Quarterly Report (10-q)

Date : 06/10/2019 @ 10:31AM
Source : Edgar (US Regulatory)
Stock : Uranium Energy Corp (UEC)
Quote : 1.0  0.0 (0.00%) @ 8:59AM

Quarterly Report (10-q)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

[X]

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended April 3 0 , 201 9

 

or

 

[  ]

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the transition period from _____ to _____

 

Commission File Number: 001-33706

 

URANIUM ENERGY CORP.

(Exact name of registrant as specified in its charter)

 

Nevada

 

98-0399476

State or other jurisdiction of incorporation of organization)

 

 (I.R.S. Employer Identification No.)

     
     
1 030 West Georgia Street , Suite 1830 , Vancouver, B .C . , Canada   V6E 2 Y 3
(Address of principal executive offices)   (Zip Code)

 

 

(604) 682-9775

 
 

(Registrant’s telephone number, including area code)

 
     
  N/A  
  (Former name, former address and former fiscal year, if changed since last report)  

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock

UEC

NYSE American

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes    No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes    No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

☐  Large accelerated filer

  Accelerated filer

   

☐  Non-accelerated filer

☐  Smaller reporting company

   
  ☐  Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐   No

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 180,684,526 shares of common stock outstanding as of June 6, 2019.

 

 

 

 

 

  URANIUM ENERGY CORP.

 

TABLE OF CONTENTS

 

PART I – FINANCIAL INFORMATION 3
Item 1.   Financial Statements 3
Item 2.   Management's Discussion and Analysis of Financial Condition and Results of Operations 26
Item 3.   Quantitative and Qualitative Disclosures About Market Risk 35
Item 4.   Controls and Procedures 35
PART II – OTHER INFORMATION 36
Item 1.   Legal Proceedings 36
Item 1A.   Risk Factors

37

Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds 47
Item 3.   Defaults Upon Senior Securities 47
Item 4.   Mine Safety Disclosures 47
Item 5.   Other Information 47
Item 6.   Exhibits 48
SIGNATURES 49

 

2

 

 

PART I – FINANCIAL INFORMATION

 

Item 1.     Financial Statements

 

 

 

3

 

 

 

 

  URANIUM ENERGY CORP.

 

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

FOR THE NINE MONTHS ENDED APRIL 30, 2019

 

(Unaudited)

 

 

 

4

 

 

 

URANIUM ENERGY COPR.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

   

Note(s)

   

April 30, 2019

   

July 31, 2018

 
                         

CURRENT ASSETS

                       

Cash and cash equivalents

    6     $ 6,093,098     $ 6,926,523  

Short-term investments

            14,858,126       -  

Inventories

            211,662       211,662  

Prepaid expenses and deposits

    3       1,609,769       1,023,183  

Other current assets

            197,042       179,360  
              22,969,697       8,340,728  
                         

MINERAL RIGHTS AND PROPERTIES

    4       63,753,971       71,122,576  

PROPERTY, PLANT AND EQUIPMENT

    5       7,121,828       7,101,552  

RESTRICTED CASH

    6       1,812,843       1,789,899  

EQUITY-ACCOUNTED INVESTMENT

    7       9,058,803       693,502  

OTHER LONG-TERM ASSETS

            338,770       563,052  
            $ 105,055,912     $ 89,611,309  
                         
                         

CURRENT LIABILITIES

                       

Accounts payable and accrued liabilities

          $ 1,445,201     $ 2,314,763  

Due to a related party

    8       48,545       807  

Current portion of long-term debt

    9       -       10,000,000  
              1,493,746       12,315,570  
                         

LONG-TERM DEBT

    9       19,185,645       9,534,974  

ASSET RETIREMENT OBLIGATIONS

    10       4,192,304       4,020,282  

DEFERRED TAX LIABILITIES

            551,652       564,923  
              25,423,347       26,435,749  
                         

STOCKHOLDERS' EQUITY

                       

Capital stock

                       

Common stock $0.001 par value: 750,000,000 shares authorized, 180,562,286 shares issued and outstanding (July 31, 2018 - 161,175,764)

    11       180,562       161,176  

Additional paid-in capital

            335,440,377       308,062,379  

Accumulated deficit

            (255,866,652 )     (245,151,636 )

Accumulated other comprehensive income

    1       (121,722 )     103,641  
              79,632,565       63,175,560  
            $ 105,055,912     $ 89,611,309  
                         

COMMITMENTS AND CONTINGENCIES

    16                  

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

5

 

 

 

URANIUM ENERGY CORP.

CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

(Unaudited)

 

 

           

Three Months Ended April 30,

   

Nine Months Ended April 30,

 
   

Note(s)

   

2019

   

2018

   

2019

   

2018

 
                                         

COSTS AND EXPENSES

                                       

Mineral property expenditures

    4     $ 1,453,358     $ 981,493     $ 3,218,818     $ 3,638,408  

General and administrative

    8,12       1,952,616       2,407,571       6,395,014       7,526,698  

Depreciation, amortization and accretion

    4,5,10       86,387       88,294       259,970       268,066  
              3,492,361       3,477,358       9,873,802       11,433,172  

LOSS FROM OPERATIONS

            (3,492,361 )     (3,477,358 )     (9,873,802 )     (11,433,172 )
                                         

OTHER INCOME (EXPENSES)

                                       

Interest income

            136,173       38,467       311,155       188,335  

Interest expenses and finance costs

    9       (815,258 )     (710,000 )     (2,383,916 )     (2,206,585 )

