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Item 1. Financial Statements

2023-06-08 compared with 2023-06-08 · 471 added, 989 removed, 157 unchanged (90% 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 September 30, 2022 and June 30, 2022 (unaudited)

Condensed consolidated statements of operations and comprehensive loss for the three months ended September 30, 2022 and 2021 (unaudited)

Condensed consolidated statements of cash flows for the three months ended September 30, 2022 and 2021 (unaudited)

Condensed consolidated statements of shareholders’ equity for the three months ended September 30, 2022 and 2021 (unaudited)

Notes to condensed consolidated financial statements (unaudited)

1 unchanged sentence

Condensed Consolidated Balance Sheets

(expressed in thousands of

dollars, except share data) (unaudited)

As restated (a)

Prepaid expenses and other

Total current assets

Deferred transaction costs

Investment in equity securities

Right-of-use assets

Land and buildings, net

Mineral interests

Accounts payable and accrued liabilities

Related party loan

Convertible debt

Operating lease liability

Total current liabilities

Warrant liability

Operating lease liability

Total liabilities

SHAREHOLDERS’ EQUITY

Common shares, unlimited shares authorized;

(expressed in thousands of U.S.

dollars, except share data)

expenses and other

current assets

Deferred transaction

in equity securities

and buildings, net

payable and accrued liabilities

lease liability

current liabilities

lease liability

SHAREHOLDERS’

shares, unlimited shares authorized;

shares outstanding:

28,242,065 at December 31, 2022 and 27,667,060 at June 30, 2022 (b)

Accumulated deficit

Accumulated other comprehensive loss

Total shareholders’ equity

Total liabilities and equity

(a) Amounts are restated.

Note 3 for more information.

27,939,322 at September 30,

2022 and 27,667,060 at June 30, 2022 (b)

other comprehensive loss

shareholders’ equity

liabilities and equity

are restated.

See Note 3 for more information.

(b) Amounts of shares outstanding are restated to give retroactive

3 unchanged sentences

NioCorp Developments Ltd.

Condensed Consolidated Statements of Operations and Comprehensive

Condensed Consolidated Statements of Operations and Comprehensive Loss

(expressed in thousands of

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

For the three months ended

For the six months ended

As restated (a)

the three months ended

September 30,

Operating expenses

Employee related costs

Professional fees

Exploration expenditures

Other operating expenses

Total operating expenses

Change in fair value of warrant liability

Loss on debt extinguishment

exchange (gain) loss

(income) expense

Gain on sale of assets

Other loss on equity securities

Loss before income taxes

Income tax benefit

Other comprehensive loss:

Other comprehensive loss (gain):

Reporting currency translation

Total comprehensive loss

Loss per common share, basic and diluted (b)

Weighted average common shares outstanding (b)

(a) Amounts are restated.

Note 3 for more information.

related costs

operating expenses

in fair value of warrant liability

on debt extinguishment

exchange loss

(gain) loss on equity securities

before income taxes

Other comprehensive

comprehensive loss (gain):

currency translation

comprehensive loss

per common share, basic and diluted (b)

average common shares outstanding (b)

are restated.

See Note 3 for more information.

(b) Amounts are restated to give effect to the Reverse Stock Split.

1 unchanged sentence

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

NioCorp Developments Ltd.

Condensed Consolidated Statements of Cash Flows

(expressed in thousands of

Developments Ltd.

Consolidated Statements of Cash Flows

in thousands of U.S.

dollars) (unaudited)

For the six months ended

As restated (a)

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss for the period

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

Unrealized loss on equity securities

Accretion of convertible debt

Loss on debt extinguishment

Gain on sale of assets

Change in fair value of warrant liability

Noncash lease expense

Foreign exchange loss

Share-based compensation

Change in working capital items:

Prepaid expenses and other

Accounts payable and accrued liabilities

Net cash used in operating activities

CASH FLOWS FROM INVESTING ACTIVITIES

Acquisition of land and buildings

Proceeds from sale of assets

Net cash provided by (used in) investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issuance of common shares

Share issuance costs

Payments of deferred transaction costs

Related party debt repayments

Net cash (used in) provided by financing activities

Exchange rate effect on cash and cash equivalents

Change in cash and cash equivalents during period

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

Supplemental cash flow information:

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

(a) Amounts are restated.

See Note 3 for more information.

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

NioCorp Developments Ltd.

Condensed Consolidated Statements of Shareholders’

(expressed in thousands of U.S.

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

For the three months ended December 31, 2022 and 2021

Shares Outstanding (b)

Common Shares

Accumulated Deficit

Accumulated Other Comprehensive Loss

Balance, September 30, 2021

Exercise of options

Debt conversions

Share-based compensation

Reporting currency translation

the three months ended

September 30,

FLOWS FROM OPERATING ACTIVITIES

loss for the period

Balance, December 31, 2021

Balance, September 30, 2022, as restated

Exercise of options

Debt conversions

Reporting currency translation

Loss for the period, as restated (a)

Balance, December 31, 2022, as restated

Amounts are restated.

to reconcile net loss to net cash used in operations:

(gain) loss on equity securities

of convertible debt

lease expense

in fair value of warrant liability

on debt extinguishment

exchange loss

in working capital items:

expenses and other

payable and accrued liabilities

cash used in operating activities

FLOWS FROM INVESTING ACTIVITIES

of land and buildings

cash used in financing activities

FLOWS FROM FINANCING ACTIVITIES

from issuance of common shares

party debt repayments

cash provided by financing activities

rate effect on cash and cash equivalents

in cash and cash equivalents during period

and cash equivalents, beginning of period

and cash equivalent, end of period

cash flow information:

paid for interest

paid for income taxes

financing transactions:

of debt for common shares

transaction costs, accrued but not paid

are restated.

See Note 3 for more information.

(b) Amounts are restated to give retroactive effect to the Reverse Stock Split.

See Note 2d for more information.

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

in thousands of U.S.

dollars, except for Common Shares outstanding) (unaudited)

the three months ended September 30, 2022 and 2021

Shares Outstanding (b)

Common Shares

Accumulated Other Comprehensive Loss

Balance, June 30, 2021

Exercise of warrants

Exercise of options

Debt conversions

Share-based compensation

Reporting currency translation

Loss for the period

Balance, December 31, 2021

Balance, June 30, 2022

Exercise of options

Debt conversions

Share issuance costs

Reporting currency translation

Loss for the period, as restated (a)

Balance, December 31, 2022, as restated

(a) Amounts are restated.

