| SUBSEQUENT EVENTS | 15. SUBSEQUENT
EVENTS Yorkville
Financings On
January 26, 2023, NioCorp entered into definitive agreements with respect to two previously announced financings with YA II PN,
Ltd., an investment fund managed by Yorkville Advisors Global, LP (together with YA II PN, Ltd., “Yorkville”). The
financings contemplated by the definitive agreements include (i) up to $ 16.0 million Debentures”) convertible into Common Shares and Common Share purchase warrants
(the “Financing Warrants”) entitling the holders thereof to purchase additional Common Shares (the “Yorkville
Convertible Debt Financing”); and (ii) a standby equity purchase facility pursuant to which NioCorp will have the right,
but not the obligation, subject to the conditions set out therein, to sell Common Shares to Yorkville with a maximum aggregate
value of up to $ 65 36 The
Yorkville Financings are expected to become effective on the date of the Transaction Closing, as previously announced on September
26, 2022. NioCorp
intends to use the proceeds from the Yorkville Financings to advance its efforts to launch construction of the Elk Creek Project
and move it to commercial operation, and to satisfy the fees and expenses incurred in connection with the Transaction, if required. Completion
of the Yorkville Financings is subject to certain conditions, including the completion of the Transaction Closing, the receipt
of the approval of the TSX, and the approval of NioCorp’s shareholders in accordance with the rules of the TSX. Yorkville
Convertible Debt Financing On
January 26, 2023, NioCorp entered into a Securities Purchase Agreement (the “Yorkville Convertible Debt Financing Agreement”),
by and between NioCorp and Yorkville. Pursuant to the Yorkville Convertible Debt Financing Agreement, Yorkville, and any investor
that exercises its contractual right previously granted by NioCorp to participate in the Yorkville Convertible Debt Financing
(collectively with Yorkville, the “Investors”), will advance an initial total amount of $9.6 million to NioCorp in
consideration of the issuance by NioCorp to the Investors of $10.0 million aggregate principal amount of Convertible Debentures
at the time of the Transaction Closing (the “First Debenture Closing”), and an additional total amount of $5.76 million
to NioCorp in consideration of the issuance by NioCorp to the Investors of $6.0 million aggregate principal amount of Convertible
Debentures on a date to be determined at the election of NioCorp, but which may not be prior to the later to occur of (i) the
date of filing of the Convertible Debt Financing Registration Statement (as defined below) and (ii) the date of the Transaction
Closing (together with the First Debenture Closing, the “Debenture Closings”). Each
Convertible Debenture issued under the Yorkville Convertible Debt Financing will be an unsecured obligation of NioCorp, will have
an 18 5.0 15.0 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 (“VWAP”)
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, unless NioCorp consents to conversion at a lower price, and (ii) the five-day VWAP 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
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. Notwithstanding the foregoing, if at any time it shall be a condition
to listing or continued listing of the Common Shares on the Nasdaq or such other principal U.S. market for the Common Shares that
the Conversion Price be not less than a minimum price (the “Floor Price”), then NioCorp and the holders will negotiate
in good faith to amend the Convertible Debentures to provide that the Conversion Price shall not be less than a Floor Price that
satisfies such condition. Any Floor Price will be subject to adjustment to give effect to any stock dividend, stock split or recapitalization. The
terms of the Convertible Debentures restrict the number of Convertible Debentures that may be converted during each calendar month
by an Investor at a Conversion Price below a fixed price equal to the quotient of (i) ten dollars divided by (ii) 11.1829212 (being
the number of Common Shares that will be exchanged for each share of GXII at the Transaction Closing), subject to adjustment to
give effect to any stock dividend, stock split or recapitalization. The Convertible Debentures will be subject to customary anti-dilution
adjustments. Pursuant
to the terms of the Convertible Debentures, following certain trigger events, and until a subsequent cure event, NioCorp will
be required to redeem $1.125 million aggregate principal amount of Convertible Debentures (the “Triggered Principal Amount”)
each month by making cash payments to the Investors, on a pro rata basis, in an amount equal to the Triggered Principal Amount,
plus accrued and unpaid interest thereon, if any, plus a redemption premium of 7% of the Triggered Principal Amount. Such monthly
prepayments under the terms of the Convertible Debentures are triggered (i) at the time when NioCorp has issued 95% of the total
amount of Common Shares pursuant to the Yorkville Convertible Debt Financing that it may issue under applicable TSX and Nasdaq
rules or (ii) when NioCorp has delayed or suspended the effectiveness or use of the Convertible Debt Financing Registration Statement
for more than 20 consecutive calendar days, and such monthly prepayment obligations will continue until, with respect to (i) above,
shareholder approval is obtained or, with respect to (ii) above, the Investors may once again resell Common Shares under the Convertible
Debt Financing Registration Statement, respectively. The
Convertible Debentures may also be redeemed at NioCorp’s option at any time and from time to time over their term at a redemption
price equal to 110 The
Convertible Debentures contain events of default customary for instruments of their type (with customary grace periods, as applicable)
and provide that, upon the occurrence of an event of default arising from certain events of bankruptcy or insolvency with respect
to NioCorp, all outstanding Convertible Debentures will become due and payable immediately without further action or notice. If
any other type of event of default occurs and is continuing, then any holder may declare all of its Convertible Debentures to
be due and payable immediately. In
conjunction with each Debenture Closing, NioCorp will issue to the Investors Financing Warrants to purchase a number of Common
Shares as 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 the greater of: (a) the quotient of ten dollars divided by 11.1829212;
or (b) the average of the daily VWAPs of the Common Shares on the principal U.S. market for the Common Shares during regular trading
hours as reported by Bloomberg Financial Markets during the five consecutive trading days ending on the trading day immediately
prior to such Debenture Closing, in each case subject to any adjustment to give effect to any stock dividend, stock split or recapitalization. The
Financing Warrants will be exercisable, in whole or in part, but not in increments of less than $ 50 50 The
Financing Warrants will 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 Convertible Debentures and the Financing Warrants restrict the conversion of Convertible Debentures or exercise of
Financing Warrants by an Investor if such a conversion or exercise would cause the Investor to exceed certain beneficial ownership
thresholds in NioCorp or such a conversion or exercise would cause the aggregate number of Common Shares issued pursuant to the
Yorkville Convertible Debt Financing to exceed the thresholds for issuance of Common Shares under the rules of the TSX and Nasdaq,
unless prior shareholder approval is obtained. 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 certain covenants that, among other things, limit NioCorp’s
ability to use the proceeds from the Yorkville Convertible Debt Financing to repay related party debt or to enter into any variable
rate transaction other than with Yorkville, subject to certain exceptions. The
Yorkville Convertible Debt Financing Agreement will terminate automatically if the Business Combination Agreement is terminated.
Also, the Investors will have the right to terminate the Yorkville Convertible Debt Financing Agreement if the First Debenture
Closing does not occur on or prior to March 22, 2023. NioCorp will have the right to terminate the Yorkville Convertible Debt
Financing Agreement at any time prior to the First Debenture Closing, provided that it will be required to pay a cash termination
fee of $ 1.6 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
NioCorp has agreed to file with the SEC a registration statement (the “Convertible Debt Financing Registration Statement”)
registering the resale by the Investors of the Common Shares issuable upon the conversion of the Convertible Debentures and the
exercise of the Financing Warrants under the Securities Act of 1933 (the “Securities Act”), as soon as practicable
but no later than 21 calendar days following the Transaction Closing, 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 the Investors 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. Yorkville
Equity Facility Financing On
January 26, 2023, NioCorp entered into a Standby Equity Purchase Agreement, (the “Yorkville Equity Facility Financing Agreement”),
by and between NioCorp and Yorkville. Pursuant to the Yorkville Equity Facility Financing Agreement, NioCorp will have the right,
but not the obligation, to sell Common Shares to Yorkville with a maximum aggregate value of up to $ 65.0 million 0.65 million aggregate principal amount of Common
Shares for no additional consideration. Additionally, NioCorp will pay to Yorkville an aggregate fee of $ 1.5 million Subject
to certain limitations, including those as described below, and adjustments contained within the Yorkville Equity Facility Financing
Agreement, NioCorp will have the option to sell Common Shares to Yorkville at a purchase price equal to (a) 97% of the VWAP of
the Common Shares on the principal U.S. market for the Common Shares during the applicable pricing period, which is a period during
a single trading day defined based on when NioCorp submits written notice (an “Advance Notice”) to Yorkville exercising
its right to an Advance (“Purchase Price Option #1”); or (b) 97% of the average of the daily VWAPs of the Common Shares
on the principal U.S. market for the Common Shares during a pricing period of three consecutive trading days commencing on the
trading day an Advance Notice is received by Yorkville, if it is received by 9:30 a.m., New York City time, or the immediately
following trading day if it is received after 9:30 a.m., New York City time (“Purchase Price Option #2”). Purchase
Price Option # 2 will be used whenever any Convertible Debentures issued to Yorkville pursuant to the Yorkville Convertible Debt
Financing Agreement are outstanding, unless waived by Yorkville. The
Yorkville Equity Facility Financing Agreement limits the number of Common Shares that may be issued to Yorkville in each Advance
to the greater of (a) 5,000,000 Common Shares and (b) the number of Common Shares equal to 100% of the average daily volume traded
of the Common Shares on the Nasdaq during the five trading days prior to an Advance Subject
to certain other conditions, NioCorp may deliver an Advance Notice only after the completion of the preceding Advance and only
so long as the Equity Facility Financing Registration Statement (as defined below) is effective and Yorkville is permitted to
utilize the prospectus thereunder to resell all of the Common Shares issuable pursuant to such Advance Notice. Pursuant to the
Yorkville Equity Facility Financing Agreement, NioCorp must prepare and file with the SEC a registration statement registering
the resale in the United States of the Common Shares issuable pursuant to the Yorkville Equity Facility Financing Agreement (the
“Equity Facility Financing Registration Statement”). Pursuant to the Yorkville Equity Facility Financing Agreement,
NioCorp in its sole discretion may choose when to file the Equity Facility Financing Registration Statement. Once effective, NioCorp
has agreed to use its commercially reasonable efforts to maintain the effectiveness of the Equity Facility Financing Registration
Statement at all times until the earliest to occur of (i) receipt of notice that Yorkville has completed resales of the full Commitment
Amount pursuant to the Equity Facility Financing Registration Statement, (ii) the 180th day following the latest closing of an
Advance that has occurred and (iii) the 180th day following the termination of the Yorkville Equity Facility Financing Agreement
in accordance with its terms. The
Yorkville Equity Facility Financing Agreement contains customary representations, warranties, conditions and indemnification obligations
by each party. The representations, warranties and covenants contained in the Yorkville Equity Facility Financing Agreement were
made only for purposes of the Yorkville Equity Facility 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 Equity Facility Financing Agreement will terminate automatically following the expiration of the Commitment Period.
In addition, the Yorkville Equity Facility Financing Agreement will terminate automatically if the Business Combination Agreement
is terminated. Also, NioCorp will have the right to terminate the Yorkville Convertible Debt Financing Agreement effective upon
five trading days’ prior written notice to Yorkville, as long as there are no outstanding unsettled Advances and provided that
it will be required to pay all amounts owed to Yorkville thereunder, including, without limitation, any unpaid portion of the
Cash Fee. The parties may also terminate the Yorkville Equity Facility Financing Agreement by mutual written consent. The
Convertible Debentures, the Financing Warrants, the Common Shares issuable upon conversion of the Convertible Debentures and upon
exercise of the Financing Warrants, the Common Shares issuable pursuant to an Advance and the $0.65 million worth of Common Shares
issuable to Yorkville for no additional consideration 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. Yorkville will not be permitted to offer
or sell any such securities directly or indirectly to any person whom, to Yorkville’s knowledge, is resident or located in a jurisdiction
of Canada or acquiring such Common Shares for the benefit of another person resident or located in a jurisdiction of Canada, or
on any marketplace in Canada. |
