This prospectus relates to the resale of
up to 758,035 shares of common stock of Uranium Energy Corp. (the “Company”) that may be offered and sold, from time
to time, by the selling securityholders identified in this prospectus. These shares consist of:
The transactions pursuant to which the
Company issued these shares to the selling securityholders are described in this prospectus under “Selling Securityholders.”
All of the proceeds from the sale of the
shares covered by this prospectus will be received by the selling securityholders. We will not receive any of the proceeds from
the sale of those shares.
Our common stock is traded on the NYSE
American under the symbol “UEC.” On April 4, 2018, the last reported sales price for our common stock on the NYSE American
was $1.35 per share.
RISK FACTORS
Prospective investors should carefully
consider the following risks, as well as the other information contained in this prospectus and in the documents incorporated by
reference herein, including the risks described in our annual report on Form 10-K and our quarterly reports on Form 10-Q, before
investing in our securities. Any one of these material risks and uncertainties has the potential to cause actual results, performance,
achievements or events to be materially different from any future results, performance, achievements or events implied, suggested
or expressed by any forward-looking statements made by us or by persons acting on our behalf. Refer to “Forward-Looking Statements”.
There is no assurance that we will
be successful in preventing the material adverse effects that any one or more of the following material risks and uncertainties
may cause on our business, prospects, financial condition and operating results, which may result in a significant decrease in
the market price of our common stock. Furthermore, there is no assurance that these material risks and uncertainties represent
a complete list of the material risks and uncertainties facing us. There may be additional risks and uncertainties of a material
nature that, as of the date of this prospectus, we are unaware of or that we consider immaterial that may become material in the
future, any one or more of which may result in a material adverse effect on us. You could lose all or a significant portion of
your investment due to any one of these material risks and uncertainties.
Risks Related to Our Company and Business
Evaluating our future performance
may be difficult since we have a limited financial and operating history, with significant negative cash flow and accumulated deficit
to date. Furthermore, there is no assurance that we will be successful in securing any form of additional financing in the future;
therefore substantial doubt exists as to whether our cash resources and/or working capital will be sufficient to enable the Company
to continue its operations over the next twelve months. Our long-term success will depend ultimately on our ability to achieve
and maintain profitability and to develop positive cash flow from our mining activities.
As more fully described under Item 1. Business,
in our Form 10-K Annual Report for Fiscal 2017, Uranium Energy Corp. was incorporated under the laws of the State of Nevada on
May 16, 2003, and since 2004, we have been predominantly engaged in uranium mining and related activities, including exploration,
pre-extraction, extraction and processing, on projects located in the United States and Paraguay. In November 2010, we commenced
uranium extraction for the first time at the Palangana Mine utilizing ISR and processed those materials at the Hobson Processing
Facility into drums of U
3
O
8
, our only sales product and source of revenue. We also hold uranium projects
in various stages of exploration and pre-extraction in the States of Arizona, Colorado, New Mexico, Texas and Wyoming, in the Republic
of Paraguay and in Canada. Since we completed the acquisition of the Alto Paraná Project located in the Republic of Paraguay
in July 2017, we are also involved in mining and related activities, including exploration, pre-extraction, extraction and processing
of titanium minerals.
As more fully described under “Liquidity
and Capital Resources” of Item 2. Management’s Discussion and Analysis of Financial Condition and Result of Operations,
in our Form 10-Q Quarterly Report for the period ended January 31, 2018, we have a history of significant negative cash flow and
net losses, with an accumulated deficit balance since inception of $236.2 million at January 31, 2018. Historically, we have been
reliant primarily on equity financings from the sale of our common stock and, for Fiscal 2014 and Fiscal 2013, on debt financing
in order to fund our operations. Although we generated revenues from sales of U
3
O
8
during Fiscal 2015, Fiscal
2013 and Fiscal 2012 of $3.1 million, $9.0 million and $13.8 million, respectively, with no revenues from sales of U
3
O
8
generated during the six months ended January 31, 2018, Fiscal 2017, Fiscal 2016, Fiscal 2014 or for any periods prior to Fiscal
2012, we have yet to achieve profitability or develop positive cash flow from our operations, and we do not expect to achieve profitability
or develop positive cash flow from operations in the near term. As a result of our limited financial and operating history, including
our significant negative cash flow and net losses to date, it may be difficult to evaluate our future performance.
At January 31, 2018, we had working capital
of $15.1 million including cash and cash equivalents of $3.6 million and short-term investments of $12.2 million. As we do not
expect to achieve and maintain profitability in the near term, our continuation as a going concern is dependent upon our ability
to obtain adequate additional financing which we have successfully secured since inception, including those from asset divestitures.
However, there is no assurance that we will be successful in securing any form of additional financing in the future and, therefore,
substantial doubt exists as to whether our cash resources and/or working capital will be sufficient to enable our Company to continue
our operations over the next twelve months from the date of this Registration Statement.
Our reliance on equity and debt financings
is expected to continue for the foreseeable future, and their availability, whenever such additional financing is required, will
be dependent on many factors beyond our control including, but not limited to, the market price of uranium, the continuing public
support of nuclear power as a viable source of electrical generation, the volatility in the global financial markets affecting
our stock price and the status of the worldwide economy, any one of which may cause significant challenges in our ability to access
additional financing, including access to the equity and credit markets. We may also be required to seek other forms of financing,
such as asset divestitures or joint venture arrangements, to continue advancing our uranium projects which would depend entirely
on finding a suitable third party willing to enter into such an arrangement, typically involving an assignment of a percentage
interest in the mineral project.
Our long-term success, including the recoverability
of the carrying values of our assets and our ability to acquire additional uranium projects and continue with exploration and pre-extraction
activities and mining activities on our existing uranium projects, will depend ultimately on our ability to achieve and maintain
profitability and positive cash flow from our operations by establishing ore bodies that contain commercially recoverable uranium
and to develop these into profitable mining activities. The economic viability of our mining activities, including the expected
duration and profitability of the Palangana Mine and of any future satellite ISR mines, such as the Burke Hollow and Goliad Projects,
located within the South Texas Uranium Belt, and the Reno Creek Project located in the Powder River Basin, Wyoming, and our projects
in the Republic of Paraguay and in Canada, have many risks and uncertainties. These include, but are not limited to: (i) a significant,
prolonged decrease in the market price of uranium and titanium minerals; (ii) difficulty in marketing and/or selling uranium concentrates;
(iii) significantly higher than expected capital costs to construct the mine and/or processing plant; (iv) significantly higher
than expected extraction costs; (v) significantly lower than expected mineral extraction; (vi) significant delays, reductions or
stoppages of uranium extraction activities; and (vi) the introduction of significantly more stringent regulatory laws and regulations.
