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| SEGMENT REPORTING | 11. 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. 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 certain components of battery-grade natural graphite materials as follows: Kellyton Graphite Plant: The Company currently processes bulk concentrate natural graphite samples through its qualification line at the Kellyton Graphite Plant. The mass production milling and shaping equipment are utilized to produce spheroidized graphite prior to purification. The purification is 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 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 coats the spherical purified graphite to manufacture the advanced graphite products it intends to sell. The purification process was developed by Westwater and on September 17, 2025, the Company announced it had received its first U.S. Patent related to its graphite purification method. Coosa Graphite Deposit: Westwater currently purchases graphite flake concentrate for the Kellyton Graphite Plant under a supply contract with Syrah Resources Limited. In 2025, the Company also entered into a contract with a non-FEOC backup feedstock supplier. 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 contracts with Syrah Resources Limited and the backup feedstock supplier provide adequate feedstock supply until then, and believes that the backup supplier reduces dependency, mitigates risk and helps ensure supply chain continuity. Currently, the Coosa Graphite Deposit is being evaluated and developed for future mining operations, with multiple permits submitted and studies conducted since 2025. 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 QA/QC 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 the Consolidated Financial Statements within our Annual Report. The CODM assesses the performance of the battery-grade graphite business segment and decides how to allocate resources based on operating expenses, as reported on the Condensed Consolidated Statement of Operations. 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, 2026, and December 31, 2025:
Expenditures for long-lived assets for the battery-grade graphite business segment for the three and six months ended June 30, 2026, were approximately $0.7 million and $2.3 million, respectively. The following tables summarize segment profit or loss and significant segment expenses for the three and six months ended June 30, 2026 and 2025:
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