uec20200131_10q.htm

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, 2020

☐	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: 183,910,180 shares of common stock outstanding as of March 9, 2020.

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	25

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32

Item 4.	Controls and Procedures	32

PART II – OTHER INFORMATION		33

Item 1.	Legal Proceedings	33

Item 1A.	Risk Factors	34

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44

Item 3.	Defaults Upon Senior Securities	45

Item 4.	Mine Safety Disclosures	45

Item 5.	Other Information	45

Item 6.	Exhibits	46

SIGNATURES		47

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

URANIUM ENERGY CORP.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JANUARY 31, 2020

(Unaudited)

URANIUM ENERGY CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

	Note(s)	January 31, 2020			July 31, 2019

CURRENT ASSETS
Cash and cash equivalents	5	$	10,272,315		$	6,058,186
Term deposits			-			11,831,671
Inventories			211,662			211,662
Prepaid expenses and deposits			1,459,916			1,343,458
Other current assets			124,351			264,956
TOTAL CURRENT ASSETS			12,068,244			19,709,933

MINERAL RIGHTS AND PROPERTIES	3		63,606,605			63,536,895
PROPERTY, PLANT AND EQUIPMENT	4		7,021,321			7,042,359
RESTRICTED CASH	5		1,834,746			1,821,392
EQUITY-ACCOUNTED INVESTMENT	6		10,994,683			8,680,449
OTHER LONG-TERM ASSETS	7		988,712			249,214
TOTAL ASSETS		$	96,514,311		$	101,040,242


CURRENT LIABILITIES
Accounts payable and accrued liabilities		$	1,917,939		$	3,002,688
Other current liabilities	11		198,108			-
Due to a related party	8		32,306			68,680
TOTAL CURRENT LIABILITIES			2,148,353			3,071,368

LONG-TERM DEBT	9		19,044,764			19,599,963
ASSET RETIREMENT OBLIGATIONS	10		3,637,698			3,541,082
OTHER LONG-TERM LIABILITIES	11		551,931			50,010
DEFERRED TAX LIABILITIES			546,941			550,551
TOTAL LIABILITIES			25,929,687			26,812,974

STOCKHOLDERS' EQUITY
Capital stock
Common stock $0.001 par value: 750,000,000 shares authorized, 183,673,815 shares issued and outstanding (July 31, 2019 - 180,896,431)	12		183,674			180,896
Additional paid-in capital			339,570,053			336,047,595
Share issuance obligation	12		-			187,100
Accumulated deficit			(269,132,022	)		(262,200,784	)
Accumulated other comprehensive (loss) income			(37,081	)		12,461
TOTAL EQUITY			70,584,624			74,227,268
TOTAL LIABILITIES AND EQUITY		$	96,514,311		$	101,040,242

COMMITMENTS AND CONTINGENCIES	16

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

URANIUM ENERGY CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

		Three Months Ended January 31,						Six Months Ended January 31,
	Note(s)	2020			2019			2020			2019

COSTS AND EXPENSES
Mineral property expenditures	3	$	1,323,323		$	899,217		$	2,846,774		$	1,765,460
General and administrative	8,12		2,394,794			2,183,463			4,709,964			4,442,398
Depreciation, amortization and accretion	3,4,10		81,752			84,807			158,138			173,583
TOTAL COSTS AND EXPENSES			3,799,869			3,167,487			7,714,876			6,381,441
LOSS FROM OPERATIONS			(3,799,869	)		(3,167,487	)		(7,714,876	)		(6,381,441	)

OTHER INCOME (EXPENSES)
Interest income			52,341			117,078			141,522			174,982
Interest expenses and finance costs	9		(859,163	)		(813,809	)		(1,744,288	)		(1,568,658	)
Income (loss) from equity-accounted investment	6		2,704,373			(105,837	)		2,363,776			282,032
Other income			9,925			29,819			17,218			96,255
Gain on disposition of assets	5		1,800			1,583,764			1,800			1,583,764
TOTAL OTHER INCOME (EXPENSES)			1,909,276			811,015			780,028			568,375
LOSS BEFORE INCOME TAXES			(1,890,593	)		(2,356,472	)		(6,934,848	)		(5,813,066	)

DEFERRED TAX BENEFITS			1,932			6,798			3,610			11,966
NET LOSS FOR THE PERIOD			(1,888,661	)		(2,349,674	)		(6,931,238	)		(5,801,100	)

OTHER COMPREHENSIVE (LOSS) INCOME,
NET OF INCOME TAXES			(39,648	)		38,232			(49,542	)		38,232
TOTAL COMPREHENSIVE LOSS FOR THE PERIOD		$	(1,928,309	)	$	(2,311,442	)	$	(6,980,780	)	$	(5,762,868	)

NET LOSS PER SHARE, BASIC AND DILUTED	13	$	(0.01	)	$	(0.01	)	$	(0.04	)	$	(0.03	)

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING,
BASIC AND DILUTED			182,802,747			177,061,313			182,021,725			171,729,303

