10-Q 1 uec20220131_10q.htm FORM 10-Q uec20220131_10q.htm
0001334933 URANIUM ENERGY CORP false --07-31 Q2 2022 0.001 0.001 750,000,000 750,000,000 277,838,585 277,838,585 236,796,866 236,796,866 10,552,493 1,183,369 1,549,166 73,200 192,015 919,617 0 0 0 0 3 0 10,000,000 0.80 0.99 1.00 1.49 1.50 2.89 Preliminary fair value of property, plant and equipment was determined using a replacement cost approach. Preliminary fair value of mineral rights and properties was determined using a discounted cash flow model (being the net present value of expected future cash flows). Expected future cash flows are based on estimates of future uranium prices and projected future revenues, estimated quantities of mineral resources and production, expected future production costs, and capital expenditures based on the life of mine plans as at the acquisition date. Working capital adjustment represents the working capital of UEC Wyoming at the date of acquisition, which was comprised of: (i) cash and cash equivalents of $1,183,369; (ii) prepaid expenses and deposits of $1,549,166; (iii) other current assets of $73,200; (iv) inventories of $192,015; and (v) accounts payable and accrued liabilities of $95,807. The fair value of these working capital items approximates their respective carrying values at the date of the acquisition. Preliminary fair value of asset retirement obligations was measured based on the expected costs and timing for final well closure, plant and equipment decommissioning and removal, and environmental remediation, which are discounted to present value using credit adjusted risk-free rates. Other non-current assets included certain material and supply inventories classified as non-current and right-of-use ("ROU") assets associated with UEC Wyoming's operating leases. The preliminary fair value of long-term inventory was determined to approximate its carrying value. ROU assets and lease liabilities for operating leases are measured based on the present value of the future lease payments over the remaining lease terms at the acquisition date. 00013349332021-08-012022-01-31 xbrli:shares 00013349332022-03-16 thunderdome:item iso4217:USD 00013349332022-01-31 00013349332021-07-31 iso4217:USDxbrli:shares 00013349332021-11-012022-01-31 00013349332020-11-012021-01-31 00013349332020-08-012021-01-31 00013349332020-07-31 00013349332021-01-31 0001334933us-gaap:CommonStockMember2021-07-31 0001334933us-gaap:AdditionalPaidInCapitalMember2021-07-31 0001334933uec:ShareIssuanceObligationMember2021-07-31 0001334933us-gaap:RetainedEarningsMember2021-07-31 0001334933us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-07-31 0001334933us-gaap:CommonStockMember2021-08-012021-10-31 0001334933us-gaap:AdditionalPaidInCapitalMember2021-08-012021-10-31 00013349332021-08-012021-10-31 0001334933us-gaap:RetainedEarningsMember2021-08-012021-10-31 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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

 

  For the quarterly period ended January 31, 2022

 

or

 

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

 

  For the transition period from _____ to _____

 

Commission File Number: 001-33706

 

URANIUM ENERGY CORP.

(Exact name of registrant as specified in its charter)

 

Nevada

 

98-0399476

(State or other jurisdiction of incorporation of organization)

 

 (I.R.S. Employer Identification No.)

   
   

1030 West Georgia Street, Suite 1830, Vancouver, B.C., Canada

 

 V6E 2Y3

(Address of principal executive offices)

 

(Zip Code)

 

 

(604) 682-9775

 
 

(Registrant’s telephone number, including area code)

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

 

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

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock

UEC

NYSE American

 

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

Yes  ☒   No  ☐

 

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

 

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

 

☐  Large accelerated filer☐  Accelerated filer
☒  Non-accelerated filer  Smaller reporting company
  Emerging growth company 

 

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

 

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

Yes     No  ☒

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 283,015,176 shares of common stock outstanding as of March 16, 2022.

 

 

 

 
 
 

CAUTIONARY NOTE TO U.S. RESIDENTS CONCERNING DISCLOSURE OF MINERAL RESOURCES

 

The Company is a U.S. Domestic Issuer for United States Securities and Exchange Commission (“SEC”) purposes, most of its shareholders are U.S. residents, the Company is required to report its financial results under U.S. generally accepted accounting principles and its only trading market is the NYSE American. However, because the Company is a reporting issuer in Canada, certain regulatory filings required of the Company in Canada contain or incorporate by reference therein certain disclosure that satisfies the additional requirements of Canadian securities laws, which differ from the requirements of United States’ securities laws. Unless otherwise indicated, all Company resource estimates included in those Canadian filings, and in the documents incorporated by reference therein, have been prepared in accordance with Canadian National Instrument 43-101 - Standards of Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy and Petroleum classification system. NI 43-101 is a rule developed by the Canadian Securities Administrators which establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects.

 

Canadian standards, including NI 43-101, differ significantly from the requirements of SEC Industry Guide 7, as defined in the Glossary of Technical Terms (“Industry Guide 7”). Thus, resource information contained, or incorporated by reference, in our Canadian filings, and in the documents incorporated by reference therein, may not be comparable to similar information disclosed by companies reporting “reserve” and resource information under SEC Industry Guide 7. In particular, and without limiting the generality of the foregoing, the term “resource” does not equate to the term “reserve” under SEC Industry Guide 7. Under SEC Industry Guide 7 standards, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. Under SEC Industry Guide 7 standards, a “final” or “bankable” feasibility study is required to report “reserves”; the three-year historical average price, to the extent possible, is used in any “reserve” or cash flow analysis to designate “reserves”; and the primary environmental analysis or report must be filed with the appropriate governmental authority.