(Loss) income from equity-accounted investment

    7       (872,851 )     (10,134 )     (590,819 )     91,099  

Other income

            17,837       1,649       114,092       37,483  

Gain (loss) on disposition of assets

    4       7,598       (1,222 )     1,591,362       (1,696 )
              (1,526,501 )     (681,240 )     (958,126 )     (1,891,364 )

LOSS BEFORE INCOME TAXES

            (5,018,862 )     (4,158,598 )     (10,831,928 )     (13,324,536 )
                                         

DEFERRED TAX BENEFITS

            1,305       11,952       13,271       268,237  

NET LOSS FOR THE PERIOD

            (5,017,557 )     (4,146,646 )     (10,818,657 )     (13,056,299 )
                                         

OTHER COMPREHENSIVE (LOSS) INCOME, NET OF INCOME TAXES

            (159,954 )     252       (121,722 )     388  

TOTAL COMPREHENSIVE LOSS FOR THE PERIOD

          $ (5,177,511 )   $ (4,146,394 )   $ (10,940,379 )   $ (13,055,911 )
                                         

NET LOSS PER SHARE, BASIC AND DILUTED

    13     $ (0.03 )   $ (0.03 )   $ (0.06 )   $ (0.08 )
                                         

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING, BASIC AND DILUTED

            179,348,614       157,704,601       174,213,254       155,996,660  

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

6

 

 

 

URANIUM ENERGY CORP.

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

 

 

           

Nine Months Ended April 30,

 
   

Note(s)

   

2019

   

2018

 

CASH PROVIDED BY (USED IN):

                       
                         

OPERATING ACTIVITIES

                       

Net loss for the period

          $ (10,818,657 )   $ (13,056,299 )

Adjustments to reconcile net loss to cash flows in operating activities

                       

Stock-based compensation

    12       2,143,598       2,133,359  

Depreciation, amortization and accretion

    4,5,10       259,970       268,066  

Amortization of long-term debt discount

    9       1,050,671       883,333  

(Gain) loss on disposition of assets

    4       (1,591,362 )     1,696  

Deferred tax benefits

            (13,271 )     (268,237 )

Loss (income) from equity-accounted investment

    7       590,819       (91,099 )

Realized loss on available-for-sale securities

            799       -  

Reimbursable Expenses for Reno Creek Acquisition

            -       483,829  

Changes in operating assets and liabilities

                       

Prepaid expenses and deposits

            (408,301 )     (265,985 )

Other current assets

            (18,481 )     445  

Accounts payable and accrued liabilities

            (869,562 )     (477,222 )

Due to a related party

    8       47,738       167  

NET CASH FLOWS USED IN OPERATING ACTIVITIES

            (9,626,039 )     (10,387,947 )
                         

FINANCING ACTIVITIES

                       

Proceeds from share issuance, net of issuance costs

    11       23,843,995       328,300  

NET CASH FLOWS PROVIDED BY FINANCING ACTIVITIES

            23,843,995       328,300  
                         

INVESTING ACTIVITIES

                       

Net cash and restricted cash received from asset acquisition

            -       289,038  

Investment in mineral rights and properties

            (105,000 )     (309,120 )

Purchase of property, plant and equipment

            (77,809 )     (11,242 )

Increase in other long-term assets

            -       (188,400 )

Purchase of short-term investments

            (29,858,126 )     (21,771,253 )

Redemption of short-term investments

            15,000,000       30,771,253  

Proceeds from disposition of assets

            12,498       -  

NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES

            (15,028,437 )     8,780,276  
                         

NET CASH FLOWS

            (810,481 )     (1,279,371 )

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD

      8,716,422       14,282,001  

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD

    6     $ 7,905,941     $ 13,002,630  
                         

SUPPLEMENTAL CASH FLOW INFORMATION

    15                  

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

7

 

 

 

URANIUM ENERGY CORP.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)

 

 

   

Common Stock

   

Additional Paid-in

   

Share Issuance

   

Accumulated

       Accumulated Other Comprehensive    

Stockholders'

 
   

Shares

   

Amount

    Capital     Obligation       Deficit        Income (Loss)     Equity   

Balance, July 31, 2018

    161,175,764     $ 161,176     $ 308,062,379     $ -     $ (245,151,636 )   $ 103,641       63,175,560  

Common stock

                                                       

Issued for equity financing, net of issuance costs

    12,613,049       12,613       15,978,349       -       -       -       15,990,962  

Issued upon exercise of stock options

    118,985       119       72,244       -       -       -       72,363  

Issued upon exercise of warrants

    3,999,881       4,000       4,818,357       -       -       -       4,822,357  

Issued in exchange of warrants pursuant to Securities Exchange Agreement

    750,000       750       976,813       -       -       -       977,563  

Issued for credit facility

    1,180,328       1,180       1,398,820       -       -       -       1,400,000  

Stock-based compensation

                                                       

Common stock issued for consulting services

    165,404       163       226,376       -       -       -       226,539  

Common stock issued under Stock Incentive Plan

    558,875       561       784,556       -       -       -       785,117  

Amortization of stock option expenses

    -       -       1,141,733       -       -       -       1,141,733  

Warrants

                                                       

Issued for equity financing

    -       -       2,978,250       -       -       -       2,978,250  

Exchanged for common stock pursuant to Securities Exchange Agreement

    -       -       (4,950,000 )     -       -       -       (4,950,000 )