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

URANIUM ENERGY CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

		Six Months Ended January 31,
	Note(s)	2020			2019
NET CASH PROVIDED BY (USED IN):

OPERATING ACTIVITIES
Net loss for the period		$	(6,931,238	)	$	(5,801,100	)
Adjustments to reconcile net loss to cash flows in operating activities
Stock-based compensation	12		1,715,636			1,588,866
Depreciation, amortization and accretion	3,4,10		158,138			173,583
Amortization of long-term debt discount	9		844,801			666,120
Gain on disposition of assets			(1,800	)		(1,583,764	)
Income from equity-accounted investment	6		(2,363,776	)		(282,032	)
Deferred tax benefits			(3,610	)		(11,966	)
Realized loss on available-for-sale securities			-			799
Changes in operating assets and liabilities
Prepaid expenses and deposits			137,189			(168,785	)
Other current assets			140,605			(81,609	)
Accounts payable and accrued liabilities			(1,134,749	)		(841,344	)
Due to a related party	8		(36,374	)		27,531
Other liabilities			(70,616	)		-
NET CASH USED IN OPERATING ACTIVITIES			(7,545,794	)		(6,313,701	)

FINANCING ACTIVITIES
Proceeds from share issuance, net of issuance costs			-			21,538,191
NET CASH PROVIDED BY FINANCING ACTIVITIES			-			21,538,191

INVESTING ACTIVITIES
Investment in mineral rights and properties			(30,000	)		(105,000	)
Purchase of property, plant and equipment			(30,194	)		(19,505	)
Investment in term deposits			-			(18,026,455	)
Proceeds from redemption of term deposits			11,831,671			-
Proceeds from disposition of assets			1,800			4,900
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES			11,773,277			(18,146,060	)

NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH			4,227,483			(2,921,570	)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD			7,879,578			8,716,422
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD	5	$	12,107,061		$	5,794,852

SUPPLEMENTAL CASH FLOW INFORMATION	15

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

URANIUM ENERGY CORP.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)

	Common Stock				Additional Paid-in		Share Issuance			Accumulated			Accumulated Other Comprehensive			Stockholders'
	Shares		Amount		Capital		Obligation			Deficit			Income (Loss)			Equity
Balance, July 31, 2019		180,896,431	$	180,896	$	336,047,595	$	187,100		$	(262,200,784	)	$	12,461		$	74,227,268
Stock-based compensation
Common stock issued for consulting services		29,167		29		31,763		-			-			-			31,792
Common stock issued under Stock Incentive Plan		435,348		436		410,026		(187,100	)		-			-			223,362
Amortization of stock option expenses		-		-		662,232		-			-			-			662,232
Net loss for the period		-		-		-		-			(5,042,577	)		-			(5,042,577	)
Other comprehensive loss		-		-		-		-			-			(9,894	)		(9,894	)
Balance, October 31, 2019		181,360,946	$	181,361	$	337,151,616	$	-		$	(267,243,361	)	$	2,567		$	70,092,183
Common stock
Issued for credit facility		1,743,462		1,743		1,398,257		-			-			-			1,400,000
Stock-based compensation
Common stock issued for consulting services		313,201		313		277,644		-			-			-			277,957
Common stock issued under Stock Incentive Plan		256,206		257		234,535		-			-			-			234,792
Amortization of stock option expenses		-		-		485,268		-			-			-			485,268
Warrants
Issued for consulting services		-		-		22,733		-			-			-			22,733
Net loss for the period		-		-		-		-			(1,888,661	)		-			(1,888,661	)
Other comprehensive loss		-		-		-		-			-			(39,648	)		(39,648	)
Balance, January 31, 2020		183,673,815	$	183,674	$	339,570,053	$	-		$	(269,132,022	)	$	(37,081	)	$	70,584,624

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

URANIUM ENERGY CORP.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)

	Common Stock				Additional Paid-in			Accumulated			Accumulated Other Comprehensive			Stockholders'
	Shares		Amount		Capital			Deficit			Income (Loss)			Equity
Balance, July 31, 2018		161,175,764	$	161,176	$	308,062,379		$	(245,151,636	)	$	103,641		$	63,175,560
Common stock
Issued for equity financing, net of issuance costs		12,613,049		12,613		15,978,349			-			-			15,990,962
Issued upon exercise of stock options		100,422		100		72,262			-			-			72,362
Issued upon exercise of warrants		2,061,764		2,062		2,494,555			-			-			2,496,617
Stock-based compensation
Common stock issued for consulting services		30,845		31		50,682			-			-			50,713
Common stock issued under Stock Incentive Plan		141,546		141		239,114			-			-			239,255
Amortization of stock option expenses		-		-		551,556			-			-			551,556
Warrants
Issued for equity financing		-		-		2,606,884			-			-			2,606,884
Issued for equity financing as issuance costs		-		-		371,366			-			-			371,366
Net loss for the period		-		-		-			(3,451,426	)		-			(3,451,426	)
Reclassification upon adoption of ASU No. 2016-01		-		-		-			103,641			(103,641	)		-
Balance, October 31, 2018		176,123,390	$	176,123	$	330,427,147		$	(248,499,421	)	$	-		$	82,103,849
Common stock
Issued upon exercise of stock options		16,964		17		(17	)		-			-			-
Issued for credit facility		1,180,328		1,180		1,398,820			-			-			1,400,000
Stock-based compensation
Common stock issued for consulting services		98,861		98		127,643			-			-			127,741
Common stock issued under Stock Incentive Plan		223,156		225		290,013			-			-			290,238
Amortization of stock option expenses		-		-		357,022			-			-			357,022
Net loss for the period		-		-		-			(2,349,674	)		-			(2,349,674	)
Other comprehensive income		-		-		-			-			38,232			38,232
Balance, January 31, 2019		177,642,699	$	177,643	$	332,600,628		$	(250,849,095	)	$	38,232		$	81,967,408