 

SEC Industry Guide 7 disclosure standards historically have not permitted the inclusion of information concerning “Measured Mineral Resources”, “Indicated Mineral Resources” or “Inferred Mineral Resources” or other descriptions of the amount of mineralization in mineral deposits that do not constitute “reserves” by SEC Industry Guide 7 standards. United States investors should also understand that “Inferred Mineral Resources” have a great amount of uncertainty as to their existence and as to their economic and legal feasibility. It cannot be assumed that all or any part of an “Inferred Mineral Resource” will ever be upgraded to a higher category. Under Canadian rules, estimated “Inferred Mineral Resources” may not form the basis of feasibility or pre-feasibility studies. United States investors are cautioned not to assume that all or any part of Measured or Indicated Mineral Resources will ever be converted into mineral reserves” as defined by SEC Industry Guide 7. Investors are cautioned not to assume that all or any part of an Inferred Mineral Resource exists or is economically or legally mineable. The Company does not have any mineral “reserves” within the meaning of SEC Industry Guide 7.

 

Disclosure of “contained pounds” or “contained ounces” in a resource estimate is permitted and typical disclosure under Canadian regulations; however, SEC Industry Guide 7 historically only permitted issuers to report mineralization that does not constitute “reserves” by SEC standards as in-place tonnage and grade without reference to unit measures. The requirements of NI 43-101 for identification of reserves are also not the same as those of SEC Industry Guide 7, and reserves reported by the Company in compliance with NI 43-101 may not qualify as “reserves” under SEC Industry Guide 7 standards. Accordingly, information concerning mineral deposits may not be comparable to information made public by companies that report in accordance with SEC Industry Guide 7 standards.

 

On October 31, 2018, the SEC adopted the Modernization of Property Disclosures for Mining Registrants (the “New Rule”), introducing significant changes to the existing mining disclosure framework to better align it with international industry and regulatory practice, including NI 43-101. The New Rule became effective as of February 25, 2019, and issuers are required to comply with the New Rule as of the annual report for their first fiscal year beginning on or after January 1, 2021, and earlier in certain circumstances. The Company does not anticipate needing to comply with the New Rule until the filing of our annual report for the fiscal year ending July 31, 2022 and, at this time, the Company does not know the full effect of the New Rule on its mineral resources and, therefore, the disclosure related to the Company’s mineral resources may be significantly different when computed using the requirements set forth in the New Rule.

 

2

 

 

 

URANIUM ENERGY CORP.

 

TABLE OF CONTENTS

 

PART I – FINANCIAL INFORMATION 4
     
Item 1. Financial Statements 4
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 28
     
Item 3. Quantitative and Qualitative Disclosures About Market Risk 37
     
Item 4. Controls and Procedures 37
     
PART II – OTHER INFORMATION 37
     
Item 1. Legal Proceedings 37
     
Item 1A. Risk Factors 38
     
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 49
     
Item 3. Defaults Upon Senior Securities 49
     
Item 4. Mine Safety Disclosures 50
     
Item 5. Other Information 50
     
Item 6. Exhibits 50
     
SIGNATURES 51

 

3

 

 

 

PART I FINANCIAL INFORMATION

 

Item 1.         Financial Statements

 

 

 

 

4

 

 

 

 

 

 

 

 

URANIUM ENERGY CORP.

 

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

FOR THE SIX MONTHS ENDED JANUARY 31, 2022

 

(Unaudited Expressed in U.S. Dollars)

 

 

 

 

 

 

 

 

5

 

 

URANIUM ENERGY CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited Expressed in U.S. Dollars)

 

  

Note(s)

  

January 31, 2022

  

July 31, 2021

 
             

CURRENT ASSETS

            

Cash and cash equivalents

  3,7  $22,663,251  $44,312,780 

Inventories

  3,4   40,231,990   29,172,480 

Prepaid expenses and deposits

  3   2,552,370   1,434,404 

Other current assets

      212,831   125,698 

TOTAL CURRENT ASSETS

      65,660,442   75,045,362 
             

MINERAL RIGHTS AND PROPERTIES

  3,5   174,712,496   63,784,003 

PROPERTY, PLANT AND EQUIPMENT

  3,6   20,286,678   7,358,037 

RESTRICTED CASH

  3,7   15,792,274   2,037,677 

EQUITY-ACCOUNTED INVESTMENT

  8   23,009,832   20,729,674 

OTHER NON-CURRENT ASSETS

  3   2,755,424   586,332 

TOTAL ASSETS

     $302,217,146  $169,541,085 
             
             

CURRENT LIABILITIES

            

Accounts payable and accrued liabilities

  9  $3,359,669  $2,763,570 

Other current liabilities

  3,12   566,854   430,409 

Current portion of long-term debt

  10   -   10,075,231 

TOTAL CURRENT LIABILITIES

      3,926,523   13,269,210 
             

ASSET RETIREMENT OBLIGATIONS

  3,11   16,831,043   3,938,655 

OTHER NON-CURRENT LIABILITIES

  3,12   1,077,570   337,084 

DEFERRED TAX LIABILITIES

      538,460   540,992 

TOTAL LIABILITIES

      22,373,596   18,085,941 
             

STOCKHOLDERS' EQUITY

            

Capital stock

            

Common stock $0.001 par value: 750,000,000 shares authorized, 277,838,585 shares issued and outstanding (July 31, 2021 - 236,796,866)

  13   277,838   236,797 

Additional paid-in capital

      578,360,849   441,990,650 

Share issuance obligation

      359,560   359,560 

Accumulated deficit

      (299,173,203)  (291,625,110)

