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Item 1. Financial Statements

2023-05-30 compared with 2023-02-13 · 1035 added, 576 removed, 250 unchanged (87% of the section changed)

FINANCIAL STATEMENTS

Condensed consolidated balance sheets as of December 31, 2022 and June 30, 2022 (unaudited)

Condensed consolidated statements of operations and comprehensive loss for the three and six months ended December 31, 2022 and 2021 (unaudited)

Condensed consolidated statements of cash flows for the six months ended December 31, 2022 and 2021 (unaudited)

Condensed consolidated statements of shareholders’ equity for the three and six months ended December 31, 2022 and 2021 (unaudited)

Condensed consolidated balance sheets as of March 31, 2023 and June 30, 2022 (unaudited)

Condensed consolidated statements of operations and comprehensive loss for the three and nine months ended March 31, 2023 and 2022 (unaudited)

Condensed consolidated statements of cash flows for the nine months ended March 31, 2023 and 2022 (unaudited)

Condensed consolidated statements of shareholders’ equity and redeemable noncontrolling interest for the three and nine months ended March 31, 2023 and 2022 (unaudited)

Notes to condensed consolidated financial statements (unaudited)

Developments Ltd.

Consolidated Balance Sheets

in thousands of U.S.

NioCorp Developments Ltd.

Condensed Consolidated Balance Sheets

(expressed in thousands of

dollars, except share data) (unaudited)

1 unchanged sentence

Total current assets

Deferred transaction costs

Investment in equity securities

2 unchanged sentences

Mineral interests

LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST,

AND SHAREHOLDERS’ EQUITY

Current liabilities

Accounts payable and accrued liabilities

3 unchanged sentences

Total current liabilities

Convertible debt

Warrant liabilities, at fair value

Earnout Shares liability, at fair value

Operating lease liability

Total liabilities

Commitments and contingencies

Redeemable noncontrolling interest

SHAREHOLDERS’ EQUITY

Common shares, unlimited shares authorized;

282,420,651 at December 31, 2022 and 276,670,606 at June 30, 2022

shares, no par value, unlimited shares authorized;

shares outstanding:

30,081,655 at March 31, 2023 and 27,667,060 at June 30,

Accumulated deficit

1 unchanged sentence

Total shareholders’ equity

Total liabilities and equity

accompanying notes are an integral part of these condensed consolidated financial statements.

Developments Ltd.

Consolidated Statements of Operations and Comprehensive Loss

in thousands of U.S.

Total liabilities, redeemable noncontrolling

interest and equity

The accompanying notes are an integral part

of these condensed consolidated financial statements.

NioCorp Developments Ltd.

Condensed Consolidated Statements of Operations and Comprehensive

(expressed in thousands of

dollars, except share and per share data) (unaudited)

For the three months ended

For the six months ended

three months ended

nine months ended

Operating expenses

4 unchanged sentences

Total operating expenses

Change in fair value of Earnout Shares liability

Change in fair value of warrant liability

Loss on debt extinguishment

Foreign exchange (gain) loss

1 unchanged sentence

Gain on sale of assets

Other loss on equity securities

Loss on equity securities

Loss before income taxes

Income tax benefit

Net loss attributable to redeemable noncontrolling

Net loss attributable to the Company

Other comprehensive loss:

2 unchanged sentences

Total comprehensive loss

Comprehensive loss attributable to redeemable

noncontrolling interest

Comprehensive loss attributable to the Company

Loss per common share, basic and diluted

Weighted average common shares outstanding

accompanying notes are an integral part of these condensed consolidated financial statements.

The accompanying notes are an integral part

of these condensed consolidated financial statements.

Developments Ltd.

2 unchanged sentences

dollars) (unaudited)

For the six months ended

For the nine months ended

CASH FLOWS FROM OPERATING ACTIVITIES

1 unchanged sentence

Adjustments to reconcile net loss to net cash used in operations:

Unrealized loss on equity securities

Initial valuation of warrants

Change in fair value of warrants

Initial valuation of Earnout Shares liability

Change in fair value of Earnout Shares liability

Share-based compensation

Fair value of Commitment Shares issued

Accretion of convertible debt

Loss on debt extinguishment

Foreign exchange loss

Unrealized loss on equity securities

Gain on sale of assets

Noncash lease expense

Foreign exchange loss

Share-based compensation

Change in working capital items:

9 unchanged sentences

Share issuance costs

Payments of deferred transaction costs

Convertible debt repayment

Proceeds of debt issuance, net of costs

Related party debt draws

Related party debt repayments

Net cash (used in) provided by financing activities

Net cash provided by financing activities

Exchange rate effect on cash and cash equivalents

4 unchanged sentences

Amounts paid for interest

Amounts paid for income taxes

Non-cash financing transactions:

Conversions of debt for common shares

Deferred transaction costs, accrued but not paid

accompanying notes are an integral part of these condensed consolidated financial statements.

Developments Ltd.

Consolidated Statements of Shareholders’ Equity

Consolidated Statements of Shareholders’ Equity and Redeemable Noncontrolling Interest

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

For the Nine Months Ended March 31, 2023 and 2022

comprehensive

Balance, September 30, 2021

$ ( 101,598 )

shareholders’

Noncontrolling

Balance, June 30, 2021

Exercise of warrants

Exercise of options

3 unchanged sentences

Loss for the period

Balance, December 31, 2021

Balance, March 31, 2022

$ ( 107,590 )

Balance, September 30, 2022

Balance, June 30, 2022

$ ( 110,397 )

Exercise of options

Fair value of Financing Warrants issued

Common Shares

issued in the GXII Transaction

Redeemable noncontrolling interest

Commitment Shares issued

Debt conversions

Share-based compensation

Share issuance costs

Share-based compensation

Reporting currency translation

Loss for the period

Balance, December 31, 2022

Balance, March 31, 2023

$ ( 146,046 )

For the six months ended December 31, 2022 and 2021

accompanying notes are an integral part of these condensed consolidated financial statements.

Developments Ltd.

Consolidated Statements of Shareholders’ Equity and Redeemable Noncontrolling Interest

in thousands of U.S.

dollars, except per share amounts or as otherwise stated) (unaudited)

For the Three Months Ended March 31, 2023 and 2022

comprehensive

Balance, June 30, 2021

Exercise of warrants

shareholders’

noncontrolling

Balance, December 31, 2021

$ ( 105,590 )

Exercise of options

Debt conversions

Share-based compensation

Share issuance costs

Reporting currency translation

Loss for the period

Balance, December 31, 2021

Balance, March 31, 2022

$ ( 107,590 )

Balance, June 30, 2022

Balance, December 31, 2022

$ ( 116,703 )

Exercise of warrants

Exercise of options

Debt conversions

Fair value of Financing Warrants issued

Common Shares issued in the GXII Transaction

Redeemable noncontrolling interest

Commitment Shares issued

Share-based compensation

Share issuance costs

Reporting currency translation

Loss for the period

Balance, December 31, 2022

Balance, March 31, 2023

$ ( 146,046 )

The accompanying notes are

an integral part of these condensed consolidated financial statements.

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

December 31, 2022

(expressed in thousands of

accompanying notes are an integral part of these condensed consolidated financial statements.

Developments Ltd.

to the Condensed Consolidated Financial Statements

in thousands of U.S.

dollars, except per share amounts or as otherwise stated) (unaudited)

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.

(“we,” “us,” “our,” “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.

