enCore Energy Corp 10-Q for FY2026 Q2
enCore Energy Corp. (EU)
10-Q
2026-08-13
For: 2026-06-30
View Original
Added on
August 13, 2026
About this 10-Q
enCore Energy Corp filed this 10-Q on August 13, 2026, covering the quarter ended June 30, 2026 (FY2026 Q2).
Headline figures
Quarter ended June 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $15.7M
- up 328.4% from $3.66M a year earlier
- Net loss
- $41.45M
- compared with a net loss of $6.33M a year earlier
- Diluted EPS
- -$0.21
- compared with -$0.03 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED | |||||
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD OF _________ TO _________. | |||||
Commission File Number: 001-41489
(Exact name of registrant as specified in its charter)
Not Applicable | ||||||||
State or other jurisdiction of incorporation or organization | (I.R.S. Employer Identification No.) | |||||||
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: 361 -239-2025
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
The TSX Venture Exchange | ||||||||
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | o | Accelerated filer | o | x | |||||||||||||
Smaller reporting company | Emerging growth company | ||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of August 10, 2026, there were 194,280,971 shares of the registrant’s no par value common shares, the registrant’s only outstanding class of voting securities, outstanding.
1
TABLE OF CONTENTS
| Cautionary Note Regarding Forward Looking Statements | ||||||||
PART I - FINANCIAL INFORMATION | ||||||||
| Financial Statements | ||||||||
Consolidated Unaudited Balance Sheets as of June 30, 2026 and Consolidated Audited Balance Sheet as of December 31, 2025 | ||||||||
Consolidated Unaudited Statements of Operations for the Three and Six Months Ended June 30, 2026 and 2025 | ||||||||
Consolidated Unaudited Statements of Equity for the Three and Six Months Ended June 30, 2026 and 2025 | ||||||||
Consolidated Unaudited Statements of Cash Flows for the Six Months Ended June 30, 2026 and 2025 | ||||||||
Notes to the Consolidated Unaudited Financial Statements | ||||||||
Item 3. | ||||||||
PART II - OTHER INFORMATION | ||||||||
Signatures | ||||||||
1
When we use the terms “enCore Energy Corp.,” “we,” “us,” “our,” or the “Company,” we are referring to enCore Energy Corp. and its subsidiaries, unless the context otherwise requires. Throughout this document we make statements that are classified as “forward-looking.” Please refer to the “Cautionary Note Regarding Forward-Looking Statements” section of this document for an explanation of these types of assertions.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (“Quarterly Report”) and information incorporated by reference herein, contains forward-looking statements and forward-looking information within the meaning of the Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation that are subject to risks and uncertainties. Forward-looking statements and information can generally be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “continue,” “plans,” “maintains,” “projects,” and similar terminology or variations (including negative variations) of such words and phrases or statements. Forward-looking statements and information are not historical facts, are made as of the date of this Quarterly Report, and include, but are not limited to, statements regarding discussions of results from operations (including, without limitation, statements about the Company’s opportunities, strategies, competition, expected activities, revenues from existing contracts and expenditures, including its sales strategy providing a base level of projected income as the Company pursues its business plan, the adequacy of the Company’s available cash resources and other statements about future events or results), performance (both operational and financial), including operational expansion and exploration and expected wellfield capacities, statements regarding expected annualized cost savings, statements regarding the ability to complete, and the timing of completion of a distribution of common shares of Verdera (as defined below), and the ability to meet expectations regarding the continuation of delineation drilling adjacent to existing wellfields, future business plans and opportunities and statements as to management’s expectations with respect to, among other things, the activities contemplated in this Quarterly Report.
Forward-looking statements and information may include, but are not limited to, statements with respect to:
| ● | the Company’s future financial and operational performance; | |||||||||||||||||||
| ● | the sufficiency of the Company’s current working capital, anticipated cash flow or its ability to raise necessary funds; | |||||||||||||||||||
| ● | the anticipated amount and timing of work programs; | |||||||||||||||||||
| ● | our expectations with respect to future exchange rates; | |||||||||||||||||||
| ● | the estimated cost of and availability of funding necessary for sustaining capital; | |||||||||||||||||||
| ● | forecast capital and non-operating spending, including changes in cost as a result of changes in trade restrictions, for example: the imposition of tariffs; | |||||||||||||||||||
| ● | the Company’s plans and expectations for its property, exploration, development, extraction and community relations operations; | |||||||||||||||||||
| ● | the use of available funds; | |||||||||||||||||||
| ● | expectations regarding the process for and receipt of regulatory approvals, permits and licenses under governmental and other applicable regulatory regimes, including U.S. government policies towards domestic uranium supply; | |||||||||||||||||||
| ● | expectations about future uranium market prices, production costs and global uranium supply and demand; | |||||||||||||||||||
| ● | expectations regarding holding physical uranium for long-term investment; | |||||||||||||||||||
| ● | the establishment of mineral resources on any of the Company’s current or future mineral properties (other than the Company’s properties that currently have established mineral resource estimates); | |||||||||||||||||||
| ● | future royalty and tax payments and rates; | |||||||||||||||||||
| ● | expectations regarding possible impacts of litigation and regulatory actions; and | |||||||||||||||||||
| ● | the completion of reclamation activities at former mine or extraction sites. | |||||||||||||||||||
Such forward-looking statements reflect the Company’s current views with respect to future events, based on information currently available to the Company and are subject to and involve certain known and unknown risks, uncertainties, assumptions and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed in or implied by such forward-looking statements and information. The forward-looking statements and information in this Quarterly Report are based on material assumptions, including the following:
2
| ● | our budget, including expected levels of exploration, evaluation, development, extraction and operational activities and costs, as well as assumptions regarding market conditions and other factors upon which we have based our income and expenditure expectations; | |||||||||||||
| ● | assumptions regarding the timing and use of our cash resources; | |||||||||||||
| ● | our ability to, and the means by which the Company can, raise additional capital to advance other exploration and evaluation objectives; | |||||||||||||
| ● | our operations and key suppliers of essential services; | |||||||||||||
| ● | the availability of our employees, contractors and subcontractors to continue operations; | |||||||||||||
| ● | our ability to obtain all necessary regulatory approvals, permits and licenses for our planned activities under governmental and other applicable regulatory regimes; | |||||||||||||
| ● | our expectations regarding the demand for and supply of uranium, the outlook for long-term contracting, changes in regulations, public perception of nuclear power, and the construction of new and ongoing operation of existing nuclear power plants; | |||||||||||||
| ● | our expectations regarding spot and long-term prices and realized prices for uranium; | |||||||||||||
| ● | our expectations that our holdings of physical uranium will be helpful in securing project financing and/or in securing long- term uranium supply agreements in the future; | |||||||||||||
| ● | our expectations regarding tax rates, currency exchange rates, and interest rates; | |||||||||||||
| ● | our decommissioning and reclamation obligations and the status and ongoing maintenance of agreements with third parties with respect thereto; | |||||||||||||
| ● | our mineral resource estimates, and the assumptions upon which they are based; | |||||||||||||
| ● | our, and our contractors’, ability to comply with current and future environmental, safety and other regulatory requirements and to obtain and maintain required regulatory approvals; and | |||||||||||||
| ● | our operations are not significantly disrupted by political instability, nationalization, terrorism, sabotage, pandemics, social or political activism, breakdown, natural disasters, governmental or political actions, litigation or arbitration proceedings, equipment or infrastructure failure, labor shortages, transportation disruptions or accidents, or other development or exploration risks. | |||||||||||||
Some of the risks and uncertainties that could cause actual results to differ materially from any future results expressed in or implied by the forward-looking statements and information in this Quarterly Report include, among others, the following:
3
| ● | our history of negative operating cash flows and our ability to develop or maintain positive cash flow from our extraction activities and the ability to obtain additional financing, if needed, in connection with the implementation of business and strategic plans; | ||||||||||
| ● | risks associated with our expansion-by-acquisition strategy; | ||||||||||
| ● | our properties do not contain mineral reserves and some of our properties, projects and facilities may not be economic within a reasonable time period or at all; | ||||||||||
| ● | reliance on key personnel, contractors and experts; | ||||||||||
| ● | conflicts of interest of our directors and officers; | ||||||||||
| ● | risks associated with exploration of, development of, and extraction from mineral properties; | ||||||||||
| ● | our reliance on third party drilling contractors, including an increased risk of loss, including weather related risks or underutilization of drilling rigs; | ||||||||||
| ● | risks inherent to mineral exploration and extraction; | ||||||||||
| ● | the commercial viability of economic extraction of minerals from uranium deposits; | ||||||||||
| ● | the subjectiveness and uncertainty of estimations of mineral resources; | ||||||||||
| ● | future mineral extraction estimates may not be achieved; | ||||||||||
| ● | estimates of commodity prices used in preliminary economic assessments may never be realized; | ||||||||||
| ● | requirements to obtain or retain key permits to advance or achieve extraction; | ||||||||||
| ● | involvement of external groups, including Native American tribes or non-governmental organizations, in the permitting process; | ||||||||||
| ● | challenges to title of our mineral property interests; | ||||||||||
| ● | our ability to attract, retain, train, motivate, and develop skilled employees; | ||||||||||
| ● | existing competition and geopolitical changes in the competitive landscape; | ||||||||||
| ● | public opinion and perception of nuclear energy; | ||||||||||
| ● | volatility in market prices of uranium; | ||||||||||
| ● | applicable laws, regulations and standards, including environmental protection laws and regulations; | ||||||||||
| ● | our ability to raise equity or obtain debt financing, including obtaining additional financing on acceptable terms when needed; | ||||||||||
| ● | accuracy of extraction, capital and operating cost estimates; | ||||||||||
| ● | ability of novel methods for extraction to yield anticipated results; | ||||||||||
| ● | the need for technical innovation and risk of obsolescence; | ||||||||||
| ● | availability of a public market for uranium, including global demand and supply; | ||||||||||
| ● | changes and uncertainty in United States trade policy, tariff and import/export regulations; | ||||||||||
| ● | risks related to our operations on federal lands, including possible designation of national monuments or withdrawal of permits; | ||||||||||
| ● | risks related to our Alta Mesa joint venture; | ||||||||||
| ● | taxation implications of United States holders if the Company is a passive foreign investment company; | ||||||||||
| ● | potential dilution if we issue additional common shares, no par value (the “common shares”) or securities convertible into common shares; | ||||||||||
| ● | price volatility of our common shares; | ||||||||||
| ● | our expectation to not declare or pay dividends; | ||||||||||
| ● | reliance on information technology systems and cybersecurity risks; | ||||||||||
| ● | the time and resources necessary to comply with corporate governance practices and securities rules and regulations in the United States and Canada; | ||||||||||
| ● | our management’s ability to maintain effective internal controls; | ||||||||||
| ● | our remediation plan and ability to remediate the material weaknesses in our internal controls over financial reporting; | ||||||||||
| ● | potential lack of access to enforcement of civil liabilities against the Company or its directors and officers; | ||||||||||
| ● | our ability to protect our proprietary data, technology and intellectual property; | ||||||||||
| ● | changes in climate conditions; and | ||||||||||
| ● | other risks included under the heading “Risk Factors” in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 31, 2026 (the “Annual Report”). | ||||||||||
4
While forward-looking statements and information reflect our good faith beliefs, they are not guarantees of future performance. Any forward-looking statements and information are based on estimates and assumptions only as of the date of this Quarterly Report, and the Company undertakes no obligation to update or revise any forward-looking statement or information to reflect information, events, results, circumstances or the occurrence of unanticipated events, except as required by applicable laws. New factors emerge from time to time, and it is not possible for management to predict all of such factors and to assess in advance the impact of each such factors on the Company’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements or information.
5
| (in thousands, except per share data) | June 30, 2026 (Unaudited) | December 31, 2025 | |||||||||
| ASSETS | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Accounts receivable | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Marketable securities | |||||||||||
| Inventory, net | |||||||||||
| Total current assets | |||||||||||
| Mineral rights and properties, net | |||||||||||
| Property, plant and equipment, net | |||||||||||
| Intangible assets, net | |||||||||||
| Restricted cash | |||||||||||
| Right of use assets - operating lease | |||||||||||
| Other long-term assets | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
| Current liabilities | |||||||||||
| Accounts payable and accrued liabilities | $ | $ | |||||||||
| Accounts payable - related parties | |||||||||||
| Operating lease liabilities, current | |||||||||||
| Total current liabilities | |||||||||||
| Deferred tax liabilities | |||||||||||
| Asset retirement obligations | |||||||||||
| Convertible senior notes | |||||||||||
| Operating lease liabilities, non-current | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies (Note 10) | |||||||||||
| Stockholders’ equity | |||||||||||
Common stock | |||||||||||
| Additional paid-in-capital | |||||||||||
| Accumulated deficit | ( | ( | |||||||||
| Accumulated other comprehensive loss | ( | ||||||||||
| Total stockholders' equity | |||||||||||
| Non-controlling interests | |||||||||||
| Total equity | |||||||||||
| Total liabilities and stockholders' equity | $ | $ | |||||||||
See accompanying notes to the unaudited consolidated financial statements.
6
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
| (in thousands, except share amounts) | 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenue | $ | $ | $ | $ | |||||||||||||
Cost of sales | |||||||||||||||||
| Gross profit (loss) | ( | ( | |||||||||||||||
| Operating costs: | |||||||||||||||||
Mineral property expenditures | |||||||||||||||||
| General and administrative | |||||||||||||||||
| Depreciation, amortization and accretion | |||||||||||||||||
| Gain on sale of mineral properties | ( | ||||||||||||||||
| Other operating costs | |||||||||||||||||
| Total operating costs | |||||||||||||||||
| Operating loss | ( | ( | ( | ( | |||||||||||||
Gain on marketable securities, realized | |||||||||||||||||
Gain (Loss) on marketable securities, unrealized | ( | ( | ( | ||||||||||||||
| Interest income | |||||||||||||||||
| Interest expense | ( | ( | ( | ( | |||||||||||||
Total other (income) expense | ( | ( | |||||||||||||||
| Net loss before income taxes | ( | ( | ( | ( | |||||||||||||
| Income tax benefit | ( | ( | |||||||||||||||
| Net loss | ( | ( | ( | ( | |||||||||||||
Less: Net loss attributable to non-controlling interests | ( | ( | ( | ( | |||||||||||||
| Net loss attributable to enCore Energy Corp. | $ | ( | $ | ( | ( | ( | |||||||||||
| Net loss per share basic and diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||
| Weighted average number of shares | |||||||||||||||||
| Basic and diluted | |||||||||||||||||
See accompanying notes to the unaudited consolidated financial statements.
7
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net loss | $ | ( | $ | ( | $ | ( | ( | ||||||||||||||||
| Foreign currency translation adjustment | |||||||||||||||||||||||
| Total other comprehensive gain, (net of tax) | |||||||||||||||||||||||
| Comprehensive loss | ( | ( | ( | ( | |||||||||||||||||||
| Comprehensive loss attributable to non-controlling interests | ( | ( | ( | ( | |||||||||||||||||||
| Comprehensive loss attributable to enCore Energy Corp. | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
See accompanying notes to the unaudited consolidated financial statements.
8
| Six Months Ended June 30, | |||||||||||
| (in thousands) | 2026 | 2025 | |||||||||
| OPERATING ACTIVITIES | |||||||||||
| Net loss | $ | ( | $ | ( | |||||||
| Adjustments to reconcile net loss to net cash used in operating activities | |||||||||||
| Amortization, depreciation and accretion | |||||||||||
Amortization of debt issuance costs | |||||||||||
Depletion | |||||||||||
| Stock based compensation | |||||||||||
| Inventory impairment charge | |||||||||||
| Gain on sale of mineral properties | ( | ||||||||||
| Exploration costs related to mineral properties | |||||||||||
| Unrealized loss on marketable securities | |||||||||||
| Deferred tax liability | ( | ( | |||||||||
| Realized gain on marketable securities | ( | ( | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivables | |||||||||||
| Prepaids and deposits | ( | ||||||||||
| Inventories | ( | ||||||||||
| Accounts payable and accrued liabilities | ( | ||||||||||
| Asset retirement obligations | ( | ( | |||||||||
Due to related parties | ( | ( | |||||||||
| Net cash used in operating activities | $ | ( | $ | ( | |||||||
| INVESTING ACTIVITIES | |||||||||||
| Purchase of property, plant, and equipment | ( | ( | |||||||||
| Purchase of intangible assets | ( | ||||||||||
| Exploration costs related to mineral properties | ( | ( | |||||||||
| Purchase of marketable securities | ( | ||||||||||
| Proceeds from sale of marketable securities | |||||||||||
| Net cash used in investing activities | $ | ( | $ | ( | |||||||
| FINANCING ACTIVITIES | |||||||||||
| Proceeds from exercise of warrants | |||||||||||
| Proceeds from exercise of stock options | |||||||||||
| Contributions from non-controlling interest | |||||||||||
| Net cash provided by financing activities | $ | $ | |||||||||
| Net decrease in cash, cash equivalents and restricted cash | ( | ( | |||||||||
| Foreign exchange difference on cash, cash equivalents and restricted cash | |||||||||||
| Cash, cash equivalents and restricted cash, beginning of period | |||||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | $ | |||||||||
See accompanying notes to the unaudited consolidated financial statements.
9
| Six Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Supplemental disclosures: | |||||||||||
| Cash paid for interest | $ | $ | |||||||||
| Non-cash activities: | |||||||||||
| Property, plant, and equipment additions included in accounts payable and accrued liabilities | |||||||||||
| Mineral property depletion costs capitalized into inventory during the period | |||||||||||
| Investments obtained as part of sale of mineral property | |||||||||||
| Inventory distributions to non-controlling interest | |||||||||||
| Shares issued for settlement of restricted stock units | |||||||||||
See accompanying notes to unaudited consolidated financial statements.
10
| Common Stock | Additional Paid- in-Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Noncontrolling Interests | Total Equity | |||||||||||||||||||||||||||||||||||||||
(in thousands, except share amounts) | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||
| Balance at January 1, 2026 | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||
| Net income ( loss) | - | - | - | - | ( | |||||||||||||||||||||||||||||||||||||||
| Cash contributions from non-controlling interest | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||
| Inventory transfers to non-controlling interest | - | - | - | - | - | ( | ( | |||||||||||||||||||||||||||||||||||||
| Shares issued for exercise of warrants | ( | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Shares issued for exercise of stock options | ( | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||
| Cumulative translation adjustment | - | - | - | - | ( | - | ( | |||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | - | ( | ( | |||||||||||||||||||||||||||||||||||||
| Cash contributions from non-controlling interest | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||
| Inventory transfer to non-controlling interest | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Shares issued for restricted stock units | ( | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||
| Cumulative translation adjustment | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
| Balance at January 1, 2025 | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | - | ( | ( | |||||||||||||||||||||||||||||||||||||
| Contributions from non-controlling interest | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Inventory transfers to non-controlling interest | - | - | - | - | - | ( | ( | |||||||||||||||||||||||||||||||||||||
| Shares issued for exercise of warrants | ( | - | - | - | ||||||||||||||||||||||||||||||||||||||||
11
| Shares issued for exercise of stock options | ( | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||
| Cumulative translation adjustment | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | - | ( | ( | |||||||||||||||||||||||||||||||||||||
| Cash contributions from non-controlling interest | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Inventory transfers to non-controlling interest | - | - | - | - | - | ( | ( | |||||||||||||||||||||||||||||||||||||
| Shares issued for exercise of stock options | ( | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||
| Cumulative translation adjustment | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||
See accompanying notes to the unaudited consolidated financial statements.
12
enCore Energy Corp.
Notes to Consolidated Financial Statements (Unaudited)
(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 extracting domestic uranium within the United States. The Company utilizes proven in-situ recovery (“ISR”) technology to produce uranium for use in the generation of reliable, 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 SEC to be defined as a Development Stage Issuer.
2.Summary of Significant Accounting Policies
Basis of Presentation
These unaudited consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the SEC applicable to interim financial information and should be read in conjunction with the consolidated financial statements and notes thereto and the summary of significant accounting policies included in the Company’s Annual Report for the year ended December 31, 2025, which was filed with the SEC on March 31, 2026.
The Company has prepared its consolidated financial statements in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”) for all periods presented.
In management’s opinion, the consolidated financial statements include all normal and recurring adjustments that are considered necessary for the fair presentation of the Company’s financial position and operating results. The results for the three and six months ended June 30, 2026 are not necessarily indicative of the results to be expected for the twelve months ending December 31, 2026.
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.
13
enCore Energy Corp.
Notes to Consolidated Financial Statements (Unaudited)
(all amounts in thousands, except for shares)
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.
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.
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 gain (loss) on marketable securities, unrealized in the unaudited consolidated statements of operations.
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 $180,267 through December 31, 2029, and $128,615 thereafter under the non-cancelable portion of these contracts.
14
enCore Energy Corp.
Notes to Consolidated Financial Statements (Unaudited)
(all amounts in thousands, except for shares)
Recently Adopted and Issued Accounting Standards
Recently Issued Accounting Standards
In November 2024, the FASB issued Accounting Standards Update (“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 unaudited consolidated financial statements and related disclosures, and we currently expect this ASU to have no impact to our results of operations, cash flows and financial condition.
In December 2025, the FASB issued Accounting Standards Update ASU 2025‑12, Codification Improvements (Issue 4 - Calculation of Earnings per Share When a Loss from Continuing Operations Exists). This ASU clarifies the application of earnings per share (“EPS”) guidance when an entity reports a loss from continuing operations, including the interaction between basic and diluted EPS calculations in such circumstances. The amendments are intended to reduce diversity in practice without changing the underlying economics of EPS presentation. The guidance is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting this ASU on its unaudited consolidated financial statements and related disclosures.
3.Inventory, Net
Costs of inventory consisted of the following:
| June 30, 2026 | December 31, 2025 | ||||||||||
| Purchased uranium inventories | $ | $ | |||||||||
| Raw uranium | |||||||||||
| Uranium concentrates from extraction | |||||||||||
| Materials and supplies | |||||||||||
| Total | $ | $ | |||||||||
In order to measure inventory at the lower of cost and net realizable value for the three months ended June 30, 2026, the Company recognized $235 in impairment losses related to purchased uranium. For the three months ended June 30, 2025, the Company did not recognize any impairment losses related to purchased uranium. For the six months ended June 30, 2026 and June 30, 2025, the Company recognized impairment losses related to purchased uranium in the amount of $311 and $155 , respectively. These losses are recorded in cost of sales in the Company’s unaudited consolidated statements of operations.
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 unaudited consolidated balance sheets as marketable securities.
15
enCore Energy Corp.
Notes to Consolidated Financial Statements (Unaudited)
(all amounts in thousands, except for shares)
The following table summarizes the changes in fair value of the Company’s investment in equity securities as of June 30, 2026 and December 31, 2025:
| June 30, 2026 | December 31, 2025 | ||||||||||
| Balance, beginning of period | $ | $ | |||||||||
| Investment obtained as part of sale of mineral property (Verdera) | |||||||||||
| Investment in publicly traded companies (Non-Verdera) | |||||||||||
| Divestment of publicly traded companies | ( | ( | |||||||||
| Fair value loss on marketable securities (unrealized) | ( | ( | |||||||||
| Foreign exchange gain (loss) translation | ( | ||||||||||
| Balance, end of period | $ | $ | |||||||||
The realized gain on marketable securities sold during the three months ended June 30, 2026 was $2,298 and $7,671 for the three months ended June 30, 2025. The realized gain on marketable securities sold during the six months ended June 30, 2026 was $6,137 and $7,671 for the six months ended June 30, 2025.
5.Intangible Assets, Net
| Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||
| June 30, 2026 | |||||||||||||||||
| Definite-lived: Data access agreement | $ | $ | $ | ||||||||||||||
| Indefinite-lived: Data purchases | - | ||||||||||||||||
| $ | $ | $ | |||||||||||||||
| December 31, 2025 | |||||||||||||||||
| Definite-lived: Data access agreement | $ | $ | $ | ||||||||||||||
| Indefinite-lived: Data purchases | - | ||||||||||||||||
| $ | $ | $ | |||||||||||||||
Aggregate intangible asset amortization expense was $5 and $10 for the three months ended June 30, 2026 and 2025, respectively. Aggregate intangible asset amortization expense was $10 and $15 for the six months ended June 30, 2026 and 2025, respectively. These amounts are recorded in depreciation, amortization and accretion expense in the unaudited consolidated statements of operations.
Estimated future intangible asset amortization expense based upon the carrying value as of June 30, 2026 is as follows:
| Remainder of 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | Thereafter | Total | |||||||||||||||||||||||||||||||||||||||||||
| Amortization expense | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
16
enCore Energy Corp.
Notes to Consolidated Financial Statements (Unaudited)
(all amounts in thousands, except for shares)
6.Property, Plant & Equipment, Net
Property, plant and equipment, net consists of the following:
| June 30, 2026 | December 31, 2025 | ||||||||||
| Uranium plants | $ | $ | |||||||||
| Other property and equipment | |||||||||||
| Construction in progress | |||||||||||
| Total property, plant and equipment | |||||||||||
| Less: Accumulated depreciation | ( | ( | |||||||||
| Total property, plant and equipment, net | $ | $ | |||||||||
17
enCore Energy Corp.
Notes to Consolidated Financial Statements (Unaudited)
(all amounts in thousands, except for shares)
7.Mineral Rights and Properties
As of June 30, 2026, we had mineral rights in the states of Texas, Wyoming, South Dakota, Colorado, Arizona and New Mexico. These mineral rights were acquired through asset acquisitions, lease agreements or option agreements. As of June 30, 2026 and 2025, annual maintenance payments of approximately $2,242 and $1,961 are required to maintain these mineral rights.
As of June 30, 2026, the activity of these mineral rights and properties was as follows:
| Amount | |||||
| Balance, December 31, 2025 | $ | ||||
| Depletion capitalized into inventory | ( | ||||
| Divestments | ( | ||||
| Balance, June 30, 2026 | $ | ||||
The Company recognized depletion of $593 and $1,610 that was capitalized to inventory during the three and six months ended June 30, 2026, respectively, utilizing the units-of-production method. Of this amount, $96 378 497 and $769 was capitalized into ending inventory as of June 30, 2026, 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 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. As of June 30, 2026, $110,799 was capitalized as Mineral rights and property on the Company’s unaudited consolidated balance sheets. See Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, for more information on all of our Texas projects.
Wyoming
Gas Hills
The Company owns a 100 % interest in the Gas Hills Project located in the historic Gas Hills Uranium District 45 miles east of Riverton, Wyoming, in Fremont County. 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 Project located in Carbon County that consists of approximately 640 surface acres and 3,240 net mineral acres of unpatented lode mining claims, a State of Wyoming mineral lease and is located within a brownfield site which has experienced extensive exploration, development, and mine extraction.
18
enCore Energy Corp.
Notes to Consolidated Financial Statements (Unaudited)
(all amounts in thousands, except for shares)
South Dakota
Dewey Burdock
The Dewey Burdock Project is an ISR uranium project located in Fall River County, near Edgemont, South Dakota. Notably, the advanced stage Dewey Burdock Uranium Project (“Dewey Burdock” or “Dewey Burdock Project”) has demonstrated ISR resources, including a 2019 Preliminary Economic Assessment citing robust economics. Dewey Burdock has its source material license from the U.S. Nuclear Regulatory Commission (“NRC”) and its underground injection permits and aquifer exemption from the U.S. Environmental Protection Agency (“EPA”).
On September 2, 2025, the Company announced that Dewey Burdock 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. The Company will work with the NRC as the lead agency for federal permitting with an objective to advance the 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 U.S. focus on domestic-sourced uranium production. This focus enables the development of essential clean energy, extracted through environmentally responsible ISR technology, to provide affordable, reliable domestic energy. During the three months ended June 30, 2026, the Bureau of Land Management approved the Dewey Burdock Project, authorizing the commencement of infrastructure construction.
On September 16, 2025, the Company announced that the EPA Environmental Appeals Board (“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 Underground Injection Control (“UIC”) permits for the Company’s 100 %-owned Dewey Burdock Project. The decision allows the Dewey Burdock Project to advance through federal permitting with the intent to continue state permitting activities in 2026, accelerating the Project towards development.
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 received 50,000,000 Preferred Shares of Verdera. The Preferred Shares provide voting rights related to approval of a “Going Public Transaction”, which resulted in the common shares of Verdera being listed on a Canadian stock exchange and concurrent registration under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which the Company 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.
