10-Q 1 uec20210430_10q.htm FORM 10-Q uec20210430_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, 2021

 

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: 233,248,398 shares of common stock outstanding as of June 7, 2021.

 

 

 
 

 

 

URANIUM ENERGY CORP.

 

TABLE OF CONTENTS

 

PART I – FINANCIAL INFORMATION

3

Item 1.

Financial Statements

3

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

25

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

37

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

48

Item 3.

Defaults Upon Senior Securities

49

Item 4.

Mine Safety Disclosures

49

Item 5.

Other Information

49

Item 6.

Exhibits

49

SIGNATURES

50

 

2

 

 

 

PART I FINANCIAL INFORMATION

 

Item 1.         Financial Statements

 

 

3

 

 

 

 

URANIUM ENERGY CORP.

 

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

FOR THE NINE MONTHS ENDED APRIL 30, 2021

 

(Unaudited Expressed in U.S. Dollars)

 

 

 

 

 

 

4

 

 

URANIUM ENERGY CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited  Expressed in U.S. Dollars)

 

   

Note(s)

   

April 30, 2021

   

July 31, 2020

 
                         

CURRENT ASSETS

                       

Cash and cash equivalents

    7     $ 43,930,316     $ 5,147,703  

Term deposits

    3       4,000,000       -  

Inventories

    4       26,405,480       211,662  

Prepaid expenses and deposits

            1,961,448       1,111,152  

Other current assets

            133,265       119,362  

TOTAL CURRENT ASSETS

            76,430,509       6,589,879  
                         

MINERAL RIGHTS AND PROPERTIES

    5       63,734,378       63,655,503  

PROPERTY, PLANT AND EQUIPMENT

    6       7,399,366       7,019,817  

RESTRICTED CASH

    7       2,037,677       1,839,216  

EQUITY-ACCOUNTED INVESTMENT

    8       13,324,548       11,515,327  

OTHER NON-CURRENT ASSETS

            648,895       769,875  

TOTAL ASSETS

          $ 163,575,373     $ 91,389,617  
                         
                         

CURRENT LIABILITIES

                       

Accounts payable and accrued liabilities

          $ 2,104,028     $ 1,858,499  

Due to a related party

    9       -       31,334  

Other current liabilities

    13       87,129       147,569  

Current portion of other loans payable

    11       189,143       -  

Current portion of long-term debt

    10       9,821,573       -  

TOTAL CURRENT LIABILITIES

            12,201,873       2,037,402  
                         

LONG-TERM DEBT

    10       -       19,869,477  

OTHER LOANS PAYABLE

    11       114,737       307,092  

ASSET RETIREMENT OBLIGATIONS

    12       3,887,569       3,734,314  

OTHER NON-CURRENT LIABILITIES

    13       488,691       479,714  

DEFERRED TAX LIABILITIES

            542,206       545,000  

TOTAL LIABILITIES

            17,235,076       26,972,999  
                         

STOCKHOLDERS' EQUITY

                       

Capital stock

                       

Common stock $0.001 par value: 750,000,000 shares authorized, 232,365,705 shares issued and outstanding (July 31, 2020 - 184,635,870)

    14       232,365       184,636  

Additional paid-in capital

            434,908,779       341,059,972  

Share issuance obligation

            103,554       103,554  

Accumulated deficit

            (289,826,057 )     (276,811,300 )

Accumulated other comprehensive income (loss)

            921,656       (120,244 )

TOTAL EQUITY

            146,340,297       64,416,618  

TOTAL LIABILITIES AND EQUITY

          $ 163,575,373     $ 91,389,617  
                         

SUBSEQUENT EVENTS

    4,8,14                  

 

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

 

5

 

 

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)

   

2021

   

2020

   

2021

   

2020

 

COSTS AND EXPENSES

                                       

Mineral property expenditures

    5     $ 1,478,754     $ 956,564     $ 3,141,772     $ 3,803,338  

General and administrative

    9,14       3,286,201       2,127,887       8,336,593       6,837,851  

Depreciation, amortization and accretion

    5,6,12       98,186       74,060       294,964       232,198  

LOSS FROM OPERATIONS

            (4,863,141 )     (3,158,511 )     (11,773,329 )     (10,873,387 )
                                         

OTHER INCOME (EXPENSES)

                                       

Interest income

            15,950       30,403       30,313       171,925  

Interest expenses and finance costs

    10       (636,178 )     (835,683 )     (2,356,819 )     (2,579,971 )

Income from equity-accounted investment

    8       870,013       684,443       767,321       3,048,219  

Gain on loan extinguishment

    11       7,759       -       286,376       -  

Other income

            16,632       4,475       30,720       21,693  

(Loss) gain on disposition of assets

            (2,133 )     216       (2,133 )     2,016  

OTHER INCOME (EXPENSES)

            272,043       (116,146 )     (1,244,222 )     663,882  

LOSS BEFORE INCOME TAXES

            (4,591,098 )     (3,274,657 )     (13,017,551 )     (10,209,505 )
                                         

DEFERRED TAX BENEFITS

            937       1,013       2,794       4,623  

NET LOSS FOR THE PERIOD

            (4,590,161 )     (3,273,644 )     (13,014,757 )     (10,204,882 )
                                         