As further discussed in Notes

5, 8, and 9, on March 17, 2023 (the “Closing Date”), the Company closed the GXII Transaction (as defined below) with

GX Acquisition Corp.

II (“GXII”), pursuant to the Business Combination Agreement, dated September 25, 2022 (the “Business

Combination Agreement”), among the Company, GXII and Big Red Merger Sub Ltd (the “Closing”).

At the Closing,

the Company also closed convertible debt financings (the “Yorkville Convertible Debt Financing”) with YA II PN, Ltd.,

an investment fund managed by Yorkville Advisors Global, LP (together with YA II PN, Ltd., “Yorkville”), and the standby

equity purchase facility with Yorkville (the “Yorkville Equity Facility Financing” and, together with the Yorkville

Convertible Debt Financing, the “Yorkville Financings”) became effective.

The transactions contemplated by the Business

Combination Agreement, including the GXII Transaction, the Yorkville Financings and the Reverse Stock Split (as defined below),

are referred to, collectively, as the “Transactions.”

The GXII Transaction is being

accounted for as an equity raise transaction in accordance with generally accepted accounting principles of the United States of

America (“U.S.

Under this method of accounting, GXII is treated as the “acquired” company for financial

reporting purposes.

Accordingly, the GXII Transaction is treated as the equivalent of NioCorp issuing common shares, no par value,

of the Company (“Common Shares”) for the assets and liabilities of GXII.

The net assets of GXII are stated at historical

cost, with no goodwill or other intangible assets recorded.

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.

financial statements do not reflect any adjustments that may be necessary if the Company is unable to continue as a going concern.

Company currently earns no operating revenues and will require additional capital in order to advance the Elk Creek Project to

6 unchanged sentences

and Consolidation

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.

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.

accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S.

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.

transactions include reference to Canadian dollars (“C$”) where applicable.

In the opinion of management, all adjustments considered necessary (including normal recurring adjustments)

for a fair statement of the financial position, results of operations, and cash flows at March 31, 2023, 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

Developments Ltd.

to the Condensed Consolidated Financial Statements

in thousands of U.S.

dollars, except per share amounts or as otherwise stated) (unaudited)

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.

Recent Accounting

9 unchanged sentences

s current financial position, results of operations or financial statement disclosures.

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

December 31, 2022

(expressed in thousands of

dollars, except per share amounts or as otherwise stated) (unaudited)

and Not Effective

3 unchanged sentences

Use of Estimates

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.

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.

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, earnout valuation, warrant liabilities, 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

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.

Basic and Diluted

Earnings per Share

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.

Basic earnings (loss) per

share represents net earnings (loss) attributable to common shareholders divided by the weighted average number of Common

Shares outstanding during the period.

The Company considers Vested Shares and Released Earnout Shares (each as defined in

Note 9), to be participating securities, requiring the use of the two-class method.

Diluted earnings per share represents net

earnings attributable to common shareholders divided by the weighted average number of Common Shares outstanding, inclusive

of the dilutive impact of all potentially dilutive securities outstanding during the period, as applicable.

The Company utilizes the weighted

average method to determine the impact of changes in a participating security on the calculation of loss per share.

The following

table sets forth the computation of the Company’s basic and diluted net loss per share attributable to common shareholders

for the three and nine months ended March 31, 2023:

For the three months ended March 31,

For the nine months ended March 31,

Net loss attributable to noncontrolling interest

Net loss available to participating securities

Net loss attributable to Vested Shares

Net loss attributed to common shareholders - basic and diluted

Weighted average shares outstanding – basic and diluted

Loss per Common Share outstanding – basic and diluted

The following shares underlying Options,

Warrants, outstanding convertible debt and redeemable noncontrolling interest shares were antidilutive due to a net loss in the periods

presented and, therefore, were excluded from the dilutive securities computation for the three- and nine-month periods ended March 31,

2023 and 2022, as indicated below.

Developments Ltd.

to the Condensed Consolidated Financial Statements

in thousands of U.S.

dollars, except per share amounts or as otherwise stated) (unaudited)

Schedule of excluded from the dilutive securities

For the three and six months ended December 31,

For the three and nine months ended

Excluded potentially dilutive securities (1)(2) :

1 unchanged sentence

Total potential dilutive securities

number of shares is based on the maximum number of shares issuable on exercise or conversion of the related securities as of 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.

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

December 31, 2022

(expressed in thousands of

Earnout Shares (as defined below) are excluded as the vesting terms were not met as of the end of the reporting period.

Reverse Stock Split

March 17, 2023, the Company effected a reverse stock split (the “Reverse Stock Split”) on the basis of one (1) post-Reverse

Stock Split Common Share for every ten (10) pre-Reverse Stock Split Common Shares issued and outstanding, with any fractional

shares resulting from the Reverse Stock Split rounded down to the nearest whole share.

Immediately after the Reverse Stock Split,

there were 30,000,442 Common Shares issued and outstanding.

All references to share and per share amounts (excluding authorized

shares) in the consolidated financial statements and accompanying notes have been retroactively restated to reflect the Reverse Stock

Redeemable Noncontrolling

Redeemable Noncontrolling Interest refers to non-controlling interest associated with the Vested Shares

that are redeemable upon the occurrence of an event that is not solely within the Company’s control and is reported in the

mezzanine section between total liabilities and shareholders’ deficit, as temporary equity in the Company’s consolidated

balance sheets.

The Company adjusts the Redeemable Noncontrolling Interest balance to reflect its estimate of the maximum redemption

amount each reporting period.

The Company’s non-controlling interest is redeemable at fair value, and no adjustment to the

earnings per share numerator is required because redemption at fair value is not considered an economic distribution different

from other common stockholders.

Foreign Currency

Translation and Functional Currency Conversion

Items included in these interim condensed consolidated financial statements of each of the Company and

the Company’s consolidated subsidiaries are measured using the currency of the primary economic environment in which the

entities operate (the “functional currency”).

Prior to March 17, 2023, the Company’s functional currency was

the Canadian dollar.

Translation gains and losses from the application of the U.S.

dollar as the reporting currency during the

period that the Canadian dollar was the functional currency are included as part of cumulative currency translation adjustment,

which is reported as a component of shareholders’ equity under accumulated other comprehensive loss.

Company re-assessed its functional currency and determined that on March 17, 2023, its functional currency changed from the Canadian

dollar to the U.S.

dollar based on significant changes in economic facts and circumstances in our organization.

The change in

functional currency was accounted for prospectively from March 17, 2023 and prior-period financial statements were not restated

for the change in functional currency.

Developments Ltd.

to the Condensed Consolidated Financial Statements

in thousands of U.S.

dollars, except per share amounts or as otherwise stated) (unaudited)

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.

Impacts to the Condensed Consolidated Statement of Operations and Comprehensive Loss (unaudited)

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

both monetary and non-monetary assets and liabilities, translated balances as of March 17, 2023 became the new accounting basis.

The exchange rate on the date of change became the historical rate at which non-monetary assets and liabilities were translated

in subsequent periods.

There was no effect on the cumulative translation adjustment on the consolidated basis.

Previously recorded

cumulative translation adjustments were not reversed.

For periods commencing after March 17, 2023, monetary assets and liabilities

denominated in foreign currencies are translated into U.S.

dollars using exchange rates in effect at the balance sheet date.

balances related to non-monetary assets and liabilities are based on prior period translated amounts, and non-monetary assets

and non-monetary liabilities incurred after March 17, 2023 are translated at the approximate exchange rate prevailing at the date

of the transaction.

