WESTWATER RESOURCES, INC. 10-Q

ITEM 1. FINANCIAL STATEMENTS WESTWATER RESOURCES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (expressed in thousands of dollars, except share amounts) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, December 31, ​ ​ Notes ​ 2020 ​ 2019 ASSETS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current Assets: ​ ​ Cash and cash equivalents 1 ​ $ 5,480 $ 1,870 Prepaid and other current assets ​ 431 340 Current assets held for sale 8 ​ 9,306 151 Total Current Assets ​ 15,217 2,361 ​ ​ ​ ​ ​ ​ ​ ​ ​ Property, plant and equipment, at cost: ​ Property, plant and equipment ​ 9,785 9,780 Less accumulated depreciation and depletion ​ (789) (785) Net property, plant and equipment 6 ​ 8,996 8,995 Operating lease right-of-use assets 14 ​ 383 470 Restricted cash 1,5 ​ 807 797 Assets held for sale, non-current 8 ​ — 14,356 Total Assets ​ $ 25,403 $ 26,979 ​ ​ LIABILITIES AND STOCKHOLDERS’ EQUITY ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current Liabilities: ​ Accounts payable ​ $ 1,205 $ 827 Accrued liabilities ​ ​ 787 994 Operating lease liability - current 14 ​ 149 147 Current liabilities held for sale ​ 8 ​ ​ 7,758 ​ ​ 1,701 Total Current Liabilities ​ 9,899 3,669 ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating lease liability, net of current 14 ​ 245 332 Liabilities held for sale, non current ​ 8 ​ ​ — ​ ​ 5,914 Total Liabilities ​ 10,144 9,915 ​ ​ ​ ​ ​ ​ ​ ​ ​ Commitments and Contingencies 13 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders’ Equity: ​ Common stock, 100,000,000 shares authorized, $.001 par value; ​ ​ ​ ​ ​ Issued shares – 10,434,012 and 3,339,541 respectively ​ ​ ​ ​ ​ ​ Outstanding shares - 10,433,851 and 3,339,380 respectively ​ 11 ​ ​ 10 ​ ​ 3 Paid-in capital 10,11 ​ 333,451 319,758 Accumulated deficit ​ (317,944) (302,439) Less: Treasury stock (161 and 161 shares, respectively), at cost ​ (258) (258) Total Stockholders’ Equity ​ 15,259 17,064 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Liabilities and Stockholders’ Equity ​ $ 25,403 $ 26,979 ​ The accompanying notes are an integral part of these condensed consolidated financial statements. 3 Table of Contents ​ WESTWATER RESOURCES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (expressed in thousands of dollars, except share and per share amounts) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended ​ For the Nine Months Ended ​ ​ ​ ​ ​ September 30, ​ September 30, ​ ​ ​ Notes 2020 2019 2020 2019 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating Expenses: ​ ​ ​ ​ ​ ​ Mineral property expenses ​ 7 ​ $ (12) $ (12) ​ $ (18) $ (77) ​ Product development expenses ​ ​ ​ ​ (1,641) ​ ​ (19) ​ ​ (1,942) ​ ​ (51) ​ General and administrative expenses ​ ​ ​ (1,536) (1,003) ​ (4,106) (3,583) ​ Arbitration costs ​ ​ ​ (171) (146) ​ (868) (631) ​ Depreciation and amortization ​ ​ ​ 19 (3) ​ (5) (5) ​ Total operating expenses ​ ​ ​ (3,341) (1,183) ​ (6,939) (4,347) ​ ​ ​ ​ ​ ​ ​ Non-Operating Income/(Expenses): ​ ​ ​ ​ ​ Loss on sale of marketable securities ​ 3,5 ​ — — ​ — (720) ​ Interest income ​ 3 ​ — 13 ​ — 347 ​ Gain on sale of fixed assets ​ ​ ​ ​ 1 ​ ​ — ​ ​ 22 ​ ​ — ​ Other income (expense) ​ ​ ​ (22) — ​ (15) (11) ​ Total other income (expense) ​ ​ ​ (21) 13 ​ 7 (384) ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss from Continuing Operations ​ ​ ​ ​ (3,362) ​ (1,170) ​ ​ (6,932) ​ (4,731) ​ ​ ​ ​ ​ ​ ​ Net Loss from Discontinued Operations ​ 8 ​ ​ (6,389) ​ ​ (664) ​ ​ (8,573) ​ ​ (3,052) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss ​ ​ ​ $ (9,751) ​ $ (1,834) ​ $ (15,505) ​ $ (7,783) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other Comprehensive Income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Transfer to realized loss upon sale of available-for-sale securities ​ ​ — — ​ — 90 ​ Comprehensive Loss ​ ​ $ (9,751) $ (1,834) ​ $ (15,505) $ (7,693) ​ ​ ​ ​ ​ ​ BASIC AND DILUTED LOSS PER SHARE ​ ​ $ (1.23) $ (0.95) ​ $ (2.63) $ (4.66) ​ WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING ​ ​ 7,904,522 1,931,419 ​ 5,905,850 1,649,145 ​ ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 4 Table of Contents WESTWATER RESOURCES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS AND SUPPLEMENTAL CASH FLOW INFORMATION (expressed in thousands of dollars) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Nine Months Ended September 30, ​ Notes 2020 2019 Operating Activities: ​ ​ Net loss ​ $ (15,505) ​ $ (7,783) Reconciliation of net loss to cash used in operations: ​ ​ ​ Non-cash lease expense ​ 2 ​ 8 Accretion of asset retirement obligations 9 ​ 170 ​ 353 Costs incurred for restoration and reclamation activities ​ 9 ​ ​ (501) ​ ​ (334) Amortization of note receivable discount ​ 3 ​ ​ — ​ ​ (299) Depreciation and amortization ​ 41 ​ 71 Stock compensation expense 11 ​ 170 ​ 255 Impairment of uranium properties ​ ​ ​ ​ 5,200 ​ ​ — Gain on disposal of uranium properties ​ 3,4 ​ ​ — ​ ​ (729) Loss on sale of marketable securities 3 ​ — ​ 720 Effect of changes in operating working capital items: ​ ​ ​ ​ ​ ​ ​ ​ (Increase)/Decrease in prepaids and other assets ​ (29) ​ 105 Increase in payables and accrued liabilities ​ 318 ​ 441 Net Cash Used In Operating Activities ​ (10,134) ​ (7,192) ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows From Investing Activities ​ ​ Proceeds from disposal of uranium assets, net ​ 4 ​ ​ — ​ ​ 2,470 Proceeds from the sale of securities, net 3 ​ — ​ 536 Proceeds from note receivable 3 ​ — ​ 750 Capital expenditures ​ ​ (107) ​ — Net Cash (Used In)/Provided By Investing Activities ​ (107) ​ 3,756 ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows From Financing Activities: ​ ​ Proceeds from note payable ​ 16 ​ ​ 331 ​ ​ — Issuance of common stock, net 11 ​ 13,530 ​ 2,628 Payment of minimum withholding taxes on net share settlements of equity awards ​ — ​ (1) Net Cash Provided By Financing Activities ​ 13,861 ​ 2,627 ​ ​ ​ Net increase/(decrease) in cash, cash equivalents and restricted cash ​ 3,620 ​ (809) Cash, Cash Equivalents and Restricted Cash, Beginning of Period ​ 5,667 ​ 5,309 Cash, Cash Equivalents and Restricted Cash, End of Period ​ $ 9,287 ​ $ 4,500 Cash Paid During the Period for: ​ ​ Interest ​ $ 5 ​ $ 4 Supplemental Non-Cash Information with Respect to Investing and Financing Activities: ​ ​ Securities received for payment of notes receivable – Laramide ​ ​ — ​ ​ 750 Total Non-Cash Investing and Financing Activities for the Period ​ $ — ​ $ 750 ​ The accompanying notes are an integral part of these condensed consolidated financial statements . ​ 5 Table of Contents WESTWATER RESOURCES, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY ​ (expressed in thousands of dollars, except share amounts) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Stock ​ Paid-In ​ Comprehensive ​ Accumulated ​ Treasury ​ ​ ​ Nine months ended September 30, 2020 Shares Amount Capital Income (Loss) Deficit Stock Total Balances, January 1, 2020 3,339,541 ​ $ 3 ​ $ 319,758 ​ $ — ​ $ (302,439) ​ $ (258) ​ $ 17,064 Net loss — ​ — ​ ​ — ​ — ​ (15,505) ​ — ​ (15,505) Common stock issued, net of issuance costs 7,093,960 ​ 7 ​ ​ 13,523 ​ — ​ — ​ — ​ 13,530 Stock compensation expense and related share issuances, net of shares withheld for payment of taxes 511 ​ — ​ ​ 170 ​ — ​ — ​ — ​ 170 Balances, September 30, 2020 10,434,012 ​ $ 10 ​ $ 333,451 ​ $ — ​ $ (317,944) ​ $ (258) ​ $ 15,259 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended September 30, 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balances, June 30, 2020 ​ 6,664,976 ​ $ 7 ​ $ 326,073 ​ $ — ​ $ (308,193) ​ $ (258) ​ $ 17,629 Net loss — ​ — ​ — ​ — ​ (9,751) ​ — ​ (9,751) Common stock issued, net of issuance costs 3,769,036 ​ 3 ​ 7,236 ​ — ​ — ​ — ​ 7,239 Stock compensation expense and related share issuances, net of shares withheld for payment of taxes — ​ — ​ 142 ​ — ​ — ​ — ​ 142 Balances, September 30, 2020 10,434,012 ​ $ 10 ​ $ 333,451 ​ $ — ​ $ (317,944) ​ $ (258) ​ $ 15,259 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Stock ​ ​ ​ Comprehensive ​ Accumulated ​ ​ ​ ​ ​ Nine months ended September 30, 2019 Shares Amount Paid-In Capital Income (Loss) Deficit Treasury Stock Total Balances, January 1, 2019 1,436,555 ​ $ 1 ​ $ 313,012 ​ $ (90) ​ $ (291,874) ​ $ (258) ​ $ 20,791 Net loss — ​ — ​ — ​ — ​ (7,783) ​ — ​ (7,783) Common stock issued, net of issuance costs 688,208 ​ 1 ​ 2,628 ​ — ​ — ​ — ​ 2,629 Stock compensation expense and related share issuances, net of shares