What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2023-06-08 compared with 2023-06-08 · 349 added, 358 removed, 284 unchanged (71% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

following discussion and analysis should be read in conjunction with our unaudited interim condensed consolidated financial statements

as of and for the three and six months ended December 31, 2022, and the related notes thereto, which have been prepared in accordance

following discussion and analysis should be read in conjunction with our unaudited condensed interim consolidated financial statements

as of and for the three months ended September 30, 2022, and the related notes thereto, which have been prepared in accordance

with generally accepted accounting principles in the United States (“U.S.

12 unchanged sentences

Management’s Discussion and Analysis of Financial Condition and Results of Operations has been amended and restated to give

effect to the restatement of our unaudited interim condensed consolidated financial statements as of and for the three and six

months ended December 31, 2022, as more fully described in Note 3 to the Condensed Consolidated Financial Statements entitled

“Restatement.” For further detail regarding the Restatement, see “Explanatory Note” and Item 4, “Controls

and Procedures.”

effect to the restatement of our unaudited interim condensed consolidated financial statements as of and for the three months

ended September 30, 2022, as more fully described in Note 3 to the Condensed Consolidated Financial Statements entitled “Restatement.”

For further detail regarding the Restatement, see “Explanatory Note” and Item 4, “Controls and Procedures.”

Regarding Forward-Looking Statements

28 unchanged sentences

and the ability to successfully raise additional capital;

NioCorp and GX Acquisition Corp.

a Delaware corporation (“GXII”), being able to receive all required regulatory, third-party and shareholder approvals

for the proposed Transaction;

the amount of redemptions by GXII public stockholders;

the consummation of the convertible debenture

transaction and the standby equity purchase facility contemplated by the definitive agreements with YA II PN, Ltd., an investment

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

NioCorp and GXII (as defined below) being

able to receive all required regulatory, third-party and shareholder approvals for the proposed Transaction;

the amount of redemptions

by GXII public stockholders;

the execution of definitive agreements relating to the convertible debenture transaction and the

standby equity purchase facility contemplated by the term sheets with Yorkville (as defined below);

and other current estimates

6 unchanged sentences

Any statements that express or involve discussions

with respect to predictions,

expectations, beliefs, plans, projections, objectives, assumptions, or future events or performance

with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, or future events or performance

(often, but not always, using words or phrases such as “expects” or “does not expect,” “is expected,”

“anticipates” or “does not anticipate,” “plans,” “estimates,” or “intends,”

“anticipates” or “does not

anticipate,” “plans,” “estimates,” or “intends,”

or stating that certain actions, events, or results “may,” “could,” “would,” “might,”

6 unchanged sentences

Related to Our Business:

risks related to our ability to operate as a

going concern;

risks related to our requirement of significant

additional capital;

risks related to our limited operating history;

risks related to our history of losses;

risks related to the restatement of our consolidated

financial statements as of and for the fiscal years ended June 30, 2022 and 2021 and the interim periods ended September 30,

2021, December 31, 2021 and March 31, 2022 and the impact of such restatement on our future financial statements and other

financial measures;

risks related to the material weakness in our

internal control over financial reporting, our efforts to remediate such material weakness and the timing of remediation;

risks related to cost increases for our exploration

and, if warranted, development projects;

risks related to a disruption in, or failure

of, our information technology systems, including those related to cybersecurity;

risks related to equipment and supply shortages;

risks related to current and future offtake

agreements, joint ventures, and partnerships;

risks related to our ability to attract qualified

risks related to the effects of the COVID-19

pandemic or other global health crises on our business plans, financial condition and liquidity;

risks related to the ability to enforce judgment

against certain of our directors.

risks related to

our ability to operate as a going concern;

risks related to

our requirement of significant additional capital;

risks related to

our limited operating history;

risks related to

our history of losses;

risks related to

the restatement of our consolidated financial statements as of and for the fiscal years ended June 30, 2022 and 2021 and the

interim periods ended September 30, 2021, December 31, 2021 and March 31, 2022 and the impact of such restatement on our future

financial statements and other financial measures;

risks related to

the material weakness in our internal control over financial reporting, our efforts to remediate such material weakness and

the timing of remediation;

risks related to

cost increases for our exploration and, if warranted, development projects;

risks related to

a disruption in, or failure of, our information technology systems, including those related to cybersecurity;

risks related to

equipment and supply shortages;

risks related to

current and future offtake agreements, joint ventures, and partnerships;

risks related to

our ability to attract qualified management;

risks related to

the effects of the COVID-19 pandemic or other global health crises on our business plans, financial condition and liquidity;

risks related to

the ability to enforce judgment against certain of our directors.