Difference from Securities Exchange Agreement

    -       -       3,952,500       -       -       -       3,952,500  

Net loss for the period

    -       -       -       -       (10,818,657 )     -       (10,818,657 )

Reclassification upon adoption of ASU No. 2016-01

    -       -       -       -       103,641       (103,641 )     -  

Other comprehensive loss

    -       -       -       -       -       (121,722 )     (121,722 )

Balance, April 30, 2019

    180,562,286     $ 180,562     $ 335,440,377     $ -     $ (255,866,652 )   $ (121,722 )   $ 79,632,565  

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

8

 

 

URANIUM ENERGY CORP.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)

 

 

   

Common Stock

   

Additional Paid-in

   

Share Issuance

   

Accumulated 

       Accumulated Other Comprehensive    

Stockholders'

 
   

Shares

   

Amount

    Capital     Obligation     Deficit       Loss      Equity  

Balance, July 31, 2017

    139,815,124     $ 139,815     $ 272,697,152     $ 638,142     $ (227,325,002 )   $ (14,702 )   $ 46,135,405  

Common stock

                                                       

Issued upon exercise of stock options

    908,178       909       327,391       -       -       -       328,300  

Issued for credit facility

    641,574       641       899,359       -       -       -       900,000  

Issued for Reno Creek Acquisition

    14,852,450       14,853       20,317,764       -       -       -       20,332,617  

Issued for Reimbursable Expenses for Reno Creek Acquisition

    353,160       353       483,476       -       -       -       483,829  

Issued for Diabase Acquisition

    164,767       165       232,156       -       -       -       232,321  

Issued for mineral property

    46,134       46       61,774       -       -       -       61,820  

Issued for settlement of liabilities

    469,358       470       698,491       -       -       -       698,961  

Stock-based compensation

                                                       

Common stock issued for consulting services

    208,889       208       322,657       -       -       -       322,865  

Common stock issued under Stock Incentive Plan

    1,023,247       1,023       1,366,763       (638,142 )     -       -       729,644  

Amortization of stock option expenses

    -       -       1,052,833       -       -       -       1,052,833  

Warrants

                                                       

Issued in connection with Reno Creek Acquisition

    -       -       5,088,928       -       -       -       5,088,928  

Net loss for the period

    -       -       -       -       (13,056,299 )     -       (13,056,299 )

Other comprehensive income

    -       -       -       -       -       388       388  

Balance, April 30, 2018

    158,482,881     $ 158,483     $ 303,548,744     $ -     $ (240,381,301 )   $ (14,314 )   $ 63,311,612  

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements

 

9

 

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
April 30, 2019
(Unaudited)
 

 

 

NOTE 1:     NATURE OF OPERATIONS

 

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, Canada and 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, 2019, or for the fiscal years ended July 31, 2018 (“Fiscal 2018”), 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.

 

During the nine months ended April 30, 2019, we completed a public offering of 12,613,049 units at a price of $1.60 per unit for gross proceeds of $20.2 million, and received cash proceeds of $4.9 million from the exercise of stock options and warrants, which substantially increased our cash and cash equivalent and improved our working capital position. At April 30, 2019, we had working capital of $21.5 million including cash and cash equivalents of $6.1 million and short-term investments of $14.9 million. On December 5, 2018, we entered into a third amended and restated credit agreement (the “Third Amended and Restated Credit Agreement”), whereby we and our lenders agreed to certain further amendments to our $20 million senior secured credit facility (the “Credit Facility”), the maturity date was extended from January 1, 2020 to January 31, 2022, and the prior monthly principal payments were deferred until the new maturity date of January 31, 2022. As a result, the $15.0 million principal amounts reported as current-portion of long-term debt at October 31, 2018 was removed from our capital resource requirement for the then next 12 months. As a consequence, our existing cash resources as at April 30, 2019 are expected to provide sufficient funds to carry our planned operations for the next 12 months from the date that our condensed consolidated financial statements are issued.  Our continuation as a going concern for a period beyond 12 months will be dependent upon our ability to obtain adequate additional financing, as our operations are capital intensive and future capital expenditures are expected to be substantial. 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.

 

 

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 2018. 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, 2019, are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2019 (“Fiscal 2019”).

 

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.

 

10

 

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
April 30, 2019
(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 we 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.

 

Recent ly Adopted Accounting Standards

 

In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, as amended by ASU No. 2016-12, “Revenue from Contracts with Customers” (“Topic 606”), which requires revenue to be recognized based on the amount an entity is expected to be entitled to for promised goods or services provided to customers. The standard also requires expanded disclosures regarding contracts with customers. The guidance in this standard supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition”, and most industry-specific guidance. Adoption of the standard may be applied retrospectively to each prior period presented (the full retrospective method) or retrospectively with the cumulative effect recognized as of the date of initial application (the modified retrospective method). The standard is effective for fiscal periods beginning after December 15, 2017 and early adoption is not permitted. Accordingly, we have adopted this standard effective August 1, 2018 and have elected to apply the modified retrospective method.

 

We have performed an assessment of the impact of implementation of ASU No. 2014-09, and concluded it will not change the timing of revenue recognition or amounts of revenue recognized compared to how we recognize revenue under our current policies. Our revenue was generated from the sale of uranium concentrates to customers. These sales contain a single delivery element and revenue is recognized at a single point in time when ownership, risk and rewards transfer to the buyer.