Other Comprehensive Loss

June 30, 2021

currency translation

for the period

September 30, 2021

June 30, 2022

issuance costs

currency translation

for the period, as restated (a)

September 30, 2022, as restated (a)

are restated.

See Note 3 for more information.

2 unchanged sentences

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

Developments Ltd.

to the Condensed Consolidated Financial Statements

September 30, 2022

in thousands of U.S.

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

DESCRIPTION OF BUSINESS

NioCorp Developments Ltd.

or the “Company”) was incorporated on February 27, 1987, under the laws of the Province of British Columbia and currently

operates in one reportable operating segment consisting of exploration and development of mineral deposits in North America, specifically,

the Elk Creek Niobium/Scandium/Titanium property (the “Elk Creek Project”) located in southeastern Nebraska.

These interim condensed consolidated

financial statements have been prepared on a going concern basis that contemplates the realization of assets and discharge of liabilities

at their carrying values in the normal course of business for the foreseeable future.

These financial statements do not reflect

any adjustments that may be necessary if the Company is unable to continue as a going concern.

The Company currently earns

no operating revenues and will require additional capital in order to advance the Elk Creek Project to construction and commercial

As further discussed in Note 4, these matters raised substantial doubt about the Company's ability to continue as a

going concern, and the Company is dependent upon the generation of profits from mineral properties, obtaining additional financing

and maintaining continued support from its shareholders and creditors.

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.

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.

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

construction and commercial operation.

As further discussed in Note 4, these matters raised substantial doubt about the Company's

ability to continue as a going concern, and the Company is dependent upon the generation of profits from mineral properties, obtaining

additional financing and maintaining continued support from its shareholders and creditors.

OF PREPARATION

Basis of Preparation

Basis of Preparation and Consolidation

The accompanying unaudited interim

condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles of the

United States of America (“U.S.

GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”).

The interim condensed consolidated financial statements include the consolidated accounts of the Company and its wholly owned subsidiaries

with all significant intercompany transactions eliminated.

The accounting policies followed in preparing these interim condensed

consolidated financial statements are those used by the Company as set out in the audited consolidated financial statements for

the year ended June 30, 2022.

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

In the opinion of management,

all adjustments considered necessary (including reclassifications and normal recurring adjustments) for a fair statement of the

financial position, results of operations, and cash flows at December 31, 2022, and for all periods presented, have been included

in these interim condensed consolidated financial statements.

Certain information and footnote disclosures normally included in

the consolidated financial statements prepared in accordance with U.S.

GAAP have been condensed or omitted pursuant to appropriate

SEC rules and regulations.

These interim condensed consolidated financial statements should be read in conjunction with the audited

consolidated financial statements for the year ended June 30, 2022.

The interim results are not necessarily indicative of results

for the full year ending June 30, 2023, or future operating periods.

Recent Accounting Standards

Issued and Adopted

In August 2020, the Financial

Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No.

2020-06, Debt -

Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity

(Subtopic 815-40) (“ASU 2020-06”), which simplifies the accounting for convertible instruments.

ASU 2020-06 removes

certain accounting models which separate the embedded conversion features from the host contract for convertible instruments.

Either a modified retrospective method of transition or a fully retrospective method of transition is permissible for the adoption

of this standard.

ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within

those fiscal years.

The Company adopted ASU 2020-06 on July 1, 2022, with no material effect on the Company’s current financial

position, results of operations or financial statement disclosures.

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

December 31, 2022

(expressed in thousands of

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 September 30, 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.

Recent Accounting

August 2020, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”)

2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts

in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”), which simplifies the accounting for convertible instruments.

ASU 2020-06 removes certain accounting models which separate the embedded conversion features from the host contract for convertible

Either a modified retrospective method of transition or a fully retrospective method of transition is permissible

for the adoption of this standard.

ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim

periods within those fiscal years.

The Company adopted ASU 2020-06 on July 1, 2022, with no material effect on the Company’s

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

Developments Ltd.

to the Condensed Consolidated Financial Statements

in thousands of U.S.

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

Issued and Not Effective

From time to time, new accounting

pronouncements are issued by the FASB that are adopted by the Company as of the specified effective date.

Unless otherwise discussed,

management believes that the impact of recently issued standards did not or will not have a material impact on the Company’s

consolidated financial statements upon adoption.

and Not Effective

time to time, new accounting pronouncements are issued by the FASB that are adopted by the Company as of the specified effective

Unless otherwise discussed, management believes that the impact of recently issued standards did not or will not have a

material impact on the Company’s consolidated financial statements upon adoption.

Use of Estimates

The preparation of consolidated

financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported

amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements,

and the reported amounts of expenses during the reporting period.

The Company regularly evaluates estimates and assumptions related

to the deferred income tax asset valuations, convertible debt valuations, and share-based compensation.

The Company bases its estimates

and assumptions on current facts, historical experience, and various other factors that it believes to be reasonable under the

circumstances, the results of which form the basis for making judgments about the other sources.

The actual results experienced

by the Company may differ materially and adversely from the Company’s estimates.

To the extent there are material differences

between estimates and the actual results, future results of operations will be affected.

Basic and Diluted Earnings per Share

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.

Basic and Diluted

Earnings per Share

On March 17, 2023, the Company

6 unchanged sentences

effect to the Reverse Stock Split.

Basic net loss per share is computed

by dividing net loss by the weighted average number of the Company’s Common Shares outstanding during the period.

net loss per share is computed by dividing the net loss by the weighted-average number of Common Share equivalents outstanding

for the period determined using the treasury stock method or the if-converted method, as applicable.

For purposes of this calculation,

options to purchase Common Shares (“Options”) and warrants to purchase Common Shares (“Warrants”) are considered

to be Common Share equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive.

The following shares underlying Options, Warrants, and outstanding convertible debt were antidilutive due to a net loss

in the periods presented and, therefore, were excluded from the dilutive securities computation for the three- and six-month periods

ended December 31, 2022 and 2021, as indicated below.

Schedule of excluded from the dilutive securities

For the three and six months ended December 31,

Excluded potentially dilutive securities (1) :

net loss per share is computed by dividing net loss by the weighted average number of the Company’s 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 as indicated below.

the three months ended

September 30,

potentially dilutive securities (1) :

Convertible debt

Total potential dilutive securities

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 U.S.

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 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.

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 Transaction (as defined below) and the proposed

financing transactions with Yorkville Advisors Global, LP (“Yorkville”), each as described in Note 13.