Revenue and expense transactions are translated at the approximate exchange rate in effect at the time of

the transactions.

Foreign exchange gains and losses are included in the statement of operations and comprehensive loss as foreign

exchange gains.

The functional currency for the Company’s Canadian subsidiary, 0896800 BC Ltd., which has no independent

operations from its parent, also changed from the Canadian dollar to the U.S.

The functional currency for Elk Creek Resources

remains as the U.S.

On February 16, 2021, the Company entered into a Convertible Security Funding Agreement (as amended by

Amendment #1 to the Convertible Security Funding Agreement dated December 2, 2021, the “CSFA”) with Lind Global Asset

Management III, LLC (“Lind”), pursuant to which the Company issued a convertible security to Lind (the “Lind

III Convertible Security”).

Pursuant to the CSFA, Lind had certain consent and participation rights applicable in connection

with the GXII Transaction and the Yorkville Financings.

As more fully discussed in Note 8, on September 25, 2022, the Company and

Lind, entered into an agreement (the “Lind Consent”), which modified certain aspects of the CSFA.

originally accounted for the Lind Consent under Accounting Standards Codification (“ASC”) Topic 450, Contingencies.

In connection with the preparation of the Company’s financial statements for the period ended March 31, 2023, the Audit Committee,

in consultation with the Company’s management, determined that the Lind Consent should have been evaluated using ASC Topic

470 – Debt (“ASC 470”), which requires an evaluation of the contract amendment under applicable ASC debt modification

This error impacted the Company’s condensed consolidated balance sheets as of September 30, 2022 and December 31,

2022 and condensed consolidated statements of operations and comprehensive loss and condensed consolidated statements of shareholders’

equity for the periods ended September 30, 2022 and December 31, 2022, as well as certain notes thereto.

The identification of

the need for the restatement arose during the Company’s quarterly close for the quarter ended March 31, 2023.

The Company performed a

comparison of the discounted cash flows of the Lind III Convertible Security pursuant to the original CSFA and pursuant to the CSFA

as amended by the Lind Consent and determined that a debt extinguishment loss of $ 201

had occurred.

Further, ASC 470 requires that the minimum estimated Consent Payment (as defined below) of $ 200

also be included in the calculation of the gain or loss on debt extinguishment.

The Company also evaluated the Contingent Consent

Warrant (as defined below) feature included in the Lind Consent and determined that the Contingent Consent Warrants meet the

criteria to be considered separate, freestanding instruments, should be accounted for as a liability under ASC Topic 480,

Distinguishing Liabilities from Equity (“ASC 480”), and should be booked at fair value on the date of the Lind Consent,

with subsequent changes in valuation recorded as a non-operating gain or loss in the statement of operations.

The following table

summarizes the components of the initial loss on extinguishment:

Schedule Of Extinguishment Of Debt

Minimum Consent Payment at inception

Debt extinguishment fair value adjustment

Initial fair value of Contingent Consent Warrants

Total loss on debt extinguishment

These interim financial statements as of and for the three and nine months ended March 31, 2023 include

the impacts of this restatement.

The following tables disclose the impacts of the restatement on the previously filed Quarterly Reports

on Form 10-Q for the reporting periods ended September 30, 2022 and December 31, 2022.

Restatement Impacts to the Condensed

Consolidated Balance Sheet (unaudited)

As of September 30, 2022

As Previously Reported

Restatement Impacts

Deferred transaction costs

Convertible debt

Total current liabilities

Warrant liability

Total liabilities

Accumulated deficit

Total shareholders’ equity

Total liabilities and equity

Restatement Impacts to the Condensed

Consolidated Statement of Operations and Comprehensive Loss (unaudited)

For the Three Months Ended September

Previously Reported

Interest expense

Loss on debt extinguishment

Change in fair value of warrant liability

Loss before income taxes

Total comprehensive loss

Loss per share

Weighted average shares outstanding, on post-reverse

stock split basis

Restatement Impacts to the Condensed

Consolidated Statement of Cash Flows (unaudited)

For the Three Months Ended September

As Previously Reported

Restatement Impacts

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss for the period

Accretion of convertible debt

Loss on debt extinguishment

Change in fair value of warrant liability

Restatement Impacts to the Condensed

Consolidated Statement of Shareholders’ Equity (unaudited)

As of September 30, 2022

Comprehensive

As Previously Reported

Balance, June 30, 2022

$ ( 110,397 )

Debt conversions

Share issuance costs

Reporting currency translation

Loss for the period As restated (a)

Balance, September 30, 2022 As restated (a)

$ ( 112,951 )

Restatement Impacts

Balance, June 30, 2022

Loss for the period As restated (a)

Balance, September 30, 2022 As restated (a)

Balance, June 30, 2022

$ ( 110,397 )

Debt conversions

Share issuance costs

Reporting currency translation

Loss for the period As restated (a)

Balance, September 30, 2022 As restated (a)

$ ( 114,274 )

Restatement Impacts to the Condensed

Consolidated Balance Sheet (unaudited)

As of December 31, 2022

As Previously Reported

Restatement Impacts

Deferred transaction costs

Convertible debt

Total current liabilities

Warrant liability

Total liabilities

Accumulated deficit

Total shareholders’ equity

Total liabilities and equity

Restatement Impacts to the Condensed

Consolidated Statement of Operations and Comprehensive Loss (unaudited)

For the Three Months Ended December 31,

Previously Reported

Interest expense (income)

Change in fair value of warrant liability

Loss before income taxes

Total comprehensive loss

Impacts to the Condensed Consolidated Statement of Shareholders’ Equity (unaudited)

the Three Months Ended December 31, 2021

Restatement Impact to the Condensed Consolidated Statement of Shareholders' Equity (unaudited)

Loss per share

Weighted average shares outstanding, on post-reverse

stock split basis

Restatement Impacts to the Condensed

Consolidated Statement of Operations and Comprehensive Loss (unaudited)

For the Six Months Ended December 31,

Previously Reported

Interest expense

Loss on debt extinguishment

Change in fair value of warrant liability

Loss before income taxes

Total comprehensive loss

Loss per share

Weighted average shares outstanding, on post-reverse

stock split basis

Restatement Impacts to the Condensed

Consolidated Statement of Cash Flows (unaudited)

For the Six Months Ended December 31,

As Previously Reported

Restatement Impacts

September 30, 2021 opening balance adjustments:

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss for the period

Accretion of convertible debt

Loss on debt extinguishment

Change in financial instrument fair value

Restatement Impacts to the Condensed

Consolidated Statement of Shareholders’ Equity (unaudited)

For the Three Months Ended December 31,

Comprehensive

As Previously Reported

Balance, September 30, 2022

$ ( 112,951 )

Exercise of options

Debt conversions

Reporting currency translation

Loss for the period As restated (a)

Balance, December 31, 2022 As restated (a)

$ ( 115,159 )

Restatement Impacts

Balance, September 30, 2022

Loss for the period As restated (a)

Balance, December 31, 2022 As restated (a)

Balance, September 30, 2022

$ ( 114,274 )

Exercise of options

Debt conversions

Reporting currency translation

Loss for the period As restated (a)

Balance, December 31, 2022 As restated (a)

$ ( 116,703 )

Restatement Impacts to the Condensed

Consolidated Statement of Shareholders’ Equity (unaudited)

For the Six Months Ended December 31,

Common Shares

Accumulated Other Comprehensive Loss

As Previously Reported

Balance, June 30, 2022

$ ( 110,397 )

Exercise of warrants

Debt conversions

Share issuance costs

Reporting currency translation

Loss for the period As restated (a)

Balance, December 31, 2022 As restated (a)

$ ( 115,159 )

Restatement Impacts

Balance, June 30, 2022

Loss for the period As restated (a)

Balance, December 31, 2022 As restated (a)

Balance, June 30, 2022

$ ( 110,397 )

Exercise of warrants

Debt conversions

Share issuance costs

Reporting currency translation

Loss for the period As restated (a)

Balance, December 31, 2022 As restated (a)

$ ( 116,703 )

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.