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

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

January 31, 2020

(Unaudited)

NOTE 1: NATURE OF OPERATIONS

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

Although planned principal operations have commenced from which significant revenues from sales of uranium concentrates were realized for the fiscal years ended July 31, 2015 (“Fiscal 2015”), July 31, 2013 (“Fiscal 2013”) and July 31, 2012 (“Fiscal 2012”), we have yet to achieve profitability and have had a history of operating losses resulting in an accumulated deficit balance since inception. No revenue from uranium sales was realized for the six months ended January 31, 2020, or for the fiscal years ended July 31, 2019 (“Fiscal 2019”), July 31, 2018 (“Fiscal 2018”), July 31, 2017 (“Fiscal 2017”), July 31, 2016 (“Fiscal 2016”) or July 31, 2014 (“Fiscal 2014”). Historically, we have been reliant primarily on equity financings from the sale of our common stock and on debt financing in order to fund our operations, and this reliance is expected to continue for the foreseeable future.

At January 31, 2020, we had cash and cash equivalents of $10.3 million and working capital of $9.9 million. By curtailing expenditures on discretionary and non-core activities and paying certain management, consulting and service provider fees by the issuance of shares of the Company in lieu of cash, our existing cash resources, and if necessary, cash generated from the sale of the Company’s liquid assets, are expected to provide sufficient funds to carry out our planned operations for 12 months from the date that our condensed consolidated financial statements are issued. Our continued operations, including the recoverability of the carrying values of our assets, are dependent ultimately on our ability to achieve and maintain profitability and positive cash flow from our operations.

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 Fiscal 2019. 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, 2020, are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2020 (“Fiscal 2020”).

Exploration Stage

We have established the existence of mineralized materials for certain uranium projects, including for our Palangana Mine. We have not established proven or probable reserves, as defined by the United States Securities and Exchange Commission (the “SEC”) under Industry Guide 7 (“Industry Guide 7”), through the completion of a “final” or “bankable” feasibility study for any of our uranium projects, including the Palangana Mine. Furthermore, we have no plans to establish proven or probable reserves for any of our uranium projects for which we plan on utilizing in-situ recovery (“ISR”) mining, such as the Palangana Mine. As a result, and despite the fact that we commenced extraction of mineralized materials at the Palangana Mine in November 2010, we remain in the Exploration Stage as defined under Industry Guide 7, and will continue to remain in the Exploration Stage until such time proven or probable reserves have been established.

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

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

January 31, 2020

(Unaudited)

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

Companies in the Production Stage as defined under Industry Guide 7, having established proven and probable reserves and exited the Exploration Stage, typically capitalize expenditures relating to ongoing development activities, with corresponding depletion calculated over proven and probable reserves using the units-of-production method and allocated to future reporting periods to inventory and, as that inventory is sold, to cost of goods sold. We are in the Exploration Stage which has resulted in us reporting larger losses than if we had been in the Production Stage due to the expensing, rather than capitalizing, of expenditures relating to ongoing mill and mine development activities. Additionally, there would be no corresponding amortization allocated to future reporting periods of our Company since those costs would have been expensed previously, resulting in both lower inventory costs and cost of goods sold and results of operations with higher gross profits and lower losses than if we had been in the Production Stage. Any capitalized costs, such as expenditures relating to the acquisition of mineral rights, are depleted over the estimated extraction life using the straight-line method. As a result, our consolidated financial statements may not be directly comparable to the financial statements of companies in the Production Stage.

Recently Adopted Accounting Standards

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) 2016-02, “Leases”, (Topic 842), together with subsequent amendments. The new standard requires a lessee to recognize on its balance sheet a liability to make lease payments (the lease liability) and the right-of-use (“ROU”) asset representing the right to the underlying asset for the lease term.

Effective August 1, 2019, the Company adopted this new standard using the modified retrospective approach with a cumulative-effect adjustment recorded at the beginning of the period of adoption. Therefore, upon adoption, the Company has recognized and measured leases without revising comparative period information or disclosure. We elected the package of practical expedients permitted under the transition guidance, which applies to expired or existing leases and allows the Company not to reassess whether a contract contains a lease, the lease classification and any initial direct costs incurred.