Our mining activities may change as a result of any one or more of these risks and uncertainties and there is no assurance that
any ore body that we extract mineralized materials from will result in achieving and maintaining profitability and developing positive
cash flow.
Our operations are capital intensive
and we will require significant additional financing to acquire additional mineral projects and continue with our exploration and
pre-extraction activities on our existing projects.
Our operations are capital intensive and
future capital expenditures are expected to be substantial. We will require significant additional financing to fund our operations,
including acquiring additional projects and continuing with our exploration and pre-extraction activities which include assaying,
drilling, geological and geochemical analysis and mine construction costs. In the absence of such additional financing we would
not be able to fund our operations or continue with our exploration and pre-extraction activities, which may result in delays,
curtailment or abandonment of any one or all of our projects.
If we are unable to service our indebtedness,
we may be faced with accelerated repayments or lose the assets securing our indebtedness. Furthermore, restrictive covenants governing
our indebtedness may restrict our ability to pursue our business strategies.
On February 9, 2016, we entered into the
Second Amended Credit Agreement with our Lenders under which we had previously drawn down the maximum $20 million in principal.
The Credit Facility requires monthly interest payments calculated at 8% per annum and other periodic fees, and principal repayments
of $1.67 million per month over a twelve-month period commencing on February 1, 2019. Our ability to continue making these scheduled
payments will be dependent on and may change as a result of our financial condition and operating results. Failure to make any
one of these scheduled payments will put us in default with the Credit Facility which, if not addressed or waived, could require
accelerated repayment of our indebtedness and/or enforcement by the Lenders against our assets. Enforcement against our assets
would have a material adverse effect on our financial condition and operating results.
Furthermore, our Credit Facility includes
restrictive covenants that, among other things, limit our ability to sell our assets or to incur additional indebtedness other
than permitted indebtedness, which may restrict our ability to pursue certain business strategies from time to time. If we do not
comply with these restrictive covenants, we could be in default which, if not addressed or waived, could require accelerated repayment
of our indebtedness and/or enforcement by the Lenders against our assets.
Our uranium extraction and sales
history is limited, with our uranium extraction to date originating from a single uranium mine. Our ability to continue generating
revenue is subject to a number of factors, any one or more of which may adversely affect our financial condition and operating
results
.
We have a limited history of uranium extraction
and generating revenue. In November 2010, we commenced uranium extraction at the Palangana Mine, which has been our sole source
of U
3
O
8
sold to generate the revenues during Fiscal 2015, Fiscal 2013 and Fiscal 2012 of $3.1 million, $9.0
million and $13.8 million, respectively, with no revenues from sales of U
3
O
8
generated during the six months
ended January 31, 2018, Fiscal 2017, Fiscal 2016, Fiscal 2014 or for any periods prior to Fiscal 2012.
During the six months ended January 31,
2018, we continued to operate the Palangana Mine at a reduced pace since implementing our strategic plan in September 2013 to align
our operations to a weak uranium commodity market in a challenging post-Fukushima environment. This strategy has included the deferral
of major pre-extraction expenditures and remaining in a state of operational readiness in anticipation of a recovery in uranium
prices. Our ability to continue generating revenue from the Palangana Mine is subject to a number of factors which include,
but are not limited to: (i) a significant, prolonged decrease in the market price of uranium; (ii) difficulty in marketing and/or
selling uranium concentrates; (iii) significantly higher than expected capital costs to construct the mine and/or processing plant;
(iv) significantly higher than expected extraction costs; (v) significantly lower than expected uranium extraction; (vi) significant
delays, reductions or stoppages of uranium extraction activities; and (vii) the introduction of significantly more stringent regulatory
laws and regulations. Furthermore, continued mining activities at the Palangana Mine will eventually deplete the Palangana Mine
or cause such activities to become uneconomical, and if we are unable to directly acquire or develop existing uranium projects,
such as our Burke Hollow and Goliad Projects, into additional uranium mines from which we can commence uranium extraction, it will
negatively impact our ability to generate revenues. Any one or more of these occurrences may adversely affect our financial condition
and operating results.
Exploration and pre-extraction programs
and mining activities are inherently subject to numerous significant risks and uncertainties, and actual results may differ significantly
from expectations or anticipated amounts. Furthermore, exploration programs conducted on our projects may not result in the establishment
of ore bodies that contain commercially recoverable uranium.
Exploration and pre-extraction programs
and mining activities are inherently subject to numerous significant risks and uncertainties, with many beyond our control and
including, but not limited to: (i) unanticipated ground and water conditions and adverse claims to water rights; (ii) unusual or
unexpected geological formations; (iii) metallurgical and other processing problems; (iv) the occurrence of unusual weather or
operating conditions and other force majeure events; (v) lower than expected ore grades; (vi) industrial accidents; (vii) delays
in the receipt of or failure to receive necessary government permits; (viii) delays in transportation; (ix) availability of contractors
and labor; (x) government permit restrictions and regulation restrictions; (xi) unavailability of materials and equipment; and
(xii) the failure of equipment or processes to operate in accordance with specifications or expectations. These risks and uncertainties
could result in: (i) delays, reductions or stoppages in our mining activities; (ii) increased capital and/or extraction costs;
(iii) damage to, or destruction of, our mineral projects, extraction facilities or other properties; (iv) personal injuries; (v)
environmental damage; (vi) monetary losses; and (vii) legal claims.
Success in mineral exploration is dependent
on many factors, including, without limitation, the experience and capabilities of a company’s management, the availability
of geological expertise and the availability of sufficient funds to conduct the exploration program. Even if an exploration program
is successful and commercially recoverable material is established, it may take a number of years from the initial phases of drilling
and identification of the mineralization until extraction is possible, during which time the economic feasibility of extraction
may change such that the material ceases to be economically recoverable. Exploration is frequently non-productive due, for example,
to poor exploration results or the inability to establish ore bodies that contain commercially recoverable material, in which case
the project may be abandoned and written-off. Furthermore, we will not be able to benefit from our exploration efforts and recover
the expenditures that we incur on our exploration programs if we do not establish ore bodies that contain commercially recoverable
material and develop these projects into profitable mining activities, and there is no assurance that we will be successful in
doing so for any of our projects.