OTHER COMPREHENSIVE INCOME (LOSS),

                                       

NET OF INCOME TAXES

    8       493,101       (479,148 )     1,041,900       (528,690 )

TOTAL COMPREHENSIVE LOSS FOR THE PERIOD

          $ (4,097,060 )   $ (3,752,792 )   $ (11,972,857 )   $ (10,733,572 )
                                         

NET LOSS PER SHARE, BASIC AND DILUTED

    15     $ (0.02 )   $ (0.02 )   $ (0.06 )   $ (0.06 )
                                         

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING, BASIC AND DILUTED

            218,822,085       183,896,944       202,304,157       182,637,673  

 

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

 

6

 

 

URANIUM ENERGY CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited  Expressed in U.S. Dollars)

 

           

Nine Months Ended April 30,

 
   

Note(s)

   

2021

   

2020

 

NET CASH PROVIDED BY (USED IN):

                       
                         

OPERATING ACTIVITIES

                       

Net loss for the period

          $ (13,014,757 )   $ (10,204,882 )

Adjustments to reconcile net loss to cash flows in operating activities

                       

Stock-based compensation

    14       3,764,300       2,411,281  

Depreciation, amortization and accretion

    5,6,12       294,964       232,198  

Amortization of long-term debt discount

    10       1,122,096       1,244,032  

Loss (gain) on disposition of assets

            2,133       (2,016 )

Gain on loan extinguishment

    11       (286,376 )     -  

Income from equity-accounted investment

    8       (767,321 )     (3,048,219 )

Deferred tax benefits

            (2,794 )     (4,623 )

Changes in operating assets and liabilities

                       

Inventories

            (26,193,818 )     -  

Prepaid expenses and deposits

            (402,017 )     248,845  

Other current assets

            (13,903 )     130,877  

Accounts payable and accrued liabilities

            256,028       (1,222,616 )

Due to a related party

    9       (31,334 )     (52,505 )
Other liabilities             22,591       (65,028 )

NET CASH USED IN OPERATING ACTIVITIES

            (35,250,208 )     (10,332,656 )
                         

FINANCING ACTIVITIES

                       

Proceeds from share issuances, net of issuance costs

    14       88,551,751       -  

Repayments of long-term debt

    10       (10,000,000 )     -  

Repayments of other loans

    11       (98,203 )     -  

Proceeds from a government loan

            -       28,756  

NET CASH PROVIDED BY FINANCING ACTIVITIES

            78,453,548       28,756  
                         

INVESTING ACTIVITIES

                       

Investment in mineral rights and properties

            (80,000 )     (80,000 )

Purchase of property, plant and equipment

    6       (142,266 )     (83,841 )

Investment in term deposits

            (10,000,000 )     -  

Proceeds from redemption of term deposits

            6,000,000       11,831,671  

Proceeds from disposition of assets

            -       2,800  

NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES

            (4,222,266 )     11,670,630  
                         

NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

            38,981,074       1,366,730  

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD

      6,986,919       7,879,578  

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD

    7     $ 45,967,993     $ 9,246,308  

 

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

 

7

 

 

URANIUM ENERGY CORP.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY

(Unaudited  Expressed in U.S. Dollars)

 

                            Accumulated Other        
   

Common Stock

   

Additional Paid-in

   

Share Issuance

   

Accumulated

   

Comprehensive Income

   

Stockholders'

 
   

Shares

   

Amount

    Capital     Obligation     Deficit     (Loss)     Equity  

Balance, July 31, 2020

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

Common stock

                                                       

Issued for equity financing, net of issuance costs

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

Issued upon exercise of stock options

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

Stock-based compensation

                                                       

Common stock issued under Stock Incentive Plan

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

Amortization of stock-based compensation

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

Warrants

                                                       

Issued for equity financing

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

Issued for equity financing as issuance costs

    -       -       134,937       -       -       -       134,937  

Net loss for the period

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

Other comprehensive income

    -       -       -       -       -       62,761       62,761  

Balance, October 31, 2020

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

Common stock

                                                       

Issued under ATM offering, net of issuance costs

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

Issued as anniversary fees for credit facility

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

Issued upon exercise of stock options

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

Issued upon exercise of warrants

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

Stock-based compensation

                                                       

Common stock issued for consulting services

    -       -       -       40,009       -       -       40,009  

Common stock issued under Stock Incentive Plan

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

Amortization of stock-based compensation

    -       -       836,569       -       -       -       836,569  

Net loss for the period

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

Other comprehensive income

    -       -       -       -       -       486,038       486,038  

Balance, January 31, 2021

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

Common stock

                                                       

Issued under ATM offering, net of issuance costs

    13,036,419       13,036       28,058,564       -       -       -       28,071,600  

Issued under direct offerings, net of issuance costs

    13,636,364       13,636       40,059,512       -       -       -       40,073,148  

Issued upon exercise of stock options

    1,511,547       1,512       1,085,332       -       -       -       1,086,844  

Issued upon exercise of warrants

    3,598,200       3,598       3,395,705       -       -       -       3,399,303  

Stock-based compensation

                                                       

