<PAGE> 1
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 2
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [Fee required]
For the fiscal year ended December 31, 1994 or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [No fee required]
For the transition period from _____________ to ____________
Commission file number 0-17171
URANIUM RESOURCES, INC.
(Exact name of Registrant as specified in its Charter)
DELAWARE 75-2212772
(State of Incorporation) (I.R.S. Employer
Identification No.)
12750 MERIT DRIVE, SUITE 1210, DALLAS, TEXAS 75251
(Address of principal executive offices, including zip code)
(214) 387-7777
(Registrant's telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
Common Stock, $.001 par value per share
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 .
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ ]
The aggregate market value of the Common Stock of the Registrant held by
nonaffiliates at March 31, 1995 was approximately $12,986,861.
Number of shares of Common Stock outstanding as of March 24, 1995: 8,049,307
shares.
Documents Incorporated by Reference: None
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<PAGE> 2
URANIUM RESOURCES, INC.
ANNUAL REPORT ON FORM 10-K/A
AMENDMENT NO. 2
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994
PART I
Pursuant to Rule 12b-32 of the Securities Exchange Act of 1934, as amended,
information not contained herein is incorporated by reference to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1994 filed on
April 17, 1994 and Form 10-K/A filed on September 1, 1995.
ITEM 1. BUSINESS. Not amended.
ITEM 2. PROPERTIES. Not amended.
ITEM 3. LEGAL PROCEEDINGS. Not amended.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not amended.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS. Not amended.
ITEM 6. SELECTED FINANCIAL DATA. Not amended.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS. Not amended.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. Not amended.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE. Not amended.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. Not amended.
ITEM 11. EXECUTIVE COMPENSATION. Not amended.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Not amended.
<PAGE> 3
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. Not amended.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) (1) Financial Statements.
See the Index to Consolidated Financial Statements on page F-1 for
a listing of those financial statements filed as part of this
Annual Report.
(a) (2) Financial Statement Schedules.
See the Index to Consolidated Financial Statements on page F-1 for
a listing of those financial statements filed as part of this
Annual Report.
(a) (3) Exhibits. Not amended.
(b) Reports on Form 8-K. Not amended.
2
<PAGE> 4
URANIUM RESOURCES, INC. AND CONSOLIDATED SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<S> <C>
Report of Independent Public Accountants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-2
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-3
Consolidated Statements of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-5
Consolidated Statements of Common Shareholders' Equity . . . . . . . . . . . . . . . . . . . . . . F-6
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-7
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-8
</TABLE>
The additional financial data referred to below should be read in
conjunction with these financial statements. Schedules not included with this
additional financial data have been omitted because they are not applicable, or
the required information is shown in the financial statements or notes thereto.
The individual financial statements of the subsidiaries of the Company have
been omitted because all such subsidiaries are included in the consolidated
financial statements being filed.
ADDITIONAL FINANCIAL DATA
Financial statement schedules for the years ended
December 31, 1994, 1993 and 1992:
<TABLE>
<S> <C><C> <C>
I - Condensed financial information of registrant . . . . . . . . . . . F-19
II - Valuation and qualifying accounts and reserves . . . . . . . . . . F-21
</TABLE>
The accounts of the Company are maintained in United States dollars.
All dollar amounts in the financial statements are stated in United States
dollars except where indicated.
F-1
<PAGE> 5
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of Directors of
Uranium Resources, Inc.:
We have audited the accompanying consolidated balance sheets of Uranium
Resources, Inc. (a Delaware Corporation) and subsidiaries as of December 31,
1994 and 1993, and the related consolidated statements of operations, common
shareholders' equity and cash flows for each of the three years in the period
ended December 31, 1994. These consolidated financial statements and the
schedules referred to below are the responsibility of the Company's management.
Our responsibility is to express an opinion on these consolidated financial
statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Uranium Resources, Inc. and
subsidiaries as of December 31, 1994 and 1993, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1994, in conformity with generally accepted accounting principles.
As discussed in Note 2 to the Consolidated Financial Statements, $2.08 million
was transferred from the Company in January, 1995 to the now bankrupt Benton
Companies. Management will record a full reserve for the recovery of this
amount in the first quarter of 1995, the effect of which is that the Company's
equity has been reduced by $2.08 million. The bankruptcy could also cause a
review of the transactions entered into by the Company with the Benton
Companies that could potentially result in claims against the Company. The
Company is unable to assess what adverse consequences, if any, might result
from such review. Accordingly, no provisions for any liabilities that might
result from such review have been made in the accompanying financial
statements.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedules listed in the index of
financial statements are presented for purposes of complying with the
Securities and Exchange Commission's rules and are not part of the basic
financial statements. These schedules have been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, fairly state in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.
ARTHUR ANDERSEN LLP
Denver, Colorado
April 7, 1995 (except with respect to the convertible debt agreement
matter discussed in Note 2, as to which the date is May 25, 1995)
F-2
<PAGE> 6
URANIUM RESOURCES, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
December 31,
-------------------------------
1994 1993
-------------- --------------
<S> <C> <C>
Current assets:
Cash and cash equivalents (including $2.08 million transferred
subsequent to yearend 1994 -- Note 2) . . . . . . . . . . . . . . $ 2,527,600 $ 2,529,741
Short-term investments -
Treasury bills . . . . . . . . . . . . . . . . . . . . . . . . . . - 39,368
Certificate of deposit, restricted -- Note 1 . . . . . . . . . . . 562,211 -
Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,740 654,050
Uranium inventory . . . . . . . . . . . . . . . . . . . . . . . . . . 4,031,611 2,378,520
Materials and supplies inventory . . . . . . . . . . . . . . . . . . 162,417 180,756
Unamortized debt issuance costs . . . . . . . . . . . . . . . . . . . - 183,000
Prepaid and other current assets . . . . . . . . . . . . . . . . . . 96,751 192,916
------------ ------------
Total current assets . . . . . . . . . . . . . . . . . . . . . 7,433,330 6,158,351
------------ ------------
Property, plant and equipment, at cost:
Uranium properties . . . . . . . . . . . . . . . . . . . . . . . . . 53,210,132 49,976,992
Other property, plant and equipment . . . . . . . . . . . . . . . . . 461,918 461,478
Less - accumulated depreciation and depletion . . . . . . . . . . . . (16,345,645) (16,018,235)
------------ ------------
Net property, plant and equipment . . . . . . . . . . . . . . 37,326,405 34,420,235
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90,491 267,107
------------ ------------
$ 44,850,226 $ 40,845,693
============ ============
</TABLE>
The accompanying notes to financial statements are an integral part of these
consolidated balance sheets.
F-3
<PAGE> 7
URANIUM RESOURCES, INC.
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
December 31,
-------------------------------
1994 1993
-------------- --------------
<S> <C> <C>
Current liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,283,265 $ 2,518,409
Short-term notes . . . . . . . . . . . . . . . . . . . . . . . . . . 7,739,225 -
Accrued interest payable . . . . . . . . . . . . . . . . . . . . . . 27,744 99,250
Current portion of long-term debt . . . . . . . . . . . . . . . . . . 82,000 5,256,000
Royalties payable . . . . . . . . . . . . . . . . . . . . . . . . . . 509,606 556,678
Current portion of restoration reserve . . . . . . . . . . . . . . . 90,000 31,000
Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . 246,790 473,568
------------ ------------
Total current liabilities . . . . . . . . . . . . . . . . . . . . 9,978,630 8,934,905
------------ ------------
Other long-term liabilities and deferred credits . . . . . . . . . . . . 2,337,624 3,030,297
Long-term debt, less current portion . . . . . . . . . . . . . . . . . . 1,405,507 5,987,779
Deferred federal income taxes . . . . . . . . . . . . . . . . . . . . . . 2,910,000 2,610,000
Commitments and contingencies - Note 10 . . . . . . . . . . . . . . . . .
