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Table of Contents

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, 2024

 

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.)

   

500 North Shoreline, Ste. 800, Corpus Christi, Texas, U.S.A.

 

78401

(U.S. corporate headquarters)

 

       (Zip Code)

   
1830  1188 West Georgia Street
Vancouver, British Columbia, Canada
(Canadian corporate headquarters)
 

V6E 4A2

 

(Zip Code)

 

(Address of principal executive offices)

 

 

(361) 888-8235

 
 

(Registrant’s telephone number, including area code)

 
   
 Not applicable 
 (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: 404,140,403 shares of common stock outstanding as of March 8, 2024.

 

 

 
 

PART I FINANCIAL INFORMATION

 

Item 1.         Financial Statements

 

 

 

 

 

 

 

 

 

URANIUM ENERGY CORP.

 

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

FOR THE three and six months ended January 31, 2024

 

(Unaudited Expressed in thousands of U.S. dollars unless otherwise stated)

 

 

 

 

 

 

 

 

 

 

 

URANIUM ENERGY CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited Expressed in thousands of U.S. dollars)


 

  

Notes

  

January 31, 2024

  

July 31, 2023

 
            

CURRENT ASSETS

           

Cash and cash equivalents

    $82,287  $45,614 

Inventories

 3   63,401   6,207 

Prepaid expenses and deposits

     3,173   2,682 

Other current assets

     720   702 

TOTAL CURRENT ASSETS

     149,581   55,205 
            

MINERAL RIGHTS AND PROPERTIES

 4   563,588   565,560 

PROPERTY, PLANT AND EQUIPMENT

 5   20,072   19,728 

RESTRICTED CASH

 6   7,251   7,251 

EQUITY-ACCOUNTED INVESTMENTS

 7   56,453   48,110 

INVESTMENT IN EQUITY SECURITIES

 8   78,583   38,656 

OTHER NON-CURRENT ASSETS

     3,350   3,079 

TOTAL ASSETS

    $878,878  $737,589 
            

CURRENT LIABILITIES

           

Accounts payable and accrued liabilities

    $5,038  $10,525 

Asset retirement obligations - current

 9   1,493   1,515 

Derivative liabilities

 10   15,047   - 

Other current liabilities

     264   154 

TOTAL CURRENT LIABILITIES

     21,842   12,194 
            

ASSET RETIREMENT OBLIGATIONS

 9   17,642   17,155 

OTHER NON-CURRENT LIABILITIES

     1,589   1,020 

DERIVATIVE LIABILITIES

 10   -   4,313 

DEFERRED TAX LIABILITIES

     68,655   71,080 

TOTAL LIABILITIES

     109,728   105,762 
            

STOCKHOLDERS’ EQUITY

           

Capital stock

           

Common stock $0.001 par value: 750,000,000 shares authorized, 401,058,973 shares issued and outstanding (July 31, 2023 - 378,452,864)

 11   401   378 

Additional paid-in capital

     1,059,266   924,737 

Share issuance obligation

     517   - 

Accumulated deficit

     (284,109)  (289,680)

Accumulated other comprehensive loss

     (6,925)  (3,608)

TOTAL EQUITY

     769,150   631,827 

TOTAL LIABILITIES AND EQUITY

    $878,878  $737,589 
            

SUBSEQUENT EVENTS

 11         

                           

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

 

 

 

URANIUM ENERGY CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited Expressed in thousands of U.S. dollars, except share and per share data)


 

      

Three Months Ended

  

Six Months Ended

 
      

January 31,

  

January 31,

 
  

Notes

  

2024

  

2023

  

2024

  

2023

 

SALES AND SERVICE REVENUE

  13  $116  $47,931  $224  $105,223 

COST OF SALES AND SERVICES

  13   (97)  (33,361)  (187)  (76,795)

GROSS PROFIT

      19   14,570   37   28,428 
                     

OPERATING COSTS

                    

Mineral property expenditures

      6,691   4,147   12,377   8,198 

General and administrative

      4,895   4,829   10,095   10,551 

Depreciation, amortization and accretion

  4,5,9   552   506   1,069   998 

TOTAL OPERATING COSTS

      12,138   9,482   23,541   19,747 

INCOME (LOSS) FROM OPERATIONS

      (12,119)  5,088   (23,504)  8,681 
                     

OTHER INCOME (EXPENSES)