 

In January 2016, the FASB issued ASU No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities” (“Topic 825”), which requires entities to measure equity investments that do not result in consolidation and are not accounted for under the equity method at fair value and recognize any changes in fair value in net income. This new guidance also updates certain disclosure requirements for these investments. The guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those years. Upon adoption, the cumulative effect adjustment should be recorded at the beginning of the fiscal year in which the guidance is adopted. We adopted this standard effective August 1, 2018. Upon adoption, we reclassified $103,641 unrealized gains and losses, net of taxes, related to investments in marketable securities by our Company or through our equity-accounted investee, from accumulated other comprehensive income to accumulative deficit in our consolidated balance sheets.

 

11

 

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
April 30, 2019
(Unaudited)
 

 

In November 2016, the FASB issued ASU 2016-18, “Restricted Cash”, which requires the statement of cash flows present the change in restricted cash and restricted cash equivalents during the period. The guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those years. We retrospectively adopted this standard effective August 1, 2018. Upon adoption, we included a reconciliation of cash and cash equivalents and restricted cash (previously “reclamation deposits”) reported within our consolidated balance sheets to the total shown in the consolidated statements of cash flows. Adoption of this guidance had no other impact on our consolidated financial statements or disclosures.

 

In June 2018, the FASB issued ASU No. 2018-07, “Improvement to Nonemployee Share-Based Payment Accounting”, with amendments to expand the scope of Accounting Standard Codification (“ASC”), Topic 718, “Compensation – Stock Compensation” (“Topic 718”), to include share-based payment transactions for acquiring goods and services from nonemployees, which were previously covered under ASC 505, “Equity-Based Payments to Non-Employees”. According to ASU No. 2018-07, nonemployee share-based payment awards within the scope of Topic 718 are measured at grant-date fair value of the equity instruments that an entity is obligated to issue when the good has been delivered or the service has been rendered and any other conditions necessary to earn the right to benefit from the instruments have been satisfied. The amendments in ASU No. 2018-07 are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. We have early adopted this standard effective August 1, 2018, along with the adoption of Topic 606, and early adoption of this standard has not had a significant impact on our condensed consolidated financial statements.

 

 

NOTE 3:     PREPAID EXPENSES AND DEPOSITS

 

At April 30, 2019, prepaid expenses and deposits consisted of the following:

 

   

April 30, 2019

   

July 31, 2018

 

Prepaid Property Renewal Fees

  $ 869,394     $ 566,977  

Prepaid Insurance

    210,085       210,155  

Prepaid Listing and Subscriptions

    66,288       48,435  

Prepaid License Fees

    74,211       17,039  

Prepaid Surety Bond Premium

    57,065       39,192  

Deposits and Expense Advances

    109,610       87,630  

Other Prepaid Expenses

    223,116       53,755  
    $ 1,609,769     $ 1,023,183  

 

12

 

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
April 30, 2019
(Unaudited)
 

 

 

NOTE 4 :     MINERAL RIGHTS AND PROPERTIES

 

Mineral Rights

 

At April 30, 2019, 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, 2019, annual maintenance payments of approximately $2,516,000 will be required to maintain these mineral rights.

 

Mineral rights and property acquisition costs consisted of the following:

   

   

April 30, 2019

   

July 31, 2018

 

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

    3,470,373       9,154,268  

Workman Creek Project

    649,854       1,657,500  

Los Cuatros Project

    257,250       257,250  

Slick Rock Project

    -       646,650  

Reno Creek Project

    31,527,870       31,527,870  

Diabase Project

    546,938       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  
      67,659,501       74,997,692  

Accumulated Depletion

    (3,929,884 )     (3,929,884 )
      63,729,617       71,067,808  
                 

Databases

    2,410,038       2,410,038  

Accumulated Amortization

    (2,408,939 )     (2,405,192 )
      1,099       4,846  
                 

Land Use Agreements

    404,310       404,310  

Accumulated Amortization

    (381,055 )     (354,388 )
      23,255       49,922  
    $ 63,753,971     $ 71,122,576  

 

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.

 

13

 

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
April 30, 2019
(Unaudited)
 

 

During the nine months ended April 30, 2019, we completed a royalty purchase agreement (the "Royalty Purchase Agreement") with Uranium Royalty Corp. (“URC”), a private entity investing in the uranium sector, in connection with the purchase by URC from our Company of a one percent (1%) net smelter return royalty (collectively, the "Royalties") for uranium only, on each of our Slick Rock, Workman Creek and Anderson projects. On December 4, 2018, we closed the Royalty Purchase Agreement and received 12,000,000 common shares of URC (the “Consideration Shares”) with a fair value of $9,077,842.

 

The fair value of the Consideration Shares, net of transaction costs of $55,787, was allocated to the respective underlying projects based on their identified mineral resources as follows:

 

Fair value of Consideration Shares

  $ 9,077,842  

Transaction costs

    55,787  

Net consideration

  $ 9,022,055  

 

Net consideration allocation to:

 

Allocation %

 

Net Consideration

Allocation

 

Anderson Project

    63 %   $ 5,683,895  

Workman Creek Project

    12 %     1,082,646  

Slick Rock Project

    25 %     2,255,514  
      100 %   $ 9,022,055  

 

The net consideration allocation amounts have reduced the carrying value of the Anderson Project by $5,683,895, the Workman Creek Project by $1,082,646 and the Slick Rock Project by $676,650. The net consideration of $2,255,514 allocated to the Slick Rock Project exceeded its carrying value of $676,650 by $1,578,864, which was recorded as a gain on disposition of asset and included in the condensed consolidated statement of operations for the nine months ended April 30, 2019.