Shareholders' equity:
Common stock, $.001 par value, 12,500,000 shares authorized;
shares issued and outstanding (net of treasury shares):
1994 - 7,954,683; 1993 - 6,640,020 . . . . . . . . . . . . . . . . 8,142 6,828
Common stock purchase warrants . . . . . . . . . . . . . . . . . . . - 349,704
Paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,040,064 7,961,217
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . 13,181,839 11,976,543
------------ ------------
28,230,045 20,294,292
Less: Treasury stock (187,500 shares), at cost . . . . . . . . . . . (11,580) (11,580)
------------ ------------
Total shareholders' equity . . . . . . . . . . . . . . . . . . . . 28,218,465 20,282,712
------------ ------------
$ 44,850,226 $ 40,845,693
============ ============
</TABLE>
The accompanying notes to financial statements are an integral part of these
consolidated balance sheets.
F-4
<PAGE> 8
URANIUM RESOURCES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------------------------
1994 1993 1992
------------ ----------- ------------
<S> <C> <C> <C>
Revenues:
Uranium sales -
Produced uranium . . . . . . . . . . . . . . . . . . . . . . . . 958,569 1,341,219 $ 4,880,964
Purchased uranium . . . . . . . . . . . . . . . . . . . . . . . . 16,375,328 S11,880,873 12,943,361
----------- ----------- -----------
Uranium sales . . . . . . . . . . . . . . . . . . . . . . . 17,333,897 13,222,092 17,824,325
Costs and expenses:
Cost of uranium sales -
Direct cost of purchased uranium . . . . . . . . . . . . . . . . 10,860,546 7,200,319 6,818,639
Royalties and brokers' fees . . . . . . . . . . . . . . . . . . . 37,254 56,664 234,491
Operating expenses . . . . . . . . . . . . . . . . . . . . . . . 1,742,669 1,824,756 3,122,475
Provision for restoration and reclamation costs . . . . . . . . . 274,465 292,200 367,913
Depreciation and depletion . . . . . . . . . . . . . . . . . . . 550,802 842,367 1,790,856
Writedown of uranium properties and other
uranium assets . . . . . . . . . . . . . . . . . . . . . . . - 1,944,645 -
Loss on acceleration of uranium contract - Note 4 . . . . . . . . . 349,265 - -
Corporate expenses -
General and administrative . . . . . . . . . . . . . . . . . . . 2,146,323 1,866,741 2,243,801
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . 30,588 36,062 41,542
----------- ----------- -----------
Total costs and expenses . . . . . . . . . . . . . . . . . . 15,991,912 S14,063,754 14,619,717
----------- ----------- -----------
Earnings (loss) from operations . . . . . . . . . . . . . . . . . . . 1,341,985 (841,662) 3,204,608
Other income (expense):
Interest expense, net of capitalized interest . . . . . . . . . . . (41,564) (22,213) (499,027)
Interest and other income, net . . . . . . . . . . . . . . . . . . 204,803 409,317 104,739
----------- ----------- -----------
Income (loss) before federal income taxes . . . . . . . . . . . . . . 1,505,224 (454,558) 2,810,320
Federal income tax provision (benefit):
Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (72) (15,608) (35,185)
Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 300,000 (91,000) 443,000
----------- ----------- -----------
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . 1,205,296 (347,950) $ 2,402,505
=========== =========== ===========
Net income (loss) per common and common
equivalent share . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.17 $ (0.05) $ 0.36
=========== =========== ===========
</TABLE>
The accompanying notes to financial statements are an integral part of these
consolidated statements.
F-5
<PAGE> 9
URANIUM RESOURCES, INC.
CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Common
Common Stock Stock
------------ Purchase Paid-In Retained Treasury
Shares Amount Warrants Capital Earnings Stock
--------- --------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balances, December 31, 1991 . . 6,662,529 $ 6,663 $ 349,737 $ 7,946,376 $9,927,743 $ -
Net income . . . . . . . . - - - - 2,402,505 -
Expiration of Rio Algom
warrants . . . . . . . . . - - (33) 33 - -
Acquisition of Belt Line
Resources, Inc. . . . . . . 164,991 165 - 14,808 (5,755) -
Treasury shares acquired
from Belt Line
Resources, Inc. . . . . . . (187,500) - - - - (11,580)
--------- --------- ----------- ----------- ---------- -----------
Balances, December 31, 1992 . . 6,640,020 $ 6,828 $ 349,704 $ 7,961,217 12,324,493 $ (11,580)
Net loss . . . . . . . . . . - - - - (347,950) -
--------- --------- ----------- ----------- ---------- -----------
Balances, December 31, 1993 . . 6,640,020 $ 6,828 $ 349,704 $ 7,961,217 11,976,543 $ (11,580)
Net income . . . . . . . . . - - - - 1,205,296 -
Issuance of common stock -
exercise of employee stock
options . . . . . . . . . . 81,781 81 - 240,475 - -
Conversion of long-term debt 496,040 496 - 2,355,693 - -
Conversion of uranium sales
contract . . . . . . . . . 736,842 737 - 3,584,756 - -
Expiration of common stock
purchase warrants . . . . . - - (349,704) 349,704 - -
Waiver of loan fees from
affiliate . . . . . . . . . - - - 548,219 - -
--------- --------- ----------- ----------- ---------- -----------
Balances, December 31, 1994 . . 7,954,683 $ 8,142 $ - $15,040,064 13,181,839 $ (11,580)
========= ========= =========== =========== ========== ===========
</TABLE>
The accompanying notes to financial statements are an integral part of these
consolidated statements.
F-6
<PAGE> 10
URANIUM RESOURCES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------
1994 1993 1992
------------ -------------- --------------
<S> <C> <C> <C>
Cash flows from operations:
Net income (loss) . . . . . . . . . . . . . . . . . . $ 1,205,296 $ (347,950) $ 2,402,505
Reconciliation of net income to cash provided by operations -
Provision for restoration and reclamation costs . . 274,465 292,200 367,913
Depreciation and depletion . . . . . . . . . . . . 581,390 878,429 1,832,398
Loss on acceleration of uranium contract . . . . . 349,265 - -
Writedown of uranium properties and other
uranium assets . . . . . . . . . . . . . . . . . - 1,944,645 -
Amortization of other assets . . . . . . . . . . . 119,307 298,405 414,179
Provision (benefit) for deferred income taxes . . . 300,000 (91,000) 443,000
Decrease in restoration and reclamation accrual . . (157,374) (299,188) (273,400)
Other non-cash items, net . . . . . . . . . . . . . 426,950 342,597 348,142
------------ -------------- --------------
Cash flow provided by operations, before changes in
operating working capital items . . . . . . . . . . 3,099,299 3,018,138 5,534,737
Effect of changes in operating working capital items -
(Increase) decrease in receivables . . . . . . . . (313,197) (501,755) 4,009,256
Decrease in inventories . . . . . . . . . . . . . . 3,957,339 2,048,358 1,199,026
Increase in prepaid and other current assets . . . (188,749) (203,078) (252,860)
(Decrease) increase in payables and accrued liabilities (1,474,311) 1,921,244 (1,304,276)
------------ -------------- --------------
Net cash provided by operations . . . . . . . . . . . . 5,080,381 6,282,907 9,185,883
------------ -------------- --------------
Investing activities:
(Increase) decrease in investments . . . . . . . . . (522,843) 30,131 330,125
Additions to property, plant and equipment -
Kingsville Dome . . . . . . . . . . . . . . . . . . (125,219) (202,289) (395,838)
Rosita . . . . . . . . . . . . . . . . . . . . . . (1,404,922) (266,486) (324,972)
Churchrock . . . . . . . . . . . . . . . . . . . . (883,678) (1,282,979) (701,396)
Crownpoint . . . . . . . . . . . . . . . . . . . . (682,785) (1,143,135) (1,218,718)
Other property . . . . . . . . . . . . . . . . . . (86,098) (206,572) (243,600)
Acquisition of Belt Line Resources, Inc., net . . . . - - (2,335)
Increase in other assets . . . . . . . . . . . . . . (1,221) (114,678) (195,764)
------------ -------------- --------------
Net cash used in investing activities . . . . . . . . . (3,706,766) (3,186,008) (2,752,498)
------------ -------------- --------------
Financing activities:
Proceeds from borrowings . . . . . . . . . . . . . . 2,250,000 700,000 4,625,000
Payments and refinancings of principal . . . . . . . (8,017,047) (2,974,401) (10,575,790)
Issuance of common stock and warrants, net . . . . . 240,556 - (27)
Proceeds from sale of uranium sales contract . . . . 4,150,735 - -
------------ -------------- --------------
Net cash used in financing activities . . . . . . . . . (1,375,756) (2,274,401) (5,950,817)
------------ -------------- --------------
Net increase (decrease) in cash and cash equivalents . (2,141) 822,498 482,568
Cash and cash equivalents, beginning of period . . . . 2,529,741 1,707,243 1,224,675
------------ -------------- --------------
Cash and cash equivalents, end of period . . . . . . . $ 2,527,600 $ 2,529,741 $ 1,707,243
============ ============== ==============
</TABLE>
The accompanying notes to financial statements are an integral part of these
consolidated statements.
