NIOCORP DEVELOPMENTS LTD 10-Q

ITEM 1. FINANCIAL STATEMENTS Contents Page Condensed consolidated balance sheets as of September 30, 2023 and June 30, 2023 (unaudited) 2 Condensed consolidated statements of operations and comprehensive loss for the three months ended September 30, 2023 and 2022 (unaudited) 3 Condensed consolidated statements of cash flows for the three months ended September 30, 2023 and 2022 (unaudited) 4 Condensed consolidated statements of shareholders’ (deficit) equity and redeemable noncontrolling interest for the three months ended September 30, 2023 and 2022 (unaudited) 5 Notes to condensed consolidated financial statements (unaudited) 6 - 13 1 NioCorp Developments Ltd. Condensed Consolidated Balance Sheets (expressed in thousands of U.S. dollars, except share data) (unaudited) As of Note September 30, 2023 June 30, 2023 ASSETS Current Cash and cash equivalents $ 1,098 $ 2,341 Prepaid expenses and other 968 1,385 Total current assets 2,066 3,726 Non-current Deposits 35 35 Investment in equity securities 8 9 Right-of-use assets 223 236 Land and buildings, net 838 839 Mineral properties 16,085 16,085 Total assets $ 19,255 $ 20,930 LIABILITIES Current Accounts payable and accrued liabilities 4 $ 3,615 $ 3,491 Convertible debt, current portion 5 6,907 - Warrant liability, at fair value 7c 1,964 - Operating lease liability 9 71 71 Total current liabilities 12,557 3,562 Non-current Convertible debt - 10,561 Warrant liabilities, at fair value 7c 3,098 4,989 Earnout Shares liability, at fair value 6 8,428 10,521 Operating lease liability 9 150 164 Total liabilities 24,233 29,797 Commitments and contingencies 9 Redeemable noncontrolling interest 1,926 2,100 SHAREHOLDERS' DEFICIT Common shares, no par value, unlimited shares authorized; 32,913,419 and 31,202,131 shares outstanding, respectively 7 147,697 140,421 Accumulated deficit ( 153,690 ) ( 150,477 ) Accumulated other comprehensive loss ( 911 ) ( 911 ) Total shareholders’ deficit ( 6,904 ) ( 10,967 ) Total liabilities, redeemable noncontrolling interest, and shareholders’ deficit $ 19,255 $ 20,930 The accompanying notes are an integral part of these condensed consolidated financial statements. 2 NioCorp Developments Ltd. Condensed Consolidated Statements of Operations and Comprehensive Loss (expressed in thousands of U.S. dollars, except share and per share data) (unaudited) For the Three Months Ended September 30, Note 2023 2022 Operating expenses Employee related costs $ 322 $ 293 Professional fees 1,187 164 Exploration expenditures 8 1,100 1,288 Other operating expenses 834 337 Total operating expenses 3,443 2,082 Change in fair value of Earnout Shares liability 6 ( 2,093 ) - Change in fair value of warrant liability 7c 73 ( 257 ) Debt extinguishment - 1,622 Foreign exchange (gain) loss ( 11 ) 173 Interest expense 2,075 258 Other loss (gain) on equity securities 1 ( 1 ) Loss before income taxes 3,488 3,877 Income tax benefit ( 101 ) - Net loss 3,387 3,877 Net loss attributable to redeemable noncontrolling interest 174 - Net loss attributable to the Company 2d $ 3,213 $ 3,877 Other comprehensive loss: Net loss $ 3,387 $ 3,877 Other comprehensive loss: Reporting currency translation - 5 Total comprehensive loss 3,387 3,882 Comprehensive loss attributable to redeemable noncontrolling interest 174 - Comprehensive loss attributable to the Company $ 3,213 $ 3,882 Loss per common share, basic and diluted 2d $ 0.09 $ 0.14 Weighted average common shares outstanding, basic and diluted 31,967,091 27,792,631 The accompanying notes are an integral part of these condensed consolidated financial statements. 3 NioCorp Developments Ltd. Condensed Consolidated Statements of Cash Flows (expressed in thousands of U.S. dollars) (unaudited) For the Three Months Ended September 30, 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES Net loss for the period $ ( 3,387 ) $ ( 3,877 ) Adjustments for: Change in fair value of Earnout Shares liability ( 2,093 ) - Change in fair value of warrant liabilities 73 ( 257 ) Accretion of convertible debt 2,075 194 Loss on debt extinguishment - 1,622 Loss on equity facility shares issued 53 - Foreign exchange loss - 177 Depreciation 1 1 Unrealized loss (gain) on equity securities 1 ( 1 ) Non-cash lease activity ( 1 ) ( 2 ) Total ( 3,278 ) ( 2,143 ) Change in working capital items: Prepaid expenses and other 417 209 Accounts payable and accrued liabilities 124 196 Net cash used in operating activities ( 2,737 ) ( 1,738 