We elected the following optional practical expedients:

•

we elected the short-term lease recognition exemption whereby ROU assets and lease liabilities will not be recognized for leasing arrangements with terms less than one year;

•

we elected the land easements practical expedient whereby existing land easements are not reassessed under the new standard;

•

we elected hindsight practical expedient when determining lease term; and

•

we elected the practical expedient not to separate non-lease components from lease components.

Based on contracts outstanding at August 1, 2019, the adoption of the new standard resulted in the recognition of operating lease ROU assets of $876,590 including $92,235 reclassified from Prepaid Expenses and Deposits, and lease liabilities of $784,355. Adoption of this standard did not have a material impact to our Consolidated Statements of Operations and Comprehensive Loss and our Consolidated Statements of Cash Flows. See Note 11: Lease Liabilities for additional qualitative and quantitative disclosures related to leasing arrangements.

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

January 31, 2020

(Unaudited)

Accounting Policy - Leases

The Company’s accounting policy as a result of adoption of ASC 842 is summarized below.

The Company determines if a contractual arrangement represents or contains a lease at inception. Operating leases with lease terms greater than 12 months are included in Other Long-term Assets and Other Current Liabilities and Other Long-term Liabilities in our Consolidated Balance Sheet. Finance leases are included in Property, Plant and Equipment and Other Current Liabilities and Other Long-term Liabilities in our Consolidated Balance Sheet.

Operating and finance lease ROU assets and lease liabilities are recognized based on the present value of the future lease payments over the lease term at commencement date. When the rate implicit to the lease cannot be readily determined, the Company utilizes its incremental borrowing rate in determining the present value of the future lease payments. The incremental borrowing rate is the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar term and the amount equal to the lease payments in a similar economic environment.

The Company’s operating lease expenses are recognized on a straight-line basis over the lease term and included in General and Administration expenses. Short-term leases, which have an initial term of 12 months or less, are not recorded in our Condensed Consolidated Balance Sheets.

The Company has leases arrangements that include both lease and non-lease components. The Company accounts for each separate lease component and its associated non-lease components as a single lease component for all of its asset classes.

NOTE 3: MINERAL RIGHTS AND PROPERTIES

Mineral Rights

At January 31, 2020, we had mineral rights in the States of Arizona, Colorado, New Mexico, Wyoming and Texas, in Canada and in the Republic of Paraguay. These mineral rights were acquired through staking, purchase or lease agreements and are subject to varying royalty interests, some of which are indexed to the sale price of uranium and titanium. At January 31, 2020, annual maintenance payments of approximately $2.7 million will be required to maintain these mineral rights.

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

January 31, 2020

(Unaudited)

Mineral rights and property acquisition costs consisted of the following:

	January 31, 2020			July 31, 2019
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		749,854			699,854
Los Cuatros Project		257,250			257,250
Slick Rock Project		30,000			-
Reno Creek Project		31,527,870			31,527,870
Diabase Project		546,938			546,938
Yuty Project		11,947,144			11,947,144
Oviedo Project		1,133,412			1,133,412
Alto Paraná Titanium Project		1,433,030			1,433,030
Other Property Acquisitions		91,080			91,080
		67,531,387			67,451,387
Accumulated Depletion		(3,929,884	)		(3,929,884	)
		63,601,503			63,521,503

Databases		2,410,038			2,410,038
Accumulated Amortization		(2,409,686	)		(2,409,188	)
		352			850

Land Use Agreements		48,770			404,310
Accumulated Amortization		(44,020	)		(389,768	)
		4,750			14,542
	$	63,606,605		$	63,536,895

We have not established proven or probable reserves, as defined by the SEC under Industry Guide 7, for any of our mineral projects. We have established the existence of mineralized materials for certain mineral projects, including our Palangana Mine. Since we commenced uranium extraction at the Palangana Mine without having established proven or probable reserves, there may be greater inherent uncertainty as to whether or not any mineralized material can be economically extracted as originally planned and anticipated.

During the six months ended January 31, 2020 and 2019, we continued with reduced operations at the Palangana Mine to capture residual uranium only. As a result, no depletion for the Palangana Mine was recorded on our Condensed Consolidated Financial Statements for the three and six months ended January 31, 2020 and 2019.