Related to Mining and Exploration:

risks related to estimates of mineral resources

and reserves;

risks related to mineral exploration and production

risks related to our lack of mineral production

from our properties;

risks related to the results of our metallurgical

risks related to the price volatility of commodities;

risks related to the establishment of a reserve

and resource for Rare Earth Elements (“REEs” or “Rare Earths”) and the development of a viable recovery

process for REEs;

risks related to the estimation of mineral resources

and mineral reserves;

risks related to changes in mineral resource

and reserve estimates;

risks related to competition in the mining industry;

risks related to the management of the water

balance at the Elk Creek Niobium/Scandium/Titanium development stage property (the “Elk Creek Project”) located

in southeastern Nebraska;

risks related to claims on the title to our

risks related to potential future litigation;

risks related to our lack of insurance covering

all our operations.

risks related to

estimates of mineral resources and reserves;

risks related to

mineral exploration and production activities;

risks related to

our lack of mineral production from our properties;

risks related to

the results of our metallurgical testing;

risks related

to the price volatility of commodities;

risks related

to the establishment of a reserve and resource for Rare Earth Elements (“REEs” or “Rare Earths”) and

the development of a viable recovery process for REEs;

risks related

to the estimation of mineral resources and mineral reserves;

risks related to

changes in mineral resource and reserve estimates;

risks related to

competition in the mining industry;

risks related to

the management of the water balance at our Elk Creek Project;

risks related to

claims on the title to our properties;

risks related to

potential future litigation;

risks related to

our lack of insurance covering all our operations.

Related to Government Regulations:

risks related to our ability to obtain or renew

permits and licenses for production;

risks related to government and environmental

regulations that may increase our costs of doing business or restrict our operations;

risks related to changes in federal and/or state

laws that may significantly affect the mining industry;

risks related to the impacts of climate change,

as well as actions taken or required by governments related to strengthening resilience in the face of potential impacts from

climate change;

risks related to land reclamation requirements.

risks related to

our ability to obtain or renew permits and licenses for production;

risks related

to government and environmental regulations that may increase our costs of doing business or restrict our operations;

risks related

to changes in federal and/or state laws that may significantly affect the mining industry;

risks related

to the impacts of climate change, as well as actions taken or required by governments related to strengthening resilience

in the face of potential impacts from climate change;

risks related

to land reclamation requirements.

Related to Our Debt:

risks related to covenants contained in agreements

with our secured creditors that may affect our assets;

risks related to the extent to which our level

of indebtedness may impair our ability to obtain additional financing.

risks related

to covenants contained in agreements with our secured creditors that may affect our assets;

risks related

to the extent to which our level of indebtedness may impair our ability to obtain additional financing.

Related to Our Common Shares:

risks related to qualifying as a “passive

foreign investment company” under the U.S.

Internal Revenue Code of 1986, as amended (the “Code”);

risks related to our Common Shares, including

price volatility, lack of dividend payments, dilution, and penny stock rules.

risks related

to qualifying as a “passive foreign investment company” under the U.S.

Internal Revenue Code of 1986, as amended

(the “Code”);

risks related

to our Common Shares, including price volatility, lack of dividend payments, dilution and penny stock rules.

Related to the Proposed Transaction

9 unchanged sentences

Transaction due to, among other things, the failure to obtain NioCorp shareholder approval or GXII stockholder approval or

the failure to consummate the Yorkville Financings;

risks related to the inability to complete the

Yorkville Financings due to, among other things, the failure to obtain shareholder approval or regulatory approval;

the execution of definitive agreements relating to the convertible debenture transaction and the standby equity purchase facility

contemplated by the term sheets with Yorkville;

the risk that the announcement and consummation

2 unchanged sentences

anticipated benefits of the Transaction;

risks relating to unexpected costs related to

the Transaction;

relating to unexpected costs related to the Transaction;

the risks that the consummation of the Transaction

1 unchanged sentence

of its charter documents.

Risks in this Form 10-Q/A:

risks related to the restatement of our consolidated

financial statements as of and for the three months ended September 30, 2022 and the three and six months ended December 31,

2022 and the impact of such restatement on our future financial statements and other financial measures;

risks related to the additional material weaknesses in our internal control over financial reporting as of December 31, 2022 identified by management subsequent to the filing of the Original Form 10-Q, our efforts to remediate such material weaknesses and the timing of remediation.

New Risks in this Form 10-Q/A:

risks related to the restatement of our consolidated financial statements as of and for the three months ended September 30, 2022 and the impact of such restatement on our future financial statements and other financial measures;

risks related to the additional material weaknesses in our internal control over financial reporting as of September 30, 2022 identified by management subsequent to the filing of the Original Form 10-Q, our efforts to remediate such material weaknesses and the timing of remediation.

one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may

12 unchanged sentences

For the reasons set forth above, investors should not attribute undue certainty to, or place undue reliance on, forward-looking

technical and scientific information that forms the basis for the Elk Creek Project disclosure included in this Quarterly Report

on Form 10-Q has been reviewed and approved by Scott Honan, M.Sc., SME-RM, NioCorp’s Chief Operating Officer.

is a “Qualified Person” as such term is defined in National Instrument 43-101 – Standards of Disclosure for

Mineral Projects and subpart 1300 of Regulation S-K.

technical and scientific information included in this Quarterly Report on Form 10-Q derived from the June 2022 Elk Creek Project

feasibility study prepared by qualified persons (within the meaning of both National Instrument 43-101 – Standards of Disclosure

for Mineral Projects (“NI 43-101”) and subpart 1300 of Regulation S-K (“S-K 1300”), as applicable) has

been reviewed and approved by Scott Honan, M.Sc., SME-RM, NioCorp’s Chief Operating Officer.

Honan is a “Qualified

Person” as such term is defined in NI 43-101 and S-K 1300.

is developing the Elk Creek Project, located in southeast Nebraska.

31 unchanged sentences

Pursuant to the Business Combination

Agreement, after 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.

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 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.

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.

The 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 Nasdaq.

