10-Q 1 uec20200430_10q.htm FORM 10-Q uec20200430_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 April 30, 2020

 

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:  184,187,920 shares of common stock outstanding as of June 8, 2020.

 

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

26

     

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

34

     

Item 4. 

Controls and Procedures

35

   

PART II – OTHER INFORMATION

36

   

Item 1.

Legal Proceedings

36

     

Item 1A.   

Risk Factors

36

     

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

47

     

Item 3.

Defaults Upon Senior Securities

47

     

Item 4.

Mine Safety Disclosures

47

     

Item 5.

Other Information

47

     

Item 6.

Exhibits

48

   

SIGNATURES

49

 

3

 

 

PART I – FINANCIAL INFORMATION

 

Item 1.     Financial Statements

 

 

 

 

 

 

 

 

 

 

4

 

 

 

 

 

 

 

 

 

 

 

URANIUM ENERGY CORP.

 

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

FOR THE NINE MONTHS ENDED APRIL 30, 2020

 

(Unaudited – Expressed in U.S. Dollars)

 

 

 

 

 

 

 

 

 

 

 

5

 

 

URANIUM ENERGY CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited – Expressed in U.S. Dollars)

 


 

   

Note(s)

   

April 30, 2020

   

July 31, 2019

 
                       

CURRENT ASSETS

                     

Cash and cash equivalents

  5     $ 7,407,189     $ 6,058,186  

Term deposits

          -       11,831,671  

Inventories

          211,662       211,662  

Prepaid expenses and deposits

          1,358,235       1,343,458  

Other current assets

          134,079       264,956  

TOTAL CURRENT ASSETS

          9,111,165       19,709,933  
                       

MINERAL RIGHTS AND PROPERTIES

  3       63,605,981       63,536,895  

PROPERTY, PLANT AND EQUIPMENT

  4       7,049,056       7,042,359  

RESTRICTED CASH

  5       1,839,119       1,821,392  

EQUITY-ACCOUNTED INVESTMENT

  6       11,199,978       8,680,449  

OTHER LONG-TERM ASSETS

  7       842,148       249,214  

TOTAL ASSETS

        $ 93,647,447     $ 101,040,242  
                       
                       

CURRENT LIABILITIES

                     

Accounts payable and accrued liabilities

        $ 1,780,073     $ 3,002,688  

Other current liabilities

  12       159,718       -  

Due to a related party

  8       16,175       68,680  

TOTAL CURRENT LIABILITIES

          1,955,966       3,071,368  
                       

LONG-TERM DEBT

  9       19,443,996       19,599,963  

GOVERNMENT LOAN PAYABLE

  10       28,756       -  

ASSET RETIREMENT OBLIGATIONS

  11       3,686,006       3,541,082  

OTHER LONG-TERM LIABILITIES

  12       526,067       50,010  

DEFERRED TAX LIABILITIES

          545,928       550,551  

TOTAL LIABILITIES

          26,186,719       26,812,974  
                       

STOCKHOLDERS' EQUITY

                     

Capital stock

                     

Common stock $0.001 par value: 750,000,000 shares authorized, 184,050,113 shares issued and outstanding (July 31, 2019 - 180,896,431)

  13       184,050       180,896  

Additional paid-in capital

          340,198,573       336,047,595  

Share issuance obligation

  13       -       187,100  

Accumulated deficit

          (272,405,666 )     (262,200,784 )

Accumulated other comprehensive (loss) income

          (516,229 )     12,461  

TOTAL EQUITY

          67,460,728       74,227,268  

TOTAL LIABILITIES AND EQUITY

        $ 93,647,447     $ 101,040,242  
                       

COMMITMENTS AND CONTINGENCIES

  17                  

SUBSEQUENT EVENT

  1,10                  

 

 

 

 

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 April 30,

   

Nine Months Ended April 30,

 
   

Note(s)

   

2020

   

2019

   

2020

   

2019

 
                                       

COSTS AND EXPENSES

                                     