withheld for the payment of taxes 393 ​ — ​ 254 ​ — ​ — ​ — ​ 254 Minimum withholding taxes on net share settlements of equity awards — ​ ​ — ​ ​ (1) ​ ​ — ​ ​ — ​ ​ — ​ ​ (1) Transfer to realized loss upon sale of available for sale securities — ​ — ​ — ​ 90 ​ — ​ — ​ ​ 90 Balances, September 30, 2019 2,125,156 ​ $ 2 ​ $ 315,893 ​ $ — ​ $ (299,657) ​ $ (258) ​ $ 15,980 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended September 30, 2019 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balances, June 30, 2019 1,658,371 ​ $ 2 ​ $ 314,179 ​ $ — ​ $ (297,823) ​ $ (258) ​ $ 16,100 Net loss — ​ — ​ — ​ — ​ (1,834) ​ — ​ (1,834) Common stock issued, net of issuance costs 466,785 ​ — ​ 1,475 ​ — ​ — ​ — ​ 1,475 Stock compensation expense and related share issuances, net of shares withheld for the payment of taxes — ​ — ​ 239 ​ — ​ — ​ — ​ 239 Balances, September 30, 2019 2,125,156 ​ $ 2 ​ $ 315,893 ​ $ — ​ $ (299,657) ​ $ (258) ​ $ 15,980 ​ ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 6 Table of Contents WESTWATER RESOURCES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) ​ ​ 1. BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements for Westwater Resources, Inc. (the “Company,” “we,” “us,” “WWR” or “Westwater”), have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The accompanying statements should be read in conjunction with the audited financial statements included in Westwater Resources, Inc.’s 2019 Annual Report on Form 10-K. In the opinion of management, all adjustments (which are of a normal, recurring nature) considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for any other period including the full year ending December 31, 2020. Significant Accounting Policies Our significant accounting policies are detailed in Note 1, Summary of Significant Accounting Policies , in the Notes to Consolidated Financial Statements within our Annual Report on Form 10-K for the year ended December 31, 2019. Recently Adopted Accounting Pronouncements In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (ASC 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement”. This update modifies the disclosure requirements for fair value measurements by removing, modifying or adding disclosures. The Company adopted this pronouncement effective January 1, 2020. The adoption of ASU 2018-13 has not had a material impact on the Company’s consolidated financial statements. Recently Issued Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, “Income Taxes - Simplifying the Accounting for Income Taxes (Topic 740)” which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 will be effective for interim and annual periods beginning after December 15, 2020. In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments”. ASU 2016-13 will change how companies account for credit losses for most financial assets and certain other instruments. For trade receivables, loans and held-to-maturity debt securities, companies will be required to estimate lifetime expected credit losses and recognize an allowance against the related instruments. For available for sale debt securities, companies will be required to recognize an allowance for credit losses rather than reducing the carrying value of the asset. The adoption of this update, if applicable, will result in earlier recognition of losses and impairments. ASU 2016-13 will be effective for interim and annual periods beginning after December 15, 2022. In November 2018, the FASB issued ASU 2018-19, “Codification Improvements to ASC 326, Financial Instruments – Credit Losses.” ASU 2016-13 introduced an expected credit loss methodology for the impairment of financial assets measured at amortized cost basis. That methodology replaces the probable, incurred loss model for those assets. ASU 2018-19 is the final version of Proposed Accounting Standards Update 2018-270, which has been deleted. Additionally, the amendments clarify that receivables arising from operating leases are not within the scope of Subtopic 326-20. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with ASC 842, Leases. ASU 2018-19 will be effective for interim and annual periods beginning after December 15, 2022. 7 Table of Contents WESTWATER RESOURCES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) ​ The Company is currently evaluating ASU 2016-13, ASU 2018-19 and ASU 2019-12 for the potential impact of adopting this guidance on its financial reporting. Cash, Cash Equivalents and Restricted Cash The following table provides a reconciliation of cash, cash equivalents and restricted cash as reported within the consolidated balance sheet that sum to the total of the same such amounts shown in the statement of cash flows. ​ ​ ​ ​ ​ ​ ​ ​ ​ As of September 30, (thousands of dollars) 2020 2019 Cash and cash equivalents ​ $ 5,480 ​ $ 716 Restricted cash included in assets held for sale (Note 8) ​ ​ 3,000 ​ ​ 3,000 Restricted cash not included in assets held for sale ​ 807 ​ 784 Cash, cash equivalents and restricted cash shown in the statement of cash flows ​ $ 9,287 ​ $ 4,500 ​ The Company’s restricted cash consists of funds held in money market accounts and used as collateral for performance obligation bonds. The funds are not available for the payment of general corporate expenses and are excluded from cash and cash equivalents. The performance obligation bonds are required for future restoration and reclamation obligations for the Company’s South Texas uranium properties. ​ 2. LIQUIDITY The Company last recorded revenues from operations in 2009. Since 2009, the Company has relied on equity financings, debt financings and asset sales to fund its operations. The Company expects to rely on debt and equity financing to fund its operations into the near future. The Company will also continue its cost reduction initiatives to identify ways to reduce its cash expenditures. In 2016, the Company began to incorporate energy-related materials into its business plan. Between 2016 and 2020 the Company obtained mineral leases in Nevada and Utah and evaluated a green-fields exploration program for lithium. In 2018, the Company acquired Alabama Graphite Corp. and its Coosa Graphite Project for the purpose of developing the only commercial sized graphite mineral deposit in the contiguous United States and production of advanced graphite products for use in batteries. In the third quarter of 2020, as further discussed below and as further discussed in Note 8, the Company made the strategic decision to focus most of its resources on its graphite business, agreeing to the sale of its uranium business and discontinuing its investment in its lithium mineral properties. As of September 30, 2020, execution of the business plan for development of the Coosa Graphite Project was underway, with the commissioning of pilot plants for processing flake graphite into battery grade graphite products. The start-up of operations for those plants is expected to commence before the end of 2020 or shortly thereafter. The Company expects the pilot plant phase to last into mid-2021. The Company will use the data generated from the pilot plant operations to inform the requirements and specifications for building a commercial sized graphite processing facility. Pursuant to the Company’s Preliminary Economic Assessment of the Coosa Graphite Project as modified, financing required for the estimated capital expenditures to construct the commercial plant is approximately $120 million. Subject to financing, the Company expects the construction phase for the commercial plant to begin in the second half of 2021 and be completed in mid-2022. The Company expects to begin generating revenues from sales of advanced graphite products from the Coosa Graphite Project in 2023. While executing on its graphite business plan, the Company has continued to fulfill its obligation to restore and reclaim its legacy uranium properties in South Texas. These activities have resulted in expenditures of approximately $3.5 million per year, and these reclamation activities are expected to continue for an additional 4-5 years before completion. The Company has provided $9.3 million in performance obligation bonds to the Texas Commission for Environment Quality as financial assurance related to its permits and licenses in South Texas, and has a recorded liability of 8 Table of Contents WESTWATER RESOURCES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) ​ approximately $6.0 million for asset retirement obligations on its balance