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

January 31, 2020

(Unaudited)

Mineral property expenditures incurred by major projects were as follows:

	Three Months Ended January 31,				Six Months Ended January 31,
	2020		2019		2020		2019
Mineral Property Expenditures
Palangana Mine	$	528,699	$	246,592	$	848,726	$	526,624
Goliad Project		36,843		19,056		96,807		37,878
Burke Hollow Project		220,812		166,469		869,673		275,014
Longhorn Project		2,289		10,157		12,446		25,533
Salvo Project		6,702		6,702		13,970		13,510
Anderson Project		13,433		15,056		29,486		37,270
Workman Creek Project		8,168		7,673		16,365		15,364
Slick Rock Project		13,271		12,206		26,405		29,430
Reno Creek Project		144,181		147,418		292,224		295,294
Yuty Project		16,718		62,600		30,914		86,003
Oviedo Project		123,117		40,758		229,055		61,483
Alto Paraná Titanium Project		110,085		34,429		166,333		60,262
Other Mineral Property Expenditures		99,005		130,101		214,370		301,795
	$	1,323,323	$	899,217	$	2,846,774	$	1,765,460

NOTE 4: PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following:

	January 31, 2020							July 31, 2019
	Cost		Accumulated Depreciation			Net Book Value		Cost		Accumulated Depreciation			Net Book Value
Hobson Processing Facility	$	6,642,835	$	(773,933	)	$	5,868,902	$	6,642,835	$	(773,933	)	$	5,868,902
Mining Equipment		2,394,278		(2,334,120	)		60,158		2,467,557		(2,402,681	)		64,876
Logging Equipment and Vehicles		1,948,557		(1,734,654	)		213,903		1,950,229		(1,730,905	)		219,324
Computer Equipment		577,410		(554,687	)		22,723		572,551		(546,652	)		25,899
Furniture and Fixtures		170,701		(169,663	)		1,038		170,701		(169,379	)		1,322
Land and Buildings		889,606		(35,009	)		854,597		889,606		(27,570	)		862,036
	$	12,623,387	$	(5,602,066	)	$	7,021,321	$	12,693,479	$	(5,651,120	)	$	7,042,359

During the six months ended January 31, 2020 and 2019, no uranium concentrate was processed at our Hobson Processing Facility due to the reduced operations at our Palangana Mine. As a result, no depreciation for the Hobson Processing Facility was recorded on our Consolidated Financial Statements for the three and six months ended January 31, 2020 and 2019.

NOTE 5: 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 Palangana Mine, Hobson Processing Facility and Reno Creek Project. Restricted cash will be released upon completion of reclamation of a mineral property or restructuring of a surety and collateral arrangement.

	January 31, 2020		July 31, 2019
Restricted cash, beginning of period	$	1,821,392	$	1,789,899
Interest received		13,354		31,493
Restricted cash, end of period	$	1,834,746	$	1,821,392

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

January 31, 2020

(Unaudited)

Cash, cash equivalents and restricted cash are included in the following accounts at January 31, 2020 and 2019:

	January 31, 2020		January 31, 2019
Cash and cash equivalents	$	10,272,315	$	3,990,524
Restricted cash		1,834,746		1,804,328
Total cash, cash equivalents and restricted cash	$	12,107,061	$	5,794,852

NOTE 6: EQUITY-ACCOUNTED INVESTMENT

As at January 31, 2020, we own 14,000,000 shares of Uranium Royalty Corp. (“URC”).

During the three months ended January 31, 2020, URC completed an initial public offering which consisted of the issuance of 20,000,000 units of URC (each, a “URC Unit”). Each URC Unit is comprised of one common share and one common share purchase warrant of URC. URC is now listed for trading on the TSX Venture Exchange with the trading symbol “URC.V”.

As at January 31, 2020, we owned a 19.5% (July 31, 2019: 32.6%) interest in URC. In addition, two of our officers are members of URC’s board of directors, one of which is an 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, 2020.

During the three months ended January 31, 2020, URC acquired a 0.5% net profit interest royalty in our Reno Creek Project from a third party.

During the six months ended January 31, 2020, the change in carrying value of our investment in URC is summarized as follows:

Balance, July 31, 2019	$	8,680,449
Share of loss from URC		(692,880	)
Gain on ownership interest dilution		3,056,656
Translation loss		(49,542	)
Balance, January 31, 2020	$	10,994,683

NOTE 7: OTHER LONG-TERM ASSETS

At January 31, 2020, other long-term assets totaled $988,712 (July 31, 2019: $249,214), which included ROU assets relating to the operating leases totaling $770,645 (July 31, 2019: $Nil) and the non-current portion of certain prepaid expenses of $218,067 (July 31, 2019: $249,214).

NOTE 8: RELATED PARTY TRANSACTIONS

During the three months ended January 31, 2020 and 2019, we incurred $35,657 and $40,017 (six months ended January 31, 2020 and 2019: $68,490 and $77,721), respectively, in general and administrative costs paid to Blender Media Inc. (“Blender”), a company controlled by Arash Adnani, a direct family member of our President and Chief Executive Officer, for various services including information technology, corporate branding, media, website design, maintenance and hosting, provided to the Company.

At January 31, 2020, the amount owing to Blender was $32,306 (July 31, 2019: $68,680).

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

January 31, 2020

(Unaudited)

NOTE 9: LONG-TERM DEBT

As at January 31, 2020, our long-term debt consisted of the following:

	January 31, 2020			July 31, 2019
Principal amount	$	20,000,000		$	20,000,000
Unamortized discount and accrued fees		(955,236	)		(400,037	)
Long-term debt, net of unamortized discount	$	19,044,764		$	19,599,963

For the three months ended January 31, 2020 and 2019, amortization of debt discount totaled $412,580 and $358,349, (six months ended January 31, 2020 and 2019: $844,801 and $666,120), respectively, which was recorded as interest expense and included in our Condensed Consolidated Statements of Operations and Comprehensive Loss.

During the three months ended January 31, 2020, and pursuant to the terms of our Third Amended and Restated Credit Agreement with our Lenders, we issued an aggregate of 1,743,462 shares with a fair value of $1,400,000 to our Lenders, representing 7% of the $20,000,000 principal balance outstanding at October 31, 2019, as payment of anniversary fees to our Lenders.

The Company’s Credit Facility has a maturity date on January 31, 2022, with an interest rate of 8% per annum and an underlying effective interest rate of 16.67%.

The aggregate yearly maturities of long-term debt based on principal amounts outstanding at January 31, 2020 are as follows:

Fiscal 2020	$	-
Fiscal 2021		-
Fiscal 2022		20,000,000
Total	$	20,000,000

NOTE 10: ASSET RETIREMENT OBLIGATIONS

Asset retirement obligations (“ARO”) relate to future remediation and decommissioning activities at our Palangana Mine, Hobson Processing Facility, Reno Creek Project and Alto Paraná Titanium Project.

Balance, July 31, 2019	$	3,541,082
Accretion		96,616
Balance, January 31, 2020	$	3,637,698

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

	January 31, 2020			July 31, 2019
Undiscounted amount of estimated cash flows	$	8,221,018		$	8,221,018

Payable in years	9	to	21	9	to	21
Inflation rate	1.56%	to	2.17%	1.56%	to	2.17%
Discount rate	5.50%	to	5.96%	5.50%	to	5.96%

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

January 31, 2020

(Unaudited)

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

Fiscal 2021	$	-
Fiscal 2022		-
Fiscal 2023		-
Fiscal 2024		-
Fiscal 2025		-
Remaining balance		8,221,018
	$	8,221,018

NOTE 11: LEASE LIABILITIES

The Company primarily has operating leases for corporate offices and a processing facility with a remaining term of 1.2 to 19.3 years. The lease for the processing facility has an evergreen option that can continue for so long as it is in operation. Short-term leases, which have an initial term of 12 months or less, are not recorded in our Consolidated Balance Sheets.

During the three and six months ended January 31, 2020, total lease expenses include the following components:

	Three Months Ended		Six Months Ended
	January 31, 2020		January 31, 2020
Operating leases	$	59,309	$	118,939
Short-term leases		23,516		397,029
Total Lease Expenses	$	82,825	$	515,968

As at January 31, 2020, the weighted average remaining lease term was 14.1 years and weighted average discount rate was 4.7%.

During the six months ended January 31, 2020, cash paid for amounts included in the measurement of operating lease liabilities totaled $100,450.

Minimum future lease payments under operating leases with terms longer than one year are as follows:

Fiscal 2020	$	120,382
Fiscal 2021		175,382
Fiscal 2022		220,000
Fiscal 2023		20,000
Fiscal 2024		20,000
Thereafter		320,000
Total lease payments		875,764
Less: imputed interest		(179,713	)
Present value of lease liabilities	$	696,051

Currrent portion of lease liabilities		189,974
Non-curent portion of lease liabilities	$	506,077

Current lease liabilities are included in Other Current Liabilities, and non-current liabilities are included in Other Long-term Liabilities in our Consolidated Balance Sheets.

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

January 31, 2020

(Unaudited)

NOTE 12: CAPITAL STOCK

A summary of share purchase warrants outstanding and exercisable at January 31, 2020 is as follows:

Weighted Average Exercise Price		Number of Warrants Outstanding		Weighted Average Remaining Contractual Life (Years)	Expiry Date
$	1.25		150,000	0.90	December 23, 2020
	1.50		150,000	0.90	December 23, 2020
	2.05		7,063,253	1.17	April 3, 2021
	2.30		308,728	2.52	August 9, 2022
	1.64		50,000	3.30	May 21, 2023
$	2.03		7,721,981	1.23

A continuity schedule of outstanding share purchase warrants for the six months ended January 31, 2020 is as follows:

	Number of Warrants			Weighted Average Exercise Price
Balance, July 31, 2019		19,443,910			1.94
Issued		300,000			1.38
Expired		(12,021,929	)		1.87
Balance, January 31, 2020		7,721,981		$	2.03

Stock Options

At January 31, 2020, we had one stock option plan, our 2019 Stock Incentive Plan, which superseded and replaced our 2018 Stock Incentive Plan (now, the “Stock Incentive Plan”).

