NIOCORP DEVELOPMENTS LTD 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 59 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of NioCorp Developments Ltd. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheet of NioCorp Developments Ltd. and subsidiaries (the "Company") as of June 30, 2024, the related consolidated statements of operations and comprehensive loss, cash flows, and shareholders' equity (deficit) and redeemable noncontrolling interest, for the year ended June 30, 2024, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2024, and the results of its operations and its cash flows for the year ended June 30, 2024, in conformity with accounting principles generally accepted in the United States of America. Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 4 to the financial statements, the Company has a working capital deficit, an accumulated deficit, and does not generate any revenue. Further, the Company does not have sufficient cash on hand to fund normal operations or the repayment of the April 2024 Notes for the next twelve months These conditions raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 4. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. 60 Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. April 2024 Notes and Warrants — Refer to Notes 3, 9, and 16 to the financial statements Critical Audit Matter Description On April 12, 2024, the Company closed a private placement of convertible promissory notes with Yorkville and Lind Global for a principal amount of $8,000,000 (“April 2024 Notes”). As part of the transaction, the Company also issued warrants to the holders of the notes, which gave the holders the right to purchase up to 615,385 common shares of NioCorp stock at a price of $3.25 per share. The notes will mature on December 31, 2024 and the warrants will expire on April 12, 2027. The Company accounts for the convertible promissory notes within Convertible Debt in current liabilities and has elected to value the notes at fair value in accordance with Accounting Standards Codification (ASC) 815, Derivatives and Hedging . The Company uses a simulation model to estimate the fair value of the convertible promissory notes and embedded features. Estimates and assumptions impacting the fair value of the convertible promissory notes include the fair value per share of the underlying shares of common stock, the term of the instruments, the expected volatility of the price of the underlying common stock and public warrants, the risk-free interest rate, and the implied discount rate. The Company based the volatility assumption used to value the notes on the weighted average of the Company’s common share volatility and the implied volatility of its public warrants over a timeframe consistent with the expected term of the instrument. As of June 30, 2024, the fair value of the convertible promissory notes was $7,089,000. The Company accounts for the associated warrants in accordance with ASC Topic 815, Derivatives and Hedging , and determined that at as of April 12, 2024, the warrants should be classified as a warrant liability. The warrant liabilities are recognized at fair value at their inception date and are remeasured each reporting period with changes in value recognized as non-operating gains and losses. The Company uses a Black-Scholes option pricing model to determine the fair value of the warrants. Estimates and assumptions impacting the fair value of the warrants include the fair value per share of the underlying shares of common stock, the term of the instruments, the historical volatility of common shares and the risk-free interest rate. As of June 30, 2024, the fair value of the warrant liability was $298,000. Given the significant assumptions made by management in determining the accounting treatment for the transaction and associated fair value of the convertible promissory notes and warrants, performing audit procedures to evaluate the reasonableness of management's conclusions and assumptions for determining the fair value of the instruments, required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists and professionals with expertise in accounting for complex financial instruments. 61 How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the April 2024 Notes and Warrants included the following, among others: ● We evaluated management’s accounting position through the following procedures: ○ Obtained and evaluated the Company’s accounting memoranda regarding the application of the relevant accounting guidance for private placement warrants and embedded derivative features. ○ Obtained, read and compared the underlying terms and conditions of the relevant contracts to the Company’s accounting memoranda and evaluated management’s identification of significant terms and conditions for completeness and accuracy. ○ Evaluated the Company’s conclusions regarding the accounting treatment applied to the private placement transaction with the assistance of professionals with expertise in accounting for complex financial instruments. ● Tested the fair value of the warrants at issuance and June 30, 2024, including the model and relevant assumptions. ● Independently calculated the loss on issuance and change in fair value between issuance and June 30, 2024 for the convertible promissory notes and warrants. ● Confirmed the outstanding principal balance of the convertible promissory notes as of June 30, 2024 with the holders of the notes. ● With the assistance of our fair value specialists, we: ○ Evaluated the reasonableness of the valuation methodologies used for the convertible promissory notes. ○ Assessed the mathematical accuracy of the valuation model used for convertible promissory notes. ○ Evaluated assumptions including the risk-free rates, discount rates, and the volatility assumptions, including the underlying source information and mathematical accuracy of the calculations, based on a range of independent estimates that we compared to the risk-free rates, discount rate and the volatility assumptions selected by management to value the convertible promissory notes. ○ Compared the fair value of the convertible promissory notes selected by management to an independently calculated value at issuance and June 30, 2024. ○ Evaluated the appropriateness of the volatility assumptions and use of the Black-Sholes option pricing model to value the warrant liability. ● Evaluated the completeness and accuracy of the disclosures related to the April private placement transaction. /s/ DELOITTE & TOUCHE LLP Denver, Colorado September 20, 2024 34 We have served as the Company's auditor since fiscal year 2024. 62 Report of Independent Registered Public Accounting Firm Shareholders and Board of Directors NioCorp Developments Ltd. Centennial, Colorado Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheet of NioCorp Developments Ltd. (the “Company”) as of June 30, 2023, the related consolidated statement of operations and comprehensive loss, shareholders’ deficit and redeemable noncontrolling interest, and cash flows for the year then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at June 30, 2023, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America. Going Concern Uncertainty The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 4 to the consolidated financial statements, the Company has an accumulated deficit and suffered recurring losses without any current revenue generating operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 4. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion. /s/ BDO USA, P.C. We served as the Company’s auditor from 2015 to 2023. Spokane, Washington October 6, 2023 63 NioCorp Developments Ltd. Consolidated Balance Sheets (expressed in thousands of U.S. dollars, except share data) As of June 30, 2024 2023 ASSETS Current Cash and cash equivalents $ 2,012 $ 2,341 Prepaid expenses and other 916 1,385 Total current assets 2,928 3,726 Non-current Deposits 35 35 Investment in equity securities 4 9 Right-of-use assets 181 236 Land and buildings, net 837 839 Mineral properties 16,085 16,085 Total assets $ 20,070 $ 20,930 LIABILITIES Current Accounts payable and accrued liabilities $ 1,843 $ 3,491 Warrant liabilities, at fair value 2,365 - Convertible debt 7,660 - Operating lease liability 96 71 Total current liabilities 11,964 3,562 Non-current Convertible debt - 10,561 Warrant liabilities, at fair value 1,651 4,989 Earnout liability, at fair value 3,817 10,521 Operating lease liability 104 164 Total liabilities 17,536 29,797 Commitments and contingencies Redeemable noncontrolling interest 1,534 2,100 SHAREHOLDERS’ EQUITY (DEFICIT) Common stock, no par value, unlimited shares authorized; 38,062,647 and 31,202,131 shares outstanding, respectively 163,823 140,421 Accumulated deficit ( 161,912 ) ( 150,477 ) Accumulated other comprehensive loss ( 911 ) ( 911 ) Total shareholders’ equity(deficit) 1,000 ( 10,967 ) Total liabilities, redeemable noncontrolling interest, and shareholders’ equity (deficit) $ 20,070 $ 20,930 The accompanying notes are an integral part of these consolidated financial statements 64 NioCorp Developments Ltd. Consolidated Statements of Operations and Comprehensive Loss (expressed in thousands of U.S. dollars, except share and per share data) For the year ended June 30, 2024 2023 Operating expenses Employee related costs $ 3,509 $ 2,323 Professional fees 3,533 2,581 Exploration expenditures 2,552 5,348 Other operating expenses 4,163 27,158 Total operating expenses 13,757 37,410 Change in fair value of earnout shares liability ( 6,704 ) ( 2,674 ) Change in fair value of warrant liabilities ( 1,875 ) 1,414 Change in fair value of convertible notes 2,542 - Loss on debt extinguishment - 1,922 Interest expense 4,490 2,336 Foreign exchange loss (gain) ( 31 ) 216 Other gains ( 147 ) ( 13 ) Loss on equity securities 5 1 Loss before income taxes ( 12,037 ) ( 40,612 ) Income tax benefit ( 139 ) ( 304 ) Net loss ( 11,898 ) ( 40,308 ) Net loss attributable to redeemable noncontrolling interest 463 228 Net loss attributable to the Company $ ( 11,435 ) $ ( 40,080 ) Other comprehensive loss: Net loss $ ( 11,898 ) $ ( 40,308 ) Other comprehensive gain: Reporting currency translation - ( 82 ) Total comprehensive loss ( 11,898 ) ( 40,226 ) Comprehensive loss attributable to redeemable noncontrolling interest 463 228 Comprehensive loss attributable to the Company $ ( 11,435 ) $ ( 39,998 ) Loss per common share, basic and diluted $ ( 0.31 ) $ ( 1.34 ) Weighted average common shares outstanding 34,320,024 28,705,840 The accompanying notes are an integral part of these consolidated financial statements 65 NioCorp Developments Ltd. Consolidated Statements of Cash Flows (expressed in thousands of U.S. dollars) For the year ended June 30, 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES Net loss for the period $ ( 11,898 ) $ ( 40,308 ) Adjustments for: Initial valuation of earnout shares liability - 13,195 Change in valuation of earnout shares liability ( 6,704 ) ( 2,674 ) Initial valuation of warrant liabilities - 2,987 Change in valuation of warrant liabilities ( 1,875 ) 1,414 Change in fair value of convertible note 2,542 - Accretion of convertible debt 4,490 2,157 Share-based compensation 2,881 1,794 Loss on debt extinguishment - 1,422 Yorkville share issuances 105 663 Foreign exchange loss - 200 Depreciation 2 3 Unrealized loss on equity securities 5 1 Noncash lease activity 20 ( 12 ) Other gains ( 148 ) ( 13 ) ( 10,580 ) ( 19,171 ) Change in working capital items: Prepaid expenses 469 ( 985 ) Accounts payable and accrued liabilities ( 1,621 ) 2,861 Net cash used in operating activities ( 11,732 ) ( 17,295 ) CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of assets - 21 Net cash provided by investing activities - 21 CASH FLOWS FROM FINANCING ACTIVITIES Issuance of debt, net of costs 6,935 14,857 Proceeds from issuance of capital stock 6,185 2,499 Related party debt draws - 1,130 Related party debt repayments - ( 3,130 ) Debt repayments ( 1,512 ) ( 515 ) Share issue costs ( 205 ) ( 204 ) Net cash provided by financing activities 11,403 14,637 Exchange rate effect on cash and cash equivalents - ( 302 ) Change in cash and cash equivalents during period ( 329 ) ( 2,939 ) Cash and cash equivalents, beginning of period 2,341 5,280 Cash and cash equivalents, end of period $ 2,012 $ 2,341 Supplemental cash flow information: Amounts paid for interest $ - $ 264 Non-cash investing and financing transactions: Conversion of debt for common shares $ 14,479 $ 5,175 Recognition of operating lease liabilities - 199 Value of warrants issued - 3,337 The accompanying notes are an integral part of these consolidated financial statements 66 NioCorp Developments Ltd. Consolidated Statements of Shareholders’ Equity (Deficit) and Redeemable Noncontrolling Interest (expressed in thousands of U.S. dollars, except share data) 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 $ - Exercise of options 265,138 11 - - 11 - Fair value of warrants granted - 3,338 - - 3,338 - Common Shares issued in the GXII Transaction 1,753,821 - - - - - Commitment shares issued 81,213 650 - - 650 - Registered direct offering – May 2023 314,465 2,000 - - 2,000 - Shares issued under the Yorkville equity facility 100,000 501 - - 501 - Debt conversions 1,020,434 5,604 - - 5,604 - Share issuance costs - ( 204 ) - - ( 204 ) - Redeemable noncontrolling interest - ( 2,328 ) - - ( 2,328 ) 2,328 Share-based compensation - 1,794 - - 1,794 - Reporting currency presentation - - - 82 82 - Loss for the year - - ( 40,080 ) - ( 40,080 ) ( 228 ) Balance, June 30, 2023 31,202,131 $ 140,421 $ ( 150,477 ) $ ( 911 ) $ ( 10,967 ) $ 2,100 Exercise of options 7,800 - - - - - Private placements 978,432 2,995 - - 2,995 - Yorkville equity facility draws 1,358,000 3,398 - - 3,398 - Debt conversions 4,232,592 14,479 - - 14,479 - Share issuance costs - ( 204 ) - - ( 204 ) - Option liability valuations - ( 148 ) - - ( 148 ) - Exchange of Class B shares 283,692 103 - - 103 ( 103 ) Share-based compensation - 2,779 - - 2,779 - Loss for the year - - ( 11,435 ) - ( 11,435 ) ( 463 ) Balance, June 30, 2024 38,062,647 $ 163,823 $ ( 161,912 ) $ ( 911 ) $ 1,000 $ 1,534 The accompanying notes are an integral part of these consolidated financial statements 67 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2024 (expressed in thousands of U.S. dollars, except share and per share data) 1. DESCRIPTION OF BUSINESS NioCorp Developments Ltd. (the “Company” or “NioCorp”) was incorporated on February 27, 1987, under the laws of the Province of British Columbia and currently operates in one reportable operating segment consisting of exploration and