NIOCORP DEVELOPMENTS LTD 10-K

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASE OF EQUITY SECURITIES Market Information The Common Shares were first listed and posted for trading on the Vancouver Stock Exchange on December 1, 1987. On March 9, 2015, the Common Shares commenced trading on the TSX under the trading symbol “NB.” In addition, the Company trades on the U.S. Over-the-Counter Bulletin Board and the OTCQX under the symbol “NIOBF” and on the Frankfurt Stock Exchange as “BR3.” The over-the-counter market quotations reflect inter-dealer prices without retail mark-up, mark-down or commission and may not reflect actual transactions. Holders As of June 30, 2021, we had 17,022 holders of record of the Common Shares. Dividends We have not paid any cash dividends on the Common Shares since our inception and do not anticipate paying any cash dividends in the foreseeable future. We plan to retain our earnings, if any, to provide funds for the expansion of our business. Securities Authorized for Issuance Under Equity Compensation Plans See Equity Compensation Plan Information under Item 12. , “ Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ,” for information on plans approved by our shareholders. Purchases of Equity Securities by the Company We did not make any repurchases in the quarter ended June 30, 2021. 39 Recent Sales of Unregistered Securities The following Common Shares were issued pursuant to Section 3(a)(9) of the Securities Act, in connection with the voluntary conversion of a portion of the amount outstanding under the Lind III Convertible Security and based upon representations and warranties of Lind III in connection therewith. Date Conversion Amount Shares Issued Conversion Price/Share June 25, 2021 $600,000 711,026 C$1.0397 June 28, 2021 $500,000 591,174 C$1.0396 June 29, 2021 $500,000 546,311 C$1.1291 August 17, 2021 $600,000 697,376 C$1.0818 The following Common Shares were issued pursuant to Section 3(a)(9) of the Securities Act, in connection with the voluntary conversion of a portion of the amount outstanding under the Nordmin Note and based upon representations and warranties of Nordmin in connection therewith. Date Conversion Amount Shares Issued Conversion Price/Share June 18, 2021 $250,000 267,535 C$1.1532 July 19, 2021 $250,000 267,333 C$1.1776 August 20, 2021 $250,000 266,918 C$1.1981 Exchange Controls There are no governmental laws, decrees, or regulations in Canada that restrict the export or import of capital, including foreign exchange controls, or that affect the remittance of dividends, interest or other payments to non-resident holders of the securities of NioCorp, other than Canadian withholding tax. See “Certain Canadian Federal Income Tax Considerations for U.S. Residents” below. Certain Canadian Federal Income Tax Considerations for U.S. Residents The following summarizes certain Canadian federal income tax consequences generally applicable under the Income Tax Act (Canada) and the regulations enacted thereunder (collectively, the “Canadian Tax Act”) and the Canada-U.S. Income Tax Convention (1980) (the “Convention”) to the holding and disposition of Common Shares. Comment is restricted to holders of Common Shares each of whom, at all material times for the purposes of the Canadian Tax Act and the Convention, (i) is resident solely in the U.S., (ii) is entitled to the benefits of the Convention, (iii) holds all Common Shares as capital property, (iii) holds no Common Shares that are “taxable Canadian property” (as defined in the Canadian Tax Act) of the holder, (iv) deals at arm’s-length with and is not affiliated with NioCorp, (v) does not and is not deemed to use or hold any Common Shares in a business carried on in Canada, and (vi) is not an insurer that carries on business in Canada and elsewhere (each such holder, a “U.S. Resident Holder”). Certain U.S.-resident entities that are fiscally transparent for U.S. federal income tax purposes (including limited liability companies) may not in all circumstances be regarded by the Canada Revenue Agency (the “CRA”) as entitled to the benefits of the Convention. Members of or holders of an interest in such an entity that holds Common Shares should consult their own tax advisers regarding the extent, if any, to which the CRA will extend the benefits of the Convention to the entity in respect of its Common Shares. Generally, a holder’s Common Shares will be considered to be capital property of the holder provided that the holder is not a trader or dealer in securities, did not acquire, hold, or dispose of the Common Shares in one or more transactions considered to be an adventure or concern in the nature of trade (i.e. speculation), and does not hold the Common Shares in the course of carrying on a business. 40 Generally, a holder’s Common Shares will not constitute “taxable Canadian property” of the holder at a particular time at which the Common Shares are listed on a “designated stock exchange” (which currently includes the TSX) unless both of the following conditions are true: (i) at any time during the 60-month period that ends at the particular time, 25% or more of the issued shares of any class of the capital stock of NioCorp were owned by or belonged to one or any combination of: a. the holder, b. persons with whom the holder did not deal at arm’s length, and c. partnerships in which the holder or a person referred to in clause (B) holds a membership interest directly or indirectly through one or more partnerships, and (ii) at any time during the 60-month period that ends at the particular time, more than 50% of the fair market value of the Common Shares was derived directly or indirectly from, one or any combination of, real or immovable property situated in Canada, “Canadian resource properties” (as defined in the Canadian Tax Act), “timber resource properties” (as defined in the Canadian Tax Act), or options in respect of, or interests in any of the foregoing, whether or not the property exists. This summary is based on the current provisions of the Canadian Tax Act and the Convention in effect on the date hereof, all specific proposals to amend the Canadian Tax Act and Convention publicly announced by or on behalf of the Minister of Finance (Canada) on or before the date hereof, and the current published administrative and assessing policies of the CRA. It is assumed that all such amendments will be enacted as currently proposed, and that there will be no other material change to any applicable law or administrative or assessing practice, although no assurance can be given in these respects. Except as otherwise expressly provided, this summary does not take into account any provincial, territorial, or foreign tax considerations, which may differ materially from those set out herein. This summary is of a general nature only, is not exhaustive of all possible Canadian federal income tax considerations, and is not intended to be and should not be construed as legal or tax advice to any particular U.S. Resident Holder. U.S. Resident Holders are urged to consult their own tax advisers for advice with respect to their particular circumstances. The discussion below is qualified accordingly. A U.S. Resident Holder who disposes or is deemed to dispose of one or more Common Shares generally should not thereby incur any liability for Canadian federal income tax in respect of any capital gain arising as a consequence of the disposition. A U.S. Resident Holder to whom NioCorp pays or is deemed to pay a dividend on the holder’s Common Shares will be subject to Canadian withholding tax, and NioCorp will be required to withhold the tax from the dividend and remit it to the CRA for the holder’s account. The rate of withholding tax under the Canadian Tax Act is 25% of the gross amount of the dividend, but should generally be reduced under the Convention to 15% (or, if the U.S. Resident Holder is a company which is the beneficial owner of at least 10% of the voting stock of NioCorp, 5%) of the gross amount of the dividend. For this purpose, a company that is a resident of the U.S. for purposes of the Canadian Tax Act and the Convention and is entitled to the benefits of the Convention shall be considered to own the voting stock of NioCorp owned by an entity that is considered fiscally transparent under the laws of the U.S. and that it is not a resident of Canada, in proportion to the Company’s ownership interest in that entity. ITEM 6. Reserved. ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following Management’s Discussion and Analysis (“MD&A”) provides information that management believes is relevant to an assessment and understanding of the consolidated financial condition and results of operations of NioCorp and subsidiaries. This item should be read in conjunction with our Consolidated Financial Statements and the notes thereto included in this Form 10-K. Discussions related to fiscal 2020 performance as compared to fiscal 2019 performance can be found in Item 7., “ Management’s Discussion and Analysis of Consolidated Financial Condition and Results of Operations” of the Company’s Annual Report on Form 10-K for the year ended June 30, 2020. 41 S ummary of Consolidated Financial and Operating Performance For the year ended June 30, 2021 2020 2019 ($000) Operating expenses $ 4,092 $ 3,432 $ 6,436 Net loss 4,390 4,001 7,336 Net loss per share (basic and diluted) 0.02 0.02 0.03 The Company’s net loss increased slightly to $4.4 million for fiscal 2021 from $4.0 million for fiscal 2020. This increased net loss in 2021 as compared to 2020 is primarily due to 2021 Option grants, which were fully vested and expensed on the grant dates. During the fiscal years ended June 30, 2021 and 2020, the Company had no revenues. Operating expenses incurred related primarily to performing exploration and feasibility study related activities, as well as the activities necessary to support corporate and shareholder duties, and are detailed in the following table. R esults of Operations (dollars in thousands) For the year ended June 30, 2021 2020 2019 Operating expenses: Employee related costs $ 1,655 $ 1,376 $ 1,557 Professional fees 386 327 315 Exploration expenditures 1,056 1,201 3,144 Other operating expenses 995 528 1,420 Total operating expenses 4,092 3,432 6,436 Other income (208 ) - - Loss on extinguishment 163 - - Change in financial instrument fair value (32 ) 38 630 Foreign exchange (gain) loss (729 ) 179 (3 ) Interest expense 1,113 354 266 (Gain) loss on equity securities (9 ) (2 ) 7 Income tax benefit - - - Net Loss $ 4,390 $ 4,001 $ 7,336 Significant items affecting operating expenses are noted below: Employee related costs for fiscal 2021 increased as compared to fiscal 2020 primarily due to increased share-based compensation costs reflecting the timing of Option issuances and the corresponding vesting periods, as well as the number of Options granted and associated fair value calculations. Exploration expenditures decreased in fiscal 2021 as compared to fiscal 2020 reflecting work performed in 2020 to develop the detailed engineering necessary to support the successful Air Permit application. Fiscal 2021 expenditures primarily related to the ongoing personnel costs, as well as ongoing engineering and metallurgical projects and project advancement activities. Other operating expenses include investor relations, general office expenditures, stock and proxy expenditures and other miscellaneous costs. Costs increased in fiscal 2021 as compared to fiscal 2020 primarily due to increases in share-based compensation costs for board members reflecting the timing of Option issuances and the corresponding vesting periods, and increased exchange registration costs associated with the Nordmin Note and the Lind III Convertible Security. These costs were partially offset by a decrease in finance-related contract costs. 42 Other significant items impacting the change in the Company’s net loss are noted below: Foreign exchange (gain) loss is primarily due to changes in the U.S. dollar against the Canadian dollar and the fiscal 2021 gain primarily reflects the impact of a strengthened Canadian dollar as applied to U.S. dollar-denominated debt instruments which are carried on the Canadian parent company books. Foreign exchange loss during fiscal 2020 reflected the impacts of a strengthened U.S. dollar to Canadian dollar rate. Interest expense increased in fiscal 2021 as compared to fiscal 2020 due primarily to the accretion associated with the Lind III Convertible Security and the Nordmin Note, both of which were entered into during fiscal year 2021, as well as an increase in interest expense incurred under the Smith Credit Agreement. L iquidity and Capital Resources We have no revenue generating operations from which we can internally generate funds. To date, our ongoing operations have been financed by the sale of our equity securities by way of private placements, convertible securities issuances, and the exercise of incentive stock options and share purchase warrants. While we believe we will be able to secure additional private placement financings in the future, we cannot predict the size or pricing of any such financings. In addition, we may raise funds through the sale of interests in our mineral properties, although current market conditions and the impacts of the COVID-19 pandemic have reduced the number of potential buyers/acquirers of any such interests. As of June 30, 2021, the Company had cash of $7.3 million and a working capital surplus of $3.4 million, compared to cash of $0.3 million and working capital deficit of $7.7 million on June 30, 2020. The working capital surplus for 2021 is due to the timing of cash inflows from financing activities and warrant exercises, as discussed below under “ Financing Activities ,” and was partially offset by expenditures incurred in connection with the closing of the Option Agreement for the Beethe008 land parcels, related party debt repayments and a continued effort to reduce our outstanding accounts payable balances. We expect that the Company will operate at a loss for the foreseeable future. The Company’s current planned operational needs are approximately $7.3 million until June 30, 2022, inclusive of the partial repayment of the Smith Loan discussed above under “Recent Corporate Events.” In addition to outstanding accounts payable and short-term liabilities, our average monthly expenditures are approximately $385,000 per month where approximately $267,000 is for corporate overhead, lease extensions and estimated costs related to securing financing necessary for advancement of the Elk Creek Project. Approximately $118,000 per month is planned for expenditures relating to the advancement of the Elk Creek Project by ECRC. The Company’s ability to continue operations and fund our current work plan is dependent on management’s ability to secure additional financing. The Company anticipates that it may not have sufficient cash, inclusive of net C$0.8 million received from warrant exercises subsequent to June 30, 2021, to continue to fund basic operations for the next twelve months, and additional funds are likely to be necessary to continue advancing the project in the areas of financing, permitting, and detailed engineering. Management is actively pursuing such additional sources of debt and equity financing, and while it has been successful in doing so in the past, there can be no assurance it will be able to do so in the future. Elk Creek property and lease commitments are $15,000 until June 30, 2022, exclusive of costs incurred to exercise our current land and mineral right option agreements, which expire at various times between September 2021 and May 2040. To maintain its currently held properties and fund its currently anticipated general and administrative costs and planned exploration and development activities at the Elk Creek Project for the fiscal year ending June 30, 2021, the Company will likely require additional financing during the current fiscal year. Should such financing not be available in that timeframe, we will be required to reduce our activities and will not be able to carry out all our presently planned activities at the Elk Creek Project. 