado. These mining properties include leased land in the states of Colorado and Utah. None of these mining properties were operational at the date of acquisition. The Company’s mining properties acquired on September 16, 2015 that the Company retains as of December 31, 2022 include Hansen, North Hansen and Hansen Picnic Tree located in Fremont and Teller Counties, Colorado. The Company also acquired the Keota project located in Weld County, Colorado and the Ferris Haggerty project located in Carbon County Wyoming. These mining assets include both owned and leased land in the states of Utah, Colorado, and Wyoming. All of the mining assets represent properties which have previously been mined, to different degrees, for uranium. As the Company has not formally established proven or probable reserves on any of its properties, there is inherent uncertainty as to whether or not any mineralized material can be economically extracted as originally planned and anticipated. The Company’s mineral properties and equipment and kinetic separation intellectual property are: As of December 31, 2022 2021 Mineral properties and equipment, net $ 12,798,904 $ 11,780,142 Kinetic separation intellectual property $ 9,488,051 $ 9,488,051 Mineral Properties and Equipment During the years ended December 31, 2022 and 2021, Western made purchases of $ 1,045,638 and $ 65,000 , which principally consisted of mining equipment, to increase mining capacity. Oil and Gas Lease and Easement The Company entered into an oil and gas lease that became effective with respect to minerals and mineral rights owned by the Company of approximately 160 surface acres of the Company’s property in Colorado. As consideration for entering into the lease, the lessee has agreed to pay the Company a royalty from the lessee’s revenue attributed to oil and gas produced, saved, and sold attributable to the net mineral interest. The Company has also received cash payments from the lessee related to the easement that the Company is recognizing incrementally over the eight year term of the easement. On June 23, 2020, the same entity, as discussed above, elected to extend the oil and gas lease easement for three additional years , commencing on the date the lease would have previously expired. During 2021, the operator completed all well development stages, and each of the eight (8) wells commenced oil and gas production by mid-August 2021. During the years ended December 31, 2022 and 2021 the Company recognized aggregate revenue of $ 635,363 and $ 272,142 , respectively, under these oil and gas lease arrangements. F- 14 WESTERN URANIUM & VANADIUM CORP. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Stated in USD) NOTE 4 – MINERAL ASSETS equipment, Kinetic separation INTELLECTUAL PROPERTY, AND OTHER PROPERTY, CONTINUED Reclamation Liabilities The Company’s mines are subject to certain asset retirement obligations, which the Company has recorded as reclamation liabilities. The reclamation liabilities of the United States mines are subject to legal and regulatory requirements, and estimates of the costs of reclamation are reviewed periodically by the applicable regulatory authorities. The reclamation liability represents the Company’s best estimate of the present value of future reclamation costs in connection with the mineral properties. The Company determined the gross reclamation liabilities of the mineral properties to be $ 751,405 and $ 740,446 as of December 31, 2022 and December 31, 2021, respectively. On March 2, 2020, the Colorado Mined Land Reclamation Board (“MLRB”) issued an order vacating the Van 4 Temporary Cessation, terminating mining operations and ordering commencement of final reclamation. The Company has begun the reclamation of the Van 4 Mine. The reclamation cost is fully covered by the reclamation bonds posted upon acquisition of the property. The Company adjusted the fair value of its reclamation obligation for the Van 4 Mine. The portion of the reclamation liability related to the Van 4 Mine and its related restricted cash are included in current liabilities and current assets, respectively, at a value of $ 75,057 . The Company expects to begin incurring the reclamation liability after 2054 for all mines that are not in reclamation and accordingly, has discounted the gross liabilities over their remaining lives using a discount rate of 5.4%. The net discounted aggregated values as of December 31, 2022 and December 31, 2021 were $300,276 and $271,620, respectively. The gross reclamation liabilities as of December 31, 2022 and December 31, 2021 are