<PAGE> 1
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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, 1999 or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
---------- ----------
Commission file number 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 720, DALLAS, TEXAS 75251
(Address of principal executive offices, including zip code)
(972) 387-7777
(Registrant'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
--- ---
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 12,256,387 as of August 12, 1999
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URANIUM RESOURCES, INC.
1999 SECOND QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<S> <C> <C>
Consolidated Balance Sheets -
June 30, 1999 (Unaudited) and
December 31, 1998 3
Consolidated Statements of Operations -
Three and Six Months Ended June 30, 1999 and 1998
(Unaudited) 5
Consolidated Statements of Cash Flows -
Six Months Ended June 30, 1999
and 1998 (Unaudited) 6
Notes to Consolidated Financial
Statements - June 30, 1999 (Unaudited) 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II -- OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 13
INDEX TO EXHIBITS E-1
</TABLE>
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
URANIUM RESOURCES, INC.
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1999 AND DECEMBER 31, 1998 (NOTE 1)
ASSETS
<TABLE>
<CAPTION>
June 30, December 31,
------------ ------------
1999 1998
------------ ------------
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 346,122 $ 3,713,566
Short-term investment:
Certificate of deposit, restricted 585,055 582,623
Receivables, net 5,883 1,482,806
Uranium inventory 966,667 956,590
Materials and supplies inventory 87,207 92,495
Prepaid and other current assets 171,608 244,301
------------ ------------
Total current assets 2,162,542 7,072,381
------------ ------------
Property, plant and equipment, at cost:
Uranium properties 99,242,837 98,073,350
Other property, plant and equipment 507,538 538,974
Less-accumulated depreciation and depletion (59,477,281) (59,059,968)
------------ ------------
Net property, plant and equipment 40,273,094 39,552,356
Other assets 4,299 4,299
Long-term investment:
Certificate of deposit, restricted 3,066,703 3,066,703
------------ ------------
$ 45,506,638 $ 49,695,739
============ ============
</TABLE>
The accompanying notes to financial statements are an integral
part of these consolidated balance sheets.
3
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URANIUM RESOURCES, INC.
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1999 AND DECEMBER 31, 1998 (NOTE 1)
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
June 30, December 31,
------------ ------------
1999 1998
------------ ------------
(Unaudited)
<S> <C> <C>
Current liabilities:
Accounts payable $ 555,821 $ 1,829,255
Notes payable 700,000 1,685,000
Accrued interest payable 3,626 113,778
Current portion of long-term debt 8,000 8,000
Royalties payable 50,320 132,626
Current portion of restoration reserve 83,000 324,000
Other accrued liabilities 295,236 348,337
------------ ------------
Total current liabilities 1,696,003 4,440,996
------------ ------------
Other long-term liabilities and deferred credits 6,049,689 5,469,394
Long-term debt, less current portion 6,279,075 6,189,007
Deferred federal income taxes 0 263,810
Shareholders' equity:
Common stock, $0.001 par value, shares authorized:
1999 - 35,000,000 1998 - 25,000,000; shares issued
and outstanding (net of treasury shares):
1999 - 12,256,387 1998 - 12,053,027 12,409 12,205
Paid-in capital 40,705,980 40,629,923
Retained earnings (accumulated deficit) (9,227,100) (7,300,178)
Less: Treasury stock (152,500 shares), at cost (9,418) (9,418)
------------ ------------
Total shareholders' equity 31,481,871 33,332,532
------------ ------------
$ 45,506,638 $ 49,695,739
============ ============
</TABLE>
The accompanying notes to financial statements are an integral
part of these consolidated balance sheets.
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URANIUM RESOURCES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX
MONTHS ENDED JUNE 30, 1999 AND 1998 (NOTE 1)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------ ------------------------------
1999 1998 1999 1998
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Revenues:
Uranium sales -
Produced uranium $ 1,036,350 $ 1,175,260 $ 1,036,350 $ 6,110,426
Purchased uranium -- 1,270,500 1,512 2,397,300
------------ ------------ ------------ -------------
Uranium sales 1,036,350 2,445,760 1,037,862 8,507,726
Costs and expenses:
Cost of uranium sales -
Direct cost of purchased uranium -- 1,054,733 -- 2,016,670
Royalties 57,234 51,247 57,234 275,517
Operating expenses 1,258,292 940,128 1,707,620 2,620,901
Provision for restoration and reclamation costs 115,943 64,593 135,943 327,434
Depreciation and depletion 326,314 865,616 349,177 3,069,284
------------ ------------ ------------ -------------
Total cost of uranium sales 1,757,783 2,976,317 2,249,974 8,309,806
------------ ------------ ------------ -------------
Earnings (loss) from operations
before corporate expenses (721,433) (530,557) (1,212,112) 197,920
Corporate expenses -
General and administrative 501,692 680,955 993,639 1,275,483
Depreciation 6,863 4,809 12,943 9,732
------------ ------------ ------------ -------------
Total corporate expenses 508,555 685,764 1,006,582 1,285,215
------------ ------------ ------------ -------------
Loss from operations (1,229,988) (1,216,321) (2,218,694) (1,087,295)
Other income (expense):
Interest expense, net of capitalized interest (36,909) (39,587) (76,844) (76,407)
Interest and other income, net 60,044 49,911 104,806 96,804
------------ ------------ ------------ -------------
Total other income 23,135 10,324 27,962 20,397
------------ ------------ ------------ -------------
Loss before federal income taxes (1,206,853) (1,205,997) (2,190,732) (1,066,898)
Federal income tax benefit:
Deferred (65,810) (240,000) (263,810) (212,000)
------------ ------------ ------------ -------------
Net loss $ (1,141,043) $ (965,997) $ (1,926,922) $ (854,898)
============ ============ ============ =============
Net loss per common share and
common equivalent (basic and diluted) $ (0.09) $ (0.08) $ (0.16) $ (0.07)
============ ============ ============ =============
Weighted average common shares and common
equivalent shares per share data:
Basic 12,055,262 12,053,027 12,054,151 12,053,027
============ ============ ============ =============
Diluted 12,055,262 12,053,027 12,054,151 12,053,027
============ ============ ============ =============
</TABLE>
The accompanying notes to financial statements are an integral
part of these consolidated statements.
5
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URANIUM RESOURCES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND 1998 (NOTE 1)
(UNAUDITED)
<TABLE>
<CAPTION>
June 30,
----------------------------
1999 1998
----------- -----------
<S> <C> <C>
Cash flows from operations:
Net loss $(1,926,922) $ (854,898)
Reconciliation of net income to cash provided by operations-
Provision for restoration and reclamation costs 135,943 327,434
Depreciation and depletion 362,120 3,079,016
Credit for deferred income taxes (263,810) (212,000)
Decrease in restoration and reclamation accrual (289,985) (11,367)
Other non-cash items, net 873,558 829,712
----------- -----------
Cash flow provided by (used in) operations, before changes in
operating working capital items (1,109,096) 3,157,897
Effect of changes in operating working capital items-
Decrease in receivables 1,476,923 4,448,499
(Increase) decrease in inventories 197,045 (774,164)
Increase in prepaid and other current assets (172,331) (134,192)
Decrease in payables and accrued liabilities (1,518,993) (2,371,129)
----------- -----------
Net cash provided by (used in) operations (1,126,452) 4,326,911
----------- -----------
Investing activities:
Increase in investments (2,432) (223,468)
Additions to property, plant and equipment -
Kingsville Dome (80,905) (2,643,826)
Rosita (43,719) (216,944)
Vasquez (45,798) (394,543)
Alta Mesa (30,842) (30,525)
Churchrock (418,091) (608,367)
Crownpoint (504,160) (350,900)
Other property (126,057) (323,117)
Increase in other assets -- (23,712)
----------- -----------
Net cash used in investing activities (1,252,004) (4,815,402)
----------- -----------
Financing activities:
Payments and refinancings of principal (2,388,988) (5,453,617)
Proceeds from borrowings 1,400,000 5,110,000
----------- -----------
Net cash used in financing activities (988,988) (343,617)
----------- -----------
Net decrease in cash and cash equivalents (3,367,444) (832,108)
Cash and cash equivalents, beginning of period 3,713,566 2,325,158
----------- -----------
Cash and cash equivalents, end of period $ 346,122 $ 1,493,050
=========== ===========
</TABLE>
The accompanying notes to financial statements are an integral
part of these consolidated statements.
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1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. The accompanying statements should be read in conjunction
with the audited financial statements included in the Company's 1998 Annual
Report on Form 10-K. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three and six months ended June 30,
1999 are not necessarily indicative of the results that may be expected for the
full calendar year ending December 31, 1999.
2. FUTURE OPERATIONS
The financial statements of the Company have been prepared on the basis
of accounting principles applicable to a going concern, which contemplates the
realization of assets and the satisfaction of liabilities in the normal course
of business. Due to a continued period of depressed prices for uranium as
compared to the Company's cost to produce uranium, the Company has generated
operating losses in each of the last two years. Operating losses have continued
during the first half of 1999. Such price declines have reduced the market price
of uranium to levels that are currently below the Company's cost to produce
uranium and below levels needed by the Company to obtain the necessary financing
to allow development of new production areas at its South Texas sites. Due to
circumstances described above, during the first quarter of 1999 the Company
shut-in its current producing operations until prices recover. The Company has
limited financial resources available to support its ongoing operations, fund
payments of debt, potential claims in litigation and provide for restoration of
its properties until such time, if ever, uranium prices recover to profitable
levels. Further, the Company will require additional capital resources to fund
the cost to resume production and to fund development of its undeveloped
properties. There is no assurance the Company will be successful in raising such
capital or that uranium prices will recover to levels which would enable the
Company to operate profitably. These factors, raise substantial doubt concerning
the ability of the Company to continue as a going concern.
The financial statements do not include any adjustments relating to the
recoverability and classification of asset carrying amounts (including
approximately $40.0 million in net property, plant and equipment) or the amount
and classification of liabilities that might result should the Company be unable
to continue as a going concern. The ability of the Company to continue as a
going concern is dependent upon a recovery of uranium prices, its ability to
successfully produce uranium at economically feasible levels and its ability to
successfully raise capital to support ongoing operations and future development
efforts.
3. LONG-TERM DEBT
RESTRUCTURING OF NOTE
In June 1999, the Company entered into an agreement to restructure the
$6,000,000 secured convertible note that was issued to mutual funds managed by
Ryback Management Company. The restructuring provides for the mandatory
conversion of the debt into 6,000,000 shares of the Company's common stock,
providing the Company obtains the necessary long-term uranium sales contracts
and financing to allow the commencement of production at one of its uranium
projects. Interest on the debt will accrue but not be payable until the maturity
date, which was extended to December 31, 2000. Upon the maturity or the date of
conversion, the noteholders will have the option to be paid the accrued interest
in eighteen monthly installments or to convert the interest into shares of
common stock at the lesser of the then market price for such stock or $1.00 per
share. The noteholders also granted to the Company a right of first offer on the
transfer of the notes or any shares into which the notes are convertible.
CAPITALIZED INTEREST
Interest capitalized in the six months ended June 30, 1999 and 1998 was
$305,000 and $300,000, respectively. Total interest costs in these periods were
$382,000 and $377,000, respectively.
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4. SHAREHOLDERS' EQUITY
COMMON STOCK
In June 1999, the Company issued 203,360 shares of common stock to
certain officers and directors of the Company in connection with the Uranium
Resources, Inc. 1999 Deferred Compensation Plan (the "Plan"). The Plan was
approved by a vote of the shareholders at the June 18, 1999 Annual Meeting.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Forward Looking Statements
This Item 2 contains "forward-looking statements" which are made
pursuant to the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995. These statements include, without limitation, statements
relating to liquidity, financing of operations, continued volatility of uranium
prices, estimates of future capital expenditures, proved undeveloped reserves
and other such matters. The words "believes," "expects," "projects," "targets,"
or "estimates" and similar expressions identify forward-looking statements. The
Company does not undertake to update, revise or correct any of the
forward-looking information. Readers are cautioned that such forward-looking
statements should be read in conjunction with the Company's disclosures under
the heading: "Cautionary Statement for the Purposes of the `Safe Harbor'
Provisions of the Private Securities Litigation Reform Act of 1995" in the
Company's 1998 Annual Report on Form 10-K.
CAPITAL RESOURCES AND LIQUIDITY
Operating Cash Flows and Liquidity
For the quarter ended June 30, 1999, the Company's cash and cash
equivalents were $346,000 a decrease of $323,000 as compared to an increase of
$905,000 for the second quarter of 1998. Cash and cash equivalents decreased by
$3,367,000 for the six months ended June 30, 1999 compared to a decrease of
$832,000 for the same period in 1998. The Company's uranium operations utilized
cash flow from operations of $17,000 for the quarter ended June 30, 1999, in
comparison to positive cash flow from operations in the same period in 1998 of
$3,804,000. Net cash used in operations for the six months ended June 30, 1999
was $1,126,000 compared to net cash provided by operations of $4,327,000 for the
same period in 1998. The Company's net working capital at June 30, 1999 was
$467,000.
As a result of the volatility of spot prices in the uranium
marketplace, during the first quarter of 1999 the Company shut-in and placed on
stand-by its two South Texas facilities. Nominal production from these sites
continued through July 1999 because their incremental production costs were at
or below the cost of purchasing uranium in the marketplace. The Company will
continue to maintain certain activities at these locations including its ongoing
groundwater restoration efforts. The Company has also begun implementing
additional steps in 1999 to preserve cash by reducing expenses and maximizing
the cash flow from its existing sales contracts.
The Company is consolidating certain of its administrative locations,
and reducing its workforce. The implementation of these measures was initiated
in the fourth quarter of 1998 and continue in 1999. The Company projects that
upon the successful implementation of these strategies it will be able to
maintain a continued positive liquidity position through 1999. To maintain a
positive liquidity position in 2000 the Company will need to meet the objectives
regarding new sales contracts and the infusion of capital required under the
restructured Note or for the Company to secure other alternative financing
options. If certain of these plans cannot be implemented and if alternative
options are not available, the Company's operations and liquidity would be
negatively impacted and it would be unlikely that the Company would be able to
continue operating as a going concern.
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Investing Cash Flows
South Texas Projects
During the six months ending June 30, 1999, capital expenditures at the
Company's South Texas locations totaled $201,000. The Company's decision to put
its Kingsville Dome and Rosita sites on stand-by has reduced new capital
spending at these locations. The Company expects to fund its 1999 expenditures
at its South Texas projects from cash on hand, sales proceeds under 1999 uranium
deliveries and through existing financing arrangements.
New Mexico Projects
Capital expenditures at the Company's Churchrock and Crownpoint
projects for permitting and land holding costs totaled approximately $922,000
for the six months ending June 30, 1999 compared to costs of $959,000 for the
first half of 1998. Capital requirements for 1999 and beyond for these projects
are expected to be met through future sales proceeds from current and additional
uranium delivery contracts and through future sources of debt and/or equity
financing.
Financing Cash Flows
In May 1996, the Company entered into a $3.0 million revolving credit
facility. This facility was renewed and expanded for a two-year term to a $5.0
million credit facility in July 1997. In July 1999, the facility was amended to
extend the term for one year and to adjust the amount available under the
agreement to $3.0 million. This facility is secured by the Company's uranium
inventory and/or by receivables from its uranium sales contracts. Principal and
interest payments under the loan are due monthly, with interest on the loan
accruing at the prime rate plus 1%. Borrowings under this facility at June 30,
1999 totaled $700,000.
Other
In June 1999, the Company assigned its rights to deliver uranium in
2000 through 2002 (the final three years) under a uranium sales contract in
return for 124,000 pounds of uranium inventory. The inventory was received in
July 1999 and the transaction will be recorded in the third quarter of 1999.
ENVIRONMENTAL ASPECTS
The Company utilizes ISL solution mining technology as its only mining
method. Unlike conventional uranium mining companies, the Company's mining
technology does not create "tailings". Nevertheless, the Company is highly
regulated. Its primary environmental costs to date have been related to
obtaining and complying with environmental mining permits and, once mining is
completed, the reclamation and restoration of the surface areas and underground
water quality to a condition consistent with applicable requirements. Accruals
for the estimated future cost of such activities are made on a per-pound basis
as part of production costs. See the Consolidated Statements of Operations for
the applicable provisions for such future costs. See also Note 1 - "Restoration
and Reclamation Costs" of Notes to Consolidated Financial Statements in the
Company's Form 10-K as of December 31, 1998.
RESULTS OF OPERATIONS
Revenues, earnings from operations and net income for the Company can
fluctuate significantly on a quarter to quarter basis during the year because of
the timing of deliveries requested by its utility customers. The Company's
customers have generally elected, where possible, to take delivery of the bulk
of the annual deliveries under their long-term sales contracts later in each
year. Accordingly, operating results for any quarter or year-to-date period are
not necessarily comparable and may not be indicative of the results, which may
be expected for future quarters or for the entire year.
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Three and Six Months Ended June 30, 1999 and 1998
The following is a summary of the key operational and financial
statistics related to the Results of Operations:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------------- -------------------------------
1999 1998 1999 1998
------------- -------------- ------------- --------------
(In thousands, except per pound data)
<S> <C> <C> <C> <C>
Uranium sales revenue $ 1,036 $ 2,446 $ 1,038 $ 8,508
Total pounds delivered 70 162 70 532
Average sales price/pound $ 14.81 $ 15.14 $ 14.83 $ 16.00
Pounds produced 35 130 103 357
Pounds purchased -- 100 -- 200
Average production cost of produced pounds (a) $ 20.28 (a) $ 17.48
Average cost of purchased pounds N/A $ 10.81 N/A $ 10.66
Average cost of produced pounds sold $ 13.01 $ 16.01 $ 13.01 $ 15.09
Average cost of purchased pounds sold N/A $ 10.81 N/A $ 10.66
</TABLE>
(a) The Company ceased uranium production operations in the first quarter of
1999 when its South Texas projects were placed on stand-by. Costs while on
stand-by are expensed to operating expenses as they are incurred. A nominal
amount of production has occurred while the projects have been on stand-by, the
inventory resulting from such incidental production has been valued at the
current spot market cost.
The Company delivered 70,000 pounds of uranium in the first half of
1999 at an average sales price of $14.83 per pound. Total deliveries for 1999
are projected at approximately 500,000 pounds with the bulk of those scheduled
in the second half of the year. Total uranium deliveries in the first half of
1998 of 532,000 pounds were at an average sales price of $16.00 per pound and
generated revenues of $8,508,000.
Details of the cost of uranium sales were as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------- -------------------------------
1999 1998 1999 1998
------------- ------------- ------------- --------------
(In thousands) (In thousands)
<S> <C> <C> <C> <C>
Cost of purchased uranium $ -- $ 1,055 $ -- $ 2,017
Royalties 57 52 57 276
Operating expenses 1,258 940 1,708 2,621
Provision for restoration and reclamation costs 116 65 136 327
Depreciation and depletion of uranium properties 326 865 349 3,069
------------- ------------- ------------- --------------
$ 1,757 $ 2,977 $ 2,250 $ 8,310
------------- ------------- ------------- --------------
</TABLE>
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The Company placed its South Texas production facilities on stand-by in
the first quarter of 1999 but continued to maintain nominal production for the
first half of 1999. Total production of 103,000 pounds during the first six
months of 1999 compared to 357,000 pounds of production in the six months ended
June 30, 1998. Certain production related activities have continued while the
facilities were on stand-by because the incremental cash costs (costs incurred
in addition to those required to maintain the projects while in a stand-by mode)
has been below the costs uranium could be purchased in the spot market.
Operating expenses in the first half of 1999 were $1,708,000 and
consisted of stand-by costs ($713,000) production sold ($572,000 or $8.17 per
pound) and a lower of cost or market adjustment ($423,000). Operating expenses
in the six months ended June 30, 1998 were attributable directly to the sale of
Kingsville Dome and Rosita produced pounds and totaled $2,131,000 ($6.22 per
pound).
The provision for restoration and reclamation in the first half of 1999
was $136,000 and consisted of $66,000 ($0.94 per pound) for production sold and
$70,000 for restoration related to a previous production site. The costs
incurred in the first half of 1999 compared to $323,000 ($0.94 per pound)
related to production sold during the same period in 1998 and $4,000 for other
restoration activities.
The depreciation and depletion provision in the six months ended June
30, 1999 was $349,000 and consisted of $273,000 ($3.90 per pound) for produced
uranium sold and $76,000 for depreciation while on stand-by. Comparable costs
for the first half of 1998 were $2,718,000 ($7.93 per pound) resulting from
Rosita and Kingsville Dome production sold during that period.
The Company incurred royalty expenses of $57,000 in the first half of
1999 compared to royalty expenses in the first six months of 1998 of $276,000.
No uranium purchases were made in the first six months of 1999. Uranium
purchases of 200,000 were made in the first half of 1998 at an average cost of
$10.66 per pound. Total deliveries in the first six months of 1998 consisted of
343,000 produced pounds at an average cost per pound of $16.54 and 189,000
purchased pounds at a cost of $10.66 per pound.
Corporate expenses consisting of general and administrative ("G&A")
expenses decreased to $1,006,000 in the first half of 1999 from $1,285,000 in
the first half of 1998. This reduction resulted primarily from the
implementation of the Company's cost reduction program which began in the fourth
quarter of 1998 and will continue throughout 1999.
YEAR 2000 READINESS
The Company currently utilizes computer software in the management of
its operations and in accounting for its operating results that could be
affected by the date change in the year 2000 (the "Y2K issue"). All critical
information technology software and systems utilized by the Company has been
purchased from and are supported by third party vendors. The Company has
conducted a review of the potential impact of the year 2000 on such systems, and
believes that it will not encounter significant operational or financial costs
related to compliance with this issue.
The Y2K issue also involves the impact of the date change in the year
2000 on machines and process controls which may utilize embedded technology as a
part of their components. The Company relies on certain non-information
technology systems such as telephones, facsimile machines, and other equipment
which may have embedded technology such as microprocessors, which may or may not
be year 2000 compliant. The assessment of this technology is outside of the
Company's control and such technology could adversely affect the Company's
ability to conduct business. Management believes any such disruption is not
likely to have a significant effect on the Company's financial position or
operations.
The Company may also be impacted by the Y2K issues of certain of the
Company's third-party suppliers and its customers. The third-party suppliers,
vendors, and customers area is currently in the assessment phase.
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Formal communications have been initiated with the Company's vendors, customers
and others with whom the Company has significant business relationships. The
Company continues to evaluate responses and make additional inquiries as needed.
As the Company is in the process of collecting this information from third
parties, management cannot currently determine whether third party compliance
issues will materially affect its operations. However, the Company is not
currently aware of any third party issues that would cause a significant
business disruption. Management anticipates a complete evaluation to conclude in
the third quarter of 1999.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None
ITEM 2. CHANGES IN SECURITIES.
In June 1999, the Company issued 203,360 shares of common stock to
certain officers and directors of the Company in connection with the Uranium
Resources, Inc. 1999 Deferred Compensation Plan (the "Plan"). The Plan was
approved by a vote of the shareholders at the June 18, 1999 Annual Meeting.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The 1999 Annual meeting of stockholders was held on June 18, 1999 in
Dallas Texas. Shares representing 10,622,685 votes (88.1% of total
outstanding) were present in person or by proxy.
At the meeting the Stockholders of the Company elected Leland O.
Erdahl, Paul K. Willmott and George R. Ireland to the Board of
Directors for a one-year term. In addition, the Company's Stockholders
approved proposals which increased the number of authorized shares of
common stock of the Company from 25,000,000 to 35,000,000; approved the
provisions of the Company's 1999 Deferred Compensation Plan and
approved the ratification of Arthur Andersen, LLP as the Company's
independent accountant for the year ended 1999.
The proposal to increase the number of authorized shares of common
stock was approved by a vote of 9,377,343 shares in favor, 1,209,199
opposed and 36,143 abstaining. The proposal to approve the provisions
of the 1999 Deferred Compensation Plan was approved by a vote of
9,663,511 shares in favor, 934,052 opposed and 24,722 abstaining. The
ratification of Arthur Andersen, LLP as independent accountants was
approved by a vote of 10,486,597 shares in favor, 126,476 opposed and
9,612 abstaining.
The stockholders failed to ratify the proposal to amend the Company's
Restated Certificate of Incorporation to authorize the creation of
1,000,000 shares of Preferred Stock. The vote on this proposal was
2,904,676 shares in favor, 3,446,797 opposed and 17,877 abstaining.
ITEM 5. OTHER INFORMATION.
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Financial Data Schedule
(b) Exhibits
See the Index to Exhibits on page E-1 for a listing of the
exhibits that are filed as part of this Quarterly Report.
(c) Reports on Form 8-K
The Company filed a Current Report on form 8-K on June 23,
1999 reporting under Item 5 that on June 18, 1999, the
stockholders of Uranium Resources, Inc. (approved an amendment
to the Company's Certificate of Incorporation to increase the
number of shares of authorized common stock from 25,000,000 to
35,000,000. The Certificate of Amendment of Restated
Certificate of Incorporation was filed with the State of
Delaware on June 22, 1999.
13
<PAGE> 14
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 12, 1999 By: /S/ Paul K. Willmott
----------------------------
Paul K. Willmott
Director, President and
Chief Executive Officer
Dated: August 12, 1999 By: /S/ Thomas H. Ehrlich
-----------------------------
Thomas H. Ehrlich
Vice President - Finance and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
14
<PAGE> 15
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
3.1* Restated Certificate of Incorporation of the Company, as amended
(filed with the Company's Annual Report on Form 10-K dated March
27, 1997).
3.2* Restated Bylaws of the Company (filed with the Company's Form
S-3 Registration No. 333-17875 on December 16, 1996).
4.1* Registration Rights Agreement dated March 25, 1997 between the
Company and Santa Fe Pacific Gold Corporation (filed with the
Company's Annual Report on Form 10-K dated March 27, 1997).
10.1* Amended and Restated Directors Stock Option Plan (filed with the
Company's Form S-8 Registration No. 333-00349 on January 22,
1996).
10.2* Amended and Restated Employee's Stock Option Plan (filed with
the Company's Form S-8 Registration No. 333-00403 on January 22,
1996).
10.3* 1995 Stock Incentive Plan (filed with the Company's Form S-8
Registration No. 333-00405 on January 22, 1996).
10.4* Non-Qualified Stock Option Agreement dated August 16, 1995,
between the Company and Leland O. Erdahl (filed with the
Company's Annual Report on Form 10-K dated March 27, 1996).
10.5* Non-Qualified Stock Option Agreement dated May 25, 1995, between
the Company and George R. Ireland (filed with the Company's
Annual Report on Form 10-K dated March 27, 1996).
10.6* Non-Qualified Stock Option Agreement dated May 25, 1995, between
the Company and James B. Tompkins (filed with the Company's
Annual Report on Form 10-K dated March 27, 1996).
10.7* Stock Option Agreement dated March 6, 1995 between the Company
and James P. Congleton, as amended on May 25, 1995 (filed with
the Company's Annual Report on Form 10-K dated March 27, 1996).
10.8* Warrant to Purchase Common Stock dated May 25, 1995, between the
Company and Grant Bettingen, Inc. (filed with the Company's
Annual Report on Form 10-K dated March 27, 1996).
10.9* Non-Qualified Stock Option Agreement dated July 31, 1995,
between the Company and Wallace M. Mays (filed with the
Company's Form S-8 Registration Statement No. 33-64481 on
November 21, 1995).
10.10* Contract for the Purchase of Natural Uranium Concentrates (U3O8)
dated April 5, 1994 between Uranium Resources, Inc., URI, Inc.
and Pacific Gas & Electric Company (filed with the Company's
Annual Report on Form 10-K for the year ended December 31,
1994).(1)
</TABLE>
E-1
<PAGE> 16
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
10.11* 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).(1)
10.12* 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).
10.13* Note and Warrant Purchase Agreement entered into May 25, 1995 by
and among Lindner Investments, Lindner Dividend Fund and the
Company (filed with the Company's Current Report on Form 8-K
dated May 25, 1995).
10.14* Loan Agreement entered into June 18, 1996 by and between Lindner
Dividend Fund and the Company (filed with the Company's Annual
Report on Form 10-K dated March 27, 1997).
10.15* Uranium Concentrates Sales Agreement dated August 21, 1996 by
and between the Company and Commonwealth Edison Company (filed
with the Company's Quarterly Report on Form 10-Q/A-2 for the
quarter ended September 30, 1996).(1)
10.16* Agreement of Santa Fe Pacific Gold Corporation as Uranco, Inc.
Shareholder with the Company and Guarantee of the Company dated
as of March 25, 1997 (filed with the Company's Annual Report on
Form 10-K dated March 27, 1997). (1)
10.17* Stock Exchange Agreement and Plan of Reorganization dated as of
March 25, 1997 (filed with the Company's Annual Report on Form
10-K dated March 27, 1997).
10.18* License to Explore and Option to Purchase dated March 21, 1997
between Santa Fe Pacific Gold Corporation and Uranco, Inc.
(filed with the Company's Annual Report on Form 10-K dated March
27, 1997).(1)
10.19* Amendment #1 to Nonqualified Stock Option Agreement dated
November 17, 1997 between the Company and Leland O. Erdahl
(filed with the Company's Annual Report on Form 10-K dated March
27, 1998) .
10.20* Amendment #1 to Nonqualified Stock Option Agreement dated
November 17, 1997 between the Company and George R. Ireland
(filed with the Company's Annual Report on Form 10-K dated March
27, 1998).
10.21* Amendment #1 to Nonqualified Stock Option Agreement dated
November 17, 1997 between the Company and James B. Tompkins
(filed with the Company's Annual Report on Form 10-K dated March
27, 1998).
10.22* Compensation Agreement dated June 2, 1997 between the Company
and Paul K. Willmott (filed with the Company's Annual Report on
Form 10-K dated March 27, 1998).
</TABLE>
E-2
<PAGE> 17
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
10.23* Compensation Agreement dated June 2, 1997 between the Company
and Richard F. Clement, Jr. (filed with the Company's Annual
Report on Form 10-K dated March 27, 1998).
10.24* Compensation Agreement dated June 2, 1997 between the Company
and Joe H. Card (filed with the Company's Annual Report on Form
10-K dated March 27, 1998).
10.25* Compensation Agreement dated June 2, 1997 between the Company
and Richard A. Van Horn (filed with the Company's Annual Report
on Form 10-K dated March 27, 1998).
10.26* Compensation Agreement dated June 2, 1997 between the Company
and Thomas H. Ehrlich (filed with the Company's Annual Report on
Form 10-K dated March 27, 1998).
10.27* Compensation Agreement dated June 2, 1997 between the Company
and Mark S. Pelizza (filed with the Company's Annual Report on
Form 10-K dated March 27, 1998).
10.28* Warrant to Purchase Common Stock for 625,000 shares dated March
23, 1998 between the Company and Lindner Investments (filed with
the Company's Annual Report on Form 10-K dated March 27, 1998).
10.29* Warrant to Purchase Common Stock for 325,000 shares dated March
23, 1998 between the Company and Lindner Investments (filed with
the Company's Annual Report on Form 10-K dated March 27, 1998).
10.30* Uranium Resources, Inc. 1999 Deferred Compensation Plan (filed
with the Company's Annual Report on Form 10-K dated March 31,
1999).
10.31 Certificate of Amendment of Restated Certificate of
Incorporation dated June 22, 1999.
10.32 Note Exchange Agreement dated June 30, 1999 between the Company
and Lindner Investments.
10.33 6.5% Secured Convertible Note for $1,500,000 dated June 30, 1999
between the Company and Lindner Investments.
10.34 6.5% Secured Convertible Note for $4,500,000 dated June 30, 1999
between the Company and Lindner Investments.
27.1 Financial Schedule.
</TABLE>
*Incorporated by reference pursuant to Rule 12b-32 under the Securities
and Exchange Act of 1934, as amended.
(1)Certain provisions have been omitted and filed separately with the
Securities and Exchange Commission pursuant to a request for
confidential treatment.
E-3
<PAGE> 1
EXHIBIT 10.31
URANIUM RESOURCES, INC.
CERTIFICATE OF AMENDMENT OF
RESTATED CERTIFICATE OF INCORPORATION
The undersigned, Paul K. Willmott, the duly elected and acting
Chairman, Chief Executive Officer and President of Uranium Resources, Inc., a
Delaware corporation (the "Corporation"), does hereby certify as follows:
First: That the Board of Directors of the Corporation, in accordance
with Section 242 of the Delaware General Corporation Law adopted resolutions
setting forth a proposed amendment of the Restated Certificate of Incorporation
of the Corporation, declaring said amendment to be advisable and calling for the
stockholders of the Corporation to consider said amendment at the next Annual
Meeting of the Stockholders, to be held on June 18, 1999.
Second: That thereafter, upon notice in accordance with Section 222 of
the Delaware General Corporation law, the Annual Meeting of the Stockholders was
held on June 18, 1999 and, at that meeting, the necessary number of shares as
required by statute were voted in favor of the amendment.
Third: That amendment deletes Article 4 of the Restated Certificate of
Incorporation in its entirety and replaces Article 4 of the Restated Certificate
of Incorporation with the following:
ARTICLE 4
The aggregate number of shares which the corporation has authority to
issue is Thirty-Five Million (35,000,000) shares, $.001 par value per share. The
shares are designated as common stock and have identical rights and privileges
in every respect. The holders of the stock of the corporation shall have no
preemptive rights to subscribe for any securities of the corporation.
Fourth: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the Delaware General Corporation Law.
IN WITNESS WHEREOF, the undersigned has executed this Certificate on
June 22, 1999.
/s/ Paul K. Willmott
-------------------------------------
Paul K. Willmott, Chairman,
Chief Executive Officer and President
<PAGE> 1
EXHIBIT 10.32
NOTE EXCHANGE AGREEMENT
This Note Exchange Agreement (the "Note Exchange Agreement") is made
and entered into this 30th day of June 1999 between Uranium Resources, Inc., a
Delaware corporation (the "Company"), and Lindner Investments, a Massachusetts
business trust ("Investments"), on behalf of its series known as "Lindner Asset
Allocation Fund" (formerly known as "Lindner Dividend Fund") ("hereinafter
"Asset Allocation Fund") and "Lindner Market Neutral Fund" (formerly known as
"Lindner Bulwark Fund") (hereinafter "Market Neutral Fund") (Investments, Asset
Allocation Fund and Market Neutral Fund being hereinafter collectively referred
to as "Lindner").
RECITALS:
1. The Company and Lindner have previously entered into a Note and
Warrant Purchase Agreement dated May 25, 1995 (the "Purchase Agreement").
2. Under the Purchase, Agreement Asset Allocation Fund loaned the
Company $4.5 million, evidenced by the Company's promissory note in that amount;
and Market Neutral Fund loaned the Company $1.5 million, evidenced by the
Company's promissory note in that amount. Each such note was dated May 25, 1995
and had a maturity date of May 31, 1998.
3. Pursuant to the Purchase Agreement and in connection with the
foregoing loans, the Company issued a warrant to Asset Allocation Fund to
purchase 1,125,000 shares of the Company's common stock, $.001 par value per
share (the "Common Stock"), and a warrant to Market Neutral Fund to purchase
375,000 shares of Common Stock, each at $4.00 per share. Prior to March 23, 1998
Asset Allocation Fund had exercised the right to purchase 500,000 shares of
Common Stock under its warrant and Market Neutral Fund had not exercised the
right to purchase any shares of Common stock under its warrant.
4. On March 23, 1998 the Company and Lindner entered into a note and
warrant exchange agreement pursuant to which the maturity date of the notes and
the expiration date of the warrants were changed to May 31, 2000; and the
conversion price of the notes and the exercise price of the unexercised portion
of the warrants were changed to $3 per share. The notes were exchanged for new
promissory notes dated March 23, 1998 (the "March 23, 1998 Notes"); and the
warrants were exchanged for new warrants dated March 24, 1999 (the "Outstanding
Warrants"). Such March 23, 1998 Notes and the Outstanding Warrants are currently
outstanding.
5. The Company has requested that Lindner amend the terms of the March
23, 1998 Notes by (i) extending the maturity date thereof, (ii) providing for
the mandatory conversion of such notes to Common Stock upon the happening of
certain events, (iii) providing for the accrual but non-payment of interest,
(iv) providing for the optional conversion of such accrued interest into Common
Stock and (v) providing for certain other changes. Lindner has agreed to such
amendments upon the terms and conditions set forth in this Note Exchange
Agreement.
<PAGE> 2
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual promises hereinafter set forth and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties,
intending to be legally bound, hereby agree as follows:
1. Outstanding Warrants. The Outstanding Warrants shall remain
outstanding, and nothing contained in this Note Exchange Agreement shall in any
way alter, modify or change any of the provisions of the Outstanding Warrants.
2. March 23, 1998 Notes. The March 23, 1998 Notes have been cancelled
and surrendered simultaneously with the execution and delivery of this Note
Exchange Agreement in exchange for new notes dated June 30, 1999 (the "Notes")
issued by the Company, which are issued under the terms and provisions of, and
shall be governed in all respects by, this Note Exchange Agreement. All
references to the Notes in this Note Exchange Agreement and the Purchase
Agreement shall refer to the new notes dated June 30, 1999 issued pursuant to
this Note Exchange Agreement
3. Amendment to the Purchase Agreement. The following provisions of the
Purchase Agreement are amended as follows:
(a) Section 1.1 of the Purchase Agreement is hereby amended by
deleting said section in its entirety and substituting the following in
its place:
"1.1 Description of the Notes. The Notes shall be
substantially in the form set forth in Exhibit 1 attached
hereto. Each of the Notes shall be dated June 30, 1999 and
shall mature on December 31, 2000. The Notes shall bear
interest on the unpaid principal balance thereof from March
30, 1999 until the earlier of the maturity date or the date of
the Mandatory Conversion Event at the rate of 6.5% per annum,
due at the earlier of the maturity date or the date of the
Mandatory Conversion Event, subject to conversion or payment
as provided in Section 3.7."
(b) Sections 3 of the Purchase Agreement (consisting of
Sections 3.1 through 3.5) is hereby amended by adding the following new
Sections 3.6 and 3.7:
"3.6 Mandatory Conversion. The entire unpaid
principal balance of all outstanding Notes shall be converted,
automatically and without further action of the Company or a
Holder, into 6 million shares of Common Stock upon the
occurrence of the Mandatory Conversion Event (as hereinafter
defined). The number of shares is not subject to adjustment
under the antidilution provisions of Section 4.2. Upon such
automatic conversion, whether or not the Notes are surrendered
to the Corporation, the Notes shall cease to be outstanding,
and each Holder shall be treated as the record holder of
Common Stock into which the Notes have been converted, as of
the date of the Mandatory Conversion Event.
<PAGE> 3
3.7 Optional Payment or Conversion of Accrued
Interest to Common Stock. On the earlier of the maturity date
or the date of the Mandatory Conversion Event, the Holder
shall have the option either to (a) convert all accrued but
unpaid interest into shares of Common Stock into that number
of shares of Common Stock determined by dividing the aggregate
amount of the accrued but unpaid interest by the lesser of (i)
Market Price or (ii) $1, or (b) receive payment of the accrued
but unpaid interest in 18 equal monthly installments together
with interest on the unpaid balance at the rate of 6.5% per
annum. The Holder shall elect either option (a) or (b) by
written notice to the Company within 15 days after the earlier
to occur of the maturity date or the Mandatory Conversion
Date. The number of shares is not subject to adjustment under
the antidilution provisions of Section 4.2."
(c) Section 11 of the Purchase Agreement is hereby amended by
adding thereto a new subsection (ss) to read as follows:
"(ss) "Mandatory Conversion Event" shall mean the
occurrence of both of the following: (i) The Company's
obtaining a long-term contract (duration of 24 months or more)
for the sale of uranium at not less than $12 per pound), and
(ii) consummation by the Company of an infusion of capital, by
the issuance of debt or equity (an "Infusion of Capital"), for
the purpose of financing the costs of commencing the
production of uranium from the Company's Vasquez property or
another suitable property, whether or not the Company
currently has the leasehold or fee interests in such other
property (Vasquez or such other property being hereinafter
referred to as "Suitable Property"). The term "Suitable
Property" would include the Company's Kingsville Dome property
with respect to which the Company currently has the leasehold
and other rights to operate and from which the Company has
produced significant amounts of uranium but which requires
significant drilling of delineation, injector and extraction
wells before commercial production can be commenced."
5. Rights of Company Upon Sale of Notes or Common Stock.
(a) Transfer of Note. No Holder shall transfer any Note or
shares of Common Stock into which the Note may be converted (the Notes
or any such shares of Common Stock being hereinafter referred to as
"Securities") or any interest therein except to one of its Affiliates
or in accordance with the following subsections (b) and (c). For
purposes of this Section 5, the term "Affiliate" shall mean Investments
or any of its series of mutual funds.
<PAGE> 4
(b) Notice of Proposed transfer. Before making any transfer of
any Securities (other than to an Affiliate), a transferring Holder (a
"transferring Holder") will deliver a written notice (the "Offer
Notice") to the Company. The Offer Notice will disclose in reasonable
detail the Securities proposed to be transferred (the "Offered
Securities"), the price at which the transferring Holder is willing to
sell the Offered Securities (the "Offer Price") and the other principal
terms and conditions on which the transferring Holder is willing to
consummate the transfer. Such Offer Notice will constitute an
irrevocable offer to sell to the Company or its assigns the Offered
Securities for the Offer Price and on the other terms and conditions
set forth in the Offer Notice, subject to the provisions of this
Section.
(c) Option to Purchase.
(i) The Company or its assigns may elect to purchase
all, but not less than all, of the Offered Securities for the
Offer Price and on the other terms and conditions set forth in
the Offer Notice by delivering written notice (an "Acceptance
Notice") of such election to the transferring Holder within 30
days after the delivery of the Offer Notice.
(ii) If the Acceptance Notice with respect to all
Offered Securities is given within the time periods described
above, the Offer Notice, together with the Acceptance Notice
related thereto, will constitute a binding agreement between
the parties thereto to buy and to sell the Offered Securities
for the Offer Price and on the other terms and conditions set
forth in the Offer Notice. All transfers of Offered Securities
pursuant to the foregoing provisions of this Section will be
consummated as soon as practicable, but in any event within 45
days after delivery of the Offer Notice.
(iii) If the Acceptance Notice with respect to all
Offered Securities is not given within the 30 day time period
described in (i) above, the transferring Holder may, within
180 days after the end of such 30-day time period, transfer
all (but not less than all) of the Offered Securities to one
or more third parties at a price no less than the Offer Price
and on other terms no more favorable to the transferees than
the terms and conditions contained in the Offer Notice. Any
such transferee shall be bound by the restrictions on transfer
contained in this section 5 with respect to all subsequent
transfers.
(iv) The parties will maintain in confidence and will
not disclose or permit to be disclosed to any third party
(other than legal counsel, accountants or other agents) the
Offer Price and the other terms and conditions contained in
the Offer Notice and, if the parties fail to comply with the
foregoing sentence, then such party will not be entitled to
exercise such rights with respect to the transaction
contemplated by the Offer Notice or by any succeeding Offer
Notice which may be given by a Holder (other than such party)
hereunder.
<PAGE> 5
6. Reaffirmation of the Purchase Agreement. Except as expressly
modified by this Note Exchange Agreement, the Purchase Agreement shall remain in
full force and effect.
7. Miscellaneous.
(a) Successors and Assigns. This Note Exchange Agreement shall
be binding upon and inure to the benefit of, and be enforceable by, the
parties hereto and their respective successors and assigns.
(b) Severability. Should any part of this Note Exchange
Agreement for any reason be declared invalid, such decision shall not
affect the validity of any remaining portion, which remaining portion
shall remain in force and effect as if this Note Exchange Agreement had
been executed with the invalid portion thereof eliminated and it is
hereby declared the intention of the parties hereto that they would
have executed the remaining portion of this Note Exchange Agreement
without including therein any such part, parts, or portion which may,
for any reason, be hereafter declared invalid.
(c) Captions. The descriptive headings of the various Sections
or parts of this Note Exchange Agreement are for convenience only and
shall not affect the meaning or construction of any of the provisions
hereof.
(d) Counterparts. This Note Exchange Agreement may be executed
in two or more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the same
instrument. The execution and delivery of this Note Exchange Agreement
shall be deemed effective upon receipt by each party hereto of a
facsimile copy of this Note Exchange Agreement executed by the other
party hereto.
(e) Governing Law. This Note Exchange Agreement shall be
construed in accordance with Missouri law.
IN WITNESS WHEREOF, the parties have executed this Note Exchange
Agreement.
URANIUM RESOURCES, INC.
By:
----------------------------------
Its:
---------------------------------
LINDNER INVESTMENTS, on behalf of its
series LINDNER ASSET ALLOCATION FUND
and LINDNER MARKET NEUTRAL FUND
By:
----------------------------------
Its:
---------------------------------
<PAGE> 1
EXHIBIT 10.33
URANIUM RESOURCES, INC.
6.5% SECURED CONVERTIBLE NOTE
$1,500,000.00 June 30, 1999
Note No.
FOR VALUE RECEIVED, the undersigned URANIUM RESOURCES, INC., a Delaware
corporation (the "Obligor" or "Uranium Resources"), hereby promises to pay to
LINDNER MARKET NEUTRAL FUND, a series of LINDNER INVESTMENTS, a Massachusetts
business trust, or its registered assigns (the "Purchaser") on December 31, 2000
the principal sum of ONE MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS
($1,500,000.00), and to pay interest on the unpaid principal balance hereof from
the date hereof at a rate of 6.5% per annum. Payment of interest shall be
deferred until the maturity date. This Note and any interest thereon may not be
transferred except as provided in the Note and Warrant Purchase Agreement dated
May 25, 1995, between Obligor and Purchaser, as supplemented by the Note and
Warrant Exchange Agreement, dated March 23, 1998, and as further supplemented
and amended by the Note Exchange Agreement dated June 30, 1999 (the "Note and
Warrant Purchase Agreement").
This Note is issued pursuant to the Note and Warrant Purchase Agreement
and this Note and the holder hereof is entitled, equally and ratably with the
holders of all other Notes outstanding under the Note and Warrant Purchase
Agreement, to all of the benefits provided for thereby, including, but not
limited to the security granted to the Purchaser therein, and the benefits under
the Guaranty executed by the Mortgaging Subsidiary in connection therewith, and
shall be bound by all of the provisions set forth therein, to which Note
Purchase and Warrant Agreement reference is hereby made for a statement thereof.
This Note is supported by the Guaranty of the Mortgaging Subsidiary,
which Guaranty will be secured by a lien and security interest in and upon the
Mortgaging Subsidiary's interest in the Collateral and the Texas Real Property.
Subject to and upon compliance with the provisions of the Note and
Warrant Purchase Agreement, the Holder of this Note is entitled, at its option,
at any time, to convert this Note into fully paid and non-assessable shares of
Common Stock of the Obligor at the initial Conversion Price of $3.00 per share,
subject to such adjustment or adjustments, if any, of such Conversion Price and
the Common Stock issuable upon conversion, as may be required by the Note and
Warrant Purchase Agreement, upon surrender of this Note, duly endorsed or
assigned to the Obligor or in blank, to the Obligor, with the conversion notice
attached hereto, or accompanied by a separate written notice substantially in
the form of such conversion notice, duly executed by the Holder and stating that
the Holder hereof elects to convert this Note, or if less than the entire
principal amount hereof is to be converted, the portion hereof to be converted,
all in accordance with the provisions of the Note and Warrant Purchase
Agreement.
<PAGE> 2
This Note is subject to mandatory conversion into shares of Common
Stock upon the occurrence of a Mandatory Conversion Event, as set forth in the
Note and Warrant Purchase Agreement. Accrued but unpaid interest is subject, at
the option of the Holder, to conversion into shares of Common Stock or, at the
option of the Holder, such interest shall be paid over a period of 18 months
after the earlier to occur of the maturity date or the Mandatory Conversion
Event, as set forth in the Note and Warrant Purchase Agreement.
Except as otherwise provided in the Note and Warrant Purchase
Agreement, no payment or adjustment is to be made on conversion for interest
accrued hereon or for dividends issued on securities issued on conversion.
No fractional shares will be issued on conversion, but instead of any
fractional interest, the Obligor shall pay a cash adjustment as provided in the
Note and Warrant Purchase Agreement.
In the event any action is taken to collect or enforce the indebtedness
evidenced by this Note (the "Indebtedness") or any part thereof, the Obligor and
each endorser hereof agrees to pay, in addition to the principal and interest
due and payable hereon, all costs of collecting this Note, including reasonable
attorneys' fees and expenses. These costs shall include any expenses incurred by
the Purchaser in any bankruptcy, reorganization or other insolvency proceeding.
Acceptance by the Purchaser of any payment in an amount less than the
amount then due and owing shall be deemed an acceptance on account only, and the
failure to pay the entire amount then due and owing shall cause the Purchaser
and endorsers to remain in default.
The liability of the Obligor and any endorsers hereof, shall be joint
and several, absolute and unconditional, without regard to the liability of any
other party hereunder or under any other document or instrument executed in
connection with this Note.
No delay or omission of any holder in exercising any right or rights
shall operate as a waiver of such right or any other rights. Waiver on one
occasion shall not be construed as a bar to or waiver of any right or remedy on
any future occasion.
The liability of the Obligor under this Note (and the liability of any
endorsers and/or Guarantors of this Note) shall not be discharged, diminished or
in any way impaired by: (a) the release, impairment, discharge, substitution,
exchange, modification of or failure to obtain foreclose or realize on any
guaranty or any security granted Purchaser by any party for the Indebtedness;
(b) any waiver by Purchaser or failure to enforce or exercise rights under any
of the terms, covenants or conditions of this Note or any guaranty; (c) the
granting of any renewal, indulgence, extension of time to Obligor, or any other
obligors of the Indebtedness. or (d) the addition or release of any person or
entity primarily or secondarily liable for the Indebtedness.
In no event shall the interest rate charged or received hereunder at
any time exceed the maximum interest rate permitted under applicable law.
Payments of interest received by Purchaser hereunder which would otherwise cause
the interest rate hereunder to exceed such
<PAGE> 3
maximum interest rate shall, to the extent of such excess, be deemed to be (and
deemed to have been contracted as being) prepayments of principal and applied as
such.
Under certain circumstances, as specified in the Note and Warrant
Purchase Agreement, the principal of this Note may be declared due and payable
in the manner and with the effect provided in the Note and Warrant Purchase
Agreement.
Transfer of this Note is subject to the Company's right of first offer
as set forth in the Note and Warrant Purchase Agreement.
This Note shall be binding upon the undersigned and its successors and
assigns and shall inure to the benefit of Purchaser, its successors and assigns.
Every person and entity at any time liable for the payment of this Note hereby
waives demand, presentment, protest, notice of protest, note of nonpayment due
and all other requirements otherwise necessary to hold them immediately liable
for payment hereunder.
This Note and the Note and Warrant Purchase Agreement are governed by
and shall be construed and enforced in accordance with Missouri law.
URANIUM RESOURCES, INC.
By: ___________________________________
President
THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT AND HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"). THIS NOTE MAY NOT BE
PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF REGISTRATION UNDER THE 1933
ACT PROVIDED, HOWEVER, THAT THIS NOTE MAY BE PLEDGED OR OTHERWISE TRANSFERRED
PURSUANT TO AN EXEMPTION FROM REGISTRATION, INCLUDING, BUT NOT LIMITED TO, THOSE
PROVIDED IN RULE 144,144A OR 145 OR REGULATION S UNDER THE 1933 ACT. TRANSFER OF
THIS NOTE IS ALSO SUBJECT TO THE RESTRICTIONS, TERMS AND CONDITIONS SET FORTH IN
THAT CERTAIN NOTE AND WARRANT PURCHASE AGREEMENT DATED MAY 25, 1995, AS AMENDED,
AMONG URANIUM RESOURCES, INC., LINDNER INVESTMENTS, A COPY OF WHICH IS AVAILABLE
FOR INSPECTION AT THE OFFICE OF URANIUM RESOURCES, INC., AND WILL BE MADE
AVAILABLE BY URANIUM RESOURCES, INC. UPON WRITTEN REQUEST.
<PAGE> 4
ASSIGNMENT
I/we assign and transfer $ principal amount of this Note No. R- to
- ------------------------------------------------------------------------------
(Print or type name, address and zip code of assignee)
Insert social security or other identifying number of assignee: ______________
and irrevocably appoint as my/our agent and attorney-in fact to transfer
this Note or the portion hereof which has been so assigned, on the books of the
Company. The agent may substitute another to act for him or her.
Dated: Signed:
-----------------------
----------------------------------------
Signature Guaranteed By: [Name of Noteholder--Sign exactly as name
appears on the first page of this Note]
- ----------------------------- By:
----------------------------------------
Its:
<PAGE> 5
NOTICE OF CONVERSION
TO Uranium Resources, Inc.:
The undersigned owner of this Secured Convertible Note hereby irrevocably
exercises the option to convert $ _______________principal amount of this
Secured Convertible Note, into shares of Common Stock of Uranium Resources,
Inc., in accordance with its terms, and directs that the shares of Common Stock
issuable and deliverable upon conversion be issued and delivered to the
undersigned unless a different note has been indicated below. If shares of
Common Stock are to be registered in the name of a person other than the
undersigned, the undersigned will pay any transfer taxes payable with respect
thereto.
Dated:
Signed:
------------------------------------------
Name of Noteholder
By:
----------------------------------------------
Its:
Fill in for registration of shares of Common Stock only if otherwise than in
name and address of the above named Noteholder:
- --------------------------- -------------------------------
(Name) (Address)
- ------------------------------- -------------------------------
(City and State) (Tax Identification Number)
(Please print name and address including zip code number)
<PAGE> 1
EXHIBIT 10.34
URANIUM RESOURCES, INC.
6.5% SECURED CONVERTIBLE NOTE
$4,500,000.00 June 30, 1999
Note No.
FOR VALUE RECEIVED, the undersigned URANIUM RESOURCES, INC., a Delaware
corporation (the "Obligor" or "Uranium Resources"), hereby promises to pay to
LINDNER ASSET ALLOCATION FUND, a series of LINDNER INVESTMENTS, a Massachusetts
business trust, or its registered assigns (the "Purchaser") on December 31, 2000
the principal sum of FOUR MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS
($4,500,000.00), and to pay interest on the unpaid principal balance hereof from
the date hereof at a rate of 6.5% per annum. Payment of interest shall be
deferred until the maturity date. This Note and any interest thereon may not be
transferred except as provided in the Note and Warrant Purchase Agreement dated
May 25, 1995, between Obligor and Purchaser, as supplemented by the Note and
Warrant Exchange Agreement, dated March 23, 1998, and as further supplemented
and amended by the Note Exchange Agreement dated June 30, 1999 (the "Note and
Warrant Purchase Agreement").
This Note is issued pursuant to the Note and Warrant Purchase Agreement
and this Note and the holder hereof is entitled, equally and ratably with the
holders of all other Notes outstanding under the Note and Warrant Purchase
Agreement, to all of the benefits provided for thereby, including, but not
limited to the security granted to the Purchaser therein, and the benefits under
the Guaranty executed by the Mortgaging Subsidiary in connection therewith, and
shall be bound by all of the provisions set forth therein, to which Note
Purchase and Warrant Agreement reference is hereby made for a statement thereof.
This Note is supported by the Guaranty of the Mortgaging Subsidiary,
which Guaranty will be secured by a lien and security interest in and upon the
Mortgaging Subsidiary's interest in the Collateral and the Texas Real Property.
