BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2013

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S.") and include the accounts of URI and its wholly-owned subsidiaries (collectively the "Company"). All significant intercompany transactions have been eliminated in consolidation.

Reverse Stock Split

Reverse Stock Split

Immediately following the close of trading on January 22, 2013, the Company completed a 1 for 10 reverse stock split for its common stock. With the reverse stock split, every ten shares of the Company's issued and outstanding common stock were combined into one issued and outstanding share of common stock. The reverse stock split had no effect on the par value of the shares or the authorized number of shares of the Company. The reverse split reduced the number of URI's outstanding common stock from approximately 161.1 million shares to approximately 16.1 million shares. All share data herein has been retroactively adjusted for the reverse stock split.

Consolidated Statements of Cash Flows

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. The Company maintains cash deposits in excess of federally insured limits. The Company monitors the soundness of the financial institution and believes the Company's risk is negligible.

Uranium Properties

Uranium Properties

Expenditures related to acquisition of mineral rights are capitalized as incurred. Exploration costs related to locating areas of potential mineralization are expensed as incurred. Commercial feasibility is established in compliance with the U.S. Securities and Exchange Commission Industry Guide 7, and consists of identifying that part of a mineral deposit that can be economically and legally extracted or produced at the time of the reserve determination. After declaring proven or probable reserves for an area of interest in accordance with Industry Guide 7, expenditures specific to the area of interest for further development are capitalized. All properties with significant acquisition or incurred costs are evaluated for their realizability on a property-by-property basis. Any impairment of such costs is recognized through a reduction in the net carrying value of the asset. (See Note 4—"PROPERTY, PLANT AND EQUIPMENT").

Depreciation and Depletion. During the periods that our facilities are not in production, depletion on our mineral interests, permits, licenses and development properties are suspended. Depreciation and depletion of our plant facilities, machinery and equipment continues in accordance with the level of stand-by activity being conducted at each site.

Other ancillary plant equipment and vehicles are depreciated using a straight line method based upon the estimated useful lives of the assets.

Other Property, Plant and Equipment

Other Property, Plant and Equipment

Other property, plant and equipment consists of corporate office equipment, furniture and fixtures and transportation equipment. Depreciation on other property is computed based upon the estimated useful lives of the assets. Repairs and maintenance costs are expensed as incurred. Gain or loss on disposal of such assets is recorded as other income or expense as such assets are disposed.

Restricted Cash

Restricted Cash

At December 31, 2013 and 2012, the Company had pledged certificates of deposit and money market accounts of $4,011,000 and $9,492,000, respectively, in order to collateralize performance bonds required for future restoration and reclamation obligations related to the Company's South Texas production and development properties. These funds are not readily available to the Company and are not included in cash equivalents.

Asset Retirement Obligations

Asset Retirement Obligations

Various federal and state mining laws and regulations require the Company to reclaim the surface areas and restore underground water quality for its ISR projects to the pre-existing or background average quality after the completion of mining. The Company records the estimated present value of reclamation liabilities and increases the carrying amount of the related asset. Reclamation costs are allocated to expense over the life of the related assets and are periodically adjusted to reflect changes in the estimated present value resulting from the passage of time and revisions to the estimates of either the timing or amount of the reclamation and remediation costs.

Future reclamation and remediation costs are accrued based on management's best estimate at the end of each period of the costs expected to be incurred at each project. Such estimates are determined by the Company's engineering studies calculating the cost of future surface and groundwater activities.

The following table shows the change in the balance of the asset retirement obligation during the years ended December 31, 2013 and 2012:

	December 31,

	2013			2012
Reserve for future restoration and reclamation costs at January 1	$	4,498,057		$	4,735,759
Changes in cash flow estimates		584,025			1,444,406
Costs incurred		(1,638,214	)		(1,767,289	)
Accretion expense		389,740			85,181


Reserve for future restoration and reclamation costs at December 31,	$	3,833,608		$	4,498,057

Contingent Liabilities-Off Balance Sheet Arrangements

Contingent Liabilities—Off Balance Sheet Arrangements

In February 2013, the Company secured $9 million in new surety bonds from Lexon Insurance Company ("Lexon") for the benefit of the Texas Commission on Environmental Quality for remediation and reclamation activities at the Company's South Texas projects. The collateral requirements for these new bonds require the Company to post 40% of the face amount of the bonds ($3.6 million) in cash collateral as a condition of their terms. These bonds replaced the existing $9.0 million of fully cash collateralized financial surety instruments that previously provided the financial surety requirements for the projects. In the event that Lexon is required to perform under its bonds or the bonds are called by the state agencies, the Company would be obligated to pay costs incurred by Lexon that exceeded the collateral amounts.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The carrying amounts reported in the balance sheets for cash and cash equivalents, receivables, accounts payable and accrued liabilities approximate fair values because of the immediate or short-term maturity of these financial instruments. The carrying amount of the convertible debt instrument is being recorded at amortized cost using the effective interest rate method. As of December 31, 2013, the estimated fair value of the derivative liability was $2,169,408. The value of the embedded derivative is being recorded at its fair value using the Black-Scholes option pricing model.