Mineral property expenditures

  3     $ 956,564     $ 1,453,358     $ 3,803,338     $ 3,218,818  

General and administrative

  8,13       2,127,887       1,952,616       6,837,851       6,395,014  

Depreciation, amortization and accretion

  3,4,11       74,060       86,387       232,198       259,970  

TOTAL COSTS AND EXPENSES

          3,158,511       3,492,361       10,873,387       9,873,802  

LOSS FROM OPERATIONS

          (3,158,511 )     (3,492,361 )     (10,873,387 )     (9,873,802 )
                                       

OTHER INCOME (EXPENSES)

                                     

Interest income

          30,403       136,173       171,925       311,155  

Interest expenses and finance costs

  9       (835,683 )     (815,258 )     (2,579,971 )     (2,383,916 )

Income (loss) from equity-accounted investment

  6       684,443       (872,851 )     3,048,219       (590,819 )

Other income

          4,475       17,837       21,693       114,092  

Gain on disposition of assets

          216       7,598       2,016       1,591,362  

TOTAL OTHER INCOME (EXPENSES)

          (116,146 )     (1,526,501 )     663,882       (958,126 )

LOSS BEFORE INCOME TAXES

          (3,274,657 )     (5,018,862 )     (10,209,505 )     (10,831,928 )
                                       

DEFERRED TAX BENEFITS

          1,013       1,305       4,623       13,271  

NET LOSS FOR THE PERIOD

          (3,273,644 )     (5,017,557 )     (10,204,882 )     (10,818,657 )
                                       

OTHER COMPREHENSIVE LOSS, NET OF INCOME TAXES

  6       (479,148 )     (159,954 )     (528,690 )     (121,722 )

TOTAL COMPREHENSIVE LOSS FOR THE PERIOD

        $ (3,752,792 )   $ (5,177,511 )   $ (10,733,572 )   $ (10,940,379 )
                                       

NET LOSS PER SHARE, BASIC AND DILUTED

  14     $ (0.02 )   $ (0.03 )   $ (0.06 )   $ (0.06 )
                                       

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING, BASIC AND DILUTED

          183,896,944       179,348,614       182,637,673       174,213,254  

 

 

 

 

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)

 


 

         

NineMonths Ended April 30,

   

Note(s)

   

2020

   

2019

 

NET CASH PROVIDED BY (USED IN):

                     
                       

OPERATING ACTIVITIES

                     

Net loss for the period

        $ (10,204,882 )   $ (10,818,657 )

Adjustments to reconcile net loss to cash flows in operating activities

                     

Stock-based compensation

  13       2,411,281       2,143,598  

Depreciation, amortization and accretion

  3,4,11       232,198       259,970  

Amortization of long-term debt discount

  9       1,244,032       1,050,671  

Gain on disposition of assets

          (2,016 )     (1,591,362 )

(Income) loss from equity-accounted investment

  6       (3,048,219 )     590,819  

Deferred tax benefits

          (4,623 )     (13,271 )

Realized loss on available-for-sale securities

          -       799  

Changes in operating assets and liabilities

                     

Prepaid expenses and deposits

          248,845       (408,301 )

Other current assets

          130,877       (18,481 )

Accounts payable and accrued liabilities

          (1,222,616 )     (869,562 )

Due to a related party

  8       (52,505 )     47,738  

Other liabilities

          (65,028 )     -  

NET CASH USED IN OPERATING ACTIVITIES

          (10,332,656 )     (9,626,039 )
                       

FINANCING ACTIVITIES

                     

Proceeds from share issuance, net of issuance costs

          -       23,843,995  

Proceeds from a government loan

          28,756       -  

NET CASH PROVIDED BY FINANCING ACTIVITIES

          28,756       23,843,995  
                       

INVESTING ACTIVITIES

                     

Investment in mineral rights and properties

          (80,000 )     (105,000 )

Purchase of property, plant and equipment

          (83,841 )     (77,809 )

Investment in term deposits

          -       (29,858,126 )

Proceeds from redemption of term deposits

          11,831,671       15,000,000  

Proceeds from disposition of assets

          2,800       12,498  

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES

          11,670,630       (15,028,437 )
                       

NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

          1,366,730       (810,481 )
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     $ 9,246,308     $ 7,905,941  
                       

SUPPLEMENTAL CASH FLOW INFORMATION

  16                  

 

 

 

 

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-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  

Stock-based compensation

                                                       