F-7
<PAGE> 11
URANIUM RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
DECEMBER 31, 1994
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION AND DESCRIPTION OF COMPANY
The consolidated financial statements have been prepared in accordance
with generally accepted accounting principles and include the accounts of
Uranium Resources, Inc. ("URI") and its wholly owned subsidiaries (collectively
"the Company"). All significant intercompany transactions have been eliminated
in consolidation.
The Company is primarily engaged in the business of acquiring,
exploring, developing and mining uranium properties, using the in situ leach
("ISL") or solution mining process. The Company has been, in the past,
involved in a number of significant ISL uranium mining joint venture
arrangements and has also provided consulting, plant design and construction
expertise to other companies. At present, the Company owns uranium interests
in South Texas and New Mexico. None of these properties was in production at
December 31, 1994.
INVENTORIES
Uranium inventory consists of uranium concentrates (U3O8) on hand and
at convertors awaiting delivery to customers and is valued at the lower of cost
(first-in, first-out) or market. The cost of produced uranium includes all
production costs, and provisions for restoration, depreciation and depletion.
Materials and supplies inventory is valued at the lower of average cost or
market.
BORROWED URANIUM
Uranium is occasionally borrowed from other parties to facilitate
deliveries under sales contracts. Repayment of the loan is normally made from
production or from purchased uranium. The liability for borrowed uranium is
recorded at the latest spot price (estimated replacement cost) and the cost is
adjusted to the actual amount when repaid.
PROPERTY, PLANT AND EQUIPMENT
Uranium Properties
Capitalization of Development Costs - All acquisition, exploration and
development costs (including financing, salary and related overhead costs)
incurred in connection with the various uranium properties are capitalized.
Gains or losses are recognized upon the sale of individual property interests.
All costs incurred in connection with unsuccessful acquisition efforts,
exploration and abandoned interests are charged to expense when known, and
properties with significant acquisition or incurred costs are evaluated on a
property by property basis. Any impairment of such costs is recognized by
providing a valuation allowance (see Note 3 - "Writedown of Abandoned
Property"). Total exploration and evaluation costs capitalized in the twelve
months ended December 31, 1994, 1993 and 1992 were $75,408, $131,606 and
$232,886, respectively.
Depreciation and Depletion - In general, depletion of uranium mineral
interests and related development costs is computed on a property by property
basis using the units-of-production method based on the proved and probable
reserves as estimated periodically by the Company's geologists and engineers.
Depreciation and depletion is provided on the investment costs, net of salvage
value, of the various uranium properties' production plants and related
equipment using the estimated production life of the uranium reserves. Other
ancillary plant equipment and vehicles are depreciated based upon the estimated
useful lives of the assets.
F-8
<PAGE> 12
UANIUM RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
DECEMBER 31, 1994
Other Property
Other property consists of corporate office equipment, furniture and
fixtures and transportation equipment. Depreciation is computed based upon the
estimated useful lives of the assets. Repairs and maintenance costs are
expensed as incurred. Gain or loss on sale or retirement is recorded as income
or expense.
Capitalization of Interest
The Company capitalizes interest cost with respect to properties
undergoing exploration or development activities that are not subject to
depreciation or depletion. The average interest rate on outstanding borrowings
during the period is used in calculating the amount of interest to be
capitalized. Interest capitalized in the twelve months ended December 31,
1994, 1993 and 1992 amounted to $849,661, $1,172,461 and $1,374,741,
respectively. Total interest costs in these periods were $891,225, $1,194,674
and $1,873,768, respectively.
RESTORATION AND RECLAMATION COSTS
Under various federal and state mining laws and regulations, the
Company is required to reclaim the surface areas and restore underground water
quality to the pre-existing mine area average quality. Accruals for the
estimated future cost of restoration and reclamation are made on a per-pound
basis as part of production costs, or when it is determined by an engineering
study that an adjustment to the accrual is required.
EARNINGS PER SHARE
Earnings per share are based on the weighted average number of common
shares and dilutive common stock equivalents outstanding during the period.
The weighted average number of shares used in the earnings per share
calculations were 7,073,000, 6,640,000 and 6,684,000 in 1994, 1993, and 1992,
respectively.
UNAMORTIZED DEBT ISSUANCE COSTS
Debt discount and related expenses arising from the issuance of debt
securities are amortized by the effective interest method.
CONSOLIDATED STATEMENTS OF CASH FLOWS
The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.
Additional disclosures of cash flow information follow:
<TABLE>
<CAPTION>
Twelve months Ended December 31,
---------------------------------------------------------
1994 1993 1992
-------------- ------------ ---------------
<S> <C> <C> <C>
Cash paid (refunded) during the period for:
Interest . . . . . . . . . . . . . . $ 755,902 $ 660,677 $ 1,314,377
Income taxes . . . . . . . . . . . . - 36,392 (40,114)
</TABLE>
The change in uranium inventory in the Consolidated Statements of Cash
Flows during 1994, 1993 and 1992 does not reflect the change in the amounts of
the non-cash capitalized restoration and depreciation and depletion provisions
included in uranium inventory. Such changes totaled ($389,127), ($607,674) and
($1,266,506), respectively.
F-9
<PAGE> 13
UANIUM RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
DECEMBER 31, 1994
Certain additional non-cash investing and financing activities were
entered into during 1994 with Oren L. Benton and entities under his control.
As a consequence of these transactions and option agreements with certain of
the Company's shareholders, Mr. Benton was in a position to exercise a
controlling interest in the Company. Following is a summary of the major
non-cash transactions:
<TABLE>
<S> <C>
In August 1994, the long-term debt and related interest expense
owed to Mr. Oren L. Benton was converted into 496,040 shares of
common stock (Note 5). $2,356,189
In August 1994, Nuexco Exchange, A.G. acquired the Company's
Note due Citibank, N.A. (Note 5). $6,500,000
In August 1994, the accrued fee obligations and related
unamortized debt discount remaining on the Note with Citibank,
N.A. were waived by Nuexco Exchange, A.G. and have been recorded
as an increase to paid-in capital (Note 5). $548,219
In August 1994, Nuexco Exchange, A.G. made an additional loan
to the Company to finance the purchase of uranium inventory (Note 5). $6,000,000
In November 1994, the Company acquired from Energy Fuels the
Scottish Nuclear Contract in exchange for 736,842 shares of
common stock and the remaining 1994 balance owed to the Company
from Energy Fuels for uranium purchased (Note 4). $4,500,000
</TABLE>
RESTRICTED CASH
At December 31, 1994, the Company had pledged a certificate of deposit
of $562,211 in order to fund letters of credit for ongoing plugging bonds
related to the Kingsville Dome and Rosita properties. This cash is not readily
available to the Company and thus is not included in cash equivalents.