Subject to and upon compliance with the provisions of the Note and
Warrant Purchase Agreement, the Holder of this Note is entitled, at its option,
at any time, to convert this Note into fully paid and non-assessable shares of
Common Stock of the Obligor at the initial Conversion Price of $3.00 per share,
subject to such adjustment or adjustments, if any, of such Conversion Price and
the Common Stock issuable upon conversion, as may be required by the Note and
Warrant Purchase Agreement, upon surrender of this Note, duly endorsed or
assigned to the Obligor or in blank, to the Obligor, with the conversion notice
attached hereto, or accompanied by a separate written notice substantially in
the form of such conversion notice, duly executed by the Holder and stating that
the Holder hereof elects to convert this Note, or if less than the entire
principal amount hereof is to be converted, the portion hereof to be converted,
all in accordance with the provisions of the Note and Warrant Purchase
Agreement.
<PAGE> 2
This Note is subject to mandatory conversion into shares of Common
Stock upon the occurrence of a Mandatory Conversion Event, as set forth in the
Note and Warrant Purchase Agreement. Accrued but unpaid interest is subject, at
the option of the Holder, to conversion into shares of Common Stock or, at the
option of the Holder, such interest shall be paid over a period of 18 months
after the earlier to occur of the maturity date or the Mandatory Conversion
Event, as set forth in the Note and Warrant Purchase Agreement.
Except as otherwise provided in the Note and Warrant Purchase
Agreement, no payment or adjustment is to be made on conversion for interest
accrued hereon or for dividends issued on securities issued on conversion.
No fractional shares will be issued on conversion, but instead of any
fractional interest, the Obligor shall pay a cash adjustment as provided in the
Note and Warrant Purchase Agreement.
In the event any action is taken to collect or enforce the indebtedness
evidenced by this Note (the "Indebtedness") or any part thereof, the Obligor and
each endorser hereof agrees to pay, in addition to the principal and interest
due and payable hereon, all costs of collecting this Note, including reasonable
attorneys' fees and expenses. These costs shall include any expenses incurred by
the Purchaser in any bankruptcy, reorganization or other insolvency proceeding.
Acceptance by the Purchaser of any payment in an amount less than the
amount then due and owing shall be deemed an acceptance on account only, and the
failure to pay the entire amount then due and owing shall cause the Purchaser
and endorsers to remain in default.
The liability of the Obligor and any endorsers hereof, shall be joint
and several, absolute and unconditional, without regard to the liability of any
other party hereunder or under any other document or instrument executed in
connection with this Note.
No delay or omission of any holder in exercising any right or rights
shall operate as a waiver of such right or any other rights. Waiver on one
occasion shall not be construed as a bar to or waiver of any right or remedy on
any future occasion.
The liability of the Obligor under this Note (and the liability of any
endorsers and/or Guarantors of this Note) shall not be discharged, diminished or
in any way impaired by: (a) the release, impairment, discharge, substitution,
exchange, modification of or failure to obtain foreclose or realize on any
guaranty or any security granted Purchaser by any party for the Indebtedness;
(b) any waiver by Purchaser or failure to enforce or exercise rights under any
of the terms, covenants or conditions of this Note or any guaranty; (c) the
granting of any renewal, indulgence, extension of time to Obligor, or any other
obligors of the Indebtedness. or (d) the addition or release of any person or
entity primarily or secondarily liable for the Indebtedness.
In no event shall the interest rate charged or received hereunder at
any time exceed the maximum interest rate permitted under applicable law.
Payments of interest received by Purchaser hereunder which would otherwise cause
the interest rate hereunder to exceed such
<PAGE> 3
maximum interest rate shall, to the extent of such excess, be deemed to be (and
deemed to have been contracted as being) prepayments of principal and applied as
such.
Under certain circumstances, as specified in the Note and Warrant
Purchase Agreement, the principal of this Note may be declared due and payable
in the manner and with the effect provided in the Note and Warrant Purchase
Agreement.
Transfer of this Note is subject to the Company's right of first offer
as set forth in the Note and Warrant Purchase Agreement.
This Note shall be binding upon the undersigned and its successors and
assigns and shall inure to the benefit of Purchaser, its successors and assigns.
Every person and entity at any time liable for the payment of this Note hereby
waives demand, presentment, protest, notice of protest, note of nonpayment due
and all other requirements otherwise necessary to hold them immediately liable
for payment hereunder.
This Note and the Note and Warrant Purchase Agreement are governed by
and shall be construed and enforced in accordance with Missouri law.
URANIUM RESOURCES, INC.
By:
--------------------------------
President
THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT AND HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"). THIS NOTE MAY NOT BE
PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF REGISTRATION UNDER THE 1933
ACT PROVIDED, HOWEVER, THAT THIS NOTE MAY BE PLEDGED OR OTHERWISE TRANSFERRED
PURSUANT TO AN EXEMPTION FROM REGISTRATION, INCLUDING, BUT NOT LIMITED TO, THOSE
PROVIDED IN RULE 144,144A OR 145 OR REGULATION S UNDER THE 1933 ACT. TRANSFER OF
THIS NOTE IS ALSO SUBJECT TO THE RESTRICTIONS, TERMS AND CONDITIONS SET FORTH IN
THAT CERTAIN NOTE AND WARRANT PURCHASE AGREEMENT DATED MAY 25, 1995, AS AMENDED,
AMONG URANIUM RESOURCES, INC., LINDNER INVESTMENTS, A COPY OF WHICH IS AVAILABLE
FOR INSPECTION AT THE OFFICE OF URANIUM RESOURCES, INC., AND WILL BE MADE
AVAILABLE BY URANIUM RESOURCES, INC. UPON WRITTEN REQUEST.
<PAGE> 4
ASSIGNMENT
I/we assign and transfer $ principal amount of this Note No. R- to
- ------------------------------------------------------------------------------
(Print or type name, address and zip code of assignee)
Insert social security or other identifying number of assignee: ________________
and irrevocably appoint as my/our agent and attorney-in fact to transfer this
Note or the portion hereof which has been so assigned, on the books of the
Company.
The agent may substitute another to act for him or her.
Dated: Signed:
- ---------------------------------
------------------------------------------
Signature Guaranteed By: [Name of Noteholder--Sign exactly as name
appears on the first page of this Note]
- ---------------------------------
By:
------------------------------------------
Its:
<PAGE> 5
NOTICE OF CONVERSION
TO Uranium Resources, Inc.:
The undersigned owner of this Secured Convertible Note hereby irrevocably
exercises the option to convert $ _______________principal amount of this
Secured Convertible Note, into shares of Common Stock of Uranium Resources,
Inc., in accordance with its terms, and directs that the shares of Common Stock
issuable and deliverable upon conversion be issued and delivered to the
undersigned unless a different note has been indicated below. If shares of
Common Stock are to be registered in the name of a person other than the
undersigned, the undersigned will pay any transfer taxes payable with respect
thereto.
Dated:
Signed:
-------------------------------------
Name of Noteholder
By:
-----------------------------------------
Its:
Fill in for registration of shares of Common Stock only if otherwise than in
name and address of the above named Noteholder:
- --------------------------- -------------------------------
(Name) (Address)
- ------------------------------- -------------------------------
(City and State) (Tax Identification Number)
(Please print name and address including zip code number)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 346,122
<SECURITIES> 585,055
<RECEIVABLES> 5,883
<ALLOWANCES> 0
<INVENTORY> 1,053,874
<CURRENT-ASSETS> 2,162,542
<PP&E> 99,750,375
<DEPRECIATION> (59,477,281)
<TOTAL-ASSETS> 45,506,638
<CURRENT-LIABILITIES> 1,696,003
<BONDS> 6,279,075
0
0
<COMMON> 12,409
<OTHER-SE> 31,469,462
<TOTAL-LIABILITY-AND-EQUITY> 45,506,638
<SALES> 1,037,862
<TOTAL-REVENUES> 1,037,862
<CGS> 2,249,974
<TOTAL-COSTS> 3,256,556
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 76,844
<INCOME-PRETAX> (2,190,732)
<INCOME-TAX> (263,810)
<INCOME-CONTINUING> (1,926,922)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,926,922)
<EPS-BASIC> (.16)
<EPS-DILUTED> (.16)
</TABLE>