development of mineral deposits in North America, specifically, the Elk Creek Niobium/Scandium/Titanium property (the “Elk Creek Project”) located in southeastern Nebraska. As further discussed in Notes 5, 9, 10, and 11, on March 17, 2023 (the “Closing Date”), the Company closed the GXII Transaction (as defined below) with GX Acquisition Corp. II (“GXII”), pursuant to the Business Combination Agreement, dated September 25, 2022 (the “Business Combination Agreement”), among the Company, GXII and Big Red Merger Sub Ltd (the “Closing”). At the Closing, the Company also closed convertible debt financings (the “Yorkville Convertible Debt Financing”) with YA II PN, Ltd., an investment fund managed by Yorkville Advisors Global, LP (together with YA II PN, Ltd., “Yorkville”), and the standby equity purchase facility with Yorkville (the “Yorkville Equity Facility Financing” and, together with the Yorkville Convertible Debt Financing, the “Yorkville Financings”) became effective. The transactions contemplated by the Business Combination Agreement, including the GXII Transaction, the Yorkville Financings and the Reverse Stock Split (as defined below), are referred to, collectively, as the “2023 Transactions.” The GXII Transaction was accounted for as an equity raise transaction in accordance with generally accepted accounting principles of the United States of America (“U.S. GAAP”). Under this method of accounting, GXII is treated as the “acquired” company for financial reporting purposes. Accordingly, the GXII Transaction is treated as the equivalent of NioCorp issuing common shares, no par value, of the Company (“Common Shares”) for the assets and liabilities of GXII. The net assets of GXII are stated at historical cost, with no goodwill or other intangible assets recorded. The Company currently earns no operating revenues and will require additional capital in order to advance the Elk Creek Project to construction and commercial operation. As further discussed in Note 4, these matters raise 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 These consolidated financial statements have been prepared in conformity with U.S. GAAP and the rules and regulations of the U.S. Securities and Exchange Commission. The consolidated financial statements include the consolidated accounts of the Company and its wholly owned subsidiaries with all significant intercompany transactions eliminated. Certain transactions include reference to Canadian dollars (“C$”) where applicable. These consolidated financial statements include the accounts of the Company and the subsidiaries listed in the following table. All intercompany transactions and balances have been eliminated. Subsidiary Jurisdiction of incorporation Ownership at June 30, 2024 2023 0896800 BC Ltd. (“0896800”) British Columbia, Canada 100 % 100 % Elk Creek Resources Corp. Nebraska, USA N/A 100 % Elk Creek Resources Corp. (“ECRC”) Delaware, USA 79.7 % (1) 79.1 % (1) NioCorp Technologies Limited United Kingdom 100 % NA (1) Represents 100% of Class A common stock owned by 0896800, and 4,282,116 and 4,565,808 Vested Shares and 3,391,596 and 3,391,596 Earnout Shares (each as defined below) held by third parties, and outstanding as of June 30, 2024 and 2023, respectively. 68 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2024 (expressed in thousands of U.S. dollars, except share and per share data) b) 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 consolidated financial statements, and the reported amounts of expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the valuation of mineral properties, deferred income tax asset valuations, convertible debt valuations, earnout valuation, derivative liabilities, warrant liabilities, and share-based compensation. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the other 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. 3. SIGNIFICANT ACCOUNTING POLICIES a) Development Stage Issuer The Company is considered to be a development stage issuer under Subpart 1300 of Regulation S-K of the United States Securities Act of 1933, as amended (“S-K 1300”), and it devotes substantially all of its efforts to acquiring and exploring mining interests that management believes should eventually provide sufficient net profits to sustain the Company’s existence. Until such interests are engaged in commercial production, the Company will continue to seek additional funding to support the completion of its exploration and development activities. The Company’s activities are subject to significant risks and uncertainties, including its ability to secure sufficient funding to continue operations, to obtain proven and probable reserves, to comply with industry regulations and obtain permits necessary for development of the Elk Creek Project, as well as environmental risks and market conditions. b) Cash and Cash Equivalents Cash and cash equivalents include cash on hand, cash in banks, investments in certificates of deposit with original maturities of 90 days or less, and money market funds. The Company maintains the majority of its cash balances with two financial institutions. Accounts at banks in the United States (“U.S.”) are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250, while accounts at banks in Canada are insured by the Canada Deposit Insurance Corporation (“CDIC”) up to C$100. At June 30, 2024, the Company had $1,406 and $0 in excess of the FDIC and CDIC insured limits, respectively. c) Foreign Currency Translation Functional and reporting currency Items included in the financial statements of each of the Company’s entities are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The reporting currency for these consolidated financial statements is U.S. dollars. Change in functional currency Prior to March 17, 2023, the Company’s functional currency was the Canadian dollar. The Company re-assessed its functional currency and determined that on March 17, 2023, its functional currency changed from the Canadian dollar to the U.S. dollar based on significant changes in economic facts and circumstances in our organization. The change in functional currency was accounted for prospectively from March 17, 2023 and prior-period consolidated financial statements were not restated for the change in functional currency. For both monetary and non-monetary assets and liabilities, translated balances as of March 17, 2023 became the new accounting basis. The exchange rate on the date of change became the historical rate at which non-monetary assets and liabilities were translated in subsequent periods. There was no effect on the cumulative translation adjustment on the consolidated basis. Previously recorded cumulative translation adjustments were not reversed. 69 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2024 (expressed in thousands of U.S. dollars, except share and per share data) The functional currency for the Company’s Canadian subsidiary, 0896800 BC Ltd., which has no independent operations from its parent, also changed from the Canadian dollar to the U.S. dollar. The functional currency for Elk Creek Resources Corp. remains as the U.S. dollar. Transactions in foreign currency Transactions made in a currency other than the functional currency are remeasured to the functional currency at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are remeasured to the functional currency at the exchange rate at that date and non-monetary assets and liabilities are remeasured at historical rates. Foreign currency translation gains and losses are included in profit or loss. Translation to reporting currency Translation gains and losses from the application of the U.S. dollar as the reporting currency for all periods prior to March 17, 2023 (when the Canadian dollar was the functional currency) are included as part of cumulative currency translation adjustment, which is reported as a component of shareholders’ equity under accumulated other comprehensive loss. d) Mineral Properties Mineral property acquisition costs, including indirectly related acquisition costs, are capitalized when incurred. Acquisition costs include cash consideration and the fair market value of Common Shares issued as consideration. Properties acquired under option agreements, whereby payments are made at the sole discretion of the Company, are capitalized as mineral property acquisition costs at such time as the payments are made. Exploration costs are expensed as incurred. When it is determined that a mining deposit can be economically and legally extracted or produced based on established proven and probable reserves under S-K 1300, and the Company’s board of directors (the “Board”) has approved the commencement of formal development activities, development costs related to such reserves and incurred after such board approval will be considered for capitalization. The establishment of proven and probable reserves is based on results of feasibility studies, which indicate whether a property is economically feasible. Upon commencement of commercial production, capitalized costs will be amortized over their estimated useful lives or units of production, whichever is a more reliable measure. Capitalized amounts relating to a property that is abandoned or otherwise considered uneconomic for the foreseeable future are written off. The recoverability of the carrying values of mineral properties is dependent upon economic reserves being discovered or developed on the properties, permitting, financing, start-up, and commercial production from, or the sale/lease of, or other strategic transactions related to these properties. Development and/or start-up of a project will depend on, among other things, management’s ability to raise sufficient capital for these purposes. We assess the carrying cost of our mineral properties for impairment whenever information or circumstances indicate the potential for impairment. This would include events and circumstances such as our inability to obtain all the necessary permits, changes in the legal status of our mineral properties, government actions, the results of exploration activities and technical evaluations and changes in economic conditions, including the price of commodities or input prices. Such evaluations compare estimated future net cash flows with our carrying costs and future obligations on an undiscounted basis. If it is determined that the estimated future undiscounted cash flows are less than the carrying value of the property, an impairment loss will be recorded. Where estimates of future net cash flows are not determinable and where other conditions indicate the potential for impairment, management uses available market information and/or third-party valuation experts to assess if the carrying value can be recovered and to estimate fair value. There was no impairment recorded to mineral properties as of June 30, 2024 or 2023, respectively. e) Long Lived Assets Long-lived assets, other than mineral properties, held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. For purposes of evaluating the recoverability of long-lived assets, the recoverability test is performed using undiscounted net cash flows related to the long-lived assets. If such assets are considered to be impaired, the impairment recognized is measured by the amount by which the carrying amount of the assets exceeds the fair 70 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2024 (expressed in thousands of U.S. dollars, except share and per share data) value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. There was no impairment recorded to long-lived assets as of June 30, 2024 or 2023, respectively. f) Leases Under Accounting Standards Codification (“ASC”) 842, Leases , we determine if a contractual arrangement is, or contains, a lease at the inception date. Right-of-use (“ROU”) assets and liabilities related to operating leases are separately reported in the consolidated balance sheets. The Company currently has no finance leases. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the lease term. When the rate implicit to the lease cannot be readily determined, we utilize our incremental borrowing rate in determining the present value of the future lease payments. The incremental borrowing rate is derived from information available at the lease commencement date and represents the rate of interest that a lessee would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term in a similar economic environment. Operating lease ROU assets also include any cumulative prepaid or accrued rent when the lease payments are uneven throughout the lease term. The ROU assets and lease liabilities may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease liabilities are increased by interest and reduced by payments each period, and the ROU asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the ROU asset result in straight-line rent expense over the lease term. Variable lease expenses are recorded when incurred. g) Convertible Debt Carried at Fair Value With regard to the Company’s debt related to the convertible promissory notes issued in April 2024 (as further discussed in Note 9), the Company has elected to account for these notes at fair value per the provisions of ASC Topic 815, Derivatives and Hedging (“ASC 815”). Under ASC 815-15-25, an election can be taken at the inception of a financial instrument to account for the instrument at fair value. The notes were recorded at fair value at inception and assessed quarterly thereafter using a Monte Carlo simulation methodology which incorporates multiple conversion scenarios. All changes in fair value subsequent to the initial recording, excluding the impact of the change in fair value related to the Company’s own credit risk, are recorded as a component of non-operating income/expense, within Change in fair value of convertible debt in the consolidated statements of operations. Changes in fair value related to the Company’s own credit risk, if any, are recorded through other comprehensive loss. h) Warrants 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 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 measured at fair value upon issuance and are not subsequently remeasured unless they are required to be reclassified. i) Earnout Shares Earnout Shares are classified as a liability due to failure to meet the equity classification criteria under ASC 815-40. The Earnout Shares are measured at fair value upon issuance and subsequently remeasured at each reporting period using a Monte Carlo simulation methodology, which includes inputs such as NioCorp’s Common Share price, the risk-free interest rate, the expected term, the weighted average of historical Common Share volatility and implied volatility underlying the Company’s Public Warrants, the dividend rate, the conversion price, and the number of Earnout Shares outstanding. Assumptions used in the model are subjective and require significant judgment. 