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Item 1. Financial Statements

2021-03-16 compared with 2020-12-15 · 460 added, 121 removed, 389 unchanged (60% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED OCTOBER 31 , 2020

FOR THE SIX MONTHS ENDED JANUARY 31, 2021

(Unaudited – Expressed in U.S.

2 unchanged sentences

(Unaudited – Expressed in U.S.

October 31, 2020

January 31, 2021

July 31, 2020

14 unchanged sentences

Other current liabilities

Current portion of other loans payable

Current portion of long-term debt

1 unchanged sentence

LONG-TERM DEBT

GOVERNMENT LOAN PAYABLE

OTHER LOANS PAYABLE

ASSET RETIREMENT OBLIGATIONS

16 unchanged sentences

(Unaudited – Expressed in U.S.

Three Months Ended October 31,

Three Months Ended January 31,

Six Months Ended January 31,

COSTS AND EXPENSES

6 unchanged sentences

Interest expenses and finance costs

Loss from equity-accounted investment

OTHER EXPENSES

Income (loss) from equity-accounted investment

Gain on loan extinguishment

Gain on disposition of assets

OTHER INCOME (EXPENSES)

LOSS BEFORE INCOME TAXES

10 unchanged sentences

(Unaudited – Expressed in U.S.

Three Months Ended October 31,

Six Months Ended January 31,

NET CASH PROVIDED BY (USED IN):

5 unchanged sentences

Amortization of long-term debt discount

Loss from equity-accounted investment

Gain on disposition of assets

Gain on loan extinguishment

Loss (income) from equity-accounted investment

Deferred tax benefits

9 unchanged sentences

Proceeds from share issuance, net of issuance costs

Repayment of promissory note

Repayment of long-term debt

NET CASH PROVIDED BY FINANCING ACTIVITIES

INVESTING ACTIVITIES

Investment in mineral rights and properties

Purchase of property, plant and equipment

1 unchanged sentence

Proceeds from redemption of term deposits

Proceeds from disposition of assets

NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES

22 unchanged sentences

Balance, October 31, 2020

Issued under ATM offering, net of issuance costs

Issued as anniversary fees for credit facility

Issued upon exercise of stock options

Issued upon exercise of warrants

Stock-based compensation

Common stock issued for consulting services

Common stock issued under Stock Incentive Plan

Amortization of stock-based compensation

Net loss for the period

Other comprehensive income

Balance, January 31, 2021

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

URANIUM ENERGY CORP.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited – Expressed in U.S.

Additional Paid-in

11 unchanged sentences

Balance, October 31, 2019

Issued as anniversary fees for credit facility

Stock-based compensation

Common stock issued for consulting services

Common stock issued under Stock Incentive Plan

Amortization of stock-based compensation

Issued for consulting services

Net loss for the period

Other comprehensive loss

Balance, January 31, 2020

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

1 unchanged sentence

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

October 31, 2020

January 31, 2021

(Unaudited – Expressed in U.S.

4 unchanged sentences

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.

At October 31, 2020, we had a working capital of $14.3 million including cash and cash equivalents of $6.7 million and term deposits of $10.0 million.

Our existing cash resources 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.

At January 31, 2021, we had cash and cash equivalents of $8.7 million and term deposits of $4.0 million.

Subsequent to January 31, 2021, we received net proceeds of $28.2 million through the sale of our common shares under an at-the-market offering (refer to Note 13:

Capital Stock).

At January 31, 2021, we had $18.0 million of term debt with a maturity date of January 31, 2022, which became a current liability at January 31, 2021, resulting in a working capital deficit of $5.0 million.

However, we believe our existing cash resources will provide sufficient funds to repay the $18.0 million principal amount when it comes 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.

9 unchanged sentences

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 three months ended October 31, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2021 (“Fiscal 2021”).

Operating results for the six months ended January 31, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2021 (“Fiscal 2021”).

Exploration Stage

4 unchanged sentences

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

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

January 31, 2021

(Unaudited – Expressed in U.S.

In accordance with U.S.

2 unchanged sentences

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.

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

October 31, 2020

(Unaudited – Expressed in U.S.

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.

4 unchanged sentences

TERM DEPOSITS

At October 31, 2020, term deposits totaled $10,000,000 (July 31, 2020:

$Nil), which are held at a major financial institution and have a term of four months with interest rate of 0.33%.

At January 31, 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%.

MINERAL RIGHTS AND PROPERTIES

Mineral Rights

At October 31, 2020, we had mineral rights in the States of Arizona, Colorado, New Mexico, Wyoming and Texas, in Canada and in the Republic of Paraguay.

At January 31, 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.

At October 31, 2020, annual maintenance payments of approximately $2.4 million will be required to maintain these mineral rights.

At January 31, 2021, annual maintenance payments of approximately $2.2 million will be required to maintain these mineral rights.

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

October 31, 2020

January 31, 2021

(Unaudited – Expressed in U.S.

Mineral rights and property acquisition costs consisted of the following:

October 31, 2020

Mineral rights and property acquisition costs consist of the following:

January 31, 2021

July 31, 2020

20 unchanged sentences

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 months ended October 31, 2020 and 2019, we continued with reduced operations at the Palangana Mine to capture residual uranium only.

As a result, no depletion for the Palangana Mine was recorded on our Condensed Consolidated Financial Statements for the three months ended October 31, 2020 and 2019.

During the three and six months ended January 31, 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 six months ended January 31, 2021 and 2020.

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

October 31, 2020

January 31, 2021

(Unaudited – Expressed in U.S.

Mineral property expenditures incurred on our projects were as follows:

Three Months Ended October 31,

Three Months Ended January 31,

Six Months Ended January 31,

Mineral Property Expenditures

12 unchanged sentences

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following:

October 31, 2020

Property, plant and equipment consist of the following:

January 31, 2021

July 31, 2020

5 unchanged sentences

Land and Buildings

During the three months ended January 31, 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 10:

Other Loans Payable.

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 Anderson Project, 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.

October 31, 2020

Restricted cash will be released upon the completion of reclamation of a mineral property or the restructuring of a surety and collateral arrangement.