In addition, pursuant to the Business

Combination Agreement, post-closing, the Company’s Board will include two directors from pre-combination GXII.

The transactions

2 unchanged sentences

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,

Accordingly, the transaction is treated as the equivalent of

NioCorp issuing Common Shares for the net assets of GXII,

accompanied by a recapitalization.

1 unchanged sentence

assets recorded.

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

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

1 unchanged sentence

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.

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.

As discussed below, on January 26, 2023, the Company entered

into definitive agreements with respect to these financings.

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 Toronto Stock Exchange (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, 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.

proceeds will depend upon redemption rates of current GXII shareholders at the consummation of the proposed Transaction.

In connection

with the Transaction Closing, a significant number of GXII shareholders may exercise their redemption rights.

See Part II, Item

1A, “Risk Factors—If the Transaction is consummated, the combined company may not realize all or any of the anticipated

benefits expected as a result of the Transaction.”

further discussed in Note 15 to the unaudited interim condensed consolidated financial statements as of and for the three and

six months ended December 31, 2022, included elsewhere in the Quarterly Report on Form 10-Q, on January 26, 2023, NioCorp entered

into definitive agreements with respect to two previously announced financings with 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”).

Yorkville Financings are expected to become effective on the date of the Transaction Closing.

intends to use the proceeds from the Yorkville Financings to advance its efforts to launch construction of the Elk Creek Project

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

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

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

with the closing of the Transaction, a significant number of GXII shareholders may exercise their redemption rights.

II, Item 1A, “Risk Factors—If the Transaction is consummated, the combined company may not realize all or any of the

anticipated benefits expected as a result of the Transaction.”

Creek Project Update

October 25, 2022, the Company announced that its demonstration-scale processing plant (the “demonstration plant”),

operated in Quebec, Canada, by L3 Process Innovation (“L3”), had completed demonstrating its planned process for removing

September 6, 2022, the Company announced that it filed with the SEC a Technical Report Summary (“TRS”) based on the

Company’s 2022 Feasibility Study for the Elk Creek Critical Minerals Project.

The TRS was filed with the SEC to comply with

Item 601(b)(96) and S-K 1300, which regulates disclosure of Mineral Resources and Mineral Reserves.

A companion Technical Report

for Canadian purposes, pursuant to National Instrument 43-101 (“NI 43-101”), was filed by NioCorp on SEDAR on June

The technical data and economic conclusions of these reports are substantively identical, with minor differences between

the reports resulting only from the respective disclosure requirements of S-K 1300 and NI 43-101.

September 6, 2022, the Company announced that its demonstration-scale processing plant (the “demonstration plant”)

in Quebec, Canada had commenced a three-tonne sample of representative ore from the Elk Creek Project.

The demonstration plant

project is intended to demonstrate that the Company can extract and separate rare earth elements from ore that NioCorp expects

to mine from the Project site, subject to receipt of necessary project financing, and that its simplified process for potentially

producing niobium, scandium, and titanium is technically and economically feasible.

demonstration plant will process Elk Creek ore samples in three phases.

1 is designed to demonstrate a new approach to the initial processing of the ore that

NioCorp expects to mine from the Project site, subject to receipt of necessary project

funding, including calcination, initial leaching, and rare earth extraction;

2 is designed to demonstrate an improved process for the second stage of leaching along

with Niobium and Titanium separation;

3 is designed to demonstrate the technical viability of separating high-purity versions

of several target magnetic rare earth products from Elk Creek ore samples, as well as

confirming previously achieved high recovery rates for high-purity Scandium trioxide.

potential magnetic rare earth products include Neodymium-Praseodymium (“NdPr”) oxide, Dysprosium oxide, and Terbium

NioCorp will utilize conventional solvent extraction (“SX”) technology to test a rare earth separation approach

developed by NioCorp and L3 Process Innovation (“L3”).

October 25, 2022, the Company announced that its demonstration plant had completed demonstrating its planned process for removing

calcium and magnesium from ore obtained from the Elk Creek Project.

This positive result is a key milestone in NioCorp’s

proposed optimization of its process flow sheet for the Elk Creek Project, which was designed by L3 and NioCorp.

carbonate minerals in this fashion is expected to reduce the size of the follow-on planned production steps and make them more

Characterization of the calcium and magnesium carbonate from the completed demonstration plant production runs has

demonstrated very low levels of impurities, and an overall 99% purity of the mixed calcium-magnesium carbonate.

January 4, 2023, the Company announced that the demonstration plant has succeeded in obtaining a Rare Earth dissolution rate of

86-95% from ore from the Elk Creek Project site through hydrochloric acid leaching and has achieved a loading rate of Rare Earths

as high as 99% in the follow-on solvent extraction recovery step.

These relatively high rates, which were expected, point to potentially

strong rates of overall recovery of separated Rare Earth oxides, subject to additional demonstration testing over the coming weeks.

solvent extraction steps will be deployed to establish the ultimate recovery rates of potential Rare Earth products.

The demonstration

plant has further established that the Rare Earths recovered in the initial solvent extraction step are accompanied by only two

impurities of note:

iron and a very small amount of nickel.

Given the success of this initial separation step, L3 and NioCorp

expect that losses in the additional solvent extraction steps would be low.