Accumulated other comprehensive income

      18,506   493,247 

TOTAL EQUITY

      279,843,550   151,455,144 

TOTAL LIABILITIES AND EQUITY

     $302,217,146  $169,541,085 
             

SUBSEQUENT EVENTS

  4,7,13,14         

 

 

 

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

 

6

 

 

URANIUM ENERGY CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited Expressed in U.S. Dollars)

 

           

Three Months Ended January 31,

   

Six Months Ended January 31,

 
   

Note(s)

   

2022

   

2021

   

2022

   

2021

 

SALES AND SERVICE REVENUE

    14     $ 13,190,925     $ -     $ 13,190,925     $ -  

COST OF SALES AND SERVICES

    14       (9,248,208 )     -       (9,248,208 )     -  

GROSS PROFIT

            3,942,717       -       3,942,717       -  
                                         

OPERATING COSTS

                                       

Mineral property expenditures

    5       2,109,173       961,257       3,765,689       1,663,018  

General and administrative

    9,13       3,715,438       2,464,703       6,832,149       5,050,392  

Acquisition-related costs

    3       2,644,980       -       2,644,980       -  

Depreciation, amortization and accretion

    5,6,11       402,980       97,598       501,420       196,778  

TOTAL OPERATING COSTS

            8,872,571       3,523,558       13,744,238       6,910,188  

LOSS FROM OPERATIONS

            (4,929,854 )     (3,523,558 )     (9,801,521 )     (6,910,188 )
                                         

OTHER INCOME (EXPENSES)

                                       

Interest income

            10,558       8,753       31,129       14,363  

Interest expenses and finance costs

    10       (566,836 )     (829,727 )     (1,097,714 )     (1,720,641 )

Income (loss) from equity-accounted investment

    8       1,732       600,913       2,754,899       (102,692 )

Gain on loan extinguishment

            -       278,617       -       278,617  

Realized gain on available-for-sale security

            -       -       547,152       -  

Other income

            7,895       2,902       14,680       14,088  

Gain on disposition of assets

            750       -       750       -  

OTHER INCOME (EXPENSES)

            (545,901 )     61,458       2,250,896       (1,516,265 )

LOSS BEFORE INCOME TAXES

            (5,475,755 )     (3,462,100 )     (7,550,625 )     (8,426,453 )
                                         

DEFERRED TAX BENEFIT

            1,488       1,041       2,532       1,857  

NET LOSS FOR THE PERIOD

            (5,474,267 )     (3,461,059 )     (7,548,093 )     (8,424,596 )
                                         

OTHER COMPREHENSIVE INCOME (LOSS)

                                       

Translation (loss) gain

    8       (617,910 )     486,038       (474,741 )     548,799  

TOTAL OTHER COMPREHENSIVE INCOME (LOSS)

            (617,910 )     486,038       (474,741 )     548,799  

TOTAL COMPREHENSIVE LOSS FOR THE PERIOD

          $ (6,092,177 )   $ (2,975,021 )   $ (8,022,834 )   $ (7,875,797 )
                                         

NET LOSS PER SHARE, BASIC AND DILUTED

    15     $ (0.02 )   $ (0.02 )   $ (0.03 )   $ (0.04 )
                                         

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING, BASIC AND DILUTED

            269,120,537       198,673,515       257,989,930       194,314,507  

 

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

 

7

 

 

URANIUM ENERGY CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited Expressed in U.S. Dollars)

 

           

Six Months Ended January 31

 
   

Note(s)

   

2022

   

2021

 

NET CASH PROVIDED BY (USED IN):

                       
                         

OPERATING ACTIVITIES

                       

Net loss for the period

          $ (7,548,093 )   $ (8,424,596 )

Adjustments to reconcile net loss to cash flows in operating activities

                       

Stock-based compensation

    13       2,574,866       2,596,573  

Depreciation, amortization and accretion

    5,6,11       501,420       196,778  

Amortization of long-term debt discount

    10       524,769       825,695  

Gain on disposition of assets

            (750 )     -  

Gain on loan extinguishment

            -       (278,617 )

(Income) loss from equity-accounted investment

    8       (2,754,899 )     102,692  

Deferred tax benefits

            (2,532 )     (1,857 )

Realized gain on available-for-sale security

            (547,152 )     -  

Foreign exchange loss

            -       1,457  

Changes in operating assets and liabilities

                       

Inventories

    4       (10,867,495 )     -  

Prepaid expenses and deposits

            (69,055 )     (355,290 )

Other current assets

            17,376       5,992  

Accounts payable and accrued liabilities

            450,289       (286,578 )

Other liabilities

            8,838       14,579  

NET CASH USED IN OPERATING ACTIVITIES

            (17,712,418 )     (5,603,172 )
                         

FINANCING ACTIVITIES

                       

Proceeds from share issuances, net of issuance costs

    13       133,143,203       15,419,317  

Repayments of long-term debt

    10       (10,000,000 )     (2,000,000 )

Repayments of other loans

            (94,523 )     (30,231 )

NET CASH PROVIDED BY FINANCING ACTIVITIES

            123,048,680       13,389,086  
                         

INVESTING ACTIVITIES

                       

Net cash used in U1A Acquisition

    3       (113,587,952 )     -  

Investment in mineral rights and properties

    5       (39,901 )     (80,000 )

Purchase of property, plant and equipment

            (84,600 )     (140,340 )

Investment in other assets

            (66,643 )     -  

Investment in term deposits

            -       (10,000,000 )

Proceeds from redemption of term deposits

            -       6,000,000  

Proceeds from disposition of assets

            750       -  

Investment in available-for-sale security

            (9,433,068 )     -  

Proceeds from sale of available-for-sale security

            9,980,220       -  

NET CASH USED IN INVESTING ACTIVITIES

            (113,231,194 )     (4,220,340 )
                         

NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

            (7,894,932 )     3,565,574  

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD

            46,350,457       6,986,919  

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD

    7     $ 38,455,525     $ 10,552,493  

 

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

 

8

 

 

URANIUM ENERGY CORP.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY

(Unaudited Expressed in U.S. Dollars)

 

   

Common Stock

   

Additional Paid-

   

Share Issuance

   

Accumulated

   

Accumulated Other Comprehensive

   

Stockholders'

 
   

Shares

   

Amount

      in Capital       Obligation       Deficit       Income (Loss)       Equity  

Balance, July 31, 2021

    236,796,866     $ 236,797     $ 441,990,650     $ 359,560     $ (291,625,110 )   $ 493,247     $ 151,455,144  

Common stock

                                                       

Issued under ATM offering, net of issuance costs

    20,743,878       20,744       62,650,379       -       -       -       62,671,123  

Issued upon exercise of stock options

    753,990       754       383,025       -       -       -       383,779  

Issued upon exercise of warrants

    491,849       492       909,836       -       -       -       910,328  

Issued for acquisition of mineral properties

    64,149       64       219,326       -       -       -       219,390  

Stock-based compensation

                                                       

Common stock issued for consulting services

    4,607       5       14,046       -       -       -       14,051  

Common stock issued under Stock Incentive Plan

    141,490       140       355,088       -       -       -       355,228  

Amortization of stock-based compensation

    -       -       803,160       -       -       -       803,160  

Net loss for the period

    -       -       -       -       (2,073,826 )     -       (2,073,826 )

Other comprehensive income

    -       -       -       -       -       143,169       143,169  

Balance, October 31, 2021

    258,996,829     $ 258,996     $ 507,325,510     $ 359,560     $ (293,698,936 )   $ 636,416     $ 214,881,546  

Common stock

                                                       

Issued as anniversary fees for credit facility

    161,594       161       599,839       -       -       -       600,000  

Issued under ATM offering, net of issuance costs

    17,751,658       17,752       67,954,914       -       -       -       67,972,666  

Issued upon exercise of stock options

    193,345       193       63,211       -       -       -       63,404  

Issued upon exercise of warrants

    572,850       573       1,141,330       -       -       -       1,141,903  

Issued for acquisition of mineral properties

    47,715       48       206,081       -       -       -       206,129  

Stock-based compensation

                                                       

Common stock issued for consulting services

    4,608       5       16,629       -       -       -       16,634  

Common stock issued under Stock Incentive Plan

    109,986       110       399,338       -       -       -       399,448  

Amortization of stock-based compensation

    -       -       653,997       -       -       -       653,997  

Net loss for the period

    -       -       -       -       (5,474,267 )     -       (5,474,267 )

Other comprehensive loss

    -       -       -       -       -       (617,910 )     (617,910 )

Balance, January 31, 2022

    277,838,585     $ 277,838     $ 578,360,849     $ 359,560     $ (299,173,203 )   $ 18,506     $ 279,843,550  

 

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

 

9

 

 

URANIUM ENERGY CORP.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited Expressed in U.S. Dollars)

 

   

Common Stock

   

Additional Paid-

   

Share Issuance

   

Accumulated

   

Accumulated Other Comprehensive

   

Stockholders'

 
   

Shares

   

Amount

    in Capital     Obligation     Deficit     Income (Loss)     Equity  

Balance, July 31, 2020

    184,635,870     $ 184,636     $ 341,059,972     $ 103,554     $ (276,811,300 )   $ (120,244 )   $ 64,416,618  

Common stock

                                                       

Issued for equity financing, net of issuance costs

    12,500,000       12,500       12,455,787       -       -       -       12,468,287  

Issued upon exercise of stock options

    13,532       15       9,294       -       -       -       9,309  

Stock-based compensation

                                                       

Common stock issued under Stock Incentive Plan

    227,390       226       235,043       30,321       -       -       265,590  

Amortization of stock-based compensation

    -       -       1,046,175       -       -       -       1,046,175  

Warrants

                                                       

Issued for equity financing

    -       -       1,518,432       -       -       -       1,518,432  

Issued for equity financing as issuance costs

    -       -       134,937       -       -       -       134,937  

Net loss for the period

    -       -       -       -       (4,963,537 )     -       (4,963,537 )

Other comprehensive income

    -       -       -       -       -       62,761       62,761  

Balance, October 31, 2020

    197,376,792     $ 197,377     $ 356,459,640     $ 133,875     $ (281,774,837 )   $ (57,483 )   $ 74,958,572  

Common stock

                                                       

Issued under ATM offering, net of issuance costs

    632,487       632       1,073,705       -       -       -       1,074,337  

Issued as anniversary fees for credit facility

    1,249,039       1,249       1,168,751       -       -       -       1,170,000  

Issued upon exercise of stock options

    559,528       559       211,566       -       -       -       212,125  

Issued upon exercise of warrants

    1,050       1       1,889       -       -       -       1,890  

Stock-based compensation

                                                       

Common stock issued for consulting services

    -       -       -       40,009       -       -       40,009  

Common stock issued under Stock Incentive Plan

    323,660       324       358,359       (30,321 )     -       -       328,362  

Amortization of stock-based compensation

    -       -       836,569       -       -       -       836,569  

Net loss for the period

    -       -       -       -       (3,461,059 )     -       (3,461,059 )

Other comprehensive income

    -       -       -       -       -       486,038       486,038  

Balance, January 31, 2021

    200,142,556     $ 200,142     $ 360,110,479     $ 143,563     $ (285,235,896 )   $ 428,555     $ 75,646,843  

 

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

 

10

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

January 31, 2022

(Unaudited Expressed in U.S. Dollars)


 

 

NOTE 1:

 NATURE OF OPERATIONS

 

Uranium Energy Corp. was incorporated in the State of Nevada on May 16, 2003.  Uranium Energy Corp. and its subsidiary companies and a controlled partnership (collectively, the “Company” or “we” or “UEC”) are engaged in uranium and titanium mining and related activities, including exploration, pre-extraction, extraction and processing of uranium concentrates and titanium minerals, on projects located in the United States, Canada and the Republic of Paraguay.

