☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files).

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~February 9, 2018,~~November 14, 2022, the registrant had ~~208,861,265~~27,945,088 Common Shares outstanding.

NioCorp Developments Ltd. (“NioCorp” or the “Company”) filed its Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2022 with the U.S. Securities and Exchange Commission (“SEC”) on November 14, 2022 (the “Original Form 10-Q”). This Amendment No. 1 on Form 10-Q/A (this “Amendment” or “Form 10-Q/A”) is being filed to restate (the “Restatement”) certain information in the Company’s previously issued condensed consolidated financial statements as of and for the three months ended September 30, 2022 (the “Affected Period”).

On May 19, 2023, the Audit Committee of the Board of Directors (the “Audit Committee”) of the Company, in consultation with the Company’s management, concluded that the Company’s previously issued condensed consolidated financial statements with respect to the Affected Period contained errors related to the accounting for the Waiver and Consent Agreement, dated September 25, 2022 (the “Lind Consent”), between the Company and Lind Global Asset Management III, LLC, and its evaluation under Accounting Standards Codification Topic 450 – Contingencies (“ASC 450”) instead of under Accounting Standards Codification Topic 470 – Debt (“ASC 470”), which requires an evaluation of the contract amendment under ASC 470 debt modification guidance. As a result of this error, the Audit Committee determined that the Company’s condensed consolidated financial statements for the Affected Period should not be relied upon and should be restated by adjusting deferred transaction costs, convertible debt, and warrant liability recognized in the Affected Period. Any previously issued or filed reports, press releases, earnings releases and investor presentations or other communications describing the Company’s previously issued condensed consolidated financial statements and other related financial information covering the Affected Period should no longer be relied upon.

The identification of the need for the restatement arose during the Company’s quarterly close for the quarter ended March 31, 2023. Pursuant to these procedures, the Audit Committee, in consultation with the Company’s management, assessed the Company’s accounting policies, as well as the presentation and accounting for modifications of debt agreements, and concluded that the Company should have evaluated the Lind Consent as a contract amendment under ASC 470 debt modification guidance.

This correction affects the Company’s condensed consolidated statements of operations and comprehensive loss and also impacts the Company’s condensed consolidated balance sheet, condensed consolidated statements of shareholders’ equity, and certain notes to the condensed consolidated financial statements, as well as management’s discussion and analysis of financial condition and results of operations included in the Original Form 10-Q. This correction does not impact the condensed consolidated statements of cash flows besides offsetting adjustments

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

See Note 3 to the condensed consolidated financial statements in Part I, Item 1, “Financial Statements” for more information regarding this correction and the background of the Restatement.

The Company’s management has concluded that the Company had material weaknesses in its internal control over financial reporting during the Affected Period relating to the error described above. For a discussion of management’s considerations of the Company’s disclosures controls and procedures, internal control over financial reporting, and material weaknesses identified, refer to Part I, Item 4, “Controls and Procedures.”

This Amendment sets forth the Original Form 10-Q, as modified and superseded where necessary to reflect the Restatement and the related internal control considerations. Accordingly, the following items included in the Original Form 10-Q have been amended, as appropriate, to reflect the Restatement and the related internal control considerations:

On March 17, 2023, the Company effected a reverse stock split (the “Reverse Stock Split”) of its common shares, without par value (“Common Shares”), 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. All references to share and per share amounts (excluding authorized shares), as well as option and warrant amounts and exercise prices, in this Amendment, including the condensed consolidated financial statements and accompanying notes, have also been restated to give retroactive effect to the Reverse Stock Split.

Additionally, in accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended, the Company is including with this Amendment currently dated certifications from its Chief Executive Officer and Chief Financial Officer. These certifications are filed or furnished, as applicable, as Exhibits 31.1, 31.2, 32.1 and 32.2.

Except as described above, this Amendment does not amend, update or change any other disclosures in the Original Form 10-Q. In addition, the information contained in this Amendment does not reflect events occurring after the Original Form 10-Q was filed and does not modify or update the disclosures therein, except to reflect the effects of the Restatement and the restatement of share and per share amounts (excluding authorized shares), as well as option and warrant amounts and exercise prices, to give retroactive effect to the Reverse Stock Split, as discussed above. This Amendment should be read in conjunction with the Company’s other filings with the SEC.

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

(expressed in thousands of U.S. dollars, except share and per share data) (unaudited)

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

(expressed in thousands of U.S. dollars, except for Common Shares ~~Outstanding)~~outstanding) (unaudited)

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

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

~~December 31, 2017~~

September 30, 2022

(expressed in thousands of U.S. dollars, ~~unless~~except per share amounts or as otherwise stated) (unaudited)

DESCRIPTION OF BUSINESS

NioCorp Developments Ltd. (“NioCorp” or the “Company”) was incorporated on February 27, 1987, under the laws of the Province of British Columbia and currently operates in one reportable operating segment consisting of exploration and development of mineral deposits in North America, specifically, the Elk Creek Niobium/Scandium/Titanium property (the “Elk Creek Project”) located in southeastern Nebraska.

These consolidated financial statements have been prepared on a going concern basis that contemplates the realization of assets and discharge of liabilities at their carrying values in the normal course of business for the foreseeable future. These financial statements do not reflect any adjustments that may be necessary if the Company is unable to continue as a going concern.

The Company currently earns no operating revenues and will require additional capital in order to advance the Elk Creek ~~Project. The Company’s~~Project to construction and commercial operation. As further discussed in Note 4, these matters raised substantial doubt about the Company's ability to continue as a going concern, ~~is uncertain~~ 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.

BASIS OF PREPARATION

Basis of Preparation and Consolidation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles of the United States of America (“USU.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). The interim condensed consolidated financial statements include the consolidated accounts of the Company and its ~~wholly-owned~~wholly owned subsidiaries with all significant intercompany transactions eliminated. The accounting policies followed in preparing these interim condensed consolidated financial statements are those used by the Company as set out in the audited consolidated financial statements for the year ended June 30, ~~2017.~~2022. Certain transactions include reference to Canadian dollars (“C$”) where applicable.

In the opinion of ~~Management,~~management, all adjustments considered necessary (including reclassifications and normal recurring adjustments) ~~to present fairly~~for a fair statement of the financial position, results of operations, and cash flows at ~~December 31, 2017,~~September 30, 2022, and for all periods presented, have been included in these interim condensed consolidated financial statements. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with USU.S. GAAP have been condensed or omitted pursuant to appropriate SEC rules and regulations. These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended June 30, ~~2017.~~2022. The interim results are not necessarily indicative of results for the full year ending June 30, ~~2018,~~2023, or future operating periods.

Recent Accounting Standards

Issued and Adopted

In ~~March 2016,~~August 2020, the Financial Accounting Standards Board ~~(“FASB”~~(the “FASB”) issued Accounting Standards Update (“ASU”) ~~2016-09, Improvements to Employee Share-Based Payment Accounting. The amendments~~No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”), which simplifies the accounting for convertible instruments. ASU 2020-06 removes certain accounting models which separate the embedded conversion features from the host contract for convertible instruments. Either a modified retrospective method of transition or a fully retrospective method of transition is permissible for the adoption of this standard. ASU require, among other things, that all income tax effects of awards be recognized in the income statement when the awards vest or are settled. The ASU also allows for an employer to repurchase more of an employee’s shares than it can today for tax withholding purposes without triggering liability accounting, and it allows for a policy election to account for forfeitures as they occur. The amendments in this ASU are2020-06 is effective for fiscal years beginning after December 15, ~~2016,~~2021, including interim periods within those fiscal years. WeThe Company adopted ~~this guidance during~~ASU 2020-06 on July 1, 2022, with no material effect on the ~~quarter ended~~ Company’s current financial position, results of operations or financial statement disclosures.

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

September 30, ~~2017. The adoption~~2022

(expressed in thousands of ~~this ASU had no material impacts on our financial statement results~~U.S. dollars, except per share amounts or ~~disclosures.~~as otherwise stated) (unaudited)

Issued and Not Effective

From time to time, new accounting pronouncements are issued by the FASB that are adopted by the Company as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards did not or will not have a material impact on the Company’s consolidated financial statements upon adoption.

~~NioCorp Developments Ltd.~~

~~Notes to the Condensed Consolidated Financial Statements~~

~~December 31, 2017~~

~~(expressed in thousands of U.S. dollars, unless otherwise stated) (unaudited)~~

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. The update clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company will apply the provisions of the update to potential future acquisitions occurring after the effective date.

In February 2016, the FASB issued ASU 2016-02, Leases. The standard requires that a lessee recognize on the balance sheet assets and liabilities for leases with lease terms of more than twelve months. The recognition, measurement, and presentation of expenses and cash flows arising from a lease have not significantly changed from the previous US GAAP. The standard is effective for fiscal years beginning after December 15, 2018, including interim periods within such fiscal year, with early adoption permitted. The Company is currently assessing the impact, if any, of implementing this guidance on its consolidated financial position, results of operations, and liquidity.

Use of Estimates

The preparation of consolidated financial statements in conformity with USU.S. GAAP requires ~~Management~~management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the deferred income tax asset valuations, convertible debt valuations, and share-based compensation. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between estimates and the actual results, future results of operations will be affected.

Basic and Diluted Earnings per Share

On March 17, 2023, the Company effected a reverse stock split (the “Reverse Stock Split”) of its common shares, without par value (“Common Shares”), 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. All references to share and per share amounts (excluding authorized shares), as well as Option and Warrant (each as defined below) amounts and exercise prices, in the condensed consolidated financial statements and accompanying notes have also been restated to give retroactive effect to the Reverse Stock Split.

Basic net loss per share is computed by dividing net loss by the weighted average number of the Company’s Common Shares outstanding during the period. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of Common Share equivalents outstanding for the period determined using the treasury stock method or the if-converted method, as applicable. For purposes of this calculation, options to purchase Common Shares (“Options”) and warrants to purchase Common Shares (“Warrants”) are considered to be Common Share equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive. The following shares underlying Options, Warrants, and outstanding convertible debt were antidilutive due to a net loss in the periods presented and, therefore, were excluded from the dilutive securities computation as indicated below.

	For the three months ended September 30,
Excluded potentially dilutive securities ⁽¹⁾:	2022		2021
Options		1,446,400		1,522,500
Warrants		1,851,625		1,347,011
Convertible debt		103,000		1,474,400
Total potential dilutive securities		3,401,025		4,343,911

(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.

RESTATEMENT

On February 16, 2021, the Company entered into a Convertible Security Funding Agreement (as amended by Amendment #1 to the Convertible Security Funding Agreement dated December 2, 2021, the “CSFA”) with Lind Global Asset Management III, LLC (“Lind”), pursuant to which the Company issued a convertible security to Lind (the “Lind III Convertible Security”). Pursuant to the CSFA, Lind had certain consent and participation rights applicable in connection with the Transaction (as defined below) and the proposed financing transactions with Yorkville Advisors Global, LP (“Yorkville”), each as described in Note 13. On September 25, 2022, the Company and Lind entered into a Waiver and Consent Agreement (the “Lind Consent”), which included the following principal terms: (i) the consent of Lind to the Transaction and the proposed financing transactions with Yorkville,

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

September 30, 2022

(expressed in thousands of U.S. dollars, except per share amounts or as otherwise stated) (unaudited)

including all actions taken by NioCorp as set out in the Business Combination Agreement to permit the completion of the Transaction; (ii) the consent of Lind to NioCorp’s expected cross-listing to The Nasdaq Stock Market LLC (“Nasdaq”) and the consolidation of the Common Shares in order to meet the minimum listing requirements thereof; (iii) the waiver of Lind of its participation right for up to 15% of the total offering in the proposed standby equity purchase agreement between NioCorp and Yorkville; and (iv) the waiver of Lind of certain restrictive covenants in the CSFA.

As consideration for entering into the Lind Consent, Lind received, amongst other things: (i) the right to receive a payment of $500, which would be reduced to $200 if the Transaction has not been consummated on or before April 30, 2023 (collectively, the “Consent Payment”); (ii) an extension of its existing participation rights under the CSFA in future financings of NioCorp for a further two-year period, subject to certain exceptions as well as an extension of such participation rights beyond the additional two-year period if Yorkville or any affiliate is a party to any such applicable transaction; and (iii) the right to receive additional Warrants (the “Contingent Consent Warrants”) if on the date that is 18 months following consummation of the Transaction, the closing trading price of the Common Shares on the Toronto Stock Exchange (the “TSX”) or such other stock exchange on which such shares may then be listed, is less than C$10.00, subject to adjustments. The number of Contingent Consent Warrants to be issued, if any, is based on the Canadian dollar equivalent (based on the then current Canadian to US dollar exchange rate as reported by Bloomberg, LP) of $5,000 divided by the five-day volume weighted average price of the Common Shares on the date of issuance. Further, the number of Contingent Consent Warrants issued will be proportionately adjusted based on the percentage of Warrants currently held by Lind that are exercised, if any, prior to the issuance of any Contingent Consent Warrants. The Lind Consent was signed as an amendment to the existing CSFA.

The Company originally accounted for both the Consent Payment and Contingent Consent Warrants as contingencies under Accounting Standards Codification (“ASC”) Topic 450: Contingencies.

The identification of the need for the restatement arose during the Company’s quarterly close for the quarter ended March 31, 2023. Pursuant to these procedures, the Audit Committee, in consultation with the Company’s management, determined that the Lind Consent should have been evaluated under ASC 470 – Debt (“ASC 470”), which requires an evaluation of the contract amendment under ASC 470 debt modification guidance.

The Company performed a comparison of the discounted cash flows of the Lind III Convertible Security pursuant to the original CSFA and pursuant to the CSFA as amended by the Lind Consent and determined that a debt extinguishment loss of $201 had occurred. Further, ASC 470 requires that the minimum estimated Consent Payment of $200 also be included in the calculation of the gain or loss on debt extinguishment. The Company also evaluated the Contingent Consent Warrant feature included in the Lind Consent and determined that the Contingent Consent Warrants meet the criteria to be considered separate, freestanding instruments, should be accounted for as a liability under ASC Topic 480, Distinguishing Liabilities from Equity (“ASC 480”), and should be booked at fair value on the date of the Lind Consent, with subsequent changes in valuation recorded as a non-operating gain or loss in the statement of operations. The following table summarizes the components of the initial loss on debt extinguishment:

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

September 30, 2022

(expressed in thousands of U.S. dollars, except per share amounts or as otherwise stated) (unaudited)

Schedule Of Extinguishment Of Debt

		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

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

		Amount
Initial valuation, September 25, 2022	$	1,221
Change in valuation		(257	)
Valuation at September 30, 2022	$	964

The Contingent Consent Warrants are classified as a Level 3 financial instrument and were valued utilizing a Monte Carlo simulation pricing model, which calculates multiple potential outcomes for future share prices based on historic volatility of the Common Shares to determine the probability of issuance at 18 months following the applicable valuation date and to determine the value of the Contingent Consent Warrants. The following table discloses the primary inputs into the Monte Carlo model at each valuation date, and the probability of issuance calculated by the model.

Key Valuation Input	September 25, 2022			September 30, 2022
Share price on valuation date	$	7.82		$	10.40
Volatility		62.4	%		63.4	%
Risk free rate		3.93	%		4.04	%
Probability of issuance		59.4	%		45.5	%

The loss on debt extinguishment is presented as a non-operating expense in the Company’s condensed consolidated statements of operations and comprehensive loss. This change in accounting also resulted in a decrease in the amount of accretion to be recognized over the remaining life of the Lind III Convertible Security. Accretion expenses are disclosed as a part of interest expense, which is not included as a component of operating costs.

This correction to the Company’s condensed consolidated statements of operations and comprehensive loss also impacts the Company’s condensed consolidated balance sheet, condensed consolidated statements of shareholders’ equity, and certain notes to the condensed consolidated financial statements for the three months ended September 30, 2022 as illustrated in the tables below. This correction does not impact the condensed consolidated statements of cash flows besides offsetting adjustments between net loss, accretion of convertible debt, and loss on debt extinguishment within the cash flows from operating activities section.