On February 20, 2026, Verdera announced POCML 7 Inc., acquired all issued and outstanding common shares of Verdera, and as a result of such transaction the resulting issuer was renamed Verdera Energy Corp. (“Resulting Verdera”) and listed on the TSX-V. The initial public offering resulted in the conversion of 15,000,000 non-voting preferred shares to common shares that the Company was issued as part of the NM Energy Canada Share Purchase Agreement. As a result of the transaction, the Going Public Transaction in the Verdera Transaction was satisfied, and the Verdera Transaction is now accounted for as a sale, resulting in the de-recognition of the NM Energy Canada assets and liabilities and recognition of the consideration received and any resulting gain or loss. The Company and Resulting Verdera entered into a Side Letter, dated March 31, 2026, to confirm the acquisition by POCML 7 Inc. and subsequent listing of Resulting Verdera’s common stock on the TSX-V satisfying the Going
19
enCore Energy Corp.
Notes to Consolidated Financial Statements (Unaudited)
(all amounts in thousands, except for shares)
Public Transaction requirement pursuant to the Share Purchase Agreement while continuing to require Resulting Verdera to register its common shares under the Exchange Act. Verdera completed its listing on the TSX-V in March of 2026, and 15,000,000 Preferred Shares were converted into common shares of Verdera. As previously disclosed, the Company agreed, subject to the satisfaction of certain conditions, including, but not limited to, the effectiveness of a resale registration statement of Resulting Verdera, to elect to convert the 35,000,000 Preferred Shares into common shares of Verdera and set a record date for, and complete, a distribution of such shares to the Company’s shareholders by way of stock dividend or similar distribution.
As a result, the Company derecognized the $1,891 and $200 carrying values of NM Energy Canada’s mineral properties and intangible assets, respectively, and recognized consideration consisting of equity interests in Verdera, which the Company has elected to measure at fair value under the fair value option, with subsequent changes in fair value recognized in earnings. The fair value of the equity interests received as of February 20, 2026 was $36,530 , which is included in marketable securities – current on the condensed consolidated balance sheets, with changes in fair value being recognized in gain (loss) on marketable securities, unrealized in the condensed consolidated statements of operations. Refer to Note 4. Investments in Equity and Marketable Securities. During the six months ended June 30, 2026, the Company recognized a gain on sale of $34,438 , which is included in gain on divestment of mineral properties in the condensed consolidated statements of operations.
8.Noncontrolling Interest in Alta Mesa
Boss Energy holds a 30 % minority interest in the Company’s Alta Mesa operations (the “JV Alta Mesa”). The Company continues to retain a 70 % interest and serve as a manager of the JV Alta Mesa property, for which it is entitled to a management fee. As a result, the Company continues to consolidate the operations of the JV Alta Mesa with the non-controlling interest being recorded.
The table below is a summary of the activity related to the non-controlling interest from December 31, 2025 through June 30, 2026.
| Amount | |||||
| Balance at December 31, 2025 | $ | ||||
| Net loss for the period attributable to non-controlling interest | ( | ||||
| Inventory transfers to non-controlling interest | ( | ||||
| Contributions from non-controlling interest | |||||
| Balance at June 30, 2026 | $ | ||||
9.Asset Retirement Obligations and Restricted Cash
The asset retirement obligations continuity summary is as follows:
Amount | |||||
| Balance, December 31, 2025 | $ | ||||
| Accretion | |||||
| Settlement | ( | ||||
| Balance, June 30, 2026 | $ | ||||
As of June 30, 2026 and December 31, 2025, the undiscounted cash flows related to asset retirement obligations totaled $26,176 and $26,443 , respectively.
As of June 30, 2026 and December 31, 2025, the Company deposited $9,802 and $8,388 , respectively, for collateralization of its performance obligations (performance bonds) with an unrelated third party. These funds are not available for the payment of general corporate obligations. The performance bonds are required for future
20
enCore Energy Corp.
Notes to Consolidated Financial Statements (Unaudited)
(all amounts in thousands, except for shares)
restoration and reclamation obligations related to the Company’s operations. These funds are categorized as restricted cash on the Company’s unaudited 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 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 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 June 30, 2026, annual maintenance payments of approximately $2,242 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) | |||||||
| Remainder of 2026 | ||||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
| Total | ||||||||
21
enCore Energy Corp.
Notes to Consolidated Financial Statements (Unaudited)
(all amounts in thousands, except for shares)
Reclamation Bonds
11.Leases
The Company leases office space in the United States 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 unaudited 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 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 June 30, 2026, the Company did not have any material leases that had not yet commenced. Operating lease cost was $150 and $54 for the three months ended June 30, 2026 and 2025, respectively. Operating lease cost was $296 and $109 for the six months ended June 30, 2026 and 2025, respectively. These costs were included in general and administrative expenses on the Company’s unaudited consolidated statements of operations.
The following table represents the weighted-average remaining lease term and discount rate:
| June 30, 2026 | December 31, 2025 | ||||||||||
| Operating Leases: | |||||||||||
| Weighted-average remaining lease term (in years) | |||||||||||
| Weighted-average discount rate | |||||||||||
As of June 30, 2026, future minimum lease payments for the Company’s operating lease liabilities are as follows:
| Year ending, | Amount | ||||
| Remainder of 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total future lease payments | |||||
| Less: imputed interest | ( | ||||
| Present value of lease liabilities | $ | ||||
22
enCore Energy Corp.
Notes to Consolidated Financial Statements (Unaudited)
(all amounts in thousands, except for shares)
As of June 30, 2026 and December 31, 2025, the following balances related to the Company’s operating leases are recorded in the unaudited consolidated balance sheets:
| June 30, 2026 | December 31, 2025 | ||||||||||
| Right of use asset | |||||||||||
| Lease liability, current | |||||||||||
| Lease liability, non-current | |||||||||||
Supplemental cash flow information related to leases was as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||
| Cash paid for operating leases | |||||||||||||||||
| Supplemental disclosure of noncash leasing activities: | |||||||||||||||||
| Right-of-use-assets obtained in exchange for new operating lease liabilities | |||||||||||||||||
12.Fair Value
Fair value accounting establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
The three levels of the fair value hierarchy are described below:
•Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical unrestricted assets or liabilities;
•Level 2 - Quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, quoted prices or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability, and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and
•Level 3 - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).
The financial instruments, including cash and cash equivalents, accounts and other receivables, restricted cash, accounts payable and accrued liabilities, are carried at cost, which approximates their fair values due to the immediate or short-term maturity.
The Company’s investments in equity securities are publicly traded stocks measured at fair value and classified within Level 1 in the fair value hierarchy. Level 1 equity securities use quoted prices for identical assets in active markets.
The Company’s investments include certain investments accounted for at fair value consisting of warrants that are valued using the Black-Scholes option model based on observable inputs and as such are classified within Level 2 of the hierarchy. The warrant asset is included in marketable securities, long-term, on the unaudited consolidated balance sheets.
23
enCore Energy Corp.
Notes to Consolidated Financial Statements (Unaudited)
(all amounts in thousands, except for shares)
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| June 30, 2026 | |||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Marketable securities, current and non-current | $ | $ | $ | $ | |||||||||||||||||||
| Warrant asset | |||||||||||||||||||||||
| Total assets | $ | $ | $ | $ | |||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Convertible debt, non-current | |||||||||||||||||||||||
| Total liabilities | $ | $ | $ | $ | |||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Marketable securities, current and non-current | $ | $ | $ | $ | |||||||||||||||||||
| Warrant asset | |||||||||||||||||||||||
| Total assets | $ | $ | $ | $ | |||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Convertible debt, non-current | |||||||||||||||||||||||
| Total liabilities | $ | $ | $ | $ | |||||||||||||||||||
13.Stockholders’ Equity
The authorized shares of the Company consist of an unlimited number of common and preferred shares, both without par value. All proceeds received for issuances of common shares are attributed to common shares on the Company’s unaudited consolidated balance sheets.
During the three months ended June 30, 2026, the Company issued 34,446 common shares upon the settlement of restricted stock units ("RSUs"). In connection with the settlement of the RSUs, the Company reclassified $58 from additional paid-in capital to common stock.
During the three months ended June 30, 2025, the Company issued672,043 common shares on the exercise of stock options, for gross proceeds of $549 . In connection with the stock options exercised, the Company reclassified $444 from additional paid in capital to common shares.
During the three months ended June 30, 2025, the Company issued
During the six months ended June 30, 2026, the Company issued:
i)34,446 common shares upon the settlement of RSUs. In connection with the settlement of the RSUs, the Company reclassified $58 from additional paid-in capital to common stock.
ii)6,786,495 total common shares on the exercise of warrants. 6,510,400 common shares were issued for gross proceeds of $22,829 , which included $5,031 reclassified from additional paid-in capital to common shares. Additionally, 276,095 common shares were issued on cashless exercises of 3,667,002 warrants, which included $3,636 reclassified from additional paid-in capital to common shares.
24
enCore Energy Corp.
Notes to Consolidated Financial Statements (Unaudited)
(all amounts in thousands, except for shares)
iii)75,234 common shares on the exercise of stock options, for gross proceeds of $149 , which included $111 reclassified from additional paid-in capital to common shares.
During the six months ended June 30, 2025, the Company issued:
i)90,000 common shares on the exercise of warrants, for gross proceeds of $236 , which included $66 reclassified from additional paid-in capital to common shares.
ii)853,376 common shares on the exercise of stock options, for gross proceeds of $690 , which included $544 reclassified from additional paid-in capital to common shares.
Share Purchase Warrants
A summary of the status of the Company’s warrants as of June 30, 2026, and changes during the six months ended are as follows:
| Number of Warrants | Weighted Average Exercise Price (CAD) | ||||||||||
| Outstanding, December 31, 2025 | C$ | ||||||||||
| Exercised | ( | ||||||||||
| Expired | ( | ||||||||||
| Outstanding, June 30, 2026 | C$ | ||||||||||
As of June 30, 2026, there were no share purchase warrants outstanding.
14.Share-Based Compensation
Options
During the three months ended June 30, 2026 and 2025, the Company recognized stock option expense of $446 and $751 , respectively, for the vested portion of the stock options. During the six months ended June 30, 2026 and 2025, the Company recognized stock option expense of $957 and $1,629 , respectively, for the vested portion of the stock options.
The Company recognized share-based compensation in connection with two stockholder approved equity plans. The Stock Option Plan (the “Stock Option Plan”) which was adopted in 2015 and later amended in 2021, and the 2024 Long Term Incentive Plan (the “LTIP”) which was adopted in 2024 and replaced the Stock Option Plan. Both plans are detailed below.
Stock Option Plan
Under the Stock Option Plan, the Company was authorized to grant options to officers, directors, employees and consultants, enabling them to acquire common shares of the Company upon exercise of the options. The number of shares reserved for issuance under the Stock Option Plan could not exceed 10 % of the outstanding common shares at the time of the grant. The options could be granted for a maximum of five years and vested as determined by the Company’s Board of Directors (the “Board”). No further grants are authorized under the Stock Option Plan as a result of the adoption of the LTIP. See further details on the LTIP below.
Activity of outstanding stock options under the Stock Option Plan for the six months ended June 30, 2026 are as follows:
25
enCore Energy Corp.
Notes to Consolidated Financial Statements (Unaudited)
(all amounts in thousands, except for shares)
Number of stock options | Weighted average exercise price (CAD) | ||||||||||
| Balance, December 31, 2025 | C$ | ||||||||||
| Exercisable, December 31, 2025 | C$ | ||||||||||
| Exercised | ( | ||||||||||
| Forfeited/expired | ( | ||||||||||
| Balance, June 30, 2026 | C$ | ||||||||||
| Exercisable, June 30, 2026 | C$ | ||||||||||
As of June 30, 2026, stock options under the Stock Option Plan outstanding and exercisable were as follows:
Options Outstanding | Options Exercisable | ||||||||||||||||||||||
June 30, 2026 | June 30, 2026 | ||||||||||||||||||||||
Option price per share (CAD) | Options # | Weighted average remaining life (years) | Weighted average exercise price (CAD) | Options # | Weighted average exercise price (CAD) | ||||||||||||||||||
C$ | C$ | C$ | |||||||||||||||||||||
C$ | C$ | C$ | |||||||||||||||||||||
C$ | C$ | ||||||||||||||||||||||
As of June 30, 2026, the aggregate intrinsic value of all outstanding stock options granted and vested under the Stock Option Plan was estimated at $0 . As of June 30, 2026, the unrecognized compensation cost related to unvested stock options under the Stock Option Plan was $0 .
A summary of the Company’s unvested stock option activity under the Stock Option Plan for the six months ended June 30, 2026 is as follows:
Number of stock options | Weighted Average Grant Date Fair Value (CAD) | ||||||||||
Outstanding, December 31, 2025 | C$ | ||||||||||
Vested | ( | ||||||||||
Forfeited | ( | ||||||||||
Outstanding, June 30, 2026 | C$ | ||||||||||
There were no stock options granted under the Stock Option Plan during the six months ended June 30, 2026.
The Company’s standard stock option vesting schedule calls for 25 six months six months after the grant date.
2024 Long Term Incentive Plan
In August 2024, the Company adopted the LTIP to replace the Stock Option Plan. Awards previously issued and outstanding pursuant to the Stock Option Plan will continue to be governed by the Stock Option Plan.
The number of common shares reserved for issuance pursuant to awards granted under the LTIP will not, in the aggregate, exceed 10 % of the issued and outstanding common shares at the time of the grant. No award, other than
26
enCore Energy Corp.
Notes to Consolidated Financial Statements (Unaudited)
(all amounts in thousands, except for shares)
an option, may vest before the date that is one year following the date on which the award is granted, except in the case of accelerated vesting as defined in the LTIP.
Activity of outstanding stock options under the LTIP for the six months ended June 30, 2026 is as follows:
| Number of stock options | Weighted average exercise price (USD) | ||||||||||
| Balance, December 31, 2025 | $ | ||||||||||
| Granted | |||||||||||
| Balance, June 30, 2026 | $ | ||||||||||
| Exercisable, June 30, 2026 | $ | ||||||||||
As of June 30, 2026, stock options outstanding and exercisable under the LTIP were as follows:
| Options Outstanding | Options Exercisable | ||||||||||||||||||||||
| June 30, 2026 | June 30, 2026 | ||||||||||||||||||||||
| Option price per share | Options # | Weighted average remaining life (years) | Weighted average exercise price (USD) | Options # | Weighted average exercise price (USD) | ||||||||||||||||||
$ | $ | $ | |||||||||||||||||||||
$ | $ | ||||||||||||||||||||||
A summary of the Company’s unvested stock option activity under the LTIP is as follows:
| Number of Shares | Weighted Average Grant Date Fair Value (USD) | ||||||||||
| Outstanding, December 31, 2025 | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
| Outstanding, June 30, 2026 | $ | ||||||||||
As of June 30, 2026, the aggregate intrinsic value of all outstanding stock options granted and vested under the LTIP was estimated at $0 . As of June 30, 2026, the unrecognized compensation cost related to unvested stock options under the LTIP was $1,273 , which is expected to be recognized over a weighted average period of 1.39 years. The Company recognized stock option expense of $444 and $957 during the three and six months ended June 30, 2026, respectively, related to stock options.
During the three and six months ended June 30, 2026, the Company granted 300,000 and 330,000 stock options, respectively, under the LTIP. A fair value of $492 was calculated for these options as measured at the grant date using the Black-Scholes option pricing model during the six months ended June 30, 2026. The weighted average assumptions used in calculating the fair values as of June 30, 2026, are as follows:
| June 30, 2026 | ||||||||
| Exercise price | $ | |||||||
| Share price | $ | |||||||
| Risk-free rate | % | |||||||
27
enCore Energy Corp.
Notes to Consolidated Financial Statements (Unaudited)
(all amounts in thousands, except for shares)
| Expected life (in years) | ||||||||
| Expected volatility | % | |||||||
| Expected dividend yield | % | |||||||
| Weighted average fair value | $ | |||||||
The Company has elected to utilize the simplified method for determining the expected life of the options. This is due to the stock options granted being considered “plain vanilla” in accordance with SAB Topic 14 in ASC 718. This simplified method allows for the average of the vesting period and contractual life.
Restricted Stock Units
Under the LTIP, RSUs may be granted to the participants and generally vest over multi-year service periods, typically to five years for officers, employees and consultants and annually for directors.
During the three and six months ended June 30, 2026, the Company granted 100,000 and 132,000 RSUs, respectively, to officers and directors under its LTIP. The following table summarizes the Company’s RSU activity for the six months ended June 30, 2026:
| Number of RSUs | Weighted Average Remaining Vesting Term (years) | Weighted Average Grant Date Fair Value (USD) | |||||||||||||||
| Balance, December 31, 2025 | $ | ||||||||||||||||
| Granted | |||||||||||||||||
| Vested | ( | - | |||||||||||||||
| Forfeited | ( | - | |||||||||||||||
| Balance, June 30, 2026 | $ | ||||||||||||||||
As of June 30, 2026, 47,025 RSUs were vested. No RSUs were vested as of June 30, 2025.
The Company recognized compensation expense of $1,711 and $3,572 during the three and six months ended June 30, 2026, respectively. As of June 30, 2026, unrecognized compensation cost related to unvested RSUs was $7,843 , which is expected to be recognized over a weighted average period of 1.96 years.
Performance Share Units
During the six months ended June 30, 2026, the Company granted 300,000 performance share units (“PSUs”) to officers and directors under its LTIP. Each PSU represents the right to receive one common share upon vesting. The awards are subject to continued service and achievement of a relative total shareholder return performance condition measured against a peer group of uranium industry companies over a three-year performance period ending December 31, 2028. Payouts range from 0 % to 200 % of target based on the Company’s performance relative to the peer group.
The following table summarizes the Company’s PSU activity for the six months ended June 30, 2026:
28
enCore Energy Corp.
Notes to Consolidated Financial Statements (Unaudited)
(all amounts in thousands, except for shares)
| Number of PSUs | Weighted Average Remaining Vesting Term (years) | Weighted Average Grant Date Fair Value (USD) | |||||||||||||||
| Balance, December 31, 2025 | - | $ | |||||||||||||||
| Granted | |||||||||||||||||
| Balance, June 30, 2026 | $ | ||||||||||||||||
During the three and six months ended June 30, 2026, the Company recognized $45 556 , which is expected to be recognized over a weighted average period of 2.51 years.
15.Debt
Convertible Senior Notes
On August 19, 2025, the Company issued $115,000 aggregate principal amount of Convertible Senior Notes. The Convertible Senior Notes bear interest at a rate of 5.5 %, annually, payable semiannually in arrears, and matures on August 15, 2030.
The net proceeds from the offering of the Convertible Senior Notes were approximately $109,657 , after deducting the debt issuance costs. The Company used $11,549 of the net proceeds from the Convertible Senior Notes offering to pay the costs of entering into the capped call transactions (the “Capped Call Transactions’) in connection with the Convertible Senior Notes and approximately $10,573 of the net proceeds from the Convertible Senior Notes offering to repay amounts outstanding under its Uranium Loan Agreement with Boss.
The Convertible Senior Notes were issued pursuant to, and are governed by, an indenture, dated August 22, 2025 (the “Indenture”), between the Company and U.S. Bank National Association, as trustee. The initial conversion rate for the Convertible Senior Notes is 303.9976 shares per $1,000 principal amount of the Convertible Senior Notes, which represents an initial conversion price of approximately $3.29 per common share, and is subject to adjustment upon the occurrence of certain specified events as set forth in the Indenture. Upon conversion, the Company will pay or deliver, as applicable, cash, common shares or a combination of cash and common shares.
Upon the occurrence of a “make-whole fundamental change” (as defined in the Indenture), the Company will in certain circumstances increase the conversion rate for a specified period of time. In addition, upon the occurrence of a “fundamental change” (as defined in the Indenture), holders of the Convertible Senior Notes may require the Company to repurchase their Convertible Senior Notes at a cash repurchase price equal to the principal amount of the Convertible Senior Notes to be repurchased, plus accrued and unpaid interest, if any.
The Convertible Senior Notes may be redeemed, in whole or in part, at the Company’s option at any time, and from time to time, on or after August 21, 2028 and on or before the 40th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the Convertible Senior Notes to be redeemed, plus accrued and unpaid interest, if any, but only if the last reported sale price per common share exceeds 130 % of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice, and (ii) the trading day immediately before the date the Company sends such notice. The indenture contains specified events of default and our failure to pay principal, interest or other amounts when due or within the relevant grace period on our Convertible Senior Notes would constitute an event of default under the Indenture, which could result in an acceleration of the maturity of the Convertible Senior Notes.
29
enCore Energy Corp.
Notes to Consolidated Financial Statements (Unaudited)
(all amounts in thousands, except for shares)
The Convertible Senior Notes are accounted for as a single liability measured at amortized cost, with debt issuance costs recorded as a direct deduction from the carrying amount of the Convertible Senior Notes and amortized over the contractual term using the effective interest method.
| June 30, 2026 | ||||||||
| Convertible Senior Notes due 2030 | $ | |||||||
| Less: Unamortized debt issuance costs | ( | |||||||
| Long-term debt | $ | |||||||
The effective interest rate of the Convertible Senior Notes was 6.6 %, which includes the amortization of debt issuance costs. For the three and six months ended June 30, 2026, the Company recognized interest expense of $1,819 and $3,634 , respectively, inclusive of amortization of debt issuance costs of $238 and $472 related to the Convertible Senior Notes.
Capped Call Transactions
In connection with the Convertible Senior Notes in August 2025, the Company entered into the Capped Call Transactions.
The Capped Calls are intended to reduce potential dilution to the Company’s common shares upon conversion of the Convertible Senior Notes and/or offset potential cash payments the Company may be required to make in excess of the principal amount of the Convertible Senior Notes, with such reduction or offset subject to a cap. The Capped Calls are subject to customary anti‑dilution adjustments substantially similar to those applicable to the Convertible Senior Notes and are separate transactions that do not form part of the terms of the Convertible Senior Notes.
The Capped Calls have an initial strike price of $3.29 per common share and an initial cap price of $4.52 per common share, each subject to customary anti‑dilution adjustments.
The Capped Calls are considered indexed to the Company’s own equity and are classified as equity. Accordingly, the Capped Calls are recorded in shareholders’ equity and are not accounted for as derivative instruments. The costs of $12,006 incurred in connection with the Capped Calls were recorded as a reduction to additional paid‑in capital. The Capped Calls are excluded from the calculation of diluted earnings per share, as they would be anti‑dilutive under the treasury stock method.
16.Related Party Transactions
Related parties include key management of the Company and any entities controlled by these individuals or their direct family members. Key management personnel consist of directors and senior management including the Executive Chairman, Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and General Counsel. Amounts paid to management personnel were immaterial for the six months ended June 30, 2026 and 2025.
On April 8, 2025, the Company entered into the Verdera transaction. Upon satisfaction of the Going Public Transaction condition on February 20, 2026, the transaction was accounted for as a sale. The Company’s Executive Chairman, the spouse of the Company’s Executive Chairman, and certain directors of the Company serve as officers, members of the board of directors or advisors to Verdera and certain directors and officers of the Company own common shares of Verdera. The Audit Committee of the Board consisting solely of disinterested directors, oversaw the negotiation of the terms of the sale on behalf of the Company. A third-party valuation firm acted as financial advisor to the Audit Committee and provided the Audit Committee with an opinion as to the fairness from a financial point of view to the Company of the Verdera Transaction. The Verdera Transaction was unanimously approved by the Board upon recommendation by the Audit Committee. For more information regarding the Verdera Transaction, see Note 7 – Mineral Rights and Properties.
On April 8, 2025, the Company entered into the Verdera transaction. Upon satisfaction of the Going Public Transaction condition on February 20, 2026, the transaction was accounted for as a sale. The Company’s Executive Chairman, the spouse of the Company’s Executive Chairman, and certain directors of the Company serve as officers, members of the board of directors or advisors to Verdera and certain directors and officers of the Company own common shares of Verdera. The Audit Committee of the Board consisting solely of disinterested directors, oversaw the negotiation of the terms of the sale on behalf of the Company. A third-party valuation firm acted as financial advisor to the Audit Committee and provided the Audit Committee with an opinion as to the fairness from a financial point of view to the Company of the Verdera Transaction. The Verdera Transaction was unanimously approved by the Board upon recommendation by the Audit Committee. For more information regarding the Verdera Transaction, see Note 7 – Mineral Rights and Properties.
30
enCore Energy Corp.
Notes to Consolidated Financial Statements (Unaudited)
(all amounts in thousands, except for shares)
As of June 30, 2026 and December 31, 2025, the following amounts were owed to related parties:
| June 30, 2026 | December 31, 2025 | ||||||||||
| 5-Spot Corporation | Consulting services | $ | $ | ||||||||
| Powerhaus Gruppe Corp | Consulting services | ||||||||||
| Officers and Board members | Accrued compensation | ||||||||||
| Total | $ | $ | |||||||||
17.Income Taxes
As of June 30, 2026, the Company maintained a valuation allowance against certain deferred tax assets. The Company continually reviews the adequacy of the valuation allowance and intends to continue maintaining a full valuation allowance on its net deferred tax assets until there is sufficient evidence to support the reversal of all or a portion of the allowance. Should the Company’s assessment change in a future period, it may release all or a portion of the valuation allowance, which would result in a deferred tax benefit in the period of adjustment.
For the three months ended June 30, 2026 and 2025, the Company recorded no 193 and $182 , respectively. The effective tax rate for the three months ended June 30, 2026 and 2025, was 0 0 % and 1 %, respectively.
The difference in statutory of 15 % and effective tax rate of 0 % is a result of certain differences on account share-based payments awards, non-taxable portion of capital gain, changes to valuation allowance, statutory tax rate difference between US and Canada, nontaxable or nondeductible items, non-controlling interest, and others.
18.Segments
The Company’s operations are located in the United States and are organized into a single reportable segment and its sole business is the extraction, recovery and sales of uranium from mineral properties along with the exploration, permitting and evaluation of uranium properties in the United States. All of the Company’s assets are held in the United States. This segment has been identified based on the way the chief operating decision maker (“CODM”) assesses the business and allocates resources. This segment is monitored for performance and is consistent with internal financial reporting.
19.Subsequent Events
On July 8, 2026, the Company entered into a Separation and General Release Agreement with its former Chief Executive Officer, whose employment was terminated without cause effective April 20, 2026. Under the agreement, in lieu of the severance contemplated by his employment agreement, the former Chief Executive Officer is entitled to receive a cash payment of $1,800 , less applicable tax withholdings, and other deductions.
In connection with continued consulting by the former Chief Executive Officer, the Company agreed to grant the former Chief Executive Officer 300,000 nonqualified stock options under the Company's 2024 Long Term Incentive Plan, pursuant to the Separation and General Release Agreement. The options vested fully upon grant,
31
enCore Energy Corp.
Notes to Consolidated Financial Statements (Unaudited)
(all amounts in thousands, except for shares)
have a five-year contractual term and have an exercise price equal to the closing price of the common shares on the grant date.
Under the separation agreement, the former Chief Executive Office will forfeit all outstanding unvested stock options and restricted stock units previously granted under the 2021 Stock Option Plan and 2024 Long Term Incentive Plan, including awards that otherwise would have vested upon a termination without cause.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with our unaudited consolidated financial statements and related notes, which have been prepared in accordance with U.S. GAAP, included elsewhere in this Quarterly Report on Form 10-Q. Additionally, the following discussion and analysis should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the audited consolidated financial statements included in Part II of our Annual Report for the year ended December 31, 2025. This discussion and analysis contains forward-looking statements and forward-looking information that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated, 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 Quarterly Report. See “Cautionary Note Regarding Forward-Looking Statements” in this Quarterly Report and the information under the heading “Risk Factors” in Part I, Item IA, “Risk Factors” of our Annual Report. 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 Company™, 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” 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 the Nasdaq Capital Market LLC (“Nasdaq”) and the TSX Venture Exchange (“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.
The Company is focused on extracting domestic uranium within the United States. The Company utilizes proven in-situ recovery (“ISR”) technology to produce uranium for use in the generation of reliable, carbon-free nuclear energy. In 2023, the Company commenced uranium extraction in South Texas. The Company’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 following developments are those management believes are most relevant to current and anticipated uranium market conditions and the Company’s business.