sheet (see Note 9). In addition to its South Texas uranium operations, the Company has spent about $0.5 million to $1.0 million annually to maintain its uranium mineral property holdings in New Mexico. In furtherance of the Company’s strategic shift to graphite battery materials, on September 1, 2020 the Company entered into a Letter of Intent (“LOI”) to sell its U.S. uranium business, including its U.S. uranium exploration assets in New Mexico and idled production assets in Texas to enCore Energy Corp. (“enCore”) (see Note 8). The pending sale includes the elimination of the $9.3 million bonding liability, the elimination of the $6.0 million in asset retirement obligations, and the elimination of more than $4.0 million in annual expenditures related to reclamation and compliance costs at the Company’s Kingsville, Vasquez, and Rosita sites in South Texas and its New Mexico land holding costs. The Company anticipates that it will receive approximately US$2.0 million of enCore common stock and retain royalty interests on the New Mexico uranium properties as consideration for the sale. This transaction is expected to close on or before December 31, 2020. The Company will retain its uranium interests in Turkey, which are subject to ongoing international arbitration proceeding. The Company’s strategic shift to focus solely on its graphite business also resulted in its decision not to renew its lithium mineral leases in Nevada and Utah when the annual rentals of approximately $0.2 million came due in late August 2020. ​ At September 30, 2020 the Company’s cash balances were $5.5 million. During the month of October 2020, the Company sold 8.5 million shares of common stock for net proceeds of $50.2 million pursuant to its Controlled Equity Offering SM Sales Agreement with Cantor Fitzgerald & Co. (“Cantor”) and its Purchase Agreement with Lincoln Park Capital LLC (“Lincoln Park”) (see Note 17). The funding provided by these financing facilities has resulted in a cash balance of approximately $53.3 million at October 31, 2020. Management believes the significant treasury balance has mitigated the Company’s capital risk through 2021 as the Company’s 2021 non-discretionary budget, budgeted graphite pilot plant program and the remaining budgeted product development initiatives are now fully funded. The Company is pursuing project financing to support primary funding of the capital expenditures for construction of the commercial plant set to occur in the second half of 2021. ​ Management believes the Company’s current cash balance is sufficient to fund its planned non-discretionary expenditures through 2022. In addition to pursuing other project financing, the Company is evaluating the renewal of the Cantor and Lincoln Park financing facilities for use in funding any required contributions by the Company to support project financing for construction of the commercial graphite facility. While the Company has been successful in the past in raising funds through equity and debt financings as well as through the sale of non-core assets, no assurance can be given that additional financing will be available to it in amounts sufficient to meet its needs, or on terms acceptable to the Company. Stock price volatility and uncertain economic conditions caused by the COVID-19 pandemic could significantly impact the Company’s ability to raise funds through equity financing. In the event funds are not available for project financing to complete construction of the commercial facility in 2022, the Company will be able to fund its non-discretionary expenditures, however, the Company may be required to change our planned business strategies. ​ 3. NOTES RECEIVABLE Laramide Note Receivable As part of the consideration for the sale of Hydro Resources, Inc. (HRI) in January 2017, the Company received a promissory note in the amount of $5.0 million, secured by a mortgage over the Churchrock and Crownpoint properties owned by Laramide Resources Ltd. (“Laramide”). The note had a three-year term and carried an initial interest rate of 5%. The Company received the first two installment payments of $1.5 million each in January 2018 and January 2019. The final principal payment of $2.0 million was due and payable on January 5, 2020. Interest was payable on a quarterly basis during the final year. Laramide had the right to satisfy up to half of the principal payments by delivering shares of its common stock to the Company, which shares were valued by reference to the volume weighted average price (“VWAP”) for Laramide’s common stock for the 20 trading days before their respective anniversaries of the initial issuance date in 9 Table of Contents WESTWATER RESOURCES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) ​ January. The fair value of this note receivable was determined using the present value of the future cash receipts discounted at a market rate of 9.5%. On August 30, 2019, the Company sold the promissory note (Note 4). Prior to August 30, 2019, the Company had received three tranches of Laramide common shares as partial consideration for the sale, which had resulted in the receipt of 2,218,133, 1,982,483 and 2,483,034 Laramide common shares in January 2017, January 2018 and January 2019, respectively. These share payments represented the initial consideration from the January 2017 sale of HRI and two note installments in January 2018 and January 2019. The first note installment in the amount of $1.5 million in January 2018, consisted of $750,000 in cash and the issuance of 1,982,483 of Laramide’s common shares. The second note installment in the amount of $1.5 million in January 2019, consisted of $750,000 in cash and the issuance of 2,483,034 of Laramide’s common shares. Additionally, Laramide made interest payments in the amount of $96,022 in cash during the year ending December 31, 2019. On March 25, 2019, the Company sold the third tranche of 2,483,034 Laramide common shares and 2,218,133 Laramide warrants resulting in net proceeds of $0.5 million and a net loss on sale of marketable securities of $0.7 million. ​ 4. SALE OF URANIUM ASSETS On March 5, 2019, the Company entered into an Asset Purchase Agreement with Uranium Royalty (USA) Corp. and Uranium Royalty Corp. (together “URC”) for the sale of four of its royalty interests on future uranium production from mineral properties located in South Dakota, Wyoming and New Mexico, as well as the remaining amount of the Laramide promissory note in the amount of $2.0 million as discussed in Note 3 above, for $2.75 million, including $0.5 million paid at signing. On June 28, 2019, Westwater and URC entered into an Amendment to the Asset Purchase Agreement. The Amendment extended the date for closing from July 31, 2019 to August 30, 2019. URC delivered an additional $1.0 million as deposit to the Company upon signing the Amendment. The transaction closed on August 30, 2019 at which time the Company transferred ownership of the royalties and promissory note in exchange for the final payment of $1.25 million. The sale of these uranium assets was accounted for as an asset disposal. The Company recorded a net gain of $0.7 million on disposal of uranium assets on its Consolidated Statements of Operations for the nine months ended September 30, 2019. At September 30, 2020, the gain has been reclassified to discontinued operations, which are reported as a separate component of Net Income/Loss for the prior periods on the Statement of Operations (see Note 8). ​ ​ ​ ​ URC Transaction ​ ​ (thousands of dollars) ​ ​ ​ Total cash consideration received, net of transaction costs ​ $ 2,470 Carrying value of promissory note ​ ​ (1,741) Carrying value of royalty interests ​ ​ — Gain on disposal of uranium assets ​ $ 729 ​ A discussion on the Company’s current efforts to sell its remaining U.S. uranium business, including its uranium exploration assets in New Mexico and idled production assets in Texas to enCore Energy (see Note 8). ​ ​ 5. FINANCIAL INSTRUMENTS Applicable accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price) and establishes 10 Table of Contents WESTWATER RESOURCES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) ​ a fair-value hierarchy that prioritizes the inputs used to measure fair value using the following definitions (from highest to lowest priority): ● Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that are observable at the measurement date. ● Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs). ● Level 3 includes unobservable inputs that reflect management’s assumptions about what factors market participants would use in pricing the asset or liability. These inputs are developed based on the best information available, including internal data. The Company believes that the fair value of its assets and liabilities approximates their reported carrying amounts. The following table presents information about assets that were recorded at fair value on a recurring and non-recurring basis as of September 30, 2020 and December 31, 2019 and indicates the fair value hierarchy. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2020 (thousands of dollars) Level 1 Level 2 Level 3 Total Current Assets ​ ​ ​ ​ Restricted cash included in assets held for sale ​ ​ 3,000 ​ ​ — ​ ​ — ​ ​ 3,000 Total current assets recorded at fair value ​ $ 3,000 ​ $ — ​ $ — ​ $ 3,000 Non-current Assets ​ ​ ​ Restricted cash not included in assets held for sale ​ $ 807 ​ $ — ​ $ — ​ $ 807 Total non-current assets recorded at fair value ​ $ 807 ​ $ — ​ $ — ​ $ 807 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2019 (thousands of dollars) Level 1 Level 2 Level 3 Total Non-current Assets ​ ​ ​ ​ Restricted cash included in assets held for sale ​ $ 3,000 ​ $ — ​ $ — ​ $ 3,000 Restricted cash not included in assets held for sale ​ ​ 797 ​ ​ — ​ ​ — ​ ​ 797 Total non-current assets recorded at fair value ​ $ 3,797 ​ $ — ​ $ — ​ $ 3,797 ​ Assets that are measured on a recurring basis include the Company’s marketable securities and restricted cash. ​ 6. PROPERTY, PLANT AND EQUIPMENT ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Book Value of Property, Plant and Equipment at September 30, 2020 (thousands of dollars) Texas Alabama New Mexico ​ Corporate Total Uranium plant ​ ​ $ 1,855 ​ $ 0 ​ $ - ​ $ - ​ $ 1,855 Mineral rights and properties ​ ​ - ​ ​ 8,972 ​ 3,900 ​ ​ - ​ ​ 12,872 Other property, plant and equipment ​ ​ 452 ​ - ​ - ​ 24 ​ 476 Total Property, Plant and Equipment ​ ​ $ 2,307 ​ $ 8,972 ​ $ 3,900 ​ $ 24 ​ $ 15,203 Property, Plant and Equipment included in assets held for sale ​ ​ ​ 2,307 ​ ​ - ​ ​ 3,900 ​ ​ - ​ ​ 6,207 Property, Plant and Equipment from Continuing Operations ​ ​ $ - ​ $ 8,972 ​ $ - ​ $ 24 ​ $ 8,996 ​ ​ ​ 11 Table of Contents WESTWATER RESOURCES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Book Value of Property, Plant and Equipment at December 31, 2019 (thousands of dollars) Texas Alabama New Mexico ​ Corporate Total Uranium plant ​ ​ $ 3,112 ​ $ - ​ $ - ​ $ - ​ $ 3,112 Mineral rights and properties ​ ​ - ​ ​ 8,972 ​ 7,806 ​ ​ - ​ ​ 16,778 Other property, plant and equipment ​ ​ 424 ​ - ​ - ​ 23 ​ 447 Total Property, Plant and Equipment ​ ​ $ 3,536 ​ $ 8,972 ​ $ 7,806 ​ $ 23 ​ $ 20,337 Property, Plant and Equipment included in assets held for sale ​ ​ ​ 3,536 ​ ​ - ​ ​ 7,806 ​ ​ - ​ ​ 11,342 Property, Plant and Equipment from Continuing Operations ​ ​ $ - ​ $ 8,972 ​ $ - ​ $ 23 ​ $ 8,995 ​ Included in the Property, Plant and Equipment tables above are the long-lived assets related to the Company’s uranium business, which are reported in discontinued operations (see Note 8). ​ Impairment of Property, Plant and Equipment ​ The Company reviews and evaluates its long-lived assets for impairment on an annual basis or more frequently when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. As discussed in Note 8, the Company has entered into a binding LOI to sell its uranium business. The proposed terms of the transaction are an indicator of impairment of the Company’s long-lived uranium property, plant and equipment. For purposes of determining the amount of impairment, the Company has estimated that a loss in the amount of $5.2 million will be recorded upon closing of the proposed transaction using the September 30, 2020 carrying values of the uranium assets and liabilities included in the transaction plus estimated costs to close the transaction. ​ As discussed in Note 8, at September 30, 2020, property, plant and equipment related to the Company’s U.S. uranium business in Texas and New Mexico, net of the $5.2 million impairment charge, have been reclassified to Held for Sale on the Condensed Consolidated Balance Sheet. Balances for prior year periods have also been reclassified. The $5.2 million impairment charge is included in discontinued operations on the Condensed Consolidated Statement of Operations for the period ended September 30, 2020. ​ 12 Table of Contents WESTWATER RESOURCES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) ​ 7. MINERAL PROPERTY EXPENDITURES Mineral property expenditures by geographical location for the three and nine months ended September 30, 2020 and 2019 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended September 30, ​ For the Nine Months Ended September 30, ​ 2020 2019 2020 2019 ​ ​ (thousands of dollars) Kingsville Dome project, Texas ​ $ 291 ​ $ 203 ​ $ 735 ​ $ 592 Rosita project, Texas ​ 158 ​ 237 ​ 371 ​ 455 Vasquez project, Texas ​ ​ 95 ​ 85 ​ 456 ​ 397 Other projects, Texas ​ 17 ​ 5 ​ 20 ​ (4) Total Texas projects ​ 561 ​ 530 ​ 1,582 ​ 1,440 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cebolleta project, New Mexico ​ ​ 150 ​ ​ — ​ ​ 291 ​ ​ 440 Juan Tafoya project, New Mexico ​ ​ 41 ​ ​ 40 ​ ​ 50 ​ ​ 49 West Largo ​ ​ — ​ ​ 13 ​ ​ — ​ ​ 13 Total New Mexico projects ​ ​ 191 ​ ​ 53 ​ ​ 341 ​ ​ 502 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Columbus Basin project, Nevada ​ ​ — ​ ​ 126 ​ ​ — ​ ​ 127 Other projects, Nevada ​ ​ — ​ ​ — ​ ​ — ​ ​ — Total Nevada projects ​ ​ — ​ ​ 126 ​ ​ — ​ ​ 127 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sal Rica project, Utah ​ ​ — ​ ​ 111 ​ ​ 1 ​ ​ 112 Total Utah projects ​ ​ — ​ ​ 111 ​ ​ 1 ​ ​ 112 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Coosa project, Alabama ​ ​ 12 ​ ​ 12 ​ ​ 18 ​ ​ 77 Bama project, Alabama ​ ​ — ​ ​ — ​ ​ — ​ ​ — Total Alabama projects ​ 12 ​ 12 ​ 18 ​ 77 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total expense for the period ​ $ 764 ​ $ 832 ​ $ 1,942 ​ $ 2,258 (Less) Mineral Property expenses attributable to Discontinued Operations ​ ​ (752) ​ ​ (820) ​ ​ (1,924) ​ ​ (2,181) Mineral Property expenses for Continued Operations ​ $ 12 ​ $ 12 ​ $ 18 ​ $ 77 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Included in the table above are mineral property expenses related to the Company’s discontinued U.S. uranium and lithium operations (see Note 8). For the nine months ended September 30, 2020 and 2019, $1.9 million was spent on mineral property expenses for the Company’s uranium properties in Texas and New Mexico. Expenditures included land-holding and maintenance, reclamation activities and standby costs. The Company also spent $0.2 million during the third quarter of 2019 for claim maintenance, permits and fees on its lithium holdings in Utah and Nevada acquired in 2016. These costs are included in the net loss from discontinued operations on the Condensed Consolidated Statements of Operations. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 8. DISCONTINUED OPERATIONS In the third quarter of 2020, the Company made the strategic decision to focus most of its resources on its graphite business, agreeing to the sale of its uranium business as further discussed below, and discontinuing its investment in its lithium business. The Company’s lithium business included mineral leases and water rights in Nevada and Utah. The Company elected not to renew the annual lease rentals on the mineral properties, which also voids the water rights. On September 1, 2020, the Company signed a binding LOI to sell its U.S. uranium assets located in New Mexico and Texas to enCore Energy Corp., a corporation incorporated under the laws of British Columbia, Canada. The proposed transaction with enCore will be structured as a direct share purchase in which enCore acquires all issued and outstanding 13 Table of Contents WESTWATER RESOURCES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) ​ equity securities of Westwater’s wholly-owned uranium subsidiaries, URI Inc., Neutron Energy Inc., and Uranco, Inc., as well as related subsidiaries, HRI-Churchrock, Inc., Hydro Restoration Corp., Belt Line Resources, Inc., and Uranium Resources, Inc. (f/k/a URI Minerals, Inc.). Westwater expects to receive enCore shares valued at approximately $2.0 million and retain royalties from future production from the New Mexico uranium properties. As part of the proposed transaction, enCore will receive $3.0 million of cash collateral currently pledged against reclamation performance