 

As at January 31, 2022, we had working capital of $61.7 million including cash and cash equivalents of $22.7 million and uranium inventory holdings of $39.8 million. Subsequent to January 31, 2022, we received further cash proceeds of $16.5 million from our at-the-market offerings (refer to Note 13: Capital Stock). We believe our existing cash resources and, if necessary, cash generated from the sale of the Company’s uranium inventories, will provide sufficient funds to carry out our planned operations for 12 months from the date that our condensed consolidated financial statements are issued. Our continuation as a going concern for a period beyond those 12 months will be dependent upon our ability to obtain adequate additional financing, as our operations are capital intensive and future capital expenditures are expected to be substantial.

 

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, and this reliance is expected to continue for the foreseeable future. Our continued operations, including the recoverability of the carrying values of our assets, are dependent ultimately on our ability to achieve and maintain profitability and positive cash flow from our operations.

 

 

NOTE 2:

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“U.S. GAAP”) for interim financial information and are presented in U.S. dollars. Accordingly, they do not include all of the information and footnotes required under U.S. GAAP for complete financial statements. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended July 31, 2021 (“Fiscal 2021”). In the opinion of management, all adjustments of a normal recurring nature and considered necessary for a fair presentation have been made. Operating results for the six months ended January 31, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2022 (“Fiscal 2022”).

 

Certain comparative figures have been reclassified to conform to the current year’s presentation.

 

Exploration Stage

 

We have established the existence of mineralized materials for certain uranium projects, including our Palangana and recently acquired Christensen Ranch Mines (collectively, the “ISR Mines”).  We have not established proven or probable reserves, as defined by the SEC, through the completion of a final or bankable feasibility study for any of our uranium projects.  Furthermore, we have no plans to establish proven or probable reserves for any of our uranium projects for which we plan on utilizing in-situ recovery (“ISR”) mining.  As a result, we remain in the Exploration Stage, as defined by the SEC, and will continue to remain in the Exploration Stage until such time that proven or probable reserves have been established.

 

Since we commenced the extraction of mineralized materials at our ISR Mines without having established proven or probable reserves, any mineralized materials established or extracted from the ISR Mines should not in any way be associated with having established or produced from proven or probable reserves.

 

11

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

January 31, 2022

(Unaudited Expressed in U.S. Dollars)


 

In accordance with U.S. GAAP, expenditures relating to the acquisition of mineral rights are initially capitalized as incurred while exploration and pre-extraction expenditures are expensed as incurred until such time we exit the Exploration Stage by establishing proven or probable reserves.  Expenditures relating to exploration activities such as drilling programs to establish mineralized materials are expensed as incurred. Expenditures relating to pre-extraction activities such as the construction of mine wellfields, ion exchange facilities and disposal wells are expensed as incurred until such time proven or probable reserves are established for that project, after which expenditures relating to mine development activities for that particular project are capitalized as incurred.

 

Companies in the Production Stage, as defined by the SEC, 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 inventory and, as that inventory is sold, to cost of goods sold. We are in the Exploration Stage which has resulted in us reporting larger losses than if we had been in the Production Stage due to the expensing, rather than capitalizing, of expenditures relating to ongoing mine development activities. Additionally, there would be no corresponding amortization allocated to future reporting periods of our Company since those costs would have been expensed previously, resulting in both lower produced inventory costs and cost of goods sold and results of operations with higher gross profits and lower losses than if we had been in the Production Stage. Any capitalized costs, such as expenditures relating to the acquisition of mineral rights, are depleted over the estimated extraction life using the straight-line method. As a result, our consolidated financial statements may not be directly comparable to the financial statements of companies in the Production Stage.

 

Business Combination

 

We recognize and measure the assets acquired and liabilities assumed in a business combination based on their estimated fair values at the acquisition date, while transaction costs related to business combinations are expensed as incurred. An income, market or cost valuation method may be utilized to estimate the fair value of the assets acquired, liabilities assumed, if any, in a business combination. The income valuation method represents the present value of future cash flows over the life of the asset using: (i) discrete financial forecasts, which rely on management’s estimates of resource quantities and exploration potential, costs to produce and develop resources, revenues, and operating expenses; (ii) appropriate discount rates; and (iii) expected future capital requirements (the “income valuation method”). The market valuation method uses prices paid for a similar asset by other purchasers in the market, normalized for any differences between the assets (the “market valuation method”). The cost valuation method is based on the replacement cost of a comparable asset at the time of the acquisition adjusted for depreciation and economic and functional obsolescence of the asset (the “cost valuation method”). If the initial accounting for the business combination is incomplete by the end of the reporting period in which the acquisition occurs, an estimate will be recorded. Subsequent to the acquisition date, and not later than one year from the acquisition date, we will record any material adjustments to the initial estimate based on new information obtained that would have existed as of the date of the acquisition. Any adjustment that arises from information obtained that did not exist as of the date of the acquisition will be recorded in the period the adjustments arises.

 

 

 

NOTE 3:

ACQUISITION OF URANIUM ONE AMERICAS, INC.