Restatement Impacts to the Condensed Consolidated Balance Sheet (unaudited)

As of September 30, 2022


	As Previously Reported			Restatement Impacts			Restated
Deferred transaction costs	$	2,809		$	(200	)	$	2,609
Total assets		23,246			(200	)		23,046
Convertible debt		755			159			914
Total current liabilities		6,511			159			6,670
Warrant liability		-			964			964
Total liabilities		6,511			1,123			7,634
Accumulated deficit		(112,951	)		(1,323	)		(114,274	)
Total shareholders’ equity		16,735			(1,323	)		15,412
Total liabilities and equity		23,246			(200	)		23,046

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

September 30, 2022

(expressed in thousands of U.S. dollars, except per share amounts or as otherwise stated) (unaudited)

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

For the Three Months Ended September 30, 2022


	As Previously Reported		Restatement Impacts			Restated
Interest expense	$	300	$	(42	)	$	258
Loss on debt extinguishment		-		1,622			1,622
Change in fair value of warrant liability		-		(257	)		(257	)
Loss before income taxes		2,554		1,323			3,877
Net loss		2,554		1,323			3,877
Total comprehensive loss		2,559		1,323			3,882
Loss per share	$	0.09	$	0.05		$	0.14
Weighted average shares outstanding		27,792,631		-			27,792,631

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

For the Three Months Ended September 30, 2022

	As Previously Reported			Restatement Impacts			Restated
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period	$	(2,554	)	$	(1,323	)	$	(3,877	)
Accretion of convertible debt		236			(42	)		194
Loss on debt extinguishment		-			1,622			1,622
Change in fair value of warrant liability		-			(257	)		(257	)

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

As of September 30, 2022

	Common Shares			Accumulated Deficit			Accumulated Other Comprehensive Loss			Total
As Previously Reported
Balance, June 30, 2022	$	129,055		$	(110,397	)	$	(993	)	$	17,665
Debt conversions		1,650			-			-			1,650
Share issuance costs		(21	)		-			-			(21	)
Reporting currency translation		-			-			(5	)		(5	)
Loss for the period		-			(2,554	)		-			(2,554	)
Balance, September 30, 2022	$	130,684		$	(112,951	)	$	(998	)	$	16,735
Restatement Impacts
Balance, June 30, 2022	$	-		$	-		$	-		$	-
Loss for the period		-			(1,323	)		-			(1,323	)
Balance, September 30, 2022	$	-		$	(1,323	)	$	-		$	(1,323	)
As Adjusted
Balance, June 30, 2022	$	129,055		$	(110,397	)	$	(993	)	$	17,665
Debt conversions		1,650			-			-			1,650
Share issuance costs		(21	)		-			-			(21	)
Reporting currency translation		-			-			(5	)		(5	)
Loss for the period, as restated		-			(3,877	)		-			(3,877	)
Balance, September 30, 2022, as restated	$	130,684		$	(114,274	)	$	(998	)	$	15,412

As previously reported, the Company restated its consolidated balance sheets as of June 30, 2022 and 2021, and consolidated statements of operations and comprehensive income, equity and cash flows for the years ended June 30, 2022 and 2021. In addition, the restatement impacted the first, second and third quarters of our fiscal year ended June 30, 2022. The summarized restatement impacts for the comparable interim period in fiscal year 2022 are presented below. The restatement corrects errors related to the accounting for the unamortized deferred financing costs and debt discounts upon extinguishments of debt related to debt conversions.

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

September 30, 2022

(expressed in thousands of U.S. dollars, except per share amounts or as otherwise stated) (unaudited)

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

For the Three Months Ended September 30, 2021

	As Previously Reported			Restatement Impacts			Restated
Foreign exchange loss	$	210		$	15		$	225
Interest expense		492			113			605
Loss before income taxes		1,960			128			2,088
Net loss		1,960			128			2,088
Reporting currency translation		(109	)		(15	)		(124	)
Total comprehensive loss		1,851			113			1,964
Loss per share	$	0.08		$	-		$	0.08
Weighted average shares outstanding		25,802,304			-			25,802,304

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

For the Three Months Ended September 30, 2021


	As Previously Reported			Restatement Impacts			Restated
CASH FLOWS FROM OPERATING ACTIVITIES
Total loss for the period	$	(1,960	)	$	(128	)	$	(2,088	)
Accretion of convertible debt		438			113			551
Foreign exchange loss		273			15			288

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

For the Three Months Ended September 30, 2021

	As Previously Reported			Restatement Impacts			Restated
June 30, 2021 opening balance adjustments:
Deficit	$	(99,076	)	$	(434	)	$	(99,510	)
Accumulated other comprehensive loss		(1,143	)		(16	)		(1,159	)
Total Shareholders’ equity		13,663			(450	)		13,213
Activity adjustments:
Loss for the period		(1,960	)		(128	)		(2,088	)
Reporting currency translation		109			15			124
September 30, 2021 ending balance adjustments:
Deficit		(101,036	)		(562	)		(101,598	)
Accumulated other comprehensive loss		(1,034	)		(1	)		(1,035	)
Total equity		13,826			(563	)		13,263

d)4.

~~Reclassifications~~

Certain prior year amounts have been reclassified to conform to fiscal 2018 presentation and these reclassifications had no effect on the reported results of operations or net equity as previously disclosed.

GOING CONCERN ISSUES

The Company incurred a loss of ~~$3,773~~$3,877 for the ~~six~~three months ended ~~December 31, 2017 (2016~~September 30, 2022 (2021 - ~~$6,322),~~$2,088) and had a working capital deficit of $3,289 and an accumulated deficit of ~~$4,370 and $78,625, respectively,~~$114,274 as of ~~December 31, 2017.~~September 30, 2022. As a development stage issuer, the Company has not yet commenced its mining operations and accordingly does not generate any revenue. As of September 30, 2022, the Company had cash of $3,192 which may not be sufficient to fund normal operations for the next twelve months without deferring payment on certain liabilities or raising additional funds. In addition, the Company will be required to raise additional funds for construction and commencement of operations. These factors ~~indicate the existence of a material uncertainty that raises~~raise substantial doubt about the ~~Company’s~~Company's ability to continue as a going concern.

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

September 30, 2022

(expressed in thousands of U.S. dollars, except per share amounts or as otherwise stated) (unaudited)

The Company’s ability to continue operations and fund its expenditures, which have historically averaged approximately $1,265 per quarter over the preceding three-year period, is dependent on ~~Management’s~~management’s ability to secure additional financing. Management is actively pursuing ~~such~~ additional sources of financing, and while it has been successful in doing so in the past, there can be no assurance it will be able to do so in the future. Other than the proposed business combination and potential financing packages discussed in Note 13, the Company did not have any further funding commitments or arrangements for additional financing as of September 30, 2022. These consolidated financial statements do not give effect to any adjustments required to realize ~~its~~the Company’s assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying financial statements.

Since March 2020, several measures have been implemented in the United States, Canada, and the rest of the world in response to the increased impact from the novel coronavirus (“COVID-19”) pandemic and subsequent COVID-19 variants. In addition, recent worldwide events have created general global economic uncertainty as well as uncertainty in capital markets, supply chain disruptions, increased interest rates, and the potential for geographic recessions. We believe this could have an adverse impact on our ability to obtain financing, development plans, results of operations, financial position, and cash flows during the current fiscal year. The full extent to which these events and our precautionary measures may continue to impact our business will depend on future developments, which continue to be highly uncertain and cannot be predicted at this time.

5.	DEFERRED TRANSACTION COSTS

The Company has deferred third-party costs, including legal fees, other professional and consulting fees, and due diligence fees, incurred in connection with the proposed transaction discussed in Note 13. These costs are deferred until closing, at which time a portion of the costs will be recorded against convertible debt to be entered into in connection with the proposed transaction, with the remainder treated as a reduction to the value of Common Shares issued.

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Schedule of account payable and accrued liabilities


			As of
	Note		September 30, 2022		June 30, 2022
Accounts payable, trade			$	2,904	$	115
Accounts payable accruals				467		654
Consent accrual		13		200		-
Interest payable to related party		9		51		-
Other accruals				48		48
Total accounts payable and accrued liabilities			$	3,670	$	817

4.7.

~~RESTRICTED CASH~~CONVERTIBLE DEBT

~~Restricted cash represents amounts held~~Changes in ~~escrow to secure payment of work related to~~ the ~~Company’s Elk Creek Feasibility Study. Under the terms of the escrow agreement, the balance of $265 was drawn against outstanding accounts payable during the quarter ended September 30, 2017.~~Lind III Convertible Security are as follows:

	Lind III Convertible Security
		(Restated)
Balance, June 30, 2022	$	2,169
Accretion expense		194
Fair value increase due to debt extinguishment		201
Conversions		(1,650	)
Balance, September 30, 2022	$	914

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

~~December 31, 2017~~

September 30, 2022

(expressed in thousands of U.S. dollars, ~~unless~~except per share amounts or as otherwise stated) (unaudited)

~~OTHER CURRENT ASSETS~~

Other current assets include legal and other professional fees associated with obtaining project debt financing for the Elk Creek Project. Amounts will be deferred until funding is completed, at which time the balance will become a direct deduction from the related debt liability.

~~CONVERTIBLE DEBT~~

As of
December 31, 2017 June 30, 2017
Convertible debt, current portion $ 667 $ 2,161
Noncurrent:
Convertible notes $ — $ 592
Convertible security 1,609 1,304
$ 1,609 $ 1,896

~~Convertible Security Funding~~

~~Changes in the Lind Partners Asset Management IV, LLC (“Lind”) convertible security (the “Convertible Security”) balance are comprised of the following:~~

Convertible Security
Balance, June 30, 2017 $ 3,465
Additional debt drawdown 1,000
Conversions, at fair value (3,030 )
Change in fair market value 174
Balance, December 31, 2017 $ 1,609

On August 10, 2017, Lind provided notice to the Company of its election to advance an additional $1.0 million in funding (the “Initial Convertible Security Increase”) under the convertible security (the ‘Initial Convertible Security”) pursuant to its right under the Convertible Security Funding Agreement, dated December 14, 2015, between the Company and Lind (the “Lind Agreement”). As a result, upon payment of the additional $1,000 in funding by Lind to the Company, the face value of the Initial Convertible Security was increased by $1,200 ($1,000 in additional funding plus implied interest), and the Company issued Warrants to Lind, as follows:

Black Scholes pricing model inputs
Funding Date Face Value¹ Warrants Issued² Issue Price³ Warrant Expiry Date Risk-free rate Yield Volatility Expected Life
August 15, 2017 $ 300 260,483 C$0.73 August 15, 2020 1.23 % 0 % 49.6 % 3 years
September 28, 2017 300 283,413 C$0.66 September 28, 2020 1.23 % 0 % 47.7 % 3 years
October 31, 2017 300 308,901 C$0.62 October 31, 2020 1.59 % 0 % 47.0 % 3 years
December 6, 2017 300 355,132 C$0.54 December 6, 2020 1.59 % 0 % 48.9 % 3 years
Total $ 1,200 1,207,929

~~Includes implied interest.~~

~~The value of warrants issued totaled $127, which was expensed to Change in Financial Instrument Fair Value. .~~

~~The price to convert one warrant into one Common Share.~~

The Initial Convertible Security is convertible into Common Shares of the Company (Common Shares”) at a conversion price equal to 85% of the volume weighted average trading price (“Volume Weighted Average Price”) of the Common Shares (in Canadian dollars) on the Toronto Stock Exchange (the “TSX”) for the five consecutive trading days immediately prior to the date on which Lind provides the Company with notice of its intention to convert an amount of the Initial Convertible Security from time to time. During the six-month period ended December 31, 2017, $2,425 principal amount of the Initial Convertible Security was converted into 6,696,590 Common Shares.

~~NioCorp Developments Ltd.~~

~~Notes to the Condensed Consolidated Financial Statements~~

~~December 31, 2017~~

~~(expressed in thousands~~

Based on the Company’s closing Common Share price of ~~U.S. dollars, unless otherwise stated) (unaudited)~~

~~The~~C$14.30 as of September 30, 2022, conversion of the remaining Lind III Convertible Security ~~contains financial and non-financial covenants customary for a facility~~undiscounted face value of ~~its size and nature, and includes a financial covenant defining an event~~$815 (including accrued interest) would require the issuance of default as all present and future liabilities of the Company or any of its subsidiaries, exclusive of related party loans, for an amount or amounts exceeding $2,000 and which have not been satisfied on time or within 90 days of invoice, or have become prematurely payable as a result of its default or breach. The Company was in compliance with these covenants as of December 31, 2017.

~~Convertible Notes~~

~~Changes~~approximately 103,000 Common Shares. For each C$0.10 change in the ~~Company’s outstanding convertible promissory notes (the “Convertible Notes”) balance are comprised~~fair value of one Common Share, the ~~following:~~total Common Shares the Company would be obligated to issue would change by approximately 800 shares.

Convertible Notes
Balance, June 30, 2017 $ 592
Accreted interest, net of interest paid 75
Balance, December 31, 2017 $ 667

~~The changes in the derivative liability related to the conversion feature of the Convertible Notes are as follows:~~

Derivative Liability
Balance, June 30, 2017 $ 82
Change in fair value of derivative liability (— )
Balance, December 31, 2017 $ 82

7.8.

COMMON ~~STOCK~~SHARES

~~Issuances~~Stock Options

~~On July 26, 2017, the Company closed a brokered private placement (the “July 2017 Private Placement”)~~Schedule of units (the “Units”) of the Company. Under the July 2017 Private Placement, a total of 2,962,500 Units were issued at C$0.65 per Unit, for total gross proceeds to the Company of approximately C$1,926. Each Unit issued pursuant to the July 2017 Private Placement consists of one Common Share and one warrant of the Company (“Warrant”). Each Warrant entitles the holder thereof to purchase one additional Common Share at a price of C$0.79 until July 26, 2021.stock option

	Number of Options		Weighted Average Exercise Price
Balance, June 30, 2022		1,446,400	C$	8.30
Granted		-		-
Exercised		-		-
Cancelled/expired		-		-
Balance, September 30, 2022		1,446,400	C$	8.30

The July 2017 Private Placement was brokered by Mackie Research Capital Corporation (the “Agent”). The Company paid the Agent an aggregate cash commission of approximately C$125, equal to six and a half per cent (6.5%) of the gross proceeds raised under the July 2017 Private Placement. The Company also issued to the Agent 192,562 broker warrants (the “Broker Warrants”), equal to six and a half per cent (6.5%) of the Units sold pursuant to the July 2017 Private Placement. Each Broker Warrant entitles the holder thereof to purchase one Common Share at a price of C$0.79 until July 26, 2021. The fair value of the Broker Warrants of $41 was estimated based on the Black Scholes pricing model using a risk-free interest rate of 1.32%, an expected dividend yield of 0%, a volatility of 60.3%, and an expected life of four years. Total cash issue costs including agents’ commission, legal and other fees was $189.

~~Proceeds of the July 2017 Private Placement were used for general working capital purposes and to continue to advance the Company’s Elk Creek Project.~~

On September 5, 2017, the Company entered into a shares-for-debt agreement with Northcott Capital Limited (“Northcott”) whereby NioCorp issued 415,747 Common Shares to settle a debt of C$253,606 owed to Northcott for past and prospective services through December 2017. Northcott manages NioCorp’s current effort to assemble a debt financing package as part of the Company’s overall Elk Creek Project financing effort. The shares issued to Northcott were priced at C$0.61 per share, which represents a 10% premium over the five-day Volume Weighted Average Price of the Common Shares of C$0.5571 as of the date of the agreement.

~~NioCorp Developments Ltd.~~

~~Notes to the Condensed Consolidated Financial Statements~~

~~December 31, 2017~~

~~(expressed in thousands of U.S. dollars, unless otherwise stated) (unaudited)~~

~~Stock Options~~

On November 9, 2017, the Company’s shareholders voted to approve a new Long-Term Incentive Plan (the “Long-Term Incentive Plan”) and the granting of incentive securities thereunder until November 9, 2020. Under the Long-Term Incentive Plan, the Company’s Board of Directors (the “Board”) may, in its discretion from time to time, grant Options and share units (in the form of RSUs and PSUs) to directors, employees and certain other service providers (as defined in the Long-Term Incentive Plan) of the Company and affiliated entities selected by the Board.

Subject to adjustment as described in the Long-Term Incentive Plan, the aggregate number of Common Shares that may be reserved for issuance to participants under the Long-Term Incentive Plan, together with all other security -based compensation arrangements of the Company, including with respect to Options outstanding under the Company’s 2016 Incentive Stock Option Plan, 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 shall not exceed 5% of the issued and outstanding Common Shares from time to time. The Long-Term Incentive Plan limits the maximum number of Common Shares issued to insiders (as defined under TSX rules for this purpose) within any one-year period, or issuable to insiders at any time, in the aggregate, under all security -based compensation arrangements (including the Long-Term Incentive Plan) to 10% of the then issued and outstanding Common Shares. The Long-Term Incentive Plan also limits the aggregate number of Common Shares that may be reserved for issuance to any one participant under the 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). Under the Long-Term Incentive Plan, Options and share units granted to non-employee directors, together with all other equity awards, are limited to an annual equity award value of C$150 per non-employee director. The total value of Options issuable to a non-employee director in a one-year period is limited to C$100. Further, and subject to the adjustment provisions of the 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 not exceed 20,451,895 Common Shares.