February 6, 2023, the Company announced that overall recoveries for praseodymium oxide, neodymium oxide, terbium oxide, and dysprosium

oxide are likely to be greater than 92% and meet commercial purity specifications for magnetic rare earth oxides.

These results

are in line with bench- and pilot-scale testing of L3’s rare earth recovery system, as well as hydrometallurgical performance

models that have been run on the rare earth recovery process upon which the demonstration plant is based.

is currently focused on demonstrating its ability to recover three high-purity Rare Earth products:

(1) neodymium-praseodymium

(“NdPr”) oxide, which is the principal component of neodymium-iron-boron (“NdFeB”) permanent Rare Earth

magnets, (2) Dy oxide, and (3) Tb oxide.

Both Dy and Tb oxides are critical to the type of powerful NdFeB magnets used in the

traction motors of electric vehicles.

The Demonstration Plant is also expected to deliver updated metallurgical recoveries for

niobium, scandium and titanium and expects to complete operations in the first calendar quarter of 2023.

long-term financing efforts continued during the quarter ended December 31, 2022, including the proposed Transaction, discussed

This positive result, which is part of Phase I operations

of the demonstration plant, is a key milestone in NioCorp’s proposed optimization of its process flow sheet for the Project,

which was designed by L3 and NioCorp.

well-known and time-tested process NioCorp is employing to remove calcium and magnesium carbonates from the ore using thermal

treatment and leaching is part of the demonstration plant’s Phase I flowsheet.

This step operated successfully, and the

removed calcium and magnesium were produced at demonstration scale as a mixed calcium and magnesium carbonate.

Removing carbonate

minerals in this fashion is expected to reduce the size of the follow-on planned production steps and make them more efficient.

Characterization of the calcium and magnesium carbonate from the completed demonstration plant production runs has demonstrated

very low levels of impurities, and an overall 99% purity of the mixed calcium-magnesium carbonate.

Phase I demonstration plant

operations will continue with calcination and a ramp-up of leaching operations as testwork and assembly of Phase II and Phase

III of the demonstration plant’s planned operations proceed in parallel.

long-term financing efforts continued during the quarter ended September 30, 2022, including the proposed Transaction, discussed

As funds become available through the Company’s fundraising efforts, we expect to undertake the following activities:

of the Company’s efforts to secure federal, state, and local permits;

Continuation of

the Company’s efforts to secure federal, state and local permits;

Continued evaluation

12 unchanged sentences

supply agreements and related infrastructure to deliver fresh water to the project site;

Initiation of revised

mine groundwater investigation and control activities;

Land clearing operations

intended to prepare property owned by ECRC for the commencement of project construction;

Initiation of efforts

to satisfy conditions of Johnson County’s Special Use Permit, including road upgrades and the provision of additional

law enforcement during the construction period;

Initiation of long-lead

equipment procurement activities;

Completion of the

operations of the demonstration plant to address process recommendations contained in the NI 43-101 technical report for the

Elk Creek Project filed on SEDAR on May 29, 2019 and to quantify REE metallurgical performance.

Initiation of revised mine groundwater

investigation and control activities;

Land clearing operations intended

to prepare property owned by ECRC for the commencement of project construction,

Initiation of long-lead equipment

procurement activities;

Operation of a small-scale demonstration plant

to address process recommendations contained in the NI 43-101 technical report for the Elk Creek Project filed on SEDAR on

May 29, 2019 and to quantify REE metallurgical performance.

and Operating Results

2 unchanged sentences

as well as the activities necessary to support corporate and shareholder duties, and are detailed in the following table.

Three Months Ended December 31,

Six Months Ended December 31,

Employee-related costs

the Three Months Ended September 30,

Operating expenses

related costs

Professional fees

Exploration expenditures

Other operating expenses

Total operating expenses

Change in fair value of warrant liability

operating expenses

Total operating

Change in fair value

of warrant liability

Loss on debt extinguishment

Foreign exchange (gain) loss

Interest (income) expense

Gain on sale of assets

Other loss on equity securities

Income tax benefit

Foreign exchange loss

Interest expense

Other (gain) loss on equity securities

Note 3, “Restatement,” to the Condensed Consolidated Financial Statements

for a discussion regarding the impacts of the Restatement.

period ended December 31, 2022 compared to the six-month period ended December 31, 2021

months ended September 30, 2022 compared to three months ended September 30, 2021

items affecting operating expenses are noted below:

Employee-related

costs decreased in 2022 as compared to 2021, primarily due to the timing of employee stock option grants.

These costs decreased

in 2022 as compared to 2021 due to stock options to purchase Common Shares (“Options”) issued in 2021, which were

fully vested and expensed on the grant date.

expenditures increased in 2022 as compared to 2021, primarily due to the timing of demonstration plant development, start-up,

and operational costs incurred in 2022, as well as costs related to the completion and filing of the Technical Report Summary

based on the Company’s 2022 Feasibility Study for the Elk Creek Project, which was filed with the SEC on September 6, 2022.

costs decreased in 2022 as compared to 2021 due to timing of the retirement of our general counsel in the second quarter of

fees increased in 2022 as compared to 2021, primarily due to the timing of legal services related to the TRS filed with the

SEC on September 6, 2022.

expenditures increased in 2022 as compared to 2021, primarily due to the timing of demonstration plant development and start-up

costs incurred in 2022, as well as costs related to the completion and filing of the TRS filed with the SEC on September 6, 2022.

operating expenses include investor relations, general office expenditures, equity offering and proxy expenditures, board-related

expenditures and other miscellaneous costs.