Common stock issued under Stock Incentive Plan

    376,298       376       246,826       -       -       -       247,202  

Amortization of stock option expenses

    -       -       381,694       -       -       -       381,694  

Net loss for the period

    -       -       -       -       (3,273,644 )     -       (3,273,644 )

Other comprehensive loss

    -       -       -       -       -       (479,148 )     (479,148 )

Balance, April 30, 2020

    184,050,113     $ 184,050     $ 340,198,573     $ -     $ (272,405,666 )   $ (516,229 )   $ 67,460,728  

 

 

 

 

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-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  

Common stock

                                               

Issued upon exercise of stock options

    1,599       2       (1 )     -       -       1  

Issued upon exercise of warrants

    1,938,117       1,938       2,323,802       -       -       2,325,740  
Issued in exchange of warrants pursuant to Securities Exchange Agreement     750,000       750       976,813       -       -       977,563  

Stock-based compensation

                                               

Common stock issued for consulting services

    35,698       34       48,051       -       -       48,085  

Common stock issued under Stock Incentive Plan

    194,173       195       255,429       -       -       255,624  

Amortization of stock option expenses

    -       -       233,155       -       -       233,155  

Warrants

                                               
Exchanged for common stock pursuant to Securities Exchange Agreement     -       -       (4,950,000 )     -       -       (4,950,000 )

Difference from Securities Exchange Agreement

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

Net loss for the period

    -       -       -       (5,017,557 )     -       (5,017,557 )

Other comprehensive loss

    -       -       -       -       (159,954 )     (159,954 )

Balance, April 30, 2019

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

 

 

 

 

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

 

10

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2020

 (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”) are engaged in uranium and titanium mining and related activities, including exploration, pre-extraction, extraction and processing of uranium concentrates and titanium minerals, on projects located in the United States, Canada and the Republic of Paraguay.

 

Although planned principal operations have commenced from which significant revenues from sales of uranium concentrates were realized for the fiscal years ended July 31, 2015 (“Fiscal 2015”), July 31, 2013 (“Fiscal 2013”) and July 31, 2012 (“Fiscal 2012”), we have yet to achieve profitability and have had a history of operating losses resulting in an accumulated deficit balance since inception. No revenue from uranium sales was realized for the nine months ended April 30, 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 April 30, 2020, we had a working capital of $7.2 million including cash and cash equivalents of $7.4 million. Subsequent to April 30, 2020, we received a loan of $277,250 under the Paycheck Protection Program (the “PPP Program”; and the “PPP Loan”) as part of the Coronavirus Aid, Relief, and Economic Security Act (“CARES”) enacted by the U.S. Congress in response to the COVID-19 pandemic.   During the three months ended April 30, 2020, in response to the significant financial market uncertainty as a result of the COVID 19 pandemic, we implemented corporate-wide cost-cutting and cash saving measures to reduce cash outlays.  By further curtailing expenditures on discretionary and non-core activities and paying directors, management, employees and certain consulting and service providers fees by way of issuance of shares of the Company in lieu of cash, our existing cash resources and cash generated from the sale of the Company’s liquid assets are expected to provide sufficient funds to carry out our planned operations for 12 months from the date 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 nine months ended April 30, 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.

 

11

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2020

 (Unaudited – Expressed in U.S. Dollars)

 


 

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

 

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

 

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

 

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 12: Lease Liabilities for additional qualitative and quantitative disclosures related to leasing arrangements.

 

12

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2020

 (Unaudited – Expressed in U.S. Dollars)

 


 

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. Assets under finance leases are included in Property, Plant and Equipment and the related lease liabilities in 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 the 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 April 30, 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 April 30, 2020 annual maintenance payments of approximately $1.2 million will be required to maintain these mineral rights.

 

13

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2020

 (Unaudited – Expressed in U.S. Dollars)

 


 

Mineral rights and property acquisition costs consisted of the following:

             
   

April 30, 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

    (2,409,935 )     (2,409,188 )
      103       850  
                 

Land Use Agreements

    48,770       404,310  

Accumulated Amortization

    (44,395 )     (389,768 )
      4,375       14,542  
    $ 63,605,981     $ 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 nine months ended April 30, 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 nine months ended April 30, 2020 and 2019.