~~The Board has the exclusive power over the granting, amendment, administration or settlement of any award.~~

~~Stock option transactions are summarized as follows:~~

Number of Options Weighted Average Exercise Price (C$)
Balance, June 30, 2017 16,605,000 $ 0.73
Issued 3,925,000 0.47
Exercised (10,091 ) 0.62
Cancelled/expired (4,470,000 ) 0.75
Balance, December 31, 2017 16,049,909 $ 0.66

The following table summarizes information about ~~stock options~~Options outstanding at ~~December 31, 2017:~~September 30, 2022:

Exercise price (C$) Expiry date Number outstanding Aggregate Intrinsic Value (C$000s) Number exercisable Aggregate Intrinsic Value (C$000s)
$ 0.47 November 9, 2022 3,925,000 $ 1,060 3,925,000 $ 1,060
$ 0.62 January 19, 2021 5,264,909 632 5,264,909 632
$ 0.76 March 6, 2022 5,650,000 — 2,825,000 —
$ 0.94 April 28, 2018 400,000 — 400,000 —
$ 0.94 April 28, 2019 100,000 — 100,000 —
$ 0.94 July 21, 2021 710,000 — 532,500 —
Balance December 31, 2017 16,049,909 $ 1,692 13,047,409 $ 1,692

~~NioCorp Developments Ltd.~~

~~Notes to the Condensed Consolidated Financial Statements~~

~~December 31, 2017~~

~~(expressed in thousands of U.S. dollars, unless otherwise stated) (unaudited)~~

Exercise Price		Expiry Date	Number Outstanding		Aggregate Intrinsic Value		Number Exercisable		Aggregate Intrinsic Value
C$	4.70	November 9, 2022		280,400	C$	2,692		280,400	C$	2,692
C$	8.40	September 18, 2023		105,000		619		105,000		619
C$	5.40	November 15, 2023		378,500		3,369		378,500		3,369
C$	7.50	December 14, 2023		182,500		1,241		182,500		1,241
C$	7.50	December 16, 2023		52,500		357		52,500		357
C$	13.60	December 17, 2024		397,500		278		397,500		278
C$	11.00	May 30, 2025		50,000		165		50,000		165
				1,446,400	C$	8,721		1,446,400	C$	8,721

The aggregate intrinsic value in the preceding table represents the total intrinsic value, based on the Company’s closing Common Share price of C$~~0.74~~14.30 as of ~~December 31, 2017,~~September 30, 2022, that would have been received by the ~~option~~Option holders had all ~~option~~Option holders exercised their ~~options~~Options as of that date. ~~The total number of~~There were no in-the-money ~~options~~Options vested and exercisable as of ~~December 31, 2017 was 9,189,909. The total intrinsic value of options exercised during the six months ended December 31, 2017 was nil.~~

September 30, 2022. As of ~~December 31, 2017,~~September 30, 2022, there was ~~$247~~$0 of unrecognized compensation cost related to unvested share-based compensation arrangements granted under the ~~2016 Incentive Stock~~ Option ~~Plan. The cost is expected to be recognized over a remaining weighted average period of approximately 0.7 years.~~plans.

c)b)

Warrants

Schedule of warrant transactions

~~Warrant transactions are summarized as follows:~~

	Number of Warrants		Weighted Average Exercise Price
Balance, June 30, 2022		1,851,624	C$	11.60
Granted		-		-
Exercised		-		-
Cancelled/expired		-		-
Balance, September 30, 2022		1,851,624	C$	11.60

Warrants Weighted average exercise price (C$)
Balance June 30, 2017 20,609,086 $ 0.79
Granted 4,362,991 0. 75
Balance, December 31, 2017 24,972,077 $ 0. 78

As discussed above under Note 6, the Company granted 1,207,929 Warrants to Lind in connection with the funding of the Convertible Security Increase. As discussed above under Note 7a, the Company granted 2,962,500 Warrants and 192,562 Broker Warrants in conjunction with the July 2017 Private Placement.

~~At December 31, 2017, the Company has outstanding exercisable Warrants, as follows:~~

Number Exercise Price (C$) Expiry Date
355,132 0.54 December 6, 2020
308,901 0.62 October 31, 2020
283,413 0.66 September 28, 2020
3,125,000 0.72 December 22, 2018
260,483 0.73 August 15, 2020
9,150,285 0.75 January 19, 2019
3,155,062 0.79 July 26, 2021
3,860,800 0.85 February 14, 2020
3,043,024 0.85 February 21, 2020
539,307 0.85 February 28, 2020
890,670 0.90 March 31, 2020
24,972,077

~~RELATED PARTY TRANSACTIONS AND BALANCES~~

The Company has a loan with Mark Smith, President, Chief Executive Officer (“CEO”) and Executive Chairman of NioCorp (the “Original Smith Loan”), that bears an interest rate of 10%, is secured by the Company’s assets pursuant to a concurrently executed general security agreement (the “General Security Agreement”), and is subject to both a 2.5% establishment fee and 2.5% prepayment fee. The principal amount outstanding under the Original Smith Loan is $1,000, and is due on June 17, 2018.

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

~~December 31, 2017~~

September 30, 2022

(expressed in thousands of U.S. dollars, ~~unless~~except per share amounts or as otherwise stated) (unaudited)

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

Number	Exercise Price		Expiry Date
50,000	C$	8.00	December 18, 2022
441,211	C$	16.30	May 10, 2023
504,613	C$	11.00	June 30, 2024
855,800	C$	9.70	February 19, 2025
1,851,624

~~The Company has a~~

RELATED PARTY TRANSACTIONS AND BALANCES

Borrowings under the non-revolving credit facility agreement (the ~~“Credit~~��Smith Credit Facility”) ~~in the amount~~with Mark Smith, Chief Executive Officer, President, and Executive Chairman of ~~$2,000 with Mr. Smith. The Credit Facility bears an~~NioCorp, bear interest at a rate of ~~10%~~10% and drawdowns from the Smith Credit Facility are subject to a ~~2.5%~~2.5% establishment fee. Amounts outstanding under the Smith Credit Facility are secured by all of the Company’s assets pursuant to ~~the General Security Agreement.~~a general security agreement. The Smith Credit Facility contains financial and non-financial covenants customary for a facility of its size and ~~nature and~~nature. The maturity date for the Smith Credit Facility is ~~due on~~ June ~~16, 2018. During the quarter ended December 31, 2017, Mr. Smith advanced an additional $180 to the Company under the Credit Facility.~~ 30, 2023.

As of ~~December 31, 2017,~~September 30, 2022, the principal amount outstanding under the Smith Credit Facility ~~is $355~~was $2,000 and accounts payable and accrued liabilities ~~included~~as of September 30, 2022, include accrued interest of $51payable ~~and loan establishment fees payable to Mr.~~under the Smith Credit Facility.

10.

EXPLORATION EXPENDITURES

Schedule of ~~$176.~~exploration expenditures

	For the Three Months Ended September 30,
	2022		2021
Technical studies and engineering	$	141	$	50
Field management and other		154		124
Metallurgical development		993		436
Geologists and field staff		-		11
Total	$	1,288	$	621

~~On June 20, 2016,~~

11.

LEASES

The Company incurred lease costs as follows:


	For the Three Months Ended September 30,
	2022			2021
Operating Lease Cost:
Fixed rent expense	$	21		$	21
Variable rent expense		3			2
Short term lease cost		2			5
Sublease income		(6	)		(5	)
Net lease cost – other operating expense		20			23

NioCorp Developments Ltd.

Notes to the Company announced a joint development agreement (the “Development Agreement”) with IBC Advanced Alloys Corp. (“IBC”) to investigate and develop applications for scandium-containing alloys for multiple downstream markets. In addition to his management dutiesCondensed Consolidated Financial Statements

September 30, 2022

(expressed in thousands of U.S. dollars, except per share amounts or as otherwise stated) (unaudited)

The maturities of lease liabilities are as follows at NioCorp, Mark Smith is also the Chairman of the IBC Board of Directors. Under the terms of the Development Agreement, each party bears its own costs incurred in development efforts. During the quarter ended December 31, 2017 the company supplied IBC with a small quantity of Scandium Trioxide which was used to manufacture several aluminum-scandium alloy ingots. The ingots, representing a range of scandium content, will undergo chemical analysis and other metallurgical testing to confirm the microstructure and performance of the alloys.September 30, 2022:


	Fiscal Year Lease Maturities
Total lease payments – through September 2023	$	93
Less portion of payments representing interest		(7	)
Present value of lease payments – current lease liability	$	86

9.12.

~~Exploration Expenditures~~FAIR VALUE MEASUREMENTS

For the three months ended December 31, For the six months ended December 31,
2017 2016 2017 2016
Technical studies and engineering $ 59 $ 1,551 $ 454 $ 1,988
Field management and other 132 399 342 633
Metallurgical development 89 419 172 1,691
Geologists and field staff 23 28 48 55
Total $ 303 $ 2,397 $ 1,016 $ 4,367

~~10.~~

~~INCOME TAXES~~

On December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act (the “Act”), which took effect on January 1, 2018. Some notable provisions of the Act include a reduction of the corporate income tax rate from 35% to 21%, 100% bonus depreciation for certain capital expenditures, and a change from a worldwide system with deferral to a territorial tax system, which includes a one-time toll charge on certain undistributed earnings of non-U.S. subsidiaries. The Company does not expect any material impacts of this new legislation on its consolidated financial statements.

~~11.~~

~~Fair Value Measurements~~

The Company measures the fair value of financial assets and liabilities based on USU.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.

~~NioCorp Developments Ltd.~~

~~Notes to the Condensed Consolidated Financial Statements~~

~~December 31, 2017~~

~~(expressed in thousands of U.S. dollars, unless otherwise stated) (unaudited)~~

Financial instruments including receivables, accounts payable and accrued liabilities, and related party loans are carried at amortized cost, which ~~Management~~management believes approximates fair value due to the short-term nature of these instruments.

The following ~~table presents~~tables present information about the assets and liabilities that are measured at fair value on a recurring basis as of ~~December 31, 2017~~September 30, 2022, and June 30, ~~2017,~~2022, respectively, and ~~indicates~~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:~~instrument.

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


	As of September 30, 2022
	Total		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	3,192	$	3,192	$	-	$	-
Equity securities		10		10		-		-
Total	$	3,202	$	3,202	$	-	$	-
Liabilities:
Warrant Liability	$	964	$	-	$	-	$	964


	As of December 31, 2017								As of June 30, 2022
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	80	$	80	$	—	$	—	$	5,280	$	5,280	$	-	$	-
Available-for-sale securities		17		17		—		—
Equity securities										10		10		-		-
Total	$	97	$	97	$	—	$	—	$	5,290	$	5,290	$	-	$	-
Liabilities:
Convertible debt	$	1,609	$	—	$	—	$	1,609
Derivative liability, convertible debt		82		—		—		82
Total	$	1,691	$	—	$	—	$	1,691

As of June 30, 2017
Total Level 1 Level 2 Level 3
Assets:
Cash and cash equivalents $ 238 $ 238 $ — $ —
Restricted cash 265 265 — —
Available-for-sale securities 23 23 — —
Total $ 526 $ 526 $ — $ —
Liabilities:
Convertible debt $ 3,465 $ — $ — $ 3,465
Derivative liability, convertible debt 82 — — 82
Total $ 3,547 $ — $ — $ 3,547

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

September 30, 2022

(expressed in thousands of U.S. dollars, except per share amounts or as otherwise stated) (unaudited)

The ~~Company measures the~~Lind III Convertible Security discussed in Note 7 was initially recorded at fair ~~market~~ value, ~~of the~~which represented a nonrecurring fair value measurement using a Level 3 ~~components using~~input. At September 30, 2022, the Black Scholes model and discounted cash flows, as appropriate. These models take into account Management’s best estimate of the conversion price of the stock, an estimate of the expected time to conversion, an estimate of the stock’s volatility, and the risk-free rate of return expected for an instrument with a term equal to the duration of the convertible debt.

~~The following table sets forth a reconciliation of changes in the~~estimated fair value of this instrument approximated carrying value given that the instrument was adjusted to fair value on September 25, 2022 and has a short remaining life until maturity.

13.

PROPOSED TRANSACTION

On September 25, 2022, the Company, GX Acquisition Corp. II, a Delaware corporation (“GXII”), and Big Red Merger Sub Ltd (“Merger Sub”), a Delaware corporation incorporated in September 2022, and a direct, wholly owned subsidiary of the Company, entered into a business combination agreement (the “Business Combination Agreement”). Pursuant to the Business Combination Agreement, as the result of a series of transactions, GXII will become a subsidiary of the Company (as successor by merger to the Company’s ~~convertible debt components classified as Level 3~~subsidiary, Elk Creek Resources Corporation, a Delaware corporation (“ECRC”)), with the pre-combination public shareholders of GXII receiving Common Shares based on a fixed exchange ratio of 1.11829212 (the “Exchange Ratio”) Common Shares for each GXII Class A common share held and not redeemed, and the GXII founders receiving shares in GXII (as successor by merger to ECRC) based on the ~~fair value hierarchy:~~

Balance, June 30, 2017 $ 3,547
Additional debt drawdown 1,000
Conversions to equity (3,030 )
Realized and unrealized gains 174
Balance, December 31, 2017 $ 1,691

~~NioCorp Developments Ltd.~~

~~Notes to the Condensed Consolidated Financial Statements~~

~~December 31, 2017~~

~~(expressed in thousands of U.S. dollars, unless otherwise stated) (unaudited)~~

~~12. Subsequent events~~

Exchange Ratio. Pursuant to ~~notice provided by Lind~~the Business Combination Agreement, after closing, the GXII founders will have the right to exchange such shares for Common Shares on a one-for-one basis under certain conditions. Pursuant to the Business Combination Agreement, the Company ~~of its election to advance an additional $2,500 in funding~~will also assume the obligations under the ~~Initial Convertible Security~~issued and outstanding GXII warrants, which will be converted into warrants exercisable into Common Shares following closing of the Transaction. The Business Combination Agreement contemplates that the Company will undertake a reverse stock split of the Common Shares at the time of close in connection with an expected cross-listing to the Nasdaq Stock Market (“Nasdaq”). In addition, pursuant to the Business Combination Agreement, post-closing, the Company’s Board will include two directors from pre-combination GXII. The transactions contemplated by the Business Combination Agreement and the ~~Lind~~ancillary agreements thereto are referred to collectively as the “Transaction.”

As currently structured, the Business Combination Agreement ~~(the “Second Tranche Increase”), Lind funded~~is expected to be accounted for as a recapitalization in accordance with U.S. GAAP. Under this method of accounting, GXII will be treated as the ~~full $2,500 Second Tranche Increase~~“acquired” company for financial reporting purposes. Accordingly, the transaction is treated as the equivalent of ~~February 7, 2018. Upon payment~~NioCorp issuing Common Shares for the net assets of ~~the full $2,500~~GXII, accompanied by a recapitalization. The net assets of GXII will be stated at historical cost, with no goodwill or other intangible assets recorded.

In addition, in ~~funding by Lind to the Company, the face amount of the Initial Convertible Security was increased by $3,000 ($2,500 in additional funding and $500 in implied interest amount). In~~ connection with the ~~funding,~~entry into the Business Combination Agreement, the Company ~~issued Common Share purchase warrants (the ‘Second Tranche Warrants”~~announced the signing of non-binding letters of intent (“LOIs”) for two separate financing packages with Yorkville. Subject to ~~Lind as follows:~~

Funding Date Face Value¹ Warrants Issued Issue Price² Warrant Expiry Date
January 30, 2018 $ 1,800 1,546,882 C$0.72 January 30, 2021
February 5, 2018 600 529,344 C$0.70 February 5, 2021
February 7, 2018 600 541,435 C$0.69 February 7, 2021

~~Includes implied interest.~~

~~The price to convert one warrant into one Common Share.~~

~~In addition,~~entering into definitive agreements, these financings could provide the ~~terms~~Company with access to up to an additional $81.0 million to help advance the Elk Creek Project. The financings contemplated by the LOIs include $16.0 million in convertible debentures that are expected to be funded at the closing of the ~~Lind Agreement, as amended, provide for additional funding of up to $2,000 as part of the second tranche,~~Transaction, and subject to certain ~~conditions, for total gross proceeds to~~limitations can be repaid by the Company ~~of up~~in either cash or Common Shares, and a standby equity purchase facility pursuant to ~~$4,500.~~

~~In January 2018, Mark Smith advanced an additional $125 in funding under~~which the ~~existing Credit Facility with~~Company will have the ~~Company. This funding is~~ability to require Yorkville, subject to the ~~same terms~~conditions set out in the definitive agreements, to purchase up to $65.0 million of its Common Shares.

The proposed Transaction is expected to close in the first calendar quarter of 2023, subject to the satisfaction or waiver of certain customary closing conditions contained in the Business Combination Agreement, including, among other things, (i) obtaining required approvals of the Transaction and ~~conditions~~related matters by the respective shareholders of NioCorp and GXII, (ii) the effectiveness of the registration statement on Form S-4 that the Company originally filed on November 7, 2022, (iii) receipt of approval for listing on Nasdaq of the NioCorp Common Shares to be issued in connection with the Transaction, (iv) receipt of approval for listing on Nasdaq of the NioCorp warrants to be issued in exchange for the GXII warrants that NioCorp has agreed to assume, (v) receipt of approval from the TSX with respect to the issuance and listing of the NioCorp Common Shares issuable in connection with the Transaction, (vi) that NioCorp and its subsidiaries (including GXII, as successor by merger to ECRC) will have at least $5.000001 million of net tangible assets upon the ~~prior drawdowns under~~consummation of the ~~Credit Facility~~Transaction, after giving effect to any redemptions by GXII public stockholders and after payment of underwriters’ fees or commissions, (vii) that, at closing, NioCorp and its subsidiaries (including GXII, as successor by merger to ECRC) will ~~be used for general corporate purposes.~~have received cash in an amount equal to or greater than $15.0 million,

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

September 30, 2022

(expressed in thousands of U.S. dollars, except per share amounts or as otherwise stated) (unaudited)

subject to certain adjustments, and (viii) the absence of any injunctions enjoining or prohibiting the consummation of the Business Combination Agreement. The proposed additional financings contemplated by the LOIs will also be subject to the approval of the TSX and the Company’s shareholders.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our unaudited condensed interim consolidated financial statements as of and for the three ~~and six~~ months ended ~~December 31, 2017~~September 30, 2022, and the related notes thereto, which have been prepared in accordance with generally accepted accounting principles in the United States (“USU.S. GAAP”). This discussion and analysis contains forward-looking statements and forward-looking information that involve risks, uncertainties, and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements and information as a result of many factors, including, but not limited to, those set forth elsewhere in this Quarterly Report on Form 10-Q. See “Note Regarding Forward-Looking Statements” below.

