10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2014

Or

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

For the transition period from to

Commission file number 001-33404

                    URANIUM RESOURCES, INC.           

(Exact Name of Issuer as Specified in Its Charter)

DELAWARE	75-2212772
(State of Incorporation)	(I.R.S. Employer Identification No.)

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

(Address of Principal Executive Offices, Including Zip Code)

                                (303) 531-0470                             

(Issuer’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o	Smaller reporting company x
(Do not check if a smaller reporting company)

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

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

Title of Each Class of Common Stock	Number of Shares Outstanding
Common Stock, $0.001 par value	25,220,471 as of November 6, 2014

URANIUM RESOURCES, INC.

TABLE OF CONTENTS

ITEM 1. FINANCIAL STATEMENTS

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

URANIUM RESOURCES, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
		September 30,	December 31,
	Notes	2014	2013
ASSETS
Current Assets:
Cash and cash equivalents		$         7,887,315	$         1,117,303
Receivables, net		361,550	47,578
Prepaid and other current assets		836,037	638,100
Total Current Assets		9,084,902	1,802,981
Property, plant and equipment, at cost:
Property, plant and equipment		96,415,388	96,407,310
Less accumulated depreciation, depletion and impairment		(65,780,634)	(65,566,411)
Net property, plant and equipment	2	30,634,754	30,840,899
Restricted cash		4,010,968	4,010,937
Total Assets		$       43,730,624	$       36,654,817
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable		$            754,272	$         1,243,169
Accrued liabilities		1,337,767	1,775,491
Current portion of asset retirement obligations	7	203,553	-
Current portion of capital leases		6,491	10,543
Total Current Liabilities		2,302,083	3,029,203
Asset retirement obligations, net of current portion	7	3,839,102	3,833,608
Derivative liability - convertible loan	4	3,811,876	2,169,408
Convertible loan, related party	3	3,885,197	1,024,715
Other long-term liabilities and deferred credits		1,350,000	1,350,000
Long-term capital leases, less current portion		-	4,495
Total Liabilities		15,188,258	11,411,429
Commitments and Contingencies	3,5,6,10
Stockholders' Equity:
Common stock, 200,000,000 shares authorized, $.001 par value;
25,167,846 and 19,820,258 shares issued and outstanding, respectively	8	25,172	19,824
Paid-in capital	8,9	230,579,521	216,703,028
Accumulated deficit		(202,052,909)	(191,470,046)
Less: Treasury stock (3,813 shares), at cost		(9,418)	(9,418)
Total Stockholders' Equity		28,542,366	25,243,388
Total Liabilities and Stockholders' Equity		$       43,730,624	$       36,654,817

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

1

URANIUM RESOURCES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
		Three Months Ended September 30,		Nine Months Ended September 30,
	Notes	2014	2013	2014	2013
			(Restated)		(Restated)
Operating expenses
Mineral property expenses	6	$          (986,623)	$          (940,017)	$       (2,928,995)	$       (3,682,470)
General and administrative		(2,202,952)	(2,174,862)	(7,001,670)	(6,749,980)
Accretion of asset retirement obligations	7	(205,995)	(97,435)	(307,612)	(292,305)
Depreciation and amortization		(68,271)	(108,720)	(245,977)	(341,680)
Impairment of uranium properties		-	(3,701)	-	(683,356)
Total operating expenses		(3,463,841)	(3,324,735)	(10,484,254)	(11,749,791)
Other income/(expenses)
Gain on derivatives	4	145,010	-	1,604,657	-
Interest expense	3	(679,168)	(3,859)	(1,717,234)	(253,485)
Other income, net		3,615	55,703	13,968	60,238
Total other income/(expense)		(530,543)	51,844	(98,609)	(193,247)
Net loss		$       (3,994,384)	$       (3,272,891)	$     (10,582,863)	$     (11,943,038)
LOSS PER SHARE - BASIC AND DILUTED		$                (0.16)	$                (0.17)	$                (0.44)	$                (0.63)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING		24,954,029	19,820,258	23,986,792	18,995,957

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

2

URANIUM RESOURCES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS AND SUPPLEMENTAL CASH FLOW INFORMATION
(Unaudited)
		Nine Months Ended September 30,
	Notes	2014	2013
			(Restated)
Operating activities:
Net loss		$   (10,582,863)	$   (11,943,038)
Reconciliation of net loss to cash used in operations:
Accretion of asset retirement obligations	7	307,612	292,305
Amortization of debt discount		1,182,607	-
Change in fair value of derivative liability	4	(1,604,657)	-
Decrease in restoration and reclamation accrual	7	(131,562)	(1,269,663)
Depreciation and amortization		245,977	341,680
Impairment of uranium properties		-	683,356
Stock compensation expense	9	737,270	299,286
Common stock issued for land obligation	8	342,595	-
Other non-cash items, net		23,174	73,875
Effect of changes in operating working capital items:
Decrease in receivables		45,016	258,532
Increase in prepaid and other current assets		(272,968)	(17,274)
Increase/(decrease) in payables, accrued liabilities and deferred credits		60,462	(231,931)
Net cash used in operating activities		(9,647,337)	(11,512,872)
Cash flows from investing activities:
Reduction in restricted cash		-	5,481,015
Reductions in uranium properties		-	(122,165)
Purchases of equipment		(6,834)	-
Net cash provided by/(used in) investing activities		(6,834)	5,358,850
Cash flows from financing activities:
Proceeds from convertible loan	3	5,000,000	-
Payments on borrowings		(8,547)	(103,173)
Issuance of common stock, net	8	11,519,950	3,599,432
Payment of minimum withholding taxes on net share settlements of equity awards		(87,220)	-
Net cash provided by financing activities		16,424,183	3,496,259
Net increase/(decrease) in cash and cash equivalents		6,770,012	(2,657,763)
Cash and cash equivalents, beginning of period		1,117,303	4,664,596
Cash and cash equivalents, end of period		$       7,887,315	$       2,006,833
Cash paid during the period for:
Interest		$            21,301	$              2,970
Other non-cash transactions:
Common stock issued for payment of convertible loan fees and interest	8	$          676,409	$                      -
Common stock issued for repayment of short-term loan principal and interest		-	5,095,833
Common stock issued for the settlement of litigation	8	333,847	-
Common stock issued for services		-	291,500
Restricted stock issued for services		-	47
Total other non-cash transactions for the period:		$       1,010,256	$       5,387,380

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

3

URANIUM RESOURCES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
	Common Stock			Accumulated	Treasury
	Shares	Amount	Paid-In Capital	Deficit	Stock	Total
Balances, January 1, 2014	19,820,258	$  19,824	$    216,703,028	$   (191,470,046)	$  (9,418)	$  25,243,388
Net loss	-	-	-	(10,582,863)	-	(10,582,863)
Common stock issued, net of issuance costs	4,747,598	4,749	11,874,191	-	-	11,878,940
Common stock issued for loan interest and fees	253,376	253	676,156	-	-	676,409
Common stock issued for land obligations	127,359	127	342,468	-	-	342,595
Common stock issued for settlement of litigation	119,231	119	333,728	-	-	333,847
Stock compensation expense and related share issuances, net of shares withheld for the payment of taxes	100,024	100	737,170	-	-	737,270
Minimum withholding taxes on net share settlements of equity awards	-	-	(87,220)	-	-	(87,220)
Balances, September 30, 2014	25,167,846	$  25,172	$    230,579,521	$   (202,052,909)	$  (9,418)	$  28,542,366

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

4

URANIUM RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. The accompanying statements should be read in conjunction with the audited financial statements included in Uranium Resources, Inc.’s 2013 Annual Report on Form 10-K. In the opinion of management, all adjustments (which are of a normal, recurring nature) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2014 are not necessarily indicative of the results that may be expected for any other period including the full year ending December 31, 2014.

Restatement of Previously Reported Consolidated Financial Information

On December 17, 2013, Uranium Resources, Inc. (collectively, the “Company,” “we,” “us,” or “URI”) filed an amended Quarterly Report on Form 10-Q/A (the “Form 10-Q/A”) to its Quarterly Report on Form 10-Q for the period ended September 30, 2013 to amend and restate the Company’s condensed consolidated financial statements and related disclosures as of September 30, 2013 and for the three and nine months ended September 30, 2013 and 2012 by reclassifying costs from property, plant and equipment to mineral property expenses. The consolidated financial statements and related disclosures in this Quarterly Report on Form 10-Q, as it relates to the period ended September 30, 2013, incorporate the effects of this restatement.

Recently Issued Accounting Pronouncements

In August 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update No. 2014-15 (ASU 2014-15), Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern, which provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements. The new standard requires management to perform interim and annual assessments of an entity's ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity's ability to continue as a going concern. The ASU applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted.

2. PROPERTY, PLANT AND EQUIPMENT

	September 30, 2014	December 31, 2013
	Net book value	Net book value
Uranium plant	$              9,108,225	$             9,190,480
Mineral rights and properties	19,782,751	19,749,754
Vehicles/depreciable equipment	1,486,519	1,591,061
Other property, plant and equipment	257,259	309,604
Total	$            30,634,754	$           30,840,899

3. DEBT

On November 13, 2013, the Company, together with each of its subsidiaries as guarantors, entered into a loan agreement (the “Loan Agreement”) with Resource Capital Fund V L.P. (“RCF”), whereby RCF agreed, subject to the terms and conditions set forth in the Loan Agreement, to provide a secured convertible loan facility of up to $15.0 million to the Company. The facility initially consisted of three tranches of $5.0 million each. RCF advanced $3.0 million of the first $5.0 million tranche shortly following the closing of the Loan Agreement and on January 29, 2014, the Company’s stockholders, excluding RCF, approved the Loan Agreement and the issuance of shares thereunder. Following such approval, RCF advanced the remaining $2.0 million of the first tranche on February 4, 2014. On April 29, 2014, the Company and RCF executed an amendment to the Loan Agreement which reduced the amount available thereunder from $15.0 million to $8.0 million, and on April 30, 2014, the Company requested, and RCF advanced, the final $3.0 million available under the Loan Agreement.  The total amount drawn under the Loan Agreement after receipt ofthis advance is $8.0 million.  No additional amounts may be drawn under the Loan Agreement.

5

URANIUM RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Amounts drawn under the Loan Agreement mature on December 31, 2016 and bear interest at 12% per annum through January 29, 2014 and 10% per annum thereafter, payable quarterly in arrears in shares of the Company’s common stock or, at RCF’s election, in cash.  Additionally, the Company paid a commitment fee quarterly equal to 1% of the amount available, but not drawn, under the Loan Agreement.  In connection with the Loan Agreement the Company also paid, in shares of the Company’s common stock, a 2% loan establishment fee in the amount of $300,000 to RCF. The number of shares to be issued as payment for interest and fees is determined based upon the volume weighted-average price (“VWAP”) of the Company’s common stock for the 20 trading days preceding the last day of each quarter for interest payments and commitment fees and the 20 trading days preceding October 17, 2013 for the loan establishment fee.  Accordingly, the Company has issued the following shares of common stock for settlement of interest expense, commitment fees and the establishment fee:

	Amount ($)	Shares of common stock issued	VWAP	Date of issuance
Establishment fee	$      300,000	117,188	$  2.5600	February 4, 2014
Q4 2013 Interest payment and commitment fee	63,083	21,218	$  2.9731	February 4, 2014
Q1 2014 Interest payment and commitment fee	138,167	45,737	$  3.0209	April 10, 2014
Q2 2014 Interest payment and commitment fee	175,159	69,233	$  2.6561	July 25, 2014
Q3 2014 Interest payment	200,000	72,477	$  2.7595	October 2, 2014
Total	$      876,409	325,853

As of September 30, 2014, interest expense of $200,000 relating to the three months ended September 30, 2014 was included in accrued liabilities on the Company’s Consolidated Balance Sheets.  

The Company’s obligations under the Loan Agreement are secured by pledges on the equity interests of the Company’s subsidiaries and a lien on substantially all of the assets of the Company and its subsidiaries. The Company may prepay all or any portion of the amounts drawn under the Loan Agreement without penalty, subject to a minimum prepayment amount of $5.0 million or (if lower) the full amount then outstanding. Prepaid amounts may not be redrawn. The loan agreement contains customary representations, warranties, covenants and events of default and grants RCF the right to designate two nominees to the Company’s Board of Directors so long as any obligations remain outstanding under the Loan Agreement.

RCF may convert amounts drawn under the Loan Agreement into shares of the Company’s common stock at any time prior to maturity on December 31, 2016. The conversion price is initially set at $2.60 per share and is subject to customary anti-dilution adjustments and further downward adjustment, subject to a floor of $1.00 per share, in the case of certain equity issuances by the Company before November 13, 2014. As of November 5, 2014, RCF owned approximately 6.8 million shares or 27% of the Company’s outstanding common stock. If RCF were to convert the entire $8.0 million outstanding under the Loan Agreement, assuming a conversion price of $2.60 per share, RCF would receive approximately 3.1 million shares of the Company’s common stock, and RCF’s ownership percentage in the Company would increase to approximately 35%.

