NIOCORP DEVELOPMENTS LTD (NB)

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The
following Management’s Discussion and Analysis (“MD&A”) provides information that management believes is
relevant to an assessment and understanding of the consolidated financial condition and results of operations of NioCorp and subsidiaries.
This item should be read in conjunction with our consolidated financial statements and the notes thereto included in this Annual
Report on Form 10-K.

See Item
1, “Business—Historical Development of the Business,” for a description of the 2023 Transactions.

Summary
of Consolidated Financial and Operating Performance

The
Company had no revenues from mining operations during the fiscal years presented below. Operating expenses incurred related primarily
to performing exploration and feasibility study related activities, as well as the activities necessary to support corporate and
shareholder duties.

The
net loss attributable to the Company decreased to $11.4 million for fiscal year 2024 from $40.1 million for fiscal year 2023.
This decreased net loss in fiscal year 2024 as compared to fiscal year 2023 is primarily due to the recognition of general transaction
expenses, Earnout Shares, and warrant liabilities associated with the fiscal year 2023 GXII Transaction as well as a decrease
in exploration expenditures and fiscal year 2024 non-cash gains associated with changes in Earnout Share valuations and warrant
liability valuations.

Results
of Operations

The
Company had no revenues from mining operations during the fiscal years presented below. Operating expenses incurred related primarily
to costs incurred in connection with the 2023 Transactions, as well as performing exploration and feasibility study related activities,
and the activities necessary to support corporate and shareholder duties, as detailed in the following table.

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Fiscal
Year 2024 as Compared to Fiscal Year 2023

Significant
items affecting operating expenses are noted below:

Other operating
expenses include costs incurred in connection with the 2023 Transactions, including direct transaction expenses, and the fair
value of warrant and Earnout Shares liabilities assumed, as well as costs related to investor relations, general office expenditures,
equity offering and proxy expenditures, Board-related expenditures, and other miscellaneous costs. These costs decreased in fiscal
year 2024 as compared to fiscal year 2023 primarily due to $23.8 million of costs incurred in connection with the 2023 Transactions,
which closed on March 17, 2023, as well as overall lower expenditures during fiscal year 2024 for financial services, Board stipends
and share-based compensation, and investor relation services. This decline was partially offset by the fiscal year 2024 impact
of $1.0 million of additional director and officer insurance premiums associated with our listing on Nasdaq.

Employee-related
costs increased in 2024 as compared to 2023, primarily due to an increase in the number of options issued to employees in
2024 partially offset by a lower fair value per option as well as the impact of board-authorized employee salary increases which
became effective April 1, 2023.

Exploration
expenditures decreased in fiscal year 2024 as compared to fiscal year 2023, reflecting work performed in fiscal year
2023 to complete the development of the Demonstration Plant and the subsequent operation of the Demonstration Plant to verify
process improvement efforts and advance the technical and economic analyses on the potential addition of magnetic rare earth oxides
to NioCorp’s planned product suite. In addition, 2023 costs increased due to costs related to the completion and filing
of the Technical Report Summary based on the Company’s 2022 Feasibility Study for the Elk Creek Project, which was filed
with the SEC on September 6, 2022. Demonstration Plant costs were lower in 2024 as project objectives were completed
and the Demonstration Plant operations ended in February 2024.

Professional
fees increased in fiscal year 2024 as compared to fiscal year 2023, primarily due to additional accounting fees incurred in
2024 associated with our change in auditors as well as legal costs associated with corporate funding initiatives and Form S-1
and S-3 filings.

Other
significant items impacting the change in the Company’s net loss are noted below:

Change
in fair value of Earnout Shares liability represents the change in fair value related to the Earnout Shares based on the results
of Monte Carlo financial modeling. Overall, the decline in the liability corresponds to the overall decline in our share value
during fiscal year 2024.

Change
in fair value of warrant liability represents the change in fair value related to (i) the additional Warrants (the “Contingent
Consent Warrants”) that the Company agreed to issue to Lind Global Asset Management III, LLC (“Lind”) upon certain
conditions in connection with the Waiver and Consent Agreement, dated September 25, 2022, between the Company and Lind (the “Lind
Consent”), as discussed in Note 9 to the consolidated financial statements included in Part II, Item 8 hereof, and (ii)
the change in fair value of the April 2024 Warrants, as discussed in Note 9 to the consolidated financial statements included
in Part II, Item 8 hereof, partially offset by the change in the fair value of the Private Warrants based primarily on the impacts
of a lower closing Common Share price, which increases the probability of these Contingent Consent Warrants being issued under
the Lind Consent terms.

Change
in fair value of convertible notes represents the impact of the initial allocation of fair value to the April 2024 Notes,
which are carried at fair value, as well as the change in fair value for the period ended June 30, 2024.

Loss
on debt extinguishment represents the loss incurred under Accounting Standards Codification (“ASC”) Topic 470,
Debt, related to the convertible security issued to Lind (the “Lind III 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 III Convertible Security) pursuant to the Convertible Security Funding Agreement, dated February 16, 2021, as
amended by Amendment #1 to the Convertible Security Funding Agreement, dated

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December 2, 2021, between the Company and Lind (as
amended, the “Lind III Agreement”), as discussed in Note 9 to the consolidated financial statements included in Part
II, Item 8 hereof.

Interest
expense increased in fiscal year 2024 as compared to fiscal year 2023 due to the impacts of Convertible Debenture interest
expense incurred in fiscal year 2024.

Loss
attributable to noncontrolling interest represents the portion of net loss in ECRC attributable to the Vested Shares, which
are not owned by the Company.

Liquidity
and Capital Resources

We
have no revenue generating operations from which we can internally generate funds. To date, our ongoing operations have been financed
by the sale of our equity securities by way of private placements, convertible securities issuances, the exercise of incentive
Options and Warrants, and related party loans. With respect to currently outstanding Options and Warrants, we believe that exercise
of these instruments, and cash proceeds from such exercises, will not occur unless and until the market price for our Common Shares
equals or exceeds the related exercise price of each instrument.

In
connection with the Closing of the 2023 Transactions, the Company received net cash proceeds of $8.3 million, as follows:

The
2023 Transactions delivered to NioCorp several important benefits, including a ready pathway to an up-listing to the Nasdaq, which
is expected to allow additional institutional firms to invest in the Company for the first time. Further, we believe it has given
NioCorp and the Elk Creek Project a much higher profile among institutional investors evaluating projects in the critical materials
space.

The sale of the April
2024 Notes has provided, and the Yorkville Equity Facility Financing is expected to provide, near-term and longer-term access to
capital. The ability of the Company to draw down on the Yorkville Equity Facility Financing Agreement, at its discretion, is subject
to certain limitations and the satisfaction of certain conditions. When available, the Yorkville Equity Facility Financing Agreement
provides an opportunity to actively manage the cash needs of the Company more closely. Historically, cash has generally been available
to the Company through private placements of equity for which the timing did not always coincide with the Company’s cash
needs. In the near term, the Company intends to utilize the Yorkville Equity Facility Financing Agreement to offset amounts owed
under the April 2024 Notes. The Company may also utilize the Yorkville Equity Facility Financing Agreement to potentially generate
funds at a time when they are in need. Alternatively, the Company can also utilize the Yorkville Equity Facility Financing Agreement
for opportunistic share sales.

On
July 19, 2024, the Company and Yorkville entered into a make-whole payment agreement under which Yorkville agreed to convert the
remaining principal and accrued interest of $553,767 under the Convertible Debenture into Common Shares in exchange for a $95,000
make-whole payment.

On
September 17, 2024, all the remaining outstanding Financing Warrants expired.

On September 17, 2024, the
Company’s Common Share price was below the threshold price set forth in the Lind Consent, and accordingly, the Company issued
2,816,742 Contingent Consent Warrants to Lind. Each Contingent Consent Warrant is exercisable for one Common Share at an exercise
price of $2.308 and may be exercised at any time prior to

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their expiration on September 17, 2028. The number
of Contingent Consent Warrants issued was based on $5.0 million divided by the five-day volume weighted average price of the Common
Shares on September 16, 2024.

As
of June 30, 2024, the Company had cash of $2.0 million and a working capital deficit of $9.0 million, compared to cash of $2.3
million and working capital of $0.2 million on June 30, 2023. Subsequent to June 30, 2024, the Company issued 339,250 Common
Shares under the Yorkville Equity Facility Financing Agreement in exchange for $0.6 million in gross cash proceeds. On
September 11, 2024, the Company and Mark Smith, Chief Executive Officer, President and Executive Chairman of NioCorp, entered into
a loan agreement (the “Smith Loan Agreement”), which provides for a $2.0 million non-revolving credit facility. An
initial drawdown under the Smith Loan Agreement of $33,000 was completed on September 11, 2024. NioCorp intends to use the
net proceeds from these transactions to satisfy amounts due under the April 2024 Notes and for general corporate purposes.

We
expect that the Company will operate at a loss for the foreseeable future. The Company’s current planned cash needs are
approximately $26.0 million until June 30, 2025.

In addition to outstanding
accounts payable and short-term liabilities, our average monthly planned expenditures through June 30, 2025 are expected to be
approximately $1.6 million per month, of which approximately $375,000 is for corporate overhead and estimated costs related to
securing financing necessary for advancement of the Elk Creek Project. This includes general overhead costs, satisfying outstanding
accounts payable, and repayment of the April 2024 Notes and the Smith Loan Agreement. This also includes anticipated financing
costs associated with the Elk Creek Project, including an updated mine plan in connection with the EXIM application process. The
scope of these financing costs remains under discussion with EXIM. Approximately $1.2 million per month is planned for expenditures
relating to the advancement of the Elk Creek Project by NioCorp’s majority owned subsidiary, ECRC. The Company’s ability
to continue operations and fund our current work plan is dependent on management’s ability to secure additional financing.

The
Company anticipates that it does not have sufficient cash on hand to continue to fund basic operations for the next twelve months,
and additional funds totaling $25.0 million to $26.0 million, net of funds raised from advances under the Yorkville Equity Facility
Financing Agreement and borrowings under the Smith Loan Agreement, are likely to be necessary to continue advancing the project
in the areas of financing, permitting, and detailed engineering. While the Yorkville Equity Facility Financing Agreement may provide
the Company with access to additional capital, the Company will likely require additional capital to meet its cash needs. Management
is actively pursuing such additional sources of debt and equity financing, and while it has been successful in doing so in the
past, there can be no assurance it will be able to do so in the future.

Elk
Creek Property and lease commitments are $15,000 through June 30, 2025. To maintain our currently held properties and fund our
currently anticipated general and administrative costs and planned exploration and development activities at the Elk Creek Project
for the fiscal year ending June 30, 2025, the Company will likely require additional financing during the current fiscal year.
Should such financing not be available in that timeframe, we will be required to reduce our activities and will not be able to
carry out all our presently planned activities at the Elk Creek Project.

On
June 6, 2023, the Company announced that it had submitted an application to EXIM to obtain EXIM Financing to fund the project
costs for the Elk Creek Project, under EXIM’s “Make More in America” initiative. The Company was informed that
its application received approval by the first of three reviews by the EXIM Transaction Review Committee on October 2, 2023. EXIM
deployed additional resources to the processing of the Company’s application during the quarter ended December 31, 2023
and has retained financial and legal consultants to support EXIM’s due diligence on the Elk Creek Project. On April 15,
2024, the Company received the PPL from EXIM. The PPL is a summary of EXIM’s initial due diligence findings and also includes
a preliminary Indicative Term Sheet. The PPL identified additional project activities to be undertaken by the Company in conjunction
with the EXIM evaluation process. These include an updated mine plan and updated Elk Creek Project capital costs on a final or
close-to-final basis reflecting updated process flows. Management is working with EXIM to continue to advance the project through
the next stages of EXIM’s due diligence and loan application process. We are currently unable to estimate how long the application
process may take, and there can be no assurances that we will be able to successfully negotiate a final commitment of debt financing
from EXIM.