All currency amounts are stated in thousands of U.S. dollars unless noted otherwise.

As used in this report, unless the context otherwise indicates, references to “we,” “our,” the “Company,” “NioCorp,” and “us” refer to NioCorp Developments Ltd. and its subsidiaries, collectively.

Restatement of Previously Issued Financial Statements

This Management’s Discussion and Analysis of Financial Condition and Results of Operations has been amended and restated to give effect to the restatement of our unaudited interim condensed consolidated financial statements as of and for the three months ended September 30, 2022, as more fully described in Note 3 to the Condensed Consolidated Financial Statements entitled “Restatement.” For further detail regarding the Restatement, see “Explanatory Note” and Item 4, “Controls and Procedures.”

Note Regarding ~~Forward Looking~~Forward-Looking Statements

This Quarterly Report on Form 10-Q and the exhibits attached hereto contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and “forward-looking information” within the meaning of applicable Canadian securities legislation (collectively, “forward-looking statements”). Such forward-looking statements concern our anticipated results and developments in the operations of the Company in future periods, planned exploration activities, the adequacy of the Company’s financial resources, and other events or conditions that may occur in the future.

Forward-looking statements have been based upon our current business and operating plans, as approved by the Company’s Board of Directors, and may include statements regarding our cash and other funding requirements and timing and sources thereof; results of feasibility studies; the accuracy of mineral resource and reserve estimates and assumptions on which they are based; the results of economic assessments and exploration activities; and current market conditions and project development plans, and the Transaction (as defined below). The material assumptions used to develop the forward-looking statements and forward-looking information included in this Quarterly Report on Form 10-Q include: our expectations of mineral prices; our forecasts and expected cash flows; our projected capital and operating costs; accuracy of mineral resource estimates and resource modeling and feasibility study results; expectations regarding mining and metallurgical recoveries; timing and reliability of sampling and assay data; anticipated political and social conditions; expected national and local government policies, including legal reforms; successful advancement of the Company’s required permitting processes; and the ability to successfully raise additional capital; NioCorp and GXII (as defined below) being able to receive all required regulatory, third-party and shareholder approvals for the proposed Transaction; the amount of redemptions by GXII public stockholders; the execution of definitive agreements relating to the convertible debenture transaction and the standby equity purchase facility contemplated by the term sheets with Yorkville (as defined below); and other current estimates and assumptions regarding the proposed Transaction and its benefits.

Forward-looking statements are frequently, but not always, identified by words such as “expects,” “anticipates,” “believes,” “intends,” “estimates,” “potential,” “possible,” and similar expressions, or statements that events, conditions, or results “will,” “may,” “could,” or “should” (or the negative and grammatical variations of any of these terms) occur or be achieved. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, or future events or performance (often, but not always, using words or phrases such as “expects” or “does not expect,” “is expected,” “anticipates” or “does not

anticipate,” “plans,” “estimates,” or “intends,” or stating that certain actions, events, or results “may,” “could,” “would,” “might,” or “will” be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements. Such forward-looking statements reflect the Company’s current views with respect to future events and are subject to certain known and unknown risks, uncertainties, and assumptions. Many factors could cause actual results, performance, or achievements to be materially different from any future results, performance, or achievements that may be expressed or implied by such forward-looking statements, including, among others, risks related to the following:

Risks Related to Our Business:

●

risks related to our ability to operate as a going concern;

●

risks related to our requirement of significant additional capital;

●

risks related to our limited operating history;

●

~~risks related to changes in economic valuations of the Elk Creek Project, such as net present value calculations, changes, or disruptions in the securities markets;~~

●

risks related to our history of losses;

	●	risks related to the restatement of our consolidated financial statements as of and for the fiscal years ended June 30, 2022 and 2021 and the interim periods ended September 30, 2021, December 31, 2021 and March 31, 2022 and the impact of such restatement on our future financial statements and other financial measures;
	●	risks related to the material weakness in our internal control over financial reporting, our efforts to remediate such material weakness and the timing of remediation;
	●	risks related to cost increases for our exploration and, if warranted, development projects;

	●	risks related to ~~feasibility study results;~~a disruption in, or failure of, our information technology systems, including those related to cybersecurity;
	●	risks related to equipment and supply shortages;
	●	risks related to current and future offtake agreements, joint ventures, and partnerships;
	●	risks related to our ability to attract qualified management;
	●	risks related to the effects of the COVID-19 pandemic or other global health crises on our business plans, financial condition and liquidity; and
	●	risks related to the ability to enforce judgment against certain of our directors.

Risks Related to Mining and Exploration:

●

risks related to estimates of mineral resources and reserves;

●

risks related to mineral exploration and production activities;

●

risks related to our lack of mineral production from our properties;

●

risks related to the results of our metallurgical testing;

●

risks related to the price volatility of commodities;

	●	risks related to ~~estimates~~the establishment of a reserve and resource for Rare Earth Elements (“REEs” or “Rare Earths”) and the development of a viable recovery process for REEs;
	●	risks related to the estimation of mineral resources and mineral reserves;

●

risks related to changes in mineral resource and reserve estimates;

	●	risks related to ~~differences~~competition in ~~United States~~the mining industry;
	●	risks related to the management of the water balance at our Elk Creek Project;
	●	risks related to claims on the title to our properties;
	●	risks related to potential future litigation; and ~~Canadian reserve and resource reporting;~~

●

risks related to our ~~exploration activities being unsuccessful;~~lack of insurance covering all our operations.

Risks Related to Government Regulations:

●

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

●

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

	●	risks related to ~~proposed legislation~~changes in federal and/or state laws that may significantly affect the mining industry;
	●	risks related to the impacts of climate change, as well as actions taken or required by governments related to strengthening resilience in the face of potential impacts from climate change; and

●

risks related to land reclamation ~~requirements;~~requirements.

Risks Related to Our Debt:

●

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

●

~~risks related to competition in the mining industry;~~

●

risks related to the ~~difficulties~~extent to which our level of ~~handling the disposal of mine water at~~indebtedness may impair our ~~Elk Creek Project;~~ability to obtain additional financing.

Risks Related to Our Common Shares:

●

risks related to ~~equipment and supply shortages;~~

●

~~risks related to current and future joint ventures and partnerships;~~

●

~~risks related to our ability to attract qualified management;~~

●

~~risks related to the ability to enforce judgment against certain of our Directors;~~

●

~~risks related to currency fluctuations;~~

●

~~risks related to claims on the title to our properties;~~

●

~~risks related to surface access on our properties;~~

●

~~risks related to potential future litigation;~~

●

~~risks related to our lack of insurance covering all our operations;~~

●

~~risks related to our status~~qualifying as a “passive foreign investment company” under the ~~United States~~U.S. Internal Revenue Code of 1986, as ~~amended;~~amended (the “Code”); and

●

risks related to ~~the~~our Common Shares, including price volatility, lack of dividend payments, dilution and penny stock ~~rules; and~~rules.

Risks Related to the Proposed Transaction

●

risks related to ~~our debt.~~the amount of any redemptions by GXII public stockholders being greater than expected, which may reduce the cash in trust available to NioCorp upon the consummation of the Transaction;

●

risks related to the occurrence of any event, change or other circumstances that could give rise to the termination of the Business Combination Agreement (as defined below) and/or payment of the termination fees;

●

risks related to the outcome of any legal proceedings that may be instituted against NioCorp or GXII following announcement of the Business Combination Agreement and the Transaction;

●

risks related to the inability to complete the Transaction due to, among other things, the failure to obtain NioCorp shareholder approval or GXII stockholder approval or the execution of definitive agreements relating to the convertible debenture transaction and the standby equity purchase facility contemplated by the term sheets with Yorkville;

●

the risk that the announcement and consummation of the Transaction disrupts NioCorp’s current plans;

●

risks relating to the ability to recognize the anticipated benefits of the Transaction;

●

risks relating to unexpected costs related to the Transaction; and

●

the risks that the consummation of the Transaction is substantially delayed or does not occur, including prior to the date on which GXII is required to liquidate under the terms of its charter documents.

New Risks in this Form 10-Q/A:

●

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

●

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

Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein. This list is not exhaustive of the factors that may affect any of the Company’s forward-looking statements. Forward-looking statements are statements about the future and are inherently uncertain, and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties, and other factors, including without limitation those discussed under the heading “Risk Factors” of our Annual Report on Form ~~10-K~~10-K/A for the fiscal year ended June 30, ~~2017,~~2022, as well as other factors described elsewhere in this report and the Company’s other reports filed with the ~~SEC.~~Securities and Exchange Commission (“SEC”).

The Company’s forward-looking statements contained in this Quarterly Report on Form 10-Q are based on the beliefs, expectations, and opinions of ~~Management~~management as of the date of this report. The Company does not assume any obligation to update forward-looking statements if circumstances or ~~Management’s~~management’s beliefs, expectations, or opinions should change, except as required by law. For the reasons set forth above, investors should not attribute undue certainty to, or place undue reliance on, forward-looking statements.

~~National Instrument 43-101 Compliance~~Qualified Person

~~Scott Honan, M.Sc., SME-RM, a qualified person as defined by National Instrument 43-101 - Standards of Disclosure for Mineral Projects, has supervised the preparation of the~~All technical and scientific ~~and technical~~ information ~~that forms the basis for the Elk Creek Project disclosure~~included in this Quarterly Report on Form 10-Q derived from the June 2022 Elk Creek Project feasibility study prepared by qualified persons (within the meaning of both National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) and subpart 1300 of Regulation S-K (“S-K 1300”), as applicable) has been reviewed and approved ~~the disclosure in this Quarterly Report on Form 10-Q related thereto.~~by Scott Honan, M.Sc., SME-RM, NioCorp’s Chief Operating Officer. Mr. Honan is ~~not independent of the Company,~~a “Qualified Person” as hesuch term is the Vice President, Business Development. For additional information on the Elk Creek Project, including information relating to exploration, data verification, the mineral resource estimates and the mineral reserve estimates, see the Reviseddefined in NI 43-101 Technical Report (the “Revised Elk Creek Feasibility Study”), dated December 15, 2017, which is available under NioCorp’s profile on the Canadian Securities Administrators website at www.sedar.com (“SEDAR”).and S-K 1300.

Company Overview

NioCorp is developing the Elk Creek Project, located in southeast Nebraska. The Elk Creek Project is an advanced Niobium ~~(Nb)/~~(“Nb”), Scandium ~~(Sc)/~~(“Sc”) and Titanium ~~(Ti) exploration project.~~(“Ti”) development stage property. The Company is evaluating the potential to produce several Rare Earth byproducts from the Elk Creek Project. Niobium is used to produce various superalloys that are extensively used in high performance aircraft and jet turbines. It also is used in High-Strength, Low-Alloy (“HSLA”) steel, a stronger steel used in ~~automotive,~~automobiles, bridges, structural systems, buildings, pipelines, and other applications that generally increases strength and/or reduces ~~the~~ weight, ~~of those applications,~~ which can result in environmental benefits, including reduced fuel consumption and material usage and fewer air emissions. Scandium can be combined with aluminum to make ~~super-high-performance~~high-performance alloys with increased strength and improved corrosion resistance. Scandium also is a critical component of advanced solid oxide fuel cells, an environmentally preferred technology for high-reliability, distributed electricity generation. Titanium is a component of various superalloys and other applications that are used for aerospace applications, weapons systems, protective armor, medical implants and many others. It also is used in pigments for paper, paint, and plastics. Rare Earths are critical to electrification and decarbonization initiatives and can be used to manufacture the strongest permanent magnets commercially available.

Our primary business strategy is to advance our Elk Creek Project to commercial production. We are focused on obtaining additional funds to carry out our near-term planned work programs associated with securing the project financing necessary to complete mine development and construction of the Elk Creek Project. ~~With~~

Recent Corporate Events

On September 25, 2022, the ~~recent filing~~Company, GXII, and Merger Sub, entered into the Business Combination Agreement. Pursuant to the Business Combination Agreement, as the result of a series of transactions, GXII will become a subsidiary of the ~~Revised Elk Creek Feasibility Study (see “Elk Creek Project Update,” below)~~Company (as successor by merger to the Company’s subsidiary, ECRC), wewith the pre-combination public shareholders of GXII receiving Common Shares based on the Exchange Ratio of 1.11829212 Common Shares for each GXII Class A common share held and not redeemed, and the GXII founders receiving shares in GXII (as successor by merger to ECRC) based on the Exchange Ratio. Pursuant to the Business Combination Agreement, after closing, the GXII founders will have the right to exchange such shares for Common Shares on a one-for-one basis under certain conditions. Pursuant to the Business Combination Agreement, the Company will also assume the obligations under the issued and outstanding GXII warrants, which will be converted into warrants exercisable into Common Shares following closing of the Transaction. The Business Combination Agreement contemplates that the Company will undertake a reverse stock split of the Common Shares at the time of close in connection with an expected cross-listing to Nasdaq. In addition, pursuant to the Business Combination Agreement, post-closing, the Company’s Board will include two directors from pre-combination GXII. The transactions contemplated by the Business Combination Agreement and the ancillary agreements thereto are ~~currently working~~referred to ~~obtain~~collectively as the “Transaction.”

The business combination pursuant to the Business Combination Agreement will be accounted for as a recapitalization in accordance with U.S. GAAP. Under this method of accounting, GXII will be treated as the “acquired” company for financial reporting purposes. Accordingly, the transaction is treated as the equivalent of

NioCorp issuing Common Shares for the net assets of GXII, accompanied by a recapitalization. The net assets of GXII will be stated at historical cost, with no goodwill or other intangible assets recorded.

In addition, in connection with the entry into the Business Combination Agreement, the Company announced the signing of non-binding LOIs for two separate financing ~~necessary~~packages with Yorkville. Subject to entering into definitive agreements, these financings could provide the Company with access to up to an additional $81.0 million to help advance the Elk Creek Project. The financings contemplated by the LOIs include $16.0 million in convertible debentures that are expected to be funded at the closing of the Transaction, and subject to certain limitations can be repaid by the Company in either cash or Common Shares, and a standby equity purchase facility pursuant to which the Company will have the ability to require Yorkville, subject to the conditions set out in the definitive agreements, to purchase up to $65.0 million of its Common Shares.

The proposed Transaction is expected to close in the first calendar quarter of 2023, subject to the satisfaction or waiver of certain customary closing conditions contained in the Business Combination Agreement, including, among other things, (i) obtaining required approvals of the Transaction and related matters by the respective shareholders of NioCorp and GXII, (ii) the effectiveness of the registration statement on Form S-4 that the Company originally filed on November 7, 2022, (iii) receipt of approval for listing on Nasdaq of the NioCorp Common Shares to be issued in connection with the Transaction, (iv) receipt of approval for listing on Nasdaq of the NioCorp warrants to be issued in exchange for the GXII warrants that NioCorp has agreed to assume, (v) receipt of approval from the Toronto Stock Exchange (the “TSX”) with respect to the issuance and listing of the NioCorp Common Shares issuable in connection with the Transaction, (vi) that NioCorp and its subsidiaries (including GXII, as successor by merger to ECRC) will have at least $5.000001 million of net tangible assets upon the consummation of the Transaction, after giving effect to any redemptions by GXII public stockholders and after payment of underwriters’ fees or commissions, (vii) that, at closing, NioCorp and its subsidiaries (including GXII, as successor by merger to ECRC) will have received cash in an amount equal to or greater than $15.0 million, subject to certain adjustments, and (viii) the absence of any injunctions enjoining or prohibiting the consummation of the Business Combination Agreement. The proposed additional financings contemplated by the LOIs will also be subject to the approval of the TSX and the Company’s shareholders.

Final proceeds will depend upon redemption rates of current GXII shareholders at the consummation of the proposed Transaction. In connection with the closing of the Transaction, a significant number of GXII shareholders may exercise their redemption rights. See Part II, Item 1A, “Risk Factors—If the Transaction is consummated, the combined company may not realize all or any of the anticipated benefits expected as a result of the Transaction.”

Elk Creek Project ~~to construction and operations, as well as conducting permitting and other related activities at and~~Update

On September 6, 2022, the Company announced that it filed with the SEC a Technical Report Summary (“TRS”) based on the Company’s 2022 Feasibility Study for the Elk Creek Critical Minerals Project.