Whether an ore body contains commercially
recoverable material depends on many factors including, without limitation: (i) the particular attributes, including material changes
to those attributes, of the ore body such as size, grade, recovery rates and proximity to infrastructure; (ii) the market price
of uranium, which may be volatile; and (iii) government regulations and regulatory requirements including, without limitation,
those relating to environmental protection, permitting and land use, taxes, land tenure and transportation.
We have not established proven or
probable reserves through the completion of a “final” or “bankable” feasibility study for any of our projects,
including the Palangana Mine. Furthermore, we have no plans to establish proven or probable reserves for any of our uranium projects
for which we plan on utilizing ISR mining, such as the Palangana Mine. Since we commenced extraction of mineralized materials from
the Palangana Mine without having established proven or probable reserves, it may result in our mining activities at the Palangana
Mine, and at any future projects for which proven or probable reserves are not established, being inherently riskier than other
mining activities for which proven or probable reserves have been established.
We have established the existence of mineralized
materials for certain projects, including the Palangana Mine. We have not established proven or probable reserves, as defined by
the SEC under Industry Guide 7, through the completion of a “final” or “bankable” feasibility study for
any of our projects, including the Palangana Mine. Furthermore, we have no plans to establish proven or probable reserves for any
of our projects for which we plan on utilizing ISR mining, such as the Palangana Mine. Since we commenced uranium extraction at
the Palangana Mine without having established proven or probable reserves, there may be greater inherent uncertainty as to whether
or not any mineralized material can be economically extracted as originally planned and anticipated. Any mineralized materials
established or extracted from the Palangana Mine should not in any way be associated with having established or produced from proven
or probable reserves.
Since we are in the Exploration Stage,
pre-production expenditures including those related to pre-extraction activities are expensed as incurred, the effects of which
may result in our consolidated financial statements not being directly comparable to the financial statements of companies in the
Production Stage.
Despite the fact that we commenced uranium
extraction at the Palangana Mine in November 2010, we remain in the Exploration Stage as defined under Industry Guide 7, and will
continue to remain in the Exploration Stage until such time proven or probable reserves have been established, which may never
occur. We prepare our consolidated financial statements in accordance with United States generally accepted accounting principles
(“U.S. GAAP”) under which acquisition costs of mineral rights are initially capitalized as incurred while pre-production
expenditures are expensed as incurred until such time we exit the Exploration Stage. Expenditures relating to exploration
activities are expensed as incurred and expenditures relating to pre-extraction activities are expensed as incurred until such
time proven or probable reserves are established for that uranium project, after which subsequent expenditures relating to mine
development activities for that particular project are capitalized as incurred.
We have neither established nor have any
plans to establish proven or probable reserves for our uranium projects for which we plan on utilizing ISR mining, such as the
Palangana Mine. Companies in the Production Stage as defined by the SEC under Industry Guide 7, having established proven and probable
reserves and exited the Exploration Stage, typically capitalize expenditures relating to ongoing development activities, with corresponding
depletion calculated over proven and probable reserves using the units-of-production method and allocated to future reporting periods
to inventory and, as that inventory is sold, to cost of goods sold. As we are in the Exploration Stage, it has resulted in us reporting
larger losses than if we had been in the Production Stage due to the expensing, instead of capitalization, of expenditures relating
to ongoing mill and mine pre-extraction activities. Additionally, there would be no corresponding amortization allocated to our
future reporting periods since those costs would have been expensed previously, resulting in both lower inventory costs and cost
of goods sold and results of operations with higher gross profits and lower losses than if we had been in the Production Stage.
Any capitalized costs, such as acquisition costs of mineral rights, are depleted over the estimated extraction life using the straight-line
method. As a result, our consolidated financial statements may not be directly comparable to the financial statements of companies
in the Production Stage.
Estimated costs of future reclamation
obligations may be significantly exceeded by actual costs incurred in the future. Furthermore, only a portion of the financial
assurance required for the future reclamation obligations has been funded.
We are responsible for certain remediation
and decommissioning activities in the future primarily for our Hobson Processing Facility, Palangana Mine, Reno Creek Project and
Alto Paraná Project and have recorded a liability of $3.9 million on our balance sheet at January 31, 2018, to recognize
the present value of the estimated costs of such reclamation obligations. Should the actual costs to fulfill these future
reclamation obligations materially exceed these estimated costs, it may have an adverse effect on our financial condition and operating
results, including not having the financial resources required to fulfill such obligations when required to do so.
During Fiscal 2015, we secured $5.6 million
of surety bonds as an alternate source of financial assurance for the estimated costs of the reclamation obligations of our Hobson
Processing Facility and Palangana Mine, of which we have $1.7 million funded and held as restricted cash for collateral purposes
as required by the surety. We may be required at any time to fund the remaining $3.9 million or any portion thereof for a number
of reasons including, but not limited to, the following: (i) the terms of the surety bonds are amended, such as an increase in
collateral requirements; (ii) we are in default with the terms of the surety bonds; (iii) the surety bonds are no longer acceptable
as an alternate source of financial assurance by the regulatory authorities; or (iv) the surety encounters financial difficulties.
Should any one or more of these events occur in the future, we may not have the financial resources to fund the remaining amount
or any portion thereof when required to do so.
We do not insure against all of the
risks we face in our operations.
In general, where coverage is available
and not prohibitively expensive relative to the perceived risk, we will maintain insurance against such risk, subject to exclusions
and limitations. We currently maintain insurance against certain risks including securities and general commercial liability claims
and certain physical assets used in our operations, subject to exclusions and limitations, however, we do not maintain insurance
to cover all of the potential risks and hazards associated with our operations. We may be subject to liability for environmental,
pollution or other hazards associated with our exploration, pre-extraction and extraction activities, which we may not be insured
against, which may exceed the limits of our insurance coverage or which we may elect not to insure against because of high premiums
or other reasons. Furthermore, we cannot provide assurance that any insurance coverage we currently have will continue to be available
at reasonable premiums or that such insurance will adequately cover any resulting liability.
