United States securities and exchange commission logo
December 6, 2022
Mark A. Smith
President and Chief Executive Officer
NioCorp Developments Ltd.
7000 South Yosemite Street, Suite 115
Centennial, CO 80112
Re: NioCorp
Developments Ltd.
Registration
Statement on Form S-4
Filed November 7,
2022
File No. 333-268227
Dear Mark A. Smith:
We have reviewed your registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Registration Statement on Form S-4
Questions and Answers About the Transactions
Q: Why am I receiving this joint proxy statement/prospectus?, page 7
1. Please revise your
disclosure to clarify whether the approval of certain proposals are
conditioned upon the
approval of other specified proposals. See Rule 14a-4(a)(3) of
Regulation 14A.
2. Please disclose in this
section the material terms of the Exchange Agreement, or provide a
cross-reference to the
section of your filing where such information is provided. For
example, we note that
you have not referenced in this section the End Date of the
exchange right, or the
terms of the Cash Exchange Election set forth in the agreement.
Mark A. Smith
FirstName LastNameMark
NioCorp Developments Ltd.A. Smith
Comapany6,
December NameNioCorp
2022 Developments Ltd.
December
Page 2 6, 2022 Page 2
FirstName LastName
Q: Do any of the directors or officers of NioCorp or GX have interests in the
Transactions that
may differ from..., page 8
3. Please quantify here and in other relevant sections of the
registration statement the
aggregate dollar amount of what the sponsor and its affiliates have at
risk that depends on
completion of a business combination. Include the current value of
securities held, loans
extended, fees due, and out-of-pocket expenses for which the sponsor
and its affiliates are
awaiting reimbursement, if any. Provide similar disclosure for the
company's officers and
directors, if material.
4. Please highlight the risk that the sponsor will benefit from the
completion of a business
combination and may be incentivized to complete an acquisition of a
less favorable target
company or on terms less favorable to shareholders rather than
liquidate.
5. Please clarify if the sponsor and its affiliates can earn a positive
rate of return on their
investment, even if other SPAC shareholders experience a negative rate
of return in the
post-business combination company.
6. We note GX's amended and restated certificate of incorporation waived
the corporate
opportunities doctrine. Please address this potential conflict of
interest and whether it
impacted the search for an acquisition target.
7. Please expand your disclosure to discuss the sponsor s ownership
interest in the combined
company. Disclose the approximate dollar value of the interest based
on the transaction
value and recent trading prices as compared to the price paid.
8. We note that GX's sponsor, officers and directors have agreed not to
redeem or elect to
cause GX to redeem any of their founder shares in connection with the
transactions.
Please describe any consideration provided in exchange for this
agreement.
Q: Is the obligation of each of NioCorp and GX to complete the Transactions
subject to any
conditions?, page 9
9. We note you disclose that the consummation of the transactions is
subject to the
satisfaction or waiver of certain closing conditions. Please revise to
clarify each condition
that is subject to being waived and the consequences of any such
waiver.
10. We note you disclose that one of the closing conditions to the
consummation of the
transactions is receipt of approval for listing on Nasdaq of the
NioCorp common shares to
be issued in connection with the transactions and the NioCorp assumed
warrants. Please
disclose which Nasdaq market tier you intend to list on and whether
this condition to
closing could be waived without recirculation or resolicitation. Also,
please advise us as to
the Nasdaq listing standard that you intend to qualify for, the status
of your listing process
and whether it appears at this time that you meet the listing
standard.
11. Please expand your disclosure to discuss whether the minimum cash
condition of
$15,000,000 may be satisfied with funds in the Trust Account and, if
so, the maximum
Mark A. Smith
FirstName LastNameMark
NioCorp Developments Ltd.A. Smith
Comapany6,
December NameNioCorp
2022 Developments Ltd.
December
Page 3 6, 2022 Page 3
FirstName LastName
number of shares that may be redeemed without causing such cash
condition to be
unsatisfied. In that regard, we note that the letters of intent
entered into with respect to the
Yorkville financing are non-binding.