Common stock issued for consulting services

    291,005       291       890,482       (40,009 )     -       -       850,764  

Common stock issued under Stock Incentive Plan

    149,614       150       307,981       -       -       -       308,131  

Amortization of stock-based compensation

    -       -       674,196       -       -       -       674,196  

Warrants

                                                       

Issued for equity financing as issuance costs

    -       -       326,528       -       -       -       326,528  

Net loss for the period

    -       -       -       -       (4,590,161 )     -       (4,590,161 )

Other comprehensive income

    -       -       -       -       -       493,101       493,101  

Balance, April 30, 2021

    232,365,705     $ 232,365     $ 434,908,779     $ 103,554     $ (289,826,057 )   $ 921,656     $ 146,340,297  

 

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)

 

 

                            Accumulated Other        
   

Common Stock

   

Additional Paid-in

   

Share Issuance

   

Accumulated

   

Comprehensive Income

   

Stockholders'

 
   

Shares

   

Amount

    Capital     Obligation     Deficit     (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-based compensation

    -       -       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 as anniversary fees 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-based compensation

    -       -       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-based compensation

    -       -       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.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2021

(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.

 

As at April 30, 2021, we had a working capital of $64.2 million including cash and cash equivalents of $43.9 million, term deposits of $4.0 million and uranium inventory holdings of $26.2 million. During the three months ended and subsequent to April 30, 2021, we entered into agreements to purchase 2.505 million pounds of uranium inventories for a total purchase price of $75.9 million, of which $18.1 million will become due in the next 12 months from the date that our condensed consolidated financial statements are issued (refer to Note 4: Inventories).  In addition, as at April 30, 2021, we had $10.0 million of term debt with a maturity date of January 31, 2022.  However, we believe our existing cash resources and if necessary, cash generated from the sale of the Company’s current assets will provide sufficient funds to fulfill our uranium inventory purchase commitments, repay the $10.0 million principal debt amount when it becomes due, and carry out our planned operations for 12 months from the date that our condensed consolidated financial statements are issued.  Our continuation as a going concern for a period beyond those 12 months will be dependent upon our ability to obtain adequate additional financing, as our operations are capital intensive and future capital expenditures are expected to be substantial. 

 

Historically, we have been reliant primarily on equity financings from the sale of our common stock and on debt financing in order to fund our operations, and this reliance is expected to continue for the foreseeable future. Our continued operations, including the recoverability of the carrying values of our assets, are dependent ultimately on our ability to achieve and maintain profitability and positive cash flow from our operations.

 

 

NOTE 2:

SUMMARY OF SIGNIFICANT POLICIES

 

Basis of Presentation

 

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“U.S. GAAP”) for interim financial information and are presented in U.S. dollars. Accordingly, they do not include all of the information and footnotes required under U.S. GAAP for complete financial statements. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended July 31, 2020 (“Fiscal 2020”). 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, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2021 (“Fiscal 2021”).

 

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 that proven or probable reserves have been established.

 

10

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2021

(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 produced inventory costs and cost of goods sold and results of operations with higher gross profits and lower losses than if we had been in the Production Stage.  Any capitalized costs, such as expenditures relating to the acquisition of mineral rights, are depleted over the estimated extraction life using the straight-line method.  As a result, our consolidated financial statements may not be directly comparable to the financial statements of companies in the Production Stage.

 

 

NOTE 3:

TERM DEPOSITS

 

As of April 30, 2021, term deposits totaled $4,000,000 (July 31, 2020: $Nil), which are held at a major financial institution with an initial term of four to six months bearing interest rate at 0.25%.

 

 

NOTE 4:

INVENTORIES

 

During the three months ended April 30, 2021, we entered into agreements to purchase 2,305,000 pounds of uranium inventories, of which 900,000 pounds of uranium inventory were received.

 

As at April 30, 2021, costs of inventories consisted of the following:

 

   

April 30, 2021

   

July 31, 2020

 

Supplies and work-in-progress

  $ 33,781     $ 33,781  

Uranium concentrates from production

    177,881       177,881  

Purchased uranium inventories

    26,193,818       -  
    $ 26,405,480     $ 211,662  

 

As of April 30, 2021, our uranium inventory purchase commitments for the next two fiscal years are as the follows:

 

   

Purchase Commitments
in Pounds

   

Total Purchase Price

 

Fiscal 2021

    100,000     $ 2,745,000  

Fiscal 2022

    600,000       18,065,000  

Fiscal 2023

    705,000       22,674,000  

Total

    1,405,000     $ 43,484,000  

 

11

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2021

(Unaudited Expressed in U.S. Dollars)


 

Subsequent to April 30, 2021, we received 100,000 pounds of uranium inventories at a purchase price of $2,745,000, and entered into agreements to purchase 200,000 pounds of uranium inventories.

 

 

NOTE 5:

MINERAL RIGHTS AND PROPERTIES

 

Mineral Rights

 

As of April 30, 2021, we had mineral rights in the States of Arizona, Colorado, New Mexico, Wyoming and Texas, in Canada and in the Republic of Paraguay.  These mineral rights were acquired through staking, purchase or lease agreements and are subject to varying royalty interests, some of which are indexed to the sale price of uranium and titanium.  As of April 30, 2021, annual maintenance payments of approximately $2.7 million will be required to maintain these mineral rights.

