enCore Energy (EU) Offloads New Mexico Assets Amidst Securities Fraud Allegations, Financial Reporting Scrutiny - Hagens Berman

SAN FRANCISCO, April 2, 2025 /PRNewswire/ -- enCore Energy Corp. (NASDAQ: EU), a uranium extraction firm branding itself as "America's Clean Energy Company," has recently divested its New Mexico uranium projects in a strategic move that coincides with mounting legal challenges and a sharp decline in investor confidence.

Prominent investor rights firm Hagens Berman is investigating the claims and urges investors who purchased enCore Energy shares and suffered substantial losses to submit your losses now. The firm also encourages persons with knowledge that may assist the firm's investigation to contact its attorneys.

Class Period: Mar. 28, 2024 – Mar. 2, 2025
Lead Plaintiff Deadline: May 13, 2025
Visit: www.hbsslaw.com/investor-fraud/eu 
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enCore's Divestiture of its New Mexico Assets:

On March 18, 2024, enCore announced the sale of its Crownpoint, Hosta Butte, Nose Rock, West Largo, and Ambrosia Lake-Treeline projects to Verdera Energy, receiving 50 million preferred shares, representing approximately 73% of Verdera's outstanding shares. This transaction, ostensibly framed as a strategic realignment, has raised eyebrows amidst ongoing scrutiny of enCore's financial reporting and internal controls. The timing of this significant asset divestiture comes as the company faces intensifying legal pressures from shareholders.

enCore Energy Corp. (EU) Securities Class Action:

The sale comes as the company faces a securities class action suit, Zhongjian v. enCore Energy Corp., et al., filed in the Southern District of Texas, alleging that the company made false and misleading statements regarding its financial health and internal controls.

The suit, brought on behalf of investors who purchased enCore securities between March 28, 2024, and March 2, 2025, focuses on the company's assertions about its internal controls and financial reporting, which now appear to be at odds with later admissions. The suit alleges that enCore lacked sufficient internal controls over financial reporting and failed to disclose that it could not capitalize certain exploratory and development costs under U.S. GAAP, leading to substantially increased net losses.

The truth allegedly emerged on March 3, 2025, when the price of enCore shares crashed 46% lower after the company announced that its FY 2024 net loss more than doubled from FY 2023. The company blamed its dismal results on "the inability to capitalize certain exploratory and development costs under U.S. GAAP which would have been capitalized under IFRS [International Financial Reporting Standards]."

In addition, enCore announced that CEO Paul Goranson had been replaced effective immediately and revealed serious weaknesses in its internal control over financial reporting, in stark contrast to its March 28, 2024 assurances that its CEO and CFO had assessed the effectiveness of internal controls as of December 31, 2023, declaring them "effective" with "no material weaknesses" discovered.

enCore's newly revealed internal control issues are extensive. The company admitted to ineffective design, implementation, and operation of process-level control activities related to financial reporting processes. Management attributed these weaknesses to an ineffective control environment, resulting in inadequate risk management, information and communications, and monitoring activities.

Furthermore, enCore acknowledged a lack of effective risk assessment processes for internal control over financial reporting. This deficiency led to unclear financial reporting objectives and insufficient evaluation of risks, including those stemming from changes in the external environment and business operations.

Hagens Berman's Investigation

Investor rights firm Hagens Berman is actively investigating the claims, urging affected investors to come forward.

Reed Kathrein, the Hagens Berman Partner leading the investigation, stated, "We are investigating the extent to which enCore's admitted control weaknesses may have been unknown to investors and the extent to which they may have adversely impacted its financial results."

If you invested in enCore and have substantial losses, or have knowledge that may assist the firm's investigation, submit your losses now »

If you'd like more information and answers to frequently asked questions about the enCore case and our investigation, read more »

Whistleblowers: Persons with non-public information regarding enCore should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email [email protected].

About Hagens Berman
Hagens Berman is a global plaintiffs' rights complex litigation firm focusing on corporate accountability. The firm is home to a robust practice and represents investors as well as whistleblowers, workers, consumers and others in cases achieving real results for those harmed by corporate negligence and other wrongdoings. Hagens Berman's team has secured more than $2.9 billion in this area of law. More about the firm and its successes can be found at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw. 

SOURCE Hagens Berman Sobol Shapiro LLP