CONCENTRATIONS OF CREDIT RISK
The primary customers of the Company are generally major utilities.
While there is no geographic limitation to the customer base, the number of
customers with which the Company can do business is limited to those utilities
that are nuclear power generators. The Company continuously evaluates the
creditworthiness of its customers.
2. LIQUIDITY ISSUES/SUBSEQUENT EVENTS
During 1994, the Company encountered liquidity problems that resulted
in the Company entering into certain transactions with companies controlled by
Oren L. Benton (the "Benton Companies") whereby the Benton Companies (a)
assisted in the restructuring of the Citibank, N.A. debt (see Note 5), (b)
arranged for an additional $6.0 million loan to the Company to purchase uranium
inventory to secure the restructured debt, (c) advanced the Company $2,250,000
to make debt payments prior to the restructuring, which advances were
subsequently converted to common stock and (d) committed to provide the Company
with an additional $7.0 million of capital (see Note 5). As a consequence of
the debt restructuring, the Company assigned most of its 1995 cash stream from
contracts with utilities for the delivery of uranium, to the lender. The debt
payments are equal to the Company's expected revenue from these contracts
resulting in almost no proceeds being received by the Company until the fourth
quarter of 1995, when the restructured debt is expected to be paid in full.
F-10
<PAGE> 14
UANIUM RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
DECEMBER 31, 1994
Further, during January, 1995, when the Benton Companies held
effective control of the common stock of the Company, the Company transferred
$1.0 million to the Benton Companies in connection with a planned joint venture
to process uranium at a Benton Companies' mill. The specific Benton Companies
which were to be part of the planned joint venture did not receive the
transferred funds. Because of the Benton Bankruptcy, the realizability of the
Company's $1.0 million investment is doubtful. Shortly thereafter, the then
Chairman and CFO of the Company, who were also officers of the Benton
Companies, transferred $1.08 million out of the Company without the
authorization of the Company's Board of Directors. In February, 1995, the
Benton Companies filed for bankruptcy. The transferred funds totaling $2.08
million have not been recovered and there can be no assurance that the
Company's efforts to pursue remedies will be successful. The Company will
record a full reserve for these transactions in the first quarter of 1995, the
effect of which is that the Company's equity has been reduced by $2.08 million.
The bankruptcy could also cause a review of the transactions entered
into by the Company with the Benton Companies that could potentially result in
claims against the Company. The Company is unable to assess what adverse
consequences, if any, might result from such review.
Subsequent to yearend, the Company experienced a severe cash shortage
and was unable to pay its trade creditors and employees. In addition, none of
the Company's properties were in production and therefore were not generating
any cash flow. Substantial investment would be required in 1995 to place these
properties into production. To meet emergency cash requirements, the Company
has borrowed money from an officer and certain current and former members of
management subsequent to yearend.
The Company pursued various options to solve its liquidity problems
and discussions regarding alternative financing arrangements are on-going. Any
cash generated from these transactions would be utilized to pay existing
payables and provide funding to complete the production start-up of the
Company's Rosita property.
On May 25, 1995, the Company entered into a $6 million convertible
debt agreement with a third party. The debt bears interest at 6.5% and is
convertible into 1.5 million shares of the Company's common stock at an initial
conversion price of $4.00 per share at any time during the three year term. In
addition, the Company granted the lenders warrants to purchase an additional
1.5 million shares at an initial price of $4.00 per share. Certain other
financial advisors associated with the transaction were granted additional
warrants and options to purchase an additional 150,000 shares at an initial
exercise price of $4.00 per share. Part of the debt proceeds were used to pay
existing payables and provide funding to complete the production start-up of
the Company's Rosita property. The balance of the proceeds will be used to
fund the commencement of pre-production activities at the Company's Kingsville
Dome facilities towards commencement of full uranium production in 1996. The
debt is secured by the Rosita and Kingsville Dome properties.
3. URANIUM PROPERTIES
KINGSVILLE DOME PROPERTY
In 1981, the Company acquired an exploration property in South Texas,
known as Kingsville Dome, from Exxon Corporation. After significant production
in 1988-1990, the property was put on a standby basis because of low uranium
spot prices and production ceased in September, 1990. Cost of uranium sales in
1994, 1993 and 1992 in the consolidated statements of operations includes
$699,804, $666,101 and $649,001, respectively, of Kingsville Dome standby
costs. At December 31, 1994 the property contained approximately 3,191,000
pounds of estimated recoverable proved and probable reserves, and the net
carrying value of the property was approximately $14,500,000.
F-11
<PAGE> 15
UANIUM RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
DECEMBER 31, 1994
ROSITA PROPERTY
In late 1985, the Company acquired several lease holdings in a uranium
prospect ("Rosita") in South Texas. At December 31, 1994, the property
contained approximately 2,933,000 pounds of estimated recoverable proved and
probable uranium reserves which had been drilled by the previous property
owner. Construction and development activities began in the first quarter of
1990 and were completed in September 1990 with production commencing
immediately thereafter. The property was put on a standby basis and production
ceased in March 1992. Total production for the three months ended March 31,
1992 was approximately 80,000 pounds. Cost of uranium sales at December 31,
1994, 1993 and 1992 in the Consolidated Statements of Operations includes
$758,688, $846,031 and $686,558, respectively, of Rosita standby costs. The
net carrying value of the property at December 31, 1994 was approximately
$8,800,000.
CHURCHROCK PROPERTIES
In December 1986, the Company executed an agreement to acquire
properties in the Churchrock region of New Mexico containing approximately
6,950,000 pounds of estimated recoverable proved and probable uranium reserves.
In September 1991, an additional 200 acres of leases were obtained by the
Company. These properties were acquired in exchange for a future production
royalty payment which, based upon the expected selling price of the uranium
production, may vary between 5% and 10%. Preliminary analysis of the drilling
data of the Churchrock properties indicates approximately 5,488,000 pounds of
estimated recoverable proved and probable reserves. Permitting activities are
currently ongoing for the properties. The net carrying value of these
properties at December 31, 1994 was approximately $5,844,000.
CROWNPOINT PROPERTY
In August 1988, the Company acquired the Crownpoint property,
consisting of 163 acres of leases and related equipment and buildings for cash
payments of $550,000, amounts payable in future years of $950,000 and a sliding
scale overriding royalty on future production. The present value of the future
payable amount, $407,054 at December 31, 1994, is recorded as a purchase money
obligation. Additionally, also in 1988, the Company staked 321 acres of claims
in the same area. In August, 1993 the Company acquired approximately 959 acres
of leases adjoining the Crownpoint properties. Initial interpretation of the
drilling data for all the properties acquired in 1988 and 1993 indicate total
estimated recoverable proved and probable uranium reserves of approximately
25,396,000 pounds. The net carrying value of these properties at December 31,
1994 was approximately $6,557,000.
WRITEDOWN OF ABANDONED PROPERTY
In the second and third quarters of 1993, the Company relinquished
ownership rights to certain leases in Texas and Wyoming and an option to lease
certain property in the Churchrock area of New Mexico. The properties covered
by these leases have not been included in the Company's proved or probable
uranium reserves and their abandonment did not affect the Company's reserve
base estimates. These abandonments resulted in a charge against net earnings
of approximately $1,560,000.