25, 2022, the Company and Lind entered into a Waiver and Consent Agreement (the “Lind Consent”), which included the

following principal terms:

(i) the consent of Lind to the Transaction and the proposed financing transactions with Yorkville,

Developments Ltd.

to the Condensed Consolidated Financial Statements

in thousands of U.S.

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

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 Transaction (as defined below) and the proposed financing transactions with Yorkville Advisors Global, LP, each as described

On September 25, 2022, the Company and Lind entered into a Waiver and Consent Agreement (the “Lind Consent”),

which included the following principal terms:

(i) the consent of Lind to the Transaction and the proposed financing transactions

with Yorkville Advisors Global, LP, 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 cross-listing to The Nasdaq Stock

Market LLC (“Nasdaq”) 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 Advisors Global, LP;

and (iv) the waiver of Lind of certain restrictive covenants

As consideration for entering

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

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

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

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

Advisors Global, LP 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 consummation of the Transaction, 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, subject to adjustments.

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

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 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 proposed standby equity purchase agreement between NioCorp

and Yorkville;

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

consideration for entering into the Lind Consent, Lind received, amongst other things:

(i) the right to receive a payment of $ 500 ,

which would 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 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 consummation of the Transaction,

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, subject to adjustments.

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.

3 unchanged sentences

Contingencies.

The identification of the need

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

Pursuant to these procedures,

the Audit Committee, in consultation with the Company’s management, determined that the Lind Consent should have been evaluated

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

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

Pursuant to these procedures, the Audit Committee, in consultation with the Company’s management, determined that

the Lind Consent should have been evaluated under ASC 470 – Debt (“ASC 470”), which requires an evaluation of

the contract amendment under ASC 470 debt modification guidance.

The Company performed a comparison

3 unchanged sentences

estimated Consent Payment of $200 also be included in the calculation of the gain or loss on debt extinguishment.

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

December 31, 2022

(expressed in thousands of

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 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 debt extinguishment:

Developments Ltd.

to the Condensed Consolidated Financial Statements

in thousands of U.S.

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

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 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 debt extinguishment:

Of Extinguishment Of Debt

Consent Payment at inception

2 unchanged sentences

Initial loss on debt extinguishment

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

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

Initial valuation, September 25, 2022

1 unchanged sentence

Valuation at September 30, 2022

Change in valuation

Valuation at December 31, 2022

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.

The following table discloses the primary inputs into the Monte Carlo model at each valuation date, and the probability of issuance calculated

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.

Key Valuation Input

September 25, 2022

September 30, 2022

Share price on valuation date

7 unchanged sentences

a component of operating costs.

correction to the Company’s condensed consolidated statements of operations and comprehensive loss also impacts the Company’s

condensed consolidated balance sheet, condensed consolidated statements of shareholders’ equity, and certain notes to the

condensed consolidated financial statements three months ended September 30, 2022 and for the three and six months ended December 31, 2022 as illustrated in the tables

This correction does not impact the condensed consolidated statements of cash flows besides offsetting adjustments between

net loss, accretion of convertible debt, and loss on debt extinguishment within the cash flows from operating activities section.

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)

Restatement Impacts to the Condensed

Consolidated Balance Sheet (unaudited)

As of September 30, 2022

This correction to the Company’s

condensed consolidated statements of operations and comprehensive loss also impacts the Company’s condensed consolidated

balance sheet, condensed consolidated statements of shareholders’ equity, and certain notes to the condensed consolidated

financial statements for the three months ended September 30, 2022 as illustrated in the tables below.

This correction does not

impact the condensed consolidated statements of cash flows besides offsetting adjustments between net loss, accretion of convertible

debt, and loss on debt extinguishment within the cash flows from operating activities section.

Restatement Impacts to the Condensed Consolidated Balance Sheet (unaudited)

of September 30, 2022

As Previously Reported

8 unchanged sentences

Total liabilities and equity

Restatement Impacts to the Condensed

Consolidated Statement of Operations and Comprehensive Loss (unaudited)

For the Three Months Ended September

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 Operations and Comprehensive Loss (unaudited)

the Three Months Ended September 30, 2022

As Previously Reported

5 unchanged sentences

Total comprehensive loss

Loss per share

Weighted average shares outstanding

Restatement Impacts to the Condensed

Consolidated Statement of Cash Flows (unaudited)

Weighted average shares

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

For the Three Months Ended September 30, 2022

6 unchanged sentences

Change in fair value of warrant liability

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)

Restatement Impacts to the Condensed

Consolidated Statement of Shareholders’ Equity (unaudited)

As of September 30, 2022

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

of September 30, 2022

Comprehensive

As Previously Reported

Previously Reported

Balance, June 30, 2022

6 unchanged sentences

$ ( 112,951 )

Restatement Impacts

Balance, June 30, 2022

9 unchanged sentences

$ ( 114,274 )

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)

Restatement Impacts to the Condensed Consolidated Balance Sheet (unaudited)

As of December 31,

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, 2022

Restatement Impacts to

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

As Previously Reported

Restatement Impacts

Interest expense (income)

Change in fair value of warrant liability

Loss before income taxes

Total comprehensive loss

average shares outstanding

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

For the Six Months

Ended December 31, 2022

As Previously Reported

Restatement Impacts

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

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

Months Ended December 31, 2022

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

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 financial instrument fair value

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)

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

For the Three Months

Ended December 31, 2022

Comprehensive

As Previously Reported

Balance, September 30, 2022

$ ( 112,951 )

Exercise of options

Debt conversions

Reporting currency translation

Loss for the period

Balance, December 31, 2022

$ ( 115,159 )

Restatement Impacts

Balance, September 30, 2022

Loss for the period

Balance, December 31, 2022

Balance, September 30, 2022

$ ( 114,274 )

Exercise of options

Debt conversions

Reporting currency translation

Loss for the period, as restated

Balance, December 31, 2022, as restated

$ ( 116,703 )

Restatement Impacts to the Condensed Consolidated Statement of Shareholders'

Equity (unaudited)

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

For the Six Months

Ended December 31, 2022

Comprehensive

As Previously Reported

Balance, June 30, 2022

$ ( 110,397 )

Exercise of warrants

Debt conversions

Share issuance costs

Reporting currency translation

Loss for the period

Balance, December 31, 2022

$ ( 115,159 )

Restatement Impacts

Balance, June 30, 2022

Loss for the period

Balance, December 31, 2022

Balance, June 30, 2022

$ ( 110,397 )

Exercise of warrants

Debt conversions

Share issuance costs

Reporting currency translation

Loss for the period, as restated

Balance, December 31, 2022, as restated

$ ( 116,703 )

As previously reported, the

Company restated its consolidated balance sheets as of June 30, 2022 and 2021, and consolidated statements of operations and comprehensive

income, equity and cash flows for the years ended June 30, 2022 and 2021.