 

On December 17, 2021, we completed the acquisition of all the issued and outstanding shares of Uranium One Americas, Inc. (“U1A”), a Nevada corporation, from Uranium One Investments Inc., a subsidiary of Uranium One Inc., for total cash consideration of $128,494,545 (the “U1A Acquisition”). Subsequent to the completion of the U1A Acquisition, we changed the name of U1A to UEC Wyoming Corp. (“UEC Wyoming”) and, in conjunction therewith, we also changed the name of U1A’s wholly-owned subsidiary, Uranium One USA Inc., a Delaware corporation, to UEC Uranium Corp.

 

The UEC Wyoming’s portfolio of projects (the “UEC Wyoming Portfolio”) primarily consists of 12 projects located in Wyoming, six of which are located in the Powder River Basin with four fully permitted, and six of which are located in the Great Divide Basin.  The U1A Acquisition creates a Wyoming hub-and-spoke operation for UEC, which is anchored by UEC Wyoming’s Irigaray processing facility.

 

The U1A Acquisition was accounted for as a business combination with UEC identified as the acquirer.  The Company’s assumption that the U1A Acquisition is a business combination is based on the Company’s assessment that substantially all the fair value of the assets are not concentrated in a single asset or group of similar assets.  In accordance with the acquisition method of accounting, the purchase price has been allocated to the assets acquired and liabilities assumed, based on their estimated fair values at the acquisition date.  In connection with the U1A Acquisition, we incurred acquisition-related costs of $2,644,980, which were expensed in the three and six months ended January 31, 2022.

 

12

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

January 31, 2022

(Unaudited Expressed in U.S. Dollars)


 

As of January 31, 2022, we had not yet completed the analysis to assign fair values to all assets acquired and liabilities assumed and, therefore the purchase price allocation for the U1A Acquisition is preliminary. The preliminary purchase price allocation may be subject to further refinement and adjustments which may result in material changes to the estimated fair value of assets acquired and liabilities assumed.  The purchase price allocation adjustments can be made throughout the end of UEC’s measurement period, which is not to exceed one year from the acquisition date.

 

The table below sets forth the consideration paid and the preliminary purchase price allocation to the fair value of the assets acquired and liabilities assumed for the U1A Acquisition:

 

Consideration paid

    

Cash

 $125,592,602 

Working capital adjustment (1)

  2,901,943 

Total consideration paid

 $128,494,545 
     

Assets acquired and liabilities assumed

    

Cash & cash equivalents (1)

 $1,183,369 

Prepaid expenses and deposits (1)

  1,549,166 

Other current assets (1)

  73,200 

Inventories (1)

  192,015 

Mineral rights and properties (2)

  110,413,823 

Property, plant and equipment (3)

  13,159,570 

Restricted cash

  13,754,533 

Other non-current assets (4)

  1,736,527 

Total assets

  142,062,203 
     

Accounts payable and accrued liabilities (1)

  95,807 

Other liabilities (4)

  764,603 

Asset retirement obligations (5)

  12,707,248 

Total liabilities

  13,567,658 

Total net assets

 $128,494,545 

 

Notes:

(1)

Working capital adjustment represents the working capital of UEC Wyoming at the date of acquisition, which was comprised of: (i) cash and cash equivalents of $1,183,369; (ii) prepaid expenses and deposits of $1,549,166; (iii) other current assets of $73,200; (iv) inventories of $192,015; and (v) accounts payable and accrued liabilities of $95,807. The fair value of these working capital items approximates their respective carrying values at the date of the acquisition.

(2)

Preliminary fair value of mineral rights and properties was determined using a discounted cash flow model (being the net present value of expected future cash flows). Expected future cash flows are based on estimates of future uranium prices and projected future revenues, estimated quantities of mineral resources and production, expected future production costs, and capital expenditures based on the life of mine plans as at the acquisition date.

(3)

Preliminary fair value of property, plant and equipment was determined using a replacement cost approach.

(4)

Other non-current assets included certain material and supply inventories classified as non-current and right-of-use (“ROU”) assets associated with UEC Wyoming’s operating leases. The preliminary fair value of long-term inventory was determined to approximate its carrying value. ROU assets and lease liabilities for operating leases are measured based on the present value of the future lease payments over the remaining lease terms at the acquisition date.

 

 

 

13

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

January 31, 2022

(Unaudited Expressed in U.S. Dollars)


 

(5)

Preliminary fair value of asset retirement obligations was measured based on the expected costs and timing for final well closure, plant and equipment decommissioning and removal, and environmental remediation, which are discounted to present value using credit adjusted risk-free rates.

 

Since it has been consolidated from December 17, 2021, UEC Wyoming’s losses totaling $919,617 were included in UEC’s consolidated statements of operations and comprehensive loss for the three and six months ended January 31, 2022.

 

The following unaudited proforma financial information presents consolidated results assuming the U1A Acquisition occurred on August 1, 2020.

 

  

Three Months Ended January 31,

  

Six Months Ended January 31,

 
  

2022

  

2021

  

2022

  

2021

 

Sales and Service Revenue

 $13,233,917  $30,091  $13,327,357  $30,091 

Net Loss

  (6,423,162)  (5,021,843)  (10,027,917)  (11,784,482)

 

 

NOTE 4:

INVENTORIES

 

During the six months ended January 31, 2022, we received 600,000 pounds of uranium concentrate inventories, and entered into agreements to purchase additional 700,000 pounds of uranium concentrate inventories under our physical uranium program (the “Physical Uranium Program”).