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, as of April 2026, there were 438 operable nuclear reactors world-wide, which required approximately 178 to 180 million pounds of U3O8 annually at full operation. According to data from TradeTech LLC, 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 anticipated future levels of electrical generating capacity required 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
33
being shut down prematurely, nuclear plants such as Palisades, Three Mile Island (“Crane Clean Energy Center”), 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.
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
•The U.S. Department of Energy’s (“DOE”) Office of Nuclear Energy is launching an initiative to strengthen the nation’s nuclear fuel supply chain. Through the Defense Production Act (“DPA”) Nuclear Fuel Cycle Consortium, the federal government will work with the domestic nuclear industry to help ensure that the United States has a secure and reliable supply of nuclear fuel for both the existing reactor fleet and the next generation of advanced reactors. Comprised of representatives from more than 90 companies spanning the nuclear industrial base, the consortium will address all facets of the nuclear fuel supply chain, including mining and milling, conversion, enrichment, deconversion, fuel fabrication, recycling, and reprocessing. Under the “Nuclear Dominance-3 by 33” campaign, by 2033 the consortium aims to: (1) catalyze a secure and cost-competitive domestic fuel supply chain; (2) accelerate advanced reactor deployment and help close the nuclear fuel cycle; and (3) explore how the DPA framework can be leveraged to grow and align workforce, financing, innovation and collaboration to support expansion of U.S. nuclear energy.
•The U.S. Nuclear Regulatory Commission (“NRC”) has accepted for review and docketed the University of Illinois Urbana-Champaign’s application for a construction permit for a research reactor based on NANO Nuclear Energy’s KRONOS Micro Modular Reactor technology. The NRC’s acceptance marks the beginning of the formal licensing process and initiates detailed technical, safety, environmental, and security reviews of the proposed reactor. Acceptance of the application does not constitute approval or issuance of a construction permit. The proposed reactor would be constructed in Champaign County, Illinois, pending completion of the NRC’s review and any subsequent licensing decision.
•The NRC released a draft Environmental Assessment and draft Finding of No Significant Impact (“FONSI”) concluding that restarting the Crane Clean Energy Center is not expected to result in significant adverse environmental impacts, pending completion of the public comment process and the agency’s final environment review.
•The DOE announced a conditional $17.5 billion loan commitment to help accelerate the deployment of 10 new Westinghouse AP1000 nuclear reactors at five sites across the United States. The financing is intended to support the purchase of long-lead nuclear components, helping reduce construction timelines by up to three years. Each project is expected to include two reactors and be jointly owned by Westinghouse and a utility or energy company partner. The initiative is intended in part to help meet rapidly growing electricity demand, including that from artificial intelligence data centers.
U.S. Market News
•The NRC renewed the operating licenses for the two-unit Diablo Canyon Nuclear Power Plant in California for an additional 20 years, marking the 99th and 100th renewed commercial reactor operating licenses. Pacific Gas & Electric Co.’s Diablo Canyon Units 1 and 2, both pressurized water reactors, are located in Avila Beach, California. Unit 1’s operating license will now expire on November 2, 2044, and Unit 2’s will expire on August 26, 2045. However, operation beyond 2030 will require changes to California state law.
•The Duane Arnold Energy Center in Iowa could receive the NRC’s package of restart licensing actions by January 2028, according to NRC officials during a public outreach meeting in Cedar Rapids. NextEra Energy announced plans in October 2025 to restart the 601 MWe boiling water reactor. The effort was further supported by a power purchase agreement between NextEra and Google to supply electricity for Google’s Cedar Rapids data center, although the January 2028 licensing target remains subject to the NRC’s review process and regulatory approval.
34
•ConverDyn has announced that it has begun analyzing the feasibility of a possible new uranium conversion plant. The Metropolis Works facility in Illinois is currently the only operating commercial uranium conversion facility in the United States. ConverDyn has retained an engineering firm to evaluate how long construction of a new plant would take, the expected cost, and whether a modular design is possible.
•NextEra Energy and Dominion Energy announced an all-stock merger valued at approximately $67 billion on May 18, 2026, that will create the world’s largest regulated electric utility business by market capitalization. The combined company will operate as NextEra Energy and continue trading on the New York Stock Exchange under the ticker symbol NEE. NextEra is the largest electric utility in the United States by market capitalization while Dominion Energy provides electricity in Virginia, North Carolina, and South Carolina. Together, the two U.S. companies will create “one of the world’s largest energy infrastructure companies, with an unmatched operating platform benefiting customers,” according to NextEra’s press release issued on May 18, 2026. The transaction was unanimously approved by the boards of both companies and is expected to close within 12 to 18 months, subject to regulatory and shareholder approvals.
•Urenco USA announced plans to expand the capacity of its U.S. uranium enrichment facility by nearly 50%, adding 2.1 million separative work units of capacity. Following the completion of the expansion and ongoing capacity upgrades, the facility’s installed capacity is expected to exceed 7.0 million separative work units.
•The NRC has granted 20-year license extensions to the Edwin I. Hatch nuclear plant’s two reactors in Georgia. With the extensions, Units 1 and 2 are licensed to operate through August 2054 and June 2058, respectively.
•The U.S. Energy Information Agency released its annual report on domestic uranium production, finding that U.S. uranium mine production increased from 677,000 pounds U3O8 in 2024 to approximately 1.4 million pounds U3O8 in 2025, the highest annual production since 2017.
•Santee Cooper, in South Carolina, is moving forward with efforts to restart the construction of Units 2 and 3, both Westinghouse AP1000 reactors, at the V.C. Summer Nuclear Station. The project is currently in the feasibility and development phase, with construction subject to an investment decision.
Global Market News
•Japan is considering replacing up to five of its aging reactors by the 2040s with a total capacity possibly reaching 5,500 MW. This represents an increase of nearly 20% above existing capacity.
•The government of Canada is developing a new nuclear strategy, which is expected to be released by the end of the year. According to an official statement by the Canadian government, the new strategy will be structured around four pillars: enabling new builds across Canada, being a global supplier and exporter of choice, expanding uranium production and nuclear fuel opportunities, and developing new Canadian nuclear innovations in fission and fusion.
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Sales of Uranium and Sales Agreements
During the six months ended June 30, 2026, the Company completed uranium sales totaling 485,000 pounds of U3O8, not including converter and transaction costs, for an average sales price of $70.10 per pound of U3O8.
The Company’s uranium sales strategy provides a base level of projected income from sales contracts.
The Company has been able to use improving uranium market conditions to create a balanced uranium sales agreement portfolio, providing multiple pricing structures to support future market changes and extraction plans. As of June 30, 2026, 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. The Company has 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 remaining agreements are fixed or a hybrid of both, fixed and market. The Company will continue to assess opportunities to secure future sales agreements that will support its continued project and extraction growth strategies. The Company is committed to honoring all sales commitments.
Our website is www.encoreuranium.com. From time to time, we may use our website as a distribution channel for ongoing updates for the company and material company information.
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Our Mineral Properties
enCore controls key mineral properties within the United States, primarily in Texas, South Dakota and Wyoming. Our current Central Processing Plants’ (“CPP”) operations are designed and permitted to process uranium from a mix of satellite ion exchange (“IX”) plants and primary sources within south Texas.
Property Location Map
Summary of Properties
South Texas Integrated ISR Project (Rosita CPP)
The South Texas Integrated ISR Project is an Exploration Stage Property, as defined by S-K 1300, which consists of five project areas: the Rosita Central Processing Plant (“Rosita CPP”), Butler Ranch Uranium ISR Project, Upper Spring Creek - Brevard Area ISR Uranium Project, Upper Spring Creek - Brown Area ISR Uranium Project inclusive of the Brown and adjacent properties (“USC – Brown or Brown”), and Rosita South Cadena ISR Project. The Company owns 100% interest in the South Texas Integrated ISR Project which is located on over 7,074 acres of private land in the state of Texas.
Alta Mesa Uranium Project, Texas
The Alta Mesa Uranium Project (“Alta Mesa”) is an Exploration Stage Property, as defined by S-K 1300, and is a fully licensed and constructed ISR project and CPP, located on over 4,597 acres of private land in the state of Texas. The Company’s ownership interest is aligned with the current Joint Venture agreement providing for ownership of 70% of the Alta Mesa project.
Mesteña Grande Uranium Project, Texas
The Mesteña Grande Uranium Project (“Mesteña Grande”) is an Exploration Stage Property, as defined by S-K 1300, located in Brooks and Jim Hogg Counties, Texas and is on land located adjacent to, and to the south, north, and west of
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Alta Mesa. The Company’s ownership interest is aligned with the current Joint Venture agreement providing for ownership of 70% of Mesteña Grande. The property consists of over 200,000 mostly contiguous acres.
Dewey Burdock Project, South Dakota
The Dewey Burdock Project is an Exploration Stage Property, as defined by S-K 1300, located in southwest South Dakota and is part of the northwestern extension of the Edgemont Uranium Mining District. The Company owns a 100% interest in the Dewey Burdock Project. The project includes federal claims, private mineral rights and private surface rights controlling the entire area within the licensed project permit boundary as well as surrounding areas. The Company currently controls approximately 16,962 acres of net mineral rights and 12,613 acres of surface rights.
Gas Hills Project, Wyoming
The Gas Hills Project, as defined by S-K 1300, is an Exploration Stage Property located in Wyoming. The Company owns a 100% interest in the Gas Hills 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, all within a brownfield site which has experienced extensive uranium development.
Exploration Update
Alta Mesa East Project, Texas
Exploration activities are currently being conducted on properties located adjacent to, and to the east of, the Alta Mesa mine site as part of our Alta Mesa East exploration project which began in November 2025. The Alta Mesa East prospect consists of 5,900 acres of private, trust-owned mineral leases with approximately 4,897 acres of individual surface leases.
The Company’s exploration plan utilizes wide-spaced (800-1600 feet) drill spacing for regional assessment and closer-spaced drillholes (400-500 feet) with even closer offsets in areas of discovered mineralization. Uranium mineralization has been discovered within five primary sands beneath the site. Exploration drilling is expected to continue throughout 2026. Ongoing drilling results continue to advance the geologic model and mineral resource assessment.
Operations Update
The Company is focused on extracting domestic uranium within the United States. The Company utilizes proven ISR technology to produce uranium for use in the generation of reliable, carbon-free nuclear energy.
enCore owns 4 of the 13 constructed and existing ISR production-facilities 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 | ||||
South Texas Integrated ISR Project (Rosita CPP)
In May 2026, the first phase of construction on the Upper Spring Creek- Brown satellite facility was completed. This is the largest satellite facility the Company has built to date. The newly constructed portion of the satellite currently can process 1,600 gallons per minute (gpm) through the facility, which represents 50% of the satellite’s planned flow capacity. This new plant is capable of producing from the first wellfield at the Upper Spring Creek Project area. Drilling activities for the first 800-gpm wellfield module are complete, and wellfield infrastructure is almost complete. Drilling and infrastructure activities for the three other 800 gpm modules are underway, with Module 2 drilling activities approximately 90% complete. Uranium extraction can begin as soon as the final authorization is received. Further expansion of the plant is currently underway. Once completed, it is expected to have a total capacity of 3,200 gpm to accommodate any future development or expansion in the immediate area.
A total of 273 holes have been drilled for the six months ended June 30, 2026, with 104 extraction and monitoring wells installed for Production Authorization Area One (“PAA-1”). The first operational wellfield has been completed and is currently awaiting final authorization for operation. Modules 2, 3 and 4 are expected to be completed before the end of the year.
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In PAA-1, eight additional overlying monitoring wells were installed at the request of the TCEQ in May 2026. A hydrologic pump test and sampling campaign was completed following the installation of these eight wells, and in June 2026, this information was incorporated into a report that was filed with TCEQ. Minor modifications to the Class III Area permit were submitted to accommodate the monitoring wells proximity to the property lines and each other and are currently under TCEQ review.
TCEQ’s approval of the waste disposal well permit is expected in the third quarter of 2026 and construction is also planned for the third quarter of 2026.
Radioactive Material License (“RML”) and Area Underground Injection Control (“UIC”) Permit amendments for the Upper Spring Creek Expansion Project onto properties adjacent to the Brown, including Houdmann and Geffer properties, are currently being prepared for submission in the third quarter of 2026. The addition of these adjacent properties will increase the size of the extraction area for additional wellfield development.
Alta Mesa Uranium Project, Texas
Extraction operations continue at PAA-7 at Alta Mesa.
2026 Alta Mesa CPP
Wellfield development operations at Alta Mesa PAA-8 and PAA-3 extension are ongoing. Monitoring well drilling and installation began in January 2026 at PAA-8 and continues. Wellfield installation at PAA-3 extension has also continued to progress. At least three modules are expected to be completed when the permitting process is completed. Drilling at Alta Mesa for the three and six months ended June 30, 2026 occurred primarily within the two planned production areas: PAA-8 and PAA-3 extension.
In PAA-8, 435 total holes have been drilled since inception. A total of 219 holes have been drilled for the six months ended June 30, 2026. Of the total wells drilled, 78 wells have been cased and completed, which includes 56 monitor wells and 22 extraction wells. The hydraulic pump test for PAA-8 was completed in March 2026. PAA-8 delineation is ongoing as well as pattern design and construction.
Development drilling at PAA-3 extension continues and is nearing completion. The PAA-3 extension project began in October 2024, with monitoring well installations occurring in the spring of 2025. During the six months period ended June 30, 2026, 259 holes were drilled, including 63 holes cased and 51 holes cased and completed to date. As of the six months period ended June 30, 2026, a total of 177 delineation holes had been drilled.
The Alta Mesa RML is in timely renewal, and a second request for additional information regarding the Alta Mesa RML renewal was received from TCEQ in June 2026.
The PAA-3 extension production area authorization amendment was submitted to the TCEQ in May 2026. The Company is awaiting formal notice of comments per TCEQ’s administrative review process.
The PAA-8 production area authorization application was submitted to the TCEQ in June 2026. The Company is currently awaiting the TCEQ permit review.
Permitting applications and other documents are currently being prepared to expand the Alta Mesa project into the adjacent Alta Mesa East project area, currently under exploration. This includes an expanded aquifer exemption, an expanded area underground injection control permit and an amendment to the RML to allow for wellfields on contiguous property. Ecological surveys have been completed in the Alta Mesa East area, and reconnaissance mapping has been completed to identify all surface water impoundments and groundwater wells to be used for baseline water quality sampling.
Dewey Burdock Project, South Dakota
Preliminary engineering has been initiated for the Dewey Burdock plant site, evaporation ponds, and deep disposal well. The EPA Class III & V Underground Injection Control permits were received in October 2025, and the Bureau of Land Management Plan of Operations was approved on June 15, 2026.
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The Company received final approval from the NRC for the 20-year license renewal, which was originally issued in 2014. As part of the license renewal process, the Environmental Assessment (“EA”), Finding of No Significant Impact FONSI and Section 106 Programmatic Agreement for the Dewey-Burdock Initial Infrastructure Development Plan of operations were approved on June 16, 2026, and were publicly issued on June 22, 2026. The Final Safety Evaluation Report (“SER”) was completed, and the NRC issued the renewed 20-year source materials license on June 30, 2026. On June 17, 2026, the NRC published Federal Register notice FR 36623 announcing issuance of the final EA, SER, and FONSI for SUA-1600. Completion of these actions occurred four days ahead of the FAST-41 scheduled completion date of June 22, 2026.
On June 15, 2026, the Company submitted an application to the South Dakota Department of Agriculture and Natural Resources for the Madison and Inyan Kara water appropriations permits and a revision of the Large Surface Mine Permit. As part of the permit revision process, Western Water Consultants have been engaged to update wildlife surveys in support of the application.
Results of Operations:
The following table summarizes the results of operations for the three months ended June 30, 2026, and 2025:
| Three Months Ended June 30, | Increase (Decrease) | Percent Change | ||||||||||||||||||
| (in thousands except per share data) | 2026 $ | 2025 $ | ||||||||||||||||||
| Revenue | 15,696 | 3,664 | 12,032 | 328 | % | |||||||||||||||
| Cost of sales | 18,272 | 2,534 | 15,738 | 621 | % | |||||||||||||||
| Operating costs | 26,919 | 20,407 | 6,512 | 32 | % | |||||||||||||||
| Interest income | 272 | 201 | 71 | 35 | % | |||||||||||||||
| Interest expense | (1,819) | (240) | (1,579) | (658) | % | |||||||||||||||
Gain (Loss) on marketable securities, unrealized | (15,870) | 2,810 | (18,680) | (665) | % | |||||||||||||||
Gain on marketable securities, realized | 2,298 | 7,671 | (5,373) | (70) | % | |||||||||||||||
| Net loss before income taxes | (44,614) | (8,835) | (35,779) | (405) | % | |||||||||||||||
| Net loss per share basic and diluted | $ | (0.21) | $ | (0.03) | $ | (0.18) | (600) | % | ||||||||||||
The following table sets forth selected operating data and financial metrics for uranium sales for the three months ended June 30, 2026, and 2025.
| Three Months Ended June 30, | Increase (Decrease) | Percent Change | |||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Volumes sold (lbs.) | 215,000 | 60,000 | 155,000 | 258% | |||||||||||||||||||
| Realized sales price ($/lbs.) | 73.00 | 61.07 | 11.93 | 20% | |||||||||||||||||||
| Weighted avg. costs applicable to revenues ($/lbs.) | 84.99 | 42.23 | 42.76 | 101% | |||||||||||||||||||
•Revenue - Revenue from uranium sales for the three months ended June 30, 2026, was $15,696 compared to revenue of $3,664 for the three months ended June 30, 2025, an increase of $12,032 or 328%. Revenue recognized for the three months ended June 30, 2026, was driven by the increased sales volume of 155,000 pounds and a 20% increase in sales price. The realized sales prices per pound of uranium for the three months ended June 30, 2026 and 2025, were $73.00 and $61.07, respectively, and included the contractual sales price less sales-related costs. The realized sale price per pound increase is dictated by the market for uranium, which is a commodity.
•Cost of Sales - Costs applicable to uranium sales were $18,272 for the three months ended June 30, 2026, related to the completed sale of 215,000 pounds of uranium at a weighted average cost of $84.99 per pound compared to uranium costs of $2,534 for the sale of 60,000 pounds at a weighted average cost of $42.23 per pound for the three months ended June 30, 2025. The increase in costs was the result of more sales of purchased uranium at a higher price versus extracted uranium at a lower price. The Company’s weighted average cost components include the
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cost of purchased uranium and uranium from extraction. See Costs of U3O8 Sold table below for more information.
•Operating expenses - Operating expenses include selling, general and administrative, mineral property expenditures, depreciation, depletion, amortization, and stock compensation expense. Operating expenses for the three months ended June 30, 2026, were $26,919 as compared to $20,407 for the three months ended June 30, 2025. This increase was primarily driven by the increased stock compensation expense and an increase in activity levels the Company is experiencing in 2026 from increased drilling at Alta Mesa and Upper Spring Creek.
•Interest income - Interest income for the three months ended June 30, 2026 and June 30, 2025, was $272 and $201, respectively. The increase was primarily driven by the increase in cash held in brokerage and bank accounts.
•Interest expense - Interest expense for the three months ended June 30, 2026 and June 30, 2025, was $1,819 and $240, respectively. The increase is primarily driven by the interest expense related to the new Convertible Senior Notes. See Note 15 - Debt for more information.
•Gain/Loss on marketable securities, unrealized - The Company recognized a loss of $15,870 on the fair value of marketable securities, unrealized for the three months ended June 30, 2026, compared to a gain of $2,810 for the three months ended June 30, 2025. Unrealized losses for the three months ended June 30, 2026, are due to unfavorable market conditions.
•Gain on marketable securities, realized - The Company recognized a gain of $2,298 on the fair value of marketable securities, realized for the three months ended June 30, 2026, as a result of the sale of common shares compared to a gain on marketable securities of $7,671 for the three months ended June 30, 2025.
The following table summarizes the results of operations for the six months ended June 30, 2026 and 2025:
| Six Months Ended June 30, | Increase (Decrease) | Percent Change | ||||||||||||||||||
| (in thousands except per share data) | 2026 $ | 2025 $ | ||||||||||||||||||
| Revenue | $ | 33,997 | $ | 21,904 | 12,093 | 55% | ||||||||||||||
| Cost of sales | 36,637 | 20,796 | 15,841 | 76% | ||||||||||||||||
| Operating costs | 16,897 | 36,011 | (19,114) | (53)% | ||||||||||||||||
| Interest income | 658 | 480 | 178 | 37% | ||||||||||||||||
| Interest expense | (3,634) | (586) | (3,048) | (520)% | ||||||||||||||||
| Loss on marketable securities, unrealized | (25,918) | (7,066) | (18,852) | (267)% | ||||||||||||||||
Gain on marketable securities, realized | 6,137 | 7,671 | (1,534) | (20)% | ||||||||||||||||
| Net loss before income taxes | (42,294) | (34,404) | (7,890) | (23)% | ||||||||||||||||
| Net loss per share basic and diluted | $ | (0.19) | $ | (0.16) | $ | (0.03) | (19)% | |||||||||||||
The following table sets forth selected operating data and financial metrics for uranium sales for the six months ended June 30, 2026, and 2025.
| Six Months Ended June 30, | Increase (Decrease) | Percent Change | |||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Volumes sold (lbs.) | 485,000 | 350,000 | 135,000 | 39% | |||||||||||||||||||
| Realized sales price ($/lb.) | $ | 70.10 | $ | 62.58 | 7.52 | 12% | |||||||||||||||||
| Weighted avg. costs applicable to revenues ($/lb.) | $ | 75.54 | $ | 59.42 | 16.12 | 27% | |||||||||||||||||
•Revenue - Revenue from uranium sales for the six months ended June 30, 2026, was $33,997 compared to revenue of $21,904 for the six months ended June 30, 2025, an increase of $12,093 or 55%. The increase in
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revenue for the six months ended June 30, 2026, was driven by an increase in volumes sold of, 135,000 pounds or 39%. The realized sales prices per pound of uranium for the six months ended June 30, 2026 and 2025 were $70.10 and $62.58, respectively, and included the contractual sales price less sales-related costs. The realized sale price per pound increase is dictated by the market for uranium, which is a commodity.
•Cost of Sales - Costs applicable to uranium sales were $36,637 for the six months ended June 30, 2026, related to the completed sale of 485,000 pounds of uranium at a weighted average cost of $75.54 per pound compared to uranium costs of $20,796 for the sale of 350,000 pounds at a weighted average cost of $59.42 per pound for the six months ended June 30, 2025. The increase in costs was the result of more purchased uranium at a higher price versus extracted uranium at a lower price. The Company’s weighted average cost components include both the cost of purchased uranium and uranium produced from extraction. See Costs of U3O8 Sold table below for more information.
•Operating expenses - Operating expenses include selling, general and administrative, mineral property expenditures, depreciation, depletion, amortization, and stock compensation, and are impacted by gains recognized on the sale of mineral property expenditures. Operating expenses for the six months ended June 30, 2026, were $16,897 as compared to $36,011 for the six months ended June 30, 2025. This decrease primarily reflects the gain on sale of mineral properties as a result of the sale of NM Energy Canada’s mineral properties and intangible assets in 2026, offset by increased activity levels the Company is experiencing in 2026. The increased activity levels are driven primarily by the increased drilling at Alta Mesa and Upper Spring Creek.
•Interest income - Interest income for the six months ended June 30, 2026 and June 30, 2025, was $658 and $480, respectively. The increase was primarily driven by the increase in cash held in brokerage and bank accounts.
•Interest expense - Interest expense for the six months ended June 30, 2026 and June 30, 2025, was $3,634 and $586, respectively. The increase is primarily driven by the interest expense related to the new Convertible Senior Notes. See Note 15 - Debt for more information.
•Loss on marketable securities, unrealized - The Company recognized a loss of $25,918 on the fair value of marketable securities, unrealized for the six months ended June 30, 2026, compared to a loss of $7,066 for the six months ended June 30, 2025. Unrealized losses for the six months ended June 30, 2026 and 2025, are due to unfavorable market conditions.
•Gain on marketable securities, realized - The Company recognized a gain of $6,137 on the fair value of marketable securities, realized for the six months ended June 30, 2026, as a result of the sale of common shares compared to a gain of $7,671 on marketable securities for the six months ended June 30, 2025.
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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 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 six months ended June 30, 2026, the Company continued its uranium extraction activities at Alta Mesa.
Total Costs of U3O8 Sold | |||||||||||||||||||||||||||||
| Six Months Ended June 30, 2026 | Six months ended June 30, 2025 | ||||||||||||||||||||||||||||
Pounds U3O8 | Cost ($000s) | Cost/Pounds | Pounds U3O8 | Cost ($000s) | Cost/Pounds | ||||||||||||||||||||||||
| Total Cost of Pounds | 485,000 | $36,637 | $75.54 | 350,000 | $20,796 | $59.42 | |||||||||||||||||||||||
| Purchased inventory | (1) | 360,000 | $29,466 | $81.85 | 225,000 | $15,430 | $68.58 | ||||||||||||||||||||||
| Extracted total | 125,000 | $7,170 | $57.36 | 125,000 | $5,365 | $42.92 | |||||||||||||||||||||||
| Extracted: | |||||||||||||||||||||||||||||
| Cash costs | (2) | $4,808 | $38.46 | $3,607 | $28.86 | ||||||||||||||||||||||||
| Non-Cash costs | (3) | $2,362 | $18.90 | $1,758 | $14.06 | ||||||||||||||||||||||||
| (1) | Lower of actual cost or market price as of end Q2-2026 and Q2-2025, respectively. | ||||||||||||||||||||||||||||
| (2) | Cash costs of extracted pounds related to cost of goods sold are a metric for investors in evaluating the Company's operations. | ||||||||||||||||||||||||||||
| (3) | Non-cash costs of extracted pounds related to cost of goods sold are an insight into additional expenses that impact overall costs and include depletion and certain sales related fees. | ||||||||||||||||||||||||||||
| Inventory Remaining on Hand | ||||||||||||||||||||||||||
| As of June 30, 2026 | As of December 31, 2025 | |||||||||||||||||||||||||
Pounds U3O8 | Cost ($000s) | Cost/Pounds | Pounds U3O8 | Cost ($000s) | Cost/Pounds | |||||||||||||||||||||
| Total Cost of Inventory | 203,304 | $14,396 | $70.81 | 132,013 | $5,317 | $40.28 | ||||||||||||||||||||
| Purchased Inventory | (1) | 140,000 | $11,263 | $80.45 | ||||||||||||||||||||||
| Extracted total | 63,304 | $3,133 | $49.49 | 132,013 | $5,317 | $40.28 | ||||||||||||||||||||
| Extracted: | ||||||||||||||||||||||||||
| Cash costs | (2) | $2,233 | $35.27 | $4,605 | $34.88 | |||||||||||||||||||||
| Non-Cash costs | (3) | $900 | $14.22 | $713 | $5.40 | |||||||||||||||||||||
| (1) | Lower of actual cost or market price as of end Q2-2026 and Q4-2025 respectively. | |||||||||||||||||||||||||
| (2) | Cash costs of extracted pounds related to cost of goods sold are a metric for investors in evaluating the Company's operations. | |||||||||||||||||||||||||
| (3) | Non-cash costs of extracted pounds related to cost of goods sold are an insight into additional expenses that impact overall costs and include depletion and certain sales related fees. | |||||||||||||||||||||||||
The Company continues to be impacted by delays in the permitting approval process associated with its assets in South Texas, including Alta Mesa and Upper Spring Creek. These delays have resulted in reduced overall production estimates for the year ending December 31, 2026. The Company has maintained its focus on developing its wellfields and has chosen to reduce its rig activity to better align its operational needs and strategic objectives. Beginning in April 2026, the Company began reducing its overall headcount by approximately 20%. As a result of the workforce reduction, the
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Company expects to see annualized cost savings to its overall operations and general and administrative expenses compared to the year ended December 31, 2025.
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.
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 June 30, 2026 and December 31, 2025, the Company had cash and cash equivalents of $21,811 and $52,403, respectively, and working capital of $87,045 and $96,134, 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, issuance of required permits which may delay the Company’s ongoing or future projects, 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 of the aggregate principal amount of the 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.
The proceeds were used, among other things, to pay down and terminate the Uranium Loan Agreement with Boss. See Note 15 - Debt for more information.