 

During the nine months ended April 30, 2019 and 2018, 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, 2019 and 2018, respectively.

 

Mineral property expenditures incurred by major projects were as follows:

 

   

Three Months Ended April 30,

   

Nine Months Ended April 30,

 
   

2019

   

2018

   

2019

   

2018

 

Mineral Property Expenditures

                               

Palangana Mine

  $ 248,687     $ 264,447     $ 775,311     $ 740,977  

Goliad Project

    34,071       28,658       71,949       71,373  

Burke Hollow Project

    605,025       152,307       880,039       570,099  

Longhorn Project

    10,157       5,760       35,691       11,832  

Salvo Project

    6,702       6,702       20,211       20,338  

Anderson Project

    15,097       15,211       52,367       45,241  

Workman Creek Project

    7,673       7,673       23,037       23,627  

Slick Rock Project

    12,206       12,206       41,637       40,012  

Reno Creek Project

    178,722       158,546       474,015       1,126,918  

Yuty Project

    8,297       114,481       94,299       339,677  

Oviedo Project

    105,724       17,982       167,207       99,224  

Alto Paraná Titanium Project

    78,325       33,312       138,588       147,744  

Other Mineral Property Expenditures

    142,672       164,208       444,467       401,346  
    $ 1,453,358     $ 981,493     $ 3,218,818     $ 3,638,408  

 

14

 

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
April 30, 2019
(Unaudited)
 

 

During the three and nine months ended April 30, 2018, and in connection with the acquisition of the Reno Creek Project, we issued 353,160 shares as settlement of certain 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.

 

 

NOTE 5 :     PROPERTY, PLANT AND EQUIPMENT

 

Property, plant and equipment consisted of the following:

 

   

April 30, 2019

   

July 31, 2018

 
   

Cost

   

Accumulated
Depreciation

   

Net Book
Value

   

Cost

   

Accumulated
Depreciation

   

Net Book
Value

 

Hobson Processing Facility

  $ 6,819,088     $ (773,933 )   $ 6,045,155     $ 6,819,088     $ (773,933 )   $ 6,045,155  

Mining Equipment

    2,467,557       (2,396,991 )     70,566       2,438,681       (2,412,277 )     26,404  

Logging Equipment and Vehicles

    1,851,883       (1,742,816 )     109,067       1,971,742       (1,850,306 )     121,436  

Computer Equipment

    589,051       (559,229 )     29,822       607,342       (577,584 )     29,758  

Furniture and Fixtures

    170,701       (169,238 )     1,463       170,701       (168,814 )     1,887  

Land and Buildings

    889,606       (23,851 )     865,755       889,606       (12,694 )     876,912  
    $ 12,787,886     $ (5,666,058 )   $ 7,121,828     $ 12,897,160     $ (5,795,608 )   $ 7,101,552  

 

During the nine months ended April 30, 2019 and 2018, 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, 2019 and 2018, respectively.

 

 

NOTE 6 :       RESTRICTED CASH

 

Restricted cash (previously “reclamation deposits”) includes cash and cash equivalents as collateral for various bonds posted in favor of applicable state regulatory agencies in Arizona, Texas and Wyoming, for estimated reclamation costs associated with our Palangana Mine, Hobson Processing Facility and Reno Creek Project. Restricted cash will be released upon completion of reclamation of a mineral property or restructuring of a surety and collateral arrangement.

 

   

April 30, 2019

   

July 31, 2018

 

Restricted cash, beginning of period

  $ 1,789,899     $ 1,706,028  

Reclamation deposit received from asset acquisition

    -       73,973  

Refund of reclamation deposit

    -       (819 )

Interest received

    22,944       10,717  

Restricted cash, end of period

  $ 1,812,843     $ 1,789,899  

 

Cash, cash equivalents and restricted cash are included in the following accounts at April 30, 2019 and 2018:

 

   

April 30, 2019

   

April 30, 2018

 

Cash and cash equivalents

  $ 6,093,098     $ 11,223,448  

Restricted cash

    1,812,843       1,779,182  

Total cash, cash equivalents and restricted cash

  $ 7,905,941     $ 13,002,630  

 

15

 

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
April 30, 2019
(Unaudited)
 

 

 

NOTE 7:      EQUITY-ACCOUNTED INVESTMENT

 

On December 4, 2018, we closed the Royalty Purchase Agreement and received 12,000,000 Consideration Shares of URC with a fair value of $9,077,842. Refer to Note 4: Mineral Rights and Properties. As a result, we own 14,000,000 shares of URC, representing a 33.7% interest in URC as at April 30, 2019. In addition, certain of our officers collectively own an interest in URC and one of our officers is a member of the board of directors of URC. As a consequence, our ability to exercise significant influence over URC’s operating and financing policies continued to exist during the three and nine months ended April 30, 2019.

 

During the nine months ended April 30, 2019, the change in carrying value of the investment in URC is summarized as follows:

 

Balance, July 31, 2018

  $ 693,502  

Share consideration received from sale of royalty interests

    9,077,842  

Share of loss from URC

    (979,188 )

Gain on ownership interest dilution

    388,369  

Foreign currency translation

    (121,722 )

Balance, April 30, 2019

  $ 9,058,803  

 

 

NOTE 8 :     RELATED PARTY TRANSACTIONS

 

During the three months ended April 30, 2019 and 2018, we incurred $39,365 and $36,210 (nine months ended April 30, 2019 and 2018: $117,086 and $112,850), 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 to Blender with a fair value of $141,678 as settlement of the equivalent amounts owed to Blender.