~~Emerging Growth Company Status~~

~~We qualify as an “emerging growth company” as defined in Section 101~~ The TRS was filed with the SEC to comply with Item 601(b)(96) and S-K 1300, which regulates disclosure of ~~the Jumpstart our Business Startups Act (“JOBS Act”) as we do not have more than $1.07 billion in annual gross revenue~~Mineral Resources and ~~did not have such amount as of June 30, 2017, this being the last day of our most recently completed fiscal year.~~

We may lose our status as an emerging growth company on the last day of our fiscal year during which (i) our annual gross revenue exceeds $1.07 billion or (ii) we issue more than $1.07 billion in non-convertible debt in a three-year period. We will lose our status as an emerging growth company if at any time we are deemed to be a large accelerated filer, as defined in Rule 405 under the Exchange Act. We will lose our status as an emerging growth company on the last day of our fiscal year following the fifth anniversary of the date of our first sale of Common SharesMineral Reserves. A companion Technical Report for Canadian purposes, pursuant to ~~an effective registration statement.~~National Instrument 43-101 (“NI 43-101”), was filed by NioCorp on SEDAR on June 28, 2022. The technical data and economic conclusions of these reports are substantively identical, with minor differences between the reports resulting only from the respective disclosure requirements of S-K 1300 and NI 43-101.

~~As an emerging growth company under~~On September 6, 2022, the ~~JOBS Act, we have elected~~Company announced that its demonstration-scale processing plant (the “demonstration plant”) in Quebec, Canada had commenced a three-tonne sample of representative ore from the Elk Creek Project. The demonstration plant project is intended to ~~opt out~~demonstrate that the Company can extract and separate rare earth elements from ore that NioCorp expects to mine from the Project site, subject to receipt of ~~the extended transition period~~necessary project financing, and that its simplified process for ~~complying with new or revised standards pursuant to Section 107(b) of the JOBS Act.~~ potentially producing niobium, scandium, and titanium is technically and economically feasible.

The ~~election is irrevocable.~~demonstration plant will process Elk Creek ore samples in three phases.

~~As an emerging growth company, we are exempt from Section 404(b) of the Sarbanes-Oxley Act of 2002 and Section 14A(a) and (b) of the Exchange Act. Such sections are described below:~~

●

~~Section 404(b)~~Phase 1 is designed to demonstrate a new approach to the initial processing of the ~~Sarbanes-Oxley Act~~ore that NioCorp expects to mine from the Project site, subject to receipt of ~~2002 requires a public company’s auditor to attest to,~~necessary project funding, including calcination, initial leaching, and ~~report on, Management’s assessment of its internal controls.~~rare earth extraction;

●

~~Sections 14A(a)~~Phase 2 is designed to demonstrate an improved process for the second stage of leaching along with Niobium and ~~(b) of the Exchange Act, implemented by Section 951 of the Dodd-Frank Wall Street Reform~~Titanium separation; and ~~Consumer Protection Act of 2010 (the “Dodd-Frank Act”) Act, require companies to hold shareholder advisory votes on executive compensation and golden parachute compensation.~~

●

Phase 3 is designed to demonstrate the technical viability of separating high-purity versions of several target magnetic rare earth products from Elk Creek ore samples, as well as confirming previously achieved high recovery rates for high-purity Scandium trioxide.

~~As long as we qualify as an emerging growth company, we~~The potential magnetic rare earth products include Neodymium-Praseodymium (“NdPr”) oxide, Dysprosium oxide, and Terbium oxide. NioCorp will ~~not be required~~utilize conventional solvent extraction (“SX”) technology to ~~comply with~~test a rare earth separation approach developed by NioCorp and L3 Process Innovation (“L3”).

On October 25, 2022, the ~~requirements~~Company announced that its demonstration plant had completed demonstrating its planned process for removing calcium and magnesium from ore obtained from the Elk Creek Project. This positive result, which is part of ~~Section 404(b)~~Phase I operations of the ~~Sarbanes-Oxley Act~~demonstration plant, is a key milestone in NioCorp’s proposed optimization of ~~2002~~its process flow sheet for the Project, which was designed by L3 and ~~Section 14A (a)~~NioCorp.

The well-known and ~~(b)~~time-tested process NioCorp is employing to remove calcium and magnesium carbonates from the ore using thermal treatment and leaching is part of the ~~Exchange Act.~~demonstration plant’s Phase I flowsheet. This step operated successfully, and the removed calcium and magnesium were produced at demonstration scale as a mixed calcium and magnesium carbonate. Removing carbonate minerals in this fashion is expected to reduce the size of the follow-on planned production steps and make them more efficient. Characterization of the calcium and magnesium carbonate from the completed demonstration plant production runs has demonstrated very low levels of impurities, and an overall 99% purity of the mixed calcium-magnesium carbonate. Phase I demonstration plant operations will continue with calcination and a ramp-up of leaching operations as testwork and assembly of Phase II and Phase III of the demonstration plant’s planned operations proceed in parallel.

Other Activities

~~Recent Corporate Events~~

~~Long-term~~Our long-term financing efforts continued during the quarter ended ~~December 31, 2017, with principal activities focused on outreach to and discussions with several potential sources of project funding, as well as completing~~September 30, 2022, including the ~~technical due diligence review (the “technical review”) of~~proposed Transaction, discussed above. As funds become available through the Company’s ~~recently released Revised Elk Creek Feasibility Study by RPM Global USA, Inc. on behalf of a potential debt financing syndicate. The technical review is projected~~fundraising efforts, we expect to ~~be completed in~~undertake the ~~quarter ending March 31, 2018. The technical review will provide an independent analysis~~following activities:

●

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

●

Continued evaluation of the potential to produce Rare Earth products;

●

Negotiation and completion of offtake agreements for the remaining uncommitted production from the project;

●

Negotiation and opinion on the technical content of the Revised Elk Creek Feasibility Study, and will be provided to financial institutions expected to form debt and/or equity syndicates that will help finance the Elk Creek Project.

~~Upon~~ completion of ~~the technical review, the following steps remain in our financing plan:~~

●

~~Completion of due diligence on the Elk Creek Project’s financial model;~~

●

~~Completion of technical and environmental due diligence;~~

●

~~Completion of additional independent market reviews for Sc and Nb;~~

●

~~Completion of legal due diligence;~~

●

~~Additional “road show” style presentations to potential debt and equity investors;~~

●

~~Negotiation and execution of specific debt and equity financing assistance, along with necessary regulatory approvals for such financings.~~

Pursuant to notice provided by Lind to the Company of its election to advance an additional $2,500 in funding under the Initial Convertible Security and the Lind Agreement (the “Second Tranche Increase”), Lind funded the full $2,500 Second Tranche Increase as of February 7, 2018. In connection with the funding, the Company issued Common Share purchase warrants (the ‘Second Tranche Warrants”) to Lind, as follows:

Funding Date Face Value¹ Warrants Issued Issue Price² Warrant Expiry Date
January 30, 2018 $ 1,800 1,546,882 C$0.72 January 30, 2021
February 5, 2018 600 529,344 C$0.70 February 5, 2021

~~February 7, 2018~~

~~600~~

~~541,435~~

~~C$0.69~~

~~February 7, 2021~~

¹~~Includes implied interest.~~

²~~The price to convert one warrant into one Common Share.~~

In addition, the terms of the Lind Agreement, as amended, provide for additional funding of up to $2,000 as part of the second tranche, subject to certain conditions, for total gross proceeds to the Company of up to $4,500.

~~Elk Creek Project Update~~

On June 30, 2017, we announced the results of the Elk Creek Feasibility Study, and the related technical report was completed and filed in Canada on SEDAR on August 10, 2017 (the “August 2017 Feasibility Study”). In connection with a review by the Ontario Securities Commission (“OSC”), on December 15, 2017, the Company filed the Revised Elk Creek Feasibility Study. The Revised Elk Creek Feasibility Study, which is available for download on SEDAR and on the Company’s website at www.niocorp.com, contains no changes to any previously reported numbers or forecasted economic returns of the Elk Creek Project from those contained in the August 2017 Feasibility Study.

At the OSC’s request, the Revised Elk Creek Feasibility Study provides (1) additional information in Section 19.1.3 on the growth forecast for global scandium markets provided by an independent scandium market expert (OnG Commodities LLC and Dr. Andrew Matheson) and relied upon by the Company in its August 2017 Feasibility Study; (2) an analysis in Section 22.4 showing Net Present Value and Internal Rate of Return sensitivities of the Elk Creek Project at +/- 30% of the August 2017 Feasibility Study’s assumed product pricing, capital expenditures, and operating costs (vs. +/- 20% originally presented in the August 2017 Feasibility Study); (3) disclosure in Section 3 of the reliance on OnG Commodities LLC and Dr. Matheson; (4) the removal in Section 24 of certain disclosure regarding the Company’s relationship with Dr. Matheson; and (5) inclusion in Section 25 of certain risk factors.

The Elk Creek Project is planned as an underground mining operation using a long-hole stoping mining method and paste backfill, operating with a processing rate of 2,760 tonnes per day. Expected total production over the 32-year mine life includes 143,824 tonnes of payable niobium, 3,237 tonnes of scandium trioxide (Sc₂O₃~~), and 359,128 tonnes of titanium dioxide (TiO~~₂). Estimated up-front direct capital costs are $705 million, in addition to indirect costs of $189 million, pre-production capital costs of $85 million, an overall contingency of $109 million, and pre-production net revenue credit of $79 million.

~~We continued to advance Elk Creek Project-related work during the quarter. Primary activities included:~~

●

Completed the Revised Elk Creek Feasibility Study written report and subsequent filing on SEDAR, as noted above, as well as completion of the underlying detailed technical report volumes, which are not public documents and are not filed on SEDAR;

●

Completed the preliminary air monitoring activities, positioning us to complete the development of an air construction permit with the Nebraska Department of Environmental Quality, which we expect to file in calendar 2018;

●

Completed step three of the nine-step Army Corps of Engineers Section 408 permitting process, with fieldwork completed in October 2017 and a subsequent submission of design information in calendar 2018;

	●	~~Initiated the competitive process to identify and select~~ engineering, procurement and construction ~~firms~~agreements;
	●	Completion of the final detailed engineering for ~~both surface and underground;~~

	●	Executed a natural gas supply agreement with Rockies Express Pipeline LLC in November 2017, and continued discussions with drilling companies, energy providers and other related businesses required for initiationthe underground portion of ~~water management and construction activities at~~ the Elk Creek Project;
	●	Initiation and completion of the final detailed engineering for surface project facilities;

	●	~~Completed a successful test production~~Construction of ~~aluminum-scandium ingots. These ingots form~~natural gas and electrical infrastructure under existing agreements to serve the ~~basis~~Elk Creek Project site;
	●	Completion of water supply agreements and related infrastructure to deliver fresh water to the project site;
	●	Initiation of revised mine groundwater investigation and control activities;
	●	Land clearing operations intended to prepare property owned by ECRC for the ~~potential commercialization~~commencement of ~~new aluminum-scandium alloys~~project construction,
	●	Initiation of long-lead equipment procurement activities; and ~~were produced by IBC Advanced Alloys, Inc., through our previously disclosed joint development agreement.~~
	●	Operation of a small-scale demonstration plant to address process recommendations contained in the NI 43-101 technical report for the Elk Creek Project filed on SEDAR on May 29, 2019 and to quantify REE metallurgical performance.

Financial and Operating Results

~~The Company continues to expense all expenditures when incurred, except for equipment, which is capitalized.~~ The Company has no revenues from mining operations. Operating expenses incurred related primarily to performing exploration activities, as well as the activities necessary to support corporate and shareholder duties, and are detailed in the following table.

For the three
months ended
December 31, For the six
months ended
December 31,
2017 2016 2017 2016
Operating expenses:
Employee-related costs $ 751 $ 459 $ 1,399 $ 962
Professional fees 118 279 393 612
Exploration expenditures 303 2,397 1,016 4,367
Other operating expenses 391 215 687 389
Total operating expenses 1,563 3,350 3,495 6,330

Change in financial instrument fair value 274 (39 ) 297 (335 )
Foreign exchange (gain) loss 36 160 (201 ) 193
Interest expense 91 71 175 140
Gain (loss) on available for sale securities (4 ) 5 7 (6 )
Income tax expense — — — —
Net Loss $ 1,960 $ 3,547 $ 3,773 $ 6,322

~~Six~~

	For the Three Months Ended September 30,
	2022			2021
Operating expenses	(As restated)¹
Employee related costs	$	293		$	319
Professional fees		164			90
Exploration expenditures		1,288			621
Other operating expenses		337			226
Total operating expenses		2,082			1,256

Change in fair value of warrant liability		(257)			-
Loss on debt extinguishment		1,622			-
Foreign exchange loss		173			225
Interest expense		258			605
Other (gain) loss on equity securities		(1	)		2
Income tax benefit		-			-
Net loss	$	3,877		$	2,088

See Note 3, “Restatement,” to the Condensed Consolidated Financial Statements for a discussion regarding the impacts of the Restatement.

Three months ended ~~December 31, 2017~~September 30, 2022 compared to ~~six~~three months ended ~~December 31, 2016~~September 30, 2021

Significant items affecting operating expenses are noted below:

~~Employee related~~Employee-related costs~~increased~~decreased in 2022 as compared to 2021 due to timing of the retirement of our general counsel in the second quarter of fiscal 2021.

Professional feesincreased ~~share-based compensation costs reflecting~~in 2022 as compared to 2021, primarily due to the timing of ~~option issuances and~~legal services related to the ~~corresponding vesting periods, as well as the number of options granted and associated fair value calculations.~~

~~Professional fees~~~~include legal and accounting services. Overall, these fees decreased, reflecting the timing of registration statements~~TRS filed with the SEC ~~and ongoing compliance efforts.~~on September 6, 2022.

Exploration expenditures~~decreased $3.4 million, reflecting~~increased in 2022 as compared to 2021, primarily due to the timing of ~~expenditures at the Elk Creek Project~~demonstration plant development and start-up costs incurred in 2022, as ~~discussed above under “~~~~Elk Creek Project Update~~~~.” 2017 expenditures primarily~~well as costs related to the ~~final wrap-up~~completion and ~~issuance~~filing of the ~~August 2017 Feasibility Study and~~TRS filed with the Revised Elk Creek Feasibility Study and ongoing permitting and project advancement activities, while 2016 costs were primarily directed towards engineering and metallurgical bench and pilot plant test work in support of our continuing feasibility study work.SEC on September 6, 2022.

Other operating expensesinclude investor relations, general office expenditures, equity offering and proxy expenditures, board-related expenditures and other miscellaneous costs. These costs increased in 2022 as compared to 2021 primarily due to ~~the timing of option issuances~~increased financial advisory fees and ~~the corresponding vesting periods, as well as the number of options granted and~~investor relations fees associated ~~fair value calculations for Board members.~~with our ongoing financing efforts.

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

~~Change in financial instrument fair value~~Loss on debt extinguishment for 2022 represents ~~non-cash changes in~~ the ~~market value of~~loss incurred under Accounting Standards Codification (“ASC”) Topic 470, Debt, related to the convertible security (the “Lind III Convertible Security”) issued to Lind Global Asset Management III, LLC (“Lind”) pursuant to the Convertible Security ~~which is carried at~~Funding Agreement, dated February 26, 2021, as amended by Amendment #1 to the Convertible Security Funding Agreement, dated December 2, 2021, between the Company and Lind, as discussed in Note 3 to the interim condensed consolidated financial statements.

Change in fair value ~~as well as changes~~of warrant liability for 2022 represents the decrease in the ~~market value of~~liability associated with the ~~derivative liability component of the Convertible Notes, and the fair market value of Warrants issued under the Convertible Security. The 2017 loss includes the value of Warrants~~warrants that may be issued to Lind ~~in connection with the Convertible Security Increase, while the 2016 gain primarily represents the impact of declining Common Share prices and trading volumes~~if on the ~~underlying valuation~~date that is 18 months following consummation of the ~~Convertible Security.~~Transaction, the closing trading price of the Common Shares on the TSX or such other stock exchange on which such shares may then be listed, is less than C$10.00, subject to adjustments, pursuant to the Waiver and Consent Agreement, dated September 25, 2022 (the “Lind Consent”), between the Company and Lind, as discussed in Note 3.

Foreign exchange ~~(gain)~~ loss is primarily due to changes in the ~~United States~~U.S. dollar ~~(“USD”)~~ against the Canadian dollar ~~(“C$”),~~ and reflects the timing of foreign currency transactions, primarily U.S. dollar-based related party loans, and subsequent changes in exchange rates. The ~~impact~~decline in ~~2017 primarily relates~~foreign exchange loss during 2022 as compared 2021 is due to ~~changing~~a declining U.S. dollar-based debt balance, partially offset by increased foreign ~~currency~~exchange rates ~~as applied to the USD-denominated convertible debt instruments and related party debt, which are recorded on the Canadian parent company books~~ in ~~C$.~~2022.

~~Three months ended December 31, 2017 compared to three months ended December 31, 2016~~

~~Overall, the increase~~Interest expense decreased in ~~net loss for the quarter ended December 31, 2017~~2022 as compared to 2021 due to the ~~same period in 2016 is~~impacts of conversions on the ~~result~~outstanding balance of ~~primarily~~ the same factors underlying the six-month changes, as discussed above, with respect to employee-related costs, professional fees, exploration expenditures, change in financial instrument fair value, and foreign exchange (gain) loss.Lind III Convertible Security.

Liquidity and Capital Resources

We have no revenue generating operations from which we can internally generate funds. To date, our ongoing operations have been financed by the sale of our equity securities by way of private placements, convertible securities issuances, ~~and~~ the exercise of incentive stock options and share purchase warrants. We believe that we will be able to secure additional private placement financings in the future, although we cannot predict the size or pricing of any such financings. In addition, we may raise funds through the sale of interests in our mineral properties, although current market conditions have substantially reduced the number of potential buyers/acquirers of any such interest(s).warrants, and related party loans.

