The accompanying notes are an integral part
of these condensed consolidated financial statements
The accompanying notes are an integral part
of these condensed consolidated financial statements
The accompanying notes are an integral part
of these condensed consolidated financial statements
The accompanying notes are an integral part
of these condensed consolidated financial statements
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
April 30, 2018
(Unaudited)
|
NOTE 1:
|
NATURE OF OPERATIONS AND GOING CONCERN
|
Uranium Energy Corp. was incorporated in
the State of Nevada on May 16, 2003. Uranium Energy Corp. and its subsidiary companies and a controlled partnership (collectively,
the “Company” or “we”) are engaged in uranium and titanium mining and related activities, including exploration,
pre-extraction, extraction and processing of uranium concentrates and titanium minerals, on projects located in the United States,
in Canada and in the Republic of Paraguay.
Although planned principal operations have
commenced from which significant revenues from sales of uranium concentrates were realized for the fiscal years ended July 31,
2015 (“Fiscal 2015”), July 31, 2013 (“Fiscal 2013”) and July 31, 2012 (“Fiscal 2012”), we have
yet to achieve profitability and have had a history of operating losses resulting in an accumulated deficit balance since inception.
No revenue from uranium sales was realized for the nine months ended April 30, 2018, or for the fiscal years ended July 31, 2017
(“Fiscal 2017”), July 31, 2016 (“Fiscal 2016”) or July 31, 2014 (“Fiscal 2014”). Historically,
we have been reliant primarily on equity financings from the sale of our common stock and, during Fiscal 2014 and Fiscal 2013,
on debt financing in order to fund our operations, and this reliance is expected to continue for the foreseeable future.
At April 30, 2018, we had working capital
of $7.4 million including cash and cash equivalents of approximately $11.2 million and short-term investments of $1.0 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 our 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 when required and on terms favorable to us; and therefore, substantial doubt exists as to whether our cash resources and
working capital will be sufficient to enable our Company to continue as a going concern for the next 12 months from the date that
our condensed consolidated financial statements are issued. Our continued operations, including the recoverability of the carrying
values of our assets, are dependent ultimately on our ability to achieve and maintain profitability and positive cash flow from
our operations.
These consolidated financial statements
have been prepared on a going concern basis and do not include any adjustments to the amounts and classification of assets and
liabilities that may be necessary in the event we can no longer continue as a going concern.
|
NOTE 2:
|
BASIS OF PRESENTATION
|
The accompanying unaudited interim condensed
consolidated financial statements have been prepared in accordance with United States (“U.S.”) generally accepted accounting
principles (“U.S. GAAP”) for interim financial information and are presented in U.S. dollars. Accordingly, they do
not include all of the information and footnotes required under U.S. GAAP for complete financial statements. These unaudited interim
condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included
in our Annual Report on Form 10-K for Fiscal 2017. In the opinion of management, all adjustments of a normal recurring nature and
considered necessary for a fair presentation, have been made. Operating results for the nine months ended April 30, 2018, are not
necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2018 (“Fiscal 2018”).
Exploration Stage
We have established the existence of mineralized
materials for certain uranium projects, including for our Palangana Mine. We have not established proven or probable reserves,
as defined by the United States Securities and Exchange Commission (the “SEC”) under Industry Guide 7, through the
completion of a “final” or “bankable” feasibility study for any of our uranium 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 in-situ recovery (“ISR”) mining, such as the Palangana Mine. As a result, and despite the fact
that we commenced extraction of mineralized materials 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.
URANIUM
ENERGY CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
April 30, 2018
(Unaudited)
Since we commenced the extraction of mineralized
materials at the Palangana Mine without having established proven or probable reserves, 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.
In accordance with U.S. GAAP, expenditures
relating to the acquisition of mineral rights are initially capitalized as incurred while exploration and pre-extraction expenditures
are expensed as incurred until such time we exit the Exploration Stage by establishing proven or probable reserves. Expenditures
relating to exploration activities such as drilling programs to establish mineralized materials are expensed as incurred. Expenditures
relating to pre-extraction activities such as the construction of mine wellfields, ion exchange facilities and disposal wells are
expensed as incurred until such time proven or probable reserves are established for that project, after which expenditures relating
to mine development activities for that particular project are capitalized as incurred.
Companies in the Production Stage as defined
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. We are in the Exploration Stage which has resulted in us reporting larger losses than if it had been in the
Production Stage due to the expensing, rather than capitalizing, of expenditures relating to ongoing mill and mine development
activities. Additionally, there would be no corresponding amortization allocated to future reporting periods of our Company 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 expenditures relating to the acquisition 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.
|
NOTE 3:
|
PREPAID EXPENSES AND DEPOSITS
|
At April 30, 2018, prepaid expenses and deposits consisted of
the following:
|
|
|
|
|
|
|
|
|
April 30, 2018
|
|
|
July 31, 2017
|
|
Prepaid Property Renewal Fees
|
|
$
|
609,866
|
|
|
$
|
189,845
|
|
Prepaid Insurance
|
|
|
213,325
|
|
|
|
91,073
|
|
Prepaid Listing and Subscriptions
|
|
|
90,384
|
|
|
|
60,289
|
|
Prepaid License Fees
|
|
|
66,207
|
|
|
|
16,389
|
|
Prepaid Surety Bond Premium
|
|
|
68,585
|
|
|
|
38,952
|
|
Deposits and Expense Advances
|
|
|
85,507
|
|
|
|
86,439
|
|
Other Prepaid Expenses
|
|
|
115,179
|
|
|
|
203,005
|
|
|
|
$
|
1,249,053
|
|
|
$
|
685,992
|
|
|
NOTE 4:
|
ACQUISITION OF RENO CREEK PROJECT
|
On August 9, 2017, we completed the acquisition
of the issued and outstanding shares of Reno Creek Holdings Inc. (“RCHI”) and, indirectly thereby, 100% of its fully
permitted Reno Creek in-situ recovery uranium project (the “Reno Creek Project”) located in the Powder River Basin,
Wyoming, from each of the Pacific Roads Resources Funds (collectively, “PRRF”; as to 97.27% of RCHI) and Bayswater
Holdings Inc. (as to the remaining 2.73% of RCHI; and, collectively with PRRF, the “Reno Creek Vendors”), in accordance
with the terms and conditions of a certain Share Purchase Agreement, dated May 9, 2017, as amended by a certain Amending Agreement,
dated August 7, 2017 (collectively, the “Share Purchase Agreement”; and, collectively, the “Reno Creek Acquisition”).
URANIUM
ENERGY CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
April 30, 2018
(Unaudited)
Pursuant to the terms of the original Share
Purchase Agreement, we agreed to reimburse all costs and expenses (the “Reimbursable Expenses”) incurred by RCHI and
its subsidiaries in the ordinary course of business from the effective date of the Share Purchase Agreement to closing, and, pursuant
to the Amending Agreement, we also agreed with that the amount to be distributed from RCHI’s subsidiaries to RCHI at closing
totalled $1,743,666, which was comprised of the Reimbursable Expenses and the amount of cash on hand held by RCHI’s subsidiaries
at the time.
In connection with the completion of the
Reno Creek Acquisition, we paid the following consideration:
|
·
|
a cash payment of $909,930;
|
|
·
|
14,392,927 shares of the Company;
|
|
·
|
an additional 241,821 shares of the Company in settlement of certain insurance costs of $340,000
incurred by the Company and RCHI at closing;
|
|
·
|
11,308,728 warrants of the Company (each a “Warrant”), with each Warrant entitling
the holder to acquire one share of the Company at an exercise price of $2.30 per share for a period of five years from the date
of issuance. The Warrants have an accelerator clause which provides that, in the event that the closing price of the shares of
the Company on its principally traded exchange is equal to or greater than $4.00 per share for a period of 20 consecutive trading
days, the Company may accelerate the expiry date of the Warrants to within 30 days by providing written notice to the holders;
|
|
·
|
a 0.5% net profits interest royalty, capped at $2.5 million; and
|
|
·
|
transaction costs of $779,509, of which $283,013 was paid by the issuance of 217,702 shares of
the Company.
|
In connection with the Reno Creek Acquisition,
we also issued 353,160 common shares in settlement of the Reimbursable Expenses totalling $483,829, which was included in the mineral
property expenditures on our condensed consolidated financial statements for the nine months ended April 30, 2018.
In accordance with ASC 360: Property, Plant
and Equipment, the Reno Creek Acquisition was accounted for as an asset acquisition as it was determined that the operations of
the Reno Creek Project do not meet the definition of a business as defined in ASC 805: Business Combinations.
