|
|
Filed
Pursuant to Rule 424(b)(3) |
|
|
Registration
No.: 333-271268 |
|
|
|
PROSPECTUS
NioCorp
Developments Ltd.
17,519,864
Common Shares
23,095,947
Common Shares offered by the Selling Shareholders
5,666,667
Warrants offered by the Selling Shareholders
This
prospectus relates to the issuance by us of up to an aggregate of 17,519,864 of our common shares, without par value (“Common
Shares”), that may be issued upon exercise of 15,666,626 warrants issued in connection with the Transactions (as defined
herein) (the “NioCorp Assumed Warrants”).
In
addition, this prospectus relates to the offer and sale from time to time by the selling shareholders identified herein (collectively,
the “Selling Shareholders”) of (i) up to an aggregate of 23,095,947 Common Shares and (ii) up to an aggregate of
5,666,667 NioCorp Assumed Warrants.
The
Common Shares being offered by the Selling Shareholders under this prospectus consist of (a) up to 3,917,290 Common Shares issuable
to a Selling Shareholder, YA II PN, Ltd. (“YA”), a fund managed by Yorkville Advisors Global, LP, upon conversion
of up to $8.0 million aggregate principal amount of, plus accrued interest on, unsecured convertible debentures
(the “Convertible Debentures”), which, together with the Financing Warrants (as defined below), were issued in the
original aggregate principal amount of $16.0 million to YA on March 17, 2023, pursuant to a Securities Purchase Agreement, dated
January 26, 2023 (as amended, the “Yorkville Convertible Debt Financing Agreement”), between us and YA, for total
cash consideration of $15.36 million, (b) up to 1,789,267 Common Shares issuable to YA upon exercise of Common Share purchase
warrants, exercisable for cash or, if at any time there is no effective registration statement registering, or no current prospectus
available for, the resale of the underlying Common Shares, on a cashless basis, at the option of the holder, at a price per Common
Share of approximately $8.9422, subject to adjustment to give effect to any stock dividend, stock split, reverse stock split or
similar transaction, and expiring on the terms as described herein (the “Financing Warrants”), (c) up to 487,701 Common
Shares issuable upon exercise of Common Share purchase warrants, each exercisable for one Common Share for cash at a price per
Common Share of C$11.00, subject to adjustment for recapitalizations, stock splits, reverse stock splits and similar events, expiring
June 30, 2024 (the “Private Placement Warrants”), which were issued to certain of the Selling Shareholders who participated
as investors (the “Private Placement Investors”) in connection with the Company’s June 2022 non-brokered private
placement (the “June 2022 Private Placement”) of units of the Company, comprised of one-tenth of one Common Share
and one-tenth of one Private Placement Warrant (after giving effect to the Reverse Stock Split (as defined herein)) (the “Units”),
for C$0.96 per Unit, (d) up to 6,510 Common Shares issuable upon exercise of Common Share purchase warrants, each exercisable
for one Common Share for cash at a price per Common Share of C$11.00, subject to adjustment for recapitalizations, stock splits,
reverse stock splits and similar events, expiring June 30, 2024 (the “Finder Warrants”), which were issued to certain
of the Selling Shareholders, Research Capital Corporation and Red Cloud Mining Capital Inc. (together, the “Finders”),
as part of a finder’s fee for services rendered in connection with the June 2022 Private Placement, (e) up to 4,565,808
Common Shares issuable upon exchange of shares of Class B common stock of Elk Creek Resources Corp. (formerly known as GXII),
a Delaware corporation and our indirect, majority-owned subsidiary (“ECRC”), that are vested as of the date hereof
(the “Vested Shares”), (f) up to 1,695,798 Common Shares issuable upon exchange of shares of Class B common stock
of ECRC that will vest in connection with the Tranche I Earnout (as defined herein) (the “Tranche I Earnout Shares”),
(g) up to 1,695,798 Common Shares issuable upon exchange of shares of Class B common stock of ECRC that will vest in connection
with the Tranche II Earnout (as defined herein) (the “Tranche II Earnout Shares”), (h) up to 6,336,981 Common Shares
issuable upon exercise of the NioCorp Assumed Warrants being offered by certain of the Selling Shareholders under this prospectus,
(i) 1,744,994 Common Shares that are issued and outstanding and were issued to certain of the Selling Shareholders who are executive
officers of the Company at prices per share ranging from C$1.50 to C$7.50, and (j) up to 855,800 Common Shares issuable upon exercise
of Common Share purchase warrants, exercisable at a price per Common Share of C$9.70, subject to adjustment for stock splits,
reverse stock splits and similar events, expiring February 19, 2025 (the “Lind Warrants” and, collectively with the
NioCorp Assumed Warrants, the Financing Warrants, the Private Placement Warrants and the Finder Warrants, the “Warrants”)),
which were issued to Lind Global Asset Management III, LLC, an entity managed by The Lind Partners, a New York based asset management
firm (“Lind III”), in connection with Lind III’s funding of $10.0 million under a convertible security (the
“Lind Convertible Security”) issued to Lind III pursuant to a convertible security funding agreement, dated February
16, 2021 (as amended, the “Lind Agreement”), between NioCorp and Lind III.
Pursuant
to the Business Combination Agreement, the Sponsor Support Agreement and the Exchange Agreement (each, as defined herein), after
the Closing, the shares of Class B common stock of ECRC are exchangeable for Common Shares on a one-for-one basis, subject to
certain equitable adjustments, under certain conditions. All of the shares of Class B common stock of ECRC were issued to GX Sponsor
II LLC (the “Sponsor”) in respect of shares of Class B common stock of GXII that were originally issued to the Sponsor
for $25,000 in the aggregate. In connection with the Closing, the Sponsor distributed all of the outstanding ECRC Class B Shares
to its members for no additional consideration.
The
NioCorp Assumed Warrants being offered by certain of the Selling Shareholders under this prospectus were issued to the Sponsor
in respect of an equal number of GXII Warrants (as defined herein) that it acquired in a private placement that occurred simultaneously
with the closing of the initial public offering of GXII at a purchase price of $1.50 per GXII Warrant. In connection with the
Closing, the Sponsor distributed all of its NioCorp Assumed Warrants to its members for no additional consideration. Each NioCorp
Assumed Warrant is exercisable for 1.11829212 Common Shares for cash or, as permitted in certain circumstances in accordance with
their terms and the NioCorp Assumed Warrant Agreement (as defined herein), on a cashless basis at a price per 1.11829212 Common
Shares of $11.50, and will expire five years after the Closing Date (as defined herein), at 5:00 p.m., New York City time, or
earlier upon redemption or liquidation. If, upon exercise of the NioCorp Assumed Warrants, a holder would be entitled to receive
a fractional interest in a share, the Company will, upon exercise, round down to the nearest whole number of Common Shares to
be issued to the NioCorp Assumed Warrant holder.
We
will not receive any of the proceeds from the sale by the Selling Shareholders of the Common Shares or the NioCorp Assumed Warrants
being offered by the Selling Shareholders under this prospectus. However, upon exercise, we will receive the cash exercise price
of the Warrants (assuming, with respect to the NioCorp Assumed Warrants and the Financing Warrants, that the holders do not exercise
their NioCorp Assumed Warrants or Financing Warrants on a cashless basis, which they may not do with respect to the Financing
Warrants for so long as there is an effective registration statement registering, and a current prospectus available for, the
resale of the Common Shares thereunder, including this prospectus and the registration statement of which this prospectus is a
part). We believe the likelihood that Warrant holders will exercise their Warrants, and therefore the amount of cash proceeds
that we would receive, is, among other things, dependent upon the market price of our Common Shares. For so long as the market
price for our Common Shares is less than the applicable exercise price of the Warrants (as is the case as of the date of this
prospectus), we believe such holders will be unlikely to exercise their Warrants. We expect to use the net proceeds that we receive
from the exercise of the Warrants, if any, for working capital and general corporate purposes, including to advance our efforts
to launch construction of the Elk Creek Project (as defined herein) and move it to commercial operation. See “Use of Proceeds.”
Our
registration of the Common Shares and the NioCorp Assumed Warrants being offered by the Selling Shareholders under this prospectus
does not mean that the Selling Shareholders will offer or sell any such Common Shares or NioCorp Assumed Warrants. The Selling
Shareholders may offer such Common Shares and NioCorp Assumed Warrants in one or more transactions at fixed prices, at prevailing
market prices at the time of sale, at varying prices determined at the time of sale, at negotiated prices, or in trading markets
for our Common Shares and the NioCorp Assumed Warrants. The Securities and Exchange Commission (the “SEC”) may take
the position that the Selling Shareholders are deemed “underwriters” within the meaning of Section 2(a)(11) of the
Securities Act of 1933 (the “Securities Act”), in connection with such sales. Any profits realized by the Selling
Shareholders and the compensation of any broker-dealer may be deemed to be underwriting discounts and commissions.
Additional
information on the Selling Shareholders, and the times and manner in which they may offer and sell Common Shares and NioCorp Assumed
Warrants under this prospectus, is set forth in the sections entitled “Selling Shareholders” and “Plan of Distribution”
beginning on pages 19 and 50, respectively, of this prospectus.
The
Selling Shareholders will pay all brokerage fees and commissions and similar expenses in connection with the offer and sale of
the Common Shares and the NioCorp Assumed Warrants being offered by the Selling Shareholders under this prospectus. We will pay
the expenses (except brokerage fees and commissions and similar expenses) incurred in registering under the Securities Act the
offer and sale of the Common Shares and the NioCorp Assumed Warrants being offered by the Selling Shareholders under this prospectus.
See “Plan of Distribution.”
If
all of the Common Shares covered by this prospectus were issued and outstanding, they would represent a substantial percentage
of our public float and of our outstanding Common Shares. As of October 24, 2023, the Common Shares covered by this prospectus
would represent approximately 49.71% of the total number of outstanding Common Shares (assuming all of the Common Shares covered
by this prospectus were issued and outstanding and not including Common Shares issuable upon exercise of outstanding stock options,
or reserved for future issuance, under the NioCorp Developments Ltd. Long-Term Incentive Plan (the “LTIP”), Common
Shares issuable in respect of the Commitment Amount (as defined herein) pursuant to the Yorkville Equity Facility Financing Agreement
(as defined herein) or Common Shares issuable upon exercise of other outstanding Common Share purchase warrants, as described
herein). Accordingly, the sale of the Common Shares covered by this prospectus, or the perception that such sales may occur, could
result in a significant decline in the public trading price of our Common Shares. Moreover, the sale of additional Common Shares
by us or by other security holders, or the perception that such sales may occur, could result in a further decline in the public
trading price of our Common Shares. See “Risk Factors—Additional Risks Related to this Offering and Our Common Shares.”
In
addition, as described herein, some of the Common Shares being offered by certain of the Selling Shareholders under this prospectus
were or may be acquired by such Selling Shareholders for no consideration or for prices below the prevailing market price of the
Common Shares. Accordingly, subject to applicable restrictions or limitations, such Selling Shareholders may have an incentive
to sell such Common Shares, even if the market price of our Common Shares declines, that is not shared by other shareholders because
the price at which they acquired or will be deemed to have acquired such Common Shares may still be lower than the then-prevailing
market price of the Common Shares. As a result, certain of the Selling Shareholders may experience a positive rate of return on
the Common Shares covered by this prospectus due to the potential differences between the prices of at which they acquired or
will be deemed to have acquired such securities and the market price of the underlying Common Shares, and other shareholders may
not experience a similar rate of return due to the differences in the purchase prices and the then-prevailing market price of
the Common Shares. For example:
| ● | The
Common Shares issuable upon conversion of the Convertible Debentures covered by this
prospectus may be acquired by YA at a discount to the market price of the Common Shares.
Accordingly, subject to the Floor Price (as defined herein) and the restrictions on conversion
pursuant to the Yorkville Convertible Debt Financing Agreement and the terms of the Convertible
Debentures, each as described herein, YA may have an incentive to sell the Common Shares
that it acquires upon conversion of the Convertible Debentures, even if the market price
of our Common Shares declines. |
| ● | Similarly,
to the extent that the Warrants are exercised, the holders of such Common Shares issued
upon exercise thereof may have an incentive to sell the Common Shares that is not shared
by other shareholders because the Common Shares issued upon the exercise of the Warrants
may have been purchased for less than the then-prevailing market price of the Common
Shares. |
| ● | The
shares of Class B common stock of GXII that were exchanged for shares of ECRC Class B common stock in connection with the Closing
were initially purchased by the Sponsor at a price of $0.003 per share. Based on the last reported sale price of the Common Shares
on The Nasdaq Global Market on October 27, 2023, as disclosed below, the Selling Shareholders who beneficially own the ECRC
Class B common stock would experience a potential profit of approximately $4.88 per share, or approximately $22,267,446 in the aggregate,
assuming they exchange all of their Vested Shares for Common Shares and sold them pursuant to this prospectus. Because of the
Common Share market price vesting conditions of the Tranche I Earnout Shares and Tranche II Earnout Shares, as described herein,
the Selling Shareholders who beneficially own such shares of ECRC Class B common stock |
| | would
not be able to exchange such Tranche I Earnout Shares or Tranche II Earnout Shares at the current market price for the Common
Shares. |
| ● | In
addition, based on the last reported sale price of the Common Shares on The Nasdaq Global
Market on October 27, 2023 and based on the CAD:USD exchange ratio of CAD$1.3857:USD$1.00
on October 27, 2023 as reported by the Bank of Canada, certain of the executive officers
of the Company that may resell their Common Shares pursuant to this prospectus would
experience a potential profit per share, with respect to a portion of the Common Shares
that they may resell pursuant to this prospectus, of between approximately $0.19 per share
and approximately $3.80 per share, or approximately $4,711,915 in the aggregate, assuming they
sold such Common Shares pursuant to this prospectus. |
See
“Risk Factors—Additional Risks Related to this Offering and Our Common Shares.”
Our
Common Shares trade on The Nasdaq Global Market under the symbol “NB” and on the Toronto Stock Exchange (the
“TSX”) under the symbol “NB.” On October 27, 2023, the last reported sale price of our Common Shares on The
Nasdaq Global Market and the TSX was $ 4.88 per Common Share and C$6.77 per Common Share, respectively. The public
NioCorp Assumed Warrants trade on The Nasdaq Capital Market under the symbol “NIOBW.” On October 27, 2023, the last
reported sale price of the public NioCorp Assumed Warrants on The Nasdaq Capital Market was $0.619 per public NioCorp
Assumed Warrant. Our principal executive office is located at 7000 South Yosemite Street, Suite 115, Centennial, Colorado 80112, and
our telephone number is (855) 264-6267.
Investing
in our Common Shares or the NioCorp Assumed Warrants involves a high degree of risk. You should review carefully the risks and
uncertainties referenced under the heading “Risk Factors” beginning on page 8 of this prospectus.
Neither
the SEC nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal offense.
The
date of this prospectus is October 30, 2023.
TABLE
OF CONTENTS
Page
ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement on Form S-1 that we filed with the SEC using a “shelf” registration
process. The Company may, from time to time, issue the Common Shares issuable upon exercise of the NioCorp Assumed Warrants as
described in this prospectus. In addition, the Selling Shareholders may, from time to time, sell the Common Shares and the NioCorp
Assumed Warrants being offered by the Selling Shareholders as described in this prospectus.
You
should rely only on the information provided in this prospectus, as well as the information incorporated by reference into this
prospectus and any applicable prospectus supplement. Neither we nor the Selling Shareholders have authorized anyone to provide
you with different information. Neither we nor the Selling Shareholders have authorized anyone to provide you with any information
or to make any representations other than those contained in this prospectus or any applicable prospectus supplement or any free
writing prospectuses prepared by or on behalf of us or to which we have referred you. Neither we nor the Selling Shareholders
take responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you.
You should not assume that the information in this prospectus or any applicable prospectus supplement is accurate as of any date
other than the date of the applicable document. Since the date of this prospectus and the documents incorporated by reference
into this prospectus, our business, financial condition, results of operations and prospects may have changed. Neither we nor
the Selling Shareholders will make an offer to sell these securities in any jurisdiction where the offer or sale is not permitted.
We
may also provide a prospectus supplement or post-effective amendment to the registration statement of which this prospectus is
a part to add information to, or update or change information contained in, this prospectus and the registration statement of
which this prospectus is a part. You should read this prospectus and any applicable prospectus supplement or post-effective amendment
to the registration statement of which this prospectus is a part together with the additional information to which we refer you
in the sections of this prospectus entitled “Where You Can Find More Information” and “Incorporation of Documents
by Reference.”
Unless
we state otherwise or the context otherwise requires, the terms “we,” “us,” “our,” “our
business” “NioCorp,” “the Company” and similar references refer to NioCorp Developments Ltd. and
its consolidated subsidiaries.
Unless
we state otherwise or the context otherwise requires, the term “ECRC” refers to Elk Creek Resources Corp. (formerly
known as GX Acquisition Corp. II), a Delaware corporation and a majority-owned subsidiary of NioCorp, as the surviving entity
of the mergers that occurred on the Closing Date as part of the Transactions, and the term “GXII” refers to GX Acquisition
Corp. II, a Delaware corporation, as it existed prior to the Closing.
This
prospectus contains our registered and unregistered trademarks and service marks, as well as trademarks and service marks of third
parties. Solely for convenience, these trademarks and service marks are referenced without the ®, ™ or similar symbols,
but such references are not intended to indicate, in anyway, that we will not assert, to the fullest extent under applicable law,
our rights to these trademarks and service marks. All brand names, trademarks and service marks appearing in this prospectus are
the property of their respective holders.
WHERE
YOU CAN FIND MORE INFORMATION
This
prospectus is part of a registration statement on Form S-1 that we filed with the SEC under the Securities Act and does not contain
all the information set forth or incorporated by reference in the registration statement. Whenever a reference is made in this
prospectus to any of our contracts, agreements or other documents, the reference may not be complete and you should refer to the
exhibits that are a part of the registration statement of which this prospectus is a part or the exhibits to the reports or other
documents incorporated by reference into this prospectus for a copy of such contract, agreement or other document. You may obtain
copies of the registration statement and its exhibits via the SEC’s EDGAR database.
We
file annual, quarterly and current reports, proxy statements and other information with the SEC under the Securities Exchange
Act of 1934 (the “Exchange Act”). The SEC maintains a website that contains reports, proxy and information statements
and other information regarding issuers, including us, that file electronically with the SEC. You may obtain documents that we
file with the SEC at www.sec.gov.
We
make available, free of charge, on our website at www.niocorp.com, our annual reports on Form 10-K, quarterly reports on
Form 10-Q, current reports on Form 8-K, proxy statements and amendments to those reports and statements as soon as reasonably
practicable after they are filed with the SEC. We do not incorporate the information on or accessible through any website into
this prospectus or any prospectus supplement, and you should not consider any information on, or that can be accessed through,
any website as part of this prospectus or any prospectus supplement (other than those filings with the SEC that we specifically
incorporate by reference into this prospectus or any prospectus supplement). Our website address and the SEC’s website address
are included in this prospectus as inactive textual references only.
INCORPORATION
OF DOCUMENTS BY REFERENCE
SEC
rules permit us to incorporate information by reference into this prospectus and any applicable prospectus supplement. This means
that we can disclose important information to you by referring you to another document filed separately with the SEC. The information
incorporated by reference is considered to be part of this prospectus and any applicable prospectus supplement, except for information
superseded by information contained in this prospectus or the applicable prospectus supplement itself or in any subsequently filed
incorporated document. This prospectus and any applicable prospectus supplement incorporate by reference the documents set forth
below that we have previously filed with the SEC, other than information in such documents that is deemed to be furnished and
not filed. These documents contain important information about us and our business and financial condition. Any report or information
within any of the documents referenced below that is furnished, but not filed, shall not be incorporated by reference into this
prospectus:
| ● | our
Annual Report on Form 10-K for the fiscal year ended June 30, 2023, filed with the SEC
on October 6, 2023; |
| ● | our
Current Reports on Form 8-K, filed with the SEC on March 1, 2023, September 1, 2023,
September 7, 2023, September 12, 2023, September 13, 2023, September 18, 2023 and October 13, 2023; and |
| ● | a
description of our Common Shares, contained in our Registration Statement on Form 8-A,
filed with the SEC on March 17, 2023, and any subsequently filed amendments and reports
filed for the purpose of updating that description. |
We
also incorporate by reference any future filings made by us with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
(excluding any information furnished to, rather than filed with, the SEC), including after effectiveness of the registration
statement of which this prospectus is a part and prior to the termination of the offering of the securities made by this prospectus.
Information in such future filings updates and supplements the information provided in this prospectus. Any statements in any such
future filings will automatically be deemed to modify and supersede any information in any document we previously filed with the SEC
that is incorporated or deemed to be incorporated herein by reference to the extent that statements in the later filed document
modify or replace such earlier statements.
You
may request a copy of these filings, at no cost, by writing or calling us at the following address or telephone number below:
NioCorp
Developments Ltd.
7000 South Yosemite Street, Suite 115
Centennial, Colorado 80112
Phone: (855) 264-6267
Those
copies will not include exhibits, unless the exhibits have specifically been incorporated by reference in this document or you
specifically request them.
SUMMARY
This
summary highlights selected information appearing in this prospectus. Because it is a summary, it may not contain all of the information
that may be important to you. To understand this offering fully, you should read this entire prospectus carefully, including the
information set forth in the section entitled “Risk Factors” contained in this prospectus and under similar headings
in the other documents that are incorporated by reference into this prospectus. You should also carefully read the information
incorporated by reference into this prospectus, including our consolidated financial statements and related notes and the exhibits
to the registration statement of which this prospectus is a part, before making an investment decision. This prospectus includes
forward-looking statements that involve risks and uncertainties. See “Cautionary Note Regarding Forward-Looking Statements.”
NioCorp
Developments Ltd.
NioCorp
is a mineral exploration company engaged in the acquisition, exploration, and development of mineral properties. NioCorp, through
its indirect, majority-owned subsidiary, 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.
| ● | Niobium
is used to produce various superalloys that are extensively used in high performance
aircraft and jet turbines. It also is used in high-strength low-alloy 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. |
| ● | 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. |
| ● | Titanium
is a component of various superalloys and other applications that are used for aerospace
applications, weapons systems, protective armor, medical implants and many others. It
also is used in pigments for paper, paint, and plastics. |
During
fiscal year 2023, the Company completed construction and operated a demonstration-scale processing plant located in Trois-Rivieres,
Quebec, built by the Company and L3 Process Development and operated by L3 Process Development (the “Demonstration
Plant”). The Demonstration Plant results showed higher recoveries for our primary niobium product, much higher recoveries and
a higher value titanium product in the form of titanium tetrachloride, and a high recovery rate for the three planned rare earth
oxides of consequence: neodymium/praseodymium oxide, dysprosium oxide and terbium oxide. In addition, we completed initial site
preparation work at the Elk Creek Project, which consisted of tree and brush clearing. A geotechnical investigation at the Elk Creek
Project site was also completed, which involved excavated test pits, geotechnical borings and the installation of shallow
groundwater piezometers. The geotechnical program generated valuable data for the firms that are working on the detailed design of
the facilities and infrastructure associated with the Elk Creek Project.
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.
Background
Completion
of the Transactions
On
March 17, 2023 (the “Closing Date”), NioCorp consummated the transactions contemplated by the previously-announced
Business Combination Agreement, dated as of September 25, 2022 (the “Business
Combination Agreement”), among NioCorp,
GXII and Big Red Merger Sub Ltd (the “Closing”). The transactions contemplated by the Business Combination Agreement,
including the reverse stock split at a ratio of 10-for-1 effectuated by each of NioCorp and ECRC on the Closing Date (the “Reverse
Stock Split”), are referred to, collectively, as the “Transactions.”
In
connection with the Closing, GXII, as the surviving entity of the mergers that occurred on the Closing Date as part of the Transactions,
changed its name to Elk Creek Resources Corp. and became an indirect, majority-owned subsidiary of NioCorp, with the pre-combination
public shareholders of GXII receiving Common Shares based on a fixed exchange ratio of 11.1829212 (or 1.11829212 after giving
effect to the Reverse Stock Split) (the “Exchange Ratio”) Common Shares for each Class A common share of GXII held
and not redeemed, and the GXII founders receiving shares of Class B common stock of ECRC based on the Exchange Ratio. Pursuant
to the Business Combination Agreement, the Sponsor Support Agreement, dated as of September 25, 2022 (as amended, supplemented
or otherwise modified, the “Sponsor Support Agreement”), by and among GXII, NioCorp, the Sponsor and certain other
stockholders of GXII, and the Exchange Agreement, dated as of March 17, 2023 (as amended, supplemented or otherwise modified,
the “Exchange Agreement”), by and among NioCorp, ECRC and the Sponsor, after the Closing, the GXII founders have the
right to exchange such shares of Class B common stock of ECRC for Common Shares on a one-for-one basis, subject to certain equitable
adjustments, under certain conditions. Such shares that constitute Vested Shares are exchangeable at any time, and from time to
time, until the tenth anniversary of the Closing Date. Such shares that constitute Tranche I Earnout Shares are not exchangeable
until the volume-weighted average price of the Common Shares on the principal securities exchange for the Common Shares as reported
by Bloomberg (“VWAP”) equals or exceeds approximately $12.00 per share for 20 of any 30 consecutive trading days during
the period from the Closing through, and including, the tenth anniversary of the Closing Date (such period, the “Earnout
Share Period”) on any stock exchange on which the Common Shares are then trading (the “Tranche I Earnout”).
Such shares that constitute Tranche II Earnout Shares are not exchangeable until the VWAP of the Common Shares equals or exceeds
approximately $15.00 per share for 20 of any 30 consecutive trading days during the Earnout Share Period on any stock exchange
on which the Common Shares are then trading (the “Tranche II Earnout”). All of the shares of Class B common stock
of ECRC were issued to GX Sponsor II LLC (the “Sponsor”) in respect of shares of Class B common stock of GXII that
were originally issued to the Sponsor for $25,000 in the aggregate. In connection with the Closing, the Sponsor distributed all
of the outstanding ECRC Class B Shares to its members for no additional consideration.
In
connection with the Closing, pursuant to the Business Combination Agreement, the Company assumed the Warrant Agreement, dated
as of March 17, 2021 (the “GXII Warrant Agreement”), by and between GXII and Continental Stock Transfer & Trust
Company (“CST”), as warrant agent, and each share purchase warrant of GXII thereunder (the “GXII Warrants”)
that was issued and outstanding immediately prior to the Closing Date was converted into one NioCorp Assumed Warrant pursuant
to the GXII Warrant Agreement, as amended by an assignment, assumption and amendment agreement, dated the Closing Date (the GXII
Warrant Agreement, as so amended, the “NioCorp Assumed Warrant Agreement”), among NioCorp, GXII, CST, as existing
warrant agent, and Computershare Inc. and its affiliate Computershare Trust Company, N.A., together as successor warrant agent
(the “NioCorp Assumed Warrant Agent”). In connection with the Closing, NioCorp issued (a) 9,999,959 public NioCorp
Assumed Warrants in respect of the GXII Warrants that were publicly traded prior to the Closing and (b) 5,666,667 NioCorp Assumed
Warrants to the Sponsor in respect of an equal number of GXII Warrants that it held prior to the Closing, which NioCorp Assumed
Warrants were subsequently distributed by the Sponsor to its members in connection with the Closing for no additional consideration.
The Sponsor acquired the GXII Warrants in respect of which the NioCorp Assumed Warrants being offered by certain of the Selling
Shareholders under this prospectus were issued in a private placement that occurred simultaneously with the closing of the initial
public offering of GXII at a purchase price of $1.50 per GXII Warrant.
Both
the public NioCorp Assumed Warrants and the NioCorp Assumed Warrants issued to the Sponsor are subject to the terms of the NioCorp
Assumed Warrant Agreement and are identical, with certain exceptions applicable to the NioCorp Assumed Warrants issued to the
Sponsor for so long as such NioCorp Assumed Warrants are held by the Sponsor, its members, or their respective affiliates and
other permitted transferees. In accordance with the NioCorp Assumed Warrant Agreement, any NioCorp Assumed Warrants issued to
the Sponsor that are not held by the Sponsor, its members, or their respective affiliates and other permitted transferees, are
treated as public NioCorp Assumed Warrants. See “Description of Capital Stock—NioCorp Assumed Warrants” for
a description of certain terms of the NioCorp Assumed Warrants.
Pursuant
to the Business Combination Agreement, at the Closing, NioCorp, ECRC, the Sponsor, the pre-Closing directors and officers of NioCorp
and the other parties thereto, including certain of the Selling Shareholders (collectively, the “RRA Shareholders”),
entered into the Amended and Restated Registration Rights Agreement, dated March 17, 2023 (the “Registration Rights and
Lockup Agreement”), pursuant to which, among other things, NioCorp became obligated to file a shelf registration statement
to register the resale of (i) outstanding Common Shares, (ii) Common Shares exchangeable for the shares of Class B common stock
of ECRC, (iii) NioCorp Assumed Warrants and (iv) Common Shares issuable upon exercise of the NioCorp Assumed Warrants, in each
case, held by the RRA Shareholders immediately after the Closing. The Registration Rights and Lockup Agreement also provides the
RRA Shareholders with certain “demand” and “piggy-back” registration rights, subject to certain requirements
and customary conditions, and provides for certain “lock-up” restrictions on transfer by the RRA Shareholders of such
securities held by them after the Closing.
We
are filing the registration statement of which this prospectus is a part, among other reasons, to satisfy our obligations under
the Registration Rights and Lockup Agreement with respect to registering the securities held by the RRA Shareholders immediately
after the Closing.
Yorkville
Financings
In
connection with the entry into the Business Combination Agreement, the Company announced the signing of non-binding letters of
intent for two separate financing packages with Yorkville Advisors Global, LP. On January 26, 2023, the Company entered into definitive
agreements with respect to these financings, including a Securities Purchase Agreement, dated January 26, 2023 (as amended the
“Yorkville Convertible Debt Financing Agreement”), between the Company and YA, and a Standby Equity Purchase Agreement,
dated January 26, 2023 (the “Yorkville Equity Facility Financing Agreement”), between the Company and YA. Pursuant
to the Yorkville Equity Facility Financing Agreement, YA has committed to purchase up to $65.0 million of our Common Shares (the
“Commitment Amount”), at our direction from time to time for a period commencing upon the Closing Date and ending
on the earliest of (i) the first day of the month next following the 36-month anniversary of the Closing, (ii) the date on which
YA shall have made payment of the full Commitment Amount and (iii) the date that the Yorkville Equity Facility Financing Agreement
otherwise terminates in accordance with its terms (the “Commitment Period”), subject to certain limitations and the
satisfaction of the conditions in the Yorkville Equity Facility Financing Agreement. Pursuant to the terms of the Yorkville Equity
Facility Financing Agreement, we issued 81,213 of our Common Shares (the “Commitment Shares”) to YA as consideration
for its irrevocable commitment to purchase Common Shares under the Yorkville Equity Facility Financing Agreement. YA has since
resold all of the Commitment Shares. On June 9, 2023, September 12, 2023 and September 18, 2023, we issued and sold 100,000, 70,000
and 75,000 Advance Shares, respectively, to YA. Additionally, we are required to pay YA an aggregate fee of $1,500,000 in cash
(the “Cash Fee”), including $500,000 that we paid on the Closing Date and an additional $500,000 we have paid as of
October 27, 2023. We will pay the remaining $500,000 balance in installments over a 12-month period following the Closing
Date, provided that, we will have the right to prepay without penalty all or part of the remaining installments of the Cash Fee
at any time.
Pursuant
to the Yorkville Convertible Debt Financing Agreement, at the Closing, YA advanced a total amount of $15.36 million to NioCorp
in consideration of the issuance by NioCorp to YA of (i) $16.0 million aggregate principal amount of Convertible Debentures (of
which there was $8.0 million aggregate principal amount outstanding as of October 24, 2023) and (ii) Financing Warrants,
exercisable for up to 1,789,267 Common Shares for cash or, if at any time there is no effective registration statement registering,
or no current prospectus available for, the resale of the underlying Common Shares, on a cashless basis, at the option of the
holder, at a price per Common Share of approximately $8.9422, subject to adjustment to give effect to any stock dividend, stock
split, reverse stock split or similar transaction (the “Financing Warrants”). The Convertible Debentures and the Financing
Warrants were issued to YA on a private offering basis pursuant to the exemption from the registration requirements of the Securities
Act provided by Rule 506(b) of Regulation D thereunder and/or Section 4(a)(2) thereof, based upon the representations and warranties
YA made to the Company in connection with the Yorkville Convertible Debt Financing Agreement. See “Description of Capital
Stock—Yorkville Convertible Debentures” and “Description of Capital Stock—Financing Warrants,” respectively,
for descriptions of certain terms of the Convertible Debentures and the Financing Warrants.
The
Yorkville Convertible Debt Financing Agreement contains customary representations, warranties, conditions and indemnification
obligations by each party. The representations, warranties and covenants contained
in the Yorkville Convertible Debt Financing
Agreement were made only for purposes of the Yorkville Convertible Debt Financing Agreement and as of specific dates, were solely
for the benefit of the parties to such agreement and are subject to certain important limitations.
The
Yorkville Convertible Debt Financing Agreement also contains covenants that, among other things, limit NioCorp’s ability
to use the proceeds from the Yorkville Convertible Debt Financing to repay related party debt or to enter into any variable rate
transaction other than with Yorkville, subject to certain exceptions.
On
January 26, 2023, in connection with the Yorkville Convertible Debt Financing Agreement, NioCorp and Yorkville also entered into
a registration rights agreement (the “Convertible Debt Financing Registration Rights Agreement”) pursuant to which,
among other matters, NioCorp has agreed to file with the SEC a registration statement registering under the Securities Act the
resale by YA of the Common Shares issuable upon the conversion of the Convertible Debentures and the exercise of the Financing
Warrants, as soon as practicable but no later than 21 calendar days following the Closing Date, and to use its reasonable best
efforts to have the Convertible Debt Financing Registration Statement declared effective as soon as practicable after the filing
thereof, but in no event later than the 45th calendar day following the filing date thereof. NioCorp further agreed to use its
reasonable best efforts to cause the Convertible Debt Financing Registration Statement to remain continuously effective for a
period that will terminate upon the first date on which all of the Common Shares issuable upon the conversion of the Convertible
Debentures and the exercise of the Financing Warrants may be sold without restriction, including volume and manner-of-sale restrictions,
pursuant to Rule 144 under the Securities Act or have been sold by Investors. NioCorp also granted to YA certain demand rights
for underwritten shelf takedowns and piggyback registration rights with respect to the Common Shares issuable upon the conversion
of the Convertible Debentures and the exercise of the Financing Warrants.
We
are filing the registration statement of which this prospectus is a part, among other reasons, to satisfy our obligations under
the Convertible Debt Financing Registration Rights Agreement with respect to registering the Common Shares issuable upon conversion
of the Convertible Debentures and exercise of the Financing Warrants.
June
2022 Private Placement
On
June 30, 2022, the Company issued 4,981,035 Units at a price of C$0.96 per Unit for aggregate gross proceeds of approximately
C$4.78 million, in connection with the closing of the June 2022 Private Placement. Each Unit consisted of one-tenth of one Common
Share and one-tenth of one Private Placement Warrant (after giving effect to the Reverse Stock Split). Each Private Placement
Warrant may be exercised for one Common Share for cash at a price of C$11.00 until June 30, 2024. Additionally, in connection
with the June 2022 Private Placement, as consideration for services rendered as finders, we issued an aggregate of 6,510 Finder
Warrants to the Finders, each of which is exercisable for one Common Share for cash at a price of C$11.00 until June 30, 2024.
In
connection with the June 2022 Private Placement, the Company entered into subscription agreements (collectively, the “Subscription
Agreements”) with each Private Placement Investor. The Subscription Agreements contain customary representations, warranties,
conditions and indemnification obligations of the parties. The representations, warranties and covenants were made only for purposes
of such agreements and as of specific dates, were solely for the benefit of the parties to such agreements and may be subject
to limitations agreed upon by the contracting parties. The Units 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 of 1933),
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.
Issuance
of the Lind Convertible Security and the Lind Warrants
On
February 19, 2021, pursuant to the Lind Agreement, Lind III advanced to the Company $10.0 million (subject to additional set off)
in consideration of which the Company issued to Lind III 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 had a term of (i) 24 months or (ii) 30 calendar days after the date on which the face value of the 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; in accordance with these terms, the Lind Convertible Security has since expired.
On
February 19, 2021, in connection with the funding and issuance of the Lind Convertible Security, the Company issued 855,800 Lind
Warrants (after giving effect to the Reverse Stock Split) to Lind III pursuant to the Lind Agreement. Each Lind Warrant entitles
the holder to acquire one Common Share at a price of C$9.70, subject to adjustment for stock splits, reverse stock splits and
similar events, until February 19, 2025.
The
Lind Convertible Security and the Lind Warrants were issued pursuant to the exemption from the registration requirements of the
Securities Act provided by Section 4(a)(2) thereof based upon the representations and warranties of Lind III in the Lind Agreement.
In
addition, pursuant to the Lind Agreement, the Company agreed to file with the SEC a registration statement on Form S-1 or Form
S-3 under the Securities Act covering the resale by Lind III of the Common Shares issuable upon conversion of the Lind Convertible
Security and upon exercise of the Lind Warrants, promptly, but in any event no later than April 1, 2021, and to use its best efforts
to have such registration statement declared effective as soon as practicable after the filing thereof, but in no event later
than the date that is 120 days following the date of the funding and issuance of the Lind Convertible Security. The Company further
agreed to use its best efforts to cause such registration statement to remain continuously effective for a period that will terminate
upon the first date on which all of such Common Shares may be sold without restriction, including volume and manner-of-sale restrictions,
pursuant to Rule 144 under the Securities Act or have been sold by Lind III. The Company also granted to Lind III certain piggyback
registration rights with respect to such Common Shares.
We
are filing the registration statement of which this prospectus forms a part, among other reasons, to satisfy our obligations under
the Lind Agreement with respect to registering the Common Shares issuable upon exercise of the Lind Warrants.
Acquisitions
of Common Shares by Certain Executive Officers of NioCorp
Certain
executive officers of NioCorp are Selling Shareholders. Such executive officers purchased or otherwise acquired their Common Shares
covered by this prospectus in connection with private placements of NioCorp between 2013 and 2016, upon exercise of Common Share
purchase warrants acquired in such private placements or upon exercise of stock options, at prices per share ranging from C$1.50
to C$7.50.
Corporate
Information
Our
Common Shares trade on The Nasdaq Global Market under the symbol “NB” and on the TSX under the symbol “NB.”
The public NioCorp Assumed Warrants trade on The Nasdaq Capital Market under the symbol “NIOBW.” Our principal executive
office is located at 7000 South Yosemite Street, Suite 115, Centennial, CO 80112, and our telephone number is (855) 264-6267.
Our website address is www.niocorp.com. This website address is not intended to be an active link, and information on,
or accessible through, our website is not incorporated by reference into this prospectus and you should not consider any information
on, or that can be accessed from, our website as part of this prospectus or any accompanying prospectus supplement.
SECURITIES
OFFERED
Common
Shares Offered by the Company |
Up
to 17,519,864 Common Shares issuable upon exercise of the NioCorp Assumed Warrants. |
|
|
Common
Shares Offered by the Selling Shareholders |
Up
to an aggregate of 23,095,947 Common Shares, consisting of:
(a)
up to 3,917,290 Common Shares issuable upon conversion of the Convertible Debentures;
(b)
up to 1,789,267 Common Shares issuable upon exercise of the Financing Warrants;
(c)
up to 487,701 Common Shares issuable upon exercise of the Private Placement Warrants;
(d)
up to 6,510 Common Shares issuable upon exercise of the Finder Warrants;
(e)
up to 4,565,808 Common Shares issuable upon exchange of the Vested Shares;
(f)
up to 1,695,798 Common Shares issuable upon exchange of the Tranche I Earnout Shares;
(g)
up to 1,695,798 Common Shares issuable upon exchange of the Tranche II Earnout Shares;
(h)
up to 6,336,981 Common Shares issuable upon exercise of NioCorp Assumed Warrants being offered by certain of the Selling
Shareholders under this prospectus;
(i)
1,744,994 Common Shares that are issued and outstanding and were issued to certain executive officers of NioCorp; and
(j)
up to 855,800 Common Shares issuable upon exercise of the Lind Warrants.
|
NioCorp
Assumed Warrants Offered by Certain of the Selling Shareholders |
Up
to an aggregate of 5,666,667 NioCorp Assumed Warrants. |
|
|
Common
Shares Outstanding Prior to this Offering(1) |
32,913,419
Common Shares (as of October 24, 2023). |
|
|
Common
Shares Outstanding After this Offering(1) |
65,447,255 Common
Shares, assuming the issuance of (i) 17,519,864 Common Shares upon exercise of the NioCorp Assumed Warrants, (ii) 3,917,290
Common Shares upon conversion of the Convertible Debentures, (iii) 1,789,267 Common Shares upon exercise of the Financing
Warrants, (iv) 487,701 Common Shares upon exercise of the Private Placement Warrants, (v) 6,510 Common Shares upon exercise
of the Finder Warrants, (vi) 4,565,808 Common Shares upon exchange of the Vested Shares, (vii) 1,695,798 Common Shares upon
exchange of the Tranche I Earnout Shares, (viii) 1,695,798 Common Shares upon exchange of the Tranche II Earnout Shares and
(ix) 855,800 Common Shares upon exercise of the Lind Warrants. |
|
|
Use
of Proceeds |
We
will not receive any proceeds from the sale by the Selling Shareholders of the Common Shares or the NioCorp Assumed Warrants
being offered by the Selling Shareholders under this prospectus. However, upon exercise, we will receive the cash exercise
price of the Warrants (assuming, with respect to the NioCorp Assumed Warrants and the Financing Warrants, that the holders
do not exercise their NioCorp Assumed Warrants or Financing Warrants on a cashless basis, which they may not do with respect
to the Financing Warrants for so long as there is an effective registration statement registering, and a current prospectus
available for, the resale of the Common Shares thereunder, including this prospectus and the registration statement of which
this prospectus is a part). We believe the likelihood that Warrant holders will exercise their Warrants, and therefore the
amount of cash proceeds that we would receive, is, among other things, dependent upon the market price of our Common Shares.
For so long as the market price for our Common Shares is less than the applicable exercise price of the Warrants (as is the
case as of the date of this prospectus), we believe such holders will be unlikely to exercise their Warrants. We expect to
use the net proceeds that we receive from the exercise of the Warrants, if any, for working capital and general corporate
purposes, including to advance our efforts to launch construction of the Elk Creek Project and move it to commercial operation.
See “Use of Proceeds.” |
|
|
Market
for Common Shares |
Our
Common Shares trade on The Nasdaq Global Market under the symbol “NB” and on the TSX under the symbol “NB.” |
|
|
Market
for NioCorp Assumed Warrants |
The
public NioCorp Assumed Warrants trade on The Nasdaq Capital Market under the symbol “NIOBW.” |
|
|
Risk
Factors |
See
“Risk Factors” and other information included in this prospectus for a discussion of factors you should consider
before investing in our securities. |
(1)
Does not include:
| ● | Common
Shares issuable upon exercise of outstanding stock options under the LTIP; |
| ● | Common
Shares reserved for future issuance under the LTIP; |
| ● | Common
Shares issuable in respect of the Commitment Amount pursuant to the Yorkville Equity
Facility Financing Agreement; |
| ● | an
aggregate of 10,400 Common Shares issuable upon exercise of other outstanding Common
Share purchase warrants with an exercise price of C$11.00, subject to adjustment for
recapitalizations, stock splits, reverse stock splits and similar events, expiring June
30, 2024; and |
| ● | an
aggregate of 250,000 Common Shares issuable upon exercise of outstanding Common Share
purchase warrants, with an exercise price of $4.60, subject to adjustment for recapitalizations,
stock splits, reverse stock splits and similar events, expiring September 1, 2025. |
RISK
FACTORS
Investing
in our Common Shares and the NioCorp Assumed Warrants involves a high degree of risk. Before making a decision to invest in our
Common Shares or the NioCorp Assumed Warrants, you should carefully consider the risks described below and under the heading “Risk
Factors” in the applicable prospectus supplement, and discussed under Part I, Item 1A. “Risk Factors” contained
in our most recent Annual Report on Form 10-K, and Part II, Item 1A. “Risk Factors” contained in our subsequent Quarterly
Reports on Form 10-Q, as well as any amendments thereto, which are incorporated by reference into this prospectus and the applicable
prospectus supplement in their entirety, together with other information in this prospectus and the applicable prospectus supplement
and the documents incorporated by reference herein and therein. See the sections of this prospectus entitled “Where You
Can Find More Information” and “Incorporation of Documents by Reference.” Additional risks and uncertainties
not presently known to us or that we currently deem immaterial may also affect our business, financial condition or results of
operations. The occurrence of any of these known or unknown risks might cause you to lose all or part of your investment in our
Common Shares or the NioCorp Assumed Warrants.
Additional
Risks Related to this Offering and Our Common Shares and the NioCorp Assumed Warrants
Future
sales, or the perception of future sales, of Common Shares covered by this prospectus could adversely affect prevailing market
prices for the Common Shares.
Under
this prospectus, we may issue up to 17,519,864 Common Shares issuable upon exercise of the NioCorp Assumed Warrants, and the Selling
Shareholders may sell (a) up to 3,917,290 Common Shares issuable to YA upon conversion of up to $8.0 million aggregate principal
amount of, plus accrued interest on, the Convertible Debentures, which are convertible on the terms of the Yorkville
Convertible Debt Financing Agreement and the Convertible Debentures, as described herein, at the Conversion Price (as defined
below), (b) up to 1,789,267 Common Shares issuable to YA upon exercise of the Financing Warrants, which are exercisable for cash
or, if at any time there is no effective registration statement registering, or no current prospectus available for, the resale
of the underlying Common Shares, on a cashless basis, at the option of the holder, at a price per Common Share of approximately
$8.9422, subject to adjustment to give effect to any stock dividend, stock split, reverse stock split or similar transaction,
(c) up to 487,701 Common Shares issuable upon exercise of the Private Placement Warrants, each exercisable for one Common Share
for cash at a price per Common Share of C$11.00, subject to adjustment for recapitalizations, stock splits, reverse stock splits
and similar events, (d) up to 6,510 Common Shares issuable upon exercise of the Finder Warrants, each exercisable for one Common
Share for cash at a price per Common Share of C$11.00, subject to adjustment for recapitalizations, stock splits, reverse stock
splits and similar events, (e) up to 4,565,808 Common Shares issuable upon exchange of the Vested Shares, (f) up to 1,695,798
Common Shares issuable upon exchange of the Tranche I Earnout Shares, (g) up to 1,695,798 Common Shares issuable upon exchange
of the Tranche II Earnout Shares, (h) up to 6,336,981 Common Shares issuable upon exercise of the NioCorp Assumed Warrants being
offered by certain of the Selling Shareholders under this prospectus, (i) 1,744,994 Common Shares that are issued and outstanding
and were issued to certain executive officers of NioCorp at prices per share ranging from C$1.50 to C$7.50 and (j) up to 855,800
Common Shares issuable upon exercise of the Lind Warrants, exercisable at a price per Common Share of C$9.70, subject to adjustment
for stock splits, reverse stock splits and similar events.
The
“Conversion Price” with respect to the Convertible Debentures means, as of any Conversion Date (as defined below)
or other date of determination, the greater of (i) 90% of the average of the daily U.S. dollar volume-weighted average price of
the Common Shares on the principal U.S. market for the Common Shares as reported by Bloomberg Financial Markets during the five
consecutive trading days immediately preceding the date on which the holder exercises its conversion right in accordance with
the requirements of the Yorkville Convertible Debt Financing Agreement (the “Conversion Date”) or other date of determination,
but not lower than the Floor Price, and (ii) the five-day volume-weighted average price of the Common Shares on the TSX (or on
the principal U.S. market if the majority of the trading volume and value of the Common Shares occurred on The Nasdaq Stock Market
LLC (“Nasdaq”) during the relevant period) for the five consecutive trading days immediately prior to the Conversion
Date or other date of determination less the maximum applicable discount allowed by the TSX.
All
of the shares of Class B common stock of ECRC were issued to the Sponsor in respect of shares of Class B common stock of GXII
that were originally issued to the Sponsor for $25,000 in the aggregate. In connection with the Closing, the Sponsor distributed
all of the outstanding ECRC Class B Shares to its members for no additional
consideration. The NioCorp Assumed Warrants being
offered by certain of the Selling Shareholders under this prospectus were issued to the Sponsor in respect of an equal number
of GXII Warrants that it acquired in a private placement that occurred simultaneously with the closing of the initial public offering
of GXII at a purchase price of $1.50 per GXII Warrant. In connection with the Closing, the Sponsor distributed all of its NioCorp
Assumed Warrants to its members for no additional consideration.
Because
some of the Common Shares covered by this prospectus were or may be acquired by certain of the Selling Shareholders for no consideration
or for prices below the prevailing market price of the Common Shares, subject to applicable restrictions or limitations, such
Selling Shareholders may have an incentive to sell such Common Shares, even if the market price of our Common Shares declines.
Similarly, to the extent that the Warrants are exercised, the holders of the Common Shares issued upon exercise thereof may have
an incentive to sell such Common Shares because the Common Shares issued upon the exercise of such Warrants may have been purchased
for less than the then-prevailing market price of the Common Shares. However, for so long as the market price for our Common Shares
is less than the applicable exercise price of the Warrants (as is the case as of the date of this prospectus), we believe holders
of the Warrants will be unlikely to exercise their Warrants.
Pursuant
to the Registration Rights and Lockup Agreement, the RRA Shareholders are subject to “lock-up” restrictions. The provisions
of these “lock-up” restrictions may be waived under limited circumstances and allow the directors and officers of
NioCorp or its shareholders, including certain of the Selling Shareholders, to sell their Common Shares at any time. There are
no pre-established conditions for the grant of such a waiver by the relevant parties, and any decision by the applicable parties
to waive those conditions may depend on a number of factors, which might include market conditions, the performance of the Common
Shares in the market and our financial condition at that time. If the “lock-up” restrictions of the applicable shareholders,
including certain of the Selling Shareholders, or the directors and officers of NioCorp are waived, additional Common Shares will
be available for sale into the public market, subject to applicable securities laws, which, in both cases, could reduce the prevailing
market price for the Common Shares.
If
all of the Common Shares covered by this prospectus were issued and outstanding, they would represent a substantial percentage
of our public float and of our outstanding Common Shares. As of October 24, 2023, the Common Shares covered by this prospectus
would represent approximately 49.71% of the total number of outstanding Common Shares (assuming all of the Common Shares covered
by this prospectus were issued and outstanding and not including Common Shares issuable upon exercise of outstanding stock options,
or reserved for future issuance, under the LTIP, Common Shares issuable in respect of the Commitment Amount pursuant to the Yorkville
Equity Facility Financing Agreement or Common Shares issuable upon exercise of other outstanding Common Share purchase warrants,
as described herein). Accordingly, the sale of the Common Shares covered by this prospectus, or the perception that such sales
may occur, could result in a significant decline in the public trading price of our Common Shares.
We
may not recognize the full value of the Yorkville Equity Facility Financing Agreement and may not receive any proceeds from the
exercise of the Warrants and our other outstanding Common Share purchase warrants, and the potential adverse effect on the prevailing
market prices for our Common Shares as a result of sales, or the perception of future sales, of Common Shares could adversely
affect our ability to raise additional capital.
Although
we have entered into the Yorkville Equity Facility Financing Agreement, we may not recognize the full value thereof. Specifically,
our ability to sell Common Shares to YA pursuant to the Yorkville Equity Facility Financing Agreement is subject to certain restrictions
and limitations, which may prevent us from selling the full Commitment Amount prior to the expiration of the Commitment Period.
Our ability to recognize the full value of the Yorkville Equity Facility Financing Agreement may be further impeded by the potential
negative pressure on the market price of our Common Shares as a result of sales, or the perception of future sales, of Common
Shares by us, by the Selling Shareholders or by other security holders. As a result, there can be no assurance that we will receive
all or even a significant portion of the proceeds that we expect to receive in connection with the Yorkville Equity Facility Financing
Agreement.
In
addition, upon exercise, we will receive the cash exercise price of the Warrants and our other outstanding Common Share purchase
warrants (assuming, with respect to the Financing Warrants and the NioCorp Assumed Warrants, that they are not exercised on a
cashless basis). We believe the likelihood that holders of the Warrants or other outstanding Common Share purchase warrants will
exercise their Warrants or other outstanding Common Share
purchase warrants, and therefore, the amount of cash proceeds that we
would receive, is, among other things, dependent upon the market price of our Common Shares. For so long as the market price for
our Common Shares is less than the applicable exercise price of the Warrants or other outstanding Common Share purchase warrants
(as is the case as of the date of this prospectus), we believe such holders will be unlikely to exercise their Warrants or other
outstanding Common Share purchase warrants. The potential adverse effect on the prevailing market price of our Common Shares as
a result of sales of Common Shares by us, by the Selling Shareholders or by other security holders, or the perception that such
sales may occur, could keep the market price for our Common Shares below the applicable exercise price of the Warrants or other
outstanding Common Share purchase warrants. Accordingly, the holders of the Warrants or other outstanding Common Share purchase
warrants may not exercise their Warrants or other outstanding Common Share purchase warrants before they expire, and we may not
receive any proceeds from the exercise of the Warrants or other outstanding Common Share purchase warrants.
We
incurred significant debt in connection with the Transactions, including upon issuance of the Convertible Debentures, and we require
significant additional capital to operate our business. For example, notwithstanding whether we are able to recognize the full
value of the Yorkville Equity Facility Financing Agreement or receive the cash exercise price of the Warrants or other outstanding
Common Share purchase warrants, we are obligated to repay or issue Common Shares upon settlement of the full $16.0 million original
aggregate principal amount of the Convertible Debentures, plus accrued interest. Such significant additional debt could adversely
affect our business, which may prevent us from fulfilling our obligations with respect to our existing debt or obtaining future
financing. Further, the Yorkville Convertible Debt Financing Agreement restricts us from pursuing certain variable rate financing
transactions, which could impair our ability to obtain additional financing on terms that are favorable, or at all. In addition,
if the market price of the Common Shares were to drop as a result of sales, or the perception of future sales, of Common Shares
by us, by the Selling Shareholders or by other security holders, this might impede our ability to raise additional capital. Our
inability to obtain additional financing on terms that are favorable, or at all, could have a material adverse effect on our financial
condition, results of operations and prospects.
Future
sales, or the perception of future sales, of Common Shares by existing shareholders or by us, or future dilutive issuances of
Common Shares by us, could adversely affect prevailing market prices for the Common Shares.
In
addition to the Common Shares that may be sold under this prospectus, subject to compliance with applicable securities laws, sales
of a substantial number of Common Shares in the public market could occur at any time, including issuances and sales of additional
Common Shares by us and sales by other security holders. These sales, or the market perception that the holders of a large number
of Common Shares or securities convertible, exercisable or exchangeable into Common Shares intend to sell Common Shares, could
reduce the prevailing market price of the Common Shares. The effect, if any, that future public sales of these securities or the
availability of these securities for sale will have on the market price of the Common Shares is uncertain. If the market price
of the Common Shares were to drop as a result, this might impede our ability to raise additional capital and might cause remaining
shareholders to lose all or part of their investment.
Additionally,
pursuant to the Yorkville Equity Facility Financing Agreement, YA has committed to purchase up to $65.0 million of our Common
Shares, at our direction from time to time during the Commitment Period, subject to certain limitations and the satisfaction of
the conditions in the Yorkville Equity Facility Financing Agreement. Pursuant to the terms of the Yorkville Equity Facility Financing
Agreement, we issued 81,213 Commitment Shares to YA as consideration for its irrevocable commitment to purchase Common Shares
under the Yorkville Equity Facility Financing Agreement. YA has since resold all of the Commitment Shares. On June 9, 2023, September
12, 2023 and September 18, 2023, we issued and sold 100,000, 70,000 and 75,000 Common Shares, respectively, to YA pursuant to
the Yorkville Equity Facility Financing Agreement. We have filed a registration statement under the Securities Act covering resales
by YA of the Common Shares issuable pursuant to the Yorkville Equity Facility Financing Agreement. Accordingly, any Common Shares
that we issue pursuant to the Yorkville Equity Facility Financing Agreement will be available for sale into the public market,
subject to applicable securities laws, which could reduce the prevailing market price for the Common Shares.
Certain
of the Selling Shareholders acquired or may acquire the Common Shares being offered by such Selling Shareholders under this prospectus
at a price below the prevailing market price of our Common Shares, and may experience a positive rate of return based on such
market price. Our future investors may not experience a similar rate of return.
As
described herein, some of the Common Shares covered by this prospectus were or may be acquired by certain of the Selling Shareholders
for no consideration or for prices below the prevailing market price of the Common Shares. Accordingly, subject to applicable
restrictions or limitations, such Selling Shareholders may have an incentive to sell such Common Shares, even if the market price
of our Common Shares declines, that is not shared by other shareholders because the price at which they acquired or will be deemed
to have acquired such Common Shares may still be lower than the then-prevailing market price of the Common Shares. As a result,
certain of the Selling Shareholders may experience a positive rate of return on the Common Shares covered by this prospectus due
to the potential differences between the prices of at which they acquired or will be deemed to have acquired such securities and
the market price of the underlying Common Shares, and other shareholders may not experience a similar rate of return due to the
differences in the purchase prices and the then-prevailing market price of the Common Shares. For example:
| ● | The
Common Shares issuable upon conversion of the Convertible Debentures covered by this
prospectus may be acquired by YA at a discount to the market price of the Common Shares.
Accordingly, subject to the Floor Price and the restrictions on conversion pursuant to
the Yorkville Convertible Debt Financing Agreement and the terms of the Convertible Debentures,
each as described herein, YA may have an incentive to sell the Common Shares that it
acquires upon conversion of the Convertible Debentures, even if the market price of our
Common Shares declines. |
| ● | Similarly,
to the extent that the Warrants are exercised, the holders of such Common Shares issued
upon exercise thereof may have an incentive to sell the Common Shares that is not shared
by other shareholders because the Common Shares issued upon the exercise of the Warrants
may have been purchased for less than the then-prevailing market price of the Common
Shares. |
| ● | The
shares of Class B common stock of GXII that were exchanged for shares of ECRC Class B
common stock in connection with the Closing were initially purchased by the Sponsor at
a price of $0.003 per share. Based on the last reported sale price of the Common Shares
on The Nasdaq Global Market on October 27, 2023 of approximately $4.88 per Common
Share, the Selling Shareholders who beneficially own the ECRC Class B common stock would
experience a potential profit of approximately $4.88 per share, or approximately $22,267,446 in the aggregate, assuming they exchange all of their Vested Shares for Common Shares.
Because of the Common Share market price vesting conditions of the Tranche I Earnout
Shares and Tranche II Earnout Shares, the Selling Shareholders who beneficially own such
shares of ECRC Class B common stock would not be able to exchange such Tranche I Earnout
Shares or Tranche II Earnout Shares at the current market price for the Common Shares. |
| ● | In
addition, based on the last reported sale price of the Common Shares on The Nasdaq Global
Market on October 27, 2023 and based on the CAD:USD exchange ratio of CAD$1.3857:USD$1.00
on October 27, 2023 as reported by the Bank of Canada, certain of the executive officers
of NioCorp that may resell their Common Shares pursuant to this prospectus would experience
a potential profit per share, with respect to a portion of the Common Shares that they
may resell pursuant to this prospectus, of between approximately $0.19 per share and approximately
$3.80 per share, or approximately $4,711,915 in the aggregate, assuming they sold such Common
Shares pursuant to this prospectus. |
There
can be no assurance that we will be able to comply with the continued listing standards of The Nasdaq Stock Market LLC (“Nasdaq”).
Our
Common Shares are currently listed on The Nasdaq Global Market under the symbol “NB,” and the public NioCorp Assumed
Warrants are currently listed on The Nasdaq Capital Market under the symbol “NIOBW.” If Nasdaq delists the Common
Shares or the public NioCorp Assumed Warrants from trading on its exchange for failure to meet Nasdaq continued listing standards,
the Company and its shareholders could face significant material adverse consequences, including:
| ● | a
limited availability of market quotations for our securities; |
| ● | a
determination that our Common Shares are a “penny stock,” which will require
brokers trading in Common Shares to adhere to more stringent rules, possibly resulting
in a reduced level of trading activity in the secondary trading market for Common Shares; |
| ● | a
limited amount of analyst coverage; and |
| ● | a
decreased ability to issue additional securities or obtain additional financing in the
future. |
The
Articles of NioCorp, as amended in connection with the Transactions (the “Amended Articles”), permit us to issue an
unlimited number of Common Shares without seeking shareholder approval.
The
Amended Articles permit us to issue an unlimited number of Common Shares. It is anticipated that we will, from time to time, issue
additional Common Shares in the future. Subject to the requirements of the British Columbia Business Corporations Act (“BCBCA”),
Nasdaq and the TSX, we will not be required to obtain the approval of the NioCorp shareholders for the issuance of additional
Common Shares. Any further issuances of Common Shares will result in immediate dilution to existing shareholders and may have
an adverse effect on the value of their shareholdings.
NioCorp
may amend the terms of the NioCorp Assumed Warrants in a manner that may be adverse to holders of public NioCorp Assumed Warrants
with the approval by the holders of at least a majority of the then outstanding public NioCorp Assumed Warrants. As a result,
the exercise price of the NioCorp Assumed Warrants could be increased, the exercise period could be shortened and the number of
Common Shares purchasable upon exercise of a NioCorp Assumed Warrant could be decreased, all without your approval.
The
NioCorp Assumed Warrants were issued in registered form under the NioCorp Assumed Warrant Agreement. Both the public NioCorp Assumed
Warrants and the NioCorp Assumed Warrants issued to the Sponsor are subject to the terms of the NioCorp Assumed Warrant Agreement
and are identical, with certain exceptions applicable to the NioCorp Assumed Warrants issued to the Sponsor for so long as such
NioCorp Assumed Warrants are held by the Sponsor, its members, or their respective affiliates and other permitted transferees.
In accordance with the NioCorp Assumed Warrant Agreement, any NioCorp Assumed Warrants issued to the Sponsor that are not held
by the Sponsor, its members, or their respective affiliates and other permitted transferees, are treated as public NioCorp Assumed
Warrants. The NioCorp Assumed Warrant Agreement provides that the terms of the public NioCorp Assumed Warrants may be amended
without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders
of at least a majority of the then outstanding public NioCorp Assumed Warrants to make any change that adversely affects the interests
of the registered holders of the public NioCorp Assumed Warrants.
Accordingly,
NioCorp may amend the terms of the public NioCorp Assumed Warrants in a manner adverse to a public holder if holders of at least
a majority of the then outstanding public NioCorp Assumed Warrants approve of such amendment. Although NioCorp’s ability
to amend the terms of the public NioCorp Assumed Warrants with the consent of at least a majority of the then outstanding public
NioCorp Assumed Warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise
price of the public NioCorp Assumed Warrants, convert the public NioCorp Assumed Warrants into cash or stock, shorten the exercise
period or decrease the number of Common Shares purchasable upon exercise of the public NioCorp Assumed Warrants.
NioCorp
may redeem your unexpired public NioCorp Assumed Warrants prior to their exercise at a time that is disadvantageous to you, thereby
making your NioCorp Assumed Warrants worthless.
NioCorp
has the ability to redeem outstanding public NioCorp Assumed Warrants at any time after they become exercisable and prior to their
expiration, at a price of $0.01 per NioCorp Assumed Warrant, provided that the last reported sale price of Common Shares equals
or exceeds approximately $16.10 per share (subject to certain adjustments) for any 20 trading days within a 30 trading-day period
ending on the third trading day prior to the date on which NioCorp gives proper notice of such redemption and provided certain
other conditions are met. The NioCorp Assumed Warrants are exercisable beginning on April 16, 2023 and NioCorp has not provided
separate notice to the holders of NioCorp Assumed Warrants at the time that they became exercisable (and therefore eligible for
redemption). If and when the public NioCorp Assumed Warrants become redeemable by NioCorp, NioCorp may not exercise its redemption
right if the issuance of Common Shares upon exercise of the NioCorp Assumed Warrants is not exempt from registration or qualification
under applicable state blue sky laws or NioCorp is unable to effect such registration or qualification. NioCorp will use its best
efforts to register or qualify Common Shares under the blue sky laws of the state of residence in those states in which the public
NioCorp Assumed Warrants were offered by GXII in its initial public offering. Redemption of the outstanding public NioCorp Assumed
Warrants could force you (i) to exercise your public NioCorp Assumed Warrants and pay the exercise price therefor at a time when
it may be disadvantageous for you to do so, (ii) to sell your public NioCorp Assumed Warrants at the then-current market price
when you might otherwise wish to hold your public NioCorp Assumed Warrants or (iii) to accept the nominal redemption price which,
at the time the outstanding public NioCorp Assumed Warrants are called for redemption, is likely to be substantially less than
the market value of your public NioCorp Assumed Warrants. None of the NioCorp Assumed Warrants issued to the Sponsor will be redeemable
by NioCorp so long as they are held by the Sponsor, its members or their respective affiliates or other permitted transferees.
There
is a limited public market for the NioCorp Assumed Warrants and we cannot guarantee that an active and liquid public market for
the NioCorp Assumed Warrants will develop.
The
public NioCorp Assumed Warrants are listed on Nasdaq under the symbol “NIOBW.” In accordance with the NioCorp Assumed
Warrant Agreement, any NioCorp Assumed Warrants issued to the Sponsor that are not held by the Sponsor, its members, or their
respective affiliates and other permitted transferees, are treated as public NioCorp Assumed Warrants. Nonetheless, the market
for the public NioCorp Assumed Warrants is limited.
A
liquid trading market for the NioCorp Assumed Warrants may never develop, or if developed, it may not be sustained. In the absence
of a liquid public trading market for the NioCorp Assumed Warrants:
| ● | you
may not be able to liquidate your investment in NioCorp Assumed Warrants; |
| ● | you
may not be able to resell your NioCorp Assumed Warrants at favorable prices, or at all; |
| ● | the
market price of NioCorp Assumed Warrants may experience significant price volatility;
and |
| ● | there
may be less efficiency in carrying out your purchase and sale orders. |
NioCorp
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.
If
NioCorp is a passive foreign investment company (“PFIC”) for any taxable year, or portion thereof, that is included
in the holding period of a U.S. holder of Common Shares or other securities of NioCorp, such U.S. holder may be subject to certain
adverse U.S. federal income tax consequences. These adverse tax consequences include requirements to treat any gain realized upon
a disposition of Common Shares or other securities, or any “excess distribution” received on Common Shares, as ordinary
income, to pay an interest charge on a portion of such gain or distribution, and certain additional reporting requirements. Such
consequences may be mitigated with respect to Common Shares (but not with respect to warrants or other securities of NioCorp)
if the holder thereof makes a timely and effective “qualified electing fund” or “QEF” election or a “mark-to-market”
election. A U.S. holder of Common Shares that makes a QEF election generally must include in income on a current basis for U.S.
federal income tax purposes its share of NioCorp’s net capital gain and ordinary earnings for any taxable year in which
it is a PFIC, whether or not NioCorp distributes any amount to its shareholders. A U.S. holder of Common Shares that 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.
NioCorp
generally will be classified as a PFIC for a taxable year if (a) 75% or more of its 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 its assets produce, or are held for the production of, passive income, based on the
quarterly average of the fair market value of such assets. NioCorp believes that it may be classified as a PFIC for its taxable
year ended June 30, 2023 and was classified as a PFIC for its taxable year ended June 30, 2022 and, based on the current composition
of its income and assets, as well as current business plans and financial expectations, may be classified as a PFIC for future
taxable years. Any conclusion regarding PFIC status is a factual determination that must be made annually at the close of each
taxable year and, thus, is subject to change. In addition, even if NioCorp concluded it did not qualify as a PFIC, it is possible
that the U.S. Internal Revenue Service (the “IRS”) could assert, and that a court could sustain, a determination that
NioCorp is a PFIC. Accordingly, there can be no assurance that NioCorp will not be treated as a PFIC for any taxable year. The
PFIC rules are complex and each holder of Common Shares or other securities of NioCorp should consult its own tax advisors regarding
these rules and the U.S. federal income tax consequences of the acquisition, ownership, and disposition of such securities.
The
Transactions could result in NioCorp becoming subject to materially adverse U.S. federal income tax consequences.
Section
7874 and related sections Code, provide for certain adverse tax consequences when the stock of a U.S. corporation is acquired
by a non-U.S. corporation in certain transactions in which former shareholders of the U.S. corporation come to own 60% or more
of the stock of the non-U.S. corporation (by vote or value, and applying certain specific counting and ownership rules). These
adverse tax consequences include (i) potential additional required gain recognition by the U.S. corporation, (ii) treatment of
certain payments to the non-U.S. corporation that reduce gross income as “base erosion payments,” (iii) an excise
tax on certain options and stock-based compensation of the U.S. corporation, (iv) disallowance of “qualified dividend”
treatment for distributions by the non-U.S. corporation, and (v) if former shareholders of the U.S. corporation come to own 80%
or more of the stock of the non-U.S. corporation, treatment of the non-U.S. corporation as a U.S. corporation subject to U.S.
federal income tax on its worldwide income (in addition to any tax imposed by non-U.S. jurisdictions). If the Transactions result
in the application of any of these, or any other, adverse tax consequences, NioCorp could incur significant additional tax costs.
While NioCorp currently does not believe the Transactions will cause such adverse tax consequences as a result of Section 7874
and related sections of the Code, this determination is subject to significant legal and factual uncertainty. NioCorp has not
sought and will not seek any rulings from the IRS as to the tax treatment of any of the Transactions. Further, there can be no
assurance that your tax advisor, the IRS, or a court, will agree with the position that NioCorp is not subject to these adverse
tax consequences.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus and the other documents incorporated by reference into this prospectus contain or may contain “forward-looking
statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, and “forward-looking
information” within the meaning of applicable Canadian securities legislation (collectively, “forward-looking statements”).
Forward-looking
statements have been based upon our current business and operating plans, as approved by the Company’s Board of Directors,
and may include statements regarding the anticipated benefits of the Transactions, including NioCorp’s ability to access
the full amount of the expected net proceeds of the Yorkville Equity Facility Financing Agreement over the next three years; NioCorp’s
ability to receive a final commitment of financing from the Export-Import Bank of the United States (“EXIM”); anticipated
benefits of the listing of the Common Shares on Nasdaq; the financial and business performance of NioCorp; NioCorp’s anticipated
results and developments in the operations of NioCorp in future periods; NioCorp’s planned exploration activities; the adequacy
of NioCorp’s financial resources; NioCorp’s ability to secure sufficient project financing to complete construction
and commence operation of the Elk Creek Project; NioCorp’s expectation and ability to produce niobium, scandium, and titanium
at the Elk Creek Project; NioCorp’s plans to produce and supply specific products and market demand for those products;
the outcome of current recovery process improvement testing, and NioCorp’s expectation that such process improvements could
lead to greater efficiencies and cost savings in the Elk Creek Project; the Elk Creek Project’s ability to produce multiple
critical metals; the Elk Creek Project’s projected ore production and mining operations over its expected mine life; the
completion of technical and economic analyses on the potential addition of magnetic rare earth oxides to NioCorp’s planned
product suite; the exercise of options to purchase additional land parcels; the execution of contracts with engineering, procurement
and construction companies; NioCorp’s ongoing evaluation of the impact of inflation, supply chain issues and geopolitical
unrest on the Elk Creek Project’s economic model; and the creation of full time and contract construction jobs over the
construction period of the Elk Creek Project.
Forward-looking
statements are frequently, but not always, identified by words such as “expects,” “anticipates,” “believes,”
“intends,” “estimates,” “potential,” “possible,” and similar expressions, or statements
that events, conditions, or results “will,” “may,” “could,” or “should” (or the
negative and grammatical variations of any of these terms) occur or be achieved. Any statements that express or involve discussions
with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, or future events or performance
(often, but not always, using words or phrases such as “expects” or “does not expect,” “is expected,”
“anticipates” or “does not anticipate,” “plans,” “estimates,” or “intends,”
or stating that certain actions, events, or results “may,” “could,” “would,” “might,”
or “will” be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements.
Such forward-looking statements reflect the Company’s current views with respect to future events and are subject to certain
known and unknown risks, uncertainties, and assumptions. Many factors could cause actual results, performance, or achievements
to be materially different from any future results, performance, or achievements that may be expressed or implied by such forward-looking
statements, including, among others, risks related to the following: NioCorp’s ability to recognize the anticipated benefits
of the Transactions, including NioCorp’s ability to access the full amount of the expected net proceeds under the Yorkville
Equity Facility Financing Agreement over the next three years; unexpected costs related to the Transactions; the outcome of any
legal proceedings that may be instituted against NioCorp following closing of the Transactions; NioCorp’s ability to receive
a final commitment of financing from EXIM on the anticipated timeline, on acceptable terms, or at all; NioCorp’s ability
to continue to meet Nasdaq listing standards; NioCorp’s ability to operate as a going concern; risks relating to the Common
Shares, including price volatility, lack of dividend payments and dilution or the perception of the likelihood any of the foregoing;
NioCorp’s requirement of significant additional capital; the extent to which NioCorp’s level of indebtedness and/or
the terms contained in agreements governing NioCorp’s indebtedness or the Yorkville Equity Facility Financing Agreement
may impair NioCorp’s ability to obtain additional financing; covenants contained in agreements with NioCorp’s secured
creditors that may affect its assets; NioCorp’s limited operating history; NioCorp’s history of losses; the restatement
of NioCorp’s consolidated financial statements as of and for the fiscal years ended June 30, 2022 and 2021 and the interim
periods ended September 30, 2021, December 31, 2021, March 31, 2022, September 30, 2022 and December 31, 2022 and the impact of
such restatement on NioCorp’s future financial statements and other financial measures; the material weaknesses in NioCorp’s
internal control over financial reporting, NioCorp’s efforts to remediate such material weaknesses and the timing of remediation;
the possibility that NioCorp may qualify as a PFIC under the Code; the
potential that the Transactions could result in NioCorp
becoming subject to materially adverse U.S. federal income tax consequences as a result of the application of Section 7874 and
related sections of the Code; cost increases for NioCorp’s exploration and, if warranted, development projects; a disruption
in, or failure of, NioCorp’s information technology systems, including those related to cybersecurity; equipment and supply
shortages; variations in the market demand for, and prices of, niobium, scandium, titanium and rare earth products; current and
future offtake agreements, joint ventures, and partnerships; NioCorp’s ability to attract qualified management; the effects
of global health crises on NioCorp’s business plans, financial condition and liquidity; estimates of mineral resources and
reserves; mineral exploration and production activities; feasibility study results; the results of metallurgical testing; changes
in demand for and price of commodities (such as fuel and electricity) and currencies; competition in the mining industry; changes
or disruptions in the securities markets; legislative, political or economic developments, including changes in federal and/or
state laws that may significantly affect the mining industry; the impacts of climate change, as well as actions taken or required
by governments related to strengthening resilience in the face of potential impacts from climate change; the need to obtain permits
and comply with laws and regulations and other regulatory requirements; the timing and reliability of sampling and assay data;
the possibility that actual results of work may differ from projections/expectations or may not realize the perceived potential
of NioCorp’s projects; risks of accidents, equipment breakdowns, and labor disputes or other unanticipated difficulties
or interruptions; the possibility of cost overruns or unanticipated expenses in development programs; operating or technical difficulties
in connection with exploration, mining, or development activities; the management of the water balance at the Elk Creek Project
site; land reclamation requirements related to the Elk Creek Project; the speculative nature of mineral exploration and development,
including the risks of diminishing quantities of grades of reserves and resources; claims on the title to NioCorp’s properties;
potential future litigation; and NioCorp’s lack of insurance covering all of NioCorp’s operations.
Should
one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may
vary materially from those described herein. This list is not exhaustive of the factors that may affect any of the Company’s
forward-looking statements. Forward-looking statements are statements about the future and are inherently uncertain, and actual
achievements of the Company or other future events or conditions may differ materially from those reflected in the forward-looking
statements due to a variety of risks, uncertainties, and other factors, including without limitation those discussed under Part
I, Item 1A. “Risk Factors” contained in our most recent Annual Report on Form 10-K, and Part II, Item 1A. “Risk
Factors” contained in our subsequent Quarterly Reports on Form 10-Q, as well as any amendments thereto, which are incorporated
by reference into this prospectus and the applicable prospectus supplement in their entirety, together with other information
in this prospectus and the applicable prospectus supplement and the documents incorporated by reference herein and therein. See
the sections of this prospectus entitled “Where You Can Find More Information” and “Incorporation of Documents
by Reference.”
The
Company’s forward-looking statements contained in this prospectus are based on the beliefs, expectations, and opinions of
management as of the date of this prospectus. The Company does not assume any obligation to update forward-looking statements
if circumstances or management’s beliefs, expectations, or opinions should change, except as required by law. For the reasons
set forth above, investors should not attribute undue certainty to, or place undue reliance on, forward-looking statements.
USE
OF PROCEEDS
This
prospectus relates to Common Shares that we may issue upon exercise of the NioCorp Assumed Warrants and to Common Shares and NioCorp
Assumed Warrants that may be offered and sold from time to time by the Selling Shareholders. All of the Common Shares and the
NioCorp Assumed Warrants being offered by the Selling Shareholders under this prospectus will be sold by the Selling Shareholders
for their own account. We will not receive any of the proceeds from these sales.
However,
upon exercise, we will receive the cash exercise price of the Warrants (assuming, with respect to the NioCorp Assumed Warrants
and the Financing Warrants, that the holders do not exercise their NioCorp Assumed Warrants or Financing Warrants on a cashless
basis, which they may not do with respect to the Financing Warrants for so long as there is an effective registration statement
registering, and a current prospectus available for, the resale of the Common Shares thereunder, including this prospectus and
the registration statement of which this prospectus is a part). We believe the likelihood that Warrant holders will exercise their
Warrants, and therefore the amount of cash proceeds that we would receive, is, among other things, dependent upon the market price
of our Common Shares. For so long as the market price for our Common Shares is less than the applicable exercise price of the
Warrants (as is the case as of the date of this prospectus), we believe such holders will be unlikely to exercise their Warrants.
We
expect to use the net proceeds that we receive from the exercise of the Warrants, if any, for working capital and general corporate
purposes, including to advance our efforts to launch construction of the Elk Creek Project and move it to commercial operation.
DETERMINATION
OF OFFERING PRICE
We
cannot currently determine the price or prices at which Common Shares or NioCorp Assumed Warrants being offered by the Selling
Shareholders may be sold by the Selling Shareholders under this prospectus as the price will be determined by the prevailing public
market price for our Common Shares and the NioCorp Assumed Warrants, by negotiations between the Selling Shareholders and the
buyers of Common Shares and NioCorp Assumed Warrants in private transactions or as otherwise described in “Plan of Distribution.”
SELLING
SHAREHOLDERS
This
prospectus relates, in part, to the offer and sale from time to time by the Selling Shareholders of (i) up to an aggregate of
23,095,947 Common Shares, consisting of (a) up to 3,917,290 Common Shares issuable upon conversion of the Convertible Debentures,
(b) up to 1,789,267 Common Shares issuable upon exercise of the Financing Warrants, (c) up to 487,701 Common Shares issuable upon
exercise of the Private Placement Warrants, (d) up to 6,510 Common Shares issuable upon exercise of the Finder Warrants, (e) up
to 4,565,808 Common Shares issuable upon exchange of the Vested Shares, (f) up to 1,695,798 Common Shares issuable upon exchange
of the Tranche I Earnout Shares, (g) up to 1,695,798 Common Shares issuable upon exchange of the Tranche II Earnout Shares, (h)
up to 6,336,981 Common Shares issuable upon exercise of the NioCorp Assumed Warrants being offered by certain of the Selling Shareholders
under this prospectus, (i) 1,744,994 Common Shares that are issued and outstanding and were issued to certain executive officers
of NioCorp and (j) up to 855,800 Common Shares issuable upon exercise of the Lind Warrants; and (ii) up to an aggregate of 5,666,667
NioCorp Assumed Warrants. For additional information regarding the issuances of the Common Shares and the NioCorp Assumed Warrants
being offered by the Selling Shareholders under this prospectus, see the section titled “Summary—Background.”
Except as otherwise described in the section titled “Summary—Background” and in the footnotes to the table below,
none of the Selling Shareholders has, or has had, any material relationship with us.
The
table below presents information regarding the Selling Shareholders and the Common Shares and the NioCorp Assumed Warrants that
they may offer from time to time under this prospectus. This table is prepared based on information supplied to us by the Selling
Shareholders. The number of Common Shares in the column “Maximum Number of Common Shares to be Offered Pursuant to this
Prospectus” represents all of the Common Shares that the Selling Shareholders may offer under this prospectus. The number
of NioCorp Assumed Warrants in the column “Maximum Number of NioCorp Assumed Warrants to be Offered Pursuant to this Prospectus”
represents all of the NioCorp Assumed Warrants that the Selling Shareholders may offer under this prospectus. The Selling Shareholders
may sell some, all or none of their Common Shares and NioCorp Assumed Warrants covered by this prospectus in this offering. We
do not know how long the Selling Shareholders will hold such Common Shares and NioCorp Assumed Warrants before selling them, and
we currently have no agreements, arrangements or understandings with the Selling Shareholders regarding the sale of any of the
Common Shares or the NioCorp Assumed Warrants the Selling Shareholders may sell under this prospectus.
Beneficial
ownership is determined in accordance with Rule 13d-3(d) promulgated by the SEC under the Exchange Act, and includes Common Shares
or NioCorp Assumed Warrants, as applicable, with respect to which the Selling Shareholders have voting or investment power. The
percentage of Common Shares beneficially owned by the Selling Shareholders prior to and after the offering shown in the table
below is based on an aggregate of 32,913,419 Common Shares outstanding on October 24, 2023. The number of Common Shares
that may actually be issued by us upon conversion of the Convertible Debentures, exercise of the Warrants, exchange of the Vested
Shares, exchange of the Tranche I Earnout Shares and exchange of the Tranche II Earnout Shares may be fewer than the number of
Common Shares being offered by this prospectus. The percentage of NioCorp Assumed Warrants beneficially owned by the Selling Shareholders
prior to and after the offering shown in the table below is based on an aggregate of 15,666,626 NioCorp Assumed Warrants outstanding
on October 24, 2023. The columns “Number of Common Shares Beneficially Owned After Offering” and “Number
of NioCorp Assumed Warrants Beneficially Owned After Offering” assume the issuance of all of the Common Shares covered by
this prospectus.
Except
as otherwise described below, based on the information provided to us by the Selling Shareholders, none of the Selling Shareholders
is a broker-dealer or an affiliate of a broker-dealer.
|
Number
of Common Shares Beneficially Owned Prior to Offering |
Number
of NioCorp Assumed Warrants Beneficially Owned Prior to Offering |
Maximum
Number of Common Shares to be Offered Pursuant to this Prospectus |
Maximum
Number of NioCorp Assumed Warrants to be Offered Pursuant to this Prospectus |
Number
of Common Shares Beneficially Owned After Offering |
Number
of NioCorp Assumed Warrants Beneficially Owned After Offering |
Name
of Selling Shareholder |
Number |
Percent |
Number |
Percent |
Number |
Percent |
Number |
Percent |
YA
II PN, Ltd. (1) |
5,706,557 |
14.78% |
— |
— |
5,706,557 |
— |
— |
— |
— |
— |
Lind
Global Asset Management III, LLC (2) |
892,258 |
2.64% |
— |
— |
892,258 |
— |
— |
— |
— |
— |
Steve
Everhart (3) |
413,189 |
1.25% |
— |
— |
65,337 |
— |
347,852 |
* |
— |
— |
Gerardus
M.M. Op De Weegh (4) |
1,000 |
* |
— |
— |
1,000 |
— |
— |
— |
— |
— |
Luc
Jansen (5) |
72,500 |
* |
— |
— |
6,000 |
— |
66,500 |
* |
— |
— |
Kenneth
Thoonen (6) |
23,985 |
* |
— |
— |
6,000 |
— |
17,985 |
* |
— |
— |
Eva
Jasja van der Haar (7) |
5,000 |
* |
— |
— |
750 |
— |
4,250 |
* |
— |
— |
Wim
Bakker (8) |
1,020 |
* |
— |
— |
520 |
— |
500 |
* |
— |
— |
Benedikt
Bruggeman (9) |
20,000 |
* |
— |
— |
5,000 |
— |
15,000 |
* |
— |
— |
Rene
Clignett (10) |
60,030 |
* |
— |
— |
6,500 |
— |
53,530 |
* |
— |
— |
Klaas
de Groot (11) |
4,000 |
* |
— |
— |
2,000 |
— |
2,000 |
* |
— |
— |
Jozef
D’Hauwe (12) |
3,600 |
* |
— |
— |
1,000 |
— |
2,600 |
* |
— |
— |
Willemina
Johanna de Vries-Mulder (13) |
11,750 |
* |
— |
— |
5,000 |
— |
6,750 |
* |
— |
— |
Hassan
Ghrib (14) |
12,130 |
* |
— |
— |
5,000 |
— |
7,130 |
* |
— |
— |
Bennie
Hoornveld (15) |
6,196 |
* |
— |
— |
3,000 |
— |
3,196 |
* |
— |
— |
Hans
Janshen (16) |
30,800 |
* |
— |
— |
10,000 |
— |
20,800 |
* |
— |
— |
Marc
Joosten (17) |
26,600 |
* |
— |
— |
10,000 |
— |
16,600 |
* |
— |
— |
La
Montagne Beheer B.V. (18) |
2,200 |
* |
— |
— |
1,000 |
— |
1,200 |
* |
— |
— |
Alwin
Leltz (19) |
3,000 |
* |
— |
— |
1,000 |
— |
2,000 |
* |
— |
— |
Ramon
Salceda (20) |
8,086 |
* |
— |
— |
1,000 |
— |
7,086 |
* |
— |
— |
Alwin
Tetteroo (21) |
22,524 |
* |
— |
— |
6,000 |
— |
16,524 |
* |
— |
— |
Peter
Tromp (22) |
10,050 |
* |
— |
— |
10,000 |
— |
50,000 |
* |
— |
— |
Toon
van Ginderen (23) |
5,000 |
* |
— |
— |
5,000 |
— |
— |
— |
— |
— |
Christa
van Ittersum (24) |
21,291 |
* |
— |
— |
10,000 |
— |
11,291 |
* |
— |
— |
Dirk
MCA van Meteren (25) |
57,000 |
* |
— |
— |
2,500 |
— |
54,500 |
* |
— |
— |
Renny
van Wijk (26) |
20,000 |
* |
— |
— |
10,000 |
— |
10,000 |
* |
— |
— |
Joannes
Peter van Wijk (27) |
8,500 |
* |
— |
— |
2,500 |
— |
6,000 |
* |
— |
— |
Anthonie
van Zalk (28) |
10,000 |
* |
— |
— |
5,000 |
— |
5,000 |
* |
— |
— |
Martin
Vandamme (29) |
18,000 |
* |
— |
— |
9,000 |
— |
9,000 |
* |
— |
— |
Edo
Veenis (30) |
14,000 |
* |
— |
— |
3,000 |
— |
11,000 |
* |
— |
— |
Jozeph
Verbon (31) |
17,150 |
* |
— |
— |
5,000 |
— |
12,150 |
* |
— |
— |
Adrianus
Verburg (32) |
18,190 |
* |
— |
— |
6,000 |
— |
12,190 |
* |
— |
— |
Mark
Verhaaren (33) |
5,000 |
* |
— |
— |
2,500 |
— |
2,500 |
* |
— |
— |
Kees
Volders (34) |
11,421 |
* |
— |
— |
1,000 |
— |
10,421 |
* |
— |
— |
Earth
Labs Inc. (35) |
12,500 |
* |
— |
— |
12,500 |
— |
— |
— |
— |
— |
James
Rowland (36) |
2,680 |
* |
— |
— |
1,340 |
— |
1,340 |
* |
— |
— |
Advisir
Venture (37) |
10,416 |
* |
— |
— |
10,416 |
— |
— |
— |
— |
— |
Gloria
Christilaw (38) |
24,063 |
* |
— |
— |
7,100 |
— |
16,963 |
* |
— |
— |
David
Christilaw and/or Gloria Christilaw JTWROS (39) |
8,073 |
* |
— |
— |
7,200 |
— |
873 |
* |
— |
— |
Sarah
Christilaw (40) |
15,128 |
* |
— |
— |
7,000 |
— |
8,128 |
* |
— |
— |
Adam
Christilaw and/or Hayley Christilaw JTWROS (41) |
8,970 |
* |
— |
— |
4,900 |
— |
4,070 |
* |
— |
— |
Hayley
Christilaw (42) |
7,850 |
* |
— |
— |
4,000 |
— |
3,850 |
* |
— |
— |
Don
Heath (43) |
30,600 |
* |
— |
— |
14,800 |
— |
15,800 |
* |
— |
— |
Debby
Heath (44) |
18,200 |
* |
— |
— |
8,100 |
— |
10,100 |
* |
— |
— |
Vance
Merson and/or Ellen Merson JTWROS (45) |
5,600 |
* |
— |
— |
3,100 |
— |
2,500 |
* |
— |
— |
Maria
Elizabeth Moore (46) |
37,500 |
* |
— |
— |
12,250 |
— |
25,250 |
* |
— |
— |
Donna
Kings (47) |
9,750 |
* |
— |
— |
3,000 |
— |
6,750 |
* |
— |
— |
Don
Ambeau (48) |
13,428 |
* |
— |
— |
4,700 |
— |
8,728 |
* |
— |
— |
Marva
Usher (49) |
12,380 |
* |
— |
— |
5,000 |
— |
7,380 |
* |
— |
— |
Michelle
Amey (50) |
13,016 |
* |
— |
— |
5,000 |
— |
8,016 |
* |
— |
— |
David
Christilaw (51) |
54,063 |
* |
— |
— |
36,100 |
— |
17,963 |
* |
— |
— |
Adam
Christilaw (52) |
40,600 |
* |
— |
— |
20,850 |
— |
19,750 |
* |
— |
— |
Colleen
Fox (53) |
13,510 |
* |
— |
— |
10,000 |
— |
3,510 |
* |
— |
— |
Chris
Young (54) |
21,300 |
* |
— |
— |
17,900 |
— |
3,400 |
* |
— |
— |
Weber
Investment Corporation (55) |
140,000 |
* |
— |
— |
45,000 |
— |
95,000 |
* |
— |
— |
Robert
M Laird (56) |
11,669 |
* |
— |
— |
3,380 |
— |
8,289 |
* |
— |
— |
Research
Capital Corporation (57) |
6,480 |
* |
— |
— |
6,480 |
— |
— |
— |
— |
— |
Red
Cloud Mining Capital Inc. (58) |
30 |
* |
— |
— |
30 |
— |
— |
— |
— |
— |
Cooper
Road, LLC (59) |
4,117,717 |
11.12% |
1,615,057 |
10.31% |
4,117,717 |
1,615,057 |
— |
— |
— |
— |
Cooper
Road Acquisition, LLC (60) |
247,272 |
* |
42,000 |
* |
247,272 |
42,000 |
— |
— |
— |
— |
Dean
C. Kehler (61) |
3,809,953 |
10.37% |
1,657,057 |
10.58% |
3,809,953 |
1,657,057 |
— |
— |
— |
— |
Elizabeth
Kehler 2012 Trust (62) |
555,038 |
1.66% |
— |
— |
555,038 |
— |
— |
— |
— |
— |
Michael
G. Maselli (63) |
778,231 |
2.31% |
192,392 |
1.23% |
778,231 |
192,392 |
— |
— |
— |
— |
Jordan
S. Bloom (64) |
627,187 |
1.87% |
192,392 |
1.23% |
627,187 |
192,392 |
— |
— |
— |
— |
Andrea
J. Kellett (65) |
76,218 |
* |
18,621 |
* |
76,218 |
18,621 |
— |
— |
— |
— |
Arthur
Baer (66) |
626,145 |
1.87% |
162,522 |
1.04% |
626,145 |
162,522 |
— |
— |
— |
— |
Equity
Trust Company Custodian FBO Arthur D. Baer ROTH IRA (67) |
83,427 |
* |
29,870 |
* |
83,427 |
29,870 |
— |
— |
— |
— |
AJA
Partners LLC (68) |
1,207,870 |
3.54% |
432,432 |
2.76% |
1,207,870 |
432,432 |
— |
— |
— |
— |
James
Harpel (69) |
333,923 |
1.00% |
108,108 |
* |
333,923 |
108,108 |
— |
— |
— |
— |
HW
2015 Trust u/a 7/23/15, Elaine Weinberger, Trustee (70) |
635,893 |
1.90% |
216,216 |
1.38% |
635,893 |
216,216 |
— |
— |
— |
— |
Marc
Mazur (71) |
107,446 |
* |
27,027 |
* |
107,446 |
27,027 |
— |
— |
— |
— |
Corbin
ERISA Opportunity Fund, Ltd. (72) |
260,229 |
* |
232,703 |
1.49% |
260,229 |
232,703 |
— |
— |
— |
— |
Corbin
Opportunity Fund, L.P. (73) |
114,246 |
* |
102,162 |
* |
114,246 |
102,162 |
— |
— |
— |
— |
Atalaya
Special Purpose Investment Fund II L.P. (74) |
258,534 |
* |
231,187 |
1.48% |
258,534 |
231,187 |
— |
— |
— |
— |
ACM
Alameda Special Purpose Investment Fund II LP(75) |
455,056 |
1.36% |
406,921 |
2.60% |
455,056 |
406,921 |
— |
— |
— |
— |
Mark
A. Smith (76) |
2,226,795 |
6.73% |
— |
— |
1,726,544 |
— |
500,251 |
* |
— |
— |
Neal
S. Shah (77) |
185,000 |
* |
— |
— |
5,450 |
— |
179,550 |
* |
— |
— |
Scott
Honan (78) |
184,452 |
* |
— |
— |
13,000 |
— |
171,452 |
* |
— |
— |
Total |
24,950,465 |
45.98% |
5,666,667 |
36.17% |
23,095,947 |
5,666,667 |
1,854,518 |
2.83% |
— |
— |
*
Represents ownership of less than 1%.
| (1) | Beneficial
ownership includes (a) an estimated 3,917,290 Common Shares issuable upon conversion
of the Convertible Debentures, assuming (i) the conversion of all $8,000,000 aggregate
principal amount outstanding of the Convertible Debentures as of October 24, 2023, plus $396,712 of accrued
interest, (ii) a conversion price equal to the Floor Price (as defined herein) of $2.1435
and (iii) none of the limitations on conversion of the Convertible Debentures set forth
in the Yorkville Convertible Debt Financing Agreement apply; and (b) 1,789,267 Common
Shares issuable upon exercise of the Financing Warrants, assuming (i) none of the holders
of the Financing Warrants elects cashless exercise and (ii) none of the limitations on
exercise of the Financing Warrants set forth the Yorkville Convertible Debt Financing
Agreement apply. Pursuant to the terms of the Convertible Debentures and the Financing
Warrants, YA may not convert Convertible Debentures or exercise Financing Warrants into
Common Shares in an amount that would result in YA (or its affiliates) beneficially owning
(as determined in accordance with Section 13(d) of the Exchange Act and the rules promulgated
thereunder) more than 4.99% of the Common Shares outstanding immediately after giving
effect to such conversion or exercise or receipt of shares (the “Beneficial Ownership
Limitation”); provided that YA may waive the Beneficial Ownership Limitation upon
not less than 65 days’ prior notice to NioCorp. In accordance with Rule 13d-3(d)
under the Exchange Act, we have excluded from the number of Common Shares beneficially
owned prior to the offering all of the Common Shares that YA may be required to purchase
under the Yorkville Equity Facility Financing Agreement, because the issuance of such
Common Shares is solely at our discretion and is subject to conditions contained in the
Yorkville Equity Facility Financing Agreement, the satisfaction of which are entirely
outside of YA’s control. YA is a fund managed by Yorkville Advisors Global, LP.
Yorkville Advisors Global II, LLC is the General Partner of Yorkville Advisors Global,
LP. All investment decisions for YA are made by Yorkville Advisors Global II, LLC’s
President and Managing Member, Mr. Mark Angelo. The business address of YA is 1012 Springfield
Avenue, Mountainside, NJ 07092. |
| (2) | 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) 855,800 Common Shares issuable upon exercise of the Lind Warrants and (b)
36,458 Common Shares issuable upon exercise of Private Placement Warrants. The Selling
Shareholder is offering pursuant to this prospectus 855,800 Common Shares issuable upon
exercise of the Lind Warrants and 36,458 Common Shares issuable upon exercise of Private
Placement Warrants. |
| (3) | The
Selling Shareholder, Steve Everhart, has sole voting and investment power over the Common
Shares. The jurisdiction of the Selling Shareholder is the United States. Beneficial
ownership includes (a) 347,842 Common Shares and (b) 65,337 Common Shares issuable upon
exercise of Private Placement Warrants. The Selling Shareholder is offering pursuant
to this prospectus 65,337 Common Shares issuable upon exercise of Private Placement Warrants. |
| (4) | The
Selling Shareholder, Gerardus M.M. Op De Weegh, has sole voting and investment power over the Common Shares. The jurisdiction
of the Selling Shareholder is Aruba. Beneficial ownership includes 1,000 |
| | Common
Shares issuable upon exercise of Private Placement Warrants. The Selling Shareholder is offering pursuant to this prospectus 1,000
Common Shares issuable upon exercise of Private Placement Warrants. |
| (5) | The
Selling Shareholder, Luc Jansen, has sole voting and investment power over the Common
Shares. The jurisdiction of the Selling Shareholder is Belgium. Beneficial ownership
includes (a) 66,500 Common Shares and (b) 6,000 Common Shares issuable upon exercise
of Private Placement Warrants. The Selling Shareholder is offering pursuant to this prospectus
6,000 Common Shares issuable upon exercise of Private Placement Warrants. |
| (6) | The
Selling Shareholder, Kenneth Thoonen, has sole voting and investment power over the Common
Shares. The jurisdiction of the Selling Shareholder is Belgium. Beneficial ownership
includes (a) 17,985 Common Shares and (b) 6,000 Common Shares issuable upon exercise
of Private Placement Warrants. The Selling Shareholder is offering pursuant to this prospectus
6,000 Common Shares issuable upon exercise of Private Placement Warrants. |
| (7) | The
Selling Shareholder, Eva Jasja van der Haar, has sole voting and investment power over
the Common Shares. The jurisdiction of the Selling Shareholder is The Netherlands. Beneficial
ownership includes (a) 4,250 Common Shares and (b) 750 Common Shares issuable upon exercise
of Private Placement Warrants. The Selling Shareholder is offering pursuant to this prospectus
750 Common Shares issuable upon exercise of Private Placement Warrants. |
| (8) | The
Selling Shareholder, Wim Bakker, has sole voting and investment power over the Common
Shares. The jurisdiction of the Selling Shareholder is The Netherlands. Beneficial ownership
includes (a) 500 Common Shares and (b) 520 Common Shares issuable upon exercise of Private
Placement Warrants. The Selling Shareholder is offering pursuant to this prospectus 520
Common Shares issuable upon exercise of Private Placement Warrants. |
| (9) | The
Selling Shareholder, Benedikt Bruggeman, has sole voting and investment power over the
Common Shares. The jurisdiction of the Selling Shareholder is Belgium. Beneficial ownership
includes (a) 15,000 Common Shares and (b) 5,000 Common Shares issuable upon exercise
of Private Placement Warrants. The Selling Shareholder is offering pursuant to this prospectus
5,000 Common Shares issuable upon exercise of Private Placement Warrants. |
| (10) | The
Selling Shareholder, Rene Clignett, has sole voting and investment power over the Common
Shares. The jurisdiction of the Selling Shareholder is The Netherlands. Beneficial ownership
includes (a) 53,530 Common Shares and (b) 6,500 Common Shares issuable upon exercise
of Private Placement Warrants. The Selling Shareholder is offering pursuant to this prospectus
6,500 Common Shares issuable upon exercise of Private Placement Warrants. |
| (11) | The
Selling Shareholder, Klaas de Groot, has sole voting and investment power over the Common
Shares. The jurisdiction of the Selling Shareholder is The Netherlands. Beneficial ownership
includes (a) 2,000 Common Shares and (b) 2,000 Common Shares issuable upon exercise of
Private Placement Warrants. The Selling Shareholder is offering pursuant to this prospectus
2,000 Common Shares issuable upon exercise of Private Placement Warrants. |
| (12) | The
Selling Shareholder, Jozef D’Hauwe, has sole voting and investment power over the
Common Shares. The jurisdiction of the Selling Shareholder is Belgium. Beneficial ownership
includes (a) 2,600 Common Shares and (b) 1,000 Common Shares issuable upon exercise of
Private Placement Warrants. The Selling Shareholder is offering pursuant to this prospectus
1,000 Common Shares issuable upon exercise of Private Placement Warrants. |
| (13) | The
Selling Shareholder, Willemina Johanna de Vries-Mulder, has sole voting and investment
power over the Common Shares. The jurisdiction of the Selling Shareholder is The Netherlands.
Beneficial ownership includes (a) 6,750 Common Shares and (b) 5,000 Common Shares issuable
upon exercise of Private Placement Warrants. The Selling Shareholder is offering pursuant
to this prospectus 5,000 Common Shares issuable upon exercise of Private Placement Warrants. |
| (14) | The
Selling Shareholder, Hassan Ghrib, has sole voting and investment power over the Common
Shares. The jurisdiction of the Selling Shareholder is The Netherlands. Beneficial ownership
includes (a) 7,130 Common Shares and (b) 5,000 Common Shares issuable upon exercise of
Private Placement Warrants. The Selling Shareholder is offering pursuant to this prospectus
5,000 Common Shares issuable upon exercise of Private Placement Warrants. |
| (15) | The
Selling Shareholder, Bennie Hoornveld, has sole voting and investment power over the
Common Shares. The jurisdiction of the Selling Shareholder is The Netherlands. Beneficial
ownership includes (a) 3,196 Common Shares and (b) 3,000 Common Shares issuable upon
exercise of Private Placement Warrants. The Selling Shareholder is offering pursuant
to this prospectus 3,000 Common Shares issuable upon exercise of Private Placement Warrants. |
| (16) | The
Selling Shareholder, Hans Janshen, has sole voting and investment power over the Common
Shares. The jurisdiction of the Selling Shareholder is The Netherlands. Beneficial ownership
includes (a) 20,800 Common Shares and (b) 10,000 Common Shares issuable upon exercise
of Private Placement Warrants. The Selling Shareholder is offering pursuant to this prospectus
10,000 Common Shares issuable upon exercise of Private Placement Warrants. |
| (17) | The
Selling Shareholder, Marc Joosten, has sole voting and investment power over the Common
Shares. The jurisdiction of the Selling Shareholder is The Netherlands. Beneficial ownership
includes (a) 16,600 Common Shares and (b) 10,000 Common Shares issuable upon exercise
of Private Placement Warrants. The Selling Shareholder is offering pursuant to this prospectus
10,000 Common Shares issuable upon exercise of Private Placement Warrants. |
| (18) | The
Selling Shareholder, La Montagne Beheer B.V., is the registered owner of the Common Shares.
The jurisdiction of the Selling Shareholder is The Netherlands. PJ van Bergen, Director
of La Montagne Beheer B.V., has voting and investment power over the Common Shares and
may be deemed to be a beneficial owner. Beneficial ownership includes (a) 1,200 Common
Shares and (b) 1,000 Common Shares issuable upon exercise of Private Placement Warrants.
The Selling Shareholder is offering pursuant to this prospectus 1,000 Common Shares issuable
upon exercise of Private Placement Warrants. |
| (19) | The
Selling Shareholder, Alwin Leltz, has sole voting and investment power over the Common
Shares. The jurisdiction of the Selling Shareholder is The Netherlands. Beneficial ownership
includes (a) 2,000 Common Shares and (b) 1,000 Common Shares issuable upon exercise of
Private Placement Warrants. The Selling Shareholder is offering pursuant to this prospectus
1,000 Common Shares issuable upon exercise of Private Placement Warrants. |
| (20) | The
Selling Shareholder, Ramon Salceda, has sole voting and investment power over the Common
Shares. The jurisdiction of the Selling Shareholder is The Netherlands. Beneficial ownership
includes (a) 7,086 Common Shares and (b) 1,000 Common Shares issuable upon exercise of
Private Placement Warrants. The Selling Shareholder is offering pursuant to this prospectus
1,000 Common Shares issuable upon exercise of Private Placement Warrants. |
| (21) | The
Selling Shareholder, Alwin Tetteroo, has sole voting and investment power over the Common
Shares. The jurisdiction of the Selling Shareholder is The Netherlands. Beneficial ownership
includes (a) 15,074 Common Shares and (b) 6,000 Common Shares issuable upon exercise
of Private Placement Warrants. The Selling Shareholder is offering pursuant to this prospectus
6,000 Common Shares issuable upon exercise of Private Placement Warrants. |
| (22) | The
Selling Shareholder, Peter Tromp, has sole voting and investment power over the Common
Shares. The jurisdiction of the Selling Shareholder is The Netherlands. Beneficial ownership
includes (a) 14,000 Common Shares and (b) 10,000 Common Shares issuable upon exercise
of Private Placement Warrants. The Selling Shareholder is offering pursuant to this prospectus
10,000 Common Shares issuable upon exercise of Private Placement Warrants. |
| (23) | The
Selling Shareholder, Toon van Ginderen, has sole voting and investment power over the Common Shares. The jurisdiction of the Selling
Shareholder is The Netherlands. Beneficial ownership includes 5,000 Common |
Shares issuable upon exercise of Private Placement Warrants.
The Selling Shareholder is offering pursuant to this prospectus 5,000 Common Shares issuable
upon exercise of Private Placement Warrants.
| (24) | The
Selling Shareholder, Christa van Ittersum, has sole voting and investment power over
the Common Shares. The jurisdiction of the Selling Shareholder is The Netherlands. Beneficial
ownership includes (a) 11,291 Common Shares and (b) 10,000 Common Shares issuable upon
exercise of Private Placement Warrants. The Selling Shareholder is offering pursuant
to this prospectus 10,000 Common Shares issuable upon exercise of Private Placement Warrants. |
| (25) | The
Selling Shareholder, Dirk MCA van Meteren, has sole voting and investment power over
the Common Shares. The jurisdiction of the Selling Shareholder is The Netherlands. Beneficial
ownership includes (a) 54,500 Common Shares and (b) 2,500 Common Shares issuable upon
exercise of Private Placement Warrants. The Selling Shareholder is offering pursuant
to this prospectus 2,500 Common Shares issuable upon exercise of Private Placement Warrants. |
| (26) | The
Selling Shareholder, Renny van Wijk, has sole voting and investment power over the Common
Shares. The jurisdiction of the Selling Shareholder is The Netherlands. Beneficial ownership
includes (a) 10,000 Common Shares and (b) 10,000 Common Shares issuable upon exercise
of Private Placement Warrants. The Selling Shareholder is offering pursuant to this prospectus
10,000 Common Shares issuable upon exercise of Private Placement Warrants. |
| (27) | The
Selling Shareholder, Joannes Peter van Wijk, has sole voting and investment power over
the Common Shares. The jurisdiction of the Selling Shareholder is The Netherlands. Beneficial
ownership includes (a) 6,000 Common Shares and (b) 2,500 Common Shares issuable upon
exercise of Private Placement Warrants. The Selling Shareholder is offering pursuant
to this prospectus 2,500 Common Shares issuable upon exercise of Private Placement Warrants. |
| (28) | The
Selling Shareholder, Anthonie van Zalk, has sole voting and investment power over the
Common Shares. The jurisdiction of the Selling Shareholder is The Netherlands. Beneficial
ownership includes (a) 5,000 Common Shares and (b) 5,000 Common Shares issuable upon
exercise of Private Placement Warrants. The Selling Shareholder is offering pursuant
to this prospectus 5,000 Common Shares issuable upon exercise of Private Placement Warrants. |
| (29) | The
Selling Shareholder, Martin Vandamme, has sole voting and investment power over the Common
Shares. The jurisdiction of the Selling Shareholder is Belgium. Beneficial ownership
includes (a) 9,000 Common Shares and (b) 9,000 Common Shares issuable upon exercise of
Private Placement Warrants. The Selling Shareholder is offering pursuant to this prospectus
9,000 Common Shares issuable upon exercise of Private Placement Warrants. |
| (30) | The
Selling Shareholder, Edo Veenis, has sole voting and investment power over the Common
Shares. The jurisdiction of the Selling Shareholder is The Netherlands. Beneficial ownership
includes (a) 11,000 Common Shares and (b) 3,000 Common Shares issuable upon exercise
of Private Placement Warrants. The Selling Shareholder is offering pursuant to this prospectus
3,000 Common Shares issuable upon exercise of Private Placement Warrants. |
| (31) | The
Selling Shareholder, Jozeph Verbon, has sole voting and investment power over the Common
Shares. The jurisdiction of the Selling Shareholder is The Netherlands. Beneficial ownership
includes (a) 12,150 Common Shares and (b) 5,000 Common Shares issuable upon exercise
of Private Placement Warrants. The Selling Shareholder is offering pursuant to this prospectus
5,000 Common Shares issuable upon exercise of Private Placement Warrants. |
| (32) | The
Selling Shareholder, Adrianus Verburg, has sole voting and investment power over the
Common Shares. The jurisdiction of the Selling Shareholder is The Netherlands. Beneficial
ownership includes (a) 12,190 Common Shares and (b) 6,000 Common Shares issuable upon
exercise of Private Placement Warrants. The Selling Shareholder is offering pursuant
to this prospectus 6,000 Common Shares issuable upon exercise of Private Placement Warrants. |
| (33) | The
Selling Shareholder, Mark Verhaaren, has sole voting and investment power over the Common
Shares. The jurisdiction of the Selling Shareholder is The Netherlands. Beneficial ownership
includes (a) 2,500 Common Shares and (b) 2,500 Common Shares issuable upon exercise of
Private Placement Warrants. The Selling Shareholder is offering pursuant to this prospectus
2,500 Common Shares issuable upon exercise of Private Placement Warrants. |
| (34) | The
Selling Shareholder, Kees Volders, has sole voting and investment power over the Common
Shares. The jurisdiction of the Selling Shareholder is The Netherlands. Beneficial ownership
includes (a) 10,421 Common Shares and (b) 1,000 Common Shares issuable upon exercise
of Private Placement Warrants. The Selling Shareholder is offering pursuant to this prospectus
1,000 Common Shares issuable upon exercise of Private Placement Warrants. |
| (35) | The
Selling Shareholder, Earth Labs Inc., is the registered owner of the Common Shares. The
jurisdiction of the Selling Shareholder is Canada. Mathew Wilson has voting and investment
power over the Common Shares and may be deemed a beneficial owner. Beneficial ownership
includes 12,500 Common Shares issuable upon exercise of Private Placement Warrants. The
Selling Shareholder is offering pursuant to this prospectus 12,500 Common Shares issuable
upon exercise of Private Placement Warrants. |
| (36) | The
Selling Shareholder, James Rowland, has sole voting and investment power over the Common
Shares. The jurisdiction of the Selling Shareholder is the United States. Beneficial
ownership includes (a) 1,340 Common Shares and (b) 1,340 Common Shares issuable upon
exercise of Private Placement Warrants. The Selling Shareholder is offering pursuant
to this prospectus 1,340 Common Shares issuable upon exercise of Private Placement Warrants. |
| (37) | The
Selling Shareholder, Advisir Venture, is the registered owner of the Common Shares. The
jurisdiction of the Selling Shareholder is Canada. Advisir Venture is a wholly owned
subsidiary of Report Card Canada Media. Gary Kelly has voting and investment power over
the Common Shares and may be deemed to be a beneficial owner. Beneficial ownership includes
10,416 Common Shares issuable upon exercise of Private Placement Warrants. The Selling
Shareholder is offering pursuant to this prospectus 10,416 Common Shares issuable upon
exercise of Private Placement Warrants. |
| (38) | The
Selling Shareholder, Gloria Christilaw, has sole voting and investment power over the
Common Shares. The jurisdiction of the Selling Shareholder is Canada. Beneficial ownership
includes (a) 16,963 Common Shares and (b) 7,100 Common Shares issuable upon exercise
of Private Placement Warrants. The Selling Shareholder is offering pursuant to this prospectus
7,100 Common Shares issuable upon exercise of Private Placement Warrants. Gloria Christilaw
also has voting and investment power over Common Shares that she beneficially owns with
David Christilaw. See footnote (39). |
| (39) | The
Selling Shareholders, David Christilaw and/or Gloria Christilaw JTWROS, have shared voting
and investment power over the Common Shares. The jurisdiction of the Selling Shareholders
is Canada. Beneficial ownership includes (a) 873 Common Shares and (b) 7,200 Common Shares
issuable upon exercise of Private Placement Warrants. The Selling Shareholders are offering
pursuant to this prospectus 7,200 Common Shares issuable upon exercise of Private Placement
Warrants. |
| (40) | The
Selling Shareholder, Sarah Christilaw, has sole voting and investment power over the
Common Shares. The jurisdiction of the Selling Shareholder is Canada. Beneficial ownership
includes (a) 8,128 Common Shares and (b) 7,000 Common Shares issuable upon exercise of
Private Placement Warrants. The Selling Shareholder is offering pursuant to this prospectus
7,000 Common Shares issuable upon exercise of Private Placement Warrants. |
| (41) | The
Selling Shareholders, Adam Christilaw and/or Hayley Christilaw JTWROS, have shared voting
and investment power over the Common Shares. The jurisdiction of the Selling Shareholders
is Canada. Beneficial ownership includes (a) 4,070 Common Shares and (b) 4,900 Common
Shares issuable upon exercise of Private Placement Warrants. The Selling Shareholders
are offering pursuant to this prospectus 4,900 Common Shares issuable upon exercise of
Private Placement Warrants. |
| (42) | The
Selling Shareholder, Hayley Christilaw, has sole voting and investment power over the
Common Shares. The jurisdiction of the Selling Shareholder is Canada. Beneficial ownership
includes (a) 3,850 Common Shares and (b) 4,000 Common Shares issuable upon exercise of
Private Placement Warrants. The Selling Shareholder is offering pursuant to this prospectus
4,000 Common Shares issuable upon exercise of Private Placement Warrants. Hayley Christilaw
also has voting and investment power over Common Shares that she beneficially owns with
Adam Christilaw. See footnote (41). |
| (43) | The
Selling Shareholder, Don Heath, has sole voting and investment power over the Common
Shares. The jurisdiction of the Selling Shareholder is Canada. Beneficial ownership includes
(a) 15,800 Common Shares and (b) 14,800 Common Shares issuable upon exercise of Private
Placement Warrants. The Selling Shareholder is offering pursuant to this prospectus 14,800
Common Shares issuable upon exercise of Private Placement Warrants. |
| (44) | The
Selling Shareholder, Debby Heath, has sole voting and investment power over the Common
Shares. The jurisdiction of the Selling Shareholder is Canada. Beneficial ownership includes
(a) 10,100 Common Shares and (b) 8,100 Common Shares issuable upon exercise of Private
Placement Warrants. The Selling Shareholder is offering pursuant to this prospectus 8,100
Common Shares issuable upon exercise of Private Placement Warrants. |
| (45) | The
Selling Shareholders, Vance Merson and/or Ellen Merson JTWROS, have shared voting and
investment power over the Common Shares. The jurisdiction of the Selling Shareholder
is Canada. Beneficial ownership includes (a) 2,500 Common Shares and (b) 3,100 Common
Shares issuable upon exercise of Private Placement Warrants. The Selling Shareholder
is offering pursuant to this prospectus 3,100 Common Shares issuable upon exercise of
Private Placement Warrants. |
| (46) | The
Selling Shareholder, Maria Elizabeth Moore, has sole voting and investment power over
the Common Shares. The jurisdiction of the Selling Shareholder is Canada. Beneficial
ownership includes (a) 25,250 Common Shares and (b) 12,250 Common Shares issuable upon
exercise of Private Placement Warrants. The Selling Shareholder is offering pursuant
to this prospectus 12,250 Common Shares issuable upon exercise of Private Placement Warrants. |
| (47) | The
Selling Shareholder, Donna Kings, has sole voting and investment power over the Common
Shares. The jurisdiction of the Selling Shareholder is Canada. Beneficial ownership includes
(a) 6,750 Common Shares and (b) 3,000 Common Shares issuable upon exercise of Private
Placement Warrants. The Selling Shareholder is offering pursuant to this prospectus 3,000
Common Shares issuable upon exercise of Private Placement Warrants. |
| (48) | The
Selling Shareholder, Don Ambeau, has sole voting and investment power over the Common
Shares. The jurisdiction of the Selling Shareholder is Canada. Beneficial ownership includes
(a) 8,728 Common Shares and (b) 4,700 Common Shares issuable upon exercise of Private
Placement Warrants. The Selling Shareholder is offering pursuant to this prospectus 4,700
Common Shares issuable upon exercise of Private Placement Warrants. |
| (49) | The
Selling Shareholder, Marva Usher, has sole voting and investment power over the Common
Shares. The jurisdiction of the Selling Shareholder is Canada. Beneficial ownership includes
(a) 7,380 Common Shares and (b) 5,000 Common Shares issuable upon exercise of Private
Placement Warrants. The Selling Shareholder is offering pursuant to this prospectus 5,000
Common Shares issuable upon exercise of Private Placement Warrants. |
| (50) | The
Selling Shareholder, Michelle Amey, has sole voting and investment power over the Common
Shares. The jurisdiction of the Selling Shareholder is Canada. Beneficial ownership includes
(a) 8,016 Common Shares and (b) 5,000 Common Shares issuable upon exercise of Private
Placement Warrants. The Selling Shareholder is offering pursuant to this prospectus 5,000
Common Shares issuable upon exercise of Private Placement Warrants. |
| (51) | The
Selling Shareholder, David Christilaw, has sole voting and investment power over the Common Shares. The securities beneficially
owned and offered hereunder are held by David Christilaw both through David |
Christilaw CHARTERED ACCOUNTANT PROFESSIONAL CORPORATION,
a professional corporation organized under the laws of Ontario and through a solely owned
entity, 939042 Ontario Inc., a corporation incorporated under the laws of Ontario, Canada.
David Christilaw is the person at David Christilaw CHARTERED ACCOUNTANT PROFESSIONAL
CORPORATION and 939042 Ontario Inc. that exercises voting and investment power over the
Common Shares. The jurisdiction of the Selling Shareholder is Canada. Beneficial ownership
includes (a) 54,063 Common Shares and (b) 36,100 Common Shares issuable upon exercise
of Private Placement Warrants. The Selling Shareholder is offering pursuant to this prospectus
36,100 Common Shares issuable upon exercise of Private Placement Warrants. David Christilaw
also has voting and investment power over Common Shares of the Company that he beneficially
owns with Gloria Christilaw. See footnote (39).
| (52) | In
addition to the Common Shares and Common Share purchase warrants he owns individually,
the Selling Shareholder, Adam Christilaw, has sole 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) 19,750 Common Shares and (b) 20,850 Common Shares issuable upon
exercise of Private Placement Warrants. The Selling Shareholder is offering pursuant
to this prospectus 20,850 Common Shares issuable upon exercise of Private Placement Warrants.
Adam Christilaw also has voting and investment power over Common Shares of the Company
that he beneficially owns with Hayley Christilaw. See footnote (41). |
| (53) | In
addition to the Common Shares and Common Share purchase warrants she owns individually,
Colleen Fox has sole 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) 3,510 Common
Shares and (b) 10,000 Common Shares issuable upon exercise of Private Placement Warrants.
The Selling Shareholder is offering pursuant to this prospectus 10,000 Common Shares
issuable upon exercise of Private Placement Warrants. |
| (54) | In
addition to the Common Shares and Common Share purchase warrants he owns individually,
Chris Young has sole 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 1589835 Ontario Inc., a corporation incorporated under the laws of Canada. The jurisdiction
of the Selling Shareholder is Canada. Beneficial ownership includes (a) 21,300 Common
Shares and (b) 17,900 Common Shares issuable upon exercise of Private Placement Warrants.
The Selling Shareholder is offering pursuant to this prospectus 17,900 Common Shares
issuable upon exercise of Private Placement Warrants. |
| (55) | 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 sole voting and investment power over the Common Shares and
may be deemed to be a beneficial owner. Beneficial ownership includes (a) 140,000 Common
Shares and (b) 45,000 Common Shares issuable upon exercise of Private Placement Warrants.
The Selling Shareholder is offering pursuant to this prospectus 45,000 Common Shares
issuable upon exercise of Private Placement Warrants. |
| (56) | The
Selling Shareholder, Robert M Laird, has sole voting and investment power over the Common
Shares. The jurisdiction of the Selling Shareholder is the United States. Beneficial
ownership includes (a) 8,289 Common Shares and (b) 3,380 Common Shares issuable upon
exercise of Private Placement Warrants. The Selling Shareholder is offering pursuant
to this prospectus 3,380 Common Shares issuable upon exercise of Private Placement Warrants. |
| (57) | The
Selling Shareholder, Research Capital Corporation, is the registered owner of Common
Share purchase warrants. The jurisdiction of the Selling Shareholder is Canada. Patrick
Walsh has sole voting and investment power over the Common Shares and may be deemed to
be a beneficial owner. Beneficial ownership includes 6,480 Common Shares issuable upon
exercise of Finder Warrants. The Selling Shareholder is offering pursuant to this prospectus
6,480 Common Shares issuable upon exercise of Finder Warrants. Research Capital Corporation
received the Finder Warrants being offered pursuant to this prospectus as part of a finder’s
fee for services rendered in connection with the June 2022 Private Placement. |
| (58) | The
Selling Shareholder, Red Cloud Mining Capital Inc., is the registered owner of Common
Share purchase warrants. The jurisdiction of the Selling Shareholder is Canada. Bruce
Tatters, the Chief Executive Officer of Red Cloud Mining Capital Inc., has sole voting
and investment power over the Common Shares and may be deemed to be a beneficial owner.
Beneficial ownership includes 30 Common Shares issuable upon exercise of Finder Warrants.
The Selling Shareholder is offering pursuant to this prospectus 30 Common Shares issuable
upon exercise of Finder Warrants. Red Cloud Mining Capital Inc. received the Finder Warrants
being offered pursuant to this prospectus as part of a finder’s fee for services
rendered in connection with the June 2022 Private Placement. |
| (59) | Cooper
Road, LLC (“Cooper Road”) is controlled by Jay Bloom, its managing member.
Jay Bloom has sole voting and investment power over the securities Cooper Road beneficially
owns. Beneficial ownership includes (a) 1,320,126 Common Shares issuable upon exchange
of Vested Shares, (b) 495,743 Common Shares issuable upon exchange of Tranche I Earnout
Shares, (c) 495,743 Common Shares issuable upon exchange of Tranche II Earnout Shares,
(d) 1,806,105 Common Shares issuable upon exercise of NioCorp Assumed Warrants and (e)
1,615,057 NioCorp Assumed Warrants, in each case, held by Cooper Road. Cooper Road is
a member of the Sponsor, and Jay Bloom was the Co-Chairman and Chief Executive Officer
of GXII prior to the Business Combination and no longer holds the position. The address
for Cooper Road is 4701 North Meridian Avenue, Unit 601, Miami Beach, FL 33140. |
| (60) | Cooper
Road Acquisition, LLC (“Cooper Road Acquisition”) is controlled by Jordan
Bloom, its sole member. Jordan Bloom has sole voting and investment power over the securities
Cooper Road Acquisition beneficially owns. Beneficial ownership includes (a) 121,164
Common Shares issuable upon exchange of Vested Shares, (b) 39,570 Common Shares issuable
upon exchange of Tranche I Earnout Shares, (c) 39,570 Common Shares issuable upon exchange
of Tranche II Earnout Shares, (d) 46,968 Common Shares issuable upon exercise of NioCorp
Assumed Warrants and (e) 42,000 NioCorp Assumed Warrants, in each case, held by Cooper
Road Acquisition. Cooper Road Acquisition and Jordan Bloom are members of the Sponsor,
and Jordan Bloom was an Officer and Vice President of GXII prior to the Business Combination
and no longer holds the position. The address for Cooper Road Acquisition is 1300 Monad
Terrace, Unit 10D, Miami Beach, FL 33139. Jordan Bloom also has sole voting and investment
power over the securities that he holds. See footnote (64). |
| (61) | Dean
C. Kehler has sole voting and investment power over the securities he holds. Beneficial
ownership includes (a) 1,122,820 Common Shares issuable upon exchange of Vested Shares,
(b) 417,030 Common Shares issuable upon exchange of Tranche I Earnout Shares, (c) 417,030
Common Shares issuable upon exchange of Tranche II Earnout Shares, (d) 1,853,073 Common
Shares issuable upon exercise of NioCorp Assumed Warrants and (e) 1,657,057 NioCorp Assumed
Warrants, in each case, held by Mr. Kehler. Mr. Kehler is a member of the Sponsor and
was Co-Chairman and Chief Executive Officer of GXII prior to the Closing and no longer
holds those positions. In connection with the Closing, Mr. Kehler became, and is currently,
a Director of the Company. The address for Mr. Kehler is c/o Trimaran Capital 1325 Avenue
of the Americas, 28th Floor, New York, NY 10019. Mr. Kehler also shares voting and investment
power over the securities that the Elizabeth Kehler 2012 Family Trust under Declaration
of Trust dated December 12, 2012 (the “Elizabeth Kehler Trust”) beneficially
owns as co-trustee. See footnote (62). |
| (62) | The
Elizabeth Kehler Trust is controlled by Dean C. Kehler and U.S. Trust Company of Delaware
as co-trustees. In their capacities as co-trustees, Mr. Kehler and U.S. Trust Company
of Delaware share voting and investment power over the securities the Elizabeth Kehler
Trust beneficially owns. Beneficial ownership includes (a) 318,470 Common Shares issuable
upon exchange of Vested Shares, (b) 118,284 Common Shares issuable upon exchange of Tranche
I Earnout Shares and (c) 118,284 Common Shares issuable upon exchange of Tranche II Earnout
Shares, in each case, held by the Elizabeth Kehler Trust. The Elizabeth Kehler Trust
and Mr. Kehler are members of the Sponsor, and Mr. Kehler was Co-Chairman and Chief Executive
Officer of GXII prior to the Closing and no longer holds those positions. In connection
with the Closing, Mr. Kehler became, and is currently, a Director of the Company. The
address for the Elizabeth Kehler Trust is c/o Trimaran Capital 1325 Avenue of the Americas,
28th Floor, New York, NY 10019. |
| (63) | Michael
Maselli has sole voting and investment power over the securities he beneficially owns. Beneficial ownership includes (a) 323,085
Common Shares issuable upon exchange of Vested Shares, (b) 119,998 Common Shares issuable upon exchange of Tranche I Earnout Shares,
(c) 119,998 Common Shares issuable |
upon exchange of Tranche II Earnout Shares, (d) 215,150
of Common Shares issuable upon exercise of NioCorp Assumed Warrants and (e) 192,392 NioCorp
Assumed Warrants, in each case, held by Mr. Maselli. Mr. Maselli is a member of the Sponsor
and was President of GXII prior to the Closing and no longer holds that position. In
connection with the Closing, Mr. Maselli became, and is currently, a Director of the
Company. The address for Mr. Maselli is 34 Rockledge Drive, Pelham, NY 10803.
| (64) | Jordan
Bloom has sole voting and investment power over the securities he holds. Beneficial ownership
includes (a) 236,419 Common Shares issuable upon exchange of Vested Shares, (b) 87,809
Common Shares issuable upon exchange of Tranche I Earnout Shares, (c) 87,809 Common Shares
issuable upon exchange of Tranche II Earnout Shares, (d) 215,150 of Common Shares issuable
upon exercise of NioCorp Assumed Warrants and (e) 192,392 NioCorp Assumed Warrants, in
each case, held by Jordan Bloom. Jordan Bloom is a member of the Sponsor and was an Officer
and Vice President of GXII prior to the Closing and no longer holds those positions.
The address for Jordan Bloom is 1300 Monad Terrace, Unit 10D, Miami Beach, FL 33139.
Jordan Bloom also has sole voting and investment power over the securities Cooper Road
Acquisition beneficially owns. See footnote (60). |
| (65) | Andrea
Kellett has sole voting and investment power over the securities she beneficially owns.
Beneficial ownership includes (a) 31,783 Common Shares issuable upon exchange of Vested
Shares, (b) 11,806 Common Shares issuable upon exchange of Tranche I Earnout Shares,
(c) 11,806 Common Shares issuable upon exchange of Tranche II Earnout Shares, (d) 20,823
of Common Shares issuable upon exercise of NioCorp Assumed Warrants and (e) 18,621 NioCorp
Assumed Warrants, in each case, held by Ms. Kellett. Ms. Kellett is a member of the Sponsor
and was the Chief Financial Officer of GXII prior to the Closing and no longer holds
that position. The address for Ms. Kellett is 36 Stillwater Avenue, Massapequa, NY 11758. |
| (66) | Arthur
Baer has sole voting and investment power over the securities he holds. Beneficial ownership
includes (a) 254,988 Common Shares issuable upon exchange of Vested Shares, (b) 94,705
Common Shares issuable upon exchange of Tranche I Earnout Shares, (c) 94,705 Common Shares
issuable upon exchange of Tranche II Earnout Shares, (d) 181,747 of Common Shares issuable
upon exercise of NioCorp Assumed Warrants and (e) 162,522 NioCorp Assumed Warrants, in
each case, held by Mr. Baer. Mr. Baer is a member of the Sponsor and was an Officer and
Vice President of GXII prior to the Closing and no longer holds those positions. The
address for Mr. Baer is 30 W. 63rd Street, Apt. 3J New York, NY 10023. Mr. Baer also
has sole voting and investment power over the securities Equity Trust Custodian FBO Arthur
D. Baer ROTH IRA (the “Baer IRA”) beneficially owns. See footnote (67). |
| (67) | The
Baer IRA is controlled by Arthur Baer. Mr. Baer has sole voting and investment power
over the securities the Baer IRA beneficially owns. Beneficial ownership includes (a)
28,704 Common Shares issuable upon exchange of Vested Shares, (b) 10,660 Common Shares
issuable upon exchange of Tranche I Earnout Shares, (c) 10,660 Common Shares issuable
upon exchange of Tranche II Earnout Shares, (d) 33,403 Common Shares issuable upon exercise
of NioCorp Assumed Warrants and (e) 29,870 NioCorp Assumed Warrants, in each case, held
by the Baer IRA. The Baer IRA and Mr. Baer are members of the Sponsor, and Mr. Baer was
an Officer and Vice President of GXII prior to the Closing and no longer holds those
positions. The address for the Baer IRA is c/o Arthur Baer, 30 W. 63rd Street, Apt. 3J
New York, NY 10023. Mr. Baer also has sole voting and investment power over the securities
that he holds. See footnote (66). |
| (68) | AJA
Partners LLC (“AJA Partners”) is controlled by Leon Wagner as manager. Mr.
Wagner has sole voting and investment power over the securities AJA Partners beneficially
owns. Beneficial ownership includes (a) 415,581 Common Shares issuable upon exchange
of Vested Shares, (b) 154,352 Common Shares issuable upon exchange of Tranche I Earnout
Shares, (c) 154,352 Common Shares issuable upon exchange of Tranche II Earnout Shares,
(d) 483,585 Common Shares issuable upon exercise of NioCorp Assumed Warrants and (e)
432,432 NioCorp Assumed Warrants, in each case, held by AJA Partners. AJA Partners is
a member of the Sponsor. The address for AJA Partners is PO Box 68, New Rochelle, NY
10804. |
| (69) | James
Harpel has sole voting and investment power over the securities he beneficially owns. Beneficial ownership includes (a) 122,231
Common Shares issuable upon exchange of Vested Shares, (b) 45,398 Common Shares issuable upon exchange of Tranche I Earnout Shares,
(c) 45,398 Common Shares issuable upon exchange of Tranche II Earnout Shares, (d) 120,896 of Common Shares issuable upon exercise
of NioCorp Assumed Warrants and (e) 108,108 NioCorp Assumed Warrants, in each case, held by Mr. Harpel. Mr. Harpel |
is a member of the Sponsor
and was a Director of GXII prior to the Closing and no longer holds that position. The
address for Mr. Harpel is 1100 South Flagler Drive, Unit 1204, West Palm Beach, FL 33401.
| (70) | HW
2015 Trust u/a 7/23/15, Elaine Weinberger, Trustee (the “HW 2015 Trust”)
is controlled by Elaine Weinberger as the trustee. Mr. Weinberger has sole voting and
investment power over the securities the HW 2015 Trust beneficially owns. Beneficial
ownership includes (a) 226,127 Common Shares issuable upon exchange of Vested Shares,
(b) 83,987 Common Shares issuable upon exchange of Tranche I Earnout Shares, (c) 83,987
Common Shares issuable upon exchange of Tranche II Earnout Shares, (d) 241,792 Common
Shares issuable upon exercise of NioCorp Assumed Warrants and (e) 216,216 NioCorp Assumed
Warrants, in each case, held by the HW 2015 Trust. Mr. Weinberger is a member of the
Sponsor and was a Director of GXII prior to the Closing and no longer holds that position.
The address for the HW 2015 is 591 Winthrop Road, Teaneck, NJ 07666. |
| (71) | Marc
Mazur has sole voting and investment power over the securities he beneficially owns.
Beneficial ownership includes (a) 44,310 Common Shares issuable upon exchange of Vested
Shares, (b) 16,456 Common Shares issuable upon exchange of Tranche I Earnout Shares,
(c) 16,456 Common Shares issuable upon exchange of Tranche II Earnout Shares, (d) 30,224
Common Shares issuable upon exercise of NioCorp Assumed Warrants and (e) 27,027 NioCorp
Assumed Warrants, in each case, held by Mr. Mazur. Mr. Mazur is a member of the Sponsor
and was a Director of GXII prior to the Closing and no longer holds that position. The
address for Mr. Mazur is 40 Beach Tree Lave, Pelham Manor, NY 10803. |
| (72) | Corbin
ERISA Opportunity Fund Ltd. (“Corbin ERISA”) is controlled by its sole general
partner, Corbin Capital Partners Group, LLC (“Corbin Capital Partners”).
Corbin Capital Partners is managed by its officers, Tracy McHale Stuart, Steven Carlino,
Daniel Friedman and Craig C. Bergstrom. Ms. McHale Stuart and Messrs. Carlino, Friedman
and Bergstrom share voting and investment power over the securities Corbin ERISA beneficially
owns. Beneficial ownership includes (a) 260,229 Common Shares issuable upon exercise
of NioCorp Assumed Warrants and (b) 232,703 NioCorp Assumed Warrants, in each case, held
by Corbin ERISA. Ms. McHale Stuart and Messrs. Carlino, Friedman and Bergstrom disclaim
beneficial ownership of the securities held by Corbin ERISA. Corbin ERISA is a member
of the Sponsor. The address for Corbin ERISA is 590 Madison Avenue, 31st Floor, New York,
NY 10022. Ms. McHale Stuart and Messrs. Carlino, Friedman and Bergstrom also share voting
and investment power over the securities Corbin Opportunity Fund LP (“Corbin Opportunity”)
beneficially owns. See footnote (73). |
| (73) | Corbin
Opportunity is controlled by its sole general partner, Corbin Capital Partners. Corbin
Capital Partners is managed by its officers, Tracy McHale Stuart, Steven Carlino, Daniel
Friedman and Craig C. Bergstrom. Ms. McHale Stuart and Messrs. Carlino, Friedman and
Bergstrom share voting and investment power over the securities Corbin Opportunity beneficially
owns. Beneficial ownership includes (a) 114,246 Common Shares issuable upon exercise
of NioCorp Assumed Warrants and (b) 102,162 NioCorp Assumed Warrants, in each case, held
by Corbin Opportunity. Ms. McHale Stuart and Messrs. Carlino, Friedman and Bergstrom
disclaim beneficial ownership of the securities held by Corbin Opportunity. Corbin Opportunity
is a member of the Sponsor The address for Corbin Opportunity is 590 Madison Avenue,
31st Floor, New York, NY 10022. Ms. McHale Stuart and Messrs. Carlino, Friedman and Bergstrom
also share voting and investment power over the securities Corbin ERISA beneficially
owns. See footnote (72). |
| (74) | Atalaya
Special Purpose Investment Fund II LP (“Atalaya”) is controlled by Ivan Zinn.
Mr. Zinn has sole voting and investment power over the securities Atalaya beneficially
owns. Beneficial ownership includes (a) 258,534 Common Shares issuable upon exercise
of NioCorp Assumed Warrants and (b) 231,187 NioCorp Assumed Warrants, in each case, held
by Atalaya. Atalaya is a member of the Sponsor. The address for Atalaya is c/o Drew Phillips
One Rockefeller Plaza, 32nd Floor, New York, NY 10020. Mr. Zinn also controls ACM Alameda
Special Purpose Investment Fund II LP (“Alameda”) and has sole voting and
investment power over the securities Alameda beneficially owns. See footnote (75). |
| (75) | Alameda
is controlled by Ivan Zinn. Mr. Zinn has sole voting and investment power over the securities Alameda beneficially owns. Beneficial
ownership includes(a) 455,056 Common Shares issuable upon exercise of NioCorp Assumed Warrants and (b) 406,921 NioCorp Assumed
Warrants, in each case, held by Alameda. Alameda is a member of the Sponsor. The address for Alameda is c/o Drew Phillips One
Rockefeller Plaza, |
32nd
Floor, New York, NY 10020. Mr. Zinn also controls Atalaya and has sole voting and investment power over the securities Atalaya
beneficially owns. See footnote (74).
| (76) | Mark
A. Smith has sole voting and investment power over the securities he beneficially owns.
Beneficial ownership includes (a) 2,041,795 Common Shares that are issued and outstanding,
(b) 50,000 Common Shares issuable upon exercise of options, exercisable at C$7.50 per
Common Share, expiring December 14, 2023, (c) 65,000 Common Shares issuable upon exercise
of options, exercisable at C$13.60 per Common Share, expiring December 17, 2024, and
(d) 70,000 Common Shares issuable upon exercise of the options, exercisable at C$9.52
per Common Share, expiring March 27, 2026, in each case, held by Mr. Smith. Mr. Smith
is offering pursuant to this prospectus 1,726,544 Common Shares that are issued and outstanding.
Mr. Smith is the President, Chief Executive Officer and Chairman of the Board of Directors
of NioCorp. The address for Mr. Smith is c/o NioCorp Developments Ltd., 7000 Yosemite
Street, Suite 115, Centennial, CO 80112. |
| (77) | Neal
S. Shah has sole voting and investment power over the securities he beneficially owns.
Beneficial ownership includes (a) 55,000 Common Shares that are issued and outstanding,
(b) 35,000 Common Shares issuable upon exercise of the options, exercisable at C$5.40
per Common Share, expiring November 15, 2023, (c) 25,000 Common Shares issuable upon
exercise of options, exercisable at C$7.50 per Common Share, expiring December 14, 2023,
(d) 30,000 Common Shares issuable upon exercise of options, exercisable at C$13.60 per
Common Share, expiring December 17, 2024, and (e) 40,000 Common Shares issuable upon
exercise of the options, exercisable at C$9.52 per Common Share, expiring March 27, 2026,
in each case, held by Mr. Shah. Mr. Shah is offering pursuant to this prospectus 5,450
Common Shares that are issued and outstanding. Mr. Shah is the Chief Financial Officer
of NioCorp. The address for Mr. Shah is c/o NioCorp Developments Ltd., 7000 Yosemite
Street, Suite 115, Centennial, CO 80112. |
| (78) | Scott
Honan has sole voting and investment power over the securities he beneficially owns.
Beneficial ownership includes (a) 54,452 Common Shares that are issued and outstanding,
(b) 35,000 Common Shares issuable upon exercise of options, exercisable at C$5.40 per
Common Share, expiring November 15, 2023, (c) 25,000 Common Shares issuable upon exercise
of options, exercisable at C$7.50 per Common Share, expiring December 14, 2023, (d) 30,000
Common Shares issuable upon exercise of options, exercisable at C$13.60 per Common Share,
expiring December 17, 2024, and (e) 40,000 Common Shares issuable upon exercise of options,
exercisable at C$9.52 per Common Share, expiring March 27, 2026, in each case, held by
Mr. Honan. Mr. Honan is offering pursuant to this prospectus 13,000 Common Shares that
are issued and outstanding. Mr. Honan is the Chief Operations Officer NioCorp. The address
for Mr. Honan is c/o NioCorp Developments Ltd., 7000 Yosemite Street, Suite 115, Centennial,
CO 80112. |
DESCRIPTION
OF CAPITAL STOCK
Common
Shares
The
authorized capital of the Company consists of an unlimited number of Common Shares, without par value. 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 the Company, to receive the remaining assets of the Company 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
the Company, other than as discussed below and Canadian withholding tax. See “Certain Canadian Federal Income Tax Considerations
for U.S. Residents” below.
Competition
Act
Limitations
on the ability to acquire and hold Common Shares may be imposed by the Competition Act (Canada). This legislation permits the
Commissioner of Competition of Canada (the “Commissioner”) to review any acquisition of a significant interest in
the Company. This legislation grants the Commissioner jurisdiction to challenge such an acquisition before the Canadian Competition
Tribunal if the Commissioner believes that it would, or would be likely to, result in a substantial lessening or prevention of
competition in any market in Canada.
Investment
Canada Act
The
Investment Canada Act subjects an acquisition of control of a company by a non-Canadian to government review if the enterprise
value of such company, as calculated pursuant to the legislation, exceeds a threshold amount. A reviewable acquisition may not
proceed unless the relevant minister is satisfied that the investment is likely to result in a net benefit to Canada. Under the
national-security-review regime in the Investment Canada Act, review on a discretionary basis may also be undertaken by the federal
government in respect of a broad range of investments by a non-Canadian. No financial threshold applies to a national security
review. The relevant test is whether such investment by a non-Canadian could be “injurious to national security.”
Warrants
From
time to time, the Company has outstanding Common Share purchase warrants, with each Common Share purchase warrant exercisable
for one Common Share. The exercise price per Common Share and the number of Common Shares issuable upon exercise of Common Share
purchase warrants is subject to adjustment upon the occurrence of certain events, including, but not limited to, the following:
| ● | the
subdivision or re-division of the outstanding Common Shares into a greater number of
Common Shares; |
| ● | the
reduction, combination or consolidation of the outstanding Common Shares into a lesser
number of Common Shares; |
| ● | 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); |
| ● | the
reorganization of the Company or the consolidation or merger or amalgamation of the Company
with or into another body corporate; and |
| ● | a
reclassification or other similar change to the outstanding Common Shares. |
The
Company will issue the Common Shares issuable upon exercise of Common Share purchase warrants within five business days following
its 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.
NioCorp
Assumed Warrants
In
connection with the Closing, pursuant to the Business Combination Agreement, the Company assumed the GXII Warrant Agreement and
each GXII Warrant thereunder that was issued and outstanding immediately prior to the Closing Date was converted into one NioCorp
Assumed Warrant pursuant to the NioCorp Assumed Warrant Agreement. In connection with the Closing, NioCorp issued (a) 9,999,959
public NioCorp Assumed Warrants in respect of the GXII Warrants that were publicly traded prior to the Closing and (b) 5,666,667
NioCorp Assumed Warrants to the Sponsor in respect of the GXII Warrants that it held prior to the Closing, which NioCorp Assumed
Warrants were subsequently distributed by the Sponsor to its members in connection with the Closing.
Both
the public NioCorp Assumed Warrants and the NioCorp Assumed Warrants issued to the Sponsor are subject to the terms of the NioCorp
Assumed Warrant Agreement and are identical, with certain exceptions applicable to the NioCorp Assumed Warrants issued to the
Sponsor for so long as such NioCorp Assumed Warrants are held by the Sponsor, its members, or their respective affiliates and
other permitted transferees. In accordance with the NioCorp Assumed Warrant Agreement, any NioCorp Assumed Warrants issued to
the Sponsor that are held by someone other than the Sponsor, its members, or their respective affiliates and other permitted transferees,
are treated as public NioCorp Assumed Warrants.
Each
NioCorp Assumed Warrant is exercisable on and after April 16, 2023 until its expiration for 1.11829212 Common Shares at a price
of $11.50 per 1.11829212 Common Shares (subject to adjustments for stock splits, stock dividends, reorganizations, recapitalizations
and the like). Under the terms of NioCorp Assumed Warrant Agreement, for so long as the NioCorp Assumed Warrants issued to the
Sponsor are held by the Sponsor, its members, or their respective affiliates and other permitted transferees, such holders have
the right to elect to exercise those NioCorp Assumed Warrants on a cashless basis. For such NioCorp Assumed Warrants exercised
on a cashless basis after the Closing, the holder will be entitled to pay the exercise price for those NioCorp Assumed Warrants
by surrendering all or portion of the cash and/or Common Shares (valued at their fair market value) into which those NioCorp Assumed
Warrants are exercisable as shall be elected by the holder. For this purpose, Common Shares so surrendered will be deemed to have
a “fair market value” equal to the average reported last sale price of the Common Shares for the 10 trading days ending
on the third trading day prior to the date of exercise of the applicable NioCorp Assumed Warrants.
The
NioCorp Assumed Warrants will expire at 5:00 p.m., New York City time, on March 17, 2028 or earlier upon redemption or liquidation.
The
Company will not be obligated to deliver any Common Shares pursuant to the exercise of a NioCorp Assumed Warrant and will have
no obligation to settle such exercise unless a registration statement under the Securities Act with respect to the Common Shares
underlying the NioCorp Assumed Warrants is then effective and a prospectus relating thereto is current, subject to the Company
satisfying its obligations described below with respect to registration. No NioCorp Assumed Warrant will be exercisable and the
Company will not be obligated to issue Common Shares upon exercise of a NioCorp Assumed Warrant unless Common Shares issuable
upon such exercise have been registered, qualified or deemed to be exempt under the securities laws of the state of residence
of the registered holder of the NioCorp Assumed Warrants. In the event that the conditions in the two immediately preceding sentences
are not satisfied with respect to a NioCorp Assumed Warrant, the holder of such NioCorp Assumed Warrant will not be entitled to
exercise such NioCorp Assumed Warrant and such NioCorp Assumed Warrant may have no value and expire worthless. In no event will
the Company be required to net cash settle any NioCorp Assumed Warrant.
The
NioCorp Assumed Warrants, and the underlying Common Shares issuable upon the exercise thereof, were registered under the Securities
Act pursuant to the Company’s registration statement on Form S-4, originally filed on November 7, 2022, as subsequently
amended, which was declared effective by the SEC on February 8, 2023. The ongoing offering of the Common Shares underlying the
NioCorp Assumed Warrants is being registered pursuant to the Company’s registration statement of which this prospectus is
a part.
The
Company will have the right to call the public NioCorp Assumed Warrants for redemption at any time following the Closing Date:
| ● | in
whole and not in part; |
| ● | at
a price of $0.01 per NioCorp Assumed Warrant; |
| ● | upon
not less than 30 days’ prior written notice of redemption (the “30-day redemption
period”) to each public NioCorp Assumed Warrant holder; |
| ● | if,
and only if, the reported last sale price of the Common Shares equals or exceeds approximately
$16.10 per share (subject to certain adjustments) for any 20 trading days within a 30-trading
day period commencing once the NioCorp Assumed Warrants become exercisable and ending
three business days before the Company sends the notice of redemption to the public NioCorp
Assumed Warrant holders; and |
| ● | if
there is an effective registration statement covering the Common Shares issuable upon
exercise of the NioCorp Assumed Warrants, and a current prospectus relating thereto,
available throughout the 30-day redemption period. |
The
NioCorp Assumed Warrants issued to the Sponsor are not redeemable by the Company for so long as such NioCorp Assumed Warrants
are held by the Sponsor, its members, or their respective affiliates or other permitted transferees. In addition, the Company
may not exercise its redemption right if the issuance of Common Shares upon exercise of the NioCorp Assumed Warrants is not exempt
from registration or qualification under applicable state blue sky laws or the Company is unable to effect such registration or
qualification.
If
the Company calls the public NioCorp Assumed Warrants for redemption as described above, the Company will have the option to require
any holder that wishes to exercise its public NioCorp Assumed Warrant to do so on a “cashless basis.” In determining
whether to require all holders to exercise their public NioCorp Assumed Warrants on a “cashless basis,” the Company
will consider, among other factors, its cash position, the number of NioCorp Assumed Warrants that are outstanding and the dilutive
effect on the Company’s shareholders of issuing the maximum number of Common Shares issuable upon the exercise of the NioCorp
Assumed Warrants. If the Company takes advantage of this option, all holders of public NioCorp Assumed Warrants would pay the
exercise price by surrendering their NioCorp Assumed Warrants for that number of Common Shares equal to the quotient obtained
by dividing (x) the product of the number of Common Shares underlying the public NioCorp Assumed Warrants, multiplied by the difference
between the exercise price of the NioCorp Assumed Warrants and the “fair market value” (defined below) by (y) the
fair market value. The “fair market value” shall mean the average reported last sale price of the Common Shares for
the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders
of public NioCorp Assumed Warrants. If the Company takes advantage of this option, the notice of redemption will contain the information
necessary to calculate the number of Common Shares to be received upon exercise of the NioCorp Assumed Warrants, including the
“fair market value” in such case. Requiring a cashless exercise in this manner will reduce the number of Common Shares
to be issued and thereby lessen the dilutive effect of a redemption of the public NioCorp Assumed Warrants. If the Company calls
the public NioCorp Assumed Warrants for redemption and does not take advantage of this option, the Sponsor, its members, and their
respective affiliates and other permitted transferees would still be entitled to exercise their NioCorp Assumed Warrants for cash
or on a cashless basis using the same formula described above that other NioCorp Assumed Warrant holders would have been required
to use had all NioCorp Assumed Warrant holders been required to exercise their NioCorp Assumed Warrants on a cashless basis, as
described in more detail below.
A
holder of a NioCorp Assumed Warrant may notify the Company in writing in the event it elects to be subject to a requirement that
such holder will not have the right to exercise such NioCorp Assumed Warrant, to the extent
that after giving effect to such exercise,
such holder (together with such holder’s affiliates), to the NioCorp Assumed Warrant Agent’s actual knowledge, would
beneficially own in excess of 4.9% or 9.8% (or such other amount as a holder may specify) of the Common Shares outstanding immediately
after giving effect to such exercise.
The
NioCorp Assumed Warrants have certain anti-dilution and adjustments rights upon certain events.
The
NioCorp Assumed Warrants may be exercised upon surrender of the certificate representing such NioCorp Assumed Warrants on or prior
to the expiration date at the offices of the NioCorp Assumed Warrant Agent, with the exercise form on the reverse side of such
certificate completed and executed as indicated, accompanied by full payment of the exercise price (or on a cashless basis, if
applicable), by certified or official bank check payable to the order of the NioCorp Assumed Warrant Agent or by wire transfer,
for the number of NioCorp Assumed Warrants being exercised. The NioCorp Assumed Warrant holders will not have the rights or privileges
of holders of Common Shares or any attendant voting rights until they exercise their NioCorp Assumed Warrants and receive Common
Shares. After the issuance of Common Shares upon exercise of the NioCorp Assumed Warrants, each holder will be entitled to one
(1) vote for each Common Share held of record on all matters to be voted on by NioCorp shareholders.
If,
upon exercise of the NioCorp Assumed Warrants, a holder would be entitled to receive a fractional interest in a share, the Company
will, upon exercise, round down to the nearest whole number of Common Shares to be issued to the NioCorp Assumed Warrant holder.
The
NioCorp Assumed Warrants were issued in registered form under the NioCorp Assumed Warrant Agreement. The NioCorp Assumed Warrant
Agreement may be amended by the parties thereto without the consent of any registered holder (i) for the purpose of curing any
ambiguity, or curing, correcting or supplementing any mistake, or adding or changing any other provisions with respect to matters
or questions arising under NioCorp Assumed Warrant Agreement as the parties may deem necessary or desirable and that the parties
deem shall not adversely affect the interest of the registered holders of the NioCorp Assumed Warrants, and (ii) to provide for
the delivery of such kind and amount of Common Shares or other securities or property (including cash) receivable upon a reclassification,
reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the holder of NioCorp
Assumed Warrants would have received if such holder had exercised his, her or its NioCorp Assumed Warrants immediately prior to
such event. All other modifications or amendments, including any amendment to increase the warrant price or shorten the exercise
period, shall require the vote or written consent of the registered holders of a majority of the then outstanding public NioCorp
Assumed Warrants. Any amendment solely to the NioCorp Assumed Warrants issued to the Sponsor and that are held by the Sponsor,
its members, or their respective affiliates or other permitted transferees, shall require the vote or written consent of a majority
of the holders of the then outstanding NioCorp Assumed Warrants issued to the Sponsor.
Convertible
Debentures
On
January 26, 2023, NioCorp entered into the Yorkville Convertible Debt Financing Agreement with YA. Pursuant to the Yorkville Convertible
Debt Financing Agreement, YA advanced a total amount of $15,360,000 to NioCorp in consideration of the issuance by NioCorp to
YA of $16,000,000 aggregate principal amount of Convertible Debentures at the time of Closing (the “Debenture Closing”).
As of October 24, 2023, there was $8,000,000 aggregate principal amount of the Convertible Debentures outstanding.
Each
Convertible Debenture issued under the Yorkville Convertible Debt Financing Agreement is an unsecured obligation of NioCorp, matures
on September 17, 2024, which maturity may be extended for one six-month period in certain circumstances at the option of NioCorp,
and incurs a simple interest rate obligation of 5.0% per annum (which will increase to 15.0% per annum upon the occurrence of
an event of default). The outstanding principal amount of, accrued and unpaid interest, if any, on, and premium, if any, on the
Convertible Debentures must be paid by NioCorp in cash when the same becomes due and payable under the terms of the Convertible
Debentures at their stated maturity, upon their redemption or otherwise.
Subject
to certain limitations contained within the Yorkville Convertible Debt Financing Agreement and the Convertible Debentures, including
those as described below, holders of the Convertible Debentures will be entitled to convert the principal amount of, and accrued
and unpaid interest, if any, on each Convertible Debenture, in whole
or in part, from time to time over their term, into a number
of Common Shares equal to the quotient of the principal amount and accrued and unpaid interest, if any, being converted divided
by the Conversion Price. The “Conversion Price” means, as of any Conversion Date (as defined below) or other date
of determination, the greater of (i) 90% of the average of the daily U.S. dollar volume-weighted average price of the Common Shares
on the principal U.S. market for the Common Shares as reported by Bloomberg Financial Markets during the five consecutive trading
days immediately preceding the date on which the holder exercises its conversion right in accordance with the requirements of
the Yorkville Convertible Debt Financing Agreement (the “Conversion Date”) or other date of determination, but not
lower than the Floor Price (as defined below), and (ii) the five-day volume-weighted average price of the Common Shares on the
TSX (or on the principal U.S. market if the majority of the trading volume and value of the Common Shares occurred on Nasdaq during
the relevant period) for the five consecutive trading days immediately prior to the Conversion Date or other date of determination
less the maximum applicable discount allowed by the TSX. The “Floor Price” means a price of $2.1435 per share, which
is equal to the lesser of (a) 30% of the average of the daily volume-weighted average price of the Common Shares on the principal
U.S. market for the Common Shares as reported by Bloomberg Financial Markets during the five consecutive trading days immediately
preceding the Debenture Closing and (b) 30% of the average of the volume-weighted average price of the Common Shares on the principal
U.S. market for the Common Shares as reported by Bloomberg Financial Markets during the five consecutive trading days immediately
following the Debenture Closing, subject to certain adjustments to give effect to any stock dividend, stock split, reverse stock
split, recapitalization or similar event.
The
terms of the Convertible Debentures restrict the number of Convertible Debentures that may be converted during each calendar month
by YA at a Conversion Price below a fixed price equal to approximately $8.9422 (i.e., the quotient of $10.00 divided by 1.11829212
(being the number of Common Shares that were exchanged for each share of GXII at the Closing, after giving effect to the Reverse
Stock Split)), subject to adjustment to give effect to any stock dividend, stock split, reverse stock split, recapitalization
or similar event. The Convertible Debentures are subject to customary anti-dilution adjustments.
The
terms of the Convertible Debentures restrict the conversion of Convertible Debentures by YA if such a conversion would cause YA
to exceed certain beneficial ownership thresholds in NioCorp or such a conversion would cause the aggregate number of Common Shares
issued pursuant to the Yorkville Convertible Debt Financing Agreement to exceed the thresholds for issuance of Common Shares under
the rules of the TSX and Nasdaq, unless prior shareholder approval is obtained.
Financing
Warrants
In
conjunction with the Debenture Closing, NioCorp issued to YA Financing Warrants to purchase 1,789,267 Common Shares, which is
equal to the quotient of the principal amount of Convertible Debentures issued in such Debenture Closing divided by the “Exercise
Price,” which is equal to approximately $8.9422 (i.e., the quotient of $10.00 divided by 1.11829212 (being the number of
Common Shares that were exchanged for each share of GXII at the Closing, after giving effect to the Reverse Stock Split)), in
each case, subject to adjustment to give effect to any stock dividend, stock split, reverse stock split, recapitalization or similar
event.
The
Financing Warrants are exercisable, in whole or in part, but not in increments of less than $50,000 aggregate Exercise Price (unless
the remaining aggregate Exercise Price is less than $50,000), beginning on May 4, 2023 and may be exercised at any time prior
to their expiration. Holders of the Financing Warrants may exercise their Financing Warrants, at their election, by paying the
Exercise Price in cash or, if at any time there is no effective registration statement registering, or no current prospectus available
for, the resale of the underlying Common Shares, on a cashless exercise basis. On each of the first 12 monthly anniversaries of
September 17, 2023, 1/12th of the Financing Warrants will expire.
The
Financing Warrants have customary anti-dilution adjustments to be determined in accordance with the requirements of the applicable
stock exchanges, including the TSX.
The
terms of the Financing Warrants restrict the exercise of Financing Warrants by YA if such an exercise would cause YA to exceed
certain beneficial ownership thresholds in NioCorp or such an exercise would cause the aggregate number of Common Shares issued
pursuant to the Yorkville Convertible Debt Financing Agreement to exceed the thresholds for issuance of Common Shares under the
rules of the TSX and Nasdaq, unless prior shareholder approval is obtained.
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 (i) the acquisition, ownership, and disposition of Common Shares, including Common Shares acquired
upon exercise of a NioCorp Assumed Warrant and (ii) the exercise, disposition, and lapse of NioCorp Assumed Warrants. 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 of such securities. 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 any tax consequences to U.S. Holders arising from the U.S. federal
alternative minimum tax or the Medicare tax on investment income, U.S. federal estate, gift and other non-income taxes, U.S. state
and local taxes, or any non-U.S. tax. 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 considerations relevant to the
Common Shares and NioCorp Assumed Warrants.
No
legal opinion from U.S. legal counsel or ruling from the IRS has been requested, or will be obtained, regarding the U.S. federal
income tax considerations relevant to the Common Shares and NioCorp Assumed Warrants.. 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 and 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 or NioCorp Assumed Warrants
that is for U.S. federal income tax purposes:
| ● | an
individual who is a citizen or resident of the United States; |
| ● | 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; |
| ● | 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. |
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 or NioCorp Assumed Warrants as part of a straddle, hedging transaction, conversion transaction,
constructive sale, or other arrangement involving more than one position; (f) acquire Common Shares or NioCorp Assumed Warrants
in connection with the exercise of employee stock options or otherwise as compensation for services; (g) hold Common Shares or
NioCorp Assumed Warrants 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
or NioCorp Assumed Warrants in connection with carrying on a business in Canada; (d) persons whose Common Shares or NioCorp Assumed
Warrants 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 tax
considerations relevant to the Common Shares and NioCorp Assumed Warrants.
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 or NioCorp Assumed Warrants, 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 considerations relevant to the Common Shares and NioCorp Assumed Warrants.
General
Rules Applicable to the Exercise and Disposition of NioCorp Assumed Warrants
Exercise
or Lapse of NioCorp Assumed Warrants
Except
as discussed below with respect to the cashless exercise of a NioCorp Assumed Warrant, a U.S. Holder generally will not recognize
gain or loss upon the acquisition of a Common Share on the exercise of a NioCorp Assumed Warrant for cash. A U.S. Holder’s
tax basis in a Common Share received upon exercise of the NioCorp Assumed Warrant should be an amount equal to the sum of the
U.S. Holder’s tax basis in the NioCorp Assumed Warrant exercised therefor and the exercise price. The U.S. Holder’s
holding period for a Common Share received upon exercise of the NioCorp Assumed Warrant will begin on the date following the date
of exercise (or possibly the date of exercise) of the NioCorp Assumed Warrant and will not include the period during which the
U.S. Holder held the NioCorp Assumed Warrant. If a NioCorp Assumed Warrant is allowed to lapse unexercised, a U.S. Holder that
has otherwise received no proceeds with respect to such NioCorp Assumed Warrant generally will recognize a capital loss equal
to such U.S. Holder’s tax basis in the NioCorp Assumed Warrant. Deductions for capital losses are subject to significant
limitations under the Code.
Under
the terms of the NioCorp Assumed Warrant Agreement, a U.S. Holder may be permitted to undertake a cashless exercise of a NioCorp
Assumed Warrant into Common Shares. The U.S. federal income tax treatment of a cashless exercise of NioCorp Assumed Warrants into
Common Shares is unclear, and the tax consequences of a cashless exercise could differ from the consequences upon the exercise
of a NioCorp Assumed Warrant described in the preceding paragraph. U.S. Holders should consult their own tax advisors regarding
the U.S. federal income tax consequences of a cashless exercise of NioCorp Assumed Warrants, including whether taxable gain or
loss is recognized in connection with such a cashless exercise.
Dispositions
of NioCorp Assumed Warrants
Subject
to the PFIC rules discussed below, a U.S. Holder generally will recognize gain or loss on any sale, exchange, redemption or other
taxable disposition of NioCorp Assumed Warrants in an amount equal to the difference between (i) the U.S. dollar value of cash
received plus the fair market value of any property received and (ii) such U.S. Holder’s adjusted tax basis in such NioCorp
Assumed Warrants. Any gain or loss recognized by a U.S. Holder on a taxable disposition of NioCorp Assumed Warrants generally
will be capital gain or loss. A U.S. Holder’s tax basis in NioCorp Assumed Warrants generally will be determined initially
by the holder’s U.S. dollar cost for the NioCorp Assumed Warrants (subject to any adjustments provided under the PFIC rules,
described 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 NioCorp Assumed Warrants have been held for
more than one year. Any gain or loss will generally be U.S. source for U.S. foreign tax credit purposes.
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 NioCorp
Assumed Warrants could be ordinary income under the rules discussed below.
Certain
Adjustments to the NioCorp Assumed Warrants
The
terms of each NioCorp Assumed Warrant provide for an adjustment to the number of Common Shares for which the NioCorp Assumed Warrant
may be exercised or to the exercise price of the NioCorp Assumed Warrant in certain events. An adjustment which has the effect
of preventing dilution generally is not taxable. A U.S. Holder of a NioCorp Assumed Warrant would, however, be treated as receiving
a constructive distribution from NioCorp if, for example, the adjustment increases the holder’s proportionate interest in
NioCorp’s assets or earnings and profits (for instance, through an increase in the number of Common Shares that would be
obtained upon exercise of such warrant) as a result of a distribution of cash or other property such as other securities to the
holders of the Common Shares which is taxable to the U.S. Holders of such shares as described under “General Rules Applicable
to the Ownership and Disposition of Common Shares—Distributions on Common Shares” below. Such constructive distribution
would be subject to tax as described under that section in the same manner as if the U.S. Holder of such NioCorp Assumed Warrant
received a cash distribution from NioCorp equal to the fair market value of such increased interest.
General
Rules Applicable to the Ownership and Disposition of Common Shares
Distributions
on 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. 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 a corporate U.S. Holder (other than certain 10% corporate shareholders)
generally will not be eligible for a “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—Risk of PFIC Status for 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.
Sales
or Other Taxable Dispositions of Common Shares
Upon
the sale or other taxable disposition of Common Shares, subject to the potential application of the PFIC rules as described below,
a U.S. Holder generally will recognize capital gain or loss in an amount equal to the difference between (i) the U.S. dollar value
of cash received plus the fair market value of any property received and (ii) such U.S. Holder’s adjusted 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 (subject to any adjustments provided under the PFIC rules, described
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.
Any gain or loss will generally be U.S. source for U.S. foreign tax credit purposes.
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
Risk
of PFIC Status for 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 U.S. federal income tax rules may apply to a U.S. Holder of Common Shares or
NioCorp Assumed Warrants. While this summary cannot describe all of the potentially adverse consequences that would result if
the Company were treated as a PFIC for a relevant taxable year, certain material consequences and related considerations are described
below.
The Company believes that it may be classified as a PFIC for its taxable year ended June 30, 2023 and was classified as a PFIC for its taxable year ended June 30, 2022 and, based on the current composition of its income and assets, as well as current business plans and financial expectations, may be classified as a PFIC for future taxable years.
No opinion of legal counsel or ruling from the IRS concerning the PFIC
status of the Company or any Subsidiary 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. In addition, even if the Company concluded that it or any Subsidiary did not qualify
as a PFIC, the IRS could challenge any determination made by the Company (or any subsidiary of the Company) concerning its PFIC
status in any taxable year, and a court could sustain such challenge. Accordingly, there can be no assurance that the Company
or any Subsidiary will not be treated as a PFIC for 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 would 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 of a foreign
corporation’s business is as an active producer, processor, merchant or handler of commodities, 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 indirect sale or disposition thereof. 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 or NioCorp Assumed Warrants are made.
Default
PFIC Rules
If
the Company is a PFIC for any tax year during which a U.S. Holder owns Common Shares or NioCorp Assumed Warrants, the U.S. federal
income tax consequences to such U.S. Holder 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 or NioCorp Assumed Warrants 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).
If
the Company is a PFIC, under Section 1291 of the Code, any gain recognized on the sale or other taxable disposition of Common
Shares or NioCorp Assumed Warrants (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 or NioCorp Assumed
Warrants, as applicable. 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 making a “purging”
election 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.
In
addition to the rules described above applying to “excess distributions” and certain other dispositions of Common
Shares or NioCorp Assumed Warrants, certain other adverse U.S. federal income tax rules may apply with respect to a U.S. Holder
if the Company is a PFIC, including in some cases even if the U.S. Holder makes a QEF Election (as described below). Each U.S.
Holder should consult its own tax advisors regarding the full tax consequences of potential PFIC status for the Company and each
subsidiary of the Company.
Under
proposed Treasury Regulations, if a U.S. Holder has an option, warrant or other right to acquire stock of a PFIC (such as a NioCorp
Assumed Warrant), such option, warrant or right is generally considered to be PFIC stock subject to the default rules of Section
1291 of the Code. This rule could adversely affect the availability of the QEF Election and Mark-to-Market Election with respect
to Common Shares acquired on exercise of NioCorp Assumed Warrants. (See discussion under “QEF Election” and “Market-to-Market
Election” below.) It is not entirely clear how various aspects of the PFIC rules would apply to the NioCorp Assumed Warrants,
and U.S. Holders should consult their own tax advisors regarding the application of the PFIC rules to NioCorp Assumed Warrants
and Common Shares acquired upon exercise of NioCorp Assumed Warrants.
QEF
Election
If
the Company is a PFIC, a U.S. Holder of Common Shares 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 of Common Shares) 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.
As
discussed above, under proposed Treasury Regulations, if a U.S. Holder has an option, warrant or other right to acquire stock
of a PFIC (such as a NioCorp Assumed Warrant, if NioCorp is a PFIC), such option, warrant or right is generally considered to
be PFIC stock subject to the default rules of Section 1291 of the Code on its disposition. However, a holder of an option, warrant
or other right to acquire stock of a PFIC may not make a QEF Election that will apply to the option, warrant or other right to
acquire PFIC stock. If a U.S. Holder of Common Shares makes a QEF Election, such election may not be treated as a timely QEF Election
with respect to Common Shares subsequently acquired on the exercise of NioCorp Assumed Warrants, and the rules of Section 1291
of the Code discussed above may continue to apply with respect to such U.S. Holder’s previously owned Common Shares. In
addition, gain recognized on the sale or other taxable disposition (other than by exercise) of the NioCorp Assumed Warrants by
a U.S. Holder will be subject to the rules of Section 1291 of the Code discussed above. U.S. Holders should consult their own
tax advisors regarding the application of the PFIC rules to NioCorp Assumed Warrants and Common Shares acquired upon exercise
of NioCorp Assumed Warrants.
The
Company will endeavor to provide U.S. Holders with the required information to allow U.S. Holders to make a QEF Election with
respect to the Common Shares in the event that the Company determines it is treated as a PFIC for any taxable year. There can
be no assurance, however, that the Company will timely provide such information for any particular year, or that the Company’s
determination regarding its PFIC status will be upheld. 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 timely 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 with respect to Common Shares and 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 SEC, (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 the foreign exchange meets certain trading volume and other requirements. 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.
Any
Mark-to-Market Election made by a U.S. Holder for Common Shares will also apply to such U.S. Holder’s Common Shares acquired
upon exercise of NioCorp Assumed Warrants. As a result, if a Market-to-Market Election
has been made by a U.S. Holder with respect
to Common Shares, any Common Shares received on exercise of NioCorp Assumed Warrants will automatically be marked-to-market in
the year of exercise. If the Company is a PFIC at the time a U.S. Holder acquires NioCorp Assumed Warrants, a U.S. Holder’s
holding period for Common Shares received on exercise of such NioCorp Assumed Warrants will include the period during which such
U.S. Holder has held the NioCorp Assumed Warrants. In these circumstances, a U.S. Holder will be treated as making a Mark-to-Market
Election with respect to its Common Shares acquired on exercise of the NioCorp Assumed Warrants after the beginning of such U.S.
Holder’s holding period for such Common Shares, unless the Common Shares are acquired in the same tax year as the year in
which the U.S. Holder acquired the corresponding NioCorp Assumed Warrants, and the tax regime and interest charge of Section 1291
described above generally will apply to the mark-to-market gain realized in the tax year in which the Common Shares are received.
However, the general mark-to-market rules will apply to subsequent tax years. 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 will also generally 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
(and such ordinary loss may be treated as capital or subject to limitations in certain cases).
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.
AS
THE PFIC RULES ARE COMPLEX AND UNCERTAIN, U.S. HOLDERS SHOULD CONSULT WITH THEIR TAX ADVISORS TO DETERMINE THE POTENTIAL APPLICATION
OF THE PFIC RULES TO THEM AND THEIR COMMON SHARES AND NIOCORP ASSUMED WARRANTS AND ANY RESULTANT TAX CONSEQUENCES.
Additional
Considerations
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 or NioCorp Assumed Warrants, 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 potential application of 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.
Information
Reporting and Backup Withholding
Certain
U.S. Holders may be subject to certain reporting obligations with respect to Common Shares and NioCorp Assumed Warrants if the
aggregate value of these and certain other “specified foreign financial assets” exceeds an applicable dollar threshold.
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 fails 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 or NioCorp Assumed Warrants
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 or NioCorp Assumed Warrants.
Dividend
payments (including constructive dividends) with respect to Common Shares and proceeds from the sale, exchange or redemption of
Common Shares or NioCorp Assumed Warrants may be subject to information reporting to the IRS and possible United States backup
withholding. Backup withholding (currently at a rate of 24%) will not apply, however, to a U.S. Holder who furnishes a correct
taxpayer identification number (generally on an IRS Form W-9 provided to the paying agent of the U.S. Holder’s broker) and
makes other required certifications, or who is otherwise exempt from backup withholding and establishes such exempt status. Backup
withholding is not an additional tax. Any amounts withheld under the U.S. backup withholding tax rules may be allowed as a credit
against a U.S. Holder’s U.S. federal income tax liability, if any, provided the required information is timely furnished
to the IRS.
THE
ABOVE SUMMARY IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF ALL TAX CONSIDERATIONS RELEVANT OR APPLICABLE TO U.S. HOLDERS
OF COMMON SHARES OR NIOCORP ASSUMED WARRANTS. U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX CONSIDERATIONS
APPLICABLE TO THEM IN THEIR OWN PARTICULAR CIRCUMSTANCES.
CERTAIN
CANADIAN FEDERAL INCOME TAX CONSIDERATIONS FOR U.S. RESIDENTS
The
following generally 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
Tax Convention (1980) (the “Convention”) to the holding and disposition of Common Shares and NioCorp Assumed Warrants.
Comment
is restricted to holders of Common Shares and NioCorp Assumed Warrants 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 for tax purposes, (ii) is a “qualifying
person” under and entitled to the benefits of the Convention, (iii) holds all Common Shares and NioCorp Assumed Warrants
as capital property, (iv) holds no Common Shares nor NioCorp Assumed Warrants that are “taxable Canadian property”
(as defined in the Canadian Tax Act) of the holder, (v) deals at arm’s length with and is not affiliated with NioCorp, (vi)
does not and is not deemed to use or hold any Common Shares or NioCorp Assumed Warrants in a business carried on in Canada, (vii)
is not an insurer that carries on business in Canada and elsewhere, and (viii) is not an “authorized foreign bank”
(as defined in the Canadian Tax Act) (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 entitled to the benefits of the Convention. Members of or holders of an interest in
such an entity that holds Common Shares or NioCorp Assumed Warrants should consult their own tax advisers regarding the extent,
if any, to which the benefits of the Convention will apply to the entity in respect of its Common Shares or NioCorp Assumed Warrants.
Generally,
a U.S. Resident Holder’s Common Shares or NioCorp Assumed Warrants will be considered to be capital property of such holder
provided that the U.S. Resident Holder is not a trader or dealer in securities, did not acquire, hold, or dispose of the Common
Shares or NioCorp Assumed Warrants 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 or NioCorp Assumed Warrants in the course of carrying on a business.
This
summary is based on the current provisions of the Canadian Tax Act and the Convention in effect as of the date prior to 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) prior to the date hereof, and the current published administrative policies and assessing practices of the Canada
Revenue Agency (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 policy or assessing practice, whether by way of judicial,
legislative or governmental decision or action, although no assurance can be given in these respects. This summary is not exhaustive
of all possible Canadian federal income tax considerations. 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.
No
gain or loss will be realized by a U.S. Resident Holder of a NioCorp Assumed Warrant upon the exercise of such NioCorp Assumed
Warrant. When a NioCorp Assumed Warrant is exercised, the U.S. Resident Holder’s cost of the Common Share acquired thereby
will be equal to the adjusted cost base of the NioCorp Assumed Warrant to such U.S. Resident Holder, plus the amount paid on the
exercise of the NioCorp Assumed Warrant. The U.S. Resident Holder’s adjusted cost base of the Common Share so acquired will
be determined by averaging the cost of the Common Share with the adjusted cost base to the U.S. Resident Holder of all Common
Shares of NioCorp held as capital property immediately before the acquisition of the Common Share.
Generally,
a U.S. Resident Holder’s Common Shares or NioCorp Assumed Warrants will not constitute “taxable Canadian property”
of such holder at a particular time at which the Common Shares are listed on a “designated stock exchange” (which
currently includes the TSX and Nasdaq) unless both of the following conditions are concurrently met:
| (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 |
| (A) | the
U.S. Resident Holder, |
| (B) | persons
with whom the U.S. Resident Holder did not deal at arm’s length, and |
| (C) | partnerships
in which the U.S. Resident Holder or a person referred to in clause (B) holds a membership
interest directly or indirectly through one or more partnerships, and |
| (ii) | 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. |
Common
Shares or NioCorp Assumed Warrants may also be deemed to be “taxable Canadian property” in certain circumstances set
out in the Canadian Tax Act.
A
U.S. Resident Holder who disposes or is deemed to dispose of one or more Common Shares or NioCorp Assumed Warrants 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 credits or is deemed to pay or credit a dividend on such 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 is not a resident of Canada, in proportion to such company’s ownership
interest in that entity.
PLAN
OF DISTRIBUTION
We
are registering the offer and sale of up to an aggregate of 17,519,864 Common Shares, which are issuable upon the exercise of
15,666,626 outstanding NioCorp Assumed Warrants. Subject to the terms of the NioCorp Assumed Warrants, shares of our Common Stock
will be issued to the NioCorp Assumed Warrant holders that elect to exercise and provide payment of the exercise price (whether
paid in cash or, if exercised on a cashless basis as permitted in certain circumstances in accordance with the terms of the NioCorp
Assumed Warrants and the NioCorp Assumed Warrant Agreement, surrender of cash and/or Common Shares into which such NioCorp Assumed
Warrants are exercisable). We do not know if or when any of the NioCorp Assumed Warrants will be exercised. We also do not know
if or when any of the Common Shares acquired upon exercise of any NioCorp Assumed Warrants will subsequently be resold. We are
not using an underwriter in connection with this offering.
We
are also registering the resale by the Selling Shareholders from time to time, of up to an aggregate of 23,095,947 Common Shares
and up to an aggregate of 5,666,667 NioCorp Assumed Warrants. We will not receive any of the proceeds from the sale of the Common
Shares or NioCorp Assumed Warrants by the Selling Shareholders. The aggregate proceeds to the Selling Shareholders will be the
purchase price of the Common Shares and the NioCorp Assumed Warrants being offered by the Selling Shareholders under this prospectus
less any discounts and commissions borne by the Selling Shareholders. We are required to pay all fees and expenses incident to
the registration of the Common Shares and the NioCorp Assumed Warrants to be offered and sold pursuant to this prospectus. The
Selling Shareholders will bear all commissions and discounts, if any, attributable to their sale of the Common Shares and the
NioCorp Assumed Warrants being offered by the Selling Shareholders under this prospectus.
The
Common Shares and the NioCorp Assumed Warrants beneficially owned by the Selling Shareholders covered by this prospectus may be
offered and sold from time to time by the Selling Shareholders. The term “Selling Shareholders” includes donees, pledgees,
transferees or other successors in interest selling Common Shares or NioCorp Common Shares being offered by the Selling Shareholders
named in this prospectus and received after the date of this prospectus from the Selling Shareholders as a gift, pledge, partnership
distribution or other transfer. The Selling Shareholders will act independently of us in making decisions with respect to the
timing, manner and size of each sale. Such sales may be made on one or more exchanges or in the over-the-counter market or otherwise,
at prices and under terms then prevailing or at prices related to the then current market price or in negotiated transactions.
The Selling Shareholders may sell Common Shares or NioCorp Assumed Warrants being offered by the Selling Shareholders under this
prospectus by one or more of, or a combination of, the following methods:
| ● | purchases
by a broker-dealer as principal and resale by such broker-dealer for its own account
pursuant to this prospectus; |
| ● | ordinary
brokerage transactions and transactions in which the broker solicits purchasers; |
| ● | block
trades in which the broker-dealer so engaged will attempt to sell the Common Shares or
NioCorp Assumed Warrants as agent but may position and resell a portion of the block
as principal to facilitate the transaction; |
| ● | an
over-the-counter distribution in accordance with the rules of Nasdaq; |
| ● | through
trading plans entered into by the Selling Shareholders pursuant to Rule 10b5-1 under
the Exchange Act in place at the time of an offering pursuant to this prospectus and
any applicable prospectus supplement hereto that provide for periodic sales of their
Common Shares or NioCorp Assumed Warrants on the basis of parameters described in such
trading plans; |
| ● | distributions
to employees, members, limited partners or stockholders of the Selling Shareholders; |
| ● | through
the writing or settlement of options or other hedging transactions, whether through an
options exchange or otherwise; |
| ● | by
pledge to secure debts and other obligations; |
| ● | delayed
delivery arrangements; |
| ● | to
or through underwriters or broker-dealers; |
| ● | in
“at the market” offerings, as defined in Rule 415 under the Securities Act,
at negotiated prices, at prices prevailing at the time of sale or at prices related to
such prevailing market prices, including sales made directly on a national securities
exchange or sales made through a market maker other than on an exchange or other similar
offerings through sales agents; |
| ● | in
privately negotiated transactions; |
| ● | in
options transactions; |
| ● | through
a combination of any of the above methods of sale; or |
| ● | any
other method permitted pursuant to applicable law. |
In
addition, any Common Shares and NioCorp Assumed Warrants being offered by the Selling Shareholders under this prospectus that
qualify for sale pursuant to Rule 144 or another exemption from registration under the Securities Act or other such exemption
may be sold under Rule 144 or such other exemption rather than pursuant to this prospectus.
To
the extent required, this prospectus may be amended or supplemented from time to time to describe a specific plan of distribution.
In connection with such transactions, broker-dealers or other financial institutions may engage in short sales of the Common Shares
and the NioCorp Assumed Warrants being offered by the Selling Shareholders under this prospectus in the course of hedging the
positions they assume with the Selling Shareholders. The Selling Shareholders may pledge Common Shares and NioCorp Assumed Warrants
to a broker-dealer or other financial institution, and, upon a default, such broker-dealer or other financial institution may
effect sales of the pledged Common Shares and NioCorp Assumed Warrants pursuant to this prospectus (as supplemented or amended
to reflect such transaction).
In
effecting sales, broker-dealers or agents engaged by the Selling Shareholders may arrange for other broker-dealers to participate.
Broker-dealers or agents may receive commissions, discounts or concessions from the Selling Shareholders in amounts to be negotiated
immediately prior to the sale.
In
offering the Common Shares and the NioCorp Assumed Warrants being offered by the Selling Shareholders under this prospectus, the
Selling Shareholders and any broker-dealers who execute sales for the Selling Shareholders may be deemed to be “underwriters”
within the meaning of the Securities Act in connection with such sales. Any profits realized by the Selling Shareholders and the
compensation of any broker-dealer may be deemed to be underwriting discounts and commissions.
In
order to comply with the securities laws of certain states, if applicable, the Common Shares and the NioCorp Assumed Warrants
being offered by the Selling Shareholders under this prospectus must be sold in such jurisdictions only through registered or
licensed brokers or dealers. In addition, in certain states the Common Shares and the NioCorp Assumed Warrants being offered by
the Selling Shareholders under this prospectus may not be sold unless they have been registered or qualified for sale in the applicable
state or an exemption from the registration or qualification requirement is available and is complied with.
We
also have agreed to indemnify certain of the Selling Shareholders and certain other persons against certain liabilities in connection
with the offering of Common Shares and NioCorp Assumed Warrants being offered by such Selling Shareholders hereby, including liabilities
arising under the Securities Act or, if such indemnity is unavailable, to contribute amounts required to be paid in respect of
such liabilities. Such Selling Shareholders have agreed to indemnify us against liabilities under the Securities Act that may
arise from certain written information furnished to us by such Selling Shareholders specifically for use in this prospectus or,
if such indemnity is unavailable, to contribute amounts required to be paid in respect of such liabilities. Insofar as indemnification
for
liabilities arising under the Securities Act may be permitted to our directors, officers, and controlling persons, we have
been advised that in the opinion of the SEC this indemnification is against public policy as expressed in the Securities Act and
is therefore, unenforceable.
Additionally,
YA has represented to us that, during the period commencing as of the time that YA first contacted the Company or the Company’s
agents regarding the specific investment in the Company contemplated by the Yorkville Convertible Debt Financing Agreement and
ending immediately prior to the execution of the Yorkville Convertible Debt Financing Agreement, YA has not directly or indirectly,
nor has any person acting on behalf of or pursuant to any understanding with YA, engaged in any transactions in the securities
of the Company (including, without limitation, any short sale involving the Company’s securities). YA has agreed that from
and after the date of the Yorkville Convertible Debt Financing Agreement and ending when no Convertible Debentures remain outstanding,
none of YA or any of its officers, or any entity managed or controlled by YA, shall, directly or indirectly, engage in any (i)
“short sale” (as such term is defined in Rule 200 of Regulation SHO of the Exchange Act) of the Common Shares or (ii)
put equivalent position or any hedging transaction which establishes a net short position with respect to any securities of the
Company (including the Common Shares), with respect to each of clauses (i) and (ii) hereof, either for its own principal account
or for the principal account of any other such person or entity.
In
addition, we will make copies of this prospectus available to the Selling Shareholders for the purpose of satisfying the prospectus
delivery requirements of the Securities Act. The Selling Shareholders may indemnify any broker-dealer that participates in transactions
involving the sale of the Common Shares or the NioCorp Assumed Warrants being offered by the Selling Shareholders under this prospectus
against certain liabilities, including liabilities arising under the Securities Act.
At
the time a particular offer of Common Shares or NioCorp Assumed Warrants being offered by the Selling Shareholders under this
prospectus is made, if required, a prospectus supplement will be distributed that will set forth the number of Common Shares or
NioCorp Assumed Warrants being offered and the terms of the offering, including the name of any underwriter, dealer or agent,
the purchase price paid by any underwriter, any discount, commission and other item constituting compensation, any discount, commission
or concession allowed or reallowed or paid to any dealer, and the proposed selling price to the public.
The
Common Shares and the NioCorp Assumed Warrants being offered hereby will not be qualified for distribution by prospectus in any
jurisdiction of Canada, and may not be offered for sale, sold, assigned or transferred in any jurisdiction of Canada except pursuant
to a prospectus or exemption from the prospectus requirement under applicable securities laws in Canada. Neither we nor the Selling
Shareholders shall offer or sell any Common Shares or NioCorp Assumed Warrants directly or indirectly to any person whom, to our
knowledge or such Selling Shareholder’s knowledge, is resident or located in a jurisdiction of Canada or acquiring such
Common Shares or NioCorp Assumed Warrants for the benefit of another person resident or located in a jurisdiction of Canada, or
on any “marketplace” (as such term is defined in National Instrument 21-101 Marketplace Operation) in Canada.
LEGAL
MATTERS
The
validity of the Common Shares offered by this prospectus will be passed upon for us by Blake, Cassels & Graydon LLP, Vancouver,
British Columbia, Canada. The validity of the NioCorp Assumed Warrants offered by certain of the Selling Shareholders under this
prospectus will be passed upon for us by Jones Day.
EXPERTS
The
consolidated financial statements of NioCorp Developments Ltd. as of June 30, 2023 and 2022 and for each of the three years in
the period ended June 30, 2023, incorporated by reference in this prospectus and in the registration statement have been so incorporated
in reliance on the report of BDO USA, P.C., 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 NioCorp Developments Ltd.’s ability to continue as a going
concern.
The
financial statements of GX Acquisition Corp. II as of December 31, 2022 and 2021 and for the years ended December 31, 2022 and
2021, have been audited by Marcum LLP, an independent registered public accounting firm, as set forth in their report (which contains
an explanatory paragraph relating to substantial doubt about the ability of GX Acquisition Corp. II to continue as a going concern
as described in Note 1 to GXII’s financial statements), and are incorporated by reference in this prospectus and in the
registration statement of which this prospectus is a part have been so incorporated in reliance on such report given upon such
firm as experts in auditing and accounting.
The
technical report summary for the Elk Creek Project prepared in accordance with subpart 1300 of Regulation S-K (the “S-K
1300 Elk Creek Technical Report Summary”), which is incorporated by reference in this prospectus, and the information summarized
or quoted from the S-K 1300 Elk Creek Technical Report Summary included or incorporated by reference in this prospectus have been
so included or incorporated by reference with the consent of the following qualified persons, as such term is defined in Item
1300 of Regulation S-K, who prepared the S-K 1300 Elk Creek Technical Report Summary and reviewed and approved such information
summarized or quoted therefrom included or incorporated by reference in this prospectus: Dahrouge Geological Consulting USA Ltd.;
Understood Mineral Resources Ltd.; Optimize Group; Tetra Tech; Adrian Brown Consultants Inc.; Metallurgy Concept Solutions; Magemi
Mining Inc.; L3 Process Development; Olsson; A2GC; Scott Honan, M.Sc, SME-RM, NioCorp; Everett Bird, P.E., Cementation; Matt Hales,
P.E., Cementation; Mahmood Khwaja, P.E., CDM Smith; Martin Lepage, P.Eng, Cementation; and Wynand Marx, M.Eng, BBE Consulting.
A matrix of the sections of the S-K 1300 Elk Creek Technical Report Summary for which each qualified person is responsible is
included in the S-K 1300 Elk Creek Technical Report Summary. Except for Scott Honan, none of the qualified persons is affiliated
with NioCorp. Mr. Honan is the Chief Operating Officer of NioCorp.
Niocorp Developments (QX) (USOTC:NIOBF)
Historical Stock Chart
From Apr 2024 to May 2024
Niocorp Developments (QX) (USOTC:NIOBF)
Historical Stock Chart
From May 2023 to May 2024