January 31, 2021

July 31, 2020

4 unchanged sentences

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

October 31, 2020

January 31, 2021

(Unaudited – Expressed in U.S.

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

October 31, 2020

October 31, 2019

Subsequent to January 31, 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.

Cash, cash equivalents and restricted cash are included in the following accounts at January 31, 2021 and 2020:

January 31, 2021

January 31, 2020

Cash and cash equivalents

2 unchanged sentences

EQUITY-ACCOUNTED INVESTMENT

At October 31, 2020, we owned 14,000,000 shares of Uranium Royalty Corp.

At January 31, 2021, we owned 14,000,000 shares of Uranium Royalty Corp.

(“URC”), representing a 19.5% (July 31, 2020:

19.5%) interest in URC.

In addition, two of our officers are members of URC’s board of directors, one of which is also 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 months ended October 31, 2020.

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 six months ended January 31, 2021.

URC is a public company listed on the TSX Venture Exchange with the trading symbol “URC.V”.

At October 31, 2020, the fair value of our investment in URC was approximately $11.6 million.

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

For the three and six months ended January 31, 2021 and 2020, income (loss) from investment in URC consisted of the following:

Three Months Ended January 31,

Six Months Ended January 31,

Share of income (loss) from URC

Gain on ownership interest dilution

For the three and six months ended January 31, 2021, we recorded translation gain of $486,038 and $548,799, respectively, and for three and six months ended January 31, 2020, we recorded translation loss of $39,648 and $49,542, respectively, as a result of translating the ending balance of investment in URC 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 six months ended January 31, 2021, the change in carrying value of our investment in URC is summarized as follows:

Balance, July 31, 2020

1 unchanged sentence

Translation gain

Balance, October 31, 2020

Balance, January 31, 2021

At January 31, 2021, the fair value of our investment in URC was approximately $21.9 million.

RELATED PARTY TRANSACTIONS

During the three months ended October 31, 2020 and 2019, we incurred $16,677 and $32,833, 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 October 31, 2020, the amount owing to Blender was $16,557 (July 31, 2020:

During the three and six months ended January 31, 2021, we incurred $17,464 and $34,141 (three and six months ended January 31, 2020:

$35,657 and $68,490), 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.

At January 31, 2021, the amount owing to Blender was $16,520 (July 31, 2020:

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

January 31, 2021

(Unaudited – Expressed in U.S.

LONG-TERM DEBT

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

October 31, 2020

As at January 31, 2021, our long-term debt consisted of the following:

January 31, 2021

July 31, 2020

4 unchanged sentences

Long-term debt, net of current portion

During the three months ended October 31, 2020 and 2019, amortization of debt discount totaled $443,867 and $432,221, respectively, which was recorded as interest expense and included in our Condensed Consolidated Statements of Operations and Comprehensive Loss.

During the three months ended October 31, 2020 and 2019, we paid $408,889 and $408,889, respectively, in cash to our lenders (the “Lenders”) for interest on the long-term debt.

For the three and six months ended January 31, 2021, amortization of debt discount totaled $381,828 and $825,695, (three and six months ended January 31, 2020:

$412,580 and $844,801), respectively, which was recorded as interest expense and included in our condensed consolidated statements of operations and comprehensive loss.

During the three and six months ended January 31, 2021, we paid $368,000 and $776,889 (three and six months ended January 31, 2020:

$408,889 and $817,778), respectively, in cash to our lenders (the “Lenders”) for interest on the long-term debt.

During the three months ended January 31, 2021, we made a voluntary principal payment of $2,000,000 to one of our Lenders, which decreased the principal balance outstanding to $18,000,000 under our credit facility (the “Credit Facility”).

During the three months ended January 31, 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, as payment of anniversary fees to our Lenders.

The Company’s Credit Facility with our Lenders has a maturity date on January 31, 2022, with an interest rate of 8% per annum and an underlying effective interest rate of 16.48%.

At January 31, 2021, our working capital ratio, excluding the current portion of the long-term debt, was 7.4:1, 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 at January 31, 2021 are as follows:

Subsequent to January 31, 2021, we made further voluntary principal payment of $8,000,000 to our Lenders, which decreased the principal balance outstanding to $10,000,000.

OTHER LOANS PAYABLE

We applied for a Paycheck Protection Program loan and received the proceeds of $277,250 (the “PPP Loan”) during Fiscal 2020.

During the three months ended January 31, 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 three months ended January 31, 2021.

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

October 31, 2020

January 31, 2021

(Unaudited – Expressed in U.S.

The Company’s credit facility (the “Credit Facility”) with our Lenders 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%.

At October 31, 2020, we had a working capital ratio of 4.7:1, which was in compliance with the debt covenant requirement under our Credit Facility being a working capital ratio of not less than 1:1.

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

Subsequent to October 31, 2020, we made a voluntary principal repayment of $2,000,000 to one of our Lenders, which decreased the principal outstanding to $18,000,000 under the Credit Facility.

Subsequent to October 31, 2020, 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, as payment of anniversary fees to our Lenders.

During the three months ended January 31, 2021, in connection with the Goliad Land Purchase, we issued a promissory note with a principal amount of $380,000 to Mar G B Ranch LLC (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 months ended January 31, 2021, we paid $3,111 in cash for interest on the Promissory Note.

At January 31, 2021, other loans payable consisted of the following:

January 31, 2021

July 31, 2020

Government loan payable

Promissory note payable

Current portion

Government loan payable

Promissory note payable

Non-current portion

Government loan payable

Promissory note payable

ASSET RETIREMENT OBLIGATIONS

1 unchanged sentence

Balance, July 31, 2020

Balance, October 31, 2020

Balance, January 31, 2021

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

October 31, 2020

January 31, 2021

July 31, 2020

3 unchanged sentences

Discount rate

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

Remaining balance

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

October 31, 2020

January 31, 2021

(Unaudited – Expressed in U.S.

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

Remaining balance

LEASE LIABILITIES

1 unchanged sentence

The lease for the processing facility has an evergreen option that can continue for so long as it is in operation.