 

14

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2020

 (Unaudited – Expressed in U.S. Dollars)

 


 

Mineral property expenditures incurred on our projects were as follows:

             
   

Three Months Ended April 30,

   

Nine Months Ended April 30,

 
   

2020

   

2019

   

2020

   

2019

 

Mineral Property Expenditures

                               

Palangana Mine

  $ 260,438     $ 248,687     $ 1,109,164     $ 775,311  

Goliad Project

    54,486       34,071       151,293       71,949  

Burke Hollow Project

    154,672       605,025       1,024,345       880,039  

Longhorn Project

    2,289       10,157       14,735       35,691  

Salvo Project

    7,843       6,702       21,813       20,211  

Anderson Project

    19,519       15,097       49,004       52,367  

Workman Creek Project

    8,168       7,673       24,533       23,037  

Slick Rock Project

    13,123       12,206       39,527       41,637  

Reno Creek Project

    159,088       178,722       451,312       474,015  

Yuty Project

    27,664       8,297       58,578       94,299  

Oviedo Project

    69,446       105,724       298,505       167,207  

Alto Paraná Titanium Project

    36,323       78,325       202,656       138,588  

Other Mineral Property Expenditures

    143,505       142,672       357,873       444,467  
    $ 956,564     $ 1,453,358     $ 3,803,338     $ 3,218,818  

 

 

NOTE 4:        PROPERTY, PLANT AND EQUIPMENT

 

Property, plant and equipment consisted of the following:

             
   

April 30, 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

    2,393,579       (2,338,287 )     55,292       2,467,557       (2,402,681 )     64,876  

Logging Equipment and Vehicles

    1,948,557       (1,747,522 )     201,035       1,950,229       (1,730,905 )     219,324  

Computer Equipment

    550,243       (478,190 )     72,053       572,551       (546,652 )     25,899  

Furniture and Fixtures

    170,701       (169,805 )     896       170,701       (169,379 )     1,322  

Land and Buildings

    889,606       (38,728 )     850,878       889,606       (27,570 )     862,036  
    $ 12,595,521     $ (5,546,465 )   $ 7,049,056     $ 12,693,479     $ (5,651,120 )   $ 7,042,359  

 

During the nine months ended April 30, 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 nine months ended April 30, 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.

             
   

April 30, 2020

   

July 31, 2019

 

Restricted cash, beginning of period

  $ 1,821,392     $ 1,789,899  

Interest received

    17,727       31,493  

Restricted cash, end of period

  $ 1,839,119     $ 1,821,392  

 

15

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2020

(Unaudited – Expressed in U.S. Dollars)

 


 

Cash, cash equivalents and restricted cash are included in the following accounts at April 30, 2020 and 2019:

             
   

April 30, 2020

   

April 30, 2019

 

Cash and cash equivalents

  $ 7,407,189     $ 6,093,098  

Restricted cash

    1,839,119       1,812,843  
Total cash, cash equivalents and restricted cash   $ 9,246,308     $ 7,905,941  

 

 

NOTE 6:         EQUITY-ACCOUNTED INVESTMENT

 

As at April 30, 2020, we own 14,000,000 shares of Uranium Royalty Corp. (“URC”).

 

During the nine months ended April 30, 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 (the “TSXV”) with the trading symbol “URC.V”.

 

As at April 30, 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 nine months ended April 30, 2020.

 

During the nine months ended April 30, 2020, URC acquired a 0.5% net profit interest royalty in our Reno Creek Project from a third party.

 

During the nine months ended April 30, 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

    (8,437 )

Gain on ownership interest dilution

    3,056,656  

Translation loss

    (528,690 )

Balance, April 30, 2020

  $ 11,199,978  

 

 

NOTE 7:         OTHER LONG-TERM ASSETS

 

At April 30, 2020 other long-term assets totaled $842,148 (July 31, 2019: $249,214), which included ROU assets relating to the operating leases totaling $700,806 (July 31, 2019: $Nil) and the non-current portion of certain prepaid expenses of $141,342 (July 31, 2019: $249,214).