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Except for potential
funding from advanced under the Yorkville Equity Facility Financing and potential funding under the Smith Loan Agreement, each
as discussed above, and the potential exercise of Options and Warrants, we currently have no further funding commitments or arrangements
for additional financing at this time, and there is no assurance that we will be able to obtain any such additional financing on
acceptable terms, if at all. Pursuant to the Exchange Agreement, NioCorp is restricted from issuing equity or equity-linked securities
(other than Common Shares) or any preferred equity or non-voting equity if such issuance would adversely impact the rights of the
holders of the shares of Class B common stock of ECRC, without the consent of the holders of a majority of the shares of Class
B common stock of ECRC. The April 2024 Purchase Agreement also contains certain covenants that, among other things, limit NioCorp’s
ability to use the proceeds from the April 2024 Purchase Agreement to pay related party debt or to enter into any variable rate
transaction, including issuances of equity or debt securities that are convertible into Common Shares at variable rates and any
equity line of credit, ATM agreement or other continuous offering of Common Shares, other than with Yorkville, subject to certain
exceptions. Notwithstanding the restrictions set forth in the Exchange Agreement and the April 2024 Purchase Agreement, there is
significant uncertainty that we would be able to secure any additional financing in the current equity or debt markets. The quantity
of funds to be raised and the terms of any proposed equity or debt financing that may be undertaken will be negotiated by management
as opportunities to raise funds arise. Management may pursue funding sources of both debt and equity financing, including but not
limited to the issuance of equity securities in the form of Common Shares, Warrants, subscription receipts, or any combination
thereof in units of the Company pursuant to private placements to accredited investors or pursuant to public offerings in the form
of underwritten/brokered offerings, registered direct offerings, or other forms of equity financing and public or private issuances
of debt securities, including secured and unsecured convertible debt instruments or secured debt project financing. Management
does not currently know the terms pursuant to which such financings may be completed in the future, but any such financings will
be negotiated at arm’s-length. Future financings involving the issuance of equity securities or derivatives thereof will
likely be completed at a discount to the then-current market price of the Company’s securities and will likely be dilutive
to current shareholders. In addition, we could raise funds through the sale of interests in our mineral properties, although current
market conditions and other recent worldwide events have substantially reduced the number of potential buyers/acquirers of any
such interests. However, we cannot provide any assurances that we will be able to be successful in raising such funds.

Based on the conditions
described within, management has concluded and the audit opinion and notes that accompany our consolidated financial statements
for the year ended June 30, 2024, disclose that substantial doubt exists as to our ability to continue as a going concern. The
consolidated financial statements included in this Annual Report on Form 10-K have been prepared under the assumption that we will
continue as a going concern. As defined under S-K 1300, we are a development stage issuer, and we have incurred losses since our
inception. We may not have sufficient cash, including option and warrant exercises subsequent to June 30, 2024, to fund normal
operations and meet debt obligations for the next twelve months without deferring payment on certain current liabilities and raising
additional funds. Uncertainty in capital markets, supply chain disruptions, increased interest rates and inflation, and the potential
for geographic recessions have contributed to general global economic uncertainty. During fiscal year 2024, these events continued
to create uncertainty with respect to overall project funding and timelines. We believe that the going concern uncertainty cannot
be alleviated with confidence until the Company has entered into a business climate where funding of its planned ongoing operating
activities is secured. Therefore, these factors raise substantial doubt as to our ability to continue as a going concern.

We
have no exposure to any asset-backed commercial paper. Other than cash held by our subsidiaries for their immediate operating
needs in Colorado and Nebraska, all of our cash reserves are on deposit with major U.S. and Canadian chartered banks. We do not
believe that the credit, liquidity, or market risks with respect thereto have increased as a result of the current market conditions.
However, in order to achieve greater security for the preservation of our capital, we have, of necessity, been required to accept
lower rates of interest, which has also lowered our potential interest income.

Operating
Activities

During the year ended
June 30, 2024, the Company’s operating activities consumed $11.7 million of cash (2023: $17.3 million). Overall, operational
outflows during fiscal year 2024 decreased from the corresponding period of 2023 due to fiscal year 2023 cash expenses related
to the 2023 Transactions and a decrease in fiscal year 2024 exploration-

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related spending at the Elk Creek Project. Going forward,
the Company’s working capital requirements are expected to increase substantially in connection with the development of the
Elk Creek Project.

Investing
Activities

The
Company had minimal investing activities during the years ended June 30, 2024 and 2023, respectively.

Financing
Activities

Net
cash provided by financing activities was $11.4 million in fiscal year 2024 (2023: $14.6 million). This decrease in financing
inflows primarily reflects the timing of cash inflows from the financing transactions disclosed below.

2024
inflows reflect the gross receipts of $1.0 million from the September 2023 Private Placement (as defined below), $1.3 million
from the December 2023 Private Placement (as defined below), $0.6 million from the June 2024 Private Placement (as defined below)
and $3.3 million from Common Share issuances under the Yorkville Equity Facility Financing Agreement, as well as $6.5 million
of net proceeds from the issuance of the April 2024 Notes.

The
following is a discussion of significant financing transactions since the beginning of fiscal year 2024:

The
Company also issued to the April 2024 Purchasers, in proportion to the aggregate principal amount of April 2024 Notes issued to
each April 2024 Purchaser, Warrants (the “April 2024 Warrants”) to purchase up to 615,385 Common Shares (the “April
2024 Warrants Shares”), which are equal to 25% of the aggregate principal amount of April 2024 Notes issued to the April
2024 Purchasers divided by the exercise price of $3.25, subject to any adjustment to give effect to any stock dividend, stock
split or recapitalization.

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Pursuant
to the April 2024 Purchase Agreement, the April 2024 Purchasers advanced an aggregate of $6.935 million to the Company in consideration
of the issuance by the Company to the April 2024 Purchasers of $8.0 million aggregate principal amount of the April 2024 Notes
and April 2024 Warrants.

Proceeds
from the April 2024 Purchase Agreement were used for general working capital purposes, including for accounts payable, other payables
and operating expenses, and to satisfy the fees and expenses incurred in connection with the April 2024 Purchase Agreement.

Subject
to certain limitations contained within the April 2024 Notes, holders of the April 2024 Notes will be entitled to convert the
principal amount of, accrued and unpaid interest, if any, and any Payment Premium that has become due and payable on each April
2024 Note, from time to time over their term, into a number of Common Shares equal to the quotient of the amount being converted
divided by a fixed conversion price of $2.75 per Common Share up to a maximum of 3,141,817 Common Shares (together with the April
2024 Warrant Shares, the “April 2024 Underlying Shares”).

The
April 2024 Notes are the unsecured obligations of the Company and will mature on December 31, 2024. The April 2024 Notes incur
a simple interest rate obligation of 0.0% per annum (which will increase to 18.0% per annum upon the occurrence of an event of
default). The outstanding principal amount of, accrued and unpaid interest, if any, on, and the Payment Premium, if any, on the
April 2024 Notes must be paid by NioCorp in cash when the same becomes due and payable under the terms of the April 2024 Notes
at their stated maturity, upon their redemption or otherwise.

The
April 2024 Purchase Agreement also contains certain covenants that, among other things, limit NioCorp’s ability to use the
proceeds from the sale of the April 2024 Notes and the exercise of the April 2024 Warrants to repay related party debt or to enter
into any variable rate transaction other than with Yorkville, subject to certain exceptions, and to distribute proceeds from the
sale of the April 2024 Notes and the exercise of the April 2024 Warrants to subsidiaries other than ECRC and 0896800 B.C. Ltd.
(together with ECRC, the “Guarantors”), upon the entry by the Guarantors into a global guaranty agreement, dated as
of April 11, 2024, among the Guarantors in favor of the Purchasers (the “Guaranty Agreement”). Pursuant to the Guaranty
Agreement, the Guarantors guaranteed the full, prompt and unconditional payment when due (whether at maturity, by acceleration
or otherwise), and the performance of all liabilities, agreements and other obligations of NioCorp to the April 2024 Purchasers
contained in the April 2024 Purchase Agreement, the April 2024 Notes, and the April 2024 Warrants, to the extent such liabilities,
agreements and obligations are payable in cash.

On September
4, 2024, NioCorp entered into (i) a consent and waiver (the “Yorkville Consent”) to the April 2024 Note issued and
sold to Yorkville pursuant to the April 2024 Purchase Agreement and (ii) a consent and waiver (together with the Yorkville Consent,
the “Consents”) to the April 2024 Note issued and sold to Lind Global Fund II LP pursuant to the April 2024 Purchase
Agreement. The Consents, among other things, reduced the amounts due to the April 2024 Purchasers on September 1, 2024 by an aggregate
of $1.2 million to an aggregate of $0.3 million, increased the amounts due to the April 2024 Purchasers on December 1, 2024 by
an aggregate of $1.2 million, and prospectively waived any term of the April 2024 Notes that would otherwise be triggered upon
a failure of the Company to pay to the April 2024 Purchasers the remainder of the amount due on September 1, 2024. Except as modified
by the Consents, the terms of the April 2024 Notes as previously disclosed are unchanged.

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Cash
Flow Considerations

The
Company has historically relied upon debt and equity financings to finance its activities. Subject to the restrictions set forth
in the Exchange Agreement and the April 2024 Purchase Agreement, the Company may pursue additional debt and/or equity financing
in the medium term; however, there can be no assurance the Company will be able to obtain any required financing in the future
on acceptable terms.

The
Company has limited financial resources compared to its proposed expenditures, no source of operating income, and no assurance
that additional funding will be available to it for current or future projects, although the Company has been successful in the
past in financing its activities through the sale of equity securities.

The
ability of the Company to arrange additional financing in the future will depend, in part, on the prevailing capital market conditions,
and its success in developing the Elk Creek Project. Any quoted market for the Common Shares may be subject to market trends generally,
notwithstanding any potential success of the Company in creating revenue, cash flows, or earnings, and any depression of the trading
price of the Common Shares could impact its ability to obtain equity financing on acceptable terms.

Historically,
the Company has used net proceeds from issuances of Common Shares to provide sufficient funds to meet its near-term exploration
and development plans and other contractual obligations when due. However, development and construction of the Elk Creek Project
will require substantial additional capital resources. This includes near-term funding and, ultimately, funding for Elk Creek
Project construction and other costs. See “Liquidity and Capital Resources” above, for the Company’s
discussion of arrangements related to possible future financings.

Debt
Covenants

The
April 2024 Notes 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 April 2024 Notes 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 April 2024 Notes to be due and
payable immediately. The April 2024 Purchase Agreement also contains certain covenants that, among other things, limit NioCorp’s
ability to use the proceeds from the April 2024 Purchase Agreement to repay related party debt or to enter into any variable rate
transaction other than with Yorkville, subject to certain exceptions. The Company was in compliance with these covenants as of
June 30, 2024.

Environmental

Our
mining and exploration activities are subject to various federal and state laws and regulations governing the protection of the
environment. We have made, and expect to make in the future, expenditures to comply with such laws and regulations, but cannot
predict the full amount of such future expenditures. As of June 30, 2024 and 2023, we had accrued $48,000 and $48,000, respectively,
related to estimated environmental obligations.

Forward-Looking
Statements

The
foregoing discussion and analysis, as well as certain information contained elsewhere in this Annual Report on Form 10-K, contain
“forward-looking statements” within the meaning of Section 27A of the Securities Act
and Section 21E of the Exchange Act, and are intended to be covered by the safe harbor created thereby. See the discussion
in “Forward-Looking Statements” in Item 1., “Business.”

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Accounting
Developments

For
a discussion of Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements, see Note 3 to the
consolidated financial statements included in this Annual Report on Form 10-K.

Critical
Accounting Estimates and Recent Accounting Pronouncements

Our
significant accounting policies are described in Note 3 to the Consolidated Financial Statements included in this Annual
Report on Form 10-K. As described in Note 3, we are required to make estimates and assumptions that affect the reported amounts
and related disclosures of assets, liabilities, revenue, and expenses. Our estimates are based on our experience and our interpretation
of economic, political, regulatory, and other factors that affect our business prospects. Many of the inputs into our estimation
process are subjective and are subject to uncertainty over time and therefore, actual results may differ significantly from our
estimates. Note 3 also discloses recent accounting pronouncements applicable to the Company.

We believe that our
most critical accounting estimates are related to the carrying value of our long term assets; accounting for income taxes and the
valuation of deferred tax assets; and the valuation of liabilities associated with warrants, convertible debt carried at fair value,
and Earnout Shares, as they require us to make assumptions that are highly uncertain at the time the accounting estimates are made
and changes in them are reasonably likely to occur from period to period. Management has discussed the development and selection
of these critical accounting estimates with the Audit Committee of our Board (the “Audit Committee”), and the Audit
Committee has reviewed the disclosures presented below. In addition, there are other items within our financial statements that
require estimation, but are not deemed to be critical. However, changes in estimates used in these and other items could have a
material impact on our consolidated financial statements.

Carrying
Value of Long-Lived Assets

The
recoverability of the carrying values of mineral properties is dependent upon economic reserves being discovered or developed
on the properties, permitting, financing, start-up, and commercial production from, or the sale/lease of, or other strategic transactions
related to these properties. Development and/or start-up of a project will depend on, among other things, management’s ability
to raise sufficient capital for these purposes. We assess the carrying cost of our mineral properties for impairment whenever
information or circumstances indicate the potential for impairment. Key inputs include events and circumstances such as our inability
to obtain all the necessary permits, changes in the legal status of our mineral properties, government actions, the results of
exploration activities and technical evaluations and changes in economic conditions, including the price of commodities or input
prices. Many of these inputs are subjective and are subject to uncertainty over time. Such evaluations compare estimated future
net cash flows with our carrying costs and future obligations on an undiscounted basis. If it is determined that the estimated
future undiscounted cash flows are less than the carrying value of the property, an impairment loss will be recorded, measured
by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Where estimates of future net cash
flows are not determinable and where other conditions indicate the potential for impairment, management uses available market
information and/or third-party valuation experts to assess if the carrying value can be recovered and to estimate fair value.

We
review and evaluate our long-lived assets, other than mineral properties, for impairment when events or changes in circumstances
indicate that the related carrying amounts may not be recoverable. An impairment loss is measured and recorded based on the estimated
fair value of the long-lived assets being tested for impairment and their carrying amounts.

Income
Taxes

We
have assets, hold interests, and conduct activities in the U.S. and Canada and are subject to their tax regimes. Tax laws are
complex and continue to evolve. While we have a history of losses, our assumptions made in tax returns are subject to review and
interpretation by taxing authorities and could be modified. Management judgment
is required in determining our provision for income taxes, our deferred tax assets and liabilities, and any valuation allowance
recorded against our deferred tax assets. We consider factors such as the cumulative income or loss in recent years; reversal
of deferred tax liabilities; projected future taxable income exclusive of temporary differences;

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the character of the income tax
asset, including income tax positions; tax planning strategies and the period over which we expect the deferred tax assets to
be recovered in the determination of the valuation allowance. In the event that actual results differ from these estimates or
we adjust our estimates in the future, we may need to adjust our valuation allowance, which could materially impact our financial
position and results of operations.

Financial
Instruments Carried at Fair Value

The
fair values of our Earnout Shares, Private Warrants, Contingent Consent Warrants, and convertible debt carried at fair value were
determined using various significant unobservable inputs, including a discount rate and our best estimate of expected volatility
and expected holding periods. Changes in the estimated fair values of these liabilities may have material impacts on our results
of operations in any given period, as any increases in these liabilities have a corresponding negative impact on our U.S. GAAP
results of operations. See Notes 9, 10, and 11c to our consolidated financial statements included in this Annual Report on Form
10-K for additional details.

Other

The
Company has one class of shares, being Common Shares. A summary of outstanding shares, share options, warrants, and convertible
debt option as of September 20, 2024, is set out below, on a fully diluted basis.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The
following Management’s Discussion and Analysis (“MD&A”) provides information that management believes is
relevant to an assessment and understanding of the consolidated financial condition and results of operations of NioCorp and subsidiaries.
This item should be read in conjunction with our consolidated financial statements and the notes thereto included in this Annual
Report on Form 10-K.

See
Item 1, “Business – Recent Corporate Events,” for a description of the Transactions.

Summary
of Consolidated Financial and Operating Performance

The
Company had no revenues from mining operations during the fiscal years presented below. Operating expenses incurred related primarily
to performing exploration and feasibility study related activities, as well as the activities necessary to support corporate and
shareholder duties.

The net loss attributable
to the Company increased to $40.1 million for fiscal year 2023 from $10.9 million for fiscal year 2022. This increased net loss
in fiscal year 2023 as compared to fiscal year 2022 is primarily due to the recognition of Earnout Shares and warrant liabilities
associated with the GXII Transaction as well as an increase in legal and other professional fees.

The net loss attributable to the Company increased to $10.9 million for fiscal year 2022 from $4.8 million
for fiscal year 2021. This increased net loss in fiscal year 2022 as compared to fiscal year 2021 is primarily due to increased
exploration expenditures associated with process development costs and rare earth review costs, as well increased non-cash costs
of our fiscal year 2022 Option grants, which were fully vested and expensed on the grant dates, and increased loss on partial debt
extinguishment from debt conversions reported as interest expense.

Results
of Operations

The
Company had no revenues from mining operations during the fiscal years presented below. Operating expenses incurred related primarily
to costs incurred in connection with the Transactions, as well as performing exploration and feasibility study related activities,
and the activities necessary to support corporate and shareholder duties, as detailed in the following table.

47

Fiscal
Year 2023 as Compared to Fiscal Year 2022

Significant
items affecting operating expenses are noted below:

Other
operating expenses include costs incurred in connection with the Transactions, including direct transaction expenses, and
the fair value of warrant and Earnout Shares liabilities assumed, as well as costs related to investor relations, general office
expenditures, equity offering and proxy expenditures, board-related expenditures, and other miscellaneous costs. These costs increased
in fiscal year 2023 as compared to fiscal year 2022 primarily due to the costs incurred in connection with the Transactions, which
closed on March 17, 2023. A summary of these costs is presented below:

In
addition, other operating expenses increased due to increased directors and officers insurance premiums associated with our US
stock exchange listing, as well as increased financial and investor relation services performed during 2023.

Exploration
expenditures increased in fiscal year 2023 as compared to fiscal year 2022, reflecting work performed in fiscal year 2023
to complete the development of the Demonstration Plant and the subsequent operation of the Demonstration Plant to verify process
improvement efforts and advance the technical and economic analyses on the potential addition of magnetic rare earth oxides to
NioCorp’s planned product suite. In addition, 2023 costs increased due to costs related to the completion and filing of
the Technical Report Summary

48

based on the Company’s 2022 Feasibility Study for the Elk Creek Project, which was filed with
the SEC on September 6, 2022.

Professional
fees increased in fiscal year 2023 as compared to fiscal year 2022, primarily due to additional accounting
and legal services related to our March 31, 2023 Form 10-Q SEC filings, as well as legal costs associated with corporate funding
initiatives.

Employee
related costs for fiscal year 2023 increased as compared to fiscal year 2022 primarily due to the impact of discretionary
bonus payouts totaling $0.2 million, partially offset by the impact of lower employee headcount at the end of fiscal year 2023
as compared to fiscal year 2022.

Other
significant items impacting the change in the Company’s net loss are noted below:

Change
in fair value of Earnout Shares liability represents the change in fair value related to the Earnout Shares between the Closing Date and the end
of fiscal year 2023, based on the results of Monte Carlo financial modeling.

Change
in fair value of warrant liability represents the change in fair value related to the additional Warrants (the “Contingent
Consent Warrants”) that the Company agreed to issue to Lind Global Asset Management III, LLC (“Lind”) upon certain
conditions in connection with the Waiver and Consent Agreement, dated September 25, 2022, between the Company and Lind (the “Lind
Consent”), as discussed in Note 9 to the consolidated financial statements included in Part II, Item 8 hereof, as well as
the change in the fair value of the Private Warrants based primarily on the impacts of a lower closing Common Share price, which
increases the probability of these Contingent Consent Warrants being issued under the Lind Consent terms.

Loss
on debt extinguishment represents the loss incurred under Accounting Standards Codification (“ASC”) Topic 470,
Debt, related to the convertible security issued to Lind (the “Lind III 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 III
Convertible Security) pursuant to the Convertible Security Funding Agreement, dated February 16, 2021, as amended by Amendment
#1 to the Convertible Security Funding Agreement, dated December 2, 2021, between the Company and Lind (as amended, the “Lind
III Agreement”), as discussed in Note 9 to the consolidated financial statements included in Part II, Item 8 hereof.

Interest
expense decreased in fiscal year 2023 as compared to fiscal year 2022 due to the impacts of conversions on the outstanding
balance of the Lind III Convertible Security during fiscal year 2022, as well as the impact of debt extinguishment accounting
as discussed in Note 9 to the consolidated financial statements included in Part II, Item 8 hereof, partially offset by Convertible
Debenture interest expense incurred in fiscal year 2023.

Loss
attributable to noncontrolling interest represents the portion of net loss in ECRC attributable to the Vested Shares, which
are not owned by the Company.

Fiscal
Year 2022 as Compared to Fiscal Year 2021

Significant
items affecting operating expenses are noted below:

Employee
related costs for fiscal year 2022 increased as compared to fiscal year 2021 primarily due to increased share-based compensation
costs which primarily reflected the impact of increased Common Share values on the fair value calculations in the Black-Scholes
model, as well as the number of Options granted.

Professional
fees increased in fiscal year 2022 as compared to fiscal year 2021, primarily due to additional legal services
related to SEC filings, including our shelf registration statement on Form S-3 filed in November 2021.

49

Exploration
expenditures increased in fiscal year 2022 as compared to fiscal year 2021 reflecting work performed in fiscal year 2022 to
advance the development of a demonstration-scale test plant to verify process improvement efforts as well as to potentially incorporate
REEs into our planned production. Fiscal year 2021 expenditures primarily related to the ongoing personnel costs, as well as ongoing
engineering and metallurgical projects and project advancement activities.

Other
operating expenses include investor relations, general office expenditures, equity offering and proxy expenditures, board-related
expenditures, and other miscellaneous costs. These costs increased in fiscal year 2022 as compared to fiscal year 2021 primarily
due to increased financial advisory fees and investor relations fees associated with our ongoing financing efforts. In addition,
share-based compensation for directors and other advisors increased in fiscal year 2022 as compared to fiscal year 2021 due to
increased share-based compensation costs, which primarily reflected the impact of increased Common Share values in the Black Scholes
model. Options issued in both periods were fully vested upon issuance and expensed on the grant date.

Other
significant items impacting the change in the Company’s net loss are noted below:

Other
income for fiscal year 2021 represents the one-time forgiveness of the Company’s U.S. Small Business Administration
Loan, which occurred on November 18, 2020.

Loss
on extinguishment for fiscal year 2021 represents the one-time loss incurred in connection with the December 18, 2020, conversion
of a convertible note in the principal amount of approximately $1.9 million issued by the Company to Nordmin pursuant to a convertible
note and warrant subscription agreement, dated as of December 18, 2020, between NioCorp and Nordmin (the “Nordmin Note”).

Foreign
exchange (gain) loss is primarily due to changes in the U.S. dollar against the Canadian dollar rate as applied to U.S. dollar-denominated
debt instruments, which are carried on the Canadian parent company books, and the fiscal year 2022 loss reflected the impacts
of a strengthened U.S. dollar to Canadian dollar, whereas the fiscal year 2021 gain primarily reflects the impact of a weakened
U.S. dollar.

Interest
expense increased in fiscal year 2022 as compared to fiscal year 2021 primarily due to the accretion of the Nordmin Note,
which was issued in December 2020, as well as accretion of the Lind Convertible Security, which was issued in February 2021.

Liquidity
and Capital Resources

We
have no revenue generating operations from which we can internally generate funds. To date, our ongoing operations have been financed
by the sale of our equity securities by way of private placements, convertible securities issuances, the exercise of incentive
Options and Warrants, and related party loans. With respect to currently outstanding Options and Warrants, we believe that exercise
of these instruments, and cash proceeds from such exercises, will not occur unless and until the market price for our Common Shares
equals or exceeds the related exercise price of each instrument.

In
connection with the Closing of the Transactions, the Company received net cash proceeds of $8.3 million, as follows:

50

The
Transactions delivered to NioCorp several important benefits, including a ready pathway to an up-listing to the Nasdaq, which
is expected to allow additional institutional firms to invest in the Company for the first time. Further, we believe it has given
NioCorp and the Elk Creek Project a much higher profile among institutional investors evaluating projects in the critical materials
space.

The
Yorkville Convertible Debt Financing has provided, and the Yorkville Equity Facility Financing is expected to provide, near-term
and longer-term access to capital. The ability of the Company to draw down on the Yorkville Equity Facility Financing Agreement,
at its discretion, is subject to certain limitations and the satisfaction of certain conditions. When available, the Yorkville
Equity Facility Financing Agreement provides an opportunity to actively manage the cash needs of the Company more closely. Historically,
cash has generally been available to the Company through private placements of equity for which the timing did not always coincide
with the Company’s cash needs. The Company may utilize the Yorkville Equity Facility Financing Agreement to potentially
generate funds at a time when they are in need. Alternatively, the Company can also utilize the Yorkville Equity Facility Financing
Agreement for opportunistic share sales.

As
of June 30, 2023, the Company had cash of $2.3 million and working capital of $0.2 million, compared to cash of $5.3 million and
working capital of $0.6 million on June 30, 2022. On September 1, 2023, the Company closed a non-brokered private placement (the
“September 2023 Private Placement”) of units of the Company (the “September 2023 Units”). A total of 250,000
September 2023 Units were issued at a price per September 2023 Unit of $4.00, for total gross proceeds to the Company of $1.0 million. Each September
2023 Unit consists of one Common Share and one Common Share purchase warrant (“September 2023 Warrant”). Each September
2023 Warrant entitles the holder to acquire one Common Share at a price of $4.60 at any time prior to September 1, 2025. In addition,
On September 12 and September 15, 2023, the Company issued 70,000 and 75,000 Common Shares, respectively, under the Yorkville
Equity Facility Financing Agreement in exchange for $0.5 million in gross cash proceeds. NioCorp intends to use the net proceeds
from these September financing transactions for working capital and general corporate purposes, including to advance its efforts
to launch construction of the Elk Creek Project and move it to commercial operation.

We
expect that the Company will operate at a loss for the foreseeable future. The Company’s current planned cash needs are
approximately $11.8 million until June 30, 2024.

In
addition to outstanding accounts payable and short-term liabilities, our average monthly planned expenditures through June 30,
2024 are expected to be approximately $685,000 per month where approximately $390,000 is for corporate overhead and estimated
costs related to securing financing necessary for advancement of the Elk Creek Project. Approximately $295,000 per month is planned
for expenditures relating to the advancement of the Elk Creek Project by NioCorp’s majority owned subsidiary, ECRC. The
Company’s ability to continue operations and fund our current work plan is dependent on management’s ability to secure
additional financing.

The
Company anticipates that it does not have sufficient cash on hand to continue to fund basic operations for the next twelve months,
and additional funds totaling $8.0 million to $9.0 million, net of funds raised from the September financing transactions discussed
above, are likely to be necessary to continue advancing the project in the areas of financing, permitting, and detailed engineering.
While the Yorkville Equity Facility Financing Agreement may provide the Company with access to additional capital, the Company
may require additional capital to meet its cash need. Management is actively pursuing such additional sources of debt and equity
financing, and while it has been successful in doing so in the past, there can be no assurance it will be able to do so in the
future.

Elk
Creek property and lease commitments are $20,000 through June 30, 2024. To maintain our currently held properties and fund our
currently anticipated general and administrative costs and planned exploration and development activities at the Elk Creek Project
for the fiscal year ending June 30, 2024, the Company will likely require additional financing during the current fiscal year.
Should such financing not be available in that timeframe, we will be required to reduce our activities and will not be able to
carry out all our presently planned activities at the Elk Creek Project.

On
June 6, 2023, the Company announced that it had submitted an application to the Export-Import Bank of the United States (“EXIM”)
for debt financing (the “EXIM Financing”) to fund the project costs for the Elk Creek Project, under EXIM’s
“Make More in America” initiative. The EXIM Financing is subject to, among other matters, the

51

satisfactory completion
of due diligence, the negotiation and settlement of final terms, and the negotiation of definitive documentation. There can be
no assurance that the EXIM Financing will be completed on the terms described herein or at all.

Except
for potential funding under the Yorkville Equity Facility Financing, discussed above, and the potential exercise of Options and
Warrants, we currently have no further funding commitments or arrangements for additional financing at this time, and there is
no assurance that we will be able to obtain any such additional financing on acceptable terms, if at all. Pursuant to the Exchange
Agreement, NioCorp is restricted from issuing equity or equity-linked securities (other than Common Shares) or any preferred equity
or non-voting equity if such issuance would adversely impact the rights of the holders of the shares of Class B common stock of
ECRC, without the consent of the holders of a majority of the shares of Class B common stock of ECRC. 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, including
issuances of equity or debt securities that are convertible into Common Shares at variable rates and any equity line of credit,
ATM agreement or other continuous offering of Common Shares, other than with Yorkville, subject to certain exceptions. Notwithstanding
the restrictions set forth in the Exchange Agreement and the Yorkville Convertible Debt Financing Agreement, there is significant
uncertainty that we would be able to secure any additional financing in the current equity or debt markets. The quantity of funds
to be raised and the terms of any proposed equity or debt financing that may be undertaken will be negotiated by management as
opportunities to raise funds arise. Management may to pursue funding sources of both debt and equity financing, including but
not limited to the issuance of equity securities in the form of Common Shares, Warrants, subscription receipts, or any combination
thereof in units of the Company pursuant to private placements to accredited investors or pursuant to public offerings in the
form of underwritten/brokered offerings, registered direct offerings, or other forms of equity financing and public or private
issuances of debt securities including secured and unsecured convertible debt instruments or secured debt project financing. Management
does not currently know the terms pursuant to which such financings may be completed in the future, but any such financings will
be negotiated at arm’s-length. Future financings involving the issuance of equity securities or derivatives thereof will
likely be completed at a discount to the then-current market price of the Company’s securities and will likely be dilutive
to current shareholders. In addition, we could raise funds through the sale of interests in our mineral properties, although current
market conditions and other recent worldwide events have substantially reduced the number of potential buyers/acquirers of any
such interests. However, we cannot provide any assurances that we will be able to be successful in raising such funds.

Based
on the conditions described within, management has concluded and the audit opinion and notes that accompany our consolidated financial statements
for the year ended June 30, 2023, disclose that substantial doubt exists as to our ability to continue in business. The consolidated financial
statements included in this Annual Report on Form 10-K have been prepared under the assumption that we will continue as a going
concern. As defined under S-K 1300, we are a development stage issuer, and we have incurred losses since our inception. We may
not have sufficient cash, including option and warrant exercises subsequent to June 30, 2023, to fund normal operations and meet
debt obligations for the next twelve months without deferring payment on certain current liabilities and raising additional funds.
Recent worldwide events have created general global economic uncertainty as well as uncertainty in capital markets, supply chain
disruptions, increased interest rates and inflation, and the potential for geographic recessions. During fiscal year 2023, these
events continued to create uncertainty with respect to overall project funding and timelines. We believe that the going concern
uncertainty cannot be alleviated with confidence until the Company has entered into a business climate where funding of its planned
ongoing operating activities is secured. Therefore, these factors raise substantial doubt as to our ability to continue as a going
concern.

We
have no exposure to any asset-backed commercial paper. Other than cash held by our subsidiaries for their immediate operating
needs in Colorado and Nebraska, all of our cash reserves are on deposit with major U.S. and Canadian chartered banks. We do not
believe that the credit, liquidity, or market risks with respect thereto have increased as a result of the current market conditions.
However, in order to achieve greater security for the preservation of our capital, we have, of necessity, been required to accept
lower rates of interest, which has also lowered our potential interest income.

52

Operating
Activities

During
the year ended June 30, 2023, the Company’s operating activities consumed $17.3 million of cash (2022: $6.2 million and
2021: $4.7 million). The cash used in operating activities for fiscal year 2023 reflects the Company’s funding of losses
of $40.1 million, the net fair value losses related to the Private Warrants and the Earnout Shares liabilities,
share-based compensation, and other non-cash transactions. Overall, operational outflows during fiscal year 2023 increased from
the corresponding period of 2022 due to cash expenses related to the Transactions and an increase in exploration-related spending
at the Elk Creek Project. Overall, fiscal year 2023 operational outflows were higher than fiscal year 2022 due primarily to increased
exploration expenditures. Going forward, the Company’s working capital requirements are expected to increase substantially
in connection with the development of the Elk Creek Project.

Investing
Activities

The
Company had minimal investing activities during the years ended June 30, 2023 and 2022, respectively.

Financing
Activities

Net
cash provided by financing activities was $14.6 million in fiscal year 2023 (2022: $4.3 million and 2021: $18.1 million). This
increase in financing inflows primarily reflects the timing of cash inflows from the financing transactions disclosed below.

The
following is a discussion of significant financing transactions for fiscal year 2023:

Pursuant
to the Yorkville Convertible Debt Financing Agreement, at the Closing, Yorkville advanced a total amount of $15.36 million to
NioCorp in consideration of the issuance by NioCorp to Yorkville of (i) $16.0 million aggregate principal amount of Convertible
Debentures and (ii) the Financing Warrants, which are 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.

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

53

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 Yorkville 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 Yorkville if such a conversion would
cause Yorkville 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.

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.