71 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2024 (expressed in thousands of U.S. dollars, except share and per share data) j) Financial Instruments The Company’s financial instruments consist of cash and cash equivalents, receivables, equity securities, accounts payable and accrued liabilities, notes payable, convertible debt, and the related party loan. It is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from its financial instruments. The fair values of these instruments approximate their carrying value unless otherwise noted. k) Concentration of Credit Risk The financial instrument which potentially subjects the Company to credit risk is cash and cash equivalents, The Company holds investments or maintains available cash primarily in two commercial banks located in Vancouver, British Columbia and Santa Clara, California. As part of its cash management process, the Company regularly monitors the relative credit standing of these institutions. l) Asset Retirement Obligation The Company is subject to various government laws and regulations relating to environmental disturbances caused by exploration and evaluation activities. The estimated costs associated with environmental remediation obligations are accrued in the period in which the liability is incurred if it is reasonably estimable or known. Until such time that a project life is established, the Company records the corresponding cost as an exploration stage expense and has accrued $ 48 as an accrued liability related to estimated obligations as of June 30, 2024 (2023 - $ 48 ). Future reclamation and environmental-related expenditures are difficult to estimate in many circumstances due to the early-stage nature of the Elk Creek Project, the uncertainties associated with defining the nature and extent of environmental disturbance, the application of laws and regulations by regulatory authorities and changes in reclamation or remediation technology. The Company periodically reviews accrued liabilities for such reclamation and remediation costs as evidence indicating that the liabilities have potentially changed becomes available. Changes in estimates are reflected in the consolidated statement of operations and comprehensive loss in the period an estimate is revised. m) Income Taxes Income taxes are provided based upon the liability method of accounting pursuant to ASC 740-10-25, “Income Taxes – Recognition.” Under the approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded against deferred tax assets if management does not believe the Company has met the “more likely than not” standard imposed by ASC 740-10-25-5 to allow recognition of such an asset. ASC 740-10-50, “Income Taxes – Disclosure,” requires the Company to evaluate its income tax positions and recognize a liability for uncertain tax positions that are not more likely than not to be sustained by tax authorities. As of June 30, 2024 and 2023, the Company believes it had no income tax uncertainties that required recognition of a liability. If the Company were to determine that uncertain tax positions meet the criteria for recognition, an estimated liability and related interest and penalties would be recognized as income tax expense. n) Reverse Stock Split On March 17, 2023, the Company effected a reverse stock split (the “Reverse Stock Split”) on the basis of one (1) post-Reverse Stock Split Common Share for every ten (10) pre-Reverse Stock Split Common Shares issued and outstanding, with any fractional shares resulting from the Reverse Stock Split rounded down to the nearest whole share. Immediately after the Reverse Stock Split, there were 30,000,442 Common Shares issued and outstanding. All references to share and per share amounts (excluding authorized shares) in the consolidated financial statements and accompanying notes have been retroactively restated to reflect the Reverse Stock Split. o) Redeemable Noncontrolling Interest Redeemable Noncontrolling Interest refers to non-controlling interest associated with the Vested Shares that are redeemable upon the occurrence of an event that is not solely within the Company’s control and is reported in the mezzanine section between total liabilities and shareholders’ deficit, as temporary equity in the Company’s consolidated balance sheets. The Company’s non-controlling interest is redeemable at fair value, and no adjustment to the earnings per share numerator is required because redemption at fair value is not considered an economic distribution different from other common stockholders. 72 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2024 (expressed in thousands of U.S. dollars, except share and per share data) p) Basic and Diluted Per Share Disclosure Basic earnings (loss) per share represents net earnings (loss) attributable to common shareholders divided by the weighted average number of Common Shares outstanding during the period. The Company considers Vested Shares and Released Earnout Shares (each as defined in Note 10), to be participating securities, requiring the use of the two-class method. Diluted earnings (loss) per share represents net earnings (loss) attributable to common shareholders divided by the weighted average number of Common Shares outstanding, inclusive of the dilutive impact of all potentially dilutive securities outstanding during the period, as applicable. The Company utilizes the weighted average method to determine the impact of changes in a participating security on the calculation of loss per share. The following table sets forth the computation of the Company’s basic and diluted net loss per share attributable to common shareholders: For the year ended June 30, 2024 2023 Net loss $ (11,898 ) $ ( 40,308 ) Adjust: Net loss attributable to noncontrolling interest 458 (251 Net loss available to participating securities ( 11,440 ) ( 40,057 ) Net loss attributable to Vested Shares 967 1,528 Net loss attributed to common shareholders - basic and diluted $ ( 10,473 ) $ ( 38,529 ) Denominator: Weighted average shares outstanding – basic and diluted 34,320,024 28,705,840 Loss per Common Share outstanding – basic and diluted $ ( 0.31 ) $ ( 1.34 ) The following shares underlying options, warrants, and outstanding convertible debt were antidilutive due to a net loss in the periods presented and, therefore, were excluded from the dilutive securities computation for the years ended June 30, 2024 and 2023, as indicated below. Schedule of excluded from the dilutive securities For the year ended June 30, 2024 2023 Excluded potentially dilutive securities (1)(2) : Options 2,495,500 1,541,500 Warrants 18,563,561 18,816,304 Convertible debt 2,849,000 2,871,660 Total potentially dilutive securities 23,908,061 23,229,464 (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 (as defined below) are excluded as the vesting terms were not met as of the end of the reporting period. q) Share Based Compensation The Company grants stock options to directors, officers, employees, and business advisors. Option terms and vesting conditions are at the discretion of the Board. Prior to March 31, 2023, the option exercise price was equal to the closing market price on The Toronto Stock Exchange (the “TSX”) on the day preceding the date of grant. Effective March 21, 2023, the option exercise price is equal to the closing market price on the Nasdaq Stock Market LLC (“Nasdaq”) on the day preceding the date of the grant. The Company estimates the fair value of stock options using the Black-Scholes option pricing model. The Company recognizes forfeitures as they occur. 73 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2024 (expressed in thousands of U.S. dollars, except share and per share data) r) Recent Accounting Standards Issued and Not Effective In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses. The amendments will require public entities to disclose significant segment expenses that are regularly provided to the chief operating decision maker and included within segment profit and loss. The amendments are effective for the Company’s annual periods beginning July 1, 2024, and interim periods beginning July 1, 2025, with early adoption permitted, and will be applied retrospectively to all prior periods presented in the financial statements. The Company has evaluated the ASU and has determined that implementation will have limited impact on the Company’s disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The amendments are effective for the Company’s annual periods beginning June 1, 2025, with early adoption permitted, and should be applied either prospectively or retrospectively. The Company is currently evaluating the ASU to determine its impact on the Company’s disclosures. From time to time, new accounting pronouncements are issued by the FASB that are adopted by the Company as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards did not or will not have a material impact on the Company’s consolidated financial statements upon adoption. 4. GOING CONCERN ISSUES The Company incurred a net loss of $ 11,435 for the year ended June 30, 2024 (2023 - $ 40,080 ) and had a working capital deficit of $ 9,036 and an accumulated deficit of $ 161,912 as of June 30, 2024. As a development stage issuer, the Company has not yet commenced its mining operations and accordingly does not generate any revenue. As of June 30, 2024, the Company had cash of $ 2,012 , which will not be sufficient to fund normal operations or the repayment of the April 2024 Notes for the next twelve months. These conditions and events raise substantial doubt about the Company’s ability to continue as a going concern. 74 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2024 (expressed in thousands of U.S. dollars, except share and per share data) In response to these conditions and events, the Company plans to obtain additional financing. Subject to the conditions discussed in Note 11d, NioCorp expects to have access to up to $ 59,269 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 June 30, 2024. The Company’s plans to obtain additional financing have not been finalized, are subject to market conditions, and are not within the Company’s control and therefore cannot be deemed probable. Further, the Company will be required to raise additional funds for the construction and commencement of operations. As a result, the Company has concluded that management’s plans do not alleviate substantial doubt about the Company’s ability to continue as a going concern. 5. 2023 GXII TRANSACTION Pursuant to the Business Combination Agreement, the following transactions (collectively, the “GXII Transaction”) occurred on the Closing Date: ● As a result of a series of transactions, GXII became an indirect, majority-owned subsidiary of NioCorp and changed its name to “Elk Creek Resources Corp” (“ECRC”). ● As the parent company of the merged entity, NioCorp issued 1,753,821 post-Reverse Stock Split Common Shares in exchange for all of the Class A shares of GXII issued and outstanding immediately prior to the Closing, including 83,770 Common Shares issued to BTIG, LLC in exchange for Class A shares of GXII that it received as partial payment for advisory services. ● All of the Class B shares of GXII issued and outstanding immediately prior to the Closing (after giving effect to the surrender of certain Class B shares of GXII in accordance with the Sponsor Support Agreement, dated September 25, 2022 (the “Sponsor Support Agreement”), among GX Sponsor II LLC (the “Sponsor”), GXII, NioCorp and the other persons party thereto) were converted into 7,957,404 shares of Class B common stock of GXII (now known as ECRC) as the surviving entity of the mergers that occurred on the Closing Date as part of the GXII Transaction. Pursuant to the Business Combination Agreement, the Sponsor Support Agreement and the Exchange Agreement, dated as of March 17, 2023 (as amended, supplemented or otherwise modified, the “Exchange Agreement”), by and among NioCorp, ECRC and the Sponsor, after the Closing, the shares of Class B common stock of ECRC are exchangeable into Common Shares on a one-for-one basis, subject to certain equitable adjustments, under certain conditions. See Note 10 for additional information regarding the Class B common stock of ECRC. ● NioCorp assumed GXII’s obligations under the agreement (the “GXII Warrant Agreement”) governing the GXII share purchase warrants (the “GXII Warrants”) and issued an aggregate of 15,666,626 warrants (the “NioCorp Assumed Warrants”) to purchase up to an aggregate of 17,519,864 Common Shares. See Note 11c for additional information regarding the NioCorp Assumed Warrants. After the distribution of funds to GXII redeeming shareholders and prior to paying transaction costs incurred by GXII, $15,676 became available to the Company. The following table summarizes the elements of the GXII Transaction allocated to the Consolidated Statements of Operations and Comprehensive Loss for the year ended June 30, 2023: Amount Gross cash proceeds, net of transaction costs incurred by GXII $ 2,168 Less: Cash costs associated with the 2023 Transactions: Net liabilities assumed 392 Yorkville Equity Facility Financing Agreement – cash costs 1,996 Transaction costs expensed 6,715 Non-cash costs associated with the 2023 Transactions: Private Warrants assumed at fair value 2,987 Earnout Shares assumed at fair value 13,195 Yorkville Equity Facility Financing Agreement – shares issued 650 Total transaction related losses incurred $ 23,767 75 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2024 (expressed in thousands of U.S. dollars, except share and per share data) The number of Common Shares issued and outstanding immediately following the consummation of the 2023 Transactions were as follows : Common Shares Percentage Legacy NioCorp Shareholders 28,246,621 93.90 % Former GXII Class A Shareholders (1) 1,753,821 5.83 % Other (2) 81,213 0.27 % Total Common Shares Outstanding Upon Completion of 2023 Transactions 30,081,655 100 % (1) Includes 83,770 Common Shares issued to BTIG, LLC in exchange for Class A shares of GXII that it received as partial payment for advisory services. (2) Represents Commitment Shares (as defined in Note 11d) issued under the Yorkville Equity Facility Financing Agreement. In connection with the GXII Transaction, the Company also closed the Yorkville Convertible Debt Financing and the Yorkville Equity Facility Financing, as discussed in Notes 9 and 11d. 6. LAND AND BUILDINGS, NET Schedule of properties As of June 30, 2024 2023 Cost Accumulated Depreciation Net Cost Accumulated Depreciation Net Land $ 807 $ - $ 807 $ 807 $ - $ 807 Buildings and other 41 11 30 41 9 32 $ 848 $ 11 $ 837 $ 848 $ 9 $ 839 7. MINERAL PROPERTIES Mineral properties consist of original acquisition costs and purchased mineral rights related to the Elk Creek Project. In addition to the land and mineral rights currently owned by the Company, the property interests of Elk Creek include eight prepaid mineral exploration option-to-purchase agreements and include a pre-determined buyout for permanent ownership of the mineral and/or surface rights. Terms of the agreements require no further significant payments, and the Company may negotiate lease extensions or elect to purchase the mineral and/or surface rights any time. Agreements that allow for the purchase of mineral rights contain provisions whereby the landowners would retain a 2% net smelter return. 8. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Schedule of account payable and accrued liabilities As of June 30, 2024 2023 Accounts payable, trade $ 1,417 $ 1,990 Trade payable accruals 350 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 $ 1,843 $ 3,491 76 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2024 (expressed in thousands of U.S. dollars, except share and per share data) 9. CONVERTIBLE DEBT Schedule of convertible debt As of June 30, 2024 2023 Current Portion Yorkville convertible debentures: $ 571 $ - April 2024 notes 7,089 - Total Current Portion $ 7,660 $ - Noncurrent Portion – Yorkville convertible debenture $ - $ 10,561 Lind III Convertible Security On February 16, 2021, the Company issued to Lind Global Asset Management III, LLC (“Lind”), an entity managed by The Lind Partners, the convertible security (the “Lind III Convertible Security”) pursuant to the Convertible Security Funding Agreement, dated February 16, 2021, as amended by Amendment #1 to the Convertible Security Funding Agreement, dated December 2, 2021, between the Company and Lind (as amended, the “Lind III Agreement”). The Lind III Convertible Security had a face value of $ 11,700 (representing $10,000 in funding plus an implied 8.5 % interest rate per annum for the term of the Lind III Convertible Security). After deducting a $ 350 commitment fee as set forth in the Lind III Agreement, NioCorp received net proceeds of $ 9,650 from the funding of the Lind III Convertible Security. The Company used a portion of the proceeds from the funding of the Lind III Convertible Security to purchase a key land parcel associated with the Company’s Elk Creek Project, with the remainder spent for general corporate purposes. The Lind III Convertible Security had a term of (i) 24 months or (ii) 30 calendar days after the date on which the face value of the Lind III Convertible Security is nil due to such amount having been fully converted and/or fully repaid (including with any applicable premium) in accordance with the terms of the Lind III Agreement, whichever is earlier. Pursuant to the Lind III Agreement, Lind was entitled to convert the Lind III Convertible Security into Common Shares in monthly installments over its term at a price per Common Share equal to 85% of the volume-weighted average price Common Shares on the TSX for the five trading days immediately preceding to the date on which Lind provides notice to the Company of its election to convert. The Lind III Agreement provided that Common Shares issuable upon conversion, together with the number of Common Shares issued upon exercise of Warrants, shall not exceed 4,358,800 Common Shares. On February 19, 2021, in connection with the funding and issuance of the Lind III Convertible Security, the Company issued 855,800 Common Share purchase warrants, exercisable at a price per Common Share of C$ 9.70 , expiring February 19, 2025 (the “Lind III Warrants”), to Lind pursuant to the Lind III Agreement. The Company identified embedded derivatives in the Lind III Convertible Security that were evaluated to be immaterial at both the closing date and at June 30, 2024 and 2023, respectively. The Company allocated the net proceeds of $ 9,477 from the Lind III Convertible Security as follows: ● $1,712 was allocated to Common Stock, representing the fair value of the Lind III Warrants based on the Black Scholes pricing model using a risk-free interest rate of 0.40 %, an expected dividend yield of 0 %, a volatility of 51.60 %, and an expected life of 4.0 years. ● $ 7,938 was allocated to the convertible debt liability. Transaction costs of $ 173 , in addition to a commitment fee of $ 350 , were recognized as a direct deduction from the debt liability, resulting in a net opening balance of $7,765. This balance was accreted up to the face value of the Lind III Convertible Security at maturity using the effective interest method and recorded as non-cash interest expense in the consolidated statement of operations and comprehensive loss. 77 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2024 (expressed in thousands of U.S. dollars, except share and per share data) Changes in the Lind III Convertible Security are as follows : For the year ending June 30, 2023 Beginning balance $ 2,169 Fair value increase due to debt extinguishment 201 Conversions ( 1,950 ) Accretion expense 95 Payment at maturity ( 515 ) Balance, June 30, 2023 $ - On September 25, 2022, the Company and Lind entered into the Waiver and Consent Agreement, dated September 25, 2022, between the Company and Lind (the “Lind Consent”), which included the following principal terms: (i) the consent of Lind to the GXII Transaction disclosed in Note 5 and Yorkville Financings disclosed below and in Note 11d, including all actions taken by NioCorp as set out in the Business Combination Agreement to permit the completion of the 2023 Transactions; (ii) the consent of Lind to NioCorp’s expected cross-listing to the Nasdaq and the consolidation of the Common Shares in order to meet the minimum listing requirements thereof; (iii) the waiver of Lind of its participation right for up to 15% of the total offering in the Yorkville Equity Facility Financing; and (iv) the waiver of Lind of certain restrictive covenants in the Lind III Agreement. As consideration for entering into the Lind Consent, Lind received, amongst other things: (i) the right to receive a payment of $500, which would have been reduced to $200 if the 2023 Transactions had not been consummated on or before April 30, 2023 (collectively, the “Consent Payment”); (ii) an extension of its existing participation rights under the Lind III Agreement in future financings of NioCorp for a further two-year period, subject to certain exceptions as well as an extension of such participation rights beyond the additional two-year period if Yorkville or any affiliate is a party to any such applicable transaction; and (iii) the right to receive additional Warrants (the “Contingent Consent Warrants”) if on the date that is 18 months following the Closing Date, the closing trading price of the Common Shares on the TSX or such other stock exchange on which such shares may then be listed, is less than C$10.00 (on a post-Reverse Stock Split basis), subject to adjustments. The number of Contingent Consent Warrants to be issued, if any, is based on the Canadian dollar equivalent (based on the then current Canadian to U.S. 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, unless otherwise agreed. Further, the number of Contingent Consent Warrants issued will be proportionately adjusted based on the percentage of Warrants currently held by Lind that are exercised, if any, prior to the issuance of any Contingent Consent Warrants. The Lind Consent was signed as an amendment to the existing Lind III Agreement. Management determined that the Lind Consent should be evaluated using ASC 470, which requires an evaluation of the contract amendment under debt modification guidance. The Company performed a comparison of the discounted cash flows of the Lind III Convertible Security pursuant to the existing Lind III Agreement and pursuant to the Lind III Agreement as amended by the Lind Consent and determined that a debt extinguishment loss of $201 had occurred. Further, ASC 470 requires that the minimum estimated Consent Payment of $200 also be included in the calculation of the initial loss on debt extinguishment. The Company also evaluated the Contingent Consent Warrant feature included in the Lind Consent and determined that the Contingent Consent Warrants meet the criteria to be considered separate, freestanding instruments, should be accounted for as a liability under ASC 480, and should be booked at fair value on the date of the Lind Consent, with subsequent changes in valuation recorded as a non-operating gain or loss in the consolidated statement of operations and comprehensive loss. The following table summarizes the components of the initial loss and final loss on extinguishment: The following table summarizes the components of the initial loss and final loss on extinguishment: Component of loss Amount Minimum Consent Payment at inception $ 200 Loss on debt extinguishment 201 Initial fair value of Contingent Consent Warrants 1,221 Initial loss on debt extinguishment 1,622 Additional Consent Payment booked (1) 300 Total loss on debt extinguishment $ 1,922 (1) Represents the difference between the accrual of the minimum Consent Payment at September 25, 2022 and the actual payment made on March 17, 2023. 78 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2024 (expressed in thousands of U.S. dollars, except share and per share data) The change in the fair value of the Contingent Consent Warrants is presented below: Amount Initial valuation, September 25, 2022 $ 1,221 Change in valuation 489 Valuation at June 30, 2023 1,710 Change in valuation $ 655 Valuation at June 30, 2024 2,365 The Contingent Consent Warrants are classified as a Level 3 financial instrument and were valued utilizing a Monte Carlo simulation pricing model, which calculates multiple potential outcomes for future share prices based on historic volatility of the Common Shares to determine the probability of issuance at 18 months following the applicable valuation date and to determine the value of the Contingent Consent Warrants. The following table discloses the primary inputs into the Monte Carlo model at each valuation date, and the probability of issuance calculated by the model. Schedule of valuation date and the probability calculated Key Valuation Input June 30, 2024 June 30, 2023 September 25, 2022 Share price on valuation date $ 1.73 $ 5.03 $ 7.82 Volatility 68.0 % 63.0 % 62.4 % Risk free rate 4.40 % 4.11 % 3.93 % Probability of issuance 100.0 % 80.8 % 59.4 % Loss on debt extinguishment is presented as a non-operating expense in the Company’s consolidated statements of operations and comprehensive loss. This accounting also resulted in a decrease in the amount of accretion to be recognized over the remaining life of the Lind III Convertible Security through February 2023. Accretion expenses are disclosed as a part of interest expense, which is not included as a component of operating costs. Yorkville Convertible Debentures In connection with the GXII Transaction, on January 26, 2023, NioCorp entered into definitive agreements with respect to the Yorkville Financings, including a Securities Purchase Agreement, dated January 26, 2023 (as amended the “Yorkville Convertible Debt Financing Agreement”), between the Company and Yorkville, and a Standby Equity Purchase Agreement, dated January 26, 2023 (the “Yorkville Equity Facility Financing Agreement”), between the Company and Yorkville. Pursuant to the Yorkville Convertible Debt Financing Agreement, at the Closing, Yorkville advanced a total amount of $15,360 to NioCorp in consideration of the issuance by NioCorp to Yorkville of (i) $ 16,000 aggregate principal amount of unsecured convertible debentures (the “Convertible Debentures”) and (ii) Common Share purchase warrants, exercisable for up to 1,789,267 Common Shares for cash or, if at any time there is no effective registration statement registering, or no current prospectus available for, the resale of the underlying Common Shares, on a cashless basis, at the option of the holder, at a price per Common Share of approximately $ 8.9422 , subject to adjustment to give effect to any stock dividend, stock split, reverse stock split or similar transaction (the “Financing Warrants”). Each Convertible Debenture issued under the Yorkville Convertible Debt Financing Agreement is an unsecured obligation of NioCorp, has an 18-month term from the Closing Date, which may be extended for one six-month period in certain circumstances at the option of NioCorp, and incurs a simple interest rate obligation of 5.0 % per annum (which will increase to 15.0 % per annum upon the occurrence of an event of default). The outstanding principal amount of, accrued and unpaid interest, if any, on, and premium, if any, on the Convertible Debentures must be paid by NioCorp in cash when the same becomes due and payable under the terms of the Convertible Debentures at their stated maturity, upon their redemption or otherwise. Subject to certain limitations contained within the Yorkville Convertible Debt Financing Agreement and the Convertible Debentures, including those as described below, holders of the Convertible Debentures will be entitled to convert the principal amount of, and accrued and unpaid interest, if any, on each Convertible Debenture, in whole or 79 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2024 (expressed in thousands of U.S. dollars, except share and per share data) in part, from time to time over their term, into a number of Common Shares equal to the quotient of the principal amount and accrued and unpaid interest, if any, being converted divided by the Conversion Price. The “Conversion Price” means, as of any Conversion Date (as defined below) or other date of determination, the greater of (i) 90% of the average of the daily U.S. dollar volume-weighted average price of the Common Shares on the principal U.S. market for the Common Shares as reported by Bloomberg Financial Markets during the five consecutive trading days immediately preceding the date on which the holder exercises its conversion right in accordance with the requirements of the Yorkville Convertible Debt Financing Agreement (the “Conversion Date”) or other date of determination, but not lower than the Floor Price (as defined below), and (ii) the five-day