During the three months ended October 31, 2020, total lease expenses include the following components:

Three Months Ended October 31,

During the three and six months ended January 31, 2021 and 2020, total lease expenses include the following components:

Three Months Ended January 31,

Six Months Ended January 31,

Operating leases

1 unchanged sentence

Total Lease Expenses

As at October 31, 2020, the weighted average remaining lease term was 16.1 years and the weighted average discount rate was 4.75%.

During the three months ended October 31, 2020, cash paid for amounts included in the measurement of operating lease liabilities totaled $53,051.

As at January 31, 2021, the weighted average remaining lease term was 15.3 years and the weighted average discount rate was 4.74%.

During the six months ended January 31, 2021, cash paid for amounts included in the measurement of operating lease liabilities totaled $114,280.

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

2 unchanged sentences

Present value of lease liabilities

Currrent portion of lease liabilities

Non-curent portion of lease liabilities

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

Current portion of lease liabilities

Non-current portion of lease liabilities

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.

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

January 31, 2021

(Unaudited – Expressed in U.S.

CAPITAL STOCK

3 unchanged sentences

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.

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

October 31, 2020

(Unaudited – Expressed in U.S.

The shares were valued at the Company’s closing price of $0.96 per share at September 23, 2020.

13 unchanged sentences

Share Purchase Warrants

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 three months ended January 31, 2021, we issued 632,487 shares of the Company’s common stock at a weighted average price of $1.74 per share under the ATM Offering for net cash proceeds of $1,074,337.

Subsequent to January 31, 2021, we issued 13,036,419 shares of the Company’s common stock at a weighted average price of $2.22 under the ATM Offering for net cash proceeds of $28,246,612.

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

January 31, 2021

(Unaudited – Expressed in U.S.

Share Purchase Warrants

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

A continuity schedule of outstanding share purchase warrants for the six months ended January 31, 2021, is as follows:

Weighted Average

3 unchanged sentences

Balance, October 31, 2020

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

Balance, January 31, 2021

A summary of share purchase warrants outstanding and exercisable at January 31, 2021, is as follows:

Weighted Average

1 unchanged sentence

Number of Warrants

Weighted Average

Remaining Contractual

December 23, 2020

Weighted Average Remaining Contractual

April 3, 2021

1 unchanged sentence

September 23, 2022

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

October 31, 2020

(Unaudited – Expressed in U.S.

Subsequent to January 31, 2021, we received cash proceeds of $511,726 and issued 435,542 shares upon the exercise of 1,597,333 share purchase warrants.

Stock Options

At October 31, 2020, 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 three months ended October 31, 2020, is as follows:

Number of Stock

Weighted Average

Exercise Price

At January 31, 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 six months ended January 31, 2021, is as follows:

Number of Stock Options

Weighted Average Exercise Price

Balance, July 31, 2020

Balance, October 31, 2020

During the three months ended October 31, 2020, 28,500 stock options were exercised, of which 18,500 stock options were exercised on a forfeiture basis, resulting in 3,532 shares being issued and 14,968 shares being forfeited as payment of exercise costs.

The balance of 10,000 stock options were exercised on a cash basis where we received $9,309 in cash proceeds.

The total intrinsic value of these stock options exercised was $6,378.

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

Balance, January 31, 2021

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

January 31, 2021

(Unaudited – Expressed in U.S.

During the three and six months ended January 31, 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 January 31,

Six Months Ended January 31,

Number of Options Exercised on Forfeiture Basis

Number of Options Exercised on Cash Basis

Total Number of Options Exercised

Number of Shares Issued on Cash Exercise

Number of Shares Issued on Forfeiture Basis

Total Number of Shares Issued Upon Exercise of Options

Cash Received from Exercise of Stock Options

Total Intrinsic Value of Options Exercised

Subsequent to January 31, 2021, we received further cash proceeds of $381,631 and issued 680,043 shares of the Company upon the exercise of 984,223 stock options.

A continuity schedule of outstanding unvested stock options at January 31, 2021, and the changes during the period, is as follows:

Number of Unvested

4 unchanged sentences

Balance, October 31, 2020

At October 31, 2020, unrecognized stock-based compensation expense related to the unvested portion of stock options totaled $1,763,358 to be recognized over the next 1.25 years.

At October 31, 2020, the aggregate intrinsic value under the provisions of ASC 718 of all outstanding stock options was estimated at $11,020 (vested:

Balance, January 31, 2021

At January 31, 2021, unrecognized stock-based compensation expense related to the unvested portion of stock options totaled $1,241,072 to be recognized over the next 1.17 years.

At January 31, 2021, the aggregate intrinsic value under the provisions of ASC 718 of all outstanding stock options was $7,093,519 (vested:

$3,740,946 and unvested:

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

A summary of stock options outstanding and exercisable at January 31, 2021, is as follows:

Options Outstanding

Options Exercisable

Range of Exercise

Outstanding at October 31, 2020

Range of Exercise Prices

Outstanding at

Janury 31, 2021

Weighted Average Exercise Price

1 unchanged sentence

Exercisable at

October 31, 2020

January 31, 2021

Weighted Average Exercise Price

2 unchanged sentences

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

October 31, 2020

January 31, 2021

(Unaudited – Expressed in U.S.

Restricted Stock Units

A summary of outstanding and unvested restricted stock units (“RSU”s) at October 31, 2020, is as follows:

Number of Restricted

Remaining Life

Intrinsic Value

A summary of outstanding and unvested restricted stock units (“RSU”s) at January 31, 2021, is as follows:

Number of Restricted Stock Units

Grant Date Fair Value

Remaining Life (Years)

Aggregate Intrinsic Value

July 30, 2019

July 16, 2020

During the three months ended October 31, 2020 and 2019, stock-based compensation relating to the RSUs totaled $271,834 and $66,928, respectively.

At October 31, 2020, outstanding unvested RSUs totaled 1,615,000 (July 31, 2020:

During the three and six months ended January 31, 2021, stock-based compensation relating to the RSUs totaled $271,834 and $543,668 (three and six months ended January 31, 2020:

$66,928 and $133,856), respectively.