 

Mineral rights and property acquisition costs consist of the following:

 

   

April 30, 2021

   

July 31, 2020

 

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

    849,854       799,854  

Los Cuatros Project

    257,250       257,250  

Slick Rock Project

    60,000       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  
      67,661,387       67,581,387  

Accumulated Depletion

    (3,929,884 )     (3,929,884 )
      63,731,503       63,651,503  
                 

Databases and Land Use Agreements

    2,458,808       2,458,808  

Accumulated Amortization

    (2,455,933 )     (2,454,808 )
      2,875       4,000  
    $ 63,734,378     $ 63,655,503  

 

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 three and nine months ended April 30, 2021 and 2020, 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, 2021 and 2020.

 

12

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2021

(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,

 
   

2021

   

2020

   

2021

   

2020

 

Mineral Property Expenditures

                               

Palangana Mine

  $ 216,791     $ 260,438     $ 648,459     $ 1,109,164  

Goliad Project

    51,437       54,486       168,493       151,293  

Burke Hollow Project

    626,695       154,672       942,311       1,024,345  

Longhorn Project

    2,289       2,289       6,866       14,735  

Salvo Project

    7,672       7,843       23,537       21,813  

Anderson Project

    19,469       19,519       58,360       49,004  

Workman Creek Project

    8,168       8,168       24,533       24,533  

Slick Rock Project

    12,994       13,123       39,123       39,527  

Reno Creek Project

    215,725       159,088       485,791       451,312  

Yuty Project

    7,129       27,664       21,457       58,578  

Oviedo Project

    109,676       69,446       256,091       298,505  

Alto Paraná Titanium Project

    88,796       36,323       134,710       202,656  

Other Mineral Property Expenditures

    111,913       143,505       332,041       357,873  
    $ 1,478,754     $ 956,564     $ 3,141,772     $ 3,803,338  

 

 

NOTE 6:

PROPERTY, PLANT AND EQUIPMENT

 

Property, plant and equipment consist of the following:

 

 

   

April 30, 2021

   

July 31, 2020

 
   

Cost

   

Accumulated
Depreciation

   

Net Book
Value

   

Cost

   

Accumulated
Depreciation

   

Net Book
Value

 

Hobson Processing Facility

  $ 6,642,835     $ (831,789 )   $ 5,811,046     $ 6,642,835     $ (773,933 )   $ 5,868,902  

Mining Equipment

    2,355,379       (2,314,364 )     41,015       2,393,579       (2,342,518 )     51,061  

Logging Equipment and Vehicles

    1,923,983       (1,761,956 )     162,027       1,924,969       (1,736,806 )     188,163  

Computer Equipment

    333,318       (285,517 )     47,801       550,243       (486,467 )     63,776  

Furniture and Fixtures

    184,941       (171,462 )     13,479       170,701       (169,946 )     755  

Land and Buildings

    1,377,601       (53,603 )     1,323,998       889,606       (42,446 )     847,160  
    $ 12,818,057     $ (5,418,691 )   $ 7,399,366     $ 12,571,933     $ (5,552,116 )   $ 7,019,817  

 

During the nine months ended April 30, 2021, we purchased 100 acres of land (the “Goliad Land Purchase”) within our Goliad Project located in Goliad County, Texas, for total consideration of $487,995, of which $380,000 was financed with a promissory note. Refer to Note 11: Other Loans Payable herein.

 

 

NOTE 7:

RESTRICTED CASH

 

Restricted cash includes cash and cash equivalents and money market funds pledged as collateral for various bonds posted in favor of applicable state regulatory agencies in Arizona, Texas and Wyoming, and for estimated reclamation costs associated with our Anderson Project, Palangana Mine, Hobson Processing Facility and Reno Creek Project.  Restricted cash will be released upon the completion of reclamation of a mineral property or the restructuring of a surety and collateral arrangement.

 

13

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2021

(Unaudited Expressed in U.S. Dollars)


 

During the three months ended April 30, 2021, we paid an additional $198,377 as surety bond collateral for inflation adjustments upon renewal of various surety bonds relating to our Palangana Mine and Hobson Processing Facility.

 

   

April 30, 2021

   

July 31, 2020

 

Restricted cash, beginning of period

  $ 1,839,216     $ 1,821,392  

Additional surety bond collateral

    198,377       -  

Interest received

    84       17,824  

Restricted cash, end of period

  $ 2,037,677     $ 1,839,216  

 

Cash, cash equivalents and restricted cash are included in the following accounts as of April 30, 2021 and 2020:

 

   

April 30, 2021

   

April 30, 2020

 

Cash and cash equivalents

  $ 43,930,316     $ 7,407,189  

Restricted cash

    2,037,677       1,839,119  

Total cash, cash equivalents and restricted cash

  $ 45,967,993     $ 9,246,308  

 

 

NOTE 8:

EQUITY-ACCOUNTED INVESTMENT

 

As of April 30, 2021, we owned 14,000,000 shares of Uranium Royalty Corp. (“URC”), representing a 18.8% (July 31, 2020: 19.5%) interest in URC. In addition, two of our officers are members of URC’s board of directors, and one of which is also an executive officer of URC. As a consequence, our ability to exercise significant influence over URC’s operating and financing policies continued to exist during the three and nine months ended April 30, 2021. URC is a public company listed on the TSX Venture Exchange with the trading symbol “URC.V” and on NASDAQ with the trading symbol “UROY”.