 

As at January 31, 2022, costs of inventories consisted of the following:

 

  

January 31, 2022

  

July 31, 2021

 

Material and supplies

 $227,466  $33,781 

Uranium concentrates from production

  177,881   177,881 

Purchased uranium inventories

  39,826,643   28,960,818 
  $40,231,990  $29,172,480 

 

As of January 31, 2022, our uranium inventory purchase commitments for the next five fiscal years are as the follows:

 

  

Purchase Commitments

in Pounds

  

Total Purchase

Price

 

Fiscal 2022

  300,000  $9,080,000 

Fiscal 2023

  1,505,000   53,134,000 

Fiscal 2024

  495,000   16,913,250 

Fiscal 2025

  400,000   14,130,000 

Fiscal 2026

  100,000   3,620,000 

Total

  2,800,000  $96,877,250 

 

Subsequent to January 31, 2022, we received 200,000 pounds of uranium concentrate inventories for a total purchase price of $6,000,000.

 

14

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

January 31, 2022

(Unaudited Expressed in U.S. Dollars)


 

Subsequent to January 31, 2022, we entered into agreements to purchase 700,000 pounds of uranium concentrate inventories under our Physical Uranium Program for a total purchase price of $35,570,000 with delivery dates from March 2022 to November 2024.

 

 

NOTE 5:

MINERAL RIGHTS AND PROPERTIES

 

Mineral Rights

 

During the three months ended January 31, 2022, in connection with the U1A Acquisition, we acquired the UEC Wyoming Portfolio, which primarily consists of 12 projects located in Wyoming, six of which are located in the Powder River Basin with four fully permitted, and six of which are located in the Great Divide Basin.  The UEC Wyoming Portfolio also consists of dozens of under-explored, mineralized brownfield projects, backed by detailed databases of historic uranium exploration and development programs.  Refer to Note 3: Acquisition of Uranium One Americas, Inc.

 

As of January 31, 2022, the preliminary fair value allocated to the UEC Wyoming Portfolio was $110,413,823 in aggregation, but we had not yet completed the analysis to assign fair values to each individual project that comprises UEC Wyoming Portfolio.

 

As at January 31, 2022, we had mineral rights in the States of Arizona, Colorado, New Mexico, Wyoming and Texas, in Canada and in the Republic of Paraguay. These mineral rights were acquired through staking, purchase or lease agreements and are subject to varying royalty interests, some of which are indexed to the sale price of uranium and titanium. As of January 31, 2022, annual maintenance payments of approximately $5.0 million will be required to maintain these mineral rights.

 

15

 

As at January 31, 2022, the carrying value of our mineral rights and properties, including the recently acquired UEC Wyoming Portfolio, were as follows:

 

  

January 31, 2022

  

July 31, 2021

 

Mineral Rights and Properties

        

Palangana Mine

 $6,027,784  $6,027,784 

Goliad Project

  8,689,127   8,689,127 

Burke Hollow Project

  1,495,750   1,495,750 

Longhorn Project

  116,870   116,870 

Salvo Project

  14,905   14,905 

Anderson Project

  3,470,373   3,470,373 

Workman Creek Project

  949,854   899,854 

Los Cuatros Project

  257,250   257,250 

Slick Rock Project

  90,000   60,000 

Reno Creek Project

  31,527,870   31,527,870 

UEC Wyoming Portfolio

  110,413,823   - 

Diabase Project

  982,358   546,938 

Yuty Project

  11,947,144   11,947,144 

Oviedo Project

  1,133,412   1,133,412 

Alto Paraná Titanium Project

  1,433,030   1,433,030 

Other Property Acquisitions

  91,080   91,080 
   178,640,630   67,711,387 

Accumulated Depletion

  (3,929,884)  (3,929,884)
   174,710,746   63,781,503 
         

Databases and Land Use Agreements

  2,458,808   2,458,808 

Accumulated Amortization

  (2,457,058)  (2,456,308)
   1,750   2,500 
  $174,712,496  $63,784,003 

 

We have not established proven or probable reserves, as defined by the SEC, for any of our mineral projects.  We have established the existence of mineralized materials for certain mineral projects.  Since we commenced uranium extraction at our ISR Mines 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.

 

16

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

January 31, 2022

(Unaudited Expressed in U.S. Dollars)


 

During the six months ended January 31, 2022, we entered into property purchase agreements, whereby we acquired 10 mineral claims as additions to our existing Diabase Project (the “Diabase Additions”) located on the southern rim of the Athabasca Basin uranium district in Saskatchewan, Canada. In connection with the Diabase Additions, we paid total consideration of $435,420, which consisted of 111,864 shares with a fair value of $425,519 and transaction costs of $9,901. As a result of these claims being added to our existing Diabase Project, the carrying value of our Diabase Project increased to $982,358 ( July 31, 2021: $546,938).

 

During the three and six months ended January 31, 2022 and 2021, we continued with reduced operations at our ISR Mines to capture residual uranium only. As a result, no depletion for the ISR Mines was recorded on our condensed consolidated financial statements for the three and six months ended January 31, 2022 and 2021. 