A summary of stock options granted by the Company during the six months ended January 31, 2020, including corresponding grant date fair values and assumptions using the Black Scholes option pricing model is as follows:

Date

Options
Granted

Exercise

Price

Term
(Years)

Fair
Value

Expected
Life (Years)

Risk-Free
Interest Rate

Dividend

Yield

Expected

Volatility

August 7, 2019

597,650

0.91

10.00

303,160

5.00

1.51

0.00

66.10

These stock options are subject to a 24-month vesting provision whereby at the end of the first three and six months from the grant date, 12.5% of the stock options granted become exercisable, and whereby at the end of each of 12, 18 and 24 months from the grant date, 25% of the total stock options become exercisable.

A continuity schedule of outstanding stock options for the underlying shares for the six months ended January 31, 2020, is as follows:

	Number of Stock Options			Weighted Average Exercise Price
Balance, July 31, 2019		15,738,350		$	1.30
Granted		597,650			0.91
Expired		(5,990,000	)		1.34
Balance, October 31, 2019		10,346,000		$	1.25
Forfeited		(21,875	)		1.19
Expired		(37,500	)		1.20
Balance, January 31, 2020		10,286,625		$	1.25

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

January 31, 2020

(Unaudited)

A continuity schedule of outstanding unvested stock options at January 31, 2020, and the changes during the period, is as follows:

	Number of Unvested Stock Options			Weighted Average Grant-Date Fair Value
Balance, July 31, 2019		3,310,600		$	0.59
Granted		597,650			0.51
Vested		(645,550	)		0.61
Balance, October 31, 2019		3,262,700		$	0.57
Forfeited		(21,875	)		0.59
Vested		(806,534	)		0.62
Balance, January 31, 2020		2,434,291		$	0.55

At January 31, 2020, unrecognized stock-based compensation expense related to the unvested portion of stock options totaled $701,836 to be recognized over the next 0.99 years.

At January 31, 2020, the aggregate intrinsic value under the provisions of ASC 718 of all outstanding stock options was estimated at $Nil (vested: $Nil and unvested: $Nil).

A summary of stock options outstanding and exercisable at January 31, 2020 is as follows:

			Options Outstanding						Options Exercisable
Range of Exercise Prices			Outstanding at January 31, 2020		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Exercisable at January 31, 2020		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)
$0.91	to	$0.99		4,227,625	$	0.94		6.11		2,309,334	$	0.94		3.30
$1.00	to	$1.49		3,572,500		1.22		1.92		3,531,250		1.22		1.89
$1.50	to	$3.75		2,486,500		1.84		2.95		2,011,750		1.91		2.83
				10,286,625	$	1.25		3.89		7,852,334	$	1.31		2.54

Restricted Stock Units

During Fiscal 2019, the Company granted 465,000 restricted stock units (each, a “RSU”) to certain directors and officers of the Company under our Stock Incentive Plan.

During the three and six months ended January 31, 2020, stock-based compensation relating to the RSUs totaled $66,928 and $133,856 (three and six months ended January 31, 2019: $Nil and $Nil), respectively. At January 31, 2020, outstanding unvested RSUs totaled 465,000 (July 31, 2019: 465,000) and unrecognized compensation costs relating to unvested RSUs totaled $304,220, which is expected to be recognized over a period of approximately 2.50 years.

Performance Based Restricted Stock Units

During Fiscal 2019, the Company granted 445,000 performance based restricted stock units (each, a “PRSU”) to the Company’s executive officers under our Stock Incentive Plan.

During the three and six months ended January 31, 2020, stock-based compensation relating to the PRSUs totaled $68,165 and $136,330 (three and six months ended January 31, 2019: $Nil and $Nil), respectively. At January 31, 2020, outstanding unvested PRSUs totaled 445,000 (July 31, 2019: 445,000) and unrecognized compensation costs relating to unvested PRSUs totaled $375,682, which is expected to be recognized over a period of approximately 2.50 years.

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

January 31, 2020

(Unaudited)

Stock-Based Compensation

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

	Three Months Ended January 31,				Six Months Ended January 31,
	2020		2019		2020			2019
Stock-Based Compensation for Consultants
Common stock issued for consulting services	$	126,150	$	229,806	$	233,758		$	360,610
Amortization of stock option expenses		53,554		30,319		100,525			84,720
		179,704		260,125		334,283			445,330
Stock-Based Compensation for Management
Common stock issued to management		34,100		35,639		68,807			70,983
Amortization of stock option expenses		162,728		139,900		406,105			356,704
Amortization of RSU & PRSU expenses		135,093		-		270,186			-
		331,921		175,539		745,098			427,687
Stock-Based Compensation for Employees
Common stock issued to employees		129,997		124,872		258,025			248,695
Amortization of stock option expenses		156,628		186,806		393,419			467,154
		286,625		311,678		651,444			715,849

Settlement of share issuance obligation		-		-		(15,189	)		-
	$	798,250	$	747,342	$	1,715,636		$	1,588,866

During the six months ended January 31, 2020, we issued 188,914 shares with a fair value of $171,911 under our Stock Incentive Plan as settlement of our then share issuance obligations totaling $187,100, which represented the fair value of the Fiscal 2019 share bonuses made by the Company at July 31, 2019 under the Stock Incentive Plan. The change in fair value of $15,189 between the measurement date of July 31, 2019 and the issuance date was recorded as a credit to the stock-based compensation for the six months ended January 31, 2020.