secured by financial warranties in the amount of $ 751,405 and $ 740,446 , respectively. Reclamation liability activity for the years ended December 31, 2022 and 2021 consists of: For the Years Ended December 31, 2022 2021 Beginning balance at January 1 $ 271,620 $ 309,940 Accretion 28,656 9,142 Discontinuation of reclamation liability - ( 47,462 ) Ending Balance at December 31 $ 300,276 $ 271,620 During the first quarter of 2021, the Company received notice that its Ferris Haggerty property was no longer considered to be subject to reclamation treatment. The Company recorded a discontinuation of the Ferris Haggerty property’s present value of $ 2,669 during the first quarter 2021. On April 29, 2021, the Company moved the Ferris Haggerty $ 10,000 restricted cash deposit into its cash after receiving payment from the state of Wyoming. During the fourth quarter of 2021, the Company received notice from the State of Colorado that its surety release request on the Hansen Picnic Tree property had been approved, and as such, this property is no longer subject to reclamation treatment. As the property was not a current development priority, Western completed reclamation on the property. The Company recorded a discontinuation of the Hansen Picnic Tree property’s present value of $ 44,793 during the fourth quarter of 2021. On December 29, 2021, the Company moved the $ 154,936 restricted cash deposit into its cash after receiving payment from the state of Colorado. F- 15 WESTERN URANIUM & VANADIUM CORP. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Stated in USD) NOTE 4 – MINERAL ASSETS equipment, Kinetic separation INTELLECTUAL PROPERTY, AND OTHER PROPERTY, CONTINUED Sunday Mine Complex Permitting Status On February 4, 2020, the Colorado DRMS sent a Notice of Hearing to Declare Termination of Mining Operations related to the status of the mining permits issued by the state of Colorado for the Sunday Mine Complex. At issue was the application of an unchallenged Colorado Court of Appeals Opinion for a separate mine (Van 4) with very different facts that are retroactively modifying DRMS rules and regulations. The Company maintains that it was timely in meeting existing rules and regulations. The hearing was scheduled to be held during several monthly MLRB Board meetings, but this matter was delayed several times. The permit hearing was held during the MLRB Board monthly meeting on July 22, 2020. At issue was the status of the five existing permits which comprise the Sunday Mine Complex. Due to COVID-19 restrictions, the hearing took place utilizing a virtual-only format. The Company prevailed in a 3 to 1 decision which acknowledged that the work completed at the Sunday Mine Complex under DRMS oversight was timely and sufficient for Western to maintain these permits. In a subsequent July 30, 2020 letter, the DRMS notified the Company that the status of the five permits (Sunday, West Sunday, St. Jude, Carnation, and Topaz) had been changed to “Active” status effective June 10, 2019, the original date on which the change of the status was approved. On August 23, 2020, the Company initiated a request for Temporary Cessation status for the Sunday Mine Complex as the mines had not been restarted within a 180-day window due to the direct and indirect impacts of the COVID-19 pandemic. Accordingly, a permit hearing was scheduled for October 21, 2020 to determine Temporary Cessation status. In a unanimous vote, the MLRB approved Temporary Cessation status for each of the five Sunday Mine Complex permits (Sunday, West Sunday, St. Jude, Carnation, and Topaz). On October 9, 2020, the MLRB issued a board order which finalized the findings of the July 22, 2020 permit hearing. On November 10, 2020, the MLRB issued a board order which finalized the findings of the October 21, 2020 permit hearing. On November 6, 2020, the MLRB signed an order placing the five Sunday Mine Complex mine permits into Temporary Cessation. On November 12, 2020, a coalition of environmental groups (the “Plaintiffs”) filed a complaint against the MLRB seeking a partial appeal of the July 22, 2020 decision by requesting termination of the Topaz Mine permit. On December 15, 2020, the same coalition of environmental groups amended their complaint against the MLRB seeking a partial appeal of the October 21, 2020 decision requesting termination of the Topaz Mine permit. The Company has joined with the MLRB in defense of their July 22, 2020 and October 21, 2020 decisions. On May 5, 2021, the Plaintiffs in the Topaz Appeal filed an opening brief with the Denver District