Developments Ltd.

to the Condensed Consolidated Financial Statements

in thousands of U.S.

dollars, except per share amounts or as otherwise stated) (unaudited)

Impacts to the Condensed Consolidated Statement of Operations and Comprehensive Loss

(unaudited) For the Three Months Ended March 31, 2022

Previously Reported

exchange gain

Interest expense

Loss before income

Reporting currency

Total comprehensive

Loss per share

Weighted average shares

outstanding, on post-reverse stock split basis

Restatement Impacts to the Condensed Consolidated Statement of Shareholders’ Equity (unaudited)

For the Three Months Ended March 31, 2022

As Previously Reported

Restatement Impacts

December 31, 2021 opening balance adjustments:

$ ( 104,494 )

$ ( 105,590 )

Accumulated other comprehensive loss

Total Shareholders’ equity

2 unchanged sentences

Reporting currency translation

December 31, 2021 ending balance adjustments:

March 31, 2022 ending balance adjustments:

Accumulated other comprehensive loss

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

December 31, 2022

(expressed in thousands of

dollars, except per share amounts or as otherwise stated) (unaudited)

Impacts to the Condensed Consolidated Statement of Operations and Comprehensive Loss (unaudited)

the Six Months Ended December 31, 2021

For the six months ended December 31, 2021

As Previously Reported

Restatement Impacts

Foreign exchange loss

Restatement Impacts to the Condensed Consolidated Statement of Operations and Comprehensive Loss (unaudited)

For the Nine Months Ended March 31, 2022

Previously Reported

exchange loss

Interest expense

Loss before income taxes

Reporting currency translation

Total comprehensive loss

Impacts to the Condensed Consolidated Statement of Cash Flows (unaudited)

the Six Months Ended December 31, 2021

Loss before income

Reporting currency

Total comprehensive

Loss per share

Weighted average shares

outstanding, on post-reverse stock split basis

Restatement Impacts to the Condensed Consolidated Statement of Cash Flows (unaudited)

For the Nine Months Ended March 31, 2022

As Previously Reported

4 unchanged sentences

Foreign exchange loss

Impacts to the Condensed Consolidated Statement of Shareholders’ Equity (unaudited)

the Six Months Ended December 31, 2021

As Previously Reported

Developments Ltd.

to the Condensed Consolidated Financial Statements

in thousands of U.S.

dollars, except per share amounts or as otherwise stated) (unaudited)

Restatement Impacts to the Condensed Consolidated Statement of Shareholders’ Equity (unaudited)

For the Nine Months Ended March 31, 2022

Restatement Impacts

June 30, 2021 opening balance adjustments:

June 30, 2021 balances as previously reported

Accumulated other comprehensive loss

3 unchanged sentences

Reporting currency translation

December 31, 2021 ending balance adjustments:

March 31, 2022 ending balance adjustments:

Accumulated other comprehensive loss

CONCERN ISSUES

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

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

December 31, 2022

(expressed in thousands of

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.

GOING CONCERN ISSUES

Company incurred a loss of $ 35,649 for the nine months ended March 31, 2023 (2022 - $ 8,080 ) and had an accumulated deficit of

$ 146,046 as of March 31, 2023.

As a development stage issuer, the Company has not yet commenced its mining operations and accordingly

does not generate any revenue.

As of March 31, 2023, the Company had cash of $ 7,145 , which may not be sufficient to fund normal

operations for the next twelve months without deferring payment on certain liabilities or raising additional funds.

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.

Company’s ability to continue operations and fund its expenditures, which have averaged approximately $ 1,929 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

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.

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

NioCorp expects

to have access to up to $ 61,600 in net proceeds from the Yorkville Equity Facility Financing over the next three years, as discussed

In addition, the Company may pursue 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 potential issuance of Common Shares

under the Yorkville Equity Facility Financing Agreement, the Company did not have any further funding commitments or arrangements

for additional financing as of March 31, 2023.

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.

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.

AND BUILDINGS, NET

increased interest rates and inflation, 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

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.

GXII TRANSACTION

Pursuant to the Business Combination Agreement, the following transactions (collectively, the “GXII

Transaction”) occurred on the Closing Date:

a result of a series of transactions, GXII became an indirect, majority-owned subsidiary

of NioCorp and changed its name to “Elk Creek Resources Corp” (“ECRC”).

the parent company of the merged entity, NioCorp issued 1,753,821 post-Reverse Stock

Split Common Shares in exchange for all of the

Class A shares of GXII issued and outstanding immediately prior to the Closing, including 83,770 Common Shares issued to BTIG, LLC in exchange for Class A shares of GXII that it received

as partial payment for advisory services.

of the Class B shares of GXII issued and outstanding immediately prior to the Closing

(after giving effect to the surrender of certain Class B shares of GXII in accordance

with the Sponsor Support Agreement, dated September 25, 2022 (the “Sponsor Support

Agreement”), among GX Sponsor II LLC (the “Sponsor”), GXII, NioCorp

and the other persons party thereto) were converted into 7,957,404 shares of Class B

common stock of GXII (now known as ECRC) as the surviving entity of the mergers that

occurred on the Closing Date as part of the GXII Transaction.

Pursuant to the Business Combination

Agreement, the Sponsor Support Agreement and the Exchange Agreement, dated as of March

17, 2023 (as amended, supplemented or otherwise modified, the “Exchange Agreement”),

by and among NioCorp, ECRC and the Sponsor, after the Closing, the shares of Class B

common stock of ECRC are exchangeable into Common Shares on a one-for-one basis, subject to certain

equitable adjustments, under certain conditions.

See Note 9 for additional information

regarding the Class B common stock of ECRC.

assumed GXII’s obligations under the agreement (the “GXII Warrant Agreement”)

governing the GXII share purchase warrants (the “GXII Warrants”) and issued

an aggregate of 15,666,626 warrants (the “NioCorp Assumed Warrants”) to purchase

up to an aggregate of 17,519,864 Common Shares.

See Note 10b for additional information

regarding the NioCorp Assumed Warrants.

Developments Ltd.

to the Condensed Consolidated Financial Statements

in thousands of U.S.

dollars, except per share amounts or as otherwise stated) (unaudited)

the distribution of funds to GXII redeeming shareholders and prior to paying transaction costs incurred by GXII, $ 15,676

became available to the Company.

The following table summarizes the elements of the

GXII Transaction allocated to the Consolidated Statements of Operations:

Gross cash proceeds, net of transaction costs incurred by GXII

Net liabilities assumed

Warrants assumed at fair value

Earnout Shares assumed at fair value

Transaction costs expensed

Net costs allocated to other operating expense

number of Common Shares issued and outstanding immediately following the consummation of the Transactions were as follows:

Common Shares

Legacy NioCorp Shareholders

Former GXII Class A Shareholders 1

Total Common Shares Outstanding Upon Completion of Transactions

1 Includes 83,770 Common Shares issued to BTIG, LLC in exchange for Class A shares of GXII that it received

as partial payment for advisory services.