At January 31, 2021, outstanding unvested RSUs totaled 1,615,000 (July 31, 2020:

1,615,000), and unrecognized compensation costs relating to unvested RSUs totaled $771,831, which is expected to be recognized over a period of approximately 1.16 years.

Performance Based Restricted Stock Units

During the three months ended October 31, 2020 and 2019, stock-based compensation relating to target performance based restricted stock units (“PRSU”s) totaled $37,544 and $68,165, respectively.

At October 31, 2020, outstanding unvested PRSUs totaled 333,750 (July 31, 2020:

During the three and six months ended January 31, 2021, stock-based compensation relating to target performance based restricted stock units (“PRSU”s) totaled $37,544 and $75,088 (three and six months ended January 31, 2020:

$68,165 and $136,330), respectively.

At January 31, 2021, outstanding unvested PRSUs totaled 333,750 (July 31, 2020:

333,750), and unrecognized compensation costs relating to unvested PRSUs totaled $164,264, which is expected to be recognized over a period of approximately 0.87 years.

1 unchanged sentence

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

Three Months Ended October 31,

Three Months Ended January 31,

Six Months Ended January 31,

Stock-Based Compensation for Consultants

11 unchanged sentences

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

October 31, 2020

January 31, 2021

(Unaudited – Expressed in U.S.

1 unchanged sentence

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 October 31,

Three Months Ended January 31,

Six Months Ended January 31,

Net Loss for the Period

3 unchanged sentences

Net Loss per Share, Basic and Diluted

For the three months ended October 31, 2020 and 2019 all outstanding stock options, RSUs, PRSUs and share purchase warrants were excluded from the calculation of the diluted loss per share since their effects would be anti-dilutive.

For the three and six months ended January 31, 2021 and 2020, all outstanding stock options, RSUs, PRSUs and share purchase warrants were excluded from the calculation of the diluted loss per share since their effects would be anti-dilutive.

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 October 31, 2020, our long-term assets located in the United States totaled $57,718,067 or 69% of our total long-term assets of $84,070,221.

At January 31, 2021, our long-term assets located in the United States totaled $58,196,798 or 68% of our total long-term assets of $85,704,749.

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

October 31, 2020

January 31, 2021

United States

17 unchanged sentences

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

October 31, 2020

January 31, 2021

(Unaudited – Expressed in U.S.

The tables below provide a breakdown of our operating results by geographic segments for the three months ended October 31, 2020 and 2019.

The tables below provide a breakdown of our operating results by geographic segments for the three and six months ended January 31, 2021 and 2020.

All intercompany transactions have been eliminated.

Three months ended October 31, 2020

Three Months Ended January 31, 2021

United States

7 unchanged sentences

Loss before income taxes

Three months ended October 31, 2019

Three Months Ended January 31, 2020

United States

7 unchanged sentences

Loss before income taxes

SUBSEQUENT EVENT S

Subsequent to October 31, 2020, 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 Paycheck Protection Program loan of $277,250 (the “PPP Loan”);

for which we applied for and received the proceeds during Fiscal 2020.

We will recognize a gain on extinguishment of the PPP Loan during the three months ending January 31, 2021.

Subsequent to October 31, 2020, we purchased 100 acres of land within our Goliad Project located in Goliad County, Texas, for total consideration of $487,995.

In connection with this land purchase, we entered into a promissory note with a principal amount of $380,000 due to Mar G B Ranch LLC (the “Promissory Note”).

Six Months Ended January 31, 2021

United States

Statement of Operations

Costs and Expenses:

Mineral property expenditures

General and administrative

Depreciation, amortization and accretion

Loss from operations

Other income (expenses)

Loss before income taxes

Six Months Ended January 31, 2020

United States

Statement of Operations

Costs and Expenses:

Mineral property expenditures

General and administrative

Depreciation, amortization and accretion

Loss from operations

Other income (expenses)

Loss before income taxes

SUBSEQUENT EVENT

Subsequent to January 31, 2021, we entered into an agreement to purchase 400,000 pounds of uranium concentrate (“U 3 O 8 ”) at a price of $27.29 per pound.

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

The following management ’ s discussion and analysis of the Company ’ s financial condition and results of operations (the “ MD&A ” ) contain forward-looking statements that involve risks, uncertainties and assumptions including, among others, statements regarding our capital needs, business plans and expectations.

In evaluating these statements you should consider various factors, including the risks, uncertainties and assumptions set forth in reports and other documents we have filed with or furnished to the SEC and, including, without limitation, this Form 10-Q Quarterly Report for the three months ended January 31, 2021, and our Form 10-K Annual Report for the fiscal year ended July 31, 2020, including the consolidated financial statements and related notes contained therein.

These factors, or any one of them, may cause our actual results or actions in the future to differ materially from any forward-looking statement made in this Quarterly Report.

Refer to “ Cautionary Note Regarding Forward-looking Statements ” as disclosed in our Form 10-K Annual Report for the fiscal year ended July 31, 2020, and Item 1A, Risk Factors, under Part II - Other Information, of this Quarterly Report.

This MD&A is focused on material changes in our financial condition from July 31, 2020, our most recently completed year end, to January 31, 2021, and our results of operations for the three and six months ended January 31, 2021, and should be read in conjunction with Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, as contained in our Form 10-K Annual Report for Fiscal 2020.

We are predominantly engaged in uranium mining and related activities, including exploration, pre-extraction, extraction and processing, on uranium projects located in the United States and Paraguay, as more fully described in our Form 10-K Annual Report for Fiscal 2020.

We utilize in-situ recovery (“ISR”) mining where possible which we believe, when compared to conventional open pit or underground mining, requires lower capital and operating expenditures with a shorter lead time to extraction and a reduced impact on the environment.

We have one uranium mine located in the State of Texas, the Palangana Mine, which utilizes ISR mining and commenced extraction of U 3 O 8 , or yellowcake, in November 2010.

We have one uranium processing facility located in the State of Texas, the Hobson Processing Facility, which processes material from the Palangana Mine into drums of U 3 O 8 , our only sales product and source of revenue, for shipping to a third-party storage and sales facility.

At January 31, 2021, we had no uranium supply or off-take agreements in place.