The net proceeds from the offering of the Notes were approximately $109,657, after deducting the initial purchasers’ discounts and commissions and offering expenses.
We believe that our available cash, expected operating cash flows, 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 June 30, 2026. 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 six months ended June 30, 2026 and 2025:
| Six Months Ended June 30, | |||||||||||||||||
| 2026 | 2025 | Cash Balance Impact Increase (Decrease) | |||||||||||||||
| Net cash used in operating activities | $ | (42,502) | $ | (17,629) | $ | 24,873 | |||||||||||
| Net cash used in investing activities | (11,486) | (2,115) | 9,371 | ||||||||||||||
| Net cash provided by financing activities | 17,947 | 6,551 | 11,396 | ||||||||||||||
| Impact of currency rate changes in cash | 6,863 | 663 | 6,200 | ||||||||||||||
| Net decrease in cash, cash equivalents and restricted cash | $ | (29,178) | $ | (12,530) | $ | (16,648) | |||||||||||
Net Cash Used in Operating Activities
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Net cash used in operating activities increased by $24,873 from $17,629 for the six months ended June 30, 2025 to $42,502 for the six months ended June 30, 2026. This was largely driven by an increase in inventory and prepaid expenses during the six months ended June 30, 2026 compared to the same period in 2025.
Net Cash Used in Investing Activities
Net cash used in investing activities increased by $9,371, to $11,486, for the six months ended June 30, 2026, compared to $2,115 for the six months ended June 30, 2025. This was largely driven by an increase in exploration costs related to mineral properties and the net purchase of marketable securities in 2026.
Net Cash Provided by Financing Activities
Net cash provided by financing activities increased by $11,396 to $17,947 for the six months ended June 30, 2026, compared to cash provided by financing activities of $6,551 for the six months ended June 30, 2025. This was largely driven by the proceeds received from the exercise of warrants during the six months ended June 30, 2026.
Off Balance Sheet Arrangements
As of June 30, 2026, 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 unaudited 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 unaudited 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. While our significant accounting policies are described in more detail in Note 2 – Summary of Significant Accounting Policies of our unaudited consolidated financial statements, we provide expanded discussion of our most critical accounting policies, estimates and judgments in the Annual Report on Form 10-K for the year ended December 31, 2025.
Smaller Reporting Company
We are a “smaller reporting company” as defined in Regulation S-K under the Securities Act and may elect to take advantage of certain of the scaled disclosures available to smaller reporting companies.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not required for smaller reporting companies.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As of June 30, 2026, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a‑15(e) and 15d‑15(e) under the Exchange Act. Based on that evaluation, management concluded that our disclosure controls and procedures were not effective at a reasonable assurance level as of June 30, 2026, due solely to the previously reported material weaknesses in internal control over financial reporting that are in the process of remediation, as described in Item 9A of our most recent Annual Report on Form 10‑K. No new material weaknesses were identified during the quarter ended June 30, 2026. Management believes the remediation measures described below and the actions taken have addressed the previously identified material weaknesses.
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The previously disclosed material weaknesses notwithstanding, management performed additional analyses and procedures, including enhanced review and validation activities, to ensure that our consolidated financial statements are complete, accurate, and prepared in accordance with U.S. GAAP. Accordingly, management believes the consolidated financial statements included in this Quarterly Report present fairly, in all material respects, our financial position, results of operations, and cash flows for the periods presented.
Remediation Update
With oversight from the Audit Committee, we continued to execute our remediation plan during the quarter. Building on the actions previously disclosed, we have:
•Advanced the design, implementation, and operation of key activities and controls across all significant accounting processes.
•Remediated and tightened user access roles and segregation-of-duties within core financial systems.
•Formalized, documented, and assigned ownership of key financial reporting controls.
•Institutionalized a disciplined financial close, including timely account reconciliations, journal entry controls, and management review controls across significant accounts.
•Integrated financial processes into a controlled enterprise resource planning environment with system-enforced workflows and audit trails.
•Enhanced general information technology (“IT”) controls over access, change management, and IT operations.
•Continued to hire key leadership roles in both accounting and IT operations.
Management believes the remediation measures described above and the actions taken have addressed the previously identified material weaknesses. However, the material weaknesses will not be considered remediated until the applicable controls have operated for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.
Changes in Internal Control over Financial Reporting
During the quarter ended June 30, 2026, we continued to implement enhancements to our internal control over financial reporting as part of the remediation program described above, including improvements to general IT controls, the financial close process, and system‑based controls. Other than these ongoing remediation enhancements, there were no changes in our internal control over financial reporting during the quarter ending June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on Controls
Our management does not expect that our disclosure controls and procedures or internal control over financial reporting will prevent all errors or all fraud. A control system provides reasonable, not absolute, assurance and is subject to inherent limitations.
PART II - OTHER INFORMATION
Item 1. - Legal Proceedings
For a discussion of the legal proceedings of the Company, see Note 10 – Commitments and Contingencies to the consolidated financial statements above.
Item 1A. - Risk Factors
There have been no material changes to the risk factors previously disclosed under Item 1A, “Risk Factors,” of our Annual Report filed on March 31, 2026.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Our operations and other activities are not subject to regulation by the Federal Mine Safety and Health Administration under the Federal Mine Safety and Health Act of 1977.
Item 5. Other Information
On August 13, 2026, the Company entered into a Controlled Equity OfferingSM Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald Canada Corporation (the “Canadian Lead Agent”) and RBC Dominion Securities Inc., as Canadian sales agents (collectively, the “Canadian Agents”), and Cantor Fitzgerald & Co. (the “U.S. Lead Agent” and, together with the Canadian Lead Agent, the “Lead Agents” and individually, a “Lead Agent”), RBC Capital Markets, LLC, B. Riley Securities, Inc. and Jett Capital Advisors, LLC, as U.S. sales agents (collectively, the “U.S. Agents” and, together with the Canadian Agents, the “Agents”), pursuant to which the Company may issue and sell from time to time common shares of the Company, having an aggregate sales price of up to $250,000,000 (or the equivalent in Canadian dollars as determined using the exchange rate posted by the Bank of Canada on each date the common shares are sold) through the Agents acting as sales agents.
Sales of our common shares in the United States, if any, may be made in transactions that are deemed to be “at the market” offerings, as defined in Rule 415 under the Securities Act, including, without limitation, sales made by means of ordinary brokers’ transactions on Nasdaq or any other existing trading market in the United States for the common shares, to or through a market maker, or subject to the terms of an applicable agency transaction notice, by any other method permitted by applicable law, including privately negotiated transactions. Sales of our common shares in Canada, if any, may be made in transactions that are deemed to be an “at-the-market distribution” under National Instrument 44-102 - Shelf Distributions, including, without limitation (i) in privately negotiated transactions, (ii) as block transactions, provided, however, that any block transactions will be completed in compliance with applicable securities laws and the rules of the TSX-V, and (iii) sales made directly on Nasdaq and the TSX-V under the symbol “EU,” or on any “marketplace” (as such term is defined in National Instrument 21-101 - Marketplace Operation). Each Lead Agent will use commercially reasonable efforts, consistent with its normal trading and sales practices and applicable laws and regulations, to sell the common shares from time to time subject to the terms of an applicable agency transaction notice. The Company will pay the Lead Agents a commission that will not exceed, but may be lower than, 2.25% of the gross offering proceeds of any common shares sold through the applicable Lead Agent under the Sales Agreement and also has provided the Agents with customary indemnification and contribution rights.
The Lead Agents are not required, individually or collectively, to sell any specific number of common shares or dollar amount of our common shares. The Company is not obligated to make any sales of common shares under the Sales Agreement. The Company or any Lead Agent (solely with respect to such Lead Agent) may suspend or terminate the offering of common shares upon notice to the other party and subject to other conditions.
The offering is being made concurrently in Canada under the terms of a prospectus supplement to a short form base shelf prospectus filed with the securities commissions or similar authorities in each of the provinces and territories of Canada. Any common shares sold in the United States will be offered and sold pursuant to the Prospectus Supplement dated August 13, 2026, and a base prospectus, dated July 1, 2026, relating to the Company’s effective shelf registration statement on Form S-3 (File No. 333-296905).
The foregoing description of the Sales Agreement is not complete and is qualified in its entirety by reference to the full text of the Sales Agreement, a copy of which is filed as Exhibit 1.1 to this Quarterly Report and incorporated by reference into this Item 5. A copy of the opinion of Morton Law LLP relating to the common shares issuable pursuant to the Sales Agreement is filed as Exhibit 5.1 to this Quarterly Report. This disclosure pursuant to Item 5. does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of common shares in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
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Item 6. Exhibits
| Exhibit | Description | ||||
| 1.1* | |||||
| 5.1* | |||||
| 23.1* | |||||
| 31.1* | |||||
| 31.2* | |||||
| 32.1** | |||||
| 101 | Interactive Data File (formatted as iXBRL) | ||||
| 101.INS* | Inline XBRL Instance Document | ||||
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | ||||
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | ||||
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | ||||
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | ||||
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | ||||
| 104* | Cover Page Interactive Data File (formatted as iXBRL and contained in Exhibit 101) | ||||
*Filed herewith.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
enCore Energy Corp
(Registrant)
Dated: August 13, 2026 By: /s/ Richard Little
Richard Little
Chief Executive Officer (Principal Executive Officer)
Dated: August 13, 2026 By: /s/ Kevin Kremke
Kevin Kremke
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
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Exhibit 1.1
Execution Version
enCore Energy Corp.
Common Shares
Controlled Equity OfferingSM
Sales Agreement
August 13, 2026
Cantor Fitzgerald Canada Corporation
181 University Avenue, Suite 1500
Toronto, Ontario
M5H 3M7
181 University Avenue, Suite 1500
Toronto, Ontario
M5H 3M7
On behalf of the Canadian sales agents
Cantor Fitzgerald & Co.
110 East 59th Street
New York, New York 10022
110 East 59th Street
New York, New York 10022
On behalf of the U.S. sales agents
Ladies and Gentlemen:
enCore Energy Corp., a corporation existing under the laws of British Columbia (the “Company”), confirms its agreement (this “Agreement”) with Cantor Fitzgerald Canada Corporation (the “Canadian Lead Agent”) and Cantor Fitzgerald & Co. (the “U.S. Lead Agent” and, together with the Canadian Lead Agent, “Lead Agents” and individually, a “Lead Agent”), the agents listed on Schedule 1(I) (the “U.S. Agents”) and the agents listed on Schedule 1(II) (the “Canadian Agents” and, together with the Lead Agents and the U.S. Agents, the “Agents,” and each, an “Agent”) with respect to the issuance and sale from time to time by the Company of common shares of the Company (the “Common Shares” and the Common Shares to be issued and sold by the Company pursuant to the terms hereof, the “Shares”), having an aggregate offering price of up to $250,000,000 (the “Maximum Amount”) through the Agents, as sales agents, during the term of this Agreement and on the terms and subject to the conditions set forth in this Agreement.
All dollar amounts referenced herein are expressed in United States dollars unless otherwise specifically indicated. When determining the aggregate value of the Shares sold, the Company will use the exchange rate posted by the Bank of Canada on the date the applicable Shares were sold to determine the United States dollar equivalent of any Shares sold in consideration for Canadian dollars, provided that if such date is not a date when the Bank of Canada Ottawa Head Office is open for business and no exchange rate is posted by the Bank of Canada, the Company will use the exchange rate posted on the most recent prior day on which the Bank of Canada Ottawa Head Office is open for business.
1.Representations and Warranties. The Company represents and warrants to, and agrees with, the Agents as of the date hereof, each Representation Date (as defined herein), each Time of Sale (as defined herein) and each Settlement Date (as defined herein) as follows:
(a)Compliance with Canadian Laws and Regulations. The Company meets the eligibility requirements to use the rules and procedures established under National Instrument 44-101 Short Form Prospectus Distributions and Companion Policy 44-101CP, National Instrument 44-102 Shelf Distributions (“NI 44-102”) and Companion Policy 44-102CP as extended, varied or amended, for the distribution of securities on a continuous or delayed basis (the “Shelf Procedures”) and to file a short form prospectus with the securities regulatory authorities (the “Canadian Qualifying Authorities”) in each of the provinces and territories of Canada (the “Canadian
Qualifying Jurisdictions”); the Company has prepared and filed a short form base shelf prospectus (the “Canadian Base Prospectus”) with the Canadian Qualifying Authorities utilizing the passport system procedures provided for under Multilateral Instrument 11-102 Passport System and National Policy 11-202 Process for Prospectus Reviews in Multiple Jurisdictions and has obtained a receipt from the British Columbia Securities Commission (a “Receipt”) evidencing the receipt on behalf of the Canadian Qualifying Authorities for the Canadian Base Prospectus and exemptive relief from the Autorité des marchés financiers with respect to certain French language translation requirements (as described in the Canadian Base Prospectus); there are no: (i) reports or information that in accordance with the requirements of Canadian Securities Laws (as defined herein) must be made publicly available in connection with the offering as at the date hereof that have not been made publicly available as required; or (ii) orders preventing or suspending the use of the Canadian Prospectus (as defined herein), preventing the distribution of the Shares or cease trade orders that have been issued by any Canadian Qualifying Authority and no proceeding for that purpose has, to the Company’s knowledge, been initiated or threatened by any Canadian Qualifying Authority. At each Time of Sale (as defined below) and each Settlement Date (as defined below), (i) the Canadian Prospectus, as amended or supplemented, will comply in all material respects with the Canadian Securities Laws, (ii) the Canadian Prospectus, as amended or supplemented, will not contain any misrepresentation, as defined under Canadian Securities Laws, (iii) the Canadian Prospectus, as amended or supplemented, will constitute full, true and plain disclosure of all material facts relating to the Shares, the Subsidiaries (as defined below) and the Company, and (iv) the Canadian Prospectus, as amended or supplemented, will not omit a material fact which is necessary to make the information and statements contained therein not misleading in light of the circumstances in which they were made. The representations and warranties set forth in the two immediately preceding sentences do not apply to statements in or omissions from the Canadian Prospectus, or any amendments or supplements thereto, made in reliance upon and in conformity with information furnished to the Company in writing by or on behalf of the Agents expressly for use therein. To its knowledge, except as disclosed in the Registration Statement, or included or incorporated in the Canadian Prospectus, the Company is not a “related issuer” or “connected issuer” (as those terms are defined in National Instrument 33-105 – Underwriting Conflicts of the Canadian Securities Administrators) of any of the Agents. With respect to the Shares, “Canadian Prospectus” means the Canadian Base Prospectus, including all documents incorporated therein by reference and the documents otherwise deemed to be a part thereof or included therein pursuant to Canadian Securities Laws, including but not limited to, Designated News Releases (as defined herein) and the prospectus supplement relating to the offering of the Shares (the “Canadian Prospectus Supplement”) to be filed by the Company with the Canadian Qualifying Authorities in accordance with Canadian Securities Laws; and “Designated News Release” means a news release disseminated by the Company in respect of previously undisclosed information that, in the Company’s determination, constitutes a material fact (as such term is defined in Canadian Securities Laws) and identified by the Company as a “designated news release” in writing on the face page of the version of such news release that is filed by the Company on SEDAR+ (as defined herein). The Canadian Prospectus Supplement shall provide that any and all Designated News Releases shall be deemed to be incorporated by reference in the Canadian Base Prospectus only for the purposes of the distribution of the Shares.
(b)Registration Requirement Compliance. The Company has filed a Registration Statement on Form S-3 (File No. 333-296905), including a base prospectus relating to certain securities, including the Common Shares, to be issued from time to time by the Company (the “U.S. Base Prospectus”); such registration statement was declared effective under the Securities Act of 1933, as amended (the “Act”); the conditions for the use of Form S-3 and such registration statement meets, and the offering and sale of the Shares as contemplated hereby comply with Rule 415 under the Act (including without limitation, Rule 415(a)(5)); no stop order, cease trade or any order suspending the effectiveness of such registration statement has been issued and, to the Company’s knowledge, no proceeding for that purpose has been initiated or threatened by the Securities and Exchange Commission (the “Commission”); such registration statement, including all exhibits thereto and the documents incorporated by reference therein at the time such registration statement and any post-effective amendment thereto initially became effective or becomes effective (the “Effective Date”) and including the information, if any, contained in a prospectus filed with the Commission pursuant to Rule 424(b) of the Act or pursuant to Rule 430A, 430B or 430C under the Act, and documents incorporated by reference that the Company will file in accordance with the provisions of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are hereinafter collectively called the “Registration Statement”; with respect to the Shares, “U.S. Prospectus” means the U.S. Base Prospectus as supplemented by the prospectus supplement relating to the offering of the Shares that is filed with the Commission pursuant to Rule 424(b) under the Act in the form first used (or made available upon request of purchasers pursuant to Rule 173 under the Act) (the “U.S. Prospectus Supplement”); any reference herein to the Registration Statement, the U.S. Base Prospectus, the U.S. Prospectus Supplement, the U.S. Prospectus, the Canadian Base Prospectus, the Canadian Prospectus Supplement or the Canadian Prospectus shall be deemed to refer to and include the documents incorporated by reference therein; any reference to any amendment or supplement to the Registration Statement, the U.S. Base Prospectus, U.S. Prospectus Supplement or U.S. Prospectus shall be deemed to refer to and include the filing after the execution hereof of any document filed with the Commission deemed to be incorporated by reference therein; “Prospectuses” means, collectively, the Canadian Prospectus and the U.S. Prospectus; and “Prospectus Supplements” means, collectively, the Canadian Prospectus Supplement and the U.S. Prospectus Supplement.
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(c)Company Not Ineligible Issuer. (i) At the time of filing the Registration Statement, (ii) at the earliest time after the filing of the Registration Statement that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the Act) of the Shares and (iii) as of the date of the execution and delivery of this Agreement (with such date being used as the determination date for purposes of this clause (iii)), the Company was not and is not an “ineligible issuer” (as defined in Rule 405 under the Act), without taking account of any determination by the Commission pursuant to Rule 405 under the Act that it is not necessary that the Company be considered an “ineligible issuer”.
(d) Issuer Free Writing Prospectuses. Each Issuer Free Writing Prospectus (as defined herein), as of its issue date, did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, or include any information that conflicted with the information contained in the Registration Statement, including any document incorporated by reference therein that has not been superseded or modified. If at any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement, the Company has promptly notified or will promptly notify the Agents and has promptly amended or supplemented or will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict. The foregoing shall not apply to statements in or omissions from any Issuer Free Writing Prospectus based upon and in conformity with written information furnished to the Company by any Agent about the Agent specifically for use therein.
(e)Incorporated Documents. The documents incorporated by reference in the Canadian Prospectus when they were filed with the Canadian Qualifying Authorities conformed in all material respects to the requirements of Canadian securities laws, including the applicable rules and regulations under such laws, and together with applicable published national, multilateral and local policy statements, instruments, notices and blanket orders of the Canadian Qualifying Authorities in each of the Canadian Qualifying Jurisdictions (collectively, the “Canadian Securities Laws”); the documents included or incorporated by reference in the Registration Statement, the U.S. Prospectus and the applicable Issuer Free Writing Prospectus(es), if any, at or prior to, as applicable, the date hereof, the Representation Date, the Time of Sale or the Settlement Date (as defined below), taken together (collectively, the “Disclosure Package”), when they were filed (or, if any amendment with respect to such document was filed, when such amendment was filed), conformed or will conform in all material respects to any applicable requirements of the Exchange Act and the rules and regulations of the Commission thereunder; and any further documents so filed and incorporated by reference in the Canadian Prospectus, the Registration Statement, the Disclosure Package and the U.S. Prospectus, when such documents are filed with the Canadian Qualifying Authorities or the Commission, will conform in all material respects to the requirements of Canadian Securities Laws or the Exchange Act and the rules and regulations of the Commission thereunder, as applicable. The documents included or incorporated by reference in the Registration Statement, when filed with the Commission, did not, and will not, contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The foregoing shall not apply to statements in, or omissions from, any such document based upon and in conformity with written information furnished to the Company by any Agent about the Agent specifically for use therein.
(f)Disclosure Conformity. On the Effective Date of the Registration Statement and any post-effective amendment thereto, the Registration Statement conformed or will conform in all material respects with the applicable requirements of the Act and the rules and regulations of the Commission under the Act; as of the date hereof, the date the U.S. Prospectus is first filed, at the time of each sale of any Shares pursuant to this Agreement (the “Time of Sale”), at each Representation Date and at each Settlement Date, the U.S. Prospectus conformed or will conform in all material respects with the applicable requirements of the Act and the rules and regulations of the Commission under the Act; on the date each was first filed, the Canadian Base Prospectus and the Canadian Prospectus Supplement did, and as of the date hereof, at each Time of Sale, at each Representation Date and at each Settlement Date, the Canadian Prospectus will, conform in all material respects with the applicable requirements of Canadian Securities Laws and the rules and regulations of the Canadian Qualifying Authorities under Canadian Securities Laws; and the Registration Statement, as of the date hereof and as of the Effective Date, did not, and at each Time of Sale, at each Representation Date and at each Settlement Date, will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; the Canadian Prospectus will not, as of its date, as of the date hereof, at each Time of Sale, at each Representation Date and at each Settlement Date, contain a misrepresentation or any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of any Agent specifically for inclusion in the Registration Statement, U.S. Prospectus or the Canadian Prospectus.
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(g)Organization and Qualification. The Company and each of its Material Subsidiaries (as defined below) (i) are duly organized, validly existing and in good standing (where such concept is recognized) under the laws of their respective jurisdictions of organization; (ii) are duly licensed or qualified as a foreign corporation for transaction of business and in good standing under the laws of each other jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such license or qualification, (iii) have all corporate or similar power and authority necessary to own, lease or operate their respective properties and to conduct their respective businesses as described in the Registration Statement, the Prospectuses and the Disclosure Package (and any amendment or supplement thereto), except where the failure to be so qualified or in good standing or have such power or authority would not, individually or in the aggregate, have a Material Adverse Effect. “Material Adverse Effect” means the effect resulting from any event, fact, circumstance, development, occurrence or state of affairs that is materially adverse to the business, assets (including intangible assets), affairs, operations, earnings, properties, condition (financial or otherwise) or results of operations of the Company and any of the Subsidiaries, taken as a whole, whether or not arising in the ordinary course of business.
(h)Subsidiaries. The subsidiaries of the Company listed in Schedule 3(I) (collectively, the “Material Subsidiaries” and each, a “Material Subsidiary”), include all of the Company’s material subsidiaries as of the date hereof, and the subsidiaries of the Company listed in Schedule 3(II) (collectively, the “Subsidiaries” and each, a “Subsidiary”), include all of the Company’s subsidiaries as of the date hereof. Except for the Subsidiaries, investments in other issuers or as otherwise described in the Registration Statement, the Prospectuses and the Disclosure Package (and any amendment or supplement thereto), the Company does not beneficially own or exercise control or direction over the securities of any person. Except as otherwise described in the Registration Statement, the Prospectuses and the Disclosure Package (and any amendment or supplement thereto), the Company owns, directly or indirectly, all of the equity interests of the Subsidiaries free and clear of all encumbrances. Except as otherwise described in the Registration Statement, the Prospectuses and the Disclosure Package (and any amendment or supplement thereto), all the equity interests of the Subsidiaries and the Joint Venture Entities (as defined below) held by the Company have been validly issued and are fully paid, non-assessable and free of preemptive and similar rights. Other than the relevant partnership, shareholder and/or joint venture agreement with respect to its Subsidiaries or Joint Venture Entities or, with respect to capital of the Company, as otherwise described in the Registration Statement, the Prospectuses and the Disclosure Package (and any amendment or supplement thereto), no person has any agreement, option, right or privilege (whether present or future, contingent or absolute, pre-emptive or contractual) capable of becoming an agreement, for the purchase from the Company or any of the Subsidiaries of any interest in any of the shares or for the issue or allotment of any unissued shares in the capital of the Subsidiaries or Joint Venture Entities or any other security convertible into or exchangeable for any such shares. There exist no options, warrants, purchase rights, or other contracts or commitments that could require the Company to sell, transfer or otherwise dispose of any securities of the Subsidiaries. The following Subsidiaries are inactive and do not hold any material assets or liabilities, nor carry on any business or operations as of the date hereof: (i) Azarga Resources Limited and (ii) Azarga Resources Canada Ltd. “Joint Venture Entity” means each person or body corporate, howsoever constituted in any jurisdiction, which is an owner or operator of any of the Material Properties, including, to the extent applicable, the Company, provided that any representation or warranty of the Company in this Agreement relating to Joint Venture Entities other than the Company shall be deemed to be limited to only apply in respect of the Alta Mesa Uranium Project, the Dewey Burdock Project, the Gas Hills Project and the Rosita Project (collectively, the “Material Properties”).
(i)Capitalization. All the outstanding Common Shares have been duly and validly authorized, created, allotted and issued and are fully paid and non-assessable and not subject to any pre-emptive or similar rights that have not been duly waived or satisfied; the Common Shares conform in all material respects to the descriptions thereof contained in the section titled “Description of Common Shares” in the Registration Statement, the Disclosure Package and the Prospectuses.
(j)Existing Instruments. There is no contract, agreement or other document of a character required to be described in the Canadian Prospectus, the Registration Statement or the U.S. Prospectus, or to be filed as an exhibit thereto or filed therewith, which is not described therein or filed or incorporated by reference as required; and the statements in the Registration Statement, the Canadian Base Prospectus, the Canadian Prospectus, the Disclosure Package or the U.S. Prospectus under the headings “Certain Canadian Federal Income Tax Considerations for Non-Residents of Canada”, “Material U.S. Federal Income Tax Consequences”, and “Description of Common Shares”, insofar as such statements summarize legal matters, agreements, documents or proceedings discussed therein, are accurate and fair summaries of such legal matters, agreements, documents or proceedings in all material respects.
(k)Authorization. The Company has full corporate power and authority to execute, deliver and perform its obligations under this Agreement, and this Agreement has been duly authorized, executed and delivered by the Company and is enforceable against the Company in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyances or transfer, moratorium or similar laws affecting creditors’ rights generally and subject to general principles of equity
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(regardless of whether enforceability is considered in a proceeding in equity or at law); the Shares have been duly authorized and, when the Shares are issued and delivered pursuant to this Agreement against payment of the consideration set forth herein, such Shares will have been duly and validly created, allotted and issued as fully paid and non-assessable, and the Shares will conform in all material respects to the descriptions thereof contained in the Registration Statement, the Prospectuses and the Disclosure Package with respect to the Shares.
(l)Investment Company Act. Neither the Company nor any of the Subsidiaries is and, after giving effect to the offering and sale of the Shares and the application of the proceeds as described in the Registration Statement, the Prospectuses and the Disclosure Package under the heading “Use of Proceeds,” will be required to register as an “investment company” as defined in the Investment Company Act of 1940, as amended (the “Investment Company Act”), and the rules and regulations of the Commission promulgated thereunder.
(m)Registration Rights. Except as otherwise described in the Registration Statement, the Prospectuses and the Disclosure Package (and any amendment or supplement thereto), there are no contracts, agreements or understandings between the Company and any person granting such person the right to (i) require the Company to file a prospectus under Canadian Securities Laws or a registration statement under the Act with respect to Common Shares owned or to be owned by such person or (ii) require the Company to have any securities of the Company registered pursuant to the Registration Statement or sold in the offering contemplated by this Agreement.
(n)Governmental Authorization and Absence of Further Requirements. No consent, approval, authorization, or filing with or order of any Governmental Authority (as defined herein) is required in connection with the transactions contemplated herein or the consummation of the transactions contemplated by this Agreement or for the issuance, offering or sale of the Shares, except such as (1) have already been obtained, (2) may be required under all applicable securities laws, including Canadian Securities Laws and applicable U.S. state and federal securities laws (the “Applicable Securities Laws”), (3) may be required by The Nasdaq Capital Market LLC (“Nasdaq”) or the TSX Venture Exchange (the “TSXV”) (collectively, the “Exchanges”) and (4) the failure of which to obtain or make would not result in a Material Adverse Effect or affect the ability of the Company and the Agents to effect the transactions contemplated hereby. No approval of the Company’s shareholders is required in connection with the transactions contemplated herein. For purposes of this Agreement, “Governmental Authority” means (i) any federal, provincial, state, local, municipal, national or international government or governmental authority, regulatory or administrative agency, governmental commission, department, board, bureau, agency or instrumentality, court, tribunal, arbitrator or arbitral body (public or private); (ii) any self-regulatory organization; or (iii) any political subdivision of any of the foregoing.
