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SEGMENT REPORTING

6 Months Ended

Jun. 30, 2025

SEGMENT REPORTING

SEGMENT REPORTING

14. SEGMENT REPORTING

The Company has one reporting segment, the “battery-grade graphite business” segment and the Company’s chief operating decision maker (“CODM”) is the President & Chief Executive Officer. Graphite extraction and processing are regulated by federal and state governments. Compliance with regulations has a material effect on the economics of our operations and the timing of project development. Our primary regulatory costs have been, and are expected to continue to relate to, obtaining licenses and operating permits from federal and state agencies before the commencement of production activities, as well as continuing compliance with licenses and permits once they have been issued.

The current environmental and technical regulatory requirements for the graphite extraction and processing industry are well established, however, the regulatory process can make permitting difficult and timing unpredictable.

U.S. regulations pertaining to graphite extraction and processing may evolve in the U.S., however, at this time we do not anticipate any adverse impact from these regulations that would be unique to our operations.

The battery-grade graphite business segment includes the Kellyton Graphite Plant and the Coosa Graphite Deposit, both at a pre-revenue stage and located in Coosa County, Alabama. Both are anticipated to be used to produce battery-grade natural graphite materials as follows:

Kellyton Graphite Plant:

The Company will process natural graphite concentrate at the Kellyton Graphite Plant through a combination of sizing, shaping, spheroidization and classification. Once completed, the purification is expected to be performed using a proprietary purification process. The process uses a combination of technologies including a caustic bake, acid leach and thermal treatment, a process that allows for a smaller and more sustainable environmental footprint than that of a hydrofluoric acid (“HF”) leaching system, which is widely used by other graphite processing companies. Once the graphite is purified to a minimum graphite carbon content of 99.95%, the Company will coat the spherical graphite to manufacture the advanced graphite products it intends to sell. The process developed by Westwater is the subject of a patent application that received a Notice of Allowance (approved for issuance) on May 20, 2025, by the U.S. Patent and Trademark Office.

Coosa Graphite Deposit:

Westwater currently purchases graphite flake concentrate for the Kellyton Graphite Plant under a supply contract with Syrah Resources Limited. Westwater expects to continue to purchase graphite concentrate from Syrah Resources Limited and/or other sources for the Kellyton Graphite Plant until the Coosa Graphite Deposit is developed and in operation. Westwater believes its current contract with Syrah Resources Limited provides adequate feedstock supply until then. Currently, the Coosa Graphite Deposit is being evaluated and developed for future mining operations, which will require permitting as well. Development of a mine at the Coosa Graphite Deposit, is expected to serve as an in-house source of graphite feedstock and will provide in-house quality assurance and quality control for raw-material inputs.

The accounting policies of the battery-grade graphite business are the same as those described in Note 1, Summary of Significant Accounting Policies, in the Notes to Consolidated Financial Statements.  The CODM assesses performance for the battery-grade graphite business segment and decides how to allocate resources based on operating expenses, as reported on the Consolidated Statement of Operations, compared to forecasted expenses. The CODM intends to continue to use operating expenses to evaluate the segment until the Kellyton Graphite Plant is operational.

The following table summarizes segment assets as of June 30, 2025, and December 31, 2024:

​

​	​	​	​	​	​	​
​	​	June 30,		​	December 31,
(thousands of dollars)	​	2025			2024
Assets:	​	​	​	​	​	​
Battery-grade graphite business segment assets	​	$	142,934	​	$	141,470
Corporate and other assets	​	​	7,564	​	​	4,887
Consolidated total assets	​	$	150,498	​	$	146,357
​	​	​	​	​	​	​
Expenditures for battery-grade graphite business segment assets	​	$	5,057	​	$	6,138

​

Expenditures for battery-grade graphite business segment assets for the three and six months ended June 30, 2025, were approximately $2.2 million and $5.1 million, respectfully.

​

​

The following tables summarize segment profit or loss and significant segment expenses for the three and six months ended June 30, 2025 and 2024:

​

​	​	​	​	​	​	​	​	​	​
Three months ended	​	​	​	​	​	​	​	​	​
​	​	June 30, 2025
(thousands of dollars)	​	Battery-grade Graphite Segment		​	Corporate and Other		​	Consolidated Statements of Operations
Other expense, net	​	$	(11)	​	$	(283)	​	$	(294)
Less:	​	​	​	​	​	​	​	​	​
Product development expenses	​	​	(275)	​	​	—	​	​	(275)
Exploration expenses	​	​	(3)	​	​	—	​	​	(3)
General and administrative expenses	​	​	(582)	​	​	(2,551)	​	​	(3,133)
Mineral property	​	​	(10)	​	​	—	​	​	(10)
Depreciation and amortization	​	​	(153)	​	​	(1)	​	​	(154)
Net loss	​	$	(1,034)	​	$	(2,835)	​	$	(3,869)
​	​	​	​	​	​	​	​	​	​
​	​	June 30, 2024
(thousands of dollars)	​	Battery-grade Graphite Segment		​	Corporate and Other		​	Consolidated Statements of Operations
Other (expense) income, net	​	$	(1,044)	​	$	63	​	$	(981)
Less:	​	​	​	​	​	​	​	​	​
Product development expenses	​	​	(281)	​	​	—	​	​	(281)
Exploration expenses	​	​	—	​	​	—	​	​	—
General and administrative expenses	​	​	(481)	​	​	(2,008)	​	​	(2,489)
Mineral property	​	​	(6)	​	​	—	​	​	(6)
Depreciation and amortization	​	​	(61)	​	​	(1)	​	​	(62)
Net loss	​	$	(1,873)	​	$	(1,946)	​	$	(3,819)
​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​
Six months ended	​	​	​	​	​	​	​	​	​
​	​	June 30, 2025
(thousands of dollars)	​	Battery-grade Graphite Segment		​	Corporate and Other		​	Consolidated Statements of Operations
Other expense, net	​	$	(296)	​	$	(39)	​	$	(335)
Less:	​	​	​	​	​	​	​	​	​
Product development expenses	​	​	(457)	​	​	—	​	​	(457)
Exploration expenses	​	​	(10)	​	​	—	​	​	(10)
General and administrative expenses	​	​	(1,058)	​	​	(4,369)	​	​	(5,427)
Mineral property	​	​	(10)	​	​	—	​	​	(10)
Depreciation and amortization	​	​	(304)	​	​	(2)	​	​	(306)
Net loss	​	$	(2,135)	​	$	(4,410)	​	$	(6,545)
​	​	​	​	​	​	​	​	​	​
​	​	June 30, 2024
(thousands of dollars)	​	Battery-grade Graphite Segment		​	Corporate and Other		​	Consolidated Statements of Operations
Other (expense) income, net	​	$	(1,073)	​	$	187	​	$	(886)
Less:	​	​	​	​	​	​	​	​	​
Product development expenses	​	​	(596)	​	​	—	​	​	(596)
Exploration expenses	​	​	(11)	​	​	—	​	​	(11)
General and administrative expenses	​	​	(1,099)	​	​	(3,995)	​	​	(5,094)
Mineral property	​	​	(6)	​	​	—	​	​	(6)
Depreciation and amortization	​	​	(121)	​	​	(3)	​	​	(124)
Net loss	​	$	(2,906)	​	$	(3,811)	​	$	(6,717)

​

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The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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