Niocorp Developments Ltd S-3, filed Jun 21, 2021
Niocorp Developments Ltd (NB)
As filed with the Securities and Exchange Commission on June 21, 2021
File No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
NioCorp Developments Ltd.
(Exact name of registrant as specified in its charter)
| British Columbia, Canada (State or other jurisdiction of incorporation or organization) |
98-1262185 (I.R.S. Employer Identification Number) |
7000 South Yosemite Street
Suite 115
Centennial, Colorado 80112
(720) 639-4647
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
CT Corporation System
111 Eighth Avenue
13th Floor
New York, New York 10011
(800) 624-0909
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Christopher M. Kelly, Esq.
Andrew C. Thomas, Esq.
Jones Day
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
(216) 586-3939
Approximate date of commencement of proposed sale to the public: From time to time after this registration statement becomes effective.
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box: ¨
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box: x
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ¨
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large Accelerated Filer | ☐ | Accelerated Filer | ☐ | |
| Non-Accelerated Filer | ☒ | Smaller Reporting Company | ☒ | |
| Emerging Growth Company | ☒ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 7(a)(2)(B) of the Securities Act. x
Calculation of Registration Fee*
| Title of Each Class of Securities to be Registered |
Amount to be Registered |
Proposed Maximum Offering Price per Unit (1) |
Proposed Maximum Aggregate Offering Price (1) |
Amount of Registration Fee (2) | |||||||||||
| Common Shares, without par value, to be offered for resale by selling shareholders | 4,321,157 | $ | 1.045 | 4,515,609 | 492.65 | ||||||||||
| Common Shares, without par value, issuable upon exercise of Common Share purchase warrants, exercisable at C$1.63 per share, to be offered for resale by selling shareholders | 4,321,157 | $ | 1.045 | 4,515,609 | 492.65 | ||||||||||
| Common Shares, without par value, issuable upon exercise of Common Share purchase warrants, exercisable at C$1.63 per share to be offered by RCC (as defined herein) | 77,961 | $ | 1.045 | 81,469 | 8.89 | ||||||||||
| Total | 8,720,275 | $ | 9,112,687 | $ | 994.19 | ||||||||||
| (1) | Estimated solely for the purpose of calculating the amount of registration fee pursuant to Rule 457(c) under the Securities Act of 1933. The proposed maximum offering price per share and proposed maximum aggregate offering price are based upon the average of the high and low prices of the common shares, without par value, of the registrant as of June 15, 2021 as quoted on the OTCQX of $1.045. |
| (2) | The registration fee of $994.19 is being paid concurrently with the filing of this Registration Statement on Form S-3. |
| * | All dollar amounts reflected herein refer to U.S. dollars unless otherwise noted. |
The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The information contained in this prospectus is not complete and may be changed. The selling shareholders may
not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus
is not an offer to sell these securities and the selling shareholders are not soliciting an offer to buy these securities in any state
where the offer or sale is not permitted.
Subject To Completion, Dated June 21, 2021
PROSPECTUS
NioCorp Developments Ltd.
8,720,275 Common Shares
This prospectus relates to the registration and resale or other disposition from time to time by certain selling shareholders (each, a “selling shareholder” and, collectively, the “selling shareholders”), of up to an aggregate of 8,720,275 common shares, without par value (“Common Shares”), of NioCorp Developments Ltd. (“NioCorp,” the “Company,” “we,” “us” or “our”) comprising the following:
| • | 4,321,157 issued and outstanding Common Shares acquired by selling shareholders in connection with the Company’s May 2021 non-brokered private placement (the “Private Placement”) of units of the Company (the “Units”); |
| • | 4,321,157 Common Shares issuable upon exercise of Common Share purchase warrants, exercisable at a price per Common Share of C$1.63, expiring May 10, 2023 (the “Selling Shareholder Warrants”), which were issued to selling shareholders in connection with the closing of the Private Placement; and |
| • | 77,961 Common Shares issuable upon exercise of Common Share purchase warrants, exercisable at a price per Common Share of C$1.63, expiring May 10, 2023 (the “Compensation Warrants” and, collectively with the Selling Shareholder Warrants, the “Warrants”), which were issued to Research Capital Corporation (“RCC”) for services rendered to us in connection with the Private Placement. |
The selling shareholders may sell or otherwise dispose of the Common Shares covered by this prospectus or interests therein on any stock exchange, market or trading facility on which the Common Shares are traded or in private transactions. These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices. Additional information about the selling shareholders, and the times and manner in which they may offer and sell Common Shares under this prospectus, is provided in the sections entitled “Selling Shareholders” and “Plan of Distribution” of this prospectus.
We will not receive any proceeds from the resale of the Common Shares by the selling shareholders. However, upon exercise, we will receive the cash exercise price of the Warrants.
Our Common Shares are traded on the Toronto Stock Exchange (the “TSX”) under the symbol “NB” and quoted on the OTCQX under the symbol “NIOBF.” On June 15, 2021, the last reported closing bid price of our Common Shares was $1.025 per Common Share on the OTCQX and C$1.26 per Common Share on the TSX. The over-the-counter quotations on the OTCQX reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions. You are urged to obtain current market quotations of the Common Shares.
All dollar amounts reflected herein refer to U.S. dollars unless otherwise noted.
We are an “emerging growth company” as defined under federal securities laws and, as such, may elect to comply with certain reduced public company requirements for future filings.
Investing in the Common Shares involves a high degree of risk. See “Risk Factors” beginning on page 4 of this prospectus.
Neither the Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of the securities offered hereby or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is .
Table of Contents
| 0896800 | 0896800 B.C. Ltd., a wholly-owned subsidiary of the Company and 100% owner of ECRC |
| 2019 Elk Creek Feasibility Study | A feasibility study for the Elk Creek Project filed on SEDAR on May 29, 2019, with an effective date of April 16, 2019 |
| CIM | Canadian Institute of Mining and Metallurgy |
| Deposit | A mineralized body which has been physically delineated by sufficient drilling, trenching, and/or underground work, and found to contain a sufficient average grade of metal or metals to warrant further exploration and/or development expenditures. Such a deposit does not qualify as a commercially mineable ore body or as containing reserves or ore, unless final legal, technical, and economic factors are resolved. |
| ECRC | Elk Creek Resources Corp., a private Nebraska corporation and wholly-owned subsidiary of 0896800 |
| Elk Creek Project | NioCorp’s niobium, scandium, and titanium project located on the Elk Creek Property |
| Elk Creek Property | NioCorp’s Carbonatite property located in Southeast Nebraska, USA, held under a series of Option to Purchase agreements with local landowners. |
| Exchange Act | United States Securities Exchange Act of 1934, as amended |
| feasibility study | A comprehensive study of a mineral deposit in which all geological, engineering, legal, operating, economic, social, environmental, and other relevant factors are considered in sufficient detail that it could reasonably serve as the basis for a final decision by a financial institution to finance the development of the deposit for mineral production |
| Grade | A particular quantity of ore or mineral, relative to other constituents, in a specified quantity of rock |
| HSLA steel | High-strength low-alloy steel |
| mineral reserve | The economically and legally mineable part of a measured or indicated mineral resource demonstrated by at least a preliminary feasibility study under NI 43-101 standards or a bankable feasibility study under SEC Industry Guide 7 Standards. This study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. A mineral reserve includes diluting materials and allowances for losses that may occur when the material is mined and processed. |
| mineral resource | A concentration or occurrence of natural, solid, inorganic or fossilized organic material in or on the Earth’s crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics, and continuity of a mineral resource are known, estimated, or interpreted from specific geological evidence and knowledge. The term “mineral resource” covers mineralization and natural material of intrinsic economic interest which has been identified and estimated through exploration and sampling and within which mineral reserves may subsequently be defined by the consideration and application of technical, economic, legal, environmental, socio-economic, and governmental factors. The phrase “reasonable prospects for economic extraction” implies a judgment by a qualified person (as that term is defined in NI 43-101) in respect of the technical and economic factors likely to influence the prospect of economic extraction. A mineral resource is an inventory of mineralization that, under realistically assumed and justifiable technical and economic conditions, might become economically extractable. |
| ii |
| inferred mineral resource: Under CIM standards, an Inferred Mineral Resource is that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings, and drill holes. | |
| indicated mineral resource: Under CIM standards, an Indicated Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings, and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed. | |
| measured mineral resource: Under CIM standards, a Measured Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape, physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling, and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings, and drill holes that are spaced closely enough to confirm both geological and grade continuity. | |
| SEC Industry Guide 7 does not define “mineral resources” and typically mineral resources may not be disclosed in reports filed with the SEC. See “Cautionary Note to U.S. Investors Regarding Mineral Reserve and Mineral Resource Estimates” below. | |
| NI 43-101 | National Instrument 43-101 of the Canadian Securities Administrators entitled “Standards of Disclosure for Mineral Projects” |
| Niobium | The element niobium (atomic number 41), a transition metal primarily used in the production of HSLA steel |
| Scandium | The element scandium (atomic number 21), a transition metal used as an alloying agent with aluminum that provides high strength and lower weight for aerospace industry components and other applications that need lightweight metals. It also is used in the electrolyte layer of solid oxide fuel cells. |
| Securities Act | United States Securities Act of 1933, as amended |
| SEDAR | System for Electronic Document Analysis and Retrieval, the electronic filing system for the disclosure documents of issuers across Canada |
| Smith Credit Facility | $3.5 million non-revolving credit facility pursuant to the Credit Facility Agreement, dated January 16, 2017, between the Company and Mark A. Smith, the Company’s Chief Executive Officer, President, Executive Chairman and Director, as amended from time to time |
| Titanium | The element titanium (atomic number 22), a transition metal which in its oxide form is a common pigment in paper, paint, and plastic. In its metallic form, titanium is used in aerospace applications, armor, chemical processing applications, marine hardware applications, medical implants, power generation, and in sporting goods. |
| iii |
SEC INDUSTRY GUIDE 7 DEFINITIONS
| development stage | A mineral project which is undergoing preparation of an established commercially mineable deposit for its extraction but which is not yet in production. This stage occurs after completion of a feasibility study. |
| exploration stage | A mineral prospect which is not in either the development or production stage |
| mineralized material | Material that is not included in the reserve as it does not meet all of the criteria for adequate demonstration for economic or legal extraction |
| probable reserve | Reserves for which quantity and grade and/or quality are computed from information similar to that used for proven (measured) reserves, but the sites for inspection, sampling, and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven reserves, is high enough to assume continuity between points of observation. |
| production stage | A project which is actively engaged in the process of extraction and beneficiation of mineral reserves to produce a marketable metal or mineral product |
| proven reserve | Reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings, or drill holes; grade and/or quality are computed from the results of detailed sampling and (b) the sites for inspection, sampling, and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth, and mineral content of reserves are well-established. |
| reserve | That part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination. Reserves must be supported by a feasibility study done to bankable standards that demonstrates the economic extraction. “Bankable standards” implies that the confidence attached to the costs and achievements developed in the study is sufficient for the project to be eligible for external debt financing. A reserve includes adjustments to the in-situ tonnes and grade to include diluting materials and allowances for losses that might occur when the material is mined. |
Cautionary
Note to U.S. Investors Regarding
Mineral Reserve and Resource Estimates
The mineral estimates incorporated by reference into this prospectus have been prepared in accordance with the requirements of the securities laws in effect in Canada, which differ from the requirements of United States securities laws. The terms “mineral reserve,” “proven mineral reserve” and “probable mineral reserve” are Canadian mining terms as defined in accordance with NI 43-101 and the CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended. These definitions differ from the definitions in the SEC Industry Guide 7 under the Securities Act. Under SEC Industry Guide 7 standards, a “final” or “bankable” feasibility study is required to report reserves, the three-year historical average price is used in any reserve or cash flow analysis to designate reserves and the primary environmental analysis or report must be filed with the appropriate governmental authority.
In addition, the terms “mineral resource,” “measured mineral resource,” “indicated mineral resource,” and “inferred mineral resource” are defined in, and required to be disclosed by NI 43-101; however, these terms are not defined terms under SEC Industry Guide 7 and are normally not permitted to be used in reports and registration statements filed with the SEC. Investors are cautioned not to assume that all or any part of a mineral deposit in these categories will ever be converted into reserves. “Inferred mineral resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian securities laws and regulations, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. Investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is economically or legally mineable. Certain disclosures of the results of mining operations incorporated by reference herein are permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute “reserves” by SEC Industry Guide 7 standards as in place tonnage and grade without reference to unit measures.
| iv |
Accordingly, information contained in the documents incorporated by reference herein contain descriptions of our mineral deposits that may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder.
In October 2018, the SEC approved final rules requiring comprehensive and detailed disclosure requirements for issuers with material mining operations. The provisions in Industry Guide 7 and Item 102 of Regulation S-K have been replaced with a new subpart 1300 of Regulation S-K under the Securities Act. The changes adopted are intended to align the SEC’s disclosure requirements more closely with global standards as embodied by the Committee for Mineral Reserves International Reporting Standards, including Canada’s NI 43-101 and CIM Definition Standards. Under the new SEC rules, SEC registrants will be permitted to disclose “mineral resources” even though they reflect a lower level of certainty than mineral reserves. Additionally, under the new SEC rules, mineral resources must be classified as “measured,” “indicated” or “inferred,” terms which have similar definitions in and are required to be disclosed by NI 43-101 for Canadian issuers and are not recognized under SEC Industry Guide 7. The Company will be required to comply with these new rules for the fiscal year ended June 30, 2022, and thereafter.
All dollar amounts in this prospectus are expressed in United States dollars unless otherwise indicated. The Company’s accounts are maintained in United States dollars and the Company’s financial statements are prepared in accordance with United States Generally Accepted Accounting Principles. Some of the Company’s material agreements use Canadian dollars and the Company’s Common Shares, as traded on the TSX, are traded in Canadian dollars. As used herein, “C$” represents Canadian dollars.
The following table sets forth the rate of exchange for the Canadian dollar, expressed in United States dollars in effect at the end of the periods indicated, the average of exchange rates in effect during such periods, and the high and low exchange rates during such periods based on the daily rate of exchange as reported by the Bank of Canada for conversion of Canadian dollars into United States dollars.
| Nine Months Ended March 31, 2021 | Fiscal Year Ended June 30, | ||||||||||||||||
| 2020 | 2019 | 2018 | |||||||||||||||
| Canadian Dollars to United States Dollars | |||||||||||||||||
| Rate at end of period | 0.7952 | 0.7338 | 0.7641 | 0.7594 | |||||||||||||
| Average rate for period | 0.7694 | 0.7453 | 0.7556 | 0.7876 | |||||||||||||
| High for period | 0.8029 | 0.7710 | 0.7811 | 0.8245 | |||||||||||||
| Low for period | 0.7344 | 0.6898 | 0.7330 | 0.7513 | |||||||||||||
This prospectus is part of a registration statement that we filed with the SEC.