                    

Interest expenses and finance costs

      (214)  (198)  (415)  (394)

Income (loss) from equity-accounted investments

  7   192   (116)  1,652   (85)

Gain on disposition of assets

      12   2   13   2 

Gain (loss) on revaluation of equity securities

  8   20,076   3,123   37,389   (343)

Gain (loss) on revaluation of derivative liabilities

  10   (5,062)  1,726   (11,963)  (899)

Other income (expenses)

      368   851   597   (271)

OTHER INCOME (EXPENSES)

      15,372   5,388   27,273   (1,990)

INCOME BEFORE INCOME TAXES

      3,253   10,476   3,769   6,691 

DEFERRED TAX (LOSS) RECOVERY

      (1,003)  416   1,802   445 

NET INCOME FOR THE PERIOD

      2,250   10,892   5,571   7,136 
                     

OTHER COMPREHENSIVE INCOME (LOSS)

                    

Translation gain (loss)

      7,732   4,617   (3,317)  (6,151)

TOTAL OTHER COMPREHENSIVE INCOME (LOSS)

      7,732   4,617   (3,317)  (6,151)

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD

     $9,982  $15,509  $2,254  $985 
                     

NET INCOME PER SHARE

  14                 

Basic

     $0.01  $0.03  $0.01  $0.02 

Diluted

     $0.01  $0.03  $0.01  $0.02 
                     

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING,

                    

Basic

      394,024,127   369,608,851   388,202,403   353,199,789 

Diluted

      403,179,679   377,825,545   397,357,956   361,416,483 

 

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

 

 

 

URANIUM ENERGY CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited Expressed in thousands of U.S. dollars)


 

  

Six Months Ended January 31,

 
 

Notes

2024

 

2023

 

NET CASH PROVIDED BY (USED IN):

       
        

OPERATING ACTIVITIES

       

Net income for the period

 $5,571 $7,136 

Adjustments to reconcile net loss to cash flows in operating activities

       

Stock-based compensation

12 2,884  3,273 

Depreciation, amortization and accretion

4,5,9 1,069  998 

(Income) loss from equity-accounted investment

7 (1,652) 85 

Gain on disposition of assets

  (13) (2)

(Gain) loss on revaluation of equity securities

8 (37,389) 343 

Loss on revaluation of derivative liabilities

10 11,963  899 

Deferred tax recovery

  (1,802) (445)

Changes in operating assets and liabilities

       

Inventories

  (57,194) 45,533 

Prepaid expenses and deposits

  (105) 623 

Other current assets

  (28) 211 

Accounts payable and accrued liabilities

  (4,743) (5,081)

Other liabilities

  29  (2)

NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES

  (81,410) 53,571 
        

FINANCING ACTIVITIES

       

Proceeds from share issuances, net of issuance costs

11,12 131,162  54,232 

Repayments of other loans

  -  (66)

Cash paid for withholding amounts on option exercise

  (875) (147)

NET CASH PROVIDED BY FINANCING ACTIVITIES

  130,287  54,019 
        

INVESTING ACTIVITIES

       

Acquisition of UEX, net of cash acquired

  -  1,984 

Acquisition of Roughrider

  -  (82,117)

Investment in mineral rights and properties

  (1,391) (51)

Capital contribution to equity-accounted investment

7 (1,645) (588)

Purchase of additional interest in equity-accounted investment

7 (5,676) - 

Investment in equity securities

8 (5,548) (26,328)

Proceeds from sale of equity securities

8 3,008  - 

Purchase of property, plant and equipment

  (937) (287)

Proceeds from disposition of assets

8 -  2 

NET CASH USED IN INVESTING ACTIVITIES

  (12,189) (107,385)
        

NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

  36,688  205 

FOREIGN EXCHANGE DIFFERENCE ON CASH

  (15) (128)

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD

  52,865  39,787 

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD

 $89,538 $39,864 

 

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

 

 

 

URANIUM ENERGY CORP.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY

 

(Unaudited - Expressed in thousands of U.S. dollars, except share data)


 

  

Common Stock

  

Additional Paid-in Capital

  

Share Issuance Obligation

  

Accumulated Deficit

  

Accumulated Other Comprehensive Loss

  

Stockholders' Equity

 
  

Shares

  

Amount

                     