4. CONTRACT COMMITMENTS
SALES CONTRACTS
The Company has entered into several long-term contract commitments to
sell uranium. Such commitments involve total future sales of uranium
concentrates of approximately 2,739,000 pounds representing future revenues of
approximately $42,974,000 over the various contract periods from January 1,
1995 through 2002. The average current
F-12
<PAGE> 16
UANIUM RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
DECEMBER 31, 1994
price of all future contracted deliveries, with escalation calculated through
December 31, 1994, is $15.69. All of the contracts contain provisions which
provide for escalation of between 80% and 90% of future inflation indices.
All revenues for the twelve months ended December 31, 1994 were from
sales to six customers, five of which represented more than 10% of total
revenues. Sales to these five customers totaled $3,847,000, $3,670,000,
$3,286,000, $3,214,000 and $2,094,000 during 1994. Revenues for the twelve
months ended December 31, 1993 were from sales to seven customers, three of
which represented more than 10% of total revenues. Sales to these three
customers totaled $4,899,000, $4,310,000 and $1,345,000 during 1993. Revenues
for the twelve months ended December 31, 1992 were from sales to six customers,
the sales to four of which individually represented more than 10% of total
revenues. Sales to these four customers totaled $6,384,000, $4,077,000,
$3,509,000 and $2,400,000 during 1992.
PURCHASE CONTRACT COMMITMENTS
In 1990, the Company entered into a long-term purchase contract to
purchase 250,000 pounds per year from 1992 through 1995, at an original base
price of $10.50 per pound as of January 1, 1990, escalated at the rate of 50%
of the prime rate and 50% of inflation. At December 31, 1994 the escalated
contract purchase price is $13.48 per pound. In July 1992, the Company entered
into a long-term purchase contract to purchase 200,000 pounds annually from
1993 through 1995. The contract contains spot market pricing considerations
and carries a minimum price of $8.00 per pound escalated at a 6% rate and a
maximum price of $8.00 per pound escalated at an 18% rate. At December 31,
1994, the escalated contract purchase price is $9.27 per pound.
In addition, the Company entered into an agreement on August 19, 1994
with Energy Fuels Nuclear, Inc. ("EFN"), an affiliated company of Mr. Benton
pursuant to which the Company assigned to EFN its rights under the foregoing
uranium purchase agreements. Through December 31, 1994, the Company purchased
150,000 pounds of uranium for $1,791,500 under the two agreements and resold
the uranium to EFN for the same price. In a separate transaction, the Company
purchased 100,000 pounds of uranium from a third-party supplier and resold the
same to another company affiliated with Mr. Benton for $940,000. At December
31, 1994 the average price for the remaining 450,000 pounds under the two
agreements was approximately $11.61 per pound.
On November 18, 1994, the Company was assigned a long-term sales
contract ("the Scottish Nuclear Contract") from Energy Fuels, Ltd. ("EFL"), an
affiliated company of Mr. Benton, in exchange for 736,842 shares of common
stock and the remaining balance due to the Company in the amount of $881,500
plus accrued interest of $33,006 for 1994 purchases of uranium made by EFN and
another company affiliated with Mr. Benton. The Scottish Nuclear Contract was
valued by the Company and EFL at $4,500,000. The deliveries under the Scottish
Nuclear Contract were accelerated to December 1994 with the Company realizing
proceeds of $4,151,735 in order to fund the current cash requirements of the
Company. The difference from the agreed upon value of the Scottish Nuclear
Contract and the proceeds received upon accelerating delivery was recorded as a
loss of $349,265 in the accompanying Consolidated Statements of Operations.
5. LONG-TERM DEBT
CITIBANK CREDIT AGREEMENT
On May 24, 1990, the Company entered into a Credit Agreement with
Citibank, N.A. ("Citibank"). On August 19, 1994, the Citibank debt agreements
were restructured as discussed below. The balance at the time of the
restructuring was $6,500,000. In connection with the restructuring the Company
has received a waiver of accrued fee obligations of $700,000, which was
arranged by one of the Benton Companies. The waiver of these fees has been
recorded, net of the unamortized debt discount remaining on the Citibank debt
(approximately $152,000) as an increase to paid-in capital.
F-13
<PAGE> 17
UANIUM RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
DECEMBER 31, 1994
CITIBANK DEBT RESTRUCTURING AND EQUITY CONVERSION
On August 19, 1994 Nuexco Exchange, A.G., ("NEAG"), a company then
owned by Mr. Benton, acquired the note (the "Note") outstanding to Citibank
under the Credit Agreement for $6,500,000. To fund this acquisition of the
Note due Citibank and for the additional loan to the Company, NEAG borrowed
$12,500,000 from Union Bank of Switzerland ("UBS") and made a new loan to the
Company of $6,000,000. The $6,000,000 loaned to the Company was used to
purchase 648,648 pounds of uranium at $9.25 per pound from EFN. The notes due
NEAG ("NEAG Notes") were secured by 599,423 pounds of uranium purchased from
EFN and by the contracts between the Company and certain utilities for delivery
of uranium. NEAG assigned their notes due from the Company and the security to
UBS. NEAG and UBS released all other collateral that had secured the original
Citibank Note. The assigned notes bear interest at Citibank prime (8.5% at
December 31, 1994) and is payable in installments which coincide with payments
the Company expects to receive from its customers under existing contracts.
The balance of the notes was $7,739,225 at December 31, 1994 and is scheduled
to be paid in full by October 1995.
To enable the Company to meet its short-term liquidity requirements
while negotiations with Citibank were in progress, Mr. Benton advanced
$1,125,000 to the Company in January 1994 and $1,125,000 in April 1994. The
advances made to the Company by Mr. Benton accrued interest at Citibank's prime
rate plus 3%. Mr. Benton also guaranteed the Company's payment obligations
through December 31, 1994 on the Citibank Note. On August 19, 1994 the
$2,250,000 in advances together with accrued but unpaid interest of $106,189
were converted into equity by the Company's issuance to Mr. Benton of 496,040
shares of common stock at a valuation of $4.75 per share.
In August 1994, the Company entered into an agreement with an
affiliated company of Mr. Benton ("Benton affiliate") which gave the Company
the right, prior to August 18, 1997 to require the Benton affiliate to purchase
up to $6,996,750 of common stock at a per share price of $4.75 (1,473,000
shares). The Benton affiliate was granted demand and piggy-back registration
rights for such shares. Mr. Benton guaranteed the Benton affiliate's
performance of its obligations under this agreement. The issuance of the
736,842 shares to the Benton affiliate in connection with the assignment of the
long-term sales contract from EFL (Note 4) was credited against this
commitment. The Company does not anticipate that the balance of the shares can
be put to the Benton Companies because of the Benton bankruptcy. In addition,
the options held by Benton affiliates from certain major shareholders of the
Company have also expired.
The Company and certain companies affiliated with Mr. Benton are also
conducting negotiations to form joint ventures involving additional uranium
properties held by the Benton Companies in the United States and abroad.
Pursuant thereto, and subsequent to yearend the Company has agreed to acquire
from the Benton Companies a significant interest in uranium properties in
Wyoming and South Dakota in return for the issuance of 360,000 shares of common
stock of the Company at a per share price of $6.00. The properties are
mineable using in situ mining methods and will be operated by the Company. It
is anticipated that a substantial portion of the Company's production from
these properties and its existing properties will be eligible for sale under
the matched sale program permitting the importation of uranium into the United
States approved by the Department of Commerce.
PURCHASE MONEY OBLIGATIONS
In 1987, the Company acquired certain long-term sales contract
delivery rights in exchange for cash plus an assignment of a $3,000,000 future
production payment, at $1.00 per pound of production sold from the Kingsville
Dome and Rosita projects, starting in 1988. The production payment was
recorded as a purchase money obligation at an original calculated present value
of $2,379,839 and the remaining balance owed at December 31, 1994 is
$1,080,453.