Questions and Answers About the GX Stockholder Meeting
Q. Why is GX proposing the Business Combination Proposal?, page 17
12. We note your disclosure that based on due diligence investigations
into NioCorp, GX
believes NioCorp is well positioned to be a reliable, U.S.-based
supplier that will produce
the referenced minerals in an environmentally superior manner
and with a strong focus
on sustainability. Please describe the meaning of such terms in
this context.
Summary
Ownership of the Combined Company After the Closing, page 29
13. In this section, please provide tabular disclosure that describes the
equity ownership in the
combined company by GX public stockholders, holders of GX founder
shares, NioCorp
stockholders, and others, following the completion of the Transactions
under no
redemption and maximum redemption scenarios, as well as the fifty
percent redemption
scenario. Please also provide tabular disclosure that illustrates the
voting power of such
parties in the combined company following completion of the
Transactions under each
such redemption scenario.
14. Please disclose the sponsor and its affiliates' total potential
ownership interest in the
combined company, assuming exercise and conversion of all securities.
15. Revise your disclosure to show the potential impact of redemptions on
the per share value
of the shares owned by non-redeeming shareholders by including a
sensitivity analysis
showing a range of redemption scenarios, including minimum, maximum
and interim
redemption levels.
16. It appears that the reduced underwriting fees remain constant and are
not adjusted based
on redemptions. Revise your disclosure to disclose the effective
underwriting fee on a
percentage basis for shares at each redemption level presented in your
sensitivity analysis
related to dilution.
Registration Rights and Lock-up Agreement, page 30
17. Please revise to disclose the amount of shares of common stock that
will have registration
rights following the consummation of the transactions.
Risk Factors, page 46
18. Disclose the material risks to unaffiliated investors presented by
conducting the
Transactions through a merger rather than an underwritten offering.
These risks could
include the absence of due diligence conducted by an underwriter that
would be subject to
liability for any material misstatements or omissions in a
registration statement.
Mark A. Smith
FirstName LastNameMark
NioCorp Developments Ltd.A. Smith
Comapany6,
December NameNioCorp
2022 Developments Ltd.
December
Page 4 6, 2022 Page 4
FirstName LastName
Risks Relating to GX and the Transactions
GX's Sponsor, directors, officers, advisors and their affiliates may elect to
purchase shares or
warrants from the GX Public Stockholders..., page 51
19. We note your disclosure here and elsewhere that GX s Sponsor,
directors, officers,
advisors or their affiliates may purchase GX Class A Shares or GX
Public Warrants or a
combination thereof in privately negotiated transactions or in the
open market and that
the purpose of any such purchases of shares could be to vote such
shares in favor of the
Transactions. We also note your disclosure that any such privately
negotiated purchases
may be effected at purchase prices that are in excess of the per share
pro rata portion of
the Trust Account. Please provide your analysis on how such potential
purchases would
comply with Rule 14e-5 under the Exchange Act. Refer to Tender Offer
Rules and
Schedules Compliance and Disclosure Interpretation 166.01 for
guidance.
Unaudited Pro Forma Condensed Combined Financial Information
Introduction, page 64
20. We note from disclosure that GX will be treated as the "acquired"
company for financial
reporting purposes. We also note from page 74 that immediately
following the completion
of the transactions it is expected that the current NioCorp
Shareholders and the current
GX shareholders will respectively own 42% and 58% of outstanding
NioCorp Common
Shares. Please provide us a robust analysis to support your conclusion
that NioCorp
Developments Ltd is an accounting acquirer for the financial reporting
purposes. Refer to
ASC 805-10-55-10 to 55-15.
21. Please provide tabular disclosure to summarize the number and
percentage ownership of
the combined entity common stock outstanding, held by GX public
stockholders, GX
founder shares, NioCorp stockholders, and others, following the
completion of the
transaction under both no redemption and maximum redemption scenarios.
22. We note from page 66 that you will issue 335,487,636 NioCorp Common
Shares assuming no redemptions. Please also disclose the number of
NioCorp Common
Shares to be issued assuming maximum redemptions.