obligation bonds totaling approximately $9.3 million upon the successful replacement of those performance obligation bonds. EnCore will also assume other liabilities related to the uranium properties including asset retirement obligations and outstanding royalties payable. The sale is expected to close on or before December 31, 2020. The Company considers assets to be held for sale when management approves and commits to a formal plan to actively market the assets for sale at a price reasonable in relation to fair value, the asset is available for immediate sale in its present condition, an active program to locate a buyer and other actions required to complete the sale have been initiated, the sale of the asset is expected to be completed within one year and it is unlikely that significant changes will be made to the plan. Management has concluded that the sale of its U.S. uranium assets to enCore meets these criteria. As a result, the assets and liabilities in the disposal group are classified as held for sale for all periods presented on the Condensed Consolidated Balance Sheet as of September 30, 2020. This divestiture will allow the Company to devote most of its available resources to the development of high-performance battery graphite. This transaction represents a major strategic shift for Westwater and is expected to significantly affect current and future operations and financial results. Due to this shift, the Company’s uranium segment has been classified as a discontinued operation and is reported separately from continuing operations on the Condensed Consolidated Statement of Operations for all periods presented. The carrying amounts of the major classes of assets and liabilities related to the Company’s discontinued uranium and lithium operations and classified as held for sale as of September 30, 2020 and December 31, 2019 were as follows: ​ 14 Table of Contents WESTWATER RESOURCES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ September 30, December 31, ​ 2020 ​ 2019 (thousands of dollars) ​ ​ Restricted Cash $ 3,000 $ — Prepaid and other current assets 89 151 Net property, plant and equipment ​ 6,207 ​ ​ — Operating lease right-of-use assets ​ 10 ​ ​ — Current Assets Held for Sale 9,306 151 ​ ​ ​ ​ ​ ​ Net property, plant and equipment — 11,342 Operating lease right-of-use assets — 14 Restricted cash — 3,000 Assets Held for Sale, non-current ​ — ​ 14,356 ​ ​ ​ ​ ​ ​ Total Assets Held for Sale $ 9,306 ​ $ 14,507 ​ Accounts payable $ 140 $ 25 Accrued liabilities 808 776 Asset retirement obligations - current 5,969 894 Operating lease liability - current 10 6 Notes payable - current ​ 331 ​ ​ — Other current liabilities ​ 500 ​ ​ — Current Liabilities Held for Sale 7,758 1,701 ​ ​ ​ ​ ​ ​ Asset retirement obligations, net of current — 5,406 Operating lease liability, net of current — 8 Other long-term liabilities — 500 Liabilities Held for Sale, non-current — 5,914 ​ ​ ​ ​ ​ ​ Total Liabilities Held for Sale $ 7,758 ​ $ 7,615 ​ The results of the Company’s uranium and lithium business segments included in discontinued operations for the three and nine months ended September 30, 2020 and 2019 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended ​ For the Nine Months Ended ​ ​ ​ September 30, ​ September 30, ​ (thousands of dollars) 2020 2019 2020 2019 Mineral property expenses $ (752) $ (820) ​ $ (1,924) $ (2,181) ​ General and administrative expenses (405) (356) ​ (1,273) (1,181) ​ Accretion of asset retirement obligations (32) (197) ​ (170) (353) ​ Depreciation and amortization (30) (20) ​ (36) (66) ​ Impairment of uranium properties ​ ​ (5,200) ​ ​ — ​ ​ (5,200) ​ ​ — ​ Gain on disposal of uranium assets ​ ​ — ​ ​ 729 ​ ​ — ​ ​ 729 ​ Other income (expense) 30 — ​ 30 — ​ Net Loss from Discontinued Operations $ (6,389) $ (664) ​ $ (8,573) $ (3,052) ​ ​ Our cash flow information for 2020 and 2019 included the following activities related to discontinued operations: 15 Table of Contents WESTWATER RESOURCES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended ​ For the Nine Months Ended ​ September 30, ​ September 30, ​ ​ 2020 ​ 2019 ​ 2020 ​ 2019 (thousands of dollars) ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization $ 30 $ 20 ​ $ 36 $ 66 Capital Expenditures ​ - ​ - ​ ​ (101) ​ - Accretion of asset retirement obligations ​ 32 ​ 197 ​ ​ 170 ​ 353 Impairment of uranium properties ​ 5,200 ​ - ​ ​ 5,200 ​ - ​ ​ ​ 9. ASSET RETIREMENT OBLIGATIONS (“ARO”) The following table summarizes the changes in the reserve for future restoration and reclamation costs on the balance sheet: ​ ​ ​ ​ ​ ​ ​ ​ September 30, December 31, (thousands of dollars) ​ 2020 ​ 2019 Balance, beginning of period ​ $ 6,300 ​ $ 6,203 Liabilities settled ​ (501) ​ (293) Accretion expense ​ 170 ​ 390 Balance, end of period ​ 5,969 ​ 6,300 Less: ARO included in current liabilities held for sale ​ ​ (5,969) ​ ​ (894) ARO included in liabilities held for sale, non-current ​ $ — ​ $ 5,406 ​ Asset retirement obligations primarily consist of estimated reclamation costs for the Company’s ISR projects in South Texas. These obligations are fully secured by performance obligation bonds totaling approximately $9.3 million and partially collateralized by $3.8 million in restricted cash. In early September 2020, Westwater entered into an agreement with enCore Energy Corp to sell its U.S. uranium assets, including those properties in Texas that are subject to the restoration obligations above (see Note 8). These assets and related liabilities were classified as held for sale during the current period and are reported on the Company’s Condensed Consolidated Balance Sheet. The sale is expected to close by year-end 2020, at which time all bonding obligations and nearly $6.0 million in reclamation liabilities will be transferred to enCore. Until the transaction closes, the Company will continue to perform plugging and surface reclamation activities at its Rosita and Vasquez projects located in Duval County, Texas. ​ 10. COMMON STOCK Common Stock Issued, Net of Issuance Costs 2020 Purchase Agreement with Lincoln Park On May 21, 2020, the Company entered into a Purchase Agreement with Lincoln Park, as amended on May 29, 2020 (the “2020 Purchase Agreement”), to place up to $12.0 million in the aggregate of the Company’s common stock on an ongoing basis when required by the Company over a term of 24 months. At the Annual Shareholders Meeting conducted on April 28, 2020, the Company received shareholder approval to sell up to 8.0 million shares of common stock under the 2020 Purchase Agreement. As an initial purchase on May 21, 2020, Lincoln Park bought $250,000 worth of Common Stock of the Company at a price of $1.2989 per share. The Company issued 156,250 shares of Common Stock to Lincoln Park as consideration for its commitment to purchase shares of Common Stock under the 2020 Purchase Agreement. On May 21, 2020, the Company entered into a registration rights agreement with Lincoln Park pursuant to which the Company filed a registration statement on Form S-1 with the Securities and Exchange Commission, which was declared effective on June 26, 2020 relating to the resale of an initial tranche of 1.97 million shares subject to the 2020 Purchase Agreement. As of September 30, 2020, the Company had sold 1.8 shares of common stock for gross proceeds of 16 Table of Contents WESTWATER RESOURCES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) ​ $3.8 million, of which 1.6 million shares of common stock and gross proceeds of $3.5 million was sold in the three months ended September 30, 2020. The Company filed a second registration statement on Form S-1 relating to the resale of 3.2 million shares which was declared effective on October 2, 2020, and sold 1.1 million shares for gross proceeds of $8.2 million in October 2020. With the October 2020 sales, the $12.0 million sales capacity of the 2020 Purchase Agreement has been reached. 