NIOCORP DEVELOPMENTS LTD 10-Q

ITEM 1. FINANCIAL STATEMENTS Contents Page Condensed consolidated balance sheets as of December 31, 2022 and June 30, 2022 (unaudited) 2 Condensed consolidated statements of operations and comprehensive loss for the three and six months ended December 31, 2022 and 2021 (unaudited) 3 Condensed consolidated statements of cash flows for the six months ended December 31, 2022 and 2021 (unaudited) 4 Condensed consolidated statements of shareholders’ equity for the three and six months ended December 31, 2022 and 2021 (unaudited) 5 Notes to condensed consolidated financial statements (unaudited) 6 – 20 1 NioCorp Developments Ltd. Condensed Consolidated Balance Sheets (expressed in thousands of U.S. dollars, except share data) (unaudited) As of Note December 31, 2022 June 30, 2022 ASSETS Current Cash $ 424 $ 5,280 Prepaid expenses and other 112 402 Total current assets 536 5,682 Non-current Deferred transaction costs 6 4,338 - Deposits 35 35 Investment in equity securities 9 10 Right-of-use assets 58 94 Land and buildings, net 5 840 850 Mineral interests 16,085 16,085 Total assets $ 21,901 $ 22,756 LIABILITIES Current Accounts payable and accrued liabilities 7 $ 4,520 $ 817 Related party loan 10 2,000 2,000 Convertible debt 8 502 2,169 Operating lease liability 12 66 82 Total current liabilities 7,088 5,068 Non-current Operating lease liability - 23 Total liabilities 7,088 5,091 SHAREHOLDERS’ EQUITY Common shares, unlimited shares authorized; shares outstanding: 282,420,651 at December 31, 2022 and 276,670,606 at June 30, 2022 9 130,995 129,055 Accumulated deficit ( 115,159 ) ( 110,397 ) Accumulated other comprehensive loss ( 1,023 ) ( 993 ) Total shareholders’ equity 14,813 17,665 Total liabilities and equity $ 21,901 $ 22,756 The accompanying notes are an integral part of these condensed consolidated financial statements. 2 NioCorp Developments Ltd. Condensed Consolidated Statements of Operations and Comprehensive Loss (expressed in thousands of U.S. dollars, except share and per share data) (unaudited) For the three months ended December 31, For the six months ended December 31, Note 2022 2021 2022 2021 Operating expenses Employee related costs $ 291 $ 1,232 $ 584 $ 1,551 Professional fees 262 424 426 514 Exploration expenditures 11 1,317 491 2,605 1,112 Other operating expenses 331 881 668 1,107 Total operating expenses 2,201 3,028 4,283 4,284 Foreign exchange (gain) loss ( 64 ) ( 61 ) 109 164 Interest expense 82 1,022 382 1,627 Gain on sale of assets 5 ( 13 ) - ( 13 ) - Other loss on equity securities 2 3 1 5 Loss before income taxes 2,208 3,992 4,762 6,080 Income tax benefit - - - - Net loss $ 2,208 $ 3,992 $ 4,762 $ 6,080 Other comprehensive loss: Net loss $ 2,208 $ 3,992 $ 4,762 $ 6,080 Other comprehensive loss (gain): Reporting currency translation 25 14 30 ( 110 ) Total comprehensive loss $ 2,233 $ 4,006 $ 4,792 $ 5,970 Loss per common share, basic and diluted $ 0.01 $ 0.01 $ 0.02 $ 0.02 Weighted average common shares outstanding 280,562,633 261,392,248 279,244,474 259,734,327 The accompanying notes are an integral part of these condensed consolidated financial statements. 3 NioCorp Developments Ltd. Condensed Consolidated Statements of Cash Flows (expressed in thousands of U.S. dollars) (unaudited) For the six months ended December 31, 2022 2021 CASH FLOWS FROM OPERATING ACTIVITIES Net loss for the period $ ( 4,762 ) $ ( 6,080 ) Adjustments to reconcile net loss to net cash used in operations: Unrealized loss on equity securities 1 5 Accretion of convertible debt 283 1,524 Gain on sale of assets ( 13 ) - Noncash lease expense ( 4 ) ( 3 ) Depreciation 1 1 Foreign exchange loss 151 225 Share-based compensation - 1,568 Total ( 4,343 ) ( 2,760 ) Change in working capital items: Prepaid expenses and other 289 ( 255 ) Accounts payable and accrued liabilities ( 70 ) 57 Net cash used in operating activities ( 4,124 ) ( 2,958 ) CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of land and buildings - ( 16 ) Proceeds from sale of assets 21 - Net cash provided by (used in) investing activities 21 ( 16 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of common shares 11 963 Share issuance costs ( 21 ) - Payments of deferred transaction costs ( 537 ) - Related party debt repayments - ( 318 ) Net cash (used in) provided by financing activities ( 547 ) 645 Exchange rate effect on cash and cash equivalents ( 206 ) ( 122 ) Change in cash and cash equivalents during period ( 4,856 ) ( 2,451 ) Cash and cash equivalents, beginning of period 5,280 7,317 Cash and cash equivalents, end of period $ 424 $ 4,866 Supplemental cash flow information: Amounts paid for interest $ - $ 40 Amounts paid for income taxes - - Non-cash financing transactions: Conversions of debt for common shares $ 1,950 $ 4,522 Deferred transaction costs, accrued but not paid 3,800 - The accompanying notes are an integral part of these condensed consolidated financial statements. 4 NioCorp Developments Ltd. Condensed Consolidated Statements of Shareholders’ Equity (expressed in thousands of U.S. dollars, except per share amounts or as otherwise stated) (unaudited) For the three months ended December 31, 2022 and 2021 Common Shares Outstanding Common Shares Accumulated Deficit Accumulated Other Comprehensive Loss Total Balance, September 30, 2021 259,118,369 $ 115,896 $ ( 101,598 ) $ ( 1,035 ) $ 13,263 Exercise of options 736,914 299 - - 299 Debt conversions 4,171,707 3,172 - - 3,172 Share-based compensation - 1,568 - - 1,568 Reporting currency translation - - - ( 14 ) ( 14 ) Loss for the period - - ( 3,992 ) - ( 3,992 ) Balance, December 31, 2021 264,026,990 $ 120,935 $ ( 105,590 ) $ ( 1,049 ) $ 14,296 Balance, September 30, 2022 279,393,227 $ 130,684 $ ( 112,951 ) $ ( 998 ) $ 16,735 Exercise of options 2,605,819 11 - - 11 Debt conversions 421,605 300 - - 300 Share-based compensation Share issuance costs Reporting currency translation - - - ( 25 ) ( 25 ) Loss for the period - - ( 2,208 ) - ( 2,208 ) Balance, December 31, 2022 282,420,651 $ 130,995 $ ( 115,159 ) $ ( 1,023 ) $ 14,813 For the six months ended December 31, 2022 and 2021 Common Shares Outstanding Common Shares Accumulated Deficit Accumulated Other Comprehensive Loss Total Balance, June 30, 2021 256,379,931 $ 113,882 $ ( 99,510 ) $ ( 1,159 ) $ 13,213 Exercise of warrants 871,750 543 - - 543 Exercise of options 1,019,616 420 - - 420 Debt conversions 5,755,693 4,522 - - 4,522 Share-based compensation - 1,568 - - 1,568 Share issuance costs Reporting currency translation - - - 110 110 Loss for the period - - ( 6,080 ) - ( 6,080 ) Balance, December 31, 2021 264,026,990 $ 120,935 $ ( 105,590 ) $ ( 1,049 ) $ 14,296 Balance, June 30, 2022 276,670,606 $ 129,055 $ ( 110,397 ) $ ( 993 ) $ 17,665 Exercise of warrants Exercise of options 2,605,819 11 - - 11 Debt conversions 3,144,226 1,950 - - 1,950 Share-based compensation Share issuance costs - ( 21 ) - - ( 21 ) Reporting currency translation - - - ( 30 ) ( 30 ) Loss for the period - - ( 4,762 ) - ( 4,762 ) Balance, December 31, 2022 282,420,651 $ 130,995 $ ( 115,159 ) $ ( 1,023 ) $ 14,813 The accompanying notes are an integral part of these condensed consolidated financial statements. 5 NioCorp Developments Ltd. Notes to the Condensed Consolidated Financial Statements December 31, 2022 (expressed in thousands of U.S. dollars, except per share amounts or as otherwise stated) (unaudited) 1. DESCRIPTION OF BUSINESS NioCorp Developments Ltd. (“NioCorp” or 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 interim condensed 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 to construction and commercial operation. As further discussed in Note 4, 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 The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles of the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). The interim condensed consolidated financial statements include the consolidated accounts of the Company and its wholly owned subsidiaries with all significant intercompany transactions eliminated. The accounting policies followed in preparing these interim condensed consolidated financial statements are those used by the Company as set out in the audited consolidated financial statements for the year ended June 30, 2022. Certain transactions include reference to Canadian dollars (“C$”) where applicable. In the opinion of management, all adjustments considered necessary (including reclassifications and normal recurring adjustments) for a fair statement of the financial position, results of operations, and cash flows at December 31, 2022, and for all periods presented, have been included in these interim condensed consolidated financial statements. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to appropriate SEC rules and regulations. These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended June 30, 2022. The interim results are not necessarily indicative of results for the full year ending June 30, 2023, or future operating periods. b) Recent Accounting Standards Issued and Adopted In August 2020, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“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) (“ASU 2020-06”), which simplifies the accounting for convertible instruments. ASU 2020-06 removes certain accounting models which separate the embedded conversion features from the host contract for convertible instruments. Either a modified retrospective method of transition or a fully retrospective method of transition is permissible for the adoption of this standard. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The Company adopted ASU 2020-06 on July 1, 2022, with no material effect on the Company’ s current financial position, results of operations or financial statement disclosures. 6 NioCorp Developments Ltd. Notes to the Condensed Consolidated Financial Statements December 31, 2022 (expressed in thousands of U.S. dollars, except per share amounts or as otherwise stated) (unaudited) Issued and Not Effective 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. c) 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, convertible debt 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. d) Basic and Diluted Earnings per Share Basic net loss per share is computed by dividing net loss by the weighted average number of the Company’s common shares, no par value (“Common Shares”) outstanding during the period. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of Common Share equivalents outstanding for the period determined using the treasury stock method or the if-converted method, as applicable. For purposes of this calculation, options to purchase Common Shares (“Options”) and warrants to purchase Common Shares (“Warrants”) are considered to be Common Share equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive. The following shares underlying Options, Warrants, and outstanding convertible debt were antidilutive due to a net loss in the periods presented and, therefore, were excluded from the dilutive securities computation for the three- and six-month periods ended December 31, 2022 and 2021, as indicated below. Schedule of excluded from the dilutive securities For the three and six months ended December 31, 2022 2021 Excluded potentially dilutive securities (1) : Options 9,960,000 18,315,000 Warrants 18,016,253 13,470,118 Convertible debt 816,000 7,804,000 Total potential dilutive securities 28,792,253 39,589,118 ( 1 ) The number of shares is based on the maximum number of shares issuable on exercise or conversion of the related securities as of the period end. Such amounts have not been adjusted for the treasury stock method or weighted average outstanding calculations as required if the securities were dilutive. 7 NioCorp Developments Ltd. Notes to the Condensed Consolidated Financial Statements December 31, 2022 (expressed in thousands of U.S. dollars, except per share amounts or as otherwise stated) (unaudited) 3. RESTATEMENT As previously reported, the Company restated its consolidated balance sheets as of June 30, 2022 and 2021, and consolidated statements of operations and comprehensive income, equity and cash flows for the years ended June 30, 2022 and 2021. In addition, the restatement impacted the first, second and third quarters of our fiscal year ended June 30, 2022. The summarized restatement impacts for the comparable interim period in fiscal year 2022 are presented below. The restatement corrects errors related to the accounting for the unamortized deferred financing costs and debt discounts upon extinguishments of debt related to debt conversions. Restatement Impacts to the Condensed Consolidated Statement of Operations and Comprehensive Loss (unaudited) For the Three Months Ended December 31, 2021 Restatement Impacts to the Condensed Consolidated Statement of Operations and Comprehensive Loss (unaudited) For the three months ended December 31, 2021 As Previously Reported Restatement Impacts Restated Interest expense $ 488 $ 534 $ 1,022 Loss before income taxes 3,458 534 3,992 Net loss 3,458 534 3,992 Reporting currency translation 15 ( 1 ) 14 Total comprehensive loss 3,473 533 4,006 Restatement Impacts to the Condensed Consolidated Statement of Shareholders’ Equity (unaudited) For the Three Months Ended December 31, 2021 Restatement Impact to the Condensed Consolidated Statement of Shareholders' Equity (unaudited) As Previously Reported Restatement Impacts Restated September 30, 2021 opening balance adjustments: Deficit $ ( 101,036 ) $ ( 562 ) $ ( 101,598 ) Accumulated other comprehensive loss ( 1,034 ) ( 1 ) ( 1,035 ) Total Shareholders’ equity 13,826 ( 563 ) 13,263 Activity adjustments: Loss for the period ( 3,458 ) ( 534 ) ( 3,992 ) Reporting currency translation ( 15 ) 1 ( 14 ) December 31, 2021 ending balance adjustments: Deficit ( 104,494 ) ( 1,096 ) ( 105,590 ) Accumulated other comprehensive loss ( 1,049 ) - ( 1,049 ) Total equity 15,392 ( 1,096 ) 14,296 8 NioCorp Developments Ltd. Notes to the Condensed Consolidated Financial Statements December 31, 2022 (expressed in thousands of U.S. dollars, except per share amounts or as otherwise stated) (unaudited) Restatement Impacts to the Condensed Consolidated Statement of Operations and Comprehensive Loss (unaudited) For the Six Months Ended December 31, 2021 For the six months ended December 31, 2021 As Previously Reported Restatement Impacts Restated Foreign exchange loss $ 149 $ 15 $ 164 Interest expense 980 647 1,627 Loss before income taxes 5,418 662 6,080 Net loss 5,418 662 6,080 Reporting currency translation ( 94 ) ( 16 ) ( 110 ) Total comprehensive loss 5,324 646 5,970 Restatement Impacts to the Condensed Consolidated Statement of Cash Flows (unaudited) For the Six Months Ended December 31, 2021 As Previously Reported Restatement Impacts Restated CASH FLOWS FROM OPERATING ACTIVITIES Total loss for the period $ ( 5,418 ) $ ( 662 ) $ ( 6,080 ) Accretion of convertible debt 877 647 1,524 Foreign exchange loss 210 15 225 Restatement Impacts to the Condensed Consolidated Statement of Shareholders’ Equity (unaudited) For the Six Months Ended December 31, 2021 As Previously Reported Restatement Impacts Restated June 30, 2021 opening balance adjustments: Deficit $ ( 99,076 ) $ ( 434 ) $ ( 99,510 ) Accumulated other comprehensive loss ( 1,143 ) ( 16 ) ( 1,159 ) Total Shareholders’ equity 13,663 ( 450 ) 13,213 Activity adjustments: Loss for the period ( 5,418 ) ( 662 ) ( 6,080 ) Reporting currency translation 94 16 110 December 31, 2021 ending balance adjustments: Deficit ( 104,494 ) ( 1,096 ) ( 105,590 ) Accumulated other comprehensive loss ( 1,049 ) - ( 1,049 ) Total equity 15,392 ( 1,096 ) 14,296 4. GOING CONCERN ISSUES The Company incurred a loss of $ 4,762 for the six months ended December 31, 2022 (2021 - $ 6,080 ) and had a working capital deficit of $ 6,552 and an accumulated deficit of $ 115,159 as of December 31, 2022. As a development stage issuer, the Company has not yet commenced its mining operations and accordingly does not generate any revenue. As of December 31, 2022, the Company had cash of $ 424 which is not sufficient to fund normal operations for the next twelve months without deferring payment on certain liabilities or raising 9 NioCorp Developments Ltd. Notes to the Condensed Consolidated Financial Statements December 31, 2022 (expressed in thousands of U.S. dollars, except per share amounts or as otherwise stated) (unaudited) 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, which have averaged approximately $ 1,400 per quarter over the preceding three-year period, is dependent on management’s ability to secure additional financing. Management is actively pursuing 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. Other than the proposed business combination and potential financing packages discussed in Notes 14 and 15, the Company did not have any further funding commitments or arrangements for additional financing as of December 31, 2022. These interim condensed 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”) pandemic and subsequent COVID-19 variants. In addition, recent worldwide events have created general global economic uncertainty as well as uncertainty in capital markets, supply chain disruptions, increased interest rates, and the potential for geographic recessions. 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. The full extent to which these events 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. 5. LAND AND BUILDINGS, NET In October 2022, the Company entered into an agreement with the State of Nebraska (the “State”) to sell a strip of Company-owned land totaling approximately 1.27 acres located adjacent to State Highway 50 in connection with highway improvements to be completed by the State, for $ 21 , inclusive of estimated fence replacement costs. The Company recorded a gain of $ 13 associated with this sale. 6. DEFERRED TRANSACTION COSTS The Company has deferred third-party costs, including legal fees, other professional and consulting fees, and due diligence fees, incurred in connection with the proposed transaction discussed in Note 14. These costs are deferred until closing, at which time a portion of the directly attributable costs will be recorded against convertible debt to be entered into in connection with the proposed transaction, with the remainder treated as a reduction to the value of Common Shares issued. 7. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Schedule of account payable and accrued liabilities As of Note December 31, 2022 June 30, 2022 Accounts payable, trade $ 3,431 $ 115 Accounts payable accruals 739 654 Consent accrual 14 200 - Interest payable to related party 10 102 - Other accruals 48 48 Total accounts payable and accrued liabilities $ 4,520 $ 817 10 NioCorp Developments Ltd. Notes to the Condensed Consolidated Financial Statements December 31, 2022 (expressed in thousands of U.S. dollars, except per share amounts or as otherwise stated) (unaudited) 8. CONVERTIBLE DEBT Changes in the convertible security (the “Lind III Convertible Security”) issued to Lind Global Asset Management III, LLC (“Lind”), are as follows: Lind III Convertible Security Balance, June 30, 2022 $ 2,169 Accretion expense 283 Conversions ( 1,950 ) Balance, December 31, 2022 $ 502 Based on the Company’s closing Common Share price of C$ 1.00 as of December 31, 2022, conversion of the remaining Lind III Convertible Security undiscounted face value of $ 515 (including accrued interest) would require the issuance of approximately 816,000 Common Shares. For each C$ 0.01 change in the fair value of one Common Share, the total Common Shares the Company would be obligated to issue would change by approximately 8,000 shares . 9. COMMON SHARES a) Stock Options Schedule of stock option Number of Options Weighted Average Exercise Price Balance, June 30, 2022 14,464,000 C$ 0.83 Granted - - Exercised ( 2,605,819 ) 0.49 Cancelled/expired ( 1,898,181 ) 0.50 Balance, December 31, 2022 9,960,000 C$ 0.98 The following table summarizes information about Options outstanding at December 31, 2022: Exercise Price Expiry Date Number Outstanding Aggregate Intrinsic Value Number Exercisable Aggregate Intrinsic Value C$ 0.84 September 18, 2023 1,050,000 C$ 168 1,050,000 C$ 168 C$ 0.54 November 15, 2023 2,085,000 959 2,085,000 959 C$ 0.75 December 14, 2023 1,825,000 456 1,825,000 456 C$ 0.75 December 16, 2023 525,000 131 525,000 131 C$ 1.36 December 17, 2024 3,975,000 - 3,975,000 - C$ 1.10 May 30, 2025 500,000 - 500,000 - 9,960,000 C$ 1,714 9,960,000 C$ 1,714 The aggregate intrinsic value in the preceding table represents the total intrinsic value, based on the Company’s closing Common Share price of C$ 1.00 as of December 31, 2022, that would have been received by the Option holders had all Option holders exercised their Options as of that date. As of December 31, 2022, there was $ 0 of unrecognized compensation cost related to unvested share-based compensation arrangements granted under the Option plans. 11 NioCorp Developments Ltd. Notes to the Condensed Consolidated Financial Statements December 31, 2022 (expressed in thousands of U.S. dollars, except per share amounts or as otherwise stated) (unaudited) b) Warrants Schedule of warrant transactions Number of Warrants Weighted Average Exercise Price Balance, June 30, 2022 18,516,253 C$ 1.16 Granted - - Exercised - - Cancelled/expired ( 500,000 ) 0.80 Balance, December 31, 2022 18,016,253 C$ 1.17 At December 31, 2022, the Company had outstanding exercisable Warrants, as follows: Schedule of outstanding exercisable warrants Number Exercise Price Expiry Date 4,412,118 C$ 1.63 May 10, 2023 5,046,135 C$ 1.10 June 30, 2024 8,558,000 C$ 0.97 February 19, 2025 18,016,253 10. RELATED PARTY TRANSACTIONS AND BALANCES Borrowings under the non-revolving credit facility agreement (the “Smith Credit Facility”) with Mark Smith, Chief Executive Officer, President, and Executive Chairman of NioCorp, bear interest at a rate of 10 % and drawdowns from the Smith Credit Facility are subject to a 2.5 % establishment fee. Amounts outstanding under the Smith Credit Facility are secured by all of the Company’s assets pursuant to a general security agreement. The Smith Credit Facility contains financial and non-financial covenants customary for a facility of its size and nature. The maturity date for the Smith Credit Facility is June 30, 2023. As of December 31, 2022, the principal amount outstanding under the Smith Credit Facility was $ 2,000 and accounts payable and accrued liabilities as of December 31, 2022, include accrued interest of $ 102 payable under the Smith Credit Facility. 11. EXPLORATION EXPENDITURES Schedule of exploration expenditures For the Three Months Ended December 31, For the Six Months Ended December 31, 2022 2021 2022 2021 Technical studies and engineering $ 28 $ 84 $ 137 $ 134 Field management and other 207 157 393 281 Metallurgical development 1,080 150 2,073 586 Geologists and field staff 2 100 2 111 Total $ 1,317 $ 491 $ 2,605 $ 1,112 12 NioCorp Developments Ltd. Notes to the Condensed Consolidated Financial Statements December 31, 2022 (expressed in thousands of U.S. dollars, except per share amounts or as otherwise stated) (unaudited) 12. LEASES The Company incurred lease costs as follows: For the Three Months Ended December 31, For the Six Months Ended December 31, 2022 2021 2022 2021 Operating Lease Cost: Fixed rent expense $ 23 $ 23 $ 44 $ 43 Variable rent expense 3 2 6 5 Short-term lease cost 3 2 5 9 Sublease income ( 12 ) ( 10 ) ( 18 ) ( 15 ) Net lease cost – other operating expense $ 17 $ 17 $ 37 $ 42 The maturities of lease liabilities are as follows at December 31, 2022: Future Lease Maturities Total remaining lease payments $ 70 Less portion of payments representing interest ( 4 ) Present value of lease payments – current lease liability $ 66 13. 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, including investments in equity securities, are measured at fair value, with unrealized gains and losses being recognized in income. 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 of December 31, 2022, and June 30, 2022, respectively, and indicate 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 include situations where there is little, if any, market activity for the instrument. 13 NioCorp Developments Ltd. Notes to the Condensed Consolidated Financial Statements December 31, 2022 (expressed in thousands of U.S. dollars, except per share amounts or as otherwise stated) (unaudited) Schedule of fair values determined by level 3 inputs are unobservable data As of December 31, 2022 Total Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 424 $ 424 $ - $ - Investment in equity securities 9 9 - - Total $ 433 $ 433 $ - $ - As of June 30, 2022 Total Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 5,280 $ 5,280 $ - $ - Investment in equity securities 10 10 - - Total $ 5,290 $ 5,290 $ - $ - The Lind III Convertible Security discussed in Note 8 was initially recorded at fair value, which represented a nonrecurring fair value measurement using a Level 3 input. At December 31, 2022 and June 30, 2022, the estimated fair value of this instrument approximated carrying value given that the instrument was issued in fiscal 2021 and has a short time period until maturity. 14. PROPOSED TRANSACTION On September 25, 2022, the Company, GX Acquisition Corp. II, a Delaware corporation (“GXII”), and Big Red Merger Sub Ltd (“Merger Sub”), a Delaware corporation incorporated in September 2022, and a direct, wholly owned subsidiary of the Company, entered into a business combination agreement (the “Business Combination Agreement”). Pursuant to the Business Combination Agreement, as the result of a series of transactions, GXII will become a subsidiary of the Company (as successor by merger to the Company’s subsidiary, Elk Creek Resources Corporation, a Delaware corporation (“ECRC”)), with the pre-combination public shareholders of GXII receiving Common Shares based on a fixed exchange ratio of 11.1829212 (the “Exchange Ratio”) Common Shares for each GXII Class A common share held and not redeemed, and the GXII founders receiving shares in GXII (as successor by merger to ECRC) based on the Exchange Ratio. Pursuant to the Business Combination Agreement, after closing of the Transaction (as defined below) (the “Transaction Closing”), the GXII founders will have the right to exchange such shares for Common Shares on a one-for-one basis under certain conditions. Pursuant to the Business Combination Agreement, the Company will also assume the obligations under the issued and outstanding GXII warrants, which will be converted into Warrants following the Transaction Closing. The Business Combination Agreement contemplates that the Company will undertake a reverse stock split of the Common Shares at the time of the Transaction Closing in connection with an expected cross-listing to the Nasdaq Stock Market (“Nasdaq”). In addition, pursuant to the Business Combination Agreement, post-closing, the Company’s Board of Directors will include two directors from pre-combination GXII. The transactions contemplated by the Business Combination Agreement and the ancillary agreements thereto are referred to collectively as the “Transaction.” As currently structured, the Business Combination Agreement is expected to be accounted for as a recapitalization in accordance with U.S. GAAP. Under this method of accounting, GXII will be treated as the “acquired” company for financial reporting purposes. Accordingly, the transaction is treated as the equivalent of NioCorp issuing Common Shares for the net assets of GXII, accompanied by a recapitalization. The net assets of GXII will be stated at historical cost, with no goodwill or other intangible assets recorded. The proposed Transaction is expected to close in the first calendar quarter of 2023, subject to the satisfaction or waiver of certain customary closing conditions contained in the Business Combination Agreement, including, among other things, (i) obtaining required approvals of the Transaction and related matters by the respective shareholders of NioCorp and GXII, (ii) the effectiveness of the registration statement on Form S-4 that the Company originally filed on November 7, 2022, and amended on December 22, 2022, January 17, 2023, January 31, 2023, and February 6, 2023, and was declared effective by the SEC on February 8, 2023, (iii) receipt of approval for listing on Nasdaq of the Common Shares to be issued in connection 14 NioCorp Developments Ltd. Notes to the Condensed Consolidated Financial Statements December 31, 2022 (expressed in thousands of U.S. dollars, except per share amounts or as otherwise stated) (unaudited) with the Transaction, (iv) receipt of approval for listing on Nasdaq of the Warrants to be issued in exchange for the GXII warrants that NioCorp has agreed to assume, (v) receipt of approval from the Toronto Stock Exchange (“TSX”) with respect to the issuance and listing of the Common Shares issuable in connection with the Transaction, (vi) that NioCorp and its subsidiaries (including GXII, as successor by merger to ECRC) will have at least $ 5.000001 million of net tangible assets upon the consummation of the Transaction, after giving effect to any redemptions by GXII public stockholders and after payment of underwriters’ fees or commissions, (vii) that, at the Transaction Closing, NioCorp and its subsidiaries (including GXII, as successor by merger to ECRC) will have received cash in an amount equal to or greater than $ 15.0 million, subject to certain adjustments, and (viii) the absence of any injunctions enjoining or prohibiting the consummation of the Business Combination Agreement. The proposed additional financings contemplated by the LOIs will also be subject to the approval of the TSX and the Company’s shareholders. In addition, in connection with the entry into the Business Combination Agreement, the Company announced the signing of non-binding letters of intent for two separate financing packages with Yorkville Advisors Global, LP. As discussed in Note 15, on January 26, 2023, the Company entered into definitive agreements with respect to these financings. On September 25, 2022, the Company and Lind entered into an agreement (the “Lind Consent”), which included the following principal terms: (i) the consent of Lind to the Transaction and Yorkville financing transactions, including all actions taken by NioCorp as set out in the Business Combination Agreement to permit the completion of the Transaction; (ii) the consent of Lind to NioCorp’s expected Nasdaq listing and the consolidation of the Common Shares in order to meet the minimum listing requirements thereof; (iii) the waiver of Lind of its participation right for up to 15 % of the total offering in the proposed standby equity purchase agreement between NioCorp and Yorkville; and (iv) the waiver of Lind of certain restrictive covenants in the Lind III Convertible Security. As consideration for entering into the Lind Consent, Lind received, amongst other things: (i) the right to receive payment of $ 500 , which will be reduced to $ 200 if the Transaction has not been consummated on or before April 30, 2023 (collectively, the “Consent Payment”); (ii) an extension of its existing participation rights under the Lind III Convertible Security in future financings of NioCorp for a further two year period, subject to certain exceptions as well as an extension of such participation rights beyond the additional two year period if Yorkville or any affiliate is a party to any such applicable transaction; and (iii) the right to receive additional Warrants (the “Consent Warrants”) if on the date that is eighteen months following consummation of the Transaction, the closing trading price of the Common Shares on the TSX or such other stock exchange on which such shares may then be listed, is less than C$ 1.00 , subject to adjustments. The number of Consent Warrants to be issued is based on the Canadian dollar equivalent (based on the then current Canadian to US dollar exchange rate as reported by Bloomberg, LP) of $ 5.0 million divided by the five-day VWAP of Common Shares on the date of issuance. Further, the number of Consent Warrants issued will be proportionately adjusted based on the percentage of Warrants currently held by Lind that are exercised, if any, prior to the issuance of any Consent Warrants. The final Consent Payment value and the issuance of Consent Warrants under the Lind Consent, if any, are subject to shareholders’ approval of the Transaction, an event which is outside of management control. Therefore, pending shareholders’ approval of the Transaction, the Company has included the minimum $ 200 payment at December 31, 2022, as an accrued liability (see Note 7) with a corresponding increase in deferred transaction costs. 15. SUBSEQUENT EVENTS Yorkville Financings On January 26, 2023, NioCorp entered into definitive agreements with respect to two previously announced financings with YA II PN, Ltd., an investment fund managed by Yorkville Advisors Global, LP (together with YA II PN, Ltd., “Yorkville”). The financings contemplated by the definitive agreements include (i) up to $ 16.0 million aggregate principal amount of unsecured convertible debentures of NioCorp (the “Convertible 15 NioCorp Developments Ltd. Notes to the Condensed Consolidated Financial Statements December 31, 2022 (expressed in thousands of U.S. dollars, except per share amounts or as otherwise stated) (unaudited) Debentures”) convertible into Common Shares and Common Share purchase warrants (the “Financing Warrants”) entitling the holders thereof to purchase additional Common Shares (the “Yorkville Convertible Debt Financing”); and (ii) a standby equity purchase facility pursuant to which NioCorp will have the right, but not the obligation, subject to the conditions set out therein, to sell Common Shares to Yorkville with a maximum aggregate value of up to $ 65 .0 million over a period of up to 36 months (the “Yorkville Equity Facility Financing” and, together with the Yorkville Convertible Debt Financing, the “Yorkville Financings”). The Yorkville Financings are expected to become effective on the date of the Transaction Closing, as previously announced on September 26, 2022. NioCorp intends to use the proceeds from the Yorkville Financings to advance its efforts to launch construction of the Elk Creek Project and move it to commercial operation, and to satisfy the fees and expenses incurred in connection with the Transaction, if required. Completion of the Yorkville Financings is subject to certain conditions, including the completion of the Transaction Closing, the receipt of the approval of the TSX, and the approval of NioCorp’s shareholders in accordance with the rules of the TSX. Yorkville Convertible Debt Financing On January 26, 2023, NioCorp entered into a Securities Purchase Agreement (the “Yorkville Convertible Debt Financing Agreement”), by and between NioCorp and Yorkville. Pursuant to the Yorkville Convertible Debt Financing Agreement, Yorkville, and any investor that exercises its contractual right previously granted by NioCorp to participate in the Yorkville Convertible Debt Financing (collectively with Yorkville, the “Investors”), will advance an initial total amount of $9.6 million to NioCorp in consideration of the issuance by NioCorp to the Investors of $10.0 million aggregate principal amount of Convertible Debentures at the time of the Transaction Closing (the “First Debenture Closing”), and an additional total amount of $5.76 million to NioCorp in consideration of the issuance by NioCorp to the Investors of $6.0 million aggregate principal amount of Convertible Debentures on a date to be determined at the election of NioCorp, but which may not be prior to the later to occur of (i) the date of filing of the Convertible Debt Financing Registration Statement (as defined below) and (ii) the date of the Transaction Closing (together with the First Debenture Closing, the “Debenture Closings”). Each Convertible Debenture issued under the Yorkville Convertible Debt Financing will be an unsecured obligation of NioCorp, will have an 18 -month term from the First Debenture Closing, which may be extended for one six-month period in certain circumstances at the option of NioCorp, and will incur a simple interest rate obligation of 5.0 % per annum (which will increase to 15.0 % per annum upon the occurrence of an event of default). The outstanding principal amount of, accrued and unpaid interest, if any, on, and premium, if any, on the Convertible Debentures must be paid by NioCorp in cash when the same becomes due and payable under the terms of the Convertible Debentures at their stated maturity, upon their redemption or otherwise. Subject to certain limitations contained within the Yorkville Convertible Debt Financing Agreement and the Convertible Debentures, including those as described below, holders of the Convertible Debentures will be entitled to convert the principal amount of, and accrued and unpaid interest, if any, on each Convertible Debenture, in whole or in part, from time to time over their term, into a number of Common Shares equal to the quotient of the principal amount and accrued and unpaid interest, if any, being converted divided by the Conversion Price. The “Conversion Price” means, as of any Conversion Date (as defined below) or other date of determination, the greater of (i) 90% of the average of the daily U.S. dollar volume-weighted average price (“VWAP”) of the Common Shares on the principal U.S. market for the Common Shares as reported by Bloomberg Financial Markets during the five consecutive trading days immediately preceding the date on which the holder exercises its conversion right in accordance with the requirements of the Yorkville Convertible Debt Financing Agreement (the “Conversion Date”) or other date of determination, unless NioCorp consents to conversion at a lower price, and (ii) the five-day VWAP of the Common Shares on the TSX (or on the principal U.S. market if the majority of the trading volume and value of the Common Shares occurred on the Nasdaq 16 NioCorp Developments Ltd. Notes to the Condensed Consolidated Financial Statements December 31, 2022 (expressed in thousands of U.S. dollars, except per share amounts or as otherwise stated) (unaudited) during the relevant period) for the five consecutive trading days immediately prior to the Conversion Date or other date of determination less the maximum applicable discount allowed by the TSX. Notwithstanding the foregoing, if at any time it shall be a condition to listing or continued listing of the Common Shares on the Nasdaq or such other principal U.S. market for the Common Shares that the Conversion Price be not less than a minimum price (the “Floor Price”), then NioCorp and the holders will negotiate in good faith to amend the Convertible Debentures to provide that the Conversion Price shall not be less than a Floor Price that satisfies such condition. Any Floor Price will be subject to adjustment to give effect to any stock dividend, stock split or recapitalization. The terms of the Convertible Debentures restrict the number of Convertible Debentures that may be converted during each calendar month by an Investor at a Conversion Price below a fixed price equal to the quotient of (i) ten dollars divided by (ii) 11.1829212 (being the number of Common Shares that will be exchanged for each share of GXII at the Transaction Closing), subject to adjustment to give effect to any stock dividend, stock split or recapitalization. The Convertible Debentures will be subject to customary anti-dilution adjustments. Pursuant to the terms of the Convertible Debentures, following certain trigger events, and until a subsequent cure event, NioCorp will be required to redeem $1.125 million aggregate principal amount of Convertible Debentures (the “Triggered Principal Amount”) each month by making cash payments to the Investors, on a pro rata basis, in an amount equal to the Triggered Principal Amount, plus accrued and unpaid interest thereon, if any, plus a redemption premium of 7% of the Triggered Principal Amount. Such monthly prepayments under the terms of the Convertible Debentures are triggered (i) at the time when NioCorp has issued 95% of the total amount of Common Shares pursuant to the Yorkville Convertible Debt Financing that it may issue under applicable TSX and Nasdaq rules or (ii) when NioCorp has delayed or suspended the effectiveness or use of the Convertible Debt Financing Registration Statement for more than 20 consecutive calendar days, and such monthly prepayment obligations will continue until, with respect to (i) above, shareholder approval is obtained or, with respect to (ii) above, the Investors may once again resell Common Shares under the Convertible Debt Financing Registration Statement, respectively. The Convertible Debentures may also be redeemed at NioCorp’s option at any time and from time to time over their term at a redemption price equal to 110 % of the principal amount being redeemed, plus accrued and unpaid interest, if any. The Convertible Debentures contain events of default customary for instruments of their type (with customary grace periods, as applicable) and provide that, upon the occurrence of an event of default arising from certain events of bankruptcy or insolvency with respect to NioCorp, all outstanding Convertible Debentures will become due and payable immediately without further action or notice. If any other type of event of default occurs and is continuing, then any holder may declare all of its Convertible Debentures to be due and payable immediately. In conjunction with each Debenture Closing, NioCorp will issue to the Investors Financing Warrants to purchase a number of Common Shares as is equal to the quotient of the principal amount of Convertible Debentures issued in such Debenture Closing divided by the “Exercise Price”, which is equal to the greater of: (a) the quotient of ten dollars divided by 11.1829212; or (b) the average of the daily VWAPs of the Common Shares on the principal U.S. market for the Common Shares during regular trading hours as reported by Bloomberg Financial Markets during the five consecutive trading days ending on the trading day immediately prior to such Debenture Closing, in each case subject to any adjustment to give effect to any stock dividend, stock split or recapitalization. The Financing Warrants will be exercisable, in whole or in part, but not in increments of less than $ 50 aggregate Exercise Price (unless the remaining aggregate Exercise Price is less than $ 50 ), beginning on the earlier of (a) six months following the issuance of the applicable Financing Warrants or (b) the effective date of the initial Convertible Debt Financing Registration Statement (the “Exercise Date”) and may be exercised at any time prior to their expiration. Holders of the Financing Warrants may exercise their Financing Warrants, at their election, by paying the Exercise Price in cash or on a cashless exercise basis. On each of the first 12 monthly anniversaries of the Exercise Date, 1/12th of the Financing Warrants will expire. 17 NioCorp Developments Ltd. Notes to the Condensed Consolidated Financial Statements December 31, 2022 (expressed in thousands of U.S. dollars, except per share amounts or as otherwise stated) (unaudited) The Financing Warrants will have customary anti-dilution adjustments to be determined in accordance with the requirements of the applicable stock exchanges, including the TSX. The terms of the Convertible Debentures and the Financing Warrants restrict the conversion of Convertible Debentures or exercise of Financing Warrants by an Investor if such a conversion or exercise would cause the Investor to exceed certain beneficial ownership thresholds in NioCorp or such a conversion or exercise would cause the aggregate number of Common Shares issued pursuant to the Yorkville Convertible Debt Financing to exceed the thresholds for issuance of Common Shares under the rules of the TSX and Nasdaq, unless prior shareholder approval is obtained. The Yorkville Convertible Debt Financing Agreement contains customary representations, warranties, conditions and indemnification obligations by each party. The representations, warranties and covenants contained in the Yorkville Convertible Debt Financing Agreement were made only for purposes of the Yorkville Convertible Debt Financing Agreement and as of specific dates, were solely for the benefit of the parties to such agreement and are subject to certain important limitations. The Yorkville Convertible Debt Financing Agreement also contains certain covenants that, among other things, limit NioCorp’s ability to use the proceeds from the Yorkville Convertible Debt Financing to repay related party debt or to enter into any variable rate transaction other than with Yorkville, subject to certain exceptions. The Yorkville Convertible Debt Financing Agreement will terminate automatically if the Business Combination Agreement is terminated. Also, the Investors will have the right to terminate the Yorkville Convertible Debt Financing Agreement if the First Debenture Closing does not occur on or prior to March 22, 2023. NioCorp will have the right to terminate the Yorkville Convertible Debt Financing Agreement at any time prior to the First Debenture Closing, provided that it will be required to pay a cash termination fee of $ 1.6 million to the Investors, on a pro rata basis. On January 26, 2023, in connection with the Yorkville Convertible Debt Financing Agreement, NioCorp and Yorkville also entered into a registration rights agreement (the “Convertible Debt Financing Registration Rights Agreement”) pursuant to which NioCorp has agreed to file with the SEC a registration statement (the “Convertible Debt Financing Registration Statement”) registering the resale by the Investors of the Common Shares issuable upon the conversion of the Convertible Debentures and the exercise of the Financing Warrants under the Securities Act of 1933 (the “Securities Act”), as soon as practicable but no later than 21 calendar days following the Transaction Closing, and to use its reasonable best efforts to have the Convertible Debt Financing Registration Statement declared effective as soon as practicable after the filing thereof, but in no event later than the 45th calendar day following the filing date thereof. NioCorp further agreed to use its reasonable best efforts to cause the Convertible Debt Financing Registration Statement to remain continuously effective for a period that will terminate upon the first date on which all of the Common Shares issuable upon the conversion of the Convertible Debentures and the exercise of the Financing Warrants may be sold without restriction, including volume and manner-of-sale restrictions, pursuant to Rule 144 under the Securities Act or have been sold by Investors. NioCorp also granted to the Investors certain demand rights for underwritten shelf takedowns and piggyback registration rights with respect to the Common Shares issuable upon the conversion of the Convertible Debentures and the exercise of the Financing Warrants. Yorkville Equity Facility Financing On January 26, 2023, NioCorp entered into a Standby Equity Purchase Agreement, (the “Yorkville Equity Facility Financing Agreement”), by and between NioCorp and Yorkville. Pursuant to the Yorkville Equity Facility Financing Agreement, NioCorp will have the right, but not the obligation, to sell Common Shares to Yorkville with a maximum aggregate value of up to $ 65.0 million (the “Commitment Amount”) for a period commencing at the Transaction Closing and ending on the earliest of (i) the first day of the month next following the 36-month anniversary of the Transaction Closing, (ii) the date on which Yorkville shall have made payment of the full Commitment Amount and (iii) the date that the Yorkville Equity Facility Financing Agreement otherwise terminates in accordance with its terms (the “Commitment Period”), and will issue to Yorkville $ 0.65 18 NioCorp Developments Ltd. Notes to the Condensed Consolidated Financial Statements December 31, 2022 (expressed in thousands of U.S. dollars, except per share amounts or as otherwise stated) (unaudited) million aggregate principal amount of Common Shares for no additional consideration. Additionally, NioCorp will pay to Yorkville an aggregate fee of $ 1.5 million in cash (the “Cash Fee”), including $0.5 million on the date of the Transaction Closing and the remainder in installments over a 12-month period following the date of the Transaction Closing, provided that, NioCorp will have the right to prepay without penalty all or part of the Cash Fee at any time. Each right to sell Common Shares under the Yorkville Equity Facility Financing Agreement is referred to as an “Advance.” Subject to certain limitations, including those as described below, and adjustments contained within the Yorkville Equity Facility Financing Agreement, NioCorp will have the option to sell Common Shares to Yorkville at a purchase price equal to (a) 97% of the VWAP of the Common Shares on the principal U.S. market for the Common Shares during the applicable pricing period, which is a period during a single trading day defined based on when NioCorp submits written notice (an “Advance Notice”) to Yorkville exercising its right to an Advance (“Purchase Price Option #1”); or (b) 97% of the average of the daily VWAPs of the Common Shares on the principal U.S. market for the Common Shares during a pricing period of three consecutive trading days commencing on the trading day an Advance Notice is received by Yorkville, if it is received by 9:30 a.m., New York City time, or the immediately following trading day if it is received after 9:30 a.m., New York City time (“Purchase Price Option #2”). Purchase Price Option # 2 will be used whenever any Convertible Debentures issued to Yorkville pursuant to the Yorkville Convertible Debt Financing Agreement are outstanding, unless waived by Yorkville. The Yorkville Equity Facility Financing Agreement limits the number of Common Shares that may be issued to Yorkville in each Advance to the greater of (a) 5,000,000 Common Shares and (b) the number of Common Shares equal to 100% of the average daily volume traded of the Common Shares on the Nasdaq during the five trading days prior to an Advance , provided that, if any Convertible Debentures are outstanding when an Advance Notice is delivered, then the maximum number of Common Shares that may be issued will be computed in accordance with (b) only (the “Maximum Advance Amount”). Notwithstanding this, NioCorp and Yorkville may agree to an issuance of a number of Common Shares in excess of the Maximum Advance Amount in any given Advance. Further, for as long as the Convertible Debentures issued to Yorkville are outstanding, the Yorkville Equity Facility Financing Agreement provides for certain limitations on the amount of Advances that NioCorp may request, including that NioCorp shall not effect more than two Advances in any month. The Yorkville Equity Facility Financing Agreement also restricts the sale of Common Shares to Yorkville if such a sale would cause Yorkville to exceed certain beneficial ownership thresholds in NioCorp or such issuance would cause the aggregate number of Common Shares issued pursuant to the Yorkville Equity Facility Financing to exceed the thresholds for issuance of Common Shares under the rules of the TSX and Nasdaq, unless prior shareholder approval is obtained. Subject to certain other conditions, NioCorp may deliver an Advance Notice only after the completion of the preceding Advance and only so long as the Equity Facility Financing Registration Statement (as defined below) is effective and Yorkville is permitted to utilize the prospectus thereunder to resell all of the Common Shares issuable pursuant to such Advance Notice. Pursuant to the Yorkville Equity Facility Financing Agreement, NioCorp must prepare and file with the SEC a registration statement registering the resale in the United States of the Common Shares issuable pursuant to the Yorkville Equity Facility Financing Agreement (the “Equity Facility Financing Registration Statement”). Pursuant to the Yorkville Equity Facility Financing Agreement, NioCorp in its sole discretion may choose when to file the Equity Facility Financing Registration Statement. Once effective, NioCorp has agreed to use its commercially reasonable efforts to maintain the effectiveness of the Equity Facility Financing Registration Statement at all times until the earliest to occur of (i) receipt of notice that Yorkville has completed resales of the full Commitment Amount pursuant to the Equity Facility Financing Registration Statement, (ii) the 180th day following the latest closing of an Advance that has occurred and (iii) the 180th day following the termination of the Yorkville Equity Facility Financing Agreement in accordance with its terms. The Yorkville Equity Facility Financing Agreement contains customary representations, warranties, conditions and indemnification obligations by each party. The representations, warranties and covenants contained in the Yorkville Equity Facility Financing Agreement were made only for purposes of the Yorkville Equity Facility 19 NioCorp Developments Ltd. Notes to the Condensed Consolidated Financial Statements December 31, 2022 (expressed in thousands of U.S. dollars, except per share amounts or as otherwise stated) (unaudited) Financing Agreement and as of specific dates, were solely for the benefit of the parties to such agreement and are subject to certain important limitations. The Yorkville Equity Facility Financing Agreement will terminate automatically following the expiration of the Commitment Period. In addition, the Yorkville Equity Facility Financing Agreement will terminate automatically if the Business Combination Agreement is terminated. Also, NioCorp will have the right to terminate the Yorkville Convertible Debt Financing Agreement effective upon five trading days’ prior written notice to Yorkville, as long as there are no outstanding unsettled Advances and provided that it will be required to pay all amounts owed to Yorkville thereunder, including, without limitation, any unpaid portion of the Cash Fee. The parties may also terminate the Yorkville Equity Facility Financing Agreement by mutual written consent. The Convertible Debentures, the Financing Warrants, the Common Shares issuable upon conversion of the Convertible Debentures and upon exercise of the Financing Warrants, the Common Shares issuable pursuant to an Advance and the $0.65 million worth of Common Shares issuable to Yorkville for no additional consideration will not be qualified for distribution by prospectus in any jurisdiction of Canada, and may not be offered for sale, sold, assigned or transferred in any jurisdiction of Canada except pursuant to a prospectus or exemption from the prospectus requirement under applicable securities laws in Canada. Yorkville will not be permitted to offer or sell any such securities directly or indirectly to any person whom, to Yorkville’s knowledge, is resident or located in a jurisdiction of Canada or acquiring such Common Shares for the benefit of another person resident or located in a jurisdiction of Canada, or on any marketplace in Canada. 20