The fair value of the consideration paid
and the allocation to the identifiable assets acquired and liabilities assumed are summarized as follows:
Consideration paid
|
|
|
|
14,634,748 UEC common shares at $1.37 per share
|
|
$
|
20,049,605
|
|
11,308,728 UEC share purchase warrants at $0.45 per warrant
|
|
|
5,088,928
|
|
Cash payment
|
|
|
909,930
|
|
Transaction costs
|
|
|
779,509
|
|
|
|
$
|
26,827,972
|
|
Assets acquired and liabilities assumed
|
|
|
|
Cash and cash equivalents
|
|
$
|
1,247,170
|
|
Prepaid expenses
|
|
|
319,874
|
|
Reclamation deposits
|
|
|
73,973
|
|
Land & buildings
|
|
|
370,085
|
|
Mineral rights & properties
|
|
|
25,553,807
|
|
Asset retirement obligations
|
|
|
(73,973
|
)
|
Deferred tax liabilities
|
|
|
(662,964
|
)
|
|
|
$
|
26,827,972
|
|
URANIUM
ENERGY CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
April 30, 2018
(Unaudited)
The Reno Creek Project is comprised of
U.S. federal mineral lode claims, state mineral leases, various private mineral leases and certain surface use agreements which
grant us the exclusive right to explore, develop and mine for uranium on a 19,437
-
acre
area in Campbell County, Wyoming. The mineral leases and surface use agreements are subject to certain royalty interests with terms
ranging from 5 to 15 years, some of which have extension provisions.
|
NOTE 5:
|
MINERAL RIGHTS AND PROPERTIES
|
Mineral Rights
At April 30, 2018, we had mineral rights
in the States of Arizona, Colorado, New Mexico, Wyoming and Texas, in Canada and in the Republic of Paraguay. These mineral rights
were acquired through staking, purchase or lease agreements and are subject to varying royalty interests, some of which are indexed
to the sale price of uranium and titanium. At April 30, 2018, annual maintenance payments of approximately $1,833,000 will be required
to maintain these mineral rights.
Mineral rights and property acquisition costs consisted of the
following:
|
|
April 30, 2018
|
|
|
July 31, 2017
|
|
Mineral Rights and Properties
|
|
|
|
|
|
|
|
|
Palangana Mine
|
|
$
|
6,285,898
|
|
|
$
|
6,285,898
|
|
Goliad Project
|
|
|
8,689,127
|
|
|
|
8,689,127
|
|
Burke Hollow Project
|
|
|
1,495,750
|
|
|
|
1,495,750
|
|
Longhorn Project
|
|
|
116,870
|
|
|
|
116,870
|
|
Salvo Project
|
|
|
14,905
|
|
|
|
14,905
|
|
Anderson Project
|
|
|
9,154,268
|
|
|
|
9,154,268
|
|
Workman Creek Project
|
|
|
1,632,500
|
|
|
|
1,520,680
|
|
Los Cuatros Project
|
|
|
257,250
|
|
|
|
257,250
|
|
Slick Rock Project
|
|
|
635,650
|
|
|
|
615,650
|
|
Reno Creek Project
|
|
|
25,553,807
|
|
|
|
-
|
|
Diabase Project
|
|
|
546,938
|
|
|
|
-
|
|
Yuty Project
|
|
|
11,947,144
|
|
|
|
11,947,144
|
|
Oviedo Project
|
|
|
1,133,412
|
|
|
|
1,133,412
|
|
Alto Paraná Titanium Project
|
|
|
1,433,030
|
|
|
|
1,433,030
|
|
Other Property Acquisitions
|
|
|
91,080
|
|
|
|
91,080
|
|
|
|
|
68,987,629
|
|
|
|
42,755,064
|
|
Accumulated Depletion
|
|
|
(3,929,884
|
)
|
|
|
(3,929,884
|
)
|
|
|
|
65,057,745
|
|
|
|
38,825,180
|
|
|
|
|
|
|
|
|
|
|
Databases
|
|
|
2,410,038
|
|
|
|
2,410,038
|
|
Accumulated Amortization
|
|
|
(2,401,943
|
)
|
|
|
(2,392,196
|
)
|
|
|
|
8,095
|
|
|
|
17,842
|
|
|
|
|
|
|
|
|
|
|
Land Use Agreements
|
|
|
404,310
|
|
|
|
404,310
|
|
Accumulated Amortization
|
|
|
(344,927
|
)
|
|
|
(315,356
|
)
|
|
|
|
59,383
|
|
|
|
88,954
|
|
|
|
$
|
65,125,223
|
|
|
$
|
38,931,976
|
|
URANIUM
ENERGY CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
April 30, 2018
(Unaudited)
We have not established proven or probable
reserves, as defined by the SEC under Industry Guide 7, for any of our mineral projects. We have established the existence of mineralized
materials for certain mineral projects, including 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.
During the three months ended April 30,
2018, we completed a definitive purchase agreement (the “Diabase Purchase Agreement”) with Nuinsco Resources Limited
(“Nuinsco”), to acquire 100% of the Diabase project (the “Diabase Project”), which covers an area of 54,236
acres in ten claim blocks located on the southern rim of the Athabasca Basin uranium district in Saskatchewan, Canada (collectively,
the “Diabase Acquisition”).
In accordance with ASC 360: Property, Plant
and Equipment, the Diabase Acquisition was accounted for as an asset acquisition.
In connection
with the Diabase Acquisition, we paid total
consideration of $546,938, consisting of $239,120 in cash, 164,767 shares with
a fair value of $232,321 and transaction costs of $75,497, which were capitalized as Mineral Rights and Properties on the consolidated
balance sheet as at April 30, 2018.
Concurrently with the closing of the Diabase
Acquisition, Uranium Royalty Corp. (“URC”), a private entity that UEC has the ability to exercise significant influence
on, was granted an exclusive right and option to acquire 100% of the royalty on the Diabase Project by paying $125,000 Canadian
Dollars to the original royalty holder of the Diabase Project at the closing date, and $1,750,000 Canadian Dollars on or before
the date four years after the closing date.
During the nine months ended April 30,
2018, we paid $50,000 in cash and issued 46,134 shares with a fair value of $61,820 as advance royalty payments for our Workman
Creek Project, which were capitalized as Mineral Rights and Properties on the consolidated balance sheet as at April 30, 2018.
During the nine months ended April 30,
2017, we abandoned the Nichols Project located in Texas with an acquisition cost of $154,774 and certain non-core mineral interests
at projects located in Arizona, Colorado and New Mexico with a combined acquisition cost of $143,168. As a result, an impairment
loss on mineral properties of $297,942 was reported on our consolidated statements of operations for the nine months ended April
30, 2017.
During the three and nine months ended
April 30, 2018 and 2017, we continued with reduced operations at the Palangana Mine to capture residual uranium only. As a result,
no depletion for the Palangana Mine was recorded on our condensed consolidated financial statements for the three and nine months
ended April 30, 2018 and 2017, respectively.
URANIUM
ENERGY CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
April 30, 2018
(Unaudited)
Mineral property expenditures incurred
by major projects were as follows:
|
|
Three Months Ended April 30,
|
|
|
Nine Months Ended April 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
Mineral Property Expenditures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Palangana Mine
|
|
$
|
264,447
|
|
|
$
|
239,781
|
|
|
$
|
740,977
|
|
|
$
|
625,430
|
|
Goliad Project
|
|
|
28,658
|
|
|
|
40,295
|
|
|
|
71,373
|
|
|
|
90,174
|
|
Burke Hollow Project
|
|
|
152,307
|
|
|
|
288,742
|
|
|
|
570,099
|
|
|
|
439,058
|
|
Longhorn Project
|
|
|
5,760
|
|
|
|
23,724
|
|
|
|
11,832
|
|
|
|
24,777
|
|
Salvo Project
|
|
|
6,702
|
|
|
|
6,701
|
|
|
|
20,338
|
|
|
|
21,710
|
|
Anderson Project
|
|
|
15,211
|
|
|
|
30,489
|
|
|
|
45,241
|
|
|
|
45,993
|
|
Workman Creek Project
|
|
|
7,673
|
|
|
|
7,673
|
|
|
|
23,627
|
|
|
|
23,593
|
|
Slick Rock Project
|
|
|
12,206
|
|
|
|
12,207
|
|
|
|
40,012
|
|
|
|
36,759
|
|
Reno Creek Project
|
|
|
158,546
|
|
|
|
-
|
|
|
|
1,126,918
|
|
|
|
-
|
|
Yuty Project
|
|
|
114,481
|
|
|
|
91,175
|
|
|
|
339,677
|
|
|
|
282,887
|
|
Oviedo Project
|
|
|
17,982
|
|
|
|
58,054
|
|
|
|
99,224
|
|
|
|
273,124
|
|
Alto Paraná Titanium Project
|
|
|
33,312
|
|
|
|
95,460
|
|
|
|
147,744
|
|
|
|
618,093
|
|
Other Mineral Property Expenditures
|
|
|
164,208
|
|
|
|
104,940
|
|
|
|
401,346
|
|
|
|
475,207
|
|
|
|
$
|
981,493
|
|
|
$
|
999,241
|
|
|
$
|
3,638,408
|
|
|
$
|
2,956,805
|
|
During the nine months ended April 30,
2018, and in connection with the Reno Creek Acquisition, we issued 353,160 shares as settlement of the Reimbursable Expenses totalling
$483,829, which was included in the mineral property expenditures on our condensed consolidated statements of operations for the
nine months ended April 30, 2018. Refer to Note 4: Acquisition of Reno Creek Project.