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of capital stock 1,532 - Share issue costs ( 38 ) ( 21 ) Net cash provided by (used in) financing activities 1,494 ( 21 ) Exchange rate effect on cash and cash equivalents - ( 329 ) Change in cash and cash equivalents during period ( 1,243 ) ( 2,088 ) Cash and cash equivalents, beginning of period 2,341 5,280 Cash and cash equivalents, end of period $ 1,098 $ 3,192 Supplemental cash flow information: Amounts paid for interest $ - $ - Amounts paid for income taxes - - Non-cash investing and financing transactions: Conversion of debt for common shares $ 5,729 $ 1,650 Deferred transaction costs, accrued but not paid - 2,809 The accompanying notes are an integral part of these condensed consolidated financial statements. 4 NioCorp Developments Ltd. Condensed Consolidated Statements of Shareholders’ (Deficit) Equity and Redeemable Noncontrolling Interest (expressed in thousands of U.S. dollars, except for share amounts) (unaudited) Common Shares Outstanding Common Stock Accumulated Deficit Accumulated Other Comprehensive Loss Total Redeemable Noncontrolling Interest Balance, June 30, 2022 27,667,060 $ 129,055 $ ( 110,397 ) $ ( 993 ) $ 17,665 $ - Debt conversions 272,262 1,650 - - 1,650 - Share issuance costs - ( 21 ) - - ( 21 ) - Reporting currency presentation - - - ( 5 ) ( 5 ) - Loss for the period - - ( 3,877 ) - ( 3,877 ) - Balance, September 30, 2022 27,939,322 $ 130,684 $ ( 114,274 ) $ ( 998 ) $ 15,412 $ - Balance, June 30, 2023 31,202,131 $ 140,421 $ ( 150,477 ) $ ( 911 ) $ ( 10,967 ) $ 2,100 Private placement 250,000 1,000 - - 1,000 - Yorkville equity facility 145,000 585 - - 585 - Debt conversions 1,316,288 5,729 - - 5,729 - Share issuance costs - ( 38 ) - - ( 38 ) - Loss for the period - - ( 3,213 ) - ( 3,213 ) ( 174 ) Balance, September 30, 2023 32,913,419 $ 147,697 $ ( 153,690 ) $ ( 911 ) $ ( 6,904 ) $ 1,926 The accompanying notes are an integral part of these condensed consolidated financial statements. 5 NioCorp Developments Ltd. Notes to the Condensed Consolidated Financial Statements September 30, 2023 (expressed in thousands of U.S. dollars, except per share amounts or as otherwise stated) (unaudited) 1. DESCRIPTION OF BUSINESS NioCorp Developments Ltd. (“we,” “us,” “our,” “NioCorp” or the “Company”) was incorporated on February 27, 1987, under the laws of the Province of British Columbia and currently operates in one reportable operating segment consisting of exploration and development of mineral deposits in North America, specifically, the Elk Creek development-stage property (the “Elk Creek Project”) located in southeastern Nebraska. These interim condensed consolidated financial statements have been prepared on a going concern basis that contemplates the realization of assets and discharge of liabilities at their carrying values in the normal course of business for the foreseeable future. These financial statements do not reflect any adjustments that may be necessary if the Company is unable to continue as a going concern. The Company currently earns no operating revenues and will require additional capital in order to advance the Elk Creek Project to construction and commercial operation. As further discussed in Note 3, these matters raised substantial doubt about the Company’s ability to continue as a going concern, and the Company is dependent upon the generation of profits from mineral properties, obtaining additional financing and maintaining continued support from its shareholders and creditors. 2. BASIS OF PREPARATION a) Basis of Preparation and Consolidation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles of the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). The interim condensed consolidated financial statements include the consolidated accounts of the Company and its wholly owned subsidiaries with all significant intercompany transactions eliminated. The accounting policies followed in preparing these interim condensed consolidated financial statements are those used by the Company as set out in the audited consolidated financial statements for the year ended June 30, 2023. Certain transactions include reference to Canadian dollars (“C$”) where applicable. In the opinion of management, all adjustments considered necessary (including normal recurring adjustments) for a fair statement of the financial position, results of operations, and cash flows at September 30, 2023, and for all periods presented, have been included in these interim condensed consolidated financial statements. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to appropriate SEC rules and regulations. These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended June 30, 2023. The interim results are not necessarily indicative of results for the full year ending June 30, 2024, or future operating periods. b) Recent Accounting Standards Issued and Not Effective From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) that are adopted by the Company as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards did not or will not have a material impact on the Company’s consolidated financial statements upon adoption. c) Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the carrying value of long-term assets, deferred income tax assets and related valuations, liabilities related to the Earnout Shares, Private Warrants, and Contingent Consent Warrants (each, as defined below), and share- 6 NioCorp Developments Ltd. Notes to the Condensed Consolidated Financial Statements September 30, 2023 (expressed in thousands of U.S. dollars, except per share amounts or as otherwise stated) (unaudited) based compensation. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between estimates and the actual results, future results of operations will be affected. d) Basic and Diluted Earnings per Share The Company utilizes the weighted average method to determine the impact of changes in a participating security on the calculation of loss per share. The following table sets forth the computation of the Company’s basic and diluted net loss per share attributable to common shareholders: For the Three Months Ended September 30, 2023 2022 Net loss $ 3,387 $ 3,877 Adjust: Net loss attributable to noncontrolling interest ( 174 ) - Net loss available to participating securities 3,213 3,877 Net loss attributable to vested shares of ECRC Class B common stock ( 257 ) - Net loss attributed to common shareholders - basic and diluted $ 2,956 $ 3,877 Denominator: Weighted average shares outstanding – basic and diluted 31,967,091 27,792,631 Loss per Common Share outstanding – basic and diluted $ 0.09 $ 0.14 The following common shares, no par value, of the Company (“Common Shares”) underlying options to purchase Common Shares (“Options”), Common Share purchase warrants (“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-month periods indicated below. Schedule of excluded from the dilutive securities For the Three Months Ended September 30, 2023 2022 Excluded potentially dilutive securities (1)(2): Options 1,319,000 1,446,400 Warrants 19,066,304 1,851,622 Convertible debt 2,448,730 103,000 Total potential dilutive securities 22,834,034 3,401,022 (1) The number of shares is based on the maximum number of shares issuable on exercise or conversion of the related securities as of the period end. Such amounts have not been adjusted for the treasury stock method or weighted average outstanding calculations as required if the securities were dilutive. (2) Earnout Shares are excluded as the vesting terms were not met as of the end of the reporting period. 3. GOING CONCERN ISSUES The Company incurred a loss of $ 3,387 for the three months ended September 30, 2023 (2022 - $ 3,877 ) and had a working capital deficit of $ 10,491 and an accumulated deficit of $ 153,690 as of September 30, 2023. 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, 2023, the Company had cash of $ 1,098 , which will 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 7 NioCorp Developments Ltd. Notes to the Condensed Consolidated Financial Statements September 30, 2023 (expressed in thousands of U.S. dollars, except per share amounts or as otherwise stated) (unaudited) 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 $ 2,450 per quarter over the preceding three-year period, is dependent on management’s ability to secure additional financing. NioCorp expects to have access to up to $ 62,030 in net proceeds from the Standby Equity Purchase Agreement, dated January 26, 2023 (the “Yorkville Equity Facility Financing Agreement”), between the Company and YA II PN, Ltd., an investment fund managed by Yorkville Advisors Global, LP (“Yorkville”), through April 1, 2026. In addition, the Company may pursue additional sources of financing, and while it has been successful in doing so in the past, there can be no assurance it will be able to do so in the future. Other than the potential issuance of Common Shares under the