 

For the three and nine months ended April 30, 2021 and 2020, income (loss) from investment in URC consisted of the following:

 

   

Three Months Ended April 30,

   

Nine Months Ended April 30,

 
   

2021

   

2020

   

2021

   

2020

 

Share of income (loss) from URC

  $ 456,132     $ 684,443     $ 353,440     $ (8,437 )

Gain on ownership interest dilution

    413,881       -       413,881       3,056,656  

Total

  $ 870,013     $ 684,443     $ 767,321     $ 3,048,219  

 

For the three and nine months ended April 30, 2021 and 2020, we recorded a gain on ownership interest dilution as a result of URC issuing more shares from the exercises of URC’s share purchase warrants.

 

For the three and nine months ended April 30, 2021, we recorded translation gains of $493,101 and $1,041,900, respectively, and for three and nine months ended April 30, 2020, we recorded translation losses of $479,148 and $528,690, respectively, as a result of translating the ending balance of the investment in URC denominated in Canadian Dollars to U.S. Dollars using the period end exchange rate, which was included in other comprehensive income (loss) in our condensed consolidated statements of operations and comprehensive loss. 

 

During the nine months ended April 30, 2021, the change in carrying value of our investment in URC is summarized as follows:

 

Balance, July 31, 2020

  $ 11,515,327  

Income from investment in URC

    353,440  

Gain on ownership interest dilution

    413,881  

Translation gain

    1,041,900  

Balance, April 30, 2021

  $ 13,324,548  

 

As of April 30, 2021, the fair value of our investment in URC was approximately $49.3 million.

 

14

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2021

(Unaudited Expressed in U.S. Dollars)


 

Subsequent to April 30, 2021, on May 20, 2021, we participated in an equity financing and acquired an additional 1,000,000 common shares of URC at a price of CAD$4.10 per share for total consideration of $3,396,852.

 

 

NOTE 9:

RELATED PARTY TRANSACTIONS

 

During the three and nine months ended April 30, 2021, we incurred $17,900 and $52,041 (three and nine months ended April 30, 2020: $36,849 and $105,339), 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, financial subscriptions, corporate branding, media, website design, maintenance and hosting, provided by Blender to the Company.

 

As of April 30, 2021, the amount owing to Blender was $nil (July 31, 2020: $31,334).

 

 

NOTE 10:

LONG-TERM DEBT

 

As of April 30, 2021, our long-term debt consisted of the following:

 

   

April 30, 2021

   

July 31, 2020

 

Principal amount

  $ 10,000,000     $ 20,000,000  

Unamortized discount and accrued fees

    (178,427 )     (130,523 )

Long-term debt, net of unamortized discount

  $ 9,821,573     $ 19,869,477  

Current portion

    9,821,573       -  

Long-term debt, net of current portion

  $ -     $ 19,869,477  

 

For the three and nine months ended April 30, 2021, amortization of debt discount totaled $296,401 and $1,122,096 (three and nine months ended April 30, 2020: $399,231 and $1,244,032), respectively, which was recorded as interest expense and included in our condensed consolidated statements of operations and comprehensive loss. During the three and nine months ended April 30, 2021, we paid $274,222 and $1,051,111 (three and nine months ended April 30, 2020: $400,000 and $1,217,778), respectively, in cash to our lenders (the “Lenders”) for interest on the long-term debt.

 

During the nine months ended April 30, 2021, we made voluntary principal payments totaling $10,000,000 to certain Lenders, which decreased the principal balance outstanding to $10,000,000 under our credit facility (the “Credit Facility”).

 

During the nine months ended April 30, 2021, and pursuant to the terms of our Third Amended and Restated Credit Agreement with our Lenders, we issued an aggregate of 1,249,039 shares with a fair value of $1,170,000, representing 6.5% of the $18,000,000 principal balance outstanding at the time, as payment of anniversary fees to our Lenders.

 

The Company’s Credit Facility with our remaining Lender has a maturity date on January 31, 2022, with an interest rate of 8% per annum and an underlying effective interest rate of 18.10%.

 

As of April 30, 2021, our working capital ratio, excluding the current portion of the long-term debt, was 32:1, which was in compliance with the debt covenant requirement under our Credit Facility being a working capital ratio, excluding any current portion of the long-term debt, of not less than 1:1.

 

The aggregate yearly maturities of long-term debt based on principal amounts outstanding as at April 30, 2021 are as follows:

 

Fiscal 2021

  $ -  

Fiscal 2022

    10,000,000  

Total

  $ 10,000,000  

 

15

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2021

(Unaudited Expressed in U.S. Dollars)


 

 

NOTE 11:

OTHER LOANS PAYABLE

 

During Fiscal 2020, we applied for a Paycheck Protection Program loan and received the proceeds of $277,250 (the “PPP Loan”). During the nine months ended April 30, 2021, we received a Notice of Paycheck Protection Program Forgiveness Payment from the Small Business Administration regarding the approval of our application for forgiveness of our PPP Loan of $277,250 and accrued interest. As a result, we recognized a gain on extinguishment of the PPP Loan of $278,617 during the nine months ended April 30, 2021.