4. DERIVATIVE LIABILITY

The conversion feature of the Loan Agreement was determined to be an embedded derivative under ASC 815 as the exercise price is subject to downward adjustment as discussed in Note 3 above and, therefore, does not meet the “fixed-for-fixed” criteria. As a result, the conversion feature of the convertible Loan Agreement is required to be bifurcated and classified as a derivative liability recorded at an initial fair value and subsequently marked-to-market each period with the changes in fair value reported in the Company’s results of operations. The initial fair value measurement of the derivative liability as determined on the date of each advance has been recognized as a debt discount and will be amortized over the life of the Loan Agreement.

The fair value of the derivative liability as of September 30, 2014 has been calculated using the Black-Scholes option pricing model with the following assumptions:

Risk-free interest rate	1.07%
Expected life of derivative liability	2.25 years
Expected volatility	87.85%
Dividend rate	0.00%

6

URANIUM RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

The change in the derivative liability related to the conversion feature is as follows:

	Derivative
	Liability
Fair value of derivative liability at December 31, 2013	$  2,169,408
Fair value of $2,000,000 drawdown	1,555,806
Fair value of $3,000,000 drawdown	1,691,319
Change in fair value of derivative liability	(1,604,657)
Fair value of derivative liability at September 30, 2014	$  3,811,876

As discussed in Note 3 above, the potential for downward adjustment of the exercise price expires on November 13, 2014 and the exercise price will remain fixed at $2.60 for the remainder of the term of the Loan Agreement.  As a result, the conversion feature will no longer qualify as an embedded derivative instrument and the fair value of the derivative as of November 13, 2014 will be reclassified to equity with no further mark-to-market adjustments.

5. FAIR VALUE OF FINANCIAL INSTRUMENTS

Our financial instruments consist of cash equivalents, restricted cash and derivative liabilities.  U.S. GAAP defines “fair value” as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price) and establishes a fair-value hierarchy that prioritizes the inputs used to measure fair value using the following definitions (from highest to lowest priority):

·

Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

·

Level 2 — Observable inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data by correlation or other means.

·

Level 3 — Prices or valuation techniques requiring inputs that are both significant to the fair-value measurement and unobservable.

The Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents.  The Company continually monitors its positions with, and the credit quality of, the financial institutions with which it invests.  Periodically throughout the year, the Company has maintained balances in various U.S. operating accounts in excess of U.S. federally insured limits.  

The following table presents information about financial instruments recognized at fair value on a recurring basis as of September 30, 2014 and December 31, 2013, and indicates the fair value hierarchy:

	September 30, 2014
	Level 1	Level 2	Level 3	Total
Assets
Restricted cash	$    4,010,968	$                -	$               -	$   4,010,968
Total financial assets	$    4,010,968	$                -	$              -	$   4,010,968
Liabilities
Derivative liabilities	$                   -	$                -	$ 3,811,876	$   3,811,876
Total financial liabilities	$                   -	$                -	$ 3,811,876	$   3,811,876

7

URANIUM RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

	December 31, 2013
	Level 1	Level 2	Level 3	Total
Assets
Restricted cash	$    4,010,937	$                -	$              -	$   4,010,937
Total financial assets	$    4,010,937	$                -	$              -	$   4,010,937
Liabilities
Derivative liabilities	$                   -	$                -	$ 2,169,408	$   2,169,408
Total financial liabilities	$                   -	$                -	$ 2,169,408	$   2,169,408

6. MINERAL PROPERTY EXPENDITURES

Mineral property expenditures for the three and nine months ended September 30, 2014 and 2013 are as follows:

	Three months ended September 30,		Nine months ended September 30,
	2014	2013	2014	2013
		(restated)		(restated)
Restoration/Recovery expenses
Kingsville Dome project	$                    -	$        429,342	$        328,304	$     1,463,185
Rosita project	131,407	8,023	131,407	8,023
Vasquez project	-	-	26,766	-
Total Restoration/Recovery expenses	131,407	437,365	486,477	1,471,208
Standby care and maintenance expenses
Kingsville Dome project	209,565	54,569	502,628	130,177
Rosita project	20,667	61,537	258,119	257,970
Vasquez project	93,194	14,561	245,702	26,801
Total standby care and maintenance expenses	323,426	130,667	1,006,449	414,948
Land maintenance and holding costs	531,790	371,985	1,436,069	1,796,314
Total mineral property expenses	$        986,623	$        940,017	$     2,928,995	$     3,682,470

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URANIUM RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

7. ASSET RETIREMENT OBLIGATIONS  

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

	September 30,	December 31,
	2014	2013
Balance, beginning  of period	$      3,833,608	$ 4,498,057
Changes in cash flow estimates	32,997	584,025
Costs incurred	(131,562)	(1,638,214)
Accretion expense	307,612	389,740
Balance, end of period	4,042,655	3,833,608
Less:  Current portion	(203,553)	-
Non-current Portion	$      3,839,102	$ 3,833,608

The Company’s current liability of $203,553 consists of the estimated costs associated with current plugging and abandonment activities and planned surface reclamation activities during 2015 at the Company’s Rosita project.  The change in cash flow estimates for the period ended September 30, 2014 was due to a change in the timing of planned restoration activities at the Rosita project.  The Company is currently performing plugging and abandonment activities at its Rosita project.  

8. COMMON STOCK

Common stock issued, net of issuance costs

Registered Direct Offering

On February 12, 2014, the Company completed a registered direct offering with the issuance of 3,960,000 shares of common stock at a price of $2.60 per share for net proceeds of $9,307,245.

At-the-market Sales

On October 31, 2011, the Company entered into an At-The-Market Sales Agreement with BTIG LLC (the “ATM Sales Agreement”), a major global securities trading firm that acts as our sales agent. Under the ATM Sales Agreement, the Company may from time to time sell shares of its common stock having an aggregate offering price up to $15.0 million in “at-the-market” offerings, which shares are registered under the Company’s currently effective registration statement on Form S-3. The Company filed a prospectus supplement dated July 2, 2014 with the Securities and Exchange Commission in connection with the offering, relating to shares of its common stock having an aggregate offering price of up to $4.1 million. The Company pays BTIG a commission equal to 3.0% of the gross proceeds from the sale of any shares pursuant to the ATM Sales Agreement.

During the nine months ended September 30, 2014 the Company sold 788,186 shares of common stock for net proceeds of $2,586,358 under the ATM Sales Agreement, of which $358,988 of the proceeds were included in accounts receivable as of September 30, 2014.  The Company subsequently received this amount on October 1, 2014.  As of November 5, 2014, approximately $6.3 million of the aggregate $15.0 million remained available for future sales under the ATM Sales Agreement.

Common stock issued for loan interest and fees

As discussed in Note 3 above, unless RCF elects to receive cash, RCF receives common shares of the Company for the payment of interest owing on the Loan Agreement.  For the nine months ended September 30, 2014, the Company issued 253,376 common shares for the payment of $676,409 in interest and fees.

9

URANIUM RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Common stock issued for settlement of litigation

On April 15, 2014, the Company and a former executive of the Company, entered into a Settlement Agreement and General Release, under the terms of which it was agreed by the Company’s former executive to dismiss with prejudice claims he brought in a lawsuit against the Company.  As a result of this Settlement Agreement, the Company issued common shares to the Company’s former executive with a grant date fair value of $333,847.  The issuance of 119,231 shares of common stock was based upon a common share price of $2.80.

Common stock issued for settlement of land obligations

On August 8, 2014, the Company issued 127,359 shares of common stock with a grant date fair value of $342,595 to the Juan Tafoya Land Corporation in satisfaction of $337,500 of base rental payments due under the Uranium Mining Lease and Agreement, dated October 12, 2006, by and between Neutron Energy, Inc., a wholly owned subsidiary of the Company, and the Juan Tafoya Land Corporation, as amended by the First Amendment thereto, dated August 8, 2014, by and among the Company, Neutron Energy, Inc. and the Juan Tafoya Land Corporation.

On October 3, 2014, the Company entered into a Second Amendment to the Uranium Mining Lease and Agreement whereby, on October 6, 2014, the Company repurchased 91,631 shares of common stock from the Juan Tafoya Land Corporation for an aggregate purchase price of $248,383.

9. STOCK-BASED COMPENSATION

Stock-based compensation awards consist of stock options, restricted stock units and restricted stock awards issued under the Company’s equity incentive plans which include: the 2013 Omnibus Incentive Plan (the “2013 Plan”); the 2007 Restricted Stock Plan (the “2007 Plan”); the Amended and Restated 2004 Directors’ Stock Option and Restricted Stock Plan (the “2004 Directors’ Plan”); the 2004 Stock Incentive Plan (the “2004 Plan”); and the 1995 Stock Incentive Plan (the “1995 Plan”). Upon approval of the 2013 Plan by the Company’s stockholders on June 4, 2013, the Company’s authority to grant new awards under all plans other than the 2013 Plan was terminated.  As of September 30, 2014, 642,699 shares were available for future issuances under the 2013 Plan.  For the three and nine months ending September 30, 2014, the Company recorded stock-based compensation cost of $273,996 and $737,270, respectively, which has been included in general and administrative expense.

Bonus Shares

In March 2014, in accordance with the Company’s short-term incentive plan, the Company awarded its executives bonuses that were paid out in common stock of the Company.  The bonus shares were valued using the closing share price of the Company’s common stock on the date of grant.  The bonus shares vested immediately and had a grant date fair value of $191,730.

Stock Options

The following table summarizes stock options outstanding and changes during the nine months ended September 30, 2014:

	Number of stock options	Weighted Average Exercise Price
Stock options outstanding at January 1, 2014	309,479	$         19.75
Granted	-	-
Exercised	-	-
Expired	(131,250)	11.60
Canceled or forfeited	(14,000)	31.31
Stock options outstanding at September 30, 2014	164,229	$         25.28
Stock options exercisable at September 30, 2014	117,564	$         34.01

10

URANIUM RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

The following table summarizes stock options outstanding and exercisable by stock option plan at September 30, 2014:

	Outstanding Options		Options Exercisable
Stock Option Plan	Number of Options Outstanding	Weighted Average Exercise  Price	Number of Options Exercisable	Weighted Average Exercise  Price
1995 Stock Incentive Plan	8,750	$            31.20	8,750	$             31.20
2004 Stock Incentive Plan	75,481	11.76	38,814	20.28
2004 Director's Plan	74,998	39.68	70,000	41.98
2013 Omnibus Incentive Plan	5,000	2.99	-	-
	164,229	$            25.28	117,564	$             34.01

Total estimated unrecognized compensation cost from unvested stock options as of September 30, 2014 was approximately $107,589, which is expected to be recognized over a weighted-average period of 1.73 years.

Restricted Stock Units

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

The following table summarizes RSU activity during the period ended September 30, 2014:

	Number of restricted stock units	Weighted-Average Grant Date Fair Value
RSUs outstanding at January 1, 2014	280,000	$             3.31
Granted	431,941	2.61
Forfeited	(29,778)	3.38
Vested	(76,886)	3.20
RSUs outstanding at September 30, 2014	605,277	$            2.82

Total estimated unrecognized compensation cost from unvested RSUs as of September 30, 2014 was approximately $1,133,404, which is expected to be recognized over a weighted-average period of 2.37 years.

Restricted Stock Awards

Time-based and performance-based restricted stock awards (“RSAs”) are valued using the closing share price of the Company’s common stock on the date of grant. Vesting based on performance criteria is generally based on the Company’s prior year performance as determined by the Compensation Committee of the Board of Directors at each vesting date, and the valuation of such grants assumes full satisfaction of all performance criteria. Employee participants who receive restricted stock awards have all of the rights of a shareholder, including the right to vote shares of restricted stock that are the subject of the grant and the right to receive any regular cash dividends paid out of current earnings.

11

URANIUM RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

The following table summarizes RSA activity during the period ended September 30, 2014:

	Number of RSAs	Weighted-Average Grant Date Fair Value
RSAs outstanding at January 1, 2014	54,151	$                 5.49
Forfeited	(5,601)	5.39
Vested	(20,230)	5.58
RSAs outstanding at September 30, 2014	28,320	$                 5.44

The total estimated unrecognized compensation cost from the unvested RSA grants at September 30, 2014 was $118,380, which is expected to be recognized over the weighted-average vesting period of 1.15 years.

10. 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.

Basic and diluted loss per common share have been calculated based on the weighted-average shares outstanding during the period.  Potentially dilutive shares of 3,846,429 were excluded from the calculation of earnings per share because the effect on the basic loss per share would be anti-dilutive due to our net loss position for the quarter ended September 30, 2014.

11. COMMITMENTS AND CONTINGENCIES

The Company’s uranium recovery operations are subject to federal and state regulations for the protection of the environment, including water quality. These laws frequently change and generally become more restrictive. The ongoing costs of complying with such regulations have not been significant to the Company’s annual operating costs. Future 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 the Company’s accrual for costs. The Company believes its operations are in compliance with current environmental regulations.