These costs decreased in 2022 as compared to 2021, primarily due to director Options

issued in 2021, which were fully vested and expensed on the grant date.

This reduction in costs associated with director Options

was partially offset by increased financial advisory fees and investor relations fees associated with our ongoing financing efforts.

These costs increased in 2022 as compared to 2021 primarily due to increased financial

advisory fees and investor relations fees associated with our ongoing financing efforts.

significant items impacting the change in the Company’s net loss are noted below :

in fair value of warrant liability for 2022 represents the decrease in the liability associated with the warrants that may

be issued to Lind if on the date that is 18 months following consummation of the Transaction, the closing

trading price of the Common Shares on the TSX or such other stock exchange on which such shares may then

be listed, is less than C$10.00, subject to adjustments, pursuant to the Waiver and Consent Agreement, dated September 25, 2022

(the “Lind Consent”), between the Company and Lind, as discussed in Note 3.

Loss on debt extinguishment

4 unchanged sentences

consolidated financial statements.

Change in fair value of warrant

liability for 2022 represents the decrease in the liability associated with the warrants that may be issued to Lind if on the

date that is 18 months following consummation of the Transaction, the closing trading price of the Common Shares on the TSX or

such other stock exchange on which such shares may then be listed, is less than C$10.00, subject to adjustments, pursuant to the

Waiver and Consent Agreement, dated September 25, 2022 (the “Lind Consent”), between the Company and Lind, as discussed

exchange loss is primarily due to changes in the U.S.

5 unchanged sentences

increased foreign exchange rates in 2022.

Interest (income) expense

decreased in 2022 as compared to 2021 due to the impacts of conversions on the outstanding balance of the Lind III Convertible

period ended December 31, 2022 compared to the three-month period ended December 31, 2021

the decrease in net loss for the three-month period ended December 31, 2022, as compared to the same period in 2021, is primarily

the result of the same factors underlying the six-month changes in expense categories as discussed above.

Interest expense decreased

in 2022 as compared to 2021 due to the impacts of conversions on the outstanding balance of the Lind III Convertible Security.

and Capital Resources

2 unchanged sentences

by the sale of our equity securities by way of private placements, convertible securities issuances, the exercise of incentive

Options and Warrants, and related party loans.

of December 31, 2022, the Company had cash of $0.4 million and a working capital deficit of $6.6 million, compared to cash of

stock options and share purchase warrants, and related party loans.

of September 30, 2022, the Company had cash of $3.2 million and a working capital deficit of $3.3 million, compared to cash of

$5.3 million and working capital surplus of $0.6 million on June 30, 2022.

21 unchanged sentences

September 25, 2022, the Company, GXII and Merger Sub entered into the Business Combination Agreement.

The NioCorp Board of Directors

considered a number of factors as generally supporting its decision to enter into the Business Combination Agreement, including,

but not limited to, the following material factors:

The NioCorp Board considered

a number of factors as generally supporting its decision to enter into the Business Combination Agreement, including, but not

limited to, the following material factors:

Acceleration of Financing Efforts .

The Transaction has the potential to (1) provide NioCorp with up to $285.0 million in net

cash proceeds at the consummation of the Transaction, depending upon the amount of redemptions by GXII public stockholders, and

up to an additional $81.0 million over the next three years

(as further discussed below), depending on the consummation of other additional financing

arrangements that NioCorp and GXII intend to pursue prior to and following the expected

closing of the Transaction and (2) significantly accelerate NioCorp’s efforts to

obtain the required Elk Creek Project financing by increasing

exposure to institutional

investors looking to make strategic investments in critical minerals plays that are crucial

to the world’s clean energy transition;

Non-Binding Yorkville

The signing of non-binding LOIs for two separate financing packages with Yorkville.

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 NioCorp in either cash or Common Shares, and a standby equity purchase

facility pursuant to which NioCorp 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 Common Shares;

Anticipated Benefits

of Nasdaq Listing .

A listing on Nasdaq, which is an established national exchange in the United States, would provide

broader access to capital and financing alternatives and would otherwise enhance NioCorp’s public profile;

The Transaction has the potential to (1) provide NioCorp with up to $285.0 million

in net cash proceeds at the consummation of the Transaction, depending upon the amount of redemptions by GXII public stockholders,

and up to an additional $81.0 million over the next three years (as further discussed below), depending on the consummation

of other additional financing arrangements that NioCorp and GXII intend to pursue prior to and following the expected closing

of the Transaction and (2) significantly accelerate NioCorp’s efforts to obtain the required Elk Creek Project financing

by increasing exposure to institutional investors looking to make strategic investments in critical minerals plays that are

crucial to the world’s clean energy transition;

Yorkville Term Sheets.

The signing of non-binding LOIs for two separate financing packages with Yorkville, where, subject

to entering into definitive agreements, such financings could provide NioCorp 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 NioCorp

in either cash or NioCorp Common Shares, and a standby equity purchase facility pursuant to which NioCorp 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 NioCorp

Common Shares;

Benefits of Nasdaq Listing .

A listing on Nasdaq, which is an established national exchange in the United States, would

provide broader access to capital and financing alternatives and would otherwise enhance NioCorp’s public profile;

The consummation of the Transaction is subject to the satisfaction or waiver of certain closing conditions

2 unchanged sentences

subject to certain adjustments.