Our fully-licensed and 100%-owned Hobson Processing Facility forms the basis for our regional operating strategy in the State of Texas, specifically the South Texas Uranium Belt where we utilize ISR mining.

We utilize a “hub-and-spoke” strategy whereby the Hobson Processing Facility acts as the central processing site (the “hub”) for the Palangana Mine and future satellite uranium mining activities, such as our Burke Hollow and Goliad Projects, located within the South Texas Uranium Belt (the “spokes”).

The Hobson Processing Facility has a physical capacity to process uranium-loaded resins up to a total of two million pounds of U 3 O 8 annually and is licensed to process up to one million pounds of U 3 O 8 annually.

We acquired the fully permitted Reno Creek Project in August 2017 and expanded our operations to the strategic Powder River Basin in Wyoming.

We also hold certain mineral rights in various stages of development in the States of Arizona, Colorado, New Mexico, Texas and Wyoming, in Canada and in the Republic of Paraguay, many of which are located in historically successful mining areas and have been the subject of past exploration and pre-extraction activities by other mining companies.

We do not expect, however, to utilize ISR mining for all of the uranium mineral rights in which case we would expect to rely on conventional open pit and/or underground mining techniques.

Since we completed the acquisition of the Alto Paraná Titanium Project located in Paraguay in July 2017, we are also involved in titanium mining and related activities, including exploration, development, extraction and processing of titanium minerals such as ilmenite.

Our operating and strategic framework is based on expanding our uranium and titanium extraction activities, which includes advancing certain projects with established mineralized materials towards extraction and establishing additional mineralized materials on our existing uranium and titanium projects or through the acquisition of additional projects.

Uranium Market Developments

Over the past few years, global uranium market fundamentals have been improving as the market transitions from being an inventory driven to more of a production driven market.

The spot market bottomed in November 2016 at about $17.75 per pound U 3 O 8 and stood at about $27.72 per pound at January 31, 2021.

Curtailments in production from several global producers have lowered uranium supply over the past few years.

In 2020, about 50% of global production was shutdown attributable to the COVID-19 virus.

This event has accelerated a rebalancing in the market, resulting in about 19 million pounds of supply being removed that will not be made up.

Supply and demand projections show a structural deficit between production and utility requirements of about 40 million pounds per year through 2026 that approaches 70 million pounds by 2030.

The gap is being filled with secondary market sources, including finite inventory that is projected to decline in upcoming years.

Higher priced contracts that have supported production are continuing to roll out of producer and utility supply portfolios.

These higher priced contracts are not replaceable with current market prices below production costs for the vast majority of western producers.

This will likely continue the trend of production cuts and deferrals until prices rise sufficiently to sustain long-term mining operations.

In late 2020, one of the world’s largest and low-cost mines shut down again because of COVID-19 concerns and is currently reducing expected supply by another 1.5 million pounds per month.

In addition, some of the more significant global projects have recently shut down or are in their final stages of production as their resources become depleted.

On the demand side of the equation, the global nuclear energy industry continues robust growth, with 53 new reactors connected to the grid since the start of 2013 and another 52 reactors under construction as of February 2021.

Nuclear generation has continued to increase over the past several years and has eclipsed pre-Fukushima production volumes.

In the 2020 edition (World Energy Outlook 2020), the International Energy Agency “Stated Policies Scenario” sees installed nuclear capacity growth of over 15% from 2019 to 2040, reaching about 480 GWE.

Further upside market pressure also appears likely as utilities finally return to a longer-term contracting cycle to replace expiring contracts, something the market has not experienced for several years.

In the U.S., significant political developments are improving the outlook for American uranium producers.

In September 2020, for the first time in 48 years, the Democratic Party platform endorsed nuclear power, creating a solid base of bipartisan political support for the nuclear industry.

In October 2020, the U.S.

Department of Commerce concluded an amendment to the Agreement Suspending the Antidumping Investigation on Uranium from the Russian Federation that reduces America’s dependence on Russian natural uranium concentrates up to 75% from prior levels.

In December, the U.S.

Federal Government omnibus spending bill passed by Congress includes $75 million for initial funding of the 10-year U.S.

Uranium Reserve.

More recently, the Nuclear Prosperity and Security Act was reintroduced in the U.S.

House of Representative that would direct the Secretary of Energy to establish and operate a U.S.

Uranium Reserve.

Response to COVID-19 Pandemic

In response to the COVID-19 pandemic, we have taken proactive steps to lower our operating expenses and to adjust our timing of capital expenditures.

For the protection of our employees, we have arranged for our teams at our Vancouver, Corpus Christi and Paraguay offices to work remotely.

In the meantime, we continued to operate our Palangana Mine at a reduced pace to capture residual uranium only and continue to advance our ISR projects with engineering and geologic evaluations that support the Company’s extraction readiness strategy.

Results of Operations

For the three and six months ended January 31, 2021, we recorded net losses of $3,461,059 ($0.02 per share) and $8,424,596 ($0.04 per share) and losses from operations of $3,523,558 and $6,910,188, respectively.

For the three and six months ended January 31, 2020, we recorded net losses of $1,888,661 ($0.01 per share) and $6,931,238 ($0.04 per share), and losses from operations of $$3,799,869 and $7,714,876, respectively.

During the three and six months ended January 31, 2021, in response to the significant financial market uncertainty as a result of the COVID-19 pandemic, we continued our efforts of corporate-wide cost-cutting and cash saving measures.

In the meantime, we continued with our strategic plan for reduced operations at our Palangana Mine to capture residual pounds of U 3 O 8 only.

As a result, no U 3 O 8 extraction or processing costs were capitalized to inventories during the three months ended January 31, 2021.

At January 31, 2021, the total value of inventories was $211,662 (July 31, 2020:

Costs and Expenses

Mineral Property Expenditures

Mineral property expenditures primarily consisted of costs relating to permitting, property maintenance, exploration and pre-extraction activities and other non-extraction related activities on our projects.

During the three and six months ended January 31, 2021, mineral property expenditures totaled $961,257 and $1,663,018, respectively, of which $242,047 and $440,067, respectively, were directly related to maintaining operational readiness and permitting compliance for our Palangana Mine and Hobson Processing Facility.