|
NOTE 6:
|
PROPERTY, PLANT AND EQUIPMENT
|
Property, plant and equipment consisted of the following:
|
|
April 30, 2018
|
|
|
July 31, 2017
|
|
|
|
|
|
|
Accumulated
|
|
|
Net Book
|
|
|
|
|
|
Accumulated
|
|
|
Net Book
|
|
|
|
Cost
|
|
|
Depreciation
|
|
|
Value
|
|
|
Cost
|
|
|
Depreciation
|
|
|
Value
|
|
Hobson Processing Facility
|
|
$
|
6,819,088
|
|
|
$
|
(773,933
|
)
|
|
$
|
6,045,155
|
|
|
$
|
6,819,088
|
|
|
$
|
(773,933
|
)
|
|
$
|
6,045,155
|
|
Mining Equipment
|
|
|
2,438,681
|
|
|
|
(2,406,874
|
)
|
|
|
31,807
|
|
|
|
2,438,681
|
|
|
|
(2,378,737
|
)
|
|
|
59,944
|
|
Logging Equipment and Vehicles
|
|
|
1,971,742
|
|
|
|
(1,844,124
|
)
|
|
|
127,618
|
|
|
|
1,971,742
|
|
|
|
(1,825,389
|
)
|
|
|
146,353
|
|
Computer Equipment
|
|
|
606,279
|
|
|
|
(573,281
|
)
|
|
|
32,998
|
|
|
|
582,980
|
|
|
|
(565,223
|
)
|
|
|
17,757
|
|
Furniture and Fixtures
|
|
|
170,701
|
|
|
|
(168,673
|
)
|
|
|
2,028
|
|
|
|
170,701
|
|
|
|
(168,248
|
)
|
|
|
2,453
|
|
Land and Buildings
|
|
|
889,605
|
|
|
|
(8,975
|
)
|
|
|
880,630
|
|
|
|
519,520
|
|
|
|
-
|
|
|
|
519,520
|
|
|
|
$
|
12,896,096
|
|
|
$
|
(5,775,860
|
)
|
|
$
|
7,120,236
|
|
|
$
|
12,502,712
|
|
|
$
|
(5,711,530
|
)
|
|
$
|
6,791,182
|
|
During the nine months ended April 30,
2018 and 2017, no uranium concentrate was processed at our Hobson Processing Facility due to the reduced operations at our Palangana
Mine. As a result, no depreciation for the Hobson Processing Facility was recorded on our consolidated financial statements for
the three and nine months ended April 30, 2018 and 2017, respectively.
During the nine months ended April 30,
2018, in connection with the Reno Creek Acquisition, we acquired certain buildings with total acquisition costs of $297,518, which
will be depreciated over the estimated useful life of 20 years using the straight-line method.
URANIUM
ENERGY CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
April 30, 2018
(Unaudited)
|
NOTE 7:
|
EQUITY-ACCOUNTED INVESTMENT
|
We acquired a total of 2,000,000 shares
of URC, a private entity investing in the uranium sector, for a total consideration of $151,676. In addition, one of our officers
was appointed as a member of the board of directors of URC. As at April 30, 2018, we own a 14.5% interest in URC and certain of
our officers collectively own an additional 11.6% interest in URC. As a result, our ability to exercise significant influence over
URC’s operating and financing policies continues to exist as at April 30, 2018.
During the nine months ended April 30,
2018, the change in fair value of the investment in URC is summarized as below:
Balance, July 31, 2017
|
|
$
|
151,676
|
|
Share of loss from URC
|
|
|
(38,057
|
)
|
Gain on ownership interest dilution
|
|
|
129,156
|
|
Balance, April 30, 2018
|
|
$
|
242,775
|
|
|
NOTE 8:
|
DUE TO RELATED PARTIES AND RELATED PARTY TRANSACTIONS
|
During the three and nine months ended
April 30, 2018, we incurred $36,210 and $112,850 (three and nine months ended April 30, 2017: $30,664 and $134,515), respectively,
in general and administrative costs paid to Blender Media Inc. (“Blender”), a company controlled by Arash Adnani, a
direct family member of our President and Chief Executive Officer, for various services including information technology, corporate
branding, media, website design, maintenance and hosting, provided to the Company.
During the nine months ended April 30,
2018, we issued 104,706 shares with a fair value of $141,678 as settlement of the equivalent amounts owed to Blender.
During the three and nine months ended
April 30, 2017, we issued 59,546 and 148,368 shares with a fair value of $78,572 and $170,060, respectively, as settlement of the
equivalent amounts owed to Blender.
At April 30, 2018, the amount owing to
Blender was $935 (July 31, 2017: $768).
|
NOTE 9:
|
TAX REFORM AND DEFERRED TAX LIABILITIES
|
The Tax Cuts and Jobs Act enacted on December
22, 2017 reduces the U.S. federal corporate tax rate from 35% to 21%, requiring the Company to remeasure existing deferred tax
balances and re-evaluate the realizability of deferred tax assets. The rate change is administratively effective at the beginning
of our Fiscal 2018, using a blended rate for the annual period. As a result, the blended statutory tax rate for Fiscal 2018 is
26.87%.
The Company is not expected to generate
taxable income in Fiscal 2018 and has not recorded any current income taxes. Consequently, the tax rate change would have no impact
on our current tax expenses but will impact the taxable losses to be recognized for Fiscal 2018. For the three months ended January
31, 2018, we remeasured our existing deferred tax liabilities at the newly enacted tax rates and recognized a deferred tax benefit
of $232,843.
The Company has incurred taxable losses
for all years since inception, which has resulted in net operating loss carry-forwards in the U.S. that may be available to reduce
future years’ taxable income. In the past, we have recorded a full valuation allowance for the deferred tax asset relating
to these tax loss carry-forwards as their realization has been determined not likely to occur.
At December 22, 2017, we re-evaluated the
realizability of the Company’s tax loss carry-forwards and our conclusion that the realization of these tax loss carry-forwards
is not likely to occur remains unchanged. As a result, we will continue to record a full valuation allowance for the deferred tax
assets relating to these tax loss carry-forwards.
The accounting for the effects of the rate
changes on deferred tax balances is complete and no provisional amounts were recorded for this item.
URANIUM
ENERGY CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
April 30, 2018
(Unaudited)
As at April 30, 2018, long-term debt consisted
of the following:
|
|
April 30, 2018
|
|
|
July 31, 2017
|
|
Principal amount
|
|
$
|
20,000,000
|
|
|
$
|
20,000,000
|
|
Unamortized discount
|
|
|
(761,832
|
)
|
|
|
(745,165
|
)
|
Long-term debt, net of unamortized discount
|
|
|
19,238,168
|
|
|
|
19,254,835
|
|
Current portion
|
|
|
5,000,000
|
|
|
|
-
|
|
Long-term debt, net of current portion
|
|
$
|
14,238,168
|
|
|
$
|
19,254,835
|
|
During the three months ended April 30,
2018, and pursuant to the terms of our Second Amended Credit Agreement, we issued 641,574 shares with a fair value of $900,000,
representing 4.5% of the $20,000,000 principal balance outstanding at January 31, 2018, as payment of anniversary fees, which was
recorded as an addition to debt discount and will be amortized over the remaining contractual life of the long-term debt.
For the three and nine months ended April
30, 2018 and 2017, the amortization of debt discount totaled $277,502 and $883,333 (three and nine months ended April 30, 2017:
$268,262 and $869,830), respectively, which was recorded as interest expense and included in our condensed consolidated statements
of operations and comprehensive income.
As at April 30, 2018, the current portion
of the long-term debt totaled $5,000,000, representing the principal amount due over the next 12 months.