volume-weighted average price of the Common Shares on the TSX (or on the principal U.S. market if the majority of the trading volume and value of the Common Shares occurred on Nasdaq during the relevant period) for the five consecutive trading days immediately prior to the Conversion Date or other date of determination less the maximum applicable discount allowed by TSX. The “Floor Price” means a price of $2.1435 per share, which is equal to the lesser of (a) 30% of the average of the daily volume-weighted average price of the Common Shares on the principal U.S. market for the Common Shares as reported by Bloomberg Financial Markets during the five consecutive trading days immediately preceding the Debenture Closing and (b) 30% of the average of the volume-weighted average price of the Common Shares on the principal U.S. market for the Common Shares as reported by Bloomberg Financial Markets during the five consecutive trading days immediately following the Debenture Closing, subject to certain adjustments to give effect to any stock dividend, stock split, reverse stock split, recapitalization or similar event. The terms of the Convertible Debentures restrict the number of Convertible Debentures that may be converted during each calendar month by Yorkville at a Conversion Price below a fixed price equal to approximately $8.9422 (i.e., the quotient of $10.00 divided by 1.11829212 (being the number of Common Shares that were exchanged for each share of GXII at the Closing, after giving effect to the Reverse Stock Split)), subject to adjustment to give effect to any stock dividend, stock split, reverse stock split, recapitalization or similar event. The Convertible Debentures are subject to customary anti-dilution adjustments. The terms of the Convertible Debentures restrict the conversion of Convertible Debentures by Yorkville if such a conversion would cause Yorkville to exceed certain beneficial ownership thresholds in NioCorp or such a conversion would cause the aggregate number of Common Shares issued pursuant to the Yorkville Convertible Debt Financing Agreement to exceed the thresholds for issuance of Common Shares under the rules of Nasdaq, unless prior shareholder approval is obtained. Pursuant to the terms of the Convertible Debentures, following certain trigger events, and until a subsequent cure event, NioCorp will be required to redeem $1,125 aggregate principal amount of Convertible Debentures (the “Triggered Principal Amount”) each month by making cash payments to the Investors, on a pro rata basis, in an amount equal to the Triggered Principal Amount, plus accrued and unpaid interest thereon, if any, plus a redemption premium of 7% of the Triggered Principal Amount. Such monthly prepayments under the terms of the Convertible Debentures are triggered (i) at the time when NioCorp has issued 95% of the total amount of Common Shares pursuant to the Yorkville Convertible Debt Financing that it may issue under applicable Nasdaq rules or (ii) when NioCorp has delayed or suspended the effectiveness or use of the Convertible Debt Financing Registration Statement for more than 20 consecutive calendar days, and such monthly prepayment obligations will continue until, with respect to (i) above, shareholder approval is obtained or, with respect to (ii) above, the Investors may once again resell Common Shares under the Convertible Debt Financing Registration Statement, respectively. The Convertible Debentures may also be redeemed at NioCorp’s option at any time and from time to time over their term at a redemption price equal to 110 % of the principal amount being redeemed, plus accrued and unpaid interest, if any. In conjunction with the issuance of the Convertible Debentures, NioCorp issued to Yorkville 1,789,267 Financing Warrants at an exercise price of approximately $ 8.9422 per Common Share (the “Financing Warrant Exercise Price”), subject to adjustment to give effect to any stock dividend, stock split, reverse stock split recapitalization or similar event. The Financing Warrants are exercisable, in whole or in part, but not in increments of less than $ 50 aggregate Financing Warrant Exercise Price (unless the remaining aggregate Financing Warrant Exercise Price is less than $50), beginning on May 4, 2023, and may be exercised at any time prior to their expiration. Holders of the Financing Warrants may exercise their Financing Warrants, at their election, by paying the Financing Warrant Exercise Price in 80 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2024 (expressed in thousands of U.S. dollars, except share and per share data) cash or, if at any time there is no effective registration statement registering, or no current prospectus available for, the resale of the underlying Common Shares, on a cashless exercise basis. 1/12th of the Financing Warrants will expire on each of the first 12 monthly anniversaries of the date that is six months following the Closing Date. The Financing Warrants have customary anti-dilution adjustments. The terms of the Financing Warrants restrict the exercise of Financing Warrants by Yorkville if such an exercise would cause Yorkville to exceed certain beneficial ownership thresholds in NioCorp or such an exercise would cause the aggregate number of Common Shares issued pursuant to the Yorkville Convertible Debt Financing Agreement to exceed the thresholds for issuance of Common Shares under the rules of the Nasdaq, unless prior shareholder approval is obtained. The Financing Warrants were originally recorded as a $ 2,704 contingent liability on January 26, 2023, and were subsequently marked to market of $ 3,337 through March 16, 2023. The change in fair value during this period resulted in a loss of $ 633 , which was booked to change in fair value of warrant liability in the consolidated statement of operations and comprehensive loss. The Financing Warrants were reclassified to shareholders equity on March 17, 2023, in connection with the closing of the Convertible Debentures as noted below. The Company allocated the net proceeds of $15,360 from the Convertible Debentures as follows: ● $ 2,704 was booked to Common Shares, representing the initial fair value of the Financing Warrant tranches on January 26, 2023 based on the Black Scholes pricing model using a risk-free interest rate of 4.33 %, an expected dividend yield of 0 %, a volatility of 64.6 %, and an expected life of 6 months to 18 months . ● $ 12,656 was booked to the convertible debt liability. In addition, transaction costs of $ 503 were recognized as a direct deduction from the debt liability, resulting in a net opening balance of $12,153 at an effective interest rate of 29.9%. This balance will be accreted to face value of the Convertible Debentures at maturity plus the conversion premium, using the effective interest method and recorded as interest expense in the consolidated statement of operations and comprehensive loss. Changes in the Convertible Debentures are as follows: Amount Opening balance, March 17, 2023 $ 12,153 Accretion expense 1,962 Principal and accrued interest converted ( 3,554 ) Balance, June 30, 2023 10,561 Accretion expense 4,489 Principal and accrued interest converted ( 14,479 ) Balance, June 30, 2024 $ 571 Less: Unamortized debt issuance costs ( 21 ) Remaining principal balance, June 30, 2024 $ 550 Upon conversion, the portion of remaining unamortized issuance costs associated with the conversion are recognized as a component of interest expense. The following table discloses the components of interest expense associated with the Convertible Debentures. For the year ending June 30, Component of Interest Expense 2024 2023 Contractual interest $ 279 $ 225 Amortization of discount and issuance costs 4,210 1,737 Total $ 4,489 $ 1,962 The Convertible Debentures contain events of default customary for instruments of their type (with customary grace periods, as applicable) and provide that, upon the occurrence of an event of default arising from certain events of bankruptcy or insolvency with respect to NioCorp, all outstanding Convertible Debentures will become due and payable immediately without further action or notice. If any other type of event of default occurs and is continuing, then any holder may declare all of its Convertible Debentures to be due and payable immediately. The Company 81 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2024 (expressed in thousands of U.S. dollars, except share and per share data) obtained a waiver from Yorkville with respect to any acceleration rights it may have under the Convertible Debentures in connection with the restatements of the Company’s consolidated financial statements for the periods ended September 30, 2022 and December 31, 2022 and the delay in filing the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2023. The Yorkville Convertible Debt Financing Agreement also contains certain covenants that, among other things, limit NioCorp’s ability to use the proceeds from the Yorkville Convertible Debt Financing to repay related party debt or to enter into any variable rate transaction other than with Yorkville, subject to certain exceptions. Based on the Company’s closing Common Share price of $ 1.73 as of June 30, 2024, conversion of the remaining Convertible Debenture principal balance of $552, including accrued interest, would require the issuance of approximately 257,000 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 11,500 shares. On July 19, 2024, the Company and Yorkville entered into a make-whole payment agreement under which Yorkville agreed to convert the remaining principal and outstanding accrued interest of $554 remaining under the Convertible Debenture into Common Shares in exchange for a $95 make-whole payment. April 2024 Notes On April 12, 2024, the Company issued and sold to Yorkville and Lind Global Fund II LP (together with Yorkville, the “April 2024 Purchasers”), $8,000 aggregate principal amount of unsecured notes (the “April 2024 Notes”), pursuant to a securities purchase agreement, dated April 11, 2024 (the “April 2024 Purchase Agreement”), between the Company and each of the April 2024 Purchasers. The Company also issued to the April 2024 Purchasers, in proportion to the aggregate principal amount of April 2024 Notes issued to each April 2024 Purchaser, Warrants (the “April 2024 Warrants”) to purchase up to 615,385 Common Shares (the “April 2024 Warrants Shares”), which are equal to 25% of the aggregate principal amount of April 2024 Notes issued to the April 2024 Purchasers divided by the exercise price of $3.25, subject to any adjustment to give effect to any stock dividend, stock split or recapitalization. The April 2024 Warrants expire on April 12, 2027. Pursuant to the April 2024 Purchase Agreement, the April 2024 Purchasers advanced an aggregate of $6,935 to the Company in consideration of the issuance by the Company to the April 2024 Purchasers of $8,000 aggregate principal amount of the April 2024 Notes and April 2024 Warrants. Under the terms of the April 2024 Notes, subject to certain exceptions, on the first day of each calendar month, beginning on June 1, 2024 (excluding August 2024) (the “Payment Date”), the Company will be required to repay a portion of the outstanding balance of all of the April 2024 Notes, on a pro-rata basis, in an amount equal to the sum of (i) $1,400 of principal (or the outstanding principal if less than such amount) in the aggregate among all of the outstanding Notes, plus (ii) 8.0% of the principal amount being paid (the “Payment Premium”), and (iii) accrued and unpaid interest, if any, as of the Payment Date. The Company is required to make payments on each Payment Date until the entire outstanding principal is repaid but will not have an obligation to make a payment on a Payment Date if certain equity conditions (the “Equity Conditions”) are satisfied. Subject to certain limitations contained within the April 2024 Notes, holders of the April 2024 Notes will be entitled to convert the principal amount of, accrued and unpaid interest, if any, and any Payment Premium that has become due and payable on each April 2024 Note, from time to time over their term, into a number of Common Shares equal to the quotient of the amount being converted divided by a fixed conversion price of $2.75 per Common Share up to a maximum of 3,141,817 Common Shares (together with the April 2024 Warrant Shares, the “April 2024 Underlying Shares”). The terms of the April 2024 Notes restrict the conversion of the April 2024 Notes by a holder if such a conversion would cause such holder to exceed certain ownership thresholds in the Company. As noted above, the Company is required to make payments on each Payment Date until the entire outstanding principal is repaid, but will not have an obligation to make a payment on a Payment Date if the Equity Conditions are satisfied (a “deferred payment”). The Equity Conditions means (i) on each of the five consecutive trading days prior a Payment Date (the “Measuring Period”) the Underlying Shares Registration Statement (as defined below) is effective 82 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2024 (expressed in thousands of U.S. dollars, except share and per share data) and available for the resale by the Purchasers of all Underlying Shares, (ii) the Company has no knowledge of any fact that would cause the Underlying Shares Registration Statement not to be effective and available for the resale of the Underlying Shares, (iii) on each day during the Measuring Period, the Common Shares are designated for quotation on Nasdaq, or on such other market or exchange on which the Common Shares are then listed or traded to the extent such other market or exchange is the principal U.S. trading market for the Common Shares (the “Principal U.S. Market”), and have not been suspended from trading nor have delisting or suspension of trading been threatened or pending, (iv) during the Measuring Period, an event of default has not occurred, (v) on each trading day during the Measuring Period, the daily U.S. dollar volume-weighted average price (“VWAP”) for a Common Share on the Principal U.S. Market as reported by Bloomberg Financial Markets is greater than 120% of the Conversion Price, (vi) on each trading day during the Measuring Period the average daily volume traded exceeded $500, and (vii) there is no limitation on conversion under the terms of Notes. Deferred payments, if any, that are not subsequently converted into Common Shares by the holders of the April 2024 Notes will require repayment by the Company upon maturity. The April 2024 Notes are the unsecured obligations of the Company