Acquisitions that we may make from
time to time could have an adverse impact on us.
From time to time we examine opportunities
to acquire additional mining assets and businesses. Any acquisition that we may choose to complete may be of a significant size,
may change the scale of our business and operations, and may expose us to new geographic, political, operating, financial and geological
risks. Our success in our acquisition activities depends on our ability to identify suitable acquisition candidates, negotiate
acceptable terms for any such acquisition and integrate the acquired operations successfully with those of our Company. Any acquisitions
would be accompanied by risks which could have a material adverse effect on our business. For example: (i) there may be a significant
change in commodity prices after we have committed to complete the transaction and established the purchase price or exchange ratio;
(ii) a material ore body may prove to be below expectations; (iii) we may have difficulty integrating and assimilating the operations
and personnel of any acquired companies, realizing anticipated synergies and maximizing the financial and strategic position of
the combined enterprise, and maintaining uniform standards, policies and controls across the organization; (iv) the integration
of the acquired business or assets may disrupt our ongoing business and our relationships with employees, customers, suppliers
and contractors; and (v) the acquired business or assets may have unknown liabilities which may be significant. In the event that
we choose to raise debt capital to finance any such acquisition, our leverage will be increased. If we choose to use equity as
consideration for such acquisition, existing shareholders may suffer dilution. Alternatively, we may choose to finance any such
acquisition with our existing resources. There can be no assurance that we would be successful in overcoming these risks or any
other problems encountered in connection with such acquisitions.
The uranium industry is subject to
numerous stringent laws, regulations and standards, including environmental protection laws and regulations. If any changes occur
that would make these laws, regulations and standards more stringent, it may require capital outlays in excess of those anticipated
or cause substantial delays, which would have a material adverse effect on our operations.
Uranium exploration and pre-extraction
programs and mining activities are subject to numerous stringent laws, regulations and standards at the federal, state and local
levels governing permitting, pre-extraction, extraction, exports, taxes, labor standards, occupational health, waste disposal,
protection and reclamation of the environment, protection of endangered and protected species, mine safety, hazardous substances
and other matters. Our compliance with these requirements requires significant financial and personnel resources.
The laws, regulations, policies or current
administrative practices of any government body, organization or regulatory agency in the United States or any other applicable
jurisdiction may change or be applied or interpreted in a manner which may also have a material adverse effect on our operations.
The actions, policies or regulations, or changes thereto, of any government body or regulatory agency or special interest group
may also have a material adverse effect on our operations.
Uranium exploration and pre-extraction
programs and mining activities are subject to stringent environmental protection laws and regulations at the federal, state, and
local levels. These laws and regulations include permitting and reclamation requirements, regulate emissions, water storage and
discharges and disposal of hazardous wastes. Uranium mining activities are also subject to laws and regulations which seek to maintain
health and safety standards by regulating the design and use of mining methods. Various permits from governmental and regulatory
bodies are required for mining to commence or continue, and no assurance can be provided that required permits will be received
in a timely manner.
Our compliance costs, including the posting
of surety bonds associated with environmental protection laws and regulations and health and safety standards, have been significant
to date, and are expected to increase in scale and scope as we expand our operations in the future. Furthermore, environmental
protection laws and regulations may become more stringent in the future, and compliance with such changes may require capital outlays
in excess of those anticipated or cause substantial delays, which would have a material adverse effect on our operations.
To the best of our knowledge, our operations
are in compliance, in all material respects, with all applicable laws, regulations and standards. If we become subject to liability
for any violations we may not be able or may elect not to insure against such risk due to high insurance premiums or other reasons.
Where coverage is available and not prohibitively expensive relative to the perceived risk, we will maintain insurance against
such risk, subject to exclusions and limitations. However, we cannot provide any assurance that such insurance will continue to
be available at reasonable premiums or that such insurance will be adequate to cover any resulting liability.
We may not be able to obtain, maintain
or amend rights, authorizations, licenses, permits or consents required for our operations.
Our exploration and mining activities are
dependent upon the grant of appropriate rights, authorizations, licences, permits and consents, as well as continuation and amendment
of these rights, authorizations, licences, permits and consents already granted, which may be granted for a defined period of time,
or may not be granted or may be withdrawn or made subject to limitations. There can be no assurance that all necessary rights,
authorizations, licences, permits and consents will be granted to us, or that authorizations, licences, permits and consents already
granted will not be withdrawn or made subject to limitations.
Major nuclear
incidents may have adverse effects on the nuclear and uranium industries.
The nuclear incident
that occurred in Japan in March 2011 had
significant and
adverse
effects on both the nuclear and uranium industries. If another nuclear incident were to occur it may have further adverse effects
for both industries. Public opinion of nuclear power as a source of electrical generation may be adversely affected, which may
cause governments of certain countries to further i
ncrease regulation
for the nuclear industry, reduce or abandon current reliance on nuclear power or reduce or abandon existing plans for nuclear power
expansion. Any one of these occurrences has the potential to reduce current and/or future demand for nuclear power, resulting in
lower demand for uranium and lower market prices for uranium, adversely affecting the operations and prospects of us. Furthermore,
the
growth of the nuclear and uranium industries is dependent on continuing and growing public support of nuclear power
as a viable source of electrical generation.
The marketability of uranium concentrates
will be affected by numerous factors beyond our control which may result in our inability to receive an adequate return on our
invested capital.
The marketability of uranium concentrates
extracted by us will be affected by numerous factors beyond our control. These factors include macroeconomic factors, fluctuations
in the market price of uranium, governmental regulations, land tenure and use, regulations concerning the importing and exporting
of uranium and environmental protection regulations. The future effects of these factors cannot be accurately predicted, but any
one or a combination of these factors may result in our inability to receive an adequate return on our invested capital.
The titanium industry is affected
by global economic factors, including risks associated with volatile economic conditions, and the market for many titanium products
is cyclical and volatile, and we may experience depressed market conditions for such products.