 

At April 30, 2019, the amount owing to Blender was $48,545 (July 31, 2018: $807).

 

 

NOTE 9 :       LONG-TERM DEBT      

 

On December 5, 2018, we entered into the Third Amended and Restated Credit Agreement with each of Sprott Resource Lending Partnership, as agent, and our remaining lenders and participants (collectively, the “Lenders”), whereby we and the Lenders agreed to certain further amendments to the $20,000,000 Credit Facility.

 

The key terms of the Third Amended and Restated Credit Agreement are summarized as follows:

 

 

extension of the maturity date from January 1, 2020 to January 31, 2022;

 

deferral of the prior monthly principal payments until the new maturity date of January 31, 2022;

 

issuance of third extension fee shares equal to 7% of the principal balance outstanding or $1,400,000 paid to the Lenders by way of the issuance of 1,180,328 shares of the Company; and

 

payment of anniversary fees to the Lenders on each of November 30, 2019, 2020 and 2021, of 7%, 6.5% and 6%, respectively, of the principal balance then outstanding, if any, payable at the option of the Company in cash or shares of the Company with a price per share calculated at a 10% discount to the five trading-day volume-weighted average price of the Company’s shares immediately prior to the applicable date.

 

Under the terms of the Third Amended and Restated Credit Agreement, the Credit Facility remains non-revolving with an amended term of 8.5 years maturing on January 31, 2022, subject to an interest a rate of 8% per annum, compounded and payable on a monthly basis. An underlying effective interest rate of 16.67% has been calculated under the assumption that the Company will carry the full principal balance of $20,000,000 to its contractual maturity on January 31, 2022 without exercising the prepayment feature; and therefore, the anniversary fee payments of $1,400,000, $1,300,000 and $1,200,000, which are calculated on the principal balance, will become due on each of November 30, 2019, 2020 and 2021, respectively.

 

16

 

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
April 30, 2019
(Unaudited)
 

 

The Third Amended and Restated Credit Agreement supersedes, in their entirety, the Second Amended and Restated Credit Agreement dated and effective February 9, 2016, the Amended and Restated Credit Agreement dated and effective March 13, 2014 and the Credit Agreement dated and effective July 30, 2013 with our Lenders.

 

As at April 30, 2019, our long-term debt consisted of the following:

 

   

April 30, 2019

   

July 31, 2018

 

Principal amount

  $ 20,000,000     $ 20,000,000  

Unamortized discount

    (814,355 )     (465,026 )

Long-term debt, net of unamortized discount

    19,185,645       19,534,974  

Current portion

    -       10,000,000  

Long-term debt, net of current portion

  $ 19,185,645     $ 9,534,974  

 

For the three and nine months ended April 30, 2019, the amortization of debt discount totaled $384,551 and $1,050,671 (three and nine months ended April 30, 2018: $277,502 and $883,333), respectively, which was recorded as interest expense and included in our condensed consolidated statements of operations and comprehensive loss.

 

 

NOTE 10 :     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, 2018

  $ 4,020,282  

Accretion

    172,022  

Balance, April 30, 2019

  $ 4,192,304  

 

The estimated amounts and timing of cash flows and assumptions used for ARO estimates are as follows:

  

   

April 30, 2019

   

July 31, 2018

 

Undiscounted amount of estimated cash flows

  $ 7,275,504     $ 7,275,504  
                         

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 2019

  $ -  

Fiscal 2020

    -  

Fiscal 2021

    -  

Fiscal 2022

    -  

Fiscal 2023

    148,391  

Remaining balance

    7,127,113  
    $ 7,275,504  

 

17

 

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
April 30, 2019
(Unaudited)
 

 

 

NOTE 11 :     CAPITAL STOCK

 

Equity Financing

 

On October 3, 2018, we completed a public offering of 12,613,049 units at a price of $1.60 per unit for gross proceeds of $20,180,878 (the “October 2018 Offering”). Each unit was comprised of one share of the Company and one-half of one share purchase warrant. Each whole warrant entitles its holder to acquire one share at an exercise price of $2.05 per share, exercisable immediately upon issuance and expiring 30 months from the date of issuance. In connection with the October 2018 Offering, we also issued compensation share purchase warrants to agents as part of share issuance costs to purchase 756,782 shares of our Company, exercisable at an exercise price of $2.05 per share and expiring 30 months from the date of issuance.

