Prospectus Supplement
to Prospectus dated March 3, 2020
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Filed Pursuant to Rule 424(b)(5)
Registration No. 333-236571
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12,500,000 Units, each
consisting of one share of Common Stock and
one-half of one Warrant
to purchase one share of Common Stock
Underwriter Compensation
Warrants to purchase 583,333 shares of Common Stock
URANIUM ENERGY CORP.
$15,000,000
This prospectus supplement
to the accompanying base prospectus of Uranium Energy Corp. (which we refer to as “UEC,” the “Company,”
“we,” or “us”) dated March 3, 2020 registers the distribution (the “Offering”) of 12,500,000
units (the “Units”) of UEC at a price of $1.20 per Unit (the “Offering Price”) pursuant to an underwriting
agreement dated September 21, 2020 (the “Underwriting Agreement”)
between UEC and H. C. Wainwright & Co., LLC and Haywood Securities Inc., as co-representatives of the underwriters (the “Co-Representatives”),
together with TD Securities Inc., Eight Capital and Roth Capital Partners, LLC (collectively
with the Co-Representatives, the “Underwriters”). Each Unit consists of one share of common stock (each, a “Share”)
and one-half of one common stock purchase warrant of UEC (each whole warrant being, a “Warrant”). The Units
will separate into Shares and Warrants immediately upon closing of the Offering. Each Warrant will entitle the holder to purchase
one share of common stock of UEC (each, a “Warrant Share”) at an exercise price of $1.80 per Warrant Share,
and is exercisable immediately upon the date of issuance until any time prior to 5:00 pm (Vancouver time) on the date that is 24
months from the date of issuance. H. C. Wainwright & Co., LLC will only solicit subscriptions in the United States, and Haywood
Securities Inc. will only solicit subscriptions in the United States through its U.S. affiliate, and in Canada pursuant to a Canadian
prospectus supplement. The other Underwriters will only solicit subscriptions in territories where they are licensed to do so.
Our shares of common stock are traded on
the NYSE American LLC (which we refer to as the “NYSE American”) under the symbol “UEC.” On September 18,
2020, the closing price of our shares of common stock on the NYSE American was $1.29 per share of common stock. Our principal offices
are located at 500 North Shoreline Boulevard, Suite 800N, Corpus Christi, Texas 78401 and 1030 West Georgia Street, Suite 1830,
Vancouver, British Columbia, Canada V6E 2Y3, and our web site address is www.uraniumenergy.com.
Investing in our securities involves
risks. Before buying any of our securities, you should read the discussion of material risks of investing in our securities in
the “Risk Factors” section beginning on page S-9 of this prospectus supplement and the “Risk Factors”
section beginning on page 8 of the accompanying base prospectus and in the documents incorporated by reference herein and
therein.
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Per Unit Price
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Total
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Public offering price
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$
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1.200
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$
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15,000,000
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Underwriters’ fees(1)
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$
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0.072
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$
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900,000
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Proceeds, before expenses, to us(2)
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$
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1.128
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$
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14,100,000
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(1)
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We have agreed to pay the Underwriters a cash fee (the “Underwriters’ Fee”) equal to 6% of the aggregate purchase price paid by the Underwriters to us per Unit. In addition, we have agreed to issue to the Underwriters (or their designees) warrants (the “Compensation Warrants”) to purchase up to a number of shares of common stock equal to 6% of the Shares issued on the closing of the Offering (2% with respect to sales made to persons on the President’s List up to $5,000,000 of Units) (the “Compensation Warrant Shares”) with the same terms as the Warrants. This prospectus supplement qualifies the distribution of the Compensation Warrants and Compensation Warrant Shares to the Underwriters. A reduced Underwriters’ Fee of 2% will be payable on the gross proceeds of up to $5,000,000 of the Offering sold to purchasers included on a president’s list (the “President’s List”), and thereafter the full 6% discount will apply. All calculations of the Underwriters’ Fees herein, assumes no sales are made to persons on the President’s List. We have also agreed to reimburse the Co-Representatives for certain of their expenses. See “Plan of Distribution”.
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(2)
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After deducting the Underwriters’ Fee but before deducting the expenses of the Offering (including listing fees) estimated to be approximately $14,100,000, which will be paid from the gross proceeds of the Offering. The amount of the offering proceeds to us presented in this table does not give effect to any exercise of the Warrants being issued in this Offering or the Compensation Warrants.
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Unless the context otherwise requires,
all references to “Warrants” in this prospectus supplement shall include “Compensation Warrants”, as applicable.
There is currently no market through
which the Warrants may be sold and purchasers may not be able to resell the Warrants purchased under this prospectus supplement.
This may affect the price of the Warrants in the secondary market, if any develops, the transparency and availability of trading
prices, and the liquidity of the Warrants. We do not intend to apply to list the Warrants on the NYSE American or any other securities
exchange or quotation service.
Neither the United States Securities
Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy
or accuracy of this prospectus supplement or the accompanying base prospectus. Any representation to the contrary is a criminal
offense.
The Underwriters, as
principals, conditionally offer a total of 12,500,000 Units, subject to prior sale, if, as and when issued by the Company and accepted
by the Underwriters in accordance with the conditions contained in the Underwriting Agreement referred to under “Plan
of Distribution” and subject to approval of certain legal matters on behalf of the Company by McMillan LLP, Canadian
and U.S. counsel to the Company, and as to certain legal matters on behalf of the Underwriters by Stikeman Elliott LLP, Canadian
counsel to the Underwriters, and Ellenoff Grossman & Schole LLP, U.S. counsel to the Underwriters.
The Offering Price was determined by negotiation
between us and the Co-Representatives, on behalf of the Underwriters, with reference to the prevailing market price of our shares
of common stock.
The Underwriters propose to initially
offer either directly, or through their respective U.S. or Canadian broker-dealer affiliates or agents, the Units at the Offering
Price. After a reasonable effort has been made to sell all of the Units at the Offering Price, the Underwriters may subsequently
reduce the selling price to purchasers. Any such reduction will not affect the proceeds received by the Company. See “Plan
of Distribution”.
Subscriptions for the Units will be received
subject to rejection or allotment in whole or in part and the right is reserved to close the subscription books at any time without
notice. The closing of the Offering is expected to occur on or about September 23, 2020. It is anticipated that the Shares
forming part of the Units will be issued in “book-entry only” form and represented by a global certificate or certificates,
or be represented by uncertificated securities, registered in the name of CDS Clearing and Depositary Services Inc. (“CDS”)
or its nominee or The Depository Trust Company (“DTC”), as directed by the Underwriters, and will be deposited
with CDS or DTC, as the case may be. Except in limited circumstances, no beneficial holder of Shares will receive definitive certificates
representing their interest in the Shares. Beneficial holders of Shares will receive only a customer confirmation from the Underwriters
or another registered dealer who is a CDS or DTC participant and from or through whom a beneficial interest in the Shares is acquired.
All Warrants are expected to be issued in physical certificated form.
In addition, the Warrant holders are entitled
to a “cashless exercise” option if, at any time of exercise, there is no effective registration statement registering,
or no current prospectus available for, the issuance or resale of Warrant Shares under the United States Securities Act of 1933,
as amended (the “U.S. Securities Act”). This option entitles the Warrant holders to elect to receive fewer Warrant
Shares without paying the cash exercise price. The number of Warrant Shares to be issued would be determined by a formula based
on the total number of Warrant Shares with respect to which the Warrant is being exercised, the daily volume weighted average price
for our Shares on the trading day immediately prior to the date of exercise and the applicable exercise price of the Warrants.
H. C. WAINWRIGHT & CO.
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HAYWOOD SECURITIES INC.
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The date of this prospectus supplement
is September 21, 2020
You should rely only on the information
contained in or incorporated by reference into this prospectus supplement and the accompanying base prospectus and any filed free
writing prospectus relating to this offering. We have not, and the Underwriters have not, authorized any other person to provide
you with additional or different information. If anyone provides you with additional or different information, you should not rely
on it. We are not, and the Underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or
sale is not permitted. You should assume that the information appearing in this prospectus supplement, the accompanying base prospectus,
any free writing prospectus and the documents incorporated by reference herein and therein is accurate only as of the respective
dates of such documents. Our business, financial condition, results of operations and prospects may have changed since those dates.
Information in this prospectus supplement updates and modifies the information in the accompanying base prospectus and information
incorporated by reference herein and therein. To the extent that any statement made in this prospectus supplement or any free writing
prospectus (unless otherwise specifically indicated therein) differs from those in the accompanying base prospectus, the statements
made in the accompanying base prospectus and the information incorporated by reference herein and therein are deemed modified or
superseded by the statements made by this prospectus supplement.
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ABOUT THIS PROSPECTUS SUPPLEMENT
This prospectus supplement relates to a
registration statement that we filed with the United States Securities and Exchange Commission (which we refer to as the “SEC”)
utilizing a shelf registration process. Under this shelf registration process, we may, from time to time, offer, sell and issue
any of the securities or any combination of the securities described in the accompanying base prospectus in one or more offerings.
The accompanying base prospectus provides you with a general description of the securities we may offer. This prospectus supplement
contains specific information about the terms of this offering of Units by us. This prospectus supplement and any free writing
prospectus filed by us (unless otherwise specifically stated therein) may add, update or change information contained in the accompanying
base prospectus and the documents incorporated by reference herein and therein. You should read this prospectus supplement, the
accompanying base prospectus and any free writing prospectus filed by us together with the information described under the sections
entitled, “Where to Find Additional Information” and “Incorporation of Certain Information by Reference”
in this prospectus supplement and any additional information you may need to make your investment decision. We have also filed
this prospectus supplement and the accompanying base prospectus with the securities regulatory authorities in each of the provinces
of Canada, except Quebec, pursuant to the multi-jurisdictional disclosure system (which Canadian-filed prospectus supplement and
accompanying prospectus we refer to as the “Canadian Prospectus”).
Prospective investors should be aware that
the acquisition of the Units described herein may have tax consequences both in the United States and Canada, as applicable. Such
consequences for investors who are resident in, or citizens of, the United States or Canada may not be described fully in this
prospectus supplement, the accompanying base prospectus or the Canadian Prospectus. See “Material U.S. Federal Income Tax
Consequences” in the accompanying base prospectus.
Unless otherwise stated, currency amounts
in this prospectus supplement are stated in United States dollars. The financial statements incorporated by reference in this prospectus
supplement and the accompanying base prospectus, and the selected consolidated financial data derived therefrom included in this
prospectus supplement, are presented in United States dollars. The financial statements incorporated by reference in this prospectus
supplement and the accompanying base prospectus, and the selected consolidated financial data derived therefrom included in this
prospectus supplement, have been prepared in accordance with United States Generally Accepted Accounting Principles.
The registration statement that contains
the accompanying base prospectus (SEC File No. 333-236571) (including the exhibits filed with and the information incorporated
by reference into the registration statement) contains additional important business and financial information about us and the
securities offered hereby that is not presented or delivered with this prospectus supplement. That registration statement, including
the exhibits filed with the registration statement and the information incorporated by reference into the registration statement,
can be read at the SEC’s website, www.sec.gov, or at the SEC office mentioned under the section of this prospectus
supplement entitled “Where to Find Additional Information” below.
WHERE TO FIND ADDITIONAL INFORMATION
We file annual, quarterly and current reports,
proxy statements and other information with the SEC. You may read and copy materials we have filed with the SEC at the SEC’s
public reference room at 100 F Street, N.E., Washington, DC 20549. Please call the SEC at 1-800-SEC-0330 for further information
on the operation of its public reference room. Our SEC filings also are available to the public on the SEC’s Internet site
at www.sec.gov. In addition, we maintain a website that contains information about us, including our SEC filings, at www.uraniumenergy.com.
The information contained on our website does not constitute a part of this prospectus supplement, the accompanying base prospectus,
the Canadian Prospectus or any other report or documents we file with or furnish to the SEC or with the securities regulatory authorities
in Canada.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This prospectus supplement, the accompanying
base prospectus and the documents incorporated herein and therein by reference contain “forward-looking-statements”
within the meaning of Section 27A of the Securities Act of 1933, as amended (which we refer to as the “Securities Act”),
Section 21E of the Securities Exchange Act of 1934, as amended (which we refer to as the “Exchange Act”) and Canadian
securities laws. Such forward-looking statements concern our anticipated results and developments in our operations in future periods,
planned exploration and, if warranted, development of our properties, plans related to our business and other matters that may
occur in the future. These statements relate to analyses and other information that are based on forecasts of future results, estimates
of amounts not yet determinable and assumptions of management.
Forward-looking statements, and any estimates
and assumptions upon which they are based, are made in good faith and reflect our views and expectations for the future as of the
date of such statements, which can change significantly. Furthermore, forward-looking statements are subject to known and unknown
risks and uncertainties which may cause actual results, performance, achievements or events to be materially different from any
future results, performance, achievements or events implied, suggested or expressed by such forward-looking statements. Accordingly,
forward-looking statements in this prospectus supplement, the accompanying base prospectus or in any documents incorporate herein
and therein by reference should not be unduly relied upon.
Forward-looking statements may be based
on a number of material estimates and assumptions, of which any one or more may prove to be incorrect. Forward-looking statements
may be identifiable by terminology concerning the future, such as “anticipate”, “believe”, “continue”,
“could”, “estimate”, “expect”, “forecast”, “intend”, “goal”,
“likely”, “may”, “might”, “outlook”, “plan”, “predict”,
“potential”, “project”, “should”, “schedule”, “strategy”, “target”,
“will” or “would”, and similar expressions or variations thereof including the negative use of such terminology.
Examples in this prospectus supplement, the accompanying base prospectus or in any documents incorporated herein and therein by
reference include, but are not limited to, such forward-looking statements reflecting or pertaining to:
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our overall strategy, objectives, plans and expectations for Fiscal 2018 and beyond;
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our expectations for worldwide nuclear power generation and future uranium supply and demand, including
long-term market prices for U3O8;
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our belief and expectations of ISR mining for our uranium projects, where applicable;
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our estimation of mineralized materials, which are based on certain estimates and assumptions,
and the economics of future production for our uranium projects including the Palangana Mine;
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our plans and expectations including anticipated expenditures relating to exploration, pre-extraction,
extraction and reclamation activities for our uranium projects including the Palangana Mine;
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our ability to obtain, maintain and amend, within a reasonable period of time, required rights,
permits and licenses from landowners, governments and regulatory authorities;
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our ability to obtain adequate additional financing including access to the equity and credit markets;
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our ability to remain in compliance with the terms of our indebtedness; and
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our belief and expectations including the possible impact of any legal proceedings or regulatory
actions against us.
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Forward-looking statements, and any estimates
and assumptions upon which they are based, are made as of the date of this prospectus supplement, the date of the accompanying
base prospectus or the date of any documents incorporated herein or therein by reference, as applicable, and we do not intend or
undertake to revise, update or supplement any forward-looking statements to reflect actual results, future events or changes in
estimates and assumptions or other factors affecting such forward-looking statements, except as required by applicable securities
laws. Should one or more forward-looking statements be revised, updated or supplemented, no inference should be made that we will
revise, update or supplement any other forward looking statements.
Forward-looking statements are subject
to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ from
those expressed or implied by the forward-looking statements, including, without limitation:
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our limited financial and operating history;
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our need for additional financing;
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our ability to service our indebtedness;
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our limited uranium extraction and sales history;
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our operations are inherently subject to numerous significant risks and uncertainties, many are
beyond our control;
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our exploration activities on our mineral properties may not result in commercially recoverable
quantities of uranium;
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limits to our insurance coverage;
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the level of government regulation, including environmental regulation;
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changes in governmental regulation and administrative practices;
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the marketability of uranium concentrates;
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the competitive environment in which we operate;
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our dependence on key personnel; and
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conflicts of interest of our directors and officers.
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For a more detailed discussion of such
risks and other important factors that could cause actual results to differ materially from those in such forward-looking statements
please see the section entitled “Risk Factors” beginning on page S-9 of this prospectus supplement and the section
entitled “Risk Factors” beginning on page 9 of the accompanying base prospectus and, to the extent applicable,
the “Risk Factors” sections in our annual reports on Form 10-K and our quarterly reports on Form 10-Q as
filed with the SEC and the Canadian securities authorities that are incorporated by reference herein. Although we have attempted
to identify important factors that could cause actual results to differ materially from those described in forward-looking statements,
there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that these
statements will prove to be accurate as actual results and future events could differ materially from those anticipated in the
statements. Investors should review our subsequent reports filed with the SEC on Forms 10-K, 10-Q and 8-K and with the Canadian
securities authorities, and any amendments thereto. We qualify all forward-looking statements by these cautionary statements.
INCORPORATION OF CERTAIN INFORMATION
BY REFERENCE
This prospectus supplement is deemed, as
of the date hereof, to be incorporated by reference into the accompanying base prospectus solely for the purpose of offering the
Units. Other documents are also incorporated, or are deemed to be incorporated, by reference into the accompanying base prospectus,
and reference should be made to the accompanying base prospectus for full particulars thereof.
The following documents which have been
filed by us with the SEC and with securities commissions or similar authorities in Canada, are also specifically incorporated by
reference into, and form an integral part of the accompanying base prospectus, as supplemented by this prospectus supplement (excluding,
unless otherwise provided therein or herein, information furnished pursuant to Item 2.02 and Item 7.01 of any Current Report on
Form 8-K):
All documents that we file with the SEC
under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, after the date of this prospectus supplement but before the
end of the offering of the securities made by this prospectus supplement and the accompanying base prospectus shall be incorporated
by reference in the accompanying base prospectus, as supplemented by this prospectus supplement, from the date of filing of such
documents. Information that we file later with the SEC and prior to the completion of the offering of securities made by this prospectus
supplement and the accompanying base prospectus will automatically update information in this prospectus supplement and the accompanying
base prospectus. In all cases, you should rely on the information we file later with the SEC over different information included
in this prospectus supplement and the accompanying base prospectus.
You may obtain copies of any of these documents
by contacting us at the address and telephone number indicated below or by contacting the SEC as described under the section entitled
“Where to Find Additional Information.” You may request a copy of these documents, and any exhibits that have specifically
been incorporated by reference as an exhibit to the registration statement of which this prospectus supplement forms a part, at
no cost, by writing to or telephoning:
Uranium Energy Corp.
Amir Adnani, President and Chief Executive
Officer
1030 West Georgia Street, Suite 1830
Vancouver, British Columbia, Canada, V6E 2Y3
Telephone: (604) 682-9775
You should rely only on the information
provided or incorporated by reference in this prospectus supplement, the accompanying base prospectus and any free writing prospectus.
You should not assume that the information in this prospectus supplement, the accompanying base prospectus, any free writing prospectus
or any document incorporated herein or therein, is accurate as of any date other than the date on the front cover of the applicable
document.
SUMMARY
The following is a summary of the principal
features of the offering and is not intended to be complete. It should be read together with the more detailed information and
financial data and statements contained elsewhere in this prospectus supplement, the accompanying base prospectus, any free writing
prospectus filed by us and the documents incorporated by reference herein and therein, including the sections entitled “Risk
Factors.”
The Company
Corporate History
Uranium Energy Corp. was incorporated under
the laws of the State of Nevada on May 16, 2003 under the name “Carlin Gold Inc.” During 2004, we changed our
business operations and focus from precious metals exploration to uranium exploration in the United States. On January 24,
2005, we completed a reverse stock split of our common stock on the basis of one share for each two outstanding shares and amended
our Articles of Incorporation to change our name to “Uranium Energy Corp.”. Effective February 28, 2006, we completed
a forward stock split of our common stock on the basis of 1.5 shares for each outstanding share and amended our Articles of Incorporation
to increase our authorized capital from 75,000,000 shares of common stock with a par value of $0.001 per share to 750,000,000 shares
of common stock with a par value of $0.001 per share. In June 2007, we changed our fiscal year end from December 31 to
July 31.
On December 31, 2007, we incorporated
a wholly-owned subsidiary, UEC Resources Ltd., under the laws of the Province of British Columbia, Canada. Effective December 18,
2009, we acquired a 100% interest in the South Texas Mining Venture, L.L.P., a Texas limited liability partnership, from each of
URN Resources Inc., a subsidiary of Uranium One Inc., and Everest Exploration, Inc. On September 3, 2010, we incorporated
a wholly-owned subsidiary, UEC Paraguay Corp., under the laws of the State of Nevada. Effective May 24, 2011, we acquired
a 100% in interest in Piedra Rica Mining S.A., a private company incorporated in Paraguay. Effective September 9, 2011, we
acquired a 100% interest in Concentric Energy Corp., a private company incorporated in the State of Nevada. Effective March 30,
2012, we acquired a 100% interest in Cue Resources Ltd., a publicly-traded company incorporated in the Province of British Columbia,
Canada. Effective March 4, 2016, we acquired a 100% interest in JDL Resources Inc., a private company incorporated in Cayman
Islands, and were granted an option to acquire a 100% interest in CIC Resources (Paraguay) Inc., a company organized and existing
under the laws of the Cayman Islands. On July 7, 2017, we acquired 100% interest in CIC Resources (Paraguay) Inc., a private
company incorporated in Cayman Islands. Effective August 9, 2017 we acquired a 100% interest in Reno Creek Holdings Inc.,
a private company governed by the laws of Canada, which owned 100% of Reno Creek Resources Inc., a private company governed by
the laws of Canada, which owned 100% of AUC Holdings, Inc. a private company incorporated in the State of Nevada, which owns
100% of AUC LLC, a limited liability company formed in the State of Delaware. Subsequent to August 9, 2017, we dissolved Reno
Creek Holdings Inc. and Reno Creek Resources Inc., and now we directly own 100% of AUC Holdings, Inc. On January 31,
2018, we incorporated a wholly-owned subsidiary under the laws of the Province of Saskatchewan, Canada, UEC Resources (SK) Corp.
On May 1, 2018, we completed a purchase
agreement with Uranerz Energy Corporation, 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 acquisition, we paid total consideration of $5,974,063, consisting of $2,940,000 in cash and 1,625,531
shares. As a result, capitalized acquisition costs of the consolidated Reno Creek project totaled $31,527,870 as at July 31,
2018.
Our principal offices are located at 500
North Shoreline Boulevard, Suite 800N, Corpus Christi, Texas 78401 and 1030 West Georgia Street, Suite 1830, Vancouver,
British Columbia, Canada V6E 2Y3.
General
We are pre-dominantly engaged in uranium
mining and related activities, including exploration, pre-extraction, extraction and processing, on uranium projects located in
the United States and Paraguay. We utilize in-situ recovery (“ISR”) mining where possible which we believe,
when compared to conventional open pit or underground mining, requires lower capital and operating expenditures with a shorter
lead time to extraction and a reduced impact on the environment. We do not expect, however, to utilize ISR mining for all of our
mineral rights in which case we would expect to rely on conventional open pit and/or underground mining techniques. We have one
uranium mine located in the State of Texas, the Palangana Mine, which utilizes ISR mining and commenced extraction of uranium oxide
(“U3O8”), or
yellowcake, in November 2010. We have one uranium processing facility located in the State of Texas, the Hobson Processing
Facility, which processes material from the Palangana Mine into drums of U3O8,
our only sales product and source of revenue, for shipping to a third-party storage and sales facility.
Since commencement of uranium extraction from the Palangana Mine in November 2010 to January 31, 2020, the Hobson Processing
Facility has processed 580,100 pounds of U3O8.
At January 31, 2020, we had no uranium supply or “off-take” agreements in place.
Our fully-licensed and 100%-owned Hobson
Processing Facility forms the basis for our regional operating strategy in the State of Texas, specifically the South Texas Uranium
Belt where we utilize ISR mining. We utilize a “hub-and-spoke” strategy whereby the Hobson Processing Facility acts
as the central processing site (the “hub”) for our Palangana Mine and future satellite uranium mining activities,
such as our Burke Hollow and Goliad Projects, located within the South Texas Uranium Belt (the “spokes”). The
Hobson Processing Facility has a physical capacity to process uranium-loaded resins up to a total of two million pounds of U3O8 annually
and is licensed to process up to one million pounds of U3O8 annually.
We hold certain mineral rights in various
stages in the States of Arizona, Colorado, New Mexico, Texas and Wyoming, in the Republic of Paraguay and in Canada, many of which
are located in historically successful mining areas and have been the subject of past exploration and pre-extraction activities
by other mining companies. We do not expect, however, to utilize ISR mining for all of our mineral rights in which case we would
expect to rely on conventional open pit and/or underground mining techniques.
Our operating and strategic framework is
based on expanding our uranium extraction activities, which includes advancing certain uranium projects with established mineralized
materials towards uranium extraction, and establishing additional mineralized materials on our existing uranium projects or through
acquisition of additional uranium projects.
During the nine months ended April 30,
2020, we continued to operate the Palangana Mine at a reduced pace since implementing our strategic plan in September 2013,
to align our operations to a weak uranium commodity market in a challenging post-Fukushima environment. This strategy has included
the deferral of major pre-extraction expenditures and remaining in a state of operational readiness in anticipation of a recovery
in uranium prices.
The Offering
The following is a brief summary of
certain terms of this offering and is not intended to be complete. It does not contain all of the information that will be important
to a holder of our securities. For a more complete description of our securities, see the section entitled “Description of
Securities” in this prospectus supplement and the relevant portions of accompanying base prospectus.
Issuer:
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Uranium Energy Corp.
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Offering:
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12,500,000 Units with each Unit consisting of one share of common stock and one-half of one common stock purchase warrant.
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Offering Price:
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$1.20 per Unit
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Shares of Common Stock Outstanding(1)
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Prior to the offering: 184,793,093 shares of common stock
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After the offering: 197,293,093 shares of common stock
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Warrants:
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The Warrants are exercisable at a price of $1.80 per share. The Warrants will become exercisable immediately upon the closing of this Offering and expire on the on the date that is 24 months from the date of issuance of the Warrants.
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Underwriters’ Fee:
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We have agreed to pay the Underwriters a cash fee equal to 6% of the aggregate purchase price paid by the Underwriters to us per Unit. In addition, we have agreed to issue to the Underwriters (or their designees) Compensation Warrants to purchase up to a number of shares of common stock equal to 6% of the Shares issued on the closing of the Offering (2% with respect to sales made to persons on the President’s List up to $5,000,000 of Units) having the same terms as the Warrants. A reduced Underwriters’ Fee of 2% will be payable on the gross proceeds of up to $5,000,000 of the Offering sold to purchasers included on a President’s List. All calculations of the Underwriters’ Fees herein, assumes no sales to the President’s List. See the section entitled “Plan of Distribution” in this prospectus supplement.
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Use of Proceeds:
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The proceeds to us, before expenses, from the sale of the Units in this Offering are estimated to be approximately $14,100,000, after deducting the Underwriters’ fee. We intend to use the net proceeds from this Offering to fund exploration and development expenditures at the Company’s projects and for general corporate and working capital purposes. See the section entitled “Use of Proceeds” in this prospectus supplement.
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Risk Factors:
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Investing in the Units involves risks that are described in the “Risk Factors” section beginning on page S-9 of this prospectus supplement and the “Risk Factors” section beginning on page 9 of the accompanying base prospectus and, to the extent applicable, the “Risk Factors” sections of our annual reports on Form 10-K and our quarterly reports on Form 10-Q as filed with the SEC.
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Listing Symbol:
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Our shares of common stock are listed for trading on the NYSE American under the symbol “UEC.” We do not intend to list the Warrants on any exchange or trading system.
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(1)
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These figures do not include: (i) 15,271,250 shares of common stock reserved for issuance pursuant
to outstanding stock options, which are exercisable at a weighted average price of $1.12 per share, as at September 18, 2020; (ii)
7,822,261 shares of common stock available for issuance under our stock incentive plan; (iii) 7,721,981 shares of common stock
reserved for issuance pursuant to outstanding stock purchase warrants, which are exercisable at a weighted average price of $2.03
per share, as at September 18, 2020; (iv) 1,615,000 shares underlying outstanding unvested restricted stock units as at September
18, 2020; (v) 757,501 shares underlying outstanding vested and unvested performance based restricted stock units as at September
18, 2020; and (vi) the 6,250,000 Warrant Shares or the 583,333 Compensation Warrant Shares underlying the Warrants and the Compensation
Warrants being offered pursuant to the Offering. To the extent any options are exercised, new options are issued under our equity
incentive plans, or we otherwise issue additional shares of common stock or securities exercisable for or convertible into shares
of common stock, there will be further dilution to new investors.
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RISK FACTORS
Investing in our securities involves
a number of very significant risks. Prospective investors should carefully consider the following risks, as well as the other information
contained in this prospectus supplement, the accompanying base prospectus and in the documents incorporated by reference herein
and therein, including the risks described in the base prospectus, our annual report on Form 10-K and our quarterly reports
on Form 10-Q, before investing in our securities. Any one of these material risks and uncertainties has the potential to cause
actual results, performance, achievements or events to be materially different from any future results, performance, achievements
or events implied, suggested or expressed by any forward-looking statements made by us or by persons acting on our behalf. Refer
to "Cautionary Note Regarding Forward-Looking Statements".
There is no assurance that we will be
successful in preventing the material adverse effects that any one or more of the following material risks and uncertainties may
cause on our business, prospects, financial condition and operating results, which may result in a significant decrease in the
market price of our common stock. Furthermore, there is no assurance that these material risks and uncertainties represent a complete
list of the material risks and uncertainties facing us. There may be additional risks and uncertainties of a material nature that,
as of the date of this prospectus, we are unaware of or that we consider immaterial that may become material in the future, any
one or more of which may result in a material adverse effect on us. You could lose all or a significant portion of your investment
due to any of these risks and uncertainties.
Risks Related to Our Company and Business
Evaluating our future performance
may be difficult since we have a limited financial and operating history, with significant negative cash flow and accumulated deficit
to date. Our long-term success will depend ultimately on our ability to achieve and maintain profitability and to develop positive
cash flow from our mining activities.
We were incorporated under the laws of
the State of Nevada on May 16, 2003, and since 2004 we have been predominantly engaged in uranium mining and related activities,
including exploration, pre-extraction, extraction and processing, on projects located in the United States and Paraguay. In November 2010
we commenced uranium extraction for the first time at the Palangana Mine utilizing ISR and processed those materials at the Hobson
Processing Facility into drums of U3O8, our only sales product and source of revenue. We also hold uranium
projects in various stages of exploration and pre-extraction in the States of Arizona, Colorado, New Mexico, Texas and Wyoming,
in Canada and the Republic of Paraguay. Since we completed the acquisition of the Alto Paraná Project located in the Republic
of Paraguay in July 2017, we are also involved in mining and related activities, including exploration, pre-extraction, extraction
and processing of titanium minerals.
As more fully described under “Liquidity
and Capital Resources” of Item 2, Management’s Discussion and Analysis of Financial Condition and Result of Operations
in our Quarterly Report on Form 10-Q for the period ended April 30, 2020, we have a history of significant negative cash
flow and net losses, with an accumulated deficit balance since inception of $272.4 million at April 30, 2020. Historically,
we have been reliant primarily on equity financings from the sale of our common stock and on debt financing in order to fund our
operations. Although we generated revenues from sales of U3O8 during Fiscal 2015, Fiscal 2013 and Fiscal
2012 of $3.1 million, $9.0 million and $13.8 million, respectively, with no revenues from sales of U3O8 generated
during the nine months ended April 30, 2020, Fiscal 2016 to Fiscal 2019, Fiscal 2014 or for any periods prior to Fiscal 2012,
we have yet to achieve profitability or develop positive cash flow from our operations, and we do not expect to achieve profitability
or develop positive cash flow from operations in the near term. As a result of our limited financial and operating history, including
our significant negative cash flow and net losses to date, it may be difficult to evaluate our future performance.