 

During Fiscal 2020, our Canadian subsidiary received a loan of $29,842 (CAD$40,000) under the Canadian Emergency Business Account Program (“CEBA”), which provides financial relief for Canadian small businesses during the COVID-19 pandemic (the “CEBA Loan”).  During the three months ended April 30, 2021, we repaid CAD$30,000 of the CEBA Loan, 75% of the total CEBA Loan principal before its initial term date on December 31, 2022 and received a CEBA Loan Closure Confirmation for forgiveness of CAD$10,000. As a result, we recognized a gain on extinguishment of the CEBA Loan of $7,759 during the three months ended April 30, 2021.

 

During the nine months ended April 30, 2021, in connection with the Goliad Land Purchase, we issued a promissory note with a principal amount of $380,000 to a landowner (the “Promissory Note”). The Promissory Note carries an interest rate of 5% per annum with principal and interest payable in 24 monthly installments with a maturity date of November 1, 2022. We may prepay the Promissory Note in any amount at any time before the maturity date without penalty.

 

During the three and nine months ended April 30, 2021, we paid $4,124 and $7,235, respectively, in cash for interest on the Promissory Note.

 

As of April 30, 2021, other loans payable consisted of the following:

 

   

April 30, 2021

   

July 31, 2020

 

Government loan payable

  $ -     $ 307,092  

Promissory note payable

    303,880       -  
    $ 303,880     $ 307,092  
                 

Current portion

               

Government loan payable

  $ -     $ -  

Promissory note payable

    189,143       -  
    $ 189,143     $ -  

Non-current portion

               

Government loan payable

  $ -     $ 307,092  

Promissory note payable

    114,737       -  
    $ 114,737     $ 307,092  

 

 

NOTE 12:

ASSET RETIREMENT OBLIGATIONS

 

Asset retirement obligations (“ARO”s) 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, 2020

  $ 3,734,314  

Accretion

    153,255  

Balance, April 30, 2021

  $ 3,887,569  

 

16

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2021

(Unaudited Expressed in U.S. Dollars)


 

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

 

   

April 30, 2021

   

July 31, 2020

 

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 2022

  $ -  

Fiscal 2023

    -  

Fiscal 2024

    -  

Fiscal 2025

    -  

Fiscal 2026

    -  

Remaining balance

    8,221,018  
    $ 8,221,018  

 

 

NOTE 13:

LEASE LIABILITIES

 

The Company primarily has operating leases for corporate offices and a processing facility with a remaining term of 0.3 to 18.1 years. The lease for the processing facility has an evergreen option that can continue for so long as it is in operation.

 

During the three and nine months ended April 30, 2021 and 2020, total lease expenses include the following components:

 

   

Three Months Ended April 30,

   

Nine Months Ended April 30,

 
   

2021

   

2020

   

2021

   

2020

 

Operating leases

  $ 56,195     $ 63,073     $ 163,028     $ 182,012  

Short-term leases

    365,027       23,289       407,982       420,318  

Total Lease Expenses

  $ 421,222     $ 86,362     $ 571,010     $ 602,330  

 

As at April 30, 2021, the weighted average remaining lease term was 16.1 years and the weighted average discount rate was 4.74%.

 

During the nine months ended April 30, 2021, cash paid for amounts included in the measurement of operating lease liabilities totaled $170,276.

 

17

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2021

(Unaudited Expressed in U.S. Dollars)


 

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

 

Fiscal 2021

  $ 68,956  

Fiscal 2022

    249,829  

Fiscal 2023

    20,000  

Fiscal 2024

    20,000  

Fiscal 2025

    20,000  

Thereafter

    300,000  

Total lease payments

    678,785  

Less: imputed interest

    (146,670 )

Present value of lease liabilities

  $ 532,115  
         

Current portion of lease liabilities

  $ 78,050  

Non-current portion of lease liabilities

  $ 454,065  

 

Current lease liabilities are included in Other Current Liabilities, and non-current lease liabilities are included in Other Non-Current Liabilities in our consolidated balance sheets.

 

 

NOTE 14:

CAPITAL STOCK

 

Equity Financing

 

On September 23, 2020, we completed a public offering of 12,500,000 units at a price of $1.20 per unit for gross proceeds of $15,000,000 (the “September 2020 Offering”).  Each unit consisted of one share of our Company and one-half of one share purchase warrant, and each whole warrant entitles its holder to acquire one share of our Company at an exercise price of $1.80 per share and expiring 24 months from the date of issuance.  In connection with the September 2020 Offering, we also issued compensation share purchase warrants to agents as part of share issuance costs to purchase 583,333 shares of our Company exercisable at an exercise price of $1.80 per share and expiring 24 months from the date of issuance.

 

The shares were valued at the Company’s closing price of $0.96 per share on September 23, 2020.  The share purchase warrants were valued using the Black-Scholes option pricing model with the following assumptions.

 

Expected Risk Free Interest Rate

    0.14 %

Expected Annual Volatility

    76.81 %

Expected Contractual Life in Years

    2.00  

Expected Annual Dividend Yield

    0.00 %

 

18

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2021

(Unaudited Expressed in U.S. Dollars)


 

The net proceeds from the September 2020 Offering were allocated to the fair values of the shares and share purchase warrants as presented below.

