Filed pursuant to Rule 424(b)3
Registration Statement No. 333-257195
PROSPECTUS
NioCorp Developments Ltd.
8,720,275 Common Shares
This prospectus relates to the
registration and resale or other disposition from time to time by certain selling shareholders (each, a “selling shareholder”
and, collectively, the “selling shareholders”), of up to an aggregate of 8,720,275 common shares, without par value (“Common
Shares”), of NioCorp Developments Ltd. (“NioCorp,” the “Company,” “we,” “us” or
“our”) comprising the following:
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4,321,157 issued and outstanding Common Shares acquired by selling shareholders in connection with the
Company’s May 2021 non-brokered private placement (the “Private Placement”) of units of the Company (the “Units”);
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4,321,157 Common Shares issuable upon exercise of Common Share purchase warrants, exercisable at a price
per Common Share of C$1.63, expiring May 10, 2023 (the “Selling Shareholder Warrants”), which were issued to selling shareholders
in connection with the closing of the Private Placement; and
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77,961 Common Shares issuable upon exercise of Common Share purchase warrants, exercisable at a
price per Common Share of C$1.63, expiring May 10, 2023 (the “Compensation Warrants” and, collectively with the Selling
Shareholder Warrants, the “Warrants”), which were issued to Research Capital Corporation (“RCC”) for
services rendered to us in connection with the Private Placement.
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The selling shareholders may
sell or otherwise dispose of the Common Shares covered by this prospectus or interests therein on any stock exchange, market or trading
facility on which the Common Shares are traded or in private transactions. These dispositions may be at fixed prices, at prevailing market
prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale, or at
negotiated prices. Additional information about the selling shareholders, and the times and manner in which they may offer and sell Common
Shares under this prospectus, is provided in the sections entitled “Selling Shareholders” and “Plan of Distribution”
of this prospectus.
We will not receive any proceeds
from the resale of the Common Shares by the selling shareholders. However, upon exercise, we will receive the cash exercise price of the
Warrants.
Our Common Shares are traded
on the Toronto Stock Exchange (the “TSX”) under the symbol “NB” and quoted on the OTCQX under the symbol “NIOBF.”
On June 30, 2021, the last reported closing bid price of our Common Shares was $1.36 per Common Share on the OTCQX and C$1.70 per Common
Share on the TSX. The over-the-counter quotations on the OTCQX reflect inter-dealer prices, without retail mark-up, mark-down or commission
and may not necessarily represent actual transactions. You are urged to obtain current market quotations of the Common Shares.
All dollar amounts reflected
herein refer to U.S. dollars unless otherwise noted.
We are an “emerging
growth company” as defined under federal securities laws and, as such, may elect to comply with certain reduced public company requirements
for future filings.
Investing in the Common Shares
involves a high degree of risk. See “Risk Factors” beginning on page 4 of this prospectus.
Neither the Securities and
Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of the securities offered
hereby or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is
July 1, 2021.
Table of
Contents
GLOSSARY OF TERMS
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0896800
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0896800 B.C. Ltd., a wholly-owned subsidiary of the Company and 100% owner of ECRC
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2019 Elk Creek Feasibility Study
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A feasibility study for the Elk Creek Project filed on SEDAR on May 29, 2019, with an effective date of April 16, 2019
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CIM
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Canadian Institute of Mining and Metallurgy
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Deposit
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A mineralized body which has been physically delineated by sufficient drilling, trenching, and/or underground work, and found to contain a sufficient average grade of metal or metals to warrant further exploration and/or development expenditures. Such a deposit does not qualify as a commercially mineable ore body or as containing reserves or ore, unless final legal, technical, and economic factors are resolved.
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ECRC
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Elk Creek Resources Corp., a private Nebraska corporation and wholly-owned subsidiary of 0896800
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Elk Creek Project
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NioCorp’s niobium, scandium, and titanium project located on the Elk Creek Property
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Elk Creek Property
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NioCorp’s Carbonatite property located in Southeast Nebraska, USA, held under a series of Option to Purchase agreements with local landowners.
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Exchange Act
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United States Securities Exchange Act of 1934, as amended
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feasibility study
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A comprehensive study of a mineral deposit in which all geological, engineering, legal, operating, economic, social, environmental, and other relevant factors are considered in sufficient detail that it could reasonably serve as the basis for a final decision by a financial institution to finance the development of the deposit for mineral production
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Grade
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A particular quantity of ore or mineral, relative to other constituents, in a specified quantity of rock
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HSLA steel
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High-strength low-alloy steel
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mineral reserve
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The economically and legally mineable part of a measured or indicated mineral resource demonstrated by at least a preliminary feasibility study under NI 43-101 standards or a bankable feasibility study under SEC Industry Guide 7 Standards. This study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. A mineral reserve includes diluting materials and allowances for losses that may occur when the material is mined and processed.
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mineral resource
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A concentration or occurrence of natural, solid, inorganic or fossilized organic material in or on the Earth’s crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics, and continuity of a mineral resource are known, estimated, or interpreted from specific geological evidence and knowledge. The term “mineral resource” covers mineralization and natural material of intrinsic economic interest which has been identified and estimated through exploration and sampling and within which mineral reserves may subsequently be defined by the consideration and application of technical, economic, legal, environmental, socio-economic, and governmental factors. The phrase “reasonable prospects for economic extraction” implies a judgment by a qualified person (as that term is defined in NI 43-101) in respect of the technical and economic factors likely to influence the prospect of economic extraction. A mineral resource is an inventory of mineralization that, under realistically assumed and justifiable technical and economic conditions, might become economically extractable.
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inferred mineral resource: Under CIM standards, an Inferred Mineral Resource is that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings, and drill holes.
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indicated mineral resource: Under CIM standards, an Indicated Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings, and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.
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measured mineral resource: Under CIM standards, a Measured Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape, physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling, and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings, and drill holes that are spaced closely enough to confirm both geological and grade continuity.
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SEC Industry Guide 7 does not define “mineral resources” and typically mineral resources may not be disclosed in reports filed with the SEC. See “Cautionary Note to U.S. Investors Regarding Mineral Reserve and Mineral Resource Estimates” below.
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NI 43-101
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National Instrument 43-101 of the Canadian Securities Administrators entitled “Standards of Disclosure for Mineral Projects”
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Niobium
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The element niobium (atomic number 41), a transition metal primarily used in the production of HSLA steel
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Scandium
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The element scandium (atomic number 21), a transition metal used as an alloying agent with aluminum that provides high strength and lower weight for aerospace industry components and other applications that need lightweight metals. It also is used in the electrolyte layer of solid oxide fuel cells.
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Securities Act
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United States Securities Act of 1933, as amended
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SEDAR
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System for Electronic Document Analysis and Retrieval, the electronic filing system for the disclosure documents of issuers across Canada
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Smith Credit Facility
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$3.5 million non-revolving credit facility pursuant to the Credit Facility Agreement, dated January 16, 2017, between the Company and Mark A. Smith, the Company’s Chief Executive Officer, President, Executive Chairman and Director, as amended from time to time
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Titanium
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The element titanium (atomic number 22), a transition metal which in its oxide form is a common pigment in paper, paint, and plastic. In its metallic form, titanium is used in aerospace applications, armor, chemical processing applications, marine hardware applications, medical implants, power generation, and in sporting goods.
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SEC INDUSTRY GUIDE 7 DEFINITIONS
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development stage
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A mineral project which is undergoing preparation of an established commercially mineable deposit for its extraction but which is not yet in production. This stage occurs after completion of a feasibility study.
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exploration stage
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A mineral prospect which is not in either the development or production stage
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mineralized material
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Material that is not included in the reserve as it does not meet all of the criteria for adequate demonstration for economic or legal extraction
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probable reserve
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Reserves for which quantity and grade and/or quality are computed from information similar to that used for proven (measured) reserves, but the sites for inspection, sampling, and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven reserves, is high enough to assume continuity between points of observation.
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production stage
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A project which is actively engaged in the process of extraction and beneficiation of mineral reserves to produce a marketable metal or mineral product
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proven reserve
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Reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings, or drill holes; grade and/or quality are computed from the results of detailed sampling and (b) the sites for inspection, sampling, and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth, and mineral content of reserves are well-established.
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reserve
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That part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination. Reserves must be supported by a feasibility study done to bankable standards that demonstrates the economic extraction. “Bankable standards” implies that the confidence attached to the costs and achievements developed in the study is sufficient for the project to be eligible for external debt financing. A reserve includes adjustments to the in-situ tonnes and grade to include diluting materials and allowances for losses that might occur when the material is mined.
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Cautionary
Note to U.S. Investors Regarding
Mineral Reserve and Resource Estimates
The mineral estimates incorporated
by reference into this prospectus have been prepared in accordance with the requirements of the securities laws in effect in Canada, which
differ from the requirements of United States securities laws. The terms “mineral reserve,” “proven mineral reserve”
and “probable mineral reserve” are Canadian mining terms as defined in accordance with NI 43-101 and the CIM Definition Standards
on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended. These definitions differ from the definitions in the
SEC Industry Guide 7 under the Securities Act. Under SEC Industry Guide 7 standards, a “final” or “bankable” feasibility
study is required to report reserves, the three-year historical average price is used in any reserve or cash flow analysis to designate
reserves and the primary environmental analysis or report must be filed with the appropriate governmental authority.
In addition, the terms
“mineral resource,” “measured mineral resource,” “indicated mineral resource,” and
“inferred mineral resource” are defined in, and required to be disclosed by NI 43-101; however, these terms are not
defined terms under SEC Industry Guide 7 and are normally not permitted to be used in reports and registration statements filed with
the SEC. Investors are cautioned not to assume that all or any part of a mineral deposit in these categories will ever be converted
into reserves. “Inferred mineral resources” have a great amount of uncertainty as to their existence, and great
uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource
will ever be upgraded to a higher category. Under Canadian securities laws and regulations, estimates of inferred mineral resources
may not form the basis of feasibility or pre-feasibility studies, except in rare cases. Investors are cautioned not to assume that
all or any part of an inferred mineral resource exists or is economically or legally mineable. Certain disclosures of the results of
mining operations incorporated by reference herein are permitted disclosure under Canadian regulations; however, the SEC normally
only permits issuers to report mineralization that does not constitute “reserves” by SEC Industry Guide 7 standards as
in place tonnage and grade without reference to unit measures.
Accordingly, information contained
in the documents incorporated by reference herein contain descriptions of our mineral deposits that may not be comparable to similar information
made public by U.S. companies subject to the reporting and disclosure requirements under the United States federal securities laws and
the rules and regulations thereunder.
In October 2018, the SEC approved
final rules requiring comprehensive and detailed disclosure requirements for issuers with material mining operations. The provisions in
Industry Guide 7 and Item 102 of Regulation S-K have been replaced with a new subpart 1300 of Regulation S-K under the Securities Act.
The changes adopted are intended to align the SEC’s disclosure requirements more closely with global standards as embodied by the
Committee for Mineral Reserves International Reporting Standards, including Canada’s NI 43-101 and CIM Definition Standards. Under
the new SEC rules, SEC registrants will be permitted to disclose “mineral resources” even though they reflect a lower level
of certainty than mineral reserves. Additionally, under the new SEC rules, mineral resources must be classified as “measured,”
“indicated” or “inferred,” terms which have similar definitions in and are required to be disclosed by NI 43-101
for Canadian issuers and are not recognized under SEC Industry Guide 7. The Company will be required to comply with these new rules for
the fiscal year ended June 30, 2022, and thereafter.
CURRENCY AND EXCHANGE RATES
All dollar amounts in this prospectus
are expressed in United States dollars unless otherwise indicated. The Company’s accounts are maintained in United States dollars
and the Company’s financial statements are prepared in accordance with United States Generally Accepted Accounting Principles. Some
of the Company’s material agreements use Canadian dollars and the Company’s Common Shares, as traded on the TSX, are traded
in Canadian dollars. As used herein, “C$” represents Canadian dollars.
The following table sets forth
the rate of exchange for the Canadian dollar, expressed in United States dollars in effect at the end of the periods indicated, the average
of exchange rates in effect during such periods, and the high and low exchange rates during such periods based on the daily rate of exchange
as reported by the Bank of Canada for conversion of Canadian dollars into United States dollars.
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Nine Months Ended March 31, 2021
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Fiscal Year Ended June 30,
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2020
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2019
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2018
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Canadian Dollars to United States Dollars
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Rate at end of period
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0.7952
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0.7338
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0.7641
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0.7594
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Average rate for period
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0.7694
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0.7453
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0.7556
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0.7876
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High for period
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0.8029
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0.7710
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0.7811
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0.8245
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Low for period
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0.7344
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0.6898
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0.7330
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0.7513
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About This
Prospectus
This prospectus is part of a
registration statement that we filed with the SEC.
We have not authorized anyone
to provide you with information different from that contained in this prospectus. If anyone provides you with different information, you
should not rely on it as having been authorized by us in making a decision about whether to invest in the securities being offered hereby.
This prospectus is offering to sell, and is seeking offers to buy, the securities only in jurisdictions where offers and sales are permitted.
The information contained in this prospectus speaks only as of the date of this prospectus unless the information specifically indicates
that another date applies, regardless of the time of delivery of this prospectus or of any sale of our Common Shares.
We may provide a prospectus supplement
containing specific information about the terms of a particular offering by the selling shareholders, or their transferees. The prospectus
supplement may add, update or change information in this prospectus. If information in a prospectus supplement is inconsistent with the
information in this prospectus, the information in the prospectus supplement shall be deemed to supersede the information contained herein
to the extent of the inconsistency. You should read both this prospectus and, if applicable, any prospectus supplement hereto. See “Where
You Can Find More Information” and “Information Incorporated by Reference.”
Documents incorporated by reference
herein include industry and market data and other information that we have obtained from, or which is based upon, market research, independent
industry publications or other publicly available information. Any such data and other information is subject to change based on various
factors, including those described below under the heading “Risk Factors” and under Item 1A. “Risk Factors” in
our most recent Annual Report on Form 10-K and in our most recent Quarterly Reports on Form 10-Q filed with the SEC, which
are incorporated herein by reference.
Our logo and some of our trademarks
are used in this prospectus, which remain our sole intellectual property. This prospectus also includes trademarks, tradenames, and service
marks that are the property of other organizations. Solely for convenience, our trademarks and tradenames referred to in this prospectus
appear without the “TM” symbol, but those references are not intended to indicate, in any way, that we will not assert, to
the fullest extent under applicable law, our rights, or the right of the applicable licensor to these trademarks and tradenames.
We have not, and the selling
shareholders have not, authorized anyone to provide you with information different from that contained or incorporated by reference in
this prospectus or in any supplement to this prospectus or free writing prospectus, and neither we nor the selling shareholders takes
any responsibility for any other information that others may give you. This prospectus is not an offer to sell, nor is it a solicitation
of an offer to buy, the securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information
contained in this prospectus or any prospectus supplement or free writing prospectus is accurate as of any date other than the date on
the front cover of those documents, or that the information contained in any document incorporated by reference is accurate as of any
date other than the date of the document incorporated by reference, regardless of the time of delivery of this prospectus or any sale
of a security. Our business, financial condition, results of operations and prospects may have changed since those dates.
Prospectus
Summary
This summary highlights information contained elsewhere
in this prospectus. It may not contain all of the information that you should consider before investing in our Common Shares. You should
read this entire prospectus carefully, including the “Risk Factors” section. This prospectus includes forward-looking statements
that involve risks and uncertainties. See “Cautionary Note Regarding Forward-Looking Statements.”
About the Company
NioCorp is a mineral exploration
company engaged in the acquisition, exploration, and development of mineral properties. NioCorp, through ECRC, is developing a superalloy
materials project that, if and when developed, will produce niobium, scandium, and titanium products. Known as the “Elk Creek Project,”
it is located near Elk Creek, Nebraska, in the southeast portion of the state.
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Niobium is used to produce various superalloys that are extensively used in high performance aircraft and jet turbines. It also is used in HSLA steel, a stronger steel used in automobiles, bridges, structural systems, buildings, pipelines, and other applications that generally enables those applications to be stronger and lighter in mass. This “lightweighting” benefit often results in environmental benefits, including reduced fuel consumption and material usage, which can result in fewer air emissions.
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Scandium can be combined with aluminum to make super-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.
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Titanium is a component of various superalloys and other applications that are used for aerospace applications, weapons systems, protective armor and medical implants. It also is used in pigments for paper, paint, and plastics.
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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.
NioCorp was incorporated under
the laws of the Province of British Columbia under the Business Corporations Act (British Columbia) on February 27, 1987, under the name
“IPC International Prospector Corp.” On May 22, 1991, we changed our name to “Kingston Resources Ltd.” On
June 29, 2001, we changed our name to “Butler Developments Corp.” On February 12, 2009, we changed our name to “Butler
Resource Corp.” On March 4, 2010, we changed our name to “Quantum Rare Earth Developments Corp.” On March 4, 2013,
we changed our name to “NioCorp Developments Ltd.”
NioCorp is a reporting issuer
in British Columbia, Alberta, Saskatchewan, Ontario, and New Brunswick. Our registered and records office is located at 595 Burrard Street,
Suite 2600, Vancouver, British Columbia V7X 1L3 (ATTN: Blake, Cassels & Graydon LLP). Our principal executive office is located at
7000 South Yosemite Street, Suite 115, Centennial, Colorado 80112. The telephone number of our principal executive office is (720) 639-4647.
The Offering
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Securities Offered by the Selling Shareholders
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8,720,275 Common Shares comprising:
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4,321,157 issued and outstanding Common Shares acquired by selling shareholders
in connection with the Private Placement;
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4,321,157 Common Shares issuable upon exercise of the Selling Shareholder
Warrants; and
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77,961 Common Shares issuable upon exercise of the Compensation Warrants.
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Offering Price
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Determined at the time of sale by the selling shareholders.
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Use of Proceeds
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We will not receive any proceeds from the resale of the Common Shares by the selling shareholders. However, upon exercise, we will receive the cash exercise price of the Warrants. See “Use of Proceeds.”
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Common Shares Outstanding as of
June 30, 2021
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256,379,931 Common Shares
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OTCQX and TSX Trading Symbols
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The Common Shares are quoted on the OTCQX under the symbol “NIOBF” and listed on the TSX under the symbol “NB.”
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Risk Factors
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Investing in our Common Shares involves a high degree of risk. See “Risk Factors” beginning on page 4 of this prospectus.
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Dividend Policy
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We currently intend to retain any future earnings to fund the development and growth of our business. Therefore, we do not currently anticipate paying cash dividends.
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Description of Private Issuances
The Private Placement
On May 10, 2021, the Company
closed the Private Placement. In connection with the closing of the Private Placement, a total of 4,334,157 Units were issued at a price
per Unit of C$1.43, for total gross proceeds to the Company of approximately C$6.2 million.
Each Unit issued in
connection with the Private Placement consisted of one Common Share and one Common Share purchase warrant. Each of such Common Share
purchase warrants, which include the Selling Shareholder Warrants, entitles the holder thereof to purchase one additional Common
Share at a price of C$1.63 at any time prior to 4:30 p.m. (Vancouver time) on May 10, 2023.
In connection with the Private
Placement, the Company entered into subscription agreements (collectively, the “Subscription Agreements”) by and between the
Company and each investor. The Subscription Agreements contain the terms of the Private Placement and typical representations and warranties
from the investors to the Company and from the Company to the investors.
The Units issued in the Private
Placement were issued on a private offering basis to investors with whom the Company had a pre-existing relationship pursuant to (i) in
the case of investors outside of the United States that were not, and were not acting for the account or benefit of, a U.S. person (as
defined in Regulation S under the Securities Act), the exclusion from the registration requirements
of the Securities Act provided by Rule 903 of Regulation S thereunder, and (ii) in the case of investors inside the United States or that
were, or were acting for the account or benefit of, a U.S. person, the exemption from the registration requirements of the Securities
Act provided by Rule 506(b) of Regulation D thereunder and Section 4(a)(2) thereof, in each case, pursuant to the representations and
covenants the investors made to the Company in connection with their purchase of the Units.
In connection with the Private
Placement, as part of a finder’s fee, the Company issued to RCC 77,961 Compensation Warrants, each of which is exercisable for
one Common Share at a price of C$1.63 until May 10, 2023. The Company also paid to RCC a cash commission of C$111,484.23 as part of the
finder’s fee. Each of the Compensation Warrants and cash commission were equivalent to 3% of the Units raised by RCC. The Compensation
Warrants were issued to RCC pursuant to the exclusion from the registration requirements of the Securities Act provided by Rule 903 of
Regulation S thereunder, pursuant to the representations and covenants RCC made to the Company in connection therewith.
RISK FACTORS
Investing in the Common Shares
involves a high degree of risk, including those described below. Prior to making a decision about investing in our Common Shares, you
should carefully consider the following risk factors, as well as specific risk factors discussed under the heading “Risk Factors”
in our most recent Annual Report on Form 10-K and in our most recent Quarterly Reports on Form 10-Q, which are or
will be incorporated herein by reference and may be amended, supplemented or superseded from time to time by other reports we file with
the SEC in the future. The risks and uncertainties we have described are not the only risks we face. Additional risks and uncertainties
not presently known to us or that we currently deem immaterial may also affect our operations. If any of these risks actually occurs,
our business, results of operations and financial condition could suffer. In that case, the trading price of our Common Shares could decline,
and you could lose part of your investment.
Risks Related to the Common Shares
We believe that we may be a “passive foreign
investment company” for the current taxable year and for one or more future taxable years, which may result in materially adverse
U.S. federal income tax consequences for U.S. investors.
We generally will be designated
as a “passive foreign investment company” (a “PFIC”) under the meaning of Section 1297 of the U.S. Internal Revenue
Code of 1986, as amended (the “Code”), if, for a tax year, (a) 75% or more of our gross income for such year is “passive
income” (generally, dividends, interest, rents, royalties, and gains from the disposition of assets producing passive income) or
(b) at least 50% or more of the value of our assets produce, or are held for the production of, passive income, based on the quarterly
average of the fair market value of such assets. U.S. shareholders should be aware that we believe we were classified as a PFIC during
our tax years ended June 30, 2020 and 2019, and based on current business plans and financial expectations, believe that we may be a PFIC
for the current and one or more future taxable years. If we are a PFIC for any taxable year during a U.S. shareholder’s holding
period, then such U.S. shareholder generally will be required to treat any gain realized upon a disposition of Common Shares, or any “excess
distribution” received on its Common Shares, as ordinary income, and to pay an interest charge on a portion of such gain or distribution.
These consequences will be mitigated if the shareholder makes a timely and effective QEF Election (as defined below) or a “mark-to-market”
election with respect to the Common Shares. A U.S. shareholder who makes a QEF Election generally must include in income on a current
basis for U.S. federal income tax purposes its share of our net capital gain and ordinary earnings for any taxable year in which we are
a PFIC, whether or not we distribute any amount to our shareholders. A U.S. shareholder who makes a mark-to-market election generally
must include as ordinary income each year the excess of the fair market value of the Common Shares over the taxpayer’s basis therein.
This paragraph is qualified in its entirety by the discussion below under the heading “Certain United States Federal Income Tax
Considerations.” Each U.S. shareholder should consult its own tax advisors regarding the PFIC rules and the U.S. federal income
tax consequences of the acquisition, ownership, and disposition of Common Shares.
Our Common Share price may be volatile and as a result you could
lose all or part of your investment.
In addition to volatility associated
with equity securities in general, the value of your investment could decline due to the impact of any of the following factors upon the
market price of the Common Shares:
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Disappointing results from our exploration and/or, if warranted, project development efforts;
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Decline in demand for Common Shares;
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Downward revisions in securities analysts’ estimates or changes in general market conditions;
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|
|
·
|
Technological innovations by competitors or in competing technologies;
|
|
|
·
|
Investor perception of our industry or our prospects; and
|
|
|
·
|
General economic trends.
|
In the twelve months ended
June 30, 2021, the trading price of our stock on the TSX ranged from a low of C$0.69 to a high of C$2.08. In addition, stock markets
in general have experienced extreme price and volume fluctuations, and the market prices of securities have been highly volatile.
These fluctuations are often unrelated to operating performance and may adversely affect the market price of the Common Shares. As a
result, you may be unable to sell any Common Shares you acquire at a desired price.
We have never paid dividends on the Common Shares.
We have not paid dividends on
the Common Shares to date, and we may not be in a position to pay dividends for the foreseeable future. Our ability to pay dividends with
respect to the Common Shares will depend on our ability to successfully develop one or more properties and generate earnings from operations.
Further, our initial earnings, if any, will likely be retained to finance our operations. Any future dividends on Common Shares will depend
upon our earnings, our then-existing financial requirements, and other factors, and will be at the discretion of our Board of Directors.
Investors’ interests in the Company will
be diluted and investors may suffer dilution in their net book value per Common Share if we issue additional employee/director/consultant
options or if we sell additional Common Shares to finance our operations.
In order to further expand the
Company’s operations and meet our objectives, any additional growth and/or expanded exploration activity will likely need to be
financed through sale of and issuance of additional Common Shares, including, but not limited to, raising funds to explore the Elk Creek
Project. Furthermore, to finance any acquisition activity, should that activity be properly approved, and depending on the outcome of
our exploration programs, we likely will also need to issue additional Common Shares to finance future acquisitions, growth, and/or additional
exploration programs of any or all of our projects or to acquire additional properties. We will also in the future grant to some or all
of our directors, officers, and key employees and/or consultants options to purchase Common Shares as non-cash incentives. The issuance
of any equity securities could, and the issuance of any additional Common Shares will, cause our existing shareholders to experience dilution
of their ownership interests.
If we issue additional Common
Shares or decide to enter into joint ventures with other parties in order to raise financing through the sale of equity securities, investors’
interests in the Company will be diluted and investors may suffer dilution in their net book value per Common Share depending on the price
at which such securities are sold.
We are subject to the continued listing criteria
of the TSX and our failure to satisfy these criteria may result in delisting of the Common Shares.
The Common Shares are currently
listed on the TSX. In order to maintain the listing, we must maintain certain financial and share distribution targets, including maintaining
a minimum number of public shareholders. In addition to objective standards, the TSX may delist the securities of any issuer if, in the
TSX’s opinion, the issuer’s financial condition and/or operating results appear unsatisfactory; if it appears that the extent
of public distribution or the aggregate market value of the security has become so reduced as to make continued listing on the TSX inadvisable;
if the issuer sells or disposes of principal operating assets or ceases to be an operating company; if an issuer fails to comply with
the listing requirements of the TSX; or if any other event occurs or any condition exists which makes continued listing on the TSX, in
the opinion of the TSX, inadvisable.
If the TSX delists the Common
Shares, investors may face material adverse consequences, including, but not limited to, a lack of a trading market for the Common Shares,
reduced liquidity, decreased analyst coverage of the Company, and an inability for us to obtain additional financing to fund our operations.
The issuance of additional Common Shares may negatively impact the
trading price of our securities.
We have issued Common
Shares in the past and will continue to issue Common Shares to finance our activities in the future. In addition, outstanding
options, warrants, and broker warrants to purchase Common Shares may be exercised, resulting in the issuance of additional Common
Shares. The issuance by us of additional Common Shares would result in dilution to our shareholders, and even the perception that
such an issuance may occur could have a negative impact on the trading price of the Common Shares.
We are an “emerging growth company,”
and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our Common Shares less
attractive to investors.
We are an “emerging growth
company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). For as long as we continue
to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other
public companies that are not emerging growth companies, including not being required to comply with the auditor attestation requirements
of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in our periodic reports
and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder
approval of any golden parachute payments not previously approved. We could be an emerging growth company through June 30, 2022, although
circumstances could cause us to lose that status earlier, including if the market value of our Common Shares held by non-affiliates exceeds
$700 million as of any December 31 before that time, in which case we would no longer be an emerging growth company as of the following
June 30. We cannot predict if investors will find our Common Shares less attractive because we may rely on these exemptions. If some investors
find our Common Shares less attractive as a result, there may be a less active trading market for our Common Shares and our Common Share
price may be more volatile. Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards
until such time as those standards apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from
new or revised accounting standards and, therefore, will be subject to the same new or revised accounting standards as other public companies
that are not emerging growth companies.
Broker-dealers may be discouraged from effecting transactions in
Common Shares because they are considered a penny stock and are subject to the penny stock rules.
Our Common Shares are currently
considered a “penny stock.” The SEC has adopted Rule 15g-9, which generally defines “penny stock” to be any equity
security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to
certain exceptions. The Common Shares are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers
who sell to persons other than established customers and “accredited investors.” The term “accredited investor”
refers generally to institutions with assets in excess of $5.0 million or individuals with a net worth in excess of $1.0 million or annual
income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction
in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC,
which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must
provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson
in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account.
The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or
in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation.
In addition, the penny stock rules require that, prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer
must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s
written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the
secondary market for the Common Shares. Consequently, these penny stock rules may affect the ability of broker-dealers to trade in the
Common Shares.
Cautionary
Note Regarding Forward-Looking Statements
The information discussed in
this prospectus and the documents incorporated by reference include “forward-looking statements.” All statements, other than
statements of historical facts, included or incorporated by reference herein concerning, among other things, planned capital expenditures,
future cash flows and borrowings, pursuit of potential acquisition opportunities, our financial position, business strategy and other
plans and objectives for future operations, future exploration activities, future mineral resource estimates, and future joint venture
arrangements are forward-looking statements. These forward-looking statements are identified by their use of terms and phrases such as
“may,” “expect,” “estimate,” “project,” “plan,” “believe,” “intend,”
“achievable,” “anticipate,” “will,” “continue,” “potential,” “should,”
“could,” and similar terms and phrases.
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. Forward-looking
statements are subject to a variety of known and unknown risks, uncertainties, and other factors that could cause actual events or results
to differ from those expressed or implied by the forward-looking statements, including, without limitation:
|
|
●
|
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 cost increases for our exploration and, if warranted, development projects;
|
|
|
●
|
risks related to feasibility study results;
|
|
|
●
|
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 of mineral resources and reserves;
|
|
|
●
|
risks related to changes in mineral resource and reserve estimates;
|
|
|
●
|
risks related to differences in U.S. and Canadian reserve and resource reporting;
|
|
|
●
|
risks related to our exploration activities being unsuccessful;
|
|
|
●
|
risks related to our ability to obtain 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 that may significantly affect the mining industry;
|
|
|
●
|
risks related to land reclamation requirements;
|
|
|
●
|
risks related to competition in the mining industry;
|
|
|
●
|
risks related to the difficulties of managing and treating water at our Elk Creek Project;
|
|
|
●
|
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 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 the need for resilience in the face of potential impacts from climate change;
|
|
|
●
|
risks related to a disruption in, or failure of, our information technology systems, including those related to cybersecurity;
|
|
|
●
|
risks related to covenants contained in agreements with our secured creditors that may affect our assets;
|
|
|
●
|
risks related to the extent to which our level of indebtedness may impair our ability to obtain additional financing;
|
|
|
●
|
risks related to our status as a PFIC under the Code;
|
|
|
●
|
risks related to our Common Shares, including price volatility, lack of dividend payments, dilution and penny stock rules;
|
|
|
●
|
risks related to our status as an “emerging growth company” and the impact of related reduced reporting requirements on our ability to attract investors; and
|
|
|
●
|
risks related to the effects of the COVID-19 pandemic on our business plans, financial condition and liquidity.
|
This list is not exhaustive of
the factors that may affect our forward-looking statements. Some of the important risks and uncertainties that could affect forward-looking
statements are described further under “Risk Factors” in this prospectus and in our most recent Annual Report on Form 10-K and
in our most recent Quarterly Reports on Form 10-Q, which are or will be incorporated herein by reference. Should one or more
of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from
those anticipated, believed, estimated, or expected. We caution readers not to place undue reliance on any such forward-looking statements,
which speak only as of the date made. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events
or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events, except as required
by law.
Use of Proceeds
This prospectus relates to the
sale or other disposition of our Common Shares by the selling shareholders listed under the “Selling Shareholders” section
below, and their transferees. We will not receive any proceeds from the resale of the Common Shares by the selling shareholders. However,
upon exercise, we will receive the cash exercise price of the Warrants and will use the proceeds, if any, for general corporate purposes.
Market for
Common Equity and Related Shareholder Matters
The outstanding Common Shares
were first listed and posted for trading on the Vancouver Stock Exchange on December 1, 1987. On March 9, 2015, the Common Shares commenced
trading on the TSX under the trading symbol “NB.” In addition, the Company trades on the United States Over-the-Counter Bulletin
Board (“OTCBB”) and the OTCQX under the symbol “NIOBF” and on the Frankfurt Stock Exchange as “BR3.”
The quotations with respect to the Common Stock on the OTCBB and the OTCQX reflect inter-dealer prices without retail mark-up, mark-down
or commission and may not reflect actual transactions.
Selling
Shareholders
This prospectus covers an aggregate
of 8,720,275 Common Shares comprising: (i) 4,321,157 issued and outstanding Common Shares acquired by selling shareholders in connection
with the Private Placement; (ii) up to 4,321,157 Common Shares issuable upon exercise of the Selling Shareholder Warrants; and (iii) up
to 77,961 Common Shares issuable upon exercise of the Compensation Warrants.
Selling shareholders are persons
or entities that, directly or indirectly, have acquired Common Shares in the Private Placement, or will acquire Common Shares from us
from time to time upon exercise of the Warrants. This prospectus and any prospectus supplement will only permit the selling shareholders
to sell the Common Shares identified in the “Number of Common Shares Offered Hereby” column in the table below.
The selling shareholders may
from time to time offer and sell the Common Shares pursuant to this prospectus and any applicable prospectus supplement. The selling shareholders
may offer all or some portion of the Common Shares they hold or acquire, but only Common Shares that are currently outstanding or Common
Shares that are acquired upon the exercise of the Warrants and in any case included in the “Number of Common Shares Offered Hereby”
column in the table below may be sold pursuant to this prospectus or any applicable prospectus supplement.
The Common Shares issued to,
or issuable upon the exercise of the Warrants held by, the selling shareholders are “restricted” shares under applicable federal
and state securities laws and are being registered to give the selling shareholders the opportunity to sell their Common Shares. The registration
of such Common Shares does not necessarily mean, however, that any of these Common Shares will be offered or sold by the selling shareholders.
The selling shareholders may from time to time offer and sell all or a portion of their Common Shares in the over-the-counter market,
in negotiated transactions, or otherwise, at market prices prevailing at the time of sale or at negotiated prices.
The registered Common Shares
may be sold directly or through brokers or dealers. To the extent required, the names of any agent or broker-dealer and applicable commissions
or discounts and any other required information with respect to any particular offer will be set forth in an accompanying prospectus supplement.
See “Plan of Distribution.”
Each of the selling shareholders
reserves the right, in its sole discretion, to accept or reject, in whole or in part, any proposed purchase of the registered Common Shares
to be made directly or through agents. To the extent that any of the selling shareholders are acting as brokers or dealers with respect
to the securities being offered hereby, they may be deemed to be “underwriters” within the meaning of the Securities Act and
any commissions received by them and any profit on the resale of the registered Common Shares may be deemed to be underwriting commissions
or discounts under the Securities Act. As of the date of this prospectus, based on the representations received by the Company from the
selling shareholders, none of the selling shareholders are registered brokers or dealers or affiliated with registered brokers or dealers.
The following table sets forth
the names of the selling shareholders who are offering for resale Common Shares pursuant to this prospectus, the number of Common Shares
beneficially owned by each such person, the number of Common Shares that may be sold in this offering and the number of Common Shares
each such person will own after this offering, assuming they sell all of the Common Shares offered. The information appearing in the table
below is based on information provided by or on behalf of the named selling shareholders. We will not receive any proceeds from the resale
of the Common Shares by the selling shareholders. However, upon exercise, we will receive the cash exercise price of the Warrants.
|
|
|
|
Beneficial Ownership After This Offering
|
|
Name of the Selling Shareholder (1)
|
Number of Common Shares Beneficially Owned Prior to This Offering (1)
|
Number of Common Shares Offered Hereby (2)
|
Number of Common Shares
|
% of Outstanding Common Shares
|
|
Research Capital Corporation (3)
|
160,211
|
77,961
|
82,250
|
*
|
|
Lind Global Asset Management III, LLC (4)
|
24,066,162
|
1,398,600
|
22,667,562
|
8.21%
|
|
Johan Landwehr (5)
|
2,000
|
2,000
|
-
|
-
|
|
Kevin McGlensey (6)
|
2,153,319
|
44,000
|
2,109,319
|
*
|
|
Glenn Schultz (7)
|
342,572
|
87,572
|
255,000
|
*
|
|
Steve Everhart (8)
|
2,498,742
|
298,742
|
2,200,000
|
*
|
|
Jason Boisvert (9)
|
2,832,278
|
264,000
|
2,568,278
|
1.01%
|
|
Maarten Soetaert (10)
|
95,000
|
60,000
|
35,000
|
*
|
|
Wim Bakker (11)
|
41,800
|
15,000
|
26,800
|
*
|
|
Rogier Botting (12)
|
54,000
|
30,000
|
24,000
|
*
|
|
Petrus Johannes Broeders (13)
|
40,000
|
15,000
|
25,000
|
*
|
|
Benedikt Bruggeman (14)
|
170,000
|
30,000
|
140,000
|
*
|
|
Jan Buter (15)
|
195,000
|
15,000
|
180,000
|
*
|
|
Rene Clignett (16)
|
533,807
|
30,000
|
503,807
|
*
|
|
Jacques de Groot (17)
|
233,500
|
60,000
|
173,500
|
*
|
|
Klaas de Groot (18)
|
65,000
|
45,000
|
20,000
|
*
|
|
Ron Feenstra (19)
|
35,000
|
15,000
|
20,000
|
*
|
|
Hassan Ghrib (20)
|
112,500
|
30,000
|
82,500
|
*
|
|
Toon Van Ginderen (21)
|
196,000
|
90,000
|
106,000
|
*
|
|
Jolanda Van Ginderen (22)
|
22,150
|
15,000
|
7,150
|
*
|
|
Bennie Hoornveld (23)
|
61,193
|
30,000
|
31,193
|
*
|
|
Hans Janshen (24)
|
234,000
|
30,000
|
204,000
|
*
|
|
Marc Joosten (25)
|
210,000
|
60,000
|
150,000
|
*
|
|
Max Lont (26)
|
66,000
|
15,000
|
51,000
|
*
|
|
Marcel Neering (27)
|
160,000
|
15,000
|
145,000
|
*
|
|
Paul van Rooy (28)
|
105,000
|
75,000
|
30,000
|
*
|
|
Alwin Tetteroo (29)
|
135,048
|
30,000
|
105,048
|
*
|
|
Peter Tromp (30)
|
200,000
|
15,000
|
185,000
|
*
|
|
Dirk Jan van Beem (31)
|
609,564
|
60,000
|
549,564
|
*
|
|
Leon van Dam (32)
|
205,000
|
30,000
|
175,000
|
*
|
|
Marco van der Vegt (33)
|
140,000
|
90,000
|
50,000
|
*
|
|
Paul Derk van Ewijk (34)
|
107,000
|
15,000
|
92,000
|
*
|
|
Indy Van Meteren (35)
|
50,000
|
30,000
|
20,000
|
*
|
|
Dirk Van Metern (36)
|
490,000
|
60,000
|
430,000
|
*
|
|
Renny van Wijk-Spinder (37)
|
312,700
|
210,000
|
102,700
|
*
|
|
Peter van Wijk (38)
|
115,000
|
15,000
|
100,000
|
*
|
|
Anthonie Van Zalk (39)
|
70,000
|
30,000
|
40,000
|
*
|
|
Martin Vandamme (40)
|
152,000
|
30,000
|
122,000
|
*
|
|
Adreanus Verburg (41)
|
131,400
|
15,000
|
116,400
|
*
|
|
Kees Volders (42)
|
111,714
|
15,000
|
96,714
|
*
|
|
Wilma de Vries-Mulder (43)
|
40,000
|
30,000
|
10,000
|
*
|
|
Sarah Christilaw (44)
|
239,832
|
80,000
|
159,832
|
*
|
|
Maria Elizabeth Moore (45)
|
538,308
|
208,000
|
330,308
|
*
|
|
Robert Baumgart (46)
|
367,000
|
210,000
|
157,000
|
*
|
|
Donna Kings (47)
|
120,000
|
70,000
|
50,000
|
*
|
|
Susan Zakamarko (48)
|
155,000
|
70,000
|
85,000
|
*
|
|
Weber Investment Corporation (49)
|
1,675,530
|
690,000
|
985,530
|
*
|
|
1589835 Ontario Inc (50)
|
917,500
|
420,000
|
497,500
|
*
|
|
Michelle Amey (51)
|
104,665
|
70,000
|
34,665
|
*
|
|
Marva Usher (52)
|
140,000
|
70,000
|
70,000
|
*
|
|
Don Ambeau (53)
|
168,250
|
70,000
|
98,250
|
*
|
|
Debby Heath (54)
|
234,600
|
112,600
|
122,000
|
*
|
|
Don Heath (55)
|
423,266
|
182,600
|
240,666
|
*
|
|
Michael Bruce Wannop and/or Wendy Spiegelberg JTWROS (56)
|
1,802,514
|
682,000
|
1,120,514
|
*
|
|
Adam Christilaw and/or Hayley Christilaw JTWROS (57)
|
409,133
|
145,400
|
263,733
|
*
|
|
Adam Christilaw (58)
|
698,350
|
431,200
|
267,150
|
*
|
|
Hayley Christilaw (59)
|
222,983
|
90,000
|
132,983
|
*
|
|
David Christilaw (60)
|
1,057,202
|
594,000
|
463,202
|
*
|
|
Edward Ivan Martin and/or Claireete Martin JTWROS (61)
|
1,046,500
|
450,000
|
596,500
|
*
|
|
Edward Ivan Martin (62)
|
104,000
|
104,000
|
-
|
-
|
|
Gloria Christilaw (63)
|
731,532
|
290,000
|
441,532
|
*
|
|
Brad Sinclair (64)
|
95,000
|
45,000
|
50,000
|
*
|
|
Colleen Fox (65)
|
218,900
|
112,600
|
106,300
|
*
|
|
Total
|
49,024,725
|
8,720,275
|
40,304,450
|
14.29%
|
__________
* Less than 1%
|
(1)
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This table is based upon information supplied by the selling shareholders, which information may not be accurate as of the date hereof. We have determined beneficial ownership in accordance with the rules of the SEC. Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the selling shareholders named in the table above have sole voting and investment power with respect to all securities that they beneficially own, subject to applicable community property laws. Applicable percentages for the Common Shares are based on 256,379,931 Common Shares outstanding on June 30, 2021, adjusted as required by rules promulgated by the SEC.
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(2)
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Includes Common Shares issuable upon exercise of Common Share purchase warrants.
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(3)
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The selling shareholder, Research Capital Corporation, is the registered owner of the Common Shares and Common Share purchase warrants. The jurisdiction of the selling shareholder is Canada. Patrick Walsh has voting and investment power over the Common Shares. Beneficial ownership includes (a) 77,961 Common Shares issuable upon exercise of Compensation Warrants and (b) 82,250 Common Shares issuable upon exercise of Common Share purchase warrants, exercisable at C$0.79 per Common Share, expiring July 26, 2021. The selling shareholder is offering pursuant to this prospectus 77,961 Common Shares issuable upon exercise of Compensation Warrants. Research Capital Corporation received the Compensation Warrants being offered pursuant to this prospectus as compensation for services rendered in the Private Placement.
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(4)
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The selling shareholder, Lind Global Asset Management III, LLC, is the registered owner of the Common Shares. The jurisdiction of the selling shareholder is the United States. Each of Lind Global Macro Fund, LP, the sole member of Lind Global Asset Management III, LLC, Lind Global Partners LLC, the general partner of Lind Global Macro Fund, LP, and Jeff Easton, the managing member of Lind Global Macro Fund, LP, have voting and investment power over the Common Shares and may be deemed to be a beneficial owner. Beneficial ownership includes: (a) 1,102,200 Common Shares, (b) 500,000 Common Shares issuable upon exercise of Common Share purchase warrants, exercisable at C$0.77 per Common Share, expiring July 9, 2021, (c) 8,558,000 Common Shares issuable upon exercise of the Common Share purchase warrants, exercisable at C$0.97 per Common Share, expiring February 19, 2025, (d) 699,300 Common shares issuable upon exercise of Selling Shareholder Warrants, and (e) 13,206,662 Common Shares issuable upon conversion of $11.7 million principal amount of the a convertible security issued to Lind Global Asset Management III, LLC pursuant to a convertible security funding agreement, dated February 16, 2021, between the Company and Lind Global Asset Management III, LLC. With respect to item (e), the number of Common Shares issuable is calculated by converting $11.7 million, the aggregate principal amount of the convertible security outstanding as of June 15, 2021, into C$14,259,960 based on the daily exchange rate on June 15, 2021 of $1.00 to C$1.2188 as reported by the Bank of Canada, then dividing the result by the conversion price per Common Share, or approximately C$1.0798, which is equal to 85% of the volume-weighted average price of the Common Shares on the TSX for the five consecutive trading days immediately prior to June 15, 2021. The selling shareholder is offering pursuant to this prospectus 699,300 Common Shares and 699,300 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(5)
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Johan
Landwehr has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The
Netherlands. Beneficial ownership includes (a) 1,000 Common Shares and (b) 1,000 Common Shares issuable upon exercise of
Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 1,000 Common Shares and 1,000 Common
Shares issuable upon exercise of Selling Shareholder Warrants.
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(6)
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Kevin McGlensey has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is the United States. Beneficial ownership includes (a) 2,131,319 Common Shares and (b) 22,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 22,000 Common Shares and 22,000 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(7)
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Glenn Schultz has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is the United States. Beneficial ownership includes (a) 298,786 Common Shares and (b) 43,786 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 43,786 Common Shares and 43,786 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(8)
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Steve Everhart has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is the United States. Beneficial ownership includes (a) 2,349,371 Common Shares and (b) 149,371 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 149,371 Common Shares and 149,371 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(9)
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Jason Boisvert has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is Canada. Beneficial ownership includes (a) 2,700,278 Common Shares and (b) 132,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 132,000 Common Shares and 132,000 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(10)
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Maarten Soetaert has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is Belgium. Beneficial ownership includes (a) 65,000 Common Shares and (b) 30,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 30,000 Common Shares and 30,000 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(11)
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Wim Bakker has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 34,300 Common Shares and (b) 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 7,500 Common Shares and 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(12)
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Rogier Botting has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 39,000 Common Shares and (b) 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 15,000 Common Shares and 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(13)
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Petrus Johannes Broeders has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 32,500 Common Shares and (b) 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 7,500 Common Shares and 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(14)
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Benedikt Bruggeman has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is Belgium. Beneficial ownership includes (a) 155,000 Common Shares and (b) 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 15,000 Common Shares and 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(15)
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Jan Buter has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 187,500 Common Shares and (b) 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 7,500 Common Shares and 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(16)
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Rene Clignett has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 518,807 Common Shares and (b) 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 15,000 Common Shares and 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(17)
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Jacques de Groot has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is Belgium. Beneficial ownership includes (a) 203,500 Common Shares and (b) 30,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 30,000 Common Shares and 30,000 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(18)
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Klaas de Groot has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 42,500 Common Shares and (b) 22,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 22,500 Common Shares and 22,500 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(19)
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Ron Feenstra has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 27,500 Common Shares and (b) 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 7,500 Common Shares and 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(20)
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Hassan Ghrib has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 97,500 Common Shares and (b) 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 15,000 Common Shares and 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(21)
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Toon Van Ginderen has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 151,000 Common Shares and (b) 45,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 45,000 Common Shares and 45,000 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(22)
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Jolanda Van Ginderen has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 14,650 Common Shares and (b) 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 7,500 Common Shares and 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(23)
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Bennie Hoornveld has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 46,193 Common Shares and (b) 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 15,000 Common Shares and 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(24)
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Hans Janshen has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 219,000 Common Shares and (b) 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 15,000 Common Shares and 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(25)
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Marc Joosten has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 180,000 Common Shares and (b) 30,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 30,000 Common Shares and 30,000 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(26)
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Max Lont has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 58,500 Common Shares and (b) 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 7,500 Common Shares and 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(27)
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Marcel Neering has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 152,500 Common Shares and (b) 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 7,500 Common Shares and 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(28)
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Paul van Rooy has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 67,500 Common Shares and (b) 37,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 37,500 Common Shares and 37,500 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(29)
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Alwin Tetteroo has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 120,048 Common Shares and (b) 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 15,000 Common Shares and 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(30)
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Peter Tromp has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 192,500 Common Shares and (b) 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 7,500 Common Shares and 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(31)
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Dirk Jan van Beem has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 579,564 Common Shares and (b) 30,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 30,000 Common Shares and 30,000 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(32)
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Leon van Dam has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 190,000 Common Shares and (b) 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 15,000 Common Shares and 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(33)
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Marco van der Vegt has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 95,000 Common Shares and (b) 45,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 45,000 Common Shares and 45,000 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(34)
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Paul Derk van Ewijk has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 99,500 Common Shares and (b) 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 7,500 Common Shares and 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(35)
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Indy Van Meteren has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 35,000 Common Shares and (b) 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 15,000 Common Shares and 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(36)
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Dirk Van Metern has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 460,000 Common Shares and (b) 30,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 30,000 Common Shares and 30,000 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(37)
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Renny van Wijk-Spinder has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 207,700 Common Shares and (b) 105,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 105,000 Common Shares and 105,000 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(38)
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Peter van Wijk has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 107,500 Common Shares and (b) 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 7,500 Common Shares and 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(39)
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Anthonie Van Zalk has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 55,000 Common Shares and (b) 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 15,000 Common Shares and 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(40)
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Martin Vandamme has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is Belgium. Beneficial ownership includes (a) 137,000 Common Shares and (b) 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 15,000 Common Shares and 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(41)
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Adreanus Verburg has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 123,900 Common Shares and (b) 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 7,500 Common Shares and 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(42)
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Kees Volders has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 104,214 Common Shares and (b) 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 7,500 Common Shares and 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(43)
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Wilma de Vries-Mulder has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 25,000 Common Shares and (b) 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 15,000 Common Shares and 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(44)
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Sarah Christilaw has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is Canada. Beneficial ownership includes (a) 138,832 Common Shares, (b) 40,000 Common Shares issuable upon exercise of Selling Shareholder Warrants, and (c) 61,000 Common Shares issuable upon exercise of Common Share purchase warrants, exercisable at C$0.79 per Common Share, expiring July 26, 2021 (the “July 2017 Warrants”). The selling shareholder is offering pursuant to this prospectus 40,000 Common Shares and 40,000 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(45)
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Maria Elizabeth Moore has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is Canada. Beneficial ownership includes (a) 284,308 Common Shares, (b) 104,000 Common Shares issuable upon exercise of Selling Shareholder Warrants, and (c) 150,000 Common Shares issuable upon exercise of July 2017 Warrants. The selling shareholder is offering pursuant to this prospectus 104,000 Common Shares and 104,000 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(46)
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Robert Baumgart has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is Canada. Beneficial ownership includes (a) 247,000 Common Shares, (b) 105,000 Common Shares issuable upon exercise of Selling Shareholder Warrants, and (c) 15,000 Common Shares issuable upon exercise of July 2017 Warrants. The selling shareholder is offering pursuant to this prospectus 105,000 Common Shares and 105,000 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(47)
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Donna Kings has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is Canada. Beneficial ownership includes (a) 60,000 Common Shares, (b) 35,000 Common Shares issuable upon exercise of Selling Shareholder Warrants, and (c) 25,000 Common Shares issuable upon exercise of July 2017 Warrants. The selling shareholder is offering pursuant to this prospectus 35,000 Common Shares and 35,000 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(48)
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Susan Zakamarko has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is Canada. Beneficial ownership includes (a) 85,000 Common Shares, (b) 35,000 Common Shares issuable upon exercise of Selling Shareholder Warrants, and (c) 35,000 Common Shares issuable upon exercise of July 2017 Warrants. The selling shareholder is offering pursuant to this prospectus 35,000 Common Shares and 35,000 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(49)
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The selling shareholder, Weber Investment Corporation, is the registered owner of the Common Shares and Common Share purchase warrants. The jurisdiction of the selling shareholder is Canada. Gary Weber has voting and investment power over the Common Shares and may be deemed to be a beneficial owner. Beneficial ownership includes (a) 963,530 Common Shares, (b) 345,000 Common Shares issuable upon exercise of Selling Shareholder Warrants, and (c) 367,000 Common Shares issuable upon exercise of July 2017 Warrants. The selling shareholder is offering pursuant to this prospectus 345,000 Common Shares and 345,000 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(50)
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The selling shareholder, 1589835 Ontario Inc, is the registered owner of the Common Shares and Common Share purchase warrants. The jurisdiction of the selling shareholder is Canada. Chris Young has voting and investment power over the Common Shares and may be deemed to be a beneficial owner. Beneficial ownership includes (a) 517,500 Common Shares, (b) 210,000 Common Shares issuable upon exercise of Selling Shareholder Warrants, and (c) 190,000 Common Shares issuable upon exercise of July 2017 Warrants. The selling shareholder is offering pursuant to this prospectus 210,000 Common Shares and 210,000 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(51)
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Michelle Amey has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is Canada. Beneficial ownership includes (a) 69,665 Common Shares and (b) 35,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 35,000 Common Shares and 35,000 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(52)
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Marva Usher has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is Canada. Beneficial ownership includes (a) 70,000 Common Shares, (b) 35,000 Common Shares issuable upon exercise of Selling Shareholder Warrants, and (c) 35,000 Common Shares issuable upon exercise of July 2017 Warrants. The selling shareholder is offering pursuant to this prospectus 35,000 Common Shares and 35,000 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(53)
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Don Ambeau has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is Canada. Beneficial ownership includes (a) 133,250 Common Shares, and (b) 35,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 35,000 Common Shares and 35,000 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(54)
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Debby Heath has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is Canada. Beneficial ownership includes (a) 124,300 Common Shares, (b) 56,300 Common Shares issuable upon exercise of Selling Shareholder Warrants, and (c) 54,000 Common Shares issuable upon exercise of July 2017 Warrants. The selling shareholder is offering pursuant to this prospectus 56,300 Common Shares and 56,300 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(55)
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Don Heath has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is Canada. Beneficial ownership includes (a) 249,966 Common Shares, (b) 91,300 Common Shares issuable upon exercise of Selling Shareholder Warrants, and (c) 82,000 Common Shares issuable upon exercise of July 2017 Warrants. The selling shareholder is offering pursuant to this prospectus 91,300 Common Shares and 91,300 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(56)
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Michael Bruce Wannop and/or Wendy Spiegelberg JTWROS have voting and investment power over the Common Shares. The jurisdiction of the selling shareholders is Canada. Beneficial ownership includes (a) 1,156,114 Common Shares, (b) 341,000 Common Shares issuable upon exercise of Selling Shareholder Warrants, and (c) 305,400 Common Shares issuable upon exercise of July 2017 Warrants. The selling shareholders are offering pursuant to this prospectus 341,000 Common Shares and 341,000 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(57)
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Adam Christilaw and/or Hayley Christilaw JTWROS have voting and investment power over the Common Shares. The jurisdiction of the selling shareholders is Canada. Beneficial ownership includes (a) 281,533 Common Shares, (b) 72,700 Common Shares issuable upon exercise of Selling Shareholder Warrants, and (c) 54,900 Common Shares issuable upon exercise of July 2017 Warrants. The selling shareholders are offering pursuant to this prospectus 72,700 Common Shares and 72,700 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(58)
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In
addition to the Common Shares and Common Share purchase warrants he owns individually, Adam Christilaw has voting and investment
power over and may be deemed to be a beneficial owner of the Common Shares and Common Share purchase warrants registered in the name
of 2064501 Ontario Inc., a corporation incorporated under the laws of Canada. The jurisdiction of the selling shareholder is
Canada. Beneficial ownership includes (a) 383,350 Common Shares, (b) 215,600 Common Shares issuable upon exercise of
Selling Shareholder Warrants, and (c) 99,400 Common Shares issuable upon exercise of July 2017 Warrants. The selling shareholder is
offering pursuant to this prospectus 215,600 Common Shares, and 215,600 Common Shares issuable upon exercise of Selling Shareholder
Warrants. Adam Christilaw also has voting and investment power over Common Shares of the Company that he beneficially owns with
Hayley Christilaw. See footnote 57.
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(59)
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Hayley Christilaw has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is Canada. Beneficial ownership includes (a) 123,083 Common Shares, (b) 45,000 Common Shares issuable upon exercise of Selling Shareholder Warrants, and (c) 54,900 Common Shares issuable upon exercise of July 2017 Warrants. The selling shareholder is offering pursuant to this prospectus 45,000 Common Shares and 45,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. Hayley Christilaw also has voting and investment power over Common Shares of the Company that she beneficially owns with Adam Christilaw. See footnote 57.
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(60)
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In addition to the Common Shares and Common Share purchase warrants he owns individually, David Christilaw has voting and investment power over and may be deemed to be a beneficial owner of the Common Shares and Common Share purchase warrants registered the names of David Christilaw CHARTERED ACCOUNTANT PROFESSIONAL CORPORATION, a professional corporation organized under the laws of Ontario, Canada, and 939042 Ontario Inc., a corporation incorporated under the laws of Ontario, Canada. The jurisdiction of the selling security holder is Canada. Beneficial ownership includes (a) 600,202 Common Shares, (b) 297,000 Common Shares issuable upon exercise of Selling Shareholder Warrants, and (c) 160,000 Common Shares issuable upon exercise of July 2017 Warrants. The selling shareholder is offering pursuant to this prospectus 297,000 Common Shares and 297,000 Common Shares issued upon exercise of Selling Shareholder Warrants.
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(61)
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Edward Ivan Martin and/or Claireete Martin JTWROS have voting and investment power over the Common Shares. The jurisdiction of the selling shareholders is Canada. Beneficial ownership includes (a) 621,500 Common Shares, (b) 225,000 Common Shares issuable upon exercise of Selling Shareholder Warrants, and (c) 200,000 Common Shares issuable upon exercise of July 2017 Warrants. The selling shareholders are offering pursuant to this prospectus 225,000 Common Shares and 225,000 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(62)
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In addition to the Common Shares and Common Share purchase warrants he beneficially owns with Claireete Martin (see footnote 61), Edward Martin has voting and investment power over and may be deemed to be a beneficial owner of the Common Shares and Common Share purchase warrants registered in the name of 1589936 Ontario Inc, a corporation incorporated under the laws of Canada. The jurisdiction of the selling shareholder is Canada. Beneficial ownership includes (a) 52,000 Common Shares and (b) 52,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 52,000 Common Shares and 52,000 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(63)
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Gloria Christilaw has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is Canada. Beneficial ownership includes (a) 526,532 Common Shares, (b) 145,000 Common Shares issuable upon exercise of Selling Shareholder Warrants, and (c) 60,000 Common Shares issuable upon exercise of July 2017 Warrants. The selling shareholder is offering pursuant to this prospectus 145,000 Common Shares and 145,000 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(64)
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In addition to the Common Shares and Common Share purchase warrants he owns individually, Brad Sinclair has voting and investment power over and may be deemed to be a beneficial owner of the Common Shares and Common Share purchase warrants registered in the name of Sinclair Professional Group, a corporation incorporated under the laws of Canada. The jurisdiction of the selling shareholder is Canada. Beneficial ownership includes (a) 47,500 Common Shares, (b) 22,500 Common Shares issuable upon exercise of Selling Shareholder Warrants, and (c) 25,000 Common Shares issuable upon exercise of July 2017 Warrants. The selling shareholder is offering pursuant to this prospectus 22,500 Common Shares and 22,500 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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(65)
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In addition to the Common Shares and Common Share purchase warrants she owns individually, Colleen Fox has voting and investment power over and may be deemed to be a beneficial owner of the Common Shares and Common Share purchase warrants registered in the name of 2506764 Ontario Inc., a corporation incorporated under the laws of Canada. The jurisdiction of the selling shareholder is Canada. Beneficial ownership includes (a) 111,300 Common Shares, (b) 56,300 Common Shares issuable upon exercise of Selling Shareholder Warrants, and (c) 51,300 Common Shares issuable upon exercise of July 2017 Warrants. The selling shareholder is offering pursuant to this prospectus 56,300 Common Shares and 56,300 Common Shares issuable upon exercise of Selling Shareholder Warrants.
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Description
of Capital Stock
Common Shares
The authorized capital of the
Company consists of an unlimited number of Common Shares without par value, of which 256,379,931 were issued and outstanding as of June
30, 2021. The holders of Common Shares are entitled to receive notice of and attend all meetings of shareholders, with each Common Share
held entitling the holder to one vote on any resolution to be passed at such shareholder meetings. The holders of Common Shares are entitled
to dividends if, as and when declared by the Company’s Board of Directors. The Common Shares are entitled, upon liquidation, dissolution,
or winding up of NioCorp, to receive the remaining assets of NioCorp available for distribution to shareholders. There are no pre-emptive,
conversion, or redemption rights attached to the Common Shares.
Exchange Controls
There are no governmental laws,
decrees, or regulations in Canada that restrict the export or import of capital, including foreign exchange controls, or that affect the
remittance of dividends, interest or other payments to non-resident holders of the securities of NioCorp, other than Canadian withholding
tax. See “Certain Canadian Federal Income Tax Considerations for U.S. Residents” below.
Certain Canadian Federal Income Tax Considerations for U.S. Residents
The following summarizes certain
Canadian federal income tax consequences generally applicable under the Income Tax Act (Canada) and the regulations enacted thereunder
(collectively, the “Canadian Tax Act”) and the Canada-United States Income Tax Convention (1980) (the “Convention”)
to the holding and disposition of Common Shares.
Comment is restricted to holders
of Common Shares each of whom, at all material times for the purposes of the Canadian Tax Act and the Convention, (i) is resident solely
in the United States, (ii) is entitled to the benefits of the Convention, (iii) holds all Common Shares as capital property, (iii) holds
no Common Shares that are “taxable Canadian property” (as defined in the Canadian Tax Act) of the holder, (iv) deals at arm’s
length with and is not affiliated with NioCorp, (v) does not and is not deemed to use or hold any Common Shares in a business carried
on in Canada, and (vi) is not an insurer that carries on business in Canada and elsewhere (each such holder, a “U.S. Resident Holder”).
Certain U.S.-resident entities
that are fiscally transparent for United States federal income tax purposes (including limited liability companies) may not in all circumstances
be regarded by the Canada Revenue Agency (the “CRA”) as entitled to the benefits of the Convention. Members of or holders
of an interest in such an entity that holds Common Shares should consult their own tax advisers regarding the extent, if any, to which
the CRA will extend the benefits of the Convention to the entity in respect of its Common Shares.
Generally, a holder’s Common
Shares will be considered to be capital property of the holder provided that the holder is not a trader or dealer in securities, did not
acquire, hold, or dispose of the Common Shares in one or more transactions considered to be an adventure or concern in the nature of trade
(i.e. speculation), and does not hold the Common Shares in the course of carrying on a business.
Generally, a holder’s Common
Shares will not constitute “taxable Canadian property” of the holder at a particular time at which the Common Shares are listed
on a “designated stock exchange” (which currently includes the TSX) unless both of the following conditions are true:
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(i)
|
at any time during the 60-month period that ends at the particular time, 25% or more of the issued shares of any class of the capital stock of NioCorp were owned by or belonged to one or any combination of
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(B)
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persons with whom the holder did not deal at arm’s length, and
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(C)
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partnerships in which the holder or a person referred to in clause (B) holds a membership interest directly or indirectly through one or more partnerships, and
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(ii)
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at any time during the 60-month period that ends at the particular time, more than 50% of the fair market value of the Common Shares was derived directly or indirectly from, one or any combination of, real or immovable property situated in Canada, “Canadian resource properties” (as defined in the Canadian Tax Act), “timber resource properties” (as defined in the Canadian Tax Act), or options in respect of, or interests in any of the foregoing, whether or not the property exists.
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This summary is based on the
current provisions of the Canadian Tax Act and the Convention in effect on the date hereof, all specific proposals to amend the Canadian
Tax Act and Convention publicly announced by or on behalf of the Minister of Finance (Canada) on or before the date hereof, and the current
published administrative and assessing policies of the CRA. It is assumed that all such amendments will be enacted as currently proposed,
and that there will be no other material change to any applicable law or administrative or assessing practice, although no assurance can
be given in these respects. Except as otherwise expressly provided, this summary does not take into account any provincial, territorial,
or foreign tax considerations, which may differ materially from those set out herein.
This summary is of a general
nature only, is not exhaustive of all possible Canadian federal income tax considerations, and is not intended to be and should not be
construed as legal or tax advice to any particular U.S. Resident Holder. U.S. Resident Holders are urged to consult their own tax advisers
for advice with respect to their particular circumstances. The discussion below is qualified accordingly.
A U.S. Resident Holder who
disposes or is deemed to dispose of one or more Common Shares generally should not thereby incur any liability for Canadian federal income
tax in respect of any capital gain arising as a consequence of the disposition.
A U.S. Resident Holder to
whom NioCorp pays or is deemed to pay a dividend on the holder’s Common Shares will be subject to Canadian withholding tax, and
NioCorp will be required to withhold the tax from the dividend and remit it to the CRA for the holder’s account. The rate of withholding
tax under the Canadian Tax Act is 25% of the gross amount of the dividend, but should generally be reduced under the Convention to 15%
(or, if the U.S. Resident Holder is a company which is the beneficial owner of at least 10% of the voting stock of NioCorp, 5%) of the
gross amount of the dividend. For this purpose, a company that is a resident of the United States for purposes of the Canadian Tax Act
and the Convention and is entitled to the benefits of the Convention shall be considered to own the voting stock of NioCorp owned by an
entity that is considered fiscally transparent under the laws of the United States and that it is not a resident of Canada, in proportion
to the Company’s ownership interest in that entity.
Warrants
As of June 30, 2021, an aggregate
of 14,342,868 Common Share purchase warrants, with each Common Share purchase warrant exercisable for one Common Share, were issued and
outstanding as follows:
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Number
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Exercise Price
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Expiry Date
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500,000
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C$
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0.77
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July 9, 2021
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372,750
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C$
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0.79
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July 26, 2021
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500,000
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C$
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0.80
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December 18, 2022
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8,558,000
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C$
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0.97
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February 19, 2024
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4,412,118
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C$
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1.63
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May 10, 2023
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The exercise price per Common
Share and the number of Common Shares issuable upon exercise of the Common Share purchase warrants is subject to adjustment upon the occurrence
of certain events including, but not limited to, the following:
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·
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the subdivision or re-division of the Company’s outstanding Common Shares into a greater number
of Common Shares;
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·
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the reduction, combination or consolidation of the Company’s outstanding Common Shares into a lesser
number of Common Shares;
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·
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the issuance of Common Shares or securities exchangeable for, or convertible into, Common Shares to all
or substantially all of the holders of Common Shares by way of stock dividend or other distribution (other than a distribution of Common
Shares upon the exercise of Common Share purchase warrants or any outstanding options);
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·
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the reorganization of the Company or the consolidation or merger or amalgamation of the Company with or
into another body corporate; and
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·
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a reclassification or other similar change to the Company’s outstanding Common Shares.
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We will issue the Common Shares
issuable upon exercise of Common Share purchase warrants within five business days following our receipt of notice of exercise and payment
of the exercise price, subject to surrender of the Common Share purchase warrants. Prior to the exercise of any Common Share purchase
warrants, holders of the Common Share purchase warrants will not have any of the rights of holders of the Common Shares issuable upon
exercise, including the right to vote or to receive any payments of dividends on the Common Shares issuable upon exercise.
The Lind Convertible Security
On February 19, 2021, pursuant
to a convertible security funding agreement, dated February 16, 2021 (the “Lind Agreement”), between the Company and Lind
Global Asset Management III, LLC (“Lind”), Lind advanced to the Company $10.0 million (subject to additional set off) in consideration
of which the Company issued to Lind a convertible security (the “Lind Convertible Security”) with a face value of $11.7 million
(representing $10.0 million in funding plus an implied 8.5% interest rate per annum for the term of the Lind Convertible Security).
The Lind Convertible Security
has a term of (i) 24 months or (ii) 30 calendar days after the date on which the face value of the Lind Convertible Security is nil due
to such amount having been fully converted and/or fully repaid (including with any applicable premium) in accordance with the terms of
the Lind Agreement, whichever is earlier. The Lind Convertible Security constitutes the direct, general and unconditional obligation of
the Company and ranks pari-passu with the Company’s other indebtedness. The Lind Convertible Security is guaranteed on a secured
basis by 0896800 and ECRC.
The Lind Convertible Security
is secured by all of the assets and property of the Company, including all of the issued and outstanding shares of 0896800 pledged by
the Company, all of the issued and outstanding shares of ECRC pledged by 0896800, and certain real property and fixtures of ECRC. The
liens securing the Lind Convertible Security rank pari-passu with the liens securing the Smith Credit Facility on all amounts up to $4.0
million. The liens securing the Lind Convertible Security rank senior to the liens securing the Smith Credit Facility on any amount that
is owed by the Company to Mr. Smith in excess of $4.0 million.
Pursuant to the Lind
Agreement, Lind is entitled to convert the Lind Convertible Security into Common Shares in monthly installments over its term at a
price per Common Share equal to 85% of the volume-weighted average price of the Common Shares on the TSX for the five trading days
immediately preceding the date on which Lind provides notice to the Company of its election to convert. Subject to certain
exceptions, the Lind Agreement contains restrictions on how much of the Lind Convertible Security may be converted in any particular
month. The Lind Agreement also provides NioCorp with the option to buy back the remaining face amount of the Lind Convertible
Security in cash at any time; provided that, if the Company exercises such option, Lind will have the option to convert up to 33.33%
of the remaining face amount into Common Shares at the price described above. In addition, Lind is entitled to accelerate its
conversion right to the full amount of the face value of the Lind Convertible Security or demand repayment thereof in cash upon the
occurrence of an event of default and other designated events described in the Lind Agreement.
The foregoing is intended as
a description of the material terms of the Lind Convertible Security only and is qualified in its entirety by reference to the full text
of the Lind Agreement, which is incorporated by reference herein. See “Where You Can Find More Information” below.
The Nordmin Convertible Note
On December 18, 2020, the Company
issued to Nordmin Engineering Ltd. (“Nordmin”) a convertible note (the “Nordmin Convertible Note”) in the initial
aggregate principal amount of approximately $1.9 million pursuant to a convertible note and warrant subscription agreement, dated December
18, 2020 (the “Nordmin Agreement”), between the Company and Nordmin, under which Nordmin agreed to subscribe for and purchase
the Nordmin Convertible Note and 500,000 Common Share purchase warrants, exercisable at a price per Common Share of C$0.80, expiring December
18, 2022, for a subscription price of approximately $1.8 million. This amount was set off against the amount owed to Nordmin by NioCorp
for past services. Pursuant to the terms of the Nordmin Agreement, on December 18, 2020, the Company issued 836,551 Common Shares to Nordmin
upon an initial conversion of approximately $0.5 million in aggregate principal amount of the Nordmin Convertible Note at a conversion
price of C$0.684 per share.
The Nordmin Convertible 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 up to 4,500,000 Common Shares at a conversion price of 92% of the five-day volume-weighted average
price of the Common Shares on the TSX at the time of conversion. The Nordmin Convertible Note contains restrictions on how much of the
principal amount may be converted in any 30-day period. The Nordmin Convertible Note also provides the Company with the option to prepay,
in whole or in part, any outstanding principal amount thereunder, upon three days’ notice to Nordmin. In addition, Nordmin is entitled
to accelerate the maturity of the Nordmin Convertible Note and require the Company to prepay the outstanding principal amount upon the
occurrence of an event of default and other designated events described in the Nordmin Convertible Note. The Nordmin Convertible Note
constitutes the direct, general and unconditional obligation of the Company. The Nordmin Convertible Note is unsecured and ranks effectively
junior to the Company’s secured indebtedness, including under the Lind Convertible Security and the Smith Credit Facility, to the
extent of the value of the assets securing such indebtedness.
The foregoing is intended as
a description of the material terms of the Nordmin Convertible Note only and is qualified in its entirety by reference to the full text
of the Nordmin Convertible Note, which is incorporated by reference herein. See “Where You Can Find More Information” below.
CERTAIN
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a general summary
of certain U.S. federal income tax considerations applicable to a U.S. Holder (as defined below) arising from and relating to the acquisition,
ownership, and disposition of the Common Shares. This summary is for general information purposes only and does not purport to be a complete
analysis or listing of all potential U.S. federal income tax considerations that may apply to a U.S. Holder arising from and relating
to the acquisition, ownership, and disposition of Common Shares. In addition, this summary does not take into account the individual facts
and circumstances of any particular U.S. Holder that may affect the U.S. federal income tax consequences to such U.S. Holder, including,
without limitation, specific tax consequences to a U.S. Holder under an applicable income tax treaty. Accordingly, this summary is not
intended to be, and should not be construed as, legal or U.S. federal income tax advice with respect to any U.S. Holder. This summary
does not address the U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local, and non-U.S. tax consequences
to U.S. Holders of the acquisition, ownership, and disposition of Common Shares. In addition, except as specifically set forth below,
this summary does not discuss applicable tax reporting requirements. Each prospective U.S. Holder should consult its own tax advisors
regarding the U.S. federal, U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local, and non-U.S. tax consequences
relating to the acquisition, ownership and disposition of the Common Shares.
No legal opinion from U.S. legal
counsel or ruling from the Internal Revenue Service (the “IRS”) has been requested, or will be obtained, regarding the U.S.
federal income tax consequences of the acquisition, ownership, and disposition of the Common Shares. This summary is not binding on the
IRS, and the IRS is not precluded from taking a position that is different from, and contrary to, the positions taken in this summary.
In addition, because the authorities on which this summary is based are subject to various interpretations, the IRS and the U.S. courts
could disagree with one or more of the conclusions described in this summary.
Scope of this Summary
Authorities
This summary is based on the
Code, Treasury Regulations (whether final, temporary, or proposed), published rulings of the IRS, published administrative positions of
the IRS, the Convention Between Canada and the United States of America with Respect to Taxes on Income and on Capital, signed September
26, 1980, as amended (the “Canada-U.S. Tax Convention”), and U.S. court decisions that are applicable, and, in each case,
as in effect and available, as of the date of this document. Any of the authorities on which this summary is based could be changed in
a material and adverse manner at any time, and any such change could be applied retroactively. This summary does not discuss the potential
effects, whether adverse or beneficial, of any proposed legislation.
U.S. Holders
For purposes of this summary,
the term “U.S. Holder” means a beneficial owner of Common Shares that is for U.S. federal income tax purposes:
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|
·
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an individual who is a citizen or resident of the United States;
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|
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·
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a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) organized under the laws of the United States, any state thereof or the District of Columbia;
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|
|
·
|
an estate whose income is subject to U.S. federal income taxation regardless of its source; or
|
|
|
·
|
a trust that (1) is subject to the primary supervision of a court within the U.S. and the control of one or more U.S. persons for all substantial decisions or (2) has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person.
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U.S. Holders Subject to Special U.S. Federal Income Tax Rules Not Addressed
This summary does not address
the U.S. federal income tax considerations applicable to U.S. Holders that are subject to special provisions under the Code, including,
but not limited to, U.S. Holders that: (a) are tax-exempt organizations, qualified retirement plans, individual retirement accounts,
or other tax-deferred accounts; (b) are financial institutions, underwriters, insurance companies, real estate investment trusts, or
regulated investment companies; (c) are broker-dealers, dealers, or traders in securities or currencies that elect to apply a mark-to-market
accounting method; (d) have a “functional currency” other than the U.S. dollar; (e) own Common Shares as part of a straddle,
hedging transaction, conversion transaction, constructive sale, or other arrangement involving more than one position; (f) acquire Common
Shares in connection with the exercise of employee stock options or otherwise as compensation for services; (g) hold Common Shares other
than as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment purposes); or (h) own,
have owned or will own (directly, indirectly, or by attribution) 10% or more of the total combined voting power of the outstanding shares
of the Company. This summary also does not address the U.S. federal income tax considerations applicable to U.S. Holders who are: (a)
U.S. expatriates or former long-term residents of the U.S.; (b) persons that have been, are, or will be a resident or deemed to be a
resident in Canada for purposes of the Income Tax Act (Canada) (the “Tax Act”); (c) persons that use or hold, will use or
hold, or that are or will be deemed to use or hold Common Shares in connection with carrying on a business in Canada; (d) persons whose
Common Shares constitute “taxable Canadian property” under the Tax Act; or (e) persons that have a permanent establishment
in Canada for the purposes of the Canada-U.S. Tax Convention. U.S. Holders that are subject to special provisions under the Code, including,
but not limited to, U.S. Holders described immediately above, should consult their own tax advisors regarding the U.S. federal, U.S.
federal alternative minimum, U.S. federal estate and gift, U.S. state and local, and non-U.S. tax consequences relating to the acquisition,
ownership and disposition of Common Shares.
If an entity or arrangement that
is classified as a partnership (or other “pass-through” entity) for U.S. federal income tax purposes holds Common Shares,
the U.S. federal income tax consequences to such entity or arrangement and the partners (or other owners or participants) of such entity
or arrangement generally will depend on the activities of the entity or arrangement and the status of such partners (or owners or participants).
This summary does not address the tax consequences to any such partner (or owner or participants). Partners (or other owners or participants)
of entities or arrangements that are classified as partnerships or as “pass-through” entities for U.S. federal income tax
purposes should consult their own tax advisors regarding the U.S. federal income tax consequences arising from and relating to the acquisition,
ownership, and disposition of Common Shares.
General Rules Applicable to the Ownership and Disposition of Common
Shares
A U.S. Holder that receives a
distribution, including a constructive distribution, with respect to a Common Share will be required to include the amount of such distribution
in gross income as a dividend (without reduction for any Canadian income tax withheld from such distribution) to the extent of the current
and accumulated “earnings and profits” of the Company, as computed for U.S. federal income tax purposes. A dividend generally
will be taxed to a U.S. Holder at ordinary income tax rates. (See, however, the exception discussed below for individual and other non-corporate
U.S. Holders, which may allow such holders preferential rates when the Company has terminated PFIC status.) To the extent that a distribution
exceeds the current and accumulated “earnings and profits” of the Company, such distribution will be treated, first, as a
tax-free return of capital to the extent of a U.S. Holder’s tax basis in the Common Shares and thereafter as gain from the sale
or exchange of such Common Shares. However, the Company may not maintain the calculations of its earnings and profits in accordance with
U.S. federal income tax principles, and U.S. Holders may have to assume that any distribution by the Company with respect to the Common
Shares will constitute ordinary dividend income. Dividends received on Common Shares by corporate U.S. Holders generally will not be eligible
for the “dividends received deduction.” Provided that (1) the Company is eligible for the benefits of the Canada-U.S. Tax
Convention or (2) the Common Shares are readily tradable on a United States securities market (and certain holding period and other conditions
are satisfied), dividends paid by the Company to non-corporate U.S. Holders , including individuals, will be eligible for the preferential
tax rates applicable to long-term capital gains for dividends unless the Company is classified as a PFIC in the tax year of distribution
or in the preceding tax year. See “—Passive Foreign Investment Company Rules—PFIC Status of the Company” below.
The dividend rules are complex, and each U.S. Holder should consult its own tax advisors regarding the application of such rules.
Upon the sale or other
taxable disposition of Common Shares, subject to the PFIC rules below, a U.S. Holder generally will recognize capital gain or loss
in an amount equal to the difference between the U.S. dollar value of cash received plus the fair market value of any property
received and such U.S. Holder’s tax basis in such Common Shares sold or otherwise disposed of. A U.S. Holder’s tax basis
in Common Shares generally will be determined initially by the holder’s U.S. dollar cost for the Common Shares (with
adjustments provided under the PFIC rules below). Subject again to the PFIC rules, gain or loss recognized on such sale or other
disposition generally will be long-term capital gain or loss if, at the time of the sale or other disposition, the Common Shares
have been held for more than one year.
Preferential tax rates currently
apply to long-term capital gain of a U.S. Holder that is an individual, estate, or trust. There are currently no preferential tax rates
for long-term capital gain of a U.S. Holder that is a corporation. Deductions for capital losses are subject to significant limitations
under the Code. If the Company is determined to be a PFIC, any gain realized on the Common Shares could be ordinary income under the rules
discussed below.
Passive Foreign Investment Company Rules
PFIC Status of the Company
If the Company were to constitute
a PFIC under the meaning of Section 1297 of the Code for any taxable year during a U.S. Holder’s holding period, then certain potentially
adverse rules may affect the U.S. federal income tax consequences to a U.S. Holder as a result of the acquisition, ownership and disposition
of Common Shares. The Company believes that it was classified as a PFIC during the tax years ended June 30, 2020 and 2019, and based on
current business plans and financial expectations, the Company expects that it may be a PFIC for the current tax year and in one or more
future tax years. No opinion of legal counsel or ruling from the IRS concerning the status of the Company as a PFIC has been obtained
or is currently planned to be requested. The determination of whether any corporation was, or will be, a PFIC for a tax year depends,
in part, on the application of complex U.S. federal income tax rules, which are subject to differing interpretations. In addition, whether
any corporation will be a PFIC for any tax year depends on the assets and income of such corporation over the course of each such tax
year and, as a result, cannot be predicted with certainty as of the date of this document. Accordingly, there can be no assurance that
the IRS will not challenge any determination made by the Company (or any subsidiary of the Company) concerning its PFIC status in any
taxable year. Each U.S. Holder should consult its own tax advisors regarding the PFIC status of the Company and each subsidiary of the
Company.
In any taxable year in which
the Company is classified as a PFIC, a U.S. Holder will be required to file an annual report with the IRS containing such information
as Treasury Regulations and/or other IRS guidance may require. IRS Form 8621 is currently used for such filings. In addition to penalties,
a failure to satisfy such reporting requirements may result in an extension of the time period during which the IRS can assess a tax.
U.S. Holders should consult their own tax advisors regarding the requirements of filing such information returns under these rules, including
the requirement to file an IRS Form 8621 annually.
The Company generally will be
a PFIC for a taxable year if, for such year, (a) 75% or more of the gross income of the Company is passive income (the “PFIC income
test”) or (b) 50% or more of the value of the Company’s assets either produce passive income or are held for the production
of passive income, based on the quarterly average of the fair market value of such assets (the “PFIC asset test”). “Gross
income” generally includes all sales revenues less the cost of goods sold, plus income from investments and from incidental or outside
operations or sources, and “passive income” generally includes, for example, dividends, interest, certain rents and royalties,
certain gains from the sale of stock and securities, and certain gains from commodities transactions.
Active business gains arising
from the sale of commodities generally are excluded from passive income if substantially all (85% or more) of a foreign corporation’s
commodities are stock in trade or inventory, depreciable property used in a trade or business, or supplies regularly used or consumed
in the ordinary course of its trade or business, and certain other requirements are satisfied.
For purposes of the PFIC income
test and PFIC asset test described above, if the Company owns, directly or indirectly, 25% or more of the total value of the outstanding
shares of another corporation, the Company will be treated as if it (a) held a proportionate share of the assets of such other corporation
and (b) received directly a proportionate share of the income of such other corporation. In addition, for purposes of the PFIC income
test and PFIC asset test described above, and assuming certain other requirements are met, “passive income” does not include
certain interest, dividends, rents, or royalties that are received or accrued by the Company from certain “related persons”
(as defined in Section 954(d)(3) of the Code) also organized in Canada, to the extent such items are properly allocable to the income
of such related person that is neither passive income nor income connected with a U.S. trade or business.
Under certain attribution rules,
if the Company is a PFIC, U.S. Holders will generally be deemed to own their proportionate share of the Company’s direct or indirect
equity interest in any company that is also a PFIC (a “Subsidiary PFIC”), and will generally be subject to U.S. federal income
tax on their proportionate share of (a) any “excess distributions,” as described below, on the stock of a Subsidiary PFIC
and (b) a disposition or deemed disposition of the stock of a Subsidiary PFIC by the Company or another Subsidiary PFIC, both as if such
U.S. Holders directly held the shares of such Subsidiary PFIC. In addition, U.S. Holders may be subject to U.S. federal income tax on
any indirect gain realized on the stock of a Subsidiary PFIC on the sale or disposition of Common Shares. Accordingly, U.S. Holders should
be aware that they could be subject to tax under the PFIC rules even if no distributions are received on the Common Shares and no redemptions
or other dispositions of Common Shares are made.
Default PFIC Rules Under Section 1291 of the Code
If the Company is a PFIC for
any tax year during which a U.S. Holder owns Common Shares, the U.S. federal income tax consequences to such U.S. Holder of the acquisition,
ownership, and disposition of Common Shares will depend on whether and when such U.S. Holder makes an election to treat the Company and
each Subsidiary PFIC, if any, as a “qualified electing fund” (“QEF”) under Section 1295 of the Code (a “QEF
Election”) or makes a mark-to-market election under Section 1296 of the Code (a “Mark-to-Market Election”). A U.S. Holder
that does not make either a QEF Election or a Mark-to-Market Election will be referred to in this summary as a “Non-Electing U.S.
Holder.”
A Non-Electing U.S. Holder will
be subject to the rules of Section 1291 of the Code (described below) with respect to (a) any gain recognized on the sale or other taxable
disposition of Common Shares and (b) any “excess distribution” received on the Common Shares. A distribution generally will
be an “excess distribution” to the extent that such distribution (together with all other distributions received in the current
tax year) exceeds 125% of the average distributions received during the three preceding tax years (or during a U.S. Holder’s holding
period for the Common Shares, if shorter).
Under Section 1291 of the Code,
any gain recognized on the sale or other taxable disposition of Common Shares (including an indirect disposition of the stock of any Subsidiary
PFIC), and any “excess distribution” received on Common Shares or deemed received with respect to the stock of a Subsidiary
PFIC, must be ratably allocated to each day in a Non-Electing U.S. Holder’s holding period for the respective Common Shares. The
amount of any such gain or excess distribution allocated to the tax year of disposition or distribution of the excess distribution, or
allocated to years before the entity became a PFIC, if any, would be taxed as ordinary income at the rates applicable for such year (and
not eligible for certain preferred rates). The amounts allocated to any other tax year would be subject to U.S. federal income tax at
the highest tax rate applicable to ordinary income in each such year. In addition, an interest charge would be imposed on the tax liability
for each such year, calculated as if such tax liability had been due in each such year. A Non-Electing U.S. Holder that is not a corporation
must treat any such interest paid as “personal interest,” which is not deductible.
If the Company is a PFIC
for any tax year during which a Non-Electing U.S. Holder holds Common Shares, the Company will continue to be treated as a PFIC with respect
to such Non-Electing U.S. Holder, regardless of whether the Company ceases to be a PFIC in one or more subsequent tax years. A Non-Electing
U.S. Holder may terminate this deemed PFIC status by electing to recognize gain (which will be taxed under the rules of Section 1291 of
the Code discussed above), but not loss, as if such Common Shares were sold on the last day of the last tax year for which the Company
was a PFIC.
QEF Election
A U.S. Holder that makes a timely
and effective QEF Election for the tax year in which the holding period of its Common Shares begins generally will not be subject to
the rules of Section 1291 of the Code discussed above with respect to such Common Shares. A U.S. Holder that makes such a QEF Election
will be subject to U.S. federal income tax on such U.S. Holder’s pro rata share (based on its ownership Common Stock) of (a) the
net capital gain of the Company, which will be taxed as long-term capital gain to such U.S. Holder, and (b) the ordinary earnings of
the Company, which will be taxed as ordinary income to such U.S. Holder. Generally, “net capital gain” is the excess of (a)
net long-term capital gain over (b) net short-term capital loss, and “ordinary earnings” are the excess of (a) “earnings
and profits” over (b) net capital gain. A U.S. Holder that makes a QEF Election will be subject to U.S. federal income tax on such
amounts for each tax year in which the Company is a PFIC, regardless of whether such amounts are actually distributed to such U.S. Holder
by the Company. However, for any tax year in which the Company is a PFIC and has no net income or gain, U.S. Holders that have made a
QEF Election would not have any income inclusions as a result of the QEF Election. If a U.S. Holder that made a QEF Election has an income
inclusion, such a U.S. Holder may, subject to certain limitations, elect to defer payment of current U.S. federal income tax on such
amounts, subject to an interest charge. If such U.S. Holder is not a corporation, any such interest paid will be treated as “personal
interest,” which is not deductible.
A U.S. Holder that makes a timely
and effective QEF Election with respect to the Company generally (a) may receive a tax-free distribution from the Company to the extent
that such distribution represents “earnings and profits” of the Company that were previously included in income by the U.S.
Holder because of such QEF Election and (b) will adjust such U.S. Holder’s tax basis in the Common Shares to reflect the amount
included in income or allowed as a tax-free distribution because of such QEF Election. A U.S. Holder that makes a QEF Election generally
will recognize capital gain or loss on the sale or other taxable disposition of Common Shares.
A U.S. Holder may make a timely
QEF Election by filing the appropriate QEF Election documents (currently IRS Form 8621) at the time such U.S. Holder files a U.S. federal
income tax return for such year. If a U.S. Holder does not make a timely QEF Election for the first year in the U.S. Holder’s holding
period in which the Company is a PFIC, the U.S. Holder may still be able to make an effective QEF Election in a subsequent year if such
U.S. Holder meets certain requirements and makes a “purging” election to recognize gain (which will be taxed under the rules
of Section 1291 of the Code discussed above) as if such Common Shares were sold for their fair market value on the day the QEF Election
is effective. If a U.S. Holder makes a QEF Election but does not make a “purging” election to recognize gain as discussed
in the preceding sentence, then such U.S. Holder shall be subject to the QEF Election rules and shall continue to be subject to tax under
the rules of Section 1291 discussed above with respect to its Common Shares. If a U.S. Holder owns PFIC stock indirectly through another
PFIC, separate QEF Elections must be made for the PFIC in which the U.S. Holder is a direct shareholder and the Subsidiary PFIC for the
QEF rules to apply to both PFICs.
A QEF Election will apply to
the tax year for which such QEF Election is timely made and to all subsequent tax years, unless such QEF Election is invalidated or terminated
or the IRS consents to revocation of such QEF Election. If a U.S. Holder makes a QEF Election and, in a subsequent tax year, the Company
ceases to be a PFIC, the QEF Election will remain in effect (although it will not be applicable) during those tax years in which the Company
is not a PFIC. Accordingly, if the Company becomes a PFIC in another subsequent tax year, the QEF Election will be effective, and the
U.S. Holder will be subject to the QEF rules described above during any subsequent tax year in which the Company qualifies as a PFIC.
The Company does not currently
intend to provide all the information necessary for U.S. Holders to make or maintain QEF elections with respect to the Company and all
Subsidiary PFICs. U.S. Holders should consult their tax advisors to determine whether any of these QEF elections will be available and
if so, what the consequences of these elections would be in their particular circumstances.
A U.S. Holder makes a QEF Election
by attaching a completed IRS Form 8621, including a PFIC Annual Information Statement, to a timely filed United States federal income
tax return. However, if the Company does not provide the required information with regard to the Company or any of its Subsidiary PFICs,
U.S. Holders may not be able to make a QEF Election for such entity and, unless they make the Mark-to-Market Election discussed in the
next section, will continue to be subject to the rules of Section 1291 of the Code discussed above that apply to Non-Electing U.S. Holders
with respect to the taxation of gains and excess distributions.
Mark-to-Market Election
A U.S. Holder may make a Mark-to-Market
Election only if the Common Shares are marketable stock. The Common Shares generally will be “marketable stock” if the Common
Shares are regularly traded on (a) a national securities exchange that is registered with the Securities and Exchange Commission, (b)
the national market system established pursuant to section 11A of the Exchange Act, or (c) a foreign securities exchange that is regulated
or supervised by a governmental authority of the country in which the market is located, provided that (i) such foreign exchange has
trading volume, listing, financial disclosure, and surveillance requirements, and meets other requirements and the laws of the country
in which such foreign exchange is located, together with the rules of such foreign exchange, ensure that such requirements are actually
enforced and (ii) the rules of such foreign exchange effectively promote active trading of listed stocks. If such stock is traded on
such a qualified exchange or other market, such stock generally will be “regularly traded” for any calendar year during which
such stock is traded, other than in de minimis quantities, on at least 15 days during each calendar quarter. The Company expects that
the Common Shares will meet the definition of “marketable stock,” although there can be no assurance of this, especially
as regards the required trading frequency.
If a U.S. Holder that makes a
Mark-to-Market Election for any taxable year with respect to its Common Shares, it generally will not be subject to the rules of Section
1291 of the Code discussed above with respect to such Common Shares for such taxable year. However, if a U.S. Holder does not make a Mark-to-Market
Election beginning in the first tax year of such U.S. Holder’s holding period for which the Company is a PFIC and such U.S. Holder
has not made a timely QEF Election, the rules of Section 1291 of the Code discussed above will apply to dispositions of, and certain distributions
on, the Common Shares.
A U.S. Holder that makes a Mark-to-Market
Election will include in ordinary income, for each tax year in which the Company is a PFIC, an amount equal to the excess, if any, of
(a) the fair market value of the Common Shares, as of the close of such tax year over (b) such U.S. Holder’s adjusted tax basis
in such Common Shares. A U.S. Holder that makes a Mark-to-Market Election will be allowed a deduction in an amount equal to the excess,
if any, of (a) such U.S. Holder’s adjusted tax basis in the Common Shares, over (b) the fair market value of such Common Shares
(but only to the extent of the net amount of previously included income as a result of the Mark-to-Market Election for prior tax years).
A U.S. Holder that makes a Mark-to-Market
Election generally also will adjust its tax basis in the Common Shares to reflect the amount included in gross income or allowed as a
deduction because of such Mark-to-Market Election. Upon a sale or other taxable disposition of Common Shares, a U.S. Holder that makes
a Mark-to-Market Election will recognize ordinary income or ordinary loss. Any such ordinary loss, however, is limited to exceed the excess,
if any, of (a) the amount included in ordinary income because of such Mark-to-Market Election for prior tax years over (b) the amount
allowed as a deduction because of such Mark-to-Market Election for prior tax years. Losses that exceed this limitation are subject to
the rules generally applicable to losses provided in the Code and Treasury Regulations, with the result that they will be capital losses
for most U.S. Holders.
A U.S. Holder makes a Mark-to-Market
Election by attaching a completed IRS Form 8621 to a timely filed United States federal income tax return. A Mark-to-Market Election applies
to the tax year in which such Mark-to-Market Election is made and to each subsequent tax year, unless the Common Shares cease to be “marketable
stock” or the IRS consents to revocation of such election. Each U.S. Holder should consult its own tax advisors regarding the requirements
for, and procedure for making, a Mark-to-Market Election.
Although a U.S. Holder may be
eligible to make a Mark-to-Market Election with respect to the Common Shares, no such election may be made with respect to the stock of
any Subsidiary PFIC that a U.S. Holder is treated as owning, because such stock is not marketable. Hence, the Mark-to-Market Election
will not be effective to avoid the application of the default rules of Section 1291 of the Code described above with respect to deemed
dispositions of Subsidiary PFIC stock or excess distributions from a Subsidiary PFIC to its shareholder.
Other PFIC and Related Rules
Under Section 1291(f) of the
Code, the IRS has issued proposed Treasury Regulations that, subject to certain exceptions, would cause a U.S. Holder that had not made
a timely QEF Election or Mark-to-Market Election to recognize gain (but not loss) upon certain transfers of Common Shares that would otherwise
be tax-deferred (e.g., gifts and exchanges pursuant to corporate reorganizations). However, the specific U.S. federal income tax consequences
to a U.S. Holder may vary based on the manner in which Common Shares are transferred.
Certain additional adverse
rules may apply with respect to a U.S. Holder if the Company is a PFIC, regardless of whether such U.S. Holder makes a QEF Election.
For example, under Section 1298(b)(6) of the Code, a U.S. Holder that uses Common Shares as security for a loan will, except as may
be provided in Treasury Regulations, be treated as having made a taxable disposition of such Common Shares.
Special rules also apply to the
amount of foreign tax credit that a U.S. Holder may claim on a distribution from a PFIC. Subject to such special rules, foreign taxes
paid with respect to any distribution in respect of stock in a PFIC are generally eligible for the foreign tax credit. The rules relating
to distributions by a PFIC and their eligibility for the foreign tax credit are complicated, and each U.S. Holder should consult with
its own tax advisors regarding the availability of the foreign tax credit with respect to distributions by a PFIC.
If U.S. Holders of Common Shares
or U.S. Holders that are treated as constructively owning Common Shares, each owning 10% or more of the Company’s equity by vote
(“10% Shareholders”) own in total more than 50% of such equity by either vote or value, the Company will be treated as a controlled
foreign corporation (“CFC”). For the Company’s taxable year ending June 30, 2019, and subsequent years, and for taxable
years of U.S. Holders ending with or within such years, the test for a 10% Shareholder will be whether the holder owns 10% of the Company’s
equity by vote or value (i.e., not only by vote). If the Company is a CFC, a 10% Shareholder would be treated, subject to certain exceptions,
as receiving a deemed dividend at the end of each taxable year of the Company in an amount equal to its pro rata share of the Company’s
“subpart F income.” Among other items, and subject to certain exceptions, “subpart F income” includes dividends,
interest, certain rents and royalties, certain gains from the sale of stock and securities, and certain gains from commodities transactions.
Thus, it is likely that, if the Company were treated as a CFC, some of its income would be subpart F income. If, for any period, the Company
were treated as a CFC and a U.S. Holder were treated as a 10% Shareholder therein, the Company would not be treated as a PFIC with respect
to such U.S. Holder for such period.
The PFIC and CFC rules are complex,
and each U.S. Holder should consult with its own tax advisors regarding the PFIC and CFC rules and how they may affect the U.S. federal
income tax consequences of the acquisition, ownership, and disposition of Common Shares.
Additional Considerations
Additional Tax on Passive Income
Certain U.S. Holders that are
individuals, estates or trusts (other than trusts that are exempt from tax) will be subject to a 3.8% tax on all or a portion of their
“net investment income,” which includes dividends on the Common Shares and net gains from the disposition of the Common Shares.
Further, excess distributions treated as dividends, gains treated as excess distributions under the PFIC rules discussed above, and mark-to-market
inclusions and deductions are all included in the calculation of net investment income.
Treasury Regulations provide,
subject to the election described in the following paragraph, that solely for purposes of this additional tax, distributions of previously
taxed income will be treated as dividends and included in net investment income subject to the additional 3.8% tax. Additionally, to determine
the amount of any capital gain from the sale or other taxable disposition of Common Shares that will be subject to the additional tax
on net investment income, a U.S. Holder who has made a QEF Election will be required to recalculate its basis in the Common Shares excluding
QEF basis adjustments.
Alternatively, a U.S. Holder
may make an election which will be effective with respect to all interests in a PFIC for which a QEF Election has been made and which
is held in that year or acquired in future years. Under this election, a U.S. Holder pays the additional 3.8% tax on QEF income inclusions
and on gains calculated after giving effect to related tax basis adjustments. U.S. Holders that are individuals, estates or trusts should
consult their own tax advisors regarding the applicability of this tax to any of their income or gains in respect of the Common Shares.
Receipt of Foreign Currency
The amount of any
distribution paid to a U.S. Holder in foreign currency, or on the sale, exchange or other taxable disposition of Common Shares,
generally will be equal to the U.S. dollar value of such foreign currency based on the exchange rate applicable on the date of
receipt (regardless of whether such foreign currency is converted into U.S. dollars at that time). A U.S. Holder will have a basis
in the foreign currency equal to its U.S. dollar value on the date of receipt. Any U.S. Holder who converts or otherwise disposes of
the foreign currency after the date of receipt may have a foreign currency exchange gain or loss that would be treated as ordinary
income or loss, and generally will be U.S. source income or loss for foreign tax credit purposes. Different rules apply to U.S.
Holders who use the accrual method of tax accounting. Each U.S. Holder should consult its own U.S. tax advisors regarding the U.S.
federal income tax consequences of receiving, owning, and disposing of foreign currency.
Foreign Tax Credit
Subject to the PFIC rules discussed
above, a U.S. Holder that pays (whether directly or through withholding) Canadian income tax with respect to dividends paid on the Common
Shares generally will be entitled, at the election of such U.S. Holder, to receive either a deduction or a credit for such Canadian income
tax. Generally, a credit will reduce a U.S. Holder’s U.S. federal income tax liability on a dollar-for-dollar basis, whereas a deduction
will reduce a U.S. Holder’s income that is subject to U.S. federal income tax. This election is made on a year-by-year basis and
applies to all foreign taxes paid (whether directly or through withholding) by a U.S. Holder during a year.
Complex limitations apply to
the foreign tax credit, including the general limitation that the credit cannot exceed the proportionate share of a U.S. Holder’s
U.S. federal income tax liability that such U.S. Holder’s “foreign source” taxable income bears to such U.S. Holder’s
worldwide taxable income. In applying this limitation, a U.S. Holder’s various items of income and deduction must be classified,
under complex rules, as either “foreign source” or “U.S. source.” Generally, dividends paid on the Common Shares
should be treated as foreign source for this purpose, and gains recognized on the sale of Common Shares by a U.S. Holder should be treated
as U.S. source for this purpose, except as otherwise provided in an applicable income tax treaty, and if an election is properly made
under the Code. However, the amount of a distribution with respect to the Common Shares that is treated as a “dividend” may
be lower for U.S. federal income tax purposes than it is for Canadian federal income tax purposes, resulting in a reduced foreign tax
credit allowance to a U.S. Holder. In addition, this limitation is calculated separately with respect to specific categories of income.
The foreign tax credit rules are complex, and each U.S. Holder should consult its own U.S. tax advisors regarding the foreign tax credit
rules.
Backup Withholding and Information Reporting
A U.S. Holder that is an individual
(and, to the extent provided in future regulations, an entity), may be subject to certain reporting obligations with respect to Common
Shares if the aggregate value of these and certain other “specified foreign financial assets” exceeds $50,000. If required,
this disclosure is made by filing Form 8938 with the IRS. Significant penalties can apply if a U.S. Holder is required to make this disclosure
and fail to do so. In addition, a U.S. Holder should consider the possible obligation to file online a FinCEN Form 114—Foreign Bank
and Financial Accounts Report, as a result of holding Common Shares in certain accounts. Holders are urged to consult their U.S. tax advisors
with respect to these and other reporting requirements that may apply to their acquisition of Common Shares.
Payments made within the U.S.,
or by a U.S. payor or U.S. middleman, of dividends on, and proceeds arising from the sale or other taxable disposition of, Common Shares
will generally be subject to information reporting and backup withholding tax, at the rate of 28%, if a U.S. Holder (a) fails to furnish
such U.S. Holder’s correct U.S. taxpayer identification number (generally on Form W-9), (b) furnishes an incorrect U.S. taxpayer
identification number, (c) is notified by the IRS that such U.S. Holder has previously failed to report properly items subject to backup
withholding tax, or (d) fails to certify, under penalty of perjury, that such U.S. Holder has furnished its correct U.S. taxpayer identification
number and that the IRS has not notified such U.S. Holder that it is subject to backup withholding tax. However, certain exempt persons
generally are excluded from these information reporting and backup withholding rules. Backup withholding is not an additional tax. Any
amounts withheld under the U.S. backup withholding tax rules will be allowed as a credit against a U.S. Holder’s U.S. federal income
tax liability, if any, or will be refunded, if such U.S. Holder furnishes required information to the IRS in a timely manner.
The discussion of reporting requirements
set forth above is not intended to constitute a complete description of all reporting requirements that may apply to a U.S. Holder. A
failure to satisfy certain reporting requirements may result in an extension of the time period during which the IRS can assess a tax
and, under certain circumstances, such an extension may apply to assessments of amounts unrelated to any unsatisfied reporting requirement.
Each U.S. Holder should consult its own tax advisors regarding the information reporting and backup withholding rules.
THE ABOVE SUMMARY IS NOT INTENDED TO CONSTITUTE
A COMPLETE ANALYSIS OF ALL TAX CONSIDERATIONS APPLICABLE TO U.S. HOLDERS WITH RESPECT TO THE ACQUISITION, OWNERSHIP, AND DISPOSITION OF
COMMON SHARES. U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX CONSIDERATIONS APPLICABLE TO THEM IN THEIR OWN PARTICULAR
CIRCUMSTANCES.
Plan of
Distribution
We are registering the Common
Shares identified in the “Number of Common Shares Offered Hereby” column of the table under “Selling Shareholders”
above to permit the resale of those Common Shares from time to time after the date of this prospectus at the discretion of the holders
of such Common Shares. We will not receive any of the proceeds from the sale by the selling shareholders of the Common Shares. However,
upon exercise, we will receive the cash exercise price of the Warrants. We will bear all fees and expenses incident to our obligation
to register such Common Shares.
The selling shareholders may,
at their discretion, sell all, none, or a portion of the Common Shares beneficially owned by them and offered hereby from time to time
directly or through one or more underwriters, broker-dealers, or agents. If the Common Shares are sold through underwriters or broker-dealers,
the selling shareholders will be responsible for underwriting discounts or commissions or agent’s commissions. The Common Shares
may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined
at the time of sale, or at negotiated prices. These sales may be effected in transactions that may involve crosses or block transactions,
or in one or more of the following methods:
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on any national securities exchange or quotation service on which the Common Shares may be listed or quoted at the time of sale;
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in the over-the-counter market;
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in transactions otherwise than on these exchanges or systems or in the over-the-counter market;
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through the writing of options, whether such options are listed on an options exchange or otherwise;
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ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
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block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;
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purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
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an exchange distribution in accordance with the rules of the applicable exchange;
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privately negotiated transactions;
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sales pursuant to Rule 144 under the Securities Act;
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broker-dealers may agree with the selling shareholders to sell a specified number of such shares at a stipulated price per share;
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a combination of any such methods of sale; and
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any other method permitted pursuant to applicable law.
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If the selling shareholders
effect such transactions by selling Common Shares to or through underwriters, broker-dealers or agents, such underwriters,
broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from the selling shareholders
or commissions from purchasers of the Common Shares for whom they may act as agent or to whom they may sell as principal (which
discounts, concessions or commissions as to particular underwriters, broker-dealers or agents may be in excess of those customary in
the types of transactions involved). In connection with sales of the Common Shares or otherwise, the selling shareholders may enter
into hedging transactions with broker-dealers, which may in turn engage in short sales of the Common Shares in the course of hedging
in positions they assume. The selling shareholders may also sell Common Shares short and deliver Common Shares covered by this
prospectus to close out short positions and to return borrowed shares in connection with such short sales. The selling shareholders
may also loan or pledge Common Shares to broker-dealers that in turn may sell such shares.
The selling shareholders and
any broker-dealer participating in the distribution of the Common Shares may be deemed to be “underwriters” within the meaning
of the Securities Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed to be
underwriting commissions or discounts under the Securities Act. At the time a particular offering of the Common Shares is made, a prospectus
supplement, if required, will be distributed that will set forth the aggregate amount of Common Shares being offered and the terms of
the offering, including the name or names of any broker-dealers or agents, any discounts, commissions and other terms constituting compensation
from the selling shareholders and any discounts, commissions or concessions allowed or re-allowed or paid to broker-dealers.
Under the securities laws of
some states, the Common Shares may be sold in such states only through registered or licensed brokers or dealers. In addition, in some
states the Common Shares may not be sold unless such Common Shares have been registered or qualified for sale in such state, or an exemption
from registration or qualification is available and is complied with.
There can be no assurance that
any selling shareholder will sell any or all of the Common Shares the resale of which is registered pursuant to the registration statement,
of which this prospectus forms a part.
The selling shareholders and
any other person participating in such distribution will be subject to applicable provisions of the Exchange Act, and the rules and regulations
thereunder, including, without limitation, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of
any of the Common Shares by the selling shareholders and any other participating person. Regulation M may also restrict the ability
of any person engaged in the distribution of the Common Shares to engage in market-making activities with respect to the Common Shares.
All of the foregoing may affect the marketability of the Common Shares and the ability of any person or entity to engage in market-making
activities with respect to the Common Shares.
We will pay all expenses of the
registration of the resale of the Common Shares, estimated to be approximately $25,144.19 in total, including, without limitation, SEC filing
fees and expenses of compliance with state securities or “blue sky” laws; provided, however, that a selling shareholder will
pay all underwriting discounts and selling commissions, if any. We will indemnify the selling shareholders against liabilities, including
some liabilities under the Securities Act, in accordance with applicable registration rights agreements, if any, or the selling shareholders
will be entitled to contribution. We may be indemnified by the selling shareholders against civil liabilities, including liabilities under
the Securities Act, that may arise from any written information furnished to us by the selling shareholder specifically for use in this
prospectus, in accordance with the related registration rights agreement, or we may be entitled to contribution.
Once sold under the registration
statement of which this prospectus forms a part the Common Shares will be freely tradable in the hands of persons other than our affiliates.
LEGAL MATTERS
Blake, Cassels & Graydon LLP will pass upon the
validity of the securities being offered hereby.
Experts
The consolidated financial statements
as of June 30, 2020 and 2019, and for each of the three years in the period ended June 30, 2020, incorporated by reference in this Prospectus
and in the Registration Statement have been so incorporated in reliance on the report of BDO USA, LLP, an independent registered public
accounting firm, incorporated herein by reference, given on the authority of said firm as experts in auditing and accounting. The report
on the consolidated financial statements contains an explanatory paragraph regarding the Company’s ability to continue as a going
concern.
Certain portions of the
description of the Elk Creek Project incorporated by reference herein were summarized or extracted from a technical report prepared
in accordance with NI 43-101 dated May 29, 2019, with an effective date of April 16, 2019, and entitled “NI 43-101 Technical
Report Feasibility Study Elk Creek Niobium Project Nebraska.” Those extracts were reviewed and approved by Mr. Jean-Francois
St-Onge, P.Eng, and Mr. Glen Kuntz, P. Geo.
None of the above experts has
or is to receive in connection with the offering, a substantial interest, direct or indirect, in the Company or any of its subsidiaries
nor was any of them connected with the Company or any of its subsidiaries as a promoter, managing or principal underwriter, voting trustee,
Director, officer, or employee.
Where You
Can Find More Information
We are subject to the informational
reporting requirements of the Exchange Act. We file reports, proxy statements and other information with the SEC. Our SEC filings are
available over the Internet at the SEC’s website at http://www.sec.gov.
We make available, free of charge,
on our website at http://www.niocorp.com, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports
on Form 8-K and amendments to those reports and statements as soon as reasonably practicable after they are filed with the SEC.
The contents of our website are not part of this prospectus, and the reference to our website does not constitute incorporation by reference
into this prospectus of the information contained at that site, other than documents we file with the SEC that are incorporated by reference
into this prospectus.
Information
Incorporated by Reference
The
SEC allows us to “incorporate by reference” into this prospectus the information in documents we file with it, which means
that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered
to be a part of this prospectus, and information that we file later with the SEC will automatically update and supersede this information.
Any statement contained in any document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this prospectus to the extent that a statement contained in or omitted from this prospectus or any accompanying
prospectus supplement, or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein,
modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this prospectus.
We
incorporate by reference the documents listed below and any future documents that we file with the SEC (excluding any portion of such
documents that are furnished and not filed with the SEC) under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act (1) after the
date of the initial filing of the registration statement of which this prospectus forms a part prior to the effectiveness of the registration
statement and (2) after the date of this prospectus until the offering of the Common Shares is terminated:
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our Annual Report on Form 10-K for the year ended June 30, 2020;
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our Quarterly Reports on Form 10-Q for the quarterly periods ended September 30, 2020, December 31, 2020, and March 31, 2021; and
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our Current Reports on Form 8-K filed
on July 2, 2020, September 25, 2020, November 6, 2020, December 14, 2020 (two reports), December 18, 2020, January 25, 2021,
February 17, 2021, April 19, 2021 (as amended by Amendment No. 1 to Current Report on Form 8-K/A filed on June 4, 2021), April 28,
2021, and May 12, 2021; and
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the description of our Common Shares set forth in Exhibit 4.26 to our Annual Report on Form 10-K for the year ended June 30, 2020, which updated the description thereof contained in the registration statement on Form 8-A filed on October 28, 2016, and any subsequently filed amendments and reports filed for the purpose of updating that description.
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will not, however, incorporate by reference in this prospectus any documents or portions thereof that are not deemed “filed”
with the SEC, including any information furnished pursuant to Item 2.02 or Item 7.01 of our current reports on Form 8-K unless,
and except to the extent, specified in such current reports.
We
will provide you with a copy of any of these filings (other than an exhibit to these filings, unless the exhibit is specifically incorporated
by reference into the filing requested) at no cost, if you submit a request to us by writing or telephoning us at the following address
and telephone number:
NioCorp Developments
Ltd.
7000 South Yosemite Street,
Suite 115
Centennial, Colorado 80112
(855) 264-6267
Attn: Corporate Secretary
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