F-14
<PAGE> 18
UANIUM RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
DECEMBER 31, 1994
SUMMARY OF LONG-TERM DEBT
<TABLE>
<CAPTION>
At December 31,
------------------------------------
1994 1993
-------------- --------------
<S> <C> <C>
Long-term debt of the Company consists of:
Citibank loan facilities . . . . . . . . . . . . . . . . . . $ - $ 9,750,000
Purchase money obligations -
Sales contract acquisitions . . . . . . . . . . . . . . 1,080,453 1,080,453
Crownpoint property (Note 3) . . . . . . . . . . . . . . 407,054 407,054
Bank debt . . . . . . . . . . . . . . . . . . . . . . . . . . - 4,609
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 1,663
-------------- --------------
1,487,507 11,243,779
Less - Current portion . . . . . . . . . . . . . . . . . . . 82,000 5,256,000
-------------- --------------
Total long-term debt . . . . . . . . . . . . . . . . . $ 1,405,507 $ 5,987,779
============== ==============
</TABLE>
Maturities of long-term debt are as follows:
<TABLE>
<CAPTION>
For the Twelve Months Ended: For the Twelve Months ended:
- ---------------------------- -----------------------------
<S> <C> <C> <C>
December 31, 1995 . . . . . . $ 82,000 December 31, 1998 . . . . . . . . . $ 282,000
December 31, 1996 . . . . . . 358,000 December 31, 1999
December 31, 1997 . . . . . . 359,000 and beyond . . . . . . . . . . . 407,000
</TABLE>
6. SHAREHOLDERS' EQUITY
COMMON STOCK
Acquisition of Belt Line Resources, Inc.
In May 1992, the Company issued 164,991 shares of common stock in
exchange for all of the common stock of Belt Line Resources, Inc., ("Belt
Line"). Belt Line's assets were comprised primarily of 187,500 shares of the
Company's common stock, which are recorded on the Company's balance sheet as
treasury stock.
Conversion of Notes to Oren L. Benton.
On August 19, 1994, the long-term debt of $2,250,000 and related
interest owed to Oren L. Benton was converted into 496,040 shares of common
stock at a price of $4.75 per share as discussed in Note 5.
CONVERSION OF URANIUM SALES CONTRACT
On November 22, 1994, the Company acquired from EFL a long-term sales
contract (Note 4) in exchange for the remaining balance due from EFN and
another company affiliated with Mr. Benton for uranium purchased and 736,842
shares of common stock.
F-15
<PAGE> 19
UANIUM RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
DECEMBER 31, 1994
WARRANTS
Common Stock Purchase Warrants
In conjunction with the March 1990 public offering, 301,875 common
stock purchase warrants were issued. Each warrant was exercisable through
February 26, 1994 to purchase one share of common stock at a price of $5.20 per
share. A total of 82,500 common stock purchase warrants had been exercised as
of December 31, 1993. The remaining warrants expired in accordance with their
terms on February 26, 1994.
Underwriter Warrants
In connection with the March 1990 public offering, the Company issued
to the underwriter, for an aggregate sum of $1,315, Underwriter's Common Stock
Purchase Warrants ("Underwriter Warrants"). The Underwriter Warrants are
exercisable through March 5, 1994 to purchase 32,886 shares of common stock at
a price of $6.60 per share. None of the Underwriter Warrants had been
exercised as of December 31, 1993 and they all expired in accordance with their
terms on March 5, 1994.
7. EMPLOYEE STOCK OPTIONS
Effective November 10, 1987, the shareholders of the Company approved
the adoption of a nonqualified stock option plan covering certain officers,
directors and other key employees. On January 15, 1992, the Board of Directors
approved the amendment and restatement of the existing stock option plan and
approved a new Directors' Stock Option Plan for directors who are not employees
of the Company. The new directors' plan provides for the grant of 20,000 stock
options to each of the non-employee directors along with additional annual
grants of stock options upon re-election as directors at the Company's annual
meeting. Currently there are 65,000 stock options outstanding under the
Directors' Stock Option Plan. Also on January 15, 1992, the Board of Directors
approved the grant of 577,248 stock options under the amended plan to officers
and employees. All of the previously outstanding options were canceled upon
the effectiveness of the new options. On August 10, 1994, the Board of
Directors increased the available options under the Employees' Stock Option
Plan and the Directors' Stock Option Plan to 850,000 options and 150,000
options, respectively. Additional details about the options granted under the
stock option plans are as follows:
<TABLE>
<CAPTION>
At December 31, 1994,
-------------------------------------------------------
Options
Exercise Options Available Options Options Options
Date of Grant Price Granted for Exercise Exercised Canceled Outstanding
------------- ------ ------- ------------ --------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
January 15, 1992 $ 2.94 617,248 163,967 81,031 137,250 398,967
May 22, 1992 $3.00 2,000 500 500 500 1,000
------- ------- ------ ------- -------
Balances at December 31, 1992 619,248 164,467 81,531 137,750 399,967
February 26, 1993 $2.50 10,000 2,500 - - 10,000
May 27, 1993 $3.50 2,000 250 250 750 1,000
------- ------- ------ ------- -------
Balances at December 31, 1993 631,248 167,217 81,781 138,500 410,967
July 11, 1994 $4.38 20,000 - - - 20,000
August 10, 1994 $4.25 140,000 - - 20,000 120,000
December 15, 1994 $5.88 3,000 - - - 3,000
------- ------- ------ ------- -------
Balances at December 31, 1994 794,248 167,217 81,781 158,500 553,967
======= ======= ====== ======= =======
</TABLE>
The exercise price for all the options granted has been the approximate
market price of the common stock on the date granted. The terms of the options
provide that no options may be exercised for one year after grant, and then for
ratable exercise over the subsequent four year period, with a total exercise
period of ten years.
F-16
<PAGE> 20
UANIUM RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
DECEMBER 31, 1994
8. FEDERAL INCOME TAXES
CHANGE IN ACCOUNTING PRINCIPLE-ACCOUNTING FOR INCOME TAXES
The Financial Accounting Standards Board has issued SFAS #109, which
requires, among other things, an asset and liability approach for financial
accounting and reporting for income taxes. This asset and liability approach
was also required under SFAS #96 which the Company implemented on an early
basis in the December 31, 1988 financial statements. As a result of the
Company's prior adoption of SFAS #96, the adoption of SFAS #109, effective
January 1, 1994, did not have any material impact on the Company's financial
statements.
The deferred federal income tax liability consists of the following:
<TABLE>
<CAPTION>
December 31,
--------------------------------------
1994 1993
------------- ------------
<S> <C> <C>
Property development costs - net of amortization $ 8,358,000 $ 7,601,000
Accelerated depreciation 114,000 101,000
Restoration reserves (866,000) (827,000)
Net operating loss carryforwards (5,417,000) (5,317,000)
Valuation allowance and other - net 721,000 1,052,000
------------- ------------
Total deferred income tax liability $ 2,910,000 $ 2,610,000
============= ============
</TABLE>
Major items causing the Company's tax provision to differ from the
federal statutory rate of 34% were:
<TABLE>
<CAPTION>
For the Twelve Months Ended December 31,
-------------------------------------------------------------------------
1994 1993 1992
----------------------- ---------------------- ----------------------
% of Pretax % of Pretax % of Pretax
Amount Income Amount Income Amount Income
------------ --------- ---------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Pretax income (loss) . . . . $ 1,505,224 $ (454,558) $ 2,810,320
------------ ------ ---------- ------ ----------- ------
Pretax income (loss) times
statutory tax rate . . . 512,000 34.0% (155,000) (34.0%) 956,000 34.0%
Increases (reductions) in
taxes resulting from:
Percentage depletion . (512,000) (34.0%) 155,000 34.0% (956,000) (34.0%)
Alternative minimum tax 299,928 19.9% (106,608) (23.5%) 407,815 14.5%
------------ ------ ---------- ------ ----------- ------
Income tax expense (benefit) $ 299,928 19.9% $ (106,608) (23.5%) $ 407,815 14.5%
============ ====== ========== ====== =========== ======
</TABLE>
The Company's book income for regular federal income tax purposes at
December 31, 1994 is entirely sheltered by cumulative percentage depletion and
investment tax credit carryforwards. However, under the Alternative Minimum
Tax ("AMT") system imposed by the 1986 Tax Reform Act ("the 86 ACT"), these
carryforward items may only be utilized on a limited basis resulting in the
above tax provisions, which consists entirely of deferred AMT.