 

 

NOTE 8:        RELATED PARTY TRANSACTIONS

 

During the three months ended April 30, 2020 and 2019, we incurred $36,849 and $39,365 (nine months ended April 30, 2020 and 2019: $105,339 and $117,086), 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 April 30, 2020, the amount owing to Blender was $16,175 (July 31, 2019: $68,680).

 

16

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2020

 (Unaudited – Expressed in U.S. Dollars)

 


 

 

NOTE 9:         LONG-TERM DEBT     

 

As at April 30, 2020, our long-term debt consisted of the following:

             
   

April 30, 2020

   

July 31, 2019

 

Principal amount

  $ 20,000,000     $ 20,000,000  

Unamortized discount and accrued fees

    (556,004 )     (400,037 )

Long-term debt, net of unamortized discount

  $ 19,443,996     $ 19,599,963  

 

For the three months ended April 30, 2020 and 2019, amortization of debt discount totaled $399,231 and $384,551, (nine months ended April 30, 2020 and 2019: $1,244,032 and $1,050,671), respectively, which was recorded as interest expense and included in our Condensed Consolidated Statements of Operations and Comprehensive Loss.

 

During the nine months ended April 30, 2020, and pursuant to the terms of our Third Amended and Restated Credit Agreement with our lenders (the “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 with our Lenders (the “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%.

 

As at April 30, 2020, we had a working capital ratio of 4.7:1, which was in compliance with the debt covenant requirement being working capital ratio not less than 1:1.

 

The aggregate yearly maturities of long-term debt based on principal amounts outstanding at April 30, 2020 are as follows:

         

Fiscal 2020

  $ -  

Fiscal 2021

    -  

Fiscal 2022

    20,000,000  

Total

  $ 20,000,000  

 

 

NOTE 10:       GOVERNMENT LOAN PAYABLE

 

In April 2020 our Canadian subsidiary received a loan of $28,756 (CAD$40,000) through the Canadian Emergency Business Account Program (“CEBA Loan”), which provides financial relief for Canadian small businesses during the COVID-19 pandemic. The CEBA Loan has an initial term date on December 31, 2022 (the “Initial Term Date”) and may be extended to December 31, 2025. The CEBA Loan is non-revolving, with an interest rate being 0% per annum prior to the Initial Term Date and 5% per annum thereafter during any extended term, which is calculated daily and paid monthly. The CEBA Loan can be repaid at any time without penalty and, if at least 75% of the CEBA Loan is paid prior to the Initial Term Date, the remaining balance of the CEBA Loan will be forgiven. We anticipate repaying the CEBA Loan prior to the Initial Term Date.

 

On April 28, 2020, we entered into a business loan agreement with Kleberg Bank, N.A., under the PPP Program administered by the Small Business Administration. The PPP Program is a part of the CARES enacted by the U.S. Congress on March 27, 2020 in response to the COVID-19 pandemic. The total loan amount we qualified for was $277,250, which was received subsequent to April 30, 2020, on May 5, 2020.

 

17

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2020

 (Unaudited – Expressed in U.S. Dollars)

 


 

Under the PPP Program the repayment of these loans, including interest, will be forgiven based on payroll, payroll-related and other allowable costs incurred in the eight-week period following the funding of the loan pursuant to the following requirements:

 

 

that not less than 75% of the loan proceeds be applied to eligible payroll costs;

 

that the remaining 25% of the loan proceeds be applied to any additional payroll costs above 75%, rent payments on leases dated before February 15, 2020 and/or utility payments under any services agreements dated before February 15, 2020; and

 

to maintain employee compensation levels (subject to specific program requirements).

 

The PPP Program provides for an initial six-month deferral of payments. The PPP Loan has a two-year maturity ending on April 28, 2022 with an interest rate of 1% per annum.

 

 

NOTE 11:       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

    144,924  

Balance, April 30, 2020

  $ 3,686,006  

 

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

                 
   

April 30, 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%  

 

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 12:       LEASE LIABILITIES

 

The Company primarily has operating leases for corporate offices and a processing facility with a remaining term of 0.9 to 19.1 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.