Titanium is used in many “quality
of life” products for which demand historically has been linked to global, regional and local GDP and discretionary spending,
which can be negatively impacted by regional and world events or economic conditions. Such events are likely to cause a decrease
in demand for products and, as a result, may have an adverse effect on our results of operations and financial condition. The timing
and extent of any changes to currently prevailing market conditions is uncertain, and supply and demand may be unbalanced at any
time. Uncertain economic conditions and market instability make it particularly difficult for us to forecast demand trends. As
a consequence, we may not be able to accurately predict future economic conditions or the effect of such conditions on our financial
condition or results of operations. We can give no assurances as to the timing, extent or duration of the current or future economic
cycles impacting the industries in which we operate.
Historically, the market for large volume
titanium applications, including coatings, paper and plastics, has experienced alternating periods of tight supply, causing prices
and margins to increase, followed by periods of lower capacity utilization resulting in declining prices and margins. The volatility
this market experiences occurs as a result of significant changes in the demand for products as a consequence of global economic
activity and changes in customers’ requirements. The supply-demand balance is also impacted by capacity additions or reductions
that result in changes of utilization rates. In addition, titanium margins are impacted by significant changes in major input costs
such as energy and feedstock. Demand for titanium depends in part on the housing and construction industries. These industries
are cyclical in nature and have historically been impacted by downturns in the economy. In addition, pricing may affect customer
inventory levels as customers may from time to time accelerate purchases of titanium in advance of anticipated price increases
or defer purchases of titanium in advance of anticipated price decreases. The cyclicality and volatility of the titanium industry
results in significant fluctuations in profits and cash flow from period to period and over the business cycle.
The uranium and titanium industries
are highly competitive and we may not be successful in acquiring additional projects.
The uranium industry is highly competitive
and our competition includes larger, more established companies with longer operating histories that not only explore for and produce
uranium, but also market uranium and other products on a regional, national or worldwide basis. Due to their greater financial
and technical resources we may not be able to acquire additional uranium projects in a competitive bidding process involving such
companies. Additionally, these larger companies have greater resources to continue with their operations during periods of depressed
market conditions.
The titanium industry is concentrated and
highly competitive and we may not be able to compete effectively with our competitors that have greater financial resources or
those that are vertically integrated, which could have a material adverse effect on our business, results of operations and financial
condition.
The global titanium market is highly competitive,
with the top six producers accounting for approximately 60% of the world’s production capacity. Competition is based on a
number of factors, such as price, product quality and service. Competition is based on a number of factors, such as price, product
quality and service. Among our competitors are companies that are vertically-integrated (those that have their own raw material
resources). Changes in the competitive landscape could make it difficult for us to retain our competitive position in various products
and markets throughout the world. Our competitors with their own raw material resources may have a competitive advantage during
periods of higher raw material prices. In addition, some of the companies with whom we compete may be able to produce products
more economically than we can. Furthermore, some of our competitors have greater financial resources, which may enable them to
invest significant capital into their businesses, including expenditures for research and development.
We hold
mineral rights in foreign jurisdictions which could be subject to additional risks due to political, taxation, economic and cultural
factors.
We hold certain mineral rights located
in Paraguay through Piedra Rica Mining S.A., Transandes Paraguay S.A., Trier S.A. and Metalicos Y No Metalicos S.R.L, which are
incorporated in Paraguay. Operations in foreign jurisdictions outside of the United States and Canada, especially in developing
countries, may be subject to additional risks as they may have different political, regulatory, taxation, economic and cultural
environments that may adversely affect the value or continued viability of our rights. These additional risks include, but are
not limited to: (i) changes in governments or senior government officials; (ii) changes to existing laws or policies on foreign
investments, environmental protection, mining and ownership of mineral interests; (iii) renegotiation, cancellation, expropriation
and nationalization of existing permits or contracts; (iv) foreign currency controls and fluctuations; and (v) civil disturbances,
terrorism and war.
In the event of a dispute arising at our
foreign operations in Paraguay, we may be subject to the exclusive jurisdiction of foreign courts or may not be successful in subjecting
foreign persons to the jurisdiction of the courts in the United States or Canada. We may also be hindered or prevented from enforcing
our rights with respect to a government entity or instrumentality because of the doctrine of sovereign immunity. Any adverse or
arbitrary decision of a foreign court may have a material and adverse impact on our business, prospects, financial condition and
results of operations.
The title to our mineral property
interests may be challenged.
Although we have taken reasonable measures
to ensure proper title to our interests in mineral properties and other assets, there is no guarantee that the title to any of
such interests will not be challenged. No assurance can be given that we will be able to secure the grant or the renewal of existing
mineral rights and tenures on terms satisfactory to us, or that governments in the jurisdictions in which we operate will not revoke
or significantly alter such rights or tenures or that such rights or tenures will not be challenged or impugned by third parties,
including local governments, aboriginal peoples or other claimants. Our mineral properties may be subject to prior unregistered
agreements, transfers or claims, and title may be affected by, among other things, undetected defects. A successful challenge to
the precise area and location of our claims could result in us being unable to operate on our properties as permitted or being
unable to enforce our rights with respect to our properties.
Due to the nature of our business,
we may be subject to legal proceedings which may divert management’s time and attention from our business and result in substantial
damage awards.
Due to the nature of our business, we may
be subject to numerous regulatory investigations, securities claims, civil claims, lawsuits and other proceedings in the ordinary
course of our business including those described under Item 1. Legal Proceedings. The outcome of these lawsuits is uncertain
and subject to inherent uncertainties, and the actual costs to be incurred will depend upon many unknown factors. We may be forced
to expend significant resources in the defense of these suits, and we may not prevail. Defending against these and other lawsuits
in the future may not only require us to incur significant legal fees and expenses, but may become time-consuming for us and detract
from our ability to fully focus our internal resources on our business activities. The results of any legal proceeding cannot be
predicted with certainty due to the uncertainty inherent in litigation, the difficulty of predicting decisions of regulators, judges
and juries and the possibility that decisions may be reversed on appeal. There can be no assurances that these matters will not
have a material adverse effect on our business, financial position or operating results.
We depend on certain key personnel,
and our success will depend on our continued ability to retain and attract such qualified personnel.
Our success is dependent on the efforts,
abilities and continued service of certain senior officers and key employees and consultants. A number of our key employees and
consultants have significant experience in the uranium industry. A loss of service from any one of these individuals may adversely
affect our operations, and we may have difficulty or may not be able to locate and hire a suitable replacement.
Certain directors and officers may
be subject to conflicts of interest.
