Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following is a discussion and analysis of the Company’s financial condition and historical results of operations. The following should be read in conjunction with our financial statements and accompanying notes. This discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results could differ materially from those projected, forecasted or expected in these forward-looking statements as a result of various factors, including but not limited to, those discussed below and elsewhere in this Annual Report. Refer to “Cautionary Note Regarding Forward-looking Statements” and Item 1A. Risk Factors herein. Our management believes the assumptions underlying the Company’s financial statements and accompanying notes are reasonable. However, the Company’s financial statements and accompanying notes may not be an indication of our financial condition and results of operations in the future.
Business Overview
enCore Energy Corp., America’s Clean Energy CompanyTM, was incorporated on October 30, 2009, under the Laws of British Columbia and is a reporting issuer in all of the provinces and territories of Canada. As of January 1, 2025, the Company ceased to be a “foreign private issuer” and has become a “domestic issuer” and a non-accelerated filer within the meanings under the Exchange Act. As a result, the Company must comply with the filing deadlines and disclosure obligations of a domestic issuer and non-accelerated filer as set forth in the Exchange Act. This classification impacts the timing of our periodic filings, internal control assessments, and other regulatory requirements. The Company’s common shares are listed on Nasdaq and the TSX-V under the trading symbol EU.
We are an Exploration Stage Issuer as defined by S-K 1300 as we have not established proven or probable mineral reserves, through the completion of a pre-feasibility or feasibility study for any of our uranium projects, as required by the SEC to be defined as a Development Stage Issuer. Even though we commenced extraction of uranium at our Rosita Project and our Alta Mesa Project, the Company remains classified as an Exploration Stage Issuer and will continue to remain an Exploration Stage Issuer until such time as proven or probable mineral reserves have been established at one of our uranium projects.
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The Company is focused on extracting domestic uranium within the United States.The Company utilizes only proven ISR technology to provide necessary fuel for the generation of clean, reliable, and carbon-free nuclear energy. In 2023, the Company commenced uranium extraction at the Rosita CPPs and at the Alta Mesa CPP in South Texas. enCore’s strategy is to build uranium extraction capacity by developing and placing into operation a series of uranium extraction facilities in South Texas, followed by a future pipeline of exploration projects in South Dakota and Wyoming, becoming a leading supplier of domestic uranium to fuel a growing demand for clean energy generation using nuclear power.
Industry and Market Update
The primary use of uranium is to fuel nuclear power plants for the generation of carbon and emission free electricity. According to the World Nuclear Association (“WNA”), as of September 2025, there were 440 operable nuclear reactors world-wide, which required approximately 180 to 225 million pounds of U3O8 annually at full operation. According to data from TradeTech LLC (“TradeTech”), the world continues to require more uranium than it produces from primary extraction. The gap between demand and primary supply is being filled by stockpiled inventories and secondary supplies, which the Company believes have dwindled significantly in recent years.
Expanding the current reactor fleet to meet the levels of electrical generating capacity remains a significant challenge to the nuclear industry. To meet those goals, the global industry must protect existing capacity, and there have been multiple public pronouncements from several countries, including the United States to protect existing nuclear generating capacity. In the United States, as a result of clean energy credits granted by several states and the production tax credit for nuclear power provided in the Inflation Reduction Act of 2022, several nuclear utilities have announced operating life extensions and capacity expansions within their existing operating fleet. Also, the industry has seen an unprecedented trend in reactor recommissioning. In the United States, where just a few years ago reactors were being shut down prematurely, nuclear plants such as Diablo Canyon, Palisades, Three Mile Island, and Duane Arnold are positioned to re-enter service.
With increasing demand expectations, an increase in uranium production must occur in an environment beset by risks, including import bans, sanctions, and secondary sanctions imposed by various countries, transportation issues, trade restrictions in other goods and services beyond nuclear fuel, and fewer available ports, all of which have combined to create widespread uncertainty in the market regarding the availability of both current and future supply.
On January 20, 2025, President Trump issued two Executive Orders that specifically referenced nuclear power and uranium as key parts to expanding energy production in the United States. The Executive Order titled, “Unleashing American Energy,” in addition to directing federal agencies to advance permitting for energy projects also called for uranium to be designated as a “critical mineral” by the U.S. Geological Survey. The Executive Order titled, “Declaring a National Energy Emergency,” directs federal agencies, under emergency authority, to advance permit and license approvals for the production of energy and energy resources. In that Executive Order, uranium is defined as an “energy resource” and subject to the emergency declaration. The U.S. Senate, on February 3, 2025, confirmed Chris Wright, former CEO of Denver-based Liberty Energy, to serve as Energy Secretary. The following day, Wright issued his first Secretarial Order, which directs the Department of Energy (“DOE”) to take immediate action to unleash energy produced in the U.S. in accordance with President Trump’s executive orders. See updates below related to President Trump’s Executive Orders.
Below is a list of some of the recent government policy, U.S. market and global market news that can influence the uranium market.
U.S. Government Policy News
•U.S. Senate Majority Leader John Thune (Republican - South Dakota) is reportedly prepared to schedule a vote on a previously postponed Russia sanctions measure. The legislation, the Sanctioning Russia Act of 2025 (S. 1241), was introduced in April by Senators Lindsey Graham (Republican-South Carolina) and Richard Blumenthal (Democrat - Connecticut) and currently has the support of 84 additional senators. A companion measure in the House of Representatives has garnered backing from more than 100 members.
•U.S. Senators Ted Cruz (Republican – Texas) and Martin Heinrich (Democrat – New Mexico) introduced the Advancing Research in Nuclear Fuel Recycling Act of in October 2025. The proposed legislation would direct the United States DOE to conduct a comprehensive study evaluating the costs, benefits, and risks associated with recycling the nation’s spent nuclear fuel, with particular emphasis on comparisons to interim storage alternatives.
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•Westinghouse Electric Company, Cameco Corporation, and Brookfield Asset Management have announced that the U.S. Government has entered into a strategic partnership to accelerate the deployment of nuclear power pursuant to Executive Orders issued by President Donald Trump on May 23, 2025. The initiative is expected to be supported by at least by an $80 billion investment for the construction of new nuclear reactors across the United States, utilizing Westinghouse reactor technology. Under the terms of the partnership, the U.S. Government will be granted a participation interest that, upon vesting, would entitle it to receive 20 percent of certain cash distributions made by Westinghouse, in excess of $17.5 billion, following the granting of the participation interest. Vesting is contingent upon the U.S. Government making a final investment decision and entering into definitive agreements for the construction of new Westinghouse nuclear reactors in the United States.
•On November 18, 2025, the U.S. Secretary of Energy, Chris Wright and the Kingdom of Saudi Arabia’s Minister of Energy, Prince Abdulaziz bin Salman Al Saud, signed a Joint Declaration confirming the completion of negotiations on civil nuclear cooperation. The declaration established a legal foundation for expanded civil nuclear cooperation between the two countries and signaled the intent for a long-term, multi-billion-dollar partnership in civil nuclear energy, which may include development, deployment, and technology collaboration involving U.S. companies.
•The U.S. Army has identified nine military installations as potential sites for microreactor power plants under its Janus Program, a next-generation nuclear power initiative aimed at enhancing energy resilience. The program envisions the deployment of commercially built microreactors at selected bases across the United States.
•The U.S. DOE has selected the TVA and Holtec Government Services to support the early deployment of advanced light-water SMRs in the United States. The selected project teams are eligible to receive up to $800 million in federal cost-shared funding to advance initial SMR projects in Tennessee and Michigan.
•U.S. Secretary of Energy Chris Wright noted in September 2025, that the United States should consider expanding its strategic uranium reserve, emphasizing the importance of securing long-term uranium supplies to support the nation’s nuclear energy program. During the quarter ended December 31, 2025, the DOE issued funding opportunities and notices to accelerate domestic critical minerals and materials production, supporting technologies that underpin nuclear fuel supply chains and other strategic materials. In January 2026, DOE announced approximately $2.7 billion in contract awards to expand domestic uranium enrichment capacity for both low-enriched uranium (LEU) and high-assay low-enriched uranium (HALEU). This initiative supports development of a more secure U.S. nuclear fuel supply chain and complements strategic reserve discussions by enhancing production capabilities.
•Since March 30, 2025, the United States has implemented a series of aggressive tariff measures that have reshaped global trade relations. On March 24, President Trump issued Executive Order 14245, imposing a 25% tariff on all goods imported from countries that continue purchasing Venezuelan oil. This was followed by a broader escalation during what the administration termed “Liberation Day,” from April 2 to April 5. The United States enacted a sweeping 10% baseline tariff on nearly all imports, with reciprocal rates reaching as high as 34% on Chinese goods and 20–24% on products from the European Union and Japan. Steel and aluminum tariffs were also significantly increased during this period, rising to 50% globally. Legal challenges quickly followed: On May 28, 2025, the United States Court of International Trade ruled that the Liberation Day tariffs exceeded presidential authority under the International Emergency Economic Powers Act (IEEPA), issuing an injunction to block enforcement. Tariffs based on Section 232 (national security) and Section 301 (China-related trade practices) remain legally intact and enforceable as of December 31, 2025. The IEEPA tariffs also remains, thus collection continued until February 2026, when the Supreme Court ruled the tariffs were unconstitutional.
•President Trump signed an Executive Order on February 14, 2025, to establish the National Energy Dominance Council, which is chaired by the Secretary of Interior, Doug Burgum, and vice-chaired by Energy Secretary, Chris Wright. The council's members also include the Secretary of State, Secretary of the Treasury, Secretary of Defense, the Attorney General, Secretary of Agriculture, Secretary of Commerce, and Secretary of Transportation. The Council was expected to present President Trump with a plan for how to raise awareness of the American energy dominance plan within 100 days. As of December 31, 2025, the council has actively advanced its agenda with the following:
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•Encouragement for power plants to increase output by 10% to 15% to support rising electricity demand, especially from artificial intelligence systems.
•Advancing the reversal of the Biden era Liquefied Natural Gas (“LNG”) export clause. The reversal of the export clause has led to the approval of record levels of future U.S. LNG exports in an effort to position the U.S. as the leading LNG exporter in the world.
•The Council has also outlined the initiative to re-open closed power plants, expanding energy infrastructure, launching small modular nuclear reactors, and fast tracking mining/mineral projects.
The Council met during the year ended December 31, 2025, however, no public version of the meeting notes and/or strategy has been made available.
U.S. Market News
•X-Energy Reactor Company, LLC, a U.S. based developer of advanced nuclear reactor and fuel technologies, has announced a Series C-1 financing round totaling approximately $500 million, anchored by Amazon.com, Inc. The investment will support the completion of X-Energy’s reactor design and licensing activities, as well as fund the initial phase of its TRISO-X fuel fabrication facility in Oak Ridge, Tennessee, to help address growing energy demand.
•Global Laser Enrichment (“GLE”) has concluded an independent, third-party validation of its next-generation uranium enrichment technology, which confirms that the company has achieved Technology Readiness Level 6 following the completion of its large-scale enrichment demonstration program.
•California-based General Matter announced plans to build a privately developed facility to enrich uranium in the state of Kentucky. The company, which is backed by investor Peter Thiel, said it intends to make a “historic investment in American nuclear infrastructure” by restoring a shuttered facility in Paducah, Kentucky. General Matter was one of four companies selected in October 2024 by the DOE to provide enrichment services to help establish a U.S. supply of high-assay low-enriched uranium for advanced reactor designs.
•Uranium Energy Corporation launched the United States Uranium Refining and Conversion Corp., a wholly owned subsidiary that will engage in the feasibility of developing a new state-of-the-art American uranium refining and conversion facility.
•During the year ended December 31, 2025, NextEra Energy announced two agreements with Google, which will strengthen U.S. nuclear leadership and help meet growing energy demand from artificial intelligence (AI) with clean and reliable nuclear energy. The cornerstone of this collaboration is the planned restart of the Duane Arnold Energy Center, the only nuclear facility in the U.S. state of Iowa. The plant (615 MWe BWR), which was shut down in 2020, is expected to be fully operational by the first quarter of 2029, pending regulatory approvals to restart the plant.
•The New York Power Authority has issued its first solicitations as part of a new initiative to develop 1 GW of advanced nuclear energy.
•Crusoe, an artificial intelligence data center developer, has entered into a partnership with Blue Energy, a U.S. based nuclear energy company, to develop a nuclear-powered data center campus with up to 1.5 GW of capacity at the Port of Victoria in Victoria, Texas. The planned 1,600-acre campus is expected to begin receiving power as early as 2028, initially supplied by natural gas–fired generation, with a transition to nuclear energy targeted for completion by 2031.
•Constellation, a U.S. based energy company, announced that its Crane Clean Energy Center has secured a $1.0 billion loan from the DOE. This transaction marks the first instance in which the DOE Loan Programs Office has simultaneously finalized a conditional loan commitment and achieved financial close.
•Urenco USA has achieved two significant milestones at its uranium enrichment facility in New Mexico: the company’s first production of enriched uranium exceeding 5% U-235, and the startup of an additional centrifuge cascade as part of its ongoing capacity expansion program.
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•Four public electric utilities -Nebraska Public Power District, Omaha Public Power District, and Lincoln Electric System—together with the Grand River Dam Authority of Oklahoma, have jointly announced the execution of a Memorandum of Understanding to establish the Great Plains New Nuclear Consortium.
•Centrus Energy announced that it has commenced domestic centrifuge manufacturing to support commercial LEU enrichment operations at its facility in Piketon, Ohio.
•The state of Texas is moving toward the creation of a taxpayer funded nuclear power incentive fund. About 80% of the fund’s $350 million would be dedicated toward reimbursing construction costs for functional nuclear reactors. The remainder would be used for research and development. As of October 2025, several companies and projects have expressed interest in Texas’s $350 million nuclear incentive fund, established under House Bill 14. The fund is administered by the Texas Advanced Nuclear Energy Office, which was created to support the development of advanced nuclear reactors and associated industries in the state.
Global Market News
•Following a meeting with U.S. President Donald Trump, the Government of Japan announced its intention to provide up to $332 billion in support for critical energy projects in the United States, including investments in the development and construction of nuclear reactor projects.
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Sales of Uranium and Sales Agreements
During the year ended December 31, 2025, the Company completed uranium sales totaling 655,000 pounds of U3O8, not including converter and transaction costs, for an average sales price of $65.89 per pound of U3O8.
enCore’s uranium sales strategy provides a base level of projected income from sales contracts while preserving a significant ability to realize opportunities when strong short-term market fundamentals are present.
The Company has been able to use improving uranium market conditions to create a balanced uranium sales agreement portfolio, to provide multiple pricing structures to support future market changes and support production plans. As of December 31, 2025, we have executed fourteen uranium sales agreements to supply uranium to nuclear power plants in the United States and one legacy uranium sales agreement with a uranium trading company. enCore’s uranium sales agreement portfolio is a mix of market related pricing, hybrid base price and market related pricing, base escalated pricing, and fixed prices. Of enCore’s fourteen current uranium sales agreements, two are market-related with no floors or ceilings and eight are market related that typically retain exposure to spot pricing, while including minimum floor and maximum ceiling prices, some of which are adjusted upwards periodically for inflation. Minimum floor prices are set at levels that provide the Company with a comfortable margin over its expected costs of operations in Texas while still allowing the Company to participate in anticipated escalations of the price of uranium. The Company will continue to assess opportunities to secure future sales agreements that will support its continued project and production growth strategies. The Company is committed to honoring all sales commitments.
Corporate Updates for the Fourth Quarter 2025
•On October 14, 2025, the Company announced new uranium discoveries had been made in areas in or near existing wellfields. These discoveries were made as a result of a major ongoing re-analysis of thousands of historic drill holes from across the Alta Mesa Project that began in April 2025. This more granular and detailed evaluation has identified uranium mineralized roll fronts in at least three areas to date.
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Operations Update
The Company is focused on producing uranium in the United States and delivering that uranium to customers. The Company currently utilizes only the proven ISR technology to provide necessary fuel for the generation of clean, reliable, and carbon-free nuclear energy.
enCore owns 3 of the 10 licensed and constructed CPPs in the United States. The Company has several key mineral resource projects in other jurisdictions within the United States. Our S-K 1300 compliant resources are listed below:
Total measured and indicated mineral resources 30.94 million lbs U3O8
Total inferred mineral resources 20.54 million lbs U3O8
The Company’s strategy over the next three years is centered around two of its fully licensed Texas CPPs: Rosita and Alta Mesa. The CPPs located at the Rosita and Alta Mesa projects are designed for, and fully capable of, processing feed resin from relocatable satellite IX plants employed at various deposits within a 100-mile radius of each plant. The Rosita CPP was the starting point for enCore’s Texas extraction strategy. In 2024, the Company announced it had commenced uranium extraction operations at Rosita from the Rosita Extension wellfield, PAA-5. Rosita is located approximately 60 miles from Corpus Christi, Texas and has an 800,000-pound U3O8 per year production capacity.
In February 2023, the Company acquired 100% of the Alta Mesa Uranium Project and the Mesteña Grande Uranium Project from Energy Fuels Inc., for $120 million. The Company’s fully licensed Alta Mesa CPP is located approximately 100 miles southwest of Corpus Christi, Texas, and has a production capacity of 1.5 million pounds of U3O8 per year through its IX system located at the plant. The facility has elution, precipitation, drying, and packaging capacity for 2.0 million pounds of U3O8 per year. This plant is designed to accept direct production feed to the IX columns in the plant and concurrently accept loaded resin from satellite locations, once the resin transfer system has been installed. The Alta Mesa Project includes existing and near-term production areas, including fully permitted and authorized production areas 6 and 7. The Mesteña Grande Uranium Project has additional inferred mineral resource areas that will require significant additional exploration drilling and permitting prior to being able to be brought online. In total, the Alta Mesa Uranium Project combined with the Mesteña Grande Uranium Project encompasses mineral leases on over 200,000 acres of private land. In February 2024, the Company sold a 30% interest in the Alta Mesa and Mesteña Grande projects to Boss for $60 million.
In June 2024, the Company announced the successful startup of uranium extraction operations at the Alta Mesa Project. With the restart of the previously operating Alta Mesa Project, the Company is now the only uranium producer in the United States with multiple production facilities in operation as of December 31, 2025. The initial ramp-up was a progressive process to advance and continue increased uranium extraction via direct feed to the Alta Mesa CPP. Exploration drilling and wellfield installation continues at PAA-7 and the second IX circuit at the Alta Mesa CPP was brought online in early 2025 and production continues through both IX circuits. During the year ended December 31, 2025, the head grade through the South train peaked at 110mg/L and averaged 38mg/L, and the West train peaked at 141mg/L for an average grade of 67mg/L.Additional production wells are being brought online regularly which has brought both processing trains to near maximum flow capacity. Utilizing the Pathcad software, the Company is able to adjust wellfield flow patterns to more optimally recover the mineralization and are adjusting patterns and flow to help improve wellfield performance.
During the year ended December 31, 2025, the Company announced new uranium discoveries made in areas in or near existing wellfields. These discoveries have been made as a result of a major ongoing re-analysis of thousands of historic drill holes that began in April 2025 across the Alta Mesa ISR Uranium Project. This more granular and detailed evaluation has identified uranium mineralized roll fronts in at least three areas to date. Follow up drilling by the Company has delineated these new roll fronts with drilling continuing to determine the extents of each.
This additional roll front uranium mineralization has been discovered in close proximity to known and already exploited roll fronts. One of these new roll fronts has progressed to the point that it has now advanced to permitting as a Wellfield 3 extension. Mineralized roll fronts have also been found overlying the past productive mineralization in Wellfield 4 with at least two new roll fronts discovered to date, each extending more than 2,500 feet in length with both included in the existing permit authorization. This newly discovered mineralization lies at a depth of 320 to 345 feet, almost 200 feet above the previously exploited roll front. This shallow mineralization makes for shorter drill times with less footage required, less cement and shorter casing intervals resulting in significant cost savings in delineation and extraction versus deeper mineralization. A third area extending south from the previously exploited mineralization in Wellfield 1 continues
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to expand with additional ongoing drilling. This granular re-analysis of previous drill data is continued through December 31, 2025, and follow-up delineation drilling is expected to continue into 2026.
The Kingsville Dome CPP is currently maintained in a standby condition and will require refurbishment prior to commencement of operations. This facility, similar in size and design to the Rosita CPP facility, has a capacity of 800,000 pounds of U3O8 per year.
As the Company has been increasing its operational pace to meet our targets for uranium extraction rates, we have successfully increased our drill rig capacity to facilitate replacing mineral resource depletion and adding mineral resources in South Texas. The Company started with 6 active drill rigs in South Texas at the beginning of 2024, and by December 31, 2024, the number increased to 17. As of December 31, 2025, the Company had 30 active rigs in South Texas. The Company has an experienced technical team with years of experience in ISR operations in Texas, Wyoming, and Nebraska supporting and managing our operations. We have been able to utilize our experience to self-execute the refurbishment of the Rosita and Alta Mesa CPPs, along with the design, construction and installation of infrastructure for three wellfields and two satellite IX facilities over a period of three years.
South Texas Regulatory Proceedings
Each of the Company’s production facilities maintain several permits and licenses in order to manage the current operations. For the Company’s operating locations, permits and licenses remain current and in effect. In specific cases, some of those permits and licenses are in renewal, and for some expansion activities, new permits or amendments will be necessary. All of our South Texas facility ISR and underground injection operations are regulated by the TCEQ and the Radioactive Material Licenses (“RMLs”) for Rosita and Alta Mesa are issued by the TCEQ under the NRC Agreement State Program that assures that a mature and consistent regulatory process is in place to provide more certainty regarding regulatory approvals.
Currently, at Alta Mesa, the RML and the Class III UIC Area Permit are in timely renewal and under technical review by the TCEQ, but those do not affect current expansion activities. At Upper Spring Creek, the TCEQ has issued the Class III UIC Area Permit, and the agency has approved the expansion of the Rosita RML to incorporate the Upper Spring Creek wellfield and satellite IX facility into the current license activities. Construction of the satellite and wellfield at Upper Spring Creek has commenced.Remaining permits needed to begin operations are the Production Area Authorization and the Class I Waste Disposal Well permit, both of which are under review by the TCEQ as of December 31, 2025.
South Dakota Developments
In addition to the Company’s operations in South Texas, it is also developing pipeline projects in other states. The advanced stage Dewey-Burdock Uranium Project in South Dakota has demonstrated ISR resources, including a 2024 S-K 1300 Technical Report Summary and Canadian National Instrument 43-101 Technical Report and PEA citing robust economics. The project has its source material license from the NRC and its underground injection permits and aquifer exemption from the EPA. In April 2024, the Company submitted its application to renew the ten year old Source Material License, SUA-1600. The NRC has confirmed that the Dewey-Burdock Source Material License is in timely renewal. The underground injection permits were appealed to the EPA’s EAB and the aquifer exemption was appealed to the 8th Circuit Court of Appeals. On September 16, 2025, the Company announced that the EAB denied in full a petition for review filed by the Oglala Sioux Tribe, Black Hills Clean Water Alliance, and NDN Collective against the EPA’s issuance of Class III and Class V UIC permits for the Dewey Burdock Project in South Dakota. The decision allows the Dewey Burdock Project to advance through federal permitting with the commencement of state permitting activities in 2025, accelerating the Project towards development ahead of schedule.
In September of 2025, the Company announced the Dewey Burdock Project had been approved for inclusion in the Fast-41 Program by the U.S. Federal Permitting Improvement Steering Council (“Permitting Council”). This is a component of the implementation of President Trump’s Executive Order on Immediate Measures to Increase American Mineral Production. The Dewey-Burdock Project received its Source and Byproduct Materials License in 2014, from the NRC, now under timely renewal, and will work with the NRC as the lead agency for federal permitting. enCore’s objective is to advance the Dewey Burdock Project into development and operation utilizing the ISR uranium extraction process.
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Under the Executive Order, the Permitting Council identifies priority infrastructure and critical mineral projects to receive accelerated permitting review. The addition of the first South Dakota ISR project supports the domestic uranium production focus of the United States. This focus enables the development of essential clean energy, extracted through environmentally responsible ISR technology, to provide affordable, reliable domestic energy.
Wyoming Developments
The Company has commenced the initial permitting work to advance the Gas Hills Project as an ISR uranium recovery operation located in central Wyoming, approximately 60 miles west of Casper. As part of the initial data collection for project permitting, the Company initiated core drilling during 2024. Our Gas Hills Project is located in the historic Gas Hills Uranium District in the brownfield area of extensive previous extraction.
In 2024, we disclosed that the Company initiated exploration drilling on the Dewey Terrace Project area. The near term goal of this drilling is designed to not only define the extent of the Dewey Terrace project mineralization, but also determine its eastern extent and potential to connect with our Dewey-Burdock deposit just across the state line in South Dakota. The drilling at both the Gas Hills and the Dewey Terrace Projects remain ongoing.
Results of Operations:
The following table summarizes the results of operations for the years ended December 31, 2025, and 2024:
Years Ended December 31 Increase(Decrease) PercentChange
(in thousands except per share data) 2025$ 2024$
Basic and diluted loss per share(1) $ (0.30) $ (0.34) 0.04 (12)%
(1) For the years ended December 31, 2025 and 2024, outstanding stock options, warrants, unvested restricted stock units and the Convertible Senior Notes are excluded from the calculation of our diluted weighted average common shares outstanding as their effect would be anti-dilutive due to a net loss from continuing operations.
The following table sets forth selected operating data and financial metrics for uranium sales for the years ended December 31, 2025, and 2024.
Year Ended December 31 Increase(Decrease) PercentChange
•Revenue - Revenue from uranium sales for the years ended December 31, 2025, was $43,155 compared to revenue of $58,334 for the years ended December 31, 2024, a decrease of $15,179. The decrease is driven by less volumes sold and lower realized sales prices caused by ceiling prices embedded in contracts with customers. The realized sales prices per pound of uranium for the years ended December 31, 2025 and 2024 were $65.89 and $81.02, respectively, and included the contractual sales price less sales-related costs such as transfer fees. The realized sale price per pound decrease is dictated by the market for uranium, which is a commodity.
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•Cost of Sales - Costs applicable to uranium sales were $33,463 for the years ended December 31, 2025, related to the completed sale of 655,000 pounds of uranium at a weighted average cost of $51.09 per pound compared to uranium costs of $65,541 for the sale of 720,000 pounds at a weighted average cost of $91.03 per pound for the years ended December 31, 2024. The decrease in costs was the result of no purchases of uranium, offset by more sales placed on extracted uranium at a lower market price. The Company’s weighted average cost components include the cost of purchased uranium and uranium from extraction.
•Operating expenses - Operating expenses include selling, general and administrative expenses. Operating expenses, excluding stock option expenses, for the years ended December 31, 2025, were $71,254 as compared to $60,188 for the years ended December 31, 2024. This increase primarily reflects the growth and increased activity levels the Company experienced in 2025, which was driven primarily by the increased extraction of uranium at Alta Mesa and Rosita which commenced during the latter part of 2024, combined with increased professional fees related to the Convertible Senior Notes and increased staff costs.
•Stock option expense - Stock option expense decreased for the years ended December 31, 2025 at $4,203 compared to $4,788 for the same period in 2024. The decrease in stock option expense is driven by the issuance, exercise, expiration and forfeiture of issued options and common shares.
•Interest income - Interest income for the years ended December 31, 2025, and December 31, 2024, was $1,715 and $2,476, respectively. The decrease was primarily driven by the decrease in cash held in brokerage and bank accounts.
•Interest expense- Interest expense for the years ended December 31, 2025, and December 31, 2024, was $3,392 and $1,735, respectively. The increase is primarily driven by the interest expense related to the Convertible Senior Notes. See Note 15 - Debt for more information.
•Gain/(Loss) on marketable securities, unrealized - The Company recognized a loss of $5,681 on the fair value of marketable securities, unrealized for the years ended, December 31, 2025 compared to a loss of $2,711 for the years ended December 31, 2024. Unrealized gains and losses for the years ended December 31, 2025 and 2024, are due to favorable and unfavorable market conditions for the respective periods.
•Gain on marketable securities, realized - The Company recognized a gain of $9,613 on the fair value of marketable securities, realized for the years ended December 31, 2025, as a result of the sale of common share investments compared to a gain $248 for the years ended December 31, 2024.
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The table below presents total cost of extracted pounds and uranium costs per extracted pound during the reporting period. Total cost of extracted pounds is the cost of sales less the cost of sales of purchased goods, which includes the aggregate purchase price of uranium sourced from purchased uranium. Uranium cost per extracted pound is the total cost of extracted pounds divided by the pounds of uranium extracted during the period. Total cost of extracted pounds and uranium costs per extracted pound, includes the allocation of cash and non-cash costs
During the year endedDecember 31, 2025, the Company continued its uranium extraction activities at its South Texas operations.
Total Costs of U3O8 Sold
Pounds U3O8 Cost ($000s) Cost/Pounds Pounds U3O8 Cost ($000s) Cost/Pounds
Extracted:
(1) Lower of actual cost or market price of the year ended December 31, 2025
Inventory Remaining on Hand
Pounds U3O8 Cost ($000s) Cost/Pounds Pounds U3O8 Cost ($000s) Cost/Pounds
Extracted:
The Company remains committed to cost efficiency and production optimization, ensuring competitive uranium extraction and processing. The Company anticipates further cost efficiencies as additional wellfield patterns come online and economies of scale improve.
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Liquidity and Capital Resources
Our short-term cash requirements are primarily driven by exploration and development activities aimed at advancing properties for uranium extraction. We expect to meet our short-term cash requirements generally through existing working capital. As of December 31, 2025, and December 31, 2024, the Company had cash and cash equivalents of $52,403 and $39,701, respectively, and working capital of $96,134 and $57,334, respectively.
Our long-term cash requirements are also primarily driven by exploration and development activities aimed at advancing properties for uranium extraction. We expect to meet our long-term cash requirements through various sources of capital, which may include a revolving credit facility or line of credit and future debt or equity issuances, existing working capital, and net cash provided by operations and property dispositions. However, there are a number of factors that may have a material adverse effect on our ability to access these capital sources, including the state of overall equity and credit markets, our degree of leverage, our unencumbered asset base and borrowing restrictions imposed by lenders (including as a result of any failure to comply with financial covenants in future indebtedness), general market conditions for uranium mining companies and other energy companies, our operating performance and liquidity and market perceptions about us. The success of our business strategy will depend, in part, on our ability to access these various capital sources.
On August 22, 2025, we issued $115,000 aggregate principal amount of Convertible Senior Notes. The Convertible Senior Notes bear an annual interest of 5.5%, payable semiannually in arrears and the Notes mature on August 15, 2030.
We believe that our available cash, expected operating cash flows, and future revolving credit facility or line of credit or equity or debt financings will provide sufficient funds for our operations and anticipated scheduled debt service payments for the next twelve-month period following December 31, 2025. We believe that our sources of long-term cash will be sufficient for our needs thereafter.
Cash Flows
The following table reflects cash flow activities for the year ended December 31, 2025 and 2024:
Year Ended December 31,
Impact of currency rate changes in cash (185) 56 (241)
Net Cash Used in Operating Activities
Net cash used in operating activities decreased by $20,212, to cash used in operating activities of $24,992, for the year ended December 31, 2025, compared to cash used in operating activities of $45,204 for the year ended December 31, 2024. This is largely driven by paying off the note payable to a related party in 2025, as discussed in Note 15, offset by less purchases of uranium inventory during the year ended December 31, 2025, compared to the year ended December 31, 2024.
Net Cash Used In Investing Activities
Net cash used in investing activities increased by $16,234, to $46,224, for the year ended December 31, 2025, compared to $29,990 for the year ended December 31, 2024. This was largely driven by the purchase of marketable securities and the acquisition of property and equipment during the year ended December 31, 2025, compared to the same period in 2024.
Net Cash Provided by Financing Activities
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Net cash provided by financing activities decreased by $22,677, to $84,740 for the year ended December 31, 2025, compared to cash provided by financing activities of $107,417 for the year ended December 31, 2024. This was largely driven by the proceeds from the Convertible Senior Notes offset by a reduction in equity financing and, payment of capped call premiums. During the year ended December 31, 2024, the Company received proceeds from the sale of minority interest to Boss, exercised warrants and received proceeds from the private placement (see Note 13 - Stockholders’ Equity).
Commitments
The Company’s sales commitments, for all sales contracts, are presented in pounds (in thousands) below.
Year Volume (in pounds)
Off Balance Sheet Arrangements
As of December 31, 2025, the Company had no material off-balance sheet arrangements such as guarantee contracts, contingent interest in assets transferred to an entity, derivative instruments obligations or any obligations that trigger financing, liquidity, market or credit risk to the Company.
Critical Accounting Policies and Estimates
Our consolidated financial statements have been prepared in accordance with U.S. GAAP. Preparation of the financial statements requires us to make judgments, estimates and assumptions that impact the reported amount of net sales and expenses, assets and liabilities and the disclosure of contingent assets and liabilities. We consider an accounting judgment, estimate or assumption to be critical when the estimate or assumption is complex in nature or requires a high degree of judgment and when the use of different judgments, estimates and assumptions could have a material impact on our consolidated financial statements. We evaluate our estimates and assumptions on a regular basis. We base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates and assumptions used in preparation of our financial statements. Our significant accounting policies are described in more detail in Note 2 – Summary of Significant Accounting Policies of our Consolidated Financial Statements.
Item 7A. Quantitative and Qualitative Disclosure About Market Risk
Our exposure to market risks includes, but is not limited to, equity price risk, uranium price risk and foreign currency risk.
Equity Price Risk
We are subject to market risk related to the market price of our common shares, which trade on Nasdaq and TSX-V. Historically, we have relied upon equity financing from the sale of our common shares or securities convertible into our common shares to fund our operations. Movements in the price of our common shares have been volatile in the past and may continue to be volatile in the future. As a result, there is a risk that we may not be able to complete an equity financing at an acceptable price when required.
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In addition, we have investments in equity securities, which are common shares and warrants of publicly listed companies. Movements in the price of these equity securities have been volatile in the past and may continue to be volatile in the future.
Uranium Price Risk
We are subject to market risk related to the market price of uranium. As of December 31, 2025, we had no uranium supply or off-take agreements in place. Since future sales of uranium concentrates are contracted based on both spot and fixed pricing, fluctuations in the market price of uranium would have a direct impact on our revenues, results of operations and cash flows. We do not use derivative financial instruments for speculative trading purposes, nor do we hedge our uranium price exposure to manage our uranium price risk.
Foreign Currency Risk
We are subject to market risk related to foreign currency exchange rate fluctuations. Our functional currency is the United States Dollar; however, a portion of our business is transacted in other currencies including the Canadian Dollar. To date, these fluctuations have not had a material impact on our results of operations.
We do not use derivative financial instruments for speculative trading purposes, nor do we hedge our foreign currency exposure to manage our foreign currency fluctuation risk.
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Item 8. Financial Statements and Supplementary Data
Index to Financial Statements
Financial Statements Page
Report of Registered Public Accounting Firm (KPMG PCAOB ID: 185) F-2
Consolidated Balance Sheets as of December 31, 2025 and 2024 F-4
Notes to Consolidated Financial Statements F-12
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Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
enCore Energy Corp:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of enCore Energy Corporation and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive loss, stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Asset Retirement Obligation Costs
As discussed in Note 9 to the consolidated financial statements, the Company recorded an asset retirement obligation (ARO) liability of $18.9 million as of December 31, 2025. Asset retirement obligations consist of estimated final well closure, plant and equipment decommissioning and removal, and environmental remediation costs to be incurred by the Company in the future. The asset retirement obligation is estimated based on the current costs adjusted for inflation and then discounted at a credit adjusted risk-free rate.
We identified the evaluation of the future costs for asset retirement obligations as a critical audit matter. Specialized skills and knowledge were required to evaluate the Company’s determination of asset retirement obligations and their related costs to satisfy the ARO.
The following are the primary procedures we performed to address this critical audit matter. We tested the determination of the planned asset retirement obligations used in the estimate by inquiring of management and inspecting cost calculations included in applications approved and permitted by regulatory agencies. We involved environmental professionals with specialized skills and knowledge, who assisted in evaluating the Company’s planned asset retirement obligations for certain sites, including comparing the Company’s planned asset retirement obligations to those communicated to regulatory authorities.
/s/ KPMG LLP
We have served as the Company’s auditor since 2024.
Houston, Texas
March 31, 2026
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F-3
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enCore Energy Corp
Consolidated Balance Sheets
December 31,
(in thousands, except per share data) 2025 2024
ASSETS
Current assets
Accounts receivable 4,944 -
Prepaid expenses and other current assets 3,559 2,700
Marketable securities, non-current - 837
Right of use assets - operating lease 3,083 310
Other long-term assets 678 -
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 12,434 $ 7,464
Accounts payable - related parties 1,060 2,378
Note payable - related party - 20,108
Operating lease liabilities, current 186 130
Convertible senior notes 109,986 -
Operating lease liabilities, non-current 3,077 202
Commitments and contingencies (Note 10)
Stockholders’ equity
Accumulated other comprehensive loss (2,626) (3,597)
Total liabilities and stockholders' equity $ 430,422 $ 392,722
See accompanying notes to the consolidated financial statements.
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enCore Energy Corp
Consolidated Statements of Operations
Years Ended December 31,
(in thousands, except share amounts) 2025 2024
Operating costs:
Depreciation, amortization and accretion 5,381 3,369
Gain on marketable securities, realized 9,613 248
Loss on marketable securities, unrealized (5,681) (2,711)
Other expense - (17)
Total other income (expense) 2,255 (1,739)
Less: Net loss attributable to non-controlling interests (6,167) (6,601)
Net loss attributable to enCore Energy Corp. $ (56,856) $ (61,392)
Net loss per share basic $ (0.30) $ (0.34)
Net loss per share diluted $ (0.30) $ (0.34)
Weighted average number of shares
See accompanying notes to the consolidated financial statements.
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enCore Energy Corp
Consolidated Statements of Comprehensive Loss
Years Ended December 31,
Other comprehensive gain (loss), (net of tax)
Foreign currency translation adjustment 971 (1,805)
Total other comprehensive gain (loss), (net of tax) 971 (1,805)
Comprehensive loss attributable to non-controlling interests (6,167) (6,601)
Comprehensive loss attributable to enCore Energy Corp. $ (55,885) $ (63,197)
See accompanying notes to the consolidated financial statements.
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enCore Energy Corp
Consolidated Statements of Cash Flow
Years Ended December 31,
OPERATING ACTIVITIES
Adjustments to reconcile net loss to net cash used in operating activities
Amortization, depreciation and accretion 5,381 3,262
Amortization of debt issuance costs 329 -
Inventory impairment charge 155 6,054
Asset retirement obligation (gain)/loss (946) 5,424
Exploration costs related to mineral properties 11,595 9,392
Unrealized loss on marketable securities 5,681 2,711
Deferred tax liability (596) (5,968)
Realized gain on marketable securities (9,613) (248)
Changes in operating assets and liabilities:
Accounts receivables (4,944) -
Prepaids and deposits 8,466 (10)
Accounts payable and accrued liabilities 4,450 4,079
Asset retirement obligations (132) (399)
Due to related parties (1,996) (55)
Net cash used in operating activities $ (24,992) $ (45,204)
INVESTING ACTIVITIES
Purchase of property, plant, and equipment (19,997) (11,348)
Purchase of intangible assets (1,000) -
Exploration costs related to mineral properties (11,595) (9,392)
Purchase of marketable securities (34,396) (9,798)
Proceeds from sale of marketable securities 20,764 548
Net cash used in investing activities $ (46,224) $ (29,990)
FINANCING ACTIVITIES
Proceeds from issuance of convertible senior notes 115,000 -
Payments of debt issuance costs (5,343) -
Private placement proceeds - 10,000
Common stock issuance costs - (50)
Proceeds from the At -the-Market ("ATM") sales - 2,008
Proceeds from exercise of warrants 510 25,471
Proceeds from exercise of stock options 1,062 1,760
Proceeds from sale of minority interest - 60,000
Contributions from non-controlling interest 5,625 8,228
Payments on note payable - related party (20,108) -
Payment of capped call premiums (12,006) -
Net cash provided by financing activities $ 84,740 $ 107,417
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enCore Energy Corp
Consolidated Statements of Cash Flow (continued)
Net increase in cash, cash equivalents and restricted cash 13,524 32,223
Cash, cash equivalents and restricted cash, beginning of year 47,452 15,173
Cash, cash equivalents and restricted cash, end of year $ 60,791 $ 47,452
See accompanying notes to the consolidated financial statements.
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enCore Energy Corp
Consolidated Statements of Cash Flow (continued)
Years Ended December 31,
Supplemental disclosures:
Cash paid for interest $ 2,328 $ -
Non-cash activities:
Inventory distributions to non-controlling interest 6,829 1,905
Inventory received in exchange for note payable - 20,108
Conversion of promissory note, including equity portion, to shares - 23,117
Unpaid contributions from NCI - 1,759
Non-cash mineral property additions 1,244 -
See accompanying notes to consolidated financial statements.
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enCore Energy Corp
Consolidated Statements of Stockholders’ Equity
(in thousands) Shares Amount
Contributions from non-controlling interest - - - 8,228 - - 1,759 9,987
Inventory transfers to non-controlling interest - - - - - - (1,905) (1,905)
Share issuance costs - (50) - - - - - (50)
Share-based compensation - - - 4,788 - - - 4,788
Cumulative translation adjustment - - - - - (1,805) - (1,805)
Cash contributions from non-controlling interest - - - 5,625 - - 9,325 14,950
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enCore Energy Corp
Consolidated Statements of Stockholders’ Equity
Inventory transfers to non-controlling interest - - - - - - (6,829) (6,829)
Share-based compensation - - - 4,203 - - - 4,203
Cumulative translation adjustment - - - - - 971 - 971
See accompanying notes to the consolidated financial statements.
F-11
enCore Energy Corp.
Notes to Consolidated Financial Statements
(all amounts in thousands, except for shares)
1.Nature of Operations
enCore Energy Corp. was incorporated on October 30, 2009, under the laws of British Columbia, Canada. enCore Energy Corp., together with its subsidiaries (collectively referred to as the “Company” or “enCore”), is principally engaged in the acquisition, exploration, development and extraction of uranium resource properties in the United States. The Company’s corporate headquarters is located at 13355 Noel Rd, Suite 1700, Dallas, Texas 75240.
The Company is focused on the extraction of domestic uranium in the United States. The Company utilizes the proven In-Situ Recovery technology (“ISR”) to provide necessary fuel for the generation of clean, reliable, and carbon-free nuclear energy.
The Company is an “Exploration Stage Issuer” as defined by Regulation S-K subpart 1300 (“S-K 1300”) of the Securities Act of 1933, as amended (the “Securities Act”) as it has not established proven or probable mineral reserves, as required by the Securities and Exchange Commission (“SEC”) to be defined as a Development Stage Issuer.
2.Summary of Significant Accounting Policies
Basis of Presentation
These consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the SEC applicable to year end financial information. As of January 1, 2025, the Company became a U.S. Domestic Issuer, as defined by the SEC. Upon becoming a U.S. Domestic Issuer, and including the report herein, the Company has prepared its consolidated financial statements in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”) for all periods presented.
These financial statements are presented in thousands of United States Dollars unless otherwise noted. There are certain disclosures where the Company discloses the amount in Canadian Dollars (“CAD,”) as this is the currency in which the instrument is denominated.
Principles of Consolidation
These financial statements incorporate the financial statements of the Company and its controlled subsidiaries. The Company consolidates entities that it controls due to ownership of a majority voting interest and consolidates variable interest entities (“VIEs”) when it is the primary beneficiary. All intercompany transactions and balances have been eliminated.
The Company has a 70% interest in the Alta Mesa Central Processing Plant (“CPP”) and Wellfield project (“Alta Mesa” or the “Alta Mesa Project”) with Boss Energy Limited (“Boss” or “Boss Energy”) owning the remaining 30%. The Company retained control after Boss acquired its interest in February 2024. Alta Mesa is considered a VIE, with the Company being considered the primary beneficiary. As a result, the Company consolidates the operations of Alta Mesa with an offsetting non-controlling interest being recorded. Refer to Note 8 – Sale of Minority Interest in Alta Mesa for more information related to the Boss transaction.
Non-controlling interests represent the portion of their equity which is not attributable, directly or indirectly, to the Company. These amounts are required to be reported as equity instead of as a liability on the consolidated balance sheets. Financial Accounting Standards Board (the “FASB”) Accounting Standard Codification (“ASC”) Topic 810, Consolidation requires net income or loss from non-controlling interests to be shown separately on the consolidated statements of operations.
Segments
Operating segments are defined as components of an entity for which discrete financial information is available and is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in making decisions regarding resource allocation and performance assessment. The Company’s CODM is the Chief Executive Officer. The Company has one operating segment and one reportable segment. This reportable segment relates to uranium extraction, recovery and sales of uranium from mineral properties along with the exploration, permitting and
F-12
enCore Energy Corp.
Notes to Consolidated Financial Statements
(all amounts in thousands, except for shares)
evaluation of uranium properties in the United States. The CODM assesses financial performance and decides how to allocate resources based on performance of mineral properties and the sale of uranium.
Mineral Rights and Properties
We have established the existence of mineralized materials for certain uranium projects, including our Rosita Uranium Project (“Rosita” or “Rosita Project”) and Alta Mesa Project (collectively, the “ISR Projects”). We have not established proven or probable reserves, as defined by S-K 1300, through the completion of a “final” or “bankable” feasibility study for any of the uranium projects we operate, including our ISR Projects. As a result, and despite the fact that we commenced the extraction of mineralized materials at our ISR Projects, we remain an Exploration Stage Issuer, as defined by the SEC, and will continue to remain as an Exploration Stage Issuer until such time that proven or probable reserves have been established.
As an Exploration Stage Issuer, expenditures relating to the acquisition of mineral rights are initially capitalized as incurred while exploration and pre-extraction expenditures are expensed as incurred until such time as we exit the Exploration Stage by establishing proven or probable reserves. Expenditures relating to exploration activities, such as drill programs to establish mineralized materials, are expensed as incurred. Expenditures relating to pre-extraction activities, such as the construction of mine wellfields, ion exchange (“IX”) facilities and disposal wells, are expensed as incurred until such time that proven or probable reserves are established for that project, after which expenditures relating to mine development activities for that particular project are capitalized as incurred. The Company presents construction and drilling costs within the exploration costs related to mineral properties in the investing cash flows section of the consolidated statements of cash flows. The remaining costs (e.g. maintenance and lease fees) are included in the operating cash flows section of the consolidated statements of cash flows.
When the Company starts to extract mineralized materials at our ISR Projects, the capitalized costs are depleted over estimated mineral resources using the units-of-production method. Depletion costs are capitalized to inventory then included in cost of sales as the inventory is sold on the consolidated statements of operations.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported revenues and expenses during the reported periods. Areas requiring significant judgments, estimates, and assumptions include the valuation of acquired mineral rights and properties, equity-method accounted investments, existence of impairment indicators for the Company’s long-lived assets, valuation and measurement of impairment losses on mineral rights and properties, valuation of asset retirement obligations, and valuation of stock options, share purchase warrants and share-based compensation. Other areas requiring estimates include depletion and amortization of mineral rights and properties and depreciation of property, plant and equipment. Actual results could differ significantly from those estimates and assumptions.
Foreign Currency
These financial statements are presented in U.S. Dollars, unless otherwise specified. The functional currency of enCore Energy Corp. is the Canadian Dollar. The functional currency of the Company’s subsidiaries is the U.S. Dollar based on the currency of the primary economic environment in which these subsidiaries operate.
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the period-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.
F-13
enCore Energy Corp.
Notes to Consolidated Financial Statements
(all amounts in thousands, except for shares)
Exchange differences arising on the translation of monetary items or on settlement of monetary items are recognized in profit or loss in the period in which they arise. Exchange differences arising on the translation of non-monetary items are recognized in other comprehensive loss in the consolidated statements of comprehensive loss to the extent that gains and losses arising on those non-monetary items are also recognized in other comprehensive loss. When the non-monetary gain or loss is recognized in profit or loss, the exchange component is also recognized in profit or loss.
On consolidation, the Company’s financial statements are translated into the presentation currency, being the U.S. Dollar. Assets and liabilities are translated at the period-end exchange rate. Income and expenses are translated at the average exchange rate for the period in which they arise. Exchange differences are recognized in accumulated comprehensive loss as a separate component within total stockholders’ equity, net of any related income tax effects, on the consolidated balance sheets.
Cash, Cash Equivalents and Restricted Cash
Cash and cash equivalents consist of bank deposits and term deposits with an original maturity of three months or less. Restricted cash is excluded from cash and cash equivalents and is included in long-term assets. Restricted cash relates to collateralization of the Company’s performance obligations with an unrelated third party, also known as performance bonds. These funds are not available for the payment of general corporate obligations. The performance bonds are required for future restoration and reclamation obligations related to the Company’s operations. Refer to Note 9 – Asset Retirement Obligations and Restricted Cash.
Inventory, net
Inventory, net includes uranium concentrates and converted products including chemicals and are measured at the lower of cost and net realizable value. The cost of converted products and uranium concentrates is based on the first in first out method. Cost includes direct materials, direct labor and operational overhead expenses. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. Consumable supplies and spares are valued at the lower of cost or replacement value.
Marketable Securities
Marketable equity securities consist of investments in publicly traded equity securities. The Company classifies and accounts for its marketable equity securities as available-for-sale. Subsequent to initial recognition, marketable equity securities are measured at fair value and changes therein are recognized as a component of loss on marketable securities, unrealized, in the consolidated statements of operations.
Equity Method Investments
Investments in an entity in which our ownership is greater than 20% but less than 50%, a 50/50 joint venture which the Company does not control, or an entity where other facts and circumstances indicate that we have the ability to exercise significant influence over its operating and financing policies, are accounted for using the equity method in accordance with FASB ASC Topic 323, Investments – Equity Method and Joint Ventures.
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enCore Energy Corp.
Notes to Consolidated Financial Statements
(all amounts in thousands, except for shares)
The Company accounts for equity method investments over which the Company exerts significant influence, but not control, over the financial and operating policies through the fair value option of FASB ASC Topic 825, Financial Instruments. The fair value of the investee’s common shares is measured based on its closing market price. Subsequent to initial recognition, equity method investments are measured at fair value and changes therein are recognized as a component of loss on marketable securities, unrealized in the consolidated statements of operations.
Property, Plant and Equipment
Property, plant and equipment is measured at cost less accumulated depreciation.Useful lives are based on the Company’s estimate at the date of acquisition and are depreciated straight-line as follows for each class of assets:
Category Range
Uranium Plant 15-25 years
Other Property Plant and Equipment 3-5 years
Software 2-3 years
Furniture 3-5 years
Buildings 10-40 years
Intangible Assets
Intangible assets consist of a data access agreement and data purchases, which are definite- and indefinite-lived assets, respectively. Definite-lived intangible assets are amortized over 14 years on a straight-line basis.
The Company reviews its definite-lived intangible assets for impairment when impairment indicators exist. When impairment indicators exist, the Company determines if the carrying value of its definite-lived intangible assets or asset groups exceeds the related undiscounted future cash flows. In cases where the carrying value exceeds the undiscounted future cash flows, the carrying value is written down to fair value. Fair value is determined using a discounted cash flow analysis.
The Company assesses its indefinite-lived intangible assets for impairment periodically to determine if any adverse conditions exist that would indicate impairment or when impairment indicators exist. The Company assesses its indefinite-lived intangible assets for impairment at least annually by comparing the fair value of the indefinite-lived intangible assets to their carrying value.
There were no indicators of impairment as of December 31, 2025 and 2024.
Impairment of Long-lived Assets
The Company reviews and evaluates its long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Mineral rights and properties are monitored for impairment based on factors such as uranium prices, government regulations, our continued right to explore the area, exploration reports, assays, technical reports, drill results and continued plans to fund exploration and development programs on the property.
On each reporting date, the Company conducts a review of potential triggering events for all its mineral rights and properties. When events or changes in circumstances indicate that the related carrying amounts may not be recoverable, the Company carries out a review and evaluation of its long-lived assets in accordance with its accounting policy. Impairment losses are recognized as part of operating losses in the consolidated statements of operations.
F-15
enCore Energy Corp.
Notes to Consolidated Financial Statements
(all amounts in thousands, except for shares)
Recoverability is measured by comparing the undiscounted future net cash flows to the net book value. When the net book value exceeds future net undiscounted cash flows, the fair value is compared to the net book value and an impairment loss may be measured and recorded based on the excess of the net book value over fair value. Fair value for mineral rights and properties prior to extraction is based on a combined approach of a discounted cash flow analysis and a market approach.
Future cash flows are estimated based on quantities of recoverable mineralized material, expected uranium prices (considering current and historical prices, trends and estimates), production levels, operating costs, capital requirements and reclamation costs, all based on the life-of-mine project plans. In estimating future cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of future cash flows from other asset groups. The Company's estimates of future cash flows are based on numerous assumptions, and it is possible that actual future cash flows will be significantly different than the estimates, as actual future quantities of recoverable minerals, uranium prices, production levels, costs and capital are each subject to significant risks and uncertainties.
There were no impairments for long-lived assets as of December 31, 2025 or 2024.
Operating Leases
The Company accounts for office leases under FASB ASC Topic 842, Leases, which requires leases to be recognized as assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. The Company recognizes in the balance sheet a liability to make lease payments (the lease liability) and the right-of-use asset representing the right to the underlying asset for the lease term. For leases with a term of twelve months or less, the Company has made an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. The office leases all meet the definition of an operating lease.
Income Taxes
The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred income tax assets and liabilities are recorded based on differences between the financial statement carrying values of existing assets and liabilities and their respective income tax bases (temporary differences), and losses carried forward. Deferred income tax assets and liabilities are measured using the enacted tax rates which will be in effect when the temporary differences are likely to reverse. The effect on deferred income tax assets and liabilities of a change in tax rates is included in operations in the period in which the change is enacted.
The Company records a valuation allowance to reduce deferred income tax assets to the amount that is believed more likely than not to be realized. When the Company concludes that all or part of the deferred income tax assets are not realizable in the future, the Company makes an adjustment to the valuation allowance that is charged to income tax benefit in the period such determination is made.
Asset Retirement Obligations
Various federal and state laws and regulations require our Company to reclaim the surface areas and restore groundwater quality to regulatory standards after the completion of extraction. We recognize the present value of the future restoration and remediation costs as an asset retirement obligation in the period in which we incur an obligation associated with the retirement of tangible long-lived assets that result from the acquisition, construction, development and/or normal use of the assets.
Asset retirement obligations (“ARO”) consist of estimated final well closure, plant and equipment decommissioning and removal and environmental remediation costs to be incurred by our Company in the future. The asset retirement obligation is estimated based on the current costs escalated at an inflation rate and discounted at a credit adjusted risk-free rate at inception. The asset retirement obligations are capitalized as part of the costs of the underlying assets and amortized over their remaining useful life. The asset retirement obligations are
F-16
enCore Energy Corp.
Notes to Consolidated Financial Statements
(all amounts in thousands, except for shares)
accreted to an undiscounted value until they are settled. The accretion expenses are charged to depreciation, amortization, and accretion on the consolidated statement of operations and the actual retirement costs are recorded against the asset retirement obligations when incurred.
Convertible Senior Notes
The Company accounts for its convertible senior notes in accordance with ASC 470, Debt. The convertible senior notes are accounted for as a single liability measured at amortized cost, as no features does not require bifurcation. Debt issuance costs are recorded as a direct deduction from the carrying amount of the notes and amortized to interest expense over the contractual term using the effective interest method. Interest expense includes both the contractual coupon and the amortization of debt issuance costs. The convertible senior notes are classified as long-term debt in the consolidated balance sheets unless amounts become due within twelve months.
In connection with the issuance of the convertible senior notes, the Company entered into capped call transactions, which are accounted for separately as equity instruments in the consolidated balance sheets.
Share-based Compensation
We measure share-based awards, typically options and restricted stock units, at fair value on the date of the grant and expense the awards over the requisite service period of employees, brokers or consultants. The fair value of these stock options is measured at the grant date using the Black-Scholes option pricing model. The fair value of restricted stock units is measured at the fair value of our common shares based on the market price at the date of the grant. The share-based awards are equity-classified.
Share-based compensation expense related to awards with only service conditions having a graded vesting schedule is recorded on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award were, in substance, multiple awards, while expense for all other awards are recognized on a straight-line basis.
The Company’s estimates may be impacted by certain variables including, but not limited to, stock price volatility, employee stock option exercise behaviors, additional stock option grants, the Company’s performance and related tax impacts.
Warrants
Warrants that are issued with shares issued have the proceeds allocated between the shares and the warrants based on their relative fair value. The fair value of the warrants is measured at the grant date using the Black-Scholes option pricing model. The fair value of the shares granted is based on the respective share’s publicly-traded market price.
Warrants issued to brokers are measured at their fair value on the vesting date. The fair value of stock options and warrants issued to brokers are estimated using the Black-Scholes option pricing model.
Financial Instruments
Financial assets and liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument. Financial assets and liabilities are recognized when the rights to receive or obligation to pay cash flows from the assets or liabilities have expired or been settled or have been transferred and the Company has transferred substantially all risks and rewards of ownership.
The Company classifies its financial instruments in the following categories: at fair value through profit and loss (“FVTPL”), at fair value through other comprehensive loss (“FVTOCI”), or at amortized cost. The Company determines the classification of financial assets at initial recognition. The classification of debt instruments is driven by the Company’s business model for managing the financial assets and their contractual cash flow characteristics. Equity instruments that are held for trading are classified as FVTPL. For other equity instruments, on the day of acquisition the Company can make an irrevocable election (on an instrument-by instrument basis) to
F-17
enCore Energy Corp.
Notes to Consolidated Financial Statements
(all amounts in thousands, except for shares)
designate them at FVTOCI. Financial liabilities are measured at amortized cost, unless they are required to be measured at FVTPL (such as debt) or the Company has opted to measure them at FVTPL. Financial assets and liabilities carried at FVTPL are initially recorded at fair value and transaction costs are expensed in profit or loss. Realized and unrealized gains and losses arising from changes in the fair value of the financial assets and liabilities held at FVTPL are included in the consolidated statements of operations in the period in which they arise.
Revenue Recognition and Accounts Receivables
Our revenues are primarily derived from the sale of uranium concentrates under contracts with major U.S. utilities. Revenue is recognized when delivery is evidenced by book transfer at the applicable uranium storage facility. The sales contracts specify the quantity to be delivered, the price, payment terms and the year of the delivery. Under these contracts, each product delivered to the customer represents a separate performance obligation. The Company's contracts with its customers include minimum quantities to be delivered over terms greater than one year and may include fixed prices, market-based prices, and other variable pricing. In many contracts the variable consideration is allocated entirely to a wholly unsatisfied performance obligation, having met the criteria to do so. Other contracts may require certain variable consideration to be estimated and constrained as part of the transaction price.
Under the Company’s uranium contracts, it invoices customers after the performance obligations have been satisfied, at which point payment is unconditional. Accordingly, the Company’s uranium contracts generally do not give rise to contract assets or liabilities.
The Company applies the optional exemption not to disclose the remaining transaction price that is variable and allocated to wholly unsatisfied future quantities. The Company expects to recognize revenue related to fixed and unconstrained variable consideration of $117,895 through December 31, 2028, and $205,620 thereafter under the non-cancelable portion of these contracts.
Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company evaluates its estimate of expected credit losses based on historical experience and current and forecasted future economic conditions for each portfolio of customers. As of December 31, 2025 and December 31, 2024, the Company did not have an allowance for expected credit losses for trade accounts receivable. As of December 31, 2025 the company had $4,944 of receivables from contracts with customers. The Company did not have receivables from contracts with customers as of December 31, 2024.
Concentrations of Credit Risk and Major Customers
The Company’s revenues are concentrated among a limited number of customers. For the year ended December 31, 2025, three customers accounted for approximately 63%, 25%, and 11% of total revenues. No other customer exceeded more than 10% of total revenues. For the year ended December 31, 2024, one customer accounted for approximately 77% of total revenues, and another customer accounted for approximately 23% of total revenues. No other customer exceeded more than 10% of the Company’s total revenue during the years ended December 31, 2025 and 2024.
As of December 31, 2025, one customer represented 100% of total trade accounts receivable. As of December 31, 2024, the Company did not have trade accounts receivable outstanding. The Company does not generally require collateral from its customers.
Geographic Concentrations
Substantially all of the Company’s revenues for the years ended December 31, 2025 and 2024 were derived from customers in the United States. As of December 31, 2025, substantially all trade accounts receivable were due from customers in the United States. The Company did not have significant revenues or receivables from customers outside the United States during the years ended December 31, 2025 and 2024
F-18
enCore Energy Corp.
Notes to Consolidated Financial Statements
(all amounts in thousands, except for shares)
Loss per Share
Basic earnings or loss per share includes no potential dilution and is computed by dividing the earnings or loss attributable to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted earnings or loss per share reflects the potential dilution of securities that could share in the earnings or loss of our Company. Securities are excluded from the calculation of our diluted weighted average common shares outstanding if their effect would be anti-dilutive based on the treasury stock method or due to a net loss from continuing operations. Potential dilutive securities include stock options, restricted stock units, warrants and the Convertible Senior Notes (as defined below), which are excluded from the calculation of our diluted weighted average common shares outstanding as their effect would be anti-dilutive due to a net loss from continuing operations for the years ended December 31, 2025 and 2024. The Capped Calls Transactions (as defined below) are excluded from the loss per share diluted calculation because under U.S. GAAP purchased puts and calls are ignored in both basic and diluted loss per share.
Non-controlling Interests
Non-controlling interests are measured at their proportionate share of the acquiree’s identifiable net assets at the acquisition date and are adjusted at each reporting date for the net income (loss) attributable to that non-controlling interest during that period. The difference between the cash received and the proportionate share of the acquiree’s identifiable net assets is attributed to additional paid-in-capital.
Recently Adopted and Issued Accounting Standards
Recently Adopted Accounting Standards
In March 2024, the FASB issued ASU 2023-09, Income Taxes (Topic 740)-Improvements to Income Tax Disclosures. The ASU requires additional quantitative and qualitative income tax disclosures to allow readers of the consolidated financial statements to assess how the Company’s operations, related tax risks and tax planning affect its tax rate and prospects for future cash flows. For public business entities, the ASU was effective for annual periods beginning after December 15, 2024. The Company adopted this effective January 1, 2025. Adoption impacted disclosures but were not material to the Company's consolidated financial statements.
Recently Issued Accounting Standards
In November 2024, the FASB issued ASU 2024‐03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220‐40): Disaggregation of Income Statement Expenses. This ASU requires public business entities to disclose, in the notes to the financial statements, disaggregated information about certain expense categories included within income statement captions, without changing the presentation of the income statement. The guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and related disclosures.
In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025‐05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This ASU provides a practical expedient that permits entities to assume that current conditions as of the balance sheet date will remain unchanged for the remaining life of current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. The guidance is effective for annual reporting periods beginning after December 15, 2025, including interim reporting periods within those annual periods. The Company did not elect to use the practical expedient as of December 31, 2025.
F-19
enCore Energy Corp.
Notes to Consolidated Financial Statements
(all amounts in thousands, except for shares)
3.Inventory, Net
Costs of inventory consisted of the following:
Purchased uranium inventories $ - $ 16,614
Uranium concentrates from extraction 1,647 2,718
Materials and supplies 112 71
In order to measure inventory at the lower of cost and net realizable value for the years ended December 31, 2025 and 2024, the Company recognized impairment losses related to purchased uranium in the amount of $155 and $6,054, respectively. These losses are recorded in cost of goods sold in the Company’s consolidated statements of operations.
The Company recognized depletion in cost of sales of $4,891 and $1,334 for the years ended December 31, 2025 and 2024, respectively. Depletion relates to capitalized costs for mineral properties that were depleted to inventory using the units-of-production method and subsequently recognized in cost of sales upon the sale of related inventory.
4.Investments in Equity and Marketable Securities
The Company records both marketable securities and equity method investments at fair value. The Company has classified these investments on the Company’s consolidated balance sheets as marketable securities.
The following table summarizes the changes in fair value of the Company’s investment in equity securities as of December 31, 2025 and December 31, 2024:
Investment in publicly traded companies 34,396 9,798
Divestment of publicly traded companies (11,151) (548)
Fair value loss on marketable securities (5,681) (2,711)
Foreign exchange gain (loss) translation 1,144 (1,589)
Noncurrent marketable securities - (837)
During the year ended December 31, 2025, the company purchased an additional 32,863,144 shares and 1,214,853 warrants to purchase common stock of an investment and disposed of 6,969,770 shares and 3,681,372 warrants related to investments held as of December 31, 2024. As of December 31, 2025, the remaining shares and warrants are carried at a fair value of $43,591. These companies are publicly traded.
During the year ended December 31, 2024, the company purchased an additional 15,158,426 shares and 3,681,372 warrants to purchase common stock of an investment and disposed of 11,508,250 shares related to investments held as of December 31, 2023. As of December 31, 2024, the remaining shares and warrants are carried at a fair value of $24,046. These companies are publicly traded.
The realized gains on marketable securities sold during the years ended December 31, 2025 and 2024 was $9,613 and $248, respectively. The unrealized loss on marketable securities for the years ended December 31, 2025 and 2024 was $5,681 and $2,711, respectively.
F-20
enCore Energy Corp.
Notes to Consolidated Financial Statements
(all amounts in thousands, except for shares)
5.Intangible Assets, Net
Intangible assets consist of the following as of December 31, 2025 and December 31, 2024:
Gross Carrying Amount AccumulatedAmortization Net Carrying Amount
Definite-lived: Data access agreement $ 263 $ 132 $ 131
Indefinite-lived: Data purchases 1,334 - 1,334
Definite-lived: Data access agreement $ 250 $ 107 $ 143
Indefinite-lived: Data purchases 328 - 328
Aggregate intangible asset amortization expense was $18 and $19 for the years ended December 31, 2025 and 2024, respectively, and was recorded in depreciation, amortization and accretion expense in the consolidated statements of operations.
Estimated future intangible asset amortization expense based upon the carrying value as of December 31, 2025 is as follows:
6.Property, Plant & Equipment, Net
Property, plant and equipment, net consists of the following:
Less: Accumulated depreciation (7,812) (4,280)
Total property, plant and equipment, net $ 41,160 $ 24,017
Aggregate depreciation expense was $3,532 and $2,113 for the years ended December 31, 2025 and 2024, respectively. These amounts are included in depreciation, amortization and accretion in the consolidated statements of operations.
F-21
enCore Energy Corp.
Notes to Consolidated Financial Statements
(all amounts in thousands, except for shares)
7.Mineral Rights and Properties
As of December 31, 2025, we had mineral rights in the U.S. states of Texas, Wyoming, South Dakota, Colorado, Arizona and New Mexico. These mineral rights were acquired through asset acquisitions, lease or option agreements. As of December 31, 2025, annual maintenance payments of approximately $2,263 are required to maintain these mineral rights.
As of December 31, 2025 the activity of these mineral rights and properties was as follows:
Amount
Depletion capitalized into inventory (2,568)
Depletion capitalized into inventory (7,332)
The Company recorded additions to mineral rights and properties totaling $1,244 and $0 for the years ended December 31, 2025 and 2024, respectively. The additions in 2025 are related to the new asset retirement obligation for Upper Spring Creek. The Company recognized depletion of $7,332 and $2,568 that was capitalized to inventory during the years ended December 31, 2025 and 2024, respectively, utilizing the units-of-production method. Of this amount $2,221 and $482 was included in distributions to non-controlling interest and $1,490 and $1,234 was capitalized into ending inventory as of December 31, 2025 and 2024, respectively.
Texas
Alta Mesa Project
The Alta Mesa Project is located in Brooks County, Texas.
In February 2024, the Company completed several transactions under a master transaction agreement (the “MT Agreement”) with Boss Energy. The completion of these transactions resulted in the Company holding a 70% interest in the project while also remaining as the project manager. Boss Energy holds a 30% interest in the project. Refer to Note 8 – Sale of Minority Interest in Alta Mesa for further details. As of December 31, 2025 and 2024, $108,632 and $118,438 was capitalized as Mineral rights and property on the Company’s consolidated balance sheets.
Wyoming
Gas Hills
The Company owns a 100% interest in the Gas Hills Exploration Project located in the historic Gas Hills Uranium District 45 miles east of Riverton, Wyoming. The Gas Hills Project consists of approximately 1,280 surface acres and 12,960 net mineral acres of unpatented lode claims, a State of Wyoming mineral lease, and private mineral leases, within a brownfield site which has experienced extensive development including extraction and mill site production. For a more detailed discussion of the Gas Hills Project see the section titled “Material Properties,” below for this project..
Juniper Ridge
The Juniper Ridge Project is an Exploration Stage Property located in Wyoming. The Company owns a 100% interest in the Juniper Ridge Exploration Project located in Carbon Count and consists of approximately 640 surface acres and 3,240 net mineral acres of unpatented lode mining claims and a State of Wyoming mineral lease and is located within a brownfield site which has experienced extensive exploration, development, and mine production.
F-22
enCore Energy Corp.
Notes to Consolidated Financial Statements
(all amounts in thousands, except for shares)
South Dakota
Dewey-Burdock
The Dewey-Burdock Project is an ISR uranium project located near Edgemont, South Dakota.
Notably, the advanced stage Dewey-Burdock Uranium Project (“Dewey-Burdock” or “Dewey-Burdock Project”) in South Dakota has demonstrated ISR resources, including a 2019 Preliminary Economic Assessment (“PEA”) citing robust economics. The Dewey-Burdock Project has its source material license from the U.S. Nuclear Regulatory Commission (“NRC”) and its underground injection permits and aquifer exemption from the US Environmental Protection Agency (“EPA”).
On September 2, 2025, the Company announced that the Dewey-Burdock Project had been approved for inclusion in the FAST-41 Program by the U.S. Federal Permitting Improvement Steering Council (“Permitting Council”). This is a component of the implementation of President Trump’s Executive Order on Immediate Measures to Increase American Mineral Production. The Dewey-Burdock Project received its Source and Byproduct Materials License in 2014, from the NRC, now under timely renewal, and will work with the NRC as the lead agency for federal permitting. The Company’s objective is to advance the Dewey-Burdock Project into development and operation utilizing the ISR uranium extraction process. Under the Executive Order, the Permitting Council identifies priority infrastructure and critical mineral projects to receive accelerated permitting review. The addition of the first South Dakota ISR project supports the domestic uranium production focus of the United States. This focus enables the development of essential clean energy, extracted through environmentally responsible ISR technology, to provide affordable, reliable domestic energy.
On September 16, 2025, the Company announced that the EPA Environmental Appeals Board (“EAB”) has denied in full a petition for review filed by the Oglala Sioux Tribe, Black Hills Clean Water Alliance, and NDN Collective against the EPA’s issuance of Class III and Class V Underground Injection Control (“UIC”) permits for the Company’s 100%-owned Dewey Burdock Project in South Dakota. The decision allows the Dewey-Burdock Project to advance through federal permitting with the intent to commence state permitting activities in 2025, accelerating the Project towards development ahead of schedule.
New Mexico
McKinley, Crownpoint and Hosta Butte
In April 2025, the Company executed a definitive sale and purchase agreement to sell certain mineral rights and properties that were classified as held for sale and owned by NM Energy Holding Canada Corp. (“NM Energy Canada,”) an enCore subsidiary (the “Verdera Transaction”) that holds the Crownpoint and Hosta Butte projects located in McKinley County, New Mexico to Verdera Energy Corp. (“Verdera”) pursuant to a share purchase agreement, dated March 17, 2025 (the “Share Purchase Agreement”). As a result of the Verdera Transaction, the Company contingently received 50,000,000 Preferred Shares of Verdera. The Preferred Shares provide voting rights related to approval of a “Going Public Transaction”, which is defined as a transaction that results in the common shares of Verdera being listed on a Canadian stock exchange and concurrent registration under the Exchange Act, which the Company has agreed to vote in favor of so long as the Going Public Transaction results in aggregate gross proceeds to Verdera of at least CAD $20 million. In the event that Verdera did not execute the Going Public Transaction by February 23, 2026, the Company would have the right to reacquire NM Energy Canada from Verdera in exchange for transferring all of the contingently received 50,000,000 Preferred Shares of Verdera back. As such, the recognition of the fair value related to the Preferred Shares had no impact to the financial statements as of December 31, 2025 and 2024 as the “Going Public Transaction” related contingencies were not resolved as of such dates. Subsequent to December 31, 2025, Verdera completed its listing on TSX-V and 15,000,000 Preferred Shares were converted into common shares of Verdera, See Note 19 - Subsequent Events for further details
F-23
enCore Energy Corp.
Notes to Consolidated Financial Statements
(all amounts in thousands, except for shares)
8.Sale of Minority Interest in Alta Mesa
On February 26, 2024, pursuant to the terms of the MT Agreement, Boss Energy acquired a 30% equity interest in a new limited liability company (the “JV Alta Mesa”) that was formed to hold the Alta Mesa Project, in exchange for a payment of $60,000. The Company holds 70% equity in the JV Alta Mesa. Upon the closing of the transaction, the parties entered into an agreement which governs the JV Alta Mesa. Pursuant to the agreement, the Company acts as manager of the JV Alta Mesa and is entitled to a management fee.
Boss also acquired 2,564,102 common shares of the Company for total proceeds to the Company of $10,000. Finally, the parties also entered into a strategic collaboration agreement for the collaboration and research to develop the Company’s prompt fission neutron technology, to be financed equally by each party. The terms of the agreement and the disposal of a 30% interest in the JV Alta Mesa support that control was retained both before and after Boss acquired their interest, and that joint control is not present. As such, the Company will continue to consolidate the operations of the JV Alta Mesa with the non-controlling interest being recorded.
The table below is a summary of the accounting for recognition of the initial non-controlling interest on Boss acquiring 30% interest in the JV Alta Mesa. The difference between the percentage of the net assets attributable to Boss and the consideration received is included as part of additional paid-in capital.
Amount
Boss Initial Non-Controlling Interest
Additional paid-in capital (20,447)
Non-controlling interest $ 39,553
The Company, upon initial recognition and formation of the joint venture and the sale of minority interest to Boss, recognized a decrease in additional paid-in capital and an increase in income tax benefit of $4,989 due to there being a difference between the selling price of the minority interest and the book basis of the non-controlling interest as of the formation date.
The table below is a summary of the accounting for the Non-Controlling Interest as of December 31, 2025 and 2024..
Amount
Initial non-controlling interest $ 39,553
Net loss for the period attributable to non-controlling interest (6,601)
Inventory transfers to non-controlling interest (1,905)
Contributions from non-controlling interest 1,759
Net loss for the period attributable to non-controlling interest (6,167)
Inventory transfers to non-controlling interest (6,829)
Contributions from non-controlling interest 9,325
F-24
enCore Energy Corp.
Notes to Consolidated Financial Statements
(all amounts in thousands, except for shares)
9.Asset Retirement Obligations and Restricted Cash
The asset retirement obligations continuity summary is as follows:
Amount
Settlement (399)
Change in estimates 5,424
Settlement (131)
Change in estimates (946)
The asset retirement obligation represents the Company’s estimate of the present value of future reclamation costs, discounted using a credit‐adjusted risk‐free interest rate of 11.0% and an inflation rate of 2.5% for each of the years ended December 31, 2025 and 2024. The Company expensed the change in estimate for the years ended December 31, 2025 and 2024 as a result of these being adjustments to the estimate for asset retirement obligations that were acquired as part of asset acquisitions.
As of December 31, 2025 and 2024, the undiscounted cash flows related to asset retirement obligations totaled $26,443 and $23,529, respectively.
As of December 31, 2025 and 2024, the Company deposited $8,388 and $7,751, respectively, for collateralization of its performance obligations with an unrelated third party also known as performance bonds. These funds are not available for the payment of general corporate obligations. The performance bonds are required for future restoration and reclamation obligations related to the Company’s operations. These funds are categorized as restricted cash on the Company’s consolidated balance sheets.
10.Commitments and Contingencies
General Legal Matters
On March 14, 2025, a purported shareholder of the Company filed a putative federal securities class action, in the United States District Court for the Southern District of Texas against the Company and certain of its current and former officers and directors (the “Litigation”).
The complaint asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and SEC Rule 10b-5 and principally alleges that the defendants failed to disclose that: (1) enCore lacked effective internal controls over financial reporting; (2) enCore could not capitalize certain exploratory and development costs under U.S. GAAP; and (3) as a result, the Company’s net losses would materially increase. The foregoing omissions allegedly made defendants’ positive public statements about Company’s business, operations, and prospects materially false or misleading and artificially inflated the Company’s share price during the class period. The Litigation seeks damages and costs. Management believes that this litigation is preliminary in nature and the Company believes that an adverse outcome is not probable or estimable at this time.
On April 23, 2025, the Company’s former Chief Executive Officer filed a demand for arbitration with the Judicial Arbiter Group against the Company. The demand principally alleged that the Company breached the former Chief Executive Officer’s employment agreement by refusing to pay him the amount he claimed to be owed under the employment agreement had the Company terminated his employment without just cause. Therefore, the former Chief Executive Officer sought damages for the amounts allegedly owed under the employment agreement for
F-25
enCore Energy Corp.
Notes to Consolidated Financial Statements
(all amounts in thousands, except for shares)
termination without just cause, including salary, a 2024 cash bonus, an annual targeted bonus and his COBRA coverage for 24 months. On October 10, 2025, the parties entered into a Confidential Settlement and General Release Agreement. As of December 31, 2025, the Company had satisfied its obligations under the agreements.
On June 2, 2025, the Company’s former Chief Operating Officer filed a demand for arbitration with the Judicial Arbiter Group against the Company. The demand principally alleges that the Company breached the former Chief Operating Officer’s employment agreement by refusing to pay him the amount he claimed to be owed under the employment agreement had the Company terminated his employment without just cause. Therefore, the former Chief Operating Officer seeks damages for the amounts allegedly owed under the employment agreement for termination without just cause, including salary and his COBRA coverage for 24 months. Management believes that this demand for arbitration is preliminary in nature and that a loss is not probable or estimable at this time.
The Company is subject to routine litigation incidental to our business. The Company is not currently a party to any material legal proceedings that Management believes would be likely to have a material adverse effect on our financial position, results of operations or cash flows.
Mineral Property Commitments
The Company enters into commitments with federal and state agencies and private individuals to lease mineral rights. These leases are renewable annually. As of December 31, 2025, annual maintenance payments of approximately $2,263 are required to maintain these mineral rights.
Sales Contracts
The Company’s sales commitments, for all sales contracts, are presented in pounds (in thousands) below.
Year Volume (in pounds)
Reclamation Bonds
The Company has indemnified third-party companies to provide reclamation bonds as collateral for the Company’s ARO. The Company is obligated to replace this collateral in the event of a default and is obligated to repay any reclamation or closure costs due. As of December 31, 2025 and December 31, 2024, the Company had $8,388 and $7,751, respectively, posted as collateral against an undiscounted ARO of $26,443 and $23,529, respectively.
11.Leases
The Company leases office space in the United States and Canada under non‐cancelable operating lease agreements. The Company does not have any finance leases. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets, and lease expense related to these leases is recognized on a straight‐line basis over the lease term.
Operating lease right‐of‐use (“ROU”) assets and lease liabilities are recognized at lease commencement. Lease liabilities are measured based on the present value of future lease payments over the lease term. As the implicit
F-26
enCore Energy Corp.
Notes to Consolidated Financial Statements
(all amounts in thousands, except for shares)
rate is not readily determinable, the Company uses its incremental borrowing rate at lease commencement. ROU assets are measured based on the related lease liabilities, adjusted for prepaid rent, accrued rent, and lease incentives.
The Company has elected the practical expedient to not separate lease and non‐lease components for all leases. Operating lease expense is recognized on a straight‐line basis over the lease term. Variable lease payments, which primarily relate to non‐fixed operating costs, are excluded from the measurement of ROU assets and lease liabilities and are expensed as incurred.
As of December 31, 2025, the Company did not have any material leases that had not yet commenced. Operating lease cost was $263 and $208 for the years ended December 31, 2025 and 2024, respectively, which was included in general and administrative expenses on the Company’s consolidated statements of operations.
The following table represents the weighted-average remaining lease term and discount rate:
December 31,
Operating Leases:
Weighted-average remaining lease term (in years) 9.50 3.08
Weighted-average discount rate 7.0% 7.0%
As of December 31, 2025, future minimum lease payments for the Company’s operating lease liabilities are as follows:
Year Ending December 31, Amount
Total future lease payments $4,546
Less: imputed interest (1,283)
Present value of lease liabilities $3,263