2019 Purchase Agreement (“2019 Purchase Agreement”) with Lincoln Park On June 6, 2019, the Company entered into the 2019 Purchase Agreement with Lincoln Park to place up to $10.0 million in the aggregate of the Company’s common stock on an ongoing basis when required by the Company over a term of 24 months. On August 6, 2019 the Company conducted a Special Meeting of Shareholders whereby the Company received such approval to sell up to 3.2 million shares of common stock under the 2019 Purchase Agreement. Following effectiveness of a registration statement on Form S-1 relating to the resale of the shares subject to the 2019 Purchase Agreement on June 18, 2019, the Company began selling shares of its common stock to Lincoln Park under the terms of the 2019 Purchase Agreement. On September 11, 2019, October 28, 2019 and February 28, 2020 the Company filed subsequent registration statements on Form S-1, which were declared effective on September 20, 2019, November 7, 2019 and March 6, 2020, respectively, registering for resale additional shares under the 2019 Purchase Agreement. During the quarter ended June 30, 2020 the Company sold 623,236 shares of common stock for gross proceeds of $593,356. The 2019 Purchase Agreement was terminated in May 2020 with historical sales of 3.2 million shares of common stock for gross proceeds of $7.7 million. Securities Purchase Agreement with Lincoln Park On May 24, 2019, Westwater entered into a Securities Purchase Agreement, as amended by Amendment No. 1 thereto dated as of May 30, 2019, with Lincoln Park, pursuant to which the Company agreed to issue and sell to Lincoln Park, and Lincoln Park agreed to purchase from the Company (i) 104,294 shares of the Company's common stock and (ii) warrants to initially purchase an aggregate of up to 182,515 shares of common stock, at an exercise price of $5.062 per share. On May 30, 2019, the Company issued and sold the common shares and the warrants to Lincoln Park and received aggregate gross proceeds before expenses of $550,751. The warrants became exercisable on November 30, 2019 and were exercised on October 6, 2020. ATM Offering Agreement with Cantor On April 14, 2017, the Company entered into a Controlled Equity Offering Sales Agreement (the “ATM Offering Agreement”) with Cantor acting as sales agent. Under the ATM Offering Agreement, the Company may from time to time sell shares of its common stock in “at-the-market” offerings. The Company pays Cantor a commission of up to 2.5% of the gross proceeds from the sale of any shares pursuant to the ATM Offering Agreement. As of September 30, 2020, the Company had sold 4.1 million shares of common stock for net proceeds of $13.9 million under the ATM Offering Agreement, of which 2.1 million shares of common stock for net proceeds of $3.7 million were sold in the three months ended September 30, 2020. During the month of October 2020, the Company registered and sold 7.3 million shares of common stock for net proceeds of $42.0 million under the ATM Offering Agreement. As of November 12, 2020, the Company has no shares of common stock registered for sale under the ATM Offering Agreement. ​ Warrants The following table summarizes warrants outstanding and changes for the three-month periods ending September 30, 2020 and 2019: 17 Table of Contents WESTWATER RESOURCES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2020 ​ September 30, 2019 ​ ​ ​ ​ ​ Number of ​ Number of ​ ​ Warrants ​ Warrants Warrants outstanding at beginning of period 186,182 197,621 Issued — — Expired — — Warrants outstanding at end of period ​ 186,182 197,621 ​ ​ ​ ​ ​ On October 6, 2020, Lincoln Park provided notice of its exercise of 182,515 warrants. Lincoln Park elected the cashless exercise method to convert the warrants to shares of common stock. Based on the cashless exercise formula, the Company issued Lincoln Park 118,799 shares of common stock. ​ ​ 11. STOCK-BASED COMPENSATION Stock-based compensation awards consist of stock options, restricted stock units and bonus shares issued under the Company’s equity incentive plans which include: the 2013 Omnibus Incentive Plan (the “2013 Plan”) and the Amended and Restated 2004 Directors’ Stock Option and Restricted Stock Plan (the “2004 Directors’ Plan”). Upon approval of the 2013 Plan by the Company’s stockholders on June 4, 2013, the Company’s authority to grant new awards under all plans other than the 2013 Plan was terminated. On July 18, 2017, April 18, 2019 and April 28, 2020, the Company’s stockholders approved amendments to the 2013 Plan to increase the authorized number of shares of common stock available and reserved for issuance under the 2013 Plan by 20,000 shares, 66,000 and 350,000 shares, respectively and in 2017 re-approved the material terms of the performance goals under the plan. Under the 2013 Plan, the Company may grant awards of stock options, stock appreciation rights, restricted stock awards, restricted stock units (“RSUs”), unrestricted stock, dividend equivalent rights, performance shares and other performance-based awards, other equity-based awards and cash bonus awards to eligible persons. The maximum number of the Company’s common stock that may be reserved for issuance under the 2013 Plan is currently 416,278 shares of common stock, plus unissued shares under the prior plans. Equity awards under the 2013 Plan are granted from time to time at the discretion of the Compensation Committee of the Board (the “Committee”), with vesting periods and other terms as determined by the Committee with a maximum term of 10 years. The 2013 Plan is administered by the Committee, which can delegate the administration to the Board, other Committees or to such other officers and employees of the Company as designated by the Committee and permitted by the 2013 Plan. As of September 30, 2020, 58,586 shares were available for future issuances under the 2013 Plan. For the nine months ending September 30, 2020 and 2019, the Company recorded stock-based compensation expense of $169,700 and $255,000, respectively. Stock compensation expense is recorded in general and administrative expenses. In addition to the plans above, upon closing of the Company’s acquisition of Alabama Graphite in April 2018, the Company issued 50,168 replacement options and warrants to the option and warrant holders of Alabama Graphite. The number of replacement options and warrants shares was determined using the arrangement exchange rate of 0.0016. The exercise prices for the option and warrant shares were first converted for the exchange rate of 0.0016 and then converted to USD using the exchange rate on December 13, 2017 of 0.77809 (CAD to USD). The options and warrant shares were issued with the same terms and conditions as were applicable prior to the acquisition of Alabama Graphite. As of September 30, 2020, there were 2,840 replacement options outstanding but all replacement warrants have expired. 18 Table of Contents WESTWATER RESOURCES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) ​ Stock Options The following tables summarize stock options outstanding and changes for the three and nine-month periods ending September 30, 2020 and 2019: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ Three months ended ​ ​ September 30, 2020 ​ September 30, 2019 ​ ​ Weighted ​ Weighted ​ ​ Number of ​ Average ​ Number of ​ Average ​ ​ Stock ​ Exercise ​ Stock ​ Exercise ​ ​ Options ​ Price ​ Options ​ Price Stock options outstanding at beginning of period 161,897 ​ $ 9.25 18,546 ​ $ 64.49 Granted — ​ — 20,942 ​ 19.25 Expired — ​ — (1,040) ​ 78.00 Canceled or forfeited ​ — ​ ​ — ​ (550) ​ ​ 19.25 Stock options outstanding at end of period 161,897 ​ $ 9.25 37,898 ​ $ 39.78 Stock options exercisable at end of period 36,093 ​ $ 34.41 37,898 ​ $ 39.78 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine months ended ​ Nine months ended ​ ​ September 30, 2020 ​ September 30, 2019 ​ ​ Weighted ​ Weighted ​ ​ Number of ​ Average ​ Number of ​ Average ​ ​ Stock ​ Exercise ​ Stock ​ Exercise ​ ​ Options ​ Price ​ Options ​ Price Stock options outstanding at beginning of period 37,786 ​ $ 37.42 19,170 ​ $ 80.00 Granted 125,804 ​ 1.59 20,942 ​ 19.25 Expired (1,693) ​ ​ 101.64 (1,664) ​ 78.00 Canceled or forfeited ​ — ​ ​ — ​ (550) ​ ​ 19.25 Stock options outstanding at end of period 161,897 ​ $ 9.25 37,898 ​ $ 39.78 Stock options exercisable at end of period 36,093 ​ $ 34.41 37,898 ​ $ 39.78 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table summarizes stock options outstanding and exercisable by stock option plan at September 30, 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding Stock Options ​ Exercisable Stock Options ​ Number of Weighted Number of Weighted ​ ​ Outstanding ​ Average ​ Stock Options ​ Average Stock Option Plan ​ Stock Options ​ Exercise Price ​ Exercisable ​ Exercise Price 2004 Plan 92 ​ $ 1,638.00 92 ​ $ 1,638.00 2004 Directors’ Plan 3 ​ 10,380.00 3 ​ 10,380.00 2013 Plan 158,962 ​ 6.92 33,158 ​ 25.47 Replacement Options-Alabama Graphite 2,840 ​ 75.94 2,840 ​ 75.94 ​ 161,897 ​ $ 9.25 36,093 ​ $ 34.41 ​ 19 Table of Contents WESTWATER RESOURCES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) ​ Restricted Stock Units Time-based and performance-based RSUs are valued using the closing share price of the Company’s common stock on the date of grant. The final number of shares issued under performance-based RSUs is generally based on the Company’s prior year performance as determined by the Compensation Committee of the Board of Directors at each vesting date, and the valuation of such awards assumes full satisfaction of all performance criteria. The following tables summarizes RSU activity for the three and nine-month periods ended September 30, 2020 and 2019: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ Three months ended ​ ​ September 30, ​ September 30, ​ ​ 2020 ​ 2019 ​ ​ Weighted- ​ Weighted- ​ ​ ​ ​ Average ​ ​ ​ Average ​ ​ Number of ​ Grant Date ​ Number of ​ Grant Date ​ ​ RSUs ​ Fair Value ​ RSUs ​ Fair Value Unvested RSUs at beginning of period 211,497 ​ $ 2.03 1,695 ​ $ 70.00 Granted — ​ — — ​ — Forfeited — ​ — — ​ — Vested — ​ — — ​ — Unvested RSUs at end of period 211,497 ​ $ 2.03 1,695 ​ $ 70.00 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine months ended ​ Nine months ended ​ ​ September 30, ​ September 30, ​ ​ 2020 ​ 2019 ​ ​ Weighted- ​ Weighted- ​ ​ ​ ​ Average ​ ​ ​ Average ​ ​ Number of ​ Grant Date ​ Number of ​ Grant Date ​ ​ RSUs ​ Fair Value ​ RSUs ​ Fair Value Unvested RSUs at beginning of period — ​ $ — 2,260 ​ $ 70.00 Granted 211,497 ​ 2.03 — ​ — Forfeited — ​ — (565) ​ 70.00 Vested — ​ — — ​ — Unvested RSUs at end of period 211,497 ​ $ 2.03 1,695 ​ $ 70.00 ​ ​ 12. EARNINGS PER SHARE Basic and diluted loss per common share have been calculated based on the weighted-average shares outstanding during the period. Additionally, potentially dilutive shares of 559,576 were excluded from the calculation of earnings per share because the effect on the basic income per share would be anti-dilutive for the nine months ended September 30, 2020. ​ 13. COMMITMENTS AND CONTINGENCIES The Company’s uranium recovery operations are subject to federal and state regulations for the protection of the environment, including water quality. Future closure and reclamation costs are provided for as each pound of uranium is produced on a unit-of-production basis. The Company reviews its reclamation obligations each year and determines the appropriate unit charge. The Company also evaluates the status of current environmental laws and their potential impact on their accrual for costs. The Company believes its operations are materially compliant with current environmental regulations. 20 Table of Contents WESTWATER RESOURCES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) ​ At any given time, the Company may enter into negotiations to settle outstanding legal proceedings and any resulting accruals will be estimated based on the relevant facts and circumstances applicable at that time. We do not expect that such settlements will, individually or in the aggregate, have a material effect on our financial position, results of operations or cash flows. ​ 14. LEASES The Company’s lease portfolio consists of operating leases for corporate offices, storage space and equipment. The leases have remaining lease terms of 3 months to 3 years, one of which includes an option to extend the corporate office lease for 3 years. Under our corporate office lease, we are required to reimburse the lessor each month for common use expenses such as maintenance and security services. Because these amounts are variable from year to year and not specifically set in the lease terms, they are not included in the measurement of the right-of-use asset and related lease liability, but rather expensed in the period incurred. The Company is party to several leases that are for under one year in length. These include such leases as those for land used in exploration and mining activities, office equipment, machinery, office space, storage and other. The Company has elected the short-term lease exemptions allowed under the new leasing standards, whereby leases with initial terms of one year or less are not capitalized and instead expensed on a straight-line basis over the lease term. In addition, the Company holds numerous leases related to mineral exploration and production to which it has not applied the new leasing standard. Leases to explore or use minerals and similar nonregenerative resources are specifically excluded by ASC 842-10. The right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term using a discount rate of 9.5%. This rate is the Company’s current estimated incremental borrowing rate. The components of lease expense are as follows: ​ ​ ​ ​ ​ ​ ​ ​ Nine months ​ Nine months ​ ​ ended ​ ended ​ ​ ​ September 30, ​ ​ September 30, (thousands of dollars) ​ 2020 ​ 2019 Operating Lease Cost ​ ​ ​ ​ ​ ​ Continuing Operations ​ $ 112 ​ $ 112 Discontinued Operations ​ ​ 4 ​ ​ 4 ​ ​ $ 116 ​ $ 116 ​ Supplemental cash flow information related to the Company’s operating leases is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine months ​ Nine months ​ ​ ​ ended ​ ended ​ ​ September 30, 2020 ​ September 30, 2019 (thousands of dollars) ​ Continuing Operations ​ Discontinued Operations ​ Continuing Operations ​ Discontinued Operations Cash paid for amounts included in lease liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from operating leases ​ $ 115 $ 4 $ 113 $ 4 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Right-of-use assets obtained in exchange for lease obligations: ​ ​ ​ ​ ​ Operating leases ​ $ 383 $ 10 $ 498 $ 15 ​ 21 Table of Contents WESTWATER RESOURCES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) ​ Supplemental balance sheet information related to the Company’s operating leases is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ ​ 2020 ​ 2019 (thousands of dollars, except lease term and discount rate) ​ Continuing Operations ​ Discontinued Operations ​ ​ Continuing Operations ​ Discontinued Operations Operating Leases ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating lease right-of-use assets ​ $ 383 ​ $ 10 ​ $ 470 ​ $ 14 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current portion of lease liabilities ​ ​ 149 ​ ​ 10 ​ ​ 147 ​ ​ 6 Operating lease liabilities – long term portion ​ ​ 245 ​ ​ — ​ ​ 332 ​ ​ 8 Total operating lease liabilities ​ $ 394 ​ $ 10 ​ $ 479 ​ $ 14 ​ ​ Weighted-average remaining lease term and discount rate for the Company’s operating leases are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ September 30, ​ ​ ​ 2020 ​ 2019 Weighted Average Remaining Lease Term (in years) ​ 3.0 ​ ​ 4.0 ​ ​ ​ ​ ​ ​ ​ ​ ​ Discount Rate ​ 9.5 % ​ 9.5 % ​ ​ Maturities of lease liabilities for the Company’s operating leases are as follows: ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ ​ 2020 Lease payments by year (In thousands) ​ ​ Continuing Operations ​ Discontinued Operations 2020 (remainder of year ) ​ $ 38 $ 2 2021 ​ 155 ​ 6 2022 ​ 158 ​ 4 2023 ​ 92 ​ — Total lease payments ​ 443 ​ 12 Less imputed interest ​ (49) ​ (2) Total Operating Lease Liability ​ $ 394 $ 10 ​ ​ As of September 30, 2020, the Company has $0.4 million in right-of-use assets and $0.4 million in related lease liabilities ($0.1 million of which is current). The most significant operating lease is for its corporate office in Centennial, Colorado, with $0.4 million remaining in undiscounted cash payments through the end of the lease term in 2023. The total undiscounted cash payments remaining on operating leases through the end of their respective terms is $0.4 million. ​ All but one operating lease are part of the company’s Continuing Operations. In May 2017 the Company’s wholly-owned subsidiary, URI, Inc. entered into an irrevocable 63 month equipment and servicing lease for a Toshiba copier used in its office in Kingsville, Texas. This lease is included in the disposal group that will be transferred to enCore in the sale of the Company’s U.S. uranium properties expected to close by year-end 2020. At September 30, 2020, there was 22 months left on the lease with a right-of-use asset balance of approximately $10,000 and a related lease liability for the same amount. These balances are included in assets held for sale and liabilities related to assets held for sale on the balance sheet. Monthly lease payments are included in the Income/Loss from Discontinued Operations. 