At April 30, 2020, we had a working
capital of $7.2 million including cash and cash equivalents of $7.4 million. In response to the significant financial market uncertainty
as a result of the COVID-19 pandemic, we implemented corporate-wide cost-cutting and cash saving measures including the deferral
of capital expenditures to reduce cash outlays. Subsequent to April 30, 2020, we received a PPP Loan of $277,250 under the
PPP Program as part of CARES enacted by the U.S. Congress in response to the COVID-19 pandemic. By further curtailing expenditures
on discretionary and non-core activities, and by paying certain management, employees, consultant and service provider fees by
way of the issuance of shares of the Company in lieu of cash, our existing cash resources and cash generated from the sale of
the Company’s liquid assets are expected to provide sufficient funds to carry out our planned operations for 12 months from
the date of this Quarterly Report. 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. 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.
Our reliance on equity and debt financings
is expected to continue for the foreseeable future, and their availability whenever such additional financing is required, will
be dependent on many factors beyond our control including, but not limited to, the market price of uranium, the continuing public
support of nuclear power as a viable source of electrical generation, the volatility in the global financial markets affecting
our stock price and the status of the worldwide economy, any one of which may cause significant challenges in our ability to access
additional financing, including access to the equity and credit markets. We may also be required to seek other forms of financing,
such as asset divestitures or joint venture arrangements, to continue advancing our uranium projects which would depend entirely
on finding a suitable third party willing to enter into such an arrangement, typically involving an assignment of a percentage
interest in the mineral project.
Our long-term success, including the recoverability
of the carrying values of our assets and our ability to acquire additional uranium projects and continue with exploration and pre-extraction
activities and mining activities on our existing uranium projects, will depend ultimately on our ability to achieve and maintain
profitability and positive cash flow from our operations by establishing ore bodies that contain commercially recoverable uranium
and to develop these into profitable mining activities. The economic viability of our mining activities, including the expected
duration and profitability of the Palangana Mine and of any future satellite ISR mines, such as the Burke Hollow and Goliad Projects,
located within the South Texas Uranium Belt, and the Reno Creek Project located in the Powder River Basin, Wyoming, and our projects
in Canada and in the Republic of Paraguay, have many risks and uncertainties. These include, but are not limited to: (i) a
significant, prolonged decrease in the market price of uranium and titanium minerals; (ii) difficulty in marketing and/or
selling uranium concentrates; (iii) significantly higher than expected capital costs to construct the mine and/or processing
plant; (iv) significantly higher than expected extraction costs; (v) significantly lower than expected mineral extraction;
(vi) significant delays, reductions or stoppages of uranium extraction activities; and (vi) the introduction of
significantly more stringent regulatory laws and regulations. Our mining activities may change as a result of any one or more of
these risks and uncertainties and there is no assurance that any ore body that we extract mineralized materials from will result
in achieving and maintaining profitability and developing positive cash flow.
Our operations are capital intensive
and we will require significant additional financing to acquire additional mineral projects and continue with our exploration and
pre-extraction activities on our existing projects.
Our operations are capital intensive and
future capital expenditures are expected to be substantial. We will require significant additional financing to fund our operations,
including acquiring additional projects and continuing with our exploration and pre-extraction activities which include assaying,
drilling, geological and geochemical analysis and mine construction costs. In the absence of such additional financing we would
not be able to fund our operations or continue with our exploration and pre-extraction activities, which may result in delays,
curtailment or abandonment of any one or all of our projects.
If we are unable to service our indebtedness,
we may be faced with accelerated repayments or lose the assets securing our indebtedness. Furthermore, restrictive covenants governing
our indebtedness may restrict our ability to pursue our business strategies.
On December 5, 2018, we entered into
the Third Amended and Restated Credit Agreement with our Lenders under which we had previously drawn down the maximum $20 million
in principal. The Credit Facility requires monthly interest payments calculated at 8% per annum and other periodic fees. Our ability
to continue making these scheduled payments will be dependent on and may change as a result of our financial condition and operating
results. Failure to make any of these scheduled payments will put us in default with the Credit Facility which, if not addressed
or waived, could require accelerated repayment of our indebtedness and/or enforcement by the Lenders against our assets. Enforcement
against our assets would have a material adverse effect on our financial condition and operating results.
Furthermore, our Credit Facility includes
restrictive covenants that, among other things, limit our ability to sell our assets or to incur additional indebtedness other
than permitted indebtedness, which may restrict our ability to pursue certain business strategies from time to time. If we do not
comply with these restrictive covenants, we could be in default which, if not addressed or waived, could require accelerated repayment
of our indebtedness and/or enforcement by the Lenders against our assets.
Our uranium extraction and sales
history is limited, with our uranium extraction to date originating from a single uranium mine. Our ability to continue generating
revenue is subject to a number of factors, any one or more of which may adversely affect our financial condition and operating
results.
We have a limited history of uranium extraction
and generating revenue. In November 2010 we commenced uranium extraction at the Palangana Mine, which has been our sole source
of U3O8 sold to generate the revenues during Fiscal 2015, Fiscal 2013 and Fiscal 2012 of $3.1 million, $9.0
million and $13.8 million, respectively, with no revenues from sales of U3O8 generated during the nine months
ended April 30, 2020, Fiscal 2016 to Fiscal 2019, Fiscal 2014 or for any periods prior to Fiscal 2012.
During the three and nine months ended
April 30, 2020 we continued to operate the Palangana Mine at a reduced pace since implementing our strategic plan in September 2013
to align our operations to a weak uranium commodity market in a challenging post-Fukushima environment. This strategy has included
the deferral of major pre-extraction expenditures and remaining in a state of operational readiness in anticipation of a recovery
in uranium prices. Our ability to continue generating revenue from the Palangana Mine is subject to a number of factors which
include, but are not limited to: (i) a significant, prolonged decrease in the market price of uranium; (ii) difficulty
in marketing and/or selling uranium concentrates; (iii) significantly higher than expected capital costs to construct the
mine and/or processing plant; (iv) significantly higher than expected extraction costs; (v) significantly lower than
expected uranium extraction; (vi) significant delays, reductions or stoppages of uranium extraction activities; and (vii) the
introduction of significantly more stringent regulatory laws and regulations. Furthermore, continued mining activities at the Palangana
Mine will eventually deplete the Palangana Mine or cause such activities to become uneconomical, and if we are unable to directly
acquire or develop existing uranium projects, such as our Burke Hollow and Goliad Projects, into additional uranium mines from
which we can commence uranium extraction, it will negatively impact our ability to generate revenues. Any one or more of these
occurrences may adversely affect our financial condition and operating results.
Exploration and pre-extraction programs
and mining activities are inherently subject to numerous significant risks and uncertainties, and actual results may differ significantly
from expectations or anticipated amounts. Furthermore, exploration programs conducted on our projects may not result in the establishment
of ore bodies that contain commercially recoverable uranium.
Exploration and pre-extraction programs
and mining activities are inherently subject to numerous significant risks and uncertainties, with many beyond our control and
including, but not limited to: (i) unanticipated ground and water conditions and adverse claims to water rights; (ii) unusual
or unexpected geological formations; (iii) metallurgical and other processing problems; (iv) the occurrence of unusual
weather or operating conditions and other force majeure events; (v) lower than expected ore grades; (vi) industrial accidents;
(vii) delays in the receipt of or failure to receive necessary government permits; (viii) delays in transportation; (ix) availability
of contractors and labor; (x) government permit restrictions and regulation restrictions; (xi) unavailability of materials
and equipment; and (xii) the failure of equipment or processes to operate in accordance with specifications or expectations.
These risks and uncertainties could result in: (i) delays, reductions or stoppages in our mining activities; (ii) increased
capital and/or extraction costs; (iii) damage to, or destruction of, our mineral projects, extraction facilities or other
properties; (iv) personal injuries; (v) environmental damage; (vi) monetary losses; and (vii) legal claims.
Success in mineral exploration is dependent
on many factors, including, without limitation, the experience and capabilities of a company’s management, the availability
of geological expertise and the availability of sufficient funds to conduct the exploration program. Even if an exploration program
is successful and commercially recoverable material is established, it may take a number of years from the initial phases of drilling
and identification of the mineralization until extraction is possible, during which time the economic feasibility of extraction
may change such that the material ceases to be economically recoverable. Exploration is frequently non-productive due, for example,
to poor exploration results or the inability to establish ore bodies that contain commercially recoverable material, in which case
the project may be abandoned and written-off. Furthermore, we will not be able to benefit from our exploration efforts and recover
the expenditures that we incur on our exploration programs if we do not establish ore bodies that contain commercially recoverable
material and develop these projects into profitable mining activities, and there is no assurance that we will be successful in
doing so for any of our projects.
Whether an ore body contains commercially
recoverable material depends on many factors including, without limitation: (i) the particular attributes, including material
changes to those attributes, of the ore body such as size, grade, recovery rates and proximity to infrastructure; (ii) the
market price of uranium, which may be volatile; and (iii) government regulations and regulatory requirements including, without
limitation, those relating to environmental protection, permitting and land use, taxes, land tenure and transportation.
We have not established proven or
probable reserves through the completion of a “final” or “bankable” feasibility study for any of our projects,
including the Palangana Mine. Furthermore, we have no plans to establish proven or probable reserves for any of our uranium projects
for which we plan on utilizing ISR mining, such as the Palangana Mine. Since we commenced extraction of mineralized materials from
the Palangana Mine without having established proven or probable reserves, it may result in our mining activities at the Palangana
Mine, and at any future projects for which proven or probable reserves are not established, being inherently riskier than other
mining activities for which proven or probable reserves have been established.
We have established the existence of mineralized
materials for certain projects, including the Palangana Mine. We have not established proven or probable reserves, as defined by
the SEC under Industry Guide 7, through the completion of a “final” or “bankable” feasibility study for
any of our projects, including the Palangana Mine. Furthermore, we have no plans to establish proven or probable reserves for any
of our projects for which we plan on utilizing ISR mining, such as the Palangana Mine. Since we commenced uranium extraction at
the Palangana Mine without having established proven or probable reserves, there may be greater inherent uncertainty as to whether
or not any mineralized material can be economically extracted as originally planned and anticipated. Any mineralized materials
established or extracted from the Palangana Mine should not in any way be associated with having established or produced from proven
or probable reserves.
Since we are in the Exploration Stage,
pre-production expenditures including those related to pre-extraction activities are expensed as incurred, the effects of which
may result in our consolidated financial statements not being directly comparable to the financial statements of companies in the
Production Stage.
Despite the fact that we commenced uranium
extraction at the Palangana Mine in November 2010, we remain in the Exploration Stage as defined under Industry Guide 7, and
will continue to remain in the Exploration Stage until such time proven or probable reserves have been established, which may never
occur. We prepare our consolidated financial statements in accordance with U.S. GAAP under which acquisition costs of mineral rights
are initially capitalized as incurred while pre-production expenditures are expensed as incurred until such time we exit the Exploration
Stage. Expenditures relating to exploration activities are expensed as incurred and expenditures relating to pre-extraction
activities are expensed as incurred until such time proven or probable reserves are established for that uranium project, after
which subsequent expenditures relating to mine development activities for that particular project are capitalized as incurred.
We have neither established nor have any
plans to establish proven or probable reserves for our uranium projects for which we plan on utilizing ISR mining, such as the
Palangana Mine. Companies in the Production Stage as defined by the SEC under Industry Guide 7, having established proven and probable
reserves and exited the Exploration Stage, typically capitalize expenditures relating to ongoing development activities, with corresponding
depletion calculated over proven and probable reserves using the units-of-production method and allocated to future reporting periods
to inventory and, as that inventory is sold, to cost of goods sold. As we are in the Exploration Stage it has resulted in us reporting
larger losses than if we had been in the Production Stage due to the expensing, instead of capitalization, of expenditures relating
to ongoing mill and mine pre-extraction activities. Additionally, there would be no corresponding amortization allocated to our
future reporting periods since those costs would have been expensed previously, resulting in both lower inventory costs and cost
of goods sold and results of operations with higher gross profits and lower losses than if we had been in the Production Stage.
Any capitalized costs, such as acquisition costs of mineral rights, are depleted over the estimated extraction life using the straight-line
method. As a result, our consolidated financial statements may not be directly comparable to the financial statements of companies
in the Production Stage.
Estimated costs of future reclamation
obligations may be significantly exceeded by actual costs incurred in the future. Furthermore, only a portion of the financial
assurance required for the future reclamation obligations has been funded.
We are responsible for certain remediation
and decommissioning activities in the future primarily for our Hobson Processing Facility, Palangana Mine, Reno Creek Project
and Alto Paraná Project and have recorded a liability of $3.7 million on our balance sheet at April 30, 2020, to recognize
the present value of the estimated costs of such reclamation obligations. Should the actual costs to fulfill these
future reclamation obligations materially exceed these estimated costs, it may have an adverse effect on our financial condition
and operating results, including not having the financial resources required to fulfill such obligations when required to do so.
During Fiscal 2015 we secured $5.6 million
of surety bonds as an alternate source of financial assurance for the estimated costs of the reclamation obligations of our Hobson
Processing Facility and Palangana Mine, of which we have $1.7 million funded and held as restricted cash for collateral purposes
as required by the surety. We may be required at any time to fund the remaining $3.9 million or any portion thereof for a number
of reasons including, but not limited to, the following: (i) the terms of the surety bonds are amended, such as an increase
in collateral requirements; (ii) we are in default with the terms of the surety bonds; (iii) the surety bonds are no
longer acceptable as an alternate source of financial assurance by the regulatory authorities; or (iv) the surety encounters
financial difficulties. Should any one or more of these events occur in the future, we may not have the financial resources to
fund the remaining amount or any portion thereof when required to do so.
We do not insure against all of the
risks we face in our operations.
In general, where coverage is available
and not prohibitively expensive relative to the perceived risk, we will maintain insurance against such risk, subject to exclusions
and limitations. We currently maintain insurance against certain risks including securities and general commercial liability claims
and certain physical assets used in our operations, subject to exclusions and limitations, however, we do not maintain insurance
to cover all of the potential risks and hazards associated with our operations. We may be subject to liability for environmental,
pollution or other hazards associated with our exploration, pre-extraction and extraction activities, which we may not be insured
against, which may exceed the limits of our insurance coverage or which we may elect not to insure against because of high premiums
or other reasons. Furthermore, we cannot provide assurance that any insurance coverage we currently have will continue to be available
at reasonable premiums or that such insurance will adequately cover any resulting liability.
Acquisitions that we may make from
time to time could have an adverse impact on us.
From time to time we examine opportunities
to acquire additional mining assets and businesses. Any acquisition that we may choose to complete may be of a significant size,
may change the scale of our business and operations, and may expose us to new geographic, political, operating, financial and geological
risks. Our success in our acquisition activities depends on our ability to identify suitable acquisition candidates, negotiate
acceptable terms for any such acquisition, and integrate the acquired operations successfully with those of our Company. Any acquisitions
would be accompanied by risks which could have a material adverse effect on our business. For example: (i) there may be a
significant change in commodity prices after we have committed to complete the transaction and established the purchase price or
exchange ratio; (ii) a material ore body may prove to be below expectations; (iii) we may have difficulty integrating
and assimilating the operations and personnel of any acquired companies, realizing anticipated synergies and maximizing the financial
and strategic position of the combined enterprise, and maintaining uniform standards, policies and controls across the organization;
(iv) the integration of the acquired business or assets may disrupt our ongoing business and our relationships with employees,
customers, suppliers and contractors; and (v) the acquired business or assets may have unknown liabilities which may be significant.
In the event that we choose to raise debt capital to finance any such acquisition, our leverage will be increased. If we choose
to use equity as consideration for such acquisition, existing shareholders may suffer dilution. Alternatively, we may choose to
finance any such acquisition with our existing resources. There can be no assurance that we would be successful in overcoming these
risks or any other problems encountered in connection with such acquisitions.
The uranium industry is subject to
numerous stringent laws, regulations and standards, including environmental protection laws and regulations. If any changes occur
that would make these laws, regulations and standards more stringent, it may require capital outlays in excess of those anticipated
or cause substantial delays, which would have a material adverse effect on our operations.
Uranium exploration and pre-extraction
programs and mining activities are subject to numerous stringent laws, regulations and standards at the federal, state and local
levels governing permitting, pre-extraction, extraction, exports, taxes, labor standards, occupational health, waste disposal,
protection and reclamation of the environment, protection of endangered and protected species, mine safety, hazardous substances
and other matters. Our compliance with these requirements requires significant financial and personnel resources.
The laws, regulations, policies or current
administrative practices of any government body, organization or regulatory agency in the United States or any other applicable
jurisdiction, may change or be applied or interpreted in a manner which may also have a material adverse effect on our operations.
The actions, policies or regulations, or changes thereto, of any government body or regulatory agency or special interest group,
may also have a material adverse effect on our operations.
Uranium exploration and pre-extraction
programs and mining activities are subject to stringent environmental protection laws and regulations at the federal, state, and
local levels. These laws and regulations include permitting and reclamation requirements, regulate emissions, water storage and
discharges and disposal of hazardous wastes. Uranium mining activities are also subject to laws and regulations which seek to maintain
health and safety standards by regulating the design and use of mining methods. Various permits from governmental and regulatory
bodies are required for mining to commence or continue, and no assurance can be provided that required permits will be received
in a timely manner.
Our compliance costs including the posting
of surety bonds associated with environmental protection laws and regulations and health and safety standards have been significant
to date and are expected to increase in scale and scope as we expand our operations in the future. Furthermore, environmental protection
laws and regulations may become more stringent in the future, and compliance with such changes may require capital outlays in excess
of those anticipated or cause substantial delays, which would have a material adverse effect on our operations.
To the best of our knowledge, our operations
are in compliance, in all material respects, with all applicable laws, regulations and standards. If we become subject to liability
for any violations, we may not be able or may elect not to insure against such risk due to high insurance premiums or other reasons.
Where coverage is available and not prohibitively expensive relative to the perceived risk, we will maintain insurance against
such risk, subject to exclusions and limitations. However, we cannot provide any assurance that such insurance will continue to
be available at reasonable premiums or that such insurance will be adequate to cover any resulting liability.
We may not be able to obtain, maintain
or amend rights, authorizations, licenses, permits or consents required for our operations.
Our exploration and mining activities are
dependent upon the grant of appropriate rights, authorizations, licences, permits and consents, as well as continuation and amendment
of these rights, authorizations, licences, permits and consents already granted, which may be granted for a defined period of time,
or may not be granted or may be withdrawn or made subject to limitations. There can be no assurance that all necessary rights,
authorizations, licences, permits and consents will be granted to us, or that authorizations, licences, permits and consents already
granted will not be withdrawn or made subject to limitations.
Major nuclear
and global market incidents may have adverse effects on the nuclear and uranium industries.
The nuclear incident
that occurred in Japan in March 2011 had significant and adverse
effects on both the nuclear and uranium industries. If another nuclear incident were to occur, it may have further adverse effects
for both industries. Public opinion of nuclear power as a source of electrical generation may be adversely affected, which may
cause governments of certain countries to further increase regulation
for the nuclear industry, reduce or abandon current reliance on nuclear power or reduce or abandon existing plans for nuclear power
expansion. Any one of these occurrences has the potential to reduce current and/or future demand for nuclear power, resulting in
lower demand for uranium and lower market prices for uranium, adversely affecting the operations and prospects of us. Furthermore,
the growth of the nuclear and uranium industries is dependent on continuing and growing public support of nuclear power
as a viable source of electrical generation.
In March 2020 the COVID-19 pandemic
has resulted in a black swan event impacting about 50% of the world’s uranium production and has accelerated the market rebalancing.
The timing for the return of global uranium production to pre-COVID-19 levels is highly uncertain as of the date of this Quarterly
Report. Recent and significant production cuts were announced in response to the global COVID-19 pandemic, including uranium facilities
in Canada, Kazakhstan, and Namibia. It is unknown at this time exactly how long the shutdowns will last or how much uranium production
will ultimately be removed from the market as a result of these shutdowns. It is the Company’s belief that the recent shutdowns
are only going to further tighten the market. The Company also believes that a large degree of uncertainty exists in the market,
primarily due to the size of mobile uranium inventories, transportation issues, premature reactor shutdowns in the U.S. and the
length of time of any uranium mine, conversion or enrichment shutdowns.
The marketability of uranium concentrates
will be affected by numerous factors beyond our control which may result in our inability to receive an adequate return on our
invested capital.
The marketability of uranium concentrates
extracted by us will be affected by numerous factors beyond our control. These factors include macroeconomic factors, fluctuations
in the market price of uranium, governmental regulations, land tenure and use, regulations concerning the importing and exporting
of uranium and environmental protection regulations. The future effects of these factors cannot be accurately predicted, but any
one or a combination of these factors may result in our inability to receive an adequate return on our invested capital.
The titanium industry is affected
by global economic factors, including risks associated with volatile economic conditions, and the market for many titanium products
is cyclical and volatile, and we may experience depressed market conditions for such products.
Titanium is used in many "quality
of life" products for which demand historically has been linked to global, regional and local GDP and discretionary spending,
which can be negatively impacted by regional and world events or economic conditions. Such events are likely to cause a decrease
in demand for products and, as a result, may have an adverse effect on our results of operations and financial condition. The timing
and extent of any changes to currently prevailing market conditions is uncertain, and supply and demand may be unbalanced at any
time. Uncertain economic conditions and market instability make it particularly difficult for us to forecast demand trends. As
a consequence, we may not be able to accurately predict future economic conditions or the effect of such conditions on our financial
condition or results of operations. We can give no assurances as to the timing, extent or duration of the current or future economic
cycles impacting the industries in which we operate.
Historically, the market for large volume
titanium applications, including coatings, paper and plastics, has experienced alternating periods of tight supply, causing prices
and margins to increase, followed by periods of lower capacity utilization resulting in declining prices and margins. The volatility
this market experiences occurs as a result of significant changes in the demand for products as a consequence of global economic
activity and changes in customers’ requirements. The supply-demand balance is also impacted by capacity additions or reductions
that result in changes of utilization rates. In addition, titanium margins are impacted by significant changes in major input costs
such as energy and feedstock. Demand for titanium depends in part on the housing and construction industries. These industries
are cyclical in nature and have historically been impacted by downturns in the economy. In addition, pricing may affect customer
inventory levels as customers may from time to time accelerate purchases of titanium in advance of anticipated price increases
or defer purchases of titanium in advance of anticipated price decreases. The cyclicality and volatility of the titanium industry
results in significant fluctuations in profits and cash flow from period to period and over the business cycle.
The uranium and titanium industries
are highly competitive and we may not be successful in acquiring additional projects.
The uranium industry is highly competitive,
and our competition includes larger, more established companies with longer operating histories that not only explore for and produce
uranium, but also market uranium and other products on a regional, national or worldwide basis. Due to their greater financial
and technical resources, we may not be able to acquire additional uranium projects in a competitive bidding process involving such
companies. Additionally, these larger companies have greater resources to continue with their operations during periods of depressed
market conditions.
The titanium industry is concentrated and
highly competitive, and we may not be able to compete effectively with our competitors that have greater financial resources or
those that are vertically integrated, which could have a material adverse effect on our business, results of operations and financial
condition.
The global titanium market is highly competitive,
with the top six producers accounting for approximately 60% of the world's production capacity. Competition is based on a number
of factors, such as price, product quality and service. Competition is based on a number of factors, such as price, product quality
and service. Among our competitors are companies that are vertically-integrated (those that have their own raw material resources).
Changes in the competitive landscape could make it difficult for us to retain our competitive position in various products and
markets throughout the world. Our competitors with their own raw material resources may have a competitive advantage during periods
of higher raw material prices. In addition, some of the companies with whom we compete may be able to produce products more economically
than we can. Furthermore, some of our competitors have greater financial resources, which may enable them to invest significant
capital into their businesses, including expenditures for research and development.
We hold
mineral rights in foreign jurisdictions which could be subject to additional risks due to political, taxation, economic and cultural
factors.
We hold certain mineral rights located
in the Republic of Paraguay through Piedra Rica Mining S.A., Transandes Paraguay S.A., Trier S.A. and Metalicos Y No Metalicos
S.R.L., which are incorporated in Paraguay. Operations in foreign jurisdictions outside of the United States and Canada, especially
in developing countries, may be subject to additional risks as they may have different political, regulatory, taxation, economic
and cultural environments that may adversely affect the value or continued viability of our rights. These additional risks include,
but are not limited to: (i) changes in governments or senior government officials; (ii) changes to existing laws or policies
on foreign investments, environmental protection, mining and ownership of mineral interests; (iii) renegotiation, cancellation,
expropriation and nationalization of existing permits or contracts; (iv) foreign currency controls and fluctuations; and (v) civil
disturbances, terrorism and war.
In the event of a dispute arising at our
foreign operations in Paraguay, we may be subject to the exclusive jurisdiction of foreign courts or may not be successful in subjecting
foreign persons to the jurisdiction of the courts in the United States or Canada. We may also be hindered or prevented from enforcing
our rights with respect to a government entity or instrumentality because of the doctrine of sovereign immunity. Any adverse or
arbitrary decision of a foreign court may have a material and adverse impact on our business, prospects, financial condition and
results of operations.
The title to our mineral property
interests may be challenged.
Although we have taken reasonable measures
to ensure proper title to our interests in mineral properties and other assets, there is no guarantee that the title to any of
such interests will not be challenged. No assurance can be given that we will be able to secure the grant or the renewal of existing
mineral rights and tenures on terms satisfactory to us, or that governments in the jurisdictions in which we operate will not revoke
or significantly alter such rights or tenures or that such rights or tenures will not be challenged or impugned by third parties,
including local governments, aboriginal peoples or other claimants. The Company has had communications and filings with the MOPC,
the mining regulator in Paraguay, whereby the MOPC is taking the position that certain concessions forming part of the Company’s
Yuty 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
certain proceedings in Paraguay to reverse the MOPC’s position in order to protect the Company’s continuing rights
in those concessions. Our mineral properties may be subject to prior unregistered agreements, transfers or claims, and title may
be affected by, among other things, undetected defects. A successful challenge to the precise area and location of our claims could
result in us being unable to operate on our properties as permitted or being unable to enforce our rights with respect to our properties.
Due to the nature of our business,
we may be subject to legal proceedings which may divert management’s time and attention from our business and result in substantial
damage awards.
Due to the nature of our business, we may
be subject to numerous regulatory investigations, securities claims, civil claims, lawsuits and other proceedings in the ordinary
course of our business including those described under Item 1, Legal Proceedings in our Quarterly Report on Form 10-Q for
the period ended April 30, 2020. The outcome of these lawsuits is uncertain and subject to inherent uncertainties, and
the actual costs to be incurred will depend upon many unknown factors. We may be forced to expend significant resources in the
defense of these suits, and we may not prevail. Defending against these and other lawsuits in the future may not only require us
to incur significant legal fees and expenses, but may become time-consuming for us and detract from our ability to fully focus
our internal resources on our business activities. The results of any legal proceeding cannot be predicted with certainty due to
the uncertainty inherent in litigation, the difficulty of predicting decisions of regulators, judges and juries and the possibility
that decisions may be reversed on appeal. There can be no assurances that these matters will not have a material adverse effect
on our business, financial position or operating results.
We depend on certain key personnel,
and our success will depend on our continued ability to retain and attract such qualified personnel.
Our success is dependent on the efforts,
abilities and continued service of certain senior officers and key employees and consultants. A number of our key employees and
consultants have significant experience in the uranium industry. A loss of service from any one of these individuals may adversely
affect our operations, and we may have difficulty or may not be able to locate and hire a suitable replacement.
Certain directors and officers may
be subject to conflicts of interest.
The majority of our directors and officers
are involved in other business ventures including similar capacities with other private or publicly-traded companies. Such individuals
may have significant responsibilities to these other business ventures, including consulting relationships, which may require
significant amounts of their available time. Conflicts of interest may include decisions on how much time to devote to our business
affairs and what business opportunities should be presented to us. Our Code of Business Conduct for Directors, Officers and Employees
provides for guidance on conflicts of interest.
The laws of the State of Nevada and
our Articles of Incorporation may protect our directors and officers from certain types of lawsuits.
The laws of the State of Nevada provide
that our directors and officers will not be liable to our Company or to our stockholders for monetary damages for all but certain
types of conduct as directors and officers. Our Bylaws provide for broad indemnification powers to all persons against all damages
incurred in connection with our business to the fullest extent provided or allowed by law. These indemnification provisions may
require us to use our limited assets to defend our directors and officers against claims, and may have the effect of preventing
stockholders from recovering damages against our directors and officers caused by their negligence, poor judgment or other circumstances.
Several of our directors and officers
are residents outside of the United States, and it may be difficult for stockholders to enforce within the United States any judgments
obtained against such directors or officers.
Several of our directors and officers are
nationals and/or residents of countries other than the United States, and all or a substantial portion of such persons’ assets
are located outside of the United States. As a result, it may be difficult for investors to effect service of process on such directors
and officers, or enforce within the United States any judgments obtained against such directors and officers, including judgments
predicated upon the civil liability provisions of the securities laws of the United States or any state thereof. Consequently,
stockholders may be effectively prevented from pursuing remedies against such directors and officers under United States federal
securities laws. In addition, stockholders may not be able to commence an action in a Canadian court predicated upon the civil
liability provisions under United States federal securities laws. The foregoing risks also apply to those experts identified in
this document that are not residents of the United States.
Disclosure controls and procedures
and internal control over financial reporting, no matter how well designed and operated, are designed to obtain reasonable, and
not absolute, assurance as to its reliability and effectiveness.
Management’s evaluation on the effectiveness
of disclosure controls and procedures is designed to ensure that information required for disclosure in our public filings is recorded,
processed, summarized and reported on a timely basis to our senior management, as appropriate, to allow timely decisions regarding
required disclosure.
Management’s report on internal control
over financial reporting is designed to provide reasonable assurance that transactions are properly authorized, assets are safeguarded
against unauthorized or improper use and transactions are properly recorded and reported. However, any system of controls, no matter
how well designed and operated, is based in part upon certain assumptions designed to obtain reasonable, and not absolute, assurance
as to its reliability and effectiveness. Any failure to maintain effective disclosure controls and procedures in the future may
result in our inability to continue meeting our reporting obligations in a timely manner, qualified audit opinions or restatements
of our financial reports, any one of which may affect the market price for our common stock and our ability to access the capital
markets.
Risks Related to Our Common Stock
Historically, the market price of
our common stock has been and may continue to fluctuate significantly.
On September 28, 2007 our common stock
commenced trading on the NYSE American (formerly known as the American Stock Exchange, the NYSE Amex Equities Exchange and the
NYSE MKT) and prior to that, traded on the OTC Bulletin Board.
The global markets have experienced significant
and increased volatility in the past and have been impacted by the effects of mass sub-prime mortgage defaults and liquidity problems
of the asset-backed commercial paper market, resulting in a number of large financial institutions requiring government bailouts
or filing for bankruptcy. The effects of these past events and any similar events in the future may continue to or further affect
the global markets, which may directly affect the market price of our common stock and our accessibility for additional financing.
Although this volatility may be unrelated to specific company performance, it can have an adverse effect on the market price of
our shares which, historically, has fluctuated significantly and may continue to do so in the future.
In addition to the volatility associated
with general economic trends and market conditions, the market price of our common stock could decline significantly due to the
impact of any one or more events, including, but not limited to, the following: (i) volatility in the uranium market; (ii) occurrence
of a major nuclear incident such as the events in Fukushima in March 2011; (iii) changes in the outlook for the nuclear
power and uranium industries; (iv) failure to meet market expectations on our exploration, pre-extraction or extraction activities,
including abandonment of key uranium projects; (v) sales of a large number of our shares held by certain stockholders including
institutions and insiders; (vi) downward revisions to previous estimates on us by analysts; (vii) removal from market
indices; (viii) legal claims brought forth against us; and (ix) introduction of technological innovations by competitors
or in competing technologies.
A prolonged decline in the market
price of our common stock could affect our ability to obtain additional financing which would adversely affect our operations.
Historically we have relied on equity financing
and, more recently, on debt financing, as primary sources of financing. A prolonged decline in the market price of our common stock
or a reduction in our accessibility to the global markets may result in our inability to secure additional financing which would
have an adverse effect on our operations.
Additional issuances of our common
stock may result in significant dilution to our existing shareholders and reduce the market value of their investment.