(o)Consents and Permits. Except as disclosed in the Registration Statement, the Prospectuses and the Disclosure Package, the Company and its Subsidiaries possess all licenses, concessions, certificates, permits, registrations and other authorizations issued by the appropriate federal, state, provincial, regional or foreign Governmental Authorities necessary to conduct their respective businesses as presently conducted (“Permits”), except for those Permits the failure of which to possess would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; the Company and its Subsidiaries have fulfilled and performed in all material respects all of their respective obligations with respect to such Permits and are in compliance with the terms and conditions of all such Permits, and neither the Company nor any such Subsidiary has received any notice of proceedings relating to the revocation or modification of any such Permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a Material Adverse Effect, in each case, except as disclosed in the Registration Statement, the Prospectuses and the Disclosure Package. All Permits are valid and in full force and effect, except where the invalidity of such Permits or failure of such Permits to be in full force and effect would not have a Material Adverse Effect.
(p)Material Changes. Since the respective dates as of which information is given in the Registration Statement, the Prospectuses and the Disclosure Package, except as may otherwise be stated therein or contemplated thereby, there has not been (i) any Material Adverse Effect, (ii) any transaction which is material to the Company and the Subsidiaries taken as a whole, (iii) any obligation or liability, direct or contingent (including any off-balance sheet obligations), incurred by the Company or any Subsidiary, which is material to the Company and the Subsidiaries taken as a whole, (iv) any material change in the capital stock or outstanding long-term indebtedness of the Company or any of the Subsidiaries or (v) any dividend or distribution of any kind declared, paid or made on the capital stock of the Company or any Subsidiary, other than in each case above in the ordinary course of business or as otherwise disclosed in the Registration Statement, the Prospectuses and the Disclosure Package.
(q)No Default and Conflict Absence. The execution, delivery and performance by the Company of this Agreement, the issuance, offering or sale of the Shares and the consummation of the transactions contemplated herein do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii)
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conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination or acceleration (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument evidencing a Company or Subsidiary debt to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals (as defined below), conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any Governmental Authority to which the Company or a Subsidiary is subject (including Applicable Securities Laws), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect. For purposes of this Agreement, “Required Approvals” means any and all consents, approvals, authorizations, orders, registrations, qualifications, or filings of or with any Governmental Authority or stock exchange required for the execution, delivery and performance by the Company of this Agreement, the issuance and sale of the Shares, and the consummation of the transactions contemplated hereby, including, without limitation, those required under Applicable Securities Laws and the rules and regulations of the Exchanges.
(r)No Material Defaults. Neither the Company nor any of the Subsidiaries is (i) in violation of its articles or by-laws or similar organizational documents; (ii) except as disclosed in the Registration Statement, the Prospectuses and the Disclosure Package, in violation or default, and no event has occurred that, with notice or lapse of time or both, would constitute such a violation or default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument evidencing debt to which the Company or any of the Subsidiaries is a party or by which the Company or any of the Subsidiaries is bound or to which any of the property or assets of the Company or any of the Subsidiaries are subject (each, a “Material Agreement” and, collectively, the “Material Agreements”); or (iii) except as disclosed in the Registration Statement, the Prospectuses and the Disclosure Package, in violation of any Applicable Law, except in the case of each of clauses (ii) and (iii) above, for any such violation or default that would not, individually or in the aggregate, have a Material Adverse Effect. The Company has filed all Material Agreements on SEDAR+ pursuant to Canadian Securities Laws that are required to be filed by the Company as “material contracts” pursuant to Section 12.2 of National Instrument 51-102 – Continuous Disclosure Obligations (“NI 51-102”). To the Company’s knowledge, no other party under any Material Agreement is in violation or default in any respect thereunder where such violation or default would have a Material Adverse Effect. For purposes of this Agreement, “Applicable Laws” means, in relation to any person or persons, the Applicable Securities Laws and all other statutes, regulations, rules, orders, by-laws, codes, ordinances, decrees, the terms and conditions of any grant of approval, permission, authority or license, or any judgment, order, decision, ruling, award, policy or guidance document, of any Governmental Authority that are applicable to such person or persons or its or their business, undertaking, property or securities and emanate from a Governmental Authority, having jurisdiction over the person or persons or its or their business, undertaking, property or securities.
(s)Financial Statements. The financial statements of the Company included or incorporated by reference in the Registration Statement, the Prospectuses and the Disclosure Package, together with the related notes and schedules, present fairly, in all material respects, the financial position of the Company and its consolidated subsidiaries as of the dates indicated and the statements of operations, comprehensive loss, cash flows and shareholders’ equity of the Company and its consolidated subsidiaries for the periods specified and have been prepared in compliance with the requirements of the Act and the Exchange Act and Canadian Securities Laws in all material respects and in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) applied on a consistent basis during the periods involved, except (i) the unaudited, interim financial statements, which are subject to normal year-end adjustments and do not contain certain footnotes as permitted by the applicable rules of the Commission and (ii) as otherwise disclosed therein. The other financial and statistical data with respect to the Company contained or incorporated by reference in the Registration Statement, the Prospectuses and the Disclosure Package are accurately and fairly presented in all material respects and prepared on a basis consistent with the financial statements and books and records of the Company; there are no financial statements (historical or pro forma) that are required to be included or incorporated by reference in the Registration Statement, the Prospectuses and the Disclosure Package that are not included or incorporated by reference; the Company does not have any material liabilities or obligations, direct or contingent (including any off-balance sheet obligations), not described in the Registration Statement, the Prospectuses and the Disclosure Package; and all disclosures contained or incorporated by reference in the Registration Statement, the Prospectuses and the Disclosure Package regarding “non-GAAP financial measures” (as such term is defined by the rules and regulations of the Commission and Canadian Securities Laws) comply in all material respects with Regulation G of the Exchange Act and Item 10 of Regulation S-K under the Act, to the extent applicable. The interactive data in eXtensible Business Reporting Language incorporated by reference in the Registration Statement, the Prospectuses and the Disclosure Package fairly presents the information called for in all material respects and has been prepared in all material respects in accordance with the Commission’s rules and guidelines applicable thereto. There are no “significant acquisitions” (within the meaning of NI 51-102) or “significant probable acquisitions” (within the meaning of National Instrument 44-101 – Short Form Prospectus Distributions and Section 10.2(2) of Form 44-101F1) for
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which the Company is required, pursuant to Canadian Securities Laws, to file a business acquisition report under NI 51-102.
(t)Proceedings Absence. No action, suit, investigation or proceeding by or before any Governmental Authority, domestic or foreign, involving the Company or any of its Subsidiaries or its or their property is pending or, to the knowledge of the Company, threatened, that if determined adversely would result in a Material Adverse Effect, except as disclosed in the Registration Statement, the Prospectuses and the Disclosure Package. The aggregate of all pending legal, regulatory or governmental proceedings to which the Company or any Subsidiary is a party or of which any of their respective properties or assets is the subject that are not described in the Registration Statement, the Prospectuses and the Disclosure Package, including ordinary routine litigation incidental to the business, could not reasonably be expected to have a Material Adverse Effect and there are no current or pending audits or investigations, actions, suits or proceedings by or before any Governmental Authority that are required to be disclosed under the Applicable Securities Laws other than as disclosed in the Registration Statement, the Prospectuses and the Disclosure Package (and any amendment or supplement thereto).
(u)Ownership of Property. Except as disclosed in the Registration Statement, the Prospectuses and the Disclosure Package, (i) the Company and its Subsidiaries are the legal and beneficial owners of, or have the right to acquire, and have good and marketable title to, the concessions, tenements, claims, properties, business, and assets held by them (the “Properties”), inclusive of all Material Properties, free and clear of all encumbrances whatsoever other than security interests under relevant joint venture agreements or such encumbrances that do not materially interfere with the use made or currently planned to be made of such Properties by the Company and its Subsidiaries. The Company and its Subsidiaries have all necessary prospecting, exploration, development, production, ingress, egress, access and surface rights, mining and mineral rights, licenses, leases, permits, consents, approvals, and authorizations with respect to their current conduct on the Properties (the “Mining Rights”), all of which are valid, subsisting, in good standing, and enforceable in accordance with their respective terms, and have been validly located and recorded in accordance with all applicable laws except for those Mining Rights the failure of which to possess would not, individually or in the aggregate, reasonably be expected to cause a Material Adverse Effect. Any and all agreements pursuant to which the Company, a Subsidiary, or a Joint Venture Entity holds or will hold any such interest in property, business, or assets are in good standing and in full force and effect in all material respects according to their terms, and the Properties are in good standing under the applicable statutes and regulations of the jurisdictions in which they are situated except, in each case, where the failure to be in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. To the Company’s knowledge, (i) there are no unrecorded encumbrances on the Properties, business, or assets in which the Company has or will have a direct or indirect economic interest except for the rights of Joint Venture Entities applicable to such Properties, business, or assets or as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; (ii) no other property rights or Mining Rights, other than permits to be acquired in the ordinary course, are necessary for the conduct of the business of the Company and its Subsidiaries as currently conducted or as contemplated to be conducted as disclosed in the Registration Statement, the Prospectuses and the Disclosure Package, and the Company knows of no claim or basis for any claim that could materially adversely affect the right of the Company or its Subsidiaries to use, transfer, access, or otherwise exploit such Mining Rights or the Properties, except to the extent that any such claim would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; (iii) except as disclosed in the Registration Statement, Prospectuses and the Disclosure Package, the Company and its Subsidiaries do not have any responsibility or obligation to pay any commission, royalty, license fee, milestone payment or similar payment to any person with respect to the Mining Rights or the Properties, other than mineral claim fees; (iv) other than as set forth in relevant partnership, shareholder and/or joint venture agreements or which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, there are no outstanding options, rights of first refusal, pre-emptive or contractual rights, or other agreements, options, rights or privileges (whether present or future, contingent or absolute, pre-emptive or contractual) capable of becoming an agreement, which entitle any person or entity to acquire any of the rights, title or interests in the Properties or the Mining Rights or minerals produced thereon, or to require the Company or any of its Subsidiaries to sell, transfer or otherwise dispose of any such rights, title or interests; (v) the Company and its Subsidiaries (including through Joint Venture Entities, as applicable) hold the Mining Rights under valid, subsisting and enforceable title documents or other recognized and enforceable agreements or instruments, sufficient to permit the Company and its Subsidiaries to access, explore, develop, mine, and exploit the mineral deposits relating thereto and otherwise to conduct the business of the Company and its Subsidiaries as currently conducted, except where the failure thereof would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect and the Company expects that any additional Mining Rights required to carry out the Company’s and its Subsidiaries’ currently planned business activities will be obtained in the ordinary course; and (vi) all such Mining Rights have been validly located and recorded in accordance with all applicable laws and are valid, in good standing and enforceable in accordance with their respective terms, and neither the Company nor any of its Subsidiaries is in default of any of the provisions of any such Mining Rights, including by way of failure to fulfill any payment or work obligation thereunder, nor has any such default been alleged, except to the extent that any such default would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company has undertaken an asset analysis in respect
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of the Material Properties, including all technical data and information, and has not found any material asset impairment and does not anticipate making any write downs in respect of the Material Properties, or any parts thereof. The description of the mineral properties or other forms of real property interests set out in the Registration Statement, the Prospectuses and the Disclosure Package constitutes an accurate description of the Material Properties in all material respects, and describes all material interests held by the Company and its Subsidiaries.
(v)Title to Real and Personal Property. The Company and each of its Subsidiaries, directly or indirectly, owns, leases, or otherwise has contractual or proprietary rights to all real and personal properties, assets, and interests necessary for the conduct of its operations as presently conducted or as contemplated to be conducted as disclosed in the Registration Statement, the Prospectuses and the Disclosure Package. The Company, its Subsidiaries, and, as applicable, its Joint Venture Entities, have good and marketable title to all real property owned by them in fee simple, defensible title to all unpatented mining claims owned by them (subject, as applicable, to the paramount title of the United States), and good and marketable title to all personal property owned by them, in each case free and clear of all liens, encumbrances, royalties, overriding royalties, net profits interests, or other burdens, charges, or defects of any kind (including mining, zoning, use, or building code restrictions that would prohibit or prevent the continued effective ownership, leasing, licensing, or use of such property in the business of the Company and its Subsidiaries), except (i) as described in the Registration Statement, the Prospectuses and the Disclosure Package, or (ii) such liens, encumbrances, and defects as would not, individually or in the aggregate, have a Material Adverse Effect. Any real property and buildings held under lease or similar rights by the Company, its Subsidiaries, or Joint Venture Entities are held under valid, subsisting, and enforceable leases or agreements, with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company, its Subsidiaries, or Joint Venture Entities. Except as described in the Registration Statement, the Prospectuses and the Disclosure Package, the Company, its Subsidiaries, or Joint Venture Entities hold either freehold title, mining leases, mining concessions, mining claims, mineral claims, exploration permits, participating interests, or other conventional property, proprietary, or contractual interests or rights, recognized in the jurisdiction in which a particular property is located, in respect of the ore bodies and minerals located in properties in which the Company, its Subsidiaries, or Joint Venture Entities have an interest, under valid, subsisting, and enforceable title documents or other recognized and enforceable agreements, contracts, or instruments, sufficient to permit the Company, its Subsidiaries, or Joint Venture Entities to explore, develop, mine, and exploit the minerals relating thereto. Except as described in the Registration Statement, the Prospectuses and the Disclosure Package, all property, leases, claims, or rights in which the Company, any Subsidiary, or any Joint Venture Entity has an interest or right have been validly located and recorded in accordance with all applicable laws and are valid and subsisting, with only such exceptions as do not materially interfere with the current use made by the Company, its Subsidiaries, or Joint Venture Entities of such properties, leases, or claims, or where the failure to be so would have a Material Adverse Effect. The Company, its Subsidiaries, and Joint Venture Entities have all necessary surface rights, access rights, and other necessary rights and interests relating to the properties in which the Company, its Subsidiaries, or Joint Venture Entities have an interest as described in the Registration Statement, the Prospectuses and the Disclosure Package, granting the Company, its Subsidiaries, or Joint Venture Entities the right and ability to explore, access, develop, construct, mine, and exploit minerals, ore, and metals for development purposes, as are appropriate in view of the rights and interests therein, with only such exceptions as do not materially interfere with the use made by the Company, its Subsidiaries, or Joint Venture Entities of the rights or interests so held or where the failure to have would have a Material Adverse Effect. Each of the proprietary interests or rights and each of the documents, contracts, agreements, instruments, arrangements, or understandings and obligations relating thereto referred to above is currently in good standing in all respects in the name of the Company, a Subsidiary, or a Joint Venture Entity, except where the failure to be so would have a Material Adverse Effect. To the Company’s knowledge, there are no unrecorded encumbrances on the properties, business, or assets in which the Company, its Subsidiaries, or Joint Venture Entities have a direct or indirect economic interest, except for the rights of Joint Venture Entities applicable to such properties, business, or assets or as would have a Material Adverse Effect. The Company is not aware of any claim or basis for any claim that could materially adversely affect the right of the Company, any Subsidiary, or any Joint Venture Entity to use, transfer, or otherwise exploit such property rights, nor of any reason that it is not or would not be entitled to do all of the exploration, development, mining, and exploitation activities contemplated in the Registration Statement and the Prospectuses. There are no expropriations or similar proceedings or any material challenges to title or ownership, actual or, to the Company’s knowledge, threatened, of which the Company, any Subsidiary, or any Joint Venture Entity has received notice against any Material Property.
(w)Mineral Reserves and Resources. With respect to information disclosed in the Registration Statement, the Prospectuses and the Disclosure Package: (i) all material assumptions underlying the Company’s mineral resource estimates, estimated economic parameters, and economic analysis have, to the knowledge of the Company, been determined to be reasonable and appropriate, and the estimates of mineral reserves and mineral resources, estimated economic parameters, and economic analysis, as described in the Registration Statement, the Prospectuses and the Disclosure Package, have been prepared by the Company and its consultants in accordance with methods generally applied in the mining industry and conform, in all material respects, to the requirements of the Applicable Securities Laws; (ii) the mineral reserve and mineral resource estimates have been prepared in accordance with Subpart 1300 of Regulation S-K under the Act (“SK-1300”) and the National
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Instrument 43-101 - Standards of Disclosure for Mineral Projects (“NI 43-101”) by or under the supervision of a “qualified person” as defined in SK-1300 or NI 43-101, as applicable; and (iii) the methods used in estimating the Company’s mineral reserves and mineral resources are in accordance with accepted mineral reserve and mineral resource estimation practices.
(x)Independent Auditor. The accountants whose report(s) appear in the U.S. Prospectus or are incorporated by reference into the Registration Statement, the Prospectuses and the Disclosure Package, are and, during the periods covered by such report(s), were independent registered public accounting firms within the meaning of the Act and the Public Company Accounting Oversight Board (United States).
(y)Cybersecurity. The Company’s and its Subsidiaries’ information technology assets and equipment, computers, systems, networks, hardware, software, websites, applications, and databases (collectively, “IT Systems”) are adequate for, and operate and perform in all material respects as required in connection with the operation of the business of the Company as currently conducted, free and clear of all material bugs, errors, defects, Trojan horses, time bombs, malware and other corruptants. The Company and its Subsidiaries have implemented and maintained commercially reasonable physical, technical and administrative controls, policies, procedures, and safeguards to maintain and protect their material confidential information and the integrity, continuous operation, redundancy and security of all IT Systems and data, including all Personal Data (as defined below) and all sensitive, confidential or regulated data (“Confidential Data”) used in connection with their businesses. “Personal Data” means (i) a natural person’s name, street address, telephone number, e-mail address, photograph, social security number or tax identification number, driver’s license number, passport number, credit card number, bank information, or customer or account number, (ii) any information which would qualify as “personally identifying information” under the Federal Trade Commission Act, as amended, (iii) any “personal information” as defined by the California Consumer Privacy Act, as amended by the California Privacy Rights Act of 2020 (collectively, “CCPA”), (iv) any “personal information” as defined by the Personal Information Protection and Electronic Documents Act (Canada), as amended (“PIPEDA”), and any applicable provincial privacy legislation (collectively, “Canadian Privacy Laws”) and (v) any other piece of information subject to Privacy Laws (as defined below). To the knowledge of the Company, there have been no breaches, violations, outages or unauthorized uses of or accesses to the same, except for those that have been remedied without material cost or liability or the duty to notify any other person, nor any incidents under internal review or investigations relating to the same, except as would not reasonably result in a Material Adverse Effect. The Company and its Subsidiaries are presently in material compliance with all applicable laws or statutes, including without limitation PIPEDA and applicable Canadian Privacy Laws (in each case to the extent applicable to the Company and its Subsidiaries), and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security of IT Systems, Confidential Data, and Personal Data and to the protection of such IT Systems, Confidential Data, and Personal Data from unauthorized use, access, misappropriation or modification.
(z)Compliance with Data Privacy Laws. The Company and its Subsidiaries are in material compliance with all applicable provincial, territorial, state and federal data privacy and security laws and regulations, including without limitation PIPEDA, CCPA and applicable Canadian Privacy Laws (collectively, the “Privacy Laws”). To ensure compliance with the Privacy Laws, the Company has in place, complies with, and takes appropriate steps to ensure compliance in all material respects with their policies and procedures relating to data privacy and security and the collection, storage, use, processing, disclosure, handling, and analysis of Personal Data and Confidential Data (the “Policies”). The Company has at all times made all disclosures to users or customers required by applicable laws and regulatory rules or requirements, and none of such disclosures made or contained in any Policies have been inaccurate or in violation of any applicable laws and regulatory rules or requirements in any material respect. The Company further certifies that neither it nor any Subsidiary: (i) has received notice of any actual or potential liability under or relating to, or actual or potential violation of, any of the Privacy Laws, and has no knowledge of any event or condition that would reasonably be expected to result in any such notice, (ii) is currently conducting or paying for, in whole or in part, any investigation, remediation, or other corrective action pursuant to any Privacy Law or (iii) is a party to any order, decree, or agreement that imposes any obligation or liability under any Privacy Law, except, in each case, as would not result in a Material Adverse Effect.
(aa)Market Stabilization. The Company has not taken, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in, under Canadian Securities Laws or the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares.
(ab)Environmental Law Compliance. Except as disclosed in the Registration Statement, the Prospectuses and the Disclosure Package:
(ac)(i) each of the Company, the Subsidiaries and the Joint Venture Entities is in compliance in all material respects with all applicable federal, provincial, state, municipal and
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local laws, statutes, ordinances, bylaws and regulations and orders, directives and decisions rendered by any ministry, department or administrative or regulatory agency relating to the protection of the environment, occupational health and safety (as it relates to exposure to Hazardous Substances) or the processing, generation, use, treatment, storage, disposal, discharge, transport, or handling of any Hazardous Substances (the “Environmental Laws”). “Hazardous Substances” means any pollutants, contaminants, chemicals or industrial, toxic, radioactive or hazardous wastes or substance, including any uranium or derivatives thereof, defined or regulated under any Environmental Laws;
(ad)(ii) each of the Company, the Subsidiaries and the Joint Venture Entities has obtained all licenses, permits, approvals, consents, certificates, registrations and other authorizations under all applicable Environmental Laws (the “Environmental Permits”) necessary as of the date hereof for the operation of the businesses carried on by the Company and the Subsidiaries and the Joint Venture Entities, other than those Environmental Permits that are routine in nature and anticipated to be obtained in the ordinary course or where the failure to have such Environmental Permits would not have a Material Adverse Effect; each Environmental Permit is valid, subsisting and in good standing; neither the Company nor the Subsidiaries or the Joint Venture Entities is in material default or breach of any Environmental Permit; and no proceeding is pending or, to the Company’s knowledge, threatened, to revoke or materially and adversely modify any Environmental Permit;
(ae)(iii) each of the Company, the Subsidiaries and the Joint Venture Entities, is in compliance in all material respects with all Environmental Laws and Environmental Permits with respect to the processing, generation, use, treatment, storage, discharge, transport, disposal and handling of Hazardous Substances;
(af)(iv) none of the Company, the Subsidiaries or the Joint Venture Entities has received any notice of, or been prosecuted or sued for an offence, violation or claim alleging, material non-compliance with or material liability under any Environmental Law and neither the Company nor the Subsidiaries has settled any allegation of material non-compliance with, or material liability under, any Environmental Law short of prosecution, which settlement includes any material ongoing obligations of the Company, the Subsidiaries or the Joint Venture Entities. There are no orders or directions or settlements relating to environmental matters requiring any material work, repairs, construction or capital or other expenditures to be made with respect to any of the assets or operations of the Company or the Subsidiaries nor has the Company or the Subsidiaries received notice of any of the same which has not been addressed;
(ag)(v) none of the Company, any Subsidiary or any Joint Venture Entity has received any notice wherein it is alleged or stated that the Company or a Subsidiary is potentially responsible for a federal, provincial, state, municipal or local clean-up site or corrective action under any Environmental Laws, in each case that would reasonably be expected to result in material liability of the Company or a Subsidiary;
(ah)(vi) none of the Company, any Subsidiary or any Joint Venture Entity has received any outstanding request for information in connection with any federal, provincial, state, municipal or local inquiries as to transportation of Hazardous Substances or sites used for the disposal of Hazardous Substances and, to the Company’s knowledge, there are no environmental audits, evaluations, assessments, studies or tests being conducted by any federal, provincial, municipal or local authority in connection with Environmental Laws except for audits, evaluations, assessments, studies or tests conducted in the ordinary course; and
(ai)(vii) the Company, each of the Subsidiaries and each of the Joint Venture Entities is in compliance in all material respects with all applicable workers’ compensation and health and safety and workplace laws, regulations and policies.
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(aj)Compliance with Money Laundering Laws. The operations of the Company and the Subsidiaries are and have been conducted at all times in compliance with applicable financial record keeping and reporting requirements of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), the Corruption of Foreign Public Officials Act (Canada) and applicable rules and regulations thereunder, and the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar applicable rules, regulations or guidelines, issued, administered or enforced by any Governmental Authority (collectively, the “Money Laundering Laws”); and no action, suit or proceeding by or before any court or Governmental Authority involving the Company or any of the Subsidiaries with respect to Money Laundering Laws is pending or, to the Company’s knowledge, threatened.
(ak)No Unlawful Payments. (i) Neither the Company nor, to the Company’s knowledge, the Subsidiaries, nor to the Company’s knowledge, any of their respective directors or officers has, in the past five years, made any unlawful contributions to any candidate for any political office (or failed fully to disclose any contribution in violation of Applicable Laws) or made any contribution or other payment to any official of, or candidate for, any federal, state, provincial, municipal, or foreign office or other person charged with similar public or quasi-public duty in violation of any Applicable Law or of the character required to be disclosed or incorporated by reference in the Registration Statement, the Prospectuses and the Disclosure Package; (ii) no relationship, direct or indirect, exists between or among the Company or, to the Company’s knowledge, any Subsidiary or any affiliate of any of them, on the one hand, and the directors, officers and shareholders of the Company or, to the Company’s knowledge, any Subsidiary, on the other hand, that is required by the Act or Canadian Securities Laws to be described or incorporated by reference in the Registration Statement, the Prospectuses and the Disclosure Package that is not so described; (iii) no relationship, direct or indirect, exists between or among the Company or any Subsidiary or any affiliate of them, on the one hand, and the directors, officers, or shareholders of the Company or, to the Company’s knowledge, any Subsidiary, on the other hand, that is required by the rules of FINRA (or Canadian equivalent thereof) to be described or incorporated by reference in the Registration Statement, the Prospectuses and the Disclosure Package that is not so described; (iv) except as disclosed or incorporated by reference in the Registration Statement, the Prospectuses and the Disclosure Package, there are no material outstanding loans or advances or material guarantees of indebtedness by the Company or, to the Company’s knowledge, any Subsidiary to or for the benefit of any of their respective officers or directors or any of the members of the families of any of them; (v) the Company has not offered, or caused any placement agent to offer, Common Shares or to make any payment of funds to any person with the intent to influence unlawfully (A) a customer or supplier of the Company or any Subsidiary to alter the customer’s or supplier’s level or type of business with the Company or any Subsidiary or (B) a trade journalist or publication to write or publish favorable information about the Company or any Subsidiary or any of their respective products or services, and, (vi) neither the Company nor any Subsidiary nor to the Company’s knowledge, any director, officer, employee or agent of the Company or any Subsidiary has made any payment of funds of the Company or any Subsidiary or received or retained any funds in violation of any Applicable Law (including, without limitation, the Foreign Corrupt Practices Act of 1977 and the Corruption of Foreign Public Officials Act (Canada)).
(al) No Conflicts with Sanctions Laws. (i) The Company represents that, neither the Company nor any of the Subsidiaries nor to the Company’s knowledge, any director, officer, employee, agent, affiliate or representative of the Company, is a government, individual, or entity (for purposes of this Section 1(ee), “Member”) that is, or is owned 50% or more or controlled by a Member that is:
(am)(A) the subject of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”), the United Nations Security Council, the European Union, His Majesty’s Treasury, the Office of the Superintendent of Financial Institutions (Canada), or pursuant to the Special Economic Measures Act (Canada) or other relevant sanctions authority or Applicable Laws, including, without limitation, designation on OFAC’s Specially Designated Nationals and Blocked Persons List or OFAC’s Foreign Sanctions Evaders List (collectively, “Sanctions”), nor
(an)(B) located, organized or resident in a country or territory that is the subject of comprehensive Sanctions (including, without limitation, Cuba, Iran, North Korea, and the Crimea, the so-called Donetsk People’s Republic, the so-called Luhansk People’s Republic regions of Ukraine).
(ao)(ii) The Company will not, directly or indirectly, use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any Subsidiary, Joint Venture Entity or other Member:
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(ap)(A) to fund or facilitate any activities or business of or with any Member or in any country or territory that, at the time of such funding or facilitation, is the subject of Sanctions; or
(aq)(B) in any other manner that will result in a violation of Sanctions by any Member (including any Member participating in the offering, whether as underwriter, advisor, investor or otherwise).
(ar)(iii) The Company represents that, except as disclosed or incorporated by reference in the Registration Statement, the Prospectuses and the Disclosure Package, since April 24, 2019, it has not engaged in and is not now engaged in any dealings or transactions with any Member, or in any country or territory, that at the time of the dealing or transaction is or was the subject of Sanctions, except to the extent such dealings (A) were licensed or otherwise authorized under such Sanctions or (B) did not and do not result in a violation of any Sanctions by the Company.
(as)Accounting and Disclosure Controls. Except as disclosed in the Registration Statement, the Prospectuses and the Disclosure Package, the Company and each of its Subsidiaries maintain effective internal control over financial reporting (as defined under Rule 13a-15 and 15d-15 under the Exchange Act) and a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences and (v) the interactive data in eXtensible Business Reporting Language incorporated by reference in the Registration Statement, the Prospectuses and the Disclosure Package fairly presents the information called for in all material respects and is prepared in accordance in all material respects with the Commission’s rules and guidelines applicable thereto. Except as disclosed in the Registration Statement, the Prospectuses and the Disclosure Package, since the end of the Company’s most recent audited fiscal year, there has been (i) no material weakness in the Company’s internal control over financial reporting (whether or not remediated) and (ii) no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. Except as described in the Registration Statement, the Prospectuses and the Disclosure Package, the Company and each of its Subsidiaries maintain an effective system of disclosure controls and procedures (as defined in Rule 13a-15 and 15d-15 of the Exchange Act) that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, and is accumulated and communicated to the Company’s management, including its principal executive officer or officers and principal financial officer or officers, as appropriate, to allow timely decisions regarding disclosure.
(at)Canadian Disclosure Controls. The Company maintains disclosure controls and procedures and internal control over financial reporting, in each case on a consolidated basis and as such terms are defined in National Instrument 52-109 – Certification of Disclosure in Issuers’ Annual and Interim Filings of the Canadian Securities Administrators (“NI 52-109”). The Company’s disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by the Company in its annual filings, interim filings and other reports filed or submitted by it under applicable Canadian Securities Laws is recorded, processed, summarized and reported within the time periods specified under such laws and is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the Company’s generally accepted accounting principles. The Company’s certifying officers have evaluated, or caused to be evaluated under their supervision, the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by the annual filings for the fiscal year most recently ended (such date, the “Evaluation Date”), and the Company has disclosed in its annual report on Form 10-K for the fiscal year ended December 31, 2025 the conclusions of the certifying officers about the effectiveness of the Company’s disclosure controls and procedures as of the Evaluation Date, as required by NI 52-109. The Company has disclosed in its annual report on Form 10-K for the fiscal year ended December 31, 2025 any material weakness relating to design or operation of internal control over financial reporting existing at the end of the period covered by the annual filings, including the unremediated material weakness in internal control over financial reporting disclosed in its annual report on Form 10-K for the fiscal year ended December 31, 2025. Except for such disclosed material weakness, there are no material weaknesses relating to the design or operation of the Company’s internal control over financial reporting that would
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reasonably be expected to adversely affect the Company’s ability to record, process, summarize and report financial information, and there are no reportable deficiencies in the Company’s disclosure controls and procedures. Since the Evaluation Date, there has been no change in the Company’s disclosure controls and procedures or internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s disclosure controls and procedures or internal control over financial reporting.
(au)Sarbanes-Oxley Act. There has been no failure on the part of the Company or to the Company’s knowledge, any of the Company’s directors or officers, in their capacities as such, to comply in all material respects with any applicable provision of the Sarbanes-Oxley Act and NI 52-109 and the rules and regulations promulgated thereunder. Each of the principal executive officer and the principal financial officer of the Company (or each former principal executive officer of the Company and each former principal financial officer of the Company as applicable) and each certifying officer of the Company (or each former certifying officer of the Company) has made all certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act with respect to all reports, schedules, forms, statements and other documents required to be filed by it or furnished by it to the Commission and as required to be made and filed by NI 52-109, as applicable. For purposes of the preceding sentence, “principal executive officer” and “principal financial officer” shall have the meanings given to such terms in the Sarbanes-Oxley Act and “certifying officer” shall have the meanings given to such term in NI 52-109.
(av)No Pre-emptive Rights. No person has any right, agreement or option, present or future, contingent or absolute, or any right capable of becoming a right, agreement or option, for the issue or allotment of any unissued Common Shares or any other agreement or option, for the issue or allotment of any unissued Common Shares or any other security convertible into or exchangeable for any such Common Shares or to require the Company to purchase, redeem or otherwise acquire any of the issued and outstanding Common Shares, other than, for greater certainty, pursuant to the shareholder rights plan of the Company, any employee benefit, incentive or stock option or purchase or similar plans of the Company and any directors’ compensation plan.
(aw)Exchange Registration. The Common Shares are registered pursuant to Section 12(b) of the Exchange Act and are accepted for trading on Nasdaq under the symbol “EU” and the TSXV under the symbol “EU”, and the Company has taken no action designed to terminate the registration of the Common Shares under the Exchange Act or delisting the Common Shares from either of the Exchanges, nor, except as disclosed or included or incorporated by reference in the Registration Statement, the Prospectuses and the Disclosure Package, has the Company received any notification that the Commission, the Canadian Qualifying Authorities or either of the Exchanges is contemplating terminating such registration or listing. Except as disclosed or included or incorporated by reference in the Registration Statement, the Prospectuses and the Disclosure Package, the Company has complied in all material respects with the applicable requirements of the Exchanges for maintenance of inclusion of the Common Shares thereon.
(ax)Labor Disputes. There is not currently any labor disruption of the Company, any Subsidiary or any Joint Venture Entity that would have a Material Adverse Effect.
(ay)Intellectual Property. Except as disclosed in the Registration Statement, the Prospectuses and the Disclosure Package, the Company and the Subsidiaries own, possess, license or have other rights to use all foreign and domestic patents, patent applications, trade and service marks, trade and service mark registrations, trade names, copyrights, licenses, inventions, trade secrets, technology, Internet domain names, know-how and other intellectual property (collectively, the “Intellectual Property”) necessary for the conduct of their respective businesses as now conducted except to the extent that the failure to own, possess, license or otherwise hold adequate rights to use such Intellectual Property would not, individually or in the aggregate, have a Material Adverse Effect.
(az)Insurance. The Company, each of its Subsidiaries, and each of the Joint Venture Entities maintain insurance covering their properties, operations, personnel, and businesses that the Company reasonably deems adequate. Such insurance insures against such losses and risks and in such amounts as are prudent and customary in the businesses in which they are engaged and in accordance with customary industry practice, other than as described in the Registration Statement, the Prospectuses and the Disclosure Package; all such insurance is fully in force on the date hereof. There are no claims by the Company, any of its Subsidiaries, or any Joint Venture Entity under any such policy or instrument as to which any insurance company is denying liability or defending under a reservation of rights clause, which would have a Material Adverse Effect. Neither the Company nor any such Subsidiary or Joint Venture Entity has been refused any insurance coverage sought or applied for which the failure of which to receive would have a Material Adverse Effect. The Company has no reason to believe that it, any of its Subsidiaries, or any Joint Venture Entity will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue their businesses at a cost that would not be reasonably expected to have a Material Adverse Effect on the Company.
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(ba)Taxes. The Company and each of the Subsidiaries have filed all federal, state, provincial, local and foreign tax returns which have been required to be filed, which such tax returns are correct and complete in all material respects, and paid all taxes shown thereon through the date hereof, to the extent that such taxes have become due and are not being contested in good faith, except where the failure to so file or pay would not have a Material Adverse Effect. Except as otherwise disclosed in the Registration Statement, the Prospectuses and the Disclosure Package, no tax deficiency has been determined adversely to the Company or any of the Subsidiaries which would have, individually or in the aggregate, a Material Adverse Effect. The Company has no knowledge of any federal, state, provincial or other governmental tax deficiency, penalty or assessment which has been asserted or threatened in writing against it which would have a Material Adverse Effect.
(bb)Dividends. Except as may be restricted by Applicable Laws, no Subsidiary is prohibited or restricted, directly or indirectly, from paying dividends to the Company, or from making any other distribution with respect to such Subsidiaries’ equity securities or from repaying to the Company or any other Subsidiaries any amounts that may from time to time become due under any loans or advances to such Subsidiaries from the Company or from transferring any property or assets to the Company or to any other Subsidiaries.
(bc)Indigenous Claims. Other than as disclosed in the Registration Statement, the Prospectuses and the Disclosure Package or as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, there are no claims or actions with respect to aboriginal or indigenous or similar rights against or affecting the Company, any Subsidiary or any Joint Venture Entity, or pending or, to the Company’s knowledge, threatened, including with respect to any of the Material Properties, or in respect of any of the other properties in which the Company has an economic interest. Other than as disclosed in the Registration Statement, the Prospectuses and the Disclosure Package, to the Company’s knowledge, there are no material land entitlement claims or aboriginal land claims that have been asserted and no legal actions relating to aboriginal or community issues that have been instituted with respect to such properties, and no material dispute in respect of such properties with any local or aboriginal or indigenous group exists or, to the Company’s knowledge, is threatened or imminent with respect thereto or activities thereon. Except as disclosed in the Registration Statement, the Prospectuses and the Disclosure Package, no dispute between the Company and any local, aboriginal or indigenous group exists, or to the Company’s knowledge, is threatened or imminent with respect to any of the Company’s properties or exploration and development activities that could reasonably be expected to have a Material Adverse Effect.
(bd)Mining Operations. All mineral exploration activities on the properties of the Company, any Subsidiary or to the Company’s knowledge, any Joint Venture Entity have been conducted in all material respects in accordance with good mining and engineering practices and all applicable workers’ compensation and health and safety and workplace laws and regulations have been duly complied with except where the failure to so conduct operations could not reasonably be expected to have a Material Adverse Effect.
(be)Technical Reports. The Company is in material compliance with the provisions of SK-1300 and NI 43-101 and has filed all technical reports in respect of its properties required thereby. The technical reports incorporated by reference or deemed to be incorporated by reference in the Registration Statement, the Prospectuses and the Disclosure Package are the only technical reports in respect of the Material Properties currently required and in effect (collectively, the “Technical Reports”). The Technical Reports continue to remain current pursuant to and comply in all material respects with the requirements of SK-1300 and NI 43-101 as applicable to such Technical Reports, and there is no new material scientific or technical information concerning the Material Properties since the effective date of the applicable Technical Report that would require a new technical report in respect thereof to be issued under SK-1300 or NI 43-101. The Company and its Subsidiaries made available to the authors of the Technical Reports, prior to the issuance thereof, for the purpose of preparing such reports, all information requested by them and none of such information contained any material misrepresentation at the time such information was provided. The scientific and technical information disclosed in the Registration Statement, the Prospectuses and the Disclosure Package, including the estimates of the mineral resources and mineral reserves of the Material Properties, has been prepared and disclosed in accordance with SK-1300 and NI 43-101 and has been reviewed by a “qualified person” (within the meaning of SK-1300 and NI 43-101) as required under SK-1300 and NI 43-101. All material assumptions underlying such mineral resource and mineral reserve estimates, estimated economic parameters, and economic analysis are, to the knowledge of the Company, reasonable and appropriate and the information upon which such estimates of mineral resources and mineral reserves were based, was, at the time of delivery thereof, complete and accurate in all material respects and there have been no material changes to such information since the date of delivery or preparation thereof.
(bf)Physical Uranium. The physical uranium purchased by the Company and reflected on the financial statements of the Company is stored at facilities that are licensed in accordance with the laws of the jurisdiction in which the storage facility is located for the handling and storage of physical uranium and to the Company’s knowledge, the owners and operators of such storage facilities are in compliance in all material respects
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with all applicable laws relating to the storage of the physical uranium held for the account of the Company. The Company has entered into uranium storage agreements with each of the operators of such uranium storage facilities and (i) the Company is in material compliance with its obligations under these agreements, and (ii) the Company is not aware of any material non-compliance or violation by the operators of each respective agreement.
(bg)Statistical, Industry-Related and Market-Related Data. Any statistical, market and industry-related data included or incorporated by reference in the Registration Statement, the Prospectuses and the Disclosure Package is based on or derived from sources which the Company reasonably believes are reliable and accurate in all material respects.
(bh)Reporting Issuer and Exchange Status. The Company is a “reporting issuer” in each of the Canadian Reporting Jurisdictions, not included in a list of defaulting reporting issuers maintained by the Canadian Qualifying Authorities and in particular, without limiting the foregoing, and as of the date hereof, the Company is in compliance in all material respects with its obligations to make timely disclosure of all material changes and material facts relating to it and there is no material change or material fact relating to the Company which has occurred and with respect to which the requisite news release has not been disseminated or material change report, as applicable, has not been filed with the Canadian Qualifying Authorities. The Company is in compliance in all material respects with the by-laws, rules and regulations of each of the Exchanges. For purposes of this Agreement, “Canadian Reporting Jurisdictions” means Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Ontario, Prince Edward Island, Québec, Saskatchewan and the Yukon.
(bi)Finder’s Fees. Neither the Company nor any of the Subsidiaries has incurred any liability for any finder’s fees, brokerage commissions or similar payments in connection with the transactions herein contemplated, except as may otherwise exist with respect to the Agents pursuant to this Agreement.
(bj)Related Parties. Except as disclosed in the Registration Statement, the Prospectuses and the Disclosure Package:
(bk)(1) neither the Company nor any Subsidiary owes any monies to or has any present loans to, or borrowed any monies from or is otherwise indebted to, any officer, director, employee, shareholder or any person not dealing at “arm’s length” (as such term is defined in Section 251(1) of the Income Tax Act (Canada)) with any of them except for usual employee reimbursements and compensation paid in the ordinary and normal course of its business;
(bl)(2) except usual employee or consulting arrangements made in the ordinary and normal course of business, neither the Company nor any Subsidiary is a party to any contract, agreement or understanding with any officer, director, employee, shareholder or any other person not dealing at arm’s length with it; and
(bm)(3) none of the directors, officers or employees of the Company, any known holder of more than ten percent (10%) of any class of shares of the Company, or any known associate or affiliate of any of the foregoing persons has had any material interest, direct or indirect, in any material transaction with the Company or any Subsidiary, or any proposed material transaction which, as the case may be, materially affected, is material to or will materially affect the Company, any Subsidiary or their respective businesses.
(bn)Broker/Dealer Relationships. Neither the Company nor any of the Subsidiaries (i) is required to register as a “broker” or “dealer” in accordance with the provisions of the Exchange Act or (ii) directly or indirectly through one or more intermediaries, controls or is a “person associated with a member” or “associated person of a member” (within the meaning set forth in the FINRA Manual).
(bo)Forward-Looking Information. No forward-looking statement within the meaning of Section 27A of the Act and Section 21E of the Exchange Act and no forward-looking information within the meaning of Section 1.1(1) of NI 51-102 contained or incorporated by reference in the Registration Statement, the Prospectuses and the Disclosure Package has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.
(bp)[Reserved]
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(bq)Actively Traded. The Common Shares are an “actively traded security” excepted from the requirements of Rule 101 of Regulation M under the Exchange Act by subsection (c)(1) of such rule.
(br)Company is not a “Controlled Foreign Corporation”. To the Company’s knowledge, based solely upon the record ownership of shares, and without regard to the beneficial ownership of shares held in street name, and any indirect or constructive ownership by U.S. Persons pursuant to Section 958 of the Internal Revenue Code of 1986, as amended (the “Code”), not actually disclosed to the Company, the Company is not a “controlled foreign corporation,” as such term is defined in the Code.
(bs)Pension Plans. Neither the Company nor any of its Subsidiaries has or maintains a “pension plan” (as defined in Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended);
(bt)Outbound Investment Security Program. The Company is not a “covered foreign person”, as that term is defined in 31 C.F.R. § 850.209. The Company does not currently engage, or has plans to engage, directly or indirectly, in a “covered activity”, as that term is defined in 31 C.F.R. § 850.208 (“Covered Activity”). The Company does not have any Joint Venture Entity that engages in or plans to engage in any Covered Activity. The Company also does not, directly or indirectly, hold a board seat on, have a voting or equity interest in, or have any contractual power to direct or cause the direction of the management or policies of any person or persons that engages or plans to engage in any Covered Activity.
2.Sale and Delivery of the Shares.
(a)Agency Transactions. On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth, the Company and the Lead Agents agree that the Company may issue and sell through the Lead Agents, as sales agents for the Company, the Shares (an “Agency Transaction”) as follows:
(i)The Company may, from time to time during the term of this Agreement, propose to the applicable Lead Agent the terms of an Agency Transaction by means of a telephone call or form of written electronic communication (confirmed promptly by electronic mail in a form substantially similar to Exhibit A hereto (an “Agency Transaction Notice”)) from at least one of the individuals listed as an authorized representative of the Company on Schedule 2 hereto as may be amended from time to time by written notice to each of the parties hereto (each, an “Authorized Company Representative”), such proposal to include, among other parameters permitted in accordance with this Agreement: the trading day(s) for Nasdaq or TSXV (which may not be a day on which Nasdaq or the TSXV, as applicable, is closed or scheduled to close prior to its regular weekday closing time) on which the Shares are to be sold (each, a “Trading Day”); the maximum number or value of Shares that the Company wishes to sell in the aggregate and on each Trading Day; and the minimum price at which the Company is willing to sell the Shares (the “Floor Price”). The Agency Transaction Notice shall be effective upon delivery to the applicable Lead Agent unless and until (A) the applicable Lead Agent in its sole discretion declines to accept the terms contained therein and does not confirm promptly in accordance with Section 2(a)(ii), (B) the entire amount of the Shares under the Agency Transaction Notice has been sold, (C) the Company suspends or terminates the Agency Transaction Notice in accordance with the notice requirements set forth in Section 2(a)(v) or Section 7, as applicable, (D) the Company issues a subsequent Agency Transaction Notice with parameters superseding those on the earlier Agency Transaction Notice or (E) this Agreement has been terminated under the provisions of this Agreement. Notwithstanding the foregoing, the Company may not deliver an Agency Transaction Notice to a Lead Agent if the Company has delivered an Agency Transaction Notice which remains in effect to another Lead Agent, unless the Company has terminated the prior Agency Transaction Notice in accordance with the notice requirements set forth in Section 2(a)(v). The terms of an Agency Transaction shall be proposed to, and each Agency Transaction Notice shall be addressed to, the respective individuals from the applicable Lead Agent set forth on Schedule 2 hereto, as such Schedule 2 may be amended from time to time by written notice of the applicable Lead Agent to the Company (the “Authorized Agent Representatives”).
(ii)If such proposed terms for an Agency Transaction are acceptable to the applicable Lead Agent, it shall promptly confirm the terms by countersigning the Agency Transaction Notice for such Agency Transaction and emailing it to the Authorized Company Representatives which delivered such Agency Transaction Notice.
(iii)Subject to the terms and conditions hereof, each Lead Agent shall, severally and not jointly, use its commercially reasonable efforts, consistent with its normal trading and sales practices and in accordance with applicable law and regulations, to sell all of the Shares designated in, and subject to the terms of, an Agency Transaction Notice. The applicable Lead Agent shall not sell any Share at a price lower than the Floor Price. The Company acknowledges and agrees with the Agents that (x) there can be no assurance that a Lead Agent will be successful in selling all or any of such Shares or as to the price at which any Shares are sold, if at all, (y) no Lead
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Agent shall incur any liability or obligation to the Company or any other person or entity if they do not sell any Shares for any reason other than a failure by the Lead Agent to use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable law and regulations to sell such Shares as required under this Agreement and (z) no Lead Agent shall be under any obligation to purchase any Shares on a principal basis pursuant to this Agreement. Each of the U.S. Agents, severally (and not jointly), covenants and agrees with the Company that (i) it shall not, directly or indirectly, advertise or solicit offers to purchase or sell Shares in Canada, and (ii) it shall not sell Shares on any “marketplace” (as defined under Canadian Securities Laws) in Canada. For the avoidance of doubt, none of the U.S. Agents is acting as an agent or underwriter of the Shares in the Canadian Qualifying Jurisdictions and no action on the part of any of the U.S. Agents in its capacity as an Agent of the offering of the Shares in the United States is intended to create any impression or support any conclusion that it is acting as an agent or underwriter of the Shares in the Canadian Qualifying Jurisdictions.
(iv)The Canadian Lead Agent hereby covenants and agrees that, if and when the Canadian Lead Agent has received an Agency Transaction Notice that has not been suspended or terminated in accordance with the terms hereof, the Canadian Lead Agent will prudently and actively monitor the market’s reaction to trades made on any marketplace pursuant to this Agreement in order to evaluate the likely market impact of future trades, and that, if the Canadian Lead Agent has concerns as to whether a particular sale contemplated by an Agency Transaction Notice may have a significant effect on the market price of the Shares, the Canadian Lead Agent will, upon receipt of the applicable Agency Transaction Notice, recommend to the Company against effecting the trade at that time or on the terms proposed.
(v)The Company may, acting through at least one Authorized Company Representative, or the applicable Lead Agent may, upon notice to the other party hereto by telephone (confirmed promptly by electronic mail), suspend an offering of the Shares or terminate an Agency Transaction Notice; provided, however, that such suspension or termination shall not affect or impair the parties’ respective obligations with respect to the Shares sold hereunder prior to the giving of such notice, including the parties’ obligations set forth under Section 2(a)(x). Notwithstanding any other provision of this Agreement, during any time period (the “No Trade Period”) in which either the Company is in possession of “material non-public information” or has knowledge of a “material change” or “material fact” with respect to the Company or the Shares which has not been generally disclosed or the Company has imposed a trading blackout period pursuant to its internal policies and procedures, the Company agrees that (i) it will not deliver an Agency Transaction Notice to any Lead Agent and (ii) it will terminate any Agency Transaction Notice that was previously delivered to any Agent. For greater certainty, at any time while an Agency Transaction Notice is pending or effective (and not currently suspended), the Company shall promptly notify the Lead Agents of the commencement of a No Trade Period and suspend any further sale of Shares under the Agency Transaction Notice until the end of the No Trade Period.
(vi)[Reserved]
(vii)The applicable Lead Agent, as sales agent in an Agency Transaction, shall not make any sales of the Shares on behalf of the Company, pursuant to this Agreement, other than by methods permitted by law including (A) by means of ordinary brokers’ transactions that qualify for delivery of the Prospectuses in accordance with Rule 153 under the Act and meet the definition of an “at-the-market distribution” under Rule 415(a)(4) under the Act, and/or (B) such transactions that constitute an “at-the-market distribution” under NI 44-102 and which comply with the rules and policies of the Exchanges, including, without limitation, (i) as sales made directly on Nasdaq and the TSXV, or on any “marketplace” (as such term is defined in National Instrument 21-101 – Marketplace Operation); (ii) as block transactions, provided, however, that any block transactions will be completed in compliance with the rules and policies of the Canadian Securities Administrators and the TSXV applicable to “at-the-market distributions” as well as all applicable rules of the Universal Market Integrity Rules promulgated by Canadian Investment Regulatory Organization; and (iii) as otherwise agreed to among the relevant parties. Each of the U.S. Agents, severally (and not jointly), covenants and agrees with the Company that (i) it shall not, directly or indirectly, advertise or solicit offers to purchase or sell Common Shares in Canada, and (ii) it shall not sell Common Shares on the TSXV or any marketplace in Canada. Each of the Canadian Agents, severally (and not jointly), covenants and agrees with the Company that (i) it shall not, directly or indirectly, advertise or solicit offers to purchase or sell Common Shares in the United States, and (ii) it shall not sell Common Shares on the Nasdaq or any marketplace in the U.S. For the avoidance of doubt, none of the U.S. Agents is acting as an agent or underwriter of the Common Shares in the Canadian Qualifying Jurisdictions and no action on the part of any of the U.S. Agents in its capacity as an Agent of the offering of the Common Shares in the United States is intended to create any impression or support any conclusion that it is acting as an agent or underwriter of the Common Shares in the Canadian Qualifying Jurisdictions.
(viii)The Canadian Lead Agent agrees that it shall not, in connection with the distribution of the Shares in an “at-the-market distribution” under NI 44-102, engage in any transactions that are
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intended to stabilize or maintain the market price of the Common Shares, including selling an aggregate number of Shares that would result in the Canadian Lead Agent creating an over-allocation position in the Common Shares.
(ix)The compensation to the Lead Agents for sales of the Shares in an Agency Transaction shall be agreed upon by the Company and the Lead Agents from time to time but shall not exceed two and a quarter percent (2.25%) of the gross offering proceeds of the Shares sold in such Agency Transaction, which amount shall be paid in the same currency as the sale of the Shares to which it relates. The applicable Lead Agent shall provide written confirmation to the Company (which may be provided by email to at least one of the Authorized Company Representatives) following the close of trading on each Trading Day and no later than the opening of the Trading Day immediately following the Trading Day on which Shares are sold in an Agency Transaction under this Agreement, setting forth (i) the number of Shares and the average price of Shares sold on such Trading Day (showing the number and the average price of Shares sold on the TSXV, on Nasdaq or on any other “marketplace”), (ii) commission payable by the Company to the Lead Agents with respect to such sales (which commission shall be paid in the same currency as the sale of the Shares to which such commission pertains) and (iii) the net offering proceeds (being the gross offering proceeds for such sales less the commission payable for such sales) (the “Net Offering Proceeds”).
(x)Settlement for sales of the Shares in an Agency Transaction pursuant to this Agreement shall occur on the first Trading Day or such other day as is industry practice for regular-way trading following the date on which such sales are made (each such day, a “Settlement Date”). On each Settlement Date, the Shares sold through the applicable Lead Agent in Agency Transactions for settlement on such date shall be issued and delivered by the Company to the applicable Lead Agent against payment by the applicable Lead Agent to the Company of the Net Offering Proceeds from the sale of such Shares. Settlement for all such Shares shall be effected by free delivery of the Shares by the Company or its transfer agent to the applicable Lead Agent’s or its designee’s account (provided that the applicable Lead Agent shall have given the Company written notice of such designee prior to the relevant Settlement Date) at CDS Clearing and Depository Services Inc. through its CDSX system for Shares sold in Canada, and at The Depository Trust Company for Shares sold in the United States, or by such other means of delivery as may be mutually agreed upon by the parties hereto, which in all cases shall be freely tradable, transferable, registered Shares in good deliverable form, in return for payment in same-day funds delivered to the account designated by the Company. If the Company, or its transfer agent (if applicable), shall default on its obligation to deliver the Shares on any Settlement Date, the Company shall (i) hold the applicable Lead Agent harmless against any loss, claim, damage, or expense (including, without limitation, reasonable legal fees and expenses), as incurred, arising out of or in connection with such default by the Company and (ii) pay the applicable Lead Agent any commission, discount or other compensation to which it would otherwise be entitled absent such default; provided, however, that without limiting Section 5 herein, with respect to (ii) above, the Company shall not be obligated to pay the applicable Lead Agent any commission, discount or other compensation on any Shares that it is not possible to settle due to: (A) a suspension or material limitation in trading in securities generally on the TSXV or Nasdaq; or (B) a material disruption in securities settlement or clearance services in the United States or Canada; or (C) failure by the applicable Lead Agent to comply with its obligations under the terms of this Agreement.
(b)[Reserved]
(c)Maximum Number of Shares. Under no circumstances shall the Company propose to any one of the Lead Agents, or any one of the Lead Agents effect, a sale of Shares in an Agency Transaction pursuant to this Agreement if such sale would (i) cause the aggregate gross sales proceeds of the Shares sold pursuant to this Agreement to exceed the Maximum Amount, (ii) cause the number of Shares sold to exceed the number of Common Shares available for offer and sale under the then effective Canadian Prospectus or Registration Statement, or (iii) cause the number of Shares sold pursuant to this Agreement to exceed the number of Shares authorized to be issued and sold from time to time pursuant to this Agreement by the Company’s board of directors, or a duly authorized committee thereof, and notified to the applicable Lead Agent in writing.
3.Agreements of the Company. The Company agrees with the Agents that:
(a)Prospectus and Registration Statement Amendments. After the date of this Agreement and during any period in which a prospectus relating to any Shares is required to be delivered by the Agents under the Act, (i) the Company will notify the Agents promptly of the time when any subsequent amendment to the Canadian Base Prospectus or the Registration Statement, other than documents incorporated by reference, has been filed with any Canadian Qualifying Authority or the Commission and/or has become effective or where a Receipt has been issued therefor, as applicable, or any subsequent supplement to the U.S. Prospectus or the Canadian Prospectus has been filed (each, an “Amendment Date”) and of any request by the Commission or any Canadian Qualifying Authority for any amendment or supplement to the Registration Statement or the Prospectuses or for additional information; (ii) the Company will file promptly all reports and other documents required to be filed by it with the Commission pursuant to Rule 433(d) under the Act and with the Canadian Qualifying Authorities; (iii) the
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Company will submit to the Agents a copy of any amendment or supplement to the Registration Statement or the Prospectuses (other than a copy of any documents incorporated by reference into the Registration Statement or the Prospectuses) within a reasonable period of time before the filing thereof and will afford the Agents and the Agents’ counsel a reasonable opportunity to comment on any such proposed filing prior to such proposed filing; and (iv) the Company will furnish to the Agents at the time of filing thereof a copy of any document that upon filing is deemed to be incorporated by reference in the Registration Statement or the Prospectuses (provided that the Company shall not be required to deliver documents or information incorporated by reference into the Registration Statement or the Prospectuses if such documents are accessible from System for Electronic Document Analysis and Retrieval Plus (“SEDAR+”) or Electronic Data Gathering Analysis and Retrieval System (“EDGAR”)) and the Company will cause (x) each amendment or supplement to the U.S. Prospectus to be filed with the Commission or, in the case of any document to be incorporated therein by reference, to be filed with the Commission as required pursuant to the Exchange Act, within the time period prescribed and (y) each amendment or supplement to the Canadian Prospectus to be filed with the Canadian Qualifying Authorities as required pursuant to the Shelf Procedures or, in the case of any document to be incorporated therein by reference, to be filed with the Canadian Qualifying Authorities as required pursuant to the Canadian Securities Laws, within the time period prescribed.
(b)Notice of Stop Orders. The Company will advise the Agents, promptly after it receives notice thereof, of the issuance by the Commission or the Canadian Qualifying Authorities of any stop order, cease trade or any order preventing or suspending the use of the Prospectuses or any Free Writing Prospectus, of any notice of objection of the Commission to the use of the form of the Registration Statement, of the suspension of the qualification of the Shares for offering or sale in the United States or the Canadian Qualifying Jurisdictions, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission or the Canadian Qualifying Authorities for the amending or supplementing of the Registration Statement or the Prospectuses or for additional information relating to the Shares. If there is an Agency Transaction Notice that has been issued by the Company that has not been suspended or terminated in accordance with the notice requirements set forth in Section 2(a)(v) or Section 7, as applicable, the Company will use its commercially reasonable efforts to prevent the issuance of any stop order, cease trade order or any order preventing or suspending the use of the Prospectuses or any Free Writing Prospectus or the suspension of any qualification for offering or sale in the United States or the Canadian Qualifying Jurisdictions, and, in the event of the issuance of any such stop order, cease trade or any order preventing or suspending the use of any prospectus relating to the Shares or suspending any such qualification, the Company will use its commercially reasonable efforts to obtain the lifting or withdrawal of such order as soon as possible. If there is no outstanding Agency Transaction Notice, then, if, in the Company’s determination and at the Company’s sole discretion, it is necessary to prevent the issuance of any stop order or cease trade order or have a stop order or cease trade order lifted, the Company will use its commercially reasonable efforts to prevent the issuance of any stop order, cease trade order or any order preventing or suspending the use of the Prospectuses or any Free Writing Prospectus or the suspension of any qualification for offering or sale in the United States or the Canadian Qualifying Jurisdictions, and, in the event of the issuance of any such stop order, cease trade order or any such order preventing or suspending the use of the Prospectuses or any Free Writing Prospectus or suspending any such qualification, the Company will use its commercially reasonable efforts to obtain the lifting or withdrawal of such order as soon as possible.
(c)Delivery of Prospectus; Subsequent Changes. Within the time during which a prospectus relating to the Shares is required to be delivered by the Agents under the Act (including in circumstances where such requirement may be satisfied pursuant to Rule 153, Rule 172 or Rule 173(a) under the Act) or the Canadian Securities Laws, the Company will comply in all material respects with all requirements imposed upon it by the Act, by the rules and regulations, or Canadian Securities Laws, as appropriate and as from time to time in force, and will file or furnish on or before their respective due dates all reports required to be filed or furnished by it with the Commission pursuant to Sections 13(a), 13(c), or 15(d) of the Exchange Act, if applicable, or any other provision of or under the Exchange Act or with the Canadian Qualifying Authorities pursuant to the Canadian Securities Laws, as appropriate. If during such period any event occurs of which the Company becomes aware and as a result of which the Prospectuses as then amended or supplemented would include any untrue statement of material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if during such period it is necessary to amend or supplement the Registration Statement or the Prospectuses to comply with the Act, the Exchange Act or the Canadian Securities Laws, or the respective rules thereunder, the Company will promptly notify the Agents to suspend the offering of Shares during such period and, if, in the Company’s determination and at the Company’s sole discretion, it is necessary to file an amendment or supplement to the Registration Statement or the Prospectuses to comply with the Act or the Canadian Securities Laws, the Company will promptly prepare and file with the Canadian Qualifying Authorities and the Commission such amendment or supplement as may be necessary to correct such statement or omission or to make the Registration Statement or the Prospectuses comply with such requirements, and the Company will furnish to the Agents such number of copies of such amendment or supplement as the Agents may reasonably request; provided, however, the Company shall not be required to furnish any documents to the Agents that are available on SEDAR+ or EDGAR.
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(d)Delivery of Registration Statement and Prospectuses. The Company will furnish to the Agents and their counsel (at the expense of the Company) copies of the Registration Statement, the Prospectuses (including all documents incorporated by reference therein) and all amendments and supplements to the Registration Statement or the Prospectuses that are filed with the Commission or Canadian Qualifying Authorities during the period in which a prospectus relating to the Shares is required to be delivered by the Agents under the Act (including all documents filed with the Commission during such period that are deemed to be incorporated by reference therein) or by the Canadian Qualifying Authorities (including all documents filed with the Canadian Qualifying Authorities during such period that are deemed to be incorporated by reference therein), in each case as soon as reasonably practicable and in such quantities as the Agents may from time to time reasonably request; provided, however, the Company shall not be required to furnish any documents to the Agents that are available on SEDAR+ or EDGAR.
(e)Company Information. The Company will furnish to the Agents such information in its possession as is reasonably requested by the Agents as necessary or appropriate to fulfil their obligations as agents pursuant to this Agreement, the Act and Canadian Securities Laws.
(f)Compliance with Blue Sky Laws. The Company will use its commercially reasonable efforts, in cooperation with the Agents, to qualify the Shares for offer and sale under the securities or blue sky laws of such jurisdictions as the Agents shall reasonably request and will continue such qualifications in effect so long as required for distribution of the Shares; provided that the Company shall not be required to (i) qualify as a foreign corporation or other entity or as a dealer in securities in any such jurisdiction where it would not otherwise be required to so qualify, (ii) file any general consent to service of process in any such jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it is not otherwise subject thereto. The Company will advise the Agents promptly of the suspension of the qualification or registration of (or any such exemption relating to) the Shares for offering, sale or trading in any jurisdiction or any initiation or threat of any proceeding for any such purpose, and in the event of the issuance of any order suspending such qualification, registration or exemption, the Company shall use its reasonable efforts to obtain the withdrawal thereof as soon as reasonably practicable.
(g)Material Non-public Information. The Company covenants that it will not issue an Agency Transaction Notice to the Lead Agents in accordance with Section 2 hereof if the Company is in possession of material non-public information regarding the Company.
(h)Expenses. Whether or not the transactions contemplated by this Agreement are consummated or this Agreement is terminated in accordance with Section 6, the Company will pay or cause to be paid all reasonable expenses incident to the performance of its obligations under this Agreement, including: (i) the fees, disbursements and expenses of the Company’s counsel and the Company’s accountants in connection with the filing, registration and delivery of the Shares under Canadian Securities Laws and the Act and all other fees or expenses in connection with the preparation and filing of the Canadian Base Prospectus, the Canadian Prospectus Supplement, the Registration Statement, the U.S. Prospectus Supplement, and any Issuer Free Writing Prospectuses prepared by or on behalf of, used by, or referred to by the Company, and amendments and supplements to any of the foregoing, and all printing costs associated therewith, (ii) all costs and expenses related to the transfer and delivery of the Shares to the Agents, (iii) all expenses and application fees related to the listing of the Shares on the TSXV and Nasdaq, (iv) the cost of the preparation, issuance and delivery of the Shares, (v) the costs and charges of any trustee, transfer agent, registrar or depositary, (vi) the reasonable fees and expenses incurred in connection with the registration or qualification and determination of eligibility for investment of the Shares under the laws of such jurisdictions as the Agents may designate and the preparation, printing and distribution of a Blue Sky Memorandum (including the reasonable and documented out-of-pocket fees and expenses of counsel for the Agents) up to an aggregate amount not to exceed $5,000, (vii) the filing fees incident to, and the reasonable and documented out-of-pocket fees and disbursements of counsel for the Agents in connection with, securing any required review by FINRA of the terms of the sale of the Shares up to an aggregate amount not to exceed $5,000, (viii) the reasonable out-of-pocket fees, disbursements and other charges of the Agents incurred on or prior to the date hereof in connection with this Agreement, the Registration Statement and the Prospectuses, including, without limitation, the fees and disbursements of counsel to the Agents in an amount not to exceed $332,750, provided that such fees, disbursements and other charges of the Agents shall be paid upon receiving an invoice or invoices therefor from the Agents, (ix) the reasonable and documented out-of-pocket fees, disbursements and other charges of the Agents incurred in connection with each Representation Date with respect to which the Company is obligated to deliver a certificate pursuant to Section 3(o) for which no waiver is applicable and excluding the date of this Agreement, including, without limitation, the reasonable and documented out-of-pocket fees and disbursements of counsel to the Agents in an amount not to exceed $32,500, provided that such fees, disbursements and other charges of the Agents shall be paid upon receiving an invoice or invoices therefor from the Agents; and (x) all other costs and expenses incident to the performance of the obligations of the Company hereunder for which provision is not otherwise made in this Section.
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(i)Use of Proceeds. The Company shall apply the net proceeds from the offering and sale of the Shares to be sold by the Company in the manner set forth in the Prospectuses under “Use of Proceeds”.
(j)Change of Circumstances. During the term of this Agreement, the Company will, at any time during a fiscal quarter in which the Company intends to deliver an Agency Transaction Notice to the Lead Agents to sell Shares, advise the Agents promptly after it has received notice or obtained knowledge thereof, of any information or fact that would alter or affect in any material respect any opinion, certificate, letter or other document provided to the Agents pursuant to this Agreement.
(k)Due Diligence Cooperation. The Company will cooperate with any reasonable due diligence review requested by any of the Agents or their counsel from time to time in connection with the transactions contemplated hereby or any Agency Transaction Notice, including, without limitation, at each Representation Date or otherwise as the Agents may reasonably request, including quarterly diligence sessions, providing information and making available documents and appropriate senior corporate officers of the Company during regular business hours as any Agent may reasonably request.
(l)Clear Market. During the period beginning on the third (3rd) Trading Day immediately prior to the date on which any Agency Transaction Notice is delivered to the Agents hereunder and ending on the third (3rd) Trading Day immediately following the final Settlement Date with respect to the Shares sold pursuant to such Agency Transaction Notice (or, if such Agency Transaction Notice has been terminated or suspended prior to the sale of all Shares covered by such Agency Transaction Notice, the date of such suspension or termination), the Company shall not offer to sell, pledge, hypothecate, contract or agree to sell, purchase any option to sell, grant any option for the purchase of, lend, or otherwise dispose of, directly or indirectly, any Common Shares or any securities convertible into or exercisable or exchangeable for Common Shares or warrants or other rights to acquire Common Shares or any other securities of the Company that are substantially similar to the Common Shares or permit the registration under the Act of any Common Shares or qualification of the distribution of Common Shares under a prospectus filed with any of the Canadian Qualifying Authorities, in each case without giving the Agents by written notice or by draft news release sent to the Agents (which, in each case, may be via email) at least two (2) business days’ prior to the issuance date specifying the nature and date of such proposed transaction. The foregoing sentence shall not apply to Shares to be offered and sold through Agents pursuant to this Agreement, and, notwithstanding the foregoing, the Company may, without giving any such prior notice, issue Common Shares or securities convertible into or exercisable or exchangeable for Common Shares pursuant to any arrangement described in the Registration Statement, the Prospectuses and the Disclosure Package, including conversion of the Company’s convertible notes, a dividend reinvestment plan of the Company, any employee benefit, incentive or stock option or purchase plans or similar plans of the Company, or any directors’ compensation plan of the Company or to satisfy instruments issued pursuant to a dividend reinvestment plan of the Company, any employee benefit, incentive or stock option or purchase plans or similar plans of the Company. If notice of a proposed transaction is provided by the Company pursuant to this Section 3(l), the Agents may suspend activity of the transactions contemplated by this Agreement for such period of time as may be requested by the Company or as may be deemed appropriate by the Agents.
(m)Affirmation of Representations, Warranties, Covenants and Other Agreements. At each Time of Sale, each Settlement Date and each Amendment Date, the Company shall be deemed to have affirmed each representation and warranty of the Company contained in this Agreement (except only to the extent that any such representation is, by its express terms, limited to a specific date).
(n)Required Filings Relating to Sale of Shares. To the extent required by applicable Canadian Securities Laws and the Exchange Act, in respect of any quarter or year, as applicable, in which sales of Shares were made by the Agents under this Agreement, the Company shall set forth with regard to the most recent applicable quarter or year, as applicable, the number of Shares and the average selling price of the Shares sold through the Agents under this Agreement, the gross and net proceeds received by the Company from such sales of Shares and the compensation paid by the Company to the Agents with respect to sales of Shares pursuant to this Agreement. For so long as the Shares are listed on the TSXV, the Company will provide the TSXV with all information it requires with respect to the offering of the Shares within the timelines prescribed by the TSXV and, for so long as the Shares are listed on Nasdaq, the Company will provide Nasdaq with all information it requires with respect to the offering of the Shares within the timelines prescribed by Nasdaq.
(o)Representation Dates; Certificate. During the term of this Agreement, each time the Company (i) files the Prospectuses relating to the Shares or amends or supplements the Registration Statement or the Prospectuses relating to the Shares by means of a post-effective amendment or supplement but not by means of incorporation of document(s) by reference to the Registration Statement or the Prospectuses relating to the Shares; (ii) files or amends an annual report on Form 10-K (other than any amendment to an annual report on Form 10-K/A solely for the purpose of including the Part III information in the most recently filed annual report on Form 10-K) or annual financial statements pursuant to Canadian Securities Laws; (iii) files or amends quarterly reports on Form 10-
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Q or interim financial statements pursuant to Canadian Securities Laws; or (iv) at any other time reasonably requested by the Agents (each date of filing of one or more of the documents referred to in clauses (i) through (iii) and any time of request pursuant to (iv) above shall be a “Representation Date”), the Company shall furnish the Agents with a certificate, in substantially the form attached hereto as Exhibit B, upon execution of this Agreement and within three (3) Trading Days after each Representation Date. The requirement to provide a certificate under this Section 3(o) shall be automatically waived for any Representation Date occurring at a time when no Agency Transaction Notice is pending or in effect, which waiver shall continue until the earlier to occur of the date the Company delivers an Agency Transaction Notice hereunder (which for such calendar quarter shall be considered a Representation Date), and the next occurring Representation Date. Notwithstanding the foregoing, if the Company subsequently decides to sell Shares following a Representation Date when the Company relied on such waiver, then before the Company delivers the Agency Transaction Notice, or the Agents sell any Shares, the Company shall provide the Agents with a certificate as set forth in this Section 3(o) dated the date of the Agency Transaction Notice are issued.
(p)Legal Opinions/Negative Assurance Letters. Upon execution of this Agreement and within three (3) Trading Days after any Representation Date with respect to which the Company is obligated to deliver a certificate pursuant to Section 3(o) for which no waiver is applicable, the Company shall cause to be furnished to the Agents, dated the date the opinions are so furnished and addressed to the Agents, in form and substance satisfactory to the Agents, acting reasonably:
(q)(i) the written opinion of Morton Law LLP, Canadian counsel for the Company, as described in Section 4(f), and other local Canadian counsel, as required, such opinion letters to be substantially similar to the form attached hereto as Exhibit C but modified as necessary to relate to the Prospectuses as amended and supplemented to the date of such opinion;
(r)(ii) the written opinion and a negative assurance letter of Paul Hastings LLP, U.S. counsel for the Company, as described in Section 4(f), such opinion and negative assurance letter, to be substantially similar to the forms attached hereto as Exhibit D but modified as necessary to relate to the Registration Statement and the Prospectuses as amended and supplemented to the date of such opinion and letter; or
(s)in lieu of any of such opinions, counsel last furnishing such opinion to the Agents may furnish the Agents with a letter to the effect that the Agents may rely on such last opinion to the same extent as though it was dated the date of such letter authorizing reliance (except that statements in such last opinion shall be deemed to relate to the Registration Statement and the Prospectuses as amended and supplemented to the time of delivery of such letter authorizing reliance).
(t)Title Opinions. Within three (3) Trading Days after any Representation Date with respect to which the Company is obligated to deliver a certificate pursuant to Section 3(o) for which no waiver is applicable, the Company shall cause to be furnished to the Agents a title opinion or report or other evidence of title acceptable to the Agents in respect of the Material Properties, provided that such opinions, reports or evidence regarding the Material Properties will not be required in respect of Representation Dates where the officer’s certificate provided under Section 3(o) has confirmed that there has been no material change to the Material Properties or material change to the ownership structure of the Material Properties since the last Representation Date.
(u)Comfort Letters. Upon execution of this Agreement and within three (3) Trading Days after each Representation Date with respect to which the Company is obligated to deliver a certificate pursuant to Section 3(o) for which no waiver is applicable, the Company shall cause its auditors to furnish to the Agents a letter (the “Comfort Letter”) dated the date the Comfort Letter is delivered, in form and substance satisfactory to the applicable Agents, acting reasonably, addressed to the applicable Agents, relating to the verification of certain of the financial information relating to the Company and any subsidiaries contained in the Registration Statement and the Prospectuses, as applicable, or incorporated by reference therein, which Comfort Letter shall be based on a review having a cut-off date not more than two (2) business days prior to the date of such letter, (i) stating that such auditors are independent public accountants within the meaning of Canadian Securities Laws, the Act and the rules and regulations thereunder, and that in their opinion the audited financial statements of the Company incorporated by reference in the Registration Statement and the Prospectuses, as applicable, comply as to form in all material respects with the published accounting requirements of Canadian Securities Laws, the Act and the related rules and regulations thereunder and with the applicable accounting requirements of Canadian Securities Laws, the Act and the Exchange Act and the related published rules and regulations adopted by the Canadian Qualifying Authorities and the Commission (the first such letter, the “Initial Comfort Letter”) and (ii) updating the Initial Comfort Letter
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with any information which would have been included in the Initial Comfort Letter had it been given on such date and modified as necessary to relate to the Registration Statement and the Prospectuses, as applicable, as amended and supplemented to the date of such letter.
(v)Market Activities. The Company will not, directly or indirectly, (i) take any action designed to or that would constitute or that might reasonably be expected to cause or result in, under Canadian Securities Laws or the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares or (ii) sell, bid for, or purchase the Shares, or pay anyone any compensation for soliciting purchases of the Shares other than the Agents; provided, however, that the Company may bid for and purchase its Common Shares in accordance with Rule 10b-18 under the Exchange Act or normal course issuer bids under applicable Canadian securities laws; provided, further, that no such bids or purchases shall be made by the Company during the two Trading Days before or after any sale of any Shares pursuant to this Agreement.
(w)Investment Company Act. The Company will conduct its affairs in such a manner so as to reasonably ensure that prior to the termination of this Agreement, it will not be or become required to register as an “investment company” under the Investment Company Act and the rules and regulations of the Commission promulgated thereunder.
(x)Offer to Refuse to Purchase. If to the knowledge of the Company any condition set forth in Section 4(a) of this Agreement shall not have been satisfied on the applicable Settlement Date, the Company shall offer to any person who has agreed to purchase Shares from the Company as the result of an offer to purchase solicited by the Agents the right to refuse to purchase and pay for such Shares.
(y)Consent to the Agents’ Trading. The Company consents to the extent permitted under the Act, the Exchange Act, Canadian Securities Laws, the rules of Nasdaq and the rules of the TSXV, to the Agents trading in the Common Shares: (i) for the account of their clients at the same time as sales of Shares occur pursuant to this Agreement; and (ii) for the Agents’ own accounts, provided that in the case of clauses (i) and (ii), by providing such consent, the Company will incur no liability on behalf of the Agents or their clients resulting from such trading activity.
(z) Actively-Traded Security. The Company shall notify the Agents promptly by an email addressed to each of the respective individuals from each of the Agents set forth on Schedule 2 attached hereto if the Common Shares cease to qualify as an “actively-traded security” exempted from the requirements of Rule 101 of Regulation M under the Exchange Act by subsection (c)(1) of such rule and the sales shall be suspended until that or other exemptive provisions have been satisfied in the judgment of each party.
(aa)Permitted Free Writing Prospectuses.
(i)The Company represents and agrees that it has not made and, unless it obtains the prior written consents of the Agents, shall not make, and the Agents represent and agree that, unless they obtain the prior written consent of the Company, they shall not make, any offer relating to the Shares that would constitute a “free writing prospectus” as defined in Rule 405 under the Act, which is required to be retained by the Company under Rule 433 under the Act; provided that the prior written consent of the Agents hereto shall be deemed to have been given in respect of each of the free writing prospectuses set forth in Schedule 4 hereto. Any such free writing prospectus consented to by the Agents hereto is herein referred to as an “Issuer Free Writing Prospectus”. The Company represents and agrees that (i) it has treated and shall treat, as the case may be, each Issuer Free Writing Prospectus as a “free writing prospectus” as defined in Rule 405 under the Act and (ii) it has complied and shall comply, as the case may be, with the requirements of Rules 164 and 433 under the Act applicable to any Issuer Free Writing Prospectus, including, without limitation, in respect of timely filing with the Commission, legending and record keeping. The Company agrees not to take any action that would result in the Agents or the Company being required to file pursuant to Rule 433(d) under the Act a free writing prospectus prepared by or on behalf of the Agents that the Agents otherwise would not have been required to file thereunder.
(ii)The Company agrees that no Issuer Free Writing Prospectus, if any, will include any information that conflicts with the information contained in the Registration Statement, including any document incorporated by reference therein that has not been superseded or modified, or the Prospectuses. In addition, no Issuer Free Writing Prospectus, if any, together with the Prospectuses, will include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, the foregoing shall not apply to any statements or omissions in any Issuer Free Writing Prospectus made in reliance on information furnished in writing to the Company by the Agents expressly stating that such information is intended for use therein.
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(iii)The Company agrees that if at any time following issuance of an Issuer Free Writing Prospectus any event occurred or occurs as a result of which such Issuer Free Writing Prospectus would conflict with the information in the Registration Statement, including any document incorporated by reference therein that has not been superseded or modified, or the Prospectuses or would include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the Company will give prompt notice thereof to the Agents and, if requested by the Agents, will prepare and furnish without charge to the Agents an Issuer Free Writing Prospectus or other document which will correct such conflict, statement or omission; provided, however, the foregoing shall not apply to any statements or omissions in any Issuer Free Writing Prospectus made in reliance on information furnished in writing to the Company by the Agents expressly stating that such information is intended for use therein.
(ab) Distribution of Offering Materials. The Company has not distributed and will not distribute, during the term of this Agreement, any offering material, term sheets or “marketing materials” (as defined in National Instrument 41-101 – General Prospectus Requirements) in connection with the offering and sale of the Shares other than the Registration Statement, the Prospectuses or any Issuer Free Writing Prospectus reviewed and consented to by the Agents and included in an Agency Transaction Notice, provided that the Canadian Agents, severally and not jointly, covenant with the Company not to take any action that would result in the Company being required to file with the Canadian Qualifying Authorities any “marketing materials” that otherwise would not be required to be filed by the Company, but for the action of the Canadian Agents.
4.Conditions to the Agents’ Obligations. The obligations of the Agents hereunder are subject to (i) the accuracy of the representations and warranties of the Company on the date hereof, on each Representation Date and as of each Time of Sale and each Settlement Date, (ii) the performance by the Company of its obligations hereunder and (iii) the following additional conditions:
(a)U.S. Prospectus Supplement. The U.S. Prospectus Supplement shall have been filed with the Commission pursuant to Rule 424(b) under the Act within the applicable time period prescribed for such filing and in accordance with this Agreement and no stop order, cease trade order or any order suspending the effectiveness of the Registration Statement shall have been issued and no order preventing or suspending the use of the U.S. Prospectus Supplement shall have been issued and no proceeding for any such purposes shall have been initiated or threatened by the Commission and no order, ruling or determination having the effect of ceasing or suspending trading in the Common Shares or any other securities of the Company shall have been issued.
(b)Canadian Prospectus Supplement. The Canadian Prospectus Supplement shall have been filed with the Canadian Qualifying Authorities under the Canadian Shelf Procedures and in accordance with this Agreement and all requests for additional information on the part of the Canadian Qualifying Authorities shall have been complied with to the reasonable satisfaction of the Agents and the Agents’ counsel.
(c)No Material Adverse Effect. Since the date of the most recent financial statements of the Company included or incorporated by reference in the Registration Statement, the Prospectuses and the Disclosure Package, except as described in or contemplated by the Registration Statement and the Prospectuses, there shall not have been any Material Adverse Effect.
(d)No Material Notices. None of the following events shall have occurred and be continuing: (i) receipt by the Company of any request for additional information from the Commission, the Canadian Qualifying Authorities or any other federal, state, foreign or other governmental, administrative or self-regulatory authority during the period of effectiveness of the Registration Statement and the Prospectuses, the response to which would require any amendments or supplements to the Registration Statement or the Prospectuses; (ii) the issuance by the Commission, the Canadian Qualifying Authorities or any other Governmental Authority of any stop order, cease trade order or any order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose; (iii) receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Shares for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and (iv) the occurrence of any event that makes any statement made in the Registration Statement or the Prospectuses or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in the Registration Statement, the Prospectuses or any document incorporated or deemed to be incorporated therein by reference so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and in the case of each of the Prospectuses, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
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(e)Officers’ Certificates. The Agents shall have received the certificate required to be delivered pursuant to Section 3(o) on or before the date on which such delivery of such certificate is required pursuant to Section 3(o).
(f)Legal Opinions/Negative Assurance Letters. The Agents shall have received the opinions of counsel and negative assurance letter and title opinions to be delivered pursuant to Sections 3(p) and 3(q) on or before the date on which such delivery of such opinions or negative assurance letter or title opinions are required pursuant to Sections 3(p) and 3(q). In addition, on the date hereof, the Agents shall have also received the opinion and negative assurance letter of Sidley Austin LLP, U.S. counsel to the Agents, it being understood that counsel for the Agents and counsel for the Company may rely upon the opinions of local counsel as to all matters not governed by the laws of the respective jurisdictions in which they are qualified to practice, and may rely, to the extent appropriate in the circumstances, as to matters of fact on certificates of the Company, auditors and public officials, and that the opinions of counsel may be subject to usual qualifications as to equitable remedies, creditors’ rights laws and public policy considerations.
(g)Comfort Letters. The Agents shall have received the Comfort Letters required to be delivered pursuant to Section 3(r) on or before the date on which such delivery of such letters are required pursuant to Section 3(r).
(h)[Reserved]
(i)Compliance with Blue Sky Laws. The Shares shall be qualified for sale in such states and jurisdictions in the United States as the Agents may reasonably request, as well as such jurisdictions outside the United States as the Agents may reasonably request, and each such qualification shall be in effect and not subject to any stop order, cease trade order or other proceeding on the relevant Representation Date.
(j) Stock Exchange Listing. The Shares shall have been duly authorized for listing on Nasdaq and the TSXV, subject only to notice of issuance at or prior to the applicable Settlement Date.
(k)Securities Act Filings Made. All filings with the Commission required by the Act and required by the Canadian Qualifying Authorities to have been filed prior to the issuance of any Agency Transaction Notice hereunder shall have been made within the applicable time period prescribed for such filing by the Act and Canadian Securities Laws.
(l) FINRA. If a filing with FINRA is required, FINRA shall not have objected to the fairness or reasonableness of the terms or arrangements under this Agreement.