Yorkville Equity Facility Financing Agreement, the Company did not have any further funding commitments or arrangements for additional financing as of September 30, 2023. These interim condensed consolidated financial statements do not give effect to any adjustments required to realize the Company’s assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying financial statements. Recent worldwide events have created general global economic uncertainty as well as uncertainty in capital markets, supply chain disruptions, increased interest rates and inflation, and the potential for geographic recessions. We believe this could have an adverse impact on our ability to obtain financing, development plans, results of operations, financial position, and cash flows during the current 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. 4. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Schedule of accounts payable and accrude liabilities As of September 30, 2023 June 30, 2023 Accounts payable, trade $ 2,521 $ 1,990 Trade payable accruals 1,018 1,324 Income taxes payable - 101 Environmental accruals 48 48 Loan origination fees payable to related party 28 28 Total accounts payable and accrued liabilities $ 3,615 $ 3,491 5. CONVERTIBLE DEBT The unsecured convertible debentures (the “Convertible Debentures”) issued to Yorkville pursuant to the Securities Purchase Agreement, dated January 26, 2023 (as amended, the “Yorkville Convertible Debt Financing Agreement”), between the Company and Yorkville, have a maturity date of September 17, 2024 , and are a classified as a current liability as of September 30, 2023. Changes in the Convertible Debentures are as follows: Schedule Changes in the convertible debentures Amount Opening balance, June 30, 2023 $ 10,561 Accretion expense 2,075 Principal and accrued interest converted ( 5,729 ) Balance, September 30, 2023 $ 6,907 Add: Unamortized debt issuance costs 1,093 Remaining principal balance, September 30, 2023 $ 8,000 Based on the Company’s closing Common Share price of $ 3.63 as of September 30, 2023, conversion of the remaining Convertible Debenture balance, including accrued interest, would require the issuance of approximately 2,448,730 Common Shares. For each $0.10 change in the fair value of one Common Share, the total shares the Company would be obligated to issue would change by approximately 69,400 shares. 8 NioCorp Developments Ltd. Notes to the Condensed Consolidated Financial Statements September 30, 2023 (expressed in thousands of U.S. dollars, except per share amounts or as otherwise stated) (unaudited) 6. CLASS B COMMON STOCK OF ECRC The shares of Class B common stock of Elk Creek Resource Corporation (“ECRC”), an indirect, majority-owned subsidiary of NioCorp formerly known as GX Acquisition Corp. II (“GXII”), the rights of the holders of which to exchange such shares into Common Shares are subject to certain vesting conditions (such shares of ECRC Class B common stock, the “Earnout Shares”), were valued utilizing a Monte Carlo Simulation pricing model with the following primary inputs: The following table discloses the primary inputs into the Monte Carlo Model Key Valuation Input September 30, 2023 Closing Common Share price $ 3.63 Term (expiry) March 17, 2033 Volatility 47.0 % Risk-free rate 4.59 % The following table sets forth a summary of the changes in the fair value of the Earnout Shares liability for the three months ended September 30, 2023: Amount Fair value as of June 30, 2023 $ 10,521 Change in fair value ( 2,093 ) Fair value as of September 30, 2023 $ 8,428 7. COMMON SHARES a) Issuance On September 1, 2023, the Company closed a non-brokered private placement (the “September 2023 Private Placement”) of units of the Company (the “September 2023 Units”). A total of 250,000 September 2023 Units were issued at a price per September 2023 Unit of $ 4.00 , for total gross proceeds to the Company of $ 1,000 . Each September 2023 Unit consists of one Common Share and one Warrant (“September 2023 Warrant”). Each September 2023 Warrant entitles the holder to acquire one Common Share at a price of $ 4.60 at any time prior to September 1, 2025. Proceeds of the September 2023 Private Placement will be used for continued advancement of the Company’s Elk Creek Critical Minerals Project and for working capital and general corporate purposes. The September 2023 Warrants were classified as an equity instrument and accordingly, the net proceeds of $ 962 were allocated