During the three and six months ended January 31, 2020, mineral property expenditures totaled $1,323,323 and $2,846,774, respectively, of which $301,114 and $650,249, respectively, were directly related to maintaining operational readiness and permitting compliance for our Palangana Mine and Hobson Processing Facility.

The following table provides mineral property expenditures on our projects for the periods indicated:

Three Months Ended January 31,

Six Months Ended January 31,

Mineral Property Expenditures

Palangana Mine

Goliad Project

Burke Hollow Project

Longhorn Project

Salvo Project

Anderson Project

Workman Creek Project

Slick Rock Project

Reno Creek Project

Oviedo Project

Alto Paraná Titanium Project

Other Mineral Property Expenditures

General and Administrative

During the three and six months ended January 31, 2021, general and administrative expenses totaled $2,464,703 and $5,050,392, respectively, which increased by $69,909 and $340,428, respectively, compared to $2,394,794 and $4,709,964, respectively, for the three and six months ended January 31, 2020.

The increases primarily resulted from increases in stock-based compensation expenses being offset by decreases in general and administrative expenses of other categories.

The following summary provides a discussion of the major expense categories including analyses of the factors that caused significant variances compared to the same period last year:

for the three and six months ended January 31, 2021, salaries and management fees totaled $379,767 and $745,270, respectively, which decreased by $37,406 and $135,942, respectively, compared to $417,173 and $881,212, respectively, for the three and six months ended January 31, 2020, primarily as a result of corporate-wide reduction in salaries and fees;

for the three and six months ended January 31, 2021, office, insurance, filing and listing fees, investor relations, corporate development and travel expenses totaled $682,482 and $1,402,246, respectively, which decreased by $170,182 and $249,530, respectively, compared to $852,664 and $1,651,776, respectively, for the three and six months ended January 31, 2020, primarily as a result of corporate-wide cost reductions;

for the three and six months ended January 31, 2021, professional fees totaled $184,396 and $306,303, respectively, which decreased by $142,311 and $155,037, respectively, compared to $326,707 and $461,340, respectively, for the three and six months ended January 31, 2020.

The decrease primarily resulted from decrease in general legal fees and accounting and audit fees.

Professional fees are primarily comprised of legal services related to certain transactional activities and regulatory compliance, in addition to audit and tax services;

for the three and six months ended January 31, 2021, stock-based compensation totaled $1,218,058 and $2,596,573, respectively, which increased by $419,808 and $880,937, respectively, compared to $798,250 and $1,715,636, respectively, for the three and six months ended January 31, 2020.

During the three and six months ended January 31, 2021, in response to the financial market uncertainty as a result of the COVID-19 pandemic, we continued our efforts of corporate-wide cost-cutting and cash saving measures implemented in Fiscal 2020, where we expanded the scope of equity-based payments, including shares issued in lieu of cash for certain salaries and fees under our Stock Incentive Plan, to compensate certain employees and consultants to reduce cash outlays.

During Fiscal 2020, we granted approximately 6.2 million stock options to our directors, officers, employees and certain consultants and awarded 1.3 million RSUs to certain of our directors and officers.

The stock-based compensation expenses included the fair value of compensation shares at the time of issuance and the amortization of the fair value of various stock awards granted in Fiscal 2020 and prior fiscal years using graded vesting method.

Depreciation, Amortization and Accretion

During the three and six months ended January 31, 2021, depreciation, amortization and accretion totaled $97,598 and $196,778, respectively, which increased by $15,846 and $38,640, respectively, compared to $81,752 and $158,138, respectively, for the three and six months ended January 31, 2020.

Depreciation, amortization and accretion include depreciation and amortization of long-term assets acquired in the normal course of operations and accretion of asset retirement obligations.

Other Income and Expenses

Interest and Finance Costs

During the three and six months ended January 31, 2021, interest and finance costs totaled $829,727 and $1,720,641, respectively, which were consistent with $859,163 and $1,744,288, for the three and six months ended January 31, 2020, respectively.

For the three and six months ended January 31, 2021, interest paid on long-term debt totaled $368,000 and $776,889, respectively, which decreased by $40,889 and $40,889, respectively, compared to $408,889 and $817,778, respectively, for the three and six months ended January 31, 2020.

For the three months ended January 31, 2021, amortization of debt discount totaled $381,828 and $825,695, respectively, which decreased by $30,752 and $19,106, respectively, compared to $412,580 and $844,801, respectively, for the three and six months ended January 31, 2020.

The decreases in interest on long-term debt and amortization of debt discount are a result of the decrease in the outstanding principle amount of our long-term debt to $18,000,000 from $20,000,000 in the comparable periods of last year.

For the three and six months ended January 31, 2021, surety bond premium totaled $61,009 and $90,079, respectively, which increased by $31,939 and $26,383, respectively, compared to $29,070 and $63,696, respectively, for the three and six months ended January 31, 2020.

Income or Loss from Equity-Accounted Investment

During the three and six months ended January 31, 2021, we recorded income of $600,913 and a loss of $102,692, respectively, as a result of income and loss pick up from URC’s operations.

During the three and six months ended January 31, 2020, we recorded income of $2,704,373 and $2,363,776, respectively, primarily due to a dilution gain of $2,728,026 and $3,056,656, respectively, recognized as a result of the change of our ownership interest in URC due to URC’s initial public offering in December 2019, offset by loss pick up totaling $23,653 and $692,880, respectively, from URC’s operations.

Gain on Loan Extinguishment

As a result, a gain on loan extinguishment of $278,617 was recorded on our statement of operations and comprehensive loss for the three and six months ended January 31, 2021.

Summary of Quarterly Results

For the Quarters Ended

January 31, 2021

October 31, 2020

July 31, 2020

April 30, 2020

Total comprehensive loss

Basic and diluted loss per share

For the Quarters Ended

January 31, 2020

October 31, 2019

July 31, 2019

April 30, 2019

Total comprehensive loss

Basic and diluted loss per share

Liquidity and Capital Resources

January 31, 2021

July 31, 2020

Cash and cash equivalents

Term deposits

Current assets

Current liabilities

Working capital (deficit)

During the six months ended January 31, 2021, we received net proceeds of $14,121,656 from the September 2020 Offering.

During the three months ended January 31, 2021, we received net proceeds of $1,074,337 under the ATM Offering.

At January 31, 2021, we had cash and cash equivalents of $8,713,193 and term deposits of $4,000,000.

Subsequent to January 31, 2021, we received further net proceeds of $28,246,612 under the ATM Offering, which substantially increased our cash and cash equivalent balances and improved our working capital position.

At January 31, 2021, our $18,000,000 long-term debt with maturity on January 31, 2022 became a current liability, resulting in a working capital deficit of $5,029,653.

With the cash proceeds received from the ATM Offering, our existing cash resources are expected to provide sufficient funds to repay the long-term debt when it comes due and carry out our planned operations for 12 months from the date of this Quarterly Report.

Our continuation as a going concern beyond 12 months from the date of this Quarterly Report 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 financings in order to fund our operations.

We have also relied, to a limited extent, on cash flows generated from our mining activities during the year ended July 31, 2015 (“Fiscal 2015), 2013 (“Fiscal 2013) and 2012 (“Fiscal 2012”).

However, we have yet to achieve profitability or develop positive cash flow from operations and we do not expect to achieve profitability or develop positive cash flow from operations in the near term.

Our reliance on equity and debt financings is expected to continue for the foreseeable future, and their availability whenever such additional financing is required, will be dependent on many factors beyond our control including, but not limited to, the market price of uranium, the continuing public support of nuclear power as a viable source of electrical generation, the volatility in the global financial markets affecting our stock price and the status of the worldwide economy, any one of which may cause significant challenges in our ability to access additional financing, including access to the equity and credit markets.

We may also be required to seek other forms of financing, such as asset divestitures or joint venture arrangements, to continue advancing our uranium projects which would depend entirely on finding a suitable third party willing to enter into such an arrangement, typically involving an assignment of a percentage interest in the mineral project.

However, there is no assurance that we will be successful in securing any form of additional financing when required and on terms favorable to us.

Our operations are capital intensive and future capital expenditures are expected to be substantial.

We will require significant additional financing to fund our operations, including continuing with our exploration and pre-extraction activities and acquiring additional mineral projects.

In the absence of such additional financing, we would not be able to fund our operations, including continuing with our exploration and pre-extraction activities, which may result in delays, curtailment or abandonment of any one or all of our mineral projects.

Our anticipated operations, including exploration and pre-extraction activities, will be dependent on and may change as a result of our financial position, the market price of uranium and other considerations, and such change may include accelerating the pace or broadening the scope of reducing our operations as originally announced in September 2013.

Our ability to secure adequate funding for these activities will be impacted by our operating performance, other uses of cash, the market price of commodities, the market price of our common stock and other factors which may be beyond our control.

Specific examples of such factors include, but are not limited to:

if the market price of uranium weakens;

if the weakness in the market price of our common stock continues;

if we default on making scheduled payments of fees and complying with the restrictive covenants as required under our Credit Facility resulting in accelerated repayment of our indebtedness and/or enforcement by the Lenders against our key assets securing our indebtedness;

if the COVID-19 pandemic worsens or continues over an extended period and causes further financial market uncertainty;

if a nuclear incident, such as the events that occurred at Fukushima in March 2011, is to occur, continuing public support of nuclear power as a viable source of electrical generation may be adversely affected, which may result in significant and adverse effects on both the nuclear and uranium industries.

Our long-term success, including the recoverability of the carrying values of our assets and our ability to acquire additional mineral projects and to continue with exploration and pre-extraction activities and mining activities on our existing mineral projects, will depend ultimately on our ability to achieve and maintain profitability and positive cash flow from our operations by establishing ore bodies that contain commercially recoverable minerals and to develop these into profitable mining activities.

Equity Financings

We filed a Form S-3 shelf registration statement under the United States Securities Act of 1933, as amended (the “Securities Act”) on March 10, 2017 (the “2017 Shelf”), providing for the public offer and sale of certain securities of our Company from time to time, at our discretion, of up to an aggregate offering amount of $100 million.

On April 9, 2019, we entered into the ATM Offering Agreement with the ATM Managers, under which the Company may, from time to time, sell shares of its common stock having an aggregate offering price of up to $37.9 million through the Managers.

In connection with the ATM Offering, on April 9, 2019, we filed a prospectus supplement to the 2017 Shelf providing for the public offer and sale of the Company’s shares having an aggregate offering price of up to $37.9 million through one or more at-the-market offerings pursuant to the ATM Offering.

On February 21, 2020, we filed a Form S-3 shelf registration statement under the Securities Act which was declared effective by the SEC on March 3, 2020 (the “2020 Shelf”) providing for the public offer and sale of certain securities of the Company from time to time, at our discretion, of up to an aggregate offering amount of $100 million.

As a result of the 2020 Shelf, our 2017 Shelf was then deemed terminated and, as a consequence, our then ATM Offering terminated unless renewed under the 2020 Shelf.

On March 19, 2020, we entered into an Amending Agreement to the ATM Offering Agreement with the ATM Managers 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 under its ATM Offering through the 2020 Shelf.

On September 23, 2020, we completed our September 2020 Offering of 12,500,000 units at a price of $1.20 per unit for gross proceeds of $15,000,000.

Each unit was comprised of one share of the Company and one-half of one share purchase warrant, and each whole warrant entitles its holder to acquire one share at an exercise price of $1.80 per share exercisable immediately upon issuance and expiring 24 months from the date of issuance.

During the three months ended January 31, 2021, we issued 632,487 shares at a weighted average price of $1.74 per share under the ATM Offering for net cash proceeds of $1,074,337.

Subsequent to January 31, 2021, we issued 13,036,419 shares at a weighted average price of $2.22 under the ATM Offering for net cash proceeds of $28,246,612.

At January 31, 2021, $30 million of the 2020 Shelf was utilized for the ATM Offering and $27.3 million was utilized for the September 2020 Offering;

and therefore, as at January 31, 2021, there was $42.7 million available for distribution under our 2020 Shelf.

Credit Facility

On December 5, 2018, we entered into the Third Amended and Restated Credit Agreement with our Lenders, whereby we and the Lenders agreed to certain further amendments to our Credit Facility, under which initial funding of $10,000,000 was received by the Company upon closing of the Credit Facility on July 30, 2013, and additional funding of $10,000,000 was received by the Company upon closing of the amended Credit Facility on March 13, 2014.

The Credit Facility is non-revolving with an amended term of 8.5 years since inception maturing on January 31, 2022, subject to an interest rate of 8% per annum, compounded and payable on a monthly basis.

The Third Amended and Restated Credit Agreement superseded, in their entirety, our Second Amended and Restated Credit Agreement dated and effective February 9, 2016, our Amended and Restated Credit Agreement dated and effective March 13, 2014 and our Credit Agreement dated and effective July 30, 2013 with our Lenders.

During the three months ended January 31, 2021, we made a voluntary payment of $2,000,000 to one of our Lenders.

During the three months ended January 31, 2021, and pursuant to the terms of the Third Amended and Restated Credit Agreement, 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, as payment of anniversary fees to our Lenders.

Subsequent to January 31, 2021, we made further voluntary principal payment of $8,000,000 to our Lenders, which decreased the principal balance outstanding to $10,000,000.

Government Loans

In April 2020, our Canadian subsidiary received a loan of $31,299 (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”).

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.

On April 28, 2020, we entered into a business loan agreement with Kleberg Bank, N.A., under the Paycheck Protection Program administered by the Small Business Administration, which is a part of the Coronavirus Aid, Relief, and Economic Security Act enacted by the U.S.

Congress in response to the COVID-19 pandemic.

On May 5, 2020, we received the PPP Loan in the amount of $277,250.

Promissory Note

During the three months ended January 31, 2021, in connection with the Goliad Land Purchase, we issued the Promissory Note with a principal amount of $380,000 to Mar G B Ranch LLC.

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 or premium.

We may prepay the Promissory Note in any amount at any time before the maturity date without penalty.

Operating Activities

Net cash used in operating activities during the six months ended January 31, 2021 and 2020 was $5,603,172 and $7,545,794, respectively.

Significant operating expenditures included mineral property expenditures, general and administrative expenses and interest payments.

Financing Activities

During the six months ended January 31, 2021, net cash provided by financing activities totaled $13,389,086 primarily from net proceeds of $14,121,656 from our September 2020 Offering, net proceeds of $1,074,337 from the ATM Offering, and net proceeds of $223,324 from the exercise of stock options and share purchase warrants, which were offset by a $2,000,000 voluntary payment to one of our Lenders under our Credit Facility and $30,231 payments under the Promissory Note.

No cash was provided by financing activities during the six months ended January 31, 2020.

Investing Activities

During the six months ended January 31, 2021, net cash used by investing activities totaled $4,220,340, primarily for cash used for the investment in term deposits of $10,000,000, cash used for the purchase of property, plant and equipment of $140,340, and cash used for investment in mineral rights and properties of $80,000, offset by cash received from the redemption of term deposits of $6,000,000.

During the six months ended January 31, 2020, net cash provided by investing activities totaled $11,773,277, primarily from cash received from the redemption of term deposits totaling $11,831,671, offset by cash used for the purchase of property, plant and equipment of $30,194 and cash used for investment in mineral rights and properties of $30,000.

Stock Options and Warrants

At January 31, 2021, we had stock options outstanding representing 13,070,468 shares at a weighted-average exercise price of $1.10 per share, and share purchase warrants outstanding representing 14,254,264 shares at a weighted-average exercise price of $1.93 per share.

At January 31, 2021, outstanding stock options and warrants represented a total 27,324,732 shares issuable for gross proceeds of approximately $41.9 million should these stock options and warrants be exercised in full on a cash basis.

At January 31, 2021, outstanding in-the-money stock options represented a total of 12,850,468 shares exercisable for gross proceeds of approximately $13.7 million should these in-the-money stock options be exercised in full on a cash basis.

The exercise of stock options and warrants is at the discretion of the respective holders and, accordingly, there is no assurance that any of the stock options or warrants will be exercised in the future.

Transactions with a Related Party

During the three and six months ended January 31, 2021, we incurred $17,464 and $34,141 (three and six months ended January 31, 2020:

$35,657 and $68,490), respectively, in general and administrative costs, paid to 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.

At January 31, 2021, the amount owing to Blender was $16,520 (July 31, 2020:

Material Commitments

Long-Term Debt Obligations

At January 31, 2021 we have made all scheduled payments and complied with all covenants under our Credit Facility, and we expect to continue complying with all scheduled payments and covenants during Fiscal 2021.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Policies

For a complete summary of all of our significant accounting policies refer to Note 2:

Summary of Significant Accounting Policies of the Notes to the Consolidated Financial Statements as presented under Item 8, Financial Statements and Supplementary Data, in our Annual Report on Form 10-K for Fiscal 2020.

Refer to “Critical Accounting Policies” under Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our Annual Report on Form 10-K for Fiscal 2020.

Subsequent Events

Subsequent to January 31, 2021, we issued 13,036,419 shares at a weighted average price of $2.22 under the ATM Offering for net cash proceeds of $28,246,612.

Subsequent to January 31, 2021, we received cash proceeds of $381,631 and issued 680,043 shares upon the exercise of 984,223 stock options.

Subsequent to January 31, 2021, we received cash proceeds of $511,726 and issued 435,542 shares upon the exercise of 1,597,333 share purchase warrants.

Subsequent to January 31, 2021, we made further voluntary principal payment of $8,000,000 to our Lenders.

Subsequent to January 31, 2021, we entered into an agreement to purchase 400,000 pounds of U 3 O 8 at a price of $27.29 per pound.

Quantitative and Qualitative Disclosures About Market Risk

Refer to Item 7A.

Quantitative and Qualitative Disclosures About Market Risk in our Annual Report on Form 10-K for Fiscal 2020.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements