UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

x   Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended June 30, 2017

 

Or

 

o   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 001-33404

 

                   URANIUM RESOURCES, INC.            

(Exact Name of Issuer as Specified in Its Charter)

 

DELAWARE

 

75-2212772

(State of Incorporation)

 

(I.R.S. Employer Identification No.)

 

6950 S. Potomac Street, Suite 300, Centennial, Colorado 80112

(Address of Principal Executive Offices, Including Zip Code)

 

                               (303) 531-0470                              

(Issuer’s Telephone Number, Including Area Code)

 

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 x No o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes x No o

 

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 o

 

Accelerated filer o

 

 

 

Non-accelerated filer o

 

Smaller reporting company x

(Do not check if a smaller reporting company)

 

 

 

 

Emerging growth company o

 

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.     o

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

Title of Each Class of Common Stock

 

Number of Shares Outstanding

Common Stock, $0.001 par value

 

24,963,345as of August 11, 2017


1


URANIUM RESOURCES, INC.

TABLE OF CO NTENTS

 

PART I — FINANCIAL INFORMATION 3  

 

ITEM 1. FINANCIAL STATEMENTS 3  

 

ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 15  

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 22  

 

ITEM 4. CONTROLS AND PROCEDURES 22  

 

PART II - OTHER INFORMATION 23  

 

ITEM 1.  LEGAL PROCEEDINGS 23  

 

ITEM 1A.  RISK FACTORS. 23  

 

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. 23  

 

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES. 23  

 

ITEM 4.  MINE SAFETY DISCLOSURES. 23  

 

ITEM 5.  OTHER INFORMATION. 23  

 

ITEM 6.  EXHIBITS. 23  

 

SIGNATURES 24  

 

EXHIBIT INDEX 25  


2



PART I — FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

URANIUM RESOURCES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(expressed in thousands of dollars, except share amounts)

(unaudited)

 

 

 

 

June 30,

 

December 31,

 

 

Notes

 

2017

 

2016

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

$ 7,152  

 

$ 3,309   

Marketable securities

 

3

 

913   

 

 

Notes receivable – current

 

3

 

1,500   

 

 

Prepaid and other current assets

 

 

 

734   

 

602   

Total Current Assets

 

 

 

10,299   

 

3,911   

 

 

 

 

 

 

 

Property, plant and equipment, at cost:

 

 

 

 

 

 

Property, plant and equipment

 

 

 

112,460   

 

112,964   

Less accumulated depreciation, depletion and impairment

 

 

 

(65,649)  

 

(66,048)  

Net property, plant and equipment

 

5

 

46,811   

 

46,916   

 

 

 

 

 

 

 

Restricted cash

 

 

 

3,941   

 

3,964   

Notes receivable – non-current

 

3

 

2,364   

 

 

Long-term assets held for sale

 

 

 

 

 

2,123   

Total Assets

 

 

 

$ 63,415   

 

$ 56,914   

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Accounts payable

 

 

 

$ 546   

 

$ 610   

Accrued liabilities

 

 

 

1,213   

 

1,981   

Convertible loan, net of discount – related party

 

7

 

 

 

5,431   

Current portion of asset retirement obligations

 

8

 

121   

 

121   

Total Current Liabilities

 

 

 

1,880   

 

8,143   

 

 

 

 

 

 

 

Asset retirement obligations, net of current portion

 

8

 

4,901   

 

4,668   

Other long-term liabilities and deferred credits

 

 

 

500   

 

500   

Long-term liabilities related to assets held for sale

 

 

 

 

 

555   

Total Liabilities

 

 

 

7,281   

 

13,866   

 

 

 

 

 

 

 

Commitments and Contingencies

 

12

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity:

 

 

 

 

 

 

Common stock, 100,000,000 shares authorized, $.001 par value;

 

 

 

 

 

 

Issued shares – 24,718,810 and 16,675,419, respectively

 

 

 

 

 

 

Outstanding shares – 24,710,785 and 16,667,394, respectively

 

9

 

25   

 

17   

Paid-in capital

 

9,10

 

294,225   

 

280,191   

Accumulated other comprehensive income

 

 

 

(161)  

 

 

Accumulated deficit

 

 

 

(237,697)  

 

(236,902)  

Treasury stock (8,025 and 8,025 shares, respectively), at cost

 

 

 

(258)  

 

(258)  

Total Stockholders' Equity

 

 

 

56,134   

 

43,048   

 

 

 

 

 

 

 

Total Liabilities and Stockholders' Equity

 

 

 

$ 63,415   

 

$ 56,914   

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


3



URANIUM RESOURCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(expressed in thousands of dollars, except share and per share amounts)

(unaudited)

 

 

 

 

For the Three Months Ended June 30,

 

For the Six Months Ended June 30,

 

 

Notes

 

2017

 

2016

 

2017

 

2016

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

Mineral property expenses

 

6

 

$ (1,552)  

 

$ (1,138)  

 

$ (2,321)  

 

$ (1,869)  

General and administrative

 

 

 

(1,608)  

 

(2,007)  

 

(3,276)  

 

(4,152)  

Accretion of asset retirement obligations

 

8

 

(131)  

 

(120)  

 

(263)  

 

(240)  

Depreciation and amortization

 

 

 

(39)  

 

(50)  

 

(77)  

 

(132)  

Impairment of uranium properties

 

 

 

 

 

(534)  

 

 

 

(534)  

       Total operating expenses

 

 

 

(3,330)  

 

(3,849)  

 

(5,937)  

 

(6,927)  

 

 

 

 

 

 

 

 

 

 

 

Non-Operating Income/(Expenses):

 

 

 

 

 

 

 

 

 

 

Loss on extinguishment of convertible debt

 

 

 

 

 

 

 

(39)  

 

 

Interest income/(expense)

 

3,7

 

186   

 

(780)  

 

238   

 

(1,523)  

Commitment fees

 

 

 

 

 

 

 

 

 

(333)  

Loss on sale of marketable securities

 

 

 

 

 

 

 

 

 

(116)  

Gain on disposal of uranium properties

 

3

 

506   

 

 

 

4,927   

 

 

Other income/(expense), net

 

 

 

(1)  

 

22   

 

16   

 

19   

        Total other income/(expense)

 

 

 

691   

 

(758)  

 

5,142   

 

(1,953)  

 

 

 

 

 

 

 

 

 

 

 

Net Loss

 

 

 

$ (2,639)  

 

$ (4,607)  

 

$ (795)  

 

$ (8,880)  

 

 

 

 

 

 

 

 

 

 

 

Other Comprehensive Loss

 

 

 

 

 

 

 

 

 

 

Unrealized fair value decrease on marketable securities

 

 

 

$ (591)  

 

$  

 

$ (161)  

 

$ (49)  

Transfer to realized loss upon sale of available-for-sale securities

 

 

 

 

 

 

 

 

 

116   

Comprehensive Loss

 

 

 

$ (3,230)  

 

$ (4,607)  

 

$ (956)  

 

$ (8,813)  

 

 

 

 

 

 

 

 

 

 

 

BASIC AND DILUTED LOSS PER SHARE

 

$ (0.11)  

 

$ (0.75)  

 

$ (0.03)  

 

$ (1.60)  

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING

 

 

 

 24,614,723

 

    6,151,858

 

  23,116,608

 

   5,559,877

 

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


4



 

URANIUM RESOURCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS AND SUPPLEMENTAL CASH FLOW INFORMATION

(expressed in thousands of dollars)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30,

 

 

Notes

 

2017

 

2016

 

 

 

 

 

 

 

Operating Activities:

 

 

 

 

 

 

Net loss

 

 

 

$ (795)  

 

$ (8,880)  

Reconciliation of net loss to cash used in operations:

 

 

 

 

 

 

Accretion of asset retirement obligations

 

8

 

263   

 

240   

Amortization of debt discount

 

 

 

30   

 

900   

Amortization of convertible loan establishment fee

 

 

 

 

 

50   

Amortization of notes receivable discount

 

 

 

(363)  

 

 

Loss on extinguishment of convertible debt

 

7

 

39   

 

 

Loss on sale of marketable securities

 

 

 

 

 

116   

Common stock issued as payment for commitment fees

 

 

 

 

 

333   

Costs incurred for restoration and reclamation activities

 

8

 

(30)  

 

(49)  

Depreciation and amortization

 

 

 

77   

 

132   

Stock compensation expense

 

10

 

38   

 

470   

Gain on disposal of uranium properties

 

3

 

(4,927)  

 

 

Impairment of uranium properties

 

 

 

 

 

534   

Amortization of non-cash investor relations fees

 

 

 

100   

 

 

Effect of changes in operating working capital items:

 

 

 

 

 

 

(Increase)/decrease in receivables

 

 

 

(5)  

 

47   

Decrease in prepaid and other current assets

 

 

 

73   

 

130   

Increase/(decrease) in payables, accrued liabilities and deferred credits

 

 

 

(834)  

 

737   

Net Cash Used In Operating Activities

 

 

 

(6,334)  

 

(5,240)  

 

 

 

 

 

 

 

Cash Flows From Investing Activities:

 

 

 

 

 

 

Proceeds from the sale of investments

 

 

 

 

 

247   

(Increase)/decrease in restricted cash

 

 

 

23   

 

(6)  

Proceeds from disposal of property, plant and equipment

 

3

 

1,950   

 

 

Net Cash Provided By Investing Activities

 

 

 

1,973   

 

241   

 

 

 

 

 

 

 

Cash Flows From Financing Activities:

 

 

 

 

 

 

Payments on borrowings

 

7

 

(5,500)  

 

 

Issuance of common stock, net

 

9

 

13,705   

 

5,108   

Payment of minimum withholding taxes on net share settlements of equity awards  

 

 

 

(1)  

 

 

Net Cash Provided By Financing Activities

 

 

 

8,204   

 

5,108   

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

 

 

3,843   

 

109   

Cash and cash equivalents, beginning of period

 

 

 

3,309   

 

865   

Cash and Cash Equivalents, End of Period

 

 

 

$ 7,152   

 

$ 974   

 

 

 

 

 

 

 

Cash paid during the period for:

 

 

 

 

 

 

Interest

 

 

 

$ 227   

 

$ 286   

Supplemental Non-Cash Information With Respect to Investing and Financing Activities:

 

 

 

 

 

 

Common stock issued for settlement of accounts payable

 

 

 

$  

 

$ 778   

Common stock issued for payment of convertible loan interest and fees

 

 

 

$  

 

$ 242   

Common stock issued for payment of commitment fees

 

 

 

$  

 

$ 523   

 

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


5



 

URANIUM RESOURCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(expressed in thousands of dollars, except share amounts)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

Shares

 

Amount

 

Paid-In Capital

Accumulated  Other Comprehensive Loss

 

Accumulated Deficit

 

Treasury Stock

 

Total

Balances, January 1, 2017

16,667,394

 

$ 17  

 

$ 280,191   

$  

 

$ (236,902)  

 

$ (258)  

 

$ 43,048   

Net loss

-

 

-  

 

 

 

 

(795)  

 

 

 

(795)  

Common stock issued, net of issuance costs

7,890,271

 

8  

 

13,697   

 

 

 

 

 

 

13,705   

Common stock issued for investor relations fees

150,000

 

-  

 

300   

 

 

 

 

 

 

300   

Stock compensation expense and related share issuances, net of shares withheld for the payment of taxes

3,120

 

-  

 

38   

 

 

 

 

 

 

38   

Minimum withholding taxes on net share settlements of equity awards

-

 

-  

 

(1)  

 

 

 

 

 

 

(1)  

Unrealized holding loss on marketable securities

-

 

-  

 

 

(161)  

 

 

 

 

 

(161)  

Balances, June 30, 2017

24,710,785

 

$ 25  

 

$ 294,225   

$ (161)  

 

$ (237,697)  

 

$ (258)  

 

$ 56,134   

 

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


6


 

URANIUM RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)


1. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements for Uranium Resources, Inc. (the “Company,” “we,” “us,” or “URI”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The accompanying statements should be read in conjunction with the audited financial statements included in Uranium Resources, Inc.’s 2016 Annual Report on Form 10-K. In the opinion of management, all adjustments (which are of a normal, recurring nature) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2017 are not necessarily indicative of the results that may be expected for any other period including the full year ending December 31, 2017.

Recently Issued Accounting Pronouncements

In January 2017, the FASB issued Accounting Standards Update No. 2017-01 (ASU 2017-01), Business Combinations:  Clarifying the Definition of a Business, which clarifies the definition of a business when determining whether a company has acquired or sold a business. The ASU applies to all entities and is effective for annual periods ending after December 15, 2017, and interim periods thereafter, with early adoption permitted under certain circumstances.  The Company does not believe that the adoption of this guidance will have a material impact on our financial statements.  

In November 2016, the FASB issued Accounting Standards Update No. 2016-18, Statement of Cash Flows:  Restricted Cash, which will require that a statement of cash flows explain the change during period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents.  As a result, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows.  The ASU applies to all entities and is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years beginning after December 15, 2019, with early adoption permitted.  As a result, upon adoption, the Company will include the restricted cash amount in its beginning-of-period and end-of-period reconciliations of cash on its statement of cash flows.  For the six months ended June 30, 2017, this would have resulted in the Company including an additional $4.0 million in its beginning-of-period cash balance and an additional $3.9 million in its end-of-period cash balance.  The Company also would not have recorded a release of restricted cash of $23.0 thousand in the investing section of its statement of cash flows.

2. LIQUIDITY

At June 30, 2017, the Company had working capital of $8.4 million, which is expected to provide it with the necessary liquidity through March 31, 2018.  At December 31, 2016, the Company had a working capital deficit of $4.3 million.  The increase in working capital of $12.7 million for the six months ended June 30, 2017 was primarily due to the following:

the completion of two equity offerings in January 2017 and February 2017 for net proceeds of $8.9 million and $4.5 million, respectively;   

the completion of the sale of the Company’s wholly-owned subsidiary Hydro Resources Inc. (“HRI”) to Laramide Resources Ltd. (“Laramide”) on January 5, 2017.  Upon completion, the Company received $2.2 million in cash, a $5.0 million promissory note, of which $1.5 million is due within 12 months, 2,218,333 shares of Laramide Resources Ltd.’s common stock which had a fair value of $0.6 million at June 30, 2017 and 2,218,333 common stock purchase warrants which had a fair value of $0.3 million at June 30, 2017.  Details regarding this transaction are discussed in Note 3, below; and   

the repayment of the remaining $5.5 million outstanding under the RCF Loan (defined in Note 7, below.)   

Also during the six months ending June 30, 2017, the Company entered into a Controlled Equity Offering Sales Agreement on April 14, 2017, with Cantor Fitzgerald & Co. acting as sales agent, pursuant to which the Company has registered the offer and sale from time to time of shares of its common stock having an aggregate offering price of up to $30.0 million (the “ATM Offering”,) of which approximately $29.2 is available for future sales as of August 11, 2017. The Company believes that the ATM Offering, along with its existing working capital balance, will provide it with the necessary liquidity to fund operations through 2018.  The Company will also continue to explore additional opportunities to raise capital, further monetize its non-core assets and identify ways to reduce its cash expenditures.


7


URANIUM RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)


While the Company has been successful in the past raising funds through equity and debt financings as well as through the sale of non-core assets, no assurance can be given that additional financing will be available to it in amounts sufficient to meet the Company’s needs or on terms acceptable to the Company.  In the event that funds are not available, the Company may be required to materially change its business plans.

3. DISPOSAL OF HYDRO RESOURCES, INC.

On January 5, 2017, Laramide and the Company closed the sale of the Company’s wholly-owned subsidiary HRI, which holds the Churchrock and Crownpoint projects, pursuant to a Share Purchase Agreement (the “Laramide SPA”).  Under the terms of the Laramide SPA, as amended on December 5, 2016, the Company received the following consideration:

$2.5 million in cash, of which $0.25 million was paid in advance on October 21, 2016; 

2,218,333 shares of Laramide common stock and 2,218,333 Laramide common stock purchase warrants.  Each common stock purchase warrant entitles the Company to purchase one share of common stock of Laramide at a price of CDN$0.45 for a period of 60 months from the date of closing;  

a $5.0 million promissory note, secured by a mortgage over the projects.  The note has a three-year term and carries an initial interest rate of 5% which then increases to 10% upon Laramide’s decision regarding commercial production at the Churchrock project.  Principal payments of approximately $1.5 million are due and payable on January 5 in each of 2018 and 2019, with the balance of $2.0 million due and payable on January 5, 2020.  Interest is payable on a quarterly basis, provided however that no interest will be payable until March 31, 2018.  Laramide will have the right to satisfy up to half of each of these principal payments by delivering shares of its common stock to the Company, which shares will be valued by reference to the volume weighted average price (“VWAP”) for Laramide’s common stock for the 20 trading days before the respective anniversary of January 5, on which each payment is due; 

a retained 4.0% Net Smelter Return Royalty (“NSR Royalty”) on the Churchrock project, which royalty may be repurchased by Laramide by January 5, 2018 for $4.95 million; and 

an option to purchase Laramide’s La Sal project for $3.0 million and an option to purchase its La Jara Mesa project for $5.0 million, both of which expire on January 5, 2018.  Any such exercise by the Company will first result in a reduction of the principal amount due under the promissory note with any remaining portions of the purchase price to be paid in cash by the Company. 

The divestiture of HRI was accounted for as an asset disposal and the non-cash consideration received from Laramide was recorded at fair value.  The fair value of the shares of Laramide common stock received was determined using the closing share price of Laramide’s stock on January 5, 2017.  The fair value of the common stock purchase warrants was determined using the Black-Scholes method on April 27, 2017, which was the date that Laramide’s stockholders approved the issuance of the warrants.    The fair value of the notes receivable was determined using the present value of the future cash receipts discounted at a market rate of 9.5%.  The Company did not record a separate fair value for the options as the exercise of the options would reduce the amount outstanding under the notes receivable.  Due to the high degree of uncertainties surrounding future mine development and minerals prices, as well as limited marketability, the Company determined the fair value of the NSR Royalty to be nil.  The following fair value amounts were recorded as the purchase consideration:

(thousands of dollars)

 

Fair Value

Cash, less transaction costs

 

$ 1,950  

Laramide common stock

 

568  

Laramide common stock purchase warrants

 

506  

Notes receivable

 

3,501  

Total consideration received

 

$ 6,525  

The fair value of the shares of Laramide’s common stock and common stock purchase warrants received were valued using Level 1 inputs of the fair value hierarchy and the fair value of the notes receivable was valued using Level 2 inputs, as defined in Note 4 below.  


8


URANIUM RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)


The Company recorded the following gain on disposal of uranium properties within its Condensed Consolidated Statement of Operations:

(thousands of dollars)

 

 

Total consideration received

 

$ 6,525   

Carrying value of Churchrock project

 

(2,123)  

Carrying value of other plant and equipment

 

(31)  

Accounts payable

 

 

Asset retirement obligation

 

105   

Royalty payable on Churchrock project

 

450   

Gain on disposal of HRI

 

$ 4,927   

4. FINANCIAL INSTRUMENTS

Applicable accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price) and establishes a fair-value hierarchy that prioritizes the inputs used to measure fair value using the following definitions (from highest to lowest priority):

Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that are observable at the measurement date. 

Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs). 

Level 3 includes unobservable inputs that reflect management’s assumptions about what factors market participants would use in pricing the asset or liability. These inputs are developed based on the best information available, including internal data. 

The Company believes that the fair values of our assets and liabilities approximate their reported carrying amounts.  The following table presents information about assets that were recorded at fair value on a recurring basis as of June 30, 2017 and December 31, 2016 and indicate the fair value hierarchy:

 

 

June 30, 2017

(thousands of dollars)

 

Level 1

Level 2

Level 3

Total

Current Assets

 

 

 

 

 

Marketable securities

 

$ 913  

$ -  

$ -  

$ 913  

Total current assets recorded at fair value

 

$ 913  

$ -  

$ -  

$ 913  

Non-Current Assets

 

 

 

 

 

Restricted cash

 

3,941  

-  

-  

3,941  

Total non-current assets recorded at fair value

 

$ 3,941  

$ -  

$ -  

$ 3,941  

 

 

 

 

 

 

 

 

December 31, 2016

 

 

Level 1

Level 2

Level 3

Total

Non-Current Assets

 

 

 

 

 

Restricted cash

 

$ 3,964  

$ -  

$ -  

$ 3,964  

Total non-current assets recorded at fair value

 

$ 3,964  

$ -  

$ -  

$ 3,964  


9


URANIUM RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)


5. PROPERTY, PLANT AND EQUIPMENT

 

 

Net Book Value of Property, Plant and Equipment at June 30, 2017

(thousands of dollars)

 

Turkey

 

Texas

 

New Mexico

 

Corporate

 

Total

Uranium plant

 

$ -  

 

$ 8,451  

 

$ -  

 

$ -  

 

$ 8,451  

Mineral rights and properties

 

17,968  

 

-  

 

19,102  

 

-  

 

37,070  

Other property, plant and equipment

21  

 

1,150  

 

-  

 

119  

 

1,290  

    Total

 

$ 17,989  

 

$ 9,601  

 

$ 19,102  

 

$ 119  

 

$ 46,811  

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Book Value of Property, Plant and Equipment at December 31, 2016

(thousands of dollars)

 

Turkey

 

Texas

 

New Mexico

 

Corporate

 

Total

Uranium plant

 

$ -  

 

$ 8,459  

 

$ -  

 

$ -  

 

$ 8,459  

Mineral rights and properties

 

17,968  

 

-  

 

19,102  

 

-  

 

37,070  

Other property, plant and equipment

22  

 

1,224  

 

-  

 

141  

 

1,387  

    Total

 

$ 17,990  

 

$ 9,683  

 

$ 19,102  

 

$ 141  

 

$ 46,916  

 

6. MINERAL PROPERTY EXPENDITURES

 

Mineral property expenditures by geographical location for the three and six months ended June 30, 2017 and 2016 are as follows:

 

 

 

For the Three Months Ended June 30,

 

For the Six Months Ended June 30,

 

 

2017

 

2016

 

2017

 

2016

 

 

(thousands of dollars)

Temrezli project, Turkey

 

$ 24  

 

$ 180  

 

$ 123  

 

$ 421  

    Total Turkey projects

 

24  

 

180  

 

123  

 

421  

 

 

 

 

 

 

 

 

 

Kingsville Dome project, Texas

 

155  

 

176  

 

418  

 

410  

Rosita project, Texas

 

172  

 

92  

 

284  

 

160  

Vasquez project, Texas

 

114  

 

102  

 

283  

 

260  

Other projects, Texas

 

1  

 

48  

 

2  

 

70  

    Total Texas projects

 

442  

 

418  

 

987  

 

900  

 

 

 

 

 

 

 

 

 

Cebolleta project, New Mexico

 

538  

 

537  

 

538  

 

537  

Juan Tafoya project, New Mexico

 

310  

 

3  

 

316  

 

11  

Other projects, New Mexico

 

2  

 

-  

 

2  

 

-  

    Total New Mexico projects

 

850  

 

540  

 

856  

 

548  

 

 

 

 

 

 

 

 

 

Columbus Basin project, Nevada

 

72  

 

-  

 

188  

 

-  

Railroad Valley project, Nevada

 

155  

 

-  

 

158  

 

-  

Other projects, Nevada

 

2  

 

-  

 

3  

 

-  

    Total Nevada projects

 

229  

 

-  

 

349  

 

-  

 

 

 

 

 

 

 

 

 

Sal Rica project, Utah

 

7  

 

-  

 

6  

 

-  

    Total Utah projects

 

7  

 

-  

 

6  

 

-  

 

 

 

 

 

 

 

 

 

Total expense for the period

 

$ 1,552  

 

1,138  

 

$ 2,321  

 

$ 1,869  

On June 20, 2017, the Company acquired its third lithium exploration project through the staking of 9,270 acres of federal placer mining claims within the Railroad Valley of central Nevada.  


10


URANIUM RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)


On March 24, 2017, the Company’s wholly owned subsidiary Lithium Holdings Nevada LLC entered into an option agreement to purchase a block of unpatented placer mining claims covering an area of approximately 3,000 acres within the Columbus Salt Marsh area of Esmeralda County, Nevada.  The claims adjoin a portion of the Company’s current property holdings at its Columbus Basin project, expanding the project area within the basin to approximately 14,200 acres. The Company has the right to conduct exploration activities on the claims during the one-year option period. Under the option agreement, the Company may acquire the mineral property claims on or before March 24, 2018 in exchange for 200,000 shares of its common stock and a 1% NSR Royalty on the claims.  The Company paid $75,000 for this option, which has been included as exploration expense for the Columbus Basin project.

7. CONVERTIBLE LOAN

On November 13, 2013, the Company entered into a loan agreement (the “RCF Loan”) with Resource Capital Fund V L.P. (“RCF”), whereby RCF agreed, subject to the terms and conditions set forth in the RCF Loan, to provide a secured convertible loan facility of up to $15.0 million to the Company, which was subsequently amended on April 29, 2014 to reduce the amount available thereunder from $15.0 million to $8.0 million.  The Company exchanged $2.5 million in principal for its common shares in December 2016 and repaid the remaining $5.5 million outstanding under the RCF Loan on February 9, 2017.  No further obligations remain under the RCF Loan following the repayment. In addition, on July 31, 2017, the Company and RCF terminated the Stockholders’ Agreement dated March 1, 2012, pursuant to which RCF had certain participation and Board rights.

As a result of the repayment, the Company recorded a loss of $39,000 on the extinguishment of debt which represented the difference between the principal amount of $5.5 million and the carrying value of the RCF Loan on the date of repayment.

8. ASSET RETIREMENT OBLIGATIONS  

The following table summarizes the changes in the reserve for future restoration and reclamation costs on the balance sheet:

 

 

June 30,

 

December 31,

 

 

2017

 

2016

(thousands of dollars)

 

 

 

 

Balance, beginning  of period

 

$ 4,894   

 

$ 4,468   

Liabilities settled

 

(30)  

 

(54)  

Liabilities disposed

 

(105)  

 

 

Accretion expense

 

263   

 

480   

Balance, end of period

 

5,022   

 

4,894   

    Less:  Current portion

 

(121)  

 

(121)  

    Less:  Liabilities held for sale

 

 

 

(105)  

Non-current portion

 

$ 4,901   

 

$ 4,668   

The Company is currently performing surface reclamation activities at its Rosita project located in Duval County, Texas.  The Company’s current liability of $0.1 million consists of the estimated costs associated with current surface reclamation activities through June 2018 at the Company’s Rosita project.  

9. COMMON STOCK

Common Stock Issued, Net of Issuance Costs

Confidentially Marketed Public Offering

On January 19, 2017, the Company completed a registered public offering for net proceeds of $8.9 million.  The Company sold 1,399,140 shares of common stock at a price of $2.01 per share and 3,426,731 pre-funded warrants at a price of $2.00 per warrant.  The warrants have an exercise price of $0.01.  All of the pre-funded warrants have been exercised.

Registered Direct Offering

On February 16, 2017, the Company completed a registered direct offering for net proceeds of $4.5 million with Aspire Capital Fund LLC (“Aspire Capital”) whereby Aspire Capital purchased 2,100,000 shares of common stock at a price of $1.58 and


11


URANIUM RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)


748,101 pre-funded common stock purchase warrants at a price of $1.57.  The warrants have an exercise price of $0.01 per share and a term of three years.  All of the pre-funded warrants have been exercised.

Controlled Equity Offering Sales Agreement

On April 14, 2017, the Company entered into a Controlled Equity Offering Sales Agreement with Cantor Fitzgerald & Co. (“Cantor”) acting as sales agent.  Under the ATM Offering, the Company may from time to time sell shares of its common stock having an aggregate offering amount up to $30.0 million in “at-the-market” offerings, which shares are registered under a registration statement on Form S-3, which was declared effective on March 9, 2017.  The Company pays Cantor a commission equal to 2.5% of the gross proceeds from the sale of any shares pursuant to the ATM Offering.  As of August 11, 2017, the Company had sold 468,859shares of common stock for net proceeds of $0.8 million under the ATM Offering.  As a result, the Company had approximately $29.2million remaining available for future sales under the ATM Offering.  

Common Stock Issued for Investor Relations Fees

On February 28, 2017, the Company issued 150,000 shares with a fair market value of $0.3 million or $2.00 per share as partial consideration for investor relations services that will be provided to the Company over the next 12 months.

10. STOCK-BASED COMPENSATION

Stock-based compensation awards consist of stock options, restricted stock units (“RSUs”) and restricted stock awards (“RSAs”) issued under the Company’s equity incentive plans which include: the 2013 Omnibus Incentive Plan (the “2013 Plan”); the 2007 Restricted Stock Plan (the “2007 Plan”); the Amended and Restated 2004 Directors’ Stock Option and Restricted Stock Plan (the “2004 Directors’ Plan”); and the 2004 Stock Incentive Plan (the “2004 Plan”). Upon approval of the 2013 Plan by the Company’s stockholders on June 4, 2013, the Company’s authority to grant new awards under all plans other than the 2013 Plan was terminated.  As of June 30, 2017, 54,460 shares were available for future issuances under the 2013 Plan.  On July 18, 2017, the Company’s stockholders approved an amendment to the 2013 Plan to increase the authorized number of shares of common stock available and reserved for issuance under the 2013 Plan by 1.0 million shares and to re-approve the material terms of the performance goals under such plan.  As a result of the amendment, as of August 11, 2017, the Company had 1,054,460 shares available for future issuances under the 2013 Plan.

For the three months ending June 30, 2017 and 2016, the Company recorded stock-based compensation expense of $15,890 and $287,022, respectively.  For the six months ending June 30, 2017 and 2016, the Company recorded stock-based compensation expense of $38,078 and $469,671, respectively.  Stock-based compensation expense has been included in general and administrative expense.

In addition to the plans above, upon closing of the Company’s acquisition of Anatolia Energy Limited in November 2015, the Company issued 374,749 replacement options and performance shares to the option holders and performance shareholders of Anatolia Energy Limited.  The number of replacement options and performance shares was based upon the Black-Scholes value with the exercise prices of the replacement options and performance shares determined using the exchange rate of 0.00548.  The options and performance shares were issued with the same terms and conditions as were applicable prior to the acquisition of Anatolia Energy Limited.  


12


URANIUM RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)


Stock Options

The following table summarizes stock options outstanding and changes for the six-month periods ending June 30, 2017 and 2016:

 

 

June 30,

 

June 30,

 

 

2017

 

2016

 

 

Number of Stock Options

 

Weighted Average Exercise Price

 

Number of Stock Options

 

Weighted Average Exercise Price

Stock options outstanding at beginning of period

 

110,828   

 

$ 18.24  

 

326,424   

 

$ 24.90  

Expired

 

(5,583)  

 

11.04  

 

(4,724)  

 

438.89  

Stock options outstanding at end of period

 

105,245   

 

$ 18.62  

 

321,700   

 

$ 18.82  

Stock options exercisable at end of period

 

105,139   

 

$ 18.60  

 

321,491   

 

$ 18.81  

The following table summarizes stock options outstanding and exercisable by stock option plan at June 30, 2017:

 

 

Outstanding Stock Options

 

Exercisable Stock Options

Stock Option Plan

 

Number of Outstanding Stock Options

 

Weighted Average Exercise  Price

 

Number of

Exercisable

Stock Options

 

Weighted Average Exercise  Price

2004 Plan

 

4,792  

 

$ 35.14  

 

4,792  

 

$ 35.14  

2004 Directors’ Plan

 

1,390  

 

629.52  

 

1,390  

 

629.52  

2013 Plan

 

417  

 

35.88  

 

312  

 

35.88  

Replacement Stock Options

 

98,646  

 

9.13  

 

98,645  

 

9.23  

 

 

105,245  

 

$ 18.62  

 

105,139  

 

$ 18.60  

Restricted Stock Units

Time-based and performance-based RSUs are valued using the closing share price of the Company’s common stock on the date of grant. The final number of shares issued under performance-based RSUs is generally based on the Company’s prior year performance as determined by the Compensation Committee of the Board of Directors at each vesting date, and the valuation of such awards assumes full satisfaction of all performance criteria.

The following table summarizes RSU activity for the six-month periods ended June 30, 2017 and 2016:

 

 

June 30,

 

June 30,

 

 

2017

 

2016

 

 

Number of RSUs

 

Weighted-Average Grant Date Fair Value

 

Number of RSUs

 

Weighted-Average Grant Date Fair Value

Unvested RSUs at beginning of period

 

8,649   

 

$ 43.71  

 

32,699   

 

$ 34.25  

Forfeited

 

 

 

-  

 

(3,334)  

 

32.21  

Vested

 

(3,625)  

 

31.32  

 

(7,698)  

 

29.45  

Unvested RSUs at end of period

 

5,024   

 

$ 52.64  

 

21,667   

 

$ 36.27  

11. EARNINGS PER SHARE

Basic and diluted loss per common share have been calculated based on the weighted-average shares outstanding during the period.  Potentially dilutive shares of 293,602 were excluded from the calculation of earnings per share because the effect on the basic income per share would be anti-dilutive for the three and six months ended June 30, 2017.


13


URANIUM RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)


12. COMMITMENTS AND CONTINGENCIES

The Company’s uranium recovery operations are subject to federal and state regulations for the protection of the environment, including water quality.  Future closure and reclamation costs are provided for as each pound of uranium is produced on a unitofproduction basis. The Company reviews its reclamation obligations each year and determines the appropriate unit charge. The Company also evaluates the status of current environmental laws and their potential impact on their accrual for costs. The Company believes its operations are materially compliant with current environmental regulations.

13. GEOGRAPHIC AND SEGMENT INFORMATION

The Company has one reportable operating segment, consisting of the exploration and development of lithium and uranium projects.  These activities are focused principally in the United States and the Republic of Turkey.  We reported no revenues during the three- and six-month periods ended June 30, 2017 and 2016.  Geographic location of property, plant and equipment, including mineral rights, and mineral property expenses, is provided in Notes 5 and 6, above.


14



ITEM 2 .  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following management’s discussion and analysis of the consolidated financial results and condition of URI for the three and six months ended June 30, 2017 has been prepared based on information available to us as of August 11, 2017. This discussion should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and notes thereto included herewith and the audited Consolidated Financial Statements of URI for the period ended December 31, 2016 and the related notes thereto filed with our Annual Report on Form 10-K, which have been prepared in accordance with U.S. GAAP. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions.  Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including, but not limited to, those set forth elsewhere in this report. See “Cautionary Note Regarding Forward-Looking Statements.”

Introduction

URI is an energy metals exploration and development company. We are focused on expanding our energy metals strategy, which includes developing our lithium business while maintaining optionality on the future rising uranium price with our significant uranium property holdings in the Republic of Turkey, Texas and New Mexico. Incorporated in 1977, URI also owns an extensive information database of historic drill-hole logs, assay certificates, maps and technical reports for uranium properties located in the western United States.

We established our lithium business in 2016 and currently control mineral rights encompassing approximately 36,730 acres across three prospective lithium brine basins in Nevada and Utah.  We are conducting exploration and geological evaluation of these properties in 2017 and 2018 for potential development of any lithium resources that may be discovered there.

The focus of our uranium business continues to be on advancing the Temrezli in-situ recovery (“ISR”) uranium project in central Turkey when uranium prices permit economic development of this project. We control extensive exploration properties in Turkey under eight exploration and operating licenses covering approximately 39,000 acres.  In Texas, we have two licensed and currently idled uranium processing facilities and approximately 11,000 acres of prospective ISR uranium projects. In New Mexico, the Company controls mineral rights encompassing approximately 186,000 acres in the prolific Grants Mineral Belt, which is one of the largest concentrations of sandstone-hosted uranium deposits in the world.

Recent Developments

Lithium Business Expansion

On June 20, 2017, the Company acquired its third lithium exploration project, through the staking of 9,270 acres of federal pacer mining claims within the Railroad Valley of central Nevada.  The Railroad Valley project is located approximately 75 miles west of Ely, Nevada.

Review of Columbus Basin Data

On April 5, 2017, the Company announced that its independent geophysical consultant has completed the review, integration and reinterpretation of historical geophysical survey data acquired by the Company and covering its Columbus Basin lithium brine exploration project in Nevada. Among other things, the results of the work indicated that the depth of the Columbus Salt Marsh basin is greater than previously anticipated and identified certain targets for lithium brine exploration.

Option Agreement for Lithium Brine Claims

On March 24, 2017, the Company’s wholly owned subsidiary Lithium Holdings Nevada LLC entered into an option agreement to purchase a block of unpatented placer mining claims covering an area of approximately 3,000 acres within the Columbus Salt Marsh area of Esmeralda County, Nevada.  The claims adjoin a portion of the Company’s current property holdings at its Columbus Basin Project, expanding the project area within the basin to approximately 14,200 acres. The Company has the right to conduct exploration activities on the claims during the one-year option period. Under the option agreement, the Company may acquire the mineral property claims on or before March 24, 2018 in exchange for 200,000 shares of URI common stock and a 1% net smelter return royalty on the claims.


15



Retirement of the RCF Loan

On February 9, 2017, the Company paid $5.5 million in cash, plus accrued and unpaid interest, to RCF to retire all of the obligations remaining under the RCF Loan, following which payment the loan agreement terminated pursuant to its terms. In addition, on July 31, 2017, the Company and RCF terminated the Stockholders’ Agreement dated March 1, 2012, pursuant to which RCF had certain participation and Board rights.

Controlled Equity Offering Sales Agreement

On April 14, 2017, the Company entered into a Controlled Equity Offering Sales Agreement with Cantor Fitzgerald & Co. (“Cantor”) acting as sales agent.  Under the ATM Offering, the Company may from time to time sell shares of its common stock having an aggregate offering amount up to $30.0 million in “at-the-market” offerings, which shares are registered under a registration statement on Form S-3, which was declared effective on March 9, 2017.  The Company pays Cantor a commission equal to 2.5% of the gross proceeds from the sale of any shares pursuant to the ATM Offering.  As of August 11, 2017, the Company had sold 468,859 shares of common stock for net proceeds of $0.8 million under the ATM Offering.  As a result, the Company had approximately $29.2 million remaining available for future sales under the ATM Offering.  

Registered Direct Offerings

On January 19, 2017, the Company raised $8.9 million in net proceeds through the registered sale of approximately 1.4 million shares of common stock and pre-funded warrants to purchase approximately 3.4 million shares of common stock at $0.01 per share. Also, on February 16, 2017, the Company raised approximately $4.5 million in additional net proceeds through the registered sale of 2.1 million shares of common stock and pre-funded warrants to purchase approximately 0.7 million shares of common stock at $0.01 per share. All of the pre-funded warrants were subsequently exercised.

Closing of Sale of HRI

On January 5, 2017, the Company completed the sale of its wholly owned subsidiary HRI, which held the Company’s Crownpoint and Churchrock properties, to Laramide for $2.5 million in cash, common stock and warrants from Laramide valued at $0.5 million, and a three-year installment promissory note in the amount of $5.0 million. The Company also retained a 4% NSR Royalty on the Churchrock project, which Laramide may purchase for $4.95 million during the first year following the closing of the transaction. In addition, the Company has an option to purchase Laramide’s La Sal project for $3.0 million and an option to purchase Laramide’s La Jara Mesa project in Cibola County, New Mexico for $5.0 million, both of which options expire in January 2018.

Results of Operations

Summary

Our consolidated net loss for the three months ended June 30, 2017 was $2.6 million, or $0.11 per share, as compared with $4.6 million, or $0.75 per share for the same period in 2016.  For the three months ended June 30, 2017, the decrease in our consolidated net loss of $2.0 million from the respective prior period was mostly the result of additional gain on the disposal of our Churchrock and Crownpoint projects of $0.5 million, a decrease in interest expense of $1.0 million and a decrease in the impairment of uranium properties of $0.5 million.

Our consolidated net loss for the six months ended June 30, 2017 was $0.8 million, or $0.03 per share, as compared with $8.9 million, or $1.60 per share for the same period in 2016.  For the six months ended June 30, 2017, the decrease in our consolidated net loss of $8.1 million from the respective prior period was the result of a gain on the disposal of our Churchrock and Crownpoint projects of $4.9 million, a decrease in interest expense of $1.8 million, a decrease in the impairment of uranium properties of $0.5 million, a decrease general administrative expenses of $0.9 million, a decrease in commitment fees of $0.3 million and a decrease of $0.1 million due to a loss on the sale of marketable securities in 2016.   Offsetting these amounts was an increase in mineral property expenses of $0.4 million.

Mineral Property Expenses

Mineral property expenses for the three and six months ended June 30, 2017 were $1.6 million and $2.3 million, respectively, as compared with $1.1 million and $1.9 million for the same periods in 2016.


16



The following table details our mineral property expenses for the three and six months ended June 30, 2017 and 2016:

 

For the Three Months Ended

June 30,

 

For the Six Months Ended

June 30,

 

2017

 

2016

 

2017

 

2016

 

(thousands of dollars)

Restoration/Recovery expenses

 

 

 

 

 

 

 

    Rosita Project

$ 51  

 

$ 6  

 

$ 90  

 

$ (12)  

         Total restoration/recovery expenses

51  

 

6  

 

90  

 

(12)  

 

 

 

 

 

 

 

 

Standby care and maintenance expenses

 

 

 

 

 

 

 

    Kingsville Dome Project

153  

 

159  

 

323  

 

301   

    Rosita Project

115  

 

79  

 

184  

 

161   

    Vasquez Project

100  

 

88  

 

192  

 

170   

    Temrezli Project

24  

 

180  

 

123  

 

421   

         Total standby care and maintenance expenses

392  

 

506  

 

822  

 

1,053   

 

 

 

 

 

 

 

 

Exploration and evaluation costs

76  

 

-  

 

185  

 

 

 

 

 

 

 

 

 

 

Land maintenance and holding costs

1,033  

 

626  

 

1,224  

 

821   

 

 

 

 

 

 

 

 

Total mineral property expenses

$ 1,552  

 

$ 1,138  

 

$ 2,321  

 

$ 1,869   

For the three and six months ended June 30, 2017, mineral property expenses increased by $0.5 million and $0.4 million, respectively, from the corresponding periods during 2016.  For both the three and six month periods, the increases were mostly the result of an increase in land maintenance and holding costs of $0.4 million,  which was due primarily to (i) a $0.3 million increase for the payment of the 2016 annual lease for its Juan Tafoya project, which the Company had previously deferred from October 2016 and subsequently paid in April 2017; and (ii) a $0.1 million increase in claims maintenance fees associated with staking additional claims at the Company’s recently acquired Railroad Valley lithium project.

General and Administrative Expenses

Significant expenditures for general and administrative expenses for the three and six months ended June 30, 2017 and 2016 were:

 

 

For the Three Months Ended June 30,

 

For the Six Months Ended June 30,

 

 

2017

 

2016

 

2017

 

2016

 

 

(thousands of dollars)

 

 

 

 

 

 

 

 

 

Stock compensation expense

 

$ 16  

 

$ 287  

 

$ 38  

 

$ 470  

Salaries and payroll burden

 

572  

 

604  

 

1,182  

 

1,298  

Legal, accounting, public company expenses

760  

 

760  

 

1,533  

 

1,628  

Insurance and bank fees

 

99  

 

141  

 

221  

 

278  

Consulting and professional services

 

9  

 

49  

 

23  

 

162  

Office expenses

 

109  

 

136  

 

216  

 

266  

Other expenses

 

43  

 

30  

 

63  

 

50  

Total

 

$ 1,608  

 

$ 2,007  

 

$ 3,276  

 

$ 4,152  

For the three months ended June 30, 2017, general and administrative charges decreased by $0.4 million as compared with the corresponding period in 2016.  This decrease was primarily due to decreases in stock compensation expense of $0.3 million.

For the six months ended June 30, 2017, general and administrative charges decreased by $0.9 million as compared with the corresponding period in 2016.  This decrease was primarily due to decreases in stock compensation expense of $0.4 million, salaries and payroll burden of $0.1 million, legal, accounting, public company expenses of $0.1 million and consulting and professional services of $0.1 million.


17



Other Income and Expenses

Loss on Sale of Marketable Securities

On February 22, 2016, we received proceeds of $0.2 million from the sale of our 76,455 shares of Energy Fuels Inc. common stock that we received as partial consideration for the sale of our Roca Honda assets during 2015.  We recorded a loss of $0.1 million as the difference between the fair value on the date we received the shares of $0.3 million and the proceeds received of $0.2 million.    

Gain on Disposal of Uranium Properties

On January 5, 2017, we completed the sale of our wholly-owned subsidiary HRI, which holds the Churchrock and Crownpoint projects, to Laramide pursuant to the Laramide SPA.  Under the terms of the Laramide SPA, as amended on December 5, 2016, we received the following consideration:

$2.5 million in cash, of which $0.25 million was paid in advance on October 21, 2016; 

2,218,333 shares of Laramide common stock and 2,218,333 Laramide common stock purchase warrants.  Each common stock purchase warrant entitles the Company to purchase one share of common stock of Laramide at a price of CDN$0.45 for a period of 60 months from the date of closing; 

a $5.0 million promissory note, secured by a mortgage over the projects.  The note has a three-year term and carries an initial interest rate of 5% which then increases to 10% upon Laramide’s decision regarding commercial production at the Churchrock project.  Principal payments of $1.5 million are due and payable on January 5 in each of 2018 and 2019, with the balance of $2.0 million due and payable on January 5, 2020.  Interest is payable on a quarterly basis, provided however that no interest will be payable until March 31, 2018.  Laramide will have the right to satisfy up to half of each of these payments by delivering shares of its common stock to the Company, which shares will be valued by reference to the VWAP for Laramide’s common stock for the 20 trading days before the respective anniversary of January 5, on which each payment is due; 

a retained 4.0% NSR Royalty on the Churchrock project, which royalty may be repurchased by Laramide by January 5, 2018 for $4.95 million; and 

an option to purchase Laramide’s La Sal project for $3.0 million and an option to purchase its La Jara Mesa project for $5.0 million, both of which expire on January 5, 2018.  Any such exercise by the Company will first result in a reduction of the principal amount due under the promissory note with any remaining portions of the purchase to be paid in cash by the Company. 

The divestiture of HRI was accounted for as an asset disposal and the non-cash consideration received from Laramide was recorded at fair value.  The fair value of the shares of Laramide common stock received was determined using the closing share price of Laramide’s stock on January 5, 2017.  The fair value of the common stock purchase warrants was determined using the Black-Scholes method on April 27, 2017, which was the date that Laramide’s stockholders approved the issuance of the warrants. The fair value of the notes receivable was determined using the present value of the future cash receipts discounted at a market rate of 9.5%.  We did not record a separate fair value for the options as the exercise of the options would reduce the amount outstanding under the notes receivable.  Due to the high degree of uncertainties surrounding future mine development and minerals prices, as well as limited marketability, the Company determined the fair value of the NSR Royalty to be nil.   We recorded the following gain on disposal of uranium properties within our Condensed Consolidated Statement of Operations:

(thousands of dollars)

 

 

Total consideration received

 

$ 6,525   

Carrying value of Churchrock project

 

(2,123)  

Carrying value of other plant and equipment

 

(31)  

Accounts payable

 

 

Asset retirement obligation

 

105   

Royalty payable on Churchrock project

 

450   

Gain on disposal of HRI

 

$ 4,927   


18



Loss on Extinguishment of Convertible Debt

On February 9, 2017, we repaid $5.5 million outstanding under the RCF Loan.  Upon repayment, we recognized a loss of $39,000, which represented the difference between the $5.5 million principal amount and the carrying value of the RCF Loan on the date of repayment.  

Interest Income/(Expense)

Interest income of $0.2 million for the three months ended June 30, 2017 consisted of accrued interest receivable of $0.1 million on the Laramide Notes and amortization of $0.1 million on the discount on the Laramide Notes.

Interest income of $0.2 million for the six months ended June 30, 2017 consisted of accrued interest receivable of $0.1 million on the Laramide Notes and amortization of $0.2 million on the discount on the Laramide Notes.  These amounts were partially offset by interest expense of $0.1 million associated with the RCF Loan prior to repayment.  

Interest expense of $0.8 million for the three months ended June 30, 2016 consisted of interest of $0.3 million payable to RCF, amortization of the debt discount of $0.5 million and amortization of the establishment fee of $25,000.

Interest expense of $1.5 million for the six months ended June 30, 2016 consisted of interest of $0.5 million payable to RCF, amortization of the debt discount of $1.0 million and amortization of the establishment fee of $50,000.

Commitment Fees

Commitment fees expense of $0.3 million for the three-months ended March 31, 2016 was the result of the issuance of 75,000 shares of our common stock to Aspire Capital on February 4, 2016 as consideration for Aspire Capital entering into an option agreement with us.  The shares had a fair value of $4.44 per share.

Financial Position

Operating Activities

Net cash used in operating activities was $6.3 million for the six months ended June 30, 2017, as compared with $5.2 million for the same period in 2016. The increase of $1.1 million in cash used is primarily due to an increase in cash used for accounts payable of $1.6 million, which was partially offset by a decrease in cash expenditures related to general and administrative expenses of $0.5 million.

Investing Activities

Net cash provided by investing activities was $2.0 million for the six months ended June 30, 2017, as compared with $0.2 million for the same period in 2016.  For the 2017 period, we received $2.0 million, net of expenses, from the sale of our wholly-owned subsidiary, HRI to Laramide which closed on January 5, 2017. For the 2016 period, we received $0.2 million from the sale of short-term investments.


19



Financing Activities

Net cash provided by financing activities was $8.2 million for the six months ended June 30, 2017.  For the six months ended June 30, 2017, net cash proceeds of $8.9 million and $4.5 million were received upon equity financings completed in January and February 2017, respectively, and $0.3 million was received from the sale of common stock sold through the Company’s ATM Offering.  This increase was offset by the repayment of $5.5 million outstanding under the RCF Loan.

Net cash provided by financing activities was $5.1 million for the six months ended June 30, 2016.  For the six months ended June 30, 2016, net cash proceeds of $0.8 million and $1.2 million were received upon equity financings completed in February and April 2016, respectively. $1.7 million in net proceeds were received from the sale of common stock to Aspire Capital under the terms of the Common Stock Purchase Agreement and $1.4 million in net proceeds were received from the sale of common stock sold through the Company’s ATM program with BTIG.

Liquidity and Capital Resources

At June 30, 2017, we had working capital of $8.4 million, which is expected to provide us with the necessary liquidity through March 31, 2018.  At December 31, 2016, we had a working capital deficit of $4.3 million.  The increase in working capital of $12.7 million for the six months ended June 30, 2017 was primarily due to the following:

the completion of two equity offerings in January 2017 and February 2017 for net proceeds of $8.9 million and $4.5 million, respectively;    

the completion of the sale of our wholly-owned subsidiary, HRI, to Laramide on January 5, 2017.  Upon completion, we received $2.2 million in cash, a $5.0 million promissory note, of which $1.5 million is due within 12 months, 2,218,333 shares of Laramide’s common stock which had a fair value of $0.6 million at June 30, 2017 and 2,218,333 common stock purchase warrants which had a fair value of $0.3 million at June 30, 2017; and   

the repayment of the remaining $5.5 million outstanding under the RCF Loan.  

Also during the six months ended June 30, 2017, we entered into a Controlled Equity Offering Sales Agreement on April 14, 2017, with Cantor Fitzgerald & Co. acting as sales agent, pursuant to which we have registered the offer and sales from time to time of shares of our common stock having an aggregate offering price of up to $30.0 million, of which approximately $29.2 is available for future sales as of August 11, 2017.  We expect that the ATM Offering, along with our existing working capital will provide us with the necessary liquidity through 2018.  We will also continue to explore additional opportunities to raise capital, further monetize our non-core assets and identify ways to reduce our cash expenditures.

While we have been successful in the past raising funds through equity and debt financings as well as through the sale of non-core assets, no assurance can be given that additional financing will be available to us in amounts sufficient to meet our needs or on terms acceptable to us.  In the event that funds are not available, we may be required to materially change our business plans.

Off- Balance Sheet Arrangements

We have no off-balance sheet arrangements.


20



CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

With the exception of historical matters, the matters discussed in this report are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from projections or estimates contained herein. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, without limitation, statements regarding the adequacy of funding, liquidity, the timing or occurrence of any future drilling or production from the Company’s properties, the timing or establishment of lithium resources, the ability of the Company to acquire additional properties or partner with other companies and the Company’s anticipated cash burn rate and capital requirements. Words such as “may,” “could,” “should,” “would,” “believe,” “estimate,” “expect,” “anticipate,” “plan,” “forecast,” “potential,” “intend,” “continue,” “project” and variations of these words, comparable words and similar expressions generally indicate forward-looking statements. You are cautioned not to place undue reliance on forward-looking statements. Actual results may differ materially from those expressed or implied by these forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include, among others:

the availability of capital to URI; 

the spot price and longterm contract price of uranium and lithium; 

risks associated with our foreign operations; 

the ability of URI to enter into and successfully close acquisitions, dispositions or other material transactions; 

government regulation of the mining industry and the nuclear power industry in the United States and the Republic of Turkey; 

operating conditions at our mining projects; 

the worldwide supply and demand of uranium and lithium; 

weather conditions; 

unanticipated geological, processing, regulatory and legal or other problems we may encounter; 

currently pending or new litigation; and 

our ability to maintain and timely receive mining and other permits from regulatory agencies. 

as well as other factors described elsewhere in this Quarterly Report on Form 10-Q, our 2016 Annual Report on Form 10-K and the other reports we file with the SEC. Most of these factors are beyond our ability to predict or control. Future events and actual results could differ materially from those set forth herein, contemplated by or underlying the forward-looking statements. Forward-looking statements speak only as of the date on which they are made. We disclaim any obligation to update any forward-looking statements made herein, except as required by law.


21



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, we are not required to provide this information in our Quarterly Reports.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its filings with the Securities and Exchange Commission (“SEC”) is recorded, processed, summarized and reported within the time period specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management has recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply judgment in evaluating the Company’s controls and procedures.

During the fiscal period covered by this report, the Company’s management, with the participation of the Chief Executive Officer and Chief Financial Officer of the Company, carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of June 30, 2017.

Changes in Internal Controls

During the three months ended June 30, 2017, no changes have been made in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


22



PART II - OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

Information regarding reportable legal proceedings is contained in Part I, Item 3., “Legal Proceedings,” in our Annual Report on Form 10-K for the year ended December 31, 2016.  The following disclosure updates the legal proceeding set forth under the headings “Dispute Over Kleberg Settlement Agreement” and “TCEQ Adjudicatory Proceeding for the Kingsville Facility” in the 2016 Form 10-K to reflect developments during the six months ended June 30, 2017 and should be read together with the corresponding disclosure in the 2016 Form 10-K.

Dispute Over Kleberg Settlement Agreement

Following the submittal of all the briefs by both parties, on June 23, 2017, the Texas Supreme Court granted the Petition for Review and subsequently scheduled oral argument for October 12, 2017.

TCEQ Adjudicatory Proceeding for the Kingsville Facility

On April 12, 2017, the TCEQ held a hearing and granted the request of URI, Inc., a wholly-owned subsidiary of the Company, to withdraw the permit application without prejudice, and ordered URI, Inc. to pay Kleberg County $15,716 and to pay another named individual $967.  URI, Inc. has made those payments and the matter is fully resolved.

ITEM 1A. RISK FACTORS .

There have been no material changes from those risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2016.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

None

ITEM 6. EXHIBITS .

See the Exhibit Index following the signature page to this Quarterly Report on Form 10-Q for a listing of the exhibits that are filed as part of this Quarterly Report.


23



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

URANIUM RESOURCES, INC.

 

 

Dated: August 11, 2017

By:

/s/ Christopher M. Jones

 

 

Christopher M. Jones

 

 

President and Chief Executive Officer

(Principal Executive Officer)

 

 

 

Dated: August 11, 2017

By:

/s/ Jeffrey L. Vigil

 

 

Jeffrey L. Vigil

 

 

Vice President - Finance and Chief Financial Officer

(Principal Financial Officer and Principal Accounting Officer)


24



EXHIBIT INDEX

 

Exhibit

Number

 

Description

 

 

 

1.1

 

Controlled Equity Offering SM  Sales Agreement, dated April 14, 2017, between Uranium Resources, Inc. and Cantor Fitzgerald & Co . (incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K filed on April 17, 2017).

 

 

 

10.1

 

Amendment, dated May 22, 2017, to Employment Agreement, effective June 14, 2013, between the Company and Jeffrey L. Vigil.

 

 

 

10.2

 

Form of Deferred Stock Unit Agreement under the Company’s 2013 Omnibus Incentive Plan.

 

 

 

31.1

 

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

 

 

31.2

 

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

 

 

32.1

 

Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

 

 

32.2

 

Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

 

 

101.INS:

 

XBRL Instance Document

 

 

 

101.SCH:

 

XBRL Taxonomy Extension Schema Document

 

 

 

101.CAL:

 

XBRL Taxonomy Extension Calculation Linkbase Document

 

 

 

101.DEF:

 

XBRL Taxonomy Extension Definition Linkbase Document

 

 

 

101.LAB:

 

XBRL Taxonomy Extension Label Linkbase Document

 

 

 

101.PRE:

 

XBRL Taxonomy Extension Presentation Linkbase Document


25

Exhibit 10.1


URANIUM RESOURCES, INC.

and

JEFFREY L. VIGIL


FIRST AMENDMENT to the EMPLOYMENT AGREEMENT



Uranium Resources, Inc., a Delaware corporation (the Company or URI ), and Jeffrey L. Vigil ( Executive ) signed an Employment Agreement ( Employment Agreement ) on the 11 th day of June 2013 with an effective as of the 14 th day of June 2013.  The Compensation Committee of the Company s Board of Directors has considered and approved a recommendation from the URI President & Chief Executive Officer to the amend the Executive s Employment Agreement as reflected herein in this First Amendment to the Employment Agreement.  All terms not defined herein are defined in the Employment Agreement.


Section 7(c) of the Employment Agreement obligates the Company to pay the Executive a specified severance payment in the event there is a Change of Control and either (a) the Executive is terminated pursuant to Section 6(b)(3) or (b) the Executive terminates the Employment Agreement pursuant to Section 6(c)(1).  The severance payment specified in Section 7(c) of the Employment Agreement is one (1) year of Base Salary.  For good and valuable consideration the sufficiency of which is hereby acknowledged and agreed to by URI and Executive, with this First Amendment to the Employment Agreement the specified severance payment for the Executive identified in Section 7(c) of the Employment Agreement is increased from one (1) year of Base Salary to one-and-one-half (1-½) years of Base Salary.  For sake of clarity and consistent with the foregoing, the entirety of Section 7(c) of the Employment Agreement is hereby revised and replaced with the following amended Section 7(c) set forth immediately below.


7(c)

Termination by Executive for Good Reason after a Change in Control .  If a Change of Control (as defined below) occurs and Executive is terminated pursuant to Section 6(b)(3) or terminates this Agreement during the Employment Period pursuant to Section 6(c)(1) within 90 days after such occurrence, then the Company will pay Executive severance in the amount of one-and-one-half (1-½) years of Base Salary, in a lump sum within 30 days after the Termination Date subject to all applicable withholding.


This First Amendment to the Employment Agreement does not change any other provision in the Employment Agreement and the remainder of the Employment Agreement remains in effective.  The Executive and the Company have executed this First Amendment to the Employment Agreement on this 22 nd day of May 2017.



EXECUTIVE:

URANIUM RESOURCES, INC.:


/s/ Jeffrey L. Vigil

/s/ Christopher M. Jones

_______________________________

_______________________________


Jeffrey L. Vigil

Christopher M. Jones

President & Chief Executive Officer



Exhibit 10.2

Form of Deferred Stock Unit Agreement
For Non-Employee Directors

This Deferred Stock Unit Agreement for Non-Employee Directors (this Agreement ) is made and entered into as of ____________ (the Grant Date ) by and between Uranium Resources, Inc., a Delaware corporation (the Company ) and __________________ (the Director ).

WHEREAS , the Company has adopted the Uranium Resources, Inc. 2013 Omnibus Incentive Plan (as amended, the Plan ) pursuant to which awards of Deferred Stock Units may be granted.

WHEREAS , the Compensation Committee of the Board of Directors (the Committee ) has determined that it is in the best interests of the Company and its stockholders to grant the award of Deferred Stock Units provided for herein.

NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:

1.

Grant of Deferred Stock Units .

1.1

Pursuant to Sections 3.5 and 10 of the Plan, the Company hereby grants to the Director on the Grant Date an Award consisting of, in the aggregate, _____________ Deferred Stock Units (the DSUs ).