12. SUBSEQUENT EVENT

On September 5, 2014, the Company, its wholly owned subsidiary Uranco Inc. and Rio Grande Resources Corporation entered into an Asset Exchange Agreement whereby the Company will acquire from Rio Grande Resources certain uranium properties located in South Texas near the Company’s processing facilities.  In exchange for the South Texas properties, the Company will transfer to Rio Grande Resources two parcels of fee-owned mineral rights and a royalty interest in the Roca Honda area of west-central New Mexico.  The Company is retaining certain leases, mining claims and fee-owned mineral interests on separate parcels in the Roca Honda area.  After completing customary due diligence and satisfying certain closing conditions, on November 6, 2014, the Company and Rio Grande Resources closed the transaction and effectuated the exchange of properties.

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

The following management’s discussion and analysis of the consolidated financial results and condition of URI for the three and nine months ended September 30, 2014 has been prepared based on information available to us as of November 5, 2014. This discussion should be read in conjunction with the unaudited Consolidated Financial Statements and notes thereto included herewith and the audited Consolidated Financial Statements of URI for the period ended December 31, 2013 and the related notes thereto filed with our Annual Report on Form 10-K, which have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). All amounts stated herein are in U.S. dollars, unless otherwise noted. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions.  Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including, but not limited to, those set forth elsewhere in this report. See “Cautionary Note Regarding Forward-Looking Statements.”

Introduction

Uranium Resources, Inc. was incorporated in 1977 to explore, develop and recover uranium. URI controls minerals rights encompassing approximately 200,000 acres in the prolific Grants Mineral Belt in New Mexico, which holds one of the largest known concentrations of sandstone-hosted uranium deposits in the world. We have two licensed processing facilities and properties in Texas, and a U.S. Nuclear Regulatory Commission license to recover up to three million pounds of uranium per year using the in situ recovery (“ISR”) process at certain properties in New Mexico. We acquired these properties over the past 25 years, along with an extensive uranium information database of historic drill-hole logs, assay certificates, maps and technical reports for the Western United States.

Highlights for the nine months ended September 30, 2014

·

Entry into an Asset Exchange Agreement

On September 5, 2014, the Company, its wholly owned subsidiary Uranco Inc. and Rio Grande Resources Corporation entered into an Asset Exchange Agreement whereby on November 6, 2014 the Company acquired from Rio Grande Resources certain uranium properties located in South Texas near the Company’s processing facilities.  In exchange for these South Texas properties, the Company transferred to Rio Grande Resources two parcels of fee-owned mineral rights and a royalty interest in the Roca Honda area of west-central New Mexico.  The Company has retained certain leases, mining claims and fee-owned mineral interests on separate parcels in the Roca Honda area.

·

Reduced Cash Burn Rate

The Company reduced its cash mineral property expenses and its general and administrative expenses by approximately 13% during the nine months ended September 30, 2014 as compared with the same period in 2013.  This reduction reflects the Company’s continuing efforts to reduce the cash burn rate.

·

Technical Reports

In April and June 2014, the Company completed Technical Reports consistent with Canadian National Instrument 43-101 standards for its Cebolleta and Juan Tafoya projects in New Mexico.

·

At-the-Market Sales

During the nine months ended September 30, 2014, the Company sold 788,186 shares of common stock for net proceeds of $2,586,358 under its ATM Sales Agreement. Under the ATM Sales Agreement, the Company may from time to time sell shares of its common stock having an aggregate offering price up to $15.0 million in “at-the-market” offerings, which shares are registered under the Company’s currently effective registration statement on Form S-3. The Company filed a prospectus supplement dated July 2, 2014 with the Securities and Exchange Commission in connection with the offering, relating to shares of its common stock having an aggregate offering price of up to $4.1 million.

13

·

Registered Direct Offering

On February 12, 2014, the Company completed a registered direct offering with the issuance of 3,960,000 shares of common stock at a price of $2.60 per share for net proceeds of $9,307,245.

·

Amendment to Loan Agreement

On April 29, 2014, the Company and RCF entered into the amendment to the Loan Agreement. The amendment reduced the amount available under the second tranche of the Loan Agreement from $5.0 million to $3.0 million and terminated RCF’s commitment relating to the $5.0 million third tranche. As a consequence, the aggregate amount available under the Loan Agreement decreased from $15.0 million to $8.0 million. Following execution of the amendment, the Company requested, and RCF advanced on April 30, 2014, the final $3.0 million available under the Loan Agreement. The total amount drawn under the Loan Agreement after receipt of this advance is $8.0 million. No additional amounts may be drawn under the Loan Agreement.  All other terms of the Loan Agreement remained unchanged.  This amendment was the result of the Company’s successful efforts to raise additional cash through equity transactions and reduce its cash burn rate which enabled the Company to lower the amount needed under the RCF Loan Agreement.

Results of Operations

Summary

Our consolidated net loss for the three months ended September 30, 2014 was $3,994,384, or $0.16 per share as compared with a consolidated net loss of $3,272,891, or $0.17 per share for the same period in 2013.  For the three months ended September 30, 2014, the increase in our consolidated net loss of $721,493 from the respective prior period was primarily the result of increases in interest expense of $675,309, including non-cash debt discount and establishment fee amortization of $484,978, and mineral property expenses of $46,606, which were partially offset by a gain on derivatives of $145,010.

Our consolidated net loss for the nine months ended September 30, 2014 was $10,582,863, or $0.44 per share as compared with a consolidated net loss of $11,943,038, or $0.63 per share for the same period in 2013.  For the nine months ended September 30, 2014, the decrease in our consolidated net loss of $1,360,175 from the respective prior period was primarily the result of a gain on derivatives of $1,604,657, a decrease in the impairment of uranium properties of $683,356, and a decrease in mineral property expenses of $753,475. These decreases were partially offset by an increase in interest expense of $1,463,749, including non-cash debt discount and establishment fee amortization of $1,182,607, as compared with the corresponding 2013 period.

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Mineral property expenses

Mineral property expenses for the three and nine months ended September 30, 2014 were $986,623 and $2,928,995, respectively, as compared with $940,017 and $3,682,470 for the 2013 periods.

The following table details our mineral property expenses for the three and nine months ended September 30, 2014 and 2013:

	Three months ended September 30,		Nine months ended September 30,
	2014	2013	2014	2013
		(restated)		(restated)
Restoration/Recovery expenses
Kingsville Dome project	$                    -	$        429,342	$        328,304	$     1,463,185
Rosita project	131,407	8,023	131,407	8,023
Vasquez project	-	-	26,766	-
Total Restoration/Recovery expenses	131,407	437,365	486,477	1,471,208
Standby care and maintenance expenses
Kingsville Dome project	209,565	54,569	502,628	130,177
Rosita project	20,667	61,537	258,119	257,970
Vasquez project	93,194	14,561	245,702	26,801
Total standby care and maintenance expenses	323,426	130,667	1,006,449	414,948
Land maintenance and holding costs	531,790	371,985	1,436,069	1,796,314
Total mineral property expenses	$        986,623	$        940,017	$     2,928,995	$     3,682,470

For the three months ended September 30, 2014, mineral property expenses increased by $46,606 as compared with the corresponding period in 2013.  This increase was primarily due to an increase in our land maintenance and holding costs of $159,805, which was the result of the timing of the $337,500 annual rental payment for our Juan Tafoya project.  During the 2013 period, this payment was made in the fourth quarter.  This was partially offset by a decrease in land holding costs related to certain claims that were not renewed during 2014.

For the nine months ended September 30, 2014, mineral property expenses decreased by $753,475 as compared with the corresponding period in 2013.  This decrease was mostly the result of the Company completing a settling pond clean-out project at the Kingsville Dome project and a staff reduction as the Company moved into the stabilization period at the Kingsville Dome and Vasquez projects.  

Also for both the three and nine months ended September 30, 2014, there was a shifting of expenses from restoration and recovery to standby care and maintenance as the Company completed most of its restoration and recovery programs during the first quarter 2014.

15

General and Administrative Charges

Significant expenditures for general and administrative expenses for the three and nine months ended September 30, 2014 and 2013 were:

	Three months ended September 30,		Nine months ended September 30,
	2014	2013	2014	2013
Stock compensation expense	$          273,996	$          115,969	$         737,270	$         299,286
Salaries and payroll burden	593,429	724,299	2,041,980	2,369,509
Legal, accounting, public company expenses	707,551	706,979	2,586,564	2,128,389
Insurance and bank fees	164,244	209,855	508,383	552,589
Consulting and professional services	227,216	94,493	434,159	585,209
Office expenses	168,543	200,554	471,722	522,009
Other expenses	67,973	122,713	221,592	292,989
Total	$       2,202,952	$       2,174,862	$      7,001,670	$      6,749,980

For the three months ended September 30, 2014, general and administrative charges increased slightly by $28,090 as compared with the corresponding period in 2013.  The significant variances for the three months ended September 30, 2014 as compared with the corresponding period in 2013 are as follows:

·

Consulting and professional service expense increased by $132,723, which was mostly the result of an increase in costs associated with due diligence regarding the Company’s asset exchange with Rio Grande Resources Corporation.

·

Insurance and bank fees decreased by $45,611, which was the result of a decrease in the Company’s renewal rates for corporate insurance policies.

·

Office expenses decreased by $32,011, which was the result of costs incurred during the 2013 period for the Company’s relocation of its corporate offices from Texas to Colorado.  There were no similar relocation costs during the 2014 period.

For the nine months ended September 30, 2014, general and administrative charges increased overall by $251,690 as compared with the corresponding period in 2013.  This increase was mostly the result of the following:

·

Non-cash stock-based compensation expense increased by $437,984, which was mostly the result of an annual performance bonus awarded to executives in March 2014 which was paid in common stock of the Company as well as an increase in the issuance of restricted stock units during 2014 as compared with the prior period.

·

Legal, accounting and public company expenses increased by $458,175, which was mostly attributable to increases in legal costs associated with the amendment to the Loan Agreement with RCF, the filing of two S-3 shelf registration statements and the filing of an S-8 registration statement for securities under the Company’s stock incentive plan along with costs associated with the asset exchange with Rio Grande Resources,  a change in the Company’s transfer agent, compliance related to the ATM sales agreement and an increase in franchise taxes.

·

Salaries and payroll burden costs decreased by $327,529, which was the result of a reduction of the employee headcount as a result of the Company’s restructuring.  Also the Company incurred severance charges during the 2013 period as a result of the restructuring and there were no similar costs during the 2014 period.

·

Consulting and professional service expenses decreased by $151,050, which was largely due to the Company’s reduced reliance on outside mining consultants and public relations firms.

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Other income and expenses

Gain/loss on derivative liability

The conversion feature of the Loan Agreement is required to be recorded as a derivative liability recorded at fair value and marked-to-market each period with the changes in fair value each period reported in the Company’s Consolidated Statement of Operations. The fair value of the derivative liability related to the conversion feature was $3,811,876 at September 30, 2014 as compared with a fair value of $2,169,408 at December 31, 2013. The unrealized gain was generated by a decrease in the Company’s stock price as well as the passage of time in the Black-Sholes option pricing model.

Interest Expense

Amounts drawn under the Company’s Loan Agreement with RCF bear interest at 12% per annum through January 29, 2014 and 10% per annum thereafter, payable quarterly in arrears in shares of the Company’s common stock or, at RCF’s election, in cash.  The following table outlines the interest payments and fees paid as of September 30, 2014 and for the three months then ended:

	Amount ($)	Shares of common stock issued	VWAP	Date of issuance
Establishment fee	$      300,000	117,188	$  2.5600	February 4, 2014
Q4 2013 Interest payment and commitment fee	63,083	21,218	$  2.9731	February 4, 2014
Q1 2014 Interest payment and commitment fee	138,167	45,737	$  3.0209	April 10, 2014
Q2 2014 Interest payment and commitment fee	175,159	69,233	$  2.6561	July 25, 2014
Q3 2014 Interest payment	200,000	72,477	$  2.7595	October 2, 2014
Total	$      876,409	325,853

As of September 30, 2014, the Company has accrued interest expense of $200,000 payable to RCF relating to the three months ended September 30, 2014.  Included in interest expense for the three and nine months ended September 30, 2014 is the amortization of the debt discount and establishment fee of $484,978 and $1,182,607, respectively.

Financial Position

Operating Activities

Net cash used in operating activities was $9,647,337 for the nine months ended September 30, 2014, as compared with $11,512,872 for the same period in 2013. The decrease of $1,865,535 in cash used is mostly the result of (a) a decrease in cash spent on mineral properties of $1,096,070 which reflects the Company’s completion of a settling pond clean-out project at the Kingsville Dome project and lower land holding costs as the Company elected not to renew certain claims; (b) a decrease in cash spent of $209,468 for general and administrative expenses, which reflects the Company’s ongoing efforts to reduce its cash burn rate; (c) a decrease in cash used of $676,409 as a result of the Company’s quarterly interest payments being paid in common stock; and were partially offset by (d) an increase in cash used in working capital activities $176,817 which is mostly the result of an increase in prepaid expenses and accounts receivable.