 

Fair Value of Shares

  $ 12,000,000  

Fair Value of Share Purchase Warrants

    1,445,756  

Total Fair Value Before Allocation to Net Proceeds

  $ 13,445,756  
         

Gross Proceeds

  $ 15,000,000  

Share Issuance Costs - Cash

    (878,344 )

Net Cash Proceeds Received

  $ 14,121,656  
         

Relative Fair Value Allocation to:

       

Shares

  $ 12,603,224  

Share Purchase Warrants

    1,518,432  
    $ 14,121,656  

 

During Fiscal 2019, we entered into an At The Market Offering Agreement (the “ATM Offering Agreement”) with H.C. Wainwright & Co., LLC and certain co-managers as set forth in the ATM Offering Agreement (collectively, the “ATM Managers”), as amended in Fiscal 2020, under which the Company may, from time to time, sell shares of its common stock having an aggregate offering price of up to $30 million through the ATM Managers (collectively, the “ATM Offering”).

 

During the nine months ended April 30, 2021, we issued 13,668,906 shares of the Company’s common stock at a weighted average price of $2.19 per share under the ATM Offering for net cash proceeds of $29,320,949.

 

On March 19, 2021, we completed a registered direct offering of 10,000,000 shares of the Company’s common stock at a price of $3.05 per share for net proceeds of $29,083,710 (the “March 2021 Offering”).

 

On April 8, 2021, we completed a registered direct offering of 3,636,364 shares of the Company’s common stock at a price of $3.30 per share for net proceeds of $11,315,966 (the “April 2021 Offering”). In connection with the April 2021 Offering, we also issued, on a private placement basis, 181,818 common stock purchase warrants (each, an “Agent Warrant”) to the agent as partial compensation, and each Agent Warrant entitles its holder to acquire one share of common stock at an exercise price of $4.125 per share and expiring five years from the date of issuance.

 

The Agent Warrants were valued at $1.80 per share using the Black-Scholes option pricing model with the following assumptions.

 

Expected Risk Free Interest Rate

    0.85 %

Expected Annual Volatility

    72.17 %

Expected Contractual Life in Years

    5.00  

Expected Annual Dividend Yield

    0.00 %

 

19

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2021

(Unaudited Expressed in U.S. Dollars)


 

Share Purchase Warrants

 

A continuity schedule of outstanding share purchase warrants for the nine months ended April 30, 2021, is as follows:

 

   

Number of
Warrants

   

Weighted Average
Exercise Price

 

Balance, July 31, 2020

    7,721,981     $ 2.03  

Issued in connection with September 2020 Offering

    6,833,333       1.80  

Balance, October 31, 2020

    14,555,314       1.92  

Exercised

    (1,050 )     1.80  

Expired

    (300,000 )     1.38  

Balance, January 31, 2021

    14,254,264       1.93  

Issued in connection with April 2021 Offering

    181,818       4.13  

Exercised

    (8,145,840 )     1.99  

Expired

    (809,304 )     2.05  

Balance, April 30, 2021

    5,480,938     $ 1.90  

 

During the three and nine months ended April 30, 2021, we received cash proceeds of $3,399,303 and $3,401,193, and issued 3,598,200 and 3,599,250 shares, respectively, from the exercise of 8,145,840 and 8,146,890 share purchase warrants, respectively.

 

A summary of share purchase warrants outstanding and exercisable as of April 30, 2021, is as follows:

 

Weighted Average
Exercise Price

   

Number of Warrants
Outstanding

   

Weighted Average

Remaining Contractual
Life (Years)

 

Expiry Date

$ 2.30       308,728       1.28  

August 9, 2022

  1.64       25,000       2.06  

May 21, 2023

  1.80       4,965,392       1.40  

September 23, 2022

  4.13       181,818       4.93  

April 5, 2026

$ 1.90       5,480,938       1.51    

 

Stock Options

 

As of April 30, 2021, we had one stock option plan, our 2020 Stock Incentive Plan, which superseded and replaced our 2019 Stock Incentive Plan.

 

A continuity schedule of outstanding stock options for the underlying shares for the nine months ended April 30, 2021, is as follows:

 

   

Number of Stock

Options

   

Weighted Average

Exercise Price

 

Balance, July 31, 2020

    15,514,750     $ 1.13  

Exercised

    (28,500 )     0.93  

Expired

    (1,315,000 )     1.43  

Balance, October 31, 2020

    14,171,250       1.10  

Exercised

    (1,100,782 )     1.11  

Balance, January 31, 2021

    13,070,468       1.10  

Granted

    42,490       2.26  

Exercised

    (1,942,848 )     1.11  

Balance, April 30, 2021

    11,170,110     $ 1.11  

 

20

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2021

(Unaudited Expressed in U.S. Dollars)


 

During the three and nine months ended April 30, 2021 and 2020, the total number of stock options exercised, the number of shares issued upon exercise of those options and the cash received from such exercises are as follows:

 

   

Three Months Ended April 30,

   

Nine Months Ended April 30,

 
   

2021

   

2020

   

2021

   

2020

 

Number of Options Exercised on Forfeiture Basis

    988,909       -       1,930,691       -  

Number of Options Exercised on Cash Basis

    953,939       -       1,141,439       -  

Total Number of Options Exercised

    1,942,848       -       3,072,130       -  
                                 

Number of Shares Issued on Cash Exercise

    953,939       -       1,141,439       -  

Number of Shares Issued on Forfeiture Basis

    557,608       -       943,168       -  

Total Number of Shares Issued Upon Exercise of Options

    1,511,547       -       2,084,607       -  
                                 

Cash Received from Exercise of Stock Options

  $ 1,086,844     $ -     $ 1,308,278     $ -  

Total Intrinsic Value of Options Exercised

  $ 3,026,602     $ -     $ 3,855,217     $ -  

 

Subsequent to April 30, 2021, we received further cash proceeds of $380,776 and issued 704,423 shares of the Company upon the exercise of 888,251 stock options.