We are authorized to issue 750,000,000
shares of common stock of which 184,793,093 shares were issued and outstanding as of September 18, 2020. Future issuances
for financings, mergers and acquisitions, exercise of stock options and share purchase warrants and for other reasons may result
in significant dilution to and be issued at prices substantially below the price paid for our shares held by our existing stockholders.
Significant dilution would reduce the proportionate ownership and voting power held by our existing stockholders and may result
in a decrease in the market price of our shares.
We filed our 2017 Shelf, which was declared
effective on March 10, 2017, providing for the public offer and sale of certain securities of our Company from time to time,
at our discretion, up to an aggregate offering amount of $100 million.
As at April 7, 2019, a total of $68.4
million of the 2017 Shelf was utilized through the registration of our shares of common stock underlying outstanding common share
purchase warrants from previous registered offerings with a remaining available balance of $31.6 million under the 2017 Shelf.
On April 8, 2019 we filed an additional Form S-3 shelf registration statement pursuant to Rule 462(b) of the
Securities Act, which became effective upon filing on April 8, 2019, providing for the public offer and sale of certain additional
securities of our Company from time to time, at our discretion, under the 2017 Shelf, of up to an aggregate offering amount of
an additional $6.3 million; then bringing the balance remaining under the 2017 Shelf to $37.9 million to be sold under the ATM.
As at January 31, 2020, all $106.3
million under the 2017 Shelf was utilized through the registration of our shares of common stock and shares of common stock underlying
outstanding common share purchase warrants from previous registered offerings as well as our shares of common stock to be sold
under the ATM.
On February 21, 2020, we filed the
2020 Shelf which was declared effective by the SEC on March 3, 2020 and, as a result, our 2017 Shelf was then deemed terminated
and, as consequence, our then ATM terminated unless renewed under the 2020 Shelf. The 2020 Shelf provides for the public offer
and sale of certain securities of the Company from time to time, at our discretion, up to an aggregate offering amount of $100
million.
On March 19, 2020, we entered into
an Amending Agreement to the Offering Agreement with the Managers under which the Company may, from time to time, sell shares of
its common stock having an aggregate offering price of up to $30 million through the Managers under its ATM through the 2020 Shelf.
At April 30, 2020 no public offer or sale of the Company’s shares has been completed under the ATM.
We are subject to the Continued Listing
Criteria of the NYSE American and our failure to satisfy these criteria may result in delisting of our common stock.
Our common stock is currently listed on
the NYSE American. In order to maintain this listing, we must maintain certain share prices, financial and share distribution
targets, including maintaining a minimum amount of shareholders’ equity and a minimum number of public shareholders.
In addition to these objective standards, the NYSE American may delist the securities of any issuer: (i) if, in its opinion,
the issuer’s financial condition and/or operating results appear unsatisfactory; (ii) if it appears that the extent
of public distribution or the aggregate market value of the security has become so reduced as to make continued listing on the
NYSE American inadvisable; (iii) if the issuer sells or disposes of principal operating assets or ceases to be an operating
company; (iv) if an issuer fails to comply with the NYSE American’s listing requirements; (v) if an issuer’s
common stock sells at what the NYSE American considers a “low selling price” and the issuer fails to correct this
via a reverse split of shares after notification by the NYSE American; or (vi) if any other event occurs or any condition
exists which makes continued listing on the NYSE American, in its opinion, inadvisable.
If the NYSE American delists our common
stock, investors may face material adverse consequences, including, but not limited to, a lack of trading market for our securities,
reduced liquidity, decreased analyst coverage of our securities and an inability for us to obtain additional financing to fund
our operations.
Risks Related to the Warrants
There is no public market for the
Warrants being offered in this offering.
There is no established public trading
market for the Warrants being offered in this offering, and we do not expect a market to develop. In addition, we do not intend
to apply for listing of the Warrants on any securities exchange or other quotation service. Without an active market, the liquidity
of the Warrants will be limited.
Holders of our Warrants will have
no rights as a common stockholder until such holders exercise their Warrants and acquire Warrant Shares.
Until you acquire Warrant Shares upon exercise
of your Warrants, you will have no rights with respect to the Warrant Shares. Upon exercise of your Warrants, you will be entitled
to exercise the rights of a common stockholder only as to matters for which the record date occurs after the exercise date.
USE OF PROCEEDS
The proceeds to us, before expenses, from
the sale of the Units in this Offering are estimated to be approximately $14,100,000. We estimate the total expenses of this Offering
which will be payable by us, excluding the Underwriters’ fees, will be approximately $100,000. After deducting the fees due
to the Underwriters, and our estimated Offering expenses, we expect the net proceeds from this Offering to be approximately $14,000,000.
We intend to use the net proceeds from this offering to fund exploration and development expenditures at the Company’s projects
and for general corporate and working capital purposes.
Until such time as the net proceeds of
the Offering are used as described above, we intend to invest the net proceeds primarily in short-term bank guaranteed deposits
or other substantially similar secure deposits.
DESCRIPTION OF SECURITIES
In this Offering, we are offering 12,500,000
Units. Each Unit consists of one Share and one-half of one Warrant. Each whole Warrant entitles the holder to purchase one Warrant
Share at an exercise price of $1.80, and is exercisable immediately upon the date of issuance until any time prior to 5:00 pm (Vancouver
time) on the date that is 24 months from the date of issuance. Each Unit will be sold to the Underwriters in this Offering at a
negotiated price of $1.20 per Unit. The Shares and Warrants will be issued separately but can only be purchased together in this
Offering. This prospectus supplement also relates to the offering of Compensation Warrants to purchase up to a number of shares
of common stock equal to 6% of the Shares issued on the closing of the Offering (2% with respect to sales made to persons on the
President’s List up to $5,000,000 of Units) having the same terms as the Warrants. This prospectus supplement also relates
to the offering of Warrant Shares upon the exercise, if any, of the Warrants issued in this offering as well as the offering of
Compensation Warrant Shares upon the exercise, if any, of the Compensation Warrants.
The material terms and provisions of our
common stock are described under the caption “Description of Common Shares” starting on page 22 of the accompanying
base prospectus.
Warrants
The material terms and provisions of the
Warrants to purchase 6,250,000 shares of common stock, as well as the Compensation Warrants to purchase up to a number of shares
of common stock equal to 6% of the Shares issued on the closing of the Offering (2% with respect to sales made to persons on the
President’s List up to $5,000,000 of Units), being offered pursuant to this prospectus supplement and the accompanying base
prospectus are summarized below. This summary is subject to and qualified in its entirety by the form of warrant, which will be
filed on a Current Report on Form 8-K in connection with this offering.
General Terms of the Warrants
The Warrants to be issued in this Offering
represent the rights to purchase up to 6,250,000 Warrant Shares at an initial exercise price of $1.80 per share. Each Warrant may
be exercised immediately upon issuance (which is currently anticipated to be September 23, 2020) until any time prior to 5:00 pm
(Vancouver time) on the date that is 24 months from the date of issuance (which is currently anticipated to be September 23, 2022).
The Compensation Warrants represent the right to purchase up to a number of shares of common stock equal to 6% of the Shares issued
on the closing of the Offering (2% with respect to sales made to persons on the President’s List up to $5,000,000 of Units).
The Compensation Warrants have the same terms as the Warrants. For purposes of the discussion below in this section “Description
of Securities”, the terms “Warrants” and “Warrant Shares” should be read to include the Compensation
Warrants and Compensation Warrant Shares.
Exercise
Holders of the Warrants may exercise their
Warrants to purchase Warrant Shares starting upon the date of issuance until any time prior to 5:00 pm (Vancouver time) on the
date that is 24 months from the date of issuance by delivering (i) notice of exercise, appropriately completed and duly signed,
and (ii) if such holder is not utilizing the cashless exercise provisions with respect to the Warrants, payment of the exercise
price for the number of Warrant Shares with respect to which the Warrant is being exercised. Warrants may be exercised in whole
or in part, but only for full shares of common stock.
The Warrant holders are entitled to a “cashless
exercise” option if, at any time of exercise, there is no effective registration statement registering, or no current prospectus
available for, the issuance or resale of the Warrant Shares. This option entitles the Warrant holders to elect to receive fewer
shares of common stock without paying the cash exercise price. The number of shares to be issued would be determined by a formula
based on the total number of shares with respect to which the Warrant is being exercised, the volume weighted average of the prices
per share of our common stock on the trading date immediately prior to the date of exercise and the applicable exercise price of
the Warrants issued in this offering.
The Warrant Shares will be, when issued
and paid for in accordance with the warrants, duly and validly authorized, issued and fully paid and non-assessable. We will authorize
and reserve at least that number of Warrant Shares equal to the number of Warrant Shares issuable upon exercise of all outstanding
Warrants.
Delivery of Warrant Shares
Upon the holder’s exercise of a Warrant,
we will promptly, but in no event later than the second trading day after the exercise date, issue and deliver, or cause to be
issued and delivered, the Warrant Shares. We will, if the holder provides the necessary information to us, issue and deliver the
shares electronically by crediting the account of the Warrant holder’s prime broker with the Depository Trust Company through
its Deposit or Withdrawal at Custodian system (commonly referred to as “DWAC”).
Rescission and Buy-In Rights
We provide certain rescission rights and
buy-in compensation to a holder if we fail to deliver the Warrant Shares by the second trading day after the date on which we receive
notice of exercise of such Warrants.
With respect to the rescission rights,
the holder has the right to rescind the exercise if the Warrant Shares are not timely delivered.
The buy-in compensation rights apply if,
due to our failure to make timely delivery of the Warrant Shares, the Warrant holder purchases (in an open market transaction or
otherwise) shares of our common stock to deliver in satisfaction of a sale by the holder of the Warrant shares that the holder
anticipated receiving from us upon exercise of the Warrant. In this event, we will:
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pay in cash to the holder the amount equal
to the excess (if any) of the buy-in price over the product of (A) such number of Warrant Shares that we were required to
deliver to the holder, times (B) the price at which the sell order giving rise to holder’s purchase obligation was executed;
and
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at the election of holder, either (A) reinstate
the portion of the Warrant as to such number of shares of common stock, or (B) deliver to the holder such number of shares
of common stock.
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Fundamental Transactions
If, at any time while the Warrants are
outstanding, we (1) consolidate or merge with or into another corporation, (2) sell, lease, license, assign, transfer
or otherwise dispose of all or substantially all of our assets, (3) are subject to or complete a tender or exchange offer
pursuant to which holders of our common stock are permitted to tender or exchange their shares for other securities, cash or property,
and which has been accepted by the holders of 50% or more of our outstanding common stock, (4) effect any reclassification
of our common stock or any compulsory share exchange pursuant to which our common stock is converted into or exchanged for other
securities, cash or property, or (5) engage in one or more transactions with another party that results in that party acquiring
more than 50% of our outstanding shares of common stock (each, a “Fundamental Transaction”), then the Warrant
holder shall have the right thereafter to receive, upon exercise of the Warrant, the same amount and kind of securities, cash or
property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately
prior to such Fundamental Transaction, the holder of the number of Warrant Shares then issuable upon exercise of the Warrant, and
any additional consideration payable as part of the Fundamental Transaction. We must cause any successor to us, or any surviving
entity, to assume the obligations under the Warrants.
Certain Adjustments
The exercise price and the number of shares
of common stock purchasable upon the exercise of the Warrants are subject to adjustment upon the occurrence of specific events,
including stock dividends, stock splits, combinations and reclassifications of our common stock.
Notice of Corporate Action
We will provide notice to holders of the
Warrants to provide them with the opportunity to exercise their Warrants and hold common stock in order to participate in or vote
on the following corporate events:
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if we shall take a record of the holders
of our common stock for the purpose of entitling them to receive (1) a dividend or other distribution, (2) a special
nonrecurring cash dividend on or a redemption of our common stock, or (3) any right to subscribe for or purchase any shares
of stock of any class or any other right;
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if we shall take a record of the holders
of our common stock for the purpose of entitling them to vote on (1) any reclassification of our capital stock, or (2) any
consolidation or merger with, or any sale or transfer of all or substantially all of our assets to, another party; or
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a voluntary or involuntary dissolution,
liquidation or winding up of our Company.
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Limitations on Exercise
The number of Warrant Shares that may be
acquired by any holder upon any exercise of the Warrant shall be limited to the extent necessary to insure that, following such
exercise (or other issuance), the total number of shares of common stock then beneficially owned by such holder and its affiliates
and any other persons whose beneficial ownership of common stock would be aggregated with the holder’s for purposes of Section 13(d) of
the Exchange Act, does not exceed 4.99% of the total number of issued and outstanding shares of common stock (including for such
purpose the shares of common stock issuable upon such exercise), or beneficial ownership limitation. The holder may elect to change
this beneficial ownership limitation from 4.99% to 9.99% of the total number of issued and outstanding shares of common stock (including
for such purpose the shares of common stock issuable upon such exercise) upon 61 days’ prior written notice.
Additional Provisions
The above summary of certain terms and
provisions of the Warrants is qualified in its entirety by reference to the detailed provisions of the Warrants, the form of which
will be filed as an exhibit to a Current Report on Form 8-K that is incorporated herein by reference. We are not required
to issue fractional shares upon the exercise of the Warrants. No holders of the Warrants will possess any rights as a stockholder
under those Warrants until the holder exercises those Warrants, except as set forth in the Warrants. The Warrants may be transferred
independent of the common stock they were issued with, on a form of assignment, subject to all applicable laws.
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES
The following is a general summary of material
U.S. federal income tax consequences arising from and relating to the acquisition of Shares acquired as part of the Units, the
exercise, disposition, and lapse of Warrants acquired as part of the Units, and the acquisition, ownership, and disposition of
Warrant Shares.
Scope of this Summary
This summary is for general information
purposes only and does not purport to be a complete analysis or listing of all potential United States federal income tax consequences
related to the acquisition, ownership and disposition of Shares, Warrants and Warrant Shares. Except as specifically set forth
below, this summary does not discuss applicable tax reporting requirements. In addition, this summary does not take into account
the individual facts and circumstances of any particular holder that may affect the United States federal income tax consequences
to such holder. Accordingly, this summary is not intended to be, and should not be construed as, legal or United States federal
income tax advice with respect to any particular holder. Each holder should consult its own tax advisors regarding the United States
federal, state and local, and non-U.S. tax consequences related to the acquisition, ownership and disposition of Shares, Warrants
and Warrant Shares.
No legal opinion from United States legal
counsel or ruling from the Internal Revenue Service (the “IRS”) has been requested, or will be obtained, regarding
the United States federal income tax consequences related to the acquisition, ownership and disposition of Shares, Warrants and
Warrant Shares. This summary is not binding on the IRS, and the IRS is not precluded from taking a position that is different from,
and contrary to, the positions taken in this summary.
Authorities
This summary is based on the Internal Revenue
Code of 1986, as amended (the “Code”), Treasury Regulations (whether final, temporary, or proposed), published rulings
of the IRS, published administrative positions of the IRS, and United States court decisions that are applicable and, in each case,
as in effect and available, as of the date of this prospectus supplement. Any of the authorities on which this summary is based
could be changed or subject to differing interpretations in a material and adverse manner at any time, and any such change could
be applied on a retroactive basis. This summary does not discuss the potential effects, whether adverse or beneficial, of any proposed
legislation that, if enacted, could be applied on a retroactive basis.
U.S. Holders
As used in this summary, the term “U.S.
Holder” means a beneficial owner of Shares, Warrants and Warrant Shares acquired pursuant to this prospectus supplement that
is for U.S. federal income tax purposes:
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an individual who is a citizen or resident of the U.S.;
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a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created
or organized in or under the laws of the U.S., any state thereof or the District of Columbia;
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an estate whose income is subject to U.S. federal income taxation regardless of its source; or
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a trust that (1) is subject to the primary supervision of a court within the U.S. and the
control of one or more U.S. persons for all substantial decisions or (2) has a valid election in effect under applicable Treasury
Regulations to be treated as a U.S. person.
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Non-U.S. Holders
The term “Non-U.S. Holder”
means any beneficial owner of Shares, Warrants and Warrant Shares acquired pursuant to this prospectus supplement that is neither
a U.S. Holder nor a partnership nor other entity or arrangement treated as a partnership for U.S. federal income tax purposes.
A Non-U.S. Holder should review the discussion under the heading “U.S. Federal Income Tax Consequences to Non-U.S. Holders
of the Acquisition, Ownership and Disposition of Shares, Warrants and Warrant Shares” below for more information. Canadian
investors should consult with their own tax advisor regarding the tax consequences of acquiring, ownership and disposing of Shares,
Warrants and Warrant Shares.
Holders Subject to Special United States
Federal Income Tax Rules
This summary deals only with persons or
entities who hold Shares, Warrants or Warrant Shares as a capital asset within the meaning of Section 1221 of the Code (generally,
property held for investment purposes). This summary does not address all aspects of U.S. federal income taxation that may be applicable
to holders in light of their particular circumstances or to holders subject to special treatment under U.S. federal income tax
law, such as (without limitation): banks, insurance companies, and other financial institutions; dealers or traders in securities,
commodities or foreign currencies; regulated investment companies; former citizens or former long-term residents of the U.S.; persons
holding Shares, Warrants or Warrant Shares as part of a straddle, appreciated financial position, synthetic security, hedge, conversion
transaction or other integrated investment; persons holding Shares, Warrants or Warrant Shares as a result of a constructive sale;
entities that acquire Shares, Warrants and Warrant Shares that are treated as partnerships for U.S. federal income tax purposes
and partners in such partnerships; real estate investment trusts; U.S. Holders that have a “functional currency” other
than the U.S. dollar; holders that acquired Shares, Warrants, or Warrant Shares in connection with the exercise of employee stock
options or otherwise as consideration for services; holders that are subject to special tax accounting rules, Warrants or Warrant
Shares as a result of such income being recognized on a applicable financial statement; or holders that are “controlled foreign
corporations” or “passive foreign investment companies.” Holders that are subject to special provisions under
the Code, including holders described immediately above, should consult their own tax advisors regarding the United States federal,
state and local, and non-U.S. tax consequences arising from and relating to the acquisition, ownership and disposition of Shares,
Warrants and Warrant Shares.
If an entity or arrangement that is classified
as a partnership (or other “pass-through” entity) for U.S. federal income tax purposes holds Shares, Warrants or Warrant
Shares, the U.S. federal income tax consequences to such entity and the partners (or other owners) of such entity generally will
depend on the activities of the entity and the status of such partners (or owners). This summary does not address the tax consequences
to any such owner or entity. Partners (or other owners) of entities or arrangements that are classified as partnerships or as “pass-through”
entities for U.S. federal income tax purposes should consult their own tax advisors regarding the U.S. federal income tax consequences
arising from and relating to the acquisition, ownership, and disposition of Shares, Warrants and Warrant Shares.
Tax Consequences Not Addressed
This summary does not address the United
States state and local, United States federal estate and gift, United States federal alternative minimum tax, or non-U.S. tax consequences
to holders of the acquisition, ownership, and disposition of Shares, Warrants and Warrant Shares. Each holder should consult its
own tax advisors regarding the United States state and local, United States federal estate and gift, United States federal net
investment income tax, United States federal alternative minimum tax, and non-U.S. tax consequences of the acquisition, ownership,
and disposition of Shares, Warrants and Warrant Shares.
Certain Material U.S. Federal Income
Tax Consequences of the Purchase of Units to U.S. Holders and Non-U.S. Holders
For U.S. federal income tax purposes, the
purchase of a Unit by U.S. Holders and Non-U.S. Holders will be treated as the purchase of two components: a component consisting
of one Share and a component consisting of 0.50 of one Warrant. The purchase price for each Unit will be allocated between these
two components in proportion to their relative fair market values at the time the Unit is purchased by the holder. This allocation
of the purchase price for each Unit will establish a holder’s initial tax basis for U.S. federal income tax purposes in the
Share and 0.50 of one Warrant that comprise each Unit.
For purposes of determining the initial
tax basis, we will allocate $1.19 of the purchase price for each Unit to the Share and $0.01 of the purchase price for each Unit
to the 0.50 of one Warrant. However, the IRS will not be bound by our allocation of the purchase price for the Units, and, therefore,
the IRS or a U.S. court may not respect the allocation set forth above. Each holder should consult its own tax advisor regarding
the allocation of the purchase price for the Units.
U.S. Federal Income Tax Consequences
to U.S. Holders of the Exercise and Disposition of Warrants
Exercise of Warrants
A U.S. Holder generally will not recognize
gain or loss on the exercise of a Warrant and related receipt of a Warrant Share (unless cash is received in lieu of the issuance
of a fractional Warrant Share). A U.S. Holder’s initial tax basis in the Warrant Share received on the exercise of a Warrant
should be equal to the sum of (a) such U.S. Holder’s tax basis in such Warrant plus (b) the exercise price paid
by such U.S. Holder on the exercise of such Warrant. It is unclear whether a U.S. Holder’s holding period for the Warrant
Share received on the exercise of a Warrant should begin on the date that such Warrant is exercised by such U.S. Holder or the
day following the date of exercise of the Warrant.
In certain limited circumstances (as
described under “Description of Securities – Warrants - Exercise”), a U.S. Holder may be permitted to
undertake a cashless exercise of Warrants into Warrant Shares. The U.S. federal income tax treatment of a cashless exercise
of Warrants into Warrant Shares is unclear, and the tax consequences of a cashless exercise could differ from the
consequences upon the exercise of a Warrant described in the preceding paragraph. U.S. Holders should consult their own tax
advisors regarding the U.S. federal income tax consequences of a cashless exercise of Warrants.
Disposition of Warrants
A U.S. Holder will recognize gain or loss
on the sale or other taxable disposition of a Warrant in an amount equal to the difference, if any, between (a) the amount
of cash plus the fair market value of any property received and (b) such U.S. Holder’s tax basis in the Warrant sold
or otherwise disposed of. Any such gain or loss generally will be a capital gain or loss, which will be long-term capital gain
or loss if the Warrant is held for more than one year. Long-term capital gains recognized by certain non-corporate U.S. Holders
(including individuals) will generally be subject to a current maximum U.S. federal income tax rate of 20%. Deductions for capital
losses are subject to complex limitations under the Code.
Expiration of Warrants without Exercise
Upon the lapse or expiration of a Warrant,
a U.S. Holder will recognize a loss in an amount equal to such U.S. Holder’s tax basis in the Warrant. Any such loss generally
will be a capital loss and will be long-term capital loss if the Warrant is held for more than one year. Deductions for capital
losses are subject to complex limitations under the Code.
Certain Adjustments to the Warrants
Under Section 305 of the Code, an
adjustment to the number of Warrant Shares that will be issued on the exercise of the Warrants, or an adjustment to the exercise
price of the Warrants, may be treated as a constructive distribution to a U.S. Holder of the Warrants if, and to the extent that,
such adjustment has the effect of increasing such U.S. Holder’s proportionate interest in our “earnings and profits”
or assets, depending on the circumstances of such adjustment (for example, if such adjustment is to compensate for a distribution
of cash or other property to our shareholders). Adjustments to the exercise price of a Warrant made pursuant to a bona fide reasonable
adjustment formula that has the effect of preventing dilution of the interest of the holders of the Warrants should generally not
result in a constructive distribution. (See the more detailed discussion of the rules applicable to distributions made by
us at “U.S. Federal Income Tax Consequences to U.S. Holders of the Acquisition, Ownership and Disposition of Shares and Warrant
Shares - Distributions” below).
U.S. Federal Income Tax Consequences
to U.S. Holders of the Acquisition, Ownership and Disposition of Shares and Warrant Shares
Distributions
Distributions (including constructive
distributions) made on Shares and Warrant Shares generally will be included in a U.S. Holder’s income as ordinary dividend
income to the extent of our current and accumulated earnings and profits (determined under U.S. federal income tax principles)
as of the end of our taxable year in which the distribution occurs. However, with respect to dividends received by certain non-corporate
U.S. Holders (including individuals), such dividends are generally taxed at the applicable long-term capital gains rates (currently
at a maximum tax rate of 20%), provided certain holding period and other requirements are satisfied. Distributions in excess of
our current and accumulated earnings and profits will be treated as a return of capital to the extent of a U.S. Holder’s
adjusted tax basis in the Shares or Warrant Shares and thereafter as capital gain from the sale or exchange of such Shares or
Warrant Shares, which will be taxable according to rules discussed under the heading “Sale, Certain Redemptions or
Other Taxable Dispositions of Shares and Warrant Shares,” below. Dividends received by a corporate holder may be eligible
for a dividends received deduction, subject to applicable limitations.
Sale, Certain Redemptions or Other
Taxable Dispositions of Shares and Warrant Shares
Upon the sale, certain qualifying redemptions,
or other taxable disposition of Shares or Warrant Shares, a U.S. Holder generally will recognize capital gain or loss equal to
the difference between (i) the amount of cash and the fair market value of any property received upon such taxable disposition
and (ii) the U.S. Holder’s adjusted tax basis in the Shares or Warrant Shares. Such capital gain or loss will be long-term
capital gain or loss if a U.S. Holder’s holding period in the Shares or Warrant Shares is more than one year at the time
of the taxable disposition. Long-term capital gains recognized by certain non-corporate U.S. Holders (including individuals) will
generally be subject to a current maximum U.S. federal income tax rate of 20%. Deductions for capital losses are subject to complex
limitations under the Code.
Other U.S. Federal Income Tax Consequences
Applicable to U.S. Holders
Information Reporting and Backup
Withholding
Information reporting requirements generally
will apply to payments of dividends on Shares and Warrant Shares and to the proceeds of a sale of Shares, Warrants or Warrant Shares
paid to a U.S. Holder unless the U.S. Holder is an exempt recipient (such as a corporation). Backup withholding will apply to those
payments if the U.S. Holder fails to provide its correct taxpayer identification number, or certification of exempt status, or
if the U.S. Holder is notified by the IRS that it has failed to report in full payments of interest and dividend income. Backup
withholding is not an additional tax, and any amounts withheld under the backup withholding rules generally will be allowed
as a refund or a credit against a U.S. Holder’s U.S. federal income tax liability, if any, provided the required information
is furnished in a timely manner to the IRS.
U.S. Federal Income Tax Consequences
to Non-U.S. Holders of the Acquisition, Ownership and Disposition of Shares, Warrants and Warrant Shares
U.S. Federal Income Tax Consequences
to Non-U.S. Holders of the Exercise and Disposition of Warrants
Exercise of Warrants
A Non-U.S. Holder generally will not recognize
gain or loss on the exercise of a Warrant and related receipt of a Warrant Share (unless cash is received in lieu of the issuance
of a fractional Warrant Share and certain other conditions are present, as discussed below under “Sale or Other Taxable Disposition
of Shares, Warrants and Warrant Shares”). A Non-U.S. Holder’s initial tax basis in the Warrant Share received on the
exercise of a Warrant should be equal to the sum of (a) such Non-U.S. Holder’s tax basis in such Warrant plus (b) the
exercise price paid by such Non-U.S. Holder on the exercise of such Warrant. It is unclear whether a Non-U.S. Holder’s holding
period for the Warrant Share received on the exercise of a Warrant should begin on the date that such Warrant is exercised by such
Non-U.S. Holder or the day following the date of exercise of the Warrant.
In certain limited circumstances (as
described under “Description of Securities – Warrants - Exercise”), a Non-U.S. Holder may be permitted to
undertake a cashless exercise of Warrants into Warrant Shares. The U.S. federal income tax treatment of a cashless exercise
of Warrants into Warrant Shares is unclear, and the tax consequences of a cashless exercise could differ from the
consequences upon the exercise of a Warrant described in the preceding paragraph. Non-U.S. Holders should consult their own
tax advisors regarding the U.S. federal income tax consequences of a cashless exercise of Warrants.
Disposition of Warrants
Subject to the discussion under the heading
“Sale or Other Taxable Disposition of Shares, Warrants and Warrant Shares” below, a Non-U.S. Holder will recognize
gain or loss on the sale or other taxable disposition of a Warrant in an amount equal to the difference, if any, between (a) the
amount of cash plus the fair market value of any property received and (b) such Non-U.S. Holder’s tax basis in the
Warrant sold or otherwise disposed of. Any such gain or loss generally will be a capital gain or loss (provided that the Warrant
Share to be issued on the exercise of such Warrant would have been a capital asset within the meaning of Section 1221 of
the Code if acquired by the Non-U.S. Holder), which will be long-term capital gain or loss if the Warrant is held for more than
one year. Any such gain recognized by a Non-U.S. Holder will be taxable for U.S. federal income tax purposes according to rules discussed
under the heading “Sale or Other Taxable Disposition of Shares, Warrants and Warrant Shares,” below.
Expiration of Warrants without Exercise
Subject to the discussion under the heading
“Sale or Other Taxable Disposition of Shares, Warrants and Warrant Shares” below, upon the lapse or expiration of a
Warrant, a Non-U.S. Holder will recognize a loss in an amount equal to such Non-U.S. Holder’s tax basis in the Warrant. Any
such loss generally will be a capital loss and will be long-term capital loss if the Warrants are held for more than one year.
Deductions for capital losses are subject to complex limitations under the Code.
Certain Adjustments to the Warrants
Under Section 305 of the Code, an
adjustment to the number of Warrant Shares that will be issued on the exercise of the Warrants, or an adjustment to the exercise
price of the Warrants, may be treated as a constructive distribution to a Non-U.S. Holder of the Warrants if, and to the extent
that, such adjustment has the effect of increasing such Non-U.S. Holder’s proportionate interest in our “earnings and
profits” or assets, depending on the circumstances of such adjustment (for example, if such adjustment is to compensate for
a distribution of cash or other property to our shareholders). Adjustments to the exercise price of a Warrant made pursuant to
a bona fide reasonable adjustment formula that has the effect of preventing dilution of the interest of the holders of the Warrants
should generally not result in a constructive distribution. See the more detailed discussion of the rules applicable to distributions
made by us under the heading “Dividends” below.
Dividends
Distributions on Shares or Warrant Shares
will constitute dividends for U.S. federal income tax purposes to the extent paid from our current and accumulated earnings and
profits, as determined under U.S. federal income tax principles. To the extent those distributions exceed our current and accumulated
earnings and profits, they will constitute a return of capital and will first reduce a Non-U.S. Holder’s basis in Shares
or Warrant Shares, but not below zero, and then will be treated as gain from the sale of stock, which will be taxable according
to rules discussed under the heading “Sale or Other Taxable Disposition of Shares, Warrants and Warrant Shares,”
below. Any dividends paid to a Non-U.S. Holder with respect to Shares or Warrant Shares generally will be subject to withholding
tax at a 30% gross rate, subject to any exemption or lower rate under an applicable treaty if the Non-U.S. Holder provides us with
a properly executed IRS Form W-8BEN or W-8BEN-E, unless the Non-U.S. Holder provides us with a properly executed IRS Form W-8ECI
(or other applicable form) relating to income effectively connected with the conduct of a trade or business within the U.S. If
we are a USRPHC (as defined below) and we do not qualify for the Regularly Traded Exception (as defined below), distributions which
constitute a return of capital will be subject to withholding tax unless an application for a withholding certificate is filed
to reduce or eliminate such withholding.
Dividends that are effectively connected
with the conduct of a trade or business within the U.S. and includible in the Non-U.S. Holder’s gross income are not subject
to the withholding tax (assuming proper certification and disclosure), but instead are subject to U.S. federal income tax on a
net income basis at applicable graduated individual or corporate rates. Any such effectively connected income received by a non-U.S.
corporation may, under certain circumstances, be subject to an additional branch profits tax at a 30% rate, subject to any exemption
or lower rate as may be specified by an applicable income tax treaty.
A Non-U.S. Holder of Shares or Warrant
Shares who wishes to claim the benefit of an applicable treaty rate or exemption is required to satisfy certain certification and
other requirements. If a Non-U.S. Holder is eligible for an exemption from or a reduced rate of U.S. withholding tax pursuant to
an income tax treaty, it may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with
the IRS.