based on the relative fair values of the Common Shares and the September 2023 Warrants on the date of issuance. The amount allocated to the fair value of the September 2023 Warrants was $ 254 and the balance of the proceeds of $ 708 was allocated to the Common Shares. The fair value of the September 2023 Warrants issued was computed using the Black Scholes option pricing model using the following assumptions: an expected life of 2.0 years, a risk-free interest rate of 4.85 %, an expected volatility of 71.63 %, and an expected dividend rate of 0 %. The Company issued the following Common Shares under the Yorkville Equity Facility Financing Agreement during the three months ended September 30, 2023: Date Common Shares Issued Gross Funds Received Market Value of Shares Issued Loss on Transaction September 12, 2023 70,000 $ 259 $ 271 $ 12 September 18, 2023 75,000 273 314 41 Loss on transaction represents a non-cash expense equal to the difference between the proceeds received and the fair value of the Common Shares issued based on The Nasdaq Stock Market LLC closing price per Common Share on the issuance date and is recorded in other operating expenses in the consolidated statement of operations and comprehensive loss. b) Stock Options Schedule of stock options Number of Options Weighted Average Exercise Price Balance, June 30, 2023 1,541,500 C$ 9.64 Cancelled/expired ( 222,500 ) 9.04 Balance, September 30, 2023 1,319,000 C$ 9.74 9 NioCorp Developments Ltd. Notes to the Condensed Consolidated Financial Statements September 30, 2023 (expressed in thousands of U.S. dollars, except per share amounts or as otherwise stated) (unaudited) The following table summarizes information about Options outstanding at September 30, 2023: Exercise Price Expiry Date Number Outstanding Aggregate Intrinsic Value Number Exercisable Aggregate Intrinsic Value C$ 5.40 November 15, 2023 208,500 C$ - 208,500 C$ - C$ 7.50 December 14, 2023 170,000 - 170,000 - C$ 7.50 December 16, 2023 2,500 - 2,500 - C$ 13.60 December 17, 2024 350,000 - 350,000 - C$ 11.00 May 30, 2025 50,000 - 50,000 - C$ 9.52 March 27, 2026 538,000 - 538,000 - 1,319,000 C$ - 1,319,000 C$ - c) Warrants Private Warrants In connection with the closing of the previously publicly disclosed business combination transaction on March 17, 2023 (the “Closing”), the Company assumed GXII’s obligations under the agreement governing the GXII Warrants, as amended by an assignment, assumption and amendment agreement (the “NioCorp Assumed Warrant Agreement”), and issued an aggregate of 15,666,626 Warrants (the “NioCorp Assumed Warrants”). The Company issued (a) 9,999,959 public NioCorp Assumed Warrants (the “Public Warrants”) in respect of the GXII Warrants that were publicly traded prior to the Closing and (b) 5,666,667 NioCorp Assumed Warrants (the “Private Warrants”) to GX Sponsor II LLC (the “Sponsor”). Each Private Warrant entitles the holder to the right to purchase 1.11829212 Common Shares at an exercise price of $11.50 per 1.11829212 Common Shares (subject to adjustments for stock splits, stock dividends, reorganizations, recapitalizations and the like). No fractional shares will be issued upon exercise of any Private Warrants, and fractional shares that would otherwise be due to the exercising holder will be rounded down to the nearest whole Common Share. In no event will the Company be required to net cash settle any Private Warrant. The Private Warrants: (i) will be exercisable either for cash or on a cashless basis at the holder’s option and (ii) will not be redeemable by the Company, in either case as long as the Private Warrants are held by the Sponsor, its members or any of their permitted transferees (as prescribed in the NioCorp Assumed Warrant Agreement). In accordance with the NioCorp Assumed Warrant Agreement, any Private Warrants that are held by someone other than the Sponsor, its members or any their permitted transferees are treated as Public Warrants. The Company classifies Private Warrants as Level 2 instruments under the fair value hierarchy and estimated the fair value using a Black Scholes model with the following assumptions: Key Valuation Input September 30, 2023 Stock price on valuation date $ 3.63 Strike price $ 11.50 Implied volatility of Public Warrants 47 % Risk free rate 4.65 % Dividend yield 0 % Expected warrant life in years 4.47 The change in the Private Warrants liability is presented below: Amount Fair value at June 30, 2023 $ 3,279 Change in fair