NOTE 13: LOSS PER SHARE

The following table reconciles the weighted average number of shares used in the calculation of the basic and diluted loss per share:

	Three Months Ended January 31,						Six Months Ended January 31,
	2020			2019			2020			2019
Numerator
Net Loss for the Period	$	(1,888,661	)	$	(2,349,674	)	$	(6,931,238	)	$	(5,801,100	)

Denominator
Basic Weighted Average Number of Shares		182,802,747			177,061,313			182,021,725			171,729,303
Dilutive Stock Options, Warrants, RSUs and PRSUs		-			-			-			-
Diluted Weighted Average Number of Shares		182,802,747			177,061,313			182,021,725			171,729,303

Net Loss per Share, Basic and Diluted	$	(0.01	)	$	(0.01	)	$	(0.04	)	$	(0.03	)

For the three and six months ended January 31, 2020 and 2019, all outstanding stock options, RSUs, PRSUs and share purchase warrants were excluded from the calculation of the diluted loss per share since we reported net losses for those periods and their effects would be anti-dilutive.

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

January 31, 2020

(Unaudited)

NOTE 14: SEGMENTED INFORMATION

We currently operate in one reportable segment which is focused on uranium mining and related activities, including exploration, pre-extraction, extraction and processing of uranium concentrates.

At January 31, 2020, our long-term assets located in the United States totaled $57,887,302 or 69% of our total long-term assets of $84,446,067.

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

January 31, 2020

Balance Sheet Items

United States

Texas

Arizona

Wyoming

Other States

Canada

Paraguay

Total

Mineral Rights and Properties

12,423,411

4,477,477

31,527,870

117,324

546,938

14,513,585

63,606,605

Property, Plant and Equipment

6,310,027

335,078

9,169

367,047

7,021,321

Restricted Cash

1,745,773

15,000

73,973

1,834,746

Equity-Accounted Investment

10,994,683

Other Long-Term Assets

836,369

25,000

127,343

988,712

Total Long-Term Assets

21,315,580

4,492,477

31,961,921

117,324

11,678,133

14,880,632

84,446,067

	July 31, 2019
Balance Sheet Items	United States
	Texas		Arizona		Wyoming		Other States		Canada		Paraguay		Total
Mineral Rights and Properties	$	12,433,203	$	4,427,477	$	31,527,870	$	87,822	$	546,938	$	14,513,585	$	63,536,895
Property, Plant and Equipment		6,333,950		-		342,515		-		14,223		351,671		7,042,359
Restricted Cash		1,732,419		15,000		73,973		-		-		-		1,821,392
Equity-Accounted Investment		-		-		-		-		8,680,449		-		8,680,449
Other Long-Term Assets		221,214		-		28,000		-		-		-		249,214
Total Long-Term Assets	$	20,720,786	$	4,442,477	$	31,972,358	$	87,822	$	9,241,610	$	14,865,256	$	81,330,309

The tables below provide a breakdown of our operating results by geographic segments for the three and six months ended January 31, 2020 and 2019. All intercompany transactions have been eliminated.

Three months ended January 31, 2020

Statement of Operations

United States

Texas

Arizona

Wyoming

Other States

Canada

Paraguay

Total

Costs and Expenses:

Mineral property expenditures

891,008

21,600

144,182

16,614

249,919

1,323,323

General and administrative

1,713,121

3,439

20,478

410

634,315

23,031

2,394,794

Depreciation, amortization and accretion

72,437

3,720

249

2,465

2,881

81,752

2,676,566

25,039

168,380

17,273

636,780

275,831

3,799,869

Loss from operations

(2,676,566

)

(25,039

)

(168,380

)

(17,273

)

(636,780

)

(275,831

)

(3,799,869

)

Other income (expenses)

(844,506

)

(4,768

)

700

2,756,714

1,136

1,909,276

Loss before income taxes

(3,521,072

)

(29,807

)

(167,680

)

(17,273

)

2,119,934

(274,695

)

(1,890,593

)

	Three Months Ended January 31, 2019
Statement of Operations	United States
	Texas			Arizona			Wyoming			Other States			Canada			Paraguay			Total
Costs and Expenses:
Mineral property expenditures	$	575,666		$	22,866		$	147,418		$	15,345		$	135		$	137,787		$	899,217
General and administrative		1,508,298			3,482			23,132			1,687			613,571			33,293			2,183,463
Depreciation, amortization and accretion		76,327			-			3,720			249			2,589			1,922			84,807
		2,160,291			26,348			174,270			17,281			616,295			173,002			3,167,487
Loss from operations		(2,160,291	)		(26,348	)		(174,270	)		(17,281	)		(616,295	)		(173,002	)		(3,167,487	)

Other income (expenses)		(775,613	)		(4,768	)		100			1,578,864			11,242			1,190			811,015