In addition, the restatement impacted the first,

second and third quarters of our fiscal year ended June 30, 2022.

The summarized restatement impacts for the comparable interim

period in fiscal year 2022 are presented below.

The restatement corrects errors related to the accounting for the unamortized

deferred financing costs and debt discounts upon extinguishments of debt related to debt conversions.

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

December 31, 2022

(expressed in thousands of

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)

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

For the Three Months Ended December 31, 2021

As Previously Reported

Restatement Impacts

Interest expense

Loss before income taxes

Reporting currency translation

Total comprehensive loss

Loss per share

Weighted average shares

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

For the Three Months Ended December 31, 2021

As Previously Reported

Restatement Impacts

September 30, 2021 opening balance adjustments:

$ ( 101,036 )

$ ( 101,598 )

Accumulated other comprehensive loss

Total Shareholders’ equity

Activity adjustments:

Loss for the period

Reporting currency translation

December 31, 2021 ending balance adjustments:

Accumulated other comprehensive loss

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

For the Six Months Ended December 31, 2021

the Three Months Ended September 30, 2021

As Previously Reported

6 unchanged sentences

Loss per share

Weighted average shares outstanding

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)

Weighted average shares

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

For the Six Months Ended December 31, 2021

the Three Months Ended September 30, 2021

As Previously Reported

5 unchanged sentences

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

For the Six Months Ended December 31, 2021

the Three Months Ended September 30, 2021

As Previously Reported

6 unchanged sentences

Reporting currency translation

December 31, 2021 ending balance adjustments:

September 30, 2021 ending balance adjustments:

Accumulated other comprehensive loss

GOING CONCERN ISSUES

The Company incurred a loss

of $ 6,306 for the six months ended December 31, 2022 (2021 - $ 6,080 ) and had a working capital deficit of $ 6,591 and an accumulated

deficit of $ 116,703 as of December 31, 2022.

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

and accordingly does not generate any revenue.

As of December 31, 2022, the Company had cash of $ 424 which is not sufficient to

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

In addition, the Company will be required to raise additional funds for construction and commencement of operations.

These factors

raise substantial doubt about the Company's ability to continue as a going concern.

The Company’s ability

to continue operations and fund its expenditures, which have averaged approximately $ 1,400 per quarter over the preceding three-year

period, is dependent on management’s ability to secure additional financing.

Management is actively pursuing additional sources

of financing, and while it has been successful in doing so in the past, there can be no assurance it will be able to do so in the

Other than the proposed business combination and potential financing packages discussed in Notes 14 and 15, the Company

did not have any further funding commitments or arrangements for additional financing as of December 31, 2022.

These interim condensed

consolidated financial statements do not give effect to any adjustments required to realize the Company’s assets and discharge

its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying financial

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

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

December 31, 2022

(expressed in thousands of

Company incurred a loss of $ 3,877 for the three months ended September 30, 2022 (2021 - $ 2,088 ) and had a working capital deficit

of $3,289 and an accumulated deficit of $ 114,274 as of September 30, 2022.

As a development stage issuer, the Company has not

yet commenced its mining operations and accordingly does not generate any revenue.

As of September 30, 2022, the Company had cash

of $ 3,192 which may not be sufficient to fund normal operations for the next twelve months without deferring payment on certain

liabilities or raising additional funds.

In addition, the Company will be required to raise additional funds for construction

and commencement of operations.

These factors raise substantial doubt about the Company's ability to continue as a going concern.

Developments Ltd.

to the Condensed Consolidated Financial Statements

in thousands of U.S.

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

COVID-19 variants.

In addition, recent worldwide events have created

general global economic uncertainty as well as uncertainty in capital markets, supply chain disruptions, increased interest rates,

and the potential for geographic recessions.

We believe this could have an adverse impact on our ability to obtain financing, development

plans, results of operations, financial position, and cash flows during the current fiscal year.

The full extent to which these

events and our precautionary measures may continue to impact our business will depend on future developments, which continue to

be highly uncertain and cannot be predicted at this time.

LAND AND BUILDINGS, NET

In October 2022, the Company

entered into an agreement with the State of Nebraska (the “State”) to sell a strip of Company-owned land totaling approximately

1.27 acres located adjacent to State Highway 50 in connection with highway improvements to be completed by the State, for $ 21 ,

inclusive of estimated fence replacement costs.

The Company recorded a gain of $ 13 associated with this sale.

DEFERRED TRANSACTION COSTS

The Company has deferred third-party

costs, including legal fees, other professional and consulting fees, and due diligence fees, incurred in connection with the proposed

transaction discussed in Note 14.

These costs are deferred until closing, at which time a portion of the directly attributable

costs will be recorded against convertible debt to be entered into in connection with the proposed transaction, with the remainder

treated as a reduction to the value of Common Shares issued.

ACCOUNTS PAYABLE AND ACCRUED

Schedule of account payable and accrued liabilities

Accounts payable, trade

Accounts payable accruals

Consent accrual

Interest payable to related party

Other accruals

Total accounts payable and accrued liabilities

CONVERTIBLE DEBT

Changes in the Lind III Convertible

Security are as follows:

Lind III Convertible Security

Company’s ability to continue operations and fund its expenditures, which have historically averaged approximately $ 1,265

per quarter over the preceding three-year period, is dependent on management’s ability to secure additional financing.

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 Note 13, the Company did not have any further funding commitments or arrangements for additional financing as of

September 30, 2022.

These consolidated financial statements do not give effect to any adjustments required to realize the Company’s

assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected

in the accompanying financial statements.

March 2020, several measures have been implemented in the United States, Canada, and the rest of the world in response to the

increased impact from the novel coronavirus (“COVID-19”) pandemic and subsequent COVID-19 variants.

In addition, recent

worldwide events have created general global economic uncertainty as well as uncertainty in capital markets, supply chain disruptions,

increased interest rates, and the potential for geographic recessions.

We believe this could have an adverse impact on our ability

to obtain financing, development plans, results of operations, financial position, and cash flows during the current fiscal year.

The full extent to which these events and our precautionary measures may continue to impact our business will depend on future

developments, which continue to be highly uncertain and cannot be predicted at this time.