Balance, July 31, 2023

  378,452,864  $378  $924,737  $-  $(289,680) $(3,608) $631,827 

Common stock

                            

Issued under ATM offerings, net of issuance costs

  10,770,000   11   56,259   -   -   -   56,270 

Issued upon exercise of stock options

  445,861   1   263   -   -   -   264 

Stock-based compensation

                            

Amortization of stock-based compensation

  -   -   1,572   -   -   -   1,572 

Net income for the period

  -   -   -   -   3,321   -   3,321 

Other comprehensive loss

  -   -   -   -   -   (11,049)  (11,049)

Balance, October 31, 2023

  389,668,725  $390  $982,831  $-  $(286,359) $(14,657) $682,205 

Common stock

                            

Issued under ATM offering, net of issuance costs

  10,418,029   10   73,228   -   -   -   73,238 

Issued upon exercise of stock options

  669,999   1   (70)  -   -   -   (69)

Issued upon exercise of warrants

  302,220   -   1,965   517   -   -   2,482 

Stock-based compensation

                            

Amortization of stock-based compensation

  -   -   1,312   -   -   -   1,312 

Net income for the period

  -   -   -   -   2,250   -   2,250 

Other comprehensive income

  -   -   -   -   -   7,732   7,732 

Balance, January 31, 2024

  401,058,973  $401  $1,059,266  $517  $(284,109) $(6,925) $769,150 

 

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

 

 

URANIUM ENERGY CORP.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

 

(Unaudited - Expressed in thousands of U.S. dollars, except share data)


 

  

Common Stock

  

Additional Paid-in Capital

  

Accumulated Deficit

  

Accumulated Other Comprehensive Loss

  

Stockholders' Equity

 
  

Shares

  

Amount

                 

Balance, July 31, 2022

  289,638,307  $289  $613,179  $(286,373) $(186) $326,909 

Common stock

                        

Issued for acquisition of UEX and Roughrider

  66,324,560   66   235,306   -   -   235,372 

Issued under ATM offerings, net of issuance costs

  5,218,890   5   21,709   -   -   21,714 

Issued upon exercise of stock options

  1,404,601   2   58   -   -   60 

Issued upon exercise of warrants

  3,410,898   4   6,136   -   -   6,140 

Stock-based compensation

                        

Common stock issued for consulting services

  4,179   -   17   -   -   17 

Common stock issued under Stock Incentive Plan

  73,618   -   299   -   -   299 

Amortization of stock-based compensation

  -   -   1,426   -   -   1,426 

Replacement options issued for acquisition of UEX

  -   -   4,026   -   -   4,026 

Net loss for the period

  -   -   -   (3,756)  -   (3,756)

Other comprehensive loss

  -   -   -   -   (10,768)  (10,768)

Balance, October 31, 2022

  366,075,053  $366  $882,156  $(290,129) $(10,954) $581,439 

Common stock

                        

Issued under ATM offering, net of issuance costs

  7,040,363   7   26,099   -   -   26,106 

Issued upon exercise of stock options

  94,302   -   -   -   -   - 

Issued upon exercise of warrants

  45,000   -   66   -   -   66 

Stock-based compensation

                        

Common stock issued for consulting services

  49,228   -   201   -   -   201 

Common stock issued under Stock Incentive Plan

  66,471   -   262   -   -   262 

Amortization of stock-based compensation

  -   -   1,085   -   -   1,085 

Net income for the period

  -   -   -   10,892   -   10,892 

Other comprehensive income

  -   -   -   -   4,617   4,617 

Balance, January 31, 2023

  373,370,417  $373  $909,869  $(279,237) $(6,337) $624,668 

 

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, 2024
(Unaudited – Expressed in thousands of U.S. dollars unless otherwise stated)

 

NOTE 1:

NATURE OF OPERATIONS

 

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

 

As at January 31, 2024, we had working capital (current assets less current liabilities) of $127,739 including cash and cash equivalents of $82,287 and purchased uranium inventories of $63,019.  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 these interim 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 achieve consistent positive cash flow from the sale of our uranium inventories and 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 financings 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 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, 2023 (“Fiscal 2023”).  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, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending  July 31, 2024 (“Fiscal 2024”).