The following table presents information about the Company's liabilities that are measured at fair value on a recurring basis as of December 31, 2013, and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value. No items were recorded at fair value on a recurring basis as of December 31, 2012. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets of identical assets or liabilities. Fair values determined by Level 2 inputs utilize data points that are observable such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the assets or liability.

	Liabilities at Fair Value, December 31		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

December 31, 2013:
Derivative liability—convertible debenture	$	2,169,408	$	—	$	2,169,408	$	—


Total	$	2,169,408	$	—	$	2,169,408	$	—

Derivative Financial Instruments

Derivative Financial Instruments

The Company reviews the terms of its equity instruments and other financing arrangements to determine whether or not there are embedded derivative instruments that are required to be accounted for separately as a derivative financial instrument. Also, in connection with the issuance of financing instruments, the Company may issue freestanding options or warrants that may, depending on their terms, be accounted for as derivative instrument liabilities, rather than as equity. The Company may also issue options or warrants to non-employees in connection with consulting or other services.

Derivative financial instruments are measured at their fair value. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. The Company uses the Black-Scholes option pricing model to estimate the fair value of the derivative instruments.

The classification of derivative instruments, including whether or not such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period. If reclassification is required, the fair value of the derivative instrument, as of the determination date, is reclassified. Any previous charges or credits to income for changes in the fair value of the derivative instrument are not reversed. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.

Earnings Per Share

Earnings Per Share

All per share data herein has been retroactively adjusted for the 1 for 10 reverse stock split that occurred following the close of trading on January 22, 2013.

Net earnings (loss) per common share—basic has been calculated based on the weighted average shares outstanding during the year and net earnings (loss) per common share—diluted has been calculated assuming the exercise or conversion of all dilutive securities. Due to net losses incurred for 2013 and 2012 there were no dilutive securities included in these years as their inclusion would be anti-dilutive.

The potential dilutive common stock that was excluded from the calculation of diluted earnings per share was 1,380,826 in 2013 and 403,274 in 2012.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the U.S. requires management to make certain estimates and assumptions. Such estimates and assumptions may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The more significant areas requiring the use of management estimates include mineral reserve estimation; useful asset lives for depreciation, depletion and amortization; environmental obligations; future restoration and reclamation costs; share based compensation expense; derivative liability and asset impairment, including estimates used to derive future cash flows associated with those assets.

Specifically regarding uranium properties, significant estimates were utilized in determining the carrying value of these assets. These assets have been recorded at their estimated net realizable value for impairment purposes, which is less than cost. The actual value realized from these assets may vary significantly from these estimates based upon market conditions, financing availability and other factors. Future market conditions in particular can be difficult to predict and measure because of the impact of events that affect public acceptance of nuclear energy, the limited size of the market for the use of uranium, changes in the prices of alternative energy sources, development of new low-cost alternative energy sources and other factors.

Regarding the reserve for future restoration and reclamation costs, significant estimates were utilized in determining the future costs to complete the groundwater restoration and surface reclamation at our ISR sites. Estimating future costs can be difficult and unpredictable because they are based principally on current legal and regulatory requirements and site closure plans that may change materially. The laws and regulations governing closure and remediation in a particular jurisdiction are subject to review at any time and may be amended to impose additional requirements and conditions which may cause our provisions for environmental liabilities to be underestimated and could materially affect the Company's financial position or results of operations. Estimates of future restoration and reclamation costs are also subject to operational risks such as acceptance of treatment techniques or other operational changes.

Also, the calculation of reserves, other mineralized material and grading are estimates and depend upon geological interpretation and statistical inferences or assumptions drawn from drilling and sampling analysis, which may prove to be unpredictable. There is a degree of uncertainty attributable to the calculation of reserves, mineralized material and corresponding grades. Until reserves and other mineralized materials are actually mined and processed, the quantity of ore and grades must be considered as an estimate only. In addition, the quantity of reserves and other mineralized materials and ore may vary depending on the price of uranium. Any material change in the quantity of reserves, other mineralized materials, mineralization or grade may affect the economic viability of our properties.

Risks and Uncertainties

Risks and Uncertainties

Historically, the market for uranium has experienced significant price fluctuations. Prices are significantly impacted by global supply and demand, which is affected by the demand for nuclear power, political, and economic conditions, governmental legislation in uranium producing and consuming countries, and production levels and costs of production of other producing companies. Increases or decreases in prices received could have a significant impact on the Company's future results of operations.

Reclassifications

Reclassifications

Certain reclassifications have been made to the prior years' financial statements to conform to the current year presentation. These reclassifications had no effect on previously reported results of operations or retained earnings.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In January 2013, the Financial Accounting Standards Board ("FASB") issued ASU No. 2013-01, "Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities." ASU 2013-01 states the intended scope of disclosures required by ASU No. 2011-11 "Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities" apply to derivatives and hedging transactions. This pronouncement is effective for fiscal years, and interim periods within those years, beginning after January 1, 2013. The adoption of this guidance is not anticipated to have an effect on the Company's consolidated financial position, results of operations, or cash flows.