Represents Commitment Shares (as defined below) issued under the Yorkville Equity Facility Financing Agreement.

connection with the GXII Transaction, the Company also closed the Yorkville Convertible Debt Financing and the Yorkville Equity

Facility Financing, as discussed in Note 8.

LAND AND BUILDINGS,

October 2022, the Company entered into an agreement with the State of Nebraska (the “State”) to sell a strip of Company-owned

2 unchanged sentences

The Company recorded a gain of $ 13 associated with this

TRANSACTION COSTS

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.

PAYABLE AND ACCRUED LIABILITIES

2 unchanged sentences

Accounts payable accruals

Consent accrual

Interest payable to related party

Taxes payable

Interest and fees payable to related party

Other accruals

Total accounts payable and accrued liabilities

Developments Ltd.

to the Condensed Consolidated Financial Statements

in thousands of U.S.

dollars, except per share amounts or as otherwise stated) (unaudited)

CONVERTIBLE DEBT

III Convertible Security

Changes in the Lind III Convertible

Security are as follows :

Balance, June 30, 2022

Fair value increase due to debt extinguishment

Accretion expense

Payment at maturity

Balance, March 31, 2023

On September 25, 2022, the Company

and Lind entered into the Lind Consent, which included the following principal terms:

(i) the consent of Lind to the GXII Transaction

disclosed in Note 5 and Yorkville Financings disclosed in Note 8, including all actions taken by NioCorp as set out in the Business

Combination Agreement to permit the completion of the Transactions;

(ii) the consent of Lind to NioCorp’s expected cross-listing

to The Nasdaq Stock Market LLC (“Nasdaq”) 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 Yorkville

Equity Facility Financing;

and (iv) the waiver of Lind of certain restrictive covenants in the CSFA.

As consideration for entering

into the Lind Consent, Lind received, amongst other things:

(i) the right to receive a payment of $500, which would have been reduced

to $200 if the Transactions had not been consummated on or before April 30, 2023 (collectively, the “Consent Payment”);

(ii) an extension of its existing participation rights under the CSFA 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 “Contingent

Consent Warrants”) if on the date that is 18 months following the Closing Date, the closing trading price of the Common Shares

on the Toronto Stock Exchange (the “TSX”) or such other stock exchange on which such shares may then be listed, is

less than C$10.00 (on a post-Reverse Stock Split basis), subject to adjustments.

The number of Contingent Consent Warrants to be

issued, if any, is based on the Canadian dollar equivalent (based on the then current Canadian to US dollar exchange rate as reported

by Bloomberg, LP) of $5,000 divided by the five-day volume weighted average price of the Common Shares on the date of issuance.

Further, the number of Contingent 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 Contingent Consent Warrants.

The Lind Consent was

signed as an amendment to the existing CSFA.

Management determined that the

Lind Consent should have been evaluated using ASC 470, which requires an evaluation of the contract amendment under debt modification

The Company performed a comparison of the discounted cash flows of the Lind III Convertible Security pursuant to the

existing CSFA and pursuant to the CSFA as amended by the Lind Consent and determined that a debt extinguishment loss of $201 had

Further, ASC 470 requires that the minimum estimated Consent Payment of $200 also be included in the calculation of the

gain or loss on debt extinguishment.

The Company also evaluated the Contingent Consent Warrant feature included in the Lind Consent

and determined that the Contingent Consent Warrants meet the criteria to be considered separate, freestanding instruments, should

be accounted for as a liability under ASC 480, and should be booked at fair value on the date of the Lind Consent, with subsequent

changes in valuation recorded as a non-operating gain or loss in the statement of operations.

The following table summarizes the

components of the initial loss on extinguishment:

Developments Ltd.

to the Condensed Consolidated Financial Statements

in thousands of U.S.

dollars, except per share amounts or as otherwise stated) (unaudited)

The following table summarizes the components of the initial loss on extinguishment:

Component of loss

Minimum Consent Payment at inception

Loss on debt extinguishment

Initial fair value of Contingent Consent Warrants

Initial loss on debt extinguishment

Changes in the fair value of the Contingent Consent Warrants are presented below:

Initial valuation, September 25, 2022

Change in valuation

Valuation at September 30, 2022

Change in valuation

Valuation at December 31, 2022

Change in valuation

Valuation at March 31, 2023

The Contingent Consent Warrants are classified as a Level 3 financial instrument and were valued utilizing

a Monte Carlo simulation pricing model, which calculates multiple potential outcomes for future share prices based on historic

volatility of the Common Shares to determine the probability of issuance at 18 months following the applicable valuation date and

to determine the value of the Contingent Consent Warrants.

The following table discloses the primary inputs into the Monte Carlo

model at each valuation date, and the probability of issuance calculated by the model.

of valuation date and the probability calculated.

Key Valuation Input

September 25,

September 30,

Share price on valuation date

Risk free rate

Probability of issuance

(1) – Share price adjusted to reflect the Reverse Stock Split.

$300 loss on debt extinguishment booked in the quarter ended March 31, 2023 represents the difference between our accrual of the

minimum Consent Payment at September 25, 2022 and the actual payment made on March 17, 2023.

Loss on debt extinguishment is presented

as a non-operating expense in the Company’s consolidated statements of operations and comprehensive loss.

This accounting

also resulted in a decrease in the amount of accretion to be recognized over the remaining life of the Lind III Convertible Security

through February 2023.

Accretion expenses are disclosed as a part of interest expense, which is not included as a component of

operating costs.

Convertible Debentures

In connection with the GXII

Transaction, on January 26, 2023, NioCorp entered into definitive agreements with respect to the Yorkville Financings, including

a Securities Purchase Agreement, dated January 26, 2023 (as amended the “Yorkville Convertible Debt Financing Agreement”),

between the Company and Yorkville, and a Standby Equity Purchase Agreement, dated January 26, 2023 (the “Yorkville Equity

Facility Financing Agreement”), between the Company and Yorkville.

to the Yorkville Convertible Debt Financing Agreement, at the Closing, Yorkville advanced

a total amount of $ 15,360 to NioCorp in consideration of the issuance by NioCorp to Yorkville of

(i) $ 16,000 aggregate principal amount of unsecured convertible debentures (the “Convertible Debentures”) and (ii)

Common Share purchase warrants, exercisable for up to 1,789,267 Common Shares for cash or, if at any time there is no effective

registration statement registering, or no current prospectus available for, the resale of the underlying Common Shares, on a cashless

basis, at the option of the holder, at a price per Common Share of approximately $ 8.9422 , subject to adjustment to give effect

to any stock dividend, stock split, reverse stock split or similar transaction (the “Financing Warrants”).

Convertible Debenture issued under the Yorkville Convertible Debt Financing is an unsecured obligation of NioCorp, has an 18-month

term from the Closing Date, which may be extended for one six-month period in certain circumstances at the option of NioCorp,

and incurs a simple interest rate obligation of 5 .0% per annum

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

December 31, 2022

(expressed in thousands of

March 31, 2023

(expressed in thousands

dollars, except per share amounts or as otherwise stated) (unaudited)

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

(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.

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 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, but not

lower than the Floor Price (as defined below), and (ii) the five-day volume-weighted average price 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 Nasdaq 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.