As of ~~December 31, 2017,~~September 30, 2022, the Company had cash of ~~$0.1~~$3.2 million and a working capital deficit of ~~$4.4~~$3.3 million, compared to cash of ~~$0.2~~$5.3 million and working capital ~~deficit~~surplus of ~~$5.8~~$0.6 million on June 30, 2017. This change in working capital is the result of cash inflows from financing initiatives and the continued conversion of the Convertible Security. These positive impacts to the working capital deficit were partially offset by year-to-date operating expenditures and the transfer of our convertible notes obligation from long term to current liabilities. As noted above under “~~Recent Corporate Events”~~, as of February 7, 2018, Lind had invested the full $2.5 million Second Tranche Increase. Subject to certain conditions, Lind may provide additional funding for up to $2 million as part of the Second Tranche funding.2022.

We expect that the Company will operate at a loss for the foreseeable future. The Company’s current planned ~~operational~~cash needs are approximately ~~$3.1~~$16.0 million until June 30, ~~2018, net of the recent investment by Lind and assuming the Company’s exercise of its right to call an additional $1.0 million under the Lind Agreement.~~2023. In addition to outstanding accounts payable and short-term liabilities, our average monthly planned expenditures are approximately ~~$379~~$1,125 per month where approximately ~~$289~~$475 is for ~~administrative purposes, including~~corporate overhead and estimated costs related to securing financing necessary for advancement of the Elk Creek Project. Approximately ~~$89~~$650 per month is planned for expenditures relating to the advancement of Elk Creek ~~Project.~~Project by NioCorp’s wholly owned subsidiary, ECRC. The Company’s ability to continue operations and fund our current work plan is dependent on ~~Management’s~~management’s ability to secure additional financing.

The Company anticipates that it ~~may need to raise $5.0 to 6.0 million~~does not have sufficient cash to continue ~~planned~~to fund basic operations for the next twelve months, ~~focused on~~and additional funds totaling $12.0 million to $13.5 million are likely to be necessary to continue advancing the project in the areas of financing, ~~the Elk Creek Resources Project.~~permitting, and detailed engineering. Management is actively pursuing such additional sources of debt and equity 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.

Elk Creek ~~Property~~property lease commitments are ~~$34~~$6 until June 30, ~~2018.~~2023. To maintain ~~its~~our currently held properties and fund ~~its~~our currently anticipated general and administrative costs and planned exploration and development activities at the Elk Creek Project for the fiscal year ending June 30, ~~2018,~~2023, the Company will likely require additional financing during the current fiscal year. Should such financing not be available in that ~~time-frame,~~timeframe, we will be required to reduce our activities and will not be able to carry out all our presently planned activities at the Elk Creek Project.

On September 25, 2022, the Company, GXII and Merger Sub entered into the Business Combination Agreement. The NioCorp Board considered a number of factors as generally supporting its decision to enter into the Business Combination Agreement, including, but not limited to, the following material factors:

●

Anticipated Acceleration of Financing Efforts. The Transaction has the potential to (1) provide NioCorp with up to $285.0 million in net cash proceeds at the consummation of the Transaction, depending upon the amount of redemptions by GXII public stockholders, and up to an additional $81.0 million over the next three years (as further discussed below), depending on the consummation of other additional financing arrangements that NioCorp and GXII intend to pursue prior to and following the expected closing of the Transaction and (2) significantly accelerate NioCorp’s efforts to obtain the required Elk Creek Project financing by increasing exposure to institutional investors looking to make strategic investments in critical minerals plays that are crucial to the world’s clean energy transition;

●

Non-Binding Yorkville Term Sheets. The signing of non-binding LOIs for two separate financing packages with Yorkville, where, subject to entering into definitive agreements, such financings could provide NioCorp with access to up to an additional $81.0 million to help advance the Elk Creek Project. The financings contemplated by the LOIs include $16.0 million in convertible debentures that are expected to be funded at the closing of the Transaction, and subject to certain limitations can be repaid by NioCorp in either cash or NioCorp Common Shares, and a standby equity purchase facility pursuant to which NioCorp will have the ability to require Yorkville, subject to the conditions set out in the definitive agreements, to purchase up to $65.0 million of NioCorp Common Shares;

●

Anticipated Benefits of Nasdaq Listing. A listing on Nasdaq, which is an established national exchange in the United States, would provide broader access to capital and financing alternatives and would otherwise enhance NioCorp’s public profile; and

●

Minimum Cash Condition. The consummation of the Transaction is subject to the satisfaction or waiver of certain closing conditions contained in the Business Combination Agreement, including, among other things, that, at the closing, NioCorp and its subsidiaries (including GXII, as successor by merger to ECRC) will have received cash in an amount equal to or greater than $15.0 million, subject to certain adjustments.

~~Other than~~The NioCorp Board also considered a variety of uncertainties and risks and other potentially negative factors concerning the ~~Lind Second Tranche funding arrangements, discussed~~Transaction, including, but not limited to, the following:

●

Risks of Failure to Complete the Transaction. The risks that:

the Transaction may not be completed despite the parties’ efforts, including the possibility that the conditions to the parties’ obligations to complete the Transaction (which include certain conditions that are not within the control of the parties to the Business Combination Agreement) may not be satisfied or that completion of the Transaction may be unduly delayed, and any resulting adverse impacts on NioCorp, its business and the trading price of NioCorp Common Shares;

the circumstances under which the Business Combination Agreement could be terminated and the impact of such termination, including the requirement that NioCorp must pay GXII (1) a Base Termination Fee of $15.0 million if it terminates the Business Combination Agreement in order to enter into an agreement providing for a Superior Proposal (as defined in the Business Combination Agreement), for a change of recommendation of the NioCorp Board, or a material breach of certain of NioCorp’s covenants relating to soliciting acquisition proposals or (2) an Intentional Breach Termination Fee of $25.0 million if GXII terminates the Business Combination Agreement as a result of a willful and material breach by NioCorp or as a result of NioCorp’s failure to consummate the closing of the Transaction within five business days after all the conditions to closing have been satisfied;

if GXII is entitled to the Base Termination Fee or the Intentional Breach Termination Fee upon termination of the Business Combination Agreement, NioCorp is also required to pay all documented and reasonable out-of-pocket expenses paid or payable by GXII and its sponsor in connection with the Business Combination Agreement and the Transaction, not to exceed $5.0 million; and

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

●

Risks Relating to the Benefits of the Transaction. The risks of:

not realizing all the anticipated benefits expected as a result of the Transaction, including the anticipated acceleration of its financing efforts and the benefits of the expected Nasdaq listing,

and that general economic and market conditions outside the control of the parties to the Business Combination Agreement could deteriorate, any of which could result in NioCorp being unable to achieve the financing necessary to advance, complete construction and commence operation of the Elk Creek Project; and

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

●

Risks Relating to the Financing. The absence of committed financing and that the parties may not be able to negotiate definitive documentation related to the Yorkville LOIs or may not otherwise be able to consummate the financing transactions contemplated thereby, which could cause NioCorp to encounter difficulties in completing the Transaction with financing terms as favorable as anticipated or at all; and

●

Restrictions on the Conduct of Business. The Business Combination Agreement places certain restrictions on the conduct of the NioCorp business prior to the consummation of the Transaction and other alternatives reasonably available to NioCorp if it did not pursue the Transaction, including continuing to pursue alternative financing arrangements.

Except as set forth above, ~~under “~~~~Recent Corporate Events~~”, we currently have no further funding commitments or arrangements for additional financing at this time, ~~(other~~other than the potential exercise of options and ~~Warrants)~~warrants, and there is no assurance that we will be able to obtain any such additional financing on acceptable terms, if at all. ~~There~~Notwithstanding the restrictions set forth in the Business Combination Agreement, there is significant uncertainty that we ~~will~~would be able to secure any additional financing in the current equity or debt markets. The quantity of funds to be raised and the terms of any proposed equity or debt financing that may be undertaken will be negotiated by ~~Management~~management as opportunities to raise funds arise. ~~Management intends~~In addition to the proposed Transaction and subject to receipt of the consent of GXII as may be required pursuant to the Business Combination Agreement, management may pursue funding sources of both debt and equity financing, including but not limited to the issuance of equity securities in the form of Common Shares, Warrants, subscription receipts, or any combination thereof in ~~Units~~units of the Company pursuant to private placements to accredited investors or pursuant to equity lines of credit or public offerings in the form of underwritten/brokered offerings, at-the-market offerings, registered direct offerings, or other forms of equity financing and public or private issuances of debt securities including secured and unsecured convertible debt instruments or secured debt project financing. Management does not currently know the terms pursuant to which such financings may be completed in the future, but any such financings will be negotiated at ~~arms’-length.~~arm’s length. Future financings involving the issuance of equity securities or derivatives thereof will likely be completed at a discount to the then-current market price of the Company’s securities and will likely be dilutive to current shareholders. In addition, we could raise funds through the sale of interests in our mineral properties, although current market conditions and the impacts of the COVID-19 pandemic and other recent worldwide events have substantially reduced the number of potential buyers/acquirers of any such interests. However, we cannot provide any assurances that we will be able to be successful in raising such funds.

~~The~~Based on the conditions described within, management has concluded and the audit opinion and notes that accompany our financial statements for the year ended June 30, ~~2017~~2022, disclose ~~a “going concern” qualification and disclosures~~that substantial doubt exists as to our ability to continue in business. The financial statements included in this Quarterly Report on Form 10-Q have been prepared under the assumption that we will continue as a going concern. We are ~~an exploration~~a development stage ~~company~~issuer and we have incurred losses since our inception. We domay not have sufficient cash to fund normal operations and meet debt obligations for the next 12twelve months without deferring payment on certain current liabilities and raising additional funds. The COVID-19 pandemic and other recent worldwide events have created general global economic uncertainty as well as uncertainty in capital markets, supply chain disruptions, increased interest rates, and the potential for geographic recessions. During fiscal year 2022 and continuing into fiscal year 2023, these events continued to create uncertainty with respect to overall project funding and timelines. We believe that the going concern ~~condition~~uncertainty cannot be ~~removed~~alleviated with confidence until the Company has entered into a business climate where funding of its planned ongoing operating activities is secured. Therefore, these factors raise substantial doubt as to our ability to continue as a going concern.

We have no exposure to any asset-backed commercial paper. Other than cash held by our subsidiaries for their immediate operating needs in Colorado and Nebraska, all of our cash reserves are on deposit with major United States and Canadian chartered banks. We do not believe that the credit, liquidity, or market risks with respect thereto have increased as a result of the current market conditions. However, in order to achieve greater security for the preservation of our capital, we have, of necessity, been required to accept lower rates of interest, which has also lowered our potential interest income.

Operating Activities

During the ~~six~~three months ended ~~December 31, 2017,~~September 30, 2022, the Company’s operating activities consumed ~~$2.6~~$1.7 million of cash ~~(2016: $5.1~~(2021: $1.6 million). The cash used in operating activities for ~~2017~~the three months ended September 30, 2022, reflects the Company’s funding of losses of ~~$3.8~~$3.9 million, partially offset by ~~share-based compensation charges~~the loss on debt extinguishment, accretion of convertible debt and other non-cash transactions. Overall, ~~2017~~ operational outflows ~~declined~~during the three months ended September 30, 2022, increased slightly from ~~2016~~the corresponding period of 2021 due to an increase in exploration-related spending at the ~~timing of the work efforts on the August 2017 Feasibility Study and the Revised~~ Elk Creek ~~Feasibility Study, offset by changes in accounts payable and accrued liabilities.~~Project. Going forward, the Company’s working capital requirements are expected to increase substantially in connection with the development of the Elk Creek Project.

Financing Activities

Financing inflows were ~~$2.1 million~~nil during the ~~six~~three months ended ~~December 31, 2017~~September 30, 2022, as compared to ~~$1.7~~$0.3 million during the corresponding period in ~~2016,~~2021, primarily reflecting the timing of ~~convertible debt instrument~~warrant and ~~private placement issuances initiated~~option exercises during ~~the comparative periods, as well as financing provided by NioCorp’s President, CEO and Executive Chairman, Mark Smith.~~2021.

Cash Flow Considerations

The Company has historically relied upon debt and equity financings ~~and, to a lesser degree, debt financings, to satisfy its capital requirements and will continue to depend heavily upon equity capital~~ to finance its activities. The Company may pursue additional debt and/or equity financing in the medium ~~term if it is able to procure such financing on terms more favorable than available equity financing;~~term; however, there can be no assurance the Company will be able to obtain any required financing in the future on acceptable terms.

The Company has limited financial resources compared to its proposed expenditures, no source of operating income, and no assurance that additional funding will be available to it for current or future projects, although the Company has been successful in the past in financing its activities through the sale of equity securities.

The ability of the Company to arrange additional financing in the future will depend, in part, on the prevailing capital market conditions, including the impacts of the COVID-19 pandemic on the timing and availability of funding, and its success in developing the Elk Creek Project. Any quoted market for the Common Shares may be subject to market trends generally, notwithstanding any potential success of the Company in creating revenue, cash flows, or earnings, and any depression of the trading price of the Common Shares could impact its ability to obtain equity financing on acceptable terms.

Historically, the Company has used net proceeds from issuances of Common Shares to provide sufficient funds to meet its near-term exploration and development plans and other contractual obligations when due. However, ~~further~~ development and construction of the Elk Creek Project will require substantial additional capital resources. This includes near-term funding and, ultimately, funding for Elk Creek Project construction and other costs. See “Liquidity and Capital Resources” above for the Company’s discussion of arrangements related to possible future ~~financing(s).~~financings.

~~Contractual Obligations~~Critical Accounting Estimates

~~Other than~~Except as ~~described~~noted below, there have been no material changes to our contractual obligations discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the heading “Tabular Disclosure of Contractual Obligations” as of June 30, 2017, in our Annual Report on Form 10-K for the fiscal year ended June 30, 2017. During the six-month period ended December 31, 2017, debt obligations decreased $3.0 million due to conversions under the Lind Agreement, partially offset by the $1.2 million Convertible Security Increase. There were no other substantial changes to contractual obligations.

~~Off Balance Sheet Arrangements~~

~~The Company has no off balance sheet arrangements.~~

~~Critical Accounting Policies~~

~~There~~ have been no material changes in our critical accounting ~~policies~~estimates discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the heading “Critical Accounting ~~Policies”~~Estimates and Recent Accounting Pronouncements” as of June 30, ~~2017,~~2022, in our Annual Report on Form ~~10-K~~10-K/A for the fiscal year ended June 30, ~~2017.~~2022.

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 Topic 815, Derivatives and Hedging, (“ASC 815”) to assist in the determination of whether the warrants should be classified as liabilities or equity. The fair value of warrants is estimated using Black Scholes modeling or Monte Carlo modeling, depending on the settlement features embedded in the warrant. Inputs under both models include inputs such as NioCorp’s Common Share price, the risk-free interest rate, the expected term, the volatility, and the dividend rate. Warrants that are determined to require liability classifications are measured at fair value upon issuance and are subsequently remeasured to their then fair value at each subsequent reporting period with changes in fair value recorded in current earnings. Warrants that are determined to require equity classifications are measured at fair value upon issuance and are not subsequently remeasured unless they are required to be reclassified.

Certain U.S. Federal Income Tax Considerations

~~The Company has been~~NioCorp believes that it qualified as a “passive foreign investment company” (“PFIC”) as defined under Section 1297 of the ~~U.S. Internal Revenue~~ Code, ~~of 1986, as amended,~~ in recent years, including its taxable years ended June 30, 2022 and ~~expects to continue~~June 30, 2021. However, based on the current composition of its income and assets, as well as current business plans and financial expectations, NioCorp does not currently expect to be treated as a PFIC infor its taxable year or foreseeable future taxable years. However, this conclusion is a factual determination that must be made annually at the ~~future.~~close of each taxable year and, thus, is subject to change. In addition, it is possible notwithstanding NioCorp’s conclusion that the IRS could assert, and that a court could sustain, a determination that NioCorp is a PFIC. Accordingly, there can be no assurance that NioCorp (or any of its subsidiaries) will not be treated as a PFIC for any taxable year. Current and prospective United States shareholders should consult their tax advisors as to the tax consequences of PFIC classification and the U.S. federal tax treatment of PFICs. Additional information on this matter is included in the “Risk Factors” section of the

Company’s Annual Report on Form ~~10-K~~10-K/A for the fiscal year ended June 30, ~~2017,~~2022, under the heading “Risks Related to the Common Shares.”

Other

The Company has one class of shares, being Common Shares. A summary of outstanding shares, share options, warrants, and convertible debt option as of November 14, 2022, is set out below, on a fully-diluted basis.

	Common Shares Outstanding (fully diluted)
Common Shares	27,945,088
Stock options¹	1,436,400
Warrants¹	1,851,625
Convertible Debt²	115,520

¹	Each exercisable into one Common Share.

²	Represents Common Shares issuable on conversion of aggregate outstanding principal amounts of $0.8 million of convertible debt as of November 14, 2022, assuming a market price per Common Share of $8.10 on that date.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest rate risk

The Company’s exposure to changes in market interest rates, relates primarily to the Company’s earned interest income on cash deposits and short-term investments. The Company maintains a balance between the liquidity of cash assets and the interest rate return thereon. The carrying amount of financial assets, net of any provisions for losses, represents the Company’s maximum exposure to credit risk.

Foreign currency exchange risk

The ~~company~~Company incurs expenditures in both ~~USD~~U.S. dollars and ~~C$.~~Canadian dollars. Canadian dollar expenditures are primarily related to ~~metallurgical-related exploration expenses, as well as~~ certain Common Share-related costs and corporate professional services. As a result, currency exchange fluctuations may impact the costs of our operating activities. To reduce this risk, we maintain sufficient cash balances in C$Canadian dollars to fund expected near-term expenditures.

Commodity price risk

The Company is exposed to commodity price risk related to the elements associated with the Elk Creek Project. A significant decrease in the global demand for these elements may have a material adverse effect on our business. The Elk Creek Project is not in production, and the Company does not currently hold any commodity derivative positions.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures (Restated)

At the end of the period covered by this Quarterly Report on Form 10-Q for the quarter ended ~~December 31, 2017,~~September 30, 2022, an evaluation was carried out under the supervision of and with the participation of our ~~Management,~~management, including the CEO and the Chief Financial Officer (“CFO”), of the effectiveness of the design and operations of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act). Based on that evaluation, the CEO and the CFO concluded at the time that the Original Form 10-Q was filed that, as of the end of the period covered by this Quarterly Report, our disclosure

controls and procedures were not effective due to the material weakness in internal control over financial reporting relating to the Company’s controls over accounting for non-routine transactions described below.

Subsequent to that evaluation, the Company identified an additional error, requiring the restatement of the Company’s condensed consolidated financial statements as of and for the three months ended September 30, 2022, which was partially caused by the same material weakness in internal control over financial reporting that management had concluded existed as of September 30, 2022 at the time the Original Form 10-Q was filed. In addition, subsequent to the evaluation of the effectiveness of the design and operations of our disclosure controls and procedures conducted at the end of the period covered by this Quarterly Report, management concluded that two other material weaknesses in internal control over financial reporting existed as of September 30, 2022, as described below. As a result, the CEO and CFO have ~~concluded~~reaffirmed their conclusion that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were not effective due to the material weaknesses in ~~ensuring~~internal control over financial reporting described below.

The Company’s disclosure controls and procedures have been designed to ensure that: (i) information required to be disclosed by us in reports that we file or submit to the SEC under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in applicable rules and forms and (ii) material information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to ~~our Management,~~management, including ~~our~~the CEO and the CFO, as appropriate, to allow for accurate and timely decisions regarding required disclosure.

~~Our~~ Management does not expect that our disclosure controls and procedures will prevent all error and all fraud. The effectiveness of our or any system of disclosure controls and procedures, however well designed and operated, can provide only reasonable assurance that the objectives of the system will be met and is subject to certain limitations, including the exercise of judgment in designing, implementing and evaluating controls and procedures and the assumptions used in identifying the likelihood of future events.

Material Weaknesses in Internal Control over Financing Reporting Existing as of September 30, 2022

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis.

Our management concluded that the previously disclosed material weakness relating to the Company’s controls over the accounting for non-routine transactions continued to exist as of September 30, 2022. Specifically, such controls were not adequately designed to ensure the consideration of all related relevant accounting guidance when such transactions were recorded. As disclosed in the Company’s Amendment No. 1 on Form 10-K/A to its Annual Report on Form 10-K for the fiscal year ended June 30, 2022, and in the Original Form 10-Q, this material weakness resulted in the restatement of the Company’s consolidated financial statements as of and for the fiscal years ended June 30, 2022 and 2021 and the interim periods ended September 30, 2021, December 31, 2021, and March 31, 2022.

The Company identified an additional error during the quarter ended March 31, 2023 relating to the accounting treatment of the Lind Consent. The error required the restatement of the Company’s condensed consolidated financial statements as of and for the three months ended September 30, 2022, as discussed in Note 3. The Company determined that the error was partially caused by the same material weakness that existed as of June 30, 2022, and that was determined to exist as of September 30, 2022 at the time the Original Form 10-Q was filed. Therefore, the material weakness continued to exist as of September 30, 2022.

In addition to the material weakness discussed above, our management concluded that two other material weaknesses in internal control over financial reporting existed as of September 30, 2022. A cumulative listing of our material weaknesses is disclosed below:

●

Control Environment: Management did not design and maintain an effective control environment based on the criteria established by the Committee of Sponsoring Organizations Integrated Framework (2013) (“COSO Framework”). Specifically, the Company does not have sufficient personnel with the appropriate levels of knowledge, experience, and training in accounting and internal controls over financial reporting commensurate with the complexity of the Company’s business. This material weakness contributed to additional material weaknesses related to the Company’s control activities as further described below.

●

Control Activities: Management did not design and maintain effective controls, including management review controls, related to non-routine transactions. Specifically, management did not have policies and procedures for the reconsideration of existing agreements when infrequent transactions occur.

●

Monitoring Activities: Management did not design and maintain effective monitoring controls to support timely evaluation of remediation of identified internal control deficiencies.

Additionally, these material weaknesses could result in a misstatement of account balances or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or timely detected.

Remediation Plan for the Material Weaknesses

To address our material weaknesses that were determined to exist as of September 30, 2022, we are currently devising a detailed plan to address each individual material weakness identified, as well as the overall monitoring process, including the following:

●

In order to remediate the material weakness relating to the Company’s control environment, we plan to develop and implement controls to ensure work performed by Company personnel and other experts is reviewed by individuals with the appropriate level of U.S. GAAP knowledge and experience. This may include separating the performance and review of certain close procedures among current accounting personnel and/or engaging third-party accounting consultants with the requisite U.S. GAAP knowledge and experience to perform work under the control and oversight of Company personnel. In addition, we plan to enhance the design of our controls over the consideration of all related relevant accounting guidance for the initial recording and subsequent measurements of non-routine transactions.

●

In order to remediate the material weakness relating to the Company’s controls activities, we are in the process of designing and implementing controls over the consideration of all related relevant accounting guidance for the initial recording and subsequent measurements of non-routine transactions.

●

In order to remediate the material weakness relating to the Company’s controls over monitoring activities, we plan to design and implement controls to manage and monitor our progress towards the remediation of internal control deficiencies and material weaknesses, including oversight by, and periodic reporting to, the Audit Committee.

The process of designing and maintaining effective internal control over financial reporting is a continuous effort that requires management to anticipate and react to changes in our business, economic and regulatory environments and to expend significant resources. As we continue to evaluate our internal control over financial reporting, we may take additional actions to remediate the material weaknesses or modify the remediation actions described above.

While we continue to devote significant time and attention to these remediation efforts, the material weaknesses will not be considered remediated until management completes the design and implementation of the actions described above and the controls operate for a sufficient period of time, and management has concluded, through testing, that these controls are effective.

Changes in Internal Control over Financial Reporting

~~There~~Other than as discussed above, there have been no changes in the Company’s internal control over financial reporting during the three months ended ~~December 31, 2017~~September 30, 2022, that have materially affected, or are reasonably likely to materially affect, the Company’s internal ~~controls~~control over financial reporting.

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We know of no material, active, or pending legal proceedings against the Company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers, or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

ITEM 1A. RISK FACTORS

~~There have been no changes to~~You should carefully consider the risk factors ~~set forth under~~discussed in Item 1A, “Risk Factors,” in the ~~heading “Risk Factors” in our~~Company’s Annual Report on Form ~~10-K~~10-K/A for the fiscal year ended June 30, ~~2017.~~2022, which could materially affect the Company’s business, financial condition or future results.

The information set forth in this Quarterly Report on Form 10-Q, including without limitation, the risk factors presented below, updates and should be read in conjunction with, the risk factors and information disclosed in the Company’s Annual Report on Form 10-K/A for the fiscal year ended June 30, 2022.

Failure to consummate the Transaction could negatively impact the price of our Common Shares and have a material adverse effect on our results of operations, cash flows and financial position.

The consummation of the Transaction is subject to the satisfaction or waiver of certain customary closing conditions contained in the Business Combination Agreement, including, among other things, (i) obtaining required approvals of the Transaction and related matters by the respective shareholders of NioCorp and GXII, (ii) the effectiveness of the registration statement on Form S-4, (iii) receipt of approval for listing on Nasdaq of the NioCorp Common Shares to be issued in connection with the Transaction, (iv) receipt of approval for listing on Nasdaq of the Warrants assumed from GXII, (v) receipt of approval from the TSX with respect to the issuance and listing of the NioCorp Common Shares issuable in connection with the Transaction, (vi) that NioCorp and its subsidiaries (including GXII, as successor by merger to ECRC) will have at least $5.000001 million of net tangible assets upon the consummation of the Transaction, after giving effect to any redemptions by GXII public stockholders and after payment of underwriters’ fees or commissions, (vii) that, at closing, NioCorp and its subsidiaries (including GXII, as successor by merger to ECRC) will have received cash in an amount equal to or greater than $15.0 million, subject to certain adjustments, and (viii) the absence of any injunctions enjoining or prohibiting the consummation of the Business Combination Agreement.

Many of the conditions to completion of the Transaction pursuant to the Business Combination Agreement are not within NioCorp’s or GXII’s control, and we cannot predict with any certainty when these conditions will be satisfied, if at all. Although NioCorp and GXII are working to complete the Transaction, satisfying the conditions to and completion of the Transaction may take longer, and could cost more, than we expect. For example, the requirements for obtaining the required stock exchange clearances and approvals could delay the completion of the Transaction for a period of time or prevent it from occurring. Any delay in completing the Transaction within the expected timeframe may adversely affect the benefits that we expect to achieve from the Transaction. If any of these conditions are not satisfied or waived, it is possible that the Business Combination Agreement may be terminated and the Transaction may not be completed.

If the Transaction is not completed for any reason, including as a result of NioCorp’s shareholders or GXII’s stockholders failing to approve the applicable proposals or the Business Combination Agreement is otherwise terminated, our ongoing business may be materially adversely affected and, without realizing any of the benefits of having completed the Transaction, we would be subject to a number of risks, including the following:

●

we may experience negative reactions from the financial markets, including negative impacts on the price of our Common Shares;

	●	we will still be required to pay certain significant costs relating to the Transaction, such as legal, accounting, financial advisor and printing fees;
	●	we may be required to pay a termination fee and reimburse GXII for certain of its expenses under the terms of the Business Combination Agreement;
	●	the Business Combination Agreement places certain restrictions on the conduct of the our business until the earlier of the termination of the Business Combination Agreement and the closing date of the Transaction, which restrictions may have delayed or prevented the us from undertaking business opportunities that, absent the Business Combination Agreement, may have been pursued;
	●	matters relating to the Transaction require substantial commitments of time and resources by management, which could have resulted in the distraction of management from ongoing business operations and pursuing other opportunities that could have been beneficial to us; and
	●	litigation related to any failure to complete the Transaction or related to any enforcement proceeding commenced against us to perform our obligations under the Business Combination Agreement.

If the Transaction is not completed, any of the risks described above may materialize and they may have a material adverse effect on our results of operations, cash flows, financial position and the price of our Common Shares.

If the Transaction is consummated, the combined company may not realize all or any of the anticipated benefits expected as a result of the Transaction.

The success of the Transaction, if consummated, will depend, in part, on the combined company’s ability to realize the anticipated benefits expected from the Transaction. In particular, a significant number of GXII shareholders may exercise their redemption rights in connection with the closing of the Transaction. In addition, the Business Combination Agreement does not make the consummation of the Transaction conditional on the entry into definitive documentation and consummation of the financing transactions contemplated by the LOIs with Yorkville, and there is no assurance that such financing transactions will be consummated. As a result, even if the minimum cash and net tangible asset conditions to closing set forth in the Business Combination Agreement are satisfied and the Transaction is consummated, after giving effect to (i) payments made to GXII stockholders who properly exercise their redemption rights and (ii) payments for potential taxes and certain expenses incurred by NioCorp and GXII in connection with the Transaction, to the extent not otherwise paid prior to the closing, the combined company may have less net cash proceeds available for general corporate purposes than anticipated. In addition, the listing of NioCorp’s Common Shares on Nasdaq may not provide the anticipated benefits of broader access to capital and financing alternatives or otherwise enhance NioCorp’s public profile. If the combined company is not successful in realizing these anticipated benefits, including the anticipated benefits of listing NioCorp’s Common Shares on the Nasdaq and the anticipated acceleration of financing efforts to advance, complete construction and commence operation of the Elk Creek Project, such consequences may adversely affect the combined company’s results of operations, cash flows, financial position and the price of our Common Shares.

We may not be able to negotiate definitive documentation related to the Yorkville financings and may not otherwise be able to consummate the financing transactions contemplated thereby, which could have a material adverse effect on the Company.

We may not be able to negotiate definitive agreements relating to the convertible debenture transaction and the standby equity purchase facility contemplated by the LOIs with Yorkville, which could cause NioCorp and GXII to encounter difficulties in completing the Transaction with financing terms as favorable as anticipated or at all. In addition, if the Yorkville financings are not completed, there can be no assurance that we will be able to find an investor of equal interest as Yorkville or a party that would be willing to consummate a transaction on terms as favorable as those contemplated by the LOIs. Failure by NioCorp to have access to financing on the terms and conditions as favorable as those contemplated by the LOIs may be materially adverse to NioCorp.

New Risk Factors in this Form 10-Q/A

The Company recently determined additional material weaknesses in its internal control over financial reporting existed as of September 30, 2022. If not remediated, the Company’s failure to establish and maintain effective disclosure controls and procedures and internal control over financial reporting could result in material misstatements in its financial statements and a failure to meet its reporting and financial obligations, each of which could have a material adverse effect on the Company’s financial condition and the trading price of the Common Shares.

Our management has determined that additional material weaknesses in its internal control over financial reporting existed as of September 30, 2022. Specifically, these additional material weaknesses relate to management’s control over the design and maintenance of an effective control environment and its monitoring controls over the timely remediation of identified internal control weaknesses. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis.

As discussed in Item Part I, Item 4, “Controls and Procedures,” of this Quarterly Report on Form 10-Q, the Company’s management has assessed the effectiveness of its disclosure controls and procedures and concluded that they were not effective as of September 30, 2022.

The Company is committed to remediating its material weaknesses as promptly as possible. Management is in the process of implementing its remediation plan. However, there can be no assurance as to when the material weaknesses will be remediated or that additional material weaknesses will not arise in the future. If the Company is unable to maintain effective internal control over financial reporting, its ability to record, process and report financial information timely and accurately could be adversely affected, which could subject the Company to litigation or investigations, require management resources, increase costs, negatively affect investor confidence and adversely impact the trading price of the Common Shares.

We may face litigation and other risks as a result of the Restatement and the material weaknesses in our internal control over financial reporting.

We previously identified a material weakness in our internal control over financial reporting that resulted in the restatement of our consolidated financial statements as of and for the fiscal years ended June 30, 2022 and 2021 and the interim periods ended September 30, 2021, December 31, 2021 and March 31, 2022. Subsequent to the filing of the Original Form 10-Q, we identified an additional error, requiring the restatement of the Company’s condensed consolidated financial statements as of and for the three months ended September 30, 2022, which was partially caused by the same material weakness in internal control over financial reporting. In addition, subsequent to the filing of the Original Form 10-Q, management concluded that two additional material weaknesses in internal control over financial reporting existed as of September 30, 2022. As a result of such material weaknesses, the Restatement and other matters raised or that may in the future be raised by the SEC or the Canadian securities regulators, we face potential for litigation or other disputes, which may include, among others, claims invoking the federal and state securities laws, contractual claims or other claims arising from the Restatement and the material weaknesses in our internal control over financial reporting and the preparation of our financial statements. As of the date of this Form 10-Q/A, we have no knowledge of any such litigation or dispute. However, we can provide no assurance that such litigation or dispute will not arise in the future. Any such litigation or dispute, whether successful or not, could adversely affect our business, financial condition and results of operations.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

~~None.~~

The following Common Shares were issued pursuant to Section 3(a)(9) of the Securities Act, in connection with the voluntary conversion of a portion of the amount outstanding under the Lind III Convertible Security and based upon representations and warranties of Lind in connection therewith.

Date	Conversion Amount (000)	Shares Issued	Conversion Price/Share
July 27, 2022	$600	102,579	C$7.504
August 8, 2022	$250	43,128	C$7.496
September 7, 2022	$600	95,819	C$8.236
September 26, 2022	$200	30,734	C$8.845

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Pursuant to Section 1503(a) of the Dodd-Frank Act, issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose specified information about mine health and safety in their periodic reports. These reporting requirements are based on the safety and health requirements applicable to mines under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”) which is administered by the U.S. Department of Labor’s Mine Safety and Health Administration (“MSHA”). During the three-month period ended ~~December 31, 2017,~~September 30, 2022, the Company and its subsidiaries and their properties or operations were not subject to regulation by MSHA under the Mine Act and thus no disclosure is required under Section 1503(a) of the Dodd-Frank Act.

ITEM 5. OTHER INFORMATION

None.