22 Table of Contents WESTWATER RESOURCES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) ​ 15. GEOGRAPHIC AND SEGMENT INFORMATION In addition to its corporate operations, the Company currently operates a graphite battery-materials reportable segment. During the quarter ended September 30, 2020, the Company made the strategic decision to sell its uranium business and discontinue its lithium business, both of which conducted exploration, standby operations and restoration and reclamation activities (see Note 8). As a result of entering into the LOI to sell the uranium business and the Company’s decision to discontinue investment into its lithium business, the Company has reclassed all uranium and lithium business activities as discontinued operations. The reportable segments are those operations whose operating results are reviewed by the Chief Executive Officer to make decisions about resources to be allocated to the segment and assess its performance provided those operations pass certain quantitative thresholds. Operations whose revenues, earnings or losses or assets exceed or are expected to exceed 10% of the total consolidated revenue, earnings or losses or assets are reportable segments. Information about current assets and liabilities of the segments has not been provided because the information is not used to assess performance. The tables below provide a breakdown of the long-term assets by reportable segments as of September 30, 2020 and December 31, 2019: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2020 (thousands of dollars) ​ Corporate Graphite Total ​ ​ ​ ​ ​ ​ ​ ​ ​ Net property, plant and equipment ​ $ 24 ​ $ 8,972 ​ $ 8,996 Restricted cash ​ 797 ​ 10 ​ 807 Operating lease right of use assets ​ 383 ​ — ​ 383 Total long-term assets ​ $ 1,204 ​ $ 8,982 ​ $ 10,186 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2019 (thousands of dollars) ​ Corporate Graphite Total ​ ​ ​ ​ ​ ​ ​ ​ ​ Net property, plant and equipment ​ $ 23 ​ $ 8,972 ​ $ 8,995 Restricted cash ​ 787 ​ 10 ​ 797 Operating lease right of use assets ​ 470 ​ — ​ 470 Total long-term assets ​ $ 1,280 ​ $ 8,982 ​ $ 10,262 ​ ​ The tables below provide a breakdown of the reportable segments for the three months ended September 30, 2020 and September 30, 2019. Non-mining activities and other administrative operations are reported in the Corporate column. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months Ended ​ ​ September 30, 2020 (thousands of dollars) Corporate Graphite Total Statement of Operations ​ ​ ​ ​ ​ ​ Mineral property expenses ​ $ — ​ $ 12 $ 12 Product development expenses ​ ​ — ​ ​ 1,641 ​ ​ 1,641 General and administrative expenses ​ 1,347 ​ 189 1,536 Arbitration expenses ​ ​ 171 ​ ​ — ​ ​ 171 Depreciation and amortization ​ (19) ​ — (19) ​ ​ ​ 1,499 ​ ​ 1,842 ​ ​ 3,341 Loss from operations ​ (1,499) ​ (1,842) (3,341) Other income/(expense) ​ (21) ​ — (21) Loss before taxes ​ $ (1,520) ​ $ (1,842) $ (3,362) 23 Table of Contents WESTWATER RESOURCES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months Ended ​ ​ September 30, 2019 (thousands of dollars) Corporate Graphite Total Statement of Operations ​ ​ ​ Mineral property expenses ​ $ — ​ $ 12 ​ $ 12 Product development expenses ​ ​ — ​ ​ 19 ​ ​ 19 General and administrative ​ 936 ​ 67 ​ 1,003 Arbitration expenses ​ ​ 146 ​ ​ — ​ ​ 146 Depreciation and amortization ​ 3 ​ — ​ 3 ​ ​ ​ 1,085 ​ ​ 98 ​ ​ 1,183 Loss from operations ​ (1,085) ​ (98) ​ (1,183) Other income ​ 13 ​ — ​ 13 Loss before taxes ​ $ (1,072) ​ $ (98) ​ $ (1,170) ​ The tables below provide a breakdown of the reportable segments for the nine months ended September 30, 2020 and September 30, 2019. Non-mining activities and other administrative operations are reported in the Corporate column. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine months Ended ​ ​ September 30, 2020 (thousands of dollars) Corporate Graphite Total Statement of Operations ​ ​ ​ Mineral property expenses ​ $ — ​ $ 18 ​ $ 18 Product development expenses ​ ​ — ​ ​ 1,942 ​ ​ 1,942 General and administrative ​ 3,630 ​ 476 ​ 4,106 Arbitration expenses ​ ​ 868 ​ ​ — ​ ​ 868 Accretion of asset retirement costs ​ — ​ — ​ — Depreciation and amortization ​ 5 ​ — ​ 5 ​ ​ 4,503 ​ 2,436 ​ 6,939 Loss from continuing operations ​ (4,503) ​ (2,436) ​ (6,939) Other income ​ (7) ​ — ​ (7) Loss before taxes ​ $ (4,496) ​ $ (2,436) ​ $ (6,932) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine months Ended ​ ​ September 30, 2019 (thousands of dollars) Corporate Graphite Total Statement of Operations ​ ​ ​ ​ ​ ​ Mineral property expenses ​ $ — ​ $ 77 ​ $ 77 Product development expenses ​ ​ — ​ ​ 51 ​ ​ 51 General and administrative ​ 3,300 ​ 283 ​ 3,583 Arbitration expenses ​ ​ 631 ​ ​ — ​ ​ 631 Accretion of asset retirement costs ​ — ​ — ​ — Depreciation and amortization ​ 5 ​ — ​ 5 ​ ​ 3,936 ​ 411 ​ 4,347 Loss from continuing operations ​ (3,936) ​ (411) ​ (4,347) Other (expense) ​ (384) ​ — ​ (384) Loss before taxes ​ $ (4,320) ​ $ (411) ​ $ (4,731) ​ ​ 24 Table of Contents 16. NOTES PAYABLE Loan under the Paycheck Protection Program (PPP) On May 4, 2020, URI, Inc, a wholly owned subsidiary of Westwater, received loan proceeds in the amount of $0.3 million under the Paycheck Protection Program (“PPP”) in accordance with the terms of a promissory note executed in favor of Celtic Bank Corporation, a Salt Lake City based Small Business Administration (“SBA”) Preferred Lender. The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for forgivable loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loan and accrued interest are forgivable as long as the borrower uses the loan proceeds for eligible purposes, including payroll costs, rent and utilities. No more than 40% of the amount forgiven can be attributable to non-payroll costs. Any unforgiven portion of the PPP loan is payable over two years at an interest rate of 1%. The deadline to apply for loan forgiveness is the maturity date of the loan, which is April 30, 2022. As part of the Flexibility Act, the deferral period for loan payments increased from 6 months to 10 months after the end of the borrower’s loan forgiveness covered period. Our 24-week covered period began when loan proceeds were received May 4, 2020 and ended October 19, 2020. Based on the changes to the deferral period, the Company has until August 19, 2021 to apply for loan forgiveness before payments on the principal, interest and fees are due. ​ The Company used the proceeds for funding its payroll and benefits costs for the restart of South Texas operations, purposes consistent with the PPP. The Company’s South Texas operations were shut down and employees furloughed in March 2020 due to the severe downturn in the capital markets and uncertainty about when economic conditions would return to normal. While the Company currently believes that its use of the loan proceeds will meet the conditions for forgiveness of the loan and is in the process of preparing the SBA’s forgiveness application, no assurance can be provided that the Company will obtain forgiveness of the loan, in whole or in part. At September 30, 2020, the loan proceeds are included in Current Liabilities Held for Sale on the Condensed Consolidated Balance Sheets. See also Note 8. ​ ​ ​ 17. SUBSEQUENT EVENT – CAPITAL RAISE During the month of October 2020, the Company sold 7.3 million shares of common stock for net proceeds of $42.0 million pursuant to the ATM Offering Agreement with Cantor Fitzgerald & Co. These shares were sold pursuant to a prospectus supplement filed on October 8, 2020 pursuant to Rule 424(b)(5) as a takedown off the Company’s shelf registration statement which had been declared effective by the Securities and Exchange Commission on April 13, 2020. ​ Also during the month of October 2020, the Company sold 1.1 million shares of common stock for net proceeds of $8.2 million pursuant to the 2020 Purchase Agreement with Lincoln Park. These shares were sold pursuant to a Form S-1 registration statement filed pursuant to Rule 424(b)(3) and declared effective by the Securities and Exchange Commission on October 2, 2020. ​ The receipt of combined net proceeds in the amount of $50.2 million from these financing facilities has resulted in a cash balance of approximately $53.3 million at October 31, 2020. The significant treasury balance has mitigated the Company’s capital risk through 2021 as the Company’s budgeted pilot plant program for processing battery-grade graphite and the remaining budgeted product development costs are now fully funded. ​ ​ ​ ​ ​ ​ ​