The “Floor Price” means a price of $2.1435 per share, which

is equal to the lesser of (a) 30% of the average of the daily volume-weighted average price of the Common Shares on the principal

market for the Common Shares as reported by Bloomberg Financial Markets during the five consecutive trading days immediately

preceding the Debenture Closing and (b) 30% of the average of the volume-weighted average price of the Common Shares on the principal

market for the Common Shares as reported by Bloomberg Financial Markets during the five consecutive trading days immediately

following the Debenture Closing, subject to certain adjustments to give effect to any stock dividend, stock split, reverse stock

split, recapitalization or similar event.

terms of the Convertible Debentures restrict the number of Convertible Debentures that may be converted during each calendar month

by Yorkville at a Conversion Price below a fixed price equal to the quotient of (i) $10.00 divided by (ii) 1.11829212 (being the

number of Common Shares that were exchanged for each share of GXII at the Closing, after giving effect to the Reverse Stock Split),

subject to adjustment to give effect to any stock dividend, stock split, reverse stock split, recapitalization or similar event.

The Convertible Debentures are subject to customary anti-dilution adjustments.

terms of the Convertible Debentures restrict the conversion of Convertible Debentures by Yorkville if such a conversion would

cause Yorkville to exceed certain beneficial ownership thresholds in NioCorp or such a conversion would cause the aggregate number

of Common Shares issued pursuant to the Yorkville Convertible Debt Financing Agreement to exceed the thresholds for issuance of

Common Shares under the rules of the TSX and Nasdaq, unless prior shareholder approval is obtained.

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 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

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.

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

March 31, 2023

(expressed in thousands

dollars, except per share amounts or as otherwise stated) (unaudited)

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.

conjunction with the issuance of the Convertible Debentures, NioCorp issued to Yorkville 1,789,267 Common Share purchase warrants

entitling Yorkville to purchase Common Shares (the “Financing Warrants”) at an exercise price of approximately

$ 8.9422 per Common Share (the “Exercise Price”), subject to adjustment to give effect to any stock dividend, stock

split, reverse stock split recapitalization or similar event.

Financing Warrants are 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 May 4, 2023, 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, if at any time there is no effective registration statement registering, or no current prospectus available

for, the resale of the underlying Common Shares, on a cashless exercise basis.

1/12th of the Financing Warrants will expire on

each of the first 12 monthly anniversaries of the date that is six months following the Closing Date.

Financing Warrants have customary anti-dilution adjustments to be determined in accordance with the requirements of the applicable

stock exchanges, including the TSX.

terms of the Financing Warrants restrict the exercise of Financing Warrants by Yorkville if such an exercise would cause Yorkville

to exceed certain beneficial ownership thresholds in NioCorp or such an exercise would cause the aggregate number of Common Shares

issued pursuant to the Yorkville Convertible Debt Financing Agreement to exceed the thresholds for issuance of Common Shares under

the rules of the TSX and Nasdaq, unless prior shareholder approval is obtained.

The Financing Warrants were originally recorded as a $2,794 contingent liability on January 26, 2023,

and were subsequently marked to market through March 16, 2023 ($3,337).

The change in fair value during this period resulted in

a loss of $633, which was booked to change in fair value of warrant liability in the Statement of Operations and Comprehensive

The Financing Warrants were reclassified to shareholders equity on March 17, 2023, in connection with the closing of the

Convertible Debentures as noted below.

Company allocated the net proceeds of $ 15,360 from the Convertible Debentures as follows:

was booked to Common Shares, representing the initial fair value of the Financing Warrant

tranches on January 26, 2023 based on the Black Scholes pricing model using a risk-free interest rate of

an expected dividend yield of 0 %,

a volatility of 64.6 %,

and an expected life of 6

was booked to the convertible debt liability.

In addition, transaction costs of $ 503

were recognized as a direct deduction from the debt liability, resulting in a net opening

balance of $12,153.

This balance will be accreted to face value of the Convertible Debentures

at maturity using the effective interest method and recorded as non-cash interest expense

in the consolidated statement of operations.

in the Convertible Debentures are as follows:

Opening balance, March 17, 2023

Accretion expense

Balance, December 31, 2022

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 .

Balance, March 31, 2023

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.

The Company obtained a waiver from Yorkville with respect to any acceleration rights it may have under the Convertible Debentures

in connection with the restatements of the Company's financial statements for the periods ended September 30, 2022 and December

31, 2021 and the delay in filing the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2023.

on the Company’s closing Common Share price of $ 6.36 as of March 31, 2023, conversion of the remaining Convertible Debenture

balance, including accrued interest, would require the issuance of

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

March 31, 2023

(expressed in thousands

dollars, except per share amounts or as otherwise stated) (unaudited)

approximately 2,723,500 Common Shares.

For each $0.10 change

in the fair value of one Common Share, the total shares the Company would be obligated to issue would change by approximately

42,300 shares.

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.

Equity Facility Financing

with the closing of the Recapitalization Transaction, the Yorkville Equity Facility Financing became effective.

Pursuant to the Yorkville

Equity Facility Financing Agreement, Yorkville has committed to purchase up to $ 65,000 of Common Shares (the “Commitment

Amount”), at NioCorp’s direction from time to time for a period commencing upon the Closing Date and ending on the

earliest of (i) the first day of the month next following the 36-month anniversary of the 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”), subject to certain limitations and the

satisfaction of the conditions in the Yorkville Equity Facility Financing Agreement.

The Common Shares that may be sold pursuant

to the Yorkville Equity Facility Financing Agreement would be purchased by Yorkville at a purchase price equal to 97 % of the daily

volume-weighted average price of the Common Shares on Nasdaq or such other principal U.S.

market for the Common Shares if the

Common Shares are ever listed or traded on the New York Stock Exchange or the NYSE American as reported by Bloomberg Financial

Markets (or, if not available, a similar service provider of national recognized standing) during the applicable pricing period,

which is a period during a single trading day or a period of three consecutive trading days, at the Company’s option and

subject to certain restrictions, in each case, defined based on when an Advance Notice (as defined in the Yorkville Equity Facility

Financing Agreement) is submitted, subject to certain limitations.

to the terms of the Yorkville Equity Facility Financing Agreement, NioCorp issued 81,213 of Common Shares (the “Commitment

Shares”) valued at $ 650 to Yorkville as consideration for its irrevocable commitment to purchase Common Shares under the

Yorkville Equity Facility Financing Agreement.

Additionally, NioCorp is required to pay Yorkville an aggregate cash fee of $ 1,500

(the “Cash Fee”), including $ 500 that NioCorp paid on the Closing Date and the remainder that it will pay in installments

over a 12 -month period following the Closing Date, provided that, it will have the right to prepay without penalty all or part

of the remaining installments of the Cash Fee at any time.

In addition, legal and other costs of $ 496 were incurred in connection

with the Yorkville Equity Facility Financing and were expensed on the effective date.

As of March 31, 2023, no Common Shares had

been issued under the Yorkville Equity Facility Financing Agreement.

The following amounts related to the Yorkville Equity Facility Financing Agreement

were expensed as other operating costs during the quarter ended March 31, 2023:

Schedule of expenses as other operating costs

Yorkville Cash Fee

Fair value of Commitment Shares issued

Legal and other related costs

Net costs expensed to other operating expense

B COMMON STOCK OF ECRC

to the Business Combination Agreement, the Sponsor Support Agreement, and the Exchange Agreement, after the Closing, the GXII

founders have the right to exchange shares of Class B common stock of ECRC for Common Shares on a one-for-one basis, subject to

certain equitable adjustments, under certain conditions.