Investing Activities

Net cash used in investing activities was $6,834 for the nine months ended September 30, 2014, as compared with net cash provided by investing activities of $5,358,850 for the same period in 2013. The decrease in cash provided by investing activities of $5,365,684 for the nine months ended September 30, 2014 is primarily due to the release of restricted cash of $5,481,015 during the same period in 2013.

17

Financing Activities

Net cash provided by financing activities was $16,424,183 for the nine months ended September 30, 2014.  For the nine months ended September 30, 2014 cash proceeds in aggregate of $5,000,000 were received from two separate advances made under our Loan Agreement with RCF.  An advance of $2,000,000 was received in January 2014 and an advance of $3,000,000 was received during April 2014.  Also during the nine months ended September 30, 2014, the Company received net proceeds of $9,307,245 from a registered direct offering the Company completed in February 2014 and $2,227,370 in net proceeds from common stock sold through the Company’s ATM program.  Offsetting these amounts were payments made for withholding taxes on net share settlements of equity awards of $87,220 and payments made on existing capital lease obligations of $8,547.

Net cash provided by financing activities was $3,496,259 for the nine months ended September 30, 2013 which resulted from the sale of common stock for net proceeds of $3,599,432 in connection with a rights offering that was completed in March 2013.  This amount was partially offset by payments of $103,173 made on existing lease obligations.

Liquidity and Capital Resources

At September 30, 2014, our working capital was $6,782,819, as compared with a working capital deficit of $1,226,222 as of December 31, 2013, which represents an increase of $8,009,041. This increase in working capital is primarily due to an increase in cash balances of $6,770,012 to $7,887,315 as of September 30, 2014. Given current planned operations, the Company expects that its existing cash balances will provide it the necessary liquidity through the third quarter of 2015. The Company will continue to look for ways to reduce its monthly cash burn rate while exploring opportunities to raise additional funds, as needed.

The Company ceased uranium production activities in 2009 due to sustained low uranium prices and does not anticipate receiving significant sales revenue and related cash inflows for 2014. Since ceasing production, the Company has primarily financed its operations through equity and debt financings. The Company has been successful at raising capital in the past, most recently with the completion of a registered direct offering in February 2014 for net proceeds of $9.3 million as well as securing debt financing in November 2013 that provided the Company with $8.0 million in cash.  The Company also has an existing ATM Sales Agreement that allows the Company to sell from time-to-time, shares of its common stock in at-the-market offerings having an aggregate offering price up to $15.0 million of which the Company has a total of $6.3 million for future sales available as of November 5, 2014.  While the Company has been successful in the past raising funds through equity and debt financings, no assurance can be given that additional financing will be available to us in amounts sufficient to meet our needs or on terms acceptable to us.  In the event funds are not available, we may be required to change our planned business strategies.

Off- Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Contractual Obligations

There were no material changes to the contractual obligations disclosed in Item 7 of Part II in our Annual Report on Form 10-K for the period ended December 31, 2013.

Subsequent Events

Share Repurchase

On August 8, 2014, the Company issued 127,359 shares of common stock with a grant date fair value of $342,595 to the Juan Tafoya Land Corporation in satisfaction of $337,500 of base rental payments due under the Uranium Mining Lease and Agreement, dated October 12, 2006, by and between Neutron Energy, Inc., a wholly owned subsidiary of the Company, and the Juan Tafoya Land Corporation, as amended by the First Amendment thereto, dated August 8, 2014, by and among the Company, Neutron Energy, Inc. and the Juan Tafoya Land Corporation.

On October 3, 2014, the Company entered into a Second Amendment to the Uranium Mining Lease and Agreement whereby, on October 6, 2014, the Company repurchased 91,631 shares of common stock from the Juan Tafoya Land Corporation for an aggregate purchase price of $248,383.

18

Closing of Land Exchange Agreement

On September 5, 2014, the Company, its wholly owned subsidiary Uranco Inc. and Rio Grande Resources Corporation entered into an Asset Exchange Agreement whereby on November 6, 2014 the Company acquired from Rio Grande Resources certain uranium properties located in South Texas near the Company’s processing facilities.  In exchange for the South Texas properties, the Company transferred to Rio Grande Resources two parcels of fee-owned mineral rights and a royalty interest in the Roca Honda area of west-central New Mexico.  The Company has retained certain leases, mining claims and fee-owned mineral interests on separate parcels in the Roca Honda area.  After completing customary due diligence and satisfying certain closing conditions, on November 6, 2014, the Company and Rio Grande Resources closed the transaction and effectuated the exchange of properties.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

With the exception of historical matters, the matters discussed in this report are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from projections or estimates contained herein. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, without limitation, statements regarding the adequacy of funding for the Company through the second quarter of 2015, the Company’s anticipated cash burn rate and capital requirements, and the outcome of developments with the Navajo Nation Council. Words such as “may,” “could,” “should,” “would,” “believe,” “estimate,” “expect,” “anticipate,” “plan,” “forecast,” “potential,” “intend,” “continue,” “project” and variations of these words, comparable words and similar expressions generally indicate forward-looking statements. You are cautioned not to place undue reliance on forward-looking statements. Actual results may differ materially from those expressed or implied by these forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include, among others:

·

the availability of capital to the Company;

·

the spot price and long-term contract price of uranium;

·

legislation and other actions by the Navajo Nation;

·

operating conditions at our mining projects;

·

government regulation of the mining industry and the nuclear power industry;

·

the world-wide supply and demand of uranium;

·

weather conditions;

·

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

·

currently pending or new litigation; and

·

timely receipt of mining and other permits from regulatory agencies;

as well as other factors described elsewhere in this Quarterly Report on Form 10-Q, our 2013 Annual Report on Form 10-K and the other reports we file with the SEC. Most of these factors are beyond our ability to predict or control. Future events and actual results could differ materially from those set forth in, contemplated by or underlying the forward-looking statements. Forward-looking statements speak only as of the date on which they are made. We disclaim any obligation to update any forward-looking statements made herein, except as required by law

19

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Smaller reporting companies are not required to provide the information required by this item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

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

During the fiscal period covered by this report, the Company’s management, with the participation of the Chief Executive Officer and Chief Financial Officer of the Company, carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of September 30, 2014.

Changes in Internal Controls

During the three months ended September 30, 2014, no changes have been made in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

Information regarding reportable legal proceedings is contained in Part I, Item 3, “Legal Proceedings”, in our Annual Report on Form 10-K for the year ended December 31, 2013 and in Part II, Item 1., “Legal Proceedings,” in our Quarterly Reports on Form 10-Q for the three months ended March 31, 2014 and June 30, 2014. The following updates and restates the description of certain legal proceedings to reflect developments during the three months ended September 30, 2014.

On December 23, 2013, the Navajo Nation Council Resources and Development Committee (“NNRDC”) acknowledged the Company’s right-of-way and surface and mineral access rights granted in the 1929 Deed by the Santa Fe Pacific Railroad Company and the easement and right of way in the 1959 Surface Owner’s Agreement between the Nation and Santa Fe Pacific Railroad Company and approved by the Bureau of Indian Affairs, and also acknowledged the same surface and mineral access rights by the Company being successor-in-interest to the Santa Fe Pacific Railroad Company to its Churchrock properties. The NNRDC also formed a subcommittee including Nation and Company representatives to draft the terms of an agreement that would result in mutual gains for both the Nation and Company considering the right-of-way and surface use granted in the 1929 Deed. One of the objectives of the subcommittee was also to develop surface reclamation standards for the old Churchrock Mine Site owned by a subsidiary of the Company, which is the subject of administrative action by the Navajo Nation Environmental Protection Agency. On July 22, 2014, the Navajo Nation Council rescinded the December 2013 resolution of the NNRDC acknowledging the Company’s rights and creating the subcommittee.  The Company is considering appropriate next steps including the potential for litigation.

On September 28, 2007, the Company filed suit against Kleburg County in the 105^th Judicial District Court, Kleburg County, Texas for declaratory relief interpreting the December 2004 Settlement Agreement between Kleburg County (the “County”) and the Company as to the level of groundwater restoration the Company agreed to achieve in Kingsville Dome production areas 1 and 2 and for recovery of the Company’s legal fees and costs of the suit.  The County filed a counterclaim alleging the Company had breached the terms of the December 2004 Settlement Agreement, asked for a Declaratory Judgment and injunctive relief ordering the Company to cure various alleged breaches of that agreement and asked that the County be awarded its legal fees and costs of the suit.  On December 13, 2012, the Court ruled that the Company is permitted to continue ISR operations in the Kingsville Dome project but must continue to restore Well I-11A to its previous use.  The Court also ruled that the Company breached the December 2004 Settlement Agreement when it tried to rely on 1987 data (in addition to original 1985 data) drawn from Well I-11 to establish clean-up standards applicable under the December 2004 Settlement Agreement for the well, and the Court awarded nominal damages in the amount of $20.00.  On November 13, 2013, the Court ruled on attorney’s fees and found that neither the Company nor the County was entitled to attorney’s fees.

On February 10, 2014, the County filed a notice of appeal on the merits judgment of December 13, 2012 and the attorney’s fee judgment on November 13, 2013.  On February 12, 2014, the Company cross-appealed on both the merits judgment and the attorney’s fees judgment.  The matter is now pending before the 13^th Court of Appeals in Corpus Christi, Texas.  The Court has set a revised briefing schedule that requires both parties to file (and in fact they did file) their opening briefs on October 8, 2014.  The revised briefing schedule also requires both parties’ response briefs to be filed on November 7, 2014 and reply briefs to be filed on November 28, 2014.

21

ITEM 1A.  RISK FACTORS

Other than as set forth below, there have been no material changes from those risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2013.

The Navajo Nation’s ban on uranium mining in what it considers to be Navajo Indian Country and its opposition to the transportation of radioactive substances over and across what it views as Navajo Nation lands may have a material adverse effect on our future operations.

In April 2005, the Navajo Nation (“Nation”) Council passed the Diné Natural Resources Protection Act of 2005, 18 Navajo Nation Code §1303, which prohibits uranium mining and processing on any sites within “Navajo Indian Country” as defined by 7 Navajo Nation Code § 254(A). The ban may impede or prevent us from developing and operating our properties located in federally defined Indian Country for two reasons. First, the Nation takes a more expansive view of its own jurisdiction over “Navajo Indian Country” than does current federal law. Specifically, 7 N.N.C. § 254(A) provides that the term “Navajo Indian Country” applies to all land within the exterior boundaries of the Navajo Indian Reservation or of the Eastern Navajo Agency, Navajo Indian allotments, dependent Indian communities, and all land held in trust for, owned in fee by, or leased by the United States to the Nation. This may conflict with federal law as codified by Congress and interpreted by the federal courts. The term “Indian Country” is derived from jurisdictional determinations in criminal law enforcement proceedings under the federal Indian Country statute, 18 U.S.C. § 1151, and understood to encompass territory situated within Indian reservations, land owned by Indian Allottees, and land within a dependent Indian community. Second, while the United States Court of Appeals for the Tenth Circuit has specifically held, en banc, that the Company’s Section 8 property in Churchrock, New Mexico is not Indian Country, approximately one-third of our in-place mineralized uranium material is located elsewhere in federally defined Indian Country. Consequently, with respect to the Nation, our ability to operate will be adversely affected unless Navajo law is modified or a waiver or other exemption is provided.

In February 2012, the Navajo Nation Council passed The Radioactive and Related Substances, Equipment, Vehicles, Persons and Materials Transportation Act of 2012 which would prohibit the transport across Nation lands of any equipment, vehicles, persons or materials for the purposes of exploring for or mining, producing, processing or milling any uranium ore, yellowcake, radioactive waste or other radioactive products on or under the surface of or adjacent to Nation lands unless the transporter has first (i) obtained Nation consent and a federal grant of easement, (ii) consented to full subject matter and personal jurisdiction of the Nation, and (iii) agreed to terms and conditions regarding clean-up and remediation. The Act would also require the Navajo Nation Environmental Protection Agency (“NNEPA”) to promulgate regulations implementing notice requirements, license fees, bonding requirements, route restrictions and curfews for the transportation of radioactive substances over and across Nation lands or otherwise within Navajo Indian Country. The Act, which may conflict with federal laws and regulations governing the transport of radioactive materials, could have a material adverse effect on our future operations, including our ability to transport equipment and personnel to and from our properties and to transport resin from New Mexico to our processing facilities in Texas.

In April 2012, the Nation’s Division of Natural Resources issued a Notice of Violation and Order to Comply with the Navajo Nation Civil Trespass Act (the “NOV”) against the Company’s subsidiary Hydro Resources, Inc. (“HRI”). The NOV assessed a $50 civil assessment for alleged trespass on Section 9, Township 16 North, Range 16 West, N.M.P.M. (“Section 9”), which is land held in trust by the United States for the benefit of the Nation (“Trust Lands”). The NOV stated that HRI’s Section 8 Churchrock property cannot be reached from New Mexico State Highway 566 without crossing either Section 9 or Section 17, both of which are Trust Lands, and that the Highway 566 right-of-way does not abut or extend into the Section 8 Churchrock property. The NOV demanded that HRI cease entering upon and crossing Section 9 and Section 17 for the purpose of transporting vehicles, equipment and/or personnel to the Section 8 Churchrock property until HRI either (i) provided documentation of a validly existing right-of-way or easement; or (ii) obtained an appropriate right-of-way from the Nation.