 

A continuity schedule of outstanding unvested stock options as of April 30, 2021, and the changes during the period, is as follows:

 

   

Number of Unvested

Stock Options

   

Weighted Average

Grant-Date Fair Value

 

Balance, July 31, 2020

    6,797,471     $ 0.46  

Vested

    (718,755 )     0.46  

Balance, October 31, 2020

    6,078,716       0.46  

Vested

    (1,042,559 )     0.48  

Balance, January 31, 2021

    5,036,157       0.45  

Granted

    42,490       1.29  

Vested

    (229,229 )     0.46  

Balance, April 30, 2021

    4,849,418     $ 0.46  

 

As of April 30, 2021, unrecognized stock-based compensation expense related to the unvested portion of stock options totaled $922,396 to be recognized over the next 1.06 years.

 

As of April 30, 2021, the aggregate intrinsic value under the provisions of ASC 718 of all outstanding stock options was $20,034,091 (vested: $10,709,934 and unvested: $9,324,157).

 

A summary of stock options outstanding and exercisable as of April 30, 2021, is as follows:

 

       

 

 

Options Outstanding

   

Options Exercisable

 

Range of Exercise

Prices

 

Outstanding at

April 30, 2021

   

Weighted

Average

Exercise Price

   

Weighted Average

Remaining

Contractual Term

(Years)

   

Exercisable at
April 30, 2021

   

Weighted

Average Exercise

Price

   

Weighted Average

Remaining

Contractual Term

(Years)

 
$ 0.80 to $

0.99

    6,577,995     $ 0.92       7.73       3,108,567     $ 0.92       6.28  
$ 1.00 to $

1.49

    2,752,625       1.17       5.13       1,415,125       1.25       1.33  
$ 1.50 to $

2.81

    1,839,490       1.68       2.21       1,797,000       1.66       2.03  
              11,170,110     $ 1.11       6.18       6,320,692     $ 1.20       3.96  

 

21

 

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2021

(Unaudited Expressed in U.S. Dollars)


 

Restricted Stock Units

 

A summary of outstanding and unvested restricted stock units (“RSU”s) as of April 30, 2021, is as follows:

 

Grant Date

 

Number of Restricted

Stock Units

   

Grant Date

Fair Value

   

Remaining Life

(Years)

   

Aggregate Intrinsic

Value

 

July 30, 2019

    310,000     $ 0.94       1.25     $ 899,000  

July 16, 2020

    1,305,000       0.91       2.21       3,784,500  
      1,615,000     $ 0.92       2.03     $ 4,683,500  

 

During the three and nine months ended April 30, 2021, stock-based compensation relating to RSUs totaled $262,970 and $806,638 (three and nine months ended April 30, 2020: $66,928 and $200,784), respectively. As of April 30, 2021, outstanding unvested RSUs totaled 1,615,000 (July 31, 2020: 1,615,000), and unrecognized compensation costs relating to unvested RSUs totaled $508,861, which is expected to be recognized over a period of approximately 1.14 years.

 

Performance Based Restricted Stock Units

 

During the three and nine months ended April 30, 2021, stock-based compensation relating to target performance based restricted stock units (“PRSU”s) totaled $37,544 and $112,632 (three and nine months ended April 30, 2020: $68,165 and $204,495), respectively. As of April 30, 2021, outstanding unvested PRSUs totaled 333,750 (July 31, 2020: 333,750), and unrecognized compensation costs relating to unvested PRSUs totaled $126,720, which is expected to be recognized over a period of approximately 0.72 years.

 

Stock-Based Compensation

 

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

 

   

Three Months Ended April 30,

   

Nine Months Ended April 30,

 
   

2021

   

2020

   

2021

   

2020

 

Stock-Based Compensation for Consultants

                               

Common stock issued to consultants

  $ 229,047     $ 131,516     $ 468,364     $ 365,274  

Amortization of stock option expenses

    54,593       57,130       224,295       157,655  
      283,640       188,646       692,659       522,929  

Stock-Based Compensation for Management

                               

Common stock issued to management

    -       24,308       -       93,115  

Amortization of stock option expenses

    154,531       100,317       614,579       506,422  

Amortization of RSU & PRSU expenses

    300,514       135,093       919,270       405,279  
      455,045       259,718       1,533,849       1,004,816  

Stock-Based Compensation for Employees

                               

Common stock issued to employees

    264,484       158,127       738,996       416,152  

Amortization of stock option expenses

    164,558       89,154       798,796       482,573  
      429,042       247,281       1,537,792