# Westwater Resources, Inc.: Form 10-Q for the period ended Sep 30, 2024 - Company: [Westwater Resources, Inc.](/companies/wwr.md) (CIK 839470) - Form: 10-Q - Filed: 2024-11-14 - Accepted by EDGAR: Nov 14, 2024, 16:20 ET - Period: 2024-09-30 - Accession: 0001558370-24-015722 - Inline XBRL: yes - Main document: https://www.sec.gov/Archives/edgar/data/839470/000155837024015722/wwr-20240930x10q.htm - All documents and exhibits: https://www.sec.gov/Archives/edgar/data/839470/000155837024015722/ ## Figures reported in this filing Standardized XBRL line items for the period ended 2024-09-30. | Line item | Period | Value | XBRL concept | | --- | --- | ---: | --- | | Research and development | 3 months, 2024-07-01 to 2024-09-30 | $254.0k | us-gaap:ResearchAndDevelopmentExpense | | Research and development | 9 months, 2024-01-01 to 2024-09-30 | $850.0k | us-gaap:ResearchAndDevelopmentExpense | | Net income | 3 months, 2024-07-01 to 2024-09-30 | −$3.1m | us-gaap:ProfitLoss | | Net income | 9 months, 2024-01-01 to 2024-09-30 | −$9.8m | us-gaap:NetIncomeLoss | | Diluted EPS | 3 months, 2024-07-01 to 2024-09-30 | −$0.05 | us-gaap:EarningsPerShareDiluted | | Diluted EPS | 9 months, 2024-01-01 to 2024-09-30 | −$0.17 | us-gaap:EarningsPerShareDiluted | | Basic EPS | 3 months, 2024-07-01 to 2024-09-30 | −$0.05 | us-gaap:EarningsPerShareBasic | | Basic EPS | 9 months, 2024-01-01 to 2024-09-30 | −$0.17 | us-gaap:EarningsPerShareBasic | | Diluted shares (weighted) | 3 months, 2024-07-01 to 2024-09-30 | 58,435,205 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding | | Diluted shares (weighted) | 9 months, 2024-01-01 to 2024-09-30 | 57,320,562 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding | | Operating cash flow | 9 months, 2024-01-01 to 2024-09-30 | −$3.8m | us-gaap:NetCashProvidedByUsedInOperatingActivities | | Capital expenditure | 9 months, 2024-01-01 to 2024-09-30 | $5.0m | us-gaap:PaymentsToAcquireProductiveAssets | | Cash and equivalents | at 2024-09-30 | $4.5m | us-gaap:CashAndCashEquivalentsAtCarryingValue | | Current assets | at 2024-09-30 | $5.7m | us-gaap:AssetsCurrent | | Total assets | at 2024-09-30 | $143.5m | us-gaap:Assets | | Current liabilities | at 2024-09-30 | $9.4m | us-gaap:LiabilitiesCurrent | | Total liabilities | at 2024-09-30 | $11.0m | us-gaap:Liabilities | | Shareholders' equity | at 2024-09-30 | $132.5m | us-gaap:StockholdersEquity | ## Management's discussion and analysis As filed, 31,508 characters. The following management’s discussion and analysis of the consolidated financial results and financial condition of Westwater for the three and nine months ended September 30, 2024, has been prepared based on information available to us as of November 14, 2024. This discussion should be read in conjunction with the unaudited Interim Financial Statements and Notes thereto included herewith and the audited consolidated financial statements of Westwater for the period ended December 31, 2023, and the related notes thereto included in our Annual Report, which were prepared in accordance with U.S. GAAP. This management’s discussion and analysis contains forward-looking statements that are subject to risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including, but not limited to, those set forth elsewhere in this report. See “Cautionary Note Regarding Forward-Looking Statements” herein. ### INTRODUCTION Westwater Resources, Inc., originally incorporated in 1977, is an energy technology company focused on developing battery-grade natural graphite materials through its two primary projects, the Kellyton Graphite Plant and the Coosa Graphite Deposit, both located in Coosa County, Alabama. Once operational, Westwater expects the Kellyton Graphite Plant to process natural flake graphite and, based on current studies and estimates, produce 12,500 metric tons (“mt”) per year of CSPG in Phase I of the Kellyton Graphite Plant, primarily for use in lithium-ion batteries. Westwater also holds mineral rights to explore and potentially mine the Coosa Graphite Deposit, which Westwater anticipates will eventually provide natural graphite flake concentrate to the Kellyton Graphite Plant. ### RECENT DEVELOPMENTS ### Customer Engagement Update On September 17, 2024, the Company entered into a binding off-take agreement for the supply of the Company’s graphite fines material (“Graphite Fines”) with Hiller Carbon, LLC (the “Fines Offtake Agreement”), a leading supplier of pelletized materials to the steel and foundry industries. Pursuant to the terms of the Fines Offtake Agreement, the Company will supply natural Graphite Fines material from its Kellyton Graphite Plant to Hiller Carbon’s plants located within the U.S. Graphite Fines are produced as a byproduct during the CSPG spherodizing process, one of the processing steps related to producing the Company’s battery anode natural graphite, which remains the Company’s main focus. The Company expects Graphite Fines production to be approximately 14,000 mt per