Sale or Other Taxable Disposition
of Shares, Warrants and Warrant Shares
In general, a Non-U.S. Holder of Shares,
Warrants or Warrant Shares will not be subject to U.S. federal income tax on gain recognized from a sale, exchange, or other taxable
disposition of such Shares, Warrants or Warrant Shares, unless:
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the gain is effectively connected with a U.S. trade or business carried on by the Non-U.S. Holder
(and, where an income tax treaty applies, is attributable to a U.S. permanent establishment of the Non-U.S. Holder), in which case
the Non-U.S. Holder will be subject to tax on the net gain from the sale at regular graduated U.S. federal income tax rates, and
if the Non-U.S. Holder is a corporation, may be subject to an additional U.S. branch profits tax at a gross rate equal to 30% of
its effectively connected earnings and profits for that taxable year, subject to any exemption or lower rate as may be specified
by an applicable income tax treaty;
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the Non-U.S. Holder is an individual who is present in the U.S. for 183 days or more in the taxable
year of disposition and certain other conditions are met, in which case the Non-U.S. Holder will be subject to a 30% tax on the
gain from the sale, which may be offset by U.S. source capital losses; or
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we are or have been a “United States real property holding corporation” (“USRPHC”)
for U.S. federal income tax purposes at any time during the shorter of the Non-U.S. Holder’s holding period or the 5-year
period ending on the date of disposition of Shares, Warrants or Warrant Shares; provided, with respect to the Shares and Warrant
Shares, that as long as our common stock is regularly traded on an established securities market as determined under the Treasury
Regulations (the “Regularly Traded Exception”), a Non-U.S. Holder would not be subject to taxation on the gain on the
sale of Shares or Warrant Shares under this rule unless the Non-U.S. Holder has owned: (i) more than 5% of our common
stock at any time during such 5-year or shorter period; (ii) Warrants with a fair market value on the date acquired by such
holder greater than the fair market value on that date of 5% of our common stock; or (iii) aggregate equity securities of
the Company with a fair market value on the date acquired in excess of 5% of the fair market value of the Company’s common
stock on such date (in any case, a “5% Shareholder”). Since the Warrants are not expected to be listed on a securities
market, the Warrants are unlikely to qualify for the Regularly Traded Exception. In determining whether a Non-U.S. Holder is a
5% Shareholder, certain attribution rules apply in determining ownership for this purpose. Non-U.S. Holders should be aware
that we have made no determination as to whether we are or have been a USRPHC, and we can provide no assurances that we are not
and will not become a USRPHC in the future. In addition, in the event that we are or become a USRPHC, we can provide no assurances
that the Shares, Warrants or Warrant Shares will meet the Regularly Traded Exception at the time a Non-U.S. Holder purchases such
securities or sells, exchanges or otherwise disposes of such securities. Non-U.S. Holders should consult with their own tax advisors
regarding the consequences to them of investing in a USRPHC. As a USRPHC, a Non-U.S. Holder will be taxed as if any gain or loss
were effectively connected with the conduct of a trade or business as described above in “Dividends” in the event that
(i) such holder is a 5% Shareholder, or (ii) the Regularly Traded Exception is not satisfied during the relevant period.
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Information Reporting and Backup
Withholding
Generally, we must report annually to the
IRS and to Non-U.S. Holders the amount of dividends paid on the Shares and Warrant Shares to Non-U.S. Holders and the amount of
tax, if any, withheld with respect to those payments. Copies of the information returns reporting such dividends and withholding
may also be made available to the tax authorities in the country in which a Non-U.S. Holder resides under the provisions of an
applicable income tax treaty.
In general, a Non-U.S. Holder will not
be subject to backup withholding with respect to payments of dividends that we make, provided we receive a statement meeting certain
requirements to the effect that the Non-U.S. Holder is not a U.S. person and we do not have actual knowledge or reason to know
that the holder is a U.S. person, as defined under the Code, that is not an exempt recipient. The requirements for the statement
will be met if (1) the Non-U.S. Holder provides its name, address and U.S. taxpayer identification number, if any, and certifies,
under penalty of perjury, that it is not a U.S. person (which certification may be made on IRS Form W-8BEN or W-8BEN-E) or
(2) a financial institution holding the instrument on behalf of the Non-U.S. Holder certifies, under penalty of perjury, that
such statement has been received by it and furnishes us or our paying agent with a copy of the statement. In addition, a Non-U.S.
Holder will be subject to information reporting and, depending on the circumstances, backup withholding with respect to payments
of the proceeds of a sale of Shares, Warrants and Warrant Shares within the U.S. or conducted through certain U.S.-related financial
intermediaries, unless the statement described above has been received, and we do not have actual knowledge or reason to know that
a holder is a U.S. person, as defined under the Code, that is not an exempt recipient, or the Non-U.S. Holder otherwise establishes
an exemption. Backup withholding is not an additional tax and any amounts withheld under the backup withholding rules will
be allowed as a refund or a credit against a Non-U.S. Holder’s U.S. federal income tax liability, if any, provided the required
information is furnished in a timely manner to the IRS.
Rules Relating to Foreign Accounts
Withholding taxes may be imposed under
Sections 1471 to 1474 of the Code, the Treasury Regulations promulgated thereunder and other official guidance (commonly referred
to as “FATCA”) on certain types of payments made to non-U.S. financial institutions and certain other non-U.S. entities.
Specifically, a 30% withholding tax may be imposed on dividends on Shares or Warrant Shares paid to a “foreign financial
institution” or a “non-financial foreign entity” (each as defined in the Code), unless (1) the foreign
financial institution undertakes certain diligence, reporting and withholding obligations, (2) the non- financial foreign
entity either certifies it does not have any “substantial United States owners” (as defined in the Code) or furnishes
identifying information regarding each substantial United States owner, or (3) the foreign financial institution or non-financial
foreign entity otherwise qualifies for an exemption from these rules. If the payee is a foreign financial institution and is subject
to the diligence, reporting and withholding requirements in (1) above, it must enter into an agreement with the U.S. Department
of the Treasury requiring, among other things, that it undertake to identify accounts held by certain “specified United
States persons” or “United States-owned foreign entities” (each as defined in the Code), annually report certain
information about such accounts, and withhold 30% on certain payments to non-compliant foreign financial institutions and certain
other account holders. Accordingly, the entity through which the Shares or Warrant Shares is held will affect the determination
of whether such withholding is required. Foreign financial institutions located in jurisdictions that have an intergovernmental
agreement with the United States governing FATCA may be subject to different rules. Future Treasury Regulations or other official
guidance may modify these requirements.
Under the applicable Treasury Regulations,
withholding under FATCA generally applies to payments of dividends on the Shares or Warrant Shares. While withholding under FATCA
would have also applied to payments of gross proceeds from the sale or other disposition of the Shares, Warrants or Warrant Shares
on or after January 1, 2019, recently proposed Treasury Regulations eliminate FATCA withholding on payments of gross proceeds.
The preamble to these proposed regulations indicates that taxpayers may rely on them pending their finalization. The FATCA withholding
tax will apply to all withholdable payments without regard to whether the beneficial owner of the payment would otherwise be entitled
to an exemption from imposition of withholding tax pursuant to an applicable income tax treaty with the United States or U.S. domestic
law. We will not pay additional amounts to holders of Shares, Warrants or Warrant Shares in respect of amounts withheld.
Prospective investors should consult their
own tax advisors regarding the potential application of withholding under FATCA to their investment in Shares, Warrants or Warrant
Shares.
PLAN OF DISTRIBUTION
Pursuant to the Underwriting Agreement,
we have agreed to issue and sell and the Underwriters, have severally agreed to purchase, as principals, subject to compliance
with all necessary legal requirements and the terms and conditions contained in the Underwriting Agreement, a total of 12,500,000
Units at the Offering Price of $1.20 per Unit, payable in cash to us against delivery of such Units, on the closing date. In consideration
for their services in connection with the Offering, the Underwriters will deduct the Underwriters’ Fee equal to 6% of the
gross proceeds of the Offering ($0.072 per Unit, for an aggregate fee payable by us of $900,000), from the offering proceeds payable
to us. A reduced Underwriters’ Fee of 2% will be payable on the gross proceeds of up to $5,000,000 of the Offering sold to
purchasers included on a President’s List. All calculations of the Underwriters’ Fees herein, assumes no sales to the
President’s List. In addition, we have agreed to issue to the Underwriters (or their designees) Compensation Warrants to
purchase up to a number of shares of common stock equal to 6% of the Shares issued on the closing of the Offering (2% with respect
to sales made to persons on the President’s List up to $5,000,000 of Units) having the same terms as the Warrants. The Offering
Price was determined by negotiation between us and the Co-Representatives on their own behalf and on behalf of the other Underwriters.
Subject to the terms and conditions of the Underwriting Agreement, we have agreed to sell to the Underwriters, and each Underwriter
has severally agreed to purchase, at the Offering Price less the Underwriting Fee set forth on the cover page of this prospectus
supplement, the number of Units listed next to its name in the following table:
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Number of Units
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H. C. Wainwright & Co., LLC
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4,375,000
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Haywood Securities Inc.
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4,375,000
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TD Securities Inc.
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1,250,000
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Eight Capital
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1,250,000
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Roth Capital Partners, LLC
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1,250,000
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Total
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12,500,000
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H. C. Wainwright & Co., LLC is not
registered as an investment dealer in any Canadian jurisdiction and, accordingly, will only sell Units into the United States and
will not, directly or indirectly, solicit offers to purchase or sell the Units in Canada. The Underwriters may sell Units in the
United States through their U.S. affiliates, Haywood Securities (USA) Inc., TD Securities
Inc., Eight Capital and Roth Capital Partners, LLC. Subject to applicable law, the
Underwriters may offer to sell the Units outside of Canada and the United States.
The offering is being made in the United
States and Canada, and we are concurrently filing the Canadian Prospectus pursuant to a multijurisdictional disclosure system implemented
by the United States and Canada.
The Underwriters propose to offer the Units
initially at the Offering Price. After a reasonable effort has been made to sell all of the Units at the Offering Price, the Underwriters
may subsequently reduce the selling price to investors from time to time in order to sell any of the Units remaining unsold. Any
such reduction will not affect the proceeds received by us.
The obligations of the Underwriters under
the Underwriting Agreement are several, and not joint, and may be terminated at their discretion at any time prior to any closing
date upon the occurrence of certain events specified in the Underwriting Agreement including standard “litigation out”,
“financial out”, “disaster out”, “material adverse effect out” and “market out”
rights of termination. In the event the Underwriting Agreement is terminated pursuant to its terms, we shall be obligated to pay
the Underwriters their actual and accountable out of pocket expenses related to the transactions contemplated therein then due
and payable, including the fees and disbursements of Underwriters’ legal counsel up to $90,000, provided, however, that such
expense cap in no way limits or impairs the indemnification and contribution provisions of the Underwriting Agreement.
The Underwriters are obligated to take
up and pay for all the Units offered by this prospectus supplement if any are purchased under the Underwriting Agreement, subject
to certain exceptions. We have agreed in the Underwriting Agreement to reimburse the Underwriters for their legal fees in an amount
not to exceed $90,000 and certain other accountable expenses in connection with the Offering as specified in the Underwriting Agreement.
We have agreed, pursuant to the Underwriting
Agreement, to indemnify the Underwriters, and each dealer selected by each Underwriter that participated in the Offering (each,
a “Selected Dealer”) and each of their respective directors, officers and employees and each person, if any who controls
such Underwriter or any Selected Dealer against certain liabilities, including liabilities under Canadian and U.S. securities legislation
in certain circumstances or to contribute to payments the Underwriters may have to make because of such liabilities.
We have agreed in the Underwriting Agreement
that from the date of the Underwriting Agreement until 30 days from the date of closing, neither the Company nor any subsidiary
of the Company shall issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of common
stock or Common Stock Equivalents (as defined in the Underwriting Agreement). In addition, we agreed that from the date of the
Underwriting Agreement until the Warrants are no longer outstanding, we shall be prohibited from effecting or entering into an
agreement to effect any issuance by the Company or any subsidiary of the Company of shares of common stock or Common Stock Equivalents
involving a Variable Rate Transaction (as defined in the Underwriting Agreement). The foregoing restrictions shall not apply in
respect of the issuance of: (i) the Shares and the Warrant, including the Compensation Warrants; (ii) shares of common
stock or options to our employees, officers or directors pursuant to any stock or option plan duly adopted by a majority of non-employee
members of the Board of Directors or of a committee; (iii) securities upon the exercise or exchange of or conversion of any
Shares and the Warrants, including the Compensation Warrants, provided that such securities have not been amended since the date
of the Underwriting Agreement to increase the number of such securities or to decrease the exercise price; and (iv) securities
issued pursuant to an acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company,
provide that any such issuance shall (A) only be to a person which is, itself or through its subsidiaries, an operating company
or an owner of an asset in a business synergistic with the business of the Company, (B) shall provide to the Company additional
benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities
primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, and (C) require
the holder thereof to be subject to a lock-up on any disposition of such securities prior to the 60th day following
the closing date.
As a condition precedent to the Underwriters’
obligation to close the Offering, subject to customary exemptions permitting dispositions to trusts for the direct or indirect
benefit of the director or officer and/or the immediate family of such person, tenders to a take-over bid or acquisition transaction
and pursuant to any existing 10b5-1 plans, all directors and officers of UEC shall be required to execute and deliver written
undertakings in favor of the Underwriters agreeing not to sell, transfer, pledge (other than as disclosed to the Underwriters
in writing), assign, or otherwise dispose of any of our securities owned, directly or indirectly by such directors or officers,
until 90 days following the closing date, without the prior written consent of the Co-Representatives on behalf of the Underwriters.
Subscriptions for the Units will be received
subject to rejection or allotment in whole or in part and the right is reserved to close the subscription books at any time without
notice. The closing of the Offering is expected to occur on or about September 23, 2020. It is anticipated that the Shares
forming part of the Units will be issued in “book-entry only” form and represented by a global certificate or certificates,
or be represented by uncertificated securities, registered in the name of CDS or its nominee and/or DTC, as directed by the Underwriters,
and will be deposited with CDS and/or DTC, as the case may be. Except in limited circumstances, no beneficial holder of Shares
will receive definitive certificates representing their interest in the Shares. Beneficial holders of Shares will receive only
a customer confirmation from the Underwriters or other registered dealer who is a CDS or DTC participant and from or through whom
a beneficial interest in the Shares is acquired. Certain other holders will receive definitive certificates representing their
interests in the Shares. All holders are expected to receive Warrants in physical certificated form.
A copy of the Underwriting Agreement and the form of Warrant
will be included as exhibits to our current report on Form 8-K that will be filed with the SEC in connection with the consummation
of this Offering.
The transfer agent for our common stock
to be issued in this Offering is Transfer Online., Inc. We will act as transfer agent for the Warrants being offered hereby.
Our common stock is traded on the NYSE American under the symbol
“UEC.” The Warrants issued to the investors in this offering are not expected to be eligible for trading on any market.
INTERESTS OF NAMED EXPERTS AND COUNSEL
Certain legal matters relating to the securities
offered pursuant to this prospectus supplement will be passed upon for us by McMillan LLP, and for the Underwriters by Stikeman
Elliott LLP, as to Canadian legal matters, and Ellenoff Grossman & Schole LLP, as to U.S. legal matters.
The consolidated financial statements of
Uranium Energy Corp. appearing in Uranium Energy Corp.’s Annual Report (Form 10-K) for the year ended July 31,
2019, and the effectiveness of the Company’s internal control over financial reporting as of July 31, 2019, have been
audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their reports thereon, which
include, among other things, that the Company did not maintain effective internal control over financial reporting as of July 31,
2019, based on Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (“COSO Framework”), because of the effects of the material weaknesses described in such reports,
included therein, and incorporated herein by reference. Such consolidated financial statements have been incorporated herein by
reference in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.
No expert or counsel named in this prospectus
supplement or the accompanying base prospectus as having prepared or certified any part of this prospectus supplement or the accompanying
base prospectus or having given an opinion upon legal matters in connection with the registration or offering of the Units was
employed on a contingency basis, or had, or is to receive, in connection with the Offering, a substantial interest, direct or
indirect, in the registrant, nor was any such person connected with the registrant as a promoter, managing or principal underwriter,
voting trustee, director, officer, or employee.
URANIUM ENERGY CORP.
$100,000,000
Common Shares
Debt Securities
Warrants
Subscription Receipts
Units
Uranium Energy Corp. (“we”
or the “Company”) may offer and sell, from time to time, up to $100,000,000 aggregate initial offering price of our
common shares (“Common Shares”), debt securities (“Debt Securities”), warrants to purchase Common Shares
or Debt Securities (“Warrants”), subscription receipts for Common Shares, Debt Securities, Warrants or any combination
thereof (“Subscription Receipts”), or any combination of Common Shares, Debt Securities, Warrants or Subscription Receipts
(“Units”) (collectively, the Common Shares, Debt Securities, Warrants, Subscription Receipts and Units are referred
to as the “Securities”) in one or more transactions under this prospectus (the “Prospectus”).
This Prospectus
provides you with a general description of the Securities that we may offer. Each time we offer Securities, we will provide you
with a prospectus supplement (the “Prospectus Supplement”) that describes specific information about the particular
Securities being offered and may add, update or change information contained in this Prospectus. You should read both this Prospectus
and the Prospectus Supplement, together with any additional information which is incorporated by reference into this Prospectus.
This Prospectus may not be used to offer or sell securities without the Prospectus Supplement which includes a description of
the method and terms of that offering.
We may sell the
Securities on a continuous or delayed basis to or through underwriters, dealers or agents or directly to purchasers. The Prospectus
Supplement, which we will provide to you each time we offer Securities, will set forth the names of any underwriters, dealers or
agents involved in the sale of the Securities, and any applicable fee, commission or discount arrangements with them. For additional
information on the methods of sale, you should refer to the section entitled “Plan of Distribution” in this Prospectus.
The Common Shares
are traded on the NYSE American LLC (“NYSE American”) under the symbol “UEC”. On March 2, 2020, the
last reported sale price of the Common Shares on NYSE American was $0.62 per Common Share. There is currently no market through
which the Securities, other than the Common Shares, may be sold and purchasers may not be able to resell the Securities purchased
under this Prospectus. This may affect the pricing of the Securities, other than the Common Shares, in the secondary market, the
transparency and availability of trading prices, the liquidity of these Securities and the extent of issuer regulation.
Investing in
the Securities involves risks. See “Risk Factors” on page 9.
Neither the
Securities and Exchange Commission nor any state securities commission has approved or disapproved of these Securities or passed
upon the adequacy or accuracy of this Prospectus. Any representation to the contrary is a criminal offense.
The date of this
Prospectus is March 3, 2020
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TABLE OF CONTENTS
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ABOUT THIS PROSPECTUS
This Prospectus is a part of a registration
statement that we filed with the SEC utilizing a “shelf” registration process. Under this shelf registration process,
we may sell any combination of the Securities described in this Prospectus in one or more offerings up to a total dollar amount
of initial aggregate offering price of $100,000,000. This Prospectus provides you with a general description of the Securities
that we may offer. The specific terms of the Securities in respect of which this Prospectus is being delivered will be set forth
in a Prospectus Supplement and may include, where applicable: (i) in the case of Common Shares, the number of Common Shares
offered, the offering price and any other specific terms of the offering; (ii) in the case of Debt Securities, the specific
designation, aggregate principal amount, currency or the currency unit for which such Debt Securities may be purchased, maturity,
interest provisions, authorized denominations, offering price, covenants, events of default, any redemption terms, any sinking
fund provisions, any exchange or conversion terms, whether payment on the Debt Securities will be senior or subordinated to our
other liabilities and obligations and any other specific terms; (iii) in the case of Warrants, the designation, number and
terms of the Common Shares or Debt Securities purchasable upon exercise of the Warrants, any procedures that will result in the
adjustment of those numbers, the exercise price, dates and periods of exercise, and the currency or the currency unit in which
the exercise price must be paid and any other specific terms; (iv) in the case of Subscription Receipts, the designation,
number and terms of the Common Shares, Warrants or Debt Securities receivable upon satisfaction of certain release conditions,
any procedures that will result in the adjustment of those numbers, any additional payments to be made to holders of Subscription
Receipts upon satisfaction of the release conditions, the terms of the release conditions, terms governing the escrow of all or
a portion of the gross proceeds from the sale of the Subscription Receipts, terms for the refund of all or a portion of the purchase
price for Subscription Receipts in the event the release conditions are not met and any other specific terms; and (v) in the
case of Units, the designation, number and terms of the Common Shares, Warrants, Debt Securities or Subscription Receipts comprising
the Units. A Prospectus Supplement may include specific variable terms pertaining to the Securities that are not within the alternatives
and parameters set forth in this Prospectus.
In connection with any offering of the
Securities (unless otherwise specified in a Prospectus Supplement), the underwriters or agents may over-allot or effect transactions
which stabilize or maintain the market price of the Securities offered at a higher level than that which might exist in the open
market. Such transactions, if commenced, may be interrupted or discontinued at any time. See “Plan of Distribution”.
Please carefully read both this Prospectus
and any Prospectus Supplement together with the documents incorporated herein by reference under “Documents Incorporated
by Reference”.
Owning securities may subject you to
tax consequences in the United States. This Prospectus or any applicable Prospectus Supplement may not describe these tax consequences
fully. You should read the tax discussion in any Prospectus Supplement with respect to a particular offering and consult your own
tax advisor with respect to your own particular circumstances.
References in this Prospectus to “$”
are to United States dollars.
You should rely only on the information
contained in this Prospectus. We have not authorized anyone to provide you with information different from that contained in this
Prospectus. The distribution or possession of this Prospectus in or from certain jurisdictions may be restricted by law. This Prospectus
is not an offer to sell these Securities and is not soliciting an offer to buy these Securities in any jurisdiction where the offer
or sale is not permitted or where the person making the offer or sale is not qualified to do so or to any person to whom it is
not permitted to make such offer or sale. The information contained in this Prospectus is accurate only as of the date of this
Prospectus, regardless of the time of delivery of this Prospectus or of any sale of the Securities. Our business, financial condition,
results of operations and prospects may have changed since that date.
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SUMMARY
Our Company
Corporate Organization
Uranium Energy Corp. was incorporated under
the laws of the State of Nevada on May 16, 2003 under the name “Carlin Gold Inc.” During 2004, we changed our
business operations and focus from precious metals exploration to uranium exploration in the United States. On January 24,
2005, we completed a reverse stock split of our common stock on the basis of one share for each two outstanding shares and amended
our Articles of Incorporation to change our name to “Uranium Energy Corp.”. Effective February 28, 2006, we completed
a forward stock split of our common stock on the basis of 1.5 shares for each outstanding share and amended our Articles of Incorporation
to increase our authorized capital from 75,000,000 shares of common stock with a par value of $0.001 per share to 750,000,000 shares
of common stock with a par value of $0.001 per share. In June 2007, we changed our fiscal year end from December 31 to
July 31.
On December 31, 2007, we incorporated
a wholly-owned subsidiary, UEC Resources Ltd., under the laws of the Province of British Columbia, Canada. Effective December 18,
2009, we acquired a 100% interest in the South Texas Mining Venture, L.L.P. (“STMV”), a Texas limited liability partnership,
from each of URN Resources Inc., a subsidiary of Uranium One Inc., and Everest Exploration, Inc. (“STMV Acquisition”).
On September 3, 2010, we incorporated a wholly-owned subsidiary, UEC Paraguay Corp., under the laws of the State of Nevada.
Effective May 24, 2011, we acquired a 100% in interest in Piedra Rica Mining S.A., a private company incorporated in Paraguay.
Effective September 9, 2011, we acquired a 100% interest in Concentric Energy Corp., a private company incorporated in the
State of Nevada. Effective March 30, 2012, we acquired a 100% interest in Cue Resources Ltd., a publicly-traded company incorporated
in the Province of British Columbia, Canada. Effective March 4, 2016, we acquired a 100% interest in JDL Resources Inc., a
private company incorporated in Cayman Islands, and were granted an option to acquire a 100% interest in CIC Resources (Paraguay)
Inc., a company organized and existing under the laws of the Cayman Islands. On July 7, 2017, we acquired 100% interest in
CIC Resources (Paraguay) Inc., a private company incorporated in Cayman Islands. Effective August 9, 2017 we acquired a 100%
interest in Reno Creek Holdings Inc., a private company governed by the laws of Canada, which owned 100% of Reno Creek Resources
Inc., a private company governed by the laws of Canada, which owned 100% of AUC Holdings, Inc. a private company incorporated
in the State of Nevada, which owns 100% of AUC LLC, a limited liability company formed in the State of Delaware. Subsequent to
August 9, 2017, we dissolved Reno Creek Holdings Inc. and Reno Creek Resources Inc., and now we directly own 100% of AUC Holdings, Inc.
On January 31, 2018, we incorporated a wholly-owned subsidiary under the laws of the Province of Saskatchewan, Canada, UEC
Resources (SK) Corp.
Our principal offices are located at 500
North Shoreline Boulevard, Suite 800N, Corpus Christi, Texas 78401 and 1030 West Georgia Street, Suite 1830, Vancouver,
British Columbia, Canada V6E 2Y3.
Our Business
We are pre-dominantly engaged in uranium
mining and related activities, including exploration, pre-extraction, extraction and processing, on uranium projects located in
the United States and Paraguay. We utilize in-situ recovery (“ISR”) mining where possible which we believe, when compared
to conventional open pit or underground mining, requires lower capital and operating expenditures with a shorter lead time to extraction
and a reduced impact on the environment. We do not expect, however, to utilize ISR mining for all of our mineral rights in which
case we would expect to rely on conventional open pit and/or underground mining techniques. We have one uranium mine located in
the State of Texas, the Palangana Mine, which utilizes ISR mining and commenced extraction of uranium oxide (“U3O8”),
or yellowcake, in November 2010. We have one uranium processing facility located in the State of Texas, the Hobson Processing
Facility, which processes material from the Palangana Mine into drums of U3O8, our only sales product and
source of revenue, for shipping to a third-party storage and sales facility. Since commencement of uranium extraction from the
Palangana Mine in November 2010 to October 31, 2019, the Hobson Processing Facility has processed 580,100 pounds of U3O8.
At October 31, 2019, we had no uranium supply or “off-take” agreements in place.
Our fully-licensed and 100%-owned Hobson
Processing Facility forms the basis for our regional operating strategy in the State of Texas, specifically in the South Texas
Uranium Belt, where we utilize ISR mining. We utilize a “hub-and-spoke” strategy whereby the Hobson Processing Facility
acts as the central processing site (the “hub”) for our Palangana Mine and future satellite uranium mining activities,
such as our Burke Hollow and Goliad Projects, located within the South Texas Uranium Belt (the “spokes”). The Hobson
Processing Facility has a physical capacity to process uranium-loaded resins up to a total of two million pounds of U3O8
annually and is licensed to process up to one million pounds of U3O8 annually.
We hold certain mineral rights in various
stages in the States of Arizona, Colorado, New Mexico, Texas and Wyoming, in Canada and in the Republic of Paraguay, many of which
are located in historically successful mining areas and have been the subject of past exploration and pre-extraction activities
by other mining companies. We do not expect, however, to utilize ISR mining for all of our mineral rights in which case we would
expect to rely on conventional open pit and/or underground mining techniques.
Our operating and strategic framework is
based on expanding our uranium extraction activities, which includes advancing certain uranium projects with established mineralized
materials towards uranium extraction, and establishing additional mineralized materials on our existing uranium projects or through
acquisition of additional uranium projects.
We may acquire additional mineral rights
as opportunities arise.
We continued to operate the Palangana Mine
at a reduced pace since implementing our strategic plan in September 2013, to align our operations to a weak uranium market
in a challenging post-Fukushima environment. This strategy has included the deferral of major pre-extraction expenditures and remaining
in a state of operational readiness in anticipation of a recovery in uranium prices.
During the fiscal year ended July 31,
2019, we made significant advancements in various aspects of our operations including:
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we secured further financing by completing a public October 2018 Offering of 12,613,049 units
of the Company at a price of $1.60 per unit for gross proceeds of approximately $20 million;
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we entered into a Third Amended and Restated Credit Agreement with our Lenders and extended our
$20,000,000 senior secured Credit Facility by deferring required principal repayments until maturity and extending the maturity
date to January 31, 2022;
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we completed a Royalty Purchase Agreement with Uranium Royalty Corp. ("URC"), where we
sold a 1% net smelter return royalty (collectively, the "Royalties") for uranium only at each of our Slick Rock, Workman
Creek and Anderson projects. As consideration for the sale of the Royalties, the Company received 12 million common shares
of URC;
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we completed an updated NI 43-101 Technical Report to consolidate the resource for the then Reno
Creek Project and the North Reno Creek Project acquired in Fiscal 2018. Additionally, the Reno Creek Permit to Mine and the NRC
Source Material License were combined into one Permit to Mine, which was approved by the Land Quality Division Uranium Recovery
Program in March 2019;
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we advanced permitting activities at the Burke Hollow Project and received a Radioactive Materials
License after receipt of the Mine Area Permit and Aquifer Exemption in Fiscal 2017 and the two Class I disposal well permits
in Fiscal 2016, completing the last permit required for uranium extraction; and
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we commenced a drilling campaign to prepare for development of the first production area where
we drilled 31 exploration/delineation holes and completed 51 monitor wells totaling 33,615 feet at the Burke Hollow Project.
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The Securities Offered under this Prospectus
We may offer the Common Shares, Debt Securities,
Warrants, Subscription Receipts or Units with a total value of up to $100,000,000 from time to time under this Prospectus, together
with any applicable Prospectus Supplement and related free writing prospectus, at prices and on terms to be determined by market
conditions at the time of offering. This Prospectus provides you with a general description of the Securities we may offer. Each
time we offer Securities, we will provide a Prospectus Supplement that will describe the specific amounts, prices and other important
terms of the Securities, including, to the extent applicable:
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designation or classification;
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aggregate principal amount or aggregate offering price;
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maturity, if applicable;
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original issue discount, if any;
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rates and times of payment of interest or dividends, if any;
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redemption, conversion, exchange or sinking fund terms, if any;
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conversion or exchange prices or rates, if any, and, if applicable, any provisions for changes
to or adjustments in the conversion or exchange prices or rates, and in the securities or other property receivable upon conversion
or exchange;
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restrictive covenants, if any;
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voting or other rights, if any; and
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important United States federal income tax considerations.
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A Prospectus Supplement and any related
free writing prospectus that we may authorize to be provided to you may also add, update or change information contained in this
Prospectus or in documents we have incorporated by reference. However, no Prospectus Supplement or free writing prospectus will
offer a security that is not registered and described in this Prospectus at the time of the effectiveness of the registration statement
of which this Prospectus is a part.
We may sell the Securities on a continuous
or delayed basis to or through underwriters, dealers or agents or directly to purchasers. The Prospectus Supplement, which we will
provide to you each time we offer Securities, will set forth the names of any underwriters, dealers or agents involved in the sale
of the Securities, and any applicable fee, commission or discount arrangements with them.
Common Shares
We may offer Common Shares. Holders of
Common Shares are entitled to one vote per Common Share on all matters that require shareholder approval. Holders of our Common
Shares are entitled to dividends when and if declared by our Board of Directors. Our Common Shares are described in greater detail
in this Prospectus under “Description of Common Shares.”
Debt Securities
We may offer Debt Securities from time
to time, in one or more series, as either senior or subordinated debt or as senior or subordinated convertible debt. The Debt Securities
may be issued under one or more documents called indentures, which are contracts between our Company and a trustee for the holders
of the Debt Securities, or may be issued without the use of an indenture. If Debt Securities are issued without the use of an indenture,
all the terms of such Debt Security shall be included in the form of such Debt Security. In this Prospectus, we have summarized
certain general features of the Debt Securities under “Description of Debt Securities”. We urge you, however, to read
any Prospectus Supplement and any free writing prospectus that we may authorize to be provided to you related to the series of
Debt Securities being offered, as well as the complete indentures, if any, or the forms of such Debt Securities, as applicable,
that contain the terms of the Debt Securities. A form of indenture has been filed as an exhibit to the registration statement of
which this Prospectus is a part, and supplemental indentures and/or forms of Debt Securities containing the terms of Debt Securities
being offered will be filed as exhibits to the registration statement of which this Prospectus is a part, or incorporated by reference
from a current report on Form 8-K that we file with the SEC.