43 In addition to the financing transactions discussed below under “ Financing Activities ,” the following transactions impacted our liquidity position during fiscal 2021: ● On December 18, 2020, the Company issued the Nordmin Note and 500,000 Nordmin Warrants to Nordmin pursuant to the Nordmin Agreement under which Nordmin agreed to subscribe for and purchase the Nordmin Note and Nordmin Warrants for a subscription price of approximately $1,804,000, which amount was set off against the amount owing to Nordmin by NioCorp for past services. The Nordmin Note will mature on December 18, 2021, with an implied interest rate of 5% per annum and, subject to certain terms and conditions, is convertible into up to 4,500,000 Common Shares at a conversion price of 92% of the five-day volume-weighted average price Common Shares on the Toronto Stock Exchange at the time of conversion. The Nordmin Note contains restrictions on how much of the principal amount may be converted in any 30-day period. The Nordmin Note also provides the Company with the option to prepay, in whole or in part, any outstanding principal amount thereunder, upon three days’ notice to Nordmin. In addition, Nordmin is entitled to accelerate the maturity of the Nordmin Note and require the Company to prepay the outstanding principal amount upon the occurrence of an event of default and other designated events described in the Nordmin Note. Subject to certain terms and conditions, each Nordmin Warrant is exercisable into one Common Share at a price of C$0.80 per share until December 18, 2022. The Nordmin Note and the Nordmin Warrants are, and the Common Shares underlying the Nordmin Warrants, will be, subject to resale restrictions and are or will be, as applicable, “restricted securities” within the meaning of Rule 144 under the United States Securities Act of 1933. Pursuant to the terms of the Nordmin Agreement, on December 18, 2020, the Company issued 836,551 Common Shares to Nordmin upon an initial conversion of $450,000 in principal amount of the Nordmin Note at a conversion price of C$0.684 per share. ● On April 17, 2020, NioCorp’s subsidiary, Elk Creek Resources Corp., received a U.S. Small Business Administration Loan (the “SBA Loan”) from American National Bank, pursuant to the Paycheck Protection Program (the “PPP”) established under the Coronavirus Aid, Relief, and Economic Security Act, commonly referred to as the CARES Act, in the amount of $196,000. Under the terms of the SBA Loan, the Company may be eligible for full or partial loan forgiveness. The unforgiven portion of the SBA Loan is payable over two years at an annual interest rate of 1%, with a deferral of payments for the first six months. The Company used the proceeds for purposes consistent with the PPP. On October 27, 2020, the Company applied for loan forgiveness of $186,000, comprising the initial SBA Loan balance less $10,000 representing an Economic Injury Disaster Loan Advance grant (the “EIDL advance”) received by the Company in April 2020. On November 18, 2020, the Company was notified that the $186,000 loan forgiveness request had been approved. On December 21, 2020, the U.S. Congress passed the Consolidated Appropriations Act, 2021, which provided additional COVID-19 pandemic relief legislation as well as government funding and other bills. The Consolidated Appropriations Act removes the previous requirement that PPP borrowers deduct the amount of any EIDL advance from their PPP forgiveness amount. The SBA released Procedural Notice 5000-20075, effective January 8, 2021, stating that the SBA will no longer deduct EIDL advances from forgiveness payments remitted to PPP lenders. Accordingly, the Company recorded a gain in other income in the consolidated statement of operations for the remaining $10,000 of the SBA Loan. We currently have no further material funding commitments or arrangements for additional financing at this time (other than the potential exercise of options and warrants) and there is no assurance that we will be able to obtain additional financing on acceptable terms, if at all. There is significant uncertainty that we will be able to secure any additional financing in the current equity or debt markets. The quantity of funds to be raised and the terms of any proposed equity or debt financing that may be undertaken will be negotiated by management as opportunities to raise funds arise. Management intends to pursue funding sources of both debt and equity financing, including but not limited to the issuance of equity securities in the form of Common Shares, warrants, subscription receipts, or any combination thereof in units of the Company pursuant to private placements to accredited investors or pursuant to equity lines of credit or public offerings in the form of underwritten/brokered offerings, at-the-market offerings, registered direct offerings, or other forms of equity financing and public or private issuances of debt securities including secured and unsecured convertible debt instruments or secured debt project financing. Management does not currently know the terms pursuant to which such financings may be completed in the future, but any such financings will be negotiated at arm’s-length. Future financings involving the issuance of equity securities or derivatives thereof will likely be completed at a discount to the then-current market price of the Company’s securities and will likely be dilutive to current shareholders. 44 Based on the conditions described within, management has concluded and the audit opinion and notes that accompany our financial statements for the year ended June 30, 2021, disclose that substantial doubt exists as to our ability to continue in business. The financial statements included in this Annual Report on Form 10-K have been prepared under the assumption that we will continue as a going concern. We are an exploration stage company and we have incurred losses since our inception. The Company anticipates that it may not have sufficient cash, including warrant exercises subsequent to June 30, 2021, to continue to fund basic operations for the next twelve months, therefore, additional funds are likely to be necessary to continue advancing the project in the areas of financing, permitting, and detailed engineering. While the COVID-19 pandemic did negatively impact our ability to obtain project financing during fiscal 2021, the full extent to which the COVID-19 pandemic and our precautionary measures may continue to impact our business will depend on future developments, which continue to be highly uncertain and cannot be predicted at this time. These include, but are not limited to, the duration and geographic spread of the pandemic, its severity, the actions to contain the virus or treat its impact, future spikes of COVID-19 infections resulting in additional preventative measures to contain or mitigate the spread of the virus, the effectiveness, distribution and acceptance of COVID-19 vaccines, including the vaccines’ efficacy against emerging COVID-19 variants, and how quickly and to what extent normal economic and operating conditions can resume. We believe that the going concern uncertainty cannot be alleviated with confidence until the Company has entered into a business climate where funding of its planned ongoing operating activities is secured. We have no exposure to any asset-backed commercial paper. Other than cash held by our subsidiaries for their immediate operating needs in Colorado and Nebraska, all of our cash reserves are on deposit with major U.S. and Canadian chartered banks. We do not believe that the credit, liquidity, or market risks with respect thereto have increased as a result of the current market conditions. However, in order to achieve greater security for the preservation of our capital, we have, of necessity, been required to accept lower rates of interest, which has also lowered our potential interest income. Operating Activities During the year ended June 30, 2021, the Company’s operating activities consumed $4.7 million of cash (2020: $3.0 million). The cash used in operating activities for fiscal 2021 reflects the Company’s funding of losses of $4.4 million, partially offset by minor non-cash adjustments and changes in working capital items. Overall, fiscal 2021 operational outflows were higher than fiscal 2020 due primarily to the reduction of outstanding accounts payable balances during fiscal year 2021. Going forward, the Company’s working capital requirements are expected to increase substantially in connection with the development of the Elk Creek Project. Investing Activities During the year ended June 30, 2021, the Company’s investing activities consumed $6.3 million of cash (2020: nil). The cash used in investing activities for fiscal 2021 reflects the Company’s purchase of the land and mineral rights discussed above under Part I., Item 2 “ Properties-Other Elk Creek Project Activities .” Financing Activities Net cash provided by financing activities was $18.1 million in fiscal 2021, compared to $3.0 million in fiscal 2020. This increase in financing inflows primarily reflect the timing of cash inflows from the Lind III Agreement, the April 2021 Private Placement (as defined below), and warrant exercises to support current operations, partially offset by expenditures incurred in connection with the Option Agreement for the Beethe008 land parcels, and debt repayments. 45 The following is a discussion of significant financing transactions for fiscal year 2021: ● On February 19, 2021, the Company issued the Lind III Convertible Security pursuant to the Lind III Agreement. The Lind III Convertible Security has a face value of $11.7 million (representing $10.0 million in funding plus an closed an implied 8.5% interest rate per annum for the term of the Lind III Convertible Security). After deducting a $350,000 commitment fee as set forth in the Lind III Agreement, NioCorp received net proceeds of $9.7 million from the funding of the Lind III Convertible Security. The Company used the proceeds from the funding of the Lind III Convertible Security to pay the exercise price under the Option Agreement, as discussed above under Part I., Item 2 “ Properties—Other Elk Creek Project Activities ,” as well as for general corporate purposes. The Lind III Convertible Security has a term of (i) 24 months or (ii) 30 calendar days after the date on which the face value of the Lind III Convertible Security is nil due to such amount having been fully converted and/or fully repaid (including with any applicable premium) in accordance with the terms of the Lind III Agreement, whichever is earlier. The Lind III Convertible Security constitutes the direct, general and unconditional obligation of the Company and ranks pari-passu with the Company’s other indebtedness. The Lind III Convertible Security is guaranteed on a secured basis by 0896800 and ECRC. The Lind III Convertible Security is secured by all of the assets and property of the Company and 0896800, including all of the issued and outstanding shares of 0896800 pledged by the Company and all of the issued and outstanding shares of ECRC pledged by 0896800, and certain real property and fixtures of ECRC. The liens securing the Lind III Convertible Security rank pari-passu with the liens securing the Smith Credit Agreement. The liens securing the Lind III Convertible Security rank senior to the liens securing the Smith Credit Agreement on any amount that is owed by the Company to Mr. Smith in excess of $4.0 million. Pursuant to the Lind III Agreement, Lind III is entitled to convert the Lind III Convertible Security into Common Shares in monthly installments over its term at a price per Common Share equal to 85% of the volume-weighted average price Common Shares on the Toronto Stock Exchange (“TSX”) for the five trading days immediately preceding to the date on which Lind III provides notice to the Company of its election to convert. Subject to certain exceptions, the Lind III Agreement contains restrictions on how much of the Lind III Convertible Security may be converted in any particular month. The Lind III Agreement also provides NioCorp with the option to buy back the remaining face amount of the Lind III Convertible Security in cash at any time; provided that, if the Company exercises such option, Lind III will have the option to convert up to 33.33% of the remaining face amount into Common Shares at the price described above. In addition, Lind III is entitled to accelerate its conversion right to the full amount of the face value of the Lind III Convertible Security or demand repayment thereof in cash upon the occurrence of an event of default and other designated events described in the Lind III Agreement. On February 19, 2021, in connection with the funding and issuance of the Lind III Convertible Security, the Company issued 8,558,000 Lind III Warrants to Lind III pursuant to the Lind III Agreement. The Lind III Convertible Security and the Lind III Warrants were issued pursuant to the exemption from the registration requirements of the Securities Act provided by Section 4(a)(2) thereof based upon the representations and warranties of Lind III in the Lind III Agreement. ● On May 10, 2021, the Company closed a non-brokered private placement (the “April 2021 Private Placement”) of units of the Company (“Units”). A total of 4,334,157 Units were issued at a price per Unit of C$1.43, for total gross proceeds to the Company of approximately C$6.2 million. Each Unit issued pursuant to the April 2021 Private Placement consisted of one Common Share and one warrant (each, an “April 2021 Warrant”). Each April 2021 Warrant entitles the holder thereof to purchase one additional Common Share at a price of C$1.63 for a period of two years from the date of issuance. Proceeds of the April 2021 Private Placement will be used for continued advancement of the Company’s Elk Creek Superalloy Materials Project, including ongoing detailed engineering efforts, conducting technical assessments of potentially adding rare earth products to the planned product offering, and for working capital and general corporate purposes. The Company paid cash commissions of C$111,000 and issued 77,961 broker warrants (having the same terms as the April 2021 Warrants) in connection with the April 2021 Private Placement to brokers outside of the United States. The broker warrants were valued at C$24,000 using a risk-free rate of 0.2791%, expected volatility of 55.42% and expected life of two years. 