 

18

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2020

 (Unaudited – Expressed in U.S. Dollars)

 


 

During the three and nine months ended April 30, 2020 total lease expenses include the following components:

             
   

Three Months Ended

   

Nine Months Ended

 
   

April 30, 2020

   

April 30, 2020

 

Operating leases

  $ 63,073     $ 182,012  

Short-term leases

    23,289       420,318  

Total Lease Expenses

  $ 86,362     $ 602,330  

 

As at April 30, 2020, the weighted average remaining lease term was 15.0 years and weighted average discount rate was 4.7%.

 

During the nine months ended April 30, 2020, cash paid for amounts included in the measurement of operating lease liabilities totaled $148,115.

 

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

 

    Operating leases  

Fiscal 2020

    64,382  

Fiscal 2021

    160,885  

Fiscal 2022

    220,000  

Fiscal 2023

    20,000  

Fiscal 2024

    20,000  

Thereafter

    320,000  

Total lease payments

    805,267  

Less: imputed interest

    (171,502 )

Present value of lease liabilities

    633,765  
         

Currrent portion of lease liabilities

    151,403  

Non-curent portion of lease liabilities

    482,362  

 

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.

 

 

NOTE 13:       CAPITAL STOCK

 

A summary of share purchase warrants outstanding and exercisable at April 30, 2020 is as follows:

 

 

Weighted Average
Exercise Price

   

Number of Warrants
Outstanding

   

Weighted Average

Remaining Contractual
Life (Years)

 

Expiry Date

 

  $ 1.25       150,000     0.65  

December 23, 2020

    1.50       150,000     0.65  

December 23, 2020

    2.05       7,063,253     0.93  

April 3, 2021

    2.30       308,728     2.28  

August 9, 2022

    1.64       50,000     3.06  

May 21, 2023

  $ 2.03       7,721,981     0.98    

 

19

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2020

 (Unaudited – Expressed in U.S. Dollars)

 


 

A continuity schedule of outstanding share purchase warrants for the nine months ended April 30, 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, April 30, 2020

    7,721,981     $ 2.03  

 

Stock Options

 

At April 30, 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 nine months ended April 30, 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)

   

Grant Date

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 %

April 13, 2020

    200,000       0.80       5.00       50,829       4.00       0.37 %     0.00 %     57.04 %

April 17, 2020

    50,000       0.83       5.00       18,031       4.00       0.31 %     0.00 %     56.95 %

April 29, 2020

    125,000       1.18       5.00       67,655       4.00       0.30 %     0.00 %     60.59 %

Total

    972,650                     $ 439,675                                  

 

The stock options granted in August 2019 are subject to a 24-month vesting provision, whereby at the end of the first three and nine 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. The stock options granted in April 2020 are subject to a 12-month vesting provision, whereby one-quarter of the stock options become exercisable immediately and at each of four, eight and 12 months from the grant date.

 

A continuity schedule of outstanding stock options for the underlying shares for the nine months ended April 30, 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  

Granted

    375,000       0.93  

Forfeited

    (107,469 )     1.09  

Expired

    (160,656 )     2.84  

Balance, April 30, 2020

    10,393,500     $ 1.22  

 

20

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2020

 (Unaudited – Expressed in U.S. Dollars)

 


 

A continuity schedule of outstanding unvested stock options at April 30, 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  

Vested

    (806,534 )     0.62  

Forfeited

    (21,875 )     0.59  

Balance, January 31, 2020

    2,434,291     $ 0.55  

Granted

    375,000       0.36  

Vested

    (184,049 )     0.45  

Forfeited

    (27,500 )     0.52  

Balance, April 30, 2020

    2,597,742     $ 0.53  

 

At April 30, 2020, unrecognized stock-based compensation expense related to the unvested portion of stock options totaled $576,611 to be recognized over the next 0.80 years.

 

At April 30, 2020, the aggregate intrinsic value under the provisions of ASC 718 of all outstanding stock options was estimated at $759,834 (vested: $403,047 and unvested: $356,787).