NioCorp Board of Directors also considered a variety of uncertainties and risks and other potentially negative factors concerning

the Transaction, including, but not limited to, the following:

Risks of Failure to Complete

the Transaction .

NioCorp Board also considered a variety of uncertainties and risks and other potentially negative factors concerning the Transaction,

including, but not limited to, the following:

of Failure to Complete the Transaction .

The risks that:

Transaction may not be completed despite the parties’ efforts, including the possibility that the conditions to the

parties’ obligations to complete the Transaction (which include certain conditions that are not within the control of

the parties to the Business Combination Agreement) may not be satisfied or that completion of the Transaction may be unduly

delayed, and any resulting adverse impacts on NioCorp, its business and the trading price of Common Shares;

the circumstances

under which the Business Combination Agreement could be terminated and the impact of such termination, including the requirement

that NioCorp must pay GXII (1) a Base Termination Fee of $15.0 million if it terminates the Business Combination Agreement

in order to enter into an agreement providing for a Superior Proposal (as defined in the Business Combination Agreement),

for a change of recommendation of the NioCorp Board, or a material breach of certain of NioCorp’s covenants relating

to soliciting acquisition proposals or (2) an Intentional Breach Termination Fee of $25.0 million if GXII terminates the Business

Combination Agreement as a result of a willful and material breach by NioCorp or as a result of NioCorp’s failure to

consummate the closing of the Transaction within five business days after all the conditions to closing have been satisfied;

if GXII is entitled

to the Base Termination Fee or the Intentional Breach Termination Fee upon termination of the Business Combination Agreement,

NioCorp is also required to pay all documented and reasonable out-of-pocket expenses paid or payable by GXII and its sponsor

in connection with the Business Combination Agreement and the Transaction, not to exceed $5.0 million;

the substantial

costs to be incurred in connection with the Transaction, including those incurred regardless of whether the Transaction are

Risks Relating to the Benefits

of the Transaction.

Transaction may not be completed despite the parties’ efforts, including the possibility

that the conditions to the parties’ obligations to complete the Transaction (which

include certain conditions that are not within the control of the parties to the Business

Combination Agreement) may not be satisfied or that completion of the Transaction may

be unduly delayed, and any resulting adverse impacts on NioCorp, its business and the

trading price of NioCorp Common Shares;

circumstances under which the Business Combination Agreement could be terminated and

the impact of such termination, including the requirement that NioCorp must pay GXII

(1) a Base Termination Fee of $15.0 million if it terminates the Business Combination

Agreement in order to enter into an agreement providing for a Superior Proposal (as defined

in the Business Combination Agreement), for a change of recommendation of the NioCorp

Board, or a material breach of certain of NioCorp’s covenants relating to soliciting

acquisition proposals or (2) an Intentional Breach Termination Fee of $25.0 million if

GXII terminates the Business Combination Agreement as a result of a willful and material

breach by NioCorp or as a result of NioCorp’s failure to consummate the closing

of the Transaction within five business days after all the conditions to closing have

been satisfied;

GXII is entitled to the Base Termination Fee or the Intentional Breach Termination Fee

upon termination of the Business Combination Agreement, NioCorp is also required to pay

all documented and reasonable out-of-pocket expenses paid or payable by GXII and its

sponsor in connection with the Business Combination Agreement and the Transaction, not

to exceed $5.0 million;

substantial costs to be incurred in connection with the Transaction, including those

incurred regardless of whether the Transaction are completed;

Relating to the Benefits of the Transaction .

The risks of:

realizing all the anticipated benefits expected as a result of the Transaction, including the anticipated acceleration of

its financing efforts and the benefits of the expected Nasdaq listing, and that general economic and market conditions outside

the control of the parties to the Business Combination Agreement could deteriorate, any of which could result in NioCorp being

unable to achieve the financing necessary to advance, complete construction and commence operation of the Elk Creek Project;

substantial costs to be incurred in connection with the Transaction, including those incurred regardless of whether the anticipated

benefits of the Transaction are realized;

realizing all the anticipated benefits expected as a result of the Transaction, including

the anticipated acceleration of its financing efforts and the benefits of the expected

Nasdaq listing,

and that general economic and market conditions outside the control of

the parties to the Business Combination Agreement could deteriorate, any of which could

result in NioCorp being unable to achieve the financing necessary to advance, complete

construction and commence operation of the Elk Creek Project;

substantial costs to be incurred in connection with the Transaction, including those

incurred regardless of whether the anticipated benefits of the Transaction are realized;

Relating to the Financing .

The absence of committed financing and that the parties

may not be able to negotiate definitive documentation related to the Yorkville LOIs or

may not otherwise be able to consummate the financing transactions contemplated thereby,

which could cause NioCorp to encounter difficulties in completing the Transaction with

financing terms as favorable as anticipated or at all;

● Restrictions

on the Conduct of Business .

The Business Combination Agreement places certain restrictions on the

conduct of the NioCorp business prior to the consummation of the Transaction and other alternatives

reasonably available to NioCorp if it did not pursue the Transaction, including continuing to pursue

alternative financing arrangements.

for the Yorkville Financings discussed in “Management’s Discussion and Analysis of Financial Condition and Results

of Operations” under the heading “ Recent Corporate Events ,” we currently have no further funding commitments

or arrangements for additional financing at this time, other than the potential exercise of Options and Warrants, and there is

no assurance that we will be able to obtain any such additional financing on acceptable terms, if at all.