We have not authorized anyone to provide you with information different from that contained in this prospectus. If anyone provides you with different information, you should not rely on it as having been authorized by us in making a decision about whether to invest in the securities being offered hereby. This prospectus is offering to sell, and is seeking offers to buy, the securities only in jurisdictions where offers and sales are permitted. The information contained in this prospectus speaks only as of the date of this prospectus unless the information specifically indicates that another date applies, regardless of the time of delivery of this prospectus or of any sale of our Common Shares.
| v |
We may provide a prospectus supplement containing specific information about the terms of a particular offering by the selling shareholders, or their transferees. The prospectus supplement may add, update or change information in this prospectus. If information in a prospectus supplement is inconsistent with the information in this prospectus, the information in the prospectus supplement shall be deemed to supersede the information contained herein to the extent of the inconsistency. You should read both this prospectus and, if applicable, any prospectus supplement hereto. See “Where You Can Find More Information” and “Information Incorporated by Reference.”
Documents incorporated by reference herein include industry and market data and other information that we have obtained from, or which is based upon, market research, independent industry publications or other publicly available information. Any such data and other information is subject to change based on various factors, including those described below under the heading “Risk Factors” and under Item 1A. “Risk Factors” in our most recent Annual Report on Form 10-K and in our most recent Quarterly Reports on Form 10-Q filed with the SEC, which are incorporated herein by reference.
Our logo and some of our trademarks are used in this prospectus, which remain our sole intellectual property. This prospectus also includes trademarks, tradenames, and service marks that are the property of other organizations. Solely for convenience, our trademarks and tradenames referred to in this prospectus appear without the “TM” symbol, but those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights, or the right of the applicable licensor to these trademarks and tradenames.
We have not, and the selling shareholders have not, authorized anyone to provide you with information different from that contained or incorporated by reference in this prospectus or in any supplement to this prospectus or free writing prospectus, and neither we nor the selling shareholders takes any responsibility for any other information that others may give you. This prospectus is not an offer to sell, nor is it a solicitation of an offer to buy, the securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus or any prospectus supplement or free writing prospectus is accurate as of any date other than the date on the front cover of those documents, or that the information contained in any document incorporated by reference is accurate as of any date other than the date of the document incorporated by reference, regardless of the time of delivery of this prospectus or any sale of a security. Our business, financial condition, results of operations and prospects may have changed since those dates.
| vi |
This summary highlights information contained elsewhere in this prospectus. It may not contain all of the information that you should consider before investing in our Common Shares. You should read this entire prospectus carefully, including the “Risk Factors” section. This prospectus includes forward-looking statements that involve risks and uncertainties. See “Cautionary Note Regarding Forward-Looking Statements.”
About the Company
NioCorp is a mineral exploration company engaged in the acquisition, exploration, and development of mineral properties. NioCorp, through ECRC, is developing a superalloy materials project that, if and when developed, will produce niobium, scandium, and titanium products. Known as the “Elk Creek Project,” it is located near Elk Creek, Nebraska, in the southeast portion of the state.
| · | Niobium is used to produce various superalloys that are extensively used in high performance aircraft and jet turbines. It also is used in HSLA steel, a stronger steel used in automobiles, bridges, structural systems, buildings, pipelines, and other applications that generally enables those applications to be stronger and lighter in mass. This “lightweighting” benefit often results in environmental benefits, including reduced fuel consumption and material usage, which can result in fewer air emissions. |
| · | Scandium can be combined with aluminum to make super-high-performance alloys with increased strength and improved corrosion resistance. Scandium also is a critical component of advanced solid oxide fuel cells, an environmentally preferred technology for high-reliability, distributed electricity generation. |
| · | Titanium is a component of various superalloys and other applications that are used for aerospace applications, weapons systems, protective armor and medical implants. It also is used in pigments for paper, paint, and plastics. |
Our primary business strategy is to advance our Elk Creek Project to commercial production. We are focused on obtaining additional funds to carry out our near-term planned work programs associated with securing the project financing necessary to complete mine development and construction of the Elk Creek Project.
NioCorp was incorporated under the laws of the Province of British Columbia under the Business Corporations Act (British Columbia) on February 27, 1987, under the name “IPC International Prospector Corp.” On May 22, 1991, we changed our name to “Kingston Resources Ltd.” On June 29, 2001, we changed our name to “Butler Developments Corp.” On February 12, 2009, we changed our name to “Butler Resource Corp.” On March 4, 2010, we changed our name to “Quantum Rare Earth Developments Corp.” On March 4, 2013, we changed our name to “NioCorp Developments Ltd.”
NioCorp is a reporting issuer in British Columbia, Alberta, Saskatchewan, Ontario, and New Brunswick. Our registered and records office is located at 595 Burrard Street, Suite 2600, Vancouver, British Columbia V7X 1L3 (ATTN: Blake, Cassels & Graydon LLP). Our principal executive office is located at 7000 South Yosemite Street, Suite 115, Centennial, Colorado 80112. The telephone number of our principal executive office is (720) 639-4647.
| -1- |
The Offering
| Securities Offered by the Selling Shareholders |
8,720,275 Common Shares comprising: | |
| · |
4,321,157 issued and outstanding Common Shares acquired by selling shareholders in connection with the Private Placement;
| |
| · |
4,321,157 Common Shares issuable upon exercise of the Selling Shareholder Warrants; and
| |
| · | 77,961 Common Shares issuable upon exercise of the Compensation Warrants. | |
| Offering Price | Determined at the time of sale by the selling shareholders. | |
| Use of Proceeds | We will not receive any proceeds from the resale of the Common Shares by the selling shareholders. However, upon exercise, we will receive the cash exercise price of the Warrants. See “Use of Proceeds.” | |
| Common Shares Outstanding as of June 15, 2021 |
253,185,585 Common Shares | |
| OTCQX and TSX Trading Symbols | The Common Shares are quoted on the OTCQX under the symbol “NIOBF” and listed on the TSX under the symbol “NB.” | |
| Risk Factors | Investing in our Common Shares involves a high degree of risk. See “Risk Factors” beginning on page 4 of this prospectus. | |
| Dividend Policy | We currently intend to retain any future earnings to fund the development and growth of our business. Therefore, we do not currently anticipate paying cash dividends. | |
| -2- |
Description of Private Issuances
The Private Placement
On May 10, 2021, the Company closed the Private Placement. In connection with the closing of the Private Placement, a total of 4,334,157 Units were issued at a price per Unit of C$1.43, for total gross proceeds to the Company of approximately C$6.2 million.
Each Unit issued in connection with the Private Placement consisted of one Common Share and one Common Share purchase warrant. Each of such Common Share purchase warrants, which include the Selling Shareholder Warrants, entitles the holder thereof to purchase one additional Common Share at a price of C$1.63 at any time prior to 4:30 p.m. (Vancouver time) on May 10, 2023.
In connection with the Private Placement, the Company entered into subscription agreements (collectively, the “Subscription Agreements”) by and between the Company and each investor. The Subscription Agreements contain the terms of the Private Placement and typical representations and warranties from the investors to the Company and from the Company to the investors.
The Units issued in the Private Placement were issued on a private offering basis to investors with whom the Company had a pre-existing relationship pursuant to (i) in the case of investors outside of the United States that were not, and were not acting for the account or benefit of, a U.S. person (as defined in Regulation S under the Securities Act), the exclusion from the registration requirements of the Securities Act provided by Rule 903 of Regulation S thereunder, and (ii) in the case of investors inside the United States or that were, or were acting for the account or benefit of, a U.S. person, the exemption from the registration requirements of the Securities Act provided by Rule 506(b) of Regulation D thereunder and Section 4(a)(2) thereof, in each case, pursuant to the representations and covenants the investors made to the Company in connection with their purchase of the Units.
In connection with the Private Placement, as part of a finder’s fee, the Company issued to RCC 77,961 Compensation Warrants, each of which is exercisable for one Common Share at a price of C$1.63 until May 10, 2023. The Company also paid to RCC a cash commission of C$111,484.23 as part of the finder’s fee. Each of the Compensation Warrants and cash commission were equivalent to 3% of the Units raised by RCC. The Compensation Warrants were issued to RCC pursuant to the exclusion from the registration requirements of the Securities Act provided by Rule 903 of Regulation S thereunder, pursuant to the representations and covenants RCC made to the Company in connection therewith.
| -3- |
Investing in the Common Shares involves a high degree of risk, including those described below. Prior to making a decision about investing in our Common Shares, you should carefully consider the following risk factors, as well as specific risk factors discussed under the heading “Risk Factors” in our most recent Annual Report on Form 10-K and in our most recent Quarterly Reports on Form 10-Q, which are or will be incorporated herein by reference and may be amended, supplemented or superseded from time to time by other reports we file with the SEC in the future. The risks and uncertainties we have described are not the only risks we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our operations. If any of these risks actually occurs, our business, results of operations and financial condition could suffer. In that case, the trading price of our Common Shares could decline, and you could lose part of your investment.
Risks Related to the Common Shares
We believe that we may be a “passive foreign investment company” for the current taxable year and for one or more future taxable years, which may result in materially adverse U.S. federal income tax consequences for U.S. investors.
We generally will be designated as a “passive foreign investment company” (a “PFIC”) under the meaning of Section 1297 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), if, for a tax year, (a) 75% or more of our gross income for such year is “passive income” (generally, dividends, interest, rents, royalties, and gains from the disposition of assets producing passive income) or (b) at least 50% or more of the value of our assets produce, or are held for the production of, passive income, based on the quarterly average of the fair market value of such assets. U.S. shareholders should be aware that we believe we were classified as a PFIC during our tax years ended June 30, 2020 and 2019, and based on current business plans and financial expectations, believe that we may be a PFIC for the current and one or more future taxable years. If we are a PFIC for any taxable year during a U.S. shareholder’s holding period, then such U.S. shareholder generally will be required to treat any gain realized upon a disposition of Common Shares, or any “excess distribution” received on its Common Shares, as ordinary income, and to pay an interest charge on a portion of such gain or distribution. These consequences will be mitigated if the shareholder makes a timely and effective QEF Election (as defined below) or a “mark-to-market” election with respect to the Common Shares. A U.S. shareholder who makes a QEF Election generally must include in income on a current basis for U.S. federal income tax purposes its share of our net capital gain and ordinary earnings for any taxable year in which we are a PFIC, whether or not we distribute any amount to our shareholders. A U.S. shareholder who makes a mark-to-market election generally must include as ordinary income each year the excess of the fair market value of the Common Shares over the taxpayer’s basis therein. This paragraph is qualified in its entirety by the discussion below under the heading “Certain United States Federal Income Tax Considerations.” Each U.S. shareholder should consult its own tax advisors regarding the PFIC rules and the U.S. federal income tax consequences of the acquisition, ownership, and disposition of Common Shares.
Our Common Share price may be volatile and as a result you could lose all or part of your investment.
In addition to volatility associated with equity securities in general, the value of your investment could decline due to the impact of any of the following factors upon the market price of the Common Shares:
| · | Disappointing results from our exploration and/or, if warranted, project development efforts; |
| · | Decline in demand for Common Shares; |
| · | Downward revisions in securities analysts’ estimates or changes in general market conditions; |
| · | Technological innovations by competitors or in competing technologies; |
| · | Investor perception of our industry or our prospects; and |
| · | General economic trends. |
In the twelve months ended May 31, 2021, the trading price of our stock on the TSX ranged from a low of C$0.69 to a high of C$2.08. In addition, stock markets in general have experienced extreme price and volume fluctuations, and the market prices of securities have been highly volatile. These fluctuations are often unrelated to operating performance and may adversely affect the market price of the Common Shares. As a result, you may be unable to sell any Common Shares you acquire at a desired price.
| -4- |
We have never paid dividends on the Common Shares.
We have not paid dividends on the Common Shares to date, and we may not be in a position to pay dividends for the foreseeable future. Our ability to pay dividends with respect to the Common Shares will depend on our ability to successfully develop one or more properties and generate earnings from operations. Further, our initial earnings, if any, will likely be retained to finance our operations. Any future dividends on Common Shares will depend upon our earnings, our then-existing financial requirements, and other factors, and will be at the discretion of our Board of Directors.
Investors’ interests in the Company will be diluted and investors may suffer dilution in their net book value per Common Share if we issue additional employee/director/consultant options or if we sell additional Common Shares to finance our operations.
In order to further expand the Company’s operations and meet our objectives, any additional growth and/or expanded exploration activity will likely need to be financed through sale of and issuance of additional Common Shares, including, but not limited to, raising funds to explore the Elk Creek Project. Furthermore, to finance any acquisition activity, should that activity be properly approved, and depending on the outcome of our exploration programs, we likely will also need to issue additional Common Shares to finance future acquisitions, growth, and/or additional exploration programs of any or all of our projects or to acquire additional properties. We will also in the future grant to some or all of our directors, officers, and key employees and/or consultants options to purchase Common Shares as non-cash incentives. The issuance of any equity securities could, and the issuance of any additional Common Shares will, cause our existing shareholders to experience dilution of their ownership interests.
If we issue additional Common Shares or decide to enter into joint ventures with other parties in order to raise financing through the sale of equity securities, investors’ interests in the Company will be diluted and investors may suffer dilution in their net book value per Common Share depending on the price at which such securities are sold.
We are subject to the continued listing criteria of the TSX and our failure to satisfy these criteria may result in delisting of the Common Shares.
The Common Shares are currently listed on the TSX. In order to maintain the listing, we must maintain certain financial and share distribution targets, including maintaining a minimum number of public shareholders. In addition to objective standards, the TSX may delist the securities of any issuer if, in the TSX’s opinion, the issuer’s financial condition and/or operating results appear unsatisfactory; if it appears that the extent of public distribution or the aggregate market value of the security has become so reduced as to make continued listing on the TSX inadvisable; if the issuer sells or disposes of principal operating assets or ceases to be an operating company; if an issuer fails to comply with the listing requirements of the TSX; or if any other event occurs or any condition exists which makes continued listing on the TSX, in the opinion of the TSX, inadvisable.
If the TSX delists the Common Shares, investors may face material adverse consequences, including, but not limited to, a lack of a trading market for the Common Shares, reduced liquidity, decreased analyst coverage of the Company, and an inability for us to obtain additional financing to fund our operations.
The issuance of additional Common Shares may negatively impact the trading price of our securities.
We have issued Common Shares in the past and will continue to issue Common Shares to finance our activities in the future. In addition, outstanding options, warrants, and broker warrants to purchase Common Shares may be exercised, resulting in the issuance of additional Common Shares. The issuance by us of additional Common Shares would result in dilution to our shareholders, and even the perception that such an issuance may occur could have a negative impact on the trading price of the Common Shares.
| -5- |
We are an “emerging growth company,” and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our Common Shares less attractive to investors.
We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We could be an emerging growth company through June 30, 2022, although circumstances could cause us to lose that status earlier, including if the market value of our Common Shares held by non-affiliates exceeds $700 million as of any December 31 before that time, in which case we would no longer be an emerging growth company as of the following June 30. We cannot predict if investors will find our Common Shares less attractive because we may rely on these exemptions. If some investors find our Common Shares less attractive as a result, there may be a less active trading market for our Common Shares and our Common Share price may be more volatile. Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.
Broker-dealers may be discouraged from effecting transactions in Common Shares because they are considered a penny stock and are subject to the penny stock rules.
Our Common Shares are currently considered a “penny stock.” The SEC has adopted Rule 15g-9, which generally defines “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. The Common Shares are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors.” The term “accredited investor” refers generally to institutions with assets in excess of $5.0 million or individuals with a net worth in excess of $1.0 million or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC, which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that, prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the Common Shares. Consequently, these penny stock rules may affect the ability of broker-dealers to trade in the Common Shares.
| -6- |
Cautionary Note Regarding Forward-Looking Statements
The information discussed in this prospectus and the documents incorporated by reference include “forward-looking statements.” All statements, other than statements of historical facts, included or incorporated by reference herein concerning, among other things, planned capital expenditures, future cash flows and borrowings, pursuit of potential acquisition opportunities, our financial position, business strategy and other plans and objectives for future operations, future exploration activities, future mineral resource estimates, and future joint venture arrangements are forward-looking statements. These forward-looking statements are identified by their use of terms and phrases such as “may,” “expect,” “estimate,” “project,” “plan,” “believe,” “intend,” “achievable,” “anticipate,” “will,” “continue,” “potential,” “should,” “could,” and similar terms and phrases.
Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, or future events or performance (often, but not always, using words or phrases such as “expects” or “does not expect,” “is expected,” “anticipates” or “does not anticipate,” “plans,” “estimates” or “intends,” or stating that certain actions, events or results “may,” “could,” “would,” “might” or “will” be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements. Forward-looking statements are subject to a variety of known and unknown risks, uncertainties, and other factors that could cause actual events or results to differ from those expressed or implied by the forward-looking statements, including, without limitation:
| ● | risks related to our ability to operate as a going concern; |
| ● | risks related to our requirement of significant additional capital; |
| ● | risks related to our limited operating history; |
| ● | risks related to changes in economic valuations of the Elk Creek Project, such as net present value calculations, changes, or disruptions in the securities markets; |
| ● | risks related to our history of losses; |
| ● | risks related to cost increases for our exploration and, if warranted, development projects; |
| ● | risks related to feasibility study results; |
| ● | risks related to mineral exploration and production activities; |
| ● | risks related to our lack of mineral production from our properties; |
| ● | risks related to the results of our metallurgical testing; |
| ● | risks related to the price volatility of commodities; |
| ● | risks related to estimates of mineral resources and reserves; |
| ● | risks related to changes in mineral resource and reserve estimates; |
| ● | risks related to differences in U.S. and Canadian reserve and resource reporting; |
| ● | risks related to our exploration activities being unsuccessful; |
| ● | risks related to our ability to obtain permits and licenses for production; |
| ● | risks related to government and environmental regulations that may increase our costs of doing business or restrict our operations; |
| ● | risks related to proposed legislation that may significantly affect the mining industry; |
| ● | risks related to land reclamation requirements; |
| ● | risks related to competition in the mining industry; |
| ● | risks related to the difficulties of managing and treating water at our Elk Creek Project; |
| ● | risks related to equipment and supply shortages; |
| ● | risks related to current and future joint ventures and partnerships; |
| ● | risks related to our ability to attract qualified management; |
| ● | risks related to the ability to enforce judgment against certain of our directors; |
| ● | risks related to claims on the title to our properties; |
| ● | risks related to surface access on our properties; |
| ● | risks related to potential future litigation; |
| ● | risks related to our lack of insurance covering all our operations; |
| -7- |
| ● | risks related to the need for resilience in the face of potential impacts from climate change; |
| ● | risks related to a disruption in, or failure of, our information technology systems, including those related to cybersecurity; |
| ● | risks related to covenants contained in agreements with our secured creditors that may affect our assets; |
| ● | risks related to the extent to which our level of indebtedness may impair our ability to obtain additional financing; |
| ● | risks related to our status as a PFIC under the Code; |
| ● | risks related to our Common Shares, including price volatility, lack of dividend payments, dilution and penny stock rules; |
| ● | risks related to our status as an “emerging growth company” and the impact of related reduced reporting requirements on our ability to attract investors; and |
| ● | risks related to the effects of the COVID-19 pandemic on our business plans, financial condition and liquidity. |
This list is not exhaustive of
the factors that may affect our forward-looking statements. Some of the important risks and uncertainties that could affect forward-looking
statements are described further under “Risk Factors” in this prospectus and in our most recent Annual Report on Form 10-K and
in our most recent Quarterly Reports on Form 10-Q, which are or will be incorporated herein by reference. Should one or more
of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from
those anticipated, believed, estimated, or expected. We caution readers not to place undue reliance on any such forward-looking statements,
which speak only as of the date made. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events
or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events, except as required
by law.
| -8- |
This prospectus relates to the sale or other disposition of our Common Shares by the selling shareholders listed under the “Selling Shareholders” section below, and their transferees. We will not receive any proceeds from the resale of the Common Shares by the selling shareholders. However, upon exercise, we will receive the cash exercise price of the Warrants and will use the proceeds, if any, for general corporate purposes.
Market for Common Equity and Related Shareholder Matters
The outstanding Common Shares were first listed and posted for trading on the Vancouver Stock Exchange on December 1, 1987. On March 9, 2015, the Common Shares commenced trading on the TSX under the trading symbol “NB.” In addition, the Company trades on the United States Over-the-Counter Bulletin Board (“OTCBB”) and the OTCQX under the symbol “NIOBF” and on the Frankfurt Stock Exchange as “BR3.” The quotations with respect to the Common Stock on the OTCBB and the OTCQX reflect inter-dealer prices without retail mark-up, mark-down or commission and may not reflect actual transactions.
| -9- |
This prospectus covers an aggregate of 8,720,275 Common Shares comprising: (i) 4,321,157 issued and outstanding Common Shares acquired by selling shareholders in connection with the Private Placement; (ii) up to 4,321,157 Common Shares issuable upon exercise of the Selling Shareholder Warrants; and (iii) up to 77,961 Common Shares issuable upon exercise of the Compensation Warrants.
Selling shareholders are persons or entities that, directly or indirectly, have acquired Common Shares in the Private Placement, or will acquire Common Shares from us from time to time upon exercise of the Warrants. This prospectus and any prospectus supplement will only permit the selling shareholders to sell the Common Shares identified in the “Number of Common Shares Offered Hereby” column in the table below.
The selling shareholders may from time to time offer and sell the Common Shares pursuant to this prospectus and any applicable prospectus supplement. The selling shareholders may offer all or some portion of the Common Shares they hold or acquire, but only Common Shares that are currently outstanding or Common Shares that are acquired upon the exercise of the Warrants and in any case included in the “Number of Common Shares Offered Hereby” column in the table below may be sold pursuant to this prospectus or any applicable prospectus supplement.
The Common Shares issued to, or issuable upon the exercise of the Warrants held by, the selling shareholders are “restricted” shares under applicable federal and state securities laws and are being registered to give the selling shareholders the opportunity to sell their Common Shares. The registration of such Common Shares does not necessarily mean, however, that any of these Common Shares will be offered or sold by the selling shareholders. The selling shareholders may from time to time offer and sell all or a portion of their Common Shares in the over-the-counter market, in negotiated transactions, or otherwise, at market prices prevailing at the time of sale or at negotiated prices.
The registered Common Shares may be sold directly or through brokers or dealers. To the extent required, the names of any agent or broker-dealer and applicable commissions or discounts and any other required information with respect to any particular offer will be set forth in an accompanying prospectus supplement. See “Plan of Distribution.”
Each of the selling shareholders reserves the right, in its sole discretion, to accept or reject, in whole or in part, any proposed purchase of the registered Common Shares to be made directly or through agents. To the extent that any of the selling shareholders are acting as brokers or dealers with respect to the securities being offered hereby, they may be deemed to be “underwriters” within the meaning of the Securities Act and any commissions received by them and any profit on the resale of the registered Common Shares may be deemed to be underwriting commissions or discounts under the Securities Act. As of the date of this prospectus, based on the representations received by the Company from the selling shareholders, none of the selling shareholders are registered brokers or dealers or affiliated with registered brokers or dealers.
The following table sets forth
the names of the selling shareholders who are offering for resale Common Shares pursuant to this prospectus, the number of Common Shares
beneficially owned by each such person, the number of Common Shares that may be sold in this offering and the number of Common Shares
each such person will own after this offering, assuming they sell all of the Common Shares offered. The information appearing in the table
below is based on information provided by or on behalf of the named selling shareholders. We will not receive any proceeds from the resale
of the Common Shares by the selling shareholders. However, upon exercise, we will receive the cash exercise price of the Warrants.
| -10- |
| Beneficial Ownership After This Offering | ||||
| Name of the Selling Shareholder (1) | Number of Common Shares Beneficially Owned Prior to This Offering (1) | Number of Common Shares Offered Hereby (2) | Number of Common Shares | % of Outstanding Common Shares |
| Research Capital Corporation (3) | 160,211 | 77,961 | 82,250 | * |
| Lind Global Asset Management III, LLC (4) | 24,066,162 | 1,398,600 | 22,667,562 | 8.21% |
| Johan Landwehr (5) | 2,000 | 2,000 | - | - |
| Kevin McGlensey (6) | 2,153,319 | 44,000 | 2,109,319 | * |
| Glenn Schultz (7) | 342,572 | 87,572 | 255,000 | * |
| Steve Everhart (8) | 2,498,742 | 298,742 | 2,200,000 | * |
| Jason Boisvert (9) | 2,832,278 | 264,000 | 2,568,278 | 1.01% |
| Maarten Soetaert (10) | 95,000 | 60,000 | 35,000 | * |
| Wim Bakker (11) | 41,800 | 15,000 | 26,800 | * |
| Rogier Botting (12) | 54,000 | 30,000 | 24,000 | * |
| Petrus Johannes Broeders (13) | 40,000 | 15,000 | 25,000 | * |
| Benedikt Bruggeman (14) | 170,000 | 30,000 | 140,000 | * |
| Jan Buter (15) | 195,000 | 15,000 | 180,000 | * |
| Rene Clignett (16) | 533,807 | 30,000 | 503,807 | * |
| Jacques de Groot (17) | 233,500 | 60,000 | 173,500 | * |
| Klaas de Groot (18) | 65,000 | 45,000 | 20,000 | * |
| Ron Feenstra (19) | 35,000 | 15,000 | 20,000 | * |
| Hassan Ghrib (20) | 112,500 | 30,000 | 82,500 | * |
| Toon Van Ginderen (21) | 196,000 | 90,000 | 106,000 | * |
| Jolanda Van Ginderen (22) | 22,150 | 15,000 | 7,150 | * |
| Bennie Hoornveld (23) | 61,193 | 30,000 | 31,193 | * |
| Hans Janshen (24) | 234,000 | 30,000 | 204,000 | * |
| Marc Joosten (25) | 210,000 | 60,000 | 150,000 | * |
| -11- |
| Max Lont (26) | 66,000 | 15,000 | 51,000 | * |
| Marcel Neering (27) | 160,000 | 15,000 | 145,000 | * |
| Paul van Rooy (28) | 105,000 | 75,000 | 30,000 | * |
| Alwin Tetteroo (29) | 135,048 | 30,000 | 105,048 | * |
| Peter Tromp (30) | 200,000 | 15,000 | 185,000 | * |
| Dirk Jan van Beem (31) | 609,564 | 60,000 | 549,564 | * |
| Leon van Dam (32) | 205,000 | 30,000 | 175,000 | * |
| Marco van der Vegt (33) | 140,000 | 90,000 | 50,000 | * |
| Paul Derk van Ewijk (34) | 107,000 | 15,000 | 92,000 | * |
| Indy Van Meteren (35) | 50,000 | 30,000 | 20,000 | * |
| Dirk Van Metern (36) | 490,000 | 60,000 | 430,000 | * |
| Renny van Wijk-Spinder (37) | 312,700 | 210,000 | 102,700 | * |
| Peter van Wijk (38) | 115,000 | 15,000 | 100,000 | * |
| Anthonie Van Zalk (39) | 70,000 | 30,000 | 40,000 | * |
| Martin Vandamme (40) | 152,000 | 30,000 | 122,000 | * |
| Adreanus Verburg (41) | 131,400 | 15,000 | 116,400 | * |
| Kees Volders (42) | 111,714 | 15,000 | 96,714 | * |
| Wilma de Vries-Mulder (43) | 40,000 | 30,000 | 10,000 | * |
| Sarah Christilaw (44) | 239,832 | 80,000 | 159,832 | * |
| Maria Elizabeth Moore (45) | 538,308 | 208,000 | 330,308 | * |
| Robert Baumgart (46) | 367,000 | 210,000 | 157,000 | * |
| Donna Kings (47) | 120,000 | 70,000 | 50,000 | * |
| Susan Zakamarko (48) | 155,000 | 70,000 | 85,000 | * |
| Weber Investment Corporation (49) | 1,675,530 | 690,000 | 985,530 | * |
| 1589835 Ontario Inc (50) | 917,500 | 420,000 | 497,500 | * |
| Michelle Amey (51) | 104,665 | 70,000 | 34,665 | * |
| Marva Usher (52) | 140,000 | 70,000 | 70,000 | * |
| -12- |
| Don Ambeau (53) | 168,250 | 70,000 | 98,250 | * |
| Debby Heath (54) | 234,600 | 112,600 | 122,000 | * |
| Don Heath (55) | 423,266 | 182,600 | 240,666 | * |
| Michael Bruce Wannop and/or Wendy Spiegelberg JTWROS (56) | 1,802,514 | 682,000 | 1,120,514 | * |
| Adam Christilaw and/or Hayley Christilaw JTWROS (57) | 409,133 | 145,400 | 263,733 | * |
| Adam Christilaw (58) | 698,350 | 431,200 | 267,150 | * |
| Hayley Christilaw (59) | 222,983 | 90,000 | 132,983 | * |
| David Christilaw (60) | 1,057,202 | 594,000 | 463,202 | * |
| Edward Ivan Martin and/or Claireete Martin JTWROS (61) | 1,046,500 | 450,000 | 596,500 | * |
| Edward Ivan Martin (62) | 104,000 | 104,000 | - | - |
| Gloria Christilaw (63) | 731,532 | 290,000 | 441,532 | * |
| Brad Sinclair (64) | 95,000 | 45,000 | 50,000 | * |
| Colleen Fox (65) | 218,900 | 112,600 | 106,300 | * |
| Total | 49,024,725 | 8,720,275 | 40,304,450 | 14.29% |
__________
* Less than 1%
| (1) | This table is based upon information supplied by the selling shareholders, which information may not be accurate as of the date hereof. We have determined beneficial ownership in accordance with the rules of the SEC. Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the selling shareholders named in the table above have sole voting and investment power with respect to all securities that they beneficially own, subject to applicable community property laws. Applicable percentages for the Common Shares are based on 253,185,585 Common Shares outstanding on June 15, 2021, adjusted as required by rules promulgated by the SEC. |
| (2) | Includes Common Shares issuable upon exercise of Common Share purchase warrants. |
| (3) | The selling shareholder, Research Capital Corporation, is the registered owner of the Common Shares and Common Share purchase warrants. The jurisdiction of the selling shareholder is Canada. Patrick Walsh has voting and investment power over the Common Shares. Beneficial ownership includes (a) 77,961 Common Shares issuable upon exercise of Compensation Warrants and (b) 82,250 Common Shares issuable upon exercise of Common Share purchase warrants, exercisable at C$0.79 per Common Share, expiring July 26, 2021. The selling shareholder is offering pursuant to this prospectus 77,961 Common Shares issuable upon exercise of Compensation Warrants. Research Capital Corporation received the Compensation Warrants being offered pursuant to this prospectus as compensation for services rendered in the Private Placement. |
| -13- |
| (4) | The selling shareholder, Lind Global Asset Management III, LLC, is the registered owner of the Common Shares. The jurisdiction of the selling shareholder is the United States. Each of Lind Global Macro Fund, LP, the sole member of Lind Global Asset Management III, LLC, Lind Global Partners LLC, the general partner of Lind Global Macro Fund, LP, and Jeff Easton, the managing member of Lind Global Macro Fund, LP, have voting and investment power over the Common Shares and may be deemed to be a beneficial owner. Beneficial ownership includes: (a) 1,102,200 Common Shares, (b) 500,000 Common Shares issuable upon exercise of Common Share purchase warrants, exercisable at C$0.77 per Common Share, expiring July 9, 2021, (c) 8,558,000 Common Shares issuable upon exercise of the Common Share purchase warrants, exercisable at C$0.97 per Common Share, expiring February 19, 2025, (d) 699,300 Common shares issuable upon exercise of Selling Shareholder Warrants, and (e) 13,206,662 Common Shares issuable upon conversion of $11.7 million principal amount of the a convertible security issued to Lind Global Asset Management III, LLC pursuant to a convertible security funding agreement, dated February 16, 2021, between the Company and Lind Global Asset Management III, LLC. With respect to item (e), the number of Common Shares issuable is calculated by converting $11.7 million, the aggregate principal amount of the convertible security outstanding as of June 15, 2021, into C$14,259,960 based on the daily exchange rate on June 15, 2021 of $1.00 to C$1.2188 as reported by the Bank of Canada, then dividing the result by the conversion price per Common Share, or approximately C$1.0798, which is equal to 85% of the volume-weighted average price of the Common Shares on the TSX for the five consecutive trading days immediately prior to June 15, 2021. The selling shareholder is offering pursuant to this prospectus 699,300 Common Shares and 699,300 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (5) | Johan Landwehr has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 1,000 Common Shares and (b) 1,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 1,000 Common Shares and 1,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (6) | Kevin McGlensey has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is the United States. Beneficial ownership includes (a) 2,131,319 Common Shares and (b) 22,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 22,000 Common Shares and 22,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (7) | Glenn Schultz has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is the United States. Beneficial ownership includes (a) 298,786 Common Shares and (b) 43,786 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 43,786 Common Shares and 43,786 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (8) | Steve Everhart has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is the United States. Beneficial ownership includes (a) 2,349,371 Common Shares and (b) 149,371 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 149,371 Common Shares and 149,371 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (9) | Jason Boisvert has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is Canada. Beneficial ownership includes (a) 2,700,278 Common Shares and (b) 132,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 132,000 Common Shares and 132,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (10) | Maarten Soetaert has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is Belgium. Beneficial ownership includes (a) 65,000 Common Shares and (b) 30,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 30,000 Common Shares and 30,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| -14- |
| (11) | Wim Bakker has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 34,300 Common Shares and (b) 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 7,500 Common Shares and 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (12) | Rogier Botting has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 39,000 Common Shares and (b) 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 15,000 Common Shares and 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (13) | Petrus Johannes Broeders has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 32,500 Common Shares and (b) 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 7,500 Common Shares and 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (14) | Benedikt Bruggeman has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is Belgium. Beneficial ownership includes (a) 155,000 Common Shares and (b) 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 15,000 Common Shares and 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (15) | Jan Buter has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 187,500 Common Shares and (b) 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 7,500 Common Shares and 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (16) | Rene Clignett has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 518,807 Common Shares and (b) 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 15,000 Common Shares and 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (17) | Jacques de Groot has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is Belgium. Beneficial ownership includes (a) 203,500 Common Shares and (b) 30,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 30,000 Common Shares and 30,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (18) | Klaas de Groot has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 42,500 Common Shares and (b) 22,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 22,500 Common Shares and 22,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (19) | Ron Feenstra has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 27,500 Common Shares and (b) 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 7,500 Common Shares and 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (20) | Hassan Ghrib has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 97,500 Common Shares and (b) 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 15,000 Common Shares and 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (21) | Toon Van Ginderen has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 151,000 Common Shares and (b) 45,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 45,000 Common Shares and 45,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| -15- |
| (22) | Jolanda Van Ginderen has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 14,650 Common Shares and (b) 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 7,500 Common Shares and 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (23) | Bennie Hoornveld has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 46,193 Common Shares and (b) 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 15,000 Common Shares and 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (24) | Hans Janshen has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 219,000 Common Shares and (b) 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 15,000 Common Shares and 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (25) | Marc Joosten has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 180,000 Common Shares and (b) 30,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 30,000 Common Shares and 30,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (26) | Max Lont has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 58,500 Common Shares and (b) 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 7,500 Common Shares and 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (27) | Marcel Neering has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 152,500 Common Shares and (b) 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 7,500 Common Shares and 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (28) | Paul van Rooy has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 67,500 Common Shares and (b) 37,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 37,500 Common Shares and 37,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (29) | Alwin Tetteroo has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 120,048 Common Shares and (b) 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 15,000 Common Shares and 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (30) | Peter Tromp has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 192,500 Common Shares and (b) 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 7,500 Common Shares and 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (31) | Dirk Jan van Beem has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 579,564 Common Shares and (b) 30,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 30,000 Common Shares and 30,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (32) | Leon van Dam has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 190,000 Common Shares and (b) 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 15,000 Common Shares and 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
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| (33) | Marco van der Vegt has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 95,000 Common Shares and (b) 45,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 45,000 Common Shares and 45,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (34) | Paul Derk van Ewijk has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 99,500 Common Shares and (b) 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 7,500 Common Shares and 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (35) | Indy Van Meteren has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 35,000 Common Shares and (b) 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 15,000 Common Shares and 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (36) | Dirk Van Metern has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 460,000 Common Shares and (b) 30,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 30,000 Common Shares and 30,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (37) | Renny van Wijk-Spinder has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 207,700 Common Shares and (b) 105,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 105,000 Common Shares and 105,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (38) | Peter van Wijk has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 107,500 Common Shares and (b) 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 7,500 Common Shares and 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (39) | Anthonie Van Zalk has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 55,000 Common Shares and (b) 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 15,000 Common Shares and 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (40) | Martin Vandamme has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is Belgium. Beneficial ownership includes (a) 137,000 Common Shares and (b) 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 15,000 Common Shares and 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (41) | Adreanus Verburg has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 123,900 Common Shares and (b) 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 7,500 Common Shares and 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (42) | Kees Volders has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 104,214 Common Shares and (b) 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 7,500 Common Shares and 7,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (43) | Wilma de Vries-Mulder has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is The Netherlands. Beneficial ownership includes (a) 25,000 Common Shares and (b) 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 15,000 Common Shares and 15,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
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| (44) | Sarah Christilaw has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is Canada. Beneficial ownership includes (a) 138,832 Common Shares, (b) 40,000 Common Shares issuable upon exercise of Selling Shareholder Warrants, and (c) 61,000 Common Shares issuable upon exercise of Common Share purchase warrants, exercisable at C$0.79 per Common Share, expiring July 26, 2021 (the “July 2017 Warrants”). The selling shareholder is offering pursuant to this prospectus 40,000 Common Shares and 40,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (45) | Maria Elizabeth Moore has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is Canada. Beneficial ownership includes (a) 284,308 Common Shares, (b) 104,000 Common Shares issuable upon exercise of Selling Shareholder Warrants, and (c) 150,000 Common Shares issuable upon exercise of July 2017 Warrants. The selling shareholder is offering pursuant to this prospectus 104,000 Common Shares and 104,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (46) | Robert Baumgart has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is Canada. Beneficial ownership includes (a) 247,000 Common Shares, (b) 105,000 Common Shares issuable upon exercise of Selling Shareholder Warrants, and (c) 15,000 Common Shares issuable upon exercise of July 2017 Warrants. The selling shareholder is offering pursuant to this prospectus 105,000 Common Shares and 105,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (47) | Donna Kings has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is Canada. Beneficial ownership includes (a) 60,000 Common Shares, (b) 35,000 Common Shares issuable upon exercise of Selling Shareholder Warrants, and (c) 25,000 Common Shares issuable upon exercise of July 2017 Warrants. The selling shareholder is offering pursuant to this prospectus 35,000 Common Shares and 35,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (48) | Susan Zakamarko has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is Canada. Beneficial ownership includes (a) 85,000 Common Shares, (b) 35,000 Common Shares issuable upon exercise of Selling Shareholder Warrants, and (c) 35,000 Common Shares issuable upon exercise of July 2017 Warrants. The selling shareholder is offering pursuant to this prospectus 35,000 Common Shares and 35,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (49) | The selling shareholder, Weber Investment Corporation, is the registered owner of the Common Shares and Common Share purchase warrants. The jurisdiction of the selling shareholder is Canada. Gary Weber has voting and investment power over the Common Shares and may be deemed to be a beneficial owner. Beneficial ownership includes (a) 963,530 Common Shares, (b) 345,000 Common Shares issuable upon exercise of Selling Shareholder Warrants, and (c) 367,000 Common Shares issuable upon exercise of July 2017 Warrants. The selling shareholder is offering pursuant to this prospectus 345,000 Common Shares and 345,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (50) | The selling shareholder, 1589835 Ontario Inc, is the registered owner of the Common Shares and Common Share purchase warrants. The jurisdiction of the selling shareholder is Canada. Chris Young has voting and investment power over the Common Shares and may be deemed to be a beneficial owner. Beneficial ownership includes (a) 517,500 Common Shares, (b) 210,000 Common Shares issuable upon exercise of Selling Shareholder Warrants, and (c) 190,000 Common Shares issuable upon exercise of July 2017 Warrants. The selling shareholder is offering pursuant to this prospectus 210,000 Common Shares and 210,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (51) | Michelle Amey has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is Canada. Beneficial ownership includes (a) 69,665 Common Shares and (b) 35,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 35,000 Common Shares and 35,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (52) | Marva Usher has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is Canada. Beneficial ownership includes (a) 70,000 Common Shares, (b) 35,000 Common Shares issuable upon exercise of Selling Shareholder Warrants, and (c) 35,000 Common Shares issuable upon exercise of July 2017 Warrants. The selling shareholder is offering pursuant to this prospectus 35,000 Common Shares and 35,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
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| (53) | Don Ambeau has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is Canada. Beneficial ownership includes (a) 133,250 Common Shares, and (b) 35,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 35,000 Common Shares and 35,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (54) | Debby Heath has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is Canada. Beneficial ownership includes (a) 124,300 Common Shares, (b) 56,300 Common Shares issuable upon exercise of Selling Shareholder Warrants, and (c) 54,000 Common Shares issuable upon exercise of July 2017 Warrants. The selling shareholder is offering pursuant to this prospectus 56,300 Common Shares and 56,300 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (55) | Don Heath has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is Canada. Beneficial ownership includes (a) 249,966 Common Shares, (b) 91,300 Common Shares issuable upon exercise of Selling Shareholder Warrants, and (c) 82,000 Common Shares issuable upon exercise of July 2017 Warrants. The selling shareholder is offering pursuant to this prospectus 91,300 Common Shares and 91,300 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (56) | Michael Bruce Wannop and/or Wendy Spiegelberg JTWROS have voting and investment power over the Common Shares. The jurisdiction of the selling shareholders is Canada. Beneficial ownership includes (a) 1,156,114 Common Shares, (b) 341,000 Common Shares issuable upon exercise of Selling Shareholder Warrants, and (c) 305,400 Common Shares issuable upon exercise of July 2017 Warrants. The selling shareholders are offering pursuant to this prospectus 341,000 Common Shares and 341,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (57) | Adam Christilaw and/or Hayley Christilaw JTWROS have voting and investment power over the Common Shares. The jurisdiction of the selling shareholders is Canada. Beneficial ownership includes (a) 281,533 Common Shares, (b) 72,700 Common Shares issuable upon exercise of Selling Shareholder Warrants, and (c) 54,900 Common Shares issuable upon exercise of July 2017 Warrants. The selling shareholders are offering pursuant to this prospectus 72,700 Common Shares and 72,700 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (58) | In addition to the Common Shares and Common Share purchase warrants he owns individually, Adam Christilaw has voting and investment power over and may be deemed to be a beneficial owner of the Common Shares and Common Share purchase warrants registered in the name of 2064501 Ontario Inc., a corporation incorporated under the laws of Canada. The jurisdiction of the selling shareholder is Canada. Beneficial ownership includes (a) 383,350 Common Shares, (b) 215,600 Common Shares issuable upon exercise of Selling Shareholder Warrants, and (c) 99,400 Common Shares issuable upon exercise of July 2017 Warrants. The selling shareholder is offering pursuant to this prospectus 215,600 Common Shares, and 215,600 Common Shares issuable upon exercise of Selling Shareholder Warrants. Adam Christilaw also has voting and investment power over Common Shares of the Company that he beneficially owns with Hayley Christilaw. See footnote 57. |