The aggregate yearly maturities of the
long-term debt based on principal amounts outstanding at April 30, 2018, are as follows:
Fiscal 2018
|
|
$
|
-
|
|
Fiscal 2019
|
|
|
10,000,000
|
|
Fiscal 2020
|
|
|
10,000,000
|
|
Total
|
|
$
|
20,000,000
|
|
|
NOTE 11:
|
ASSET RETIREMENT OBLIGATIONS
|
The asset retirement obligations (the “ARO”) relate
to future remediation and decommissioning activities at our Palangana Mine, Hobson Processing Facility, Reno Creek Project and
Alto Paraná Titanium Project.
Balance, July 31, 2017
|
|
$
|
3,729,902
|
|
Accretion
|
|
|
162,305
|
|
Assumed from Reno Creek Acquisition
|
|
|
73,973
|
|
Balance, April 30, 2018
|
|
$
|
3,966,180
|
|
URANIUM
ENERGY CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
April 30, 2018
(Unaudited)
The estimated amounts and timing of cash
flows and assumptions used for ARO estimates are as follows:
|
|
April 30, 2018
|
|
|
July 31, 2017
|
|
Undiscounted amount of estimated cash flows
|
|
$
|
7,275,504
|
|
|
$
|
7,098,581
|
|
|
|
|
|
|
|
|
|
|
Payable in years
|
|
|
5.0 to 17
|
|
|
|
5.0 to 17
|
|
Inflation rate
|
|
|
1.37% to 2.14%
|
|
|
|
1.37% to 2.14%
|
|
Discount rate
|
|
|
5.48% to 6.40%
|
|
|
|
5.48% to 6.40%
|
|
The
undiscounted amounts of estimated cash flows for the next five fiscal years and beyond are as follows:
Fiscal 2018
|
|
$
|
-
|
|
Fiscal 2019
|
|
|
-
|
|
Fiscal 2020
|
|
|
-
|
|
Fiscal 2021
|
|
|
-
|
|
Fiscal 2022
|
|
|
148,391
|
|
Remaining balance
|
|
|
7,127,113
|
|
|
|
$
|
7,275,504
|
|
URANIUM
ENERGY CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
April 30, 2018
(Unaudited)
Share Transactions
A summary of the share transactions for
the nine months ended April 30, 2018 are as follows:
|
|
Common
|
|
|
Value per Share
|
|
|
Issuance
|
|
Period / Description
|
|
Shares Issued
|
|
|
Low
|
|
|
High
|
|
|
Value
|
|
Balance, July 31, 2017
|
|
|
139,815,124
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mineral Property
|
|
|
46,134
|
|
|
$
|
1.34
|
|
|
$
|
1.34
|
|
|
$
|
61,820
|
|
Reno Creek Acquisition
|
|
|
14,852,450
|
|
|
|
1.30
|
|
|
|
1.37
|
|
|
|
20,332,617
|
|
Reimbursable Expenses for Reno Creek Acquisition
|
|
|
353,160
|
|
|
|
1.37
|
|
|
|
1.37
|
|
|
|
483,829
|
|
Consulting Services
|
|
|
124,469
|
|
|
|
1.19
|
|
|
|
1.73
|
|
|
|
192,403
|
|
Options Exercised (1)
|
|
|
66,516
|
|
|
|
0.45
|
|
|
|
0.93
|
|
|
|
31,860
|
|
Settlement of Current Liabilities
|
|
|
104,706
|
|
|
|
1.35
|
|
|
|
1.35
|
|
|
|
141,678
|
|
Shares Issued Under 2017 Stock Incentive Plan
|
|
|
591,496
|
|
|
|
1.28
|
|
|
|
1.60
|
|
|
|
785,329
|
|
Balance, October 31, 2017
|
|
|
155,954,055
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consulting Services
|
|
|
55,909
|
|
|
|
1.49
|
|
|
|
1.84
|
|
|
|
91,903
|
|
Options Exercised (2)
|
|
|
184,416
|
|
|
|
0.45
|
|
|
|
1.32
|
|
|
|
163,534
|
|
Shares Issued Under 2017 Stock Incentive Plan
|
|
|
258,444
|
|
|
|
1.06
|
|
|
|
1.77
|
|
|
|
341,667
|
|
Balance, January 31, 2018
|
|
|
156,452,824
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit Facility
|
|
|
641,574
|
|
|
|
1.40
|
|
|
|
1.40
|
|
|
|
900,000
|
|
Diabase Acquisition
|
|
|
164,767
|
|
|
|
1.41
|
|
|
|
1.41
|
|
|
|
232,321
|
|
Consulting Services
|
|
|
28,511
|
|
|
|
1.33
|
|
|
|
1.43
|
|
|
|
38,559
|
|
Options Exercised (3)
|
|
|
657,246
|
|
|
|
0.45
|
|
|
|
1.28
|
|
|
|
298,204
|
|
Settlement of Current Liabilities
|
|
|
364,652
|
|
|
|
1.33
|
|
|
|
1.72
|
|
|
|
557,283
|
|
Shares Issued Under 2017 Stock Incentive Plan
|
|
|
173,307
|
|
|
|
1.30
|
|
|
|
1.57
|
|
|
|
240,790
|
|
Balance, April 30, 2018
|
|
|
158,482,881
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
111,250 stock options were exercised on a forfeiture basis, resulting in 66,516 net shares being
issued.
|
|
(2)
|
171,250 stock options were exercised on a forfeiture basis, resulting in 74,416 net shares being
issued.
|
|
(3)
|
238,125 options were exercised on a forfeiture basis resulting in 157,246 net shares issued
|
Share Purchase Warrants
A summary of share purchase warrants outstanding and exercisable
at April 30, 2018 are as follows:
Weighted
Average
Exercise Price
|
|
|
Number of Warrants
Outstanding
|
|
|
Expiry Date
|
|
Weighted Average
Remaining Contractual
Life (Years)
|
|
$
|
1.20
|
|
|
|
4,604,631
|
|
|
March 10, 2019
|
|
|
0.86
|
|
|
1.35
|
|
|
|
2,600,000
|
|
|
January 30, 2020
|
|
|
1.75
|
|
|
1.95
|
|
|
|
50,000
|
|
|
June 3, 2018
|
|
|
0.09
|
|
|
2.00
|
|
|
|
9,571,929
|
|
|
January 20, 2020
|
|
|
1.72
|
|
|
2.30
|
|
|
|
11,308,728
|
|
|
August 9, 2022
|
|
|
4.28
|
|
|
2.35
|
|
|
|
2,850,000
|
|
|
June 25, 2018
|
|
|
0.15
|
|
$
|
1.97
|
|
|
|
30,985,288
|
|
|
|
|
|
2.38
|
|
During the nine months ended April 30,
2018, in connection with the Reno Creek Acquisition, we issued 11,308,728 Warrants, with each Warrant entitling the holder to acquire
one share of the Company at an exercise price of $2.30 per share for a period of five years from the date of issuance. Refer to
Note 4: Acquisition of Reno Creek Project
URANIUM
ENERGY CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
April 30, 2018
(Unaudited)
Stock Options
At April 30, 2018, we had one stock option
plan, our 2017 Stock Incentive Plan (the “2017 Plan”). The 2017 Plan provides for not more than 22,439,420
shares of the Company that may be issued and consists of: (i) 12,305,500 shares issuable pursuant to awards previously granted
that were outstanding under our 2016 Stock Incentive Plan (the “2016 Plan”); (ii) 4,133,920 shares remaining available
for issuance under the 2016 Plan; and (iii) 6,000,000 additional shares that may be issued pursuant to awards that may be granted
under the 2017 Plan. The 2017 Plan superseded and replaced the 2016 Plan, which superseded and replaced our prior 2015, 2014,
2013, 2009 and 2006 Stock Incentive Plans, such that no further shares are issuable under those prior plans.
During the nine months ended April 30,
2018, we granted stock options under the 2017 Plan to certain directors, officers, employees and consultants to purchase a total
of 2,054,000 shares of the Company exercisable at $1.09 to $1.29 per share with a term of five years.
The majority of these stock options are
subject to a 24-month vesting provision whereby at the end of the first three and six months after the grant date, 12.5% of the
total stock options become exercisable, and whereby at the end of each of 12, 18 and 24 months after the grant date, 25% of the
total stock options become exercisable.
A summary of stock options granted by the
Company during the nine months ended April 30, 2018, including corresponding grant date fair values and assumptions using the Black
Scholes option pricing model is as follows:
|
|
Options
|
|
|
Exercise
|
|
|
Term
|
|
|
Fair
|
|
|
Expected
|
|
|
Risk-Free
|
|
|
Dividend
|
|
|
Expected
|
|
Date
|
|
Issued
|
|
|
Price
|
|
|
(Years)
|
|
|
Value
|
|
|
Life (Years)
|
|
|
Interest Rate
|
|
|
Yield
|
|
|
Volatility
|
|
August 22, 2017
|
|
|
1,754,000
|
|
|
$
|
1.28
|
|
|
|
5.00
|
|
|
$
|
1,112,090
|
|
|
|
3.10
|
|
|
|
1.49
|
%
|
|
|
0.00
|
%
|
|
|
73.68
|
%
|
August 22, 2017
|
|
|
100,000
|
|
|
|
1.28
|
|
|
|
5.00
|
|
|
|
67,998
|
|
|
|
2.90
|
|
|
|
1.46
|
%
|
|
|
0.00
|
%
|
|
|
83.16
|
%
|
November 1, 2017
|
|
|
150,000
|
|
|
|
1.09
|
|
|
|
5.00
|
|
|
|
78,460
|
|
|
|
2.80
|
|
|
|
1.71
|
%
|
|
|
0.00
|
%
|
|
|
74.54
|
%
|
March 1, 2018
|
|
|
50,000
|
|
|
|
1.29
|
|
|
|
5.00
|
|
|
|
29,117
|
|
|
|
2.80
|
|
|
|
2.32
|
%
|
|
|
0.00
|
%
|
|
|
68.42
|
%
|
Total
|
|
|
2,054,000
|
|
|
|
|
|
|
|
|
|
|
$
|
1,287,665
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A continuity schedule of outstanding stock
options for the underlying shares for the three and nine months ended April 30, 2018 is as follows:
|
|
Number of Stock
|
|
|
Weighted Average
|
|
|
|
Options
|
|
|
Exercise Price
|
|
Balance, July 31, 2017
|
|
|
12,260,500
|
|
|
$
|
1.33
|
|
Granted
|
|
|
1,854,000
|
|
|
|
1.28
|
|
Exercised
|
|
|
(111,250
|
)
|
|
|
0.50
|
|
Balance, October 31, 2017
|
|
|
14,003,250
|
|
|
$
|
1.33
|
|
Granted
|
|
|
150,000
|
|
|
|
1.09
|
|
Exercised
|
|
|
(281,250
|
)
|
|
|
0.97
|
|
Forfeited
|
|
|
(51,250
|
)
|
|
|
1.23
|
|
Balance, January 31, 2018
|
|
|
13,820,750
|
|
|
$
|
1.34
|
|
Granted
|
|
|
50,000
|
|
|
|
1.29
|
|
Exercised
|
|
|
(738,125
|
)
|
|
|
0.46
|
|
Balance, April 30, 2018
|
|
|
13,132,625
|
|
|
$
|
1.39
|
|
At April 30, 2018, the aggregate intrinsic
value under the provisions of ASC 718 of all outstanding stock options was estimated at $3,368,554 (vested: $2,988,364 and unvested:
$380,190).
At April 30, 2018, unrecognized stock-based
compensation expense related to the unvested portion of stock options granted totaled $488,585 to be recognized over the next 0.86
year.
URANIUM
ENERGY CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
April 30, 2018
(Unaudited)
A summary of stock options outstanding and exercisable at April
30, 2018 is as follows:
|
|
Options Outstanding
|
|
|
Options Exercisable
|
|
Range of
Exercise Prices
|
|
Outstanding at
April 30, 2018
|
|
|
Weighted
Average
Exercise Price
|
|
|
Weighted Average
Remaining
Contractual Term
(Years)
|
|
|
Exercisable at
April 30, 2018
|
|
|
Weighted
Average
Exercise Price
|
|
|
Weighted Average
Remaining
Contractual Term
(Years)
|
|
$0.45 to $1.06
|
|
|
1,935,500
|
|
|
$
|
0.93
|
|
|
|
3.13
|
|
|
|
1,935,500
|
|
|
$
|
0.93
|
|
|
|
3.13
|
|
$1.07 to $2.00
|
|
|
9,924,625
|
|
|
|
1.28
|
|
|
|
2.18
|
|
|
|
8,371,625
|
|
|
|
1.29
|
|
|
|
1.79
|
|
$2.01 to $3.86
|
|
|
1,272,500
|
|
|
|
2.89
|
|
|
|
2.58
|
|
|
|
1,272,500
|
|
|
|
2.89
|
|
|
|
2.58
|
|
|
|
|
13,132,625
|
|
|
$
|
1.39
|
|
|
|
2.36
|
|
|
|
11,579,625
|
|
|
$
|
1.40
|
|
|
|
2.10
|
|
Stock-Based Compensation
A summary of stock-based compensation expense
is as follows:
|
|
Three Months Ended April 30,
|
|
|
Nine Months Ended April 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
Stock-Based Compensation for Consultants
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued for consulting services
|
|
$
|
168,107
|
|
|
$
|
398,944
|
|
|
$
|
606,885
|
|
|
$
|
920,971
|
|
Stock options issued to consultants
|
|
|
43,463
|
|
|
|
24,796
|
|
|
|
385,082
|
|
|
|
303,047
|
|
|
|
|
211,570
|
|
|
|
423,740
|
|
|
|
991,967
|
|
|
|
1,224,018
|
|
Stock-Based Compensation for Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued to management
|
|
|
34,265
|
|
|
|
33,057
|
|
|
|
103,509
|
|
|
|
175,950
|
|
Stock options issued to management
|
|
|
45,926
|
|
|
|
62,873
|
|
|
|
226,907
|
|
|
|
430,218
|
|
|
|
|
80,191
|
|
|
|
95,930
|
|
|
|
330,416
|
|
|
|
606,168
|
|
Stock-Based Compensation for Employees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued to employees
|
|
|
120,711
|
|
|
|
106,166
|
|
|
|
497,747
|
|
|
|
322,613
|
|
Stock options issued to employees
|
|
|
106,113
|
|
|
|
42,041
|
|
|
|
440,844
|
|
|
|
329,379
|
|
|
|
|
226,824
|
|
|
|
148,207
|
|
|
|
938,591
|
|
|
|
651,992
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Settlement of share issuance obligation
|
|
|
-
|
|
|
|
-
|
|
|
|
(127,615
|
)
|
|
|
-
|
|
|
|
$
|
518,585
|
|
|
$
|
667,877
|
|
|
$
|
2,133,359
|
|
|
$
|
2,482,178
|
|
On August 22, 2017, we issued 398,839 shares
with a fair value of $510,528 under the 2017 Plan as settlement of share issuance obligations totaling $638,142, which represented
the fair value of the Fiscal 2017 share bonuses made by the Company as at July 31, 2017 under the 2017 Plan. The change in fair
value of $127,615 between the measurement date of July 31, 2017 and the issuance date of August 22, 2017, was recorded as a credit
to the stock-based compensation for the nine months ended April 30, 2018.
URANIUM
ENERGY CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
April 30, 2018
(Unaudited)
The following table reconciles the weighted
average number of shares used in the calculation of the basic and diluted loss per share:
|
|
Three Months Ended April 30,
|
|
|
Nine Months Ended April 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
Numerator
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss for the Period
|
|
$
|
(4,146,646
|
)
|
|
$
|
(3,798,864
|
)
|
|
$
|
(13,056,299
|
)
|
|
$
|
(12,383,927
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Weighted Average Number of Shares
|
|
|
157,704,601
|
|
|
|
137,452,998
|
|
|
|
155,996,660
|
|
|
|
124,676,016
|
|
Dilutive Stock Options and Warrants
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
Diluted Weighted Average Number of Shares
|
|
|
157,704,601
|
|
|
|
137,452,998
|
|
|
|
155,996,660
|
|
|
|
124,676,016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss per Share, Basic and Diluted
|
|
$
|
(0.03
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(0.10
|
)
|
For the three and nine months ended April
30, 2018 and 2017, all outstanding stock options and share purchase warrants were excluded from the calculation of the diluted
loss per share since we reported net losses for those periods and their effects would be anti-dilutive.
|
NOTE 14:
|
SEGMENTED INFORMATION
|
We currently operate in one reportable
segment which is focused on uranium mining and related activities, including exploration, pre-extraction, extraction and processing
of uranium concentrates.
At April 30, 2018, our long-term assets
located in the United States totaled $59,467,948 or 79% of our total long-term assets of $75,156,444.
The table below provides a breakdown of
the long-term assets by geographic segments:
|
|
April 30, 2018
|
|
|
|
United States
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet Items
|
|
Texas
|
|
|
Arizona
|
|
|
Wyoming
|
|
|
Other States
|
|
|
Canada
|
|
|
Paraguay
|
|
|
Total
|
|
Mineral Rights and Properties
|
|
$
|
12,742,158
|
|
|
$
|
11,044,018
|
|
|
$
|
25,553,807
|
|
|
$
|
724,717
|
|
|
$
|
546,938
|
|
|
$
|
14,513,585
|
|
|
$
|
65,125,223
|
|
Property, Plant and Equipment
|
|
|
6,373,925
|
|
|
|
-
|
|
|
|
361,113
|
|
|
|
-
|
|
|
|
28,709
|
|
|
|
356,489
|
|
|
|
7,120,236
|
|
Reclamation Deposits
|
|
|
1,690,209
|
|
|
|
15,000
|
|
|
|
73,973
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,779,182
|
|
Equity-Accounted Investment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
242,775
|
|
|
|
-
|
|
|
|
242,775
|
|
Other Long-Term Assets
|
|
|
460,821
|
|
|
|
-
|
|
|
|
428,207
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
889,028
|
|
Total Long-Term Assets
|
|
$
|
21,267,113
|
|
|
$
|
11,059,018
|
|
|
$
|
26,417,100
|
|
|
$
|
724,717
|
|
|
$
|
818,422
|
|
|
$
|
14,870,074
|
|
|
$
|
75,156,444
|
|
|
|
July
31, 2017
|
|
|
|
United
States
|
|
|
|
|
|
|
|
|
|
|
Balance
Sheet Items
|
|
Texas
|
|
|
Arizona
|
|
|
Wyoming
|
|
|
Other
States
|
|
|
Canada
|
|
|
Paraguay
|
|
|
Total
|
|
Mineral
Rights and Properties
|
|
$
|
12,780,728
|
|
|
$
|
10,932,199
|
|
|
$
|
-
|
|
|
$
|
705,464
|
|
|
$
|
-
|
|
|
$
|
14,513,585
|
|
|
$
|
38,931,976
|
|
Property, Plant and
Equipment
|
|
|
6,414,329
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
11,185
|
|
|
|
365,668
|
|
|
|
6,791,182
|
|
Reclamation Deposits
|
|
|
1,690,209
|
|
|
|
15,000
|
|
|
|
-
|
|
|
|
819
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,706,028
|
|
Equity-Accounted Investment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
151,676
|
|
|
|
-
|
|
|
|
151,676
|
|
Other Long-Term Assets
|
|
|
422,769
|
|
|
|
-
|
|
|
|
582,206
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,004,975
|
|
Total Long-Term Assets
|
|
$
|
21,308,035
|
|
|
$
|
10,947,199
|
|
|
$
|
582,206
|
|
|
$
|
706,283
|
|
|
$
|
162,861
|
|
|
$
|
14,879,253
|
|
|
$
|
48,585,837
|
|
URANIUM
ENERGY CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
April 30, 2018
(Unaudited)
The tables below provide a breakdown of
our operating results by geographic segments for the three and nine months ended April 30, 2018 and 2017. All intercompany transactions
have been eliminated.
|
|
Three Months Ended April 30, 2018
|
|
|
|
United States
|
|
|
|
|
|
|
|
|
|
|
Statement
of Operations
|
|
Texas
|
|
|
Arizona
|
|
|
Wyoming
|
|
|
Other States
|
|
|
Canada
|
|
|
Paraguay
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mineral property expenditures
|
|
$
|
611,170
|
|
|
$
|
23,136
|
|
|
$
|
165,566
|
|
|
$
|
15,846
|
|
|
$
|
-
|
|
|
$
|
165,775
|
|
|
$
|
981,493
|
|
General and administrative
|
|
|
1,427,445
|
|
|
|
3,389
|
|
|
|
34,533
|
|
|
|
1,141
|
|
|
|
794,682
|
|
|
|
146,381
|
|
|
|
2,407,571
|
|
Depreciation, amortization and accretion
|
|
|
79,903
|
|
|
|
-
|
|
|
|
3,716
|
|
|
|
249
|
|
|
|
3,600
|
|
|
|
826
|
|
|
|
88,294
|
|
Impairment loss on mineral properties
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
2,118,518
|
|
|
|
26,525
|
|
|
|
203,815
|
|
|
|
17,236
|
|
|
|
798,282
|
|
|
|
312,982
|
|
|
|
3,477,358
|
|
Loss from operations
|
|
|
(2,118,518
|
)
|
|
|
(26,525
|
)
|
|
|
(203,815
|
)
|
|
|
(17,236
|
)
|
|
|
(798,282
|
)
|
|
|
(312,982
|
)
|
|
|
(3,477,358
|
)
|
Other income (expenses)
|
|
|
(677,570
|
)
|
|
|
(4,611
|
)
|
|
|
(249
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
1,190
|
|
|
|
(681,240
|
)
|
Loss before income taxes
|
|
$
|
(2,796,088
|
)
|
|
$
|
(31,136
|
)
|
|
$
|
(204,064
|
)
|
|
$
|
(17,236
|
)
|
|
$
|
(798,282
|
)
|
|
$
|
(311,792
|
)
|
|
$
|
(4,158,598
|
)
|
|
|
Three
Months Ended April 30, 2017
|
|
|
|
United
States
|
|
|
|
|
|
|
|
|
|
|
Statement
of Operations
|
|
Texas
|
|
|
Arizona
|
|
|
Wyoming
|
|
|
Other
States
|
|
|
Canada
|
|
|
Paraguay
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mineral
property expenditures
|
|
$
|
703,147
|
|
|
$
|
23,354
|
|
|
$
|
-
|
|
|
$
|
28,051
|
|
|
$
|
-
|
|
|
$
|
244,689
|
|
|
$
|
999,241
|
|
General and administrative
|
|
|
1,363,303
|
|
|
|
3,389
|
|
|
|
-
|
|
|
|
1,068
|
|
|
|
721,423
|
|
|
|
3,473
|
|
|
|
2,092,656
|
|
Depreciation, amortization
and accretion
|
|
|
115,071
|
|
|
|
-
|
|
|
|
-
|
|
|
|
249
|
|
|
|
2,016
|
|
|
|
456
|
|
|
|
117,792
|
|
Impairment loss on
mineral properties
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
2,181,521
|
|
|
|
26,743
|
|
|
|
-
|
|
|
|
29,368
|
|
|
|
723,439
|
|
|
|
248,618
|
|
|
|
3,209,689
|
|
Loss from operations
|
|
|
(2,181,521
|
)
|
|
|
(26,743
|
)
|
|
|
-
|
|
|
|
(29,368
|
)
|
|
|
(723,439
|
)
|
|
|
(248,618
|
)
|
|
|
(3,209,689
|
)
|
Other income (expenses)
|
|
|
(593,873
|
)
|
|
|
(4,611
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
1,034
|
|
|
|
(488
|
)
|
|
|
(597,938
|
)
|
Loss before income
taxes
|
|
$
|
(2,775,394
|
)
|
|
$
|
(31,354
|
)
|
|
$
|
-
|
|
|
$
|
(29,368
|
)
|
|
$
|
(722,405
|
)
|
|
$
|
(249,106
|
)
|
|
$
|
(3,807,627
|
)
|
|
|
Nine Months Ended April 30, 2018
|
|
|
|
United States
|
|
|
|
|
|
|
|
|
|
|
Statement
of Operations
|
|
Texas
|
|
|
Arizona
|
|
|
Wyoming
|
|
|
Other States
|
|
|
Canada
|
|
|
Paraguay
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mineral property expenditures
|
|
$
|
1,795,078
|
|
|
$
|
69,698
|
|
|
$
|
1,134,782
|
|
|
$
|
52,205
|
|
|
$
|
-
|
|
|
$
|
586,645
|
|
|
$
|
3,638,408
|
|
General and administrative
|
|
|
4,587,983
|
|
|
|
10,488
|
|
|
|
558,326
|
|
|
|
3,385
|
|
|
|
2,153,051
|
|
|
|
213,465
|
|
|
|
7,526,698
|
|
Depreciation, amortization and accretion
|
|
|
247,687
|
|
|
|
-
|
|
|
|
9,125
|
|
|
|
747
|
|
|
|
7,717
|
|
|
|
2,790
|
|
|
|
268,066
|
|
Impairment loss on mineral properties
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Inventory write-down
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
6,630,748
|
|
|
|
80,186
|
|
|
|
1,702,233
|
|
|
|
56,337
|
|
|
|
2,160,768
|
|
|
|
802,900
|
|
|
|
11,433,172
|
|
Loss from operations
|
|
|
(6,630,748
|
)
|
|
|
(80,186
|
)
|
|
|
(1,702,233
|
)
|
|
|
(56,337
|
)
|
|
|
(2,160,768
|
)
|
|
|
(802,900
|
)
|
|
|
(11,433,172
|
)
|
Other income (expenses)
|
|
|
(1,888,966
|
)
|
|
|
(14,146
|
)
|
|
|
1,241
|
|
|
|
-
|
|
|
|
-
|
|
|
|
10,507
|
|
|
|
(1,891,364
|
)
|
Loss before income taxes
|
|
$
|
(8,519,714
|
)
|
|
$
|
(94,332
|
)
|
|
$
|
(1,700,992
|
)
|
|
$
|
(56,337
|
)
|
|
$
|
(2,160,768
|
)
|
|
$
|
(792,393
|
)
|
|
$
|
(13,324,536
|
)
|
|
|
Nine
Months Ended April 30, 2017
|
|
|
|
United
States
|
|
|
|
|
|
|
|
|
|
|
Statement
of Operations
|
|
Texas
|
|
|
Arizona
|
|
|
Wyoming
|
|
|
Other
States
|
|
|
Canada
|
|
|
Paraguay
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mineral
property expenditures
|
|
$
|
1,651,954
|
|
|
$
|
69,866
|
|
|
$
|
-
|
|
|
$
|
60,881
|
|
|
$
|
-
|
|
|
$
|
1,174,104
|
|
|
$
|
2,956,805
|
|
General and administrative
|
|
|
4,628,740
|
|
|
|
30,372
|
|
|
|
-
|
|
|
|
3,203
|
|
|
|
1,915,131
|
|
|
|
38,695
|
|
|
|
6,616,141
|
|
Depreciation, amortization
and accretion
|
|
|
390,138
|
|
|
|
-
|
|
|
|
-
|
|
|
|
747
|
|
|
|
5,984
|
|
|
|
530
|
|
|
|
397,399
|
|
Impairment loss on
mineral properties
|
|
|
185,942
|
|
|
|
8,334
|
|
|
|
-
|
|
|
|
103,666
|
|
|
|
-
|
|
|
|
-
|
|
|
|
297,942
|
|
Inventory write-down
|
|
|
60,694
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
60,694
|
|
|
|
|
6,917,468
|
|
|
|
108,572
|
|
|
|
-
|
|
|
|
168,497
|
|
|
|
1,921,115
|
|
|
|
1,213,329
|
|
|
|
10,328,981
|
|
Loss from operations
|
|
|
(6,917,468
|
)
|
|
|
(108,572
|
)
|
|
|
-
|
|
|
|
(168,497
|
)
|
|
|
(1,921,115
|
)
|
|
|
(1,213,329
|
)
|
|
|
(10,328,981
|
)
|
Other income (expenses)
|
|
|
(2,067,125
|
)
|
|
|
(14,146
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
635
|
|
|
|
(449
|
)
|
|
|
(2,081,085
|
)
|
Loss before income
taxes
|
|
$
|
(8,984,593
|
)
|
|
$
|
(122,718
|
)
|
|
$
|
-
|
|
|
$
|
(168,497
|
)
|
|
$
|
(1,920,480
|
)
|
|
$
|
(1,213,778
|
)
|
|
$
|
(12,410,066
|
)
|
URANIUM
ENERGY CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
April 30, 2018
(Unaudited)
|
NOTE 15:
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
During the nine months ended April 30,
2018 and 2017, we issued 208,889 and 559,623 shares with a fair value of $322,865 and $694,170, respectively, for consulting services.
During the nine months ended April 30,
2018 and 2017, we issued 624,408 and 670,425 shares with a fair value of $857,258 and $725,364, respectively, as compensation to
certain management, employees and consultants of the Company under the 2017 Plan.
During the nine months ended April 30,
2018, we issued 398,839 shares with a fair value of $510,528 as settlement of share issuance obligations of $638,142 relating to
the Fiscal 2017 share bonuses made by the Company under the 2017 Plan.
During the nine months ended April 30,
2018 and 2017, we issued 306,053 and 151,679 shares with a fair value of $442,571 and $175,060, respectively, as settlement of
certain of the Company’s accounts payable.
During the nine months ended April 30,
2018, we paid $256,389 in cash and issued 163,305 shares, of which 119,546 shares were issued under our 2017 Plan, as settlement
of certain severance obligations totaling $492,638.
During the nine months ended April 30,
2018 and 2017, we issued 46,134 and 46,800 shares with a fair value of $61,820 and $48,672, respectively, as an advance royalty
payment for the Workman Creek Project.
During the nine months ended April 30,
2018, we issued 14,634,748 shares and paid $909,930 in cash as consideration to acquire the Reno Creek Project. In addition, we
issued 353,160 shares as payment of the Reimbursable Expenses totalling $483,829 and issued 217,702 shares with a fair value of
$283,013 as payment of certain transaction costs.
During the nine months ended April 30,
2018, we issued 164,767 shares with a fair value of $232,321 and paid $239,120 in cash as consideration to acquire the Diabase
Project.
During the nine months ended April 30,
2018 and 2017, we paid $1,213,333 and $1,213,333, respectively, in cash for interest on the long-term debt.
During the three months ended April 30,
2018, we issued 641,574 shares with a fair value of $900,000 as payment of anniversary fees to our Lenders.
|
NOTE 16:
|
COMMITMENTS AND CONTINGENCIES
|
We are renting or leasing various office or storage space located
in the United States, Canada and Paraguay with total monthly payments of $20,617. Office lease agreements for the United States
and Canada expire between July 2018 and March 2021.
The aggregate minimum rental and lease payments over the next
five fiscal years are as follows:
Fiscal 2018
|
|
$
|
62,108
|
|
Fiscal 2019
|
|
|
123,116
|
|
Fiscal 2020
|
|
|
87,082
|
|
Fiscal 2021
|
|
|
58,055
|
|
Fiscal 2022
|
|
|
-
|
|
|
|
$
|
330,361
|
|
We are committed to paying our key executives
a total of $708,000 per year for various management services.
URANIUM
ENERGY CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
April 30, 2018
(Unaudited)
We are subject to ordinary routine litigation
incidental to our business. Except as disclosed below, we are not aware of any material legal proceedings pending or that have
been threatened against the Company.
On or about March 9, 2011, the Texas Commission
on Environmental Quality (the “TCEQ”) granted the Company’s applications for a Class III Injection Well Permit,
Production Area Authorization and Aquifer Exemption for its Goliad Project. On or about December 4, 2012, the U.S. Environmental
Protection Agency (the “EPA”) concurred with the TCEQ issuance of the Aquifer Exemption permit (the “AE”).
With the receipt of this concurrence, the final authorization required for uranium extraction, the Goliad Project achieved fully-permitted
status. On or about May 24, 2011, a group of petitioners, inclusive of Goliad County, appealed the TCEQ action to the 250
th
District
Court in Travis County, Texas. A motion filed by the Company to intervene in this matter was granted. The petitioners’
appeal lay dormant until on or about June 14, 2013, when the petitioners filed their initial brief in support of their position.
On or about January 18, 2013, a different group of petitioners, exclusive of Goliad County, filed a petition
for review with the Court of Appeals for the Fifth Circuit in the United States (the “Fifth Circuit”) to appeal the
EPA’s decision. On or about March 5, 2013, a motion filed by the Company to intervene in this matter was granted. The
parties attempted to resolve both appeals, to facilitate discussions and avoid further legal costs. The parties jointly agreed,
through mediation initially conducted through the Fifth Circuit on or about August 8, 2013, to abate the proceedings in the State
District Court. On or about August 21, 2013, the State District Court agreed to abate the proceedings. The EPA subsequently
filed a motion to remand without vacatur with the Fifth Circuit wherein the EPA’s stated purpose was to elicit additional
public input and further explain its rationale for the approval. In requesting the remand without vacatur, which would allow
the AE to remain in place during the review period, the EPA denied the existence of legal error and stated that it was unaware
of any additional information that would merit reversal of the AE. The Company and the TCEQ filed a request to the Fifth
Circuit for the motion to remand without vacatur, and if granted, to be limited to a 60-day review period. On December 9,
2013, by way of a procedural order from a three-judge panel of the Fifth Circuit, the Court granted the remand without vacatur
and initially limited the review period to 60 days. In March of 2014, at the EPA’s request, the Fifth Circuit extended the
EPA’s time period for review and additionally, during that same period, the Company conducted a joint groundwater survey
of the site, the result of which reaffirmed the Company’s previously filed groundwater direction studies. On or about June
17, 2014, the EPA reaffirmed its earlier decision to uphold the granting of the Company’s existing AE, with the exception
of a northwestern portion containing less than 10% of the uranium resource which was withdrawn, but not denied, from the AE area
until additional information is provided in the normal course of mine development. On or about September 9, 2014, the petitioners
filed a status report with the State District Court which included a request to remove the stay agreed to in August 2013 and to
set a briefing schedule (the “Status Report”). In that Status Report, the petitioners also stated that they had decided
not to pursue their appeal at the Fifth Circuit. The Company continues to believe that the pending appeal is without
merit and is continuing as planned towards uranium extraction at its fully-permitted Goliad Project.
On or about April 3, 2012, the Company
received notification of a lawsuit filed in the State of Arizona, in the Superior Court for the County of Yavapai, by certain petitioners
(the “Plaintiffs”) against a group of defendants, including the Company and former management and board members of
Concentric Energy Corp. (“Concentric”). The lawsuit asserts certain claims relating to the Plaintiffs’ equity
investments in Concentric, including allegations that the former management and board members of Concentric engaged in various
wrongful acts prior to and/or in conjunction with the merger of Concentric. The lawsuit originally further alleged that the Company
was contractually liable for liquidated damages arising from a pre-merger transaction which the Company previously acknowledged
and recorded as an accrued liability, and which portion of the lawsuit was settled in full by a cash payment of $149,194 to the
Plaintiffs and subsequently dismissed. The Court dismissed several other claims set forth in the Plaintiffs’ initial complaint,
but granted the Plaintiffs leave to file an amended complaint. The Court denied a subsequent motion to dismiss the amended
complaint, finding that the pleading met the minimal pleading requirements under the applicable procedural rules. In October
2013, the Company filed a formal response denying liability for any of the Plaintiffs’ remaining claims. The Court set the
case for a four-week jury trial that was to take place in Yavapai County, Arizona, in April 2016. In November 2015, after
the completion of discovery, the Company and the remaining defendants filed motions for summary judgment, seeking to dismiss all
of the Plaintiffs’ remaining claims. While those motions were pending, the parties reached a settlement agreement with
respect to all claims asserted by the Plaintiffs in that lawsuit. A formal settlement and release agreement was subsequently
executed, pursuant to which all of the Plaintiffs’ claims in the Arizona lawsuit were dismissed with prejudice. Pursuant
to the terms of the settlement agreement, the Defendants collectively paid $500,000 to the Plaintiffs, of which $50,000 was paid
by the Company.
URANIUM
ENERGY CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
April 30, 2018
(Unaudited)
On June 1, 2015, the Company received notice
that Westminster Securities Corporation (“Westminster”) filed a suit in the United States District Court for the Southern
District of New York, alleging a breach of contract relating to certain four-year warrants issued by Concentric in December 2008.
Although the Concentric warrants expired by their terms on December 31, 2012, Westminster bases its claim upon transactions allegedly
occurring prior to UEC’s merger with Concentric. On March 2, 2018, the District Court granted the Company’s
motion for summary judgment, dismissing all claims asserted by Westminster and the other plaintiffs in that action, and entered
judgment in favor of the Company. On March 22, 2018, the plaintiffs filed an appeal of the District Court’s order of dismissal.
On March 28, 2018, the Company and plaintiffs entered into a mutual general release, whereby the plaintiffs agreed to withdraw
their appeal and irrevocably release any and all claims against the Company in exchange for the Company’s agreement to irrevocably
release any and all claims against the plaintiffs, including any claims for attorneys’ fees and costs that the Company incurred
in defending the action. On April 19, 2018, the Court of Appeals entered an order dismissing the appeal. The case is now closed.
On or about June 29, 2015, Heather M. Stephens
filed a class action complaint against the Company and two of its executive officers in the United States District Court, Southern
District of Texas, with an amended class action complaint filed on November 16, 2015 (the “Securities Case”), seeking
unspecified damages and alleging the defendants violated Section 17(b) of the Securities Act of 1933 and Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934. The Company filed a motion to dismiss and on July 15, 2016, the U.S. District Court for
the Southern District of Texas entered a final judgement dismissing the case in its entirety with prejudice. On September 22, 2016,
the plaintiffs voluntarily dismissed their appeal of the District Court’s judgment and on September 26, 2016 the Fifth Circuit
dismissed the Securities Case pursuant to the plaintiffs’ motion. As a result, the judgment in favor of the Company is final.
No settlement payments or any other consideration was paid by the Company to the plaintiffs
in connection with the Securities Case dismissal.
On or about September 10, 2015, John Price
filed a stockholder derivative complaint on behalf of the Company against the Company’s Board of Directors, executive management
and three of its vice presidents in the United States District Court, Southern District of Texas, with an amended stockholder derivative
complaint filed on December 4, 2015 (the “Federal Derivative Case”), seeking unspecified damages on behalf of the Company
against the defendants for allegedly breaching their fiduciary duties to the Company with respect to the allegations in the Securities
Case. The Company filed a motion to dismiss. The plaintiff ultimately abandoned the Federal Derivative Case, which the Court dismissed
on or about November 17, 2016. No settlement payments or any other consideration was paid by the Company to the plaintiff in connection
with the plaintiff’s abandonment of the Federal Derivative Case
On or about October 2, 2015, Marnie W.
McMahon filed a stockholder derivative complaint on behalf of the Company against the Company’s Board of Directors, executive
management and three of its vice presidents in the District Court of Nevada (the “Nevada Derivative Case”) (collectively,
with the Federal Derivative Case, the “Derivative Cases”) seeking unspecified damages on behalf of the Company against
the defendants for allegedly breaching their fiduciary duties to the Company with respect to the allegations in the Securities
Case. On January 21, 2016, the Court granted the Company’s motion to stay the Nevada Derivative Case pending the outcome
of the Federal Derivative Case. Following the voluntary dismissal of the Federal Derivative Case, Ms. McMahon filed an amended
complaint on February 10, 2017, which again asserted that the Company’s directors breached their fiduciary duties relating
to the factual allegations in the Securities Case. The Company filed a motion to dismiss and on September 13, 2017, the Court granted
the Company’s motion to dismiss the Nevada Derivative Case. On or about October 5, 2017, the Plaintiff filed a notice of
appeal with the Court.
URANIUM
ENERGY CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
April 30, 2018
(Unaudited)
The Company’s Board of Directors
received a shareholder demand letter dated September 10, 2015 relating to the allegations in the Securities Case (the “Shareholder
Demand”). The letter demands that the Board of Directors initiate an action against the Company’s Board of Directors
and two of its executive officers to recover damages allegedly caused to the Company. The Board of Directors appointed a committee
of independent directors to evaluate the allegations in the demand letter. Subsequently, the Federal District Court dismissed the
Securities Case, which was based on similar factual allegations, and the Federal Derivative Case was abandoned. The committee of
independent directors has now completed its evaluation and recommended that the Board of Directors reject the demand. After considering
the committee’s recommendation and all other material information relevant to the investigation, the Board of Directors voted
to reject the demand letter.
The Company has had recent communications
and filings with the Ministry of Public Works and Communications (“MOPC”), the mining regulator in Paraguay, whereby
the MOPC is taking the position that certain concessions forming part of the Company’s Yuty, Oviedo and Alto Parana projects
are not eligible for extension as to exploration or continuation to exploitation in their current stages. While the Company remains
fully committed to its development path forward in Paraguay, it caused its legal counsel to file an appeal with the Administrative
Courts in Paraguay to reverse the MOPC’s position in order to protect the Company’s continuing rights in those concessions.
In the interim the Company also continues to pay all required maintenance fees and otherwise conducts its business in a manner
to comply with all applicable mining laws in Paraguay.
At any given time, we may enter into negotiations
to settle outstanding legal proceedings and any resulting accruals will be estimated based on the relevant facts and circumstances
applicable at that time. We do not expect that such settlements will, individually or in the aggregate, have a material
effect on our financial position, results of operations or cash flows.
|
NOTE 17:
|
SUBSEQUENT EVENT
|
Subsequent to April 30, 2018, we completed
a purchase agreement (the “NRC Purchase Agreement”) with Uranerz Energy Corporation (“Uranerz”), a wholly
owned subsidiary of Energy Fuels Inc., whereby we acquired 100% of its advanced stage North Reno Creek Project located immediately
adjacent to and within our existing Reno Creek Project permitting boundary in the Powder River Basin, Wyoming.
In connection with the closing of the NRC
Purchase Agreement, we paid Uranerz the following consideration:
|
·
|
$2,940,000 in cash; and
|
|
·
|
1,625,531 shares of the Company, at a deemed issuance price of $1.5072 per share, representing
the volume weighted average price of our shares on the NYSE American for the five trading days immediately prior to the closing
date.
|
|
|
|