The majority of our directors and officers
are involved in other business ventures including similar capacities with other private or publicly-traded companies. Such individuals
may have significant responsibilities to these other business ventures, including consulting relationships, which may require significant
amounts of their available time. Conflicts of interest may include decisions on how much time to devote to our business affairs
and what business opportunities should be presented to us. Our Code of Business Conduct for Directors, Officers and Employees provides
for guidance on conflicts of interest.
The laws of the State of Nevada and
our Articles of Incorporation may protect our directors and officers from certain types of lawsuits.
The laws of the State of Nevada provide
that our directors and officers will not be liable to us or to our stockholders for monetary damages for all but certain types
of conduct as directors and officers. Our Bylaws provide for broad indemnification powers to all persons against all damages incurred
in connection with our business to the fullest extent provided or allowed by law. These indemnification provisions may require
us to use our limited assets to defend our directors and officers against claims, and may have the effect of preventing stockholders
from recovering damages against our directors and officers caused by their negligence, poor judgment or other circumstances.
Several of our directors and officers
are residents outside of the United States, and it may be difficult for stockholders to enforce within the United States any judgments
obtained against such directors or officers.
Several of our directors and officers are
nationals and/or residents of countries other than the United States, and all or a substantial portion of such persons’ assets
are located outside of the United States. As a result, it may be difficult for investors to effect service of process on such directors
and officers, or enforce within the United States any judgments obtained against such directors and officers, including judgments
predicated upon the civil liability provisions of the securities laws of the United States or any state thereof. Consequently,
stockholders may be effectively prevented from pursuing remedies against such directors and officers under United States federal
securities laws. In addition, stockholders may not be able to commence an action in a Canadian court predicated upon the civil
liability provisions under United States federal securities laws. The foregoing risks also apply to those experts identified in
this document that are not residents of the United States.
Disclosure controls and procedures
and internal control over financial reporting, no matter how well designed and operated, are designed to obtain reasonable, and
not absolute, assurance as to its reliability and effectiveness.
Management’s evaluation on the effectiveness
of disclosure controls and procedures is designed to ensure that information required for disclosure in our public filings is recorded,
processed, summarized and reported on a timely basis to our senior management, as appropriate, to allow timely decisions regarding
required disclosure. Management’s report on internal control over financial reporting is designed to provide reasonable assurance
that transactions are properly authorized, assets are safeguarded against unauthorized or improper use and transactions are properly
recorded and reported. However, any system of controls, no matter how well designed and operated, is based in part upon certain
assumptions designed to obtain reasonable, and not absolute, assurance as to its reliability and effectiveness. Any failure to
maintain effective disclosure controls and procedures in the future may result in our inability to continue meeting our reporting
obligations in a timely manner, qualified audit opinions or restatements of our financial reports, any one of which may affect
the market price for our common stock and our ability to access the capital markets.
Risks Related to Our Common Stock
Historically, the market price of
our common stock has been and may continue to fluctuate significantly.
On September 28, 2007, our common stock
commenced trading on the NYSE American (formerly known as the American Stock Exchange, the NYSE Amex Equities Exchange and the
NYSE MKT) and prior to that, traded on the OTC Bulletin Board.
The global markets have experienced significant
and increased volatility in the past, and have been impacted by the effects of mass sub-prime mortgage defaults and liquidity problems
of the asset-backed commercial paper market, resulting in a number of large financial institutions requiring government bailouts
or filing for bankruptcy. The effects of these past events and any similar events in the future may continue to or further affect
the global markets, which may directly affect the market price of our common stock and our accessibility for additional financing.
Although this volatility may be unrelated to specific company performance, it can have an adverse effect on the market price of
our shares which, historically, has fluctuated significantly and may continue to do so in the future.
In addition to the volatility associated
with general economic trends and market conditions, the market price of our common stock could decline significantly due to the
impact of any one or more events, including, but not limited to, the following: (i) volatility in the uranium market; (ii) occurrence
of a major nuclear incident such as the events in Fukushima in March 2011; (iii) changes in the outlook for the nuclear power and
uranium industries; (iv) failure to meet market expectations on our exploration, pre-extraction or extraction activities, including
abandonment of key uranium projects; (v) sales of a large number of our shares held by certain stockholders including institutions
and insiders; (vi) downward revisions to previous estimates on us by analysts; (vii) removal from market indices; (viii) legal
claims brought forth against us; and (ix) introduction of technological innovations by competitors or in competing technologies.
A prolonged decline in the market
price of our common stock could affect our ability to obtain additional financing which would adversely affect our operations.
Historically, we have relied on equity
financing and, more recently, on debt financing, as primary sources of financing. A prolonged decline in the market price of our
common stock or a reduction in our accessibility to the global markets may result in our inability to secure additional financing
which would have an adverse effect on our operations.
Additional issuances of our common
stock may result in significant dilution to our existing shareholders and reduce the market value of their investment.
We are authorized to issue 750,000,000
shares of common stock of which 157,821,788 shares were issued and outstanding as of April 4, 2018. Future issuances for financings,
mergers and acquisitions, exercise of stock options and share purchase warrants and for other reasons may result in significant
dilution to and be issued at prices substantially below the price paid for our shares held by our existing stockholders. Significant
dilution would reduce the proportionate ownership and voting power held by our existing stockholders, and may result in a decrease
in the market price of our shares.
We filed the 2014 Shelf which was declared
effective on January 10, 2014, providing for the public offer and sale of certain securities of the Company from time to time,
at our discretion, up to an aggregate offering amount of $100 million. We filed the 2017 Shelf, which was declared effective on
March 10, 2017, and, as a result, it replaced the 2014 Shelf which was then deemed terminated. The 2017 Shelf provides for the
public offer and sale of certain securities of our Company from time to time, at our discretion, up to an aggregate offering amount
of $100 million, of which a total of $33.7 million has been utilized through public offerings as of January 31, 2018.
We are subject to the Continued Listing
Criteria of the NYSE American and our failure to satisfy these criteria may result in delisting of our common stock
.
Our common stock is currently listed on
the NYSE American. In order to maintain this listing, we must maintain certain share prices, financial and share distribution
targets, including maintaining a minimum amount of shareholders’ equity and a minimum number of public shareholders.