| (59) | Hayley Christilaw has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is Canada. Beneficial ownership includes (a) 123,083 Common Shares, (b) 45,000 Common Shares issuable upon exercise of Selling Shareholder Warrants, and (c) 54,900 Common Shares issuable upon exercise of July 2017 Warrants. The selling shareholder is offering pursuant to this prospectus 45,000 Common Shares and 45,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. Hayley Christilaw also has voting and investment power over Common Shares of the Company that she beneficially owns with Adam Christilaw. See footnote 57. |
| (60) | In addition to the Common Shares and Common Share purchase warrants he owns individually, David Christilaw has voting and investment power over and may be deemed to be a beneficial owner of the Common Shares and Common Share purchase warrants registered the names of David Christilaw CHARTERED ACCOUNTANT PROFESSIONAL CORPORATION, a professional corporation organized under the laws of Ontario, Canada, and 939042 Ontario Inc., a corporation incorporated under the laws of Ontario, Canada. The jurisdiction of the selling security holder is Canada. Beneficial ownership includes (a) 600,202 Common Shares, (b) 297,000 Common Shares issuable upon exercise of Selling Shareholder Warrants, and (c) 160,000 Common Shares issuable upon exercise of July 2017 Warrants. The selling shareholder is offering pursuant to this prospectus 297,000 Common Shares and 297,000 Common Shares issued upon exercise of Selling Shareholder Warrants. |
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| (61) | Edward Ivan Martin and/or Claireete Martin JTWROS have voting and investment power over the Common Shares. The jurisdiction of the selling shareholders is Canada. Beneficial ownership includes (a) 621,500 Common Shares, (b) 225,000 Common Shares issuable upon exercise of Selling Shareholder Warrants, and (c) 200,000 Common Shares issuable upon exercise of July 2017 Warrants. The selling shareholders are offering pursuant to this prospectus 225,000 Common Shares and 225,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (62) | In addition to the Common Shares and Common Share purchase warrants he beneficially owns with Claireete Martin (see footnote 61), Edward Martin has voting and investment power over and may be deemed to be a beneficial owner of the Common Shares and Common Share purchase warrants registered in the name of 1589936 Ontario Inc, a corporation incorporated under the laws of Canada. The jurisdiction of the selling shareholder is Canada. Beneficial ownership includes (a) 52,000 Common Shares and (b) 52,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. The selling shareholder is offering pursuant to this prospectus 52,000 Common Shares and 52,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (63) | Gloria Christilaw has voting and investment power over the Common Shares. The jurisdiction of the selling shareholder is Canada. Beneficial ownership includes (a) 526,532 Common Shares, (b) 145,000 Common Shares issuable upon exercise of Selling Shareholder Warrants, and (c) 60,000 Common Shares issuable upon exercise of July 2017 Warrants. The selling shareholder is offering pursuant to this prospectus 145,000 Common Shares and 145,000 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (64) | In addition to the Common Shares and Common Share purchase warrants he owns individually, Brad Sinclair has voting and investment power over and may be deemed to be a beneficial owner of the Common Shares and Common Share purchase warrants registered in the name of Sinclair Professional Group, a corporation incorporated under the laws of Canada. The jurisdiction of the selling shareholder is Canada. Beneficial ownership includes (a) 47,500 Common Shares, (b) 22,500 Common Shares issuable upon exercise of Selling Shareholder Warrants, and (c) 25,000 Common Shares issuable upon exercise of July 2017 Warrants. The selling shareholder is offering pursuant to this prospectus 22,500 Common Shares and 22,500 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
| (65) | In addition to the Common Shares and Common Share purchase warrants she owns individually, Colleen Fox has voting and investment power over and may be deemed to be a beneficial owner of the Common Shares and Common Share purchase warrants registered in the name of 2506764 Ontario Inc., a corporation incorporated under the laws of Canada. The jurisdiction of the selling shareholder is Canada. Beneficial ownership includes (a) 111,300 Common Shares, (b) 56,300 Common Shares issuable upon exercise of Selling Shareholder Warrants, and (c) 51,300 Common Shares issuable upon exercise of July 2017 Warrants. The selling shareholder is offering pursuant to this prospectus 56,300 Common Shares and 56,300 Common Shares issuable upon exercise of Selling Shareholder Warrants. |
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Common Shares
The authorized capital of the Company consists of an unlimited number of Common Shares without par value, of which 253,185,585 were issued and outstanding as of June 15, 2021. The holders of Common Shares are entitled to receive notice of and attend all meetings of shareholders, with each Common Share held entitling the holder to one vote on any resolution to be passed at such shareholder meetings. The holders of Common Shares are entitled to dividends if, as and when declared by the Company’s Board of Directors. The Common Shares are entitled, upon liquidation, dissolution, or winding up of NioCorp, to receive the remaining assets of NioCorp available for distribution to shareholders. There are no pre-emptive, conversion, or redemption rights attached to the Common Shares.
Exchange Controls
There are no governmental laws, decrees, or regulations in Canada that restrict the export or import of capital, including foreign exchange controls, or that affect the remittance of dividends, interest or other payments to non-resident holders of the securities of NioCorp, other than Canadian withholding tax. See “Certain Canadian Federal Income Tax Considerations for U.S. Residents” below.
Certain Canadian Federal Income Tax Considerations for U.S. Residents
The following summarizes certain Canadian federal income tax consequences generally applicable under the Income Tax Act (Canada) and the regulations enacted thereunder (collectively, the “Canadian Tax Act”) and the Canada-United States Income Tax Convention (1980) (the “Convention”) to the holding and disposition of Common Shares.
Comment is restricted to holders of Common Shares each of whom, at all material times for the purposes of the Canadian Tax Act and the Convention, (i) is resident solely in the United States, (ii) is entitled to the benefits of the Convention, (iii) holds all Common Shares as capital property, (iii) holds no Common Shares that are “taxable Canadian property” (as defined in the Canadian Tax Act) of the holder, (iv) deals at arm’s length with and is not affiliated with NioCorp, (v) does not and is not deemed to use or hold any Common Shares in a business carried on in Canada, and (vi) is not an insurer that carries on business in Canada and elsewhere (each such holder, a “U.S. Resident Holder”).
Certain U.S.-resident entities that are fiscally transparent for United States federal income tax purposes (including limited liability companies) may not in all circumstances be regarded by the Canada Revenue Agency (the “CRA”) as entitled to the benefits of the Convention. Members of or holders of an interest in such an entity that holds Common Shares should consult their own tax advisers regarding the extent, if any, to which the CRA will extend the benefits of the Convention to the entity in respect of its Common Shares.
Generally, a holder’s Common Shares will be considered to be capital property of the holder provided that the holder is not a trader or dealer in securities, did not acquire, hold, or dispose of the Common Shares in one or more transactions considered to be an adventure or concern in the nature of trade (i.e. speculation), and does not hold the Common Shares in the course of carrying on a business.
Generally, a holder’s Common Shares will not constitute “taxable Canadian property” of the holder at a particular time at which the Common Shares are listed on a “designated stock exchange” (which currently includes the TSX) unless both of the following conditions are true:
| (i) | at any time during the 60-month period that ends at the particular time, 25% or more of the issued shares of any class of the capital stock of NioCorp were owned by or belonged to one or any combination of |
| (A) | the holder, |
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| (B) | persons with whom the holder did not deal at arm’s length, and |
| (C) | partnerships in which the holder or a person referred to in clause (B) holds a membership interest directly or indirectly through one or more partnerships, and |
| (ii) | at any time during the 60-month period that ends at the particular time, more than 50% of the fair market value of the Common Shares was derived directly or indirectly from, one or any combination of, real or immovable property situated in Canada, “Canadian resource properties” (as defined in the Canadian Tax Act), “timber resource properties” (as defined in the Canadian Tax Act), or options in respect of, or interests in any of the foregoing, whether or not the property exists. |
This summary is based on the current provisions of the Canadian Tax Act and the Convention in effect on the date hereof, all specific proposals to amend the Canadian Tax Act and Convention publicly announced by or on behalf of the Minister of Finance (Canada) on or before the date hereof, and the current published administrative and assessing policies of the CRA. It is assumed that all such amendments will be enacted as currently proposed, and that there will be no other material change to any applicable law or administrative or assessing practice, although no assurance can be given in these respects. Except as otherwise expressly provided, this summary does not take into account any provincial, territorial, or foreign tax considerations, which may differ materially from those set out herein.
This summary is of a general nature only, is not exhaustive of all possible Canadian federal income tax considerations, and is not intended to be and should not be construed as legal or tax advice to any particular U.S. Resident Holder. U.S. Resident Holders are urged to consult their own tax advisers for advice with respect to their particular circumstances. The discussion below is qualified accordingly.
A U.S. Resident Holder who disposes or is deemed to dispose of one or more Common Shares generally should not thereby incur any liability for Canadian federal income tax in respect of any capital gain arising as a consequence of the disposition.
A U.S. Resident Holder to whom NioCorp pays or is deemed to pay a dividend on the holder’s Common Shares will be subject to Canadian withholding tax, and NioCorp will be required to withhold the tax from the dividend and remit it to the CRA for the holder’s account. The rate of withholding tax under the Canadian Tax Act is 25% of the gross amount of the dividend, but should generally be reduced under the Convention to 15% (or, if the U.S. Resident Holder is a company which is the beneficial owner of at least 10% of the voting stock of NioCorp, 5%) of the gross amount of the dividend. For this purpose, a company that is a resident of the United States for purposes of the Canadian Tax Act and the Convention and is entitled to the benefits of the Convention shall be considered to own the voting stock of NioCorp owned by an entity that is considered fiscally transparent under the laws of the United States and that it is not a resident of Canada, in proportion to the Company’s ownership interest in that entity.
Warrants
As of June 15, 2021, an aggregate of 15,421,168 Common Share purchase warrants, with each Common Share purchase warrant exercisable for one Common Share, were issued and outstanding as follows:
| Number | Exercise Price | Expiry Date | |||||
| 500,000 | C$ | 0.77 | July 9, 2021 | ||||
| 1,451,050 | C$ | 0.79 | July 26, 2021 | ||||
| 500,000 | C$ | 0.80 | December 18, 2022 | ||||
| 8,558,000 | C$ | 0.97 | February 19, 2024 | ||||
| 4,412,118 | C$ | 1.63 | May 10, 2023 | ||||
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The exercise price per Common Share and the number of Common Shares issuable upon exercise of the Common Share purchase warrants is subject to adjustment upon the occurrence of certain events including, but not limited to, the following:
| · | the subdivision or re-division of the Company’s outstanding Common Shares into a greater number of Common Shares; |
| · | the reduction, combination or consolidation of the Company’s outstanding Common Shares into a lesser number of Common Shares; |
| · | the issuance of Common Shares or securities exchangeable for, or convertible into, Common Shares to all or substantially all of the holders of Common Shares by way of stock dividend or other distribution (other than a distribution of Common Shares upon the exercise of Common Share purchase warrants or any outstanding options); |
| · | the reorganization of the Company or the consolidation or merger or amalgamation of the Company with or into another body corporate; and |
| · | a reclassification or other similar change to the Company’s outstanding Common Shares. |
We will issue the Common Shares issuable upon exercise of Common Share purchase warrants within five business days following our receipt of notice of exercise and payment of the exercise price, subject to surrender of the Common Share purchase warrants. Prior to the exercise of any Common Share purchase warrants, holders of the Common Share purchase warrants will not have any of the rights of holders of the Common Shares issuable upon exercise, including the right to vote or to receive any payments of dividends on the Common Shares issuable upon exercise.
The Lind Convertible Security
On February 19, 2021, pursuant to a convertible security funding agreement, dated February 16, 2021 (the “Lind Agreement”), between the Company and Lind Global Asset Management III, LLC (“Lind”), Lind advanced to the Company $10.0 million (subject to additional set off) in consideration of which the Company issued to Lind a convertible security (the “Lind 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 Convertible Security).
The Lind 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 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 Agreement, whichever is earlier. The Lind Convertible Security constitutes the direct, general and unconditional obligation of the Company and ranks pari-passu with the Company’s other indebtedness. The Lind Convertible Security is guaranteed on a secured basis by 0896800 and ECRC.
The Lind Convertible Security is secured by all of the assets and property of the Company, including all of the issued and outstanding shares of 0896800 pledged by the Company, 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 Convertible Security rank pari-passu with the liens securing the Smith Credit Facility on all amounts up to $4.0 million. The liens securing the Lind Convertible Security rank senior to the liens securing the Smith Credit Facility on any amount that is owed by the Company to Mr. Smith in excess of $4.0 million.
Pursuant to the Lind Agreement, Lind is entitled to convert the Lind 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 of the Common Shares on the TSX for the five trading days immediately preceding the date on which Lind provides notice to the Company of its election to convert. Subject to certain exceptions, the Lind Agreement contains restrictions on how much of the Lind Convertible Security may be converted in any particular month. The Lind Agreement also provides NioCorp with the option to buy back the remaining face amount of the Lind Convertible Security in cash at any time; provided that, if the Company exercises such option, Lind 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 is entitled to accelerate its conversion right to the full amount of the face value of the Lind Convertible Security or demand repayment thereof in cash upon the occurrence of an event of default and other designated events described in the Lind Agreement.
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The foregoing is intended as a description of the material terms of the Lind Convertible Security only and is qualified in its entirety by reference to the full text of the Lind Agreement, which is incorporated by reference herein. See “Where You Can Find More Information” below.
The Nordmin Convertible Note
On December 18, 2020, the Company issued to Nordmin Engineering Ltd. (“Nordmin”) a convertible note (the “Nordmin Convertible Note”) in the initial aggregate principal amount of approximately $1.9 million pursuant to a convertible note and warrant subscription agreement, dated December 18, 2020 (the “Nordmin Agreement”), between the Company and Nordmin, under which Nordmin agreed to subscribe for and purchase the Nordmin Convertible Note and 500,000 Common Share purchase warrants, exercisable at a price per Common Share of C$0.80, expiring December 18, 2022, for a subscription price of approximately $1.8 million. This amount was set off against the amount owed to Nordmin by NioCorp for past services. 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 approximately $0.5 million in aggregate principal amount of the Nordmin Convertible Note at a conversion price of C$0.684 per share.
The Nordmin Convertible Note will mature on December 18, 2021, and has no stated interest rate, 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 of the Common Shares on the TSX at the time of conversion. The Nordmin Convertible Note contains restrictions on how much of the principal amount may be converted in any 30-day period. The Nordmin Convertible 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 Convertible 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 Convertible Note. The Nordmin Convertible Note constitutes the direct, general and unconditional obligation of the Company. The Nordmin Convertible Note is unsecured and ranks effectively junior to the Company’s secured indebtedness, including under the Lind Convertible Security and the Smith Credit Facility, to the extent of the value of the assets securing such indebtedness.
