WESTWATER RESOURCES, INC. Income Taxes Disclosure

The Company recognizes future tax assets and liabilities for each tax jurisdiction based on the difference between the financial reporting and tax basis of assets and liabilities using the enacted tax rates expected to be in effect when the taxes are paid or recovered. A valuation allowance is provided against net future tax assets for which the Company does not consider the realization of such assets to meet the required “more likely than not” standard.

The Company’s future tax assets and liabilities at December 31, 2025 and 2024, include the following components:

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The composition of the valuation allowance by tax jurisdiction is summarized as follows:

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The valuation allowance decreased $18.4 million from the year ended December 31, 2024, to the year ended December 31, 2025. There was decrease in the net deferred tax assets, capital loss carryforwards and accrued compensation offset by an increase in NOLs and equity-based compensation and exploration.

In July 2025, the United States enacted tax reform legislation known as the One Big Beautiful Bill Act (OBBBA). Under OBBBA, global intangible low tax foreign income (“GILTI”) was restructured into Net CFC Tested Income (NCTI)

for tax years beginning after December 31, 2025. NCTI and additional tax reform implemented by OBBBA remain immaterial to the Company for the year ended December 31, 2025.

Because the Company does not believe it is more likely than not that the net deferred tax assets will be realized, the Company continues to record a 100% valuation against the net deferred tax assets.

At December 31, 2025, the Company had U.S. NOLs of approximately $284.0 million which expire from 2026 to indefinite availability.  As a result of the Tax Cuts and Jobs Act of 2017, U.S. NOLs generated in years ending after 2017 have an indefinite carryforward rather than the previous 20-year carryforward.  This does not impact losses incurred in years ended in 2017 or earlier.

The following table presents the expiration of U.S. NOLs by tax year as of December 31, 2025:

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At December 31, 2025, the Company had Australian net operating loss carryforwards of $14.4 million, including approximately $13.3 million associated with the purchase of our Turkish assets which are available indefinitely, subject to continuing to meet relevant statutory tests.  In Turkey, the company had NOLs of approximately $0.2 million, which expire from 2026 to 2030.  

Federal and state laws impose substantial restrictions on the utilization of NOLs in the event of an ownership change for income tax purposes, as defined in Section 382 of the Internal Revenue Code (“IRC”). Pursuant to IRC Section 382, annual use of the Company’s NOLs may be limited in the event a cumulative change in ownership of more than 50% occurs within a three-year period.   Following the issuance of the Company’s Common Stock in 2001, the Neutron merger in 2012, the Anatolia transaction in 2015 and the Alabama Graphite acquisition in 2018, the ability to utilize the NOLs will be severely limited on an annual and aggregate basis.  A formal Section 382 study would be required to determine the actual allowable usage of U.S. NOLs.  However, it is possible that past ownership changes will result in the inability to utilize a significant portion of the Company’s NOLs that was generated prior to any change of control.  The Company’s ability to use its remaining NOLs may be further limited if the Company experiences an IRC Section 382 ownership change in connection with future changes in the Company’s stock ownership.  Based on information currently available, the Company currently estimates that $191.1 million of the U.S. NOLs will not be able to be utilized and have reduced the Company’s deferred tax asset accordingly. This resulted in a decrease in the valuation allowance.

For financial reporting purposes, loss from operations before income taxes consists of the following components:

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The following table presents a reconciliation of income taxes calculated at the statutory rate and the provision for income taxes:

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The Company does not have any uncertain tax positions. Should the Company incur interest and penalties relating to tax uncertainties, such amounts would be classified as a component of the interest expense and operating expense, respectively.

Westwater Resources, Inc., and its wholly owned subsidiaries, files in the U.S. federal jurisdiction and various state jurisdictions. Anatolia Energy Limited and Anatolia Uranium Pty Ltd file in the Australian jurisdiction and Adur Madencilik files in the Turkish jurisdiction. Alabama Graphite Corporation files in U.S. federal and state jurisdictions.