DEFERRED TRANSACTION

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 13.

These costs are deferred until closing, at which time

a portion of the 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

of account payable and accrued liabilities

payable, trade

payable accruals

payable to related party

Total accounts payable

and accrued liabilities

in the Lind III Convertible Security are as follows:

III Convertible Security

Balance, June 30,

1 unchanged sentence

Fair value increase due to debt extinguishment

Balance, December 31, 2022

Based on the Company’s

closing Common Share price of C$ 10.00 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 81,600 Common Shares.

For each C$ 0.10 change in the fair value of one Common Share, the total Common Shares the Company would be obligated to issue would change by approximately 800 shares.

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

December 31, 2022

(expressed in thousands of

Balance, September

Developments Ltd.

to the Condensed Consolidated Financial Statements

in thousands of U.S.

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

COMMON SHARES

Stock Options

Schedule of stock option

on the Company’s closing Common Share price of C$ 14.30 as of September 30, 2022, conversion of the remaining Lind III Convertible

Security undiscounted face value of $ 815 (including accrued interest) would require the issuance of approximately 103,000 Common

For each C$ 0.10 change in the fair value of one Common Share, the total Common Shares the Company would be obligated to

issue would change by approximately 800 shares.

of stock option

Number of Options

2 unchanged sentences

Cancelled/expired

Balance, December 31, 2022

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

Schedule of information about stock options outstanding

Exercise Price

Number Outstanding

Aggregate Intrinsic Value

Number Exercisable

Aggregate Intrinsic Value

September 18, 2023

November 15, 2023

December 14, 2023

December 16, 2023

December 17, 2024

The aggregate intrinsic value

in the preceding table represents the total intrinsic value, based on the Company’s closing Common Share price of C$ 10.00

as of December 31, 2022, that would have been received by the Option holders had all Option holders exercised their Options as

of that date.

As of December 31, 2022, there was $ 0 of unrecognized compensation cost related to unvested share-based compensation

arrangements granted under the Option plans.

Schedule of warrant transactions

Number of Warrants

Weighted Average Exercise Price

Balance, June 30, 2022

Cancelled/expired

Balance, December 31, 2022

At December 31, 2022, the Company

had outstanding exercisable Warrants, as follows:

Schedule of outstanding exercisable warrants

Exercise Price

Balance, September 30, 2022

following table summarizes information about Options outstanding at September 30, 2022:

Intrinsic Value

aggregate intrinsic value in the preceding table represents the total intrinsic value, based on the Company’s closing Common

Share price of C$ 14.30 as of September 30, 2022, that would have been received by the Option holders had all Option holders exercised

their Options as of that date.

There were no in-the-money Options vested and exercisable as of September 30, 2022.

As of September

30, 2022, there was $ 0 of unrecognized compensation cost related to unvested share-based compensation arrangements granted under

the Option plans.

of warrant transactions

Average Exercise Price

June 30, 2022

February 19, 2025

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

December 31, 2022

(expressed in thousands of

Cancelled/expired

September 30, 2022

Developments Ltd.

to the Condensed Consolidated Financial Statements

in thousands of U.S.

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

RELATED PARTY TRANSACTIONS

Borrowings under the non-revolving

credit facility agreement (the “Smith Credit Facility”) with Mark Smith, Chief Executive Officer, President, and Executive

Chairman of NioCorp, bear interest at a rate of 10 % and drawdowns from the Smith Credit Facility are subject to a 2.5 % establishment

Amounts outstanding under the Smith Credit Facility are secured by all of the Company’s assets pursuant to a general

security agreement.

The Smith Credit Facility contains financial and non-financial covenants customary for a facility of its size

September 30, 2022, the Company had outstanding exercisable Warrants, as follows:

PARTY TRANSACTIONS AND BALANCES

under the non-revolving credit facility agreement (the “Smith Credit Facility”) with Mark Smith, Chief Executive Officer,

President, and Executive Chairman of NioCorp, bear interest at a rate of 10 % and drawdowns from the Smith Credit Facility are

subject to a 2.5 % establishment fee.

Amounts outstanding under the Smith Credit Facility are secured by all of the Company’s

assets pursuant to a general security agreement.

The Smith Credit Facility contains financial and non-financial covenants customary

for a facility of its size and nature.

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

As of December 31, 2022, the

principal amount outstanding under the Smith Credit Facility was $ 2,000 and accounts payable and accrued liabilities as of December

31, 2022, include accrued interest of $ 102 payable under the Smith Credit Facility.

EXPLORATION EXPENDITURES

Schedule of exploration expenditures

For the Three Months Ended December 31,

For the Six Months Ended December 31,

Technical studies and engineering

Field management and other

Metallurgical development

Geologists and field staff

of September 30, 2022, the principal amount outstanding under the Smith Credit Facility was $ 2,000 and accounts payable and accrued

liabilities as of September 30, 2022, include accrued interest of $ 51 payable under the Smith Credit Facility.

of exploration expenditures

the Three Months Ended September 30,

studies and engineering

management and other

Metallurgical

and field staff

Company incurred lease costs as follows:

For the Three Months Ended December 31,

For the Six Months Ended December 31,

Operating Lease Cost:

Fixed rent expense

Variable rent expense

Short-term lease cost

Sublease income

Net lease cost – other operating expense

The maturities of lease liabilities

are as follows at December 31, 2022:

Future Lease Maturities

Total remaining lease payments

Less portion of payments representing interest

Present value of lease payments – current lease liability

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

December 31, 2022

(expressed in thousands of

the Three Months Ended September 30,

term lease cost

lease cost – other operating expense

Developments Ltd.

to the Condensed Consolidated Financial Statements

in thousands of U.S.

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

FAIR VALUE MEASURMENTS

The Company measures the fair

value of financial assets and liabilities based on U.S.

GAAP guidance which defines fair value, establishes a framework for measuring

fair value, and expands disclosures about fair value measurements.

The Company classifies financial

assets and liabilities as held-for-trading, available-for-sale, held-to-maturity, loans and receivables, or other financial liabilities

depending on their nature.

Financial assets and financial liabilities are recognized at fair value on their initial recognition.

Financial assets and liabilities

classified as held-for-trading are measured at fair value, with gains and losses recognized in net income.

maturities of lease liabilities are as follows at September 30, 2022:

Year Lease Maturities

lease payments – through September 2023

portion of payments representing interest

value of lease payments – current lease liability

VALUE MEASUREMENTS

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

GAAP guidance which defines fair value, establishes

a framework for measuring fair value, and expands disclosures about fair value measurements.

Company classifies financial assets and liabilities as held-for-trading, available-for-sale, held-to-maturity, loans and receivables,

or other financial liabilities depending on their nature.

Financial assets and financial liabilities are recognized at fair value

on their initial recognition.

assets and liabilities classified as held-for-trading are measured at fair value, with gains and losses recognized in net income.

Financial assets classified as held-to-maturity, loans and receivables, and financial liabilities other than those classified

as held-for-trading are measured at amortized cost, using the effective interest method of amortization.

Financial assets classified

as held-to-maturity, loans and receivables, and financial liabilities other than those classified as held-for-trading are measured

at amortized cost, using the effective interest method of amortization.

Financial assets classified as available-for-sale, including

investments in equity securities, are measured at fair value, with unrealized gains and losses being recognized in income.

Financial instruments including

receivables, accounts payable and accrued liabilities, and related party loans are carried at amortized cost, which management

believes approximates fair value due to the short-term nature of these instruments.

The following tables present

information about the assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2022, and

June 30, 2022, respectively, and indicate the fair value hierarchy of the valuation techniques the Company utilized to determine

such fair value.

In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for

identical instruments.

Fair values determined by Level 2 inputs utilize data points that are observable, such as quoted prices,

interest rates, and yield curves.

Fair values determined by Level 3 inputs are unobservable data points for the financial instrument

and include situations where there is little, if any, market activity for the instrument.

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

As of December 31, 2022

Cash and cash equivalents

Investment in equity securities

Warrant liability

As of June 30, 2022

Cash and cash equivalents

Investment in equity securities

The Lind III Convertible

Security discussed in Note 8 was initially recorded at fair value, which represented a nonrecurring fair value measurement using

a Level 3 input.

At December 31, 2022 and June 30, 2022, the estimated fair value of this instrument approximated carrying value

given that the instrument was adjusted to fair value on September 25, 2022 and has a short remaining life until maturity.

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)

PROPOSED TRANSACTION

On September 25, 2022, the Company,

GX Acquisition Corp.

II, a Delaware corporation (“GXII”), and Big Red Merger Sub Ltd (“Merger Sub”), a

Delaware corporation incorporated in September 2022, and a direct, wholly owned subsidiary of the Company, entered into a business

combination agreement (the “Business Combination Agreement”).

Pursuant to the Business Combination Agreement, as the

result of a series of transactions, GXII will become a subsidiary of the Company (as successor by merger to the Company’s

subsidiary, Elk Creek Resources Corporation, a Delaware corporation (“ECRC”)), with the pre-combination public shareholders

of GXII receiving Common Shares based on a fixed exchange ratio of 1.11829212 (the “Exchange Ratio”) Common Shares

for each GXII Class A common share held and not redeemed, and the GXII founders receiving shares in GXII (as successor by merger

to ECRC) based on the Exchange Ratio.

Pursuant to the Business Combination Agreement, after closing of the Transaction (as defined

below) (the “Transaction Closing”), the GXII founders will have the right to exchange such shares for Common Shares

on a one-for-one basis under certain conditions.

Pursuant to the Business Combination Agreement, the Company will also assume the

obligations under the issued and outstanding GXII warrants, which will be converted into Warrants following the Transaction Closing.

The Business Combination Agreement contemplates that the Company will undertake a reverse stock split of the Common Shares at the

time of the Transaction Closing in connection with an expected cross-listing to the Nasdaq Stock Market (“Nasdaq”).

In addition, pursuant to the Business Combination Agreement, post-closing, the Company’s Board of Directors will include

two directors from pre-combination GXII.

The transactions contemplated by the Business Combination Agreement and the ancillary

agreements thereto are referred to collectively as the “Transaction.”

As currently structured, the

Business Combination Agreement is expected to be accounted for as a recapitalization in accordance with U.S.

Under this method

of accounting, GXII will be treated as the “acquired” company for financial reporting purposes.

Accordingly, the transaction

is treated as the equivalent of NioCorp issuing Common Shares for the net assets of GXII, accompanied by a recapitalization.

net assets of GXII will be stated at historical cost, with no goodwill or other intangible assets recorded.

The proposed Transaction is

expected to close in the first calendar quarter of 2023, subject to the satisfaction or waiver of certain customary closing conditions

contained in the Business Combination Agreement, including, among other things, (i) obtaining required approvals of the Transaction

and related matters by the respective shareholders of NioCorp and GXII, (ii) the effectiveness of the registration statement on

Form S-4 that the Company originally filed on November 7, 2022, and amended on December 22, 2022, January 17, 2023, January 31,

2023, and February 6, 2023, and was declared effective by the SEC on February 8, 2023, (iii) receipt of approval for listing on

Nasdaq of the Common Shares to be issued in connection 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

TSX with respect to the issuance and listing of the Common Shares issuable in connection with the Transaction, (vi) that NioCorp

and its subsidiaries (including GXII, as successor by merger to ECRC) will have at least $ 5.000001 million of net tangible assets

upon the consummation of the Transaction, after giving effect to any redemptions by GXII public stockholders and after payment

of underwriters’ fees or commissions, (vii) that, at the Transaction Closing, NioCorp and its subsidiaries (including GXII,

as successor by merger to ECRC) will have received cash in an amount equal to or greater than $ 15 .0 million, subject to certain

adjustments, and (viii) the absence of any injunctions enjoining or prohibiting the consummation of the Business Combination Agreement.

The proposed additional financings contemplated by the LOIs will also be subject to the approval of the TSX and the Company’s

shareholders.

In addition, in connection with

the entry into the Business Combination Agreement, the Company announced the signing of non-binding letters of intent for two separate

financing packages with Yorkville Advisors Global, LP.

As discussed in Note 15, on January 26, 2023, the Company entered into definitive

agreements with respect to these financings.

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)

SUBSEQUENT EVENTS

Yorkville Financings

On January 26, 2023, NioCorp

entered into definitive agreements with respect to two previously announced financings with YA II PN, Ltd., an investment fund

managed by Yorkville Advisors Global, LP (together with YA II PN, Ltd., “Yorkville”).

The financings contemplated by

the definitive agreements include (i) up to $ 16 .0 million aggregate principal amount of unsecured convertible debentures of NioCorp

(the “Convertible Debentures”) convertible into Common Shares and Common Share purchase warrants (the “Financing

Warrants”) entitling the holders thereof to purchase additional Common Shares (the “Yorkville Convertible Debt Financing”);

and (ii) a standby equity purchase facility pursuant to which NioCorp will have the right, but not the obligation, subject to the

conditions set out therein, to sell Common Shares to Yorkville with a maximum aggregate value of up to $ 65 .0 million over a period

of up to 36 months (the “Yorkville Equity Facility Financing” and, together with the Yorkville Convertible Debt Financing,

the “Yorkville Financings”).

The Yorkville Financings are

expected to become effective on the date of the Transaction Closing, as previously announced on September 26, 2022.

NioCorp intends to use the proceeds

from the Yorkville Financings to advance its efforts to launch construction of the Elk Creek Project and move it to commercial

operation, and to satisfy the fees and expenses incurred in connection with the Transaction, if required.

Completion of the Yorkville

Financings is subject to certain conditions, including the completion of the Transaction Closing, the receipt of the approval of

the TSX, and the approval of NioCorp’s shareholders in accordance with the rules of the TSX.

Yorkville Convertible Debt

On January 26, 2023, NioCorp

entered into a Securities Purchase Agreement (the “Yorkville Convertible Debt Financing Agreement”), by and between

NioCorp and Yorkville.

Pursuant to the Yorkville Convertible Debt Financing Agreement, Yorkville, and any investor that exercises

its contractual right previously granted by NioCorp to participate in the Yorkville Convertible Debt Financing (collectively with

Yorkville, the “Investors”), will advance an initial total amount of $9.6 million to NioCorp in consideration of the

issuance by NioCorp to the Investors of $10.0 million aggregate principal amount of Convertible Debentures at the time of the Transaction

Closing (the “First Debenture Closing”), and an additional total amount of $5.76 million to NioCorp in consideration

of the issuance by NioCorp to the Investors of $6.0 million aggregate principal amount of Convertible Debentures on a date to be

determined at the election of NioCorp, but which may not be prior to the later to occur of (i) the date of filing of the Convertible

Debt Financing Registration Statement (as defined below) and (ii) the date of the Transaction Closing (together with the First

Debenture Closing, the “Debenture Closings”) .

Each Convertible Debenture issued

under the Yorkville Convertible Debt Financing will be an unsecured obligation of NioCorp, will have an 18 -month term from the

First Debenture Closing, which may be extended for one six-month period in certain circumstances at the option of NioCorp, and

will incur a simple interest rate obligation of 5.0 % per annum (which will increase to 15.0 % per annum upon the occurrence of an

event of default).

The outstanding principal amount of, accrued and unpaid interest, if any, on, and premium, if any, on the Convertible

Debentures must be paid by NioCorp in cash when the same becomes due and payable under the terms of the Convertible Debentures

at their stated maturity, upon their redemption or otherwise.

Subject to certain limitations

contained within the Yorkville Convertible Debt Financing Agreement and the Convertible Debentures, including those as described

below, holders of the Convertible Debentures will be entitled to convert the principal amount of, and accrued and unpaid interest,

if any, on each Convertible Debenture, in whole or in part, from time to time over their term, into a number of Common Shares equal

to the quotient of the principal amount and accrued and unpaid interest, if any, being converted divided by the

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)

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.

the majority of the trading volume and value of the Common Shares occurred on the 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.

Notwithstanding the foregoing, if at any time it shall be a condition to listing or continued listing of the

Common Shares on the Nasdaq or such other principal U.S.

market for the Common Shares that the Conversion Price be not less than

a minimum price (the “Floor Price”), then NioCorp and the holders will negotiate in good faith to amend the Convertible

Debentures to provide that the Conversion Price shall not be less than a Floor Price that satisfies such condition.

Any Floor Price

will be subject to adjustment to give effect to any stock dividend, stock split or recapitalization.

The terms of the Convertible

Debentures restrict the number of Convertible Debentures that may be converted during each calendar month by an Investor at a Conversion

Price below a fixed price equal to the quotient of (i) ten dollars divided by (ii) 1.11829212 (being the number of Common Shares

that will be exchanged for each share of GXII at the Transaction Closing), subject to adjustment to give effect to any stock dividend,

stock split or recapitalization.

The Convertible Debentures will be subject to customary anti-dilution adjustments.

Pursuant to the terms of the

Convertible Debentures, following certain trigger events, and until a subsequent cure event, NioCorp will be required to redeem

$1.125 million aggregate principal amount of Convertible Debentures (the “Triggered Principal Amount”) each month by

making cash payments to the Investors, on a pro rata basis, in an amount equal to the Triggered Principal Amount, plus accrued

and unpaid interest thereon, if any, plus a redemption premium of 7% of the Triggered Principal Amount.

Such monthly prepayments

under the terms of the Convertible Debentures are triggered (i) at the time when NioCorp has issued 95% of the total amount of

Common Shares pursuant to the Yorkville Convertible Debt Financing that it may issue under applicable TSX and Nasdaq rules or (ii)

when NioCorp has delayed or suspended the effectiveness or use of the Convertible Debt Financing Registration Statement for more

than 20 consecutive calendar days, and such monthly prepayment obligations will continue until, with respect to (i) above, shareholder

approval is obtained or, with respect to (ii) above, the Investors may once again resell Common Shares under the Convertible Debt

Financing Registration Statement, respectively.

The Convertible Debentures may

also be redeemed at NioCorp’s option at any time and from time to time over their term at a redemption price equal to 110 %

of the principal amount being redeemed, plus accrued and unpaid interest, if any.

The Convertible Debentures contain

events of default customary for instruments of their type (with customary grace periods, as applicable) and provide that, upon

the occurrence of an event of default arising from certain events of bankruptcy or insolvency with respect to NioCorp, all outstanding

Convertible Debentures will become due and payable immediately without further action or notice.

If any other type of event of

default occurs and is continuing, then any holder may declare all of its Convertible Debentures to be due and payable immediately.

In conjunction with each Debenture

Closing, NioCorp will issue to the Investors Financing Warrants to purchase a number of Common Shares as is equal to the quotient

of the principal amount of Convertible Debentures issued in such Debenture Closing divided by the “Exercise Price”,

which is equal to the greater of:

(a) the quotient of ten dollars divided by 1.11829212;

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.

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)

The Financing Warrants will

be exercisable, in whole or in part, but not in increments of less than $ 50 aggregate Exercise Price (unless the remaining aggregate

Exercise Price is less than $ 50 ), beginning on the earlier of (a) six months following the issuance of the applicable Financing

Warrants or (b) the effective date of the initial Convertible Debt Financing Registration Statement and may be exercised at any time prior to their expiration.