Pursuant
to the Yorkville Equity Facility Financing Agreement, Yorkville 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
Yorkville shall have made payment

54

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 Yorkville
as consideration for its irrevocable commitment to purchase Common Shares under the Yorkville Equity Facility Financing Agreement.
Yorkville has since resold all of the Commitment Shares. On June 9, 2023, we issued and sold 100,000 Common Shares to Yorkville
under the Yorkville Equity Facility Financing Agreement. Additionally, we are required to pay Yorkville 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 $250,000 we have paid
as of June 30, 2023. We will pay the remaining $750,000 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. The Common Shares that may be sold pursuant to the Yorkville Equity Facility Financing Agreement would be purchased by Yorkville
at a purchase price equal to 97% of the daily volume-weighted average price of the Common Shares on Nasdaq or such other principal
U.S. market for the Common Shares if the Common Shares are ever listed or traded on the New York Stock Exchange or the NYSE American
as reported by Bloomberg Financial Markets (or, if not available, a similar service provider of national recognized standing)
during the applicable pricing period, which is a period during a single trading day or a period of three consecutive trading days,
at the Company’s option and subject to certain restrictions, in each case, defined based on when an Advance Notice (as defined
in the Yorkville Equity Facility Financing Agreement) is submitted, subject to certain limitations.

As
of June 30, 2023, 100,000 Common Shares, representing $488,080 in net proceeds, had been issued under the Yorkville Equity Facility
Financing Agreement.

The
following is a discussion of significant financing transactions for fiscal year 2022:

Cash
Flow Considerations

The
Company has historically relied upon debt and equity financings to finance its activities. Subject to the restrictions set forth
in the Yorkville Convertible Debt Financing Agreement, the Company may pursue additional debt and/or equity financing in the medium
term; however, there can be no assurance the Company will be able to obtain any required financing in the future on acceptable
terms.

55

The
Company has limited financial resources compared to its proposed expenditures, no source of operating income, and no assurance
that additional funding will be available to it for current or future projects, although the Company has been successful in the
past in financing its activities through the sale of equity securities.

The
ability of the Company to arrange additional financing in the future will depend, in part, on the prevailing capital market conditions,
and its success in developing the Elk Creek Project. Any quoted market for the Common Shares may be subject to market trends generally,
notwithstanding any potential success of the Company in creating revenue, cash flows, or earnings, and any depression of the trading
price of the Common Shares could impact its ability to obtain equity financing on acceptable terms.

Historically,
the Company has used net proceeds from issuances of Common Shares to provide sufficient funds to meet its near-term exploration
and development plans and other contractual obligations when due. However, development and construction of the Elk Creek Project
will require substantial additional capital resources. This includes near-term funding and, ultimately, funding for Elk Creek
Project construction and other costs. See “Liquidity and Capital Resources” above, for the Company’s
discussion of arrangements related to possible future financings.

Debt
Covenants

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. The Company obtained a waiver from Yorkville with respect to any acceleration rights it may have
under the Convertible Debentures in connection with the restatements of the Company’s financial statements for the periods
ended September 30, 2022, and December 31, 2022, and the delay in filing the Company’s Quarterly Report on Form 10-Q for
the quarterly period ended March 31, 2023. 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
Company was in compliance with these covenants as of June 30, 2023.

Environmental

Our
mining and exploration activities are subject to various federal and state laws and regulations governing the protection of the
environment. We have made, and expect to make in the future, expenditures to comply with such laws and regulations, but cannot
predict the full amount of such future expenditures. As of June 30, 2023 and 2022, we had accrued $48,000 and $48,000, respectively,
related to estimated environmental obligations.

Forward-Looking
Statements

The
foregoing discussion and analysis, as well as certain information contained elsewhere in this Annual Report on Form 10-K, contain
“forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act, and are intended to be covered by the safe harbor created thereby. See the discussion in “Forward-Looking Statements”
in Item 1., “Business.”

Accounting
Developments

For
a discussion of Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements, see Note 3 to the consolidated
financial statements included in this Annual Report on Form 10-K.

Critical
Accounting Estimates and Recent Accounting Pronouncements

Our
significant accounting policies are described in Note 3 to the consolidated financial statements included in this Annual Report
on Form 10-K. As described in Note 3, we are required to make estimates and assumptions that affect the reported amounts and related
disclosures of assets, liabilities, revenue, and expenses. Our estimates are based on our experience and our interpretation of
economic, political, regulatory, and other factors that affect our

56

business prospects. Many of the inputs into our estimation
process are subjective and are subject to uncertainty over time and therefore, actual results may differ significantly from our
estimates. Note 3 also discloses recent accounting pronouncements applicable to the Company.

We believe that our most critical accounting estimates are related to the carrying value of our long term
assets; accounting for income taxes and the valuation of deferred tax assets; and the valuation of warrants and earnout shares,
as they require us to make assumptions that are highly uncertain at the time the accounting estimates are made and changes in them
are reasonably likely to occur from period to period. Management has discussed the development and selection of these critical
accounting estimates with the Audit Committee of our board of directors, and the Audit Committee has reviewed the disclosures presented
below. In addition, there are other items within our consolidated financial statements that require estimation, but are not deemed to be critical.
However, changes in estimates used in these and other items could have a material impact on our consolidated financial statements.

Carrying
Value of Long-Lived Assets

The
recoverability of the carrying values of mineral properties is dependent upon economic reserves being discovered or developed
on the properties, permitting, financing, start-up, and commercial production from, or the sale/lease of, or other strategic transactions
related to these properties. Development and/or start-up of a project will depend on, among other things, management’s ability
to raise sufficient capital for these purposes. We assess the carrying cost of our mineral properties for impairment whenever
information or circumstances indicate the potential for impairment. Key inputs include events and circumstances such as our inability
to obtain all the necessary permits, changes in the legal status of our mineral properties, government actions, the results of
exploration activities and technical evaluations and changes in economic conditions, including the price of commodities or input
prices. Many of these inputs are subjective and are subject to uncertainty over time. Such evaluations compare estimated future
net cash flows with our carrying costs and future obligations on an undiscounted basis. If it is determined that the estimated
future undiscounted cash flows are less than the carrying value of the property, an impairment loss will be recorded, measured
by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Where estimates of future net cash
flows are not determinable and where other conditions indicate the potential for impairment, management uses available market
information and/or third-party valuation experts to assess if the carrying value can be recovered and to estimate fair value.

We
review and evaluate our long-lived assets, other than mineral properties, for impairment when events or changes in circumstances
indicate that the related carrying amounts may not be recoverable. An impairment loss is measured and recorded based on the estimated
fair value of the long-lived assets being tested for impairment and their carrying amounts.

Income
Taxes

We have assets, hold interests, and conduct activities in the U.S. and Canada and are subject to their
tax regimes. Tax laws are complex and continue to evolve. While we have a history of losses, our assumptions made in tax returns
are subject to review and interpretation by taxing authorities and could be modified. Management
judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities, and any valuation
allowance recorded against our deferred tax assets. We consider factors such as the cumulative income or loss in recent years;
reversal of deferred tax liabilities; projected future taxable income exclusive of temporary differences; the character of the
income tax asset, including income tax positions; tax planning strategies and the period over which we expect the deferred tax
assets to be recovered in the determination of the valuation allowance. In the event that actual results differ from these estimates
or we adjust our estimates in the future, we may need to adjust our valuation allowance, which could materially impact our financial
position and results of operations.

57

Earnout
Shares and Private Warrants

The
fair values of our Earnout Shares liability and Private Warrants liability were determined using various significant unobservable
inputs, including a discount rate and our best estimate of expected volatility and expected holding periods. Changes in the estimated
fair values of these liabilities may have material impacts on our results of operations in any given period, as any increases
in these liabilities have a corresponding negative impact on our U.S. GAAP results of operations. See Note 10 and 11c to our consolidated
financial statements included in this Annual Report on Form 10-K for additional details.

Other

The
Company has one class of shares, being Common Shares. A summary of outstanding shares, share options, warrants, and convertible
debt option as of October 6, 2023, is set out below, on a fully diluted basis.

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The
following Management’s Discussion and Analysis (“MD&A”) provides information that management believes is
relevant to an assessment and understanding of the consolidated financial condition and results of operations of NioCorp and subsidiaries.
This item should be read in conjunction with our Consolidated Financial Statements and the notes thereto included in this Annual
Report on Form 10-K. Discussions related to fiscal year 2021 performance as compared to fiscal 2020 performance can be found in
Item 7., “Management’s Discussion and Analysis of Consolidated Financial Condition and Results of Operations”
of the Company’s Annual Report on Form 10-K for the year ended June 30, 2021.

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Summary
of Consolidated Financial and Operating Performance

The
Company’s net loss increased to $9.9 million for fiscal year 2022 from $4.4 million for fiscal year 2021. This increased
net loss in fiscal year 2022 as compared to fiscal year 2021 is primarily due to increased exploration expenditures associated
with process development costs and rare earth review costs, as well increased non-cash costs of our fiscal year 2022 Option grants,
which were fully vested and expensed on the grant dates.

The
Company had no revenues during the fiscal years presented below. Operating expenses incurred related primarily to performing exploration
and feasibility study related activities, as well as the activities necessary to support corporate and shareholder duties and
are detailed in the following table.

Results
of Operations

Significant
items affecting operating expenses are noted below:

Employee
related costs for fiscal year 2022 increased as compared to fiscal year 2021 primarily due to increased share-based compensation
costs which primarily reflected the impact of increased Common Share values on the fair value calculations in the Black-Scholes
model, as well as the number of Options granted.

Professional
fees increased in fiscal year 2022 as compared to fiscal year 2021, primarily due to the timing of legal services related
to SEC filings, including our shelf registration statement on Form S-3 filed in November 2021.

Exploration
expenditures increased in fiscal year 2022 as compared to fiscal year 2021 reflecting work performed in fiscal year 2022 to
advance the development of a demonstration-scale test plant to verify process improvement efforts as well as to potentially incorporate
REEs into our planned production. Fiscal year 2021 expenditures primarily related to the ongoing personnel costs, as well as ongoing
engineering and metallurgical projects and project advancement activities.

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Other
operating expenses include investor relations, general office expenditures, equity offering and proxy expenditures, board-related
expenditures, and other miscellaneous costs. These costs increased in fiscal year 2022 as compared to fiscal year 2021 primarily
due to increased financial advisory fees and investor relations fees associated with our ongoing financing efforts. In addition,
share-based compensation for directors and other advisors increased in fiscal year 2022 as compared to fiscal year 2021 due to
increased share-based compensation costs, which primarily reflected the impact of increased Common Share values in the Black Scholes
model. Options issued in both periods were fully vested upon issuance and expensed on the grant date.

Other
significant items impacting the change in the Company’s net loss are noted below:

Other
income for fiscal year 2021 represents the one-time forgiveness of the Company’s U.S. Small Business Administration
Loan, which occurred on November 18, 2020.

Loss
on extinguishment for fiscal year 2021 represents the one-time loss incurred in connection with the December 18, 2020, conversion
of the Nordmin Note.

Foreign
exchange (gain) loss is primarily due to changes in the U.S. dollar against the Canadian dollar rate as applied to U.S. dollar-denominated
debt instruments which are carried on the Canadian parent company books, and the fiscal year 2022 loss reflected the impacts of
a strengthened U.S. dollar to Canadian dollar, whereas the fiscal year 2021 gain primarily reflects the impact of a weakened U.
S. dollar.

Interest
expense increased in fiscal year 2022 as compared to fiscal year 2021 primarily due to the accretion of the Nordmin Note,
which was issued in December 2020, as well as accretion of the Lind III Convertible Security, which was issued in February 2021.

Liquidity
and Capital Resources

We
have no revenue generating operations from which we can internally generate funds. To date, our ongoing operations have been financed
by the sale of our equity securities by way of private placements, convertible securities issuances, and the exercise of incentive
stock options and share purchase warrants. While we believe we will be able to secure additional private placement financings
in the future, we cannot predict the size or pricing of any such financings. In addition, we may raise funds through the sale
of interests in our mineral properties, although current market conditions and the impacts of the COVID-19 pandemic have reduced
the number of potential buyers/acquirers of any such interests.

As
of June 30, 2022, the Company had cash of $5.3 million and working capital of $2.0 million, compared to cash of $7.3 million and
working capital of $3.4 million on June 30, 2021. The slight decline in working capital surplus for fiscal year 2022 is due to
the timing of cash inflows from financing activities and warrant exercises, as discussed below under “Financing Activities,”
and was partially offset by exploration-related expenditures and general corporate overhead expenditures.

We
expect that the Company will operate at a loss for the foreseeable future. The Company’s current planned operational needs
are approximately $9.5 million through June 30, 2023, inclusive of the repayment of amounts outstanding under the Smith Credit
Agreement which is due on June 30, 2023.

In addition to outstanding accounts payable and short-term liabilities, our average monthly expenditures
through June 30, 2023 are expected to be approximately $550 per month where approximately $295 is for corporate overhead, lease
extensions and estimated costs related to securing financing necessary for advancement of the Elk Creek Project. Approximately
$255 per month is planned for expenditures relating to the advancement of the Elk Creek Project by ECRC. The Company’s ability
to continue operations and fund our current work plan is dependent on management’s ability to secure additional financing.

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The
Company anticipates that it may not have sufficient cash to continue to fund basic operations for the next twelve months, and
additional funds totaling $3.5 million to $4.5 million are likely to be necessary to continue advancing the project in the areas
of financing, permitting, and detailed engineering. Management is actively pursuing such additional sources of debt and equity
financing, and while it has been successful in doing so in the past, there can be no assurance it will be able to do so in the
future.

Elk
Creek property and lease commitments are $8 through June 30, 2023, exclusive of costs incurred to exercise our current land and
mineral right option agreements, which expire at various times between December 2024 and May 2040. To maintain its currently held
properties and fund its currently anticipated general and administrative costs and planned exploration and development activities
at the Elk Creek Project for the fiscal year ending June 30, 2023, the Company will likely require additional financing during
the current fiscal year. Should such financing not be available in that timeframe, we will be required to reduce our activities
and will not be able to carry out all our presently planned activities at the Elk Creek Project.

We
currently have no further material funding commitments or arrangements for additional financing at this time (other than the potential
exercise of options and warrants) and there is no assurance that we will be able to obtain additional financing on acceptable
terms, if at all. There is significant uncertainty that we will be able to secure any additional financing in the current equity
or debt markets. The quantity of funds to be raised and the terms of any proposed equity or debt financing that may be undertaken
will be negotiated by management as opportunities to raise funds arise. Management intends to pursue funding sources of both debt
and equity financing, including but not limited to the issuance of equity securities in the form of Common Shares, warrants, subscription
receipts, or any combination thereof in units of the Company pursuant to private placements to accredited investors or pursuant
to equity lines of credit or public offerings in the form of underwritten/brokered offerings, at-the-market offerings, registered
direct offerings, or other forms of equity financing and public or private issuances of debt securities including secured and
unsecured convertible debt instruments or secured debt project financing. Management does not currently know the terms pursuant
to which such financings may be completed in the future, but any such financings will be negotiated at arm’s-length. Future
financings involving the issuance of equity securities or derivatives thereof will likely be completed at a discount to the then-current
market price of the Company’s securities and will likely be dilutive to current shareholders.

Based
on the conditions described within, management has concluded and the audit opinion and notes that accompany our financial statements
for the year ended June 30, 2022, disclose that substantial doubt exists as to our ability to continue in business. The financial
statements included in this Annual Report on Form 10-K have been prepared under the assumption that we will continue as a going
concern. As defined under S-K 1300, we are a development stage issuer, and we have incurred losses since our inception. The Company
anticipates that it may not have sufficient cash, including warrant exercises subsequent to June 30, 2022, to continue to fund
basic operations for the next twelve months, therefore, additional funds are likely to be necessary to continue advancing the
project in the areas of financing, permitting, and detailed engineering. While the COVID-19 pandemic did negatively impact our
ability to obtain project financing during fiscal years 2021 and 2022, the full extent to which the COVID-19 pandemic and our
precautionary measures may continue to impact our business will depend on future developments, which continue to be highly uncertain
and cannot be predicted at this time. In addition, recent worldwide events have created general global economic uncertainty as
well as uncertainty in capital markets, supply chain disruptions, increased interest rates, and the potential for geographic recessions.
We believe that the going concern uncertainty cannot be alleviated with confidence until the Company has entered into a business
climate where funding of its planned ongoing operating activities is secured.

We
have no exposure to any asset-backed commercial paper. Other than cash held by our subsidiaries for their immediate operating
needs in Colorado and Nebraska, all of our cash reserves are on deposit with major U.S. and Canadian chartered banks. We do not
believe that the credit, liquidity, or market risks with respect thereto have increased as a result of the current market conditions.
However, in order to achieve greater security for the preservation of our capital, we have, of necessity, been required to accept
lower rates of interest, which has also lowered our potential interest income.

45

Operating
Activities

During
the year ended June 30, 2022, the Company’s operating activities consumed $6.2 million of cash (2021: $4.7 million). The
cash used in operating activities for fiscal year 2022 reflects the Company’s funding of losses of $9.9 million, partially
offset by non-cash adjustments and changes in working capital items. Overall, fiscal year 2022 operational outflows were higher
than fiscal year 2021 due primarily to increased exploration expenditures. Going forward, the Company’s working capital
requirements are expected to increase substantially in connection with the development of the Elk Creek Project.

Investing
Activities

During
the year ended June 30, 2022, the Company’s investing activities consumed $16 of cash (2021: $6.3 million). The cash used
in investing activities for fiscal year 2021 reflects the Company’s purchase of the land and mineral rights discussed above
under Part I., Item 2, “Properties - Other Elk Creek Project Activities.”

Financing
Activities

Net
cash provided by financing activities was $4.3 million in fiscal year 2022 (2021: $18.1 million). This decrease in financing inflows
primarily reflect the timing of cash inflows from the Lind III Agreement, private placements, and warrant exercises during the
respective fiscal years.

The
following is a discussion of significant financing transactions for fiscal year 2022:

Cash
Flow Considerations

The
Company has historically relied upon equity financings, and to a lesser degree, debt financings, to satisfy its capital requirements
and will continue to depend heavily upon equity capital to finance its activities. The Company may pursue debt financing in the
medium term if it is able to procure such financing on terms more favorable than available equity financing; however, there can
be no assurance the Company will be able to obtain any required financing in the future on acceptable terms.

The
Company has limited financial resources compared to its proposed expenditures, no source of operating income, and no assurance
that additional funding will be available to it for current or future projects, although the Company has been successful in the
past in financing its activities through the sale of equity securities.

The
ability of the Company to arrange additional financing in the future will depend, in part, on the prevailing capital market conditions
and its success in developing the Elk Creek Project. Any quoted market for the Common Shares may be subject to market trends generally,
notwithstanding any potential success of the Company in creating revenue, cash flows, or earnings, and any depression of the trading
price of the Company’s Common Shares could impact its ability to obtain equity financing on acceptable terms.

46

Historically,
the Company has used net proceeds from issuances of Common Shares to provide sufficient funds to meet its near-term exploration
and development plans and other contractual obligations when due. However, further development and construction of the Elk Creek
Project will require substantial additional capital resources. This includes near-term funding and, ultimately, long-term funding
(including debt and equity financing) for Elk Creek Project construction and other costs.

Debt
Covenants

The
Lind III Convertible Security contains financial and non-financial covenants customary for a facility of this size and nature,
and includes a financial covenant defining an event of default as all present and future liabilities of the Company or any of
its subsidiaries, exclusive of related party loans, for an amount or amounts exceeding C$2.0 million, and which have not been
satisfied on time or within 90 days of invoice, or have become prematurely payable as a result of its default or breach. In addition,
The Smith Credit Agreement contains financial and non-financial covenants customary for a facility of its size and nature. The
Company was in compliance with these covenants as of June 30, 2022.

Environmental

Our
mining and exploration activities are subject to various federal and state laws and regulations governing the protection of the
environment. We have made, and expect to make in the future, expenditures to comply with such laws and regulations, but cannot
predict the full amount of such future expenditures. As of June 30, 2022 and 2021, we had accrued $48 and $48, respectively, related
to estimated environmental obligations.

Forward-Looking
Statements

The
foregoing discussion and analysis, as well as certain information contained elsewhere in this Annual Report on Form 10-K, contain
“forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of
the Exchange Act, and are intended to be covered by the safe harbor created thereby. See the discussion in “Forward-Looking
Statements” in Item 1., “Business.”

Accounting
Developments

For
a discussion of Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements, see Note 3 to the
Consolidated Financial Statements.

Critical
Accounting Estimates and Recent Accounting Pronouncements

Our significant accounting
policies are described in Note 3 to the Consolidated Financial Statements included in this Annual Report on Form 10-K. As
described in Note 3, we are required to make estimates and assumptions that affect the reported amounts and related disclosures
of assets, liabilities, revenue, and expenses. Our estimates are based on our experience and our interpretation of economic, political,
regulatory, and other factors that affect our business prospects. Many of the inputs into our estimation process are subject to
uncertainty over time and therefore, actual results may differ significantly from our estimates. Note 3 also discloses recent accounting
pronouncements applicable to the Company.

We
believe that our most critical accounting estimates are related to the carrying value of our long term assets; accounting for
income taxes; and valuation of deferred tax assets, as they require us to make assumptions that are highly uncertain at the time
the accounting estimates are made and changes in them are reasonably likely to occur from period to period. Management has discussed
the development and selection of these critical accounting estimates with the Audit Committee of our board of directors, and the
Audit Committee has reviewed the disclosures presented below. In addition, there are other items within our financial statements
that require estimation, but are not deemed to be critical. However, changes in estimates used in these and other items could
have a material impact on our financial statements.

47

Carrying
Value of Long-Lived Assets

The
recoverability of the carrying values of mineral properties is dependent upon economic reserves being discovered or developed
on the properties, permitting, financing, start-up, and commercial production from, or the sale/lease of, or other strategic transactions
related to these properties. Development and/or start-up of a project will depend on, among other things, management’s ability
to raise sufficient capital for these purposes. We assess the carrying cost of our mineral properties for impairment whenever
information or circumstances indicate the potential for impairment. Key inputs include events and circumstances such as our inability
to obtain all the necessary permits, changes in the legal status of our mineral properties, government actions, the results of
exploration activities and technical evaluations and changes in economic conditions, including the price of commodities or input
prices. Many of these inputs are subjective and are subject to uncertainty over time. Such evaluations compare estimated future
net cash flows with our carrying costs and future obligations on an undiscounted basis. If it is determined that the estimated
future undiscounted cash flows are less than the carrying value of the property, an impairment loss will be recorded, measured
by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Where estimates of future net cash
flows are not determinable and where other conditions indicate the potential for impairment, management uses available market
information and/or third-party valuation experts to assess if the carrying value can be recovered and to estimate fair value.

We
review and evaluate our long-lived assets, other than mineral properties, for impairment when events or changes in circumstances
indicate that the related carrying amounts may not be recoverable. An impairment loss is measured and recorded based on the estimated
fair value of the long-lived assets being tested for impairment and their carrying amounts.