and will mature on December 31, 2024. The April 2024 Notes will incur a simple interest rate obligation of 0.0% per annum (which will increase to 18.0% per annum upon the occurrence of an event of default). The outstanding principal amount, accrued and unpaid interest, if any, and the Payment Premium, if any, on the April 2024 Notes must be paid by NioCorp in cash when the same becomes due and payable under the terms of the April 2024 Notes at their stated maturity, upon their redemption, or otherwise. The April 2024 Notes may also be redeemed at the Company’s option at any time and from time to time over their term at a redemption price equal to the principal amount being redeemed, plus the Payment Premium, plus accrued and unpaid interest, if any, as of the redemption date. The April 2024 Notes contain events of default customary for instruments of their type (with customer grace periods, as applicable) and provide that, upon the occurrence of an event of default arising from certain events of bankruptcy or insolvency with respect to the company, all outstanding April 2024 Notes will become due and payable immediately without further action or notice. If any other type of event of default occurs and is continuing, then any holder may declare all of its April 2024 Notes to be due and payable immediately. The April 2024 Purchase Agreement contains customary representations, warranties, conditions and indemnification obligations by each party. The representations, warranties and covenants contained in the April 2024 Purchase Agreement were made only for purposes of the April 2024 Purchase Agreement and as of specific dates, were solely for the benefit of the parties to such agreement and are subject to certain important limitations. The April 2024 Purchase Agreement also contains certain covenants that, among other things, limit NioCorp’s ability to use the proceeds from the April 2024 Purchase Agreement to repay related party debt or to enter into any variable rate transaction other than with Yorkville, subject to certain exceptions, and to distribute proceeds from the April 2024 Purchase Agreement to subsidiaries other than ECRC and 0896800 B.C. Ltd. (together with ECRC, the “Guarantors”), upon the entry by the Guarantors into a global guaranty agreement, dated as of April 11, 2024, among the Guarantors in favor of the Purchasers (the “Guaranty Agreement”). Pursuant to the Guaranty Agreement, the Guarantors guaranteed the full, prompt and unconditional payment when due (whether at maturity , by acceleration or otherwise), and the performance of all liabilities, agreements and other obligations of NioCorp to the April 2024 Purchasers contained in the April 2024 Notes, the April 2024 Warrants and the April 2024 Purchase Agreement, to the extent such liabilities, agreements and obligations are payable in cash. Based upon the Company’s analysis of the criteria contained in ASC 815, the Company determined that April 2024 Warrants met the definition of a derivative liability, as any warrant exercise that could cause the holder to exceed 19.9% ownership of NioCorp Common Shares would require shareholder approval. As such, the April 2024 Warrants were recognized as warrant liabilities on the consolidated balance sheet and were measured at their inception date fair value and subsequently remeasured at each reporting period with changes being recorded as a non-operating gain or loss in the consolidated statement of operations and comprehensive loss. The Company elected to value the April 2024 Notes at fair value in accordance with ASC 815-15-25. The fair value of the April 2024 Notes was estimated using a Monte Carlo simulation pricing model and the April 2024 Notes were 83 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2024 (expressed in thousands of U.S. dollars, except share and per share data) classified as Level 3 instruments. The Company incurred transaction costs totaling $ 474 in connection with the issuance of the April 2024 Notes and due to the fair value election noted above, these costs were expensed at closing. Components and initial valuations associated with the April 2024 Notes were comprised of the following amounts: ● $ 902 was recorded to warrant liabilities, representing the initial fair value of the April 2024 Warrants based on the assumptions outlined below. ● $ 10,315 was recorded to the April 2024 Notes, representing the fair value based on the assumptions outlined below. The Company also recognized an opening transaction loss of $ 4,256 , representing the difference between the fair value of the April 2024 Notes, including the fair value of the variable conversion features embedded therein, and cash received in the transaction. The following table discloses the primary inputs for the Monte Carlo model used in valuing the April 2024 Notes: Key Valuation Input June 30, 2024 April 12, 2024 Closing Common Share price $ 1.73 $ 3.11 Term (expiry) December 31, 2024 December 31, 2024 Weighted average of the equity volatility and implied volatility of the public warrants 80 % 66.0 % Risk-free rate 5.33 % 5.26 % Implied discount rate 15.0 % 15.0 % The following table sets forth a summary of the changes in the fair value of the April 2024 Notes for the year ended June 30, 2024: Amount Fair value, April 12, 2024 $ 10,315 Principal payments ( 1,512 ) Change in fair value ( 1,714 ) Balance, June 30, 2024 $ 7,089 Remaining principal balance, June 30, 2024 $ 7,128 The following table discloses the primary inputs for the Black-Scholes model used in valuing the April 2024 Warrants. Key Valuation Input June 30, 2024 April 12, 2024 Closing Common Share price $ 1.73 $ 3.24 Term (years) 2.78 3.0 Historic equity volatility 66.34 % 62.39 % Risk-free rate 4.57 % 4.77 % The following table sets forth a summary of the changes in the fair value of the April 2024 Warrant liability for the year ended June 30, 2024. Amount Fair value as of April 12, 2024 $ 902 Change in fair value ( 604 ) Fair value as of June 30, 2024 $ 298 10. CLASS B COMMON STOCK OF ECRC Pursuant to the Business Combination Agreement, the Sponsor Support Agreement, and the Exchange Agreement, after the Closing, the GXII founders have the right to exchange shares of Class B common stock of ECRC for Common Shares on a one-for-one basis, subject to certain equitable adjustments, under certain conditions. All 7,957,404 shares of Class B common stock of ECRC that were issued in connection with the Closing were issued and outstanding as of 84 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2024 (expressed in thousands of U.S. dollars, except share and per share data) June 30, 2023. Of the issued and outstanding shares of Class B common stock of ECRC, 4,565,808 shares (the “Vested Shares”) were vested as of the Closing Date and are exchangeable at any time, and from time to time, until the tenth anniversary of the Closing Date (the “Ten-Year Anniversary”) and 3,391,596 shares (the “Earnout Shares”) are exchangeable until the Ten-Year Anniversary, subject to certain vesting conditions. Under certain circumstances, and subject to certain exceptions, NioCorp may instead settle all or a portion of any exchange pursuant to the terms of the Exchange Agreement in cash, in lieu of Common Shares, based on a volume-weighted average price of Common Shares. On February 28, 2024 and May 16, 2024, 243,692 Vested Shares and 40,000 Vested Shares, respectively, were exchanged for an equivalent number of Common Shares. This exchange resulted in a change in the Company’s ownership interest in ECRC and was accounted for as an equity transaction in accordance with ASC 810-10-45-23, with no gain or loss recognized. Accordingly, the carrying amount of the noncontrolling interest was adjusted to reflect the change in the Company’s ownership interest with a corresponding offset booked to equity. All of the shares of Class B common stock of ECRC are subject to the Amended and Restated Registration Rights Agreement, dated as of March 17, 2023 (the “Registration Rights and Lock-up Agreement”), among NioCorp, GXII, the Sponsor, the pre-Closing directors and officers of NioCorp and the other parties thereto, including the members of the Sponsor. Pursuant to Registration Rights and Lock-up Agreement, all shares of Class B common Stock of ECRC (including the Vested Shares and the Released Earnout Shares) are subject to certain “lock-up” restrictions on transfer beginning upon the Closing and ending upon the earlier of (i) one year after the Closing and (ii) the date on which the trading price of Common Shares exceeds certain thresholds or the date on which NioCorp completes a transaction that results in all of NioCorp’s shareholders having the right to exchange their Common Shares for cash, securities or other property. Both Vested Shares and Released Earnout Shares may be exchanged by the holders into Common Shares at any time. Under the Exchange Agreement, all Vested Shares and Earnout Shares must be exchanged for Common Shares by the Ten-Year Anniversary except for Released Earnout Shares that have been vested for a period of fewer than twenty-four months as of the Ten-Year Anniversary. Such Released Earnout Shares will be forfeited if not exchanged for Common Shares by the date that is twenty-four months after the vesting date. Vested Shares As the exchange of Vested Shares are contingently redeemable at the option of the noncontrolling interest shareholders, the Company classifies the carrying amount of the redeemable noncontrolling interest in the mezzanine section on the consolidated balance sheet, which is presented above the equity section and below liabilities. Adjustments to the carrying value of the redeemable noncontrolling interest associated with redemptions are recorded by reclassifying the proportionate amount of mezzanine equity to permanent equity. Earnout Shares The Earnout Shares vest (the “Released Earnout Shares”) in two equal tranches based upon achieving market share price milestones of approximately $12.00 per Common Share and approximately $15.00 per Common Share, respectively, prior to the Ten-Year Anniversary, or upon a change in control as defined in the underlying agreement. These shares will be forfeited if the market share price milestones or an acceleration event is not reached prior to the Ten-Year Anniversary. At such time that the Earnout Shares shall become vested, and therefore, become Released Earnout Shares, the shares will be transferred to the redeemable noncontrolling interest in the mezzanine section of the Consolidated Balance Sheet. The Earnout Shares were classified as a liability due to failure to meet the equity classification criteria under ASC 815-40, as Level 3 instruments under the fair value hierarchy and are considered a financial liability under ASC 480, Distinguishing Liabilities from Equity. The Earnout Shares were measured at fair value on the Closing Date with subsequent changes in fair value recorded in earnings. The Earnout Shares were valued utilizing a Monte Carlo simulation pricing model. The following table discloses the primary inputs into the Monte Carlo models. 85 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2024 (expressed in thousands of U.S. dollars, except share and per share data) The following table discloses the primary inputs into the Monte Carlo models. Key Valuation Input June 30, 2024 June 30, 2023 March 17, 2023 Closing Common Share price $ 1.73 $ 5.03 $ 7.00 Term (expiry) March 17, 2033 March 17, 2033 March 17, 2033 Implied volatility of Public Warrants 65.0 % 33.5 % 19.5 % Risk-free rate 4.35 % 3.83 % 3.39 % The following table sets forth a summary of the changes in the fair value of the Earnout Shares liability for the year ended June 30, 2024: Amount Fair value as of March 17, 2023 $ 13,195 Change in fair value ( 2,674 ) Fair value as of June 30, 2023 10,521 Change in fair value ( 6,704 ) Fair value as of June 30, 2024 $ 3,817 11. COMMON SHARES a) Issuances Fiscal Year 2024 Issuances 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 Elk Creek 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 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 %. On December 22, 2023, the Company closed a non-brokered private placement (the “December 2023 Private Placement”) of 413,432 units of the Company (the “December 2023 Units”). Each December 2023 Unit consists of one Common Share and one Warrant (“December 2023 Warrant”). Each December 2023 Warrant entitles the holder to acquire one Common Share at a price of $ 3.54 at any time until December 22, 2025. 274,587 of the December 2023 Units were issued and sold to certain accredited investors, who are not affiliated with the Company but with whom the Company had a pre-existing relationship, at a price of $ 3.08 per December 2023 Unit, and 138,845 of the December 2023 Units were issued and sold to certain officers and directors of the Company (the “Insider Investors”), at a price of $ 3.205 per December 2023 Unit. The price per December 2023 Unit paid by the Insider Investors included $0.125 per December 2023 Warrant underlying each December 2023 Unit purchased by the Insider Investors which allowed the Insider Investors to participate in the December 2023 Private Placement in accordance with the rules of Nasdaq. The Company received aggregate gross proceeds from the December 2023 Private Placement of approximately $ 1,290 . Proceeds of the December 2023 Private Placement will be used for continued advancement of the Elk Creek Project and for working capital and general corporate purposes. The Company recorded a non-cash expense of $ 92 and $ 10 to other operating expense and employee related costs, respectively, representing the excess of fair value of the December 2023 Units over the purchase price paid by Insider Investors. 