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, including

issuances of equity or debt securities that are convertible into Common Shares at variable rates and any equity line of credit,

ATM agreement or other continuous offering of Common Shares, other than with Yorkville, subject to certain exceptions.

Notwithstanding

the restrictions set forth in the Business Combination Agreement and the Yorkville Convertible Debt Financing Agreement, there

The Business Combination Agreement places certain restrictions

on the conduct of the NioCorp business prior to the consummation of the Transaction and

other alternatives reasonably available to NioCorp if it did not pursue the Transaction,

including continuing to pursue alternative financing arrangements.

as set forth above, we currently have no further funding commitments or arrangements for additional financing at this time, other

than the potential exercise of options and warrants, and there is no assurance that we will be able to obtain any such additional

financing on acceptable terms, if at all.

Notwithstanding the restrictions set forth in the Business Combination Agreement, there

is significant uncertainty that we would be able to secure any additional financing in the current equity or debt markets.

1 unchanged sentence

by management as opportunities to raise funds arise.

In addition to the proposed Transaction and Yorkville Financings, and subject

to receipt of the consent of GXII as may be required pursuant to the Business Combination Agreement, management may pursue funding

sources of both debt and equity financing, including but not limited to the issuance of equity securities in the form of Common

Shares, Warrants, subscription receipts, or any combination thereof in units of the Company pursuant to private placements to

accredited investors or pursuant to public offerings in the form of underwritten/brokered offerings, registered direct offerings,

or other forms of equity financing and public or private issuances of debt securities including secured and unsecured convertible

debt instruments or secured debt project financing.

Management does not currently know the terms pursuant to which such financings

may be completed in the future, but any such financings will be negotiated at arm’s length.

Future financings involving

the issuance of equity securities or derivatives thereof will likely be completed at a discount to the then-current market price

of the Company’s securities and will likely be dilutive to current shareholders.

In addition, we could raise funds through

the sale of interests in our mineral properties, although current market conditions and the impacts of the COVID-19 pandemic and

other recent worldwide events have substantially reduced the number of potential buyers/acquirers of any such interests.

we cannot provide any assurances that we will be able to be successful in raising such funds.

In addition to the proposed Transaction and subject to receipt of the consent

of GXII as may be required pursuant to the Business Combination Agreement, management may pursue funding sources of both debt

and equity financing, including but not limited to the issuance of equity securities in the form of Common Shares, Warrants, subscription

receipts, or any combination thereof in units of the Company pursuant to private placements to accredited investors or pursuant

to equity lines of credit or public offerings in the form of underwritten/brokered offerings, at-the-market offerings, registered

direct offerings, or other forms of equity financing and public or private issuances of debt securities including secured and

unsecured convertible debt instruments or secured debt project financing.

Management does not currently know the terms pursuant

to which such financings may be completed in the future, but any such financings will be negotiated at arm’s length.

financings involving the issuance of equity securities or derivatives thereof will likely be completed at a discount to the then-current

market price of the Company’s securities and will likely be dilutive to current shareholders.

In addition, we could raise

funds through the sale of interests in our mineral properties, although current market conditions and the impacts of the COVID-19

pandemic and other recent worldwide events have substantially reduced the number of potential buyers/acquirers of any such interests.

However, we cannot provide any assurances that we will be able to be successful in raising such funds.

on the conditions described within, management has concluded and the audit opinion and notes that accompany our financial statements

15 unchanged sentences

Other than cash held by our subsidiaries for their immediate operating

needs in Colorado and Nebraska, all of our cash reserves are on deposit with major U.S.

and Canadian chartered banks.

believe that the credit, liquidity, or market risks with respect thereto have increased as a result of the current market conditions.

However, in order to achieve greater security for the preservation of our capital, we have, of necessity, been required to accept

lower rates of interest, which has also lowered our potential interest income.

the six months ended December 31, 2022, the Company’s operating activities consumed $4.1 million of cash (2021:

$3.0 million).

The cash used in operating activities for the six months ended December 31, 2022, reflects the Company’s funding of losses

of $6.3 million, partially offset by the loss on debt extinguishment, accretion of convertible debt, and other non-cash transactions.

Overall, operational outflows during the six months ended December 31, 2022, increased from the corresponding period of 2021 due

to an increase in exploration-related

spending at the Elk Creek Project.

Going forward, the Company’s working capital requirements

are expected to increase substantially in connection with the development of the Elk Creek Project.

outflows were $0.5 million during the six months ended December 31, 2022, as compared to $0.6 million of inflows during the corresponding

period in 2021, with 2022 outflows reflecting the timing of vendor payments related to deferred Transaction costs incurred during

the period and 2021 inflows primarily reflecting the timing of warrant and option exercises, partially offset by a partial repayment

under the related party loan with our President, Chief Executive Officer (“CEO”) and Executive Chairman, Mark Smith.

needs in Colorado and Nebraska, all of our cash reserves are on deposit with major United States and Canadian chartered banks.