~~None.~~

ITEM 6. EXHIBITS

Exhibit No.		Title
2.1(2)**		Business Combination Agreement, dated as of September 25, 2022, by and among NioCorp Developments Ltd., GX Acquisition Corp. II and Big Red Merger Sub Ltd
3.1(1)		Notice of Articles dated April 5, 2016
3.2(1)		Articles, as amended, effective as of January 27, 2015
~~10.1~~10.1(2)		~~Amendment #7 to Lind~~GXII Support Agreement, dated ~~August 28, 2017, between the Company~~as of September 25, 2022, by and ~~Lind Asset Management IV,~~among GX Acquisition Corp. II, NioCorp Developments Ltd., GX Sponsor II LLC, in its capacity as a shareholder of GX Acquisition Corp. II, and certain other shareholders of GX Acquisition Corp. II
~~10.2~~10.2(2)		~~Amendment #8 to Lind~~Company Support Agreement, dated ~~January 23, 2018, between the Company~~as of September 25, 2022, by and ~~Lind Asset Management IV, LLC~~
~~10.3(2)~~		among GX Acquisition Corp. II, NioCorp Developments Ltd. ~~Long Term Incentive Plan~~and certain shareholders of NioCorp Developments Ltd.
~~31.1~~10.3(2)#		Employment Agreement, dated as of September 25, 2022, by and between Elk Creek Resources Corporation and Neal Shah
10.4(2)#		Employment Agreement, dated as of September 25, 2022, by and between Elk Creek Resources Corporation and Scott Honan
10.5(2)#		Employment Agreement, dated as of September 25, 2022, by and between Elk Creek Resources Corporation and Jim Sims
10.6(2)#		Form of Restrictive Covenant Agreement
10.7(3)		Waiver and Consent Agreement, dated September 25, 2022, between NioCorp Developments Ltd. and Lind Global Asset Management III, LLC
31.1		Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2		Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
~~101.INS (3)~~101.INS(4)		Inline XBRL Instance Document
~~101.SCH(3)~~101.SCH(4)		Inline XBRL Taxonomy Extension- Schema
~~101.CAL(3)~~101.CAL(4)		Inline XBRL Taxonomy Extension – Calculations
~~101.DEF(3)~~101.DEF(4)		Inline XBRL Taxonomy Extension – Definitions
~~101.LAB(3)~~101.LAB(4)		Inline XBRL Taxonomy Extension – Labels
~~101.PRE(3)~~101.PRE(4)		Inline XBRL Taxonomy Extension – Presentations
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

~~(1)~~

Management compensation plan, arrangement or agreement.

Certain exhibits to this agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted exhibit will be furnished to the Securities and Exchange Commission upon request.

(1)	Previously filed as an exhibit to the Company’s Draft Registration Statement on Form S-1 (Registration No. 377-01354) submitted to the SEC on July 26, 2016, and incorporated herein by reference.

(2)	Previously filed as an exhibit to the Company’s Current Report on Form 8-K (File No. 000-55710) filed with the SEC on ~~November 13, 2017~~September 29, 2022, and incorporated herein by reference.
(3)	Previously filed as an exhibit to the Company’s Registration Statement on Form S-4 (Registration No. 333-268227) filed with the SEC on November 7, 2022, and incorporated herein by reference.

(4)

Submitted Electronically Herewith. Attached as Exhibit 101 to this report are the following formatted in inline XBRL (Extensible Business Reporting Language): (i) the Condensed Interim Consolidated Balance Sheets as of ~~December 31, 2017~~September 30, 2022 and June 30, ~~2017,~~2022, (ii) the Condensed Interim Consolidated Statements of Operations and Comprehensive Loss for the Three ~~and Six~~ Months ended ~~December 31, 2017~~September 30, 2022 and ~~2016,~~2021, (iii) the Condensed Interim Consolidated Statements of Cash Flows for the ~~Six~~Three Months ~~Ended December 31, 2017~~ended September 30, 2022 and ~~2016,~~2021, (iv) the Condensed Interim Consolidated Statements of Shareholders’ Equity for the ~~Six~~Three Months ~~Ended December 31, 2017~~ended September 30, 2022 and ~~the Year ended June 30, 2017~~2021 and (v) the Notes to the Condensed Interim Consolidated Financial Statements.

~~SIGNATURES~~

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

NIOCORP DEVELOPMENTS LTD.

(Registrant)

By:	/s/ Mark A. Smith
	Mark A. Smith
	President, Chief Executive Officer and Executive Chairman
	(Principal Executive Officer)

Date: ~~February 9, 2018~~June 7, 2023

By:	/s/ Neal Shah
	Neal Shah
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

Date: ~~February 9, 2018~~June 7, 2023

British Columbia, Canada		98-1262185
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

7000 South Yosemite Street, Suite 115Centennial, CO ~~Centennial, CO~~ (Address of Principal Executive Offices)	80112 ~~80112~~ (Zip code)

Registrant’s telephone number, including area code: ~~(855)~~ (855) 264-6267

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Not Applicable		Not Applicable		Not Applicable

		Page
		~~Page~~

Condensed consolidated balance sheets as of ~~December 31, 2017~~September 30, 2022 and June 30, ~~2017~~2022 (unaudited)		2

Condensed consolidated statements of operations and comprehensive loss for the three ~~and six~~ months ended ~~December 21, 2017~~September 30, 2022 and ~~2016~~2021 (unaudited)		3

Condensed consolidated statements of cash flows for the ~~six~~three months ended ~~December 31, 2017~~September 30, 2022 and ~~2016~~2021 (unaudited)		4

Condensed consolidated statements of shareholders’ equity for the ~~six~~three months ended ~~December 31, 2017~~September 30, 2022 and ~~the year ended June 30, 2017~~2021 (unaudited)		5

Notes to condensed consolidated financial statements (unaudited)		6 ~~- 14~~– 17


	For the three months ended September 30,
	2022			2021
	As restated ^(a)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period	$	(3,877	)	$	(2,088	)
Adjustments to reconcile net loss to net cash used in operations:
Unrealized (gain) loss on equity securities		(1	)		2
Accretion of convertible debt		194			551
Noncash lease expense		(2	)		(1	)
Change in fair value of warrant liability		(257	)		-
Loss on debt extinguishment		1,622			-
Depreciation		1			1
Foreign exchange loss		177			288
		(2,143	)		(1,247	)
Change in working capital items:
Prepaid expenses and other		209			(270	)
Accounts payable and accrued liabilities		196			(92	)
Net cash used in operating activities		(1,738	)		(1,609	)

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of land and buildings		-			(16	)
Net cash used in financing activities		-			(16	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common shares		-			664
Share issue costs		(21	)		-
Related party debt repayments		-			(318	)
Net cash provided by financing activities		(21	)		346
Exchange rate effect on cash and cash equivalents		(329	)		(170	)
Change in cash and cash equivalents during period		(2,088	)		(1,449	)
Cash and cash equivalents, beginning of period		5,280			7,317
Cash and cash equivalent, end of period	$	3,192		$	5,868

Supplemental cash flow information:
Amounts paid for interest	$	-		$	40
Amounts paid for income taxes		-			-
Non-cash financing transactions:
Conversions of debt for common shares	$	1,650		$	1,350
Deferred transaction costs, accrued but not paid		2,809			-

	For the six months ended December 31,
	2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES
Total loss for the period	$	(3,773	)	$	(6,322	)
Non-cash elements included in net loss:
Depreciation		3			4
Change in financial instrument fair value		297			(335	)
Unrealized gain (loss) on available-for-sale investments		7			(6	)
Accretion of convertible debt		75			54
Foreign exchange (gain) loss		(197	)		228
Share-based compensation		1,113			394
		(2,475	)		(5,983	)
Change in working capital items:
Receivables		7			—
Prepaid expenses		144			68
Accounts payable and accrued liabilities		(242	)		842
Net cash used in operating activities		(2,566	)		(5,073	)

CASH FLOWS FROM INVESTING ACTIVITIES
Deposits		15			—
Net cash used in investing activities		15			—

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of capital stock		1,545			1,675
Share issue costs		(189	)
Issuance of convertible debt		1,000
Related party debt drawdown		180
Other current assets		(422	)
Net cash provided by financing activities		2,114			1,675
Exchange rate effect on cash, cash equivalents and restricted cash		14			(20	)
Change in cash, cash equivalents and restricted cash during period		(423	)		(3,418	)
Cash, cash equivalents and restricted cash, beginning of period		503			4,412
Cash, cash equivalents and restricted cash, end of period	$	80		$	994

Supplemental cash flow information:
Amounts paid for interest	$	32		$	32
Amounts paid for income taxes
Non-cash financing transactions
Lind conversions		3,030			983
Debt to equity conversion		207			—

☒		~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~
~~For the quarterly period ended December 31, 2017~~
OR
☐		~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

	●	Part I, Item 1, “Financial Statements”;
	●	Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”;
	●	Part I, Item 4, “Controls and Procedures”;
	●	Part II, Item 1A, “Risk Factors”; and
	●	Part II, Item 6, “Exhibits.”


			Page
PART I — FINANCIAL INFORMATION

ITEM 1.	FINANCIAL STATEMENTS	1
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	1518
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	2329
ITEM 4.	CONTROLS AND PROCEDURES	2329

PART II — OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS	2431
ITEM 1A.	RISK FACTORS	2431
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	2433
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	2433
ITEM 4.	MINE SAFETY DISCLOSURES	2433
ITEM 5.	OTHER INFORMATION	2433
ITEM 6.	EXHIBITS	2534

SIGNATURES		2635

		For the three months ended December 31,						For the six months ended December 31,
	Note	2017			2016			2017			2016
Operating expenses
Employee related costs		$	751		$	459		$	1,399		$	962
Professional fees			118			279			393			612
Exploration expenditures	9		303			2,397			1,016			4,367
Other operating expenses			391			215			687			389
Total operating expenses			1,563			3,350			3,495			6,330
Change in financial instrument fair value	6		274			(39	)		297			(335	)
Foreign exchange loss (gain)			36			160			(201	)		193
Interest expense			91			71			175			140
(Loss) gain on available for sale securities			(4	)		5			7			(6	)
Loss before income taxes			1,960			3,547			3,773			6,322
Income tax benefit			—			—			—			—
Net loss		$	1,960		$	3,547		$	3,773		$	6,322

Other comprehensive loss:
Net loss		$	1,960		$	3,547		$	3,773		$	6,322
Other comprehensive (gain) loss:
Reporting currency translation			(27	)		(165	)		258			(231	)
Total comprehensive loss		$	1,933		$	3,382		$	4,031		$	6,091

Loss per common share, basic		$	0.01		$	0.02		$	0.02		$	0.03

Weighted average common shares outstanding			206,000,263			183,625,989			204,027,181			182,078,028

	Common Shares Outstanding		Common Stock			Additional Paid-in Capital			Deficit			Accumulated Other Comprehensive Loss			Total

Balance, June 30, 2016		180,467,990	$	58,401		$	8,630		$	(60,222	)	$	(615	)	$	6,194

Exercise of warrants		3,447,137		1,675			—			—			—			1,675
Exercise of options		150,000		70			—			—			—			70
Fair value of broker warrants granted		—		—			20			—			—			20
Fair value of Lind warrants granted		—		—			233			—			—			233
Private placements - February 2017		7,364,789		3,927			—			—			—			3,927
Debt conversions		7,346,421		4,103			—			—			—			4,103
Share issuance costs		—		(181	)		—			—			—			(181	)
Fair value of stock options exercised		—		34			(34	)		—			—			—
Share-based payments		—		—			1,471			—			—			1,471
Reporting currency presentation		—		—			—			—			9			9
Loss for the year		—		—			—			(14,630	)		—			(14,630	)
Balance, June 30, 2017		198,776,337	$	68,029		$	10,320		$	(74,852	)	$	(606	)	$	2,891
Exercise of options		10,091		5			—			—			—			5
Fair value of broker warrants granted		—		—			41			—			—			41
Fair value of Lind warrants granted		—		—			127			—			—			127
Private placements - July 2017		2,962,500		1,540			—			—			—			1,540
Private placement – September 2017		415,747		207												207
Debt conversions		6,696,590		3,030			—			—			—			3,030
Share issuance costs		—		(230	)		—			—			—			(230	)
Fair value of stock options exercised		—		2			(2	)		—			—			—
Share-based payments		—		—			1,113			—			—			1,113
Reporting currency presentation		—		—			—			—			(258	)		(258	)
Loss for the period		—		—			—			(3,773	)		—			(3,773	)
Balance, December 31, 2017		208,861,265	$	72,583		$	11,599		$	(78,625	)	$	(864	)	$	4,693


	For the three months ended September 30, 2022 and 2021
	Common Shares Outstanding ^(b)		Common Shares			Accumulated Deficit			Accumulated Other Comprehensive Loss			Total
Balance, June 30, 2021		25,637,993	$	113,882		$	(99,510	)	$	(1,159	)	$	13,213
Exercise of warrants		87,175		543			-			-			543
Exercise of options		28,270		121			-			-			121
Debt conversions		158,398		1,350			-			-			1,350
Reporting currency translation		-		-			-			124			124
Loss for the period		-		-			(2,088	)		-			(2,088	)
Balance, September 30, 2021		25,911,836	$	115,896		$	(101,598	)	$	(1,035	)	$	13,263

Balance, June 30, 2022		27,667,060	$	129,055		$	(110,397	)	$	(993	)	$	17,665
Debt conversions		272,262		1,650			-			-			1,650
Share issuance costs		-		(21	)		-			-			(21	)
Reporting currency translation		-		-			-			(5	)		(5	)
Loss for the period, as restated ^(a)		-		-			(3,877	)		-			(3,877	)
Balance, September 30, 2022, as restated ^(a)		27,939,322	$	130,684		$	(114,274	)	$	(998	)	$	15,412

	As of
	December 31, 2017		June 30, 2017
Convertible debt, current portion	$	667	$	2,161
Noncurrent:
Convertible notes	$	—	$	592
Convertible security		1,609		1,304
	$	1,609	$	1,896

	Convertible Security
Balance, June 30, 2017	$	3,465
Additional debt drawdown		1,000
Conversions, at fair value		(3,030	)
Change in fair market value		174
Balance, December 31, 2017	$	1,609

								Black Scholes pricing model inputs
Funding Date	Face Value¹		Warrants Issued²		Issue Price³		Warrant Expiry Date	Risk-free rate			Yield			Volatility			Expected Life
August 15, 2017	$	300		260,483		C$0.73	August 15, 2020		1.23	%		0	%		49.6	%	3 years
September 28, 2017		300		283,413		C$0.66	September 28, 2020		1.23	%		0	%		47.7	%	3 years
October 31, 2017		300		308,901		C$0.62	October 31, 2020		1.59	%		0	%		47.0	%	3 years
December 6, 2017		300		355,132		C$0.54	December 6, 2020		1.59	%		0	%		48.9	%	3 years
Total	$	1,200		1,207,929

	Convertible Notes
Balance, June 30, 2017	$	592
Accreted interest, net of interest paid		75
Balance, December 31, 2017	$	667

	Derivative Liability
Balance, June 30, 2017	$	82
Change in fair value of derivative liability		(—	)
Balance, December 31, 2017	$	82

	Number of Options			Weighted Average Exercise Price (C$)
Balance, June 30, 2017		16,605,000		$	0.73
Issued		3,925,000			0.47
Exercised		(10,091	)		0.62
Cancelled/expired		(4,470,000	)		0.75
Balance, December 31, 2017		16,049,909		$	0.66

Exercise price (C$)		Expiry date	Number outstanding		Aggregate Intrinsic Value (C$000s)		Number exercisable		Aggregate Intrinsic Value (C$000s)
$	0.47	November 9, 2022		3,925,000	$	1,060		3,925,000	$	1,060
$	0.62	January 19, 2021		5,264,909		632		5,264,909		632
$	0.76	March 6, 2022		5,650,000		—		2,825,000		—
$	0.94	April 28, 2018		400,000		—		400,000		—
$	0.94	April 28, 2019		100,000		—		100,000		—
$	0.94	July 21, 2021		710,000		—		532,500		—
	Balance December 31, 2017			16,049,909	$	1,692		13,047,409	$	1,692

	Warrants		Weighted average exercise price (C$)
Balance June 30, 2017		20,609,086	$	0.79
Granted		4,362,991		0. 75
Balance, December 31, 2017		24,972,077	$	0. 78

	For the three months ended December 31,				For the six months ended December 31,
	2017		2016		2017		2016
Technical studies and engineering	$	59	$	1,551	$	454	$	1,988
Field management and other		132		399		342		633
Metallurgical development		89		419		172		1,691
Geologists and field staff		23		28		48		55
Total	$	303	$	2,397	$	1,016	$	4,367

	As of June 30, 2017
	Total		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	238	$	238	$	—	$	—
Restricted cash		265		265		—		—
Available-for-sale securities		23		23		—		—
Total	$	526	$	526	$	—	$	—
Liabilities:
Convertible debt	$	3,465	$	—	$	—	$	3,465
Derivative liability, convertible debt		82		—		—		82
Total	$	3,547	$	—	$	—	$	3,547

Funding Date		Face Value¹	Warrants Issued	Issue Price²	Warrant Expiry Date
January 30, 2018	$	1,800	1,546,882	C$0.72	January 30, 2021
February 5, 2018		600	529,344	C$0.70	February 5, 2021
February 7, 2018		600	541,435	C$0.69	February 7, 2021