86 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2024 (expressed in thousands of U.S. dollars, except share and per share data) The December 2023 Warrants were classified as an equity instrument and accordingly, the estimated net proceeds of $1,241 were allocated based on the relative fair values of the Common Shares and the December 2023 Warrants on the date of issuance. The amount allocated to the fair value of the December 2023 Warrants was $ 264 and the balance of the proceeds of $ 977 was allocated to the Common Shares. The fair value of the December 2023 Warrants issued was computed using the Black Scholes pricing model using the following assumptions: an expected life of 2.0 years, a risk-free interest rate of 4.33 %, an expected volatility of 54.8 %, and an expected dividend rate of 0 %. On June 24, 2024, the Company closed a non-brokered private placement (the “June 2024 Private Placement”) of units of the Company (the “June 2024 Units”). A total of 315,000 June 2024 Units were issued at a price per June 2024 Unit of $1.91, for total gross proceeds to the Company of $ 602 . Each June 2024 Unit consists of one Common Share and one Warrant (“June 2024 Warrant”). Each June 2024 Warrant entitles the holder to acquire one Common Share at a price of $2.20 at any time prior to June 24, 2026. Proceeds of the June 2024 Private Placement will be used for continued advancement of the Elk Creek Project and for working capital and general corporate purposes. The June 2024 Warrants were classified as an equity instrument and accordingly, the net proceeds of $602 were allocated based on the relative fair values of the Common Shares and the June 2024 Warrants on the date of issuance. The amount allocated to the fair value of the June 2024 Warrants was $ 161 and the balance of the proceeds of $ 441 was allocated to Common Shares. The fair value of the June 2024 Warrants issued was computed using the Black Scholes pricing model using the following assumptions: an expected life of 2.0 years, a risk-free interest rate of 4.73 %, an expected volatility of 73.92 %, and an expected dividend rate of 0 %. Fiscal Year 2023 Issuances In addition to the Common Shares issued in connection with the GXII Transaction, as discussed in Note 5, the following Common Share issuances occurred during fiscal year 2023: On April 28, 2023, the Company closed a registered direct offering and issued 314,465 Common Shares for $2,000, before deducting share issuance costs of $172. The Common Shares were sold pursuant to a securities purchase agreement, dated April 26, 2023, between the Company and a fund managed by Kingdon Capital Management, LLC. On June 9, 2023, the Company issued 100,000 Common Shares under the Yorkville Equity Facility Financing Agreement (discussed below) in exchange for $488 in cash proceeds. The Company recorded a non-cash operating expense of $13 which represented the difference between the proceeds received and the fair value of the Common Shares issued based on Nasdaq closing price per Common Share on the issuance date. b) Stock Options On January 19, 2024, the Company’s shareholders voted to approve an amendment and restatement of its long-term incentive plan (the “2017 Amended Long-Term Incentive Plan”) and the granting of incentive securities thereunder until January 19, 2027. Under the 2017 Amended Long-Term Incentive Plan, the Board may, in its discretion from time to time, grant options and share units (in the form of restricted share units and performance share units) to directors, employees and certain other service providers (as defined in the 2017 Amended Long-Term Incentive Plan) of the Company and affiliated entities selected by the Board. Subject to adjustment as described in the 2017 Amended Long-Term Incentive Plan, the aggregate number of Common Shares that may be reserved for issuance to participants under the 2017 Amended Long-Term Incentive Plan, together with all other security-based compensation arrangements of the Company, may not exceed 10% of the issued and outstanding Common Shares from time to time, and the Common Shares reserved for issuance upon settlement of share units will not exceed 5% of the issued and outstanding Common Shares from time to time. The 2017 Amended Long-Term Incentive Plan limits the maximum number of Common Shares issued to insiders (as defined under TSX rules for this purpose) within any 1-year period, or issuable to insiders at any time, in the aggregate, under all security-based compensation arrangements (including the 2017 Amended Long-Term 87 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2024 (expressed in thousands of U.S. dollars, except share and per share data) Incentive Plan) to 10% of the then issued and outstanding Common Shares. The 2017 Amended Long-Term Incentive Plan also limits the aggregate number of Common Shares that may be reserved for issuance to any one participant under the 2017 Amended Long-Term Incentive Plan, together with all other security-based compensation arrangements of the Company, to 5% of the then issued and outstanding Common Shares (on a non-diluted basis). Subject to the adjustment provisions of the 2017 Amended Long-Term Incentive Plan, the aggregate number of Common Shares actually issued or transferred by the Company upon the exercise of incentive stock options will be limited as described above. The Board has power over the granting, amendment, administration, or settlement of any award. Stock option transactions are summarized as follows: Schedule of stock option Number of Options Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Remaining Contractual Life Balance, June 30, 2023 1,541,500 $ 7.19 Granted 1,625,000 2.99 Exercised ( 7,800 ) 3.95 Cancelled/expired ( 663,200 ) 5.88 Balance, June 30, 2024 2,495,500 $ 4.78 $ - 3.44 years As of June 30, 2024, 100 % of the outstanding stock options were fully vested. The total intrinsic value of options exercised during the year ended June 30, 2024 was immaterial, and as of June 30, 2024, there were no unrecognized compensation costs related to unvested share-based compensation arrangements granted. The Company recognized share-based compensation expense of $ 2,779 and $ 1,794 for the years ended June 30, 2024 and 2023, respectively. The following table summarizes the weighted average information and assumptions used to determine option costs: Year ended June 30, 2024 2023 Fair value per option granted during the period $ 1.71 $ 3.09 Risk-free interest rate 4.25 % 3.30 % Expected dividend yield 0 % 0 % Expected stock price volatility (historical basis) 63.2 % 63.6 % Expected option life in years 5.0 3.0 Prior to January 1, 2024, the Company concluded that under ASU 718, Compensation – Stock Compensation (Topic 718) , Options previously issued on December 31, 2021, May 30, 2022, and March 27, 2023, which included a C$ strike price should remain equity-classified as management determined that the Options qualified for an exemption from liability classification as the Options were denominated in a currency in which a substantial portion of the Company’s equity securities traded. Effective January 1, 2024, the Company determined that due to historically decreasing trading volume on the TSX, this exemption no longer applied and accordingly, these Options were classified as a liability based on their fair values on that date. The Company recorded a mark-to-market gain of $147 in other operating expenses related to these option liabilities for the year ended June 30, 2024. The associated liability related to these Canadian-denominated Options was nil at June 30, 2024. On March 28, 2024, the Board approved a modification to Options previously issued on March 27, 2023, with dual strike prices of $6.95 and C$9.52, under which the option to exercise in C$ was removed. No other terms or conditions were amended by the Board. Based on this amendment, the Company re-classified these Options to equity on March 28, 2024, based on their fair value on that date. 88 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2024 (expressed in thousands of U.S. dollars, except share and per share data) c) Warrants Warrant transactions are summarized as follows. Weighted average exercise prices related to Canadian dollar denominated warrants were converted to U.S. dollars using end of period foreign currency exchange rates. Warrants Weighted Average Exercise Price Balance, June 30, 2022 1,851,622 $ 8.99 Granted: Yorkville financing warrants 1,789,267 8.94 GXII warrants 15,666,626 11.50 Expired ( 491,211 ) 11.67 Balance, June 30, 2023 18,816,304 10.98 Granted 1,593,817 3.33 Expired ( 1,846,560 ) 8.67 Balance, June 30, 2024 18,563,561 10.53 At June 30, 2024, the Company has outstanding exercisable warrants, as follows: Number Exercise Price Expiry Date 855,800 C$ 9.70 February 19, 2025 447,318 $ 8.94 (1) 250,000 $ 4.60 September 1, 2025 413,432 $ 3.54 December 22, 2025 315,000 2.20 June 24, 2025 615,385 $ 3.25 April 12, 2027 15,666,626 $ 11.50 March 17, 2028 18,563,561 (1) Expires in 3 equal monthly tranches on July 17, 2024, August 17, 2024, and September 17, 2024. In connection with the Closing, pursuant to the Business Combination Agreement, the Company assumed the GXII Warrant Agreement and each GXII Warrant thereunder that was issued and outstanding immediately prior to the Closing Date was converted into one NioCorp Assumed Warrant pursuant to the GXII Warrant Agreement, as amended by an Assignment, Assumption and Amendment Agreement, dated March 17, 2023, among the Company, GXII, Continental Stock Transfer & Trust Company, as the existing warrant agent, and Computershare Inc. and its affiliate, Computershare Trust Company, N.A, together as the successor warrant agent (the “NioCorp Assumed Warrant Agreement”). In connection with the Closing, NioCorp issued (a) 9,999,959 public NioCorp Assumed Warrants (the “Public Warrants”) in respect of the GXII Warrants that were publicly traded prior to the Closing and (b) 5,666,667 NioCorp Assumed Warrants (the “Private Warrants”) to the Sponsor in respect of the GXII Warrants that it held prior to the Closing, which NioCorp Assumed Warrants were subsequently distributed by the Sponsor to its members in connection with the Closing. Each NioCorp Assumed Warrant entitles the holder to the right to purchase 1.11829212 Common Shares at an exercise price of $11.50 per 1.11829212 Common Shares (subject to adjustments for stock splits, stock dividends, reorganizations, recapitalizations and the like). No fractional shares will be issued upon exercise of any NioCorp Assumed Warrants, and fractional shares that would otherwise be due to the exercising holder will be rounded down to the nearest whole Common Share. In no event will the Company be required to net cash settle any NioCorp Assumed Warrant. Public Warrants The Company may elect to redeem the Public Warrants subject to certain conditions, in whole and not in part, at a price of $0.01 per Public Warrant if (i) 30 days’ prior written notice of redemption is provided to the holders, (ii) the last reported sale price of the Common Shares equals or exceeds approximately $16.10 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days 89 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2024 (expressed in thousands of U.S. dollars, except share and per share data) within a 30-trading day period ending on the third business day prior to the date on which the Company sends the notice of redemption to the warrant holders and (iii) there is an effective registration statement covering the Common Shares issuable upon exercise of the Public Warrants, and a current prospectus relating thereto, available through the redemption date. Upon issuance of a redemption notice by the Company, the warrant holders will have until the redemption date to exercise for cash, or, at the Company’s election, on a cashless basis. The Public Warrants are not precluded from equity classification and are accounted for as such on the date of issuance, and each balance sheet date thereafter. Because the 2023 Transactions resulted in an excess of liabilities over assets acquired, no value was ascribed to the Public Warrants. Private Warrants 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 of their permitted transferees are treated as Public Warrants. The Company accounts for the Private Warrants assumed in the 2023 Transactions in accordance with the guidance contained in ASC 815-40. Such guidance provides that because the Private Warrants do not meet the criteria for equity treatment thereunder, each Private Warrant must be recorded as a liability. This liability is carried as a component of Warrant Liabilities on the consolidated balance sheet and is subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liability will be adjusted to its current fair value, with the change in fair value recognized in the consolidated statement of operations and comprehensive loss. The Company will reassess the classification at each balance sheet date. 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 June 30, 2024 June 30, 2023 March 17, 2023 Stock price on valuation date $ 1.73 $ 5.03 $ 7.00 Strike price $ 11.50 $ 11.50 $ 11.50 Implied volatility of Public Warrants 69.0 % 33.5 % 19.5 % Risk free rate 4.45 % 4.18 % 3.47 % Dividend yield 0 % 0 % 0 % Expected warrant life in years 3.7 4.7 5.0 The change in the Private Warrants liability is presented below: Amount Initial valuation, March 17, 2023 $ 2,987 Change in valuation 292 Valuation at June 30, 2023 3,279 Change in valuation ( 1,926 ) Valuation at June 30, 2024 $ 1,353 d) Yorkville Equity Facility Financing Concurrent with the closing of the GXII Transaction, the Yorkville Equity Facility Financing became effective. Pursuant to the Yorkville Equity Facility Financing Agreement, Yorkville committed to purchase up to $65,000 of Common Shares (the “Commitment Amount”), at NioCorp’s direction from time to time for a period commencing upon the Closing Date and ending on the earliest of (i) the first day of the month next following the 36-month anniversary of the Closing, (ii) the date on which Yorkville shall have made payment of the full Commitment Amount and (iii) the date that the Yorkville Equity Facility Financing Agreement otherwise terminates in accordance with its terms (the “Commitment Period”), subject to certain limitations and the 90 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2024 (expressed in thousands of U.S. dollars, except share and per share data) satisfaction of the conditions in the Yorkville Equity Facility Financing Agreement. The Common Shares that may be sold pursuant to the Yorkville Equity Facility Financing Agreement would be purchased by Yorkville at a purchase price equal to 97% of the daily volume-weighted average price of the Common Shares on Nasdaq or such other principal U.S. market for the Common Shares if the Common Shares are ever listed or traded on the New York Stock Exchange or the NYSE American as reported by Bloomberg Financial Markets (or, if not available, a similar service provider of national recognized standing) during the applicable pricing period, which is a period during a single trading day or a period of three consecutive trading days, at the Company’s option and subject to certain restrictions, in each case, defined based on when an Advance Notice (as defined in the Yorkville Equity Facility Financing Agreement) is submitted, subject to certain limitations. Pursuant to the terms of the Yorkville Equity Facility Financing Agreement, NioCorp