value ( 181 ) Fair value at September 30, 2023 $ 3,098 10 NioCorp Developments Ltd. Notes to the Condensed Consolidated Financial Statements September 30, 2023 (expressed in thousands of U.S. dollars, except per share amounts or as otherwise stated) (unaudited) Contingent Consent Warrants As consideration for entering into the previously publicly disclosed Waiver and Consent Agreement, dated September 25, 2022 (the “Lind Consent”), between the Company and Lind Global Asset Management III, LLC (“Lind”), Lind received, amongst other things, the right to receive additional Warrants (the “Contingent Consent Warrants”) if on September 17, 2024, 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. The number of Contingent Consent Warrants to be issued, if any, is based on the Canadian dollar equivalent (based on the then current Canadian to US dollar exchange rate as reported by Bloomberg, LP) of $5,000 divided by the five-day volume weighted average price of the Common Shares on the date of issuance. Further, the number of Contingent Consent Warrants issued will be proportionately adjusted based on the percentage of Warrants currently held by Lind that are exercised, if any, prior to the issuance of any Contingent Consent Warrants. The 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 the balance sheet date and the probability of issuance calculated by the model. Key Valuation Input September 30, 2023 Share price on valuation date $ 3.63 Volatility 62.0 % Risk free rate 4.60 % Probability of issuance 92.7 % The change in the fair value of the Contingent Consent Warrants is presented below: Amount Fair value at June 30, 2023 $ 1,710 Change in fair value 254 Fair value at September 30, 2023 $ 1,964 The measurement date for the potential issuance of Contingent Consent Warrants is September 17, 2024, and therefore, as of September 30, 2023, the Contingent Consent Warrants are classified as a current liability. 8. EXPLORATION EXPENDITURES Schedule of exploration expenditures For the Three Months Ended September 30, 2023 2022 Technical studies and engineering $ 200 $ 141 Field management and other 135 154 Metallurgical development 746 993 Geologists and field staff 19 - Total $ 1,100 $ 1,288 11 NioCorp Developments Ltd. Notes to the Condensed Consolidated Financial Statements September 30, 2023 (expressed in thousands of U.S. dollars, except per share amounts or as otherwise stated) (unaudited) 9. LEASES The Company incurred lease costs as follows: For the Three Months Ended September 30, 2023 2022 Operating Lease Cost: Fixed rent expense $ 23 $ 21 Variable rent expense 3 3 Short-term lease cost 2 2 Sublease income ( 6 ) ( 6 ) Net lease cost – other operating expense $ 22 $ 20 The maturities of lease liabilities are as follows at September 30, 2023: Future Lease Maturities Total remaining lease payments $ 291 Less portion of payments representing interest ( 70 ) Present value of lease payments 221 Less current portion of lease payments 71 Non-current lease liability $ 150 10. FAIR VALUE MEASUREMENTS The following tables present information about the assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2023, and June 30, 2023, 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 fair values determined by Level 3 inputs are unobservable data As of September 30, 2023 Note Total Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 1,098 $ 1,098 $ - $ - Investment in equity securities 8 8 - - Total $ 1,106 $ 1,106 $ - $ - Liabilities: Earnout Shares liability 6 $ 8,428 $ - $ - $ 8,428 Warrant liabilities 7c 5,062 - 3,098 1,964 Total $ 13,490 $ - $ 3,098 $ 10,392 12 NioCorp Developments Ltd. Notes to the Condensed Consolidated Financial Statements September 30, 2023 (expressed in thousands of U.S. dollars, except per share amounts or as otherwise stated) (unaudited) As of June 30, 2023 Total Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 2,341 $ 2,341 $ - $ - Investment in equity securities 9 9 - - Total $ 2,350 $ 2,350 $ - $ - Liabilities: Earnout Shares liability $ 10,521 $ - $ - $ 10,521 Warrant liabilities 4,989 - 3,279 1,710 Total $ 15,510 $ - $ 3,279 $ 12,231 The Convertible Debentures discussed in Note 5 were initially recorded at fair value, which represented a nonrecurring fair value measurement using a Level 3 input. At September 30, 2023, the estimated fair value of this instrument approximated carrying value given that the instrument was issued in March 2023 and has a short time period until maturity. 13