Court seeking to overturn the July 22, 2020 and October 21, 2020 MLRB permit hearing decisions on the Topaz Mine permit. The MLRB and the Company were to respond with an answer brief within 35 days on or before June 9, 2021, but instead sought a settlement. The judicial review process was delayed as extensions were put in place until August 20, 2021. A settlement was not reached, and the MLRB and the Company submitted answer briefs on August 20, 2021. The Plaintiff submitted a reply brief on September 10, 2021. On March 1, 2022, the Denver District Court reversed the MLRB’s orders regarding the Topaz Mine and remanded the case back to MLRB for further proceedings consistent with its order. The Company and the MLRB had until April 19, 2022 to appeal the Denver District Court’s ruling. Neither the Company nor the MLRB appealed the Denver District Court ruling. Subsequently on March 20, 2023, the MLRB issued a board order for the Company to commence final reclamation, which upon completion will terminate mining operations at the Topaz Mine. Reclamation is to commence immediately at the Topaz Mine and is to be completed within five years by March 2028. The Company is currently working toward the completion of an updated Topaz Mine Plan of Operations which is a separate federal requirement of the BLM for the conduct of mining activities on the federal land at the Topaz Mine and needed to re-permit the Topaz Mine with Colorado’s DRMS. F- 16 WESTERN URANIUM & VANADIUM CORP. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Stated in USD) NOTE 4 – MINERAL ASSETS equipment, Kinetic separation INTELLECTUAL PROPERTY, AND OTHER PROPERTY, CONTINUED Kinetic Separation Intellectual Property The Kinetic Separation intellectual property was acquired in Western’s acquisition of Black Range on September 16, 2015. Previously Black Range acquired its Kinetic Separation assets in the dissolution of a joint venture on March 17, 2015, through the acquisition of all the assets of the joint venture and received a 25-year license to utilize all of the patented and unpatented technology owned by the joint venture. The technology license agreement for patents and unpatented technology became effective as of March 17, 2015, for a period of 25 years, until March 16, 2040. There are no remaining license fee obligations, and there are no future royalties due under the agreement. The Company has the right to sub-license the technology to third parties. The Company may not sell or assign the Kinetic Separation license; however, the license could be transferred in the case of a sale of the Company. The Company has developed improvements to Kinetic Separation during the term of the license agreement and retains ownership of, and may obtain patent protection on, any such improvements developed by the Company. The Kinetic Separation patent was filed on September 13, 2012 and granted on February 14, 2014 by the United States Patent Office. The patent is effective for a period of 20 years until September 13, 2032. This patent is supported by two provisional patent applications. The provisional patent applications expired after one year but were incorporated in the U.S. Patent by reference and claimed benefit prior to their expirations. The status of the patent and two provisional patent applications has not changed subsequent to the 2014 patent grant. The Company has the continued right to use any patented portion of the Kinetic Separation technology that enters the public domain subsequent to the patent expiration. The Company anticipates Kinetic Separation will improve the efficiency of the mining and processing of the sandstone-hosted ore from Western’s conventional mines through the separation of waste from mineral bearing-ore, potentially reducing transportation, mill processing, and mill tailings costs. Kinetic Separation is not currently in use or being applied at any Company mines. The Company views Kinetic Separation as a cost saving technology, which it will seek to incorporate into ore production subsequent to commencing scaled production levels. There are also alternative applications, which the Company has explored. NOTE 5 – Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities consisted of: As of December 31, 2022 2021 Trade accounts payable $ 403,705 $ 510,831 Accrued liabilities 147,910 188,762 Total accounts payable and accrued liabilities $ 551,615 $ 699,593 F- 17 WESTERN URANIUM & VANADIUM CORP. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Stated in USD) NOTE 6 – COMMITMENTS AND CONTINGENCIES Supply Contract In December 2015, the Company signed a uranium concentrates supply agreement with a major United States utility company for delivery commencing in 2018 and continuing for a five-year period through 2022. On March 8, 2021, the Company entered into an agreement with a third party to complete the Year 4 (2021) uranium concentrate delivery. The Company paid $ 78,000 in April 2021 to the assignee for which the assignee made the delivery in May 2021. In April 2022, in satisfaction of the Year 5 delivery under its supply contract, the Company delivered 125,000 lbs of uranium concentrate from its prepaid uranium concentrate inventory. Accordingly, during the year ended December 31, 2022, the Company recorded revenue of $7,223,609 (at a price of approximately $57 per pound) and cost of revenue of $4,044,083, related to the delivery of the uranium. In May 2022, the Company received the cash proceeds from this sale. Strategic Acquisition of Physical Uranium In May 2021, the Company executed a binding agreement to purchase 125,000 pounds of natural uranium concentrate at approximately $ 32 per pound. In December 2021, the Company paid $ 4,044,083 , in connection with its full prepayment of the purchase price for 125,000 pounds of natural uranium concentrate. This uranium concentrate was subsequently delivered under the terms of the aforementioned uranium concentrates supply agreement in April 2022. NOTE 7 – SHARE CAPITAL AND OTHER EQUITY INSTRUMENTS Authorized Capital The holders of the Company’s common shares are entitled to one vote per share. Holders of common shares are entitled to ratably receive such dividends, if any, as may be declared by the board of directors, out of legally available funds. Upon the liquidation, dissolution, or winding down of the Company, holders of common shares are entitled to share ratably in all assets of the Company that are legally available for distribution. As of December 31, 2022 and 2021, an unlimited number of common shares were authorized for issuance. Private Placements On February 16, 2021, the Company closed a non-brokered private placement of 3,250,000 units at a price of CAD $ 0.80 per unit. The aggregate gross proceeds raised in the private placement amounted to CAD $ 2,600,000 (USD $ 1,950,509 in net proceeds). Each unit consisted of one common share of Western (a “Share”) plus one common share purchase warrant of Western (a “Warrant”). Each warrant entitled the holder to purchase one Share at a price of CAD $ 1.20 per Share for a period of three years following the closing date of the private placement. A total of 3,250,000 Shares and 3,250,000 Warrants were issued in the private placement. On March 1, 2021, the Company closed a non-brokered private placement of 3,125,000 units at a price of CAD $ 0.80 per unit. The aggregate gross proceeds raised in the private placement amounted to CAD $ 2,500,000 (USD $ 1,918,797 in net proceeds). Each unit consisted of one Share plus one Warrant. Each Warrant entitled the holder to purchase one Share at a price of CAD $ 1.20 per Share for a period of three years following the closing date of the private placement. A total of 3,125,000 Shares and 3,125,000 Warrants were issued in the private placement. On December 17, 2021, the Company closed a non-brokered private placement of 372,966 units at a price of CAD $ 1.60 per unit. The aggregate gross proceeds raised in the private placement amounted to CAD $ 596,746 (USD $ 434,973 in net proceeds). Each unit consisted of one Share plus one Warrant. Each Warrant entitled the holder to purchase one Share at a price of CAD $ 2.50 per Share for a period of three years following the closing date of the private placement. A total of 372,966 Shares and 372,966 Warrants were issued in the private placement. On January 20, 2022, the Company closed a non-brokered private placement of 2,495,575 units at a price of CAD $ 1.60 per unit. The aggregate gross proceeds raised in the private placement amounted to CAD $ 3,992,920 (USD $ 3,011,878 in net proceeds). Each unit consisted of one common share of Western (a “Share”) plus one common share purchase warrant of Western (a “Warrant”). Each Warrant entitled the holder to purchase one Share at a price of CAD $ 2.50 per Share for a period of three years following the closing date of the private placement. A total of 2,495,575 Shares and 2,495,575 Warrants were issued to investors and 98,985 Warrants were issued to broker dealers in connection with the private placement. F- 18 WESTERN URANIUM & VANADIUM CORP. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Stated in USD) NOTE 7 – SHARE CAPITAL AND OTHER EQUITY INSTRUMENTS, CONTINUED Warrant Exercises During the year ended December 31, 2022 and 2021, an aggregate of 2,020,351 and 2,066,693 warrants were exercised for total gross proceeds of $ 2,620,395 and $ 2,004,864 , respectively. Incentive Stock Option Plan The Company maintains an Incentive Stock Option Plan (the “Plan”) that permits the granting of stock options as incentive compensation. Shareholders of the Company approved the Plan on June 30, 2008 and amendments to the Plan on June 20, 2013. The board of directors approved additional changes to the Plan on September 12, 2015. On October 1, 2021, the Company further amended the Plan, principally to allow for the cashless exercise of stock options. The purpose of the Plan is to attract, retain, and motivate directors, management, staff, and consultants by providing them with the opportunity, through stock options, to acquire a proprietary interest in the Company and benefit from its growth. The Plan provides that the aggregate number of common shares for which stock options may be granted will not exceed 10 % of the issued and outstanding common shares at the time stock options are granted. As of December 31, 2022, a total of 43,602,565 common shares were outstanding, and at that date the maximum number of stock options eligible for issue under the Plan was 4,360,257 . Stock Options On February 10, 2022, the Company granted options under the Plan for the purchase of an aggregate of 900,000 common shares to five individuals consisting of directors and officers of the Company. The options have a five year term, an exercise price of CAD $ 1.76 (US $ 1.30 as of December 31, 2022) and vest equally in thirds commencing initially on the date of grant and thereafter on April 1, 2022, and July 1, 2022. On October 31, 2022, the Board of Directors granted options under the Plan for the purchase of an aggregate of 1,665,000 common shares to individuals consisting of directors and officers of the Company. Each of these options have a five year term, an exercise price of CAD $ 1.60 (US $ 1.18 as of December 31, 2022) and vest equally in two installments beginning on the date of grant and thereafter on April 30, 2023. The Company utilized the Black-Scholes option pricing model to determine the fair value of these stock options, using the assumptions as outlined below: December 31, 2022 Stock Price CAD $ 1.44 - $ 1.76 Exercise Price CAD $ 1.60 - $ 1.76 Dividend Yield 0 % Expected Volatility 103.3 % - 108.4 % Weighted Average Risk-Free Interest Rate 1.61 % - 4.45 % Expected life (in years) 2.6 F- 19 WESTERN URANIUM & VANADIUM CORP. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Stated in USD) NOTE 7 – SHARE CAPITAL AND OTHER EQUITY INSTRUMENTS, CONTINUED Stock Options, continued During the year ended December 31, 2022, the Company issued 13,517 shares of common stock pursuant to the cashless exercise of 50,000 stock options (with a market price on date of exercise of CAD $ 1.3705 (US $ 1.00 as of December 31, 2022). Number of Shares Weighted Average Exercise Price Weighted Average Contractual Life (Years) Weighted Average Grant Date Fair Value Intrinsic Value Outstanding – January 1, 2022 2,324,670 $ 1.35 1.67 $ 0.39 $ 528,714 Granted 2,565,000 1.22 - 0.72 Expired ( 533,336 ) 1.32 - 0.19 Exercised ( 50,000 ) 0.74 - 0.05 - Outstanding – December 31, 2022 4,306,334 $ 1.24 3.35 $ 0.61 $ 60,965 Exercisable – December 31, 2022 3,473,834 $ 1.26 2.88 $ 0.60 $ 60,965 The Company’s stock-based compensation expense related to stock options for the years ended December 31, 2022 and 2021 was $ 1,566,520 and $ 0 , respectively, which is included in general and administrative expenses on the Company’s consolidated statements of operations and other comprehensive loss. As of December 31, 2022 and 2021, the Company had $ 364,095 and $ 0 of unamortized stock option expense, respectively. Warrants Number of Shares Weighted Average Exercise Price Weighted Average Contractual Life (Years) Intrinsic Value Outstanding - January 1, 2022 9,735,948 $ 1.09 1.49 $ 3,799,606 Issued 2,594,560 1.84 - - Exercised ( 2,020,351 ) 1.21 - - Expired/Forfeited ( 948,081 ) 2.00 - - Outstanding – December 31, 2022 9,362,076 $ 1.19 1.43 $ 27,227 Exercisable – December 31, 2022 9,362,076 $ 1.19 1.43 $ 27,227 Note 8 – Mining Expenditures For the Years Ended December 31, 2022 2021 Permits $ 282,851 $ 134,261 Mining costs 471,622 578,034 Royalties 7,860 5,362 $ 762,333 $ 717,657 F- 20 WESTERN URANIUM & VANADIUM CORP. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Stated in USD) NOTE 9 – Related Party Transactions AND BALANCES The Company has transacted with related parties pursuant to service arrangements in the ordinary course of business, as follows: Prior to the acquisition of Black Range, Mr. George Glasier, the Company’s CEO, who is also a director (“Seller”), transferred his interest in a former joint venture with Ablation Technologies, LLC to Black Range. In connection with the transfer, Black Range issued 25 million shares of Black Range common stock to Seller and committed to pay AUD $500,000 (USD $340,252 as of December 31, 2022) to Seller within 60 days of the first commercial application of the kinetic separation technology. Western assumed this contingent payment obligation in connection with the acquisition of Black Range. At the date of the acquisition of Black Range, this contingent obligation was determined to be probable. Since the deferred contingent consideration obligation is probable and the amount is estimable, the Company recorded the deferred contingent consideration as an assumed liability in the amount of $ 340,252 and $ 362,794 as of December 31, 2022 and December 31, 2021, respectively. The Company has multiple lease arrangements with Silver Hawk Ltd., an entity which is owned by George Glasier and his wife Kathleen Glasier. These leases, which are all on a month-to-month basis, are for the Company’s rental of office, workshop, warehouse and employee housing facilities The Company incurred rent expense of $ 55,198 and $ 34,427 in connection with these arrangement for the years ended December 31, 2022 and 2021, respectively. The Company also owed Mr. Glasier reimbursable expenses in the amount of $ 87,221 and $ 65,753 as of December 31, 2022 and December 31, 2021, respectively, which are recorded in accounts payable and accrued liabilities. Note 10 – Income Taxes The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows: As of December 31, 2022 2021 Deferred tax assets: Net operating loss carryovers $ 5,708,411 $ 5,815,866 Marketable securities 16,094 15,720 Accrued expenses 35,681 46,604 Amortization capitalized cost 725,959 - Unrealized foreign exchange 64,761 - Accretion expense 8,639 - Deferred tax assets, gross 6,559,545 5,878,190 Less: valuation allowance ( 3,688,584 ) ( 3,488,821 ) Deferred tax assets, net 2,870,961 2,389,369 Deferred tax liabilities: Property and equipment ( 5,314,338 ) ( 5,098,256 ) Amortization annual expense ( 265,510 ) - Deferred tax liabilities, net $ ( 2,708,887 ) $ ( 2,708,887 ) The change in the Company’s valuation allowance is as follows: For the Years Ended December 31, 2022 2021 Beginning of year $ 3,488,821 $ 2,997,084 Increase in valuation allowance 199,763 491,737 End of year $ 3,688,584 $ 3,488,821 F- 21 WESTERN URANIUM & VANADIUM CORP. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Stated in USD) Note 10 – Income Taxes, CONTINUED A reconciliation of the provision for income taxes with the amounts computed by applying the statutory federal income tax rate to income from operations before the provision for income taxes is as follows: For the Years Ended December 31, 2022 2021 U.S. federal statutory rate ( 21.0 )% ( 21.0 )% State and foreign taxes ( 3.8 )% ( 3.8 )% Permanent differences Stock-based compensation 37.4 % 0 % Other 1.0 % 0 % True-up to prior years return 19.3 % 0 % Valuation allowance ( 32.9 )% 24.8 % Effective income tax rate 0 % 0 % The Company has net operating loss carryovers of approximately $ 23,017,786 for federal and state income tax purposes and net operating loss carryovers of $ 11,663,991 for Canadian provincial tax purposes which begin to expire in 2026. The ultimate realization of the net operating loss is dependent upon future taxable income, if any, of the Company. Based on losses from inception, the Company determined that as of December 31, 2022 it is more likely than not that the Company will not realize benefits from the deferred tax assets. The Company will not record income tax benefits in the consolidated financial statements until it is determined that it is more likely than not that the Company will generate sufficient taxable income to realize the deferred income tax assets. As a result of the analysis, the Company determined that a deferred tax asset valuation allowance of $ 3,688,584 and $ 3,488,821 was required as of December 31, 2022 and 2021, respectively. Internal Revenue Code (“IRC”) Section 382 imposes limitations on the use of net operating loss carryovers when the share ownership of one or more 5% shareholders (shareholders owning 5% or more of the Company’s