 

The shares were valued at the Company’s closing price of $1.54 per share at October 3, 2018. The share purchase warrants were valued using the Black-Scholes option pricing model with the following assumptions:

 

Expected Risk Free Interest Rate

    2.90 %

Expected Annual Volatility

    63.30 %

Expected Contractual Life in Years

    2.50  

Expected Annual Dividend Yield

    0.00 %

 

The net proceeds from the October 2018 Offering were allocated to the fair values of the shares and share purchase warrants as presented below:

 

Fair Value of Shares

  $ 19,424,095  

Fair Value of Share Purchase Warrants

    3,094,693  

Total Fair Value Before Allocation to Net Proceeds

  $ 22,518,788  
         

Gross Proceeds

  $ 20,180,878  

Share Issuance Costs - Cash

    (1,211,667 )

Net Cash Proceeds Received

  $ 18,969,211  
         

Relative Fair Value Allocation to:

       

Shares

  $ 16,362,327  

Share Purchase Warrants

    2,606,884  
    $ 18,969,211  

 

Share Transactions

 

During the three months ended April 30, 2019, we entered into a Securities Exchange Agreement (the “Securities Exchange Agreement”) with each of Pacific Road Resources Reno Creek Cayco 1 Ltd. (“Cayco 1”), Pacific Road Resources Reno Creek Cayco 2 Ltd. (“Cayco 2”), Pacific Road Resources Reno Creek Cayco 3 Ltd. (“Cayco 3”), Pacific Road Resources Reno Creek Cayco 4 Ltd. (“Cayco 4”) and Reno Creek Unit Trust (“RCUT”, and together with Cayco 1, Cayco 2, Cayco 3 and Cayco 4, the “Pacific Road Parties”), whereby the Pacific Roads Parties exchanged their collective 11,000,000 outstanding common stock purchase warrants of the Company (the “Warrants”) for an aggregate of 750,000 common shares of the Company (each, a “Share”), with a fair value of $1.33 per Share (collectively, the “Securities Exchange”). The Warrants, with an exercise price of $2.30 and expiry date of August 9, 2022, were valued at $0.45 per share using the Barrier Option Pricing Model at the date of issuance on August 9, 2017 in connection with the acquisition of the Reno Creek Project. The difference between the carrying value of the Warrants of $4,950,000 and fair value of the shares of $997,500 was recorded as additional paid in capital and has had no impact on the Company’s condensed consolidated Statement of operations and comprehensive loss.

 

18

 

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
April 30, 2019
(Unaudited)
 

 

A summary of the share transactions for the nine months ended April 30, 2019 is as follows:

 

Period / Description

 

Common

   

Value per Share

   

Issuance

 
  Shares Issued    

Low

   

High

    Value    

Balance, July 31, 2018

    161,175,764                          

Equity Financing

    12,613,049     $ 1.60     $ 1.60     $ 20,180,878  

Credit Facility

    1,180,328       1.19       1.19       1,400,000  

Exchange of Warrants

    750,000       1.33       1.33       997,500  

Consulting Services

    165,404       1.23       1.77       226,539  

Warrants Exercised

    3,999,881       1.20       1.35       4,822,357  

Options Exercised (1)

    118,985       0.45       1.32       123,221  

Shares Issued Under Stock Incentive Plan

    558,875       1.25       1.72       785,117  

Balance, April 30, 2019

    180,562,286                          

 

 

(1)

151,500 stock options were exercised on a forfeiture basis, resulting in 52,735 net shares being issued.

 

Share Purchase Warrants

 

A continuity schedule of outstanding share purchase warrants is as follows:

 

   

Number of
Warrants

   

Weighted Average
Exercise Price

 

Balance, July 31, 2018

    30,923,489     $ 1.97  

Issued

    7,063,253       2.05  

Exercised

    (3,999,881 )     1.21  

Expired

    (3,542,951 )     2.13  

Cancelled

    (11,000,000 )     2.30  

Balance, April 30, 2019

    19,443,910     $ 1.94  

 

A summary of share purchase warrants outstanding and exercisable at April 30, 2019 is as follows:

 

Weighted

Average
Exercise Price

   

Number of Warrants
Outstanding

 

Expiry Date

 

Weighted Average

Remaining Contractual
Life (Years)

 
$ 1.35       2,450,000  

January 30, 2020

    0.75  
  1.64       50,000  

May 21, 2023

    4.06  
  2.00       9,571,929  

January 20, 2020

    0.73  
  2.05       7,063,253  

April 3, 2021

    1.93  
  2.30       308,728  

August 9, 2022

    3.28  
$ 1.94       19,443,910         1.21  

 

During the nine months ended April 30, 2019, we received cash proceeds totaling $4,822,357 from the exercise of 3,999,881 share purchase warrants at a weighted average exercise price of $1.21 per share.

 

19

 

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
April 30, 2019
(Unaudited)
 

 

 

NOTE 12 :      STOCK-BASED COMPENSATION

 

At April 30, 2019, we had one stock option plan, the 2018 Stock Incentive Plan, which superseded and replaced our prior equity compensation plan, being our 2017 Stock Incentive Plan (collectively, the “Stock Incentive Plan”).

 

Stock Options

 

During the nine months ended April 30, 2019, we granted stock options under the Stock Incentive Plan to certain employees to purchase a total of 130,000 shares of the Company exercisable at $1.25 to $1.44 per share with a term of five years.

 

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, 2019, including corresponding grant date fair values and assumptions using the Black Scholes option pricing model is as follows:

 

Date

 

Options
Granted

   

Exercise

Price

   

Term
(Years)

   

Fair
Value

   

Expected
Life (Years)

   

Risk-Free
Interest Rate

   

Dividend Yield

   

Expected

Volatility

 

January 3, 2019

    40,000     $ 1.25       5.00     $ 24,164       3.70       2.34 %     0.00 %     63.70 %

April 11, 2019

    90,000       1.44       5.00       58,047       3.70       2.29 %     0.00 %     58.06 %

Total

    130,000                     $ 82,211                                  

 

A continuity schedule of outstanding stock options for the underlying shares for the nine months ended April 30, 2019 is as follows:

 

   

Number of Stock

Options

   

Weighted Average

Exercise Price

 

Balance, July 31, 2018

    14,911,625     $ 1.41  

Granted

    130,000       1.38  

Exercised

    (217,750 )     1.11  

Forfeited

    (87,500 )     1.42  

Balance, April 30, 2019

    14,736,375     $ 1.41  

 

During the nine months ended April 30, 2019, we issued 118,985 shares upon exercise of stock options, of which 66,250 stock options were exercised in cash for proceeds of $72,363, and 151,500 stock options were exercised on a forfeiture basis resulting in 52,735 net shares issued. The intrinsic value of these exercised options totaled $124,405.