Income
Taxes

We
account for income taxes using the liability method, recognizing certain temporary differences between the financial reporting
basis of our liabilities and assets and the related income tax basis for such liabilities and assets. This method generates a
net deferred income tax liability or asset, as measured by the statutory tax rates in effect. We derive our deferred income tax
expense or benefit by recording the change in the net deferred income tax liability or asset balance for the year. With respect
to the earnings we derive from the operations of our consolidated subsidiaries, in those situations where the earnings are indefinitely
reinvested, no deferred taxes have been provided on the unremitted earnings (including the excess of the carrying value of the
net equity of such entities for financial reporting purposes over the tax basis of such equity) of our consolidated subsidiaries.

We
are subject to reviews of our income tax filings and other tax payments, and disputes can arise with the taxing authorities over
the interpretation of its contracts or laws. We recognize and record potential tax liabilities and record tax liabilities for
anticipated tax audit issues in the U.S. and other tax jurisdictions based on our estimate of whether, and the extent to which,
additional taxes will be due. We adjust these reserves in light of changing facts and circumstances; however, due to the complexity
of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current
estimate. If our estimate of tax liabilities proves to be different than the ultimate assessment, an additional expense or benefit
would result. We recognize interest and penalties, if any, related to unrecognized tax benefits in Income tax benefit (expense).
In certain jurisdictions, we must pay a portion of the disputed amount to the local government in order to formally appeal
the assessment. Such payment is recorded as a receivable if we believe the amount is ultimately recoverable.

Valuation
of Deferred Tax Assets

Our
deferred income tax assets include certain future tax benefits. We record a valuation allowance against any portion of those deferred
income tax assets when we believe, based on the weight of available evidence, it is more likely than not that some portion or
all of the deferred income tax asset will not be realized. We review the likelihood that we will realize the benefit of our deferred
tax assets and therefore the need for valuation allowances on a quarterly basis, or more frequently if events indicate that a
review is required. In determining the requirement for a valuation allowance, the historical and projected financial results of
the legal entity or consolidated group recording the net deferred tax asset is considered, along with all other available positive
and negative evidence.

48

Other

The Company
has one class of shares, being Common Shares. A summary of outstanding shares, share options, warrants, and convertible debt option
as of September 6, 2022, is set out below, on a fully diluted basis.

ITEM 7.        MANAGEMENT’S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis (“MD&A”) provides information that management believes is relevant to an assessment and understanding of the consolidated financial condition and results of operations of NioCorp and subsidiaries. This item should be read in conjunction with our Consolidated Financial Statements and the notes thereto included in this Form 10-K. Discussions related to fiscal 2020 performance as compared to fiscal 2019 performance can be found in Item 7., “Management’s Discussion and Analysis of Consolidated Financial Condition and Results of Operations” of the Company’s Annual Report on Form 10-K for the year ended June 30, 2020.

41

Summary of Consolidated Financial and Operating Performance

The Company’s net loss increased slightly to $4.4 million for fiscal 2021 from $4.0 million for fiscal 2020. This increased net loss in 2021 as compared to 2020 is primarily due to 2021 Option grants, which were fully vested and expensed on the grant dates.

During the fiscal years ended June 30, 2021 and 2020, the Company had no revenues. Operating expenses incurred related primarily to performing exploration and feasibility study related activities, as well as the activities necessary to support corporate and shareholder duties, and are detailed in the following table.

Results of Operations (dollars in thousands)

Significant items affecting operating expenses are noted below:

Employee related costs for fiscal 2021 increased as compared to fiscal 2020 primarily due to increased share-based compensation costs reflecting the timing of Option issuances and the corresponding vesting periods, as well as the number of Options granted and associated fair value calculations.

Exploration expenditures decreased in fiscal 2021 as compared to fiscal 2020 reflecting work performed in 2020 to develop the detailed engineering necessary to support the successful Air Permit application. Fiscal 2021 expenditures primarily related to the ongoing personnel costs, as well as ongoing engineering and metallurgical projects and project advancement activities.

Other operating expenses include investor relations, general office expenditures, stock and proxy expenditures and other miscellaneous costs. Costs increased in fiscal 2021 as compared to fiscal 2020 primarily due to increases in share-based compensation costs for board members reflecting the timing of Option issuances and the corresponding vesting periods, and increased exchange registration costs associated with the Nordmin Note and the Lind III Convertible Security. These costs were partially offset by a decrease in finance-related contract costs.

42

Other significant items impacting the change in the Company’s net loss are noted below:

Foreign exchange (gain) loss is primarily due to changes in the U.S. dollar against the Canadian dollar and the fiscal 2021 gain primarily reflects the impact of a strengthened Canadian dollar as applied to U.S. dollar-denominated debt instruments which are carried on the Canadian parent company books. Foreign exchange loss during fiscal 2020 reflected the impacts of a strengthened U.S. dollar to Canadian dollar rate.

Interest expense increased in fiscal 2021 as compared to fiscal 2020 due primarily to the accretion associated with the Lind III Convertible Security and the Nordmin Note, both of which were entered into during fiscal year 2021, as well as an increase in interest expense incurred under the Smith Credit Agreement.

Liquidity and Capital Resources

We have no revenue generating operations from which we can internally generate funds. To date, our ongoing operations have been financed by the sale of our equity securities by way of private placements, convertible securities issuances, and the exercise of incentive stock options and share purchase warrants. While we believe we will be able to secure additional private placement financings in the future, we cannot predict the size or pricing of any such financings. In addition, we may raise funds through the sale of interests in our mineral properties, although current market conditions and the impacts of the COVID-19 pandemic have reduced the number of potential buyers/acquirers of any such interests.

As of June 30, 2021, the Company had cash of $7.3 million and a working capital surplus of $3.4 million, compared to cash of $0.3 million and working capital deficit of $7.7 million on June 30, 2020. The working capital surplus for 2021 is due to the timing of cash inflows from financing activities and warrant exercises, as discussed below under “Financing Activities,” and was partially offset by expenditures incurred in connection with the closing of the Option Agreement for the Beethe008 land parcels, related party debt repayments and a continued effort to reduce our outstanding accounts payable balances.

We expect that the Company will operate at a loss for the foreseeable future. The Company’s current planned operational needs are approximately $7.3 million until June 30, 2022, inclusive of the partial repayment of the Smith Loan discussed above under “Recent Corporate Events.”

In addition to outstanding accounts payable and short-term liabilities, our average monthly expenditures are approximately $385,000 per month where approximately $267,000 is for corporate overhead, lease extensions and estimated costs related to securing financing necessary for advancement of the Elk Creek Project. Approximately $118,000 per month is planned for expenditures relating to the advancement of the Elk Creek Project by ECRC. The Company’s ability to continue operations and fund our current work plan is dependent on management’s ability to secure additional financing.

The
Company anticipates that it may not have sufficient cash, inclusive of net C$0.8 million received from warrant exercises subsequent to
June 30, 2021, to continue to fund basic operations for the next twelve months, and additional funds are likely to be necessary to
continue advancing the project in the areas of financing, permitting, and detailed engineering. Management is actively
pursuing such additional sources of debt and equity financing, and while it has been successful in doing so in the past,
there can be no assurance it will be able to do so in the future.

Elk Creek property and lease commitments are $15,000 until June 30, 2022, exclusive of costs incurred to exercise our current land and mineral right option agreements, which expire at various times between September 2021 and May 2040. To maintain its currently held properties and fund its currently anticipated general and administrative costs and planned exploration and development activities at the Elk Creek Project for the fiscal year ending June 30, 2021, the Company will likely require additional financing during the current fiscal year. Should such financing not be available in that timeframe, we will be required to reduce our activities and will not be able to carry out all our presently planned activities at the Elk Creek Project.

43

In addition to the financing transactions discussed below under “Financing Activities,” the following transactions impacted our liquidity position during fiscal 2021:

The Nordmin Note will mature on December 18, 2021, with an implied interest rate of 5% per annum and, subject to certain terms and conditions, is convertible into up to 4,500,000 Common Shares at a conversion price of 92% of the five-day volume-weighted average price Common Shares on the Toronto Stock Exchange at the time of conversion. The Nordmin Note contains restrictions on how much of the principal amount may be converted in any 30-day period. The Nordmin Note also provides the Company with the option to prepay, in whole or in part, any outstanding principal amount thereunder, upon three days’ notice to Nordmin. In addition, Nordmin is entitled to accelerate the maturity of the Nordmin Note and require the Company to prepay the outstanding principal amount upon the occurrence of an event of default and other designated events described in the Nordmin Note.

Subject to certain terms and conditions, each Nordmin Warrant is exercisable into one Common Share at a price of C$0.80 per share until December 18, 2022. The Nordmin Note and the Nordmin Warrants are, and the Common Shares underlying the Nordmin Warrants, will be, subject to resale restrictions and are or will be, as applicable, “restricted securities” within the meaning of Rule 144 under the United States Securities Act of 1933.

Pursuant to the terms of the Nordmin Agreement, on December 18, 2020, the Company issued 836,551 Common Shares to Nordmin upon an initial conversion of $450,000 in principal amount of the Nordmin Note at a conversion price of C$0.684 per share.

On October 27, 2020, the Company applied for loan forgiveness of $186,000, comprising the initial SBA Loan balance less $10,000 representing an Economic Injury Disaster Loan Advance grant (the “EIDL advance”) received by the Company in April 2020. On November 18, 2020, the Company was notified that the $186,000 loan forgiveness request had been approved.

On December 21, 2020, the U.S. Congress passed the Consolidated Appropriations Act, 2021, which provided additional COVID-19 pandemic relief legislation as well as government funding and other bills. The Consolidated Appropriations Act removes the previous requirement that PPP borrowers deduct the amount of any EIDL advance from their PPP forgiveness amount. The SBA released Procedural Notice 5000-20075, effective January 8, 2021, stating that the SBA will no longer deduct EIDL advances from forgiveness payments remitted to PPP lenders. Accordingly, the Company recorded a gain in other income in the consolidated statement of operations for the remaining $10,000 of the SBA Loan.

We currently have no further material funding commitments or arrangements for additional financing at this time (other than the potential exercise of options and warrants) and there is no assurance that we will be able to obtain additional financing on acceptable terms, if at all. There is significant uncertainty that we will be able to secure any additional financing in the current equity or debt markets. The quantity of funds to be raised and the terms of any proposed equity or debt financing that may be undertaken will be negotiated by management as opportunities to raise funds arise. Management intends to pursue funding sources of both debt and equity financing, including but not limited to the issuance of equity securities in the form of Common Shares, warrants, subscription receipts, or any combination thereof in units of the Company pursuant to private placements to accredited investors or pursuant to equity lines of credit or public offerings in the form of underwritten/brokered offerings, at-the-market offerings, registered direct offerings, or other forms of equity financing and public or private issuances of debt securities including secured and unsecured convertible debt instruments or secured debt project financing. Management does not currently know the terms pursuant to which such financings may be completed in the future, but any such financings will be negotiated at arm’s-length. Future financings involving the issuance of equity securities or derivatives thereof will likely be completed at a discount to the then-current market price of the Company’s securities and will likely be dilutive to current shareholders.