Warrants
We may offer Warrants for the purchase
of Common Shares or Debt Securities, in one or more series, from time to time. We may issue Warrants independently or together
with Common Shares, Debt Securities, or Subscription Receipts, and the Warrants may be attached to or separate from such securities.
The Warrants will be evidenced by warrant
certificates and may be issued under one or more warrant indentures, which are contracts between our Company and a warrant trustee
for the holders of the Warrants. We may also choose to act as our own warrant trustee. In this Prospectus, we have summarized certain
general features of the Warrants under “Description of Warrants”. We urge you, however, to read any Prospectus Supplement
and any free writing prospectus that we may authorize to be provided to you related to the series of Warrants being offered, as
well as the warrant certificates and, if applicable, the warrant indentures, that contain the terms of the Warrants. Specific warrant
certificates and, if applicable, warrant indentures, will contain additional important terms and provisions and will be filed as
exhibits to the registration statement of which this Prospectus is a part, or incorporated by reference from a current report on
Form 8-K that we file with the SEC.
Subscription Receipts
We may issue Subscription Receipts, which
will entitle holders to receive upon satisfaction of certain release conditions and for no additional consideration, Common Shares,
Debt Securities, Warrants or any combination thereof. Subscription Receipts will be issued pursuant to one or more subscription
receipt agreements, each to be entered into between our Company and an escrow agent, which will establish the terms and conditions
of the Subscription Receipts. Each escrow agent will be a financial institution organized under the laws of the United States or
any state thereof, or Canada or a province thereof, and authorized to carry on business as a trustee. A copy of the form of subscription
receipt agreement will be filed as an exhibit to the registration statement of which this Prospectus is a part, or will be incorporated
by reference from a current report on Form 8-K that we file with the SEC.
Units
We may offer Units consisting of Common
Shares, Debt Securities, Warrants and/or Subscription Receipts to purchase any of such securities in one or more series. In this
Prospectus, we have summarized certain general features of the Units under “Description of Units”. We urge you, however,
to read any Prospectus Supplement and any free writing prospectus that we may authorize to be provided to you related to the series
of Units being offered. We may evidence each series of units by unit certificates that we will issue under a separate unit agreement
with a unit agent. We may also choose to act as our own unit agent. We will file as exhibits to the registration statement of which
this Prospectus is a part, or will incorporate by reference from a current report on Form 8-K that we file with the SEC, any
unit agreements that describe the terms of the series of Units we are offering before the issuance of the related series of Units.
THIS PROSPECTUS MAY NOT BE USED
TO OFFER OR SELL ANY SECURITIES UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
RISK FACTORS
Prospective investors should carefully
consider the following risks, as well as the other information contained in this prospectus and in the documents incorporated by
reference herein, including the risks described in our annual report on Form 10-K and our quarterly reports on Form 10-Q,
before investing in our securities. Any one of these material risks and uncertainties has the potential to cause actual results,
performance, achievements or events to be materially different from any future results, performance, achievements or events implied,
suggested or expressed by any forward-looking statements made by us or by persons acting on our behalf. Refer to "Forward-Looking
Statements".
There is no assurance that we will
be successful in preventing the material adverse effects that any one or more of the following material risks and uncertainties
may cause on our business, prospects, financial condition and operating results, which may result in a significant decrease in
the market price of our common stock. Furthermore, there is no assurance that these material risks and uncertainties represent
a complete list of the material risks and uncertainties facing us. There may be additional risks and uncertainties of a material
nature that, as of the date of this prospectus, we are unaware of or that we consider immaterial that may become material in the
future, any one or more of which may result in a material adverse effect on us. You could lose all or a significant portion of
your investment due to any of these risks and uncertainties.
Risks Related to Our Company and Business
Evaluating our future performance
may be difficult since we have a limited financial and operating history, with significant negative cash flow and accumulated deficit
to date. Our long-term success will depend ultimately on our ability to achieve and maintain profitability and to develop positive
cash flow from our mining activities.
As more fully described under Item 1. Business
in our Form 10-K Annual Report for the year ended July 31, 2019 (“Fiscal 2019”), we were incorporated under
the laws of the State of Nevada on May 16, 2003, and since 2004, we have been predominantly engaged in uranium mining and
related activities, including exploration, pre-extraction, extraction and processing, on projects located in the United States
and Paraguay. In November 2010, we commenced uranium extraction for the first time at the Palangana Mine utilizing ISR and
processed those materials at the Hobson Processing Facility into drums of U3O8, our only sales product and
source of revenue. We also hold uranium projects in various stages of exploration and pre-extraction in the States of Arizona,
Colorado, New Mexico, Texas and Wyoming, in Canada and the Republic of Paraguay. Since we completed the acquisition of the Alto
Paraná Project located in the Republic of Paraguay in July 2017, we are also involved in mining and related activities,
including exploration, pre-extraction, extraction and processing of titanium minerals.
As more fully described under “Liquidity
and Capital Resources” of Item 2. Management’s Discussion and Analysis of Financial Condition and Result of Operations,
in our Form 10-Q Quarterly Report for the period ended October 31, 2019, we have a history of significant negative cash
flow and net losses, with an accumulated deficit balance since inception of $267.2 million at October 31, 2019. Historically,
we have been reliant primarily on equity financings from the sale of our common stock and on debt financing in order to fund our
operations. Although we generated revenues from sales of U3O8 during the years ended July 31 2015 (“Fiscal
2015”), July 31, 2013 (“Fiscal 2013”) and July 31, 2012 (“Fiscal 2012”) of $3.1 million,
$9.0 million and $13.8 million, respectively, with no revenues from sales of U3O8 generated during the three
months ended October 31, 2019, July 31, 2016 (“Fiscal 2016”) to Fiscal 2019, July 31, 2014 (“Fiscal
2014”) or for any periods prior to Fiscal 2012, we have yet to achieve profitability or develop positive cash flow from our
operations, and we do not expect to achieve profitability or develop positive cash flow from operations in the near term. As a
result of our limited financial and operating history, including our significant negative cash flow and net losses to date, it
may be difficult to evaluate our future performance.
At October 31, 2019, we had cash and
cash equivalents of $13.1 million and working capital of $13.0 million. With reduction of our cash burn rate from that incurred
in Fiscal 2019 by curtailing expenditures on discretionary and non-core activities and paying certain management, consulting and
service provider fees by issuance of shares of the Company in lieu of cash, our existing cash resources and, if necessary, cash
generated from the sale of the Company’s liquid asset, are expected to provide sufficient funds to carry out our planned
operations for 12 months from the date of our last Quarterly Report as at October 31, 2019. 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. 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.
Our reliance on equity and debt financings
is expected to continue for the foreseeable future, and their availability whenever such additional financing is required, will
be dependent on many factors beyond our control including, but not limited to, the market price of uranium, the continuing public
support of nuclear power as a viable source of electrical generation, the volatility in the global financial markets affecting
our stock price and the status of the worldwide economy, any one of which may cause significant challenges in our ability to access
additional financing, including access to the equity and credit markets. We may also be required to seek other forms of financing,
such as asset divestitures or joint venture arrangements to continue advancing our uranium projects which would depend entirely
on finding a suitable third party willing to enter into such an arrangement, typically involving an assignment of a percentage
interest in the mineral project.
Our long-term success, including the recoverability
of the carrying values of our assets and our ability to acquire additional uranium projects and continue with exploration and pre-extraction
activities and mining activities on our existing uranium projects, will depend ultimately on our ability to achieve and maintain
profitability and positive cash flow from our operations by establishing ore bodies that contain commercially recoverable uranium
and to develop these into profitable mining activities. The economic viability of our mining activities, including the expected
duration and profitability of the Palangana Mine and of any future satellite ISR mines, such as the Burke Hollow and Goliad Projects,
located within the South Texas Uranium Belt, and the Reno Creek Project located in the Powder River Basin, Wyoming, and our projects
in Canada and in the Republic of Paraguay, have many risks and uncertainties. These include, but are not limited to: (i) a
significant, prolonged decrease in the market price of uranium and titanium minerals; (ii) difficulty in marketing and/or
selling uranium concentrates; (iii) significantly higher than expected capital costs to construct the mine and/or processing
plant; (iv) significantly higher than expected extraction costs; (v) significantly lower than expected mineral extraction;
(vi) significant delays, reductions or stoppages of uranium extraction activities; and (vii) the introduction of
significantly more stringent regulatory laws and regulations. Our mining activities may change as a result of any one or more of
these risks and uncertainties and there is no assurance that any ore body that we extract mineralized materials from will result
in achieving and maintaining profitability and developing positive cash flow.
Our operations are capital intensive
and we will require significant additional financing to acquire additional mineral projects and continue with our exploration and
pre-extraction activities on our existing projects.
Our operations are capital intensive and
future capital expenditures are expected to be substantial. We will require significant additional financing to fund our operations,
including acquiring additional projects and continuing with our exploration and pre-extraction activities which include assaying,
drilling, geological and geochemical analysis and mine construction costs. In the absence of such additional financing we would
not be able to fund our operations or continue with our exploration and pre-extraction activities, which may result in delays,
curtailment or abandonment of any one or all of our projects.
If we are unable to service our indebtedness,
we may be faced with accelerated repayments or lose the assets securing our indebtedness. Furthermore, restrictive covenants governing
our indebtedness may restrict our ability to pursue our business strategies.
On December 5, 2018, we entered into
the third amended and restated credit agreement (the “Third Amended and Restated Credit Agreement”) with our lenders
(the “Lenders”) under which we had previously drawn down the maximum $20 million in principal (collectively, the “Credit
Facility”). The Credit Facility requires monthly interest payments calculated at 8% per annum and other periodic fees. Our
ability to continue making these scheduled payments will be dependent on and may change as a result of our financial condition
and operating results. Failure to make any of these scheduled payments will put us in default with the Credit Facility which, if
not addressed or waived, could require accelerated repayment of our indebtedness and/or enforcement by the Lenders against our
assets. Enforcement against our assets would have a material adverse effect on our financial condition and operating results.
Furthermore, our Credit Facility includes
restrictive covenants that, among other things, limit our ability to sell our assets or to incur additional indebtedness other
than permitted indebtedness, which may restrict our ability to pursue certain business strategies from time to time. If we do not
comply with these restrictive covenants, we could be in default which, if not addressed or waived, could require accelerated repayment
of our indebtedness and/or enforcement by the Lenders against our assets.
Our uranium extraction and sales
history is limited, with our uranium extraction to date originating from a single uranium mine. Our ability to continue generating
revenue is subject to a number of factors, any one or more of which may adversely affect our financial condition and operating
results.
We have a limited history of uranium extraction
and generating revenue. In November 2010, we commenced uranium extraction at the Palangana Mine, which has been our sole source
of U3O8 sold to generate the revenues during Fiscal 2015, Fiscal 2013 and Fiscal 2012 of $3.1 million, $9.0
million and $13.8 million, respectively, with no revenues from sales of U3O8 generated during the three months
ended October 31, 2019, Fiscal 2016 to Fiscal 2019, Fiscal 2014 or for any periods prior to Fiscal 2012.
During the three months ended October 31,
2019, we continued to operate the Palangana Mine at a reduced pace since implementing our strategic plan in September 2013
to align our operations to a weak uranium commodity market in a challenging post-Fukushima environment. This strategy has included
the deferral of major pre-extraction expenditures and remaining in a state of operational readiness in anticipation of a recovery
in uranium prices. Our ability to continue generating revenue from the Palangana Mine is subject to a number of factors which
include, but are not limited to: (i) a significant, prolonged decrease in the market price of uranium; (ii) difficulty
in marketing and/or selling uranium concentrates; (iii) significantly higher than expected capital costs to construct the
mine and/or processing plant; (iv) significantly higher than expected extraction costs; (v) significantly lower than
expected uranium extraction; (vi) significant delays, reductions or stoppages of uranium extraction activities; and (vii) the
introduction of significantly more stringent regulatory laws and regulations. Furthermore, continued mining activities at the Palangana
Mine will eventually deplete the Palangana Mine or cause such activities to become uneconomical, and if we are unable to directly
acquire or develop existing uranium projects, such as our Burke Hollow, Goliad, Reno Creek and North Reno Creek Projects, into
additional uranium mines from which we can commence uranium extraction, it will negatively impact our ability to generate revenues.
Any one or more of these occurrences may adversely affect our financial condition and operating results.
Exploration and pre-extraction programs
and mining activities are inherently subject to numerous significant risks and uncertainties, and actual results may differ significantly
from expectations or anticipated amounts. Furthermore, exploration programs conducted on our projects may not result in the establishment
of ore bodies that contain commercially recoverable uranium.
Exploration and pre-extraction programs
and mining activities are inherently subject to numerous significant risks and uncertainties, with many beyond our control and
including, but not limited to: (i) unanticipated ground and water conditions and adverse claims to water rights; (ii) unusual
or unexpected geological formations; (iii) metallurgical and other processing problems; (iv) the occurrence of unusual
weather or operating conditions and other force majeure events; (v) lower than expected ore grades; (vi) industrial accidents;
(vii) delays in the receipt of or failure to receive necessary government permits; (viii) delays in transportation; (ix) availability
of contractors and labor; (x) government permit restrictions and regulation restrictions; (xi) unavailability of materials
and equipment; and (xii) the failure of equipment or processes to operate in accordance with specifications or expectations.
These risks and uncertainties could result in: (i) delays, reductions or stoppages in our mining activities; (ii) increased
capital and/or extraction costs; (iii) damage to, or destruction of, our mineral projects, extraction facilities or other
properties; (iv) personal injuries; (v) environmental damage; (vi) monetary losses; and (vii) legal claims.
Success in mineral exploration is dependent
on many factors, including, without limitation, the experience and capabilities of a company’s management, the availability
of geological expertise and the availability of sufficient funds to conduct the exploration program. Even if an exploration program
is successful and commercially recoverable material is established, it may take a number of years from the initial phases of drilling
and identification of the mineralization until extraction is possible, during which time the economic feasibility of extraction
may change such that the material ceases to be economically recoverable. Exploration is frequently non-productive due, for example,
to poor exploration results or the inability to establish ore bodies that contain commercially recoverable material, in which case
the project may be abandoned and written-off. Furthermore, we will not be able to benefit from our exploration efforts and recover
the expenditures that we incur on our exploration programs if we do not establish ore bodies that contain commercially recoverable
material and develop these projects into profitable mining activities, and there is no assurance that we will be successful in
doing so for any of our projects.
Whether an ore body contains commercially
recoverable material depends on many factors including, without limitation: (i) the particular attributes, including material
changes to those attributes, of the ore body such as size, grade, recovery rates and proximity to infrastructure; (ii) the
market price of uranium, which may be volatile; and (iii) government regulations and regulatory requirements including, without
limitation, those relating to environmental protection, permitting and land use, taxes, land tenure and transportation.
We have not established proven or
probable reserves through the completion of a “final” or “bankable” feasibility study for any of our projects,
including the Palangana Mine. Furthermore, we have no plans to establish proven or probable reserves for any of our uranium projects
for which we plan on utilizing ISR mining, such as the Palangana Mine. Since we commenced extraction of mineralized materials from
the Palangana Mine without having established proven or probable reserves, it may result in our mining activities at the Palangana
Mine, and at any future projects for which proven or probable reserves are not established, being inherently riskier than other
mining activities for which proven or probable reserves have been established.
We have established the existence of mineralized
materials for certain projects, including the Palangana Mine. We have not established proven or probable reserves, as defined by
the SEC under Industry Guide 7, through the completion of a “final” or “bankable” feasibility study for
any of our projects, including the Palangana Mine. Furthermore, we have no plans to establish proven or probable reserves for any
of our projects for which we plan on utilizing ISR mining, such as the Palangana Mine. Since we commenced uranium extraction at
the Palangana Mine without having established proven or probable reserves, there may be greater inherent uncertainty as to whether
or not any mineralized material can be economically extracted as originally planned and anticipated. Any mineralized materials
established or extracted from the Palangana Mine should not in any way be associated with having established or produced from proven
or probable reserves.
Since we are in the Exploration Stage,
pre-production expenditures including those related to pre-extraction activities are expensed as incurred, the effects of which
may result in our consolidated financial statements not being directly comparable to the financial statements of companies in the
Production Stage.
Despite the fact that we commenced uranium
extraction at the Palangana Mine in November 2010, we remain in the Exploration Stage as defined under Industry Guide 7, and
will continue to remain in the Exploration Stage until such time proven or probable reserves have been established, which may never
occur. We prepare our consolidated financial statements in accordance with U.S. GAAP under which acquisition costs of mineral rights
are initially capitalized as incurred while pre-production expenditures are expensed as incurred until such time we exit the Exploration
Stage. Expenditures relating to exploration activities are expensed as incurred and expenditures relating to pre-extraction
activities are expensed as incurred until such time proven or probable reserves are established for that uranium project, after
which subsequent expenditures relating to mine development activities for that particular project are capitalized as incurred.
We have neither established nor have any
plans to establish proven or probable reserves for our uranium projects for which we plan on utilizing ISR mining, such as the
Palangana Mine. Companies in the Production Stage, as defined by the SEC under Industry Guide 7, having established proven and
probable reserves and exited the Exploration Stage, typically capitalize expenditures relating to ongoing development activities,
with corresponding depletion calculated over proven and probable reserves using the units-of-production method and allocated to
future reporting periods to inventory and, as that inventory is sold, to cost of goods sold. As we are in the Exploration Stage,
it has resulted in us reporting larger losses than if we had been in the Production Stage due to the expensing, instead of capitalization,
of expenditures relating to ongoing mill and mine pre-extraction activities. Additionally, there would be no corresponding amortization
allocated to our future reporting periods since those costs would have been expensed previously, resulting in both lower inventory
costs and cost of goods sold and results of operations with higher gross profits and lower losses than if we had been in the Production
Stage. Any capitalized costs, such as acquisition costs of mineral rights, are depleted over the estimated extraction life using
the straight-line method. As a result, our consolidated financial statements may not be directly comparable to the financial statements
of companies in the Production Stage.
Estimated costs of future reclamation
obligations may be significantly exceeded by actual costs incurred in the future. Furthermore, only a portion of the financial
assurance required for the future reclamation obligations has been funded.
We are responsible for certain remediation
and decommissioning activities in the future primarily for our Hobson Processing Facility, Palangana Mine, Reno Creek Project and
Alto Paraná Project and have recorded a liability of $3.6 million on our balance sheet at October 31, 2019, to recognize
the present value of the estimated costs of such reclamation obligations. Should the actual costs to fulfill these future
reclamation obligations materially exceed these estimated costs, it may have an adverse effect on our financial condition and operating
results, including not having the financial resources required to fulfill such obligations when required to do so.
During Fiscal 2015, we secured $5.6 million
of surety bonds as an alternate source of financial assurance for the estimated costs of the reclamation obligations of our Hobson
Processing Facility and Palangana Mine, of which we have $1.7 million funded and held as restricted cash for collateral purposes
as required by the surety. We may be required at any time to fund the remaining $3.9 million or any portion thereof for a number
of reasons including, but not limited to, the following: (i) the terms of the surety bonds are amended, such as an increase
in collateral requirements; (ii) we are in default with the terms of the surety bonds; (iii) the surety bonds are no
longer acceptable as an alternate source of financial assurance by the regulatory authorities; or (iv) the surety encounters
financial difficulties. Should any one or more of these events occur in the future, we may not have the financial resources to
fund the remaining amount or any portion thereof when required to do so.
We do not insure against all of the
risks we face in our operations.
In general, where coverage is available
and not prohibitively expensive relative to the perceived risk, we will maintain insurance against such risk, subject to exclusions
and limitations. We currently maintain insurance against certain risks including securities and general commercial liability claims
and certain physical assets used in our operations, subject to exclusions and limitations, however, we do not maintain insurance
to cover all of the potential risks and hazards associated with our operations. We may be subject to liability for environmental,
pollution or other hazards associated with our exploration, pre-extraction and extraction activities, which we may not be insured
against, which may exceed the limits of our insurance coverage or which we may elect not to insure against because of high premiums
or other reasons. Furthermore, we cannot provide assurance that any insurance coverage we currently have will continue to be available
at reasonable premiums or that such insurance will adequately cover any resulting liability.
Acquisitions that we may make from
time to time could have an adverse impact on us.
From time to time, we examine opportunities
to acquire additional mining assets and businesses. Any acquisition that we may choose to complete may be of a significant size,
may change the scale of our business and operations, and may expose us to new geographic, political, operating, financial and geological
risks. Our success in our acquisition activities depends on our ability to identify suitable acquisition candidates, negotiate
acceptable terms for any such acquisition, and integrate the acquired operations successfully with those of our Company. Any acquisitions
would be accompanied by risks which could have a material adverse effect on our business. For example: (i) there may be a
significant change in commodity prices after we have committed to complete the transaction and established the purchase price or
exchange ratio; (ii) a material ore body may prove to be below expectations; (iii) we may have difficulty integrating
and assimilating the operations and personnel of any acquired companies, realizing anticipated synergies and maximizing the financial
and strategic position of the combined enterprise, and maintaining uniform standards, policies and controls across the organization;
(iv) the integration of the acquired business or assets may disrupt our ongoing business and our relationships with employees,
customers, suppliers and contractors; and (v) the acquired business or assets may have unknown liabilities which may be significant.
In the event that we choose to raise debt capital to finance any such acquisition, our leverage will be increased. If we choose
to use equity as consideration for such acquisition, existing shareholders may suffer dilution. Alternatively, we may choose to
finance any such acquisition with our existing resources. There can be no assurance that we would be successful in overcoming these
risks or any other problems encountered in connection with such acquisitions.
The uranium industry is subject to
numerous stringent laws, regulations and standards, including environmental protection laws and regulations. If any changes occur
that would make these laws, regulations and standards more stringent, it may require capital outlays in excess of those anticipated
or cause substantial delays, which would have a material adverse effect on our operations.
Uranium exploration and pre-extraction
programs and mining activities are subject to numerous stringent laws, regulations and standards at the federal, state and local
levels governing permitting, pre-extraction, extraction, exports, taxes, labor standards, occupational health, waste disposal,
protection and reclamation of the environment, protection of endangered and protected species, mine safety, hazardous substances
and other matters. Our compliance with these requirements requires significant financial and personnel resources.
The laws, regulations, policies or current
administrative practices of any government body, organization or regulatory agency in the United States or any other applicable
jurisdiction, may change or be applied or interpreted in a manner which may also have a material adverse effect on our operations.
The actions, policies or regulations, or changes thereto, of any government body or regulatory agency or special interest group,
may also have a material adverse effect on our operations.
Uranium exploration and pre-extraction
programs and mining activities are subject to stringent environmental protection laws and regulations at the federal, state, and
local levels. These laws and regulations include permitting and reclamation requirements, regulate emissions, water storage and
discharges and disposal of hazardous wastes. Uranium mining activities are also subject to laws and regulations which seek to maintain
health and safety standards by regulating the design and use of mining methods. Various permits from governmental and regulatory
bodies are required for mining to commence or continue, and no assurance can be provided that required permits will be received
in a timely manner.
Our compliance costs including the posting
of surety bonds associated with environmental protection laws and regulations and health and safety standards have been significant
to date and are expected to increase in scale and scope as we expand our operations in the future. Furthermore, environmental protection
laws and regulations may become more stringent in the future, and compliance with such changes may require capital outlays in excess
of those anticipated or cause substantial delays, which would have a material adverse effect on our operations.
To the best of our knowledge, our operations
are in compliance, in all material respects, with all applicable laws, regulations and standards. If we become subject to liability
for any violations, we may not be able or may elect not to insure against such risk due to high insurance premiums or other reasons.
Where coverage is available and not prohibitively expensive relative to the perceived risk, we will maintain insurance against
such risk, subject to exclusions and limitations. However, we cannot provide any assurance that such insurance will continue to
be available at reasonable premiums or that such insurance will be adequate to cover any resulting liability.
We may not be able to obtain, maintain
or amend rights, authorizations, licenses, permits or consents required for our operations.
Our exploration and mining activities are
dependent upon the grant of appropriate rights, authorizations, licences, permits and consents, as well as continuation and amendment
of these rights, authorizations, licences, permits and consents already granted, which may be granted for a defined period of time,
or may not be granted or may be withdrawn or made subject to limitations. There can be no assurance that all necessary rights,
authorizations, licences, permits and consents will be granted to us, or that authorizations, licences, permits and consents already
granted will not be withdrawn or made subject to limitations.
Major nuclear
incidents may have adverse effects on the nuclear and uranium industries.
The nuclear incident
that occurred in Japan in March 2011 had significant and adverse effects on both the nuclear and uranium industries. If another
nuclear incident were to occur, it may have further adverse effects for both industries. Public opinion of nuclear power as a source
of electrical generation may be adversely affected, which may cause governments of certain countries to further increase regulation
for the nuclear industry, reduce or abandon current reliance on nuclear power or reduce or abandon existing plans for nuclear power
expansion. Any one of these occurrences has the potential to reduce current and/or future demand for nuclear power, resulting in
lower demand for uranium and lower market prices for uranium, adversely affecting the operations and prospects of us. Furthermore,
the growth of the nuclear and uranium industries is dependent on continuing and growing public support of nuclear power as a viable
source of electrical generation.
The marketability of uranium concentrates
will be affected by numerous factors beyond our control which may result in our inability to receive an adequate return on our
invested capital.
The marketability of uranium concentrates
extracted by us will be affected by numerous factors beyond our control. These factors include macroeconomic factors, fluctuations
in the market price of uranium, governmental regulations, land tenure and use, regulations concerning the importing and exporting
of uranium and environmental protection regulations. The future effects of these factors cannot be accurately predicted, but any
one or a combination of these factors may result in our inability to receive an adequate return on our invested capital.
The titanium industry is affected
by global economic factors, including risks associated with volatile economic conditions, and the market for many titanium products
is cyclical and volatile, and we may experience depressed market conditions for such products.
Titanium is used in many "quality
of life" products for which demand historically has been linked to global, regional and local GDP and discretionary spending,
which can be negatively impacted by regional and world events or economic conditions. Such events are likely to cause a decrease
in demand for products and, as a result, may have an adverse effect on our results of operations and financial condition. The timing
and extent of any changes to currently prevailing market conditions is uncertain, and supply and demand may be unbalanced at any
time. Uncertain economic conditions and market instability make it particularly difficult for us to forecast demand trends. As
a consequence, we may not be able to accurately predict future economic conditions or the effect of such conditions on our financial
condition or results of operations. We can give no assurances as to the timing, extent or duration of the current or future economic
cycles impacting the industries in which we operate.
Historically, the market for large volume
titanium applications, including coatings, paper and plastics, has experienced alternating periods of tight supply, causing prices
and margins to increase, followed by periods of lower capacity utilization resulting in declining prices and margins. The volatility
this market experiences occurs as a result of significant changes in the demand for products as a consequence of global economic
activity and changes in customers’ requirements. The supply-demand balance is also impacted by capacity additions or reductions
that result in changes of utilization rates. In addition, titanium margins are impacted by significant changes in major input
costs such as energy and feedstock. Demand for titanium depends in part on the housing and construction industries. These industries
are cyclical in nature and have historically been impacted by downturns in the economy. In addition, pricing may affect customer
inventory levels as customers may from time to time accelerate purchases of titanium in advance of anticipated price increases
or defer purchases of titanium in advance of anticipated price decreases. The cyclicality and volatility of the titanium industry
results in significant fluctuations in profits and cash flow from period to period and over the business cycle.
The uranium and titanium industries
are highly competitive and we may not be successful in acquiring additional projects.
The uranium industry is highly competitive,
and our competition includes larger, more established companies with longer operating histories that not only explore for and produce
uranium, but also market uranium and other products on a regional, national or worldwide basis. Due to their greater financial
and technical resources, we may not be able to acquire additional uranium projects in a competitive bidding process involving such
companies. Additionally, these larger companies have greater resources to continue with their operations during periods of depressed
market conditions.
The titanium industry is concentrated and
highly competitive, and we may not be able to compete effectively with our competitors that have greater financial resources or
those that are vertically integrated, which could have a material adverse effect on our business, results of operations and financial
condition.
The global titanium market is highly competitive,
with the top six producers accounting for approximately 60% of the world's production capacity. Competition is based on a number
of factors, such as price, product quality and service. Competition is based on a number of factors, such as price, product quality
and service. Among our competitors are companies that are vertically-integrated (those that have their own raw material resources).
Changes in the competitive landscape could make it difficult for us to retain our competitive position in various products and
markets throughout the world. Our competitors with their own raw material resources may have a competitive advantage during periods
of higher raw material prices. In addition, some of the companies with whom we compete may be able to produce products more economically
than we can. Furthermore, some of our competitors have greater financial resources, which may enable them to invest significant
capital into their businesses, including expenditures for research and development.
We hold
mineral rights in foreign jurisdictions which could be subject to additional risks due to political, taxation, economic and cultural
factors.
We hold certain mineral rights located
in the Republic of Paraguay through Piedra Rica Mining S.A., Transandes Paraguay S.A., Trier S.A. and Metalicos Y No Metalicos
S.R.L., which are incorporated in Paraguay. Operations in foreign jurisdictions outside of the United States and Canada, especially
in developing countries, may be subject to additional risks as they may have different political, regulatory, taxation, economic
and cultural environments that may adversely affect the value or continued viability of our rights. These additional risks include,
but are not limited to: (i) changes in governments or senior government officials; (ii) changes to existing laws or policies
on foreign investments, environmental protection, mining and ownership of mineral interests; (iii) renegotiation, cancellation,
expropriation and nationalization of existing permits or contracts; (iv) foreign currency controls and fluctuations; and (v) civil
disturbances, terrorism and war.
In the event of a dispute arising at our
foreign operations in Paraguay, we may be subject to the exclusive jurisdiction of foreign courts or may not be successful in
subjecting foreign persons to the jurisdiction of the courts in the United States or Canada. We may also be hindered or prevented
from enforcing our rights with respect to a government entity or instrumentality because of the doctrine of sovereign immunity.
Any adverse or arbitrary decision of a foreign court may have a material and adverse impact on our business, prospects, financial
condition and results of operations.
The title to our mineral property
interests may be challenged.
Although we have taken reasonable measures
to ensure proper title to our interests in mineral properties and other assets, there is no guarantee that the title to any of
such interests will not be challenged. No assurance can be given that we will be able to secure the grant or the renewal of existing
mineral rights and tenures on terms satisfactory to us, or that governments in the jurisdictions in which we operate will not revoke
or significantly alter such rights or tenures or that such rights or tenures will not be challenged or impugned by third parties,
including local governments, aboriginal peoples or other claimants. The Company has had communications and filings with the MOPC,
the mining regulator in Paraguay (the “MOPC”), whereby the MOPC is taking the position that certain concessions forming
part of the Company’s Yuty 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 in Paraguay to reverse the MOPC’s position in order to protect the Company’s continuing rights
in those concessions. Our mineral properties may be subject to prior unregistered agreements, transfers or claims, and title may
be affected by, among other things, undetected defects. A successful challenge to the precise area and location of our claims could
result in us being unable to operate on our properties as permitted or being unable to enforce our rights with respect to our properties.
Due to the nature of our business,
we may be subject to legal proceedings which may divert management’s time and attention from our business and result in substantial
damage awards.
Due to the nature of our business, we may
be subject to numerous regulatory investigations, securities claims, civil claims, lawsuits and other proceedings in the ordinary
course of our business including those described under Item 1. Legal Proceedings in our Form 10-K Annual Report for Fiscal
2019. The outcome of these lawsuits is uncertain and subject to inherent uncertainties, and the actual costs to be incurred
will depend upon many unknown factors. We may be forced to expend significant resources in the defense of these suits, and we may
not prevail. Defending against these and other lawsuits in the future may not only require us to incur significant legal fees and
expenses, but may become time-consuming for us and detract from our ability to fully focus our internal resources on our business
activities. The results of any legal proceeding cannot be predicted with certainty due to the uncertainty inherent in litigation,
the difficulty of predicting decisions of regulators, judges and juries and the possibility that decisions may be reversed on appeal.