 

Exploration Stage

 

We have established the existence of mineralized materials for certain uranium projects, including our Palangana Mine, Christensen Ranch Mine (collectively, the “ISR Mines”), Roughrider and Christie Lake Projects.  We have not established proven or probable reserves, as defined by the United States Securities and Exchange Commission (“SEC”) subpart 1300 of Regulation S-K (“S-K 1300”), through the completion of a “final” or “bankable” feasibility study for any of the uranium projects we operate, including our ISR Mines.  Furthermore, we have no present plans to establish proven or probable reserves for any of our uranium projects for which we plan on utilizing in-situ recovery (“ISR”) mining, such as our ISR Mines.  As a result, and despite the fact that we commenced extraction of mineralized materials at our ISR Mines, we remain an Exploration Stage issuer, as defined by the SEC, and will continue to remain as an Exploration Stage issuer until such time proven or probable reserves have been established.

 

Since we commenced extraction of mineralized materials at our ISR Mines without having established proven or probable reserves, any mineralized materials established or extracted from our 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, 2024
(Unaudited – Expressed in thousands of U.S. dollars unless otherwise stated)

 

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 as we exit the Exploration Stage by establishing proven or probable reserves.  Expenditures relating to exploration activities, such as drill 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 that 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 future reporting periods to inventory and, as that inventory is sold, to cost of goods sold.  We are in the Exploration Stage which has resulted in our Company reporting larger losses than if it had been in the Production Stage due to the expensing, instead of capitalization, of expenditures relating to ongoing mine development activities.  Additionally, there would be no corresponding depletion allocated to future reporting periods of our Company since those costs would have been expensed previously, resulting in both lower inventory costs and cost of goods sold and results of operations with higher gross profits and lower losses than if we had been in the Production Stage.  Any capitalized costs, such as expenditures relating to the acquisition of mineral rights, are depleted over the estimated extraction life using the straight-line method when the underlying property is converted to the Production Stage.  As a result, our consolidated financial statements may not be directly comparable to the financial statements of companies in the Production Stage.

 

Accounting Pronouncements Not Yet Adopted

 

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.  The ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets.  All disclosure requirements under ASU 2023-07 are also required for public entities with a single reportable segment.  The ASU is effective for the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2025, and subsequent interim periods, with early adoption permitted.  The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures.  The ASU expands public entities' income tax disclosures by requiring disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid.  The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions.  The ASU will be effective for annual periods beginning after December 15, 2024.  The guidance will be applied on a prospective basis with the option to apply the standard retrospectively.  Early adoption is permitted.  The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.

 

NOTE 3:

INVENTORIES

 

As at January 31, 2024, we held 1,166,000 ( July 31, 2023: 171,000) pounds of purchased uranium concentrate inventory.  Costs of inventories consist of the following:

 

  

January 31, 2024

  

July 31, 2023

 

Material and supplies

 $204  $228 

Uranium concentrates from production

  178   178 

Purchased uranium inventories

  63,019   5,801 
  $63,401  $6,207 

 

As of January 31, 2024, our uranium inventory purchase commitments for the next five fiscal years are as the follows:

 

  

Purchase Commitments

     
  

in Pounds

  

Purchase Price

 

Fiscal 2024

  300,000  $12,355 

Fiscal 2025

  600,000   23,120 

Fiscal 2026

  100,000   3,620 

Total

  1,000,000  $39,095 

 

12

 
URANIUM ENERGY CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2024
(Unaudited – Expressed in thousands of U.S. dollars unless otherwise stated)
 

NOTE 4:

MINERAL RIGHTS AND PROPERTIES

 

Mineral Rights

 

As at January 31, 2024, we own mineral rights in the States of Arizona, New Mexico, Texas and Wyoming, in Canada and in the Republic of Paraguay.  These mineral rights were acquired through staking, purchase or lease or option agreements and are subject to varying royalty interests, some of which are indexed to the sale price of uranium or titanium.  As of January 31, 2024, annual maintenance payments of approximately $4,106 will be required to maintain these mineral rights.