The foregoing is intended as a description of the material terms of the Nordmin Convertible Note only and is qualified in its entirety by reference to the full text of the Nordmin Convertible Note, which is incorporated by reference herein. See “Where You Can Find More Information” below.
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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a general summary of certain U.S. federal income tax considerations applicable to a U.S. Holder (as defined below) arising from and relating to the acquisition, ownership, and disposition of the Common Shares. This summary is for general information purposes only and does not purport to be a complete analysis or listing of all potential U.S. federal income tax considerations that may apply to a U.S. Holder arising from and relating to the acquisition, ownership, and disposition of Common Shares. In addition, this summary does not take into account the individual facts and circumstances of any particular U.S. Holder that may affect the U.S. federal income tax consequences to such U.S. Holder, including, without limitation, specific tax consequences to a U.S. Holder under an applicable income tax treaty. Accordingly, this summary is not intended to be, and should not be construed as, legal or U.S. federal income tax advice with respect to any U.S. Holder. This summary does not address the U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local, and non-U.S. tax consequences to U.S. Holders of the acquisition, ownership, and disposition of Common Shares. In addition, except as specifically set forth below, this summary does not discuss applicable tax reporting requirements. Each prospective U.S. Holder should consult its own tax advisors regarding the U.S. federal, U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local, and non-U.S. tax consequences relating to the acquisition, ownership and disposition of the Common Shares.
No legal opinion from U.S. legal counsel or ruling from the Internal Revenue Service (the “IRS”) has been requested, or will be obtained, regarding the U.S. federal income tax consequences of the acquisition, ownership, and disposition of the Common Shares. This summary is not binding on the IRS, and the IRS is not precluded from taking a position that is different from, and contrary to, the positions taken in this summary. In addition, because the authorities on which this summary is based are subject to various interpretations, the IRS and the U.S. courts could disagree with one or more of the conclusions described in this summary.
Scope of this Summary
Authorities
This summary is based on the Code, Treasury Regulations (whether final, temporary, or proposed), published rulings of the IRS, published administrative positions of the IRS, the Convention Between Canada and the United States of America with Respect to Taxes on Income and on Capital, signed September 26, 1980, as amended (the “Canada-U.S. Tax Convention”), and U.S. court decisions that are applicable, and, in each case, as in effect and available, as of the date of this document. Any of the authorities on which this summary is based could be changed in a material and adverse manner at any time, and any such change could be applied retroactively. This summary does not discuss the potential effects, whether adverse or beneficial, of any proposed legislation.
U.S. Holders
For purposes of this summary, the term “U.S. Holder” means a beneficial owner of Common Shares that is for U.S. federal income tax purposes:
| · | an individual who is a citizen or resident of the United States; |
| · | a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) organized under the laws of the United States, any state thereof or the District of Columbia; |
| · | an estate whose income is subject to U.S. federal income taxation regardless of its source; or |
| · | a trust that (1) is subject to the primary supervision of a court within the U.S. and the control of one or more U.S. persons for all substantial decisions or (2) has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person. |
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U.S. Holders Subject to Special U.S. Federal Income Tax Rules Not Addressed
This summary does not address the U.S. federal income tax considerations applicable to U.S. Holders that are subject to special provisions under the Code, including, but not limited to, U.S. Holders that: (a) are tax-exempt organizations, qualified retirement plans, individual retirement accounts, or other tax-deferred accounts; (b) are financial institutions, underwriters, insurance companies, real estate investment trusts, or regulated investment companies; (c) are broker-dealers, dealers, or traders in securities or currencies that elect to apply a mark-to-market accounting method; (d) have a “functional currency” other than the U.S. dollar; (e) own Common Shares as part of a straddle, hedging transaction, conversion transaction, constructive sale, or other arrangement involving more than one position; (f) acquire Common Shares in connection with the exercise of employee stock options or otherwise as compensation for services; (g) hold Common Shares other than as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment purposes); or (h) own, have owned or will own (directly, indirectly, or by attribution) 10% or more of the total combined voting power of the outstanding shares of the Company. This summary also does not address the U.S. federal income tax considerations applicable to U.S. Holders who are: (a) U.S. expatriates or former long-term residents of the U.S.; (b) persons that have been, are, or will be a resident or deemed to be a resident in Canada for purposes of the Income Tax Act (Canada) (the “Tax Act”); (c) persons that use or hold, will use or hold, or that are or will be deemed to use or hold Common Shares in connection with carrying on a business in Canada; (d) persons whose Common Shares constitute “taxable Canadian property” under the Tax Act; or (e) persons that have a permanent establishment in Canada for the purposes of the Canada-U.S. Tax Convention. U.S. Holders that are subject to special provisions under the Code, including, but not limited to, U.S. Holders described immediately above, should consult their own tax advisors regarding the U.S. federal, U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local, and non-U.S. tax consequences relating to the acquisition, ownership and disposition of Common Shares.
If an entity or arrangement that is classified as a partnership (or other “pass-through” entity) for U.S. federal income tax purposes holds Common Shares, the U.S. federal income tax consequences to such entity or arrangement and the partners (or other owners or participants) of such entity or arrangement generally will depend on the activities of the entity or arrangement and the status of such partners (or owners or participants). This summary does not address the tax consequences to any such partner (or owner or participants). Partners (or other owners or participants) of entities or arrangements that are classified as partnerships or as “pass-through” entities for U.S. federal income tax purposes should consult their own tax advisors regarding the U.S. federal income tax consequences arising from and relating to the acquisition, ownership, and disposition of Common Shares.
General Rules Applicable to the Ownership and Disposition of Common Shares
A U.S. Holder that receives a distribution, including a constructive distribution, with respect to a Common Share will be required to include the amount of such distribution in gross income as a dividend (without reduction for any Canadian income tax withheld from such distribution) to the extent of the current and accumulated “earnings and profits” of the Company, as computed for U.S. federal income tax purposes. A dividend generally will be taxed to a U.S. Holder at ordinary income tax rates. (See, however, the exception discussed below for individual and other non-corporate U.S. Holders, which may allow such holders preferential rates when the Company has terminated PFIC status.) To the extent that a distribution exceeds the current and accumulated “earnings and profits” of the Company, such distribution will be treated, first, as a tax-free return of capital to the extent of a U.S. Holder’s tax basis in the Common Shares and thereafter as gain from the sale or exchange of such Common Shares. However, the Company may not maintain the calculations of its earnings and profits in accordance with U.S. federal income tax principles, and U.S. Holders may have to assume that any distribution by the Company with respect to the Common Shares will constitute ordinary dividend income. Dividends received on Common Shares by corporate U.S. Holders generally will not be eligible for the “dividends received deduction.” Provided that (1) the Company is eligible for the benefits of the Canada-U.S. Tax Convention or (2) the Common Shares are readily tradable on a United States securities market (and certain holding period and other conditions are satisfied), dividends paid by the Company to non-corporate U.S. Holders , including individuals, will be eligible for the preferential tax rates applicable to long-term capital gains for dividends unless the Company is classified as a PFIC in the tax year of distribution or in the preceding tax year. See “—Passive Foreign Investment Company Rules—PFIC Status of the Company” below. The dividend rules are complex, and each U.S. Holder should consult its own tax advisors regarding the application of such rules.
Upon the sale or other taxable disposition of Common Shares, subject to the PFIC rules below, a U.S. Holder generally will recognize capital gain or loss in an amount equal to the difference between the U.S. dollar value of cash received plus the fair market value of any property received and such U.S. Holder’s tax basis in such Common Shares sold or otherwise disposed of. A U.S. Holder’s tax basis in Common Shares generally will be determined initially by the holder’s U.S. dollar cost for the Common Shares (with adjustments provided under the PFIC rules below). Subject again to the PFIC rules, gain or loss recognized on such sale or other disposition generally will be long-term capital gain or loss if, at the time of the sale or other disposition, the Common Shares have been held for more than one year.
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Preferential tax rates currently apply to long-term capital gain of a U.S. Holder that is an individual, estate, or trust. There are currently no preferential tax rates for long-term capital gain of a U.S. Holder that is a corporation. Deductions for capital losses are subject to significant limitations under the Code. If the Company is determined to be a PFIC, any gain realized on the Common Shares could be ordinary income under the rules discussed below.
Passive Foreign Investment Company Rules
PFIC Status of the Company
If the Company were to constitute a PFIC under the meaning of Section 1297 of the Code for any taxable year during a U.S. Holder’s holding period, then certain potentially adverse rules may affect the U.S. federal income tax consequences to a U.S. Holder as a result of the acquisition, ownership and disposition of Common Shares. The Company believes that it was classified as a PFIC during the tax years ended June 30, 2020 and 2019, and based on current business plans and financial expectations, the Company expects that it may be a PFIC for the current tax year and in one or more future tax years. No opinion of legal counsel or ruling from the IRS concerning the status of the Company as a PFIC has been obtained or is currently planned to be requested. The determination of whether any corporation was, or will be, a PFIC for a tax year depends, in part, on the application of complex U.S. federal income tax rules, which are subject to differing interpretations. In addition, whether any corporation will be a PFIC for any tax year depends on the assets and income of such corporation over the course of each such tax year and, as a result, cannot be predicted with certainty as of the date of this document. Accordingly, there can be no assurance that the IRS will not challenge any determination made by the Company (or any subsidiary of the Company) concerning its PFIC status in any taxable year. Each U.S. Holder should consult its own tax advisors regarding the PFIC status of the Company and each subsidiary of the Company.
In any taxable year in which the Company is classified as a PFIC, a U.S. Holder will be required to file an annual report with the IRS containing such information as Treasury Regulations and/or other IRS guidance may require. IRS Form 8621 is currently used for such filings. In addition to penalties, a failure to satisfy such reporting requirements may result in an extension of the time period during which the IRS can assess a tax. U.S. Holders should consult their own tax advisors regarding the requirements of filing such information returns under these rules, including the requirement to file an IRS Form 8621 annually.
The Company generally will be a PFIC for a taxable year if, for such year, (a) 75% or more of the gross income of the Company is passive income (the “PFIC income test”) or (b) 50% or more of the value of the Company’s assets either produce passive income or are held for the production of passive income, based on the quarterly average of the fair market value of such assets (the “PFIC asset test”). “Gross income” generally includes all sales revenues less the cost of goods sold, plus income from investments and from incidental or outside operations or sources, and “passive income” generally includes, for example, dividends, interest, certain rents and royalties, certain gains from the sale of stock and securities, and certain gains from commodities transactions.
Active business gains arising from the sale of commodities generally are excluded from passive income if substantially all (85% or more) of a foreign corporation’s commodities are stock in trade or inventory, depreciable property used in a trade or business, or supplies regularly used or consumed in the ordinary course of its trade or business, and certain other requirements are satisfied.
For purposes of the PFIC income test and PFIC asset test described above, if the Company owns, directly or indirectly, 25% or more of the total value of the outstanding shares of another corporation, the Company will be treated as if it (a) held a proportionate share of the assets of such other corporation and (b) received directly a proportionate share of the income of such other corporation. In addition, for purposes of the PFIC income test and PFIC asset test described above, and assuming certain other requirements are met, “passive income” does not include certain interest, dividends, rents, or royalties that are received or accrued by the Company from certain “related persons” (as defined in Section 954(d)(3) of the Code) also organized in Canada, to the extent such items are properly allocable to the income of such related person that is neither passive income nor income connected with a U.S. trade or business.
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Under certain attribution rules, if the Company is a PFIC, U.S. Holders will generally be deemed to own their proportionate share of the Company’s direct or indirect equity interest in any company that is also a PFIC (a “Subsidiary PFIC”), and will generally be subject to U.S. federal income tax on their proportionate share of (a) any “excess distributions,” as described below, on the stock of a Subsidiary PFIC and (b) a disposition or deemed disposition of the stock of a Subsidiary PFIC by the Company or another Subsidiary PFIC, both as if such U.S. Holders directly held the shares of such Subsidiary PFIC. In addition, U.S. Holders may be subject to U.S. federal income tax on any indirect gain realized on the stock of a Subsidiary PFIC on the sale or disposition of Common Shares. Accordingly, U.S. Holders should be aware that they could be subject to tax under the PFIC rules even if no distributions are received on the Common Shares and no redemptions or other dispositions of Common Shares are made.
Default PFIC Rules Under Section 1291 of the Code
If the Company is a PFIC for any tax year during which a U.S. Holder owns Common Shares, the U.S. federal income tax consequences to such U.S. Holder of the acquisition, ownership, and disposition of Common Shares will depend on whether and when such U.S. Holder makes an election to treat the Company and each Subsidiary PFIC, if any, as a “qualified electing fund” (“QEF”) under Section 1295 of the Code (a “QEF Election”) or makes a mark-to-market election under Section 1296 of the Code (a “Mark-to-Market Election”). A U.S. Holder that does not make either a QEF Election or a Mark-to-Market Election will be referred to in this summary as a “Non-Electing U.S. Holder.”
A Non-Electing U.S. Holder will be subject to the rules of Section 1291 of the Code (described below) with respect to (a) any gain recognized on the sale or other taxable disposition of Common Shares and (b) any “excess distribution” received on the Common Shares. A distribution generally will be an “excess distribution” to the extent that such distribution (together with all other distributions received in the current tax year) exceeds 125% of the average distributions received during the three preceding tax years (or during a U.S. Holder’s holding period for the Common Shares, if shorter).
Under Section 1291 of the Code, any gain recognized on the sale or other taxable disposition of Common Shares (including an indirect disposition of the stock of any Subsidiary PFIC), and any “excess distribution” received on Common Shares or deemed received with respect to the stock of a Subsidiary PFIC, must be ratably allocated to each day in a Non-Electing U.S. Holder’s holding period for the respective Common Shares. The amount of any such gain or excess distribution allocated to the tax year of disposition or distribution of the excess distribution, or allocated to years before the entity became a PFIC, if any, would be taxed as ordinary income at the rates applicable for such year (and not eligible for certain preferred rates). The amounts allocated to any other tax year would be subject to U.S. federal income tax at the highest tax rate applicable to ordinary income in each such year. In addition, an interest charge would be imposed on the tax liability for each such year, calculated as if such tax liability had been due in each such year. A Non-Electing U.S. Holder that is not a corporation must treat any such interest paid as “personal interest,” which is not deductible.