1.2

Each DSU represents the right to receive one share of Stock, subject to the terms and conditions set forth in this Agreement and the Plan. Capitalized terms that are used but not defined herein have the meaning ascribed to them in the Plan.

1.3

The DSUs shall be credited to a separate account maintained for the Director on the books and records of the Company (the Account ). All amounts credited to the Account shall continue for all purposes to be part of the general assets of the Company.

2.

Consideration .

The grant of the DSUs is made in consideration of the services to be rendered by the Director to the Company.

3.

Vesting .

3.1

Except as otherwise provided herein, provided that the Director remains a Service Provider through the applicable vesting date, the DSUs will vest in accordance with the following schedule:

Vesting Date

Number of DSUs That Vest





Once vested, the DSUs become Vested DSUs .



1


3.2

The foregoing vesting schedule notwithstanding, (i) if the Director s Service terminates prior to the Vesting Date as a result of the Director s death or Disability, 100% of the unvested DSUs shall immediately vest on the date of the Director s termination of Service, and (ii) upon the occurrence of a Change in Control, 100% of the unvested DSUs shall immediately vest as of the date of the Change in Control. If the Director s Service terminates for any reason other than the Director s death or Disability at any time before all of his or her DSUs have vested, the Director s unvested DSUs shall be automatically forfeited upon such termination of Service and neither the Company nor any Affiliate shall have any further obligations to the Director under this Agreement.

4.

Restrictions .

Subject to any exceptions set forth in this Agreement or the Plan, until such time as the DSUs are delivered in accordance with Section 6, the DSUs or the rights relating thereto may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Director. Any attempt to assign, alienate, pledge, attach, sell or otherwise transfer or encumber the DSUs or the rights relating thereto shall be wholly ineffective and, if any such attempt is made, the DSUs will be forfeited by the Director and all of the Director s rights to such DSUs shall immediately terminate without any payment or consideration by the Company.

5.

Rights as Stockholder; Dividend Equivalent Rights .

5.1

The Director shall not have any rights of a stockholder with respect to the shares of Stock underlying the DSUs unless and until the DSUs vest and are settled by the delivery of such shares of Stock.

5.2

If during the period the Director holds any DSUs granted under this Agreement, the Company pays a cash dividend with respect to the shares of Stock, the Director s Account shall be credited with an additional number of DSUs having a value equal to the cash dividends that would have been paid to the Director if one share of Stock had been issued on the record date for the dividend for each DSU granted to the Director as set forth in this Agreement, based on the Fair Market Value of a share of Stock on the applicable dividend payment date and rounded down to the nearest whole share. Any such additional DSUs shall be considered DSUs under this Agreement and shall also be credited with additional DSUs as cash dividends, if any, are declared and shall be subject to the same restrictions and conditions as the DSUs with respect to which they were credited.

6.

Delivery of DSUs .

6.1

Subject to Section 9 hereof, the delivery date of the DSUs shall be the date of the Director s separation from service (as provided under Section 409A of the Code) for any reason, unless delivery is deferred pursuant to Section 6.2. On the delivery date, the Company shall (a) issue and deliver to the Director the number of shares of Stock equal to the number of Vested DSUs; and (b) enter the Director s name on the books of the Company as the stockholder of record with respect to the shares of Stock delivered to the Director.

6.2

Notwithstanding Section 6.1, the Director may elect to defer the delivery of the DSUs beyond the Director s separation from service (as provided under Section 409A of the Code). Any deferral election must be made in compliance with such rules and procedures as the Committee deems advisable.

7.

No Right to Continued Service on the Board .

Neither the Plan nor this Agreement shall confer upon the Director any right to be retained as a Director of the Company or in any other capacity. Further, nothing in the Plan or this Agreement shall be construed to limit the discretion of the Company to terminate the Director s Service at any time, with or without Cause.



 


8.

Adjustments . If any change is made to the outstanding Stock or the capital structure of the Company, if required, the DSUs shall be adjusted or terminated in any manner as contemplated by Section 17 of the Plan.

9.

Tax Liability and Withholding .

9.1

The Director shall be required to pay to the Company, and the Company shall have the right to deduct from any compensation paid to the Director pursuant to the Plan, the amount of any required withholding taxes in respect of the DSUs and to take all such other action as the Committee deems necessary to satisfy all obligations for the payment of such withholding taxes. The Committee may permit the Director to satisfy any federal, state or local tax withholding obligation by any of the following means, or by a combination of such means:

(a)

tendering a cash payment;

(b)

authorizing the Company to withhold shares of Stock from the shares of Stock otherwise issuable or deliverable to the Director in accordance with Section 18.3 of the Plan; and

(c)

delivering to the Company previously owned and unencumbered shares of Stock.

9.2

Notwithstanding any action the Company takes with respect to any or all income tax, social insurance, payroll tax, or other tax-related withholding ( Tax-Related Items ), the ultimate liability for all Tax-Related Items is and remains the Director s responsibility and the Company (a) makes no representation or undertakings regarding the treatment of any Tax-Related Items in connection with the grant, vesting or delivery of the DSUs or the subsequent sale of any shares; and (b) does not commit to structure the DSUs to reduce or eliminate the Director s liability for Tax-Related Items.

10.

Compliance with Law .

The issuance and transfer of shares of Stock shall be subject to compliance by the Company and the Director with all applicable requirements of federal and state securities laws and with all applicable requirements of any stock exchange on which the Company s shares of Stock may be listed. No shares of Stock shall be issued or transferred unless and until any then applicable requirements of state and federal laws and regulatory agencies have been fully complied with to the satisfaction of the Company and its counsel.

11.

Notices . Any notice required to be delivered to the Company under this Agreement shall be in writing and addressed to the Secretary of the Company at the Company s principal corporate offices. Any notice required to be delivered to the Director under this Agreement shall be in writing and addressed to the Director at the Director s address as shown in the records of the Company. Either party may designate another address in writing (or by such other method approved by the Company) from time to time.

12.

Interpretation . Any dispute regarding the interpretation of this Agreement shall be submitted by the Director or the Company to the Committee (excluding the Director if the Director serves on the Committee) for review. The resolution of such dispute by the Committee shall be final and binding on the Director and the Company.

13.

DSUs Subject to Plan . This Agreement is subject to the Plan as approved by the Company s stockholders. The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail. Any amendment, modification, or termination of the Plan shall not constitute a change or impairment of the terms and conditions of the Director s membership on the Board.



3


14.

Successors and Assigns . The Company may assign any of its rights under this Agreement. This Agreement will be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement will be binding upon the Director and the Director s beneficiaries, executors, administrators and the person(s) to whom the DSUs may be transferred by will or the laws of descent or distribution.

15.

Amendment . The Committee has the right to amend, alter, suspend, discontinue or cancel the DSUs, prospectively or retroactively; provided, that, no such amendment shall adversely affect the Director s material rights under this Agreement without the Director s consent otherwise than as provided under Section 18.10 of the Plan.

16.

Counterparts . This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. Counterpart signature pages to this Agreement transmitted by facsimile transmission, by electronic mail in portable document format (.pdf), or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing an original signature.

17.

Acceptance . The Director hereby acknowledges receipt of a copy of the Plan and this Agreement. The Director has read and understands the terms and provisions thereof, and accepts the DSUs subject to all of the terms and conditions of the Plan and this Agreement. The Director acknowledges that there may be adverse tax consequences upon the vesting or delivery of the DSUs or disposition of the underlying shares and that the Director has been advised to consult a tax advisor prior to such vesting, delivery or disposition.

[Signature page follows]





 


IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.


URANIUM RESOURCES, INC.


By:                                             

Name:

Title:


DIRECTOR


                                                   

Name:






5

Exhibit 31.1

 

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

I, Christopher M. Jones, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q of Uranium Resources, Inc.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: August 11, 2017

 

/s/ Christopher M. Jones

 

Title: President and Chief Executive Officer

 


Exhibit 31.2

 

Certification of Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

I, Jeffrey L. Vigil, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q of Uranium Resources, Inc.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

 

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: August 11, 2017

 

/s/ Jeffrey L. Vigil

 

Title: Vice President - Finance and Chief Financial Officer



Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Christopher M. Jones, President and Chief Executive Officer of Uranium Resources, Inc. (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

 

(1) The Quarterly Report on Form 10-Q of the Company for the period ended June 30, 2017 (the “Report”), which this certification accompanies, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

/s/ Christopher M. Jones

 

Christopher M. Jones

 

President and Chief Executive Officer

 

August 11, 2017

 


Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Jeffrey L. Vigil, Vice President - Finance and Chief Financial Officer of Uranium Resources, Inc. (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

 

(1) The Quarterly Report on Form 10-Q of the Company for the period ended June 30, 2017 (the “Report”), which this certification accompanies, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

/s/ Jeffrey L. Vigil

 

Jeffrey L. Vigil

 

Vice President - Finance and Chief Financial Officer

 

August 11, 2017