 

As at January 31, 2024, the carrying value of our mineral rights and properties were as follows:

 

Costs

 

United States

  

Canada

  

Paraguay

  

Total

 

Balance, July 31, 2023

 $172,440  $384,607  $15,014  $572,061 

Additions

  50   1,340   -   1,390 

Foreign exchange difference

  -   (3,365)  -   (3,365)

Balance, January 31, 2024

  172,490   382,582   15,014   570,086 

 

Accumulated Amortization and Impairment

 

United States

  

Canada

  

Paraguay

  

Total

 

Balance, July 31, 2023

  (6,389)  (112)  -   (6,501)

Foreign exchange difference

  -   3   -   3 

Balance, January 31, 2024

  (6,389)  (109)  -   (6,498)
                 

Carrying Value

                

Balance, July 31, 2023

 $166,051  $384,495  $15,014  $565,560 

Balance, January 31, 2024

 $166,101  $382,473  $15,014  $563,588 
 

NOTE 5:

PROPERTY, PLANT AND EQUIPMENT

 

Property, plant and equipment consists of the following:

 

   

January 31, 2024

   

July 31, 2023

 
   

Cost

   

Accumulated

   

Net Book

   

Cost

   

Accumulated

   

Net Book

 
           

Depreciation

   

Value

           

Depreciation

   

Value

 

Plant and Processing Facilities

  $ 19,347     $ (2,348 )   $ 16,999     $ 19,145     $ (1,998 )   $ 17,147  

Mining Equipment

    3,501       (2,560 )     941       2,915       (2,478 )     437  

Logging Equipment and Vehicles

    2,838       (2,111 )     727       2,799       (1,989 )     810  

Computer Equipment

    309       (288 )     21       306       (280 )     26  

Furniture and Fixtures

    244       (183 )     61       198       (180 )     18  

Buildings

    338       (95 )     243       297       (87 )     210  

Land

    1,080       -       1,080       1,080       -       1,080  
    $ 27,657     $ (7,585 )   $ 20,072     $ 26,740     $ (7,012 )   $ 19,728  

 

13

 
URANIUM ENERGY CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2024
(Unaudited – Expressed in thousands of U.S. dollars unless otherwise stated)
 

NOTE 6:          RESTRICTED CASH

 

Restricted cash includes cash and cash equivalents and money market funds 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 completion of reclamation of a mineral property or restructuring of a surety and collateral arrangement.

 

Restricted cash consisted of the following:

 

  

January 31, 2024

  

July 31, 2023

 

Balance, beginning of year

 

$

7,251

  

$

7,251

 

Balance, end of year

 

$

7,251

  

$

7,251

 

 

Cash, cash equivalents and restricted cash are included in the following accounts:

 

  

January 31, 2024

  

July 31, 2023

 
Cash and cash equivalents 

$

82,287

  

$

45,614 
Restricted cash  7,251   7,251 

Total cash, cash equivalents and restricted cash

 

$

89,538

  

$

52,865 

 

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents and restricted cash.  These assets include Canadian dollar and U.S. dollar denominated certificates of deposit, money market accounts and demand deposits.  These instruments are maintained at financial institutions in Canada and the U.S.  The maximum credit risk of these assets is the carrying amount less amount covered by the Canada Deposit Insurance Corporation, the Securities Investor Protection Corporation or the U.S. Federal Deposit Insurance Corporation, should the financial institutions with which these amounts are invested be rendered insolvent.  The Company does not consider any of its financial assets to be impaired as of  January 31, 2024

 

14

 
URANIUM ENERGY CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2024
(Unaudited – Expressed in thousands of U.S. dollars unless otherwise stated)
 

NOTE 7:

EQUITY-ACCOUNTED INVESTMENTS

 

During the six months ended January 31, 2024, we participated in an equity financing and acquired an additional 1,930,750 common shares of Uranium Royalty Corp. ("URC") at a price of $2.94 per share for total consideration of $5,676.

 

As at January 31, 2024, we owned 16,930,750 shares of URC, representing a 15.0% ( July 31, 2023: 14.9%) interest in URC.  In addition, two of our officers are members of URC's board of directors.  Furthermore, one of these officers also holds an executive position within 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, 2024.  Should URC’s outstanding options and warrants be fully exercised, the Company’s ownership interest would decrease from 15.0% to 13.0%.  URC is a public company listed on the Toronto Stock Exchange with the trading symbol “URC” and on NASDAQ with the trading symbol “UROY”.  As at January 31, 2024, the fair value of our investment in URC was approximately $57.2 million ( July 31, 2023: $34.2 million) and the carrying amount of URC was $32.3 million ( July 31, 2023: $24.6 million).

 

As at January 31, 2024, we owned 50% of the outstanding shares of JCU (Canada) Exploration Company Limited (“JCU”) acquired through our acquisition of UEX Corporation completed on August 19, 2022 (the "UEX Acquisition").  JCU is a private Canadian company engaged in the exploration and development of uranium assets in Canada.  The Company’s 50% interest in JCU is a joint venture, which is accounted for using the equity method.

 

We incurred $12 and $43 in exploration expenditures on behalf of JCU for the three and six months ended January 31, 2024. As at January 31, 2024, the amount receivable from JCU totaled $8 ( July 31, 2023: $201).

 

During the six months ended January 31, 2024, the changes in carrying value of our equity-accounted investments are summarized as follows:

 

Balance, July 31, 2023

 $48,110 

Addition in URC

  5,676 

Capital contribution to JCU

  1,645 

Share of income (loss) from URC and JCU

  1,221 

Gain on dilution of ownership interest in URC

  431 

Foreign exchange difference

  (630)

Balance, January 31, 2024

 $56,453 

 

For the three and six months ended January 31, 2024 and 2023, income (loss) from our equity-accounted investments consisted of the following:

 

  

Three Months Ended January 31, 2024

  

Six Months Ended January 31,

 
  

2024

  

2023

  

2024

  

2023

 

Share of income (loss)

 $182  $(506) $1,221  $(701)

Gain on dilution of ownership interest

  10   390   431   616 

Total

 $192  $(116) $1,652  $(85)

 

Subsequent to January 31, 2024, we participated in an equity financing and acquired an additional 1,047,614 common shares of URC at a price of $3.40 per share for total consideration of $3.6 million.

 

15

 
URANIUM ENERGY CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2024
(Unaudited – Expressed in thousands of U.S. dollars unless otherwise stated)
 

NOTE 8:

INVESTMENTS IN EQUITY SECURITIES

 

During the six months ended January 31, 2024, the changes in our investments in equity securities are summarized as follows:

 

Balance, July 31, 2023

 $38,656 

Dispositions

  (3,008)

Additions

  5,548 

Gain on revaluation of equity securities

  37,389 

Foreign exchange difference

  (2)

Balance, January 31, 2024

 $78,583 

 

The cumulative revaluation adjustment since acquisition of the equity securities held at January 31, 2024 is a gain of $22,359.

 

NOTE 9:

ASSET RETIREMENT OBLIGATIONS

 

Asset retirement obligations (“ARO”s) relate to future remediation and decommissioning activities for our plants, processing facilities and various projects, and are summarized as follows:

 

Balance, July 31, 2023

  $ 18,670  

Accretion

    487  

Liabilities settled in cash

    (22 )

Balance, January 31, 2024

    19,135  

Asset retirement obligations, current

    1,493  

Asset retirement obligations, non-current

  $ 17,642  

 

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

 

   

January 31, 2024

   

July 31, 2023

 

Undiscounted amount of estimated cash flows

  $ 29,042     $ 29,064  
                 

Payable in years

    1 to 23       1 to 23  

Inflation rate

    1.56% to 5.32%       1.56% to 5.32%  

Discount rate

    3.72% to 6.35%       3.72% to 6.35%  

 

Our undiscounted amounts of estimated cash flows for the next five fiscal years and beyond are as follows:

 

Fiscal 2024

  $ 1,493  

Fiscal 2025

    1,472  

Fiscal 2026

    2,489  

Fiscal 2027

    2,509  

Fiscal 2028

    1,990  

Remaining balance

    19,089  
    $ 29,042  

 

16

 
URANIUM ENERGY CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2024
(Unaudited – Expressed in thousands of U.S. dollars unless otherwise stated)

 

 

NOTE 10:

DERIVATIVE LIABILITIES

 

On August 19, 2022, the Company issued replacement warrants (each, a "Replacement Warrant") in connection with the UEX Acquisition.  The Replacement Warrants are accounted for as derivative liabilities as the exercise prices of the Replacement Warrants are denominated in Canadian dollars which differs from our functional currency.

 

As at January 31, 2024, the fair value of the Replacement Warrants was estimated using the Black-Scholes model with the following assumptions, which is level 2 of the fair value measurement hierarchy:

 

Exercise Price in U.S. dollars

 

2.400 to3.3131

 

Exercise Price in Canadian dollars

 

CA$3.22 to CA$4.44

 

Expected Risk Free Interest Rate

 5.02%

Expected Volatility

 47.40%

Expected Life in Years

 0.6 

Expected Dividend Yield

 0%

 

The movement in derivative liabilities during the period is as follows:

 

Balance, July 31, 2023

 $4,313 

Exercise of Replacement Warrants

  (1,229)

Change in fair value during the period

  11,963 

Balance, January 31, 2024

 $15,047 

 

As at January 31, 2024, the number of Replacement Warrants outstanding was 3,372,992 with an expiry date of September 7, 2024 (refer to  Note 11).

 

NOTE 11:

CAPITAL STOCK

 

Equity Financing

 

On May 17, 2021, 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 by the SEC on June 1, 2021, providing for the public offer and sale of certain securities of the Company from time to time, at our discretion, of up to an aggregate offering amount of $200 million (the “2021 Shelf”), which included an at-the-market offering agreement prospectus (the “May 2021 ATM Offering”) covering the offering, issuance and sale of up to a maximum offering of $100 million as part of the $200 million under the 2021 Shelf.

 

On May 14, 2021, we entered into an at-the-market offering agreement (the “2021 ATM Offering Agreement”) with H.C. Wainwright & Co., LLC and certain co-managers (collectively, the “2021 ATM Managers”) as set forth in the 2021 ATM Offering Agreement under which we may, from time to time, sell shares of our common stock having an aggregate offering price of up to $100 million through the 2021 ATM Managers selected by us.

 

On November 26, 2021, we filed a prospectus supplement to our 2021 Shelf with respect to the continuation of the May 2021 ATM Offering Agreement with the 2021 ATM Managers under which we may, if eligible, from time to time, sell shares of our common stock having an aggregate offering price of up to an additional $100 million for a total of $200 million through the 2021 ATM Managers selected by us (the “November 2021 ATM Offering”; and, collectively with the May 2021 ATM Offering, the “2021 ATM Offering”).

 

On November 16, 2022, we filed a Form S-3 automatic shelf registration statement under the Securities Act, which became effective upon filing, providing for the public offer and sale of certain securities of the Company from time to time, at our discretion, of an undetermined dollar value of common stock, debt securities, warrants to purchase common stock or debt securities, subscription receipts for and units which include common stock, debt securities, warrants or any combination thereof (the “2022 Shelf”), which included an at-the-market offering agreement prospectus (the “2022 ATM Offering”; and, collectively, with the 2021 ATM Offering, the “ATM Offerings”) covering the offering, issuance and sale of up to a maximum offering of $300 million under the 2022 Shelf.

 

17

 
URANIUM ENERGY CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2024
(Unaudited – Expressed in thousands of U.S. dollars unless otherwise stated)

 

On November 16, 2022, we also entered into an at-the-market offering agreement (the “2022 ATM Offering Agreement”) with H.C. Wainwright & Co., LLC and certain co-managers (collectively, the “2022 ATM Managers”) as set forth in the 2022 ATM Offering Agreement under which we may, from time to time, sell shares of our common stock having an aggregate offering price of up to $300 million through the 2022 ATM Managers selected by us.

 

During the three and six months ended January 31, 2024, we issued 10,418,029 and 21,188,029 shares of the Company’s common stock under the ATM Offerings for net cash proceeds of $73,238 and $129,508, respectively.

 

Subsequent to January 31, 2024, we issued a further 1,700,000 shares of the Company’s common stock under our ATM Offerings for net cash proceeds of $13,390.

 

Share Purchase Warrants

 

A continuity schedule of our outstanding share purchase warrants for the three and six months ended January 31, 2024, is as follows:

 

  

Number of

  

Weighted Average

 
  

Warrants

  

Exercise Price

 

Balance, July 31, 2023

  3,857,030  $3.31 

Exercised

  (302,220)  2.53 

Balance, January 31, 2024

  3,554,810  $3.38 

 

A summary of our share purchase warrants outstanding and exercisable as of January 31, 2024, is as follows:

 

    

Number of

  

Weighted Average Remaining

  

Weighted Average

  

Warrants

  

Contractual

  

Exercise Price

  

Outstanding

  

Life (Years)

 

Expiry Date

$3.34   3,372,992   0.60 

September 7, 2024

 4.13   181,818   2.18 

April 5, 2026

$3.38   3,554,810   0.68  

 

During the three and six months ended January 31, 2024, we received cash proceeds totaling $737 from the exercise of share purchase warrants and cash advances of $517 for warrants to be exercised in the future period.