46 ● On April 30, 2021, the Company repaid $1.0 million to Mr. Smith to retire all of the outstanding balance on the loan (the “Smith Loan”) pursuant to the Loan Agreement, dated June 17, 2015, by and between the Company and Mr. Smith, as amended from time to time. On April 30, 2021, and May 4, 2021, the Company repaid $250,000 and $250,000, respectively, representing partial repayments on the Smith Credit Agreement. Each of these loan repayments utilized proceeds from the exercise of warrants. Additionally, on May 4, 2021, the Company repaid $138,000 to Mr. Smith, representing accrued interest on the Smith Loan through the repayment date noted above and accrued interest on the Smith Credit Agreement through April 30, 2021. On July 23, 2021, the Company repaid $358,000 to Mr. Smith, representing a partial repayment of $318,000 on the Smith Credit Agreement, plus accrued interest through June 30, 2021. C ash Flow Considerations The Company has historically relied upon equity financings, and to a lesser degree, debt financings, to satisfy its capital requirements and will continue to depend heavily upon equity capital to finance its activities. The Company may pursue debt financing in the medium term if it is able to procure such financing on terms more favorable than available equity financing; however, there can be no assurance the Company will be able to obtain any required financing in the future on acceptable terms. The Company has limited financial resources compared to its proposed expenditures, no source of operating income, and no assurance that additional funding will be available to it for current or future projects, although the Company has been successful in the past in financing its activities through the sale of equity securities. The ability of the Company to arrange additional financing in the future will depend, in part, on the prevailing capital market conditions and its success in developing the Elk Creek Project. Any quoted market for the Common Shares may be subject to market trends generally, notwithstanding any potential success of the Company in creating revenue, cash flows, or earnings, and any depression of the trading price of the Company’s Common Shares could impact its ability to obtain equity financing on acceptable terms. Historically, the Company has used net proceeds from issuances of Common Shares to provide sufficient funds to meet its near-term exploration and development plans and other contractual obligations when due. However, further development and construction of the Elk Creek Project will require substantial additional capital resources. This includes near-term funding and, ultimately, long-term funding (including debt and equity financing) for Elk Creek Project construction and other costs. Debt Covenants The Lind III Convertible Security contains financial and non-financial covenants customary for a facility of this size and nature, and includes a financial covenant defining an event of default as all present and future liabilities of the Company or any of its subsidiaries, exclusive of related party loans, for an amount or amounts exceeding C$2.0 million, and which have not been satisfied on time or within 90 days of invoice, or have become prematurely payable as a result of its default or breach. In addition, The Smith Credit Agreement contains financial and non-financial covenants customary for a facility of its size and nature. The Company was in compliance with these covenants as of June 30, 2021. Contractual Obligations Our contractual obligations at June 30, 2021, are summarized as follows (amounts in thousands): Payments due by period Total Less than 1 year 1-3 years 4-5 years After 5 years Debt $ 13,761 $ 3,661 1 $ 10,100 2 $ - $ - Operating leases 272 96 131 15 30 Total contractual obligations $ 14,033 $ 3,757 $ 10,231 $ 15 $ 30 (1) Amounts represent principal of $3,490 and estimated interest payments of $171, assuming no early extinguishment. (2) Amounts represent principal of $8,632 and prepaid interest of $1,468. 47 O ff-Balance Sheet Arrangements The Company does not have any off-balance sheet arrangements. E nvironmental Our mining and exploration activities are subject to various federal and state laws and regulations governing the protection of the environment. We have made, and expect to make in the future, expenditures to comply with such laws and regulations, but cannot predict the full amount of such future expenditures. As of June 30, 2021 and 2020, we had accrued $48,000 and $48,000, respectively, related to estimated environmental obligations. F orward-Looking Statements The foregoing discussion and analysis, as well as certain information contained elsewhere in this Annual Report on Form 10-K, contain “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, and are intended to be covered by the safe harbor created thereby. See the discussion in “Forward-Looking Statements” in Item 1., “Business.” A ccounting Developments For a discussion of Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements, see Note 3 to the Consolidated Financial Statements. C ritical Accounting Policies Listed below are the accounting policies that we believe are critical to our financial statements due to the degree of uncertainty regarding the estimates or assumptions involved and the magnitude of the asset, liability, revenue or expense being reported. Our discussion of financial condition and results of operations is based upon the information reported in our Consolidated Financial Statements. The preparation of these Consolidated Financial Statements in conformity with U.S. GAAP requires us to make assumptions and estimates that affect the reported amounts of assets, liabilities, revenues, and expenses, as well as the disclosure of contingent assets and liabilities as of the date of our financial statements. We base our assumptions and estimates on historical experience and various other sources that we believe to be reasonable under the circumstances. Actual results may differ from the estimates we calculate due to changes in circumstances, global economics and politics, and general business conditions. A summary of our significant accounting policies is detailed in Note 3 to the Consolidated Financial Statements. We have outlined below those policies identified as being critical to the understanding of our business and results of operations and that require the application of significant management judgment. Carrying Value of Long-Lived Assets The recoverability of the carrying values of mineral properties is dependent upon economic reserves being discovered or developed on the properties, permitting, financing, start-up, and commercial production from, or the sale/lease of, or other strategic transactions related to these properties. Development and/or start-up of a project will depend on, among other things, management’s ability to raise sufficient capital for these purposes. We assess the carrying cost of our mineral properties for impairment whenever information or circumstances indicate the potential for impairment. This would include events and circumstances such as our inability to obtain all the necessary permits, changes in the legal status of our mineral properties, government actions, the results of exploration activities and technical evaluations and changes in economic conditions, including the price of commodities or input prices. Such evaluations compare estimated future net cash flows with our carrying costs and future obligations on an undiscounted basis. If it is determined that the estimated future undiscounted cash flows are less than the carrying value of the property, an impairment loss will be recorded. Where estimates of future net cash flows are not determinable and where other conditions indicate the potential for impairment, management uses available market information and/or third-party valuation experts to assess if the carrying value can be recovered and to estimate fair value. 48 We review and evaluate our long-lived assets, other than mineral properties, for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. An impairment loss is measured and recorded based on the estimated fair value of the long-lived assets being tested for impairment and their carrying amounts. Income Taxes We account for income taxes using the liability method, recognizing certain temporary differences between the financial reporting basis of our liabilities and assets and the related income tax basis for such liabilities and assets. This method generates a net deferred income tax liability or asset, as measured by the statutory tax rates in effect. We derive our deferred income tax expense or benefit by recording the change in the net deferred income tax liability or asset balance for the year. With respect to the earnings we derive from the operations of our consolidated subsidiaries, in those situations where the earnings are indefinitely reinvested, no deferred taxes have been provided on the unremitted earnings (including the excess of the carrying value of the net equity of such entities for financial reporting purposes over the tax basis of such equity) of our consolidated subsidiaries. We are subject to reviews of our income tax filings and other tax payments, and disputes can arise with the taxing authorities over the interpretation of its contracts or laws. We recognize and record potential tax liabilities and record tax liabilities for anticipated tax audit issues in the U.S. and other tax jurisdictions based on our estimate of whether, and the extent to which, additional taxes will be due. We adjust these reserves in light of changing facts and circumstances; however, due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate. If our estimate of tax liabilities proves to be different than the ultimate assessment, an additional expense or benefit would result. We recognize interest and penalties, if any, related to unrecognized tax benefits in Income tax benefit (expense). In certain jurisdictions, we must pay a portion of the disputed amount to the local government in order to formally appeal the assessment. Such payment is recorded as a receivable if we believe the amount is ultimately recoverable. Valuation of Deferred Tax Assets Our deferred income tax assets include certain future tax benefits. We record a valuation allowance against any portion of those deferred income tax assets when we believe, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized. We review the likelihood that we will realize the benefit of our deferred tax assets and therefore the need for valuation allowances on a quarterly basis, or more frequently if events indicate that a review is required. In determining the requirement for a valuation allowance, the historical and projected financial results of the legal entity or consolidated group recording the net deferred tax asset is considered, along with all other available positive and negative evidence. 49 O ther The Company has one class of shares, being Common Shares. A summary of outstanding shares, share options, warrants, and convertible debt option as of September 8, 2021, is set out below, on a fully-diluted basis. Common Shares Outstanding (fully diluted) Common Shares 258,683,308 Stock options 1 15,765,000 Warrants 1 13,470,118 Convertible Debt 2 12,325,177 1 Each exercisable into one Common Share 2 Represents Common Shares issuable on conversion of aggregate outstanding principal amounts of US$10.2 million of convertible debt as of September 8, 2021, assuming a market price per Common Share of $0.9056 on that date. I TEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK I nterest rate risk The Company’s exposure to changes in market interest rates, relates primarily to the Company’s earned interest income on cash deposits and short-term investments. The Company maintains a balance between the liquidity of cash assets and the interest rate return thereon. The carrying amount of financial assets, net of any provisions for losses, represents the Company’s maximum exposure to credit risk. F oreign currency exchange risk The company incurs expenditures in both U.S. and Canadian dollars. Canadian dollar expenditures are primarily related to engineering and metallurgical exploration expenses, as well as certain professional services. As a result, currency exchange fluctuations may impact the costs of our operating activities. To reduce this risk, we maintain sufficient cash balances in Canadian dollars to fund expected near-term expenditures. C ommodity price risk The Company is exposed to commodity price risk related to the elements associated with the Elk Creek Project. A significant decrease in the global demand for these elements may have a material adverse effect on our business. The Elk Creek Project is not in production, and the Company does not currently hold any commodity derivative positions. I TEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Q uarterly Results The following is a summary of selected quarterly financial information (unaudited, amounts in thousands, except per share amounts): Fiscal Year Ended June 30, 2021 Fiscal Year Ended June 30, 2020 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Total Operating Expenses $ 1,063 $ 1,213 $ 845 $ 971 $ 892 $ 1,001 $ 817 $ 722 Net Loss $ 1,053 $ 1,081 $ 1,013 $ 1,243 $ 1,005 $ 1,076 $ 1,262 $ 658 Loss Per Common Share $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 50 Report of Independent Registered Public Ac counting Firm Shareholders and Board of Directors NioCorp Developments Ltd. Centennial, Colorado Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of NioCorp Developments Ltd. (the “Company”) as of June 30, 2021 and 2020, the related consolidated statements of operations and comprehensive loss, shareholders’ equity, and cash flows for each of the three years in the period ended June 30, 2021, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at June 30, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2021, in conformity with accounting principles generally accepted in the United States of America. Going Concern Uncertainty The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 4 to the consolidated financial statements, the Company has suffered recurring losses from operations, and has an accumulated deficit. In addition, the COVID-19 pandemic could have a material adverse impact on the Company’s results of operations, cash flows and liquidity. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 4. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ BDO USA, LLP We have served as the Company’s auditor since 2015. Spokane, Washington September 8, 2021 51 NioCorp Developments Ltd. Consolidated Balance Shee ts (expressed in thousands of U.S. dollars, except share data) As of June 30, Note 2021 2020 ASSETS Current Cash $ 7,317 $ 307 Prepaid expenses and other 24 31 Total current assets 7,341 338 Non-current Deposits 35 35 Investment in equity securities 16 7 Right-of-use assets 12 156 - Land and buildings, net 5 837 - Mineral interests 5 16,085 10,617 Total assets $ 24,470 $ 10,997 LIABILITIES Current Accounts payable and accrued liabilities 6 $ 408 $ 3,065 Related party loan 10 2,318 3,818 Convertible debt, current portion 7 1,123 838 Operating lease liability 12 69 - Notes payable, current portion 8 - 258 Derivative liability, convertible debt 7 - 33 Total current liabilities 3,918 8,012 Non-current Notes payable, net of current portion 8 - 344 Operating lease liability 12 105 - Convertible debt, net of current portion 7 6,784 - Total liabilities 10,807 8,356 Commitments and contingencies SHAREHOLDERS’ EQUITY Common stock, no par value, unlimited shares authorized; shares outstanding: 256,379,931 at June 30, 2021 and 235,925,684 at June 30, 2020 9 113,882 97,682 Accumulated deficit (99,076 ) (94,686 ) Accumulated other comprehensive loss (1,143 ) (355 ) Total shareholder equity 13,663 2,641 Total liabilities and equity $ 24,470 $ 10,997 The accompanying notes are an integral part of these consolidated financial statements 52 NioCorp Developments Ltd. Consolidated Statements of Operations and Comprehensive Loss (expressed in thousands of U.S. dollars, except share and per share data) For the year ended June 30, Note 2021 2020 2019 Operating expenses Employee related costs $ 1,655 $ 1,376 $ 1,557 Professional fees 386 327 315 Exploration expenditures 11 1,056 1,201 3,144 Other operating expenses 995 528 1,420 Total operating expenses 4,092 3,432 6,436 Change in financial instrument fair value 7 (32 ) 38 630 Other income 8 (208 ) - - Loss on debt extinguishment 7 163 - - Foreign exchange loss (gain) (729 ) 179 (3 ) Interest expense 1,113 354 266 (Gain) loss on equity securities (9 ) (2 ) 7 Loss before income taxes 4,390 4,001 7,336 Income tax benefit 14 - - - Net loss $ 4,390 $ 4,001 $ 7,336 Other comprehensive loss: Net loss $ 4,390 $ 4,001 $ 7,336 Other comprehensive (gain) loss: Reporting currency translation 788 (171 ) 6 Total comprehensive loss $ 5,178 $ 3,830 $ 7,342 Loss per common share, basic and diluted $ 0.02 $ 0.02 $ 0.03 Weighted average common shares outstanding 241,967,116 234,610,126 223,160,189 The accompanying notes are an integral part of these consolidated financial statements 53 NioCorp Developments Ltd. Consolidated Statements of Cash Flow s (expressed in thousands of U.S. dollars) For the year ended June 30, 2021 2020 2019 CASH FLOWS FROM OPERATING ACTIVITIES Total loss for the period $ (4,390 ) $ (4,001 ) $ (7,336 ) Adjustments for: Noncash lease expense 30 - - Change in financial instrument fair value (32 ) 38 630 Unrealized (gain) loss on equity securities (9 ) (2 ) 7 Accretion of convertible debt 670 - 44 Foreign exchange (gain) loss (665 ) 144 23 Gain on debt forgiveness (196 ) - - Loss on debt extinguishment 163 - - Write-off of deferred costs - - 474 Share-based compensation 797 153 604 (3,632 ) (3,668 ) (5,554 ) Change in working capital items: Receivables - - - Prepaid expenses 9 40 (53 ) Accounts payable and accrued liabilities (1,103 ) 579 1,252 Net cash used in operating activities (4,726 ) (3,049 ) (4,355 ) CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of mineral rights (5,468 ) - - Acquisition of land and buildings (837 ) Net cash used in investing activities (6,305 ) - - CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of capital stock 10,677 470 3,794 Share issue costs (174 ) - (134 ) Issuance of convertible debt, net of costs 9,477 - 1,000 Loan repayments (406 ) - - Related party debt draws - 2,338 - Related party debt repayments (1,500 ) - - Long term debt funding - 196 - Net cash provided by financing activities 18,074 3,004 4,660 Exchange rate effect on cash, cash equivalents and restricted cash (33 ) (5 ) (21 ) Change in cash, cash equivalents and restricted cash during period 7,010 (50 ) 284 Cash, cash equivalents and restricted cash, beginning of period 307 357 73 Cash, cash equivalents and restricted cash, end of period $ 7,317 $ 307 $ 357 Supplemental cash flow information: Amounts paid for interest $ 873 $ 64 $ 129 Amounts paid for income taxes - - - Non-cash investing and financing transactions: Conversion of debt for common shares $ 3,106 $ 980 $ 4,582 Recognition of operating lease liabilities 231 - - Derecognition of operating lease liabilities (22 ) - - Accounts payable to note conversion 1,640 406 - Value of warrants issued 1,795 - 156 The accompanying notes are an integral part of these consolidated financial statements 54 NioCorp Developments Ltd. Consolidated Statements of Shareholders’ Eq uity (expressed in thousands of U.S. dollars, except share data) Common Shares Outstanding Common Stock Deficit Accumulated other comprehensive income Total Balance, July 1, 2018 213,405,372 $ 87,062 $ (83,349 ) $ (520 ) $ 3,193 Exercise of warrants 115,000 64 - - 64 Exercise of options 16,203 - - - - Fair value of warrants granted - 156 - - 156 Private placement – September 2018 4,975,158 2,412 - - 2,412 Private placement – April 2019 2,957,164 1,317 - - 1,317 Debt conversions 11,027,318 4,582 - - 4,582 Share issuance costs - (134 ) - - (134 ) Share-based compensation - 604 - - 604 Reporting currency presentation - - - (6 ) (6 ) Loss for the year - - (7,336 ) - (7,336 ) Balance, June 30, 2019 232,496,215 $ 96,063 $ (90,685 ) $ (526 ) $ 4,852 Exercise of warrants 664,549 338 - - 338 Exercise of options 320,500 148 - - 148 Debt conversions 2,444,420 980 - - 980 Share-based compensation - 153 - - 153 Reporting currency presentation - - - 171 171 Loss for the year - - (4,001 ) - (4,001 ) Balance, June 30, 2020 235,925,684 $ 97,682 $ (94,686 ) $ (355 ) $ 2,641 Exercise of warrants 9,106,283 5,338 - - 5,338 Exercise of options 2,952,296 215 - - 215 Fair value of warrants granted - 1,795 - - 1,795 Private placement – May 2021 4,334,157 5,124 - - 5,124 Debt conversions 4,061,511 3,106 - - 3,106 Share issuance costs - (175 ) - - (175 ) Share-based compensation - 797 - - 797 Reporting currency presentation - - - (788 ) (788 ) Loss for the year - - (4,390 ) - (4,390 ) Balance, June 30, 2021 256,379,931 $ 113,882 $ (99,076 ) $ (1,143 ) $ 13,663 The accompanying notes are an integral part of these consolidated financial statements 55 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2021 (expressed in thousands of U.S. dollars, except share and per share data) 1. DESCRIPTION OF BUSINESS NioCorp Developments Ltd. (the “Company”) was incorporated on February 27, 1987, under the laws of the Province of British Columbia and currently operates in one reportable operating segment consisting of exploration and development of mineral deposits in North America, specifically, the Elk Creek Niobium/Scandium/Titanium property (the “Elk Creek Project”) located in Southeastern Nebraska. These consolidated financial statements have been prepared on a going concern basis that contemplates the realization of assets and discharge of liabilities at their carrying values in the normal course of business for the foreseeable future. These financial statements do not reflect any adjustments that may be necessary if the Company is unable to continue as a going concern. The Company currently earns no operating revenues and will require additional capital in order to advance the Elk Creek Project. These matters raised substantial doubt about the Company’s ability to continue as a going concern, and the Company is dependent upon the generation of profits from mineral properties, obtaining additional financing and maintaining continued support from its shareholders and creditors. 2. BASIS OF PREPARATION a) Basis of Preparation and Consolidation These consolidated financial statements have been prepared in conformity with generally accepted accounting principles of the U.S. (“U.S. GAAP”). Certain transactions include reference to Canadian dollars (“C$”) where applicable. These consolidated financial statements include the accounts of the Company and the subsidiaries listed in the following table. All intercompany transactions and balances have been eliminated. Country of Ownership at June 30, incorporation 2021 2020 0896800 BC Ltd. (“0896800”) Canada 100 % 100 % Elk Creek Resources Corp. (“ECRC”) USA 100 % 100 % b) Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the deferred income tax asset valuations and share-based compensation. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between estimates and the actual results, future results of operations will be affected. c) Prior Period Presentation During fiscal year 2021 the Company combined the presentation of Additional Paid in Capital into the Common stock line item in Shareholders’ Equity on the consolidated balance sheets. This presentation change was made as the Company’s common shares are issued at no par value (“Common Shares”), and the fiscal year 2020 and 2019 presentations were changed to conform with the current period presentation. 3. SIGNIFICANT ACCOUNTING POLICIES a) Exploration Stage Enterprise The Company is in the exploration stage of operation and devotes substantially all of its efforts to acquiring and exploring mining interests that management believes should eventually provide sufficient net profits to sustain the Company’s existence. Until such interests are engaged in commercial production, the Company will continue to seek additional funding to support the completion of its exploration and development activities. The Company’s activities are subject to significant risks and uncertainties, including its ability to secure sufficient funding to continue operations, to obtain proven and probable reserves, to comply with industry regulations and obtain permits necessary for development of the Elk Creek Project, as well as environmental risks and market conditions. 56 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2021 (expressed in thousands of U.S. dollars, except share and per share data) b) Cash and Cash Equivalents Cash and cash equivalents include cash on hand, cash in banks, investments in certificates of deposit with original maturities of 90 days or less, and money market funds. c) Foreign Currency Translation Functional and reporting currency Items included in the financial statements of each of the Company’s entities are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The functional currency of the Company is the Canadian dollar and the functional currency for Elk Creek Resources Corp., a wholly owned subsidiary, is the U.S. dollar. The reporting currency for these consolidated financial statements is U.S. dollars. Transactions in foreign currency Transactions made in a currency other than the functional currency are remeasured to the functional currency at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are remeasured to the functional currency at the exchange rate at that date and non-monetary assets and liabilities are remeasured at historical rates. Foreign currency translation gains and losses are included in profit or loss. Translation to reporting currency The results and financial position of entities that have a functional currency different from the reporting currency are translated into the reporting currency as follows: ● Assets and liabilities for each statement of financial position presented are translated at the closing rate at the end of the reporting date. ● Income and expenses for each statement of income are translated at average exchange rates, unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions. ● All resulting exchange differences are recognized in other comprehensive income. d) Mineral Properties Mineral property acquisition costs, including indirectly related acquisition costs, are capitalized when incurred. Acquisition costs include cash consideration and the fair market value of Common Shares issued as consideration. Properties acquired under option agreements, whereby payments are made at the sole discretion of the Company, are capitalized as mineral property acquisition costs at such time as the payments are made. Exploration costs are expensed as incurred. When it is determined that a mining deposit can be economically and legally extracted or produced based on established proven and probable reserves under the United States Securities and Exchange Commission (“SEC”) Industry Guide 7, development costs related to such reserves and incurred after such determination will be considered for capitalization. The establishment of proven and probable reserves is based on results of feasibility studies, which indicate whether a property is economically feasible. Upon commencement of commercial production, capitalized costs will be amortized over their estimated useful lives or units of production, whichever is a more reliable measure. Capitalized amounts relating to a property that is abandoned or otherwise considered uneconomic for the foreseeable future are written off. 57 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2021 (expressed in thousands of U.S. dollars, except share and per share data) The recoverability of the carrying values of mineral properties is dependent upon economic reserves being discovered or developed on the properties, permitting, financing, start-up, and commercial production from, or the sale/lease of, or other strategic transactions related to these properties. Development and/or start-up of a project will depend on, among other things, management’s ability to raise sufficient capital for these purposes. We assess the carrying cost of our mineral properties for impairment whenever information or circumstances indicate the potential for impairment. This would include events and circumstances such as our inability to obtain all the necessary permits, changes in the legal status of our mineral properties, government actions, the results of exploration activities and technical evaluations and changes in economic conditions, including the price of commodities or input prices. Such evaluations compare estimated future net cash flows with our carrying costs and future obligations on an undiscounted basis. If it is determined that the estimated future undiscounted cash flows are less than the carrying value of the property, an impairment loss will be recorded. Where estimates of future net cash flows are not determinable and where other conditions indicate the potential for impairment, management uses available market information and/or third-party valuation experts to assess if the carrying value can be recovered and to estimate fair value. e) Long Lived Assets Long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. For purposes of evaluating the recoverability of long-lived assets, the recoverability test is performed using undiscounted net cash flows related to the long-lived assets. If such assets are considered to be impaired, the impairment recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. f) Leases Effective July 1, 2019, we adopted ASC 842, Leases. The impact of this adoption was immaterial. Under ASC 842, we determine if a contractual arrangement is, or contains, a lease at the inception date. Right-of-use (“ROU”) assets and liabilities related to operating leases are separately reported in the consolidated balance sheets. The Company currently has no finance leases. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the lease term. When the rate implicit to the lease cannot be readily determined, we utilize our incremental borrowing rate in determining the present value of the future lease payments. The incremental borrowing rate is derived from information available at the lease commencement date and represents the rate of interest that a lessee would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term in a similar economic environment. Operating lease ROU assets also include any cumulative prepaid or accrued rent when the lease payments are uneven throughout the lease term. The ROU assets and lease liabilities may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease liabilities are increased by interest and reduced by payments each period, and the ROU asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the ROU asset result in straight-line rent expense over the lease term. Variable lease expenses are recorded when incurred. g) Financial Instruments The Company’s financial instruments consist of cash, receivables, equity securities, accounts payable and accrued liabilities, convertible debt and the related party loan. It is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from its financial instruments. The fair values of these instruments approximate their carrying value unless otherwise noted. h) Concentration of Credit Risk The financial instrument which potentially subjects the Company to credit risk is cash and cash equivalents, The Company holds investments or maintains available cash primarily in two commercial banks located in Vancouver, British Columbia and Santa Clara, California. As part of its cash management process, the Company regularly monitors the relative credit standing of these institutions. i) Asset Retirement Obligation The Company is subject to various government laws and regulations relating to environmental disturbances caused by exploration and evaluation activities. The estimated costs associated with environmental remediation obligations are accrued in the period in which the liability is incurred if it is reasonably estimable or known. Until such time that a project life is established, the Company records the corresponding cost as an exploration stage expense and has accrued $48 related to estimated obligations as of June 30, 2021 (2020 - $48). Future reclamation and environmental-related expenditures are difficult to estimate in many circumstances due to the early-stage nature of the Elk Creek Project, the uncertainties associated with defining the nature and extent of environmental disturbance, the application of laws and regulations by regulatory authorities and changes in reclamation or remediation technology. The Company periodically reviews accrued liabilities for such reclamation and remediation costs as evidence indicating that the liabilities have potentially changed becomes available. Changes in estimates are reflected in the consolidated statement of operations in the period an estimate is revised. j) Income Taxes Income taxes are provided based upon the liability method of accounting pursuant to Accounting Standards Codification (“ASC”) 740-10-25, “Income Taxes – Recognition.” Under the approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded against deferred tax assets if management does not believe the Company has met the “more likely than not” standard imposed by ASC 740-10-25-5 to allow recognition of such an asset. k) Basic and Diluted Per Share Disclosure Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of Common Shares outstanding. In computing diluted earnings per share, the weighted average number of shares outstanding is adjusted to reflect the effect of potentially dilutive securities. Potentially dilutive shares, such as stock options and warrants, are excluded from the calculation when their inclusion would be anti-dilutive, such as when the exercise price of the instrument exceeds the fair market value of the Company’s common stock and when a net loss is reported. The dilutive effect of convertible debt securities is reflected in the diluted earnings (loss) per share calculation using the if-converted method. Conversion of the debt securities is not assumed for purposes of calculating diluted earnings (loss) per share if the effect is anti-dilutive. 