issued 81,213 of Common Shares (the “Commitment Shares”) valued at $650 to Yorkville as consideration for its irrevocable commitment to purchase Common Shares under the Yorkville Equity Facility Financing Agreement. On June 9, 2023, NioCorp issued and sold 100,000 Common Shares to Yorkville under the Yorkville Equity Facility Financing Agreement. Additionally, NioCorp is required to pay Yorkville an aggregate fee of $1,500 in cash (the “Cash Fee”), including $500 that NioCorp paid on the Closing Date and an additional $250 NioCorp was paid as of June 30, 2023. NioCorp will pay the remaining $750 balance in installments over a 12-month period following the Closing Date, provided that it will have the right to prepay without penalty all or part of the remaining installments of the Cash Fee at any time. In addition, legal and other costs of $496 were incurred in connection with the Yorkville Equity Facility Financing and were expensed on the effective date. The following amounts related to the Yorkville Equity Facility Financing Agreement were expensed as other operating costs during the year ended June 30, 2023: Schedule of expenses as other operating costs Amount Yorkville Cash Fee $ 1,500 Fair value of Commitment Shares issued 650 Legal and other related costs 496 Costs expensed to other operating expense $ 2,646 12. RELATED PARTY TRANSACTIONS AND BALANCES The Company was party to a non-revolving credit facility agreement (the “Smith Credit Facility”) with Mark Smith, Chief Executive Officer, President, and Executive Chairman of NioCorp, which expired on June 30, 2023. The Smith Credit Facility bore interest at a rate of 10 % and drawdowns from the Smith Credit Facility were subject to a 2.5 % establishment fee. Amounts outstanding under the Smith Credit Facility were secured by all of the Company’s assets pursuant to a general security agreement. Changes in the Smith Credit Agreement principal balance are as follows: For the year ending June 30,2023 Beginning balance $ 2,000 Amounts advanced 1,130 Repayments ( 3,130 ) Balance, end of period $ - On March 22, 2023, the Company repaid Mr. Smith $ 1,841 of principal borrowed under the Smith Credit Facility. This repayment was made out of funds transferred to the Company from the GXII trust account on the Closing Date. The Company repaid the remaining principal balance of $ 1,289 on May 31, 2023. Accounts payable and accrued liabilities as of June 30, 2024 includes $ 28 of origination fees payable under the Smith Credit Agreement. During fiscal year 2023 the Company paid a total of $ 183 , representing accrued interest on the Smith Credit Agreement. 91 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2024 (expressed in thousands of U.S. dollars, except share and per share data) 13. EXPLORATION EXPENDITURES Schedule of exploration expenditures For the year ended June 30, 2024 2023 Feasibility study and engineering $ 353 $ 410 Field management and other 503 738 Metallurgical 1,678 4,174 Geologists and field staff 18 26 Total $ 2,552 $ 5,348 14. LEASES Effective February 2023, the Company entered into a 39-month corporate office lease extension and recognized a corresponding ROU asset and lease liability of $198 associated with this extension, based on a discount rate of 16 %. As of June 30, 2024 and 2023, the Company had one corporate office lease with a remaining lease term of 2.6 years and 3.6 years, respectively. During the year ended June 30, 2024 and 2023, operating cash flows included cash payments of $ 71 and $ 93 , respectively related to the measurement of lease liabilities. The Company incurred lease costs as follows: For the year ended June 30, 2024 2023 Operating Lease Cost: Fixed rent expense $ 90 $ 83 Variable rent expense 14 13 Short term lease cost 9 10 Sublease income ( 32 ) ( 33 ) Net lease cost – other operating expense $ 81 $ 73 The maturity of lease liabilities is as follows at June 30, 2024: Fiscal Year Lease Maturities 2025 96 2026 98 2027 50 Total lease payments 244 Less amount of payments representing interest ( 44 ) Present value of lease payments 200 Less current portion of operating lease liability ( 95 ) Noncurrent operating lease liability $ 105 15. INCOME TAXES Domestic and foreign components of loss before income taxes for the years ended June 30, 2024 and 2023 are as follows: For the year ended June 30, 2024 2023 Canada $ 8,319 $ 34,606 United States 3,679 6,006 United Kingdom 39 - Total $ 12,037 $ 40,612 92 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2024 (expressed in thousands of U.S. dollars, except share and per share data) The following table is a reconciliation of income taxes at statutory rates: For the year ended June 30, 2024 2023 Loss before income taxes $ 12,037 $ 40,612 Combined Canadian federal and provincial statutory income tax rate 27 % 27 % Income tax benefit at statutory tax rates 3,250 10,965 Foreign rate differential ( 62 ) ( 131 ) Earnout shares liability 1,810 ( 2,841 ) Warrant liability 506 ( 1,518 ) GXII transaction costs - ( 925 ) Share based compensation ( 747 ) ( 412 ) Accretion expense ( 1,138 ) ( 496 ) Convertible note valuation ( 607 ) - Loss on debt extinguishment - ( 54 ) Capital loss rate differential - ( 2 ) Change in estimates related to prior years ( 160 ) 14 Other 5 45 Change in valuation allowance ( 2,718 ) ( 4,341 ) Income tax benefit $ 139 $ 304 Income tax benefit for the year ends June 30, 2024 and 2023 were derived solely from our U.S. operations. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The significant components of deferred taxes are as follows: As of June 30, 2024 2023 Deferred tax assets Net operating losses available for future periods $ 14,177 $ 11,893 Mineral interests 9,438 9,477 Startup and organizational costs 1,987 2,132 Research and development costs 1,419 1,060 Share issuance/financing costs 635 446 Capital losses available for future periods 456 419 Other 69 36 Total deferred tax assets 28,181 25,463 Valuation allowance ( 28,181 ) ( 25,463 ) Net deferred tax assets $ - $ - Changes in the valuation allowance are as follows: For the year ended June 30, 2024 2023 Valuation allowance, beginning of year $ ( 25,463 ) $ ( 18,948 ) Current year additions ( 2,718 ) ( 4,341 ) Startup and organizational costs acquired - ( 2,174 ) Valuation allowance, end of year $ ( 28,181 ) $ ( 25,463 ) The Company acquired a federal income tax payable of $ 443 in connection with the GXII Transaction. As a result of a post-transaction loss at ECRC, partial releases of the valuation allowance attributed to the reduction of the acquired federal income tax payable of $139 and $304 were recorded as an income tax benefit in the consolidated statement of operations and comprehensive loss for the year ended June 30, 2024 and 2023, respectively. The Company establishes a valuation allowance against future income tax assets if, based on available information, it is more likely than not that all of the assets will not be realized. The valuation allowance of $ 28,181 at June 30, 2024, relates mainly to net 93 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2024 (expressed in thousands of U.S. dollars, except share and per share data) operating loss carryforwards in Canada and mineral interests due to deferred exploration expenditures in the United States, where the utilization of such attributes is not more likely than not. The Company has the following cumulative net operating losses for Canadian and U.S. income tax purposes and these carryforwards will generally expire between 2028 and 2044. As a result of the Tax Cuts and Jobs Act of 2017, U.S. tax losses incurred for our tax years ending on and after June 30, 2019, totaling $ 3,924 , have no expiration. Schedule of cumulative net operating losses As of June 30, Jurisdiction 2024 2023 Canada $ 47,623 $ 40,267 United States 4,905 3,491 United Kingdom 39 - Total $ 52,567 $ 43,758 In addition, the Company has a Canadian capital loss carryforward of $ 3,388 as of June 30, 2024, which has no expiration date and can be used to offset future capital gains, and U.S. state net operating loss carryforwards of $ 7,018 as of June 30, 2024 which generally expire between 2031 and 2044. At June 30, 2024 and 2023, we had no undistributed earnings of foreign subsidiaries that would be subject to income tax upon distribution to Canada from a foreign subsidiary. As such, as of June 30, 2024 and 2023, we did not provide for deferred taxes on any such earnings of our foreign subsidiaries. The Company had no unrecognized tax benefits as of June 30, 2024 or 2023. The Company recognizes interest accrued related to unrecognized tax benefits and penalties in its income tax provision. The Company has not recognized any interest or penalties in the fiscal years presented in these consolidated financial statements. The Company is subject to income tax in the U.S. federal jurisdiction, the United Kingdom, and Canada. Certain years remain subject to examination but there are currently no ongoing exams in any taxing jurisdictions. 16. FAIR VALUE MEASUREMENTS The Company measures the fair value of financial assets and liabilities based on U.S. GAAP guidance which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The Company classifies financial assets and liabilities as held-for-trading, available-for-sale, held-to-maturity, loans and receivables, or other financial liabilities depending on their nature. Financial assets and financial liabilities are recognized at fair value on their initial recognition. Financial assets and liabilities classified as held-for-trading are measured at fair value, with gains and losses recognized in net income. Financial assets classified as held-to-maturity, loans and receivables, and financial liabilities other than those classified as held-for-trading are measured at amortized cost, using the effective interest method of amortization. Financial assets classified as available-for-sale, including investments in equity securities, are measured at fair value, with unrealized gains and losses being recognized in income. Financial instruments including receivables, accounts payable and accrued liabilities, and related party loans are carried at amortized cost, which management believes approximates fair value due to the short-term nature of these instruments. The following tables present information about the assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2024, and 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. 94 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2024 (expressed in thousands of U.S. dollars, except share and per share data) Schedule of fair values determined by level 3 inputs are unobservable data As of June 30, 2024 Total Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 2,012 $ 2,012 $ - $ - Investment in equity securities 4 4 - - Total $ 2,016 $ 2,016 $ - $ - Liabilities: April 2024 notes $ 7,089 $ - $ - $ 7,089 Earnout Shares liability 3,817 - - 3,817 Warrant liabilities 4,016 - 1,651 2,365 Total $ 14,922 $ - $ 1,651 $ 13,271 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 Yorkville Convertible Debt Financing discussed in Note 9 was initially recorded at fair value, which represented a nonrecurring fair value measurement using a Level 3 input. At June 30, 2024, 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. 17. SUBSEQUENT EVENTS Yorkville Consents On September 4, 2024, NioCorp entered into (i) a consent and waiver (the “Yorkville Consent”) to the April 2024 Note issued and sold to Yorkville pursuant to the April 2024 Purchase Agreement and (ii) a consent and waiver (together with the Yorkville Consent, the “Consents”) to the April 2024 Note issued and sold to Lind Global Fund II LP pursuant to the April 2024 Purchase Agreement. The Consents, among other things, reduced the amounts due to the April 2024 Purchasers on September 1, 2024 by an aggregate of $ 1,176 to an aggregate of $ 336 , increased the amounts due to the April 2024 Purchasers on December 1, 2024 by an aggregate of $ 1,176 , and prospectively waived any term of the April 2024 Notes that would otherwise be triggered upon a failure of the Company to pay to the April 2024 Purchasers the remainder of the amount due on September 1, 2024. Except as modified by the Consents, the terms of the April 2024 Notes as previously disclosed are unchanged. Smith Loan Agreement On September 11, 2024, the Company and Mark Smith entered into a Loan Agreement (the “Smith Loan Agreement”) pursuant to which Mr. Smith agreed to make available to the Company a non-revolving, multiple draw credit facility of up to $ 2,000 (the “Loan”). The Loan is non-revolving and amounts paid back under the terms of the Smith Loan Agreement do not again become available for drawdowns at the request of the Company. The Company will pay interest to Mr. Smith on amounts outstanding under the Loan and on any overdue interest at a rate equal to 10 % per annum, calculated monthly in arrears, through to the date of repayment of the Loan. Mr. Smith 95 NioCorp Developments Ltd. Notes to Consolidated Financial Statements June 30, 2024 (expressed in thousands of U.S. dollars, except share and per share data) will also receive an establishment fee equal to 2.5 % of the amount of any drawdown payable at the time of the drawdown as consideration of the advancement of such drawdown. Any outstanding balance on the Loan, including accrued interest, shall be immediately due and payable by the Company on the earlier of the date of expiration of the Smith Loan Agreement on June 30, 2025 and the occurrence of an event of default (the “Due Date”). The Company can repay the Loan at any time without notice and without penalty, but any amount of principal or interest repaid by the Company prior to the Due Date will be subject to an early payment fee of 2.5% of the value of any such payment. Amounts outstanding under the Smith Loan Agreement are secured by all of the Company’s assets pursuant to a general security agreement between the Company and Mr. Smith, dated September 11, 2024. Lind Consent Warrant Issuance On September 17, 2024, the Company’s Common Share price was below the threshold price set forth in the Lind Consent, and accordingly, the Company issued 2,816,742 Contingent Consent Warrants to Lind. Each Contingent Consent Warrant is exercisable for one Common Share at an exercise price of $ 2.308 and may be exercised at any time prior to their expiration on September 17, 2028. The number of Contingent Consent Warrants issued was based on $ 5,000 divided by the five-day volume weighted average price of the Common Shares on September 16, 2024. 96 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None.