All 7,957,404 shares of Class B common stock

of ECRC that were issued in connection with the Closing were issued and outstanding as of March 31, 2023.

Of the issued

and outstanding shares of Class B common stock of ECRC, 4,565,808 shares (the “Vested Shares”) were vested

as of the Closing Date and are exchangeable at any time, and from time to time, until the tenth anniversary of the Closing Date

(the “Ten-Year Anniversary”) and 3,391,596 shares (the “Earnout Shares”) are exchangeable until the Ten-Year

Anniversary, subject to certain vesting conditions.

Under certain circumstances, and subject to certain exceptions, NioCorp may

instead settle all or a portion of any exchange pursuant to the terms of the Exchange Agreement in cash, in lieu of Common Shares,

based on a volume-weighted average price of Common Shares.

of the shares of Class B common stock of ECRC are subject to the Amended and Restated Registration Rights Agreement, dated as

of March 17, 2023 (the “Registration Rights and Lock-up Agreement”), among NioCorp, GXII, the Sponsor, the pre-Closing

directors and officers of NioCorp and the other parties thereto, including the members of the Sponsor.

Pursuant to Registration

Rights and Lock-up Agreement, all shares of

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

March 31, 2023

(expressed in thousands

dollars, except per share amounts or as otherwise stated) (unaudited)

Class B common Stock of ECRC (including the Vested Shares and the Released Earnout

Shares) are subject to certain “lock-up” restrictions on transfer beginning upon the

Closing and ending upon the earlier of (i) one year after the Closing and (ii) the date on which the trading price of Common Shares

exceeds certain thresholds or the date on which NioCorp completes a transaction that results in all of NioCorp’s shareholders

having the right to exchange their Common Shares for cash, securities or other property.

Both Vested Shares and Released Earnout

Shares may be exchanged by the holders into Common Shares at any time.

Under the Exchange Agreement, all Vested Shares

and Earnout Shares must be exchanged for Common Shares by the Ten-Year Anniversary except for Released Earnout Shares that have

been vested for a period of fewer than twenty-four months as of the Ten-Year Anniversary.

Such Released Earnout Shares will be

forfeited if not exchanged for Common Shares by the date that is twenty-four months after the vesting date.

the exchange of Vested Shares are contingently redeemable at the option of the noncontrolling interest shareholders, the Company

classifies the carrying amount of the redeemable noncontrolling interest in the mezzanine section on the consolidated balance

sheet, which is presented above the equity section and below liabilities.

The redeemable noncontrolling interests are classified

as a Level 1 financial instrument and are measured at the fair value of the Company’s Common Shares at each reporting period.

Adjustments to the carrying value of the redeemable noncontrolling interest are recorded through retained earnings.

Earnout Shares vest (the “Released Earnout Shares”) in two equal tranches based upon achieving market share price

milestones of approximately $12.00 per Common Share and approximately $15.00 per Common Share, respectively, prior to the Ten-Year

Anniversary, or upon a change in control as defined in the underlying agreement.

These shares will be forfeited if the market

share price milestones or an acceleration event is not reached prior to the Ten-Year Anniversary.

At such time that the Earnout

Shares shall become vested, and therefore, become Released Earnout Shares, the shares will be transferred to the redeemable noncontrolling

interest in the mezzanine section of the consolidated balance sheet.

The Earnout Shares were classified as a liability due to failure to meet the equity classification criteria

under ASC 815-40, as Level 3 instruments under the fair value hierarchy and are considered a financial liability under ASC 480,

Distinguishing Liabilities from Equity.

The Earnout Shares were measured at fair value on the Closing Date with subsequent changes

in fair value recorded in earnings.

The Earnout Shares were valued utilizing a Monte Carlo simulation pricing model, which calculates

multiple potential outcomes for future share prices and establishes current fair value based on the most likely outcome.

The following

table discloses the primary inputs into the Monte Carlo models.

The following table discloses the primary inputs into the Monte Carlo models.

Valuation Input

Common Share price

March 17, 2033

Implied volatility of Public Warrants

The following table sets forth

a summary of the changes in the fair value of the Earnout Shares liability for the period ended March 31, 2023:

Fair value as of March 17, 2023

Change in fair value

Fair value as of March 31, 2023

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

March 31, 2023

(expressed in thousands

dollars, except per share amounts or as otherwise stated) (unaudited)

Schedule of stock option

2 unchanged sentences

Balance, June 30, 2022

( 2,605,819 )

Cancelled/expired

( 1,898,181 )

Balance, December 31, 2022

following table summarizes information about Options outstanding at December 31, 2022:

Number Outstanding

Balance, March 31, 2023

following table summarizes information about Options outstanding at March 31, 2023:

Intrinsic Value

4 unchanged sentences

December 17, 2024

March 27, 2026

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

Share price of C$ 8.57 as of March 31, 2023, 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

As of March 31, 2023, there was $ 0 of unrecognized compensation cost related to unvested share-based

compensation arrangements granted under the Option plans.

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

December 31, 2022

(expressed in thousands of

dollars, except per share amounts or as otherwise stated) (unaudited)

Schedule of warrant transactions

Average Exercise Price

Balance, June 30, 2022

June 30, 2022

Cancelled/expired

Balance, December 31, 2022

December 31, 2022, the Company had outstanding exercisable Warrants, as follows:

March 31, 2023

(1) Includes 15,666,626

NioCorp Assumed Warrants assumed in connection with the Closing of the Transactions discussed below.

March 31, 2023, the Company had outstanding exercisable Warrants, as follows:

Schedule of outstanding exercisable warrants

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

March 31, 2023

(expressed in thousands

dollars, except per share amounts or as otherwise stated) (unaudited)

June 30, 2024

February 19, 2025

March 17, 2028

(1) Represents the Financing Warrants, 1/12th of which will expire on each of the first 12 monthly anniversaries

of the date that is six months following the Closing Date.

connection with the Closing, pursuant to the Business Combination Agreement, the Company assumed the GXII Warrant Agreement and

each GXII Warrant thereunder that was issued and outstanding immediately prior to the Closing Date was converted into one NioCorp

Assumed Warrant pursuant to the GXII Warrant Agreement, as amended by an Assignment, Assumption and Amendment Agreement, dated March 17, 2023, among the Company, GXII, Continental Stock Transfer & Trust Company, as the existing warrant agent, and Computershare Inc.

and its affiliate, Computershare Trust Company, N.A, together as the successor warrant agent (the “NioCorp Assumed Warrant Agreement”).

In connection with the Closing, NioCorp issued (a) 9,999,959

public NioCorp Assumed Warrants (the “Public Warrants”) in respect of the GXII Warrants that were publicly traded

prior to the Closing and (b) 5,666,667 NioCorp Assumed Warrants (the “Private Warrants”) to the Sponsor in respect

of the GXII Warrants that it held prior to the Closing, which NioCorp Assumed Warrants were subsequently distributed by the Sponsor

to its members in connection with the Closing.

Each NioCorp Assumed Warrant

entitles the holder to the right to purchase 1.11829212 Common Shares at an exercise price of $11.50 per 1.11829212 Common Shares

(subject to adjustments for stock splits, stock dividends, reorganizations, recapitalizations and the like).

No fractional shares

will be issued upon exercise of any NioCorp Assumed Warrants, and fractional shares that would otherwise be due to the exercising

holder will be rounded down to the nearest whole Common Share.

In no event will the Company be required to net cash settle any

NioCorp Assumed Warrant.