year, based on the anticipated annual Phase I CSPG production of 12,500 mt per year, and delivery of the Graphite Fines to Hiller Carbon to occur when the Kellyton Graphite Plant begins production. On July 17, 2024, the Company entered into the Offtake Agreement with FCA, an electric vehicle manufacturer and part of the Stellantis group of companies. Under the terms of the Offtake Agreement, FCA will be obligated to purchase CSPG natural graphite anode products (the “Product”) in amounts (the “Annual Offtake Volume”) and at prices described in the Offtake Agreement, upon Westwater providing CSPG in accordance with the terms of the contract. The anticipated Annual Offtake Volume in 2026 is 10,000 mt of Product, and in years 2027 through 2031, the final year of the Offtake Agreement, is 15,000 mt of Product. As previously announced, during the first quarter of 2024, the Company entered into the Procurement Agreement with SK On. Pursuant to the terms of the Procurement Agreement, Westwater will supply CSPG natural graphite anode products from its Kellyton Graphite Plant to SK On battery plants located within the U.S. Under the terms of the Procurement Agreement, SK On will be obligated to purchase, on an annual basis, a quantity of CSPG equal to a percentage of the forecasted volume required by SK On (the “Minimum Purchase Amount”), provided that the Minimum Purchase Amount may be increased from time to time by the mutual agreement of the parties, upon Westwater providing CSPG in accordance with the terms of the contract. The forecasted volume required by SK On in the final year of the Procurement Agreement is 10,000 mt of CSPG. Westwater continues to engage with these and other potential customers by providing samples of CSPG produced by the Company for testing and evaluation, hosting site tours of the Kellyton Graphite Plant, and having technical product development and commercial discussions. Feedback from certain potential customers indicates that Westwater’s material meets their initial specifications, and has resulted in the Company providing additional, or in some cases, larger product samples to these potential customers. ### Kellyton Graphite Plant – Construction and Estimated Cost Update Westwater has lowered its estimate of Phase I cost to $245 million, down from the previous estimate of $271 million. This represents a decrease in estimated cost of $26 million, or 9.6%. During the third quarter, Westwater continued to evaluate its plant design, the construction schedule and the costs related thereto. The decrease in estimated costs primarily relates to savings as a result of further design optimization and savings in steel, piping and equipment installation. The revised estimate of $245 million includes an 11% contingency and 2% escalation factor on the remaining uncommitted spend. During the first three quarters of 2024, construction activities consisted of receipt of additional long-lead equipment components and installing equipment and structural steel. As of the end of the third quarter of 2024, micronization (sizing) and spheroidization (shaping) mills were placed in the SPG building and the structural steel work is near completion. Installation of peripheral support equipment surrounding the micronization and spheroidization mills in the SPG building began during the third quarter of 2024. Westwater has constructed and continues to operate its R&D Lab. The R&D Lab allows Westwater to continue product development and optimization with potential customers, and to perform additional quality control tests. It also affords greater flexibility to optimize future samples in accordance with customer specifications. Since inception of the project, and inclusive of liabilities as of September 30, 2024, the Company has incurred costs of approximately $121.5 million, net of $1.5 million recoupment of capital costs, related to construction activities for Phase I of the Kellyton Graphite Plant (Refer to *Note 5* for further details). While the Company has continued construction activities related to Phase I of the Kellyton Graphite Plant during the first half of 2024, Westwater has reduced the level of construction activity from anticipated levels, including adjusting the timing of future work, until receipt of the additional funding needed to complete construction of Phase I of the Kellyton Graphite Plant. The Company now estimates that approximately $124 million will be required to complete construction of Phase I of the Kellyton Graphite Plant. Reducing the level of construction activity until financing is secured is expected to impact the overall schedule to complete Phase I of the Kellyton Graphite Plant. As a result of entry into the Offtake Agreement and Procurement Agreement, we expect to begin production in 2026, subject to securing financing to complete construction of Phase I of the Kellyton Graphite Plant. ### Qualification Line Development at Kellyton Graphite Plant During the quarter ended September 30, 2024, Westwater continued to receive and install equipment for its qualification line at the Kellyton Graphite Plant. The qualification line is expected to be operational in the fourth quarter of 2024 and will be utilized to prepare larger bulk samples of CSPG for customer qualification. The qualification line is expected to produce approximately 1 mt per day of CSPG and the samples produced on it will be representative of CSPG mass production. The Company expects that the operation of the qualification line will allow Westwater to supply its customers bulk samples of CSPG in 1 to 10 mt batches for cell qualification activities while the Company completes the construction of Phase I of the Kellyton Graphite Plant. The line will also be used to train Westwater’s operations team which the Company expects will expedite the commissioning and startup of the Kellyton Graphite Plant. ### Construction Financing Update On September 4, 2024, the Company announced that it had executed a term sheet and agreed to exclusivity with a global financial institution for a $150.0 million secured debt facility, which would be used to complete the construction of Phase I of the Kellyton Graphite Plant. The progression from signing the term sheet to loan closing is subject to customary agreement on final terms, due diligence, and loan conditions, and no assurance can be given that the Company will ultimately enter into the secured debt facility, or that financing will be available in amounts sufficient to meet its needs, or on terms acceptable to the Company. ### Coosa Graphite Deposit Through its wholly owned subsidiary, Alabama Graphite, Westwater holds mineral rights across 41,965 acres of the Alabama graphite belt in Coosa County, Alabama. During the fourth quarter of 2023, Westwater completed an IA, with an economic analysis for the Coosa Graphite Deposit. The IA was completed as a Technical Report Summary (“TRS”) disclosing Mineral Resources, including an economic analysis, for the Coosa Graphite Deposit, in accordance with S-K 1300. The TRS was completed on behalf of Westwater by SLR International Corporation (“SLR”) with an effective date of December 11, 2023, and filed with the SEC on Form 8-K/A on October 9, 2024. For further information regarding the IA and the Coosa Graphite Deposit, refer to Item 2, Properties, in the Annual Report and the aforementioned Form 8-K/A. Westwater commenced a strategic financing review process for the Coosa Graphite Deposit in the first quarter of 2024. This strategic financing review process seeks to identify investment sources and partners for the Coosa Graphite Deposit, and may include review of strategic investment partners or other strategic transactions. ### Graphite and Vanadium as Critical Materials Presently, the United States is almost 100% dependent on imports for battery-grade graphite, which is currently the primary anode material in the lithium-ion batteries that power electric vehicles, smartphones, and laptops, and store power generated from intermittent renewable energy sources. Westwater intends to process natural flake graphite into battery-grade graphite, primarily for lithium-ion batteries. Approximately 78% of natural graphite anode global supply comes from China (Benchmark, 2023). In addition, China is one of the largest global importers of natural graphite flake, relying on less expensive African sources. Both of these factors cause China to pose a geopolitical risk, particularly to the U.S. and EU. China and the U.S. have imposed tariffs and export controls on critical minerals, including graphite, indicating the potential for further trade barriers between China and the United States. Effective December 1, 2023, China began requiring government approval for exports of two types of graphite products, including high-purity, high-hardness and high-intensity synthetic graphite material and natural flake graphite and its products. Westwater believes these export restrictions continue to highlight the supply-chain risk for the U.S. and other countries related to natural graphite products and could provide an opportunity for Westwater. On March 31, 2022, President Biden invoked the Defense Production Act to encourage the domestic production of critical materials, including graphite, for advanced batteries for electric vehicles and clean energy storage. On August 16, 2022, President Biden signed into law the Inflation Reduction Act (“IRA”). The IRA provides a 10% tax credit for the costs of producing certain critical minerals, including graphite and vanadium. This credit is eligible for direct pay and is also transferable to unrelated taxpayers. In addition, a key provision of the IRA that could indirectly benefit the Company is the Clean Vehicle credit. The IRA eliminates the previous limitation on the number of electric vehicles a manufacturer can sell before the Clean Vehicle credit is phased out or eliminated. Further, the IRA sets a minimum domestic content threshold for the percentage of the value of applicable critical minerals contained in the battery of the electric vehicles. Because Westwater intends to produce battery grade graphite for lithium-ion batteries to be used in electric vehicles in the United States, management believes the domestic content requirement could provide indirect future benefit to the Company. On May 3, 2024, the U.S. Department of the Treasury (the “Treasury Department”) adopted final regulations related to the Clean Vehicle Tax credit of $7,500 under section 30D of the Internal Revenue Code (the “federal electric vehicle tax credit”). The final rules effectuate the guidance previously provided in December 2023 by the Treasury Department related to the key requirements for the federal electric vehicle tax credit. The final rules include a process – called the traced qualifying value test – for automakers to trace the battery supply chain to qualify for the federal electric vehicle tax credit’s domestic content requirements, which takes effect in 2025. The final rules also prohibit battery parts and critical minerals from “excluded entities” – defined as foreign entities of concern, or FEOCs – from qualifying for the federal electric vehicle tax credit. Under relevant Treasury Department and U.S. Department of Energy interpretive regulations regarding the scope and application of FEOC-related restrictions, the People’s Republic of China is identified as an FEOC. The final FEOC battery component rules are important to Westwater because, beginning in 2027, any electric vehicle whose batteries contain graphite that was extracted or processed in any way, and to any degree, by an FEOC – including China – will be ruled ineligible for the federal electric vehicle tax credit. As a result, an FEOC must be excluded from an electric vehicle battery’s supply chain in order for the electric vehicle to be eligible for the federal electric vehicle tax credit. Because Westwater is not an FEOC and intends to produce battery grade graphite for lithium-ion batteries to be used in electric vehicles in the United States, management believes its future production of battery-graphite products will meet the domestic content requirements of the IRA, which we anticipate will provide indirect future benefit to the Company. In November 2024, President Trump was re-elected as President; it is not yet known how a change in Presidential administration may affect the domestic production of critical materials, and related tariff and tax incentive policies, Westwater has developed graphite-purification technology and advanced product-development processes designed to meet the demands of potential customers for battery-grade graphite materials. Westwater is developing methodologies and constructing facilities intended to produce high purity, battery-grade graphite products at its Kellyton Graphite Plant. These products are being designed to serve all major battery sectors. In addition, we believe the processes we intend to use are environmentally sustainable and permittable in the United States, where a robust regulatory environment complements our core values to reliably deliver safe, well-made products to our customers. Westwater has and will continue to support the efforts by the relevant United States governmental agencies, the State of Alabama and local municipalities to ensure that they remain aware of the importance of natural battery-grade graphite, its importance to the nation’s security, and how the Kellyton Graphite Plant and the Coosa Graphite Deposit fit into the critical minerals-equation. ### Equity Financings #### Capital Raises during the three and nine months ended September 30, 2024 During the three and nine months ended September 30, 2024, the Company sold 0.5 million and 2.3 million shares of common stock for net proceeds of $0.3 million and $1.1 million, respectively, pursuant to the ATM Offering Agreement with Cantor. During the three and nine months ended September 30, 2024, the Company sold 0.4 million shares of common stock for net proceeds of $0.1 million, pursuant to the ATM Sales Agreement with H.C. Wainwright. See *Note 6* to the Interim Financial Statements for additional information. ### RESULTS OF OPERATIONS ### Summary Our net loss for the three months ended September 30, 2024, was $3.1 million, or $0.05 per share, as compared with a net loss of $3.5 million, or $0.07 per share for the same period in 2023. The $0.4 million decrease in our net loss was primarily due to lower costs related to product development and exploration; partially offset by a loss on the sale of raw material inventory and less interest income. Our net loss for the nine months ended September 30, 2024, was $9.8 million, or $0.17 per share, as compared with a net loss of $9.5 million or $0.19 per share for the same period in 2023. The $0.3 million increase in our net loss was primarily due to a loss on the sale of raw material inventory and less interest income; partially offset by a decrease in product development and exploration expenses. ### Product Development Expenses Product development expenses for the three and nine months ended September 30, 2024, were $0.3 million and $0.9 million, respectively, a decrease of $0.7 million and $1.8 million compared to the same periods in 2023, respectively. Product development expenses for the three and nine months ended September 30, 2024 and 2023, related primarily to sample production of battery-grade natural graphite products for evaluation by potential customers. Since the third quarter of 2023, the Company has utilized its in-house R&D Lab for sample processing, resulting in lower costs for each batch of samples produced. ### Exploration Expenses Exploration expenses for the three and nine months ended September 30, 2024 decreased by $0.1 million and $0.2 million, respectively, compared to the same periods in 2023, due to lower personnel costs. ### General and Administrative Expenses General and administrative expense for the three and nine months ended September 30, 2024, remained essentially flat compared to the same periods in 2023. ### Other Expense, net Other expense, net for the three and nine months ended September 30, 2024, was $0.4 million and $1.2 million, respectively, an increase of $0.5 million and $2.4 million, respectively, compared to the same periods in 2023. The increase in other expense, net for both periods is due to lower average cash balance resulting in less interest income earned and a loss on the sale of raw material inventory in the current periods. ### FINANCIAL POSITION ### Operating Activities Net cash used in operating activities of $3.8 million for the nine months ended September 30, 2024, represents a decrease of $8.4 million compared to the same period in 2023. The decrease in cash used in operating activities was primarily due to $3.4 million of cash collected on sales of raw material inventory in 2024, a decrease in purchases of raw material inventory of $2.2 million, a decrease in third-party services related to product development of $1.0 million, and $0.7 million less legal and consulting expense in 2024 compared to 2023. These changes to operating cash flow were partially offset by a reduction of interest income of $1.0 million. The remaining change in operating cash flow was primarily due to other non-capital related liabilities of $2.1 million. ### Investing Activities Net cash used in investing activities decreased by $51.8 million for the nine months ended September 30, 2024, as compared to the same period in 2023. The decrease was a result of lower capital expenditures as the Company reduces construction activity while seeking debt financing to fund the remaining construction of Phase I of the Kellyton Graphite Plant. This decrease was slightly offset by $1.5 million of cash received from the sale of an asset during 2024. Refer to *Note 5* for further details. ### Financing Activities Net cash provided by financing activities decreased by $3.0 million for the nine months ended September 30, 2024, as compared to the same period in 2023. The decrease was primarily due to fewer shares of common stock sold under the ATM Sales Agreement and ATM Offering Agreement, lower trading volumes, and lower average stock prices during the nine months ended September 30, 2024, compared to the same period in 2023. ### LIQUIDITY AND CAPITAL RESOURCES Since 2009, the Company has not recorded revenue from operations and, as of September 30, 2024, current liabilities exceeded current assets. As such, Westwater is subject to all of the risks associated with development stage companies. Management expects to continue to incur cash losses as a result of construction activity at the Kellyton Graphite Plant and general and administrative expenses until operations commence at the Kellyton Graphite Plant. Operations at the Kellyton Graphite Plant are dependent on securing the additional funding needed to complete construction of Phase I of the Kellyton Graphite Plant. The Company has relied on equity and debt financings and asset sales to fund its operations. During the nine months ended September 30, 2024, and through the date that the Interim Financial Statement were issued, the Company continued construction activities related to the Kellyton Graphite Plant. However, while the Company has continued certain construction activities related to Phase I of the Kellyton Graphite Plant, those activities have been significantly reduced from anticipated levels until the additional funding needed to complete Phase I of the Kellyton Graphite Plant is in place. The Company’s construction related contracts include termination provisions at the Company’s election that do not obligate the Company to make payments beyond what is incurred by the third-party service provider through the date of such termination. In its going concern analysis, the Company considered construction activity and related costs through the date that the Interim Financial Statements were issued. Based on this analysis and excluding potential external funding opportunities and the Company’s current equity facility, the Company’s planned non-discretionary expenditures for one year past the issue date of these Interim Financial Statements, exceed the cash on hand as of the date of these Interim Financial Statements. On September 30, 2024, the Company’s cash balance was approximately $4.5 million. On August 29, 2024, the Company terminated the ATM Offering Agreement with Cantor, and on August 30, 2024, entered into a new ATM Sales Agreement with H.C. Wainwright. During the nine months ended September 30, 2024, the Company sold 2.3 million shares of common stock for net proceeds of $1.1 million pursuant to the ATM Offering Agreement with Cantor, and sold 0.4 million shares of common stock for net proceeds of $0.1 million pursuant to the ATM Sales Agreement with H.C. Wainwright. As of September 30, 2024, the Company has approximately $7.8 million remaining available for future sales under the ATM Sales Agreement with H.C. Wainwright. On August 30, 2024, the Company entered into the 2024 Lincoln Park PA, pursuant to which Lincoln Park has committed to purchase up to $30.0 million of the Company’s common stock. The Company has registered approximately 10.5 million shares of common stock that are available for future sales pursuant to the 2024 Lincoln Park PA. The Company expects to continue to incur losses as a result of costs and expenses related to construction activity and ongoing general and administrative expenses until operations commence at the Kellyton Graphite Plant. The Company has historically relied and expects to continue to rely, on debt and equity financing to fund its operations and business plan. Along with evaluating the use of the ATM Sales Agreement and 2024 Lincoln Park PA, the Company is considering other forms of project financing to fund the construction of the Kellyton Graphite Plant. The alternative sources of project financing could include, but are not limited to, project debt, convertible debt, or pursuing a partnership or joint venture. If funds are not available to fund the construction of Phase I of the Kellyton Graphite Plant through the equity markets or alternative financing sources, the Company may be required to reduce or severely curtail operations, change its planned business development strategies related to the Coosa Graphite Deposit and Phase I of the Kellyton Graphite Plant, alter the construction and commissioning timeline of Phase I of the Kellyton Graphite Plant, or put the construction of Phase I on hold until additional funding is obtained. If the Company is required to abandon construction and development or alter its intended long-term plans related the Kellyton Graphite Plant, the Company could be required to evaluate the recoverability of its long-lived assets. While the Company has advanced its business plan and has been successful in the past raising funds through equity and debt financings as well as through the sale of non-core assets, no assurance can be given that additional financing will be available in amounts sufficient to meet its needs, or on terms acceptable to the Company. Recent volatility in the equity and debt capital markets, rising interest rates, inflation, electric vehicle production and adoption rates, generally uncertain economic conditions and regulatory policy and enforcement, and unstable geopolitical conditions could significantly impact the Company’s ability to access the necessary funding to advance its business plan. On July 3, 2024, the Company filed a new Registration Statement on Form S-3 (the “Registration Statement”), which was declared effective by the SEC on August 29, 2024. The Company is subject to General Instruction I.B.6 of Form S-3, which limits the amount that the Company may sell under the Registration Statement. After giving effect to these limitations and the current public float of our common stock, and after giving effect to the terms of the ATM Offering Agreement with Cantor and the ATM Sales Agreement with H.C. Wainwright, the Company may offer and sell shares of our common stock having an aggregate offering price of up to approximately $7.8 million under the ATM Sales Agreement with H.C. Wainwright as of September 30, 2024. The Company’s ability to raise additional funds under the ATM Sales Agreement may be further limited by the Company’s market capitalization, share price and trading volume. ### OFF-BALANCE SHEET ARRANGEMENTS We have no off-balance sheet arrangements. ### CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS With the exception of historical matters, the matters discussed in this report are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from projections or estimates contained herein. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, without limitation, statements regarding the adequacy of funding, liquidity, access to capital, financing activities, the timing or occurrence of any future drilling or production from the Company’s properties, economic conditions, the strategic goals of the business, costs of any phase of development or operational line at the Kellyton Graphite Plant and estimated construction and commissioning timelines and completion dates, the start date for the mining of the Coosa Graphite Deposit, and the Company’s anticipated cash burn rate and capital requirements. Words such as “may,” “could,” “should,” “would,” “believe,” “estimate,” “expect,” “anticipate,” “plan,” “forecast,” “potential,” “intend,” “continue,” “project,” “target” and variations of these words, comparable words and similar expressions generally indicate forward-looking statements. You are cautioned not to place undue reliance on forward-looking statements. Actual results may differ materially from those expressed or implied by these forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include, among others: - the spot price and long-term contract price of graphite (both flake graphite feedstock and purified graphite products) and vanadium, and the world-wide supply and demand of graphite and vanadium; - the effects, extent and timing of the entry of additional competition in the markets in which we operate; - our ability to obtain contracts or other agreements with customers; - available sources and transportation of graphite feedstock; - the ability to control costs and avoid cost and schedule overruns during the development, construction and operation of the Kellyton Graphite Plant; - the ability to construct and operate the Kellyton Graphite Plant in accordance with the requirements of permits and licenses and the requirements of tax credits and other incentives; - the effects of inflation, including labor shortages and supply chain disruptions; - rising interest rates and the associated impact on the availability and cost of financing sources; - uncertainty in debt and equity capital markets and the associated impact on the availability and cost of financing sources; - the availability and supply of equipment and materials needed to construct the Kellyton Graphite Plant; - stock price volatility; - changes in the U.S. administration or government regulation of the mining and manufacturing industries in the U.S.; - unanticipated geopolitical, geological, processing, regulatory and legal or other problems we may encounter; - the results of our exploration activities, and the possibility that future exploration results may be materially less promising than initial exploration results; - any graphite or vanadium discoveries not being in high enough concentration to make it economic to extract the minerals; - our ability to finance growth plans; - our ability to obtain and maintain rights of ownership or access to our mining properties; - currently pending or new litigation or arbitration; and - our ability to maintain and timely receive mining, manufacturing, and other permits from regulatory agencies. In addition, other factors are described in our Annual Report, and the other reports we file with the SEC. Most of these factors are beyond our ability to predict or control. Future events and actual results could differ materially from those set forth herein, contemplated by or underlying the forward-looking statements. Forward-looking statements speak only as of the date on which they are made. We disclaim any obligation to update any forward-looking statements made herein, except as required by law. ## Controls and procedures As filed, 1,776 characters. ### Evaluation of Disclosure Controls and Procedures The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its filings with the SEC is recorded, processed, summarized and reported within the time period specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management has recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply judgment in evaluating the Company’s controls and procedures. During the fiscal period covered by this report, the Company’s management, with the participation of the Chief Executive Officer and Chief Financial Officer of the Company, carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of September 30, 2024. ### Changes in Internal Controls There were no changes in our internal control over financial reporting during the nine months ended September 30, 2024, that materially affected, or are reasonably likely to materially affect our internal control over financial reporting. ## Risk factors As filed, 296 characters. An investment in our common stock involves various risks. When considering an investment in us, careful consideration should be given to the risk factors discussed in *Risk Factors in Item 1A* in our Annual Report. There are no material changes to the risk factors described in our Annual Report. Filed Nov 14, 2024. Source: SEC EDGAR, the filing index for accession 0001558370-24-015722. Last ingested by Listed: Oct 24, 2026, 14:58 ET. No prices; not investment advice.