23. We note from page 66 that the aggregate equity value of the
outstanding GX Class A
shares and GX Class B shares before the transactions and prior to
redemptions was
determined to be $343.5 million, based on the pro rata redemption
amount per share as of
June 30, 2022 of approximately $10 per share. Please revise to
disclose separately the
values of GX Class A shares and GX Class B shares, including number of
shares, and
amount per share.
Unaudited Pro Forma Condensed Combined Statement of Operations, page 68
24. We note from your footnote H that you included $16 million of
convertible debt with
Yorkville in the pro forma balance sheet. We also note from page 149
that each NioCorp
Convertible Debenture will bear interest at 5% per annum. Please
clarify why there were
Mark A. Smith
NioCorp Developments Ltd.
December 6, 2022
Page 5
no adjustments for interest expense associated with the Yorkville
financing and any debt
issuance costs and related amortization.
Notes to the Unaudited Pro Forma Condensed Combined Financial Information, page
69
25.
We note you provided multiple footnotes to one amount of adjustment
for pro forma
balance sheet on page 67. For each adjustment you made, please revise
to clearly show, in
a tabular format, what individual amounts were included in the
calculation leading to the
amount of adjustment in each redemption scenario. In addition, provide
sufficient
explanations for each of those individual amounts separately. Refer to
Rule 11-02(a)(8) of
Regulations S-X.
26. Please revise footnote B to clarify whether the $7,062,000 of
transaction costs to be paid
in cash includes the advisory fee of $382,382 disclosed on page 180.
In addition, revise to
present (1) the amounts of transaction costs incurred and recognized
in the historical
financial statements for the periods presented of NioCorp and GX and
(2) the amounts of
transaction costs that have been incurred but not recognized in the
historical financial
statements of NioCorp and GX. Tell us how you present in the pro forma
financial
statements for those transaction costs that have incurred but not
recognized in the
historical financial statements or are expected to be incurred.
27. Please revise your footnote D on page 70 to describe how you
determined the fair value of
$42.6 million reported as a noncontrolling interest.
28. Please revise your footnote (G) on page 71 to describe how you
determined the fair value
of $2.7 million for Earnout Shares obligation.
29. Please revise your footnote L to clearly show quantitatively how the
percentages were
calculated and how the amounts of the adjustments for net income
(loss) attributable to
noncontrolling interests were calculated.
(3) Loss Per Share, page 71
30. We note from page 72 that the numbers of shares issued to GX
shareholders are to be
335,487,636 shares under no redemptions and 3,438,748 shares under the
maximum
redemptions. Please revise to clarify whether these numbers of shares
include the shares
issued to Class B GX shareholders. To the extent these shares do not
include the shares
issued to Class B GX shareholders, revise the caption to indicate
these shares issued to
GX Shareholders are for Class A GX shareholders.
31. We note you presented 637,427 shares to be issued for payment of
transaction costs. We
FirstName LastNameMark A. Smith
also note from footnotes A, B and C that you will issue shares to cover
these transaction
Comapany
costs.NameNioCorp
Please reviseDevelopments
to disclose theLtd.
number of shares to be issued for
each of A, B, and C
and reconcile to
December 6, 2022 Page 5 637,427 shares.
FirstName LastName
Mark A. Smith
FirstName LastNameMark
NioCorp Developments Ltd.A. Smith
Comapany6,
December NameNioCorp
2022 Developments Ltd.
December
Page 6 6, 2022 Page 6
FirstName LastName
32. Please provide a footnote to show how 3,354,876 shares for payment of
deferred
underwriting fees were derived.
GX Special Meeting of Stockholders, page 92
33. With respect to the proposed changes to the GX charter reflected in GX
proposals 2 and 3,
please clarify the reasons for and the general effect of such
amendments in the context of
the Transactions. In that regard, we note that as a result of the
Transactions, GX will
become a subsidiary of NioCorp.
The Transactions
Background of the Transactions, page 106
34. Please revise your disclosure to describe in greater detail how Mr.
Baer of GX was
introduced to Mr. Mark Smith of NioCorp.
35. Please substantially revise your disclosure throughout this section to
discuss in greater
detail the substance of meetings and discussions among representatives
of GX and
NioCorp, including the material terms that were discussed, how
parties' positions differed,
and how issues were resolved. For example, please discuss how the
parties determined
the transaction structure, a valuation of $255 million for NioCorp,
the exchange ratio, and
the minimum cash condition.
36. Please expand your disclosure to discuss the negotiations between the
parties
and Yorkville leading up to the delivery of the non-binding term
sheets by and among
GX, NioCorp and Yorkville for the standby equity purchase agreement
and the unsecured
convertible debenture on August 30, 2022.
Opinion of NioCorp's Financial Advisor, page 124
37. Please quantify the fees GenCap will receive for acting as financial
advisor in connection
with the business combination and any alternative transaction, and the
fee for rendering its
opinion. See Item 4(b) of Form S-4 and Item 1015(b)(4) of Regulation
M-A.
Discounted Cash Flow & Market Multiples Analysis, page 127
38. Please disclose any additional criteria that was utilized in
identifying the companies
selected by GenCap for its Discounted Cash Flow & Market Multiples
Analysis. In
addition, discuss whether any companies meeting the selection criteria
used by GenCap in
this analysis were excluded from the analysis and, if applicable,
explain why such
companies were excluded.
Opinion of GX's Financial Advisor, page 130
39. We note you disclose that pursuant to the original engagement letter
dated September 14,
2022, Scalar agreed to provide an opinion as to the fairness of the
consideration and that
the engagement letter provided for a transaction fee equal to
$150,000. Please disclose
Mark A. Smith
NioCorp Developments Ltd.
December 6, 2022
Page 7
whether such engagement was modified or amended and whether GX has
agreed to
pay any other compensation to Scalar and discuss the nature and terms
of any such
compensation.
40. We note your disclosure that in connection with rendering its fairness
opinion, Scalar
reviewed certain financial forecasts, estimates, and other data
relating to the business and
financial prospects of NioCorp that were publicly available, including
the Corporate
Presentation. Please tell us the nature of such Corporate
Presentation, and where it is
publicly available. In addition, please tell us whether the
financial forecasts provided to
GenCap are publicly available, and the nature of such financial
forecasts.
Discounted Cash Flow Analysis, page 132
41. Please disclose if any companies meeting the selection criteria for
the Selected Pre-
Production Companies, Selected Commercial Production Companies and
Selected
Commercial Production Companies were excluded from the discounted cash
flow
valuation sensitivity analysis and, if applicable, explain why such
companies were
excluded.
Management After the Transactions, page 185
42. We note you disclose that Mark A. Smith, your chief executive officer,
also serves as the
chief executive officer of IBC Advanced Alloys Corp. Please discuss
the amount
of time he devotes to your business activities and the nature of any
material conflicts of
interest that may exist as a result of him working for your company on
a part-time basis.
Where You Can Find Additional Information, page 223
43. Please revise to incorporate by reference your definitive proxy
statement for your 2022
annual general meeting of shareholders. In that regard, we note that
your annual report on
Form 10-K for the fiscal year ended June 30, 2022 incorporates by
reference
information provided in such filing.
Exhibits
44. Please file consents from GenCap and Scalar as exhibits to your
registration statement.
Refer to Rule 436 of the Securities Act.
45. We note from the fee table provided in Exhibit 107 that it appears that
you are registering
the issuance of 83,871,907 NioCorp common shares issuable upon exchange
of the
Second Merger Class B Shares. If so, please provide your analysis as to
why you believe
FirstName LastNameMark A. Smith
you are eligible to register such issuance. In that regard, it appears
that the Second
Comapany NameNioCorp
Merger Developments
Class B Shares Ltd.privately. For guidance, refer
to Securities Act
will be offered
Sections
December Compliance
6, 2022 Page 7 and Disclosure Interpretation Question 103.04.
FirstName LastName
Mark A. Smith
FirstName LastNameMark
NioCorp Developments Ltd.A. Smith
Comapany6,
December NameNioCorp
2022 Developments Ltd.
December
Page 8 6, 2022 Page 8
FirstName LastName
General
46. With a view toward disclosure, please tell us whether GX's sponsor is,
is controlled by, or
has substantial ties with a non-U.S. person. Please also tell us
whether anyone or any
entity associated with or otherwise involved in the transaction, is,
is controlled by, or has
substantial ties with a non-U.S. person. If so, also include risk
factor disclosure that
addresses how this fact could impact your ability to complete your
initial business
combination. For instance, discuss the risk to investors that you may
not be able to
complete an initial business combination with a U.S. target company
should the
transaction be subject to review by a U.S. government entity, such as
the Committee on
Foreign Investment in the United States (CFIUS), or ultimately
prohibited. Further,
disclose that the time necessary for government review of the
transaction or a decision to
prohibit the transaction could prevent you from completing an initial
business
combination and require you to liquidate. Disclose the consequences of
liquidation to
investors, such as the losses of the investment opportunity in a
target company, any price
appreciation in the combined company, and the warrants, which would
expire worthless.
47. Please highlight the material risks to public warrant holders,
including those arising from
differences between private and public warrants. Clearly explain the
steps, if any, the
company will take to notify all shareholders, including beneficial
owners, regarding when
the warrants become eligible for redemption.
48. Please revise to disclose all possible sources and extent of dilution
that shareholders who
elect not to redeem their shares may experience in connection with the
business
combination. Provide disclosure of the impact of each significant
source of dilution,
including the amount of equity held by founders, convertible
securities, including warrants
retained by redeeming shareholders, at each of the redemption levels
detailed in your
sensitivity analysis, including any needed assumptions. In addition,
please ensure your
disclosure reflects the potential impact of the Yorkville financing
transactions and the
Lind III Agreement.
49. Quantify the value of warrants, based on recent trading prices, that
may be retained by
redeeming stockholders assuming maximum redemptions and identify any
material
resulting risks.
50. We note that Cantor was engaged as capital markets advisor to GX in
connection with the
transactions and that part of the IPO underwriting fee was deferred
conditioned on
completion of a business combination. Please quantify the aggregate
fees payable to
Cantor, both in cash and equity, as both deferred underwriting
compensation and advisory
fees that are contingent on completion of the business combination.
51. Please file a form of your preliminary proxy card as an appendix to
the proxy statement.
Refer to Note to paragraph (a)(3) of Exchange Act Rule 14a-4.
Mark A. Smith
FirstName LastNameMark
NioCorp Developments Ltd.A. Smith
Comapany6,
December NameNioCorp
2022 Developments Ltd.
December
Page 9 6, 2022 Page 9
FirstName LastName
52. Please revise to clearly state the current status of your Elk Creek
Project and discuss in
greater detail the planned phases and related costs for the project,
including testing,
permitting, construction and production.
53. Please tell us what consideration was given, if any, by GX's board to
the discount to GX's
Class A shares' trading price reflected in the consideration for the
business transaction. In
that regard, we note that the estimated implied value of merger
consideration to GX
shareholders of $8.75 is at a discount to the GX Class A share closing
price of $9.80 on
September 23, 2022.
54. Please provide an organizational chart outlining your pre- and
post-business combination
corporate structure and illustrating the relationships of the various
entities discussed
throughout the registration statement.
55. Please tell us whether the Yorkville Convertible Debt Financing
Agreement and the
Yorkville Equity Facility Financing Agreement will be filed as
exhibits to the registration
statement.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
You may contact Brain McAllister, Staff Accountant, at (202) 551-3341 or
Steve Lo,
Staff Accountant, at (202) 551-3394 if you have questions regarding comments on
the financial
statements and related matters. For questions regarding comments on engineering
matters, you
may contact John Coleman, Mining Engineer, at (202) 551-3610. Please contact
Karina Dorin,
Staff Attorney, at (202) 551-3763 or Laura Nicholson, Special Counsel, at (202)
551-3584 with
any other questions.
Sincerely,
Division of
Corporation Finance
Office of
Energy & Transportation