If the Company is a PFIC for any tax year during which a Non-Electing U.S. Holder holds Common Shares, the Company will continue to be treated as a PFIC with respect to such Non-Electing U.S. Holder, regardless of whether the Company ceases to be a PFIC in one or more subsequent tax years. A Non-Electing U.S. Holder may terminate this deemed PFIC status by electing to recognize gain (which will be taxed under the rules of Section 1291 of the Code discussed above), but not loss, as if such Common Shares were sold on the last day of the last tax year for which the Company was a PFIC.
QEF Election
A U.S. Holder that makes a timely and effective QEF Election for the tax year in which the holding period of its Common Shares begins generally will not be subject to the rules of Section 1291 of the Code discussed above with respect to such Common Shares. A U.S. Holder that makes such a QEF Election will be subject to U.S. federal income tax on such U.S. Holder’s pro rata share (based on its ownership Common Stock) of (a) the net capital gain of the Company, which will be taxed as long-term capital gain to such U.S. Holder, and (b) the ordinary earnings of the Company, which will be taxed as ordinary income to such U.S. Holder. Generally, “net capital gain” is the excess of (a) net long-term capital gain over (b) net short-term capital loss, and “ordinary earnings” are the excess of (a) “earnings and profits” over (b) net capital gain. A U.S. Holder that makes a QEF Election will be subject to U.S. federal income tax on such amounts for each tax year in which the Company is a PFIC, regardless of whether such amounts are actually distributed to such U.S. Holder by the Company. However, for any tax year in which the Company is a PFIC and has no net income or gain, U.S. Holders that have made a QEF Election would not have any income inclusions as a result of the QEF Election. If a U.S. Holder that made a QEF Election has an income inclusion, such a U.S. Holder may, subject to certain limitations, elect to defer payment of current U.S. federal income tax on such amounts, subject to an interest charge. If such U.S. Holder is not a corporation, any such interest paid will be treated as “personal interest,” which is not deductible.
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A U.S. Holder that makes a timely and effective QEF Election with respect to the Company generally (a) may receive a tax-free distribution from the Company to the extent that such distribution represents “earnings and profits” of the Company that were previously included in income by the U.S. Holder because of such QEF Election and (b) will adjust such U.S. Holder’s tax basis in the Common Shares to reflect the amount included in income or allowed as a tax-free distribution because of such QEF Election. A U.S. Holder that makes a QEF Election generally will recognize capital gain or loss on the sale or other taxable disposition of Common Shares.
A U.S. Holder may make a timely QEF Election by filing the appropriate QEF Election documents (currently IRS Form 8621) at the time such U.S. Holder files a U.S. federal income tax return for such year. If a U.S. Holder does not make a timely QEF Election for the first year in the U.S. Holder’s holding period in which the Company is a PFIC, the U.S. Holder may still be able to make an effective QEF Election in a subsequent year if such U.S. Holder meets certain requirements and makes a “purging” election to recognize gain (which will be taxed under the rules of Section 1291 of the Code discussed above) as if such Common Shares were sold for their fair market value on the day the QEF Election is effective. If a U.S. Holder makes a QEF Election but does not make a “purging” election to recognize gain as discussed in the preceding sentence, then such U.S. Holder shall be subject to the QEF Election rules and shall continue to be subject to tax under the rules of Section 1291 discussed above with respect to its Common Shares. If a U.S. Holder owns PFIC stock indirectly through another PFIC, separate QEF Elections must be made for the PFIC in which the U.S. Holder is a direct shareholder and the Subsidiary PFIC for the QEF rules to apply to both PFICs.
A QEF Election will apply to the tax year for which such QEF Election is timely made and to all subsequent tax years, unless such QEF Election is invalidated or terminated or the IRS consents to revocation of such QEF Election. If a U.S. Holder makes a QEF Election and, in a subsequent tax year, the Company ceases to be a PFIC, the QEF Election will remain in effect (although it will not be applicable) during those tax years in which the Company is not a PFIC. Accordingly, if the Company becomes a PFIC in another subsequent tax year, the QEF Election will be effective, and the U.S. Holder will be subject to the QEF rules described above during any subsequent tax year in which the Company qualifies as a PFIC.
The Company does not currently intend to provide all the information necessary for U.S. Holders to make or maintain QEF elections with respect to the Company and all Subsidiary PFICs. U.S. Holders should consult their tax advisors to determine whether any of these QEF elections will be available and if so, what the consequences of these elections would be in their particular circumstances.
A U.S. Holder makes a QEF Election by attaching a completed IRS Form 8621, including a PFIC Annual Information Statement, to a timely filed United States federal income tax return. However, if the Company does not provide the required information with regard to the Company or any of its Subsidiary PFICs, U.S. Holders may not be able to make a QEF Election for such entity and, unless they make the Mark-to-Market Election discussed in the next section, will continue to be subject to the rules of Section 1291 of the Code discussed above that apply to Non-Electing U.S. Holders with respect to the taxation of gains and excess distributions.
Mark-to-Market Election
A U.S. Holder may make a Mark-to-Market Election only if the Common Shares are marketable stock. The Common Shares generally will be “marketable stock” if the Common Shares are regularly traded on (a) a national securities exchange that is registered with the Securities and Exchange Commission, (b) the national market system established pursuant to section 11A of the Exchange Act, or (c) a foreign securities exchange that is regulated or supervised by a governmental authority of the country in which the market is located, provided that (i) such foreign exchange has trading volume, listing, financial disclosure, and surveillance requirements, and meets other requirements and the laws of the country in which such foreign exchange is located, together with the rules of such foreign exchange, ensure that such requirements are actually enforced and (ii) the rules of such foreign exchange effectively promote active trading of listed stocks. If such stock is traded on such a qualified exchange or other market, such stock generally will be “regularly traded” for any calendar year during which such stock is traded, other than in de minimis quantities, on at least 15 days during each calendar quarter. The Company expects that the Common Shares will meet the definition of “marketable stock,” although there can be no assurance of this, especially as regards the required trading frequency.
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If a U.S. Holder that makes a Mark-to-Market Election for any taxable year with respect to its Common Shares, it generally will not be subject to the rules of Section 1291 of the Code discussed above with respect to such Common Shares for such taxable year. However, if a U.S. Holder does not make a Mark-to-Market Election beginning in the first tax year of such U.S. Holder’s holding period for which the Company is a PFIC and such U.S. Holder has not made a timely QEF Election, the rules of Section 1291 of the Code discussed above will apply to dispositions of, and certain distributions on, the Common Shares.
A U.S. Holder that makes a Mark-to-Market Election will include in ordinary income, for each tax year in which the Company is a PFIC, an amount equal to the excess, if any, of (a) the fair market value of the Common Shares, as of the close of such tax year over (b) such U.S. Holder’s adjusted tax basis in such Common Shares. A U.S. Holder that makes a Mark-to-Market Election will be allowed a deduction in an amount equal to the excess, if any, of (a) such U.S. Holder’s adjusted tax basis in the Common Shares, over (b) the fair market value of such Common Shares (but only to the extent of the net amount of previously included income as a result of the Mark-to-Market Election for prior tax years).
A U.S. Holder that makes a Mark-to-Market Election generally also will adjust its tax basis in the Common Shares to reflect the amount included in gross income or allowed as a deduction because of such Mark-to-Market Election. Upon a sale or other taxable disposition of Common Shares, a U.S. Holder that makes a Mark-to-Market Election will recognize ordinary income or ordinary loss. Any such ordinary loss, however, is limited to exceed the excess, if any, of (a) the amount included in ordinary income because of such Mark-to-Market Election for prior tax years over (b) the amount allowed as a deduction because of such Mark-to-Market Election for prior tax years. Losses that exceed this limitation are subject to the rules generally applicable to losses provided in the Code and Treasury Regulations, with the result that they will be capital losses for most U.S. Holders.
A U.S. Holder makes a Mark-to-Market Election by attaching a completed IRS Form 8621 to a timely filed United States federal income tax return. A Mark-to-Market Election applies to the tax year in which such Mark-to-Market Election is made and to each subsequent tax year, unless the Common Shares cease to be “marketable stock” or the IRS consents to revocation of such election. Each U.S. Holder should consult its own tax advisors regarding the requirements for, and procedure for making, a Mark-to-Market Election.
Although a U.S. Holder may be eligible to make a Mark-to-Market Election with respect to the Common Shares, no such election may be made with respect to the stock of any Subsidiary PFIC that a U.S. Holder is treated as owning, because such stock is not marketable. Hence, the Mark-to-Market Election will not be effective to avoid the application of the default rules of Section 1291 of the Code described above with respect to deemed dispositions of Subsidiary PFIC stock or excess distributions from a Subsidiary PFIC to its shareholder.
Other PFIC and Related Rules
Under Section 1291(f) of the Code, the IRS has issued proposed Treasury Regulations that, subject to certain exceptions, would cause a U.S. Holder that had not made a timely QEF Election or Mark-to-Market Election to recognize gain (but not loss) upon certain transfers of Common Shares that would otherwise be tax-deferred (e.g., gifts and exchanges pursuant to corporate reorganizations). However, the specific U.S. federal income tax consequences to a U.S. Holder may vary based on the manner in which Common Shares are transferred.
Certain additional adverse rules may apply with respect to a U.S. Holder if the Company is a PFIC, regardless of whether such U.S. Holder makes a QEF Election. For example, under Section 1298(b)(6) of the Code, a U.S. Holder that uses Common Shares as security for a loan will, except as may be provided in Treasury Regulations, be treated as having made a taxable disposition of such Common Shares.
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Special rules also apply to the amount of foreign tax credit that a U.S. Holder may claim on a distribution from a PFIC. Subject to such special rules, foreign taxes paid with respect to any distribution in respect of stock in a PFIC are generally eligible for the foreign tax credit. The rules relating to distributions by a PFIC and their eligibility for the foreign tax credit are complicated, and each U.S. Holder should consult with its own tax advisors regarding the availability of the foreign tax credit with respect to distributions by a PFIC.
If U.S. Holders of Common Shares or U.S. Holders that are treated as constructively owning Common Shares, each owning 10% or more of the Company’s equity by vote (“10% Shareholders”) own in total more than 50% of such equity by either vote or value, the Company will be treated as a controlled foreign corporation (“CFC”). For the Company’s taxable year ending June 30, 2019, and subsequent years, and for taxable years of U.S. Holders ending with or within such years, the test for a 10% Shareholder will be whether the holder owns 10% of the Company’s equity by vote or value (i.e., not only by vote). If the Company is a CFC, a 10% Shareholder would be treated, subject to certain exceptions, as receiving a deemed dividend at the end of each taxable year of the Company in an amount equal to its pro rata share of the Company’s “subpart F income.” Among other items, and subject to certain exceptions, “subpart F income” includes dividends, interest, certain rents and royalties, certain gains from the sale of stock and securities, and certain gains from commodities transactions. Thus, it is likely that, if the Company were treated as a CFC, some of its income would be subpart F income. If, for any period, the Company were treated as a CFC and a U.S. Holder were treated as a 10% Shareholder therein, the Company would not be treated as a PFIC with respect to such U.S. Holder for such period.
The PFIC and CFC rules are complex, and each U.S. Holder should consult with its own tax advisors regarding the PFIC and CFC rules and how they may affect the U.S. federal income tax consequences of the acquisition, ownership, and disposition of Common Shares.
Additional Considerations
Additional Tax on Passive Income
Certain U.S. Holders that are individuals, estates or trusts (other than trusts that are exempt from tax) will be subject to a 3.8% tax on all or a portion of their “net investment income,” which includes dividends on the Common Shares and net gains from the disposition of the Common Shares. Further, excess distributions treated as dividends, gains treated as excess distributions under the PFIC rules discussed above, and mark-to-market inclusions and deductions are all included in the calculation of net investment income.
Treasury Regulations provide, subject to the election described in the following paragraph, that solely for purposes of this additional tax, distributions of previously taxed income will be treated as dividends and included in net investment income subject to the additional 3.8% tax. Additionally, to determine the amount of any capital gain from the sale or other taxable disposition of Common Shares that will be subject to the additional tax on net investment income, a U.S. Holder who has made a QEF Election will be required to recalculate its basis in the Common Shares excluding QEF basis adjustments.
Alternatively, a U.S. Holder may make an election which will be effective with respect to all interests in a PFIC for which a QEF Election has been made and which is held in that year or acquired in future years. Under this election, a U.S. Holder pays the additional 3.8% tax on QEF income inclusions and on gains calculated after giving effect to related tax basis adjustments. U.S. Holders that are individuals, estates or trusts should consult their own tax advisors regarding the applicability of this tax to any of their income or gains in respect of the Common Shares.
Receipt of Foreign Currency
The amount of any distribution paid to a U.S. Holder in foreign currency, or on the sale, exchange or other taxable disposition of Common Shares, generally will be equal to the U.S. dollar value of such foreign currency based on the exchange rate applicable on the date of receipt (regardless of whether such foreign currency is converted into U.S. dollars at that time). A U.S. Holder will have a basis in the foreign currency equal to its U.S. dollar value on the date of receipt. Any U.S. Holder who converts or otherwise disposes of the foreign currency after the date of receipt may have a foreign currency exchange gain or loss that would be treated as ordinary income or loss, and generally will be U.S. source income or loss for foreign tax credit purposes. Different rules apply to U.S. Holders who use the accrual method of tax accounting. Each U.S. Holder should consult its own U.S. tax advisors regarding the U.S. federal income tax consequences of receiving, owning, and disposing of foreign currency.
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Foreign Tax Credit
Subject to the PFIC rules discussed above, a U.S. Holder that pays (whether directly or through withholding) Canadian income tax with respect to dividends paid on the Common Shares generally will be entitled, at the election of such U.S. Holder, to receive either a deduction or a credit for such Canadian income tax. Generally, a credit will reduce a U.S. Holder’s U.S. federal income tax liability on a dollar-for-dollar basis, whereas a deduction will reduce a U.S. Holder’s income that is subject to U.S. federal income tax. This election is made on a year-by-year basis and applies to all foreign taxes paid (whether directly or through withholding) by a U.S. Holder during a year.
Complex limitations apply to the foreign tax credit, including the general limitation that the credit cannot exceed the proportionate share of a U.S. Holder’s U.S. federal income tax liability that such U.S. Holder’s “foreign source” taxable income bears to such U.S. Holder’s worldwide taxable income. In applying this limitation, a U.S. Holder’s various items of income and deduction must be classified, under complex rules, as either “foreign source” or “U.S. source.” Generally, dividends paid on the Common Shares should be treated as foreign source for this purpose, and gains recognized on the sale of Common Shares by a U.S. Holder should be treated as U.S. source for this purpose, except as otherwise provided in an applicable income tax treaty, and if an election is properly made under the Code. However, the amount of a distribution with respect to the Common Shares that is treated as a “dividend” may be lower for U.S. federal income tax purposes than it is for Canadian federal income tax purposes, resulting in a reduced foreign tax credit allowance to a U.S. Holder. In addition, this limitation is calculated separately with respect to specific categories of income. The foreign tax credit rules are complex, and each U.S. Holder should consult its own U.S. tax advisors regarding the foreign tax credit rules.