We do not believe that the credit, liquidity, or market risks with respect thereto have increased as a result of the current market

However, in order to achieve greater security for the preservation of our capital, we have, of necessity, been required

to accept lower rates of interest, which has also lowered our potential interest income.

the three months ended September 30, 2022, the Company’s operating activities consumed $1.7 million of cash (2021:

The cash used in operating activities for the three months ended September 30, 2022, reflects the Company’s funding

of losses of $3.9 million, partially offset by the loss on debt extinguishment, accretion of convertible debt and other non-cash

transactions.

Overall, operational outflows during the three months ended September 30, 2022, increased slightly from the corresponding

period of 2021 due to an increase in exploration-related spending at the Elk Creek Project.

Going forward, the Company’s

working capital requirements are expected to increase substantially in connection with the development of the Elk Creek Project.

inflows were nil during the three months ended September 30, 2022, as compared to $0.3 million during the corresponding period

in 2021, primarily reflecting the timing of warrant and option exercises during 2021.

Flow Considerations

Company has historically relied upon debt and equity financings to finance its activities.

Subject to the restrictions set forth

in the Business Combination Agreement and the Yorkville Convertible Debt Financing Agreement, the Company may pursue additional

debt and/or equity financing in the medium term;

The Company may pursue additional debt

and/or equity financing in the medium term;

however, there can be no assurance the Company will be able to obtain any required

19 unchanged sentences

Accounting Estimates

Except as noted below, there have been

no material changes in our critical accounting estimates discussed in “Management’s Discussion and Analysis of Financial

Condition and Results of Operations” under the heading “Critical Accounting Estimates and Recent Accounting Pronouncements”

as of June 30, 2022, in our Annual Report on Form 10-K/A for the fiscal year ended June 30, 2022.

We apply relevant accounting guidance

for warrants to purchase our stock based on the nature of the relationship with the counterparty.

For warrants issued to investors

or lenders in exchange for cash or other financial assets, we follow guidance issued within ASC 480, Distinguishing Liabilities

from Equity, and ASC Topic 815, Derivatives and Hedging, (“ASC 815”) to assist in the determination of whether the

warrants should be classified as liabilities or equity.

The fair value of warrants is estimated using Black Scholes modeling or

Monte Carlo modeling, depending on the settlement features embedded in the warrant.

Inputs under both models include inputs such

as NioCorp’s Common Share price, the risk-free interest rate, the expected term, the volatility, and the dividend rate.

Warrants that are determined to require liability classifications are measured at fair value upon issuance and are subsequently

remeasured to their then fair value at each subsequent reporting period with changes in fair value recorded in current earnings.

Warrants that are determined to require equity classifications are measured at fair value upon issuance and are not subsequently

remeasured unless they are required to be reclassified.

Except as noted below, there

have been no material changes in our critical accounting estimates discussed in “Management’s Discussion and Analysis

of Financial Condition and Results of Operations” under the heading “Critical Accounting Estimates and Recent Accounting

Pronouncements” as of June 30, 2022, in our Annual Report on Form 10-K/A for the fiscal year ended June 30, 2022.

apply relevant accounting guidance for warrants to purchase our stock based on the nature of the relationship with the counterparty.

For warrants issued to investors or lenders in exchange for cash or other financial assets, we follow guidance issued within ASC

480, Distinguishing Liabilities from Equity, and ASC Topic 815, Derivatives and Hedging, (“ASC 815”) to assist in

the determination of whether the warrants should be classified as liabilities or equity.

The fair value of warrants is estimated

using Black Scholes modeling or Monte Carlo modeling, depending on the settlement features embedded in the warrant.

both models include inputs such as NioCorp’s Common Share price, the risk-free interest rate, the expected term, the volatility,

and the dividend rate.

Warrants that are determined to require liability classifications are measured at fair value upon issuance

and are subsequently remeasured to their then fair value at each subsequent reporting period with changes in fair value recorded

in current earnings.

Warrants that are determined to require equity classifications are measured at fair value upon issuance and

are not subsequently remeasured unless they are required to be reclassified.

Federal Income Tax Considerations

11 unchanged sentences

a PFIC for any taxable year.

Current and prospective U.S.

shareholders should consult their tax advisors as to the tax consequences

of PFIC classification and the U.S.

Current and prospective United States shareholders should consult their tax advisors as to the tax

consequences of PFIC classification and the U.S.

federal tax treatment of PFICs.

Additional information on this matter is included in the “Risk

Factors” section of the Company’s Annual Report on Form 10-K/A for the fiscal year ended June 30, 2022, under the

heading “Risks Related to the Common Shares.

Additional information on this matter is included

in the “Risk Factors” section of the

Company’s Annual Report on Form 10-K/A for the fiscal year ended June 30,

2022, under the heading “Risks Related to the Common Shares.”

Company has one class of shares, being Common Shares.

A summary of outstanding shares, Options, Warrants, and convertible debt

option as of February 13, 2023, is set out below, on a fully-diluted basis.

A summary of outstanding shares, share options, warrants, and convertible

debt option as of November 14, 2022, is set out below, on a fully-diluted basis.

Shares Outstanding

Common Shares

Convertible Debt 2

exercisable into one Common Share.

Common Shares issuable on conversion of aggregate outstanding principal amounts of $0.8

million of convertible debt as of February 13, 2023, assuming a market price per Common

million of convertible debt as of November 14, 2022, assuming a market price per Common

Share of $8.10 on that date.

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 2. Management’s Discussion and Analysis