Holders of the Financing Warrants may exercise their Financing Warrants,

at their election, by paying the Exercise Price in cash or on a cashless exercise basis.

On each of the first 12 monthly anniversaries

of the later of (a) the date that is six months following the issuance of the applicable Financing Warrants and

(b) the effective date of the initial Convertible Debt Financing Registration Statement, 1/12th of the Financing Warrants will expire.

The Financing Warrants will

have customary anti-dilution adjustments to be determined in accordance with the requirements of the applicable stock exchanges,

including the TSX.

The terms of the Convertible

Debentures and the Financing Warrants restrict the conversion of Convertible Debentures or exercise of Financing Warrants by an

Investor if such a conversion or exercise would cause the Investor to exceed certain beneficial ownership thresholds in NioCorp

or such a conversion or exercise would cause the aggregate number of Common Shares issued pursuant to the Yorkville Convertible

Debt Financing to exceed the thresholds for issuance of Common Shares under the rules of the TSX and Nasdaq, unless prior shareholder

approval is obtained.

The Yorkville Convertible Debt

Financing Agreement contains customary representations, warranties, conditions and indemnification obligations by each party.

representations, warranties and covenants contained in the Yorkville Convertible Debt Financing Agreement were made only for purposes

of the Yorkville Convertible Debt Financing Agreement and as of specific dates, were solely for the benefit of the parties to such

agreement and are subject to certain important limitations.

The Yorkville Convertible Debt

Financing Agreement also contains certain covenants that, among other things, limit NioCorp’s ability to use the proceeds

from the Yorkville Convertible Debt Financing to repay related party debt or to enter into any variable rate transaction other

than with Yorkville, subject to certain exceptions.

The Yorkville Convertible Debt

Financing Agreement will terminate automatically if the Business Combination Agreement is terminated.

Also, the Investors will

have the right to terminate the Yorkville Convertible Debt Financing Agreement if the First Debenture Closing does not occur on

or prior to March 22, 2023.

NioCorp will have the right to terminate the Yorkville Convertible Debt Financing Agreement at any

time prior to the First Debenture Closing, provided that it will be required to pay a cash termination fee of $ 1.6 million to the

Investors, on a pro rata basis.

On January 26, 2023, in connection

with the Yorkville Convertible Debt Financing Agreement, NioCorp and Yorkville also entered into a registration rights agreement

(the “Convertible Debt Financing Registration Rights Agreement”) pursuant to which NioCorp has agreed to file with

the SEC a registration statement (the “Convertible Debt Financing Registration Statement”) registering the resale by

the Investors of the Common Shares issuable upon the conversion of the Convertible Debentures and the exercise of the Financing

Warrants under the Securities Act of 1933 (the “Securities Act”), as soon as practicable but no later than 21 calendar

days following the Transaction Closing, and to use its reasonable best efforts to have the Convertible Debt Financing Registration

Statement declared effective as soon as practicable after the filing thereof, but in no event later than the 45th calendar day

following the filing date thereof.

NioCorp further agreed to use its reasonable best efforts to cause the Convertible Debt Financing

Registration Statement to remain continuously effective for a period that will terminate upon the first date on which all of the

Common Shares issuable upon the conversion of the Convertible Debentures and the exercise of the Financing Warrants may be sold

without restriction,

including volume and manner-of-sale restrictions, pursuant to Rule 144 under the Securities Act or have been sold by

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.

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

December 31, 2022

(expressed in thousands

as available-for-sale, including investments in equity securities, are measured at fair value, with unrealized gains and losses

being recognized in income.

instruments including receivables, accounts payable and accrued liabilities, and related party loans are carried at amortized

cost, which management believes approximates fair value due to the short-term nature of these instruments.

following tables present information about the assets and liabilities that are measured at fair value on a recurring basis as

of September 30, 2022, and June 30, 2022, respectively, and indicate the fair value hierarchy of the valuation techniques the

Company utilized to determine such fair value.

In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted)

in active markets for identical instruments.

Fair values determined by Level 2 inputs utilize data points that are observable,

such as quoted prices, interest rates, and yield curves.

Fair values determined by Level 3 inputs are unobservable data points

for the financial instrument and include situations where there is little, if any, market activity for the instrument.

of fair values determined by level 3 inputs are unobservable data

of September 30, 2022

cash equivalents

of June 30, 2022

cash equivalents

Developments Ltd.

to the Condensed Consolidated Financial Statements

in thousands of U.S.

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

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 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) 500,000 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.

Lind III Convertible Security discussed in Note 7 was initially recorded at fair value, which represented a nonrecurring fair

value measurement using a Level 3 input.

At September 30, 2022, the estimated fair value of this instrument approximated carrying

value given that the instrument was adjusted to fair value on September 25, 2022 and has a short remaining life 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

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

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

December 31, 2022

(expressed in thousands

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 1.11829212 (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,

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 exercisable into Common Shares following closing of the Transaction.

Business Combination Agreement contemplates that the Company will undertake a reverse stock split of the Common Shares at the

time of close 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 will include two directors from pre-combination

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.

addition, in connection with the entry into the Business Combination Agreement, the Company announced the signing of non-binding

letters of intent (“LOIs”) for two separate financing packages with Yorkville.

Subject to entering into definitive

agreements, these financings could provide the Company with access to up to an additional $ 81 .0 million to help advance the Elk

Creek Project.

The financings contemplated by the LOIs include $ 16 .0 million in convertible debentures that are expected to be

funded at the closing of the Transaction, and subject to certain limitations can be repaid by the Company in either cash or Common

Shares, and a standby equity purchase facility pursuant to which the Company will have the ability to require Yorkville, subject

to the conditions set out in the definitive agreements, to purchase up to $ 65 .0 million of its Common Shares.

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, (iii) receipt of approval for listing

on Nasdaq of the NioCorp Common Shares to be issued in connection with the Transaction, (iv) receipt of approval for listing on

Nasdaq of the NioCorp warrants to be issued in exchange for the GXII warrants that NioCorp has agreed to assume, (v) receipt of

approval from the TSX with respect to the issuance and listing of the NioCorp 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 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 ,

Developments Ltd.

to the Condensed Consolidated Financial Statements

in thousands of U.S.

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

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 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.

certain adjustments, and (viii) the absence of any injunctions enjoining or prohibiting the consummation of the Business Combination

The proposed additional financings contemplated by the LOIs will also be subject to the approval of the TSX and the

Company’s shareholders.

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/A

Item 1. Financial Statements