On December 23, 2013, the Navajo Nation Council Resources and Development Committee (“NNRDC”) acknowledged the right-of-way and surface use of the Company at its Churchrock properties licensed by the U.S. Nuclear Regulatory Commission. The right of way and surface and mineral access rights were granted in a 1929 Deed by the Santa Fe Pacific Railroad, and were passed to the Company as the successor in interest to the 1929 Deed. The NNRDC also authorized the creation of a subcommittee to work with the Navajo Nation Executive Director of the Natural Resources Division and the Department of Justice, along with representatives of the Company, to consider the terms of an agreement that results in mutual gains for both the Nation and the Company, considering the right of way and surface use granted in the 1929 Deed. On July 22, 2014, the Navajo Nation Council rescinded the December 2013 resolution of the NNRDC acknowledging the Company’s rights and creating the subcommittee.

If further agreement with the Nation is not reached, our development plan could be materially adversely affected.

22

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

On August 8, 2014, the Company issued 127,359 shares of common stock to the Juan Tafoya Land Corporation, a New Mexico corporation (the “JTLC”), in satisfaction of base rental payments due under a Uranium Mining Lease and Agreement, dated as of October 12, 2006, by and between the JTLC and Neutron Energy, Inc., a Nevada corporation and a wholly owned subsidiary of the Company (“Neutron”), as amended by the First Amendment to Uranium Mining Lease and Agreement, dated as of August 8, 2014 (the “Amendment”), by and among the Company, Neutron and JTLC (as so amended, the “Mining Lease”). The shares were issued in satisfaction of $337,500 of base rent for 2014 due from Neutron under the Mining Lease, at a value of approximately $2.65 per share. The shares issued under the Mining Lease were issued pursuant to the exemption from registration set forth in Section 4(a)(2) of the Securities Act of 1933, as amended.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4.  MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5.  OTHER INFORMATION.

None

ITEM 6.  EXHIBITS

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

23

SIGNATURES

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

	URANIUM RESOURCES, INC.
Dated: November 6, 2014	By:	/s/ Christopher M. Jones
		Christopher M. Jones
		President and Chief Executive Officer (Principal Executive Officer)
Dated: November 6, 2014	By:	/s/ Jeffrey L. Vigil
		Jeffrey L. Vigil
		Vice President - Finance and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

24

EXHIBIT INDEX

Exhibit Number	Description
10.1	Asset Exchange Agreement, dated September 5, 2014, among Rio Grande Resources Corporation, Uranium Resources, Inc., and Uranco, Inc. (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed on September 9, 2014).
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS:	XBRL Instance Document
101.SCH:	XBRL Taxonomy Extension Schema Document
101.CAL:	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF:	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB:	XBRL Taxonomy Extension Label Linkbase Document
101.PRE:	XBRL Taxonomy Extension Presentation Linkbase Document

25

EX-31

Exhibit 31.1

Certification of Chief Executive Officer

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

I, Christopher M. Jones, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: November 6, 2014

/s/ Christopher M. Jones

Title: President and Chief Executive Officer

EX-31

Exhibit 31.2

Certification of Chief Financial Officer

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

I, Jeffrey L. Vigil, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: November 6, 2014

/s/ Jeffrey L. Vigil

Title: Vice President - Finance and Chief Financial
Officer

EX-32

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

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

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

(1) The Quarterly Report on Form 10-Q of the Company for the period ended September 30, 2014 (the “Report”), which this certification accompanies, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

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

/s/ Christopher M. Jones

Christopher M. Jones

President and Chief Executive Officer

November 6, 2014

EX-32

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

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

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

(1) The Quarterly Report on Form 10-Q of the Company for the period ended September 30, 2014 (the “Report”), which this certification accompanies, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

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

/s/ Jeffrey L. Vigil

Jeffrey L. Vigil

Vice President - Finance and Chief Financial Officer

November 6, 2014

XML

SUBSEQUENT EVENT (Detail) (Subsequent event, Uranco, Rio Grande Resources)	0 Months Ended
	Nov. 06, 2014 item
Subsequent event | Uranco | Rio Grande Resources
Subsequent event
Number of parcels	2

XML

STOCK-BASED COMPENSATION (Details) (USD $)	3 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2014	Sep. 30, 2014 2013 Omnibus Incentive Plan	Mar. 31, 2014 Short-term incentive plan
Stock-Based Compensation Plans
Number of shares available for future grants			642,699
Stock compensation expense (in dollars)	$ 273,996	$ 737,270
Grant date fair value of vested bonus shares issued				$ 191,730

XML

STOCK-BASED COMPENSATION (Tables)

9 Months Ended

Sep. 30, 2014

STOCK-BASED COMPENSATION

Summary of stock options outstanding and changes during the period

	Number of stock options		Weighted Average Exercise Price
Stock options outstanding at January 1, 2014	309,479		$	19.75
Granted	—		—
Exercised	—		—
Expired	(131,250	)	11.60
Canceled or forfeited	(14,000	)	31.31
Stock options outstanding at September 30, 2014	164,229		$	25.28
Stock options exercisable at September 30, 2014	117,564		$	34.01

Summary of stock options outstanding and currently exercisable

	Outstanding Options			Options Exercisable
Stock Option Plan	Number of Options Outstanding	Weighted Average Exercise Price		Number of Options Exercisable	Weighted Average Exercise Price
1995 Stock Incentive Plan	8,750	$	31.20	8,750	$	31.20
2004 Stock Incentive Plan	75,481	11.76		38,814	20.28
2004 Director’s Plan	74,998	39.68		70,000	41.98
2013 Omnibus Incentive Plan	5,000	2.99		—	—
	164,229	$	25.28	117,564	$	34.01

Summary of RSU activity

	Number of restricted stock units		Weighted- Average Grant Date Fair Value
RSUs outstanding at January 1, 2014	280,000		$	3.31
Granted	431,941		2.61
Forfeited	(29,778	)	3.38
Vested	(76,886	)	3.20
RSUs outstanding at September 30, 2014	605,277		$	2.82

Summary of RSA activity

	Number of RSAs		Weighted- Average Grant Date Fair Value
RSAs outstanding at January 1, 2014	54,151		$	5.49
Forfeited	(5,601	)	5.39
Vested	(20,230	)	5.58
RSAs outstanding at September 30, 2014	28,320		$	5.44

XML

STOCK-BASED COMPENSATION (Details 5) (Restricted stock, USD $)	9 Months Ended
	Sep. 30, 2014
Restricted stock
Number of Shares
Balance at the beginning of the period (in shares)	54,151
Forfeited (in shares)	(5,601)
Vested (in shares)	(20,230)
Balance at the end of the period (in shares)	28,320
Weighted Average Grant Date Fair Value
Balance at the beginning of the period (in dollars per share)	$ 5.49
Forfeited (in dollars per share)	$ 5.39
Vested (in dollars per share)	$ 5.58
Balance at the end of the period (in dollars per share)	$ 5.44
Total estimated unrecognized compensation cost (in dollars)	$ 118,380
Weighted average vesting period over which compensation cost is expected to be recognized	1 year 1 month 24 days

XML

DEBT

9 Months Ended

Sep. 30, 2014

DEBT

DEBT

3. DEBT

On November 13, 2013, the Company, together with each of its subsidiaries as guarantors, entered into a loan agreement (the “Loan Agreement”) with Resource Capital Fund V L.P. (“RCF”), whereby RCF agreed, subject to the terms and conditions set forth in the Loan Agreement, to provide a secured convertible loan facility of up to $15.0 million to the Company. The facility initially consisted of three tranches of $5.0 million each. RCF advanced $3.0 million of the first $5.0 million tranche shortly following the closing of the Loan Agreement and on January 29, 2014, the Company’s stockholders, excluding RCF, approved the Loan Agreement and the issuance of shares thereunder. Following such approval, RCF advanced the remaining $2.0 million of the first tranche on February 4, 2014. On April 29, 2014, the Company and RCF executed an amendment to the Loan Agreement which reduced the amount available thereunder from $15.0 million to $8.0 million, and on April 30, 2014, the Company requested, and RCF advanced, the final $3.0 million available under the Loan Agreement.  The total amount drawn under the Loan Agreement after receipt of this advance is $8.0 million.  No additional amounts may be drawn under the Loan Agreement.

Amounts drawn under the Loan Agreement mature on December 31, 2016 and bear interest at 12% per annum through January 29, 2014 and 10% per annum thereafter, payable quarterly in arrears in shares of the Company’s common stock or, at RCF’s election, in cash.  Additionally, the Company paid a commitment fee quarterly equal to 1% of the amount available, but not drawn, under the Loan Agreement.  In connection with the Loan Agreement the Company also paid, in shares of the Company’s common stock, a 2% loan establishment fee in the amount of $300,000 to RCF. The number of shares to be issued as payment for interest and fees is determined based upon the volume weighted-average price (“VWAP”) of the Company’s common stock for the 20 trading days preceding the last day of each quarter for interest payments and commitment fees and the 20 trading days preceding October 17, 2013 for the loan establishment fee.  Accordingly, the Company has issued the following shares of common stock for settlement of interest expense, commitment fees and the establishment fee:

	Amount ($)		Shares of common stock issued	VWAP		Date of issuance
Establishment fee	$	300,000	117,188	$	2.5600	February 4, 2014
Q4 2013 Interest payment and commitment fee	63,083		21,218	$	2.9731	February 4, 2014
Q1 2014 Interest payment and commitment fee	138,167		45,737	$	3.0209	April 10, 2014
Q2 2014 Interest payment and commitment fee	175,159		69,233	$	2.6561	July 25, 2014
Q3 2014 Interest payment	200,000		72,477	$	2.7595	October 2, 2014
Total	$	876,409	325,853

As of September 30, 2014, interest expense of $200,000 relating to the three months ended September 30, 2014 was included in accrued liabilities on the Company’s Consolidated Balance Sheets.

The Company’s obligations under the Loan Agreement are secured by pledges on the equity interests of the Company’s subsidiaries and a lien on substantially all of the assets of the Company and its subsidiaries. The Company may prepay all or any portion of the amounts drawn under the Loan Agreement without penalty, subject to a minimum prepayment amount of $5.0 million or (if lower) the full amount then outstanding. Prepaid amounts may not be redrawn. The loan agreement contains customary representations, warranties, covenants and events of default and grants RCF the right to designate two nominees to the Company’s Board of Directors so long as any obligations remain outstanding under the Loan Agreement.

RCF may convert amounts drawn under the Loan Agreement into shares of the Company’s common stock at any time prior to maturity on December 31, 2016. The conversion price is initially set at $2.60 per share and is subject to customary anti-dilution adjustments and further downward adjustment, subject to a floor of $1.00 per share, in the case of certain equity issuances by the Company before November 13, 2014. As of November 5, 2014, RCF owned approximately 6.8 million shares or 27% of the Company’s outstanding common stock. If RCF were to convert the entire $8.0 million outstanding under the Loan Agreement, assuming a conversion price of $2.60 per share, RCF would receive approximately 3.1 million shares of the Company’s common stock, and RCF’s ownership percentage in the Company would increase to approximately 35%.

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) (USD $)	Sep. 30, 2014	Dec. 31, 2013
Assets
Restricted cash	$ 4,010,968	$ 4,010,937
Liabilities
Derivative liabilities	3,811,876	2,169,408
Recurring
Assets
Restricted cash	4,010,968	4,010,937
Total financial assets	4,010,968	4,010,937
Liabilities
Derivative liabilities	3,811,876	2,169,408
Total financial liabilities	3,811,876	2,169,408
Recurring | Level 1
Assets
Restricted cash	4,010,968	4,010,937
Total financial assets	4,010,968	4,010,937
Recurring | Level 3
Liabilities
Derivative liabilities	3,811,876	2,169,408
Total financial liabilities	$ 3,811,876	$ 2,169,408

XML

DERIVATIVE LIABILITY (Details) (RCF, Facility, USD $)	9 Months Ended		9 Months Ended	0 Months Ended			9 Months Ended
	Sep. 30, 2014	Nov. 14, 2013	Sep. 30, 2014 Minimum	Feb. 04, 2014 Tranche one	Nov. 13, 2013 Tranche one	Apr. 30, 2014 Tranche two	Sep. 30, 2014 Tranche one $2,000,000	Sep. 30, 2014 Tranche two $3,000,000
Assumptions used in calculation of the derivative liability using the Black-Scholes option pricing model
Risk-free interest rate (as a percent)			1.07%
Expected life of derivative liability			2 years 3 months
Expected volatility (as a percent)			87.85%
Dividend rate (as a percent)	0.00%
Changes in the derivative liability related to the conversion feature
Balance at the beginning of the period	$ 2,169,408
Fair value drawdown							1,555,806	1,691,319
Change in fair value of derivative liability	(1,604,657)
Balance at the end of the period	3,811,876
Proceeds from Issuance of Debt				$ 2,000,000	$ 3,000,000	$ 3,000,000
Conversion rate of amount drawn under the agreement into common shares (in dollars per share)		$ 2.60

XML

MINERAL PROPERTY EXPENDITURES (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Mineral property expenditures
Total Restoration/Recovery expenses	$ 131,407	$ 437,365	$ 486,477	$ 1,471,208
Total standby care and maintenance expenses	323,426	130,667	1,006,449	414,948
Land maintenance and holding costs	531,790	371,985	1,436,069	1,796,314
Total mineral property expenses	986,623	940,017	2,928,995	3,682,470
Kingsville Dome Project
Mineral property expenditures
Total Restoration/Recovery expenses		429,342	328,304	1,463,185
Total standby care and maintenance expenses	209,565	54,569	502,628	130,177
Rosita Project
Mineral property expenditures
Total Restoration/Recovery expenses	131,407	8,023	131,407	8,023
Total standby care and maintenance expenses	20,667	61,537	258,119	257,970
Vasquez Project
Mineral property expenditures
Total Restoration/Recovery expenses			26,766
Total standby care and maintenance expenses	$ 93,194	$ 14,561	$ 245,702	$ 26,801

XML

ASSET RETIREMENT OBLIGATIONS (Details) (USD $)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Change in the reserve for future restoration and reclamation costs
Balance at beginning of period			$ 3,833,608	$ 4,498,057	$ 4,498,057
Changes in cash flow estimates			32,997		584,025
Costs incurred			(131,562)		(1,638,214)
Accretion expense	205,995	97,435	307,612	292,305	389,740
Balance at ending of period	4,042,655		4,042,655		3,833,608
Less: Current portion	(203,553)		(203,553)
Non-current portion	$ 3,839,102		$ 3,839,102		$ 3,833,608

XML

PROPERTY, PLANT AND EQUIPMENT

9 Months Ended

Sep. 30, 2014

PROPERTY, PLANT AND EQUIPMENT

PROPERTY, PLANT AND EQUIPMENT

2. PROPERTY, PLANT AND EQUIPMENT

	September 30, 2014		December 31, 2013
	Net book value		Net book value
Uranium plant	$	9,108,225	$	9,190,480
Mineral rights and properties	19,782,751		19,749,754
Vehicles/depreciable equipment	1,486,519		1,591,061
Other property, plant and equipment	257,259		309,604
Total	$	30,634,754	$	30,840,899

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COMMON STOCK (Details) (USD $)	9 Months Ended		0 Months Ended		0 Months Ended		0 Months Ended	9 Months Ended				0 Months Ended			9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Apr. 15, 2014 Former executive	Apr. 15, 2014 Former executive	Feb. 12, 2012 Registered direct offering	Feb. 12, 2012 Registered direct offering	Oct. 31, 2011 BTIG, LLC ATM Sales Agreement	Sep. 30, 2014 BTIG, LLC ATM Sales Agreement	Jul. 02, 2014 BTIG, LLC ATM Sales Agreement	Nov. 05, 2014 BTIG, LLC ATM Sales Agreement Subsequent event	Oct. 31, 2011 BTIG, LLC ATM Sales Agreement Maximum	Oct. 06, 2014 Juan Tafoya Land Corporation Uranium Mining Lease and Agreement	Aug. 08, 2014 Juan Tafoya Land Corporation Uranium Mining Lease and Agreement	Aug. 08, 2014 Juan Tafoya Land Corporation Uranium Mining Lease and Agreement	Sep. 30, 2014 RCF Facility
COMMON STOCK
Common stock issued					3,960,000			788,186
Common share price (in dollars per share)				$ 2.80		$ 2.60
Proceeds from sale of shares of common stock	$ 11,519,950	$ 3,599,432			$ 9,307,245			$ 2,586,358
Aggregate offering price of the shares of common stock available to be sold under ATM Sales Agreement										6,300,000	15,000,000
Aggregate price of the common stock in the prospectus filed with the SEC									4,100,000
Percentage of commission to be paid on the gross proceeds from the sale of shares under ATM Sales Agreement							3.00%
Common stock issued for loan interest and fees															253,376
Proceeds included in accounts receivable								358,988
Interest and fees															676,409
Amount settled on settlement			333,847
Common stock issued for settlement of litigation			119,231
Common stock issued for settlement of land obligations (in shares)													127,359
Common stock issued for settlement of land obligation	342,595												342,595
Rental payments														337,500
Repurchase of common stock (in shares)												91,631
Repurchase of common stock												$ 248,383

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CONSOLIDATED BALANCE SHEETS (USD $)	Sep. 30, 2014	Dec. 31, 2013
Current Assets:
Cash and cash equivalents	$ 7,887,315	$ 1,117,303
Receivables, net	361,550	47,578
Prepaid and other current assets	836,037	638,100
Total Current Assets	9,084,902	1,802,981
Property, plant and equipment, at cost:
Property, plant and equipment	96,415,388	96,407,310
Less accumulated depreciation, depletion and impairment	(65,780,634)	(65,566,411)
Net property, plant and equipment	30,634,754	30,840,899
Restricted cash	4,010,968	4,010,937
Total Assets	43,730,624	36,654,817
Current Liabilities:
Accounts payable	754,272	1,243,169
Accrued liabilities	1,337,767	1,775,491
Current portion of asset retirement obligations	203,553
Current portion of capital leases	6,491	10,543
Total Current Liabilities	2,302,083	3,029,203
Asset retirement obligations, net of current portion	3,839,102	3,833,608
Derivative liability - convertible loan	3,811,876	2,169,408
Convertible loan, related party	3,885,197	1,024,715
Other long-term liabilities and deferred credits	1,350,000	1,350,000
Long-term capital leases, less current portion		4,495
Total Liabilities	15,188,258	11,411,429
Commitments and Contingencies
Stockholders' Equity:
Common stock, 200,000,000 shares authorized, $.001 par value;25,167,846 and 19,820,258 shares issued and outstanding, respectively	25,172	19,824
Paid-in capital	230,579,521	216,703,028
Accumulated deficit	(202,052,909)	(191,470,046)
Less: Treasury stock (3,813 shares), at cost	(9,418)	(9,418)
Total Stockholders' Equity	28,542,366	25,243,388
Total Liabilities and Stockholders' Equity	$ 43,730,624	$ 36,654,817

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (USD $)	Common Stock	Paid-In Capital	Accumulated Deficit	Treasury Stock	Total
Balances at Dec. 31, 2013	$ 19,824	$ 216,703,028	$ (191,470,046)	$ (9,418)	$ 25,243,388
Balances (in shares) at Dec. 31, 2013	19,820,258				19,820,258
Increase (Decrease) in Stockholders' Equity
Net loss			(10,582,863)		(10,582,863)
Common stock issued, net of issuance costs	4,749	11,874,191			11,878,940
Common stock issued, net of issuance costs (in shares)	4,747,598
Common stock issued for payment of convertible loan interest and fees	253	676,156			676,409
Common stock issued for loan interest and fees (in shares)	253,376
Common stock issued for settlement of land obligation	127	342,468			342,595
Common stock issued for settlement of land obligations (in shares)	127,359
Common stock issued for the settlement of litigation	119	333,728			333,847
Common stock issued for settlement of litigation (in shares)	119,231
Stock compensation expense and related share issuances, net of shares withheld for the payment of taxes	100	737,170			737,270
Stock compensation expense and related share issuances, net of shares withheld for the payment of taxes (in shares)	100,024
Minimum withholding taxes on net share settlements of equity awards		(87,220)			(87,220)
Balances at Sep. 30, 2014	$ 25,172	$ 230,579,521	$ (202,052,909)	$ (9,418)	$ 28,542,366
Balances (in shares) at Sep. 30, 2014	25,167,846				25,167,846

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STOCK-BASED COMPENSATION (Details 3) (USD $)							9 Months Ended
	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2014 1995 Stock Incentive Plan	Sep. 30, 2014 2004 Stock Incentive Plan	Sep. 30, 2014 2004 Director's Plan-Options	Sep. 30, 2014 2013 Omnibus Incentive Plan	Sep. 30, 2014 Stock options
Options Outstanding
Number of options outstanding (in shares)	164,229	309,479	8,750	75,481	74,998	5,000
Weighted Average Exercise price (in dollars per share)	$ 25.28	$ 19.75	$ 31.20	$ 11.76	$ 39.68	$ 2.99
Options Exercisable
Number of Options Exercisable (in shares)	117,564		8,750	38,814	70,000
Weighted Average Exercise Price (in dollars per share)	$ 34.01		$ 31.20	$ 20.28	$ 41.98
Total estimated unrecognized compensation cost (in dollars)							$ 107,589
Weighted average vesting period over which compensation cost is expected to be recognized							1 year 8 months 23 days

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2014

FAIR VALUE OF FINANCIAL INSTRUMENTS

Schedule of financial instruments recognized at fair value on a recurring basis

	September 30, 2014
	Level 1		Level 2		Level 3		Total
Assets
Restricted cash	$	4,010,968	$	—	$	—	$	4,010,968
Total financial assets	$	4,010,968	$	—	$	—	$	4,010,968
Liabilities
Derivative liabilities	$	—	$	—	$	3,811,876	$	3,811,876
Total financial liabilities	$	—	$	—	$	3,811,876	$	3,811,876

	December 31, 2013
	Level 1		Level 2		Level 3		Total
Assets
Restricted cash	$	4,010,937	$	—	$	—	$	4,010,937
Total financial assets	$	4,010,937	$	—	$	—	$	4,010,937
Liabilities
Derivative liabilities	$	—	$	—	$	2,169,408	$	2,169,408
Total financial liabilities	$	—	$	—	$	2,169,408	$	2,169,408

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STOCK-BASEDCOMPENSATION (Details 4) (Restricted stock units, USD $)	9 Months Ended
	Sep. 30, 2014
Restricted stock units
Number of Shares
Balance at the beginning of the period (in shares)	280,000
Granted (in shares)	431,941
Forfeited (in shares)	(29,778)
Vested (in shares)	(76,886)
Balance at the end of the period (in shares)	605,277
Weighted Average Grant Date Fair Value
Balance at the beginning of the period (in dollars per share)	$ 3.31
Granted (in dollars per share)	$ 2.61
Forfeited (in dollars per share)	$ 3.38
Vested (in dollars per share)	$ 3.20
Balance at the end of the period (in dollars per share)	$ 2.82
Total estimated unrecognized compensation cost (in dollars)	$ 1,133,404
Weighted average vesting period over which compensation cost is expected to be recognized	2 years 4 months 13 days

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ASSET RETIREMENT OBLIGATIONS (Tables)

9 Months Ended

Sep. 30, 2014

ASSET RETIREMENT OBLIGATIONS

Schedule of change in the balance of the asset retirement obligation

	September 30,			December 31,
	2014			2013
Balance, beginning of period	$	3,833,608		$	4,498,057
Changes in cash flow estimates	32,997			584,025
Costs incurred	(131,562		)	(1,638,214		)
Accretion expense	307,612			389,740
Balance, end of period	4,042,655			3,833,608
Less: Current portion	(203,553		)	—
Non-current Portion	$	3,839,102		$	3,833,608

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BASIS OF PRESENTATION

9 Months Ended

Sep. 30, 2014

BASIS OF PRESENTATION

BASIS OF PRESENTATION

1. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. The accompanying statements should be read in conjunction with the audited financial statements included in Uranium Resources, Inc.’s 2013 Annual Report on Form 10-K. In the opinion of management, all adjustments (which are of a normal, recurring nature) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2014 are not necessarily indicative of the results that may be expected for any other period including the full year ending December 31, 2014.

Restatement of Previously Reported Consolidated Financial Information

On December 17, 2013, Uranium Resources, Inc. (collectively, the “Company,” “we,” “us,” or “URI”) filed an amended Quarterly Report on Form 10-Q/A (the “Form 10-Q/A”) to its Quarterly Report on Form 10-Q for the period ended September 30, 2013 to amend and restate the Company’s condensed consolidated financial statements and related disclosures as of September 30, 2013 and for the three and nine months ended September 30, 2013 and 2012 by reclassifying costs from property, plant and equipment to mineral property expenses. The consolidated financial statements and related disclosures in this Quarterly Report on Form 10-Q, as it relates to the period ended September 30, 2013, incorporate the effects of this restatement.

Recently Issued Accounting Pronouncements

In August 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update No. 2014-15 (ASU 2014-15), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. The ASU applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted.

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Sep. 30, 2014	Dec. 31, 2013
CONSOLIDATED BALANCE SHEETS
Common stock, shares authorized	200,000,000	200,000,000
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares issued	25,167,846	19,820,258
Common stock, shares outstanding	25,167,846	19,820,258
Treasury stock, shares at cost	3,813	3,813

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2014

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

11. COMMITMENTS AND CONTINGENCIES

The Company’s uranium recovery operations are subject to federal and state regulations for the protection of the environment, including water quality. These laws frequently change and generally become more restrictive. The ongoing costs of complying with such regulations have not been significant to the Company’s annual operating costs. Future 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 the Company’s accrual for costs. The Company believes its operations are in compliance with current environmental regulations.