In addition to these objective standards, the NYSE American may delist the securities of any issuer: (i) if, in its opinion, the
issuer’s financial condition and/or operating results appear unsatisfactory; (ii) if it appears that the extent of public
distribution or the aggregate market value of the security has become so reduced as to make continued listing on the NYSE American
inadvisable; (iii) if the issuer sells or disposes of principal operating assets or ceases to be an operating company; (iv) if
an issuer fails to comply with the NYSE American’s listing requirements; (v) if an issuer’s common stock sells at what
the NYSE American considers a “low selling price” and the issuer fails to correct this via a reverse split of shares
after notification by the NYSE American; or (vi) if any other event occurs or any condition exists which makes continued listing
on the NYSE American, in its opinion, inadvisable.
If the NYSE American delists our common
stock, investors may face material adverse consequences, including, but not limited to, a lack of trading market for our securities,
reduced liquidity, decreased analyst coverage of our securities and an inability for us to obtain additional financing to fund
our operations.
The Selling Securityholders, CEF (Capital
Markets) Limited, Sprott Resource Lending Partnership, Resource Income Partners Limited Partnership, RIBO Trust, Suntrail Investments
Ltd., Salim Jiwa and McMillan LLP are offering, from time to time, up to an aggregate of 758,035 shares of common stock under this
prospectus.
On February 9, 2016, we entered into a
second amended and restated credit agreement (the “Second Amended and Restated Credit Agreement”) by and among the
Company, certain of the Company’s U.S. subsidiaries, specifically, South Texas Mining Venture L.L.P., URN Texas GP, LLC and
URN South Texas Project, Ltd., as guarantors (collectively, the “Guarantors”), and Sprott Resource Lending Partnership,
as agent (“Sprott”), Sprott Resource Lending Partnership, Resource Income Partners Limited Partnership and CEF (Capital
Markets) Limited, as lenders (collectively, the “Lenders”), whereby the parties made certain further amendments (collectively,
the “Second Amendments”) to a $20,000,000 senior secured credit facility (the “Credit Facility”) made available
to us on and subject to the terms and conditions of a credit agreement dated July 30, 2013 among the parties (the “Credit
Agreement”), as amended by an amended and restated credit agreement dated March 13, 2014 among the parties (the “Amended
and Restated Credit Agreement”).
Under the Credit Facility, the Company
received initial funding in the amount of $10,000,000 on July 30, 2013 (the “Initial Advance”), and drew down a further
$10,000,000 pursuant to a second and third advance on March 13, 2014, in accordance with the terms of the Amended and Restated
Credit Agreement, bringing the total principal amount outstanding under the Credit Facility to $20,000,000.
The Second Amendments include, among other
things: (i) an extension to the maturity date of the Credit Facility from July 31, 2017 to January 1, 2020 (the “Second Credit
Facility Extension”); (ii) a deferral of the monthly principal payments commencement date from July 31, 2016 to February
1, 2019; and (iii) a decrease of the exercise price under the 2,600,000 common stock purchase warrants issued to the Lenders, on
a pro rata basis, in connection with the Initial Advance (the “Bonus Warrants”) to $1.35 and an extension of the exercise
period under the Bonus Warrants to January 30, 2020. In addition, should any principal be outstanding on each of February 1, 2017,
2018 and 2019 (each, a “Second Extension Annual Fee Payment Date”), an annual fee will be due by the Company to the
Lenders in cash or common shares of the Company (each a “Second Extension Annual Fee Share Payment”), at the option
of the Company, at the rate of 5.5%, 4.5% and 4.5%, respectively, on each such date. The Second Extension Annual Fee Share Payment
is to be payable (if at all) in such number of common shares of the Company determined on the basis of a 10% discount to the five
trading-day volume-weighted average trading price of our common shares on the NYSE American immediately prior to the applicable
date. No Second Extension Annual Fee Share Payment is payable on a Second Extension Annual Fee Payment Date should the Credit Facility
be repaid in full prior to such date.
In connection with the Second Credit Facility
Extension, the Company issued to the Lenders, on a pro rata basis, an aggregate of 959,613 restricted common shares of the Company
as a second extension fee.
Subsequent to the closing of the Second
Amended and Restated Credit Agreement, on February 23, 2016, Sprott assigned 80% of its $5,000,000 loan to The Rick and Bonnie
Rule Family Trust (now named RIBO Trust), Suntrail Investments Ltd. and Salim Jiwa as to 20%, 20% and 40%, respectively, and transferred
an aggregate of 191,923 of the 239,903 restricted common shares of the Company it received as a second extension fee as well as
an aggregate of 520,000 of the 650,000 Bonus Warrants that were issued to Sprott pursuant to the Credit Agreement to RIBO Trust,
Suntrail Investments Ltd. and Salim Jiwa in the same percentages as the loan. These transfers were made by Sprott pursuant to exemptions
from the registration requirements under the United States Securities Act of 1933, as amended (the “Securities Act”).
In accordance with the Second Amended and
Restated Credit Facility, the Company issued to the Lenders, which includes RIBO Trust, Suntrail Investments Ltd. and Salim Jiwa,
on a pro rata basis, an aggregate of 641,574 restricted common shares of the Company as a Second Extension Annual Fee Share Payment.
Effective on March 5, 2018, we accepted
a Shares for Debt Subscription Agreement with McMillan LLP for the issuance of 116,461 restricted common shares in settlement of
$154,892.95 owing by us to McMillan LLP. We issued the 116,461 restricted common shares on March 14, 2018.
We agreed to file the registration statement
of which this prospectus forms a part with the SEC in accordance with the requirements of the Securities Act in order to register
such 758,035 shares of common stock for resale by the Selling Securityholders.
The securities issued with respect to the
Second Amended and Restated Credit Agreement were issued in reliance on Rule 506 of Regulation D of the Securities Act, with respect
to investors in the United States, and in reliance on Rule 903 of Regulation S of the Securities Act, with respect to those investors
who were not “U.S. persons”, within the meaning of Regulation S, and who were otherwise outside of the United States.
Sales to United States investors pursuant to Rule 506 of Regulation D were limited to institutional investors that qualified as
“accredited investors” within the meaning of Rule 501(a) of Regulation D.
The securities issued with respect to the
Shares for Debt Subscription Agreement were issued in reliance on Rule 903 of Regulation S of the Securities Act, as such investor
was not a “U.S. person”, within the meaning of Regulation S and was outside of the United States based on representations
and warranties contained in the Shares for Debt Subscription Agreement.