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Based on the conditions described within, management has concluded and the audit opinion and notes that accompany our financial statements for the year ended June 30, 2021, disclose that substantial doubt exists as to our ability to continue in business. The financial statements included in this Annual Report on Form 10-K have been prepared under the assumption that we will continue as a going concern. We are an exploration stage company and we have incurred losses since our inception. The Company anticipates that it may not have sufficient cash, including warrant exercises subsequent to June 30, 2021, to continue to fund basic operations for the next twelve months, therefore, additional funds are likely to be necessary to continue advancing the project in the areas of financing, permitting, and detailed engineering. While the COVID-19 pandemic did negatively impact our ability to obtain project financing during fiscal 2021, the full extent to which the COVID-19 pandemic and our precautionary measures may continue to impact our business will depend on future developments, which continue to be highly uncertain and cannot be predicted at this time. These include, but are not limited to, the duration and geographic spread of the pandemic, its severity, the actions to contain the virus or treat its impact, future spikes of COVID-19 infections resulting in additional preventative measures to contain or mitigate the spread of the virus, the effectiveness, distribution and acceptance of COVID-19 vaccines, including the vaccines’ efficacy against emerging COVID-19 variants, and how quickly and to what extent normal economic and operating conditions can resume. We believe that the going concern uncertainty cannot be alleviated with confidence until the Company has entered into a business climate where funding of its planned ongoing operating activities is secured.

We have no exposure to any asset-backed commercial paper. Other than cash held by our subsidiaries for their immediate operating needs in Colorado and Nebraska, all of our cash reserves are on deposit with major U.S. and Canadian chartered banks. We do not believe that the credit, liquidity, or market risks with respect thereto have increased as a result of the current market conditions. However, in order to achieve greater security for the preservation of our capital, we have, of necessity, been required to accept lower rates of interest, which has also lowered our potential interest income.

Operating Activities

During the year ended June 30, 2021, the Company’s operating activities consumed $4.7 million of cash (2020: $3.0 million). The cash used in operating activities for fiscal 2021 reflects the Company’s funding of losses of $4.4 million, partially offset by minor non-cash adjustments and changes in working capital items. Overall, fiscal 2021 operational outflows were higher than fiscal 2020 due primarily to the reduction of outstanding accounts payable balances during fiscal year 2021. Going forward, the Company’s working capital requirements are expected to increase substantially in connection with the development of the Elk Creek Project.

Investing Activities

During the year ended June 30, 2021, the Company’s investing activities consumed $6.3 million of cash (2020: nil). The cash used in investing activities for fiscal 2021 reflects the Company’s purchase of the land and mineral rights discussed above under Part I., Item 2 “Properties-Other Elk Creek Project Activities.”

Financing Activities

Net cash provided by financing activities was $18.1 million in fiscal 2021, compared to $3.0 million in fiscal 2020. This increase in financing inflows primarily reflect the timing of cash inflows from the Lind III Agreement, the April 2021 Private Placement (as defined below), and warrant exercises to support current operations, partially offset by expenditures incurred in connection with the Option Agreement for the Beethe008 land parcels, and debt repayments.

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The following is a discussion of significant financing transactions for fiscal year 2021:

The Lind III Convertible Security has a term of (i) 24 months or (ii) 30 calendar days after the date on which the face value of the Lind III 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 III Agreement, whichever is earlier. The Lind III Convertible Security constitutes the direct, general and unconditional obligation of the Company and ranks pari-passu with the Company’s other indebtedness. The Lind III Convertible Security is guaranteed on a secured basis by 0896800 and ECRC.

The Lind III Convertible Security is secured by all of the assets and property of the Company and 0896800, including all of the issued and outstanding shares of 0896800 pledged by the Company and all of the issued and outstanding shares of ECRC pledged by 0896800, and certain real property and fixtures of ECRC. The liens securing the Lind III Convertible Security rank pari-passu with the liens securing the Smith Credit Agreement. The liens securing the Lind III Convertible Security rank senior to the liens securing the Smith Credit Agreement on any amount that is owed by the Company to Mr. Smith in excess of $4.0 million.

Pursuant to the Lind III Agreement, Lind III is entitled to convert the Lind III Convertible Security into Common Shares in monthly installments over its term at a price per Common Share equal to 85% of the volume-weighted average price Common Shares on the Toronto Stock Exchange (“TSX”) for the five trading days immediately preceding to the date on which Lind III provides notice to the Company of its election to convert. Subject to certain exceptions, the Lind III Agreement contains restrictions on how much of the Lind III Convertible Security may be converted in any particular month. The Lind III Agreement also provides NioCorp with the option to buy back the remaining face amount of the Lind III Convertible Security in cash at any time; provided that, if the Company exercises such option, Lind III will have the option to convert up to 33.33% of the remaining face amount into Common Shares at the price described above. In addition, Lind III is entitled to accelerate its conversion right to the full amount of the face value of the Lind III Convertible Security or demand repayment thereof in cash upon the occurrence of an event of default and other designated events described in the Lind III Agreement.

On February 19, 2021, in connection with the funding and issuance of the Lind III Convertible Security, the Company issued 8,558,000 Lind III Warrants to Lind III pursuant to the Lind III Agreement.

The Lind III Convertible Security and the Lind III 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 III Agreement.

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Cash Flow Considerations

The Company has historically relied upon equity financings, and to a lesser degree, debt financings, to satisfy its capital requirements and will continue to depend heavily upon equity capital to finance its activities. The Company may pursue debt financing in the medium term if it is able to procure such financing on terms more favorable than available equity financing; however, there can be no assurance the Company will be able to obtain any required financing in the future on acceptable terms.

The Company has limited financial resources compared to its proposed expenditures, no source of operating income, and no assurance that additional funding will be available to it for current or future projects, although the Company has been successful in the past in financing its activities through the sale of equity securities.

The ability of the Company to arrange additional financing in the future will depend, in part, on the prevailing capital market conditions and its success in developing the Elk Creek Project. Any quoted market for the Common Shares may be subject to market trends generally, notwithstanding any potential success of the Company in creating revenue, cash flows, or earnings, and any depression of the trading price of the Company’s Common Shares could impact its ability to obtain equity financing on acceptable terms.

Historically, the Company has used net proceeds from issuances of Common Shares to provide sufficient funds to meet its near-term exploration and development plans and other contractual obligations when due. However, further development and construction of the Elk Creek Project will require substantial additional capital resources. This includes near-term funding and, ultimately, long-term funding (including debt and equity financing) for Elk Creek Project construction and other costs.

Debt Covenants

The Lind III Convertible Security contains financial and non-financial covenants customary for a facility of this size and nature, and includes a financial covenant defining an event of default as all present and future liabilities of the Company or any of its subsidiaries, exclusive of related party loans, for an amount or amounts exceeding C$2.0 million, and which have not been satisfied on time or within 90 days of invoice, or have become prematurely payable as a result of its default or breach. In addition, The Smith Credit Agreement contains financial and non-financial covenants customary for a facility of its size and nature. The Company was in compliance with these covenants as of June 30, 2021.

Contractual Obligations

Our contractual obligations at June 30, 2021, are summarized as follows (amounts in thousands):

(1)     Amounts represent principal of $3,490 and estimated interest payments of $171, assuming no early extinguishment.

(2)     Amounts represent principal of $8,632 and prepaid interest of $1,468.

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Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements.

Environmental

Our mining and exploration activities are subject to various federal and state laws and regulations governing the protection of the environment. We have made, and expect to make in the future, expenditures to comply with such laws and regulations, but cannot predict the full amount of such future expenditures. As of June 30, 2021 and 2020, we had accrued $48,000 and $48,000, respectively, related to estimated environmental obligations.

Forward-Looking Statements

The foregoing discussion and analysis, as well as certain information contained elsewhere in this Annual Report on Form 10-K, contain “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, and are intended to be covered by the safe harbor created thereby. See the discussion in “Forward-Looking Statements” in Item 1., “Business.”

Accounting Developments

For a discussion of Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements, see Note 3 to the Consolidated Financial Statements.

Critical Accounting Policies

Listed below are the accounting policies that we believe are critical to our financial statements due to the degree of uncertainty regarding the estimates or assumptions involved and the magnitude of the asset, liability, revenue or expense being reported. Our discussion of financial condition and results of operations is based upon the information reported in our Consolidated Financial Statements. The preparation of these Consolidated Financial Statements in conformity with U.S. GAAP requires us to make assumptions and estimates that affect the reported amounts of assets, liabilities, revenues, and expenses, as well as the disclosure of contingent assets and liabilities as of the date of our financial statements. We base our assumptions and estimates on historical experience and various other sources that we believe to be reasonable under the circumstances. Actual results may differ from the estimates we calculate due to changes in circumstances, global economics and politics, and general business conditions. A summary of our significant accounting policies is detailed in Note 3 to the Consolidated Financial Statements. We have outlined below those policies identified as being critical to the understanding of our business and results of operations and that require the application of significant management judgment.

Carrying Value of Long-Lived Assets

The recoverability of the carrying values of mineral properties is dependent upon economic reserves being discovered or developed on the properties, permitting, financing, start-up, and commercial production from, or the sale/lease of, or other strategic transactions related to these properties. Development and/or start-up of a project will depend on, among other things, management’s ability to raise sufficient capital for these purposes. We assess the carrying cost of our mineral properties for impairment whenever information or circumstances indicate the potential for impairment. This would include events and circumstances such as our inability to obtain all the necessary permits, changes in the legal status of our mineral properties, government actions, the results of exploration activities and technical evaluations and changes in economic conditions, including the price of commodities or input prices. Such evaluations compare estimated future net cash flows with our carrying costs and future obligations on an undiscounted basis. If it is determined that the estimated future undiscounted cash flows are less than the carrying value of the property, an impairment loss will be recorded. Where estimates of future net cash flows are not determinable and where other conditions indicate the potential for impairment, management uses available market information and/or third-party valuation experts to assess if the carrying value can be recovered and to estimate fair value.

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We review and evaluate our long-lived assets, other than mineral properties, for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. An impairment loss is measured and recorded based on the estimated fair value of the long-lived assets being tested for impairment and their carrying amounts.

Income Taxes

We account for income taxes using the liability method, recognizing certain temporary differences between the financial reporting basis of our liabilities and assets and the related income tax basis for such liabilities and assets. This method generates a net deferred income tax liability or asset, as measured by the statutory tax rates in effect. We derive our deferred income tax expense or benefit by recording the change in the net deferred income tax liability or asset balance for the year. With respect to the earnings we derive from the operations of our consolidated subsidiaries, in those situations where the earnings are indefinitely reinvested, no deferred taxes have been provided on the unremitted earnings (including the excess of the carrying value of the net equity of such entities for financial reporting purposes over the tax basis of such equity) of our consolidated subsidiaries.

We are subject to reviews of our income tax filings and other tax payments, and disputes can arise with the taxing authorities over the interpretation of its contracts or laws. We recognize and record potential tax liabilities and record tax liabilities for anticipated tax audit issues in the U.S. and other tax jurisdictions based on our estimate of whether, and the extent to which, additional taxes will be due. We adjust these reserves in light of changing facts and circumstances; however, due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate. If our estimate of tax liabilities proves to be different than the ultimate assessment, an additional expense or benefit would result. We recognize interest and penalties, if any, related to unrecognized tax benefits in Income tax benefit (expense). In certain jurisdictions, we must pay a portion of the disputed amount to the local government in order to formally appeal the assessment. Such payment is recorded as a receivable if we believe the amount is ultimately recoverable.

Valuation of Deferred Tax Assets

Our deferred income tax assets include certain future tax benefits. We record a valuation allowance against any portion of those deferred income tax assets when we believe, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized. We review the likelihood that we will realize the benefit of our deferred tax assets and therefore the need for valuation allowances on a quarterly basis, or more frequently if events indicate that a review is required. In determining the requirement for a valuation allowance, the historical and projected financial results of the legal entity or consolidated group recording the net deferred tax asset is considered, along with all other available positive and negative evidence.

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Other

The Company has one class of shares, being Common Shares. A summary of outstanding shares, share options, warrants, and convertible debt option as of September 8, 2021, is set out below, on a fully-diluted basis.