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Document and Entity Information	9 Months Ended
	Sep. 30, 2014	Nov. 06, 2014
Document and Entity Information
Entity Registrant Name	URANIUM RESOURCES INC /DE/
Entity Central Index Key	0000839470
Document Type	10-Q
Document Period End Date	Sep. 30, 2014
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		25,220,471
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3

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SUBSEQUENT EVENT

9 Months Ended

Sep. 30, 2014

SUBSEQUENT EVENT

SUBSEQUENT EVENTS

12. SUBSEQUENT EVENT

On September 5, 2014, the Company, its wholly owned subsidiary Uranco Inc. and Rio Grande Resources Corporation entered into an Asset Exchange Agreement whereby the Company will acquire from Rio Grande Resources certain uranium properties located in South Texas near the Company’s processing facilities.  In exchange for the South Texas properties, the Company will transfer to Rio Grande Resources two parcels of fee-owned mineral rights and a royalty interest in the Roca Honda area of west-central New Mexico.  The Company is retaining certain leases, mining claims and fee-owned mineral interests on separate parcels in the Roca Honda area.  After completing customary due diligence and satisfying certain closing conditions, on November 6, 2014, the Company and Rio Grande Resources closed the transaction and effectuated the exchange of properties.

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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Operating expenses
Mineral property expenses	$ (986,623)	$ (940,017)	$ (2,928,995)	$ (3,682,470)
General and administrative	(2,202,952)	(2,174,862)	(7,001,670)	(6,749,980)
Accretion of asset retirement obligations	(205,995)	(97,435)	(307,612)	(292,305)
Depreciation and amortization	(68,271)	(108,720)	(245,977)	(341,680)
Impairment of uranium properties		(3,701)		(683,356)
Total operating expenses	(3,463,841)	(3,324,735)	(10,484,254)	(11,749,791)
Other income/(expenses)
Gain on derivatives	145,010		1,604,657
Interest expense	(679,168)	(3,859)	(1,717,234)	(253,485)
Other income, net	3,615	55,703	13,968	60,238
Total other income/(expense)	(530,543)	51,844	(98,609)	(193,247)
Net loss	$ (3,994,384)	$ (3,272,891)	$ (10,582,863)	$ (11,943,038)
LOSS PER SHARE - BASIC AND DILUTED (in dollars per share)	$ (0.16)	$ (0.17)	$ (0.44)	$ (0.63)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING (in shares)	24,954,029	19,820,258	23,986,792	18,995,957

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MINERAL PROPERTY EXPENDITURES

9 Months Ended

Sep. 30, 2014

MINERAL PROPERTY EXPENDITURES

MINERAL PROPERTY EXPENDITURES

6. MINERAL PROPERTY EXPENDITURES

Mineral property expenditures for the three and nine months ended September 30, 2014 and 2013 are as follows:

	Three months ended September 30,				Nine months ended September 30,
	2014		2013		2014		2013
			(restated)				(restated)
Restoration/Recovery expenses
Kingsville Dome project	$	—	$	429,342	$	328,304	$	1,463,185
Rosita project	131,407		8,023		131,407		8,023
Vasquez project	—		—		26,766		—
Total Restoration/Recovery expenses	131,407		437,365		486,477		1,471,208
Standby care and maintenance expenses
Kingsville Dome project	209,565		54,569		502,628		130,177
Rosita project	20,667		61,537		258,119		257,970
Vasquez project	93,194		14,561		245,702		26,801
Total standby care and maintenance expenses	323,426		130,667		1,006,449		414,948
Land maintenance and holding costs	531,790		371,985		1,436,069		1,796,314
Total mineral property expenses	$	986,623	$	940,017	$	2,928,995	$	3,682,470

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FAIR VALUE OF FINANCIAL INSTRUMENTS

9 Months Ended

Sep. 30, 2014

FAIR VALUE OF FINANCIAL INSTRUMENTS

FAIR VALUE OF FINANCIAL INSTRUMENTS

5. FAIR VALUE OF FINANCIAL INSTRUMENTS

Our financial instruments consist of cash equivalents, restricted cash and derivative liabilities.  U.S. GAAP defines “fair value” as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price) and establishes a fair-value hierarchy that prioritizes the inputs used to measure fair value using the following definitions (from highest to lowest priority):

· Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

· Level 2 — Observable inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data by correlation or other means.

· Level 3 — Prices or valuation techniques requiring inputs that are both significant to the fair-value measurement and unobservable.

The Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents.  The Company continually monitors its positions with, and the credit quality of, the financial institutions with which it invests.  Periodically throughout the year, the Company has maintained balances in various U.S. operating accounts in excess of U.S. federally insured limits.

The following table presents information about financial instruments recognized at fair value on a recurring basis as of September 30, 2014 and December 31, 2013, and indicates the fair value hierarchy:

	September 30, 2014
	Level 1		Level 2		Level 3		Total
Assets
Restricted cash	$	4,010,968	$	—	$	—	$	4,010,968
Total financial assets	$	4,010,968	$	—	$	—	$	4,010,968
Liabilities
Derivative liabilities	$	—	$	—	$	3,811,876	$	3,811,876
Total financial liabilities	$	—	$	—	$	3,811,876	$	3,811,876

	December 31, 2013
	Level 1		Level 2		Level 3		Total
Assets
Restricted cash	$	4,010,937	$	—	$	—	$	4,010,937
Total financial assets	$	4,010,937	$	—	$	—	$	4,010,937
Liabilities
Derivative liabilities	$	—	$	—	$	2,169,408	$	2,169,408
Total financial liabilities	$	—	$	—	$	2,169,408	$	2,169,408

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MINERAL PROPERTY EXPENDITURES (Tables)

9 Months Ended

Sep. 30, 2014

MINERAL PROPERTY EXPENDITURES

Summary of mineral property expenditures

	Three months ended September 30,				Nine months ended September 30,
	2014		2013		2014		2013
			(restated)				(restated)
Restoration/Recovery expenses
Kingsville Dome project	$	—	$	429,342	$	328,304	$	1,463,185
Rosita project	131,407		8,023		131,407		8,023
Vasquez project	—		—		26,766		—
Total Restoration/Recovery expenses	131,407		437,365		486,477		1,471,208
Standby care and maintenance expenses
Kingsville Dome project	209,565		54,569		502,628		130,177
Rosita project	20,667		61,537		258,119		257,970
Vasquez project	93,194		14,561		245,702		26,801
Total standby care and maintenance expenses	323,426		130,667		1,006,449		414,948
Land maintenance and holding costs	531,790		371,985		1,436,069		1,796,314
Total mineral property expenses	$	986,623	$	940,017	$	2,928,995	$	3,682,470

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PROPERTY, PLANT AND EQUIPMENT (Tables)

9 Months Ended

Sep. 30, 2014

PROPERTY, PLANT AND EQUIPMENT

Schedule of property, plant and equipment

	September 30, 2014		December 31, 2013
	Net book value		Net book value
Uranium plant	$	9,108,225	$	9,190,480
Mineral rights and properties	19,782,751		19,749,754
Vehicles/depreciable equipment	1,486,519		1,591,061
Other property, plant and equipment	257,259		309,604
Total	$	30,634,754	$	30,840,899

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STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2014

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

9. STOCK-BASED COMPENSATION

Stock-based compensation awards consist of stock options, restricted stock units and restricted stock awards issued under the Company’s equity incentive plans which include: the 2013 Omnibus Incentive Plan (the “2013 Plan”); the 2007 Restricted Stock Plan (the “2007 Plan”); the Amended and Restated 2004 Directors’ Stock Option and Restricted Stock Plan (the “2004 Directors’ Plan”); the 2004 Stock Incentive Plan (the “2004 Plan”); and the 1995 Stock Incentive Plan (the “1995 Plan”). Upon approval of the 2013 Plan by the Company’s stockholders on June 4, 2013, the Company’s authority to grant new awards under all plans other than the 2013 Plan was terminated.  As of September 30, 2014, 642,699 shares were available for future issuances under the 2013 Plan.  For the three and nine months ending September 30, 2014, the Company recorded stock-based compensation cost of $273,996 and $737,270, respectively, which has been included in general and administrative expense.

Bonus Shares

In March 2014, in accordance with the Company’s short-term incentive plan, the Company awarded its executives bonuses that were paid out in common stock of the Company.  The bonus shares were valued using the closing share price of the Company’s common stock on the date of grant.  The bonus shares vested immediately and had a grant date fair value of $191,730.

Stock Options

The following table summarizes stock options outstanding and changes during the nine months ended September 30, 2014:

	Number of stock options		Weighted Average Exercise Price
Stock options outstanding at January 1, 2014	309,479		$	19.75
Granted	—		—
Exercised	—		—
Expired	(131,250	)	11.60
Canceled or forfeited	(14,000	)	31.31
Stock options outstanding at September 30, 2014	164,229		$	25.28
Stock options exercisable at September 30, 2014	117,564		$	34.01

The following table summarizes stock options outstanding and exercisable by stock option plan at September 30, 2014:

	Outstanding Options			Options Exercisable
Stock Option Plan	Number of Options Outstanding	Weighted Average Exercise Price		Number of Options Exercisable	Weighted Average Exercise Price
1995 Stock Incentive Plan	8,750	$	31.20	8,750	$	31.20
2004 Stock Incentive Plan	75,481	11.76		38,814	20.28
2004 Director’s Plan	74,998	39.68		70,000	41.98
2013 Omnibus Incentive Plan	5,000	2.99		—	—
	164,229	$	25.28	117,564	$	34.01

Total estimated unrecognized compensation cost from unvested stock options as of September 30, 2014 was approximately $107,589, which is expected to be recognized over a weighted-average period of 1.73 years.

Restricted Stock Units

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

The following table summarizes RSU activity during the period ended September 30, 2014:

	Number of restricted stock units		Weighted- Average Grant Date Fair Value
RSUs outstanding at January 1, 2014	280,000		$	3.31
Granted	431,941		2.61
Forfeited	(29,778	)	3.38
Vested	(76,886	)	3.20
RSUs outstanding at September 30, 2014	605,277		$	2.82

Total estimated unrecognized compensation cost from unvested RSUs as of September 30, 2014 was approximately $1,133,404, which is expected to be recognized over a weighted-average period of 2.37 years.

Restricted Stock Awards

Time-based and performance-based restricted stock awards (“RSAs”) are valued using the closing share price of the Company’s common stock on the date of grant. Vesting based on performance criteria is generally based on the Company’s prior year performance as determined by the Compensation Committee of the Board of Directors at each vesting date, and the valuation of such grants assumes full satisfaction of all performance criteria. Employee participants who receive restricted stock awards have all of the rights of a shareholder, including the right to vote shares of restricted stock that are the subject of the grant and the right to receive any regular cash dividends paid out of current earnings.

The following table summarizes RSA activity during the period ended September 30, 2014:

	Number of RSAs		Weighted- Average Grant Date Fair Value
RSAs outstanding at January 1, 2014	54,151		$	5.49
Forfeited	(5,601	)	5.39
Vested	(20,230	)	5.58
RSAs outstanding at September 30, 2014	28,320		$	5.44

The total estimated unrecognized compensation cost from the unvested RSA grants at September 30, 2014 was $118,380, which is expected to be recognized over the weighted-average vesting period of 1.15 years.

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ASSET RETIREMENT OBLIGATIONS

9 Months Ended

Sep. 30, 2014

ASSET RETIREMENT OBLIGATIONS

ASSET RETIREMENT OBLIGATIONS

7. ASSET RETIREMENT OBLIGATIONS

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

	September 30,			December 31,
	2014			2013
Balance, beginning of period	$	3,833,608		$	4,498,057
Changes in cash flow estimates	32,997			584,025
Costs incurred	(131,562		)	(1,638,214		)
Accretion expense	307,612			389,740
Balance, end of period	4,042,655			3,833,608
Less: Current portion	(203,553		)	—
Non-current Portion	$	3,839,102		$	3,833,608

The Company’s current liability of $203,553 consists of the estimated costs associated with current plugging and abandonment activities and planned surface reclamation activities during 2015 at the Company’s Rosita project.  The change in cash flow estimates for the period ended September 30, 2014 was due to a change in the timing of planned restoration activities at the Rosita project.  The Company is currently performing plugging and abandonment activities at its Rosita project.

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COMMON STOCK

9 Months Ended

Sep. 30, 2014

COMMON STOCK.

COMMON STOCK

8. COMMON STOCK

Common stock issued, net of issuance costs

Registered Direct Offering

On February 12, 2014, the Company completed a registered direct offering with the issuance of 3,960,000 shares of common stock at a price of $2.60 per share for net proceeds of $9,307,245.

At-the-market Sales

On October 31, 2011, the Company entered into an At-The-Market Sales Agreement with BTIG LLC (the “ATM Sales Agreement”), a major global securities trading firm that acts as our sales agent. Under the ATM Sales Agreement, the Company may from time to time sell shares of its common stock having an aggregate offering price up to $15.0 million in “at-the-market” offerings, which shares are registered under the Company’s currently effective registration statement on Form S-3. The Company filed a prospectus supplement dated July 2, 2014 with the Securities and Exchange Commission in connection with the offering, relating to shares of its common stock having an aggregate offering price of up to $4.1 million. The Company pays BTIG a commission equal to 3.0% of the gross proceeds from the sale of any shares pursuant to the ATM Sales Agreement.

During the nine months ended September 30, 2014 the Company sold 788,186 shares of common stock for net proceeds of $2,586,358 under the ATM Sales Agreement, of which $358,988 of the proceeds were included in accounts receivable as of September 30, 2014.  The Company subsequently received this amount on October 1, 2014.  As of November 5, 2014, approximately $6.3 million of the aggregate $15.0 million remained available for future sales under the ATM Sales Agreement.

Common stock issued for loan interest and fees

As discussed in Note 3 above, unless RCF elects to receive cash, RCF receives common shares of the Company for the payment of interest owing on the Loan Agreement.  For the nine months ended September 30, 2014, the Company issued 253,376 common shares for the payment of $676,409 in interest and fees.

Common stock issued for settlement of litigation

On April 15, 2014, the Company and a former executive of the Company, entered into a Settlement Agreement and General Release, under the terms of which it was agreed by the Company’s former executive to dismiss with prejudice claims he brought in a lawsuit against the Company.  As a result of this Settlement Agreement, the Company issued common shares to the Company’s former executive with a grant date fair value of $333,847.  The issuance of 119,231 shares of common stock was based upon a common share price of $2.80.

Common stock issued for settlement of land obligations

On August 8, 2014, the Company issued 127,359 shares of common stock with a grant date fair value of $342,595 to the Juan Tafoya Land Corporation in satisfaction of $337,500 of base rental payments due under the Uranium Mining Lease and Agreement, dated October 12, 2006, by and between Neutron Energy, Inc., a wholly owned subsidiary of the Company, and the Juan Tafoya Land Corporation, as amended by the First Amendment thereto, dated August 8, 2014, by and among the Company, Neutron Energy, Inc. and the Juan Tafoya Land Corporation.

On October 3, 2014, the Company entered into a Second Amendment to the Uranium Mining Lease and Agreement whereby, on October 6, 2014, the Company repurchased 91,631 shares of common stock from the Juan Tafoya Land Corporation for an aggregate purchase price of $248,383.

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EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2014

EARNINGS PER SHARE

EARNINGS PER SHARE

10. 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.

Basic and diluted loss per common share have been calculated based on the weighted-average shares outstanding during the period.  Potentially dilutive shares of 3,846,429 were excluded from the calculation of earnings per share because the effect on the basic loss per share would be anti-dilutive due to our net loss position for the quarter ended September 30, 2014.

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STOCK-BASED COMPENSATION (Details 2) (USD $)	9 Months Ended
	Sep. 30, 2014
Outstanding Options, Number of stock options
Balance at the beginning of the period (in shares)	309,479
Expired (in shares)	(131,250)
Canceled or forfeited (in shares)	(14,000)
Balance at the end of the period (in shares)	164,229
Exercisable at the end of the period (in shares)	117,564
Outstanding Options, Weighted Average Exercise Price
Balance at the beginning of the period (in dollars per share)	$ 19.75
Expired (in dollars per share)	$ 11.60
Canceled or forfeited (in dollars per share)	$ 31.31
Balance at the end of the period (in dollars per share)	$ 25.28
Exercisable at the end of the period (in dollars per share)	$ 34.01

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DERIVATIVE LIABILITY (Tables)

9 Months Ended

Sep. 30, 2014

DERIVATIVE LIABILITY.

Schedule of assumptions used in calculation of the derivative liability using the Black-Scholes option pricing model

Risk-free interest rate	1.07%
Expected life of derivative liability	2.25 years
Expected volatility	87.85%
Dividend rate	0.00%

Schedule of changes in the derivative liability related to the conversion feature

	Derivative
	Liability
Fair value of derivative liability at December 31, 2013	$	2,169,408
Fair value of $2,000,000 drawdown	1,555,806
Fair value of $3,000,000 drawdown	1,691,319
Change in fair value of derivative liability	(1,604,657		)
Fair value of derivative liability at September 30, 2014	$	3,811,876

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PROPERTY, PLANT AND EQUIPMENT (Details) (USD $)	Sep. 30, 2014	Dec. 31, 2013
PROPERTY, PLANT AND EQUIPMENT
Property, Plant and Equipment Balances (net)	$ 30,634,754	$ 30,840,899
Uranium plant
PROPERTY, PLANT AND EQUIPMENT
Property, Plant and Equipment Balances (net)	9,108,225	9,190,480
Mineral rights and properties
PROPERTY, PLANT AND EQUIPMENT
Property, Plant and Equipment Balances (net)	19,782,751	19,749,754
Vehicles/depreciable equipment
PROPERTY, PLANT AND EQUIPMENT
Property, Plant and Equipment Balances (net)	1,486,519	1,591,061
Other property, plant and equipment
PROPERTY, PLANT AND EQUIPMENT
Property, Plant and Equipment Balances (net)	$ 257,259	$ 309,604

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Operating activities:
Net loss	$ (10,582,863)	$ (11,943,038)
Reconciliation of net loss to cash used in operations:
Accretion of asset retirement obligations	307,612	292,305
Amortization of debt discount	1,182,607
Change in fair value of derivative liability	(1,604,657)
Decrease in restoration and reclamation accrual	(131,562)	(1,269,663)
Depreciation and amortization	245,977	341,680
Impairment of uranium properties		683,356
Stock compensation expense	737,270	299,286
Common stock issued for settlement of land obligation	342,595
Other non-cash items, net	23,174	73,875
Effect of changes in operating working capital items:
Decrease in receivables	45,016	258,532
Increase in prepaid and other current assets	(272,968)	(17,274)
Increase/(decrease) in payables, accrued liabilities and deferred credits	60,462	(231,931)
Net cash used in operating activities	(9,647,337)	(11,512,872)
Cash flows from investing activities:
Reduction in restricted cash		5,481,015
Reductions in uranium properties		(122,165)
Purchases of equipment	(6,834)
Net cash provided by/(used in) investing activities	(6,834)	5,358,850
Cash flows from financing activities:
Proceeds from convertible loan	5,000,000
Payments on borrowings	(8,547)	(103,173)
Issuance of common stock, net	11,519,950	3,599,432
Payment of minimum withholding taxes on net share settlements of equity awards	(87,220)
Net cash provided by financing activities	16,424,183	3,496,259
Net increase/(decrease) in cash and cash equivalents	6,770,012	(2,657,763)
Cash and cash equivalents, beginning of period	1,117,303	4,664,596
Cash and cash equivalents, end of period	7,887,315	2,006,833
Cash paid during the period for:
Interest	21,301	2,970
Other non-cash transactions:
Common stock issued for payment of convertible loan interest and fees	676,409
Common stock issued for repayment of short-term loan principal and interest		5,095,833
Common stock issued for the settlement of litigation	333,847
Common stock issued for services		291,500
Restricted stock issued for services		47
Total other non-cash transactions for the period:	$ 1,010,256	$ 5,387,380

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DERIVATIVE LIABILITY

9 Months Ended

Sep. 30, 2014

DERIVATIVE LIABILITY.

DERIVATIVE LIABILITY

4. DERIVATIVE LIABILITY

The conversion feature of the Loan Agreement was determined to be an embedded derivative under ASC 815 as the exercise price is subject to downward adjustment as discussed in Note 3 above and, therefore, does not meet the “fixed-for-fixed” criteria. As a result, the conversion feature of the convertible Loan Agreement is required to be bifurcated and classified as a derivative liability recorded at an initial fair value and subsequently marked-to-market each period with the changes in fair value reported in the Company’s results of operations. The initial fair value measurement of the derivative liability as determined on the date of each advance has been recognized as a debt discount and will be amortized over the life of the Loan Agreement.

The fair value of the derivative liability as of September 30, 2014 has been calculated using the Black-Scholes option pricing model with the following assumptions:

Risk-free interest rate	1.07%
Expected life of derivative liability	2.25 years
Expected volatility	87.85%
Dividend rate	0.00%

The change in the derivative liability related to the conversion feature is as follows:

	Derivative
	Liability
Fair value of derivative liability at December 31, 2013	$	2,169,408
Fair value of $2,000,000 drawdown	1,555,806
Fair value of $3,000,000 drawdown	1,691,319
Change in fair value of derivative liability	(1,604,657		)
Fair value of derivative liability at September 30, 2014	$	3,811,876

As discussed in Note 3 above, the potential for downward adjustment of the exercise price expires on November 13, 2014 and the exercise price will remain fixed at $2.60 for the remainder of the term of the Loan Agreement.  As a result, the conversion feature will no longer qualify as an embedded derivative instrument and the fair value of the derivative as of November 13, 2014 will be reclassified to equity with no further mark-to-market adjustments.

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DEBT (Details) (USD $)	9 Months Ended		0 Months Ended		0 Months Ended					9 Months Ended					0 Months Ended	8 Months Ended	0 Months Ended					9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Nov. 05, 2014 RCF Subsequent event	Nov. 05, 2014 RCF Subsequent event	Jul. 25, 2014 RCF Facility	Apr. 10, 2014 RCF Facility	Feb. 04, 2014 RCF Facility	Nov. 14, 2013 RCF Facility item	Nov. 13, 2013 RCF Facility tranche	Sep. 30, 2014 RCF Facility item	Apr. 30, 2014 RCF Facility	Apr. 29, 2014 RCF Facility	Nov. 14, 2013 RCF Facility	Nov. 14, 2013 RCF Facility Minimum	Oct. 02, 2014 RCF Facility Subsequent event	Oct. 02, 2014 RCF Facility Subsequent event	Feb. 04, 2014 RCF Facility Tranche one	Nov. 13, 2013 RCF Facility Tranche one	Apr. 30, 2014 RCF Facility Tranche two	Sep. 30, 2014 RCF Facility Period through January 29, 2014	Sep. 30, 2014 RCF Facility Period after January 29, 2014	Sep. 30, 2014 RCF Forecast Subsequent event	Sep. 30, 2014 RCF Forecast Facility Subsequent event
Debt
Maximum borrowing capacity									$ 15,000,000			$ 8,000,000						$ 5,000,000
Number of tranches									3
Proceeds from borrowings																	2,000,000	3,000,000	3,000,000
Amount drawn											8,000,000
Additional amounts that may be drawn											0
Annualized interest rate (as a percent)																				12.00%	10.00%
Commitment fee (as a percent)										1.00%
Loan establishment fee (as a percent)							2.00%
Loan establishment fee							300,000
Period of trading days for which volume weighted average price was considered to determine shares issuable for payment of commitment fee and accrued interest										20
Period of trading days for which volume weighted average price was considered to determine shares issuable for payment of loan establishment fee										20
Number of shares of common stock issued for payment of loan establishment fee							117,188
Volume weighted average price for payment of loan establishment fee (in dollars per share)							$ 2.5600
Interest payment and commitment fee, amount					175,159	138,167	63,083
Number of shares of common stock issued for payment of commitment fee and accrued interest					69,233	45,737	21,218
Volume weighted average price for payment of commitment fee and accrued interest (in dollars per share)					$ 2.6561	$ 3.0209	$ 2.9731
Interest on loan paid	21,301	2,970													200,000
Number of shares of common stock issued for payment of accrued interest															72,477
Volume weighted average price for payment of accrued interest (in dollars per share)															$ 2.7595
Amount																876,409
Shares of common stock issued																325,853
Prepayment amount														$ 5,000,000
Number of nominees designated								2
Price at which principal amounts of the debt are convertible into shares, at any time prior to the maturity date of December 31, 2016 (in dollars per share)													$ 2.60										$ 2.60
Floor conversion price, subject to customary anti-dilution adjustments and further downward adjustment (in dollars per share)													$ 1.00
Number of shares held			6,800,000
Ownership percentage				27.00%
Number of shares of common stock issued upon conversion																							3,100,000
Ownership percentage after conversion of debt outstanding																						35.00%

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EARNINGS PER SHARE (Details)	0 Months Ended	3 Months Ended
	Jan. 22, 2013	Sep. 30, 2014
EARNINGS PER SHARE
Reverse stock split ratio	0.1
Potential dilutive common stock excluded from the calculation of earnings per share (in shares)		3,846,429

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DEBT (Tables)

9 Months Ended

Sep. 30, 2014

DEBT

Schedule of shares issued of common stock for settlement of interest, commitment fees and the establishment fee

	Amount ($)		Shares of common stock issued	VWAP		Date of issuance
Establishment fee	$	300,000	117,188	$	2.5600	February 4, 2014
Q4 2013 Interest payment and commitment fee	63,083		21,218	$	2.9731	February 4, 2014
Q1 2014 Interest payment and commitment fee	138,167		45,737	$	3.0209	April 10, 2014
Q2 2014 Interest payment and commitment fee	175,159		69,233	$	2.6561	July 25, 2014
Q3 2014 Interest payment	200,000		72,477	$	2.7595	October 2, 2014
Total	$	876,409	325,853