enCore Energy Corp.

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 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 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 (as defined below). See Note Payable - Related Party below for additional information.

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 “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.

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.

The effective interest rate of the Convertible Senior Notes was 6.6%, which includes the amortization of debt issuance costs. For the year ended December 31, 2025, the Company recognized interest expense of $2,266 and amortization of debt issuance costs of $329 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.

Note Payable - Related Party

On December 5, 2023, the Company, through a subsidiary, entered into a loan agreement (the “Uranium Loan”) with Boss to borrow up to 200,000 pounds of uranium from Boss. The Uranium Loan initially bore interest of 9% per annum and was repayable in 12 months in cash or uranium at the election of Boss. Boss is considered a related party given its minority ownership of the Alta Mesa JV. On February 21, 2025, the Company, through a subsidiary, amended the Uranium Loan effective February 26, 2025, to revise the schedule of repayment of the loaned uranium and to update the redelivery and repayment methods.

On June 27, 2025, the Company and Boss amended the Uranium Loan to extend the repayment date one week to July 3, 2025. On July 2, 2025, the Company and Boss, among other things, extended the loan repayment date of the Uranium Loan to December 27, 2025, increase the interest rate to 10% per annum and provide for a cash facility of $3,600.

On August 22, 2025, the Company repaid the Uranium Loan in full and terminated the Uranium Loan. The total payoff amount was $10,573, consisting of $10,054 in principal and $519 in accrued interest. As a result, there wasno outstanding balance as of December 31, 2025.

During the years ended December 31, 2025, and 2024, the Company incurred interest expense of $797 and $1,531, respectively.

Convertible Promissory Note

On February 14, 2023, the Company issued a secured convertible promissory note (the “Convertible Promissory Note”) in connection with the Alta Mesa asset acquisition.

The principal value of the Convertible Promissory Note was $60,000, and the Convertible Promissory Note was secured by certain assets of the Company pursuant to the terms of a Pledge Agreement, a Security Agreement, and a Guaranty Agreement between the parties.

The principal portion of the Convertible Promissory Note was convertible at any time and at the option of the holder into common shares of the Company at a conversion price of $2.91 per share until maturity and bore interest at a rate of 8.0% per annum.

The premium related to the conversion was determined to be $3,813, which was recognized in equity as part of additional paid-in capital. The remainder of the proceeds of $56,187 was allocated to the debt component of the Convertible Promissory Note. The debt component was accreted to the principal balance over its estimated life. The Company incurred accretion expense of $65 and $3,052 for the years ended December 31, 2024 and 2023.

During the year ended December 31, 2024, the Company incurred interest expense of $1,735.

In February 2024, the debt was converted to equity by the issuance of 6,872,143 common shares to the debt holder.

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 years ended December 31, 2025 and 2024.

During the year ended December 31, 2025 the Company entered into several amendments to the Uranium Loan with Boss. On August 22, 2025 the Company repaid all outstanding amounts and terminated the Uranium Loan Agreement as discussed in Note 15 – Debt. Boss owns 30% of the JV Alta Mesa, as discussed in Note 8 - Sale of Minority Interest in Alta Mesa.

On April 8, 2025, the Company completed a sale of NM Energy Canada that holds the Crownpoint and Hosta Butte projects pursuant to a Purchase Agreement with Verdera. The spouse of the Company’s former Chairman, the Company’s former 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 consideration received in the sale pursuant to the purchase agreement. The purchase agreement was unanimously approved by the Board upon recommendation by the Audit Committee. For more information regarding the Sale, see Note 7 – Mineral Rights and Properties.

As of December 31, 2025, and December 31, 2024, the following amounts were owed to related parties:

17. Income Taxes

Net loss before income taxes was generated as follows:

Income tax expense (benefit) is comprised of the following:

The amounts of income tax paid, net of tax refunds received, are as follows:

A reconciliation of income tax benefit (expense) to the amount computed by applying the 15% Canadian federal income tax rate after the adoption of ASU 2023-09 is presented below. The Canadian federal income tax rate is utilized as the Company's income tax filing entity is a Canadian corporation that is domiciled in Canada.

Deferred taxes result from the temporary differences between financial reporting carrying amounts and the tax basis of existing assets and liabilities. The table below summarizes the principal components of the deferred tax assets (liabilities) as follows:

Deferred income taxes have not been recorded on the basis differences for investments in consolidated subsidiaries as these basis differences are indefinitely reinvested or will reverse in a non-taxable manner. Quantification of the deferred income tax liability, if any, associated with indefinitely reinvested basis differences is not practicable.

A valuation allowance has been taken against the US federal and state deferred tax assets of $19,486. A valuation allowance has been taken against the Canadian deferred tax assets of $27,420.

The following table summarizes the changes to the valuation allowance:

(1) The additions to the valuation allowance during the year ended December 31, 2025 result from the generation of additional tax losses as well as increases to tax assets such as mineral property and inventory. The additions to the valuation allowance during the year ended December 31, 2024 result from the generation of additional tax losses and deferred tax assets acquired from Base Resources.

(2) The reductions to the valuation allowance during the year ended December 31, 2025 result from the decrease to tax assets such as debt issuance costs, property, plant and equipment and asset retirement obligations. For the year ended December 31, 2024, the reductions to the valuation allowance result from the decrease to tax assets such as ARO and mineral properties in the U.S.

The following table summarizes the Company’s capital losses and net operating losses as of December 31, 2025 that can be applied against future taxable income:

Under Section 382 of the Internal Revenue Code of 1986, a corporation that undergoes an ownership change is subject to limitation on its use of pre-change tax attributes and carryforward to offset future taxable income. At December 31, 2025 and 2024, the historical section 382 federal net operating loss limitation for certain subsidiaries is $11,302.

In addition, as a result of the Tax Cuts and Jobs Act, U.S. net operating loss carryforwards generated after December 31, 2017 are limited to usage at 80% of taxable income and will be permitted to be carried forward indefinitely.

Utilization of the Canadian loss carry forwards will be subject to the Acquisition of Control Rules in any year as a result of previous changes in ownership.

The Company files income tax returns in the U.S. federal and various state jurisdictions with varying statutes of limitations. The Company’s net operating losses from all years may be subject to adjustment for three or four years following the year in which utilized. We do not anticipate that any potential tax adjustments will have a significant impact on our financial position or results of operations.

The Company’s policy is to include interest and penalties related to uncertain tax positions in the income tax expense line on the financial statements. As of December 31, 2025, the Company does not have any uncertain tax positions.

For the year ended December 31, 2025, the Company recorded income tax benefit of $0.5 million on loss before tax of $63.5 million. For the year ended December 31, 2024, the Company recorded income tax benefit of $5.9 million on loss before tax of $73.9 million. For the year ended December 31, 2023, the Company recorded income tax benefit of $0.5 million on loss before tax of $26.1 million. The effective tax rate was 0.77%, and 8.02% for the years ended December 31, 2025 and 2024, respectively.

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 CODM assesses the business and allocates resources. This segment is monitored for performance and is consistent with internal financial reporting.

The CODM evaluates segment performance and allocates resources using financial information on a basis consistent with the Company’s consolidated financial statements. The significant segment expense information reviewed by the CODM are those presented on the accompanying consolidated statements of operations. The CODM evaluates the performance of the Company’s reportable segment based on income (loss) from operations, which is also what is reported on the consolidated statement of operations. The measure of segment assets is reported on the accompanying consolidated balance sheets as total consolidated assets.

The accounting policies of the segment are the same as those described in Note 2. Summary of Significant Accounting Policies.

Revenues from three external customers accounted for all of the Company’s total revenues during the period, each of which individually accounted for 10% or more the Company’s total revenues. Revenues from these customers were $27,231, $10,980, and $4,944, respectively. All such revenues are attributable to the Company’s single reportable segment.

19. Subsequent Events

On February 20, 2026, Verdera announced POCML 7 Inc. acquired all issued and outstanding common shares of Verdera and as a result of such qualifying 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. The shares issued are valued at $27,010. As a result of the IPO, the conditions associated with the Company’s transaction involving NME satisfied the Going Public Transaction, and the transaction is now accounted for as a sale rather than a financing arrangement, resulting in the derecognition of the NM Energy Canada assets and liabilities and recognition of the consideration received and any resulting gain or loss. Since the IPO occurred after the balance sheet date, the accounting for the sale is not reflected in the financial statements as of December 31, 2025. 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 satisfied the Going Public Transaction requirement pursuant to the Share Purchase Agreement.

During February 2026, holders of previously issued warrants exercised approximately 6.6 million warrants, providing approximately $18.1 million cash to the Company.