At December 31, 1994, approximately $1,382,000 of percentage depletion
(available for regular tax purposes) had not been utilized to shelter book
income and is available to carry forward to future accounting periods. The
Company made income tax payments in 1993 of $36,392 and received a refund of
$40,114 in 1992. No tax payments were required in 1994.
The Company has available for regular federal income tax purposes at
December 31, 1994 estimated net operating loss carryforwards of approximately
$15,933,000 which expire primarily in 1998 through 2010, if not previously
utilized.
F-17
<PAGE> 21
UANIUM RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
DECEMBER 31, 1994
At December 31, 1994, the Company had investment tax credit carryforwards of
approximately $28,000, after adjusting for the reductions required by the 86
ACT, which expire for regular tax purposes in 1995 through 2000.
9. OTHER LONG-TERM LIABILITIES AND DEFERRED CREDITS
<TABLE>
<CAPTION>
December 31,
-----------------------------------
1994 1993
----------- -------------
<S> <C> <C>
Other long-term liabilities and deferred credits on the balance sheet
consisted of:
Reserve for future restoration and reclamation costs,
net of current portion of $90,000 and $31,000 in
1994 and 1993 (Note 1) . . . . . . . . . . . . . . . . . . . . . $ 2,337,624 $ 2,330,297
Citibank additional loan fee, net of
current portion of $100,000 in 1993 . . . . . . . . . . . . . . . - 700,000
----------- -------------
Total other long-term liabilities and deferred credits . . . . . $ 2,337,624 $ 3,030,297
=========== =============
</TABLE>
10. COMMITMENTS AND CONTINGENCIES
The Company's mining operations are subject to federal and state regulations
for the protection of the environment, including water quality. These laws are
constantly changing and generally becoming more restrictive. The ongoing costs
of complying with such regulations has not been significant to the Company's
annual operating costs. Future mine closure and reclamation costs are provided
for as each pound of uranium is produced on a unit-of-production 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 in compliance with current environmental
regulations.
Cash flow is not substantially impacted by environmental expenditures.
Nevertheless, in 1995, the Company expects to have to post and fund a bond with
the Texas Natural Resources Conservation Commission to provide for the
reclamation of all the Company's permitted projects. The Company expects the
bond will approximate its recorded reclamation costs. The Company also expects
to continue to make future expenditures to comply with environmental
requirements.
The Company is from time to time involved in various legal proceedings of a
character normally incident to its business. Management does not believe that
adverse decisions in any pending or threatened proceedings will have a material
adverse effect on the Company's financial condition or results of operations.
F-18
<PAGE> 22
SCHEDULE I
URANIUM RESOURCES, INC.
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
(PARENT COMPANY ONLY)
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
------------------------------
1994 1993
------------- -------------
<S> <C> <C>
ASSETS
- ------
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . $ 27,406 $ 12,902
Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,904 17,673
Prepaid and other current assets . . . . . . . . . . . . . . . . . . . --- 96,204
------------- -------------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . 65,310 126,779
------------- -------------
Property, plant and equipment, at cost:
Net property, plant and equipment . . . . . . . . . . . . . . . . . . 18,483 23,604
Investment in subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 16,999,145 14,950,962
Intercompany notes receivable . . . . . . . . . . . . . . . . . . . . . . . . 7,991,000 2,206,000
------------- -------------
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 25,073,938 $ 17,307,345
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 131,778 $ 15,818
Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 62,463 136,583
------------- -------------
Total current liabilities . . . . . . . . . . . . . . . . . . . . 194,241 152,401
------------- -------------
Deferred federal income taxes . . . . . . . . . . . . . . . . . . . . . . . . (676,000) (465,000)
Shareholders' equity:
Common stock, $.001 par value, 12,500,000 shares authorized;
shares issued and outstanding: 1994 - 7,954,683; 1993 - 6,640,020 8,142 6,828
Common stock purchase warrants . . . . . . . . . . . . . . . . . . . . --- 349,704
Paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,365,716 5,286,869
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . 13,181,839 11,976,543
------------- -------------
Total shareholders' equity . . . . . . . . . . . . . . . . . . . . 25,555,697 17,619,944
------------- -------------
$ 25,073,938 $ 17,307,345
============= =============
</TABLE>
F-19
<PAGE> 23
SCHEDULE I
(CONT'D)
URANIUM RESOURCES, INC.
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
(PARENT COMPANY ONLY)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------
1994 1993 1992
-------------- -------------- --------------
<S> <C> <C> <C>
Income:
Equity in operating income of subsidiaries before
federal income taxes . . . . . . . . . . . . . . $ 2,559,183 $ 524,275 $ 3,870,478
Interest and other income . . . . . . . . . . . . . . 166,372 150,997 249,356
-------------- -------------- --------------
Total income . . . . . . . . . . . . . . . . . . 2,725,555 675,272 4,119,834
Expenses:
General and administrative . . . . . . . . . . . . . 1,219,124 1,070,928 1,291,997
Interest and other expense . . . . . . . . . . . . . 1,207 58,902 17,517
-------------- -------------- --------------
Total expenses . . . . . . . . . . . . . . . . . 1,220,331 1,129,830 1,309,514
-------------- -------------- --------------
Earnings (loss) from operations . . . . . . . . . . . . 1,505,224 (454,558) 2,810,320
Federal income tax provision (benefit) . . . . . . . . 299,928 (106,608) 407,815
-------------- -------------- --------------
Net income (loss) . . . . . . . . . . . . . . . . . . . $ 1,205,296 $ (347,950) $ 2,402,505
============== ============== ==============
</TABLE>
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------------------------
1994 1993 1992
------------ ------------ ------------
<S> <C> <C> <C>
Cash flows from operations:
Net income (loss) . . . . . . . . . . . . . . . . . $ 1,205,296 $ (347,950) $ 2,402,505
Reconciliation of net income to cash provided by
operations:
Equity in operating income of
subsidiaries . . . . . . . . . . . . . . . . (2,559,183) (524,275) (3,870,478)
Provision for deferred income
taxes . . . . . . . . . . . . . . . . . . . . 300,000 (91,000) 443,000
Other non-cash items, net . . . . . . . . . . . 101,325 148,435 127,968
Changes in operating working capital
and other items . . . . . . . . . . . . . . . 707,332 794,724 911,495
------------ ------------ ------------
Net cash provided by (used in) operations . . . . . . . (245,230) (20,066) 14,490
------------ ------------ ------------
Investment activities:
Other property . . . . . . . . . . . . . . . . . . . . --- - (245)
------------ ------------ ------------
Net cash provided by (used in) investing activities . . --- - (245)
------------ ------------ ------------
Financing activities:
Issuance of common stock and warrants,net . . . . . 240,556 - (27)
Other . . . . . . . . . . . . . . . . . . . . . . 19,178 - -
------------ ------------ ------------
Net cash provided by (used in) financing activities . . 259,734 - (27)
------------ ------------ ------------
Net increase (decrease) in cash and cash equivalents . 14,504 (20,066) 14,218
Cash and cash equivalents, beginning of period . . . . 12,902 32,968 18,750
------------ ------------ ------------
Cash and cash equivalents, end of period . . . . . . . $ 27,406 $ 12,902 $ 32,968
============ ============ ============
</TABLE>
F-20
<PAGE> 24
SCHEDULE II
URANIUM RESOURCES, INC.