 

Mineral property expenditures incurred on our projects, including $438,784 incurred for the UEC Wyoming Portfolio since the date of U1A Acquisition, were as follows:

 

  

Three Months Ended January 31,

  

Six Months Ended January 31,

 
  

2022

  

2021

  

2022

  

2021

 

Mineral Property Expenditures

                

Palangana Mine

 $266,396  $232,866  $511,716  $431,668 

Goliad Project

  31,986   71,267   129,440   117,056 

Burke Hollow Project

  702,155   185,838   1,417,696   315,616 

Longhorn Project

  4,529   2,289   7,450   4,577 

Salvo Project

  4,453   7,673   10,149   15,865 

Anderson Project

  16,114   19,425   32,609   38,891 

Workman Creek Project

  8,168   8,167   16,755   16,365 

Slick Rock Project

  12,994   12,993   26,484   26,129 

Reno Creek Project

  224,333   169,576   424,152   270,066 

Allemand Ross Project

  48,889   -   48,889   - 

Christensen Ranch Mine

  263,227   -   263,227   - 

Ludeman Project

  46,277   -   46,277   - 

Moore Ranch Project

  18,547   -   18,547   - 

Yuty Project

  12,567   8,334   20,612   14,328 

Oviedo Project

  139,847   98,804   322,594   146,415 

Alto Paraná Titanium Project

  143,794   29,463   204,652   45,914 

Other Mineral Property Expenditures

  164,897   114,562   264,440   220,128 
  $2,109,173  $961,257  $3,765,689  $1,663,018 

 

 

NOTE 6:

PROPERTY, PLANT AND EQUIPMENT

 

During the three months ended January 31, 2022, in connection with the U1A Acquisition, we acquired a satellite plant located at the Christensen Ranch Mine (the “Christensen Plant”), a central processing plant (the “Irigaray Processing Facility”), and various equipment with a total fair value of $13,159,570.  Refer to Note 3: Acquisition of Uranium One Americas Inc.  The recently acquired plant. facility and equipment have an estimated useful life of three to 21 years and will be depreciated using the straight-line method over their respective useful lives.

 

17

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

January 31, 2022

(Unaudited Expressed in U.S. Dollars)


 

As at January 31, 2022, property, plant and equipment consist of the following:

 

  

January 31, 2022

  

July 31, 2021

 
  

Cost

  

Accumulated
Depreciation

  

Net Book
Value

  

Cost

  

Accumulated
Depreciation

  

Net Book
Value

 

Plant and Processing Facilities

 $18,622,945  $(1,034,024) $17,588,921  $6,642,835  $(851,075) $5,791,760 

Mining Equipment

  2,807,651   (2,361,006)  446,645   2,355,341   (2,313,489)  41,852 

Logging Equipment and Vehicles

  2,705,582   (1,825,440)  880,142   1,923,983   (1,774,887)  149,096 

Computer Equipment

  348,929   (304,553)  44,376   326,056   (283,645)  42,411 

Furniture and Fixtures

  190,731   (176,978)  13,753   184,941   (172,302)  12,639 

Buildings

  297,518   (64,760)  232,758   297,518   (57,322)  240,196 

Land

  1,080,083   -   1,080,083   1,080,083   -   1,080,083 
  $26,053,439  $(5,766,761) $20,286,678  $12,810,757  $(5,452,720) $7,358,037 

 

 

NOTE 7:

RESTRICTED CASH

 

Restricted cash includes cash and cash equivalents and money market funds pledged as collateral for various bonds posted in favor of applicable state regulatory agencies in Arizona, Texas and Wyoming, and for estimated reclamation costs associated with our plants, processing facilities and various projects. Restricted cash will be released upon the completion of reclamation of a plant or a mineral property or the restructuring of a surety and collateral arrangement.

 

As at January 31, 2022, restricted cash consisted of the following:

 

  

January 31, 2022

  

July 31, 2021

 

Restricted cash, beginning of period

 $2,037,677  $1,839,216 

Restricted cash received from U1A Acquisition

  13,754,533   - 

Additional surety bond collateral

  -   198,377 

Interest received

  64   84 

Restricted cash, end of period

 $15,792,274  $2,037,677 

 

Cash, cash equivalents and restricted cash are included in the following accounts as at  January 31, 2022 and 2021:

 

  

January 31, 2022

  

January 31, 2021

 

Cash and cash equivalents

 $22,663,251  $8,713,193 

Restricted cash

  15,792,274   1,839,300 

Total cash, cash equivalents and restricted cash

 $38,455,525  $10,552,493 

 

Subsequent to January 31, 2022, we received $1,754,507 as a result of the partial release of surety bond collateral related to the Christensen Ranch Mine and Irigaray Processing Facility.

 

 

NOTE 8:

EQUITY-ACCOUNTED INVESTMENT

 

As at January 31, 2022, we owned 15,000,000 shares of Uranium Royalty Corp. (“URC”), representing a 16.2% ( July 31, 2021: 18.1%) interest in URC. In addition, two of our officers are members of URC’s board of directors, and one is also an executive officer of URC. As a consequence, our ability to exercise significant influence over URC’s operating and financing policies continued to exist during the three and six months ended January 31, 2022. Should URC's outstanding options and warrants be fully exercised, UEC's ownership interest would decrease from 16.2% to 13.5%.

 

URC is a public company listed on the TSX Venture Exchange with the trading symbol “URC.V” and on NASDAQ with the trading symbol “UROY”. As at January 31, 2022, the fair value of our investment in URC was approximately $48.8 million.

 

18

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

January 31, 2022

(Unaudited Expressed in U.S. Dollars)


 

During the six months ended January 31, 2022, the change in carrying value of the equity-accounted investment is summarized as follows:

 

Balance, July 31, 2021

 $20,729,674 

Share of income from URC

  182,717 

Gain on dilution of ownership interest

  2,572,182 

Translation loss

  (474,741)

Balance, January 31, 2022

 $23,009,832 

 

For the three and six months ended January 31, 2022 and 2021, income (loss) from our equity-accounted investment consisted of the following:

 

  

Three Months Ended January 31,

  

Six Months Ended January 31,

 
  

2022

  

2021

  

2022

  

2021

 

Share of income (loss) from URC

 $