There can be no assurances that these matters will not have a material adverse effect on our business, financial position or operating
results.
We depend on certain key personnel,
and our success will depend on our continued ability to retain and attract such qualified personnel.
Our success is dependent on the efforts,
abilities and continued service of certain senior officers and key employees and consultants. A number of our key employees and
consultants have significant experience in the uranium industry. A loss of service from any one of these individuals may adversely
affect our operations, and we may have difficulty or may not be able to locate and hire a suitable replacement.
Certain directors and officers may
be subject to conflicts of interest.
The majority of our directors and officers
are involved in other business ventures including similar capacities with other private or publicly-traded companies. Such individuals
may have significant responsibilities to these other business ventures, including consulting relationships, which may require significant
amounts of their available time. Conflicts of interest may include decisions on how much time to devote to our business affairs
and what business opportunities should be presented to us. Our Code of Business Conduct for Directors, Officers and Employees provides
for guidance on conflicts of interest.
The laws of the State of Nevada
and our Articles of Incorporation may protect our directors and officers from certain types of lawsuits.
The laws of the State of Nevada provide
that our directors and officers will not be liable to our Company or to our stockholders for monetary damages for all but certain
types of conduct as directors and officers. Our Bylaws provide for broad indemnification powers to all persons against all damages
incurred in connection with our business to the fullest extent provided or allowed by law. These indemnification provisions may
require us to use our limited assets to defend our directors and officers against claims, and may have the effect of preventing
stockholders from recovering damages against our directors and officers caused by their negligence, poor judgment or other circumstances.
Several of our directors and officers
are residents outside of the United States, and it may be difficult for stockholders to enforce within the United States any judgments
obtained against such directors or officers.
Several of our directors and officers are
nationals and/or residents of countries other than the United States, and all or a substantial portion of such persons’ assets
are located outside of the United States. As a result, it may be difficult for investors to effect service of process on such directors
and officers, or enforce within the United States any judgments obtained against such directors and officers, including judgments
predicated upon the civil liability provisions of the securities laws of the United States or any state thereof. Consequently,
stockholders may be effectively prevented from pursuing remedies against such directors and officers under United States federal
securities laws. In addition, stockholders may not be able to commence an action in a Canadian court predicated upon the civil
liability provisions under United States federal securities laws. The foregoing risks also apply to those experts identified in
this document that are not residents of the United States.
Disclosure controls and procedures
and internal control over financial reporting, no matter how well designed and operated, are designed to obtain reasonable, and
not absolute, assurance as to its reliability and effectiveness.
Management’s evaluation on the effectiveness
of disclosure controls and procedures is designed to ensure that information required for disclosure in our public filings is recorded,
processed, summarized and reported on a timely basis to our senior management, as appropriate, to allow timely decisions regarding
required disclosure.
Management’s report on internal control
over financial reporting is designed to provide reasonable assurance that transactions are properly authorized, assets are safeguarded
against unauthorized or improper use and transactions are properly recorded and reported. However, any system of controls, no matter
how well designed and operated, is based in part upon certain assumptions designed to obtain reasonable, and not absolute, assurance
as to its reliability and effectiveness. Any failure to maintain effective disclosure controls and procedures in the future may
result in our inability to continue meeting our reporting obligations in a timely manner, qualified audit opinions or restatements
of our financial reports, any one of which may affect the market price for our common stock and our ability to access the capital
markets.
Risks Related to Our Common Stock
Historically, the market price of
our common stock has been and may continue to fluctuate significantly.
On September 28, 2007, our common
stock commenced trading on the NYSE American (formerly known as the American Stock Exchange, the NYSE Amex Equities Exchange and
the NYSE MKT) and prior to that, traded on the OTC Bulletin Board.
The global markets have experienced significant
and increased volatility in the past and have been impacted by the effects of mass sub-prime mortgage defaults and liquidity problems
of the asset-backed commercial paper market, resulting in a number of large financial institutions requiring government bailouts
or filing for bankruptcy. The effects of these past events and any similar events in the future may continue to or further affect
the global markets, which may directly affect the market price of our common stock and our accessibility for additional financing.
Although this volatility may be unrelated to specific company performance, it can have an adverse effect on the market price of
our shares which, historically, has fluctuated significantly and may continue to do so in the future.
In addition to the volatility associated
with general economic trends and market conditions, the market price of our common stock could decline significantly due to the
impact of any one or more events, including, but not limited to, the following: (i) volatility in the uranium market; (ii) occurrence
of a major nuclear incident such as the events in Fukushima in March 2011; (iii) changes in the outlook for the nuclear
power and uranium industries; (iv) failure to meet market expectations on our exploration, pre-extraction or extraction activities,
including abandonment of key uranium projects; (v) sales of a large number of our shares held by certain stockholders including
institutions and insiders; (vi) downward revisions to previous estimates on us by analysts; (vii) removal from market
indices; (viii) legal claims brought forth against us; and (ix) introduction of technological innovations by competitors
or in competing technologies.
A prolonged decline in the market
price of our common stock could affect our ability to obtain additional financing which would adversely affect our operations.
Historically, we have relied on equity
financing and more recently, on debt financing, as primary sources of financing. A prolonged decline in the market price of our
common stock or a reduction in our accessibility to the global markets may result in our inability to secure additional financing
which would have an adverse effect on our operations.
Additional issuances of our common
stock may result in significant dilution to our existing shareholders and reduce the market value of their investment.
We are authorized to issue 750,000,000
shares of common stock of which 183,773,018 shares were issued and outstanding as of February 20, 2020. Future issuances for
financings, mergers and acquisitions, exercise of stock options and share purchase warrants and for other reasons may result in
significant dilution to and be issued at prices substantially below the price paid for our shares held by our existing stockholders.
Significant dilution would reduce the proportionate ownership and voting power held by our existing stockholders and may result
in a decrease in the market price of our shares.
We filed a Form S-3 shelf registration
statement under the United States Securities Act of 1933, as amended (the “Securities Act”), which was declared
effective on March 10, 2017 (the “2017 Shelf”), providing for the public offer and sale of certain securities
of our Company from time to time, at our discretion, of up to an aggregate offering amount of $100 million.
As at April 7, 2019, a total of $68.4
million of the 2017 Shelf was utilized through the registration of our shares of common stock underlying outstanding common share
purchase warrants from previous registered offerings with a remaining available balance of $31.6 million under the 2017 Shelf.
On April 8, 2019 we filed an additional Form S-3 shelf registration statement pursuant to Rule 462(b) of the
Securities Act, which became effective upon filing on April 8, 2019, providing for the public offer and sale of certain additional
securities of our Company representing an additional 20%, or $6.3 million, of the then remaining $31.6 million available under
the 2017 Shelf, which increased the remaining amount available under the 2017 Shelf to $37.9 million.
On April 9, 2019, we entered into
an At The Market Offering Agreement (the “Offering Agreement”) with H.C. Wainwright & Co., LLC (as the “Lead
Manager”) and the co-managers set forth on the signature page of the Offering Agreement (each, a “Co-Manager”
and, collectively, with the Lead Manager, the “Managers”); under which the Company may, from time to time, sell shares
of its common stock having an aggregate offering price of up to $37.9 million through the Managers (collectively, the “ATM”).
In connection with the ATM, on April 9, 2019, we filed a prospectus supplement to the 2017 Shelf providing for the public
offer and sale of the Company’s shares having an aggregate offering price of up to $37.9 million through one or more at-the-market
offerings pursuant to the ATM. As of the date hereof, no public offer or sale of the Company’s shares has been completed
under the ATM.
As at October 31, 2019, all $106.3
million under the 2017 Shelf was utilized through the registration of our shares of common stock and shares of common stock underlying
outstanding common share purchase warrants from previous registered offerings as well as our shares of common stock to be sold
under the ATM.
This Form S-3 shelf registration statement
(the “2020 Shelf”), which when declared effective by the SEC, will replace the 2017 Shelf and the 2017 Shelf will be
deemed terminated. When the 2020 Shelf is declared effective by the SEC, it will provide for the public offer and sale of certain
securities of the Company from time to time, at our discretion, up to an aggregate offering amount of $100 million.
We are subject to the Continued Listing
Criteria of the NYSE American and our failure to satisfy these criteria may result in delisting of our common stock.
Our common stock is currently listed on
the NYSE American. In order to maintain this listing, we must maintain certain share prices, financial and share distribution
targets, including maintaining a minimum amount of shareholders’ equity and a minimum number of public shareholders.
In addition to these objective standards, the NYSE American may delist the securities of any issuer: (i) if, in its opinion,
the issuer’s financial condition and/or operating results appear unsatisfactory; (ii) if it appears that the extent
of public distribution or the aggregate market value of the security has become so reduced as to make continued listing on the
NYSE American inadvisable; (iii) if the issuer sells or disposes of principal operating assets or ceases to be an operating
company; (iv) if an issuer fails to comply with the NYSE American’s listing requirements; (v) if an issuer’s
common stock sells at what the NYSE American considers a “low selling price” and the issuer fails to correct this via
a reverse split of shares after notification by the NYSE American; or (vi) if any other event occurs or any condition exists
which makes continued listing on the NYSE American, in its opinion, inadvisable.
If the NYSE American delists our common
stock, investors may face material adverse consequences, including, but not limited to, a lack of trading market for our securities,
reduced liquidity, decreased analyst coverage of our securities and an inability for us to obtain additional financing to fund
our operations.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This Prospectus, including the documents
that are and will be incorporated by reference into this Prospectus, include statements and information about our strategy, objectives,
plans and expectations for the future that are not statements or information of historical fact. These statements and information
are considered to be forward-looking statements, or forward-looking information, within the meaning of and under the protection
provided by the safe harbor provision for forward-looking statements as contained in the Private Securities Litigation Reform
Act of 1995 and similar Canadian securities laws.
Forward-looking statements, and any estimates
and assumptions upon which they are based, are made in good faith and reflect our views and expectations for the future as of the
date of such statements, which can change significantly. Furthermore, forward-looking statements are subject to known and unknown
risks and uncertainties which may cause actual results, performance, achievements or events to be materially different from any
future results, performance, achievements or events implied, suggested or expressed by such forward-looking statements. Accordingly,
forward-looking statements in this Prospectus or in any documents incorporate by reference into this Prospectus should not be unduly
relied upon.
Forward-looking statements may be based
on a number of material estimates and assumptions, of which any one or more may prove to be incorrect. Forward-looking statements
may be identifiable by terminology concerning the future, such as “anticipate”, “believe”, “continue”,
“could”, “estimate”, “expect”, “forecast”, “intend”, “goal”,
“likely”, “may”, “might”, “outlook”, “plan”, “predict”,
“potential”, “project”, “should”, “schedule”, “strategy”, “target”,
“will” or “would”, and similar expressions or variations thereof including the negative use of such terminology.
Examples in this Prospectus or in any documents incorporated by reference include, but are not limited to, such forward-looking
statements reflecting or pertaining to:
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our overall strategy, objectives, plans and expectations for Fiscal 2019 and beyond;
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our expectations for worldwide nuclear power generation and future uranium supply and demand, including
long-term market prices for U3O8;
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our belief and expectations of ISR mining for our uranium projects, where applicable;
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our estimation of mineralized materials, which are based on certain estimates and assumptions,
and the economics of future production for our uranium projects including the Palangana Mine;
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our plans and expectations including anticipated expenditures relating to exploration, pre-extraction,
extraction and reclamation activities for our uranium projects including the Palangana Mine;
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our ability to obtain, maintain and amend, within a reasonable period of time, required rights,
permits and licenses from landowners, governments and regulatory authorities;
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our ability to obtain adequate additional financing including access to the equity and credit markets;
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our ability to remain in compliance with the terms of our indebtedness; and
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our belief and expectations including the possible impact of any legal proceedings or regulatory
actions against the Company.
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Forward-looking statements, and any estimates
and assumptions upon which they are based, are made as of the date of this Prospectus or the date of any documents incorporated
by reference into this Prospectus, as applicable, and we do not intend or undertake to revise, update or supplement any forward-looking
statements to reflect actual results, future events or changes in estimates and assumptions or other factors affecting such forward-looking
statements, except as required by applicable securities laws. Should one or more forward-looking statements be revised, updated
or supplemented, no inference should be made that we will revise, update or supplement any other forward-looking statements.
Forward-looking statements are subject
to known and unknown risks and uncertainties. As discussed in more detail under “Risk Factors” in this Prospectus,
we have identified a number of material risks and uncertainties which reflect our outlook and conditions known to us as of the
date of this Prospectus and including, but not limited to, the following:
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our limited financial and operating history;
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our need for additional financing;
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our ability to service our indebtedness;
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our limited uranium extraction and sales history;
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our operations are inherently subject to numerous significant risks and uncertainties, many beyond
our control;
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our exploration activities on our mineral properties may not result in commercially recoverable
quantities of uranium;
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limits to our insurance coverage;
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the level of government regulation, including environmental
regulation;
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changes in governmental regulation and administrative
practices;
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the marketability of uranium concentrates;
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the competitive environment in which we operate;
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our dependence on key personnel; and
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conflicts of interest of our directors and officers.
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Any one of the foregoing material risks
and uncertainties has the potential to cause actual results, performance, achievements or events to be materially different from
any future results, performance, achievements or events implied, suggested or expressed by any forward-looking statements made
by us or by persons acting on our behalf. Furthermore, there is no assurance that we will be successful in preventing the material
adverse effects that any one or more of these material risks and uncertainties may cause on our business, prospects, financial
condition and operating results, or that the foregoing list represents a complete list of the material risks and uncertainties
facing us. There may be additional risks and uncertainties of a material nature that, as of the date of this Prospectus, we are
unaware of or that we consider immaterial that may become material in the future, any one or more of which may result in a material
adverse effect on us.
Forward-looking statements made by us or
by persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary information.
RATIO OF EARNINGS TO FIXED CHARGES
We did not have any fixed charges during
the fiscal year ended July 31, 2012. Although we did incur fixed charges during the fiscal years ended July 31, 2013,
2014, 2015, 2016, 2017, 2018 and 2019 and for the three months ended October 31, 2019 in the form of interest expenses. However,
we did not have any net earnings from continued operations during these periods. Accordingly, we have no ratio of earnings to fixed
charges to illustrate for such periods.
USE OF PROCEEDS
Except as otherwise provided in the applicable
Prospectus Supplement, we intend to use the net proceeds from the sale of the Securities covered by this Prospectus for general
corporate purposes, which may include working capital, capital expenditures, acquisitions, exploration and development of existing
or acquired mineral properties or repayment of indebtedness.
DESCRIPTION OF COMMON SHARES
We are authorized to issue 750,000,000
common shares with a par value of $0.001. Upon liquidation, dissolution or winding up of our Company, the holders of our common
shares are entitled to share ratably in all net assets available for distribution to common stockholders after payment to creditors.
Our common stock is not convertible or redeemable and has no preemptive, subscription or conversion rights. Each outstanding share
of common stock is entitled to one vote on all matters submitted to a vote of stockholders. There are no cumulative voting rights.
The holders of outstanding shares of common
stock are entitled to receive dividends out of assets legally available therefore at such times and in such amounts as our board
of directors may from time to time determine. Holders of common stock will share equally on a per share basis in any dividend declared
by the board of directors. We have not paid any dividends on our common stock and do not anticipate paying any cash dividends on
such stock in the foreseeable future.
We may, from time to time, issue Common
Shares or other securities otherwise than through the Offering of Securities pursuant to this Prospectus.
DESCRIPTION OF DEBT SECURITIES
We may issue Debt Securities in one or
more series under an indenture (the “Indenture”), to be entered into between us and Transfer Online, Inc. as trustee,
or may be issued without the use of an indenture. If such Debt Securities are issued with the use of an Indenture, the Indenture
will be subject to and governed by the United States Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”).
A copy of the form of the Indenture will be filed with the SEC as an exhibit to the registration statement of which this Prospectus
forms a part and will be filed on SEDAR. The following description sets forth certain general terms and provisions of the Debt
Securities and is not intended to be complete. For a more complete description, prospective investors should refer to the Indenture
and/or the terms of the Debt Securities, as applicable. If Debt Securities are issued without the use of an Indenture, all the
terms of such Debt Security shall be included in the form of such Debt Security. If Debt Securities are issued, whether pursuant
to an Indenture or without an Indenture, we will describe in the applicable Prospectus Supplement the particular terms and provisions
of any series of Debt Securities and a description of how the general terms and provisions described below may apply to that series
of Debt Securities. Prospective investors should rely on information in the applicable Prospectus Supplement and not on the following
information to the extent that the information in such Prospectus Supplement is different from the following information. We will
file as exhibits to the registration statement of which this Prospectus is a part, or will incorporate by reference from a current
report on Form 8-K that we file with the SEC, any supplemental indenture describing the terms and conditions of Debt Securities
we are offering before the issuance of such Debt Securities.
We may issue debt securities and incur
additional indebtedness other than through the offering of Debt Securities pursuant to this Prospectus.
If we issue Debt Securities pursuant to
an Indenture, the following provisions shall apply unless otherwise specified in the applicable Prospectus Supplement with respect
to such issuance of Debt Securities:
General
The Indenture will not limit the aggregate
principal amount of Debt Securities that we may issue under the Indenture and will not limit the amount of other indebtedness that
we may incur. The Indenture will provide that we may issue Debt Securities from time to time in one or more series and may be denominated
and payable in U.S. dollars, Canadian dollars or any foreign currency. Unless otherwise indicated in the applicable Prospectus
Supplement, the Debt Securities will be unsecured obligations of our Company. The Indenture will also permit our Company to increase
the principal amount of any series of the Debt Securities previously issued and to issue that increased principal amount.
The applicable Prospectus Supplement for
any series of Debt Securities that we offer will describe the specific terms of the Debt Securities and may include, but is not
limited to, any of the following:
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the title of the Debt Securities;
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the aggregate principal amount of the Debt Securities;
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the percentage of principal amount at which the Debt Securities will be issued;
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whether payment on the Debt Securities will be senior or subordinated to our other liabilities
or obligations;
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whether payment of the Debt Securities will be guaranteed by any other person;
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the date or dates, or the methods by which such dates will be determined or extended, on which
we may issue the Debt Securities and the date or dates, or the methods by which such dates will be determined or extended, on which
we will pay the principal and any premium on the Debt Securities and the portion (if less than the principal amount) of Debt Securities
to be payable upon a declaration of acceleration of maturity;
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whether the Debt Securities will bear interest, the interest rate (whether fixed or variable) or
the method of determining the interest rate, the date from which interest will accrue, the dates on which we will pay interest
and the record dates for interest payments, or the methods by which such dates will be determined or extended;
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the place or places we will pay principal, premium, if any, and interest and the place or places
where Debt Securities can be presented for registration of transfer or exchange;
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whether and under what circumstances we will be required to pay any additional amounts for withholding
or deduction for taxes with respect to the Debt Securities, and whether and on what terms we will have the option to redeem the
Debt Securities rather than pay the additional amounts;
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whether we will be obligated to redeem or repurchase the Debt Securities pursuant to any sinking
or purchase fund or other provisions, or at the option of a holder and the terms and conditions of such redemption;
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whether we may redeem the Debt Securities prior to maturity and the terms and conditions of any
such redemption;
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the denominations in which we will issue any registered Debt Securities, if other than denominations
of $1,000 and any multiple of $l,000 and, if other than denominations of $5,000, the denominations in which any unregistered debt
security shall be issuable;
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whether we will make payments on the Debt Securities in a currency or currency unit other than
U.S. dollars or by delivery of our common shares or other property;
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whether payments on the Debt Securities will be payable with reference to any index, formula or
other method;
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whether we will issue the Debt Securities as global securities and, if so, the identity of the
depositary for the global securities;
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whether we will issue the Debt Securities as unregistered securities, registered securities or
both;
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any changes or additions to events of default or covenants whether or not such events of default
or covenants are consistent with the events of default or covenants in the Indenture;
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the applicability of, and any changes or additions to, the provisions for defeasance described
under “Defeasance” below;
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whether the holders of any series of Debt Securities have special rights if specified events occur;
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the terms, if any, for any conversion or exchange of the Debt Securities for any other securities;
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provisions as to modification, amendment or variation of any rights or terms attaching to the Debt
Securities; and
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any other terms, conditions, rights and preferences (or limitations on such rights and preferences)
including covenants and events of default which apply solely to a particular series of the Debt Securities being offered which
do not apply generally to other Debt Securities, or any covenants or events of default generally applicable to the Debt Securities
which do not apply to a particular series of the Debt Securities.
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Unless stated otherwise in the applicable
Prospectus Supplement, no holder of Debt Securities will have the right to require our Company to repurchase the Debt Securities
and there will be no increase in the interest rate if we become involved in a highly leveraged transaction or if our Company has
a change of control.
We may issue Debt Securities bearing no
interest or interest at a rate below the prevailing market rate at the time of issuance, and offer and sell the Debt Securities
at a discount below their stated principal amount. We may also sell any of the Debt Securities for a foreign currency or currency
unit, and payments on the Debt Securities may be payable in a foreign currency or currency unit. In any of these cases, we will
describe certain Canadian federal and U.S. federal income tax consequences and other special considerations in the applicable Prospectus
Supplement.
We may issue Debt Securities with terms
different from those of Debt Securities previously issued and, without the consent of the holders thereof, we may reopen a previous
issue of a series of Debt Securities and issue additional Debt Securities of such series (unless the reopening was restricted when
such series was created).
Ranking and Other Indebtedness
Unless otherwise indicated in an applicable
Prospectus Supplement, the Debt Securities will be unsecured obligations and will rank equally with all of our other unsecured
and other subordinated debt from time to time outstanding and equally with other Debt Securities issued under the Indenture. The
Indenture will provide that the Debt Securities will be subordinated to and junior in right of payment to all present and future
Senior Indebtedness. “Senior Indebtedness” will be defined in the Indenture as: (a) all indebtedness of our Company
in respect of borrowed money, other than: (i) indebtedness evidenced by the Debt Securities; and (ii) indebtedness which,
by the terms of the instrument creating or evidencing it, is expressed to rank in right of payment equally with or subordinate
to the indebtedness evidenced by the Debt Securities; (b) all obligations of our Company for the reimbursement of amounts
paid pursuant to any letter of credit, banker’s acceptance or similar credit transaction; and (c) all obligations of
the type referred to in paragraphs (a) through (b) above of other persons for the payment of which we are responsible
or liable as obligor, guarantor or otherwise. For greater certainty, “Senior Indebtedness” will include all indebtedness
of our Company for borrowed money which is outstanding as at the date of the Indenture.
Our Board of Directors may establish the
extent and manner, if any, to which payment on or in respect of a series of Debt Securities will be senior or will be subordinated
to the prior payment of our other liabilities and obligations, other than Senior Indebtedness, and whether the payment of principal,
premium, if any, and interest, if any, will be guaranteed by any other person and the nature and priority of any security.
Debt Securities in Global Form
The Depositary and Book-Entry
Unless otherwise specified in the applicable
Prospectus Supplement, a series of the Debt Securities may be issued in whole or in part in global form as a “global security”
and will be registered in the name of or issued in bearer form and be deposited with a depositary, or its nominee, each of which
will be identified in the applicable Prospectus Supplement relating to that series. Unless and until exchanged, in whole or in
part, for the Debt Securities in definitive registered form, a global security may not be transferred except as a whole by the
depositary for such global security to a nominee of the depositary, by a nominee of the depositary to the depositary or another
nominee of the depositary or by the depositary or any such nominee to a successor of the depositary or a nominee of the successor.
The specific terms of the depositary arrangement
with respect to any portion of a particular series of the Debt Securities to be represented by a global security will be described
in the applicable Prospectus Supplement relating to such series. We anticipate that the provisions described in this section will
apply to all depositary arrangements.
Upon the issuance of a global security,
the depositary therefor or its nominee will credit, on its book entry and registration system, the respective principal amounts
of the Debt Securities represented by the global security to the accounts of such persons, designated as “participants”,
having accounts with such depositary or its nominee. Such accounts shall be designated by the underwriters, dealers or agents participating
in the distribution of the Debt Securities or by our Company if such Debt Securities are offered and sold directly by our Company.
Ownership of beneficial interests in a global security will be limited to participants or persons that may hold beneficial interests
through participants. Ownership of beneficial interests in a global security will be shown on, and the transfer of that ownership
will be effected only through, records maintained by the depositary therefor or its nominee (with respect to interests of participants)
or by participants or persons that hold through participants (with respect to interests of persons other than participants). The
laws of some states in the United States may require that certain purchasers of securities take physical delivery of such securities
in definitive form.
So long as the depositary for a global
security or its nominee is the registered owner of the global security or holder of a global security in bearer form, such depositary
or such nominee, as the case may be, will be considered the sole owner or holder of the Debt Securities represented by the global
security for all purposes under the Indenture. Except as provided below, owners of beneficial interests in a global security will
not be entitled to have a series of the Debt Securities represented by the global security registered in their names, will not
receive or be entitled to receive physical delivery of such series of the Debt Securities in definitive form and will not be considered
the owners or holders thereof under the Indenture.
Any payments of principal, premium, if
any, and interest, if any, on global securities registered in the name of a depositary or securities registrar will be made to
the depositary or its nominee, as the case may be, as the registered owner of the global security representing such Debt Securities.
None of our Company, any trustee or any paying agent for the Debt Securities represented by the global securities will have any
responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests
of the global security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.
We expect that the depositary for a global
security or its nominee, upon receipt of any payment of principal, premium, if any, or interest, if any, will credit participants’
accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of the global
security as shown on the records of such depositary or its nominee. We also expect that payments by participants to owners of beneficial
interests in a global security held through such participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers registered in “street name”, and will be the
responsibility of such participants.
Discontinuance of Depositary’s Services
If a depositary for a global security representing
a particular series of the Debt Securities is at any time unwilling or unable to continue as depositary or, if at any time the
depositary for such series shall no longer be registered or in good standing under the Exchange Act, and a successor depositary
is not appointed by us within 90 days, we will issue such series of the Debt Securities in definitive form in exchange for a global
security representing such series of the Debt Securities. If an event of default under the Indenture has occurred and is continuing,
Debt Securities in definitive form will be printed and delivered upon written request by the holder to the trustee. In addition,
we may at any time and in our sole discretion determine not to have a series of the Debt Securities represented by a global security
and, in such event, will issue a series of the Debt Securities in definitive form in exchange for all of the global securities
representing that series of Debt Securities.
Debt Securities in Definitive Form
A series of the Debt Securities may be
issued in definitive form, solely as registered securities, solely as unregistered securities or as both registered securities
and unregistered securities. Registered securities will be issuable in denominations of $1,000 and integral multiples of $1,000
and unregistered securities will be issuable in denominations of $5,000 and integral multiples of $5,000 or, in each case, in such
other denominations as may be set out in the terms of the Debt Securities of any particular series. Unless otherwise indicated
in the applicable Prospectus Supplement, unregistered securities will have interest coupons attached.
Unless otherwise indicated in the applicable
Prospectus Supplement, payment of principal, premium, if any, and interest, if any, on the Debt Securities (other than global securities)
will be made at the office or agency designated by our Company, or at our option we can pay principal, interest, if any, and premium,
if any, by cheque mailed or delivered to the address of the person entitled at the address appearing in the security register of
the trustee or electronic funds wire or other transmission to an account of persons who meet certain thresholds set out in the
Indenture who are entitled to receive payments by wire transfer. Unless otherwise indicated in the applicable Prospectus Supplement,
payment of interest, if any, will be made to the persons in whose name the Debt Securities are registered at the close of business
on the day or days specified by us.
At the option of the holder of Debt Securities,
registered securities of any series will be exchangeable for other registered securities of the same series, of any authorized
denomination and of a like aggregate principal amount. If, but only if, provided in an applicable Prospectus Supplement, unregistered
securities (with all unmatured coupons, except as provided below, and all matured coupons in default) of any series may be exchanged
for registered securities of the same series, of any authorized denominations and of a like aggregate principal amount and tenor.
In such event, unregistered securities surrendered in a permitted exchange for registered securities between a regular record date
or a special record date and the relevant date for payment of interest shall be surrendered without the coupon relating to such
date for payment of interest, and interest will not be payable on such date for payment of interest in respect of the registered
security issued in exchange for such unregistered security, but will be payable only to the holder of such coupon when due in accordance
with the terms of the Indenture. Unless otherwise specified in an applicable Prospectus Supplement, unregistered securities will
not be issued in exchange for registered securities.
The applicable Prospectus Supplement may
indicate the places to register a transfer of the Debt Securities in definitive form. Service charges may be payable by the holder
for any registration of transfer or exchange of the Debt Securities in definitive form, and we may, in certain instances, require
a sum sufficient to cover any tax or other governmental charges payable in connection with these transactions.
We shall not be required to:
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issue or register the transfer of or exchange any series of the Debt Securities in definitive form
during a period beginning at the opening of 15 business days before any selection of securities of that series of the Debt Securities
to be redeemed and ending on the relevant date of notice of such redemption, as provided in the Indenture;
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register the transfer of or exchange any registered security in definitive form, or portion thereof,
called for redemption, except the unredeemed portion of any registered security being redeemed in part;
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exchange any unregistered security called for redemption except to the extent that such unregistered
security may be exchanged for a registered security of that series and like tenor; provided that such registered security will
be simultaneously surrendered for redemption with written instructions for payment consistent with the provisions of the Indenture;
or
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issue or register the transfer of or exchange any of the Debt Securities in definitive form which
have been surrendered for repayment at the option of the holder, except the portion, if any, of such Debt Securities not to be
so repaid.
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Merger, Amalgamation or Consolidation
The Indenture will provide that we may
not amalgamate or consolidate with, merge into or enter into any statutory arrangement with any other person or, directly or indirectly,
convey, transfer or lease all or substantially all of our properties and assets to another person, unless among other items:
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the resulting, surviving or transferee person is organized and existing under the laws of Canada,
or any province or territory thereof, the United States, any state thereof or the District of Columbia, or, if the amalgamation,
merger, consolidation, statutory arrangement or other transaction would not impair the rights of holders, any other country;
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the resulting, surviving or transferee person, if other than our Company, assumes all of our obligations
under the Debt Securities and the Indenture; and
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immediately after the transaction, no default or event of default under the Indenture shall have
happened and be continuing.
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When such a successor person assumes our
obligations in such circumstances, subject to certain exceptions, we shall be discharged from all obligations and covenants under
the Debt Securities and the Indenture.
Provision of Financial Information
We will file with the trustee, within 20
days after we file or furnish them with the SEC, copies of our annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the SEC may by rules and regulations prescribe) which we are required
to file or furnish with the SEC pursuant to Section 13 or 15(d) of the Exchange Act.
Notwithstanding that we may not remain
subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or otherwise report on an annual and
quarterly basis on forms provided for such annual and quarterly reporting pursuant to rules and regulations promulgated by
the SEC, we will continue to provide the trustee:
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within 20 days after the time periods required for the filing or furnishing of such forms by the
SEC, annual reports on Form 10-K or any successor form, quarterly reports on Form 10-Q or any successor form and current
reports of Form 8-K or any successor form.