 

Subsequent to January 31, 2024, 994,702 warrants with an expiry date of September 7, 2024 were exercised and proceeds of $3,262 were received. 

 

18

 
URANIUM ENERGY CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2024
(Unaudited – Expressed in thousands of U.S. dollars unless otherwise stated)

 

 

NOTE 12:

STOCK-BASED COMPENSATION

 

Stock Options

 

A continuity schedule of our outstanding stock options for the three and six months ended January 31, 2024, is as follows:

 

  

Number of Stock

  

Weighted Average

 
  

Options

  

Exercise Price

 

Balance, July 31, 2023

  8,326,983  $1.92 

Granted

  17,500   5.04 

Exercised

  (608,182)  1.69 

Cancelled/Forfeited

  (191,259)  1.59 

Expired

  (27,000)  3.69 

Balance, October 31, 2023

  7,518,042   1.94 

Granted

  10,000   7.63 

Exercised

  (878,503)  1.45 

Balance, January 31, 2024

  6,649,539  $2.01 

 

The table below sets forth the number of shares issued and cash received upon exercise of our stock options:

 

  

Three Months Ended January 31,

  

Six Months Ended January 31,

 
  

2024

  

2023

  

2024

  

2023

 

Number of Options Exercised on Cash Basis

  100,425   -   289,675   138,537 

Number of Options Exercised on Forfeiture Basis

  778,078   197,110   1,197,010   2,389,795 

Total Number of Options Exercised

  878,503   197,110   1,486,685   2,528,332 

Number of Shares Issued on Cash Exercise

  100,425   -   289,675   138,537 

Number of Shares Issued on Forfeiture Basis

  569,574   94,302   826,185   1,360,366 

Total Number of Shares Issued Upon Exercise of Options

  669,999   94,302   1,115,860   1,498,903 

Cash Received from Exercise of Stock Options

 $137  $-  $400  $206 

Total Intrinsic Value of Options Exercised

 $4,561  $381  $6,591  $5,976 

  

19

 
URANIUM ENERGY CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2024
(Unaudited – Expressed in thousands of U.S. dollars unless otherwise stated)

 

A continuity schedule of our outstanding unvested stock options as of January 31, 2024, and the changes during the period, is as follows:

 

  

Number of Unvested Stock Options

  

Weighted Average Grant-Date Fair Value

 

Balance, July 31, 2023

  1,803,265  $2.28 

Granted

  17,500   3.36 

Cancelled/Forfeited

  (12,300)  2.37 

Vested

  (133,062)  2.18 

Balance, October 31, 2023

  1,675,403   2.29 

Granted

  10,000   5.05 

Vested

  (429,513)  2.39 

Balance, January 31, 2024

  1,255,890  $2.28 

 

For the six months ended  January 31, 2024, the fair value of the stock options granted was estimated using the Black-Scholes model with the following assumptions, which is level 2 of the fair value measurement hierarchy:

 

Exercise Price

4.722 to7.6363

Expected Risk Free Interest Rate

3.99% to 4.67%

Expected Volatility

79.30% to 79.53%

Expected Life in Years

5

Expected Dividend Yield

0.00%

 

As at January 31, 2024, the aggregate intrinsic value of all of our outstanding stock options was estimated at $37,408 (vested: $32,300 and unvested: $5,108). As at January 31, 2024, our unrecognized compensation cost related to unvested stock options was $1,508, which is expected to be recognized over 1.08 years.

 

A summary of our stock options outstanding and exercisable as of January 31, 2024, is as follows:

 

  

Options Outstanding

  

Options Exercisable

 
          

Weighted

          

Weighted

 
          

Average

          

Average

 

Range of

     

Weighted

  

Remaining

      

Weighted

  

Remaining

 

Exercise

 

Outstanding at

  

Average

  

Contractual

  

Exercisable at

  

Average

  

Contractual

 

Prices

 

January 31, 2024

  

Exercise Price

  

Term (Years)

  

January 31, 2024

  

Exercise Price

  

Term (Years)

 

$0.80 to $0.99

  2,402,500  $0.92   5.99   2,402,500  $0.92   5.99 

$1.00 to $1.99

  1,350,000   1.11   6.34   1,350,000   1.11   6.34 

$2.00 to $2.99

  608,399