The following table sets forth information
as of April 4, 2018 regarding the ownership of the shares of common stock to be sold by the Selling Securityholders. The number
of shares indicated for each Selling Securityholder includes both the shares and, if applicable, the shares underlying certain
warrants issued under the Credit Agreement.
Information with respect to “Number
of shares owned prior to this offering” includes shares issuable upon exercise of warrants, if applicable, held by the Selling
Securityholders and other shares held of record by the Selling Securityholders. The “Number of shares being offered”
consists of the 758,035 shares which may be resold by the Selling Securityholders pursuant to this prospectus.
Information with respect to “Number
of shares to be owned upon completion of this offering” assumes the sale of all of the shares being offered by this prospectus
and no other purchases or sales of our common stock by the Selling Securityholders.
Except as described below and to our knowledge,
the named Selling Securityholders own and have sole voting and investment power over all shares or rights to these shares. Except
for their ownership of common stock described below, none of the Selling Securityholders had or have any material relationship
with us. The Selling Securityholders may have sold or transferred, in transactions exempt from the registration requirements of
the Securities Act, some or all of the common stock held by them since the date as of which information is presented below.
The applicable percentages of beneficial
ownership are based on an aggregate of 157,821,788 shares of our common stock issued and outstanding on April 4, 2018, adjusted
as may be required by rules promulgated by the SEC.
Name of Selling Securityholder
|
|
Number of shares owned
prior to this
offering
(1)
|
|
|
Number of shares being offered
(2)
|
|
|
Number of shares to be owned upon completion of this offering
(3)
|
|
|
Percent owned upon completion of this offering
(3)(4)
|
|
CEF (Capital Markets) Limited
(5)
|
|
|
3,243,041
|
(6)
|
|
|
320,787
|
|
|
|
2,922,254
|
|
|
|
1.8
|
%
|
Sprott Resource Lending Partnership
(7)
|
|
|
199,004
|
(8)
|
|
|
32,079
|
|
|
|
166,925
|
|
|
|
0.1
|
%
|
Resource Income Partners Limited Partnership
(9)
|
|
|
1,289,336
|
(10)
|
|
|
160,393
|
|
|
|
1,128,943
|
|
|
|
0.7
|
%
|
RIBO Trust
(11)
|
|
|
199,004
|
(12)
|
|
|
32,079
|
|
|
|
166,925
|
|
|
|
0.1
|
%
|
Suntrail Investments Ltd.
(13)
|
|
|
246,985
|
(14)
|
|
|
32,079
|
|
|
|
214,906
|
|
|
|
0.1
|
%
|
Salim Jiwa
|
|
|
398,008
|
(15)
|
|
|
64,157
|
|
|
|
333,851
|
|
|
|
0.2
|
%
|
McMillan LLP
(16)
|
|
|
116,461
|
(17)
|
|
|
116,461
|
|
|
|
Nil
|
|
|
|
Nil
|
|
Total
|
|
|
|
|
|
|
758,035
|
|
|
|
4,933,804
|
|
|
|
3.1
|
%
|
|
(1)
|
Beneficial ownership calculation under Rule 13d-3 of the Securities Exchange Act of 1934, as amended.
Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement,
understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting
of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may
be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose
of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the
shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing
the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially
owned by such person (and only such person) by reason of these acquisition rights.
|
|
(2)
|
The “Number of shares being offered” for each Selling Securityholder consists of the
shares which are being registered pursuant to the registration statement of which this prospectus forms a part, that is, the 641,574
shares of common stock issued on February 1, 2018, pursuant to the Second Amended and Restated Credit Agreement, and the 116,461
shares of common stock issued on March 14, 2018, pursuant to the Shares for Debt Subscription Agreement.
|
|
(3)
|
Assumes that the Selling Securityholders sell all of the shares which are being registered under
the registration statement of which this prospectus forms a part.
|
|
(4)
|
Based on 157,821,788 shares of our common stock issued and outstanding as of April 4, 2018.
|
|
(5)
|
CEF (Capital Markets) Limited is a wholly owned subsidiary of CEF Holdings. Warren Gilman, Chairman
and Chief Executive Officer of CEF Holdings, has discretionary voting and investment authority over these shares.
|
|
(6)
|
This figure consists of 1,943,041 shares of common stock and 1,300,000 shares of common stock issuable
upon exercise of warrants.
|
|
(7)
|
Narinder Nagra, President and Chief Operating Officer of Sprott Resource Lending Partnership, has
discretionary voting and investment authority over these shares.
|
|
(8)
|
This figure consists of 69,004 shares of common stock and 130,000 shares of common stock issuable
upon exercise of warrants.
|
|
(9)
|
Arthur Richards Rule, President of Resource Capital Investment Corp. (“RCIC”, which
is the corporate general partner of Resource Income Partners Limited Partnership and Exploration Capital Partners 2014 Limited
Partnership), and Gretchen Carter, Chief Financial Officer of RCIC, have discretionary voting and investment authority over these
shares.
|
|
(10)
|
This figure consists of: (i) 345,219 shares of common stock and 650,000 shares of common stock
issuable upon exercise of warrants held by Resource Income Partners Limited Partnership; and (ii) 294,117shares of common stock
issuable upon exercise of warrants held by Exploration Capital Partners 2014 Limited Partnership.
|
|
(11)
|
Arthur Rule IV and Bonnie Rule, trustees of RIBO Trust have discretionary voting and investment
authority over these shares.
|
|
(12)
|
This figure consists of 69,004 shares of common stock and 130,000 shares of common stock issuable
upon exercise of warrants.
|
|
(13)
|
Ivan Hooper has discretionary voting and investment authority over these shares.
|
|
(14)
|
This figure consists of 116,985 shares of common stock and 130,000 shares of common stock issuable
upon exercise of warrants.
|
|
(15)
|
This figure consists of 138,008 shares of common stock and 260,000 shares of common stock issuable
upon exercise of warrants.
|
|
(16)
|
Tom Theodorakis and Bernhard Zinkhofer of McMillan LLP have discretionary voting and investment
authority over these shares.
|
|
(17)
|
This figure consists of 116,461 shares of common stock only.
|