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Events of Default
Unless otherwise specified in the applicable
Prospectus Supplement relating to a particular series of Debt Securities, the following is a summary of events which will, with
respect to any series of the Debt Securities, constitute an event of default under the Indenture with respect to the Debt Securities
of that series:
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we fail to pay principal of, or any premium on, or any Additional Amounts in respect of, any Debt
Security of that series when it is due and payable;
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we fail to pay interest (including Additional Amounts) payable on any Debt Security of that series
when it becomes due and payable, and such default continues for 30 days;
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we fail to make any required sinking fund or analogous payment for that series of Debt Securities;
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we fail to observe or perform any of our covenants or agreements in the Indenture that affect or
are applicable to the Debt Securities of that series for 90 days after written notice to us by the trustee or to us and the trustee
by holders of at least 25% in aggregate principal amount of the outstanding Debt Securities of that series;
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a default (as defined in any indenture or instrument under which we or one of our subsidiaries
has at the date of the Indenture or will thereafter have outstanding any indebtedness) has occurred and is continuing, or we or
any of our subsidiaries has failed to pay principal amounts with respect to such indebtedness at maturity and such event of default
or failure to pay has resulted in such indebtedness under such indenture or instrument being declared due, payable or otherwise
being accelerated, in either event so that an amount in excess of the greater of $15,000,000 and 2% of our shareholders’
equity will be or become due, payable and accelerated upon such declaration or prior to the date on which the same would otherwise
have become due, payable and accelerated (the “Accelerated Indebtedness”), and such acceleration will not be rescinded
or annulled, or such event of default or failure to pay under such indenture or instrument will not be remedied or cured, whether
by payment or otherwise, or waived by the holders of such Accelerated Indebtedness, then: (i) if the Accelerated Indebtedness
will be as a result of an event of default which is not related to the failure to pay principal or interest on the terms, at the
times, and on the conditions set out in any such indenture or instrument, it will not be considered an event of default for the
purposes of the indenture governing the Debt Securities until 30 days after such indebtedness has been accelerated; or (ii) if
the Accelerated Indebtedness will occur as a result of such failure to pay principal or interest or as a result of an event of
default which is related to the failure to pay principal or interest on the terms, at the times, and on the conditions set out
in any such indenture or instrument, then: (A) if such Accelerated Indebtedness is, by its terms, non-recourse to our Company
or our subsidiaries, it will be considered an event of default for purposes of the Indenture governing the Debt Securities; or
(B) if such Accelerated Indebtedness is recourse to our Company or our subsidiaries, any requirement in connection with such
failure to pay or event of default for the giving of notice or the lapse of time or the happening of any further condition, event
or act under such indenture or instrument in connection with such failure to pay or event of default will be applicable together
with an additional seven days before being considered an event of default for the purposes of the Indenture;
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certain events involving our bankruptcy, insolvency or reorganization; and
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any other event of default provided for in that series of Debt Securities.
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A default under one series of Debt Securities
will not necessarily be a default under another series. The trustee may withhold notice to the holders of the Debt Securities of
any default, except in the payment of principal or premium, if any, or interest, if any, if in good faith it considers it in the
interests of the holders to do so and so advises us in writing.
If an event of default (except for events
involving our bankruptcy, insolvency or reorganization) for any series of Debt Securities occurs and continues, the trustee or
the holders of at least 25% in aggregate principal amount of the Debt Securities of that series may require us to repay immediately:
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the entire principal and interest of the Debt Securities of the series; or
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if the Debt Securities are discounted securities, that portion of the principal as is described
in the applicable Prospectus Supplement.
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If an event of default relates to events
involving our bankruptcy, insolvency or reorganization, the principal of all Debt Securities will become immediately due and payable
without any action by the trustee or any holder.
Subject to certain conditions, the holders
of a majority of the aggregate principal amount of the Debt Securities of the affected series can rescind and annul an accelerated
payment requirement. If Debt Securities are discounted securities, the applicable Prospectus Supplement will contain provisions
relating to the acceleration of maturity of a portion of the principal amount of the discounted securities upon the occurrence
or continuance of an event of default.
Other than its duties in case of a default,
the trustee is not obligated to exercise any of the rights or powers that it will have under the Indenture at the request or direction
of any holders, unless the holders offer the trustee reasonable security or indemnity. If they provide this reasonable security
or indemnity, the holders of a majority in aggregate principal amount of any series of Debt Securities may, subject to certain
limitations, direct the time, method and place of conducting any proceeding for any remedy available to the trustee, or exercising
any trust or power conferred upon the trustee, for any series of Debt Securities.
We will be required to furnish to the trustee
a statement annually as to our compliance with all conditions and covenants under the Indenture and, if we are not in compliance,
we must specify any defaults. We will also be required to notify the trustee as soon as practicable upon becoming aware of any
event of default.
No holder of a Debt Security of any series
will have any right to institute any proceeding with respect to the Indenture, or for the appointment of a receiver or a trustee,
or for any other remedy, unless:
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the holder has previously given to the trustee written notice of a continuing event of default
with respect to the Debt Securities of the affected series;
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the holders of at least 25% in principal amount of the outstanding Debt Securities of the series
affected by an event of default have made a written request, and the holders have offered reasonable indemnity, to the trustee
to institute a proceeding as trustee; and
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the trustee has failed to institute a proceeding, and has not received from the holders of a majority
in aggregate principal amount of the outstanding Debt Securities of the series affected by an event of default a direction inconsistent
with the request, within 60 days after receipt of the holders’ notice, request and offer of indemnity.
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However, such above-mentioned limitations
do not apply to a suit instituted by the holder of a Debt Security for the enforcement of payment of the principal of or any premium,
if any, or interest on such Debt Security on or after the applicable due date specified in such Debt Security.
Defeasance
When we use the term “defeasance”,
it means discharge from our obligations with respect to any Debt Securities of or within a series under the Indenture. Unless otherwise
specified in the applicable Prospectus Supplement, if we deposit with the trustee cash, government securities or a combination
thereof sufficient to pay the principal, interest, if any, premium, if any, and any other sums due to the stated maturity date
or a redemption date of the Debt Securities of a series, then at our option:
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we will be discharged from the obligations with respect to the Debt Securities of that series;
or
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we will no longer be under any obligation to comply with certain restrictive covenants under the
Indenture and certain events of default will no longer apply to us.
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If this happens, the holders of the Debt
Securities of the affected series will not be entitled to the benefits of the Indenture except for registration of transfer and
exchange of Debt Securities and the replacement of lost, stolen, destroyed or mutilated Debt Securities. These holders may look
only to the deposited fund for payment on their Debt Securities.
To exercise the defeasance option, we must
deliver to the trustee:
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an opinion of counsel in the United States to the effect that the holders of the outstanding Debt
Securities of the affected series will not recognize gain or loss for U.S. federal income tax purposes as a result of a defeasance
and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been
the case if the defeasance had not occurred;
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an opinion of counsel in Canada or a ruling from the Canada Revenue Agency to the effect that the
holders of the outstanding Debt Securities of the affected series will not recognize income, gain or loss for Canadian federal,
provincial or territorial income or other tax purposes as a result of a defeasance and will be subject to Canadian federal, provincial
or territorial income tax and other tax on the same amounts, in the same manner and at the same times as would have been the case
had the defeasance not occurred; and
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a certificate of one of our officers and an opinion of counsel, each stating that all conditions
precedent provided for relating to defeasance have been complied with.
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If we are to be discharged from our obligations
with respect to the Debt Securities, and not just from our covenants, the U.S. opinion must be based upon a ruling from or published
by the United States Internal Revenue Service or a change in law to that effect.
In addition to the delivery of the opinions
described above, the following conditions must be met before we may exercise our defeasance option:
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no event of default or event that, with the passing of time or the giving of notice, or both, shall
constitute an event of default shall have occurred and be continuing for the Debt Securities of the affected series;
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we are not an “insolvent person” within the meaning of applicable bankruptcy and insolvency
legislation; and
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other customary conditions precedent are satisfied.
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Modification and Waiver
Modifications and amendments of the Indenture
may be made by our Company and the trustee pursuant to one or more Supplemental Indentures (a “Supplemental Indenture”)
with the consent of the holders of a majority in aggregate principal amount of the outstanding Debt Securities of each series affected
by the modification. However, without the consent of each holder affected, no such modification may:
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change the stated maturity of the principal of, premium, if any, or any installment of interest,
if any, on any Debt Security;
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reduce the principal, premium, if any, or rate of interest, if any, or change any obligation of
our Company to pay any Additional Amounts;
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reduce the amount of principal of a debt security payable upon acceleration of its maturity or
the amount provable in bankruptcy;
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change the place or currency of any payment;
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affect the holder’s right to require our Company to repurchase the Debt Securities at the
holder’s option;
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impair the right of the holders to institute a suit to enforce their rights to payment;
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adversely affect any conversion or exchange right related to a series of Debt Securities;
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reduce the percentage of Debt Securities required to modify the Indenture or to waive compliance
with certain provisions of the Indenture; or
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reduce the percentage in principal amount of outstanding Debt Securities necessary to take certain
actions.
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The holders of a majority in principal
amount of outstanding Debt Securities of any series may on behalf of the holders of all Debt Securities of that series waive, insofar
as only that series is concerned, past defaults under the Indenture and compliance by our Company with certain restrictive provisions
of the Indenture. However, these holders may not waive a default in any payment of principal, premium, if any, or interest on any
Debt Security or compliance with a provision that cannot be modified without the consent of each holder affected.
We may modify the Indenture pursuant to
a Supplemental Indenture without the consent of any holders to:
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evidence a successor under the Indenture;
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add covenants or surrender any right or power for the benefit of holders;
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provide for unregistered securities to become registered securities under the Indenture and make
other such changes to unregistered securities that in each case do not materially and adversely affect the interests of holders
of outstanding Debt Securities;
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establish the forms of the Debt Securities;
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appoint a successor trustee under the Indenture;
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add provisions to permit or facilitate the defeasance and discharge of the Debt Securities as long
as there is no material adverse effect on the holders;
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cure any ambiguity, correct or supplement any defective or inconsistent provision or make any other
provisions in each case that would not materially and adversely affect the interests of holders of outstanding Debt Securities,
if any;
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comply with any applicable laws of the United States and Canada in order to effect and maintain
the qualification of the Indenture under such laws to the extent they do not conflict with the applicable laws of the United States;
or
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change or eliminate any provisions of the Indenture where such change takes effect when there are
no Debt Securities outstanding under the Indenture.
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Governing Law
The Indenture and the Debt Securities will
be governed by and construed in accordance with the laws of the State of New York.
The Trustee
Any trustee under the Indenture or its
affiliates may provide other services to our Company in the ordinary course of their business. If the trustee or any affiliate
acquires any conflicting interest and a default occurs with respect to the Debt Securities, the trustee must eliminate the conflict
or resign.
Resignation and Removal of Trustee
The trustee may resign or be removed with
respect to one or more series of the Debt Securities and a successor trustee may be appointed to act with respect to such series.
Consent to Service
In connection with the Indenture, we will
irrevocably designate and appoint CT Corporation System, 111 8th Avenue, 13th Floor, New York, New York,
U.S.A., 10011, as our Company’s authorized agent upon which process may be served in any suit or proceeding arising out of
or relating to the Indenture or the Debt Securities that may be instituted in any U.S. federal or New York State court located
in The Borough of Manhattan, in the City of New York, or brought by the trustee (whether in its individual capacity or in its capacity
as trustee under the Indenture), and will irrevocably submit to the non-exclusive jurisdiction of such courts.
Enforceability of Judgments
Because all or substantially all of our
assets, as well as the assets of certain of the directors of our Company, are within the United States, any judgment obtained in
Canada against our Company or certain of our directors, including judgments with respect to the payment of principal on the Debt
Securities, may not be collectible within Canada.
We have been advised that there is doubt
as to the enforceability in the United States, by a court in original actions or actions to enforce judgments of Canadian courts,
of civil liabilities predicated solely upon Canadian federal or provincial securities laws.
DESCRIPTION OF WARRANTS
The following description, together with
the additional information we may include in any applicable Prospectus Supplements and free writing prospectuses, summarizes the
material terms and provisions of the Warrants that we may offer under this Prospectus, which may consist of Warrants to purchase
Common Shares or Debt Securities and may be issued in one or more series. Warrants may be offered independently or together with
Common Shares, Debt Securities or Subscription Receipts offered by any Prospectus Supplement, and may be attached to or separate
from those Securities. While the terms we have summarized below will apply generally to any Warrants that we may offer under this
Prospectus, we will describe the particular terms of any series of Warrants that we may offer in more detail in the applicable
Prospectus Supplement and any applicable free writing prospectus. The terms of any Warrants offered under a Prospectus Supplement
may differ from the terms described below.
General
We will evidence each series of Warrants
by Warrant certificates (“Warrant Certificates”) that we may issue under one or more warrant indentures (each, a “Warrant
Indenture”), which we may enter into with a warrant trustee (the “Warrant Trustee”) that we will name in the
relevant Prospectus Supplement. We may also choose to act as our own Warrant Trustee. We may also issue Warrants without the use
of a Warrant Indenture, and in such case, all the terms of the Warrants shall be included in the form of Warrant.
This summary of some of the provisions
of the Warrants is not complete. The statements made in this Prospectus relating to any Warrant Indenture and Warrants to be issued
under this Prospectus are summaries of certain anticipated provisions thereof and do not purport to be complete and are subject
to, and are qualified in their entirety by reference to, all provisions of the applicable Warrant Certificate and, if applicable,
Warrant Indenture. Prospective investors should refer to the Warrant Certificate and/or Warrant Indenture relating to the specific
Warrants being offered for the complete terms of the Warrants. We will file as exhibits to the registration statement of which
this Prospectus is a part, or will incorporate by reference from a current report on Form 8-K that we file with the SEC, any
Warrant Certificate and/or Warrant Indenture describing the terms and conditions of Warrants we are offering before the issuance
of such Warrants.
The applicable Prospectus Supplement relating
to any Warrants offered by our Company will describe the particular terms of those Warrants and include specific terms relating
to the offering.
Equity Warrants
The particular terms of each issue of equity
warrants (“Equity Warrants”) will be described in the applicable Prospectus Supplement. This description will include,
where applicable:
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the designation and aggregate number of Equity Warrants;
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the price at which the Equity Warrants will be offered;
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the currency or currencies in which the Equity Warrants will be offered;
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the date on which the right to exercise the Equity Warrants will commence and the date on which
the right will expire;
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the number of Common Shares that may be purchased upon exercise of each Equity Warrant and the
price at which and currency or currencies in which the Common Shares may be purchased upon exercise of each Equity Warrant;
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the designation and terms of any Securities with which the Equity Warrants will be offered, if
any, and the number of the Equity Warrants that will be offered with each Security;
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the date or dates, if any, on or after which the Equity Warrants and the other Securities with
which the Equity Warrants will be offered will be transferable separately;
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whether the Equity Warrants will be subject to redemption and, if so, the terms of such redemption
provisions;
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whether we will issue the Equity Warrants as global securities and, if so, the identity of the
depositary of the global securities;
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whether the Equity Warrants will be listed on any exchange;
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material United States and Canadian federal income tax consequences of owning the Equity Warrants;
and
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any other material terms or conditions of the Equity Warrants.
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Debt Warrants
The particular terms of each issue of debt
warrants (“Debt Warrants”) will be described in the related Prospectus Supplement. This description will include, where
applicable:
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the designation and aggregate number of Debt Warrants;
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the price at which the Debt Warrants will be offered;
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the currency or currencies in which the Debt Warrants will be offered;
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the date on which the right to exercise the Debt Warrants will commence and the date on which the
right will expire;
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the principal amount of Debt Securities that may be purchased upon exercise of each Debt Warrant
and the price at which and currency or currencies in which that principal amount of Debt Securities may be purchased upon exercise
of each Debt Warrant;
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the designation and terms of any Securities with which the Debt Warrants will be offered, if any,
and the number of the Debt Warrants that will be offered with each Security;
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the date or dates, if any, on or after which the Debt Warrants and the other Securities with which
the Debt Warrants will be offered will be transferable separately;
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the terms and provisions of the Debt Securities issuable upon the exercise of the Debt Warrants;
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the minimum or maximum amount of Debt Warrants that may be exercised at any one time;
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whether the Debt Warrants will be subject to redemption, and, if so, the terms of such redemption
provisions;
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whether we will issue the Debt Warrants as global securities and, if so, the identity of the depositary
of the global securities;
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whether the Debt Warrants will be listed on any exchange;
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material United States and Canadian federal income tax consequences of owning the Debt Warrants;
and
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any other material terms or conditions of the Debt Warrants.
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Rights of Holders Prior to Exercise
Prior to the exercise of their Warrants,
holders of Warrants will not have any of the rights of holders of the Common Shares or Debt Securities issuable upon exercise of
the Warrants.
Exercise of Warrants
Each Warrant will entitle the holder to
purchase the Securities that we specify in the applicable Prospectus Supplement at the exercise price that we describe therein.
Unless we otherwise specify in the applicable Prospectus Supplement, holders of the Warrants may exercise the Warrants at any time
up to the specified time on the expiration date that we set forth in the applicable Prospectus Supplement. After the close of business
on the expiration date, unexercised Warrants will become void.
Holders of the Warrants may exercise the
Warrants by delivering the Warrant Certificate representing the Warrants to be exercised together with specified information, and
paying the required amount to our Company or, if applicable, the Warrant Trustee, in immediately available funds, as provided in
the applicable Prospectus Supplement. We will set forth on the Warrant Certificate and in the applicable Prospectus Supplement
the information that the holder of the Warrant will be required to deliver to our Company or, if applicable, the Warrant Trustee.
Upon receipt of the required payment and
the Warrant Certificate properly completed and duly executed at our Company or, if applicable, the corporate trust office of the
Warrant Trustee or any other office indicated in the applicable Prospectus Supplement, we will issue and deliver the securities
purchasable upon such exercise. If fewer than all of the Warrants represented by the Warrant Certificate are exercised, then we
will issue a new Warrant Certificate for the remaining amount of Warrants. If we so indicate in the applicable Prospectus Supplement,
holders of the Warrants may surrender securities as all or part of the exercise price for Warrants.
Anti-Dilution
The Warrant Certificate and/or Warrant
Indenture will specify that upon the subdivision, consolidation, reclassification or other material change of the Common Shares
or Debt Securities or any other reorganization, amalgamation, merger or sale of all or substantially all of our assets, the Warrants
will thereafter evidence the right of the holder to receive the securities, property or cash deliverable in exchange for or on
the conversion of or in respect of the Common Shares or Debt Securities to which the holder of a Common Share or Debt Security
would have been entitled immediately after such event. Similarly, any distribution to all or substantially all of the holders of
Common Shares of rights, options, warrants, evidences of indebtedness or assets will result in an adjustment in the number of Common
Shares to be issued to holders of Equity Warrants.
Global Securities
We may issue Warrants in whole or in part
in the form of one or more global securities, which will be registered in the name of and be deposited with a depositary, or its
nominee, each of which will be identified in the applicable Prospectus Supplement. The global securities may be in temporary or
permanent form. The applicable Prospectus Supplement will describe the terms of any depositary arrangement and the rights and limitations
of owners of beneficial interests in any global security. The applicable Prospectus Supplement will describe the exchange, registration
and transfer rights relating to any global security.
Modifications
The Warrant Certificate and/or Warrant
Indenture will provide for modifications and alterations to the Warrants issued thereunder by way of a resolution of holders of
Warrants at a meeting of such holders or a consent in writing from such holders. The number of holders of Warrants required to
pass such a resolution or execute such a written consent will be specified in the Warrant Certificate and/or Warrant Indenture.
We may amend any Warrant Certificate and/or
Warrant Indenture and the Warrants, without the consent of the holders of the Warrants, to cure any ambiguity, to cure, correct
or supplement any defective or inconsistent provision, or in any other manner that will not materially and adversely affect the
interests of holders of outstanding Warrants.
DESCRIPTION OF SUBSCRIPTION RECEIPTS
We may issue Subscription Receipts, which
will entitle holders to receive upon satisfaction of certain release conditions and for no additional consideration, Common Shares,
Debt Securities, Warrants or any combination thereof. Subscription Receipts will be issued pursuant to one or more subscription
receipt agreements (each, a “Subscription Receipt Agreement”), each to be entered into between our Company and an escrow
agent (the “Escrow Agent”), which will establish the terms and conditions of the Subscription Receipts. Each Escrow
Agent will be a financial institution organized under the laws of the United States or a state thereof, or Canada or a province
thereof, and authorized to carry on business as an escrow agent. We will file as exhibits to the registration statement of which
this Prospectus is a part, or will incorporate by reference from a current report on Form 8-K that we file with the SEC, any
Subscription Receipt Agreement describing the terms and conditions of Subscription Receipts we are offering before the issuance
of such Subscription Receipts.
The following description sets forth certain
general terms and provisions of Subscription Receipts and is not intended to be complete. The statements made in this Prospectus
relating to any Subscription Receipt Agreement and Subscription Receipts to be issued thereunder are summaries of certain anticipated
provisions thereof and are subject to, and are qualified in their entirety by reference to, all provisions of the applicable Subscription
Receipt Agreement and the Prospectus Supplement describing such Subscription Receipt Agreement.
The Prospectus Supplement relating to any
Subscription Receipts we offer will describe the Subscription Receipts and include specific terms relating to their offering. All
such terms will comply with the requirements of NYSE American relating to Subscription Receipts. If underwriters or agents are
used in the sale of Subscription Receipts, one or more of such underwriters or agents may also be parties to the Subscription Receipt
Agreement governing the Subscription Receipts sold to or through such underwriters or agents.
General
The Prospectus Supplement and the Subscription
Receipt Agreement for any Subscription Receipts we offer will describe the specific terms of the Subscription Receipts and may
include, but are not limited to, any of the following:
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the designation and aggregate number of Subscription Receipts offered;
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the price at which the Subscription Receipts will be offered;
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the currency or currencies in which the Subscription Receipts will be offered;
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the designation, number and terms of the Common Shares, Debt Securities, Warrants or combination
thereof to be received by holders of Subscription Receipts upon satisfaction of the release conditions, and the procedures that
will result in the adjustment of those numbers;
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the conditions (the “Release Conditions”) that must be met in order for holders of
Subscription Receipts to receive for no additional consideration Common Shares, Debt Securities, Warrants or a combination thereof;
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the procedures for the issuance and delivery of Common Shares, Debt Securities, Warrants or a combination
thereof to holders of Subscription Receipts upon satisfaction of the Release Conditions;
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whether any payments will be made to holders of Subscription Receipts upon delivery of the Common
Shares, Debt Securities, Warrants or a combination thereof upon satisfaction of the Release Conditions (e.g., an amount
equal to dividends declared on Common Shares by our Company to holders of record during the period from the date of issuance of
the Subscription Receipts to the date of issuance of any Common Shares pursuant to the terms of the Subscription Receipt Agreement,
or an amount equal to interest payable by our Company in respect of Debt Securities during the period from the date of issuance
of the Subscription Receipts to the date of issuance of the Debt Securities pursuant to the terms of the Subscription Receipt Agreement);
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the terms and conditions under which the Escrow Agent will hold all or a portion of the gross proceeds
from the sale of Subscription Receipts, together with interest and income earned thereon (collectively, the “Escrowed Funds”),
pending satisfaction of the Release Conditions;
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the terms and conditions pursuant to which the Escrow Agent will hold Common Shares, Debt Securities,
Warrants or a combination thereof pending satisfaction of the Release Conditions;
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the terms and conditions under which the Escrow Agent will release all or a portion of the Escrowed
Funds to our Company upon satisfaction of the Release Conditions;
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if the Subscription Receipts are sold to or through underwriters or agents, the terms and conditions
under which the Escrow Agent will release a portion of the Escrowed Funds to such underwriters or agents in payment of all or a
portion of their fees or commission in connection with the sale of the Subscription Receipts;
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procedures for the refund by the Escrow Agent to holders of Subscription Receipts of all or a portion
of the subscription price for their Subscription Receipts, plus any pro rata entitlement to interest earned or income generated
on such amount, if the Release Conditions are not satisfied;
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any entitlement of our Company to purchase the Subscription Receipts in the open market by private
agreement or otherwise;
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whether we will issue the Subscription Receipts as global securities and, if so, the identity of
the depositary for the global securities;
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whether we will issue the Subscription Receipts as bearer securities, registered securities or
both;
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provisions as to modification, amendment or variation of the Subscription Receipt Agreement or
any rights or terms attaching to the Subscription Receipts;
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the identity of the Escrow Agent;
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whether the Subscription Receipts will be listed on any exchange;
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material United States and Canadian federal tax consequences of owning the Subscription Receipts;
and
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any other terms of the Subscription Receipts.
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In addition, the Prospectus Supplement
and the Subscription Receipt Agreement for any Subscription Receipts we offer will describe all contractual rights of rescission
that will be granted to initial purchasers of Subscription Receipts in the event this Prospectus, the Prospectus Supplement under
which Subscription Receipts are issued or any amendment hereto or thereto contains a misrepresentation, as discussed further under
the sub-paragraph entitled “Rescission” below.
The holders of Subscription Receipts
will not be shareholders of our Company. Holders of Subscription Receipts are entitled only to receive Common Shares, Debt Securities,
Warrants or a combination thereof on exchange of their Subscription Receipts, plus any cash payments provided for under the Subscription
Receipt Agreement, if the Release Conditions are satisfied. If the Release Conditions are not satisfied, the holders of Subscription
Receipts shall be entitled to a refund of all or a portion of the subscription price therefor and all or a portion of the pro
rata share of interest earned or income generated thereon, as provided in the Subscription Receipt Agreement.
Escrow
The Escrowed Funds will be held in escrow
by the Escrow Agent, and such Escrowed Funds will be released to our Company (and, if the Subscription Receipts are sold to or
through underwriters or agents, a portion of the Escrowed Funds may be released to such underwriters or agents in payment of all
or a portion of their fees in connection with the sale of the Subscription Receipts) at the time and under the terms specified
by the Subscription Receipt Agreement. If the Release Conditions are not satisfied, holders of Subscription Receipts will receive
a refund of all or a portion of the subscription price for their Subscription Receipts plus their pro rata entitlement to
interest earned or income generated on such amount, in accordance with the terms of the Subscription Receipt Agreement. Common
Shares, Debt Securities or Warrants may be held in escrow by the Escrow Agent and will be released to the holders of Subscription
Receipts following satisfaction of the Release Conditions at the time and under the terms specified in the Subscription Receipt
Agreement.
Anti-Dilution
The Subscription Receipt Agreement will
specify that upon the subdivision, consolidation, reclassification or other material change of the Common Shares, Debt Securities
or Warrants or any other reorganization, amalgamation, merger or sale of all or substantially all of our assets, the Subscription
Receipts will thereafter evidence the right of the holder to receive the securities, property or cash deliverable in exchange for
or on the conversion of or in respect of the Common Shares, Debt Securities or Warrants to which the holder of a Common Share,
Debt Security or Warrant would have been entitled immediately after such event. Similarly, any distribution to all or substantially
all of the holders of Common Shares of rights, options, warrants, evidences of indebtedness or assets will result in an adjustment
in the number of Common Shares to be issued to holders of Subscription Receipts whose Subscription Receipts entitle the holders
thereof to receive Common Shares. Alternatively, such securities, evidences of indebtedness or assets may, at the option of our
Company, be issued to the Escrow Agent and delivered to holders of Subscription Receipts on exercise thereof. The Subscription
Receipt Agreement will also provide that if other actions of our Company affect the Common Shares, Debt Securities or Warrants,
which, in the reasonable opinion of the directors of our Company, would materially affect the rights of the holders of Subscription
Receipts and/or the rights attached to the Subscription Receipts, the number of Common Shares, Debt Securities or Warrants which
are to be received pursuant to the Subscription Receipts shall be adjusted in such manner, if any, and at such time as our directors
may in their discretion reasonably determine to be equitable to the holders of Subscription Receipts in such circumstances.
Rescission
The Subscription Receipt Agreement will
also provide that any misrepresentation in this Prospectus, the Prospectus Supplement under which the Subscription Receipts are
offered, or any amendment thereto, will entitle each initial purchaser of Subscription Receipts to a contractual right of rescission
following the issuance of the Common Shares, Debt Securities or Warrants to such purchaser entitling such purchaser to receive
the amount paid for the Subscription Receipts upon surrender of the Common Shares, Debt Securities or Warrants, provided that such
remedy for rescission is exercised in the time stipulated in the Subscription Receipt Agreement. This right of rescission does
not extend to holders of Subscription Receipts who acquire such Subscription Receipts from an initial purchaser, on the open market
or otherwise, or to initial purchasers who acquire Subscription Receipts in the United States.
Global Securities
We may issue Subscription Receipts in whole
or in part in the form of one or more global securities, which will be registered in the name of and be deposited with a depositary,
or its nominee, each of which will be identified in the applicable Prospectus Supplement. The global securities may be in temporary
or permanent form. The applicable Prospectus Supplement will describe the terms of any depositary arrangement and the rights and
limitations of owners of beneficial interests in any global security. The applicable Prospectus Supplement also will describe the
exchange, registration and transfer rights relating to any global security.
Modifications
The Subscription Receipt Agreement will
provide for modifications and alterations to the Subscription Receipts issued thereunder by way of a resolution of holders of Subscription
Receipts at a meeting of such holders or a consent in writing from such holders. The number of holders of Subscriptions Receipts
required to pass such a resolution or execute such a written consent will be specified in the Subscription Receipt Agreement.
DESCRIPTION OF UNITS
The following description, together with
the additional information we may include in any applicable Prospectus Supplements, summarizes the material terms and provisions
of the Units that we may offer under this Prospectus. While the terms we have summarized below will apply generally to any Units
that we may offer under this Prospectus, we will describe the particular terms of any series of Units in more detail in the applicable
Prospectus Supplement. The terms of any Units offered under a Prospectus Supplement may differ from the terms described below.
We will file as exhibits to the registration
statement of which this Prospectus is a part, or will incorporate by reference from a current report on Form 8-K that we file
with the SEC, the form of unit agreement, if any (“Unit Agreement”), between our Company and a unit agent, if any (“Unit
Agent”), that describes the terms and conditions of the series of Units we are offering, and any supplemental agreements,
before the issuance of the related series of Units. We may also choose to act as our own Unit Agent. The following summaries of
material terms and provisions of the Units are subject to, and qualified in their entirety by reference to, all the provisions
of the Unit Agreement, if applicable, and any supplemental agreements applicable to a particular series of Units. We urge you to
read the applicable Prospectus Supplements related to the particular series of Units that we sell under this Prospectus, as well
as the complete Unit Agreement, if applicable, and any supplemental agreements that contain the terms of the Units.
General
We may issue units comprising one or more
of Common Shares, Debt Securities, Warrants and Subscription Receipts in any combination. Each Unit will be issued so that the
holder of the Unit is also the holder of each security included in the Unit. Thus, the holder of a Unit will have the rights and
obligations of a holder of each included security. The Unit Agreement, if applicable, under which a Unit is issued may provide
that the securities included in the Unit may not be held or transferred separately, at any time or at any time before a specified
date.
We will describe in the applicable Prospectus
Supplement the terms of the series of Units, including:
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the designation and terms of the Units and of the securities comprising the Units, including whether
and under what circumstances those securities may be held or transferred separately;
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if applicable, any provisions of the governing Unit Agreement that differ from those described
below; and
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any provisions for the issuance, payment, settlement, transfer or exchange of the Units or of the
securities comprising the Units.
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The provisions described in this section,
as well as those described under “Description of Common Shares,” “Description of Debt Securities,” “Description
of Warrants,” and “Description of Subscription Receipts” will apply to each Unit and to any Common Share, Debt
Security, Warrant or Subscription Receipt included in each Unit, respectively.
Issuance in Series
We may issue Units in such amounts and
in numerous distinct series as we determine.
Enforceability of Rights by Holders of Units
Each Unit Agent, if applicable, will act
solely as our agent under the applicable Unit Agreement, if any, and will not assume any obligation or relationship of agency or
trust with any holder of any Unit. A single bank or trust company may act as Unit Agent for more than one series of Units. A Unit
Agent will have no duty or responsibility in case of any default by our Company under the applicable Unit Agreement, if any, or
Unit, including any duty or responsibility to initiate any proceedings at law or otherwise, or to make any demand upon our Company.
Any holder of a Unit may, without the consent of the related Unit Agent, if applicable, or the holder of any other Unit, enforce
by appropriate legal action its rights as holder under any security included in the Unit.
