NioDevelopments .(NB) - 2024 Q4 - Annual Report

Financial Performance and Liquidity - The company has a working capital deficit and does not generate any revenue, raising substantial doubt about its ability to continue as a going concern[352] - Cash and cash equivalents decreased to $2,012 thousand from $2,341 thousand year-over-year[374] - Total current assets declined to $2,928 thousand from $3,726 thousand compared to the previous year[374] - Net loss for the period improved to $(11,898) thousand from $(40,308) thousand year-over-year[376] - Total operating expenses decreased significantly to $13,757 thousand from $37,410 thousand[376] - Net cash used in operating activities was $(11,732) thousand, an improvement from $(17,295) thousand in the previous year[379] - Net cash provided by financing activities increased to $11,403 thousand from $14,637 thousand[379] - Total liabilities decreased to $17,536 thousand from $29,797 thousand year-over-year[374] - Loss per common share improved to $(0.31) from $(1.34) compared to the previous year[376] - Weighted average common shares outstanding increased to 34,320,024 from 28,705,840[376] - Total shareholders' equity improved to $1,000 thousand from a deficit of $(10,967) thousand[374] - NioCorp's total shareholders' equity (deficit) as of June 30, 2024, was $1,000, compared to $(10,967) as of June 30, 2023[380] - The company reported a net loss of $11,435 for the year ended June 30, 2024, compared to a net loss of $40,080 for the previous year[380] - NioCorp issued 4,232,592 common shares through debt conversions, raising $14,479 in 2024[380] - The company's redeemable noncontrolling interest decreased from $2,100 as of June 30, 2023, to $1,534 as of June 30, 2024[380] - NioCorp's cash and cash equivalents exceeded FDIC insurance limits by $1,406 as of June 30, 2024[389] - The company's functional currency changed from Canadian dollars to U.S. dollars on March 17, 2023, due to significant changes in economic circumstances[390] - The company currently earns no operating revenues and requires additional capital to advance the Elk Creek Project to construction and commercial operation[384] - The company had a working capital deficit of $9,036 and an accumulated deficit of $161,912 as of June 30, 2024[416] - The company had cash of $2,012 as of June 30, 2024, which is insufficient to fund normal operations or repay the April 2024 Notes for the next twelve months[416] - The company plans to obtain additional financing, expecting access to up to $59,269 in net proceeds from the Yorkville Equity Facility Financing Agreement through April 1, 2026[418] - Net loss for the year ended June 30, 2024 was $11.898 million, compared to $40.308 million in 2023[411] - Basic and diluted loss per share for 2024 was $0.31, compared to $1.34 in 2023[411] - Total potentially dilutive securities excluded from computation were 23.908 million shares in 2024[412] - The company incurred a net loss of $11,435 for the year ended June 30, 2024, compared to a net loss of $40,080 in 2023[416] Financing and Debt - The company closed a private placement of convertible promissory notes for a principal amount of $8,000,000 on April 12, 2024[358] - The fair value of the convertible promissory notes was $7,089,000 as of June 30, 2024[359] - The fair value of the warrant liability was $298,000 as of June 30, 2024[360] - The company uses a simulation model to estimate the fair value of the convertible promissory notes and embedded features[359] - The company uses a Black-Scholes option pricing model to determine the fair value of the warrants[360] - The company issued $8,000 aggregate principal amount of unsecured notes (April 2024 Notes) to Yorkville and Lind Global Fund II LP[456] - The April 2024 Notes require monthly payments of $1,400 principal plus 8.0% payment premium and accrued interest, starting June 1, 2024[458] - The April 2024 Notes can be converted into Common Shares at a fixed conversion price of $2.75 per share, up to a maximum of 3,141,817 shares[459] - The April 2024 Notes mature on December 31, 2024 and carry a 0.0% interest rate, increasing to 18.0% upon default[462] - The company recognized an opening transaction loss of $4,256 related to the April 2024 Notes[466] - The fair value of the April 2024 Notes decreased from $10,315 on April 12, 2024 to $7,089 on June 30, 2024[468] - The fair value of the April 2024 Warrants decreased from $902 on April 12, 2024 to $298 on June 30, 2024[470] - Yorkville advanced $15,360 to NioCorp in exchange for $16,000 aggregate principal amount of unsecured convertible debentures and Common Share purchase warrants exercisable for up to 1,789,267 Common Shares[437] - The Convertible Debentures have an 18-month term with a 5.0% annual interest rate, increasing to 15.0% upon default[438] - The initial fair value of the Financing Warrants was $2,704, with a subsequent mark-to-market value of $3,337, resulting in a loss of $633[449] - The net proceeds of $15,360 from the Convertible Debentures were allocated with $12,656 booked to the convertible debt liability and $503 recognized as transaction costs[451] - The Convertible Debentures have an effective interest rate of 29.9%, with the balance accreted to face value at maturity plus the conversion premium[451] - The Financing Warrants were reclassified to shareholders' equity on March 17, 2023, following the closing of the Convertible Debentures[449] - Total interest expense for 2024 is $4,489, compared to $1,962 for the year ending June 30, 2023[452] - The remaining principal balance of the Convertible Debenture as of June 30, 2024 is $550[453] - The company issued the Lind III Convertible Security with a face value of $11,700, receiving net proceeds of $9,650 after deducting a $350 commitment fee[427] - Lind received a payment of $500, which would have been reduced to $200 if the 2023 Transactions had not been consummated by April 30, 2023[431] - A debt extinguishment loss of $201 occurred due to the Lind Consent, with a minimum estimated Consent Payment of $200 included in the calculation[432] - The initial loss on debt extinguishment totaled $1,622, including a $200 minimum Consent Payment, a $201 loss on debt extinguishment, and an initial fair value of Contingent Consent Warrants at $1,221[433] - The total loss on debt extinguishment amounted to $1,922, including an additional Consent Payment of $300[433] Regulatory and Environmental Compliance - The company is subject to various federal and state regulations, including environmental, labor, and mine safety regulations, which require permits and licenses for exploration and development activities[70] - The company's Elk Creek Project is governed by federal and state laws, including the General Mining Law of 1872, and requires permits and financial assurance for reclamation[71] - The company is subject to various federal, state, and local environmental regulations, which are becoming increasingly restrictive, potentially requiring additional capital expenditures and increased operating costs[72][74] - Compliance with environmental laws such as CERCLA, RCRA, CAA, NEPA, CWA, and SDWA could result in significant liabilities, fines, and delays in project approvals[74][75][76][77][78] - The Clean Air Act (CAA) may impose limitations on production levels or require additional capital expenditures for compliance, particularly for new and existing facilities[75] - The National Environmental Policy Act (NEPA) could cause delays in permit issuance or require project changes, impacting the economic feasibility of proposed projects[76] - The Clean Water Act (CWA) regulates stormwater discharge and prohibits unauthorized discharges, with potential penalties for non-compliance[77] - The Safe Drinking Water Act (SDWA) regulates subsurface injection wells, and violations could result in fines, penalties, and remediation costs[78] - Nebraska's environmental regulations, particularly the Prevention of Significant Deterioration (PSD) permit, could impact the timeline and costs of the Elk Creek Project[79] - The Company accrued $48 as an accrued liability related to estimated environmental obligations as of June 30, 2024[406] Operational and Project Development - The company acquired net cash of approximately $2.2 million and assumed net liabilities of approximately $0.4 million after considering GXII expenses related to the 2023 Transactions[48] - The company incurred expenses of approximately $6.8 million related to the 2023 Transactions, recorded as other operating expenses[48] - The company successfully produced a 1-kilogram ingot of Al-Sc alloy at pilot-scale in October 2023, marking progress in the Al-Sc master alloy initiative[53] - The company received a Preliminary Project Letter (PPL) from EXIM on April 15, 2024, indicating initial due diligence findings and a preliminary Indicative Term Sheet for potential debt financing of up to $800 million[55] - The company completed operations at the Demonstration Plant in February 2024, achieving improved recoveries and higher purities for niobium and titanium products[60] - The company retained a mine engineering consultant in February 2024 to evaluate electrifying the mine and using Railveyor technology, indicating potential savings in upfront capital costs and operating costs[61] - The company is focused on obtaining additional funds to advance the Elk Creek Project to commercial production, including securing project financing for detailed design, development, and construction[62] - The company is evaluating the production of a higher value titanium tetrachloride product with substantially higher metallurgical recovery compared to TiO2, based on Demonstration Plant results[68] - NioCorp completed the GXII Transaction on March 17, 2023, which was accounted for as an equity raise transaction under U.S. GAAP[383] - The company's mineral property acquisition costs are capitalized when incurred, and exploration costs are expensed as incurred[395] - No impairment recorded to mineral properties as of June 30, 2024 or 2023[396] - No impairment recorded to long-lived assets as of June 30, 2024 or 2023[397][398] - The Company currently has no finance leases[398] Equity and Share Issuance - The company issued 1,753,821 post-Reverse Stock Split Common Shares in exchange for all Class A shares of GXII, including 83,770 Common Shares issued to BTIG, LLC[420] - The total Common Shares outstanding upon completion of the 2023 Transactions were 30,081,655, with Legacy NioCorp Shareholders holding 93.90% and Former GXII Class A Shareholders holding 5.83%[421] - The company issued 250,000 units in September 2023 at $4.00 per unit, raising $1,000, with each unit consisting of one Common Share and one Warrant[479] - In December 2023, the company issued 413,432 units, raising $1,290, with each unit consisting of one Common Share and one Warrant[481] - The company issued 315,000 units in June 2024 at $1.91 per unit, raising $602, with each unit consisting of one Common Share and one Warrant[483] - The company issued 314,465 Common Shares in April 2023, raising $2,000 before deducting share issuance costs of $172[484] - The company issued 100,000 Common Shares in June 2023 under the Yorkville Equity Facility Financing Agreement, raising $488[485] - The 2017 Amended Long-Term Incentive Plan limits the issuance of Common Shares to insiders to 10% of the issued and outstanding Common Shares[487] - Stock options balance increased from 1,541,500 in June 2023 to 2,495,500 in June 2024, with a weighted average exercise price of $4.78[489] - The company recognized share-based compensation expenses of $2,779 for the year ended June 30, 2024, compared to $1,794 in 2023[489] - Fair value per option granted decreased from $3.09 in 2023 to $1.71 in 2024, with a risk-free interest rate increase from 3.30% to 4.25%[490] - The company recorded a mark-to-market gain of $147 related to Canadian-denominated options reclassified as liabilities[490] - Warrants balance increased from 18,816,304 in June 2023 to 18,563,561 in June 2024, with a weighted average exercise price of $10.53[493] - Outstanding exercisable warrants include 15,666,626 with an exercise price of $11.50, expiring on March 17, 2028[494] - The company issued 9,999,959 Public Warrants and 5,666,667 Private Warrants in connection with the GXII Warrant Agreement[495] - Public Warrants can be redeemed at $0.01 per warrant if specific conditions are met, including a share price exceeding $16.10 for 20 trading days[497] - Private Warrants are exercisable for cash or on a cashless basis and are not redeemable by the company while held by the Sponsor or its members[498] - Private Warrants are classified as Level 2 instruments and measured using a Black Scholes model, with changes in fair value recognized in the consolidated statement of operations[499] Asset and Liability Management - The company's land and buildings had a net value of $837 as of June 30, 2024, compared to $839 in 2023[423] - The company's total accounts payable and accrued liabilities were $1,843 as of June 30, 2024[425] - The company's current portion of convertible debt was $7,660 as of June 30, 2024, including $7,089 from April 2024 Notes[426] - Convertible promissory notes issued in April 2024 are accounted for at fair value using a Monte Carlo simulation methodology[401] - Warrants are measured at fair value using Black Scholes or Monte Carlo modeling[402] - Earnout Shares are measured at fair value using a Monte Carlo simulation methodology[403] - 7,957,404 shares of Class B common stock of ECRC were issued and outstanding as of June 30, 2023, with 4,565,808 Vested Shares and 3,391,596 Earnout Shares[471] - 243,692 Vested Shares were exchanged for Common Shares on February 28, 2024, and 40,000 Vested Shares were exchanged on May 16, 2024[472] - Earnout Shares vest based on market share price milestones of $12.00 and $15.00 per Common Share, or upon a change in control[475] - The fair value of Earnout Shares as of June 30, 2024, was $3,817, down from $10,521 as of June 30, 2023[478] Risk Management and Market Exposure - The company maintains sufficient cash balances in Canadian dollars to fund expected near-term expenditures to mitigate foreign currency exchange risk[347] - The company is exposed to commodity price risk related to the elements associated with the Elk Creek Project[348] - The company does not currently hold any commodity derivative positions as the Elk Creek Project is not in production[349] - Forward-looking statements highlight the company's reliance on securing sufficient project financing for the Elk Creek Project and the potential impact of regulatory changes, market conditions, and operational risks[83][84][85][87][88][89] Employee and Compensation - As of June 30, 2024, the company had seven full-time employees and one contract employee, relying on consultants for specialized skills[80] - The company's compensation programs are designed to align employee incentives with performance, including competitive wages, benefits, and ethical performance considerations[81][82]