58 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2021 (expressed in thousands of U.S. dollars, except share and per share data) l) Share Based Compensation The Company grants stock options to directors, officers, and employees. Option terms and vesting conditions are at the discretion of the Board of Directors. The option exercise price is equal to the closing market price on the Toronto Stock Exchange on the day preceding the date of grant. The Company estimates the fair value of stock options using the Black-Scholes option pricing model. The Company recognizes forfeitures as they occur. m) Recent Accounting Standards Issued and Adopted In July 2020, NioCorp adopted Accounting Standards Update (“ASU”) 2018-13 – “Fair Value Measurements (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement.” This update modifies the disclosure requirements on fair value measurements in Topic 820 and eliminates ‘at a minimum’ from the phrase ‘an entity shall disclose at a minimum’ to promote the appropriate exercise of discretion by entities when considering fair value disclosures and to clarify that materiality is an appropriate consideration. The adoption of this standard had no impact on the consolidated financial statements. Issued and Not Effective In August 2020, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40),” which simplifies the accounting for convertible instruments. The guidance removes certain accounting models which separate the embedded conversion features from the host contract for convertible instruments, requiring bifurcation only if the convertible debt feature qualifies as a derivative or for convertible debt issued at a substantial premium. The ASU removes certain settlement conditions required for equity contracts to qualify for the derivative scope exception, permitting more contracts to qualify for the exception. In addition, the guidance eliminates the treasury stock method to calculate diluted earnings per share for convertible instruments and requires the use of the if-converted method. The ASU is effective for annual reporting periods beginning after December 15, 2021, including interim reporting periods within those annual periods, with early adoption permitted no earlier than the fiscal year beginning after December 15, 2020. The ASU allows entities to use a modified or full retrospective transition method. Under the modified approach, entities will apply the guidance to all financial instruments that are outstanding as of the beginning of the year of adoption with the cumulative effect recognized as an adjustment to the opening balance of retained earnings. Under the full retrospective method, entities will apply the guidance to all outstanding financial instruments for each prior reporting period presented. The Company will adopt this ASU on July 1, 2022, and is currently evaluating the potential impact of the new guidance on our financial statements. In December 2019, the FASB issued ASU No 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” (“ASU 2019-12”). ASU 2019-12 removes certain exceptions to the general principles in ASC Topic 740. ASU 2019-12 is effective for public entities for fiscal years beginning after December 15, 2020, with early adoption permitted. The Company will adopt this ASU on July 1, 2021, and does expect ASU 2019-12 to have a material effect on the Company’s current financial position, results of operations or financial statement disclosures. 59 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2021 (expressed in thousands of U.S. dollars, except share and per share data) From time to time, new accounting pronouncements are issued by the FASB that are adopted by the Company as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards did not or will not have a material impact on the Company’s consolidated financial statements upon adoption. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. 4. GOING CONCERN ISSUES The Company incurred a loss of $4,390 for the year ended June 30, 2021 (2020 - $4,001 and 2019 - $7,336) and had an accumulated deficit of $99,076 as of June 30, 2021. As an exploration stage entity, the Company has not yet commenced its mining operations and accordingly does not generate any revenue. As of June 30, 2021, the Company had cash of $8,626 which may not be sufficient to fund normal operations for the next twelve months without deferring payment on certain liabilities or raising additional funds. In addition, the Company will be required to raise additional funds for construction and commencement of operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue operations and fund its expenditures is dependent on management’s ability to secure additional financing. Management is actively pursuing such additional sources of financing, and while it has been successful in doing so in the past, there can be no assurance it will be able to do so in the future. These consolidated financial statements do not give effect to any adjustments required to realize the Company’s assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying financial statements. Since March 2020, several measures have been implemented in the United States, Canada, and the rest of the world in response to the increased impact from the novel coronavirus (“COVID-19”). The full extent to which the COVID-19 pandemic and our precautionary measures may continue to impact our business will depend on future developments, which continue to be highly uncertain and cannot be predicted at this time, including, but not limited to, the duration and geographic spread of the pandemic, its severity, the actions to contain the virus or treat its impact, future spikes of COVID-19 infections resulting in additional preventative measures to contain or mitigate the spread of the virus, the effectiveness, distribution and acceptance of COVID-19 vaccines, including the vaccines’ efficacy against emerging COVID-19 variants, and how quickly and to what extent normal economic and operating conditions can resume. We believe this could have an adverse impact on our ability to obtain financing, development plans, results of operations, financial position, and cash flows during the current fiscal year. 5. MINERAL INTERESTS During the year ended June 30, 2011, the Company completed the acquisition of the Elk Creek property through a share exchange agreement with 0859404 BC Ltd, a Canadian company, which owned all the issued and outstanding shares of ECRC. The Company issued 18,990,539 Common Shares to acquire all of the issued and outstanding shares of 0859404 BC Ltd. and issued 1,034,348 Common Shares as a finder’s fee with respect to the acquisition. The transaction did not meet the definition of a business acquisition, as set forth in ASC 805, and therefore was accounted for as a purchase of assets. The acquisition price was based on the market value of the Company’s Common Shares on the closing date and total consideration given was C$13,246, including associated deferred tax impacts of C$4,736. On April 23, 2021, ECRC formally closed the purchase of two parcels of land and associated buildings and mineral rights in Johnson County, Nebraska, associated with the Elk Creek Project, pursuant to an Amended and Restated Option to Purchase, dated as of April 29, 2020 (the “Option Agreement”). Pursuant to the terms of the Option Agreement, the Owner sold, transferred, conveyed and assigned all of her rights, privileges, title and interest in and to the real property to ECRC, including any associated mineral rights. The Option Agreement provided for a purchase price calculated based on the appraised value per acre of the parcels of land, the mineral rights and the structures erected on the land. The purchase price was approximately $6,300, including indirect costs of $57. Of this amount, $837 was allocated to land and buildings and the remaining $5,468 was allocated to mineral interests as costs related to mineral rights acquisition. In addition to the land and mineral rights currently owned by the Company, the property interests of Elk Creek include nine prepaid mineral exploration option-to-purchase agreements and include a pre-determined buyout for permanent ownership of the mineral and/or surface rights. Terms of the agreements require no further significant payments, and the Company may negotiate lease extensions or elect to purchase the mineral and/or surface rights any time. Agreements that allow for the purchase of mineral rights contain provisions whereby the landowners would retain a 2% net smelter return. 60 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2021 (expressed in thousands of U.S. dollars, except share and per share data) 6. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES As of June 30, Note 2021 2020 Accounts payable, trade $ 163 $ 2,460 Interest payable to related party 10 40 450 Other accruals 205 155 Total accounts payable and accrued liabilities $ 408 $ 3,065 7. CONVERTIBLE DEBT As of June 30, 2021 2020 Current Portion: Nordmin note $ 1,123 $ - Convertible promissory notes - 800 Lind IV convertible security - 38 Total current portion $ 1,123 $ 838 Noncurrent Portion: Lind III convertible security $ 6,784 $ - Lind III Convertible Security On February 19, 2021, the Company issued to Lind Global Asset Management III, LLC (“Lind III”), an entity managed by The Lind Partners, a New York-based asset management firm (“The Lind Partners”), a convertible security (the “Lind III Convertible Security”) pursuant to a definitive convertible security funding agreement, dated as of February 16, 2021 (the “Lind III Agreement”), between the Company and Lind III. The Lind III Convertible Security has a face value of $11,700 (representing $10,000 in funding plus an implied 8.5% interest rate per annum for the term of the Lind III Convertible Security). After deducting a $350 commitment fee as set forth in the Lind III Agreement, NioCorp received net proceeds of $9,650 from the funding of the Lind III Convertible Security. As further discussed in Note 5, on April 23, 2021, the Company used a portion of the proceeds from the funding of the Lind III Convertible Security to purchase a key land parcel associated with the Company’s Elk Creek Project, with the remainder to be spent for general corporate purposes. The Lind III Convertible Security has a term of (i) 24 months or (ii) 30 calendar days after the date on which the face value of the Lind III Convertible Security is nil due to such amount having been fully converted and/or fully repaid (including with any applicable premium) in accordance with the terms of the Lind III Agreement, whichever is earlier. The Lind III Convertible Security constitutes the direct, general and unconditional obligation of the Company and ranks pari-passu with the Company’s other indebtedness. The Lind III Convertible Security is guaranteed on a secured basis by 0896800 and ECRC. The Lind III Convertible Security is secured by all of the assets and property of the Company and 0896800, including all of the issued and outstanding shares of 0896800 pledged by the Company and all of the issued and outstanding shares of ECRC pledged by 0896800, and certain real property and fixtures of ECRC. The liens securing the Lind III Convertible Security rank pari-passu with the liens securing a non-revolving credit facility (the “Smith Credit Facility”) with a limit of $3,500 with Mark Smith, President, Chief Executive Officer (“CEO”) and Executive Chairman of NioCorp, pursuant to the Credit Facility Agreement, dated January 16, 2017, between the Company and Mr. Smith, as amended from time to time. The liens securing the Lind III Convertible Security rank senior to the liens securing the Smith Credit Facility on any amount that is owed by the Company to Mr. Smith in excess of $4,000. 61 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2021 (expressed in thousands of U.S. dollars, except share and per share data) Pursuant to the Lind III Agreement, Lind III is entitled to convert the Lind III Convertible Security into Common Shares in monthly installments over its term at a price per Common Share equal to 85% of the volume-weighted average price Common Shares on the Toronto Stock Exchange (“TSX”) for the five trading days immediately preceding to the date on which Lind III provides notice to the Company of its election to convert. The Lind III Agreement provides that Common Shares issuable upon conversion, together with the number of Common Shares issued upon exercise of Warrants, shall not exceed 43,588,000 Common Shares. Subject to certain exceptions, the Lind III Agreement contains restrictions on how much of the Lind III Convertible Security may be converted in any particular month. The Lind III Agreement also provides NioCorp with the option to buy back the remaining face amount of the Lind III Convertible Security in cash at any time; provided that, if the Company exercises such option, Lind III will have the option to convert up to 33.33% of the remaining face amount into Common Shares at the price described above. In addition, Lind III is entitled to accelerate its conversion right to the full amount of the face value of the Lind III Convertible Security or demand repayment thereof in cash upon the occurrence of an event of default and other designated events described in the Lind III Agreement. On February 19, 2021, in connection with the funding and issuance of the Lind III Convertible Security, the Company issued 8,558,000 Common Share purchase warrants, exercisable at a price per Common Share of C$0.97, expiring February 19, 2025 (the “Lind III Warrants”), to Lind III pursuant to the Lind III Agreement. The Company identified embedded derivatives in the Lind III Convertible Security that were evaluated to be immaterial at both the closing date and at June 30, 2021. The Company allocated the net proceeds of $9,477 from the Lind III Convertible Security as follows: ● $1,712 was booked to Common Stock, representing the fair value of the Lind III Warrants based on the Black Scholes pricing model using a risk-free interest rate of 0.40%, an expected dividend yield of 0%, a volatility of 51.60%, and an expected life of 4.0 years. ● $7,938 was booked to the convertible debt liability. Transaction costs of $173, in addition to a commitment fee of $350, were recognized as a direct deduction from the debt liability, resulting a net opening balance of $7,765. This balance will be accreted up to face value of the Lind III Convertible Security at maturity using the effective interest method and recorded as non-cash interest expense in the consolidated statement of operations. Based on the Company’s closing Common Share price of C$1.70 as of June 30, 2021, conversion of the remaining Lind III Convertible Security balance, including accrued interest, would require the issuance of approximately 13,738,000 Common Shares. For each C$0.01 change in the fair value of one Common Share, the total shares the Company would be obligated to issue would change by approximately 110,000 shares. Changes in the Lind III Convertible Security are as follows: Convertible Security Initial valuation $ 7,765 Conversions (1,600 ) Accretion expense 619 Balance, June 30, 2021 $ 6,784 The Lind III Convertible Security contains financial and non-financial covenants customary for a facility of this size and nature, and includes a financial covenant defining an event of default as all present and future liabilities of the Company or any of its subsidiaries, exclusive of related party loans, for an amount or amounts exceeding C$2.0 million, and which have not been satisfied on time or within 90 days of invoice, or have become prematurely payable as a result of its default or breach. The Company was in compliance with these covenants as of June 30, 2021. 62 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2021 (expressed in thousands of U.S. dollars, except share and per share data) Nordmin Note On December 18, 2020, the Company issued a convertible note in the principal amount of approximately $1,872 (the “Nordmin Note”) and 500,000 Common Share purchase warrants, exercisable at a price per Common Share of $0.80, expiring December 18, 2022 (the “Nordmin Warrants”) to Nordmin Engineering Ltd. (“Nordmin”) pursuant to a convertible note and warrant subscription agreement, dated December 18, 2020 (the “Nordmin Agreement”), between the Company and Nordmin. Under the Nordmin Agreement, Nordmin agreed to subscribe for and purchase the Nordmin Note and Nordmin Warrants for a subscription price of approximately $1,804. This amount was set off against the amount owed to Nordmin by NioCorp for past services. The Nordmin Note will mature on December 18, 2021, and has no stated interest rate, an implied interest rate of 5% per annum and, subject to certain terms and conditions, is convertible into up to 4,500,000 Common Shares at a conversion price of 92% of the five-day volume-weighted average price of the Common Shares on the TSX at the time of conversion. The Nordmin Note contains restrictions on how much of the principal amount may be converted in any 30-day period. The Nordmin Note also provides the Company with the option to prepay, in whole or in part, any outstanding principal amount thereunder, upon three days’ notice to Nordmin. In addition, Nordmin is entitled to accelerate the maturity of the Nordmin Note and require the Company to prepay the outstanding principal amount upon the occurrence of an event of default and other designated events described in the Nordmin Note. The Nordmin Note constitutes the direct, general and unconditional obligation of the Company. The Nordmin Note is unsecured and ranks effectively junior to the Company’s secured indebtedness, including under the Lind III Convertible Security, the Smith Loan and the Smith Credit Facility, to the extent of the value of the assets securing such indebtedness. Pursuant to the terms of the Nordmin Agreement, on December 18, 2020, the Company issued 836,551 Common Shares to Nordmin upon an initial conversion of $450 in principal amount of the Nordmin Note at a conversion price of C$0.684 per share. The Company accounted for this transaction as a debt extinguishment under Accounting Standards Codification 470, Debt. Accordingly, the Company wrote off the value of the existing obligation, calculated the fair value of the Nordmin Note and recorded a loss of $163 on the difference in the consolidated statement of operations. This loss included $63 related to the fair value of the Nordmin Warrants at closing. The fair value of the Nordmin Warrants was estimated based on the Black Scholes pricing model using a risk-free interest rate of 0.32%, an expected dividend yield of 0%, a volatility of 43.16%, and an expected life of 2.0 years. The Company initially recorded the Nordmin Note at a fair value of $1,740. The remaining initial fair value balance will be accreted up to net face value of the Nordmin Note over the remaining time until maturity using the effective interest method. In addition, transaction costs of $25 were expensed at closing. Changes in the Nordmin Note are as follows: Convertible Note Extinguishment of accounts payable $ 1,740 Conversions (668 ) Accretion expense 51 Balance, June 30, 2021 $ 1,123 Based on the Company’s closing Common Share price of C$1.70 as of June 30, 2021, conversion of the remaining Nordmin Note balance would require the issuance of 819,000 Common Shares. For each C$0.01 change in the fair value of one Common Share, the total shares the Company would be obligated to issue would change by approximately 4,800 shares. 63 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2021 (expressed in thousands of U.S. dollars, except share and per share data) Convertible Promissory Notes The Company completed a non-brokered private placement of unsecured convertible promissory notes, for gross proceeds of $800 in October 2015. The convertible promissory notes bore interest at a rate of 8%, payable quarterly in arrears, were non-transferable and had an original term of three years from the date of issue. Principal under the convertible promissory notes was convertible by lenders at any time into, and payable by the Company in, Common Shares of the Company at a conversion price of C$0.97 per Common Share, calculated on conversion or repayment using the then-current Bank of Canada noon exchange rate. Interest, when due, was payable either in cash or Common Shares, at the election of the Company. Effective October 10, 2018, the due date for the convertible promissory notes was extended for one year to October 14, 2019, and effective October 10, 2019, the due date was extended for one year to October 14, 2020. All other terms and conditions remained unchanged. Effective October 12, 2020, the maturity date for $750 of the Company’s outstanding convertible promissory notes was extended for one year to October 14, 2021. All terms and conditions remained unchanged, except the amended agreement provides that the Company may repay all or any of the amount of outstanding principal and any accrued but unpaid interest, with 14 days’ advance written notice (the “Notice”), as follows: ● with respect to the outstanding principal and any accrued but unpaid interest, in cash, using the Bank of Canada daily US$-C$ exchange rate on the date of the Notice; or ● with respect to the outstanding principal only, provided that the volume weighted average trading price of the Common Shares is C$0.97 or greater for a period of ten consecutive trading days prior to the date of the Notice, and subject to Toronto Stock Exchange approval, by converting all or any portion of the outstanding principal into Common Shares at a conversion rate of C$0.97 per Common Share, using the Bank of Canada daily US$-C$ exchange rate on the date of the Notice. One of the Company’s convertible promissory notes valued at $50 was not extended under the agreement above and was converted into 67,695 Common Shares on October 14, 2020. On March 16, 2021, the remaining convertible notes, with a face value of $750, were converted into 976,921 Common Shares on March 16, 2021. In addition, the Company paid $11 to the noteholders for outstanding interest accrued through the conversion date. The conversion feature of the convertible promissory notes met the definition of a derivative liability instrument because the conversion feature was denominated in a currency other than the Company’s Canadian dollar functional currency and the conversion rate was variable and therefore did not meet the “fixed-for-fixed” criteria outlined in ASC 815-40-15. As a result, the conversion feature of the convertible promissory notes was required to be recorded as a derivative liability recorded at fair value and marked-to-market each period with the changes in fair value each period being charged or credited to income. The remaining balance of the conversion feature was written off at final conversion. Lind IV Convertible Security Funding Convertible Security Balance June 30, 2020 $ 38 Conversions, at fair value (38 ) Balance, June 30, 2021 $ - On June 27, 2018, the Company signed a definitive convertible security funding agreement (the “Lind IV Agreement”) with Lind Asset Management IV, LLC (“Lind IV”). Pursuant to the issuance of a convertible security (the “Lind IV Convertible Security”), a total of $1,000 was funded on July 9, 2018. Upon payment of the $1,000 in funding by Lind IV to the Company, the Lind IV Convertible Security was issued in the amount of $1,200. The remaining balance of the Lind IV Convertible Security was converted to Common Shares on July 9, 2020. 8. NOTES PAYABLE As of June 30, 2021 2020 Current Portion: Vendor note $ - $ 166 SBA loan - 92 Total current portion $ - $ 258 Noncurrent Portion: Vendor note $ - $ 240 SBA Loan - 104 Total noncurrent portion $ - $ 344 64 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2021 (expressed in thousands of U.S. dollars, except share and per share data) Vendor Note On April 13, 2020, the Company entered into an agreement with a vendor to convert amounts due for services performed to a 28-month note payable at a stated interest rate of 3%. The Company paid off the remaining note balance of $290 on March 30, 2021. SBA Loan On April 17, 2020, ECRC received a U.S. Small Business Administration Loan (the “SBA Loan”) from American National Bank, pursuant to the Paycheck Protection Program (the “PPP”) established under the Coronavirus Aid, Relief, and Economic Security Act, commonly referred to as the CARES Act, in the amount of $196. Under the terms of the SBA Loan, the Company may be eligible for full or partial loan forgiveness. The unforgiven portion of the SBA Loan is payable over two years at an annual interest rate of 1%, with a deferral of payments for the first six months. The Company used the proceeds for purposes consistent with the PPP. On October 27, 2020, the Company applied for loan forgiveness of $186, comprising the initial SBA Loan balance less $10 representing an Economic Injury Disaster Loan Advance grant (the “EIDL advance”) received by the Company in April 2020. On November 18, 2020, the Company was notified that the $186 loan forgiveness request had been approved and recorded a corresponding gain in other income in the consolidated statement of operations. On December 21, 2020, the U.S. Congress passed the Consolidated Appropriations Act, 2021 (the “Act”), which provided additional COVID-19 relief as well as government funding and other bills. The Act removes the previous requirement that PPP borrowers deduct the amount of any EIDL advance from their PPP forgiveness amount. The SBA released Procedural Notice 5000-20075, effective January 8, 2021, stating that the SBA will no longer deduct EIDL advances from forgiveness payments remitted to PPP lenders. Accordingly, the Company recorded an increase in other income in the consolidated statement of operations for the remaining $10 of the SBA Loan. 9. COMMON STOCK a) Issuances Fiscal Year 2021 Issuances On May 10, 2021, the Company closed a non-brokered private placement (the “April 2021 Private Placement”) of units of the Company (“Units”). A total of 4,334,157 Units were issued at a price per Unit of C$1.43, for total gross proceeds to the Company of C$6,198. Each Unit issued pursuant to the April 2021 Private Placement consisted of one Common Share and one warrant (“April 2021 Warrant”). Each April 2021 Warrant entitles the holder thereof to purchase one additional Common Share at a price of C$1.63 for a period of two years from the date of issuance. Proceeds of the April 2021 Private Placement will be used for continued advancement of the Elk Creek Project, including ongoing detailed engineering efforts, conducting technical assessments of potentially adding rare earth products to the planned product offering, and for working capital and general corporate purposes. The Company paid cash commissions of C$111 and issued 77,961 broker warrants (having the same terms as the April 2021 Warrants) in connection with the April 2021 Private Placement to brokers outside of the United States. The broker warrants were valued at C$24 using a risk-free rate of 0.28%, expected volatility of 55% and expected life of two years. Fiscal Year 2019 Issuances On September 14, 2018, the Company completed the first tranche closing (the “2018 First Tranche Closing”) of a non-brokered private placement (the “September 2018 Offering”) of Units. The 2018 First Tranche Closing consisted of the issuance of 2,917,587 Units, at a price of C$0.63 per Unit, for gross proceeds of C$1,838. Each Unit issued in connection with the 2018 First Tranche Closing consists of one Common Share and one-half of one Warrant. Each Warrant entitles the holder thereof to purchase one additional Common Share at a price of C$0.75 until September 14, 2020. 65 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2021 (expressed in thousands of U.S. dollars, except share and per share data) On September 28, 2018, the Company completed the second and final tranche closing (the “2018 Second Tranche Closing”) of the September 2018 Offering. The 2018 Second Tranche Closing consisted of the issuance of 2,057,571 Units, at a price of C$0.63 per Unit, for gross proceeds of C$1,296. Each Unit issued in connection with the 2018 Second Tranche Closing consists of one Common Share and one-half of one Warrant. Each Warrant entitles the holder thereof to purchase one additional Common Share at a price of C$0.75 until September 28, 2020. Net proceeds from the September 2018 Offering were used by the Company for continued development of NioCorp’s Elk Creek Project and for general corporate purposes. The Company paid cash commissions of C$18 in connection with the September 2018 Offering to brokers outside of the United States. On April 29, 2019, the Company closed the first tranche (the “2019 First Tranche Closing”) of a non-brokered private placement (the “April 2019 Private Placement”) of Units of the Company. In connection with the 2019 First Tranche Closing, a total of 1,666,664 Units were issued at a price per Unit of C$0.60, for total gross proceeds to the Company of approximately C$1,000. On May 9, 2019, the Company closed the second and final tranche of the April 2019 Private Placement (the “2019 Second Tranche Closing”) and a total of 1,290,500 Units were issued at a price per Unit of C$0.60, for total gross proceeds to the Company of approximately C$800. Each Unit issued pursuant to the April 2019 Private Placement consisted of one Common Share and one-half of one Common Share purchase Warrant. Each full Warrant entitles the holder thereof to purchase one additional Common Share at a price of C$0.72 for a period of two years from their date of issuance. Proceeds from the April 2019 Private Placement will be used for working capital and general corporate purposes. b) Stock Options On November 9, 2017, the Company’s shareholders voted to approve the NioCorp Developments Ltd. Long-Term Incentive Plan (the “Original 2017 Long-Term Incentive Plan”). On November 5, 2020, the Company’s shareholders voted to approve an amendment and restatement of the Original 2017 Long-Term Incentive Plan (the “2017 Amended Long-Term Incentive Plan”) and the granting of incentive securities thereunder until November 5, 2023. The 2017 Amended Long-Term Incentive Plan is substantially similar to the Original 2017 Long-Term Incentive Plan, other than with respect to the following amendments: ● the 2017 Amended Long-Term Incentive Plan removed the restrictions that (i) the number of stock options (“Options”) and share units which may be granted to non-employee directors under the 2017 Amended Long-Term Incentive Plan, in combination with all other equity awards granted to non-employee directors, may not exceed an annual equity award value (based on the grant date fair value as determined by the Company’s Board of Directors (the “Board”)) of C$150 per non-employee director, and (ii) that the total value of Options issuable to any one non-employee director in any one year may not exceed C$100. The 2017 Amended Long-Term Incentive Plan also removed the corresponding amendment provision with respect to amending non-employee director limits; ● the 2017 Amended Long-Term Incentive Plan amended the limit on the number of Common Shares that may be issued or transferred by the Company upon the exercise of Options granted under the 2017 Amended Long-Term Incentive Plan that are intended to qualify as “incentive stock options” under Section 422 of the United States Internal Revenue Code (“Incentive Stock Options”) from 20,451,895 Common Shares to 23,811,009 Common Shares, and such amended limit will increase by 3,000,000 Common Shares on each of the first and second anniversaries of the amended effective date of the 2017 Amended Long-Term Incentive Plan, being November 5, 2021 and November 5, 2022, subject to the plan’s aggregate Common Share limitation; and ● the 2017 Amended Long-Term Incentive Plan includes certain amendments of a housekeeping nature. 66 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2021 (expressed in thousands of U.S. dollars, except share and per share data) Under the 2017 Amended Long-Term Incentive Plan, the Board may, in its discretion from time to time, grant Options and share units (in the form of restricted share units and performance share units) to directors, employees and certain other service providers (as defined in the 2017 Amended Long-Term Incentive Plan) of the Company and affiliated entities selected by the Board. Subject to adjustment as described in the 2017 Amended Long-Term Incentive Plan, the aggregate number of Common Shares that may be reserved for issuance to participants under the 2017 Amended Long-Term Incentive Plan, together with all other security-based compensation arrangements of the Company, including with respect to stock options outstanding under the Company’s 2016 Incentive Stock Option Plan, may not exceed 10% of the issued and outstanding Common Shares from time to time, and the Common Shares reserved for issuance upon settlement of share units will not exceed 5% of the issued and outstanding Common Shares from time to time. The 2017 Amended Long-Term Incentive Plan limits the maximum number of Common Shares issued to insiders (as defined under TSX rules for this purpose) within any one-year period, or issuable to insiders at any time, in the aggregate, under all security-based compensation arrangements (including the 2017 Amended Long-Term Incentive Plan) to 10% of the then issued and outstanding Common Shares. The 2017 Amended Long-Term Incentive Plan also limits the aggregate number of Common Shares that may be reserved for issuance to any one participant under the 2017 Amended Long-Term Incentive Plan, together with all other security-based compensation arrangements of the Company, to 5% of the then issued and outstanding Common Shares (on a non-diluted basis). Subject to the adjustment provisions of the 2017 Amended Long-Term Incentive Plan, the aggregate number of Common Shares actually issued or transferred by the Company upon the exercise of Incentive Stock Options will be limited as described above. The Board has power over the granting, amendment, administration or settlement of any award. Stock option transactions are summarized as follows: Number of Options Weighted Average Exercise Price Balance July 1, 2018 15,587,409 C$0.65 Granted 4,445,000 C$0.54 Exercised (16,203 ) C$0.47 Cancelled/expired (566,297 ) C$0.79 Balance June 30, 2019 19,449,909 C$0.62 Exercised (320,500 ) C$0.62 Balance June 30, 2020 19,129,409 C$0.62 Granted 3,700,000 C$0.78 Exercised (2,952,296 ) C$0.61 Cancelled/expired (3,912,113 ) C$0.64 Balance June 20, 2021 15,965,000 C$0.65 The following table summarizes the information and assumptions used to determine option costs: Year ended June 30, 2021 2020 2019 Fair value per option granted during the period (C$) $ 0.25 - $ 0.21 Risk-free interest rate 0.26% - 2.02% Expected dividend yield 0% - 0% Expected stock price volatility (historical basis) 54.1% - 57.0% Expected option life in years 3.0 - 3.0 The following table summarizes information about stock options outstanding at June 30, 2021: Exercise Price Expiry Date Number Outstanding Aggregate Intrinsic Value Number Exercisable Aggregate Intrinsic Value C$0.94 July 21, 2021 540,000 C$410 540,000 C$410 C$0.76 March 6, 2022 4,700,000 4,418 4,700,000 4,418 C$0.47 November 9, 2022 3,205,000 3,942 3,205,000 3,942 C$0.84 September 18, 2023 1,050,000 903 1,050,000 903 C$0.54 November 15, 2023 4,120,000 4,779 4,120,000 4,779 C$0.75 December 14, 2023 1,825,000 1,734 1,825,000 1,734 C$0.75 December 16, 2023 525,000 499 525,000 499 Balance June 30, 2021 15,965,000 C$16,685 15,965,000 C$16,685 67 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2021 (expressed in thousands of U.S. dollars, except share and per share data) The aggregate intrinsic value in the preceding table represents the total intrinsic value, based on the Company’s closing stock price of C$1.70 as of June 30, 2021, which would have been received by the option holders had all option holders exercised their options as of that date. The total number of in-the-money options vested and exercisable as of June 30, 2021, was 15,965,000. The total intrinsic value of options exercised during the year ended June 30, 2021, was C$1,333. As of June 30, 2021, there was no unrecognized compensation cost related to unvested share-based compensation arrangements granted. c) Warrants Warrant transactions are summarized as follows: Warrants Weighted Average Exercise Price Balance July1, 2018 28,648,610 C$0.77 Granted: Lind IV warrants 1,035,319 C$0.77 September 2018 private placement 2,487,577 C$0.75 April 2019 private placement 1,478,580 C$0.72 Exercised (115,000) C$0.75 Expired (12,160,285) C$0.74 Balance June 30, 2019 21,374,801 C$0.78 Exercised (664,549) C$0.69 Expired (8,333,801) C$0.86 Balance June 30, 2020 12,376,451 C$0.74 Granted: Nordmin warrants 500,000 C$0.80 Lind III Warrants 8,558,000 C$0.97 April 2021 private placement 4,412,118 C$1.63 Exercised (9,106,283) C$0.75 Expired (2,398,418) C$0.73 Balance June 30, 2021 14,341,868 C$1.16 At June 30, 2021, the Company has outstanding exercisable warrants, as follows: Number Exercise Price Expiry Date 500,000 C$0.77 July 9, 2021 371,750 C$0.79 July 26, 2021 500,000 C$0.80 December 18, 2022 4,412,218 C$1.63 May 10, 2023 8,558,000 C$0.97 February 19, 2025 14,341,868 10. RELATED PARTY TRANSACTIONS AND BALANCES The Company had a loan with Mark Smith, President, Chief Executive Officer (“CEO”) and Executive Chairman of NioCorp (the “Original Smith Loan”), that bore an interest rate of 10%, was secured by the Company’s assets pursuant to a concurrently executed general security agreement (the “General Security Agreement”) and was subject to both a 2.5% establishment fee and 2.5% prepayment fee. On December 14, 2020, the maturity date for the Original Smith Loan was extended to December 15, 2021. On April 30, 2021, the Company repaid $1,000 to Mr. Smith to retire all of the outstanding balance of the Original Smith Loan. During fiscal year 2021, the Company paid a total of $272 representing accrued interest through the retirement date. Mr. Smith waived the prepayment fee in connection with the retirement of the Original Smith Loan. 68 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2021 (expressed in thousands of U.S. dollars, except share and per share data) The Company has a non-revolving credit facility agreement (the “Smith Credit Agreement”) with an original amount of $2,000 with Mr. Smith. The Smith Credit Agreement bears an interest rate of 10% and drawdowns from the Smith Credit Agreement are subject to a 2.5% establishment fee. Amounts outstanding under the Smith Credit Agreement are secured by all of the Company’s assets pursuant to the General Security Agreement. The Smith Credit Agreement contains financial and non-financial covenants customary for a facility of its size and nature. On January 17, 2020, the Company entered into an amending agreement to the Smith Credit Agreement, increasing the limit of the non-revolving credit facility to $2,500 from the previous limit of $2,000. On April 3, 2020, the Smith Credit Agreement was amended to increase the limit of the non-revolving credit facility to $3,000 and on June 10, 2020, the Smith Credit Agreement was amended to increase the limit of the non-revolving credit facility to $3,500 and the maturity date for loans made under the Smith Credit Agreement was extended to December 15, 2020. On December 14, 2020, the maturity date for the Smith Credit Agreement was extended to December 15, 2021. On April 30, 2021 and May 4, 2021, the Company repaid $250 and $250, respectively, representing partial repayments on the Smith Credit Agreement. During fiscal year 2021, the Company paid a total of $535 representing accrued interest on the Smith Credit Agreement through April 30, 2021. As of June 30, 2021, the principal amount outstanding under the Smith Credit Agreement is $2,318. Accounts payable and accrued liabilities as of June 30, 2021, include accrued interest of $40 payable to Mr. Smith under the Smith Credit Agreement. 11. EXPLORATION EXPENDITURES For the year ended June 30, 2021 2020 2019 Feasibility study and engineering $ 79 $ 40 $ 2,403 Field management and other 656 985 577 Metallurgical 272 176 164 Geologists and field staff 49 - - Total $ 1,056 $ 1,201 $ 3,144 12. LEASES Effective August 1, 2020, the Company entered into a three-year corporate office lease extension and recognized the corresponding ROU asset and lease liability associated with this lease extension, along with two existing building leases located at the Elk Creek Project. The Company has applied a discount rate of 16%. In connection with the purchase of land, building and mineral rights discussed in Note 5, the Company reversed the remaining ROU asset and lease liability associated with the Elk Creek building leases. There was no gain or loss on this reversal. As of June 30, 2021, the Company has one corporate office lease with a remaining lease term of 2.3 years. During the year ended June 30, 2021, operating cash flows included cash payments of $64 related to the measurement of lease liabilities. The Company incurred lease costs as follows: For the year ended June 30, 2021 2020(1) Operating Lease Cost: Fixed rent expense $ 106 $ 114 Variable rent expense 7 — Short term lease cost 13 12 Sublease income (18 ) (12 ) Net lease cost $ 108 $ 114 Lease cost – other operating expense $ 89 $ 98 Lease cost – exploration expenditures 19 16 Net lease cost $ 108 $ 114 1 Fixed rent expense for fiscal year 2020 represents rental costs associated with contracts with de minimis ROU and lease liability balances. In addition, the Company incurred rent expense of $134 for the year ended June 30, 2019. Fiscal Year Lease Maturities 2022 $ 90 2023 92 2024 23 Total lease payments 205 Less amount of payments representing interest (31 ) Present value of lease payments 174 Less current portion of lease liability (69 ) Noncurrent lease liability $ 105 69 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2021 (expressed in thousands of U.S. dollars, except share and per share data) 13. DEFERRED FINANCING COSTS During the year ended June 30, 2019, the Company issued an updated feasibility study report on the Elk Creek Project. Due to the nature of changes in the underground mining portion of the technical study, the Company elected to expense deferred legal and other professional fees associated with obtaining project debt financing for the Elk Creek Project and a total of $714 was included in other operating expenses for the year ended June 30, 2019. Future financing-related fees will continue to be expensed until a definitive agreement has been approved by the Board. 14. INCOME TAXES Domestic and foreign components of loss before income taxes for the years ended June 30, 2020, 2019 and 2018 are as follows: For the year ended June 30, 2021 2020 2019 Canada $ 2,928 $ 2,473 $ 3,622 United States 1,462 1,528 3,714 Total $ 4,390 $ 4,001 $ 7,336 The following table is a reconciliation of income taxes at statutory rates: For the year ended June 30, 2021 2020 2019 Loss before income taxes $ 4,390 $ 4,001 $ 7,336 Combined federal and provincial statutory income tax rate 27% 27% 27% Income tax benefit at statutory tax rates 1,185 1,080 1,981 Foreign rate differential (31 ) (30 ) (71 ) Warrant expense - - (42 ) Share based compensation (212 ) (41 ) (163 ) Change in estimates related to prior years 739 (4 ) 211 Capital loss rate differential 182 - - Change in valuation allowance (1,882 ) (946 ) (1,821 ) Other 19 (59 ) (95 ) Income tax benefit $ - $ - $ - Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The significant components of deferred taxes are as follows: As of June 30, 2021 2020 Deferred tax assets Mineral interest $ 8,658 $ 8,393 Net operating losses available for future periods 7,921 6,899 Capital losses available for future periods 643 - Other 54 102 Total deferred tax assets 17,276 15,394 Valuation allowance (17,276 ) (15,394 ) Net deferred tax assets $ - $ - During the year ended June 30, 2021, we identified an error in the recognition of capital losses related to realized mineral property write downs and foreign exchange gains and losses in Canada. This resulted in increases to capital losses available for future periods, net operating loss carryforwards, and other of $660, $61, and $30, respectively, relating to out of period adjustments to deferred tax assets recorded during fiscal year 2021. After evaluation and consideration of the full valuation allowance historically applied against total deferred tax assets, we determined that the impact of the adjustment was not material to the previously issued financial statements, nor are the out of period adjustments material to the estimated results of fiscal year 2021. 70 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2021 (expressed in thousands of U.S. dollars, except share and per share data) Changes in the valuation allowance are as follows: For the year ended June 30, 2021 2020 Valuation allowance, beginning of year $ (15,394 ) $ (14,448 ) Current year additions (1,882 ) (946 ) Valuation allowance, end of year $ (17,276 ) $ (15,394 ) The Company establishes a valuation allowance against future income tax assets if, based on available information, it is more likely than not that all of the assets will not be realized. The valuation allowance of $17,276 at June 30, 2021, relates mainly to net operating loss carryforwards in Canada and mineral interest due to deferred exploration expenditures in the United States, where the utilization of such attributes is not more likely than not. The Company has the following cumulative net operating losses for Canadian and U.S. income tax purposes and these carryforwards will generally expire between 2026 and 2041. As a result of the Tax Cuts and Jobs Act of 2017, U.S. tax losses incurred for tax years commencing in 2018 have no expiration. As of June 30, Jurisdiction 2021 2020 Canada $ 28,896 $ 23,258 United States 2,179 1,695 Total $ 31,075 $ 24,953 In addition, the Company has a Canadian capital loss carryforward of $5,102 as of June 30, 2021, which has no expiration date and can be used to offset future capital gains. The Company had no unrecognized tax benefits as of June 30, 2021 or 2020. The Company recognizes interest accrued related to unrecognized tax benefits and penalties in its income tax provision. The Company has not recognized any interest or penalties in the fiscal years presented in these financial statements. The Company is subject to income tax in the U.S. federal jurisdiction and Canada. Certain years remain subject to examination but there are currently no ongoing exams in any taxing jurisdictions. In addition to the PPP loan previously discussed, the CARES Act, among other things, includes provisions related to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, increased limitations on qualified charitable contributions, and technical corrections to tax depreciation methods for qualified improvement property. Management believes these provisions of the CARES Act had no material impacts or benefits on our business. 15. Fair Value Measurements The Company measures the fair value of financial assets and liabilities based on U.S. GAAP guidance which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The Company classifies financial assets and liabilities as held-for-trading, available-for-sale, held-to-maturity, loans and receivables or other financial liabilities depending on their nature. Financial assets and financial liabilities are recognized at fair value on their initial recognition. Financial assets and liabilities classified as held-for-trading are measured at fair value, with gains and losses recognized in net income. Financial assets classified as held-to-maturity, loans and receivables, and financial liabilities other than those classified as held-for-trading are measured at amortized cost, using the effective interest method of amortization. Financial assets classified as available-for-sale are measured at fair value, with unrealized gains and losses being recognized in income. 71 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2021 (expressed in thousands of U.S. dollars, except share and per share data) Financial instruments, including receivables, accounts payable and accrued liabilities, and related party loans are carried at amortized cost, which management believes approximates fair value due to the short-term nature of these instruments. The following tables present information about the assets and liabilities that are measured at fair value on a recurring basis as at June 30, 2021 and 2020, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical instruments. Fair values determined by Level 2 inputs utilize data points that are observable such as quoted prices, interest rates, and yield curves. Fair values determined by Level 3 inputs are unobservable data points for the financial instrument, and included situations where there is little, if any, market activity for the instrument: As of June 30, 2021 Total Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 7,317 $ 7,317 $ - $ - Investment in equity securities 16 16 - - Total $ 7,333 $ 7,333 $ - $ - Liabilities $ - $ - $ - $ - As of June 30, 2020 Total Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 307 $ 307 $ - $ - Investment in equity securities 7 7 - - Total $ 314 $ 314 $ - $ - Liabilities: Convertible debt $ 38 $ - $ - $ 38 Derivative liability, convertible debt 33 - - 33 Total $ 71 $ - $ - $ 71 The Company measures the fair market value of the Level 3 components using the Black-Scholes model and discounted cash flows, as appropriate. These models were initially prepared by a third party and take into account management’s best estimate of the conversion price of the stock, an estimate of the expected time to conversion, an estimate of the stock’s volatility, and the risk-free rate of return expected for an instrument with a term equal to the duration of the convertible debt. The following table sets forth a reconciliation of changes in the fair value of the Company’s convertible debt components classified as Level 3 in the fair value hierarchy: As of June 30, 2021 2020 2019 Beginning balance $ 71 $ 1,012 $ 4,114 Convertible securities closings - - 1,000 Conversions to equity (38 ) (980 ) (4,582 ) Realized and unrealized gain/loss (33 ) 39 480 Ending balance $ - $ 71 $ 1,012 72 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2021 (expressed in thousands of U.S. dollars, except share and per share data) As discussed in Note 7, the Nordmin Note and Lind III Convertible Security were initially recorded at fair value, which represents a nonrecurring fair value measurement using a Level 3 input. These loans are privately held with no public market for this debt and therefore were initially classified as a Level 3 fair value measurement. The significant unobservable valuation inputs for the Nordmin Note and Lind III Convertible Security included an expected return of 7% and 21%, respectively. At June 30, 2021, the estimated fair value of these instruments approximates carrying value given that the instruments were issued in fiscal 2021 and both have short time periods until maturity. 16. SUBSEQUENT EVENTS On July 23, 2021, the Company repaid $358 to Mr. Smith, representing a partial repayment of $318 on the Smith Credit Agreement (as disclosed in Note 10), plus accrued interest through June 30, 2021. 73 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH AC COUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None. ITEM 9A. CO NTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures The management of NioCorp Developments Ltd. has evaluated, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures as of June 30, 2021. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of June 30, 2021, our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), were effective and designed to provide reasonable assurance that (i) information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (ii) information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures. The management of NioCorp Developments Ltd., including the Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. Management’s Report on Internal Control over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Our management assessed the effectiveness of our internal control over financial reporting as of June 30, 2021. In making this assessment, our management used the criteria set forth in the Internal Control -Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on our management assessment, we have concluded that, as of June 30, 2021, our internal control over financial reporting was effective. Changes in Internal Control over Financial Reporting There has been no change in our internal control over financial reporting during the year ended June 30, 2021, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Our independent registered public accounting firm is not required to formally attest to the effectiveness of our internal control over financial reporting as long as long as we meet the exemption requirements discussed above under Part I, Item 1., “ Emerging Growth Company Status.” ITEM 9B. OTHER INF ORMATION None. 74 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNA NCE Incorporated by reference from the information in our proxy statement for the 2021 Annual Meeting of Stockholders or amendment to this annual report on Form 10-K, which we will file with the SEC within 120 days of the end of the fiscal year to which this report relates. ITEM 11. EXECUTIVE COMPENSATI ON Incorporated by reference from the information in our proxy statement for the 2021 Annual Meeting of Stockholders or amendment to this annual report on Form 10-K, which we will file with the SEC within 120 days of the end of the fiscal year to which this report relates. ITEM 12. SECURITY OWNERSHIP OF CERTAI N BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Incorporated by reference from the information in our proxy statement for the 2021 Annual Meeting of Stockholders or amendment to this annual report on Form 10-K, which we will file with the SEC within 120 days of the end of the fiscal year to which this report relates. ITEM 13. CERTAIN RELATIONSHIPS A ND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Incorporated by reference from the information in our proxy statement for the 2021 Annual Meeting of Stockholders or amendment to this annual report on Form 10-K, which we will file with the SEC within 120 days of the end of the fiscal year to which this report relates. ITEM 14. PRINCIPAL ACCOUNTING FEES A ND SERVICES Incorporated by reference from the information in our proxy statement for the 2021 Annual Meeting of Stockholders or amendment to this annual report on Form 10-K, which we will file with the SEC within 120 days of the end of the fiscal year to which this report relates. 75 PA RT IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDUL ES The following documents are filed as a part of this report: (a) Financial Statements (1) The Consolidated Financial Statements, together with the reports thereon of BDO USA, LLP dated September 8, 2021, are included as part of Item 8, “Financial Statements and Supplementary Data,” commencing on page 50 above. Page Reports of Independent Registered Public Accounting Firms 51 Consolidated Balance Sheets 52 Consolidated Statements of Operations and Comprehensive Loss 53 Consolidated Statements of Cash Flows 54 Consolidated Statements of Equity 55 Notes to Consolidated Financial Statements 56 (a) Exhibits Exhibit No. Title 3.1(1) Notice of Articles dated April 5, 2016 3.2(1) Articles, as amended, effective as of January 27, 2015 4.1(6) Form of Subscription Agreement in respect of units of the Company issued in July 2017 4.4(17) Subscription Agreement, dated as of December 18, 2020, between the Company and Nordmin Engineering Ltd. 4.2(17) Form of Nordmin Note 4.3(17) Form of Nordmin Warrant Certificate 4.5(19) Convertible Security Funding Agreement, dated February 26, 2021, between the Company and Lind Global Asset Management III, LLC 4.5(19) Form of Lind Warrant Certificate, in respect of Lind III Warrants 4.6(20) Form of Subscription Agreement in respect of units of the Company issued in May 2021 4.7(21) Form of Warrant Certificate in respect of warrants issued in May 2021 4.8(21) Non-Transferable Broker Warrant Certificate, dated May 10, 2021, in respect of non-transferable broker warrants issued to Research Capital Corporation 4.9 Description of Securities 10.1#(8) NioCorp Developments Ltd. Long Term Incentive Plan, effective as of November 9, 2017 10.2#(1) Consulting Agreement, dated May 13, 2014, between the Company and KMSmith, LLC 10.3#(14) Amendment to Contract, dated September 1, 2019, between the Company and KMSmith, LLC 10.4#(14) Contract Assignment and Novation Agreement, dated as of August 31, 2020, among the Company, KMSmith, LLC and 76 Resources, Inc. 10.5# Contract Assignment and Novation Agreement, dated as of August 1, 2021, among the Company, 76 Resources, Inc. and 76 Resources, LLC 10.6(2)** Offtake Agreement, dated June 13, 2006, between the Company and CMC Cometals, a division of Commercial Metals Company 10.7(7) Offtake agreement with ThyssenKrupp Metallurgical Products GmbH 10.8(14)**, *** Woltemath 003J Amended and Restated Option to Purchase, dated January 4, 2017, among ECRC and Victor L. and Juanita E. Woltemath 76 10.9(14)**, *** Woltemath 003J Extension to Option to Purchase, dated December 23, 2019, among ECRC and Victor L. and Juanita E. Woltemath 10.10(3) Smith Credit Agreement 10.11(4) Amending Agreement to Smith Credit Agreement, dated March 20, 2017, between the Company and Mark Smith 10.12(9) Amending Agreement to Smith Credit Agreement, dated April 6, 2018, between the Company and Mark Smith 10.13(10) Amending Agreement to Smith Credit Agreement, dated May 31, 2019, between the Company and Mark Smith 10.14(11) Amending Agreement to Smith Credit Agreement, dated January 17, 2020, between the Company and Mark Smith 10.15(12) Amending Agreement to Smith Credit Agreement, dated April 3, 2020, between the Company and Mark Smith 10.16(13) Amending Agreement to Smith Credit Agreement, dated June 10, 2020, between the Company and Mark Smith 10.17(16) Amending Agreement to Smith Credit Agreement, dated December 14, 2020, between the Company and Mark Smith 10.18(5) Security Agreement, dated June 17, 2015, from the Company to Mark Smith 10.19#(15) NioCorp Developments Ltd. Long Term Incentive Plan, as amended 10.20#(18) Amended and Restated 2016 Incentive Stock Option Plan 21.1(1) Subsidiaries of NioCorp Developments Ltd. 23.1 Consent of BDO USA. 23.2 Consent of Mr. Glen Kuntz, P. Geo, Consulting Specialist – Geology/Mining, Nordmin Engineering Ltd. 23.3 Consent of Mr. Jean-Francois St-Onge, P.Eng, Associate Consulting Specialist – Mining, Optimize Group Inc., subcontractor to Nordmin Engineering Ltd. 31.1 Certification of the Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2 Certification of the Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1 Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2 Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 101.INS(22) XBRL Instance Document 101.SCH(22) XBRL Taxonomy Extension – Schema 101.CAL(22) XBRL Taxonomy Extension – Calculations 101.DEF(22) XBRL Taxonomy Extension – Definitions 101.LAB(22) XBRL Taxonomy Extension – Labels 101.PRE(22) XBRL Taxonomy Extension – Presentations # Management compensation plan, arrangement or agreement. ** Portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K, which portions will be furnished to the Securities and Exchange Commission upon request. *** Certain exhibits to this agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted exhibit will be furnished to the Securities and Exchange Commission upon request. (1) Previously filed as an exhibit to the Company’s Draft Registration Statement on Form S-1 (Registration No. 377-01354) submitted to the SEC on July 26, 2016 and incorporated herein by reference. (2) Previously filed as an exhibit to the Company’s Registration Statement on Form S-1 (Registration No. 333-213451) filed with the SEC on September 2, 2016 and incorporated herein by reference. 77 (3) Previously filed as an exhibit to the Company’s Current Report on Form 8-K (File No. 000-55710) filed with the SEC on January 20, 2017 and incorporated herein by reference. (4) Previously filed as an exhibit to the Company’s Current Report on Form 8-K (File No. 000-55710) filed with the SEC on March 24, 2017 and incorporated herein by reference. (5) Previously filed as an exhibit to the Company’s Registration Statement on Form S-1 (Registration No. 333-217272) filed with the SEC on April 12, 2017 and incorporated herein by reference. (6) Previously filed as an exhibit to the Company’s Current Report on Form 8-K (File No. 000-55710) filed with the SEC on August 1, 2017 and incorporated herein by reference. (7) Previously filed as an exhibit to the Company’s Annual Report on Form 10-K (File No. 000-55710) filed with the SEC on August 29, 2017 and incorporated herein by reference. (8) Previously filed as an exhibit to the Company’s Current Report on Form 8-K (File No. 000-55710) filed with the SEC on November 13, 2017 and incorporated herein by reference. (9) Previously filed as an exhibit to the Company’s Current Report on Form 8-K (File No. 000-55710) filed with the SEC on April 9, 2018 and incorporated herein by reference. (10) Previously filed as an exhibit to the Company’s Current Report on Form 8-K (File No. 000-55710) filed with the SEC on June 5, 2019 and incorporated herein by reference. (11) Previously filed as an exhibit to the Company’s Current Report on Form 8-K (File No. 000-55710) filed with the SEC on January 17, 2020 and incorporated herein by reference. (12) Previously filed as an exhibit to the Company’s Current Report on Form 8-K (File No. 000-55710) filed with the SEC on April 3, 2020 and incorporated herein by reference (13) Previously filed as an exhibit to the Company’s Current Report on Form 8-K (File No. 000-55710) filed with the SEC on June 10, 2020 and incorporated herein by reference. (14) Previously filed as an exhibit to the Company’s Annual Report on Form 10-K (File No. 000-55710) filed with the SEC on September 16, 2020 and incorporated herein by reference. (15) Previously filed as an exhibit to the Company’s Current Report on Form 8-K (File No. 000-55710) filed with the SEC on November 6, 2020 and incorporated herein by reference. (16) Previously filed as an exhibit to the Company’s Current Report on Form 8-K (File No. 000-55710) filed with the SEC on December 14, 2020 and incorporated herein by reference. (17) Previously filed as an exhibit to the Company’s Current Report on Form 8-K (File No. 000-55710) filed with the SEC on December 18, 2020 and incorporated herein by reference. (18) Previously filed as an exhibit to the Company’s Current Report on Form 8-K (File No. 000-55710) filed with the SEC on January 25, 2021 and incorporated herein by reference. (19) Previously filed as an exhibit to the Company’s Current Report on Form 8-K (File No. 000-55710) filed with the SEC on February 17, 2021 and incorporated herein by reference. (20) Previously filed as an exhibit to the Company’s Current Report on Form 8-K (File No. 000-55710) filed with the SEC on May 12, 2021 and incorporated herein by reference. (21) Previously filed as an exhibit to the Company’s Registration Statement on Form S-3 (File No. 333-257195) filed with the SEC on June 21, 2021 and incorporated herein by reference. 78 (22) Submitted Electronically Herewith. Attached as Exhibit 101 to this report are the following formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets at June 30, 2021 and June 30, 2020, (ii) the Consolidated Statements of Operations and Comprehensive Loss for the years ended June 30, 2021, 2020 and 2019, (iii) the Consolidated Statements of Cash Flows for the years ended June 30, 2021, 2020 and 2019, (iv) the Consolidated Statements of Changes in Equity for the years ended June 30, 2021, 2020 and 2019, (v) the Notes to the Consolidated Financial Statements. ITEM 16. FORM 1 0–K SUMMARY None. 79 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. NIOCORP DEVELOPMENTS LTD. By: /s/Neal Shah Neal Shah Chief Financial Officer September 8, 2021 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on September 8, 2021. Signature Title /s/ Mark A. Smith President, Chief Executive Officer (Principal Mark A. Smith Executive Officer and Authorized U.S. Representative) and Chairman of the Board of Directors /s/ Neal Shah Chief Financial Officer (Principal Financial and Neal Shah Accounting Officer) /s/ Michael Morris Director Michael Morris /s/ David C. Beling Director David C. Beling /s/ Anna Castner Wightman Director Anna Castner Wightman /s/ Nilsa Guerrero-Mahon Director Nilsa Guerrero-Mahon /s/ Fernanda Fenga Director Fernanda Fenga 80