outstanding capital stock) has increased on a cumulative basis over a period of three years by more than 50 percentage points. Management cannot control any ownership changes that occur. Accordingly, there is a risk of an ownership change beyond the control of the Company that could trigger a limitation of the use of the loss carryover. The Company has analyzed the issuances of common shares during the years ended December 31, 2022 and 2021 and does not believe such change of control occurred. If such ownership change under IRC section 382 had occurred, such change would substantially limit the Company’s ability to utilize its net operating loss carryforwards in the future. NOTE 11 – FINANCIAL INSTRUMENTS Fair Values The Company’s financial instruments consist of cash, restricted cash, accounts payable, contingent consideration and accrued liabilities. The fair values of these financial instruments approximate their carrying values due to the short-term maturity of these instruments. The Company’s financial instruments also incorporate marketable securities that are adjusted to fair value at each balance sheet date based on quoted prices which are considered level 1 inputs. The reclamation deposits, which are reflected in restricted cash on the consolidated balance sheets, are deposits mainly invested in certificates of deposit at major financial institutions, and their fair values are estimated to approximate their carrying values. There were no transfers of financial instruments between Levels 1, 2, and 3 during the years ended December 31, 2022 and 2021. Foreign Currency Risk Foreign currency risk is the risk that changes in the rates of exchange on foreign currencies will impact the financial position or cash flows of the Company. The Company’s reporting currency is the United States dollar. The functional currency for Western standalone entity is the Canadian dollar. The Company is exposed to foreign currency risks in relation to certain activity that is to be settled in Canadian funds. Management monitors its foreign currency exposure regularly to minimize the risk of an adverse impact on its cash flows. F- 22 WESTERN URANIUM & VANADIUM CORP. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Stated in USD) NOTE 11 – FINANCIAL INSTRUMENTS, CONTINUED Concentration of Credit Risk Concentration of credit risk is the risk of loss in the event that certain counterparties are unable to fulfil their obligations to the Company. The Company limits its exposure to credit loss on its cash and restricted cash by placing its cash with high credit quality financial institutions. Liquidity Risk Liquidity risk is the risk that the Company’s consolidated cash flows from operations will not be sufficient for the Company to continue operating and discharge is liabilities. The Company is exposed to liquidity risk as its continued operation is dependent upon its ability to obtain financing, either in the form of debt or equity, or achieve profitable operations in order to satisfy its liabilities as they come due. As of December 31, 2022, the Company had a working capital of $ 9,568,963 and cash on hand of $ 9,682,133 . Market Risk Market risk is the risk that fluctuations in the market prices of minerals will impact the Company’s future cash flows. The Company is exposed to market risk on the price of uranium and vanadium, which will determine its ability to build and achieve profitable operations, the amount of exploration and development work that the Company will be able to perform, and the number of financing opportunities that will be available. Management believes that it would be premature at this point to enter into any hedging or forward contracts to mitigate its exposure to specific market price risks. Note 12 – COVID-19 The world continues to be impacted by the COVID-19 pandemic. COVID-19 and the measures to prevent its spread, previously impacted the Company’s business in a number of ways. COVID-19 has primarily caused Western delays in reporting, regulatory matters, operations, and sick/quarantine days for employees infected/exposed to COVID-19. The COVID-19 pandemic previously limited Western’s participation in industry and investor conference events during 2020 and 2021. The impact of future disruptions and the extent of adverse impacts on the Company’s financial and operating results will be dictated by the unpredictable duration and severity of the future waves of COVID-19. The Company is continuing to monitor COVID-19 and its subvariants and the potential impact of the pandemic on the Company’s operations. F-23