UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

FORM 10-Q

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

For the quarterly period ended December 31, 2020

OR

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

For the transition period from        to

NioCorp Developments Ltd.

(Exact Name of Registrant as Specified in its Charter)

Securities registered pursuant to Section 12(b) of the Act:

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.

Yes ☒ No ☐

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). Yes ☒ No ☐

Yes ☒     No ☐

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, 2018,5, 2021, the registrant had 208,861,265241,081,316 Common Shares outstanding.

TABLE OF CONTENTS

PART I—I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Contents

NioCorp Developments Ltd.

Condensed Consolidated Balance Sheets

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

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

NioCorp Developments Ltd.

Condensed Consolidated Statements of Operations and Comprehensive Loss

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

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

NioCorp Developments Ltd.

NioCorp Developments Ltd.

Condensed Consolidated Statements of Operations and Comprehensive Loss

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

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

NioCorp Developments Ltd.

Condensed Consolidated Statements of Cash Flows

(expressed in thousands of U.S. dollars) (unaudited)

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

NioCorp Developments Ltd.

NioCorp Developments Ltd.

Condensed Consolidated Statements of Shareholders’ Equity

(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.

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

December 31, 20172020

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

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 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.Project to construction and commercial operation. The Company’s ability to continue as a going concern is uncertain and is dependent upon obtaining sufficient financing, the generation of profits from mineral properties, obtaining additional financing, and maintaining continued support from its shareholders and creditors.

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles of the United States of America (“US 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-ownedwholly 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, 2017.2020.

In the opinion of Management,management, all adjustments considered necessary (including reclassifications and normal recurring adjustments) to present fairly the financial position, results of operations, and cash flows at December 31, 2017,2020, 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 US 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, 2017.2020. The interim results are not necessarily indicative of results for the full year ending June 30, 2018,2021, or future operating periods.

Issued and Adopted

In March 2016, the Financial Accounting Standards Board (“FASB”) issuedOn July 1, 2020, NioCorp adopted Accounting Standards Update (“ASU”) 2016-09, Improvements2018-13 - Fair Value Measurements (Topic 820): Disclosure Framework - Changes to Employee Share-Based Payment Accounting. The amendmentsthe Disclosure Requirements for Fair Value Measurement. This update modifies the disclosure requirements on fair value measurements in this ASU require, among other things,Topic 820 and eliminates ‘at a minimum’ from the phrase ‘an entity shall disclose at a minimum’ to promote the appropriate exercise of discretion by entities when considering fair value disclosures and to clarify that all income tax effects of awards be recognized in the income statement when the awards vest or are settled. The ASU also allows formateriality is 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 are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. We adopted this guidance during the quarter ended September 30, 2017.appropriate consideration. The adoption of this ASUstandard had no material impactsimpact on ourthe consolidated financial statement results or disclosures.statements.

Issued and Not Effective

From time to time, new accounting pronouncements are issued by the FASBFinancial Accounting Standards Board 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, 20172020

(expressed in thousands of U.S. dollars, unlessexcept per share amounts or as 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.

The preparation of consolidated financial statements in conformity with US GAAP requires Managementmanagement 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.

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.

The Company incurred a loss of $3,773$2,134 for the six months ended December 31, 2017 (20162020 (2019 - $6,322),$2,081) and had a working capital deficit and an accumulated deficit of $4,370$7,471 and $78,625,$96,820, respectively, as of December 31, 2017. These factors indicate2020. As an exploration stage entity, the existence of a material uncertainty that raises substantial doubt about the Company’s ability to continue as a going concern.Company has not yet commenced its mining operations and accordingly does not generate any revenue.

The Company’s ability to continue operations and fund its expenditures, which have historically averaged $700 to $850 per quarter, is dependent on Management’smanagement’s ability to secure additional financing. As of December 31, 2020, the Company had cash of $133, which is not sufficient cash to fund normal operations and meet debt obligations for the next twelve months without deferring payment on certain current liabilities and raising additional funds. 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. The Company has approximately $700 available on its non-revolving credit facility agreement with a related party (refer to Note 8), however, the Company did not have any further funding commitments or arrangements for additional financing as of December 31, 2020. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

These consolidated financial statements do not give effect to any adjustments required to realize its 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.

Restricted cash represents amounts heldSince March 2020, several measures have been implemented in escrow to secure paymentthe United States, Canada, and the rest of work relatedthe world in response to the Company’s Elk Creek Feasibility Study. Underincreased impact from the termsnovel coronavirus (“COVID-19”) pandemic. While the impact of the escrow agreement,COVID-19 pandemic is expected to be temporary, the balancecurrent circumstances are dynamic and the impact on business operations cannot be reasonably estimated at this time. The continued spread of $265 was drawn against outstanding accounts payableCOVID-19 has resulted in business travel restrictions and other capital market disruptions, and this has had an impact on the following: the Company’s ability to obtain financing and advance development plans; and the Company’s results of operations, financial position, and cash flows during the quarter ended September 30, 2017.current fiscal year.

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

December 31, 20172020

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

Other current assets include legal and other professional fees associated with obtaining project debt financing

On December 18, 2020, an accounts payable balance of $1,640 was exchanged 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 note as discussed in Note 5.

Nordmin Convertible Security FundingNote

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

On August 10, 2017, Lind provided notice toDecember 18, 2020, the Company issued a convertible note in the principal amount of its electionapproximately $1,872 (the “Nordmin Note”) and 500,000 warrants (the “Nordmin Warrants”) to advance an additional $1.0 million in funding (the “Initial Convertible Security Increase”) under the convertible security (the ‘Initial Convertible Security”Nordmin Engineering Ltd. (“Nordmin”) pursuant to its righta convertible note and warrant subscription agreement (the “Nordmin Agreement”) under which Nordmin agreed to subscribe for and purchase the Convertible Security Funding Agreement, dated December 14, 2015, betweenNordmin Note and Nordmin Warrants for a subscription price of approximately $1,804. This amount was set off against the Company and Lind (the “Lind Agreement”). As a result, upon payment of the additional $1,000 in fundingamount owed to Nordmin 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:NioCorp for past services.

The Initial Convertible SecurityNordmin Note will mature on December 18, 2021 and has no stated interest rate, an implied interest rate of 5% per annum and, subject to certain terms and conditions, is convertible into Common Sharesup to 4,500,000 common shares of the Company (Common(“Common Shares”) at a conversion price equal to 85%of 92% of the volume weightedfive-day volume-weighted average trading price (“Volume Weighted Average Price”) of the Common Shares (in Canadian dollars) on the Toronto Stock Exchange (the “TSX”) forat the five consecutive trading days immediately prior totime of conversion. The Nordmin Note contains restrictions on how much of the date on which Lindprincipal amount may be converted in any 30-day period. The Nordmin Note also provides the Company with the option to prepay, in whole or in part, any outstanding principal amount thereunder, upon three days’ notice of its intention to convert an amountNordmin. In addition, Nordmin is entitled to accelerate the maturity of the Initial Convertible Security from timeNordmin Note and require the Company to time. Duringprepay the six-month period ended December 31, 2017, $2,425outstanding principal amount upon the occurrence of an event of default and other designated events described in the Nordmin Note.

Subject to certain terms and conditions, each Nordmin Warrant is exercisable into one Common Share at a price of C$0.80 per share until December 18, 2022. The Nordmin Note and the Nordmin Warrants are, and the Common Shares underlying the Nordmin Warrants, will be, as applicable, subject to resale restrictions and are or will be “restricted securities” within the meaning of Rule 144 under the United States Securities Act of 1933.

The Company accounted for this transaction as a debt extinguishment under Accounting Standards Codification 470, Debt. Accordingly, the Company wrote off the value of the Initial Convertible Securityexisting obligation, calculated the fair value of the Nordmin Note and recorded a loss of $163 on the difference in the consolidated statement of operations. This loss included $63 related to the fair value of the Nordmin Warrants at closing. The fair value of the Nordmin Warrants was converted into 6,696,590 Common Shares.estimated based on the Black Scholes pricing model using a risk-free interest rate of 0.32%, an expected dividend yield of 0%, a volatility of 43.16%, and an expected life of 2.0 years.

The Company initially recorded the Nordmin Note at a fair value of $1,740. The remaining initial fair value balance will be accreted up to net face value of the Nordmin Note over the remaining time until maturity using the effective interest method. In addition, transaction costs of $25 were expensed at closing.

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

December 31, 20172020

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

The Convertible Security contains financial and non-financial covenants customary for a facility of its size and nature, and includes a financial covenant defining an event of default as all present and future liabilitiesPursuant to the terms of the Nordmin Agreement, on December 18, 2020, the Company or anyissued 836,551 Common Shares to Nordmin upon an initial conversion of its subsidiaries, exclusive$450 in principal amount of related party loans, for an amount or amounts exceeding $2,000 and which have not been satisfiedthe Nordmin Note at a conversion price of C$0.684 per share.

Based on time or within 90 daysthe Company’s closing Common Share price of invoice, or have become prematurely payable as a result of its default or breach. The Company was in compliance with these covenantsC$0.81 as of December 31, 2017.2020, conversion of the remaining Nordmin Note balance would require the issuance of 2,428,888 Common Shares. For each C$0.01 change in the fair value of one Common Share, the total shares the Company would be obligated to issue would change by approximately 30,000 shares.

Convertible Promissory Notes

Changes in

Effective October 12, 2020, the maturity date for $750 of the Company’s outstanding convertible promissory notes (the “Convertible Notes”) balance are comprisedwas extended for one year to October 14, 2021. All terms and conditions remained unchanged, except the amended agreement provides that the Company may repay all or any of the following:amount of outstanding principal and any accrued but unpaid interest, with 14 days’ advance written notice (the “Notice”), as follows:

$50 of the Company’s convertible promissory notes was not extended under the agreement above and was converted into 67,695 Common Shares on October 14, 2020.

The changes in the derivative liability related to the conversion feature of the Convertible Notescompany’s convertible promissory notes are as follows:

Convertible Security

On July 26, 2017,9, 2020, Lind Asset Management IV, LLC, the Company closed a brokered private placement (the “July 2017 Private Placement”) of units (the “Units”)holder of the Company. Underconvertible security, converted the July 2017 Private Placement, a totalremaining balance thereunder 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$38 into 64,298 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.

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.Shares.

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

December 31, 2017

2020

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

SBA Loan

On April 17, 2020, the NioCorp’s subsidiary, Elk Creek Resources Corp., received a U.S. Small Business Administration Loan (the “SBA Loan”) from American National Bank, pursuant to the Paycheck Protection Program (the “PPP”) established under the Coronavirus Aid, Relief, and Economic Security Act, commonly referred to as the CARES Act, in the amount of $196. Under the terms of the SBA Loan, the Company may be eligible for full or partial loan forgiveness. The unforgiven portion of the SBA Loan is payable over two years at an annual interest rate of 1%, with a deferral of payments for the first six months. The Company used the proceeds for purposes consistent with the PPP.

On October 27, 2020, the Company applied for loan forgiveness of $186, comprising the initial SBA Loan balance less $10 representing an Economic Injury Disaster Loan Advance grant (the “EIDL advance”) received by the Company in April 2020. On November 18, 2020, the Company was notified that the $186 loan forgiveness request had been approved and recorded a corresponding gain in other income in the consolidated statement of operations.

On December 21, 2020, the U.S. Congress passed the Consolidated Appropriations Act, 2021 (the “Act”), which provided additional COVID-19 relief as well as government funding and other bills. The Act removes the previous requirement that PPP borrowers deduct the amount of any EIDL advance from their PPP forgiveness amount. The Small Business Administration is currently developing the guidance and procedures associated with this change in statute, and the Company expects to apply for this additional forgiveness once the process is completed.

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 subjectNioCorp Developments Ltd.

Notes to the adjustment provisionsCondensed Consolidated Financial Statements

December 31, 2020

(expressed in thousands of the Long-Term Incentive Plan, the aggregate number of Common Shares actually issuedU.S. dollars, except per share amounts or transferred by the Company upon the exercise of incentive stock options will not exceed 20,451,895 Common Shares.as otherwise stated) (unaudited)  

The Board has the exclusive power over the granting, amendment, administration or settlementCompany granted 3,700,000 options at an average fair value price of any award.

Stock$C0.25 per option, transactions are summarized as follows:based on Black-Scholes models with an average risk-free rate of 0.26%, average stock price volatility of 54.07%, and a three-year expected option life.

The following table summarizes information about stock options to purchase Common Shares (“Options”) outstanding at December 31, 2017:2020: 

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

December 31, 2017

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

The aggregate intrinsic value in the preceding table represents the total intrinsic value, based on the Company’s closing Common Share price of C$0.740.81 as of December 31, 2017,2020, that would have been received by the optionOption holders had all optionOption holders exercised their optionsOptions as of that date. The total number of in-the-money optionsOptions vested and exercisable as of December 31, 20172020, was 9,189,909. The total intrinsic value of options exercised during the six months ended December 31, 2017 was nil.

17,239,909. As of December 31, 2017,2020, 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

Warrant transactions are summarized as follows:

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, 2017,2020, the Company hashad outstanding exercisable Warrants, as follows:

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

December 31, 2020

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

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. TheAs of December 31, 2020, 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

(expressed in thousands of U.S. dollars, unless otherwise stated) (unaudited)was $1,000.

The Company also has a non-revolving credit facility agreement (the “Credit Facility”Agreement”) in the amountwith a limit of $2,000$3,500 with Mr. Smith. The Credit FacilityAgreement bears an interest rate of 10% and drawdowns from the Credit FacilityAgreement are subject to a 2.5% establishment fee. Amounts outstanding under the Credit FacilityAgreement are secured by all of the Company’s assets pursuant to the General Security Agreement. The Credit FacilityAgreement contains financial and non-financial covenants customary for a facility of its size and nature and 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.nature. As of December 31, 2017,2020, the principal amount outstanding under the Credit Facility is $355Agreement was $2,818.

On December 14, 2020, the maturity dates for the Original Smith Loan and accountsthe Credit Agreement were extended from December 15, 2020 to December 15, 2021.          

Accounts payable and accrued liabilities includedas of December 31, 2020, include accrued interest payableof $667 and loan establishmentorigination fees of $58 payable to Mr. Smith of $176.

On June 20, 2016,under the Company announced a joint development agreement (the “Development Agreement”) with IBC Advanced Alloys Corp. (“IBC”) to investigateOriginal Smith Loan and develop applications for scandium-containing alloys for multiple downstream markets. In addition to his management duties 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.Credit Agreement. 

On December 22, 2017, President Trump signedEffective August 1, 2020, the Company entered into lawa three-year corporate office lease extension and recognized the Tax Cutscorresponding right of use asset 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 systemlease liability associated with deferral to a territorial tax system, which includes a one-time toll charge on certain undistributed earnings of non-U.S. subsidiaries.this lease extension, along with two existing nominal leases. The Company does not expect any material impactshas applied a discount rate of this new legislation on its consolidated financial statements.16%.

These three operating leases have an average remaining life of 2.2 years as of December 31, 2020. The Company incurred lease costs of $44 and $53 for the six months ended December 31, 2020 and 2019, respectively.

The maturities of lease liabilities are as follows at December 31, 2020:

NioCorp Developments Ltd.

Notes to the Condensed Consolidated Financial Statements

December 31, 2020

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

The Company measures the fair value of financial assets and liabilities based on US 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 are measured at fair value, with unrealized gains and losses being recognized in income.

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

The following table presentstables present information about the assets and liabilities that are measured at fair value on a recurring basis as of December 31, 20172020 and June 30, 2017,2020, respectively, and indicatesindicate 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.