The Company may elect to redeem the Public Warrants subject to certain conditions, in whole and not in

part, at a price of $0.01 per Public Warrant if (i) 30 days’ prior written notice of redemption is provided to the holders,

(ii) the last reported sale price of the Common Shares equals or exceeds approximately $16.10 per share (as adjusted for stock

splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period

ending on the third business day prior to the date on which the Company sends the notice of redemption to the warrant holders and

(iii) there is an effective registration statement covering the Common Shares issuable upon exercise of the Public Warrants, and

a current prospectus relating thereto, available through the redemption date.

Upon issuance of a redemption notice by the Company,

the warrant holders will have until the redemption date to exercise for cash, or, at the Company’s election, on a cashless

The Public Warrants are not precluded from equity classification and are accounted for as such on the date of issuance,

and each balance sheet date thereafter.

Because the Transactions resulted in an excess of liabilities over assets acquired, no

value was ascribed to the Public Warrants.

The Private Warrants:

be exercisable either for cash or on a cashless basis at the holder’s option and (ii) will not be redeemable by the Company,

in either case as long as the Private Warrants are held by the Sponsor, its members or any of their permitted transferees (as

prescribed in the NioCorp Assumed Warrant Agreement).

In accordance with the NioCorp Assumed Warrant Agreement, any Private Warrants

that are held by someone other than the Sponsor, its members or any their permitted transferees are treated as Public Warrants.

The Company accounts for the Private Warrants assumed in the Transactions in accordance with the guidance

contained in ASC 815-40.

Such guidance provides that because the Private Warrants do not meet the criteria for equity treatment

thereunder, each Private Warrant must be recorded as a liability.

This liability is subject to re-measurement at each balance sheet

With each such re-measurement, the warrant liability will be adjusted to its current fair value, with the change in fair

value recognized in the Company’s statement of operations.

The Company will reassess the classification at each balance

Company classifies Private Warrants as Level 2 instruments under the fair value hierarchy and estimated the fair value using

a Black Scholes model with the following assumptions:

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

March 31, 2023

(expressed in thousands

dollars, except per share amounts or as otherwise stated) (unaudited)

Key Valuation Input

March 17, 2023

March 31, 2023

Stock price on valuation date

Implied volatility of Public Warrants

Risk free rate

Dividend yield

in the fair value of the Private Warrants are shown below:

Initial valuation, March 17, 2023

Change in valuation

Valuation at March 31, 2023

PARTY TRANSACTIONS AND BALANCES

7 unchanged sentences

The maturity date for the Smith Credit Facility is June 30, 2023.

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.

On February 28, 2023,

the Smith Credit facility was amended to increase the borrowing limit to $ 4,000 from the previous limit of $ 3,500 .

subsequently drew down $ 1,130 , leaving an available balance under the Smith Credit Facility of $52.

On March 22, 2023, the Company repaid Mr.

Smith $2,000, representing $159 of interest and $1,841 of principal

borrowed under the Smith Credit Facility.

This repayment was made out of funds transferred to the Company from the GXII trust account

on the Closing Date.

As of March 31, 2023, the principal amount outstanding under the Smith Credit Facility was $1,289 and accounts

payable and accrued liabilities as of March 31, 2023, include accrued interest of $3 and $28 of origination fees payable under

the Smith Credit Facility.

EXPLORATION EXPENDITURES

Schedule of exploration expenditures

Three Months Ended December 31,

Six Months Ended December 31,

studies and engineering

For the Three Months Ended

For the Nine Months Ended

Technical studies and engineering

Field management and other

3 unchanged sentences

Notes to the Condensed Consolidated Financial Statements

December 31, 2022

(expressed in thousands of

March 31, 2023

(expressed in thousands

dollars, except per share amounts or as otherwise stated) (unaudited)

Company incurred lease costs as follows:

Three Months Ended December 31,

Six Months Ended December 31,

Net lease cost –

other operating expense

maturities of lease liabilities are as follows at December 31, 2022:

For the Three Months Ended

For the Nine Months Ended

Operating Lease Cost:

Fixed rent expense

Variable rent expense

Short-term lease cost

Sublease income

Net lease cost – other operating expense

maturities of lease liabilities are as follows at March 31, 2023:

Future Lease Maturities

Total remaining lease payments

portion of payments representing interest

Present value of

lease payments – current lease liability

VALUE MEASUREMENTS

Less portion of payments representing interest

Present value of lease payments

Less current portion of lease payments

Non current lease liability

February 21, 2023, the Company executed an amendment to its existing office lease agreement, extending the lease for 39 months

through January 31, 2027.

FAIR VALUE MEASUREMENTS

Company measures the fair value of financial assets and liabilities based on U.S.

14 unchanged sentences

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

of March 31, 2023, and June 30, 2022, respectively, and indicate the fair value hierarchy of the valuation techniques the Company

utilized to determine such fair value.

7 unchanged sentences

Notes to the Condensed Consolidated Financial Statements

December 31, 2022

(expressed in thousands of

March 31, 2023

(expressed in thousands

dollars, except per share amounts or as otherwise stated) (unaudited)

Schedule of fair values determined by level 3 inputs are unobservable data

December 31, 2022

As of March 31, 2023

Cash and cash equivalents

Investment in equity securities

June 30, 2022

Earnout Shares liability

Warrants liabilities

As of June 30, 2022

Cash and cash equivalents

Investment in equity securities

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.

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.”

currently structured, the Business Combination Agreement is expected to be accounted for as a recapitalization in accordance with

Under this method of accounting, GXII will be treated as the “acquired” company for financial reporting

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.

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

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

December 31, 2022

(expressed in thousands of

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.

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.

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

(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.

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

(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.

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.

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”).

financings contemplated by the definitive agreements include (i) up to $ 16.0 million aggregate principal amount of unsecured convertible

debentures of NioCorp (the “Convertible

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

December 31, 2022

(expressed in thousands of

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”).

Yorkville Financings are expected to become effective on the date of the Transaction Closing, as previously announced on September

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.

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.

Convertible Debt Financing

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”).

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.

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

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

December 31, 2022

(expressed in thousands of

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.

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

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.

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.

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.

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.

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.

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.

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.

each of the first 12 monthly anniversaries of the Exercise Date, 1/12th of the Financing Warrants will expire.

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

December 31, 2022

(expressed in thousands of

dollars, except per share amounts or as otherwise stated) (unaudited)

Financing Warrants will have customary anti-dilution adjustments to be determined in accordance with the requirements of the applicable

stock exchanges, including the TSX.

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.

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.

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.

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.

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.

Equity Facility Financing

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

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

December 31, 2022

(expressed in thousands of

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.”

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”).

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.

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.

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.

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

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

December 31, 2022

(expressed in thousands of

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.

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

The parties may also terminate the Yorkville Equity Facility Financing Agreement by mutual written consent.

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.

Yorkville Convertible Debt Financing discussed in Note 8 was initially recorded at fair value, which

represented a nonrecurring fair value measurement using a Level 3 input.

At March 31, 2023, the estimated fair value of this instrument

approximated carrying value given that the instrument was issued in March 2023 and has a short time period until maturity.

April 28, 2023, the Company issued and sold 314,465 Common Shares in a registered direct offering at a price of $ 6.36 per share.

Net proceeds to the Company from the offering were approximately $ 1,800 .

NioCorp intends to use the net proceeds from the offering

for working capital and general corporate purposes, including to advance its efforts to launch construction of the Elk Creek Project

and move it to commercial operation.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements