NioDevelopments .(NB) - 2021 Q3 - Quarterly Report

PART I — FINANCIAL INFORMATION Financial Statements The unaudited statements show a pre-revenue company with a $3.1 million net loss and substantial doubt about its going concern status Condensed Consolidated Balance Sheets Total assets grew to $19.5 million, driven by an increase in cash to $8.6 million from financing activities Condensed Consolidated Balance Sheets (in thousands of U.S. dollars) | | March 31, 2021 | June 30, 2020 | | :--- | :--- | :--- | | Assets | | | | Cash | $8,626 | $307 | | Total current assets | $8,650 | $338 | | Total assets | $19,524 | $10,997 | | Liabilities | | | | Total current liabilities | $5,743 | $8,012 | | Total liabilities | $13,835 | $8,356 | | Shareholders' Equity | | | | Total shareholder equity | $5,689 | $2,641 | | Total liabilities and equity | $19,524 | $10,997 | Condensed Consolidated Statements of Operations and Comprehensive Loss The company reported a net loss of $3.15 million for the nine-month period, a slight improvement due to a foreign exchange gain Statement of Operations Highlights (in thousands of U.S. dollars) | | Nine Months Ended March 31, 2021 | Nine Months Ended March 31, 2020 | | :--- | :--- | :--- | | Total operating expenses | $3,121 | $2,710 | | Other income | ($208) | $0 | | Foreign exchange (gain) loss | ($497) | $359 | | Interest expense | $612 | $233 | | Net loss | $3,147 | $3,343 | | Loss per common share | $0.01 | $0.01 | Condensed Consolidated Statements of Cash Flows Financing activities provided $11.9 million in net cash, resulting in a net cash increase of $8.3 million for the period Cash Flow Summary (in thousands of U.S. dollars) | | For the nine months ended March 31, 2021 | For the nine months ended March 31, 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | ($3,648) | ($2,172) | | Net cash provided by financing activities | $11,917 | $1,865 | | Change in cash and cash equivalents | $8,319 | ($309) | | Cash and cash equivalents, end of period | $8,626 | $48 | Notes to Condensed Consolidated Financial Statements Notes detail the going concern uncertainty, recent financing, PPP loan forgiveness, and key subsequent events - The company's ability to continue as a going concern is uncertain due to its lack of operating revenues and an accumulated deficit of $97.8 million[20][26][27] - On February 19, 2021, the company secured significant funding by issuing a convertible security to Lind III, receiving net proceeds of $9.65 million[33] - The company's $196,000 SBA Paycheck Protection Program (PPP) loan was fully forgiven[51][52][54] - Subsequent to the quarter end, the company purchased key land parcels for its Elk Creek Project for approximately $6.2 million and closed a private placement for C$6.2 million[73][75] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses project advancements, financing activities, and reiterates the going concern risk due to its pre-revenue status Recent Corporate Events and Elk Creek Project Update The company secured financing, purchased key land parcels for the Elk Creek Project, and initiated a review of rare earth element potential - The company secured $9.65 million in net proceeds from the Lind III Convertible Security in February 2021 and raised approximately C$6.2 million from a private placement in May 2021[95][103] - On April 23, 2021, the company closed on the purchase of key land parcels in Nebraska for its Elk Creek Project at a price of approximately $6.2 million[104] - NioCorp has launched a review to assess the economic potential of adding rare earth products to its planned output from the Elk Creek Project[106] Financial and Operating Results The net loss for the nine-month period decreased slightly to $3.1 million, primarily due to a foreign exchange gain and other income Comparison of Operating Results (in thousands of U.S. dollars) | | Nine Months Ended March 31, 2021 | Nine Months Ended March 31, 2020 | | :--- | :--- | :--- | | Total operating expenses | $3,121 | $2,710 | | Other income | ($208) | $0 | | Foreign exchange (gain) loss | ($497) | $359 | | Interest expense | $612 | $233 | | Net Loss | $3,147 | $3,343 | - The decrease in net loss for the nine-month period was primarily driven by a foreign exchange gain resulting from a decline in the U.S. dollar relative to the Canadian dollar[119] Liquidity and Capital Resources Liquidity improved with a working capital surplus of $2.9 million, but substantial doubt about its going concern status remains - As of March 31, 2021, the Company had cash of $8.6 million and a working capital surplus of $2.9 million, a significant improvement from a deficit of $7.7 million on June 30, 2020[123] - The company anticipates it has sufficient cash for basic operations for the next twelve months but will require additional financing to advance the Elk Creek Project[125] - Both the annual audit opinion and the current 10-Q disclose that substantial doubt exists about the company's ability to continue as a going concern[128] Quantitative and Qualitative Disclosures About Market Risk The company is exposed to interest rate, foreign currency exchange, and commodity price risks - The company's primary market risks include interest rate risk, foreign currency exchange risk (USD/CAD), and commodity price risk for its project minerals[141][142][143] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of the end of the reporting period - Management concluded that as of the end of the period, the company's disclosure controls and procedures were effective[144] - There were no material changes in the Company's internal control over financial reporting during the three months ended March 31, 2021[146] PART II — OTHER INFORMATION Legal Proceedings The company is not aware of any material, active, or pending legal proceedings against it - The company is not involved in any material legal proceedings[149] Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K - No changes to the risk factors from the Annual Report on Form 10-K for the fiscal year ended June 30, 2020, were reported[150] Unregistered Sales of Equity Securities and Use of Proceeds The company issued 976,921 Common Shares upon the conversion of convertible promissory notes - On March 16, 2021, the Company issued 976,921 Common Shares from the conversion of $750,000 in convertible promissory notes[151] Exhibits This section lists exhibits filed with the report, including key financing agreements and officer certifications - Key exhibits filed include the Convertible Security Funding Agreement with Lind Global Asset Management III, LLC, and certifications from the CEO and CFO[156]