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
<TABLE>
<CAPTION>
ADDITIONS
CHARGED ------------------------------
BALANCE AT TO COSTS CHARGED TO
BEGINNING AND OTHER BALANCE AT
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS DEDUCTIONS(A) END OF PERIOD
----------- --------- -------- --------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1994:
Accrued restoration costs $2,361,297 $ 274,465 $(50,764)(b) $ 157,374 $2,427,624(c)
Year ended December 31, 1993:
Accrued restoration costs $2,448,239 $ 292,200 $(79,954)(b) $ 299,188 $2,361,297(c)
Year ended December 31, 1992:
Accrued restoration costs $2,542,955 $ 367,913 $(189,229)(b) $ 273,400 $2,448,239(c)
</TABLE>
- --------------------
(a) Deductions represent costs incurred in the restoration process.
(b) Decrease resulted primarily from restoration provision amounts in
beginning inventory which were expensed in the current year.
(c) Amounts recorded as current liabilities at December 31, 1994, 1993 and
1992 are $90,000, $31,000, and $73,000 respectively.
F-21
<PAGE> 25
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Date: January 30, 1996
URANIUM RESOURCES, INC.
By: /s/ Paul K. Willmott
-------------------------------------------
Paul K. Willmott, Chairman of the Board,
Chief Executive Officer and President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Date
- --------- ----
<S> <C>
/s/ Paul K. Willmott January 30, 1996
- -----------------------------------------------
Paul K. Willmott,
Chairman of the Board, Chief Executive Officer,
President (Principal Executive Officer)
/s/ Leland O. Erdahl January 30, 1996
- -----------------------------------------------
Leland O. Erdahl,
Director
/s/ George R. Ireland January 30, 1996
- -----------------------------------------------
George R. Ireland,
Director
/s/ James B. Tompkins January 30, 1996
- -----------------------------------------------
James B. Tompkins,
Director
/s/ Thomas H. Ehrlich January 30, 1996
- -----------------------------------------------
Thomas H. Ehrlich,
Vice President and Chief Financial Officer
(Principal Financial Officer and Principal
Accounting Officer)
</TABLE>
F-22
<PAGE> 26
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIALLY
NUMBER DESCRIPTION NUMBERED PAGE
<S> <C> <C>
3.1 Certificate of Incorporation of the Company (filed with the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30,
1990).*
3.2 Bylaws of the Company (filed with the Company's Form 10 - General Form
for Registration of Securities Pursuant to Section 12(b) or (g) of the
Securities Exchange Act of 1934 as filed with the Securities and Exchange
Commission on September 8, 1988).*
4.1 Renewal Promissory Note in the amount of $6,500,000 dated August 19, 1994
between URI, Inc. as borrower and NUEXCO Exchange AG as lender**
4.2 Full and Final Release executed as of June 13, 1994 by URI, Inc., Hydro
Resources, Inc., Citibank, N.A. and the Company**
4.3 Release Agreement dated August 19, 1994 by and among URI, Inc., Hydro
Resources, Inc., Concord International Mining and Management Corp.,
NUEXCO Exchange AG and the Company and UBS**
4.4 Reimbursement and Collateral Agreement dated as of August 19, 1994 by and
between URI, Inc. and Citibank, N.A.**
4.5 Promissory Note in the amount of $6,000,000 dated August 15, 1994 between
URI, Inc., Hydro Resources, Inc. and the Company all as the maker and
NUEXCO Exchange AG as lender**
4.6 Assignment dated August 19, 1994 between NUEXCO Exchange AG and Union
Bank of Switzerland**
4.7 Stock Purchase Agreement dated August 18, 1994 between Oren L. Benton and
the Company**
4.8 Stock Sale Right Agreement dated August 18, 1994 by and between Concord
International, Oren L. Benton and the Company**
4.9 Directors Stock Option Plan**
4.10 Employees' Stock Option Plan**
10.1 Agreement dated as of July 16, 1992 between Uranerz Exploration and
Mining Limited, Uranerz U.S.A., Inc., Uranium Resources, Inc. and URI,
Inc.**(1)
10.2 Agreement dated July 30, 1990 between Uranerz Exploration and Mining
Limited, Uranerz U.S.A., Inc., Uranium Resources, Inc. and URI, Inc.
(filed with Post-Effective Amendment No. 3 to the Company's Form S-1
Registration Statement as filed with the Securities and Exchange
Commission on December 7, 1990).*
</TABLE>
E-1
<PAGE> 27
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIALLY
NUMBER DESCRIPTION NUMBERED PAGE
<S> <C> <C>
10.3 Contract dated as of November 17, 1987 and amended as of May 29, 1992 by
Hydro Resources, Inc., a wholly-owned subsidiary of Uranium Resources,
Inc., and Public Service Company of New Mexico (filed with the Company's
Form 8 - Amendment to Application or Report as filed with the Securities
and Exchange Commission on December 9, 1988).*
10.4 Contract for the Sale of Uranium Concentrates dated as of April 21, 1987
between Southern California Edison Company and Uranium Resources, Inc.
(filed with the Company's Form 8 - Amendment to Application or Report as
filed with the Securities and Exchange Commission on November 7, 1988).*
10.5 Contract for the Purchase of Natural Uranium Concentrates (U3 O8) dated
April 5, 1994 between Uranium Resources, Inc., URI, Inc. and Pacific Gas
& Electric Company**(1)
10.6 Agreement for the Sale of Uranium Concentrates dated as of August 23,
1990 between OES Fuel, Incorporated, Uranium Resources, Inc., and URI,
Inc. (filed with Post-Effective Amendment No. 3 to the Company's Form S-1
Registration Statement as filed with the Securities and Exchange
Commission on December 7, 1990) *
10.7 U3 O8 Sales Agreement dated September 30, 1988 between GPU Nuclear
Corporation and URI, Inc. guaranteed by Uranium Resources, Inc. (filed
with the Company's Form 8 - Amendment to Application or Report as filed
with the Securities and Exchange Commission on December 9, 1988)*
10.8 Uranium Concentrates Sales Agreement effective as of August 25, 1994 by
and between Energy Fuels Exploration Company and URI, Inc.**
10.9 Assignment and Assumption made effective as of August 18, 1994 by and
between URI, Inc. and Energy Fuels Nuclear, Inc.**
10.10 Uranium Concentrates Sales Agreement effective as of August 18, 1994 by
and between URI, Inc. and Energy Fuels Nuclear, Inc.**
10.11 Summary of Supplemental Health Care Plan (filed with Amendment No. 1 to
the Company's Form S-1 Registration Statement (File No. 33-32754) as
filed with the Securities and Exchange Commission on February 20, 1990).*
10.12 Agreement for the Purchase and Sale of General Partnership Interest -
Cheyenne River Partners, L.P. entered into as of November 18, 1994 by and
between Energy Fuels, Ltd. and the Company**
10.13 Joint Production Venture Agreement draft undated between Energy Fuels,
Ltd. and the Company**
10.14 Assignment entered into November 18, 1994 by and between Energy Fuels,
Ltd. and URI, Inc.**
22.1 Subsidiaries of the Company**
24.1 Consent of Arthur Andersen LLP**
</TABLE>
* Incorporated by reference pursuant to Rule 12b-32 under the Securities
and Exchange Act of 1934, as amended.
E-2
<PAGE> 28
** Previously filed.
(1) Certain provisions have been omitted and filed separately with the
Securities and Exchange Commission pursuant to a request for
confidential treatment.
E-3