 

20

 

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
April 30, 2019
(Unaudited)
 

 

A continuity schedule of outstanding unvested stock options at April 30, 2019, and the changes during the periods, is as follows:

 

   

Number of Unvested

Stock Options

   

Weighted Average

Grant-Date Fair Value

 

Balance, July 31, 2018

    3,479,500     $ 0.68  

Granted

    130,000       0.63  

Vested

    (1,554,250 )     0.68  

Forfeited

    (75,000 )     0.67  

Balance, April 30, 2019

    1,980,250     $ 0.67  

 

At April 30, 2019, the aggregate intrinsic value under the provisions of ASC 718 of all outstanding stock options was estimated at $2,066,559 (vested: $2,008,016 and unvested: $58,543).

 

At April 30, 2019, unrecognized stock-based compensation expense related to the unvested portion of stock options totaled $545,992 to be recognized over the next 0.83 year.

 

A summary of stock options outstanding and exercisable at April 30, 2019 is as follows:

  

 

 

Options Outstanding

   

Options Exercisable

 

Range of

Exercise Prices

 

Outstanding at
April 30, 2019

   

Weighted

Average

Exercise Price

   

Weighted Average Remaining Contractual Term (Years)

   

Exercisable at
April 30, 2019

   

Weighted

Average

Exercise Price

   

Weighted Average Remaining Contractual Term (Years)

 

$0.93

to $1.41     11,384,875     $ 1.23       1.33       10,942,625     $ 1.23       1.25  

$1.42

to $3.86     3,351,500       2.04       3.23       1,813,500       2.48       2.36  
          14,736,375     $ 1.41       1.76       12,756,125     $ 1.40       1.40  

 

Stock - Based Compensation

 

A summary of stock-based compensation expense is as follows:

 

   

Three Months Ended April 30,

   

Nine Months Ended April 30,

 
   

2019

   

2018

   

2019

   

2018

 

Stock-Based Compensation for Consultants

                               

Common stock issued for consulting services

  $ 155,813     $ 168,107     $ 516,423     $ 606,885  

Amortization of stock option expenses

    37,336       43,463       122,056       385,082  
      193,149       211,570       638,479       991,967  

Stock-Based Compensation for Management

                               

Common stock issued to management

    33,126       34,265       104,109       103,509  

Amortization of stock option expenses

    70,395       45,926       427,099       226,907  
      103,521       80,191       531,208       330,416  

Stock-Based Compensation for Employees

                               

Common stock issued to employees

    132,638       120,711       381,333       497,747  

Amortization of stock option expenses

    125,424       106,113       592,578       440,844  
      258,062       226,824       973,911       938,591  
                                 

Settlement of share issuance obligation

    -       -       -       (127,615 )
    $ 554,732     $ 518,585     $ 2,143,598     $ 2,133,359  

 

21

 

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
April 30, 2019
(Unaudited)
 

 

 

NOTE 13 :      LOSS PER SHARE

 

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,

 
   

2019

   

2018

   

2019

   

2018

 

Numerator

                               

Net Loss for the Period

  $ (5,017,557 )   $ (4,146,646 )   $ (10,818,657 )   $ (13,056,299 )
                                 

Denominator

                               

Basic Weighted Average Number of Shares

    179,348,614       157,704,601       174,213,254       155,996,660  

Dilutive Stock Options and Warrants

    -       -       -       -  

Diluted Weighted Average Number of Shares

    179,348,614       157,704,601       174,213,254       155,996,660  
                                 

Net Loss per Share, Basic and Diluted

  $ (0.03 )   $ (0.03 )   $ (0.06 )   $ (0.08 )

 

For the three and nine months ended April 30, 2019 and 2018, 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, 2019, our long-term assets located in the United States totaled $57,597,112 or 70% of our total long-term assets of $82,086,215.

 

The table below provides a breakdown of the long-term assets by geographic segments:

 

   

April 30, 2019

 

Balance Sheet Items

 

United States

   

 

   

 

   

 

 
   

Texas

   

Arizona

   

Wyoming

   

Other States

    Canada     Paraguay     Total  

Mineral Rights and Properties

  $ 12,700,030     $ 4,377,477     $ 31,527,870     $ 88,071     $ 546,938     $ 14,513,585     $ 63,753,971  

Property, Plant and Equipment

    6,405,816       -       346,235       -       16,813       352,964       7,121,828  

Restricted Cash

    1,723,870       15,000       73,973       -       -       -       1,812,843  

Equity-Accounted Investment

    -       -       -       -       9,058,803       -       9,058,803  

Other Long-Term Assets

    242,042       -       96,728       -       -       -       338,770  

Total Long-Term Assets

  $ 21,071,758     $ 4,392,477     $ 32,044,806     $ 88,071     $ 9,622,554     $ 14,866,549     $ 82,086,215  

 

   

July 31, 2018

 

Balance Sheet Items

 

United States