Our Company, any Unit Agent, and any of
their agents may treat the registered holder of any Unit Certificate as an absolute owner of the Units evidenced by that certificate
for any purpose and as the person entitled to exercise the rights attaching to the Units so requested, despite any notice to the
contrary.
PLAN OF DISTRIBUTION
General
We may offer and sell the Securities, separately
or together: (i) to one or more underwriters or dealers; (ii) through one or more agents; or (iii) directly to one
or more other purchasers. The Securities offered pursuant to any Prospectus Supplement may be sold from time to time in one or
more transactions at: (i) a fixed price or prices, which may be changed from time to time; (ii) market prices prevailing
at the time of sale; (iii) prices related to such prevailing market prices; or (iv) other negotiated prices. We may only
offer and sell the Securities pursuant to a Prospectus Supplement during the period that this Prospectus, including any amendments
hereto, remains effective. The Prospectus Supplement for any of the Securities being offered thereby will set forth the terms of
the offering of such Securities, including the type of Security being offered, the name or names of any underwriters, dealers or
agents, the purchase price of such Securities, the proceeds to our Company from such sale, any underwriting commissions or discounts
and other items constituting underwriters’ compensation and any discounts or concessions allowed or re-allowed or paid to
dealers. Only underwriters so named in the Prospectus Supplement are deemed to be underwriters in connection with the Securities
offered thereby.
By Underwriters
If underwriters are used in the sale, the
Securities will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions,
including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. Unless
otherwise set forth in the Prospectus Supplement relating thereto, the obligations of underwriters to purchase the Securities will
be subject to certain conditions, but the underwriters will be obligated to purchase all of the Securities offered by the Prospectus
Supplement if any of such Securities are purchased. We may offer the Securities to the public through underwriting syndicates represented
by managing underwriters or by underwriters without a syndicate. We may agree to pay the underwriters a fee or commission for various
services relating to the offering of any Securities. Any such fee or commission will be paid out of the general corporate funds
of our Company. We may use underwriters with whom we have a material relationship. We will describe in the Prospectus Supplement,
naming the underwriter, the nature of any such relationship.
By Dealers
If dealers are used, and if so specified
in the applicable Prospectus Supplement, we will sell such Securities to the dealers as principals. The dealers may then resell
such Securities to the public at varying prices to be determined by such dealers at the time of resale. Any public offering price
and any discounts or concessions allowed or re-allowed or paid to dealers may be changed from time to time. We will set forth the
names of the dealers and the terms of the transaction in the applicable Prospectus Supplement.
By Agents
The Securities may also be sold through
agents designated by our Company. Any agent involved will be named, and any fees or commissions payable by our Company to such
agent will be set forth, in the applicable Prospectus Supplement. Any such fees or commissions will be paid out of the general
corporate funds of our Company. Unless otherwise indicated in the Prospectus Supplement, any agent will be acting on a best efforts
basis for the period of its appointment.
Direct Sales
Securities may also be sold directly by
our Company at such prices and upon such terms as agreed to by our Company and the purchaser. In this case, no underwriters, dealers
or agents would be involved in the offering.
General Information
Underwriters, dealers and agents that participate
in the distribution of the Securities offered by this Prospectus may be deemed underwriters under the Securities Act, and any discounts
or commissions they receive from us and any profit on their resale of the securities may be treated as underwriting discounts and
commissions under the Securities Act.
Underwriters, dealers or agents who participate
in the distribution of Securities may be entitled under agreements to be entered into with our Company to indemnification by our
Company against certain liabilities, including liabilities under Canadian provincial and territorial and United States securities
legislation, or to contribution with respect to payments which such underwriters, dealers or agents may be required to make in
respect thereof. Such underwriters, dealers or agents may be customers of, engage in transactions with, or perform services for,
our Company in the ordinary course of business.
We may enter into derivative transactions
with third parties, or sell securities not covered by this Prospectus to third parties in privately negotiated transactions. If
the applicable Prospectus Supplement indicates, in connection with those derivatives, the third parties may sell securities covered
by this Prospectus and the applicable Prospectus Supplement, including in short sale transactions. If so, the third parties may
use securities pledged by us or borrowed from us or others to settle those sales or to close out any related open borrowings of
stock, and may use securities received from us in settlement of those derivatives to close out any related open borrowings of stock.
The third parties in such sale transactions will be identified in the applicable Prospectus Supplement.
One or more firms, referred to as “remarketing
firms,” may also offer or sell the Securities, if the Prospectus Supplement so indicates, in connection with a remarketing
arrangement upon their purchase. Remarketing firms will act as principals for their own accounts or as agents for us. These remarketing
firms will offer or sell the Securities in accordance with the terms of the Securities. The Prospectus Supplement will identify
any remarketing firm and the terms of its agreement, if any, with us and will describe the remarketing firm’s compensation.
Remarketing firms may be deemed to be underwriters in connection with the Securities they remarket.
In connection with any offering of Securities,
underwriters may over-allot or effect transactions which stabilize or maintain the market price of the Securities offered at a
level above that which might otherwise prevail in the open market. Such transactions may be commenced, interrupted or discontinued
at any time.
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES
The following is a general summary of the
material U.S. federal income tax consequences that may be relevant to a beneficial owner of Debt Securities and Common Shares acquired
pursuant to this Prospectus. This summary does not address the U.S. federal income tax consequences of the acquisition, ownership,
and exercise of Warrants, Subscription Receipts, or Units.
Scope of this Summary
This summary is for general information
purposes only and does not purport to be a complete analysis or listing of all potential U.S. federal income tax consequences related
to the acquisition, ownership and disposition of Debt Securities and Common Shares. Except as specifically set forth below, this
summary does not discuss applicable tax reporting requirements. In addition, this summary does not take into account the individual
facts and circumstances of any particular holder that may affect the U.S. federal income tax consequences to such holder. Accordingly,
this summary is not intended to be, and should not be construed as, legal or U.S. federal income tax advice with respect to any
particular holder. Each holder should consult its own tax advisors regarding the U.S. federal, state and local, and non-U.S. tax
consequences related to the acquisition, ownership and disposition of Debt Securities and Common Shares.
No legal opinion from U.S. legal counsel
or ruling from the Internal Revenue Service (the “IRS”) has been requested, or will be obtained, regarding the U.S.
federal income tax consequences related to the acquisition, ownership and disposition of Debt Securities and Common Shares. This
summary is not binding on the IRS, and the IRS is not precluded from taking a position that is different from, and contrary to,
the positions taken in this summary.
Authorities
This summary is based on the Internal Revenue
Code of 1986, as amended (the “Code”), Treasury Regulations (whether final, temporary, or proposed), published rulings
of the IRS, published administrative positions of the IRS, and U.S. court decisions that are applicable and, in each case, as in
effect and available, as of the date of this Prospectus. Any of the authorities on which this summary is based could be changed
in a material and adverse manner at any time, and any such change could be applied on a retroactive basis. This summary does not
discuss the potential effects, whether adverse or beneficial, of any proposed legislation that, if enacted, could be applied on
a retroactive basis.
U.S. Holders
As used in this summary, the term “U.S.
Holder” means a beneficial owner of Debt Securities or Common Shares acquired pursuant to this Prospectus that is, for U.S.
federal income tax purposes:
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an individual who is a citizen or resident of the United States;
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a corporation (or other entity classified as a corporation for U.S. federal income tax purposes)
created or organized in or under the laws of the United States, any state thereof or the District of Columbia;
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an estate the income of which is subject to U.S. federal income taxation regardless of its source;
or
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a trust that: (i) is subject to the primary supervision of a court within the United States
and the control of one or more U.S. persons for all substantial decisions of the trust; or (ii) has a valid election in effect
under applicable Treasury Regulations to be treated as a U.S. person.
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Non-U.S. Holders
The term “Non-U.S. Holder”
means any beneficial owner of Debt Securities or Common Shares acquired pursuant to this Prospectus that is neither a U.S. Holder
nor a partnership (nor other entity or arrangement treated as a partnership for U.S. federal income tax purposes).
Holders Subject to Special U.S. Federal
Income Tax Rules
This summary deals only with persons or
entities who hold Debt Securities or Common Shares as a capital asset within the meaning of Section 1221 of the Code (generally,
property held for investment purposes). This summary does not address all aspects of U.S. federal income taxation that may be applicable
to holders in light of their particular circumstances or to holders subject to special treatment under U.S. federal income tax
law, such as (without limitation):
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banks, insurance companies, and other financial institutions;
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dealers or traders in securities, commodities or foreign currencies;
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regulated investment companies;
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tax-exempt entities, qualified retirement plans, individual retirement accounts, or other tax-deferred
accounts;
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U.S. expatriates or former long-term residents of the United States;
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persons holding Debt Securities or Common Shares as part of a straddle, appreciated financial position,
synthetic security, hedge, conversion or constructive sale transaction or other integrated investment;
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entities that acquire Debt Securities or Common Shares that are treated as partnerships and other
pass-through entities for U.S. federal income tax purposes and partners and investors in such entities;
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real estate investment trusts;
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U.S. Holders that have a “functional currency” other than the U.S. dollar;
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U.S. Holders that are required to accelerate the recognition of any item of gross income with respect
to Debt Securities or Common Shares as a result of such income being recognized on an applicable financial statement;
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holders that acquired Debt Securities or Common Shares in connection with the exercise of employee
stock options or otherwise as consideration for services; or
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holders that are “controlled foreign corporations”, “passive foreign investment
companies” and corporations that accumulate earnings to avoid U.S. federal income tax.
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Holders that are subject to special provisions
under the Code, including holders described immediately above, should consult their own tax advisors regarding the U.S. federal,
state and local, and non-U.S. tax consequences arising from and relating to the acquisition, ownership and disposition of Debt
Securities and Common Shares.
If an entity or arrangement that is classified
as a partnership (or other “pass-through” entity) for U.S. federal income tax purposes holds Debt Securities or Common
Shares, the U.S. federal income tax consequences to such entity and the partners (or other owners) of such entity generally will
depend on the activities of the entity and the status of such partners (or owners). This summary does not address the tax consequences
to any such partner, owner or entity. Partners (or other owners) of entities or arrangements that are classified as partnerships
or as “pass-through” entities for U.S. federal income tax purposes should consult their own tax advisors regarding
the U.S. federal income tax consequences arising from and relating to the acquisition, ownership, and disposition of Debt Securities
and Common Shares.
Tax Consequences Not Addressed
This summary does not address the U.S.
state and local, U.S. federal estate and gift, U.S. federal net investment income, U.S. federal alternative minimum, or non-U.S.
tax consequences to holders of Debt Securities and Common Shares. Each holder should consult its own tax advisors regarding the
U.S. state and local, U.S. federal estate and gift, U.S. federal net investment income, U.S. federal alternative minimum, and non-U.S.
tax consequences of the acquisition, ownership, and disposition of Debt Securities and Common Shares.
Debt Securities
U.S. Federal Income Tax Consequences
to U.S. Holders
Payments of Interest
Interest on a Debt Security generally will
be taxable to a U.S. Holder as ordinary interest income at the time of receipt or accrual in accordance with the U.S. Holder’s
method of accounting for U.S. federal income tax purposes.
Sale, Exchange or Retirement of Debt
Securities
Upon the sale, exchange, retirement or
other taxable disposition of a Debt Security, a U.S. Holder generally will recognize gain or loss equal to the difference between
the amount realized on the disposition, less any accrued but unpaid interest, which will be taxable as ordinary income in the manner
described above under “Payments of Interest,” and the U.S. Holder’s adjusted tax basis in the Debt Security.
The adjusted tax basis of a Debt Security generally will equal its initial cost reduced by principal payments previously received
on the Debt Security. Gain or loss recognized by a U.S. Holder generally will be long-term capital gain or loss if the U.S. Holder’s
holding period for the Debt Security exceeds one year at the time of the disposition. Deductions for capital losses are subject
to complex limitations under the Code.
Information Reporting and Backup
Withholding
Information reporting requirements generally
will apply to payments of interest on Debt Securities and to the proceeds of a sale of Debt Securities paid to a U.S. Holder unless
the U.S. Holder is an exempt recipient (such as a corporation). Backup withholding will apply to those payments if the U.S. Holder
fails to provide its correct taxpayer identification number or certification of exempt status, or if the U.S. Holder is notified
by the IRS that it has failed to report in full payments of interest and dividend income. Backup withholding is not an additional
tax, and any amounts withheld under the backup withholding rules generally will be allowed as a refund or a credit against
a U.S. Holder’s U.S. federal income tax liability, if any, provided the required information is furnished in a timely manner
to the IRS.
U.S. Federal Income Tax Consequences
to Non-U.S. Holders
U.S. Federal Withholding Tax
The 30% U.S. federal withholding tax will
not apply to any payment of interest on a Debt Security to a Non-U.S. Holder under the “portfolio interest rule” if
certain requirements are satisfied and provided that:
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interest paid on the Debt Securities is not effectively connected with the Non-U.S. Holder’s
conduct of a trade or business in the United States;
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the Non-U.S. Holder does not actually (or constructively) own 10% or more of the total combined
voting power of all classes of the Company’s voting stock within the meaning of the Code and applicable Treasury Regulations;
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the Non-U.S. Holder is not a controlled foreign corporation that is related directly or constructively
to the Company through stock ownership; or
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the Non-U.S. Holder provides its name and address on an IRS Form W-8BEN or W-8BEN-E (or other
applicable form), and certifies, under penalties of perjury, that it is not a United States person as defined under the Code (generally
through the provision of an IRS Form W-8BEN or W-8BEN-E or other applicable form).
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If a Non-U.S. Holder cannot satisfy the
requirements above, payments of interest will generally be subject to the 30% U.S. federal withholding tax, unless such Non-U.S.
Holder provides the Company with a properly executed:
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IRS Form W-8BEN (or other applicable form) claiming an exemption from or reduction in withholding
under the benefit of an applicable income tax treaty; or
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IRS Form W-8ECI (or other applicable form) stating that interest paid on the Debt Securities
is not subject to withholding tax because it is effectively connected with the conduct of a trade or business in the United States
(as discussed below under “U.S. Federal Income Tax”).
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The 30% U.S. federal withholding tax generally
will not apply to any payment of principal or gain that a Non-U.S. Holder realizes on the sale, exchange, retirement or other disposition
of a Debt Security.
U.S. Federal Income Tax
If a Non-U.S. Holder is engaged in a trade
or business in the United States and interest on the Debt Securities is effectively connected with the conduct of that trade or
business (and, if required by an applicable income tax treaty, is attributable to a U.S. permanent establishment), then such Non-U.S.
Holder will be subject to U.S. federal income tax on that interest on a net income basis in the same manner as if such Non-U.S.
Holder were a U.S. person as defined under the Code, and such Non-U.S. Holder will be exempt from the 30% U.S. federal withholding
tax, provided the certification requirements discussed above in “U.S. Federal Withholding Tax” are satisfied. In addition,
if the Non-U.S. Holder is a foreign corporation, such holder may be subject to a branch profits tax equal to 30% (or lower applicable
income tax treaty rate) of such interest, subject to adjustments.
Any gain realized on the disposition of
a Debt Security, including as redemption by the Company as discussed below, generally will not be subject to U.S. federal income
tax unless:
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the gain is effectively connected with a U.S. trade or business carried on by the Non-U.S. Holder
(and, where an income tax treaty applies, is attributable to a U.S. permanent establishment of the Non-U.S. Holder), in which case
the Non-U.S. Holder will be subject to tax on the net gain from the disposition at regular graduated U.S. federal income tax rates,
and if the Non-U.S. Holder is a corporation, may be subject to an additional U.S. branch profits tax at a gross rate equal to 30%
of its effectively connected earnings and profits for that taxable year, subject to any exemption or lower rate as may be specified
by an applicable income tax treaty; or
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the Non-U.S. Holder is an individual who is present in the United States for 183 days or more in
the taxable year of disposition and certain other conditions are met, in which case the Non-U.S. Holder will be subject to a 30%
tax on the gain from the sale, which may be offset by U.S. source capital losses.
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Information Reporting and Backup
Withholding
Generally, the Company must report to the
IRS and to a Non-U.S. Holder the amount of interest paid to such Non-U.S. Holder and the amount of tax, if any, withheld with respect
to those payments. Copies of the information returns reporting such interest payments and any withholding may also be made available
to the tax authorities in the country in which such Non-U.S. Holder resides under the provisions of an applicable income tax treaty.
In general, a Non-U.S. Holder will not
be subject to backup withholding with respect to payments on the Debt Securities that the Company makes to such Non-U.S. Holder
provided that the Company does not have actual knowledge or reason to know that such Non-U.S. Holder is a U.S. person as defined
under the Code, and the Company received from such Non-U.S. Holder the statement described above under “U.S. Federal Withholding
Tax.”
Information reporting and, depending on
the circumstances, backup withholding will apply to the proceeds of a sale of the Debt Securities within the United States or conducted
through certain U.S.-related financial intermediaries, unless the Non-U.S. Holder certifies, under penalties of perjury, that such
holder is a Non-U.S. Holder (and the payor does not have actual knowledge or reason to know that such holder is a U.S. person as
defined under the Code), or such holder otherwise establishes an exemption.
Any amounts withheld under the backup
withholding rules will be allowed as a refund or a credit against a Non-U.S. Holder’s U.S. federal income tax liability
provided the required information is furnished to the IRS.
Foreign Account Tax Compliance Act
Sections 1471 through 1474 of the Code
(commonly referred to as “FATCA”) impose a reporting regime and potentially a 30% withholding tax on certain payments
made to or through: (i) a “foreign financial institution” (as specifically defined in the Code) that does not
enter into an agreement with the IRS to provide the IRS with certain information in respect of its account holders and investors;
or (ii) a “non-financial foreign entity” (as specifically defined in the Code) that does not provide sufficient
information with respect to its substantial U.S. owners (if any). The United States has entered into, and continues to negotiate,
intergovernmental agreements (each, an “IGA”) with a number of other jurisdictions to facilitate the implementation
of FATCA. An IGA may significantly alter the application of FATCA and its information reporting and withholding requirements with
respect to any particular investor.
FATCA withholding may apply to payments
in respect of the Debt Securities if the payee does not provide documentation (typically IRS Form W-9 or the relevant IRS
Form W-8) providing the required information or establishing compliance with, or an exemption from, FATCA. FATCA is particularly
complex and its application remains uncertain. Non-U.S. Holders should consult their own tax advisors regarding how these rules may
apply in their particular circumstances.
Common Shares
U.S. Federal Income Tax Consequences
to U.S. Holders
Distributions
Distributions made on Common Shares generally
will be included in a U.S. Holder’s income as ordinary dividend income to the extent of the Company’s current and accumulated
earnings and profits (determined under U.S. federal income tax principles) as of the end of the taxable year in which the distribution
occurs. However, with respect to dividends received by certain non-corporate U.S. Holders (including individuals), such dividends
are generally taxed at the applicable long-term capital gains rates (currently at a maximum tax rate of 20%), provided certain
holding period and other requirements are satisfied. Distributions in excess of current and accumulated earnings and profits will
be treated as a return of capital to the extent of a U.S. Holder’s adjusted tax basis in the Common Shares and thereafter
as capital gain from the sale or exchange of the Common Shares, which will be taxable according to rules discussed under the
heading “Sale, Exchange or Other Taxable Disposition of Common Shares”, below. Dividends received by a corporate holder
may be eligible for a dividends received deduction, subject to applicable limitations.
Sale, Exchange or Other Taxable Disposition
of Common Shares
Upon the sale, exchange or other taxable
disposition of Common Shares, a U.S. Holder generally will recognize capital gain or loss equal to the difference between: (i) the
amount of cash and the fair market value of any property received upon such taxable disposition; and (ii) the U.S. Holder’s
adjusted tax basis in the Common Shares. Such capital gain or loss will be long-term capital gain or loss if a U.S. Holder’s
holding period in the Common Shares is more than one year at the time of the taxable disposition. Long-term capital gains recognized
by certain non-corporate U.S. Holders (including individuals) will generally be subject to a maximum U.S. federal income tax rate
of 20%. Deductions for capital losses are subject to complex limitations under the Code.
Information Reporting and Backup
Withholding
Information reporting requirements generally
will apply to payments of dividends on Common Shares and to the proceeds of a sale of Common Shares paid to a U.S. Holder unless
the U.S. Holder is an exempt recipient (such as a corporation). Backup withholding will apply to those payments if the U.S. Holder
fails to provide its correct taxpayer identification number or certification of exempt status, or if the U.S. Holder is notified
by the IRS that it has failed to report in full payments of interest and dividend income. Backup withholding is not an additional
tax, and any amounts withheld under the backup withholding rules generally will be allowed as a refund or a credit against
a U.S. Holder’s U.S. federal income tax liability, if any, provided the required information is furnished in a timely manner
to the IRS.
U.S. Federal Income Tax Consequences
to Non-U.S. Holders
Dividends
Distributions on Common Shares paid to
Non-U.S. Holders will constitute dividends for U.S. federal income tax purposes to the extent paid from the Company’s current
and accumulated earnings and profits, as determined under U.S. federal income tax principles. To the extent those distributions
exceed current and accumulated earnings and profits, they will constitute a return of capital and will first reduce a Non-U.S.
Holder’s basis in Common Shares, but not below zero, and then will be treated as gain from the sale of stock, which will
be taxable according to rules discussed below under the heading “Sale or Other Taxable Disposition of Common Shares”.
Any dividends paid to a Non-U.S. Holder with respect to Common Shares generally will be subject to withholding tax at a 30% gross
rate, subject to any exemption or lower rate under an applicable treaty if the Non-U.S. Holder provides the Company with a properly
executed IRS Form W-8BEN, unless the Non-U.S. Holder provides the Company with a properly executed IRS Form W-8ECI (or
other applicable form) relating to income effectively connected with the conduct of a trade or business within the United States.
Dividends that are effectively connected
with the conduct of a trade or business within the United States and includible in the Non-U.S. Holder’s gross income are
not subject to the withholding tax (assuming proper certification and disclosure), but instead are subject to U.S. federal income
tax on a net income basis at applicable graduated individual or corporate rates. Any such effectively connected income received
by a non-U.S. corporation may, under certain circumstances, be subject to an additional branch profits tax at a 30% rate, subject
to any exemption or lower rate as may be specified by an applicable income tax treaty.
A Non-U.S. Holder of Common Shares who
wishes to claim the benefit of an applicable treaty rate or exemption is required to satisfy certain certification and other requirements.
If a Non-U.S. Holder is eligible for an exemption from or a reduced rate of U.S. withholding tax pursuant to an income tax treaty,
it may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS.
Sale or Other Taxable Disposition
of Common Shares
In general, a Non-U.S. Holder of Common
Shares will not be subject to U.S. federal income tax on gain recognized from a sale, exchange, or other taxable disposition of
such Common Shares, unless:
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the gain is effectively connected with a U.S. trade or business carried on by the Non-U.S. Holder
(and, where an income tax treaty applies, is attributable to a U.S. permanent establishment of the Non-U.S. Holder), in which case
the Non-U.S. Holder will be subject to tax on the net gain from the disposition at regular graduated U.S. federal income tax rates,
and if the Non-U.S. Holder is a corporation, may be subject to an additional U.S. branch profits tax at a gross rate equal to 30%
of its effectively connected earnings and profits for that taxable year, subject to any exemption or lower rate as may be specified
by an applicable income tax treaty;
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the Non-U.S. Holder is an individual who is present in the United States for 183 days or more in
the taxable year of the disposition and certain other conditions are met, in which case the Non-U.S. Holder will be subject to
a 30% tax on the gain from the sale, which may be offset by U.S. source capital losses; or
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the Company is or has been a “United States real property holding corporation” (“USRPHC”)
for U.S. federal income tax purposes at any time during the shorter of the Non-U.S. Holder’s holding period or the 5-year
period ending on the date of the disposition; provided that, as long as the Company’s Common Shares regularly traded on an
established securities market as determined under the Treasury Regulations (the “Regularly Traded Exception”), a Non-U.S.
Holder would not be subject to taxation on the gain on the disposition of Common Shares under this rule unless the Non-U.S.
Holder has owned more than 5% of our common stock at any time during such 5-year or shorter period (a “5% Shareholder”).
Non-U.S. Holders should be aware that the Company has made no determination as to whether the Company is or has been a USRPHC,
and the Company can provide no assurances that it is not and will not become a USRPHC in the future. In addition, in the event
that the Company is or becomes a USRPHC, the Company can provide no assurances that the Common Shares will meet the Regularly Traded
Exception at the time a Non-U.S. Holder purchases such Common Shares or sells, exchanges or otherwise disposes of such Common Shares.
Non-U.S. Holders should consult with their own tax advisors regarding the consequences to them of investing in a USRPHC. If the
Company is a USRPHC, a Non-U.S. Holder will be taxed as if any gain or loss were effectively connected with the conduct of a U.S.
trade or business as described above in “Dividends” in the event that: (i) such holder is a 5% Shareholder; or
(ii) the Regularly Traded Exception is not satisfied during the relevant period.
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Information Reporting and Backup
Withholding
Generally, the Company must report annually
to the IRS and to Non-U.S. Holders the amount of dividends paid on the Common Shares to Non-U.S. Holders and the amount of tax,
if any, withheld with respect to those dividends. Copies of the information returns reporting such dividends and withholding may
also be made available to the tax authorities in the country in which a Non-U.S. Holder resides under the provisions of an applicable
income tax treaty.
In general, a Non-U.S. Holder will not
be subject to backup withholding with respect to payments of dividends by the Company, provided the Company receives a statement
meeting certain requirements to the effect that the Non-U.S. Holder is not a U.S. person and the Company does not have actual knowledge
or reason to know that the holder is a U.S. person, as defined under the Code, or the Non-U.S. Holder otherwise establishes an
exemption. The requirements for the statement will be met if: (i) the Non-U.S. Holder provides its name, address and U.S.
taxpayer identification number, if any, and certifies, under penalty of perjury, that it is not a U.S. person (which certification
may be made on IRS Form W-8BEN, W-8BEN-E or other applicable form); or (ii) a financial institution holding the instrument
on behalf of the Non-U.S. Holder certifies, under penalty of perjury, that such statement has been received by it and furnishes
the Company or the paying agent with a copy of the statement. In addition, a Non-U.S. Holder will be subject to information reporting
and, depending on the circumstances, backup withholding with respect to payments of the proceeds of a sale of Common Shares within
the United States or conducted through certain U.S.-related financial intermediaries, unless the statement described above has
been received, and the Company does not have actual knowledge or reason to know that a holder is a U.S. person, as defined under
the Code, or the Non-U.S. Holder otherwise establishes an exemption. Backup withholding is not an additional tax and any amounts
withheld under the backup withholding rules will be allowed as a refund or a credit against a Non-U.S. Holder’s U.S.
federal income tax liability, if any, provided the required information is furnished in a timely manner to the IRS.
Foreign Account Tax Compliance Act
FATCA imposes a reporting regime and potentially
a 30% withholding tax on certain payments made to or through: (i) a “foreign financial institution” (as specifically
defined in the Code) that does not enter into an agreement with the IRS to provide the IRS with certain information in respect
of its account holders and investors; or (ii) a “non-financial foreign entity” (as specifically defined in the
Code) that does not provide sufficient information with respect to its substantial U.S. owners (if any). The United States has
entered into, and continues to negotiate, IGAs with a number of other jurisdictions to facilitate the implementation of FATCA.
An IGA may significantly alter the application of FATCA and its information reporting and withholding requirements with respect
to any particular investor.
FATCA withholding may apply to dividends
and other payments in respect of Common Shares if the payee does not provide documentation (typically IRS Form W-9 or the
relevant IRS Form W-8) providing the required information or establishing compliance with, or an exemption from, FATCA. FATCA
is particularly complex and its application remains uncertain. Non-U.S. Holders should consult their own tax advisors regarding
how these rules may apply in their particular circumstances.
INTERESTS OF NAMED EXPERTS AND COUNSEL
The law firm of McMillan LLP has acted
as our Company’s legal counsel by providing an opinion on the validity of the securities, other than Debt Securities, offered
in this Prospectus and applicable Prospectus Supplements.
The law firm of Kelley Drye &
Warren LLP has acted as special New York legal counsel to our Company by providing an opinion on the validity of the Debt Securities
offered in this Prospectus.
Counsel named in the applicable Prospectus
Supplement will pass upon legal matters for any underwriters, dealers or agents.
The consolidated financial statements of
the Company appearing in the Company’s Annual Report (Form 10-K) for the year ended July 31, 2019, and the effectiveness
of the Company’s internal control over financial reporting as of July 31, 2019, have been audited by Ernst &
Young LLP, independent registered public accounting firm, as set forth in their reports thereon, which include, among other things,
that the Company did not maintain effective internal control over financial reporting as of July 31, 2019, based on Internal
Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO
Framework”), because of the effects of the material weaknesses described in such reports, included therein, and incorporated
herein by reference. Such consolidated financial statements have been incorporated herein by reference in reliance upon such reports
given on the authority of such firm as experts in accounting and auditing.
No expert or counsel named in this prospectus
as having prepared or certified any part of this prospectus or having given an opinion upon the validity of the securities being
registered or upon other legal matters in connection with the registration or offering of the common stock was employed on a contingency
basis, or had, or is to receive, in connection with the offering, a substantial interest, direct or indirect, in the registrant,
nor was any such person connected with the registrant as a promoter, managing or principal underwriter, voting trustee, director,
officer, or employee.
TRANSFER AGENT AND REGISTRAR
Our registrar and transfer agent for our common shares is Transfer
Online, Inc. located at 512 SE Salmon Street, Portland, Oregon, U.S.A., 97214.
RECENT DEVELOPMENTS
Filing of Canadian Prospectus
On February 21, 2020, we filed a prospectus
pursuant to the multi-jurisdictional disclosure system between the United States and Canada with the securities regulatory authorities
in the Provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Newfoundland and Labrador,
and Prince Edward Island, which upon final receipt, will permit our Company to offer and sell the Securities for gross proceeds
of up to $100,000,000. The Securities that may be sold in the Provinces of Canada named above, together with the Securities to
be sold in the United States pursuant to this Prospectus, will not exceed $100,000,000.
DOCUMENTS INCORPORATED BY REFERENCE
The SEC allows us to “incorporate
by reference” information into this prospectus, which means that we can disclose important information to you by referring
you to another document filed separately with the SEC. The information incorporated by reference is deemed to be a part of this
prospectus, except for any information superseded by information in this prospectus.
The following documents filed by our company
with the SEC are incorporated herein by reference:
All reports and other documents subsequently
filed by us pursuant to Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference herein and to be a part hereof from the date of the filing of such reports and documents.
Any statement contained in a document incorporated by reference in this registration statement shall be deemed to be modified or
superseded for purposes of this registration statement to the extent that a statement contained in this registration statement
or in any subsequently filed document that is also incorporated by reference in this registration statement modifies or supersedes
such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute
a part of this registration statement.
We will provide to each person, including
any beneficial owner, to whom a Prospectus is delivered, a copy of any or all of the information that has been incorporated by
reference in the Prospectus but not delivered with the Prospectus. We will provide this information, at no cost to the requester,
upon written or oral request to us at the following address or telephone number:
Amir Adnani, President and Chief Executive
Officer
1030 West Georgia Street, Suite 1830
Vancouver, British Columbia, Canada, V6E 2Y3
Telephone: (604) 682-9775
We file annual and quarterly reports,
current reports on Form 8-K and proxy statements with the SEC. The public may read and copy any materials we file
with the SEC at the SEC’s Public Reference Room at 100 F Street N.E., Washington, DC 20549. The public may obtain information
on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site (http://www.sec.gov)
that contains reports, proxy and information statements and other information regarding issuers that file electronically with
the SEC.
We have filed a registration statement
on Form S-3 with the SEC for the securities we are offering by this Prospectus. This Prospectus does not include all of the
information contained in the registration statement. You should refer to the registration statement and its exhibits for additional
information.
__________
URANIUM
ENERGY CORP.
$15,000,000
PROSPECTUS SUPPLEMENT
H. C. WAINWRIGHT &
CO.
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HAYWOOD SECURITIES INC.
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September 21, 2020
__________
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