(m)Regulation M. The Common Shares shall qualify as an “actively-traded security” excepted from the requirements of Rule 101 of Regulation M under the Exchange Act by subsection (c)(1) of such rule.
(n)Additional Certificates. The Company shall have furnished to the Agents such certificate or certificates, in addition to those specifically mentioned herein, as the Agents may have reasonably requested as to the accuracy and completeness at each Representation Date of any statement in the Registration Statement or the Prospectuses or any documents filed under the Exchange Act and Canadian Securities Laws and deemed to be incorporated by reference into the Prospectuses, as to the accuracy at such Representation Date of the representations and warranties of the Company herein, as to the performance by the Company of its obligations hereunder, or as to the fulfillment of the conditions concurrent and precedent to the obligations hereunder of the Agents.
(o)[Reserved]
(p)Press Release. Concurrently with the execution of this Agreement, the Company shall have issued and disseminated, and filed with the Canadian Qualifying Authorities in compliance with NI 44-102, a news release (i) announcing that the Company has entered into this Agreement, (ii) indicating that the Prospectus Supplements have been or will be filed, (iii) specifying where and how a purchaser of Shares may obtain a copy of this Agreement and the Prospectus Supplements and (iv) if applicable, that the completion of the distribution of Shares would constitute a material fact or material change. Promptly after the execution of this Agreement, and in any event before any sales of Shares are made hereunder, the Company shall file this Agreement with the Canadian Qualifying Authorities in accordance with applicable Canadian Securities Laws.
5.Indemnification and Contribution.
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(a)The Company agrees to indemnify and hold harmless each Agent, the directors, officers, employees, affiliates and agents of each Agent and each person, if any, who controls such Agent within the meaning of Canadian Securities Laws, the Act or the Exchange Act against any and all losses, claims, damages and liabilities (including, without limitation, reasonable and documented legal fees and other reasonable and documented expenses incurred in connection with any suit, action or proceeding or any claim asserted, as such fees and expenses are incurred), joint or several, that arise out of, or are based upon, any untrue statement or alleged untrue statement of a material fact or “misrepresentation” as defined under Canadian Securities Laws contained in the Canadian Base Prospectus, the Canadian Prospectus Supplement, the Registration Statement as originally filed, the U.S. Prospectus Supplement or any Issuer Free Writing Prospectus, or in any amendment thereof or supplement thereto, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, in each case except insofar as such losses, claims, damages or liabilities arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made therein in reliance upon and in conformity with any information relating to any Agent furnished to the Company in writing by such Agent expressly for use therein, it being understood and agreed that the only such information furnished by any Agent consists of the information described as such in subsection (b) below.
(b)Each Agent severally and not jointly agrees to indemnify and hold harmless the Company, its directors, its officers, its agents, its employees and each person, if any, who controls the Company within the meaning of Canadian Securities Laws, the Act or the Exchange Act, to the same extent as the foregoing indemnity from the Company to each Agent, but only with respect to any losses, claims, damages or liabilities (including, without limitation, reasonable and documented legal fees and other expenses incurred in connection with any suit, action or proceeding or any claim asserted, as such fees and expenses are incurred) that arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to such Agent furnished to the Company in writing by such Agent expressly for use in the documents referred to in the foregoing indemnity. The Company acknowledges that the names of the Agents set forth on the cover page and on the back cover page of the Prospectuses and the Prospectus Supplements constitute the only information furnished in writing by or on behalf of the several Agents for inclusion in the Registration Statement or the Prospectuses.
(c)If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any person in respect of which indemnification may be sought pursuant to either paragraph (a) or (b) above, such indemnified party shall promptly notify the indemnifying party in writing; provided that the failure to notify the indemnifying party shall not relieve it from any liability that it may have under paragraph (a) or (b) above except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided, further, that the failure to notify the indemnifying party shall not relieve it from any liability that it may have to an indemnified party otherwise than under paragraph (a) or (b) above. If any such proceeding shall be brought or asserted against an indemnified party and it shall have notified the indemnifying party thereof, the indemnifying party shall retain counsel reasonably satisfactory to the indemnified party (who shall not, without the consent of the indemnified party, be counsel to the indemnifying party) to represent the indemnified party and any others entitled to indemnification pursuant to this Section 5 that the indemnifying party may designate in such proceeding and shall pay the reasonable and documented fees and expenses in such proceeding and shall pay the reasonable and documented fees and expenses of such counsel related to such proceeding, as incurred. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the contrary; (ii) the indemnifying party has failed within a reasonable time to retain counsel reasonably satisfactory to the indemnified party; (iii) the indemnified party shall have reasonably concluded that there may be legal defenses available to it that are different from or additional to those available to the indemnifying party; or (iv) the named parties in any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood and agreed that the indemnified party shall not, in connection with any proceeding or related proceeding in the same jurisdiction, be liable for the reasonable and documented fees and expenses of more than one separate firm (in addition to any local counsel) for all indemnified parties, and that all such reasonable and documented fees and expenses shall be paid or reimbursed as they are incurred. Any such separate firm for any Agent, its affiliates, directors and officers, employees and agents, and any control persons of such Agent shall be designated in writing by the Agents and any such separate firm for the Company, its directors, its officers, its agents, its employees and any control persons of the Company shall be designated in writing by the Company. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent, the indemnifying party agrees to indemnify each indemnified party from and against any loss or liability by reason of such settlement. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested that an indemnifying party reimburse the indemnified party for reasonable and documented fees and expenses of counsel as contemplated by this paragraph, the indemnifying party shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is
26
entered into more than 45 days after receipt by the indemnifying party of such request and (ii) the indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement, unless such amounts are being contested in good faith. No indemnifying party shall, without the written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnification could have been sought hereunder by such indemnified party, unless such settlement (i) includes an unconditional release of the indemnified party, in form and substance reasonably satisfactory to such indemnified party, from all liability on claims that are the subject matter of such proceeding and (ii) does not include any statement as to or any admission of fault, culpability or a failure to act, by or on behalf of any indemnified party.
(d)In the event that the indemnity provided in paragraph (a) or (b) of this Section 5 is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities referred to therein (collectively, “Losses”), then each indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such Losses (i) in such proportion as is appropriate to reflect the relative benefits received by the Company, on the one hand, and by the Agents, on the other, from the offering of the Shares; provided, however, that in no case shall any Agent (except as may be provided in any agreement among Agents relating to the offering of the Shares) be responsible for any amount in excess of the total discounts and commissions or any portion thereof actually received by such Agent hereunder; or (ii) if the allocation provided by the immediately preceding sentence is not permitted by applicable law, in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company, on the one hand, and of the Agents, on the other, in connection with the statements or omissions which resulted in such Losses as well as any other relevant equitable considerations. Benefits received by the Company shall be deemed to be equal to the total net proceeds from the offering (before deducting expenses) received by it, and benefits received by the Agents shall be deemed to be equal to the total discounts and commissions received by the Agents. Relative fault shall be determined by reference to, among other things, whether any untrue or any alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or the Agents on the other, the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission.
(e)The Company and the Agents agree that it would not be just and equitable if contribution pursuant to this Section 5 were determined by pro rata allocation (even if the Agents were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to above. The amount paid or payable by an indemnified party as a result of the Losses incurred by an indemnified party referred to above shall be deemed to include, subject to the limitations set forth above, any reasonable and documented legal or other expenses incurred by such indemnified party in connection with any such action or claim. Notwithstanding the provisions of this paragraph (e), in no event shall any Agent be required to contribute any amount in excess of the amount by which the total discounts and commissions received by such Agent with respect to the offering of the Shares exceeds the amount of any damages that such Agent has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Agents’ obligations to contribute pursuant to this Section 5 are several in proportion to their respective purchase obligations hereunder and not joint.
6.Termination.
(a)The Company may terminate this Agreement in its sole discretion with respect to all Agents or any Agent at any time upon giving prior written notice. The Company may update Schedules 1(I) and 1(II) from time to time to reflect the current Agents. Any such termination shall be without liability of any party to the other party, except that (i) with respect to any pending sale, the obligations of the Company, including, without limitation, in respect of compensation of the Agents, shall remain in full force and effect notwithstanding such termination; and (ii) the provisions of Sections 1 (Representations and Warranties), 3 (Agreements of the Company) (except that if no Shares have been previously sold hereunder, only Section 3(h) (Expenses)), 5 (Indemnification and Contribution), 7(b) (Applicable Law), 7(e) (Representations and Indemnities to Survive) and 7(j) (Waiver of Jury Trial) of this Agreement shall remain in full force and effect notwithstanding such termination.
(b)Any Agent may terminate its obligations under this Agreement solely with respect to such Agent in its sole discretion at any time upon giving prior written notice to the Company. Any such termination shall be without liability of any party to another party, except that (i) with respect to any pending sale, the obligations of the Company, including, without limitation, in respect of compensation of the Agents, shall remain in full force and effect notwithstanding such termination; and (ii) the provisions of Sections 1 (Representations and Warranties), 3 (Agreements of the Company) (except that if no Shares have been previously sold hereunder, only
27
Section 3(h) (Expenses)), 5 (Indemnification and Contribution), 7(b) (Applicable Law), 7(e) (Representations and Indemnities to Survive) and 7(j) (Waiver of Jury Trial) of this Agreement shall remain in full force and effect notwithstanding such termination.
(c)Unless previously terminated pursuant to this Section 6, this Agreement shall remain in full force and effect until the earliest to occur of (i) termination of this Agreement pursuant to Section 6(a) or 6(b) above or otherwise by mutual written agreement of the parties and (ii) such date that the aggregate gross sales proceeds of the Shares sold pursuant to this Agreement equals the Maximum Amount, in each case except that (x) with respect to any pending sale, the obligations of the Company, including, without limitation, in respect of compensation of the Agents, shall remain in full force and effect notwithstanding such termination; and (y) the provisions of Sections 1 (Representations and Warranties), 3 (Agreements of the Company) (except that if no Shares have been previously sold hereunder, only Section 3(h) (Expenses)), 5 (Indemnification and Contribution), 7(b) (Applicable Law), 7(e) (Representations and Indemnities to Survive) and 7(j) (Waiver of Jury Trial) of this Agreement shall remain in full force and effect notwithstanding such termination.
(d)Any termination of this Agreement shall be effective on the date specified in the notice of termination; provided that such termination shall not be effective until the close of business on the date of receipt of such notice by the Agents or the Company, as the case may be. If such termination shall occur prior to the Settlement Date for any sale of Shares, such sale shall settle in accordance with the provisions of this Agreement.
7. Miscellaneous.
(a)No Advisory or Fiduciary Responsibility. The Company acknowledges and agrees that: (i) the sale of the Shares pursuant to this Agreement, including the determination of the terms of the offering and any related commissions, is an arm’s-length commercial transaction between the Company, on the one hand, and the several Agents, on the other hand, and the Company is capable of evaluating and understanding and understands and accepts the terms, risks and conditions of the transactions contemplated by this Agreement; (ii) in connection with the offer and sale of the Shares as contemplated hereby and the process leading to such transaction, the Agents owe no fiduciary duties to the Company or its affiliates, stockholders, creditors, employees or any other party; (iii) no Agent has assumed or will assume an advisory or fiduciary responsibility in favor of the Company with respect to the offer and sale of the Shares as contemplated hereby or the process leading thereto (irrespective of whether such Agent has advised or is currently advising the Company on other matters) and no Agent has any obligation to the Company with respect to the offering contemplated hereby except the obligations expressly set forth in this Agreement; (iv) the several Agents and their respective affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Company and that the several Agents have no obligation to disclose to the Company any of such interests by virtue of any advisory, agency or fiduciary relationship; and (v) the Agents have not provided any legal, accounting, regulatory or tax advice with respect to the offering contemplated hereby and the Company has consulted its own legal, accounting, regulatory and tax advisors to the extent it deemed appropriate. This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Company and the several Agents, or any of them, with respect to the subject matter hereof. The Company hereby waives and releases, to the fullest extent permitted by law, any claims that the Company may have against the several Agents with respect to any breach or alleged breach of fiduciary duty.
(b)Applicable Law. This Agreement will be governed by and construed in accordance with the laws of the State of New York without regard to the principles of conflicts of laws.
(c)Judgment Currency. The obligation of the Company in respect of any sum due to any Agent in United States dollars shall, notwithstanding any judgment in a currency other than United States dollars, not be discharged until the first business day following receipt by such Agent of any sum adjudged to be so due in such other currency, on which (and only to the extent that) such Agent may in accordance with normal banking procedures purchase United States dollars with such other currency; if the United States dollars so purchased are less than the sum originally due to such Agent hereunder, the Company agrees, as a separate obligation and notwithstanding any such judgment, to indemnify such Agent against such loss. If the United States dollars so purchased are greater than the sum originally due to such Agent hereunder, such Agent agrees to pay to the Company an amount equal to the excess of the dollars so purchased over the sum originally due to such Agent hereunder.
(d)Compliance with USA Patriot Act. In accordance with the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law on October 26, 2001)), the Agents are required to obtain, verify and record information that identifies their respective clients, including the Company, which information may include the names and addresses of their respective clients, as well as other information that will allow the Agents to properly identify their respective clients.
28
(e)Representations and Indemnities to Survive. The respective agreements, representations, warranties, indemnities and other statements of the Company or its officers and of the Agents set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of any Agent or the Company or any of the officers, directors, employees, agents or controlling persons referred to in Section 5 hereof, and will survive delivery of and payment for the Shares. The provisions of Sections 3(h) and 5 hereof shall survive the termination or cancellation of this Agreement.
(f)Notices. All communications hereunder will be in writing and effective only on receipt, and, if sent to the Agents, will be mailed, delivered or emailed to Cantor Fitzgerald Canada Corporation, 181 University Avenue, Suite 1500, Toronto, Ontario M5H 3M7, Attention: Elan Shevel, Email: EShevel@cantor.com; Cantor Fitzgerald & Co., 110 East 59th Street, New York, New York 10022, Attention: (i) Capital Markets and (ii) General Counsel, Email: (i) notices-IBD@cantor.com and (ii) legal-IBD@cantor.com; RBC Capital Markets, LLC, 200 Vesey Street, 8th Floor, New York, New York 10281; RBC Dominion Securities Inc., 21st Floor, Park Place, 666 Burrard Street, Vancouver, British Columbia V6C 2X8; B. Riley Securities, Inc., 299 Park Avenue, 21st Floor, New York, New York 10171, Attention: Frank Pigott, General Counsel, telephone: (703) 312-1720, Email: atmdesk@brileysecurities.com; and Jett Capital Advisors, LLC, 712 Fifth Avenue, 11th Floor, New York, New York 10019, Attention: Joseph Riggio, Partner, jr@jettcapital.com; with a copy (not to constitute notice) to: Bennett Jones LLP, One First Canadian Place, Suite 3400, Toronto, Ontario M5X 1A4 Attention: James Clare, Email: clarej@bennettjones.com; and Sidley Austin LLP, 787 Seventh Avenue, New York, New York 10019, Attention: Daniel O’Shea, Email: doshea@sidley.com; or, if sent to the Company, will be mailed, delivered or emailed to enCore Energy Corp., One Galleria Tower 13355 Noel Rd, Suite 1700, Dallas, Texas 75240, Attention: Robbie Hudson, Email: rhudson@encoreuranium.com; with a copy (not to constitute notice) to: Morton Law LLP, 750 West Pender Street, Suite 1200, Vancouver, BC V6C 2T8 1601, Attention: Edward L. Mayerhofer, Email: elm@mortonlaw.ca; and Paul Hastings LLP, 2001 Ross Avenue, Suite 2700, Dallas, TX 75201, Attention: Charlie Haag, Email: charliehaag@paulhastings.com.
(g)Recognition of the U.S. Special Resolution Regimes.
(i)In the event that any Agent that is a Covered Entity (as defined herein) becomes subject to a proceeding under a U.S. Special Resolution Regime (as defined herein), the transfer from such Agent of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.
(ii)In the event that any Agent that is a Covered Entity or a BHC Act Affiliate (as defined herein) of such Agent becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights (as defined herein) under this Agreement that may be exercised against such Agent are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.
(iii)As used in this Section:
“BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).
“Covered Entity” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
“U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
(h)Counterparts. This Agreement may be signed in one or more counterparts, each of which shall constitute an original and all of which together shall constitute one and the same agreement. Counterparts may
29
be delivered via electronic mail (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
(i)Severability. If any provision of this Agreement is determined to be void or unenforceable in whole or in part, it shall be deemed not to affect or impair the validity of any other provision of this Agreement and such void or unenforceable provision shall be severable from this Agreement.
(j)Waiver of Jury Trial. Each of the Company and each of the Agents hereby irrevocably waives any right it may have to a trial by jury in respect of any claim based upon or arising out of this Agreement or the transactions contemplated hereby or thereby.
(k)Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers, directors, employees, agents and controlling persons referred to in Section 5 hereof, and no other person will have any right or obligation hereunder.
(l)Headings. The Section headings used herein are for convenience only and shall not affect the construction hereof.
(m)[Reserved]
(n)Time. Time shall be of the essence of this Agreement.
[Signature page follows]
30
Please confirm that the foregoing correctly sets forth the agreement between the Company and the Agents.
Very truly yours,
ENCORE ENERGY CORP.
By: /s/ Richard H. Little
Name: Richard H. Little
Title: Chief Executive Officer
Name: Richard H. Little
Title: Chief Executive Officer
Confirmed as of the date first above mentioned:
CANTOR FITZGERALD CANADA CORPORATION By: /s/ Elan Shevel Name: Elan Shevel Title: Chief Compliance Officer | ||
CANTOR FITZGERALD & CO. By: /s/ Matthew Crawford Name: Matthew Crawford Title: Managing Director | ||
RBC CAPITAL MARKETS, LLC By: /s/ Anthony Ianno Name: Anthony Ianno Title: Managing Director | ||
RBC DOMINION SECURITIES INC. By: /s/ Michael Scott Name: Michael Scott Title: Managing Director B. RILEY SECURITIES, INC. By: /s/ Ernie Dahlman Name: Ernie Dahlman Title: Managing Director | ||
JETT CAPITAL ADVISORS, LLC By: /s/ Joseph Riggio Name: Joseph Riggio Title: Partner | ||
SCHEDULE 1(I)
U.S. AGENTS
1.Cantor Fitzgerald & Co.
2.RBC Capital Markets, LLC
3.B. Riley Securities, Inc.
4.Jett Capital Advisors, LLC
SCHEDULE 1(II)
CANADIAN AGENTS
1.Cantor Fitzgerald Canada Corporation
2.RBC Dominion Securities Inc.
SCHEDULE 2
AUTHORIZED COMPANY REPRESENTATIVES
AUTHORIZED AGENT REPRESENTATIVES
[Intentionally Omitted.]
SCHEDULE 3
(I) Material Subsidiaries
[Intentionally Omitted.]
(II) Subsidiaries
[Intentionally Omitted.]
SCHEDULE 4
ISSUER FREE WRITING PROSPECTUSES
None.
EXHIBIT A
enCore Energy Corp.
One Galleria Tower 13355 Noel Rd, Suite 1700
Dallas, Texas 75240
One Galleria Tower 13355 Noel Rd, Suite 1700
Dallas, Texas 75240
[_______], 20[__]
[●] / [●]
[●] / [●]
[address] / [address]
VIA EMAIL
TRANSACTION NOTICE
Ladies and Gentlemen:
The purpose of this Transaction Notice is to propose certain terms of the Agency Transaction entered into with [●] under, and pursuant to, that certain Controlled Equity OfferingSM Sales Agreement among the Company, Cantor Fitzgerald Canada Corporation, Cantor Fitzgerald & Co., RBC Capital Markets, LLC, RBC Dominion Securities Inc., B. Riley Securities, Inc. and Jett Capital Advisors, LLC dated August 13, 2026 (the “Agreement”). Please indicate your acceptance of the proposed terms below. Upon acceptance, the particular Agency Transaction to which this Transaction Notice relates shall supplement, form a part of, and be subject to, the Agreement. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Agreement.
The terms of the particular Agency Transaction to which this Transaction Notice relates are as follows:
| Trading Day(s) on which Shares may be Sold: | [_______], 20[ ], [_______], 20[ ] . . . [ ], 20[ ] | ||||
Maximum [Number]/[Value] of Shares to be Sold in the Aggregate: | [_______] | ||||
Maximum [Number]/[Value] of Shares to be Sold on each Trading Day: | [_______] | ||||
| Stock exchange: | [ ] | ||||
| Floor Price: | [USD/CAD][ ] | ||||
[Remainder of Page Intentionally Blank]
A-1
Very truly yours,
ENCORE ENERGY CORP.
By:
Name:
Title:
Name:
Title:
Accepted and agreed as of
the date first above written:
the date first above written:
[●] / [●]
| By: | ||||||||
| Name: | ||||||||
| Title: | ||||||||
A-2
A-3
EXHIBIT B
Form of Officer’s Certificate
[Intentionally Omitted.]
A-4
EXHIBIT C
Form of Initial Opinion of
Canadian Counsel to the Company
Canadian Counsel to the Company
[Intentionally Omitted.]
C-1
EXHIBIT D
Form of Opinion of
U.S. Counsel to the Company
U.S. Counsel to the Company
[Intentionally Omitted.]
D-1
Exhibit 5.1
August 13, 2026 | |||||
enCore Energy Corp. 13355 Noel Road, Suite 1700 Dallas, TX 75240 | |||||
Dear Sirs and Mesdames:
Re: | enCore Energy Corp. (the “Company”) Prospectus Supplement | ||||
We have acted as British Columbia counsel to the Company, a British Columbia corporation. We refer to the registration statement on Form S-3 (Registration No. 333-296905) as originally filed by the Company under the United States Securities Act of 1933, as amended (the “Securities Act”) with the U.S. Securities and Exchange Commission (the “Commission”) and declared effective on July 1, 2026 (including information deemed incorporated by reference therein in accordance with applicable rules of the Commission, the “Registration Statement”), the base prospectus, dated June 18, 2026, forming part of the Registration Statement, with respect to the offering from time to time of the Company’s securities (the “Base Prospectus”) and the prospectus supplement dated August 13, 2026 (the “Prospectus Supplement”, together with the Base Prospectus, the “Prospectus”), relating to the sale through Cantor Fitzgerald Canada Corporation and RBC Dominion Securities Inc. (being, the Canadian agents), and Cantor Fitzgerald & Co., RBC Capital Markets, LLC, B. Riley Securities, Inc. and Jett Capital Advisors, LLC (being, the U.S. agents) (collectively, the “Agents”), from time to time by the Company of up to US$250,000,000 of common shares of the Company (the “Sales Agreement Shares”) pursuant to the Registration Statement, the Prospectus and the terms of a Controlled Equity OfferingSM Sales Agreement dated August 13, 2026 (the “Sales Agreement”) among the Agents and the Company.
We have examined the Registration Statement and the Prospectus and have reviewed such questions of law as we have considered necessary and appropriate for the purposes of our opinion set forth below. In rendering our opinion set forth below, we have assumed the authenticity of all documents submitted to us as originals, the genuineness of all signatures and the conformity to authentic originals of all documents submitted to us as copies or electronic transmissions. We have also assumed the legal capacity for all purposes relevant hereto of all natural persons and, with respect to all parties to agreements or instruments relevant hereto other than the Company, that such parties had the requisite power and authority (corporate or otherwise) to execute, deliver and perform such agreements or instruments, that such agreements or instruments have been duly authorized by all requisite action (corporate or otherwise), executed and delivered by such parties and that such agreements or instruments are the legal, valid, binding and enforceable obligations of such parties. As to questions of fact material to our opinion, we have relied upon certificates of officers of the Company and of public officials. We have not undertaken any independent investigation to verify the accuracy or completeness of any of the foregoing assumptions.
Suite 1200 – 750 West Pender Street, Vancouver, B.C. V6C 2T8 Website: www.mortonlaw.ca
Telephone: 604.681.1194 Facsimile: 604.681.9652
Telephone: 604.681.1194 Facsimile: 604.681.9652
MORTON LAW LLP Page 2
For purposes of this legal opinion, we have assumed that:
(a)the Registration Statement, and any amendments thereto (including post-effective amendments), will have become effective and such effectiveness will not have been terminated or rescinded;
(b)the Prospectus will have been prepared and filed in compliance with the Securities Act and the applicable rules and regulations thereunder;
(c)all Sales Agreement Shares will be offered, issued and sold, as applicable, in compliance with applicable securities laws and in the manner stated in the Registration Statement and the Prospectus;
(d)the Sales Agreement will have been executed and delivered by the Company and the Agents, and will constitute legally valid and binding obligations of the Company and the Agents, enforceable against each of them in accordance with its terms;
(e)the representations and warranties of the Company set forth in the Sales Agreement are true and correct and accurate in all respects (which representations and warranties we have relied upon without independent investigation);
(f)that if any obligation under any document is required to be performed in a jurisdiction outside of the Province of British Columbia, the performance of that obligation will not be illegal under he laws of that jurisdiction;
(g)the Company will have received the agreed upon consideration for the issuance of any Sales Agreement Shares and any such Sales Agreement Shares will have been delivered by or on behalf of the Company against payment therefor; and
(h)the Company has complied and will comply with the laws of all relevant jurisdictions in connection with the transactions contemplated by, and the performance of its obligations under, the Registration Statement, the Prospectus and the Sales Agreement.
Based upon the foregoing, and in reliance thereon, we are of the opinion that the Sales Agreement Shares have been duly authorized and, when issued and paid for in accordance with the Sales Agreement and as contemplated in the Prospectus, will be validly issued, fully paid and non-assessable.
The foregoing opinion is limited to the laws of the Province of British Columbia and the federal laws of Canada applicable therein on the date of this opinion, and we are expressing no opinion as to the effect of the laws of any other jurisdiction, domestic or foreign. We have no responsibility or obligation to: (i) update this opinion, (ii) take into account or inform the addressee or any other person of any changes in law, facts or other developments subsequent to the date hereof that do or may affect the opinion we
MORTON LAW LLP Page 3
express, or (iii) advise the addressee or any other person of any other change in any matter addressed in this opinion. Nor do we have any responsibility or obligation to consider the applicability or correctness of this opinion to any person other than the addressee.
This opinion is addressed to the Company in connection with the filing of the Registration Statement and Prospectus Supplement and may not be relied upon by any other person without our prior written consent. Notwithstanding the foregoing, we hereby consent to the filing of this opinion as an exhibit to the Quarterly Report on Form 10-Q, which forms a part of the Registration Statement and to the use of our name in the Base Prospectus and Prospectus Supplement forming a part of the Registration Statement under the caption “Legal Matters”. In giving this consent, we do not admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act and the rules and regulations thereunder.
Yours truly,
MORTON LAW LLP
MORTON LAW LLP
/s/ Morton Law LLP
Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Richard Little, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of enCore Energy Corp.; | |||||||
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |||||||
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |||||||
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | |||||||
| a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |||||||
| b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |||||||
| c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |||||||
| d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and | |||||||
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): | |||||||
| a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |||||||
| b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. | |||||||
Date: August 13, 2026
| /s/ Richard Little | ||||||||
| Richard Little | ||||||||
| Chief Executive Officer | ||||||||
| (Principal Executive Officer) | ||||||||
Exhibit 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Kevin Kremke, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of enCore Energy Corp.; | |||||||
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |||||||
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |||||||
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | |||||||
| a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |||||||
| b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |||||||
| c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |||||||
| d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and | |||||||
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): | |||||||
| a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |||||||
| b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. | |||||||
Date: August 13, 2026
| /s/ Kevin Kremke | ||||||||
| Kevin Kremke | ||||||||
| Chief Financial Officer | ||||||||
| (Principal Financial Officer) | ||||||||
Exhibit 32.1
CERTIFICATIONS PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of enCore Energy Corp. (the “Company”) for the quarter ending June 30, 2026, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Richard Little, Chief Executive Officer of the Company, and Kevin Kremke, Chief Financial Officer of the Company, each certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:
| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | ||||
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. | ||||
| Dated: August 13, 2026 | /s/ Richard Little | |||||||
| Richard Little | ||||||||
| Chief Executive Officer | ||||||||
| (Principal Executive Officer) | ||||||||
| Dated: August 13, 2026 | /s/ Kevin Kremke | |||||||
| Kevin Kremke | ||||||||
| Chief Financial Officer | ||||||||
| (Principal Financial Officer) | ||||||||