 

A summary of stock options outstanding and exercisable at April 30, 2020 is as follows:

             

 

 

Options Outstanding

   

Options Exercisable

 

Range of

Exercise

Prices

 

 

Outstanding at

April 30, 2020

   

Weighted

Average

Exercise Price

   

Weighted Average

Remaining

Contractual

Term (Years)

   

Exercisable at
April 30, 2020

   

Weighted

Average

Exercise Price

   

Weighted Average

Remaining

Contractual Term

(Years)

 

$0.80

to  $0.99     4,403,250     $ 0.92     5.85       2,394,008     $ 0.93       3.33  

$1.00

to  $1.49     3,630,000       1.22     1.81       3,511,250       1.22       1.71  

$1.50

to  $3.28     2,360,250       1.76     2.82       1,890,500       1.81       2.72  
          10,393,500     $ 1.22     3.75       7,795,758     $ 1.27       2.45  

 

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 nine months ended April 30, 2020, stock-based compensation relating to the RSUs totaled $66,928 and $200,784 (three and nine months ended April 30, 2019: $Nil and $Nil), respectively. At April 30, 2020 outstanding unvested RSUs totaled 465,000 (July 31, 2019: 465,000), and unrecognized compensation costs relating to unvested RSUs totaled $237,292, which is expected to be recognized over a period of approximately 2.25 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.

 

21

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2020

 (Unaudited – Expressed in U.S. Dollars)

 


 

During the three and nine months ended April 30, 2020, stock-based compensation relating to the PRSUs totaled $68,165 and $204,495 (three and nine months ended April 30, 2019: $Nil and $Nil), respectively. At April 30, 2020 outstanding unvested PRSUs totaled 445,000 (July 31, 2019: 445,000), and unrecognized compensation costs relating to unvested PRSUs totaled $307,517, which is expected to be recognized over a period of approximately 2.25 years.

 

Stock-Based Compensation

 

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

             
   

Three Months Ended April 30,

   

Nine Months Ended April 30,

 
   

2020

   

2019

   

2020

   

2019

 

Stock-Based Compensation for Consultants

                               

Common stock issued for consulting services

  $ 131,516     $ 155,813     $ 365,274     $ 516,423  

Amortization of stock option expenses

    57,130       37,336       157,655       122,056  
      188,646       193,149       522,929       638,479  

Stock-Based Compensation for Management

                               

Common stock issued to management

    24,308       33,126       93,115       104,109  

Amortization of stock option expenses

    100,317       70,395       506,422       427,099  

Amortization of RSU & PRSU expenses

    135,093       -       405,279       -  
      259,718       103,521       1,004,816       531,208  

Stock-Based Compensation for Employees

                               

Common stock issued to employees

    158,127       132,638       416,152       381,333  

Amortization of stock option expenses

    89,154       125,424       482,573       592,578  
      247,281       258,062       898,725       973,911  
                                 

Settlement of share issuance obligation

    -       -       (15,189 )     -  
    $ 695,645     $ 554,732     $ 2,411,281     $ 2,143,598  

 

During the nine months ended April 30, 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 nine months ended April 30, 2020.

 

 

NOTE 14:       LOSS PER SHARE

 

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

             
   

Three Months Ended April 30,

   

Nine Months Ended April 30,

 
   

2020

   

2019

   

2020

   

2019

 

Numerator

                               

Net Loss for the Period

  $ (3,273,644 )   $ (5,017,557 )   $ (10,204,882 )   $ (10,818,657 )
                                 

Denominator

                               

Basic Weighted Average Number of Shares

    183,896,944       179,648,614       182,637,673       174,213,254  

Dilutive Stock Options, Warrants, RSUs and PRSUs

    -       -       -       -  

Diluted Weighted Average Number of Shares

    183,896,944       179,648,614       182,637,673       174,213,254  
                                 

Net Loss per Share, Basic and Diluted

  $ (0.02 )   $ (0.03 )   $ (0.06 )   $ (0.06 )

 

For the three and nine months ended April 30, 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.

 

22

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2020

 (Unaudited – Expressed in U.S. Dollars)

 


 

 

NOTE 15:        SEGMENTED INFORMATION

 

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

 

At April 30, 2020, our long-term assets located in the United States totaled $57,816,137 or 68% of our total long-term assets of $84,536,282.

 

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

   

April 30, 2020

 
   

United States

                         
Balance Sheet Items  

Texas

   

Arizona

   

Wyoming

   

Other States

    Canada     Paraguay     Total  

Mineral Rights and Properties

  $ 12,423,036     $ 4,477,477     $ 31,527,870