Backup Withholding and Information Reporting
A U.S. Holder that is an individual (and, to the extent provided in future regulations, an entity), may be subject to certain reporting obligations with respect to Common Shares if the aggregate value of these and certain other “specified foreign financial assets” exceeds $50,000. If required, this disclosure is made by filing Form 8938 with the IRS. Significant penalties can apply if a U.S. Holder is required to make this disclosure and fail to do so. In addition, a U.S. Holder should consider the possible obligation to file online a FinCEN Form 114—Foreign Bank and Financial Accounts Report, as a result of holding Common Shares in certain accounts. Holders are urged to consult their U.S. tax advisors with respect to these and other reporting requirements that may apply to their acquisition of Common Shares.
Payments made within the U.S., or by a U.S. payor or U.S. middleman, of dividends on, and proceeds arising from the sale or other taxable disposition of, Common Shares will generally be subject to information reporting and backup withholding tax, at the rate of 28%, if a U.S. Holder (a) fails to furnish such U.S. Holder’s correct U.S. taxpayer identification number (generally on Form W-9), (b) furnishes an incorrect U.S. taxpayer identification number, (c) is notified by the IRS that such U.S. Holder has previously failed to report properly items subject to backup withholding tax, or (d) fails to certify, under penalty of perjury, that such U.S. Holder has furnished its correct U.S. taxpayer identification number and that the IRS has not notified such U.S. Holder that it is subject to backup withholding tax. However, certain exempt persons generally are excluded from these information reporting and backup withholding rules. Backup withholding is not an additional tax. Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a credit against a U.S. Holder’s U.S. federal income tax liability, if any, or will be refunded, if such U.S. Holder furnishes required information to the IRS in a timely manner.
The discussion of reporting requirements set forth above is not intended to constitute a complete description of all reporting requirements that may apply to a U.S. Holder. A failure to satisfy certain reporting requirements may result in an extension of the time period during which the IRS can assess a tax and, under certain circumstances, such an extension may apply to assessments of amounts unrelated to any unsatisfied reporting requirement. Each U.S. Holder should consult its own tax advisors regarding the information reporting and backup withholding rules.
THE ABOVE SUMMARY IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF ALL TAX CONSIDERATIONS APPLICABLE TO U.S. HOLDERS WITH RESPECT TO THE ACQUISITION, OWNERSHIP, AND DISPOSITION OF COMMON SHARES. U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX CONSIDERATIONS APPLICABLE TO THEM IN THEIR OWN PARTICULAR CIRCUMSTANCES.
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We are registering the Common Shares identified in the “Number of Common Shares Offered Hereby” column of the table under “Selling Shareholders” above to permit the resale of those Common Shares from time to time after the date of this prospectus at the discretion of the holders of such Common Shares. We will not receive any of the proceeds from the sale by the selling shareholders of the Common Shares. However, upon exercise, we will receive the cash exercise price of the Warrants. We will bear all fees and expenses incident to our obligation to register such Common Shares.
The selling shareholders may, at their discretion, sell all, none, or a portion of the Common Shares beneficially owned by them and offered hereby from time to time directly or through one or more underwriters, broker-dealers, or agents. If the Common Shares are sold through underwriters or broker-dealers, the selling shareholders will be responsible for underwriting discounts or commissions or agent’s commissions. The Common Shares may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale, or at negotiated prices. These sales may be effected in transactions that may involve crosses or block transactions, or in one or more of the following methods:
| · | on any national securities exchange or quotation service on which the Common Shares may be listed or quoted at the time of sale; |
| · | in the over-the-counter market; |
| · | in transactions otherwise than on these exchanges or systems or in the over-the-counter market; |
| · | through the writing of options, whether such options are listed on an options exchange or otherwise; |
| · | ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
| · | block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; |
| · | purchases by a broker-dealer as principal and resale by the broker-dealer for its account; |
| · | an exchange distribution in accordance with the rules of the applicable exchange; |
| · | privately negotiated transactions; |
| · | short sales; |
| · | sales pursuant to Rule 144 under the Securities Act; |
| · | broker-dealers may agree with the selling shareholders to sell a specified number of such shares at a stipulated price per share; |
| · | a combination of any such methods of sale; and |
| · | any other method permitted pursuant to applicable law. |
If the selling shareholders effect such transactions by selling Common Shares to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from the selling shareholders or commissions from purchasers of the Common Shares for whom they may act as agent or to whom they may sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers or agents may be in excess of those customary in the types of transactions involved). In connection with sales of the Common Shares or otherwise, the selling shareholders may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the Common Shares in the course of hedging in positions they assume. The selling shareholders may also sell Common Shares short and deliver Common Shares covered by this prospectus to close out short positions and to return borrowed shares in connection with such short sales. The selling shareholders may also loan or pledge Common Shares to broker-dealers that in turn may sell such shares.
The selling shareholders and any broker-dealer participating in the distribution of the Common Shares may be deemed to be “underwriters” within the meaning of the Securities Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed to be underwriting commissions or discounts under the Securities Act. At the time a particular offering of the Common Shares is made, a prospectus supplement, if required, will be distributed that will set forth the aggregate amount of Common Shares being offered and the terms of the offering, including the name or names of any broker-dealers or agents, any discounts, commissions and other terms constituting compensation from the selling shareholders and any discounts, commissions or concessions allowed or re-allowed or paid to broker-dealers.
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Under the securities laws of some states, the Common Shares may be sold in such states only through registered or licensed brokers or dealers. In addition, in some states the Common Shares may not be sold unless such Common Shares have been registered or qualified for sale in such state, or an exemption from registration or qualification is available and is complied with.
There can be no assurance that any selling shareholder will sell any or all of the Common Shares the resale of which is registered pursuant to the registration statement, of which this prospectus forms a part.
The selling shareholders and any other person participating in such distribution will be subject to applicable provisions of the Exchange Act, and the rules and regulations thereunder, including, without limitation, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the Common Shares by the selling shareholders and any other participating person. Regulation M may also restrict the ability of any person engaged in the distribution of the Common Shares to engage in market-making activities with respect to the Common Shares. All of the foregoing may affect the marketability of the Common Shares and the ability of any person or entity to engage in market-making activities with respect to the Common Shares.
We will pay all expenses of the registration of the resale of the Common Shares, estimated to be approximately $25,144.19 in total, including, without limitation, SEC filing fees and expenses of compliance with state securities or “blue sky” laws; provided, however, that a selling shareholder will pay all underwriting discounts and selling commissions, if any. We will indemnify the selling shareholders against liabilities, including some liabilities under the Securities Act, in accordance with applicable registration rights agreements, if any, or the selling shareholders will be entitled to contribution. We may be indemnified by the selling shareholders against civil liabilities, including liabilities under the Securities Act, that may arise from any written information furnished to us by the selling shareholder specifically for use in this prospectus, in accordance with the related registration rights agreement, or we may be entitled to contribution.
Once sold under the registration statement of which this prospectus forms a part the Common Shares will be freely tradable in the hands of persons other than our affiliates.
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Blake, Cassels & Graydon LLP will pass upon the validity of the securities being offered hereby.
The consolidated financial statements as of June 30, 2020 and 2019, and for each of the three years in the period ended June 30, 2020, incorporated by reference in this Prospectus and in the Registration Statement have been so incorporated in reliance on the report of BDO USA, LLP, an independent registered public accounting firm, incorporated herein by reference, given on the authority of said firm as experts in auditing and accounting. The report on the consolidated financial statements contains an explanatory paragraph regarding the Company’s ability to continue as a going concern.
Certain portions of the description of the Elk Creek Project incorporated by reference herein were summarized or extracted from a technical report prepared in accordance with NI 43-101 dated May 29, 2019, with an effective date of April 16, 2019, and entitled “NI 43-101 Technical Report Feasibility Study Elk Creek Niobium Project Nebraska.” Those extracts were reviewed and approved by Mr. Jean-Francois St-Onge, P.Eng, and Mr. Glen Kuntz, P. Geo.
None of the above experts has or is to receive in connection with the offering, a substantial interest, direct or indirect, in the Company or any of its subsidiaries nor was any of them connected with the Company or any of its subsidiaries as a promoter, managing or principal underwriter, voting trustee, Director, officer, or employee.
Where You Can Find More Information
We are subject to the informational reporting requirements of the Exchange Act. We file reports, proxy statements and other information with the SEC. Our SEC filings are available over the Internet at the SEC’s website at http://www.sec.gov.
We make available, free of charge, on our website at http://www.niocorp.com, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports and statements as soon as reasonably practicable after they are filed with the SEC. The contents of our website are not part of this prospectus, and the reference to our website does not constitute incorporation by reference into this prospectus of the information contained at that site, other than documents we file with the SEC that are incorporated by reference into this prospectus.
Information Incorporated by Reference
The SEC allows us to “incorporate by reference” into this prospectus the information in documents we file with it, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be a part of this prospectus, and information that we file later with the SEC will automatically update and supersede this information. Any statement contained in any document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in or omitted from this prospectus or any accompanying prospectus supplement, or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein, modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
We incorporate by reference the documents listed below and any future documents that we file with the SEC (excluding any portion of such documents that are furnished and not filed with the SEC) under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act (1) after the date of the initial filing of the registration statement of which this prospectus forms a part prior to the effectiveness of the registration statement and (2) after the date of this prospectus until the offering of the Common Shares is terminated:
| · | our Annual Report on Form 10-K for the year ended June 30, 2020; |
| · | our Quarterly Reports on Form 10-Q for the quarterly periods ended September 30, 2020, December 31, 2020, and March 31, 2021; and |
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| · | our Current Reports on Form 8-K filed on July 2, 2020, September 25, 2020, November 6, 2020, December 14, 2020 (two reports), December 18, 2020, January 25, 2021, February 17, 2021, April 19, 2021 (as amended by Amendment No. 1 to Current Report on Form 8-K/A filed on June 4, 2021), April 28, 2021, and May 12, 2021; and |
| · | the description of our Common Shares set forth in Exhibit 4.26 to our Annual Report on Form 10-K for the year ended June 30, 2020, which updated the description thereof contained in the registration statement on Form 8-A filed on October 28, 2016, and any subsequently filed amendments and reports filed for the purpose of updating that description. |
We will not, however, incorporate by reference in this prospectus any documents or portions thereof that are not deemed “filed” with the SEC, including any information furnished pursuant to Item 2.02 or Item 7.01 of our current reports on Form 8-K unless, and except to the extent, specified in such current reports.
We will provide you with a copy of any of these filings (other than an exhibit to these filings, unless the exhibit is specifically incorporated by reference into the filing requested) at no cost, if you submit a request to us by writing or telephoning us at the following address and telephone number:
NioCorp Developments Ltd.
7000 South Yosemite Street, Suite 115
Centennial, Colorado 80112
(855) 264-6267
Attn: Corporate Secretary
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
| Item 14. | Other Expenses of Issuance and Distribution. |
The following are the estimated expenses of the issuance and distribution of the securities being registered, all of which are payable by the registrant. All of the items below, except for the registration fee, are estimates.
| Amount | ||||
| Securities and Exchange Commission registration fee | $ | 994.19 | ||
| Legal fees and expenses | 15,000.00 | * | ||
| Accounting fees and expenses | 8,000.00 | * | ||
| Printing and engraving expenses | 1,000.00 | * | ||
| Travel and miscellaneous expenses | 150.00 | * | ||
| Total | $ | 25,144.19 | * | |
| *Estimated |
| Item 15. | Indemnification of Directors and Officers. |
The corporate laws of British Columbia allow the registrant, and its corporate articles require it (subject to the provisions of the Business Corporations Act (British Columbia) (the “BCBCA”) noted below), to indemnify its directors, former directors, alternate directors and their heirs and legal personal representatives against all eligible penalties to which such person is or may be liable, and the registrant must, after the final disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by such person in respect of that proceeding if the eligible party has not been reimbursed for those expenses and is wholly successful, on the merits or otherwise, in the outcome of the proceeding or is substantially successful on the merits in the outcome of the proceeding. Each director and alternate director is deemed to have contracted with the registrant on the terms of the indemnity contained in the registrant’s articles.
For the purposes of such an indemnification:
“eligible party,” in relation to the registrant, means an individual who:
| (1) | is or was a director or officer of the registrant; |
| (2) | is or was a director or officer of another corporation: |
| (i) | at a time when the corporation is or was an affiliate of the registrant; or |
| (ii) | at the request of the registrant; or |
| (3) | at the request of the registrant, is or was, or holds or held a position equivalent to that of, a director or officer of a partnership, trust, joint venture or other unincorporated entity; and |
includes, except in the definition of “eligible proceeding” and certain other cases, the heirs and personal or other legal representatives of that individual;
“eligible penalty” means a judgment, penalty or fine awarded or imposed in, or an amount paid in settlement of, an eligible proceeding;
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“eligible proceeding” means a proceeding in which an eligible party or any of the heirs and personal or other legal representatives of the eligible party, by reason of the eligible party being or having been a director or officer of, or holding or having held a position equivalent to that of a director or officer of, the registrant or an associated corporation:
| (1) | is or may be joined as a party; or |
| (2) | is or may be liable for or in respect of a judgment, penalty or fine in, or expenses related to, the proceeding; |
“expenses” includes costs, charges and expenses, including legal and other fees, but does not include judgments, penalties, fines or amounts paid in settlement of a proceeding; and
“proceeding” includes any legal proceeding or investigative action, whether current, threatened, pending or completed.
In addition, under the BCBCA, the registrant may pay, as they are incurred in advance of the final disposition of an eligible proceeding, the expenses actually and reasonably incurred by an eligible party in respect of that proceeding, provided that the registrant first receives from the eligible party a written undertaking that, if it is ultimately determined that the payment of expenses is prohibited by the restrictions noted below, the eligible party will repay the amounts advanced.
Notwithstanding the provisions of the registrant’s articles noted above, the registrant must not indemnify an eligible party or pay the expenses of an eligible party, if any of the following circumstances apply:
| (1) | if the indemnity or payment is made under an earlier agreement to indemnify or pay expenses and, at the time that the agreement to indemnify or pay expenses was made, the registrant was prohibited from giving the indemnity or paying the expenses by its memorandum or articles; |
| (2) | if the indemnity or payment is made otherwise than under an earlier agreement to indemnify or pay expenses and, at the time that the indemnity or payment is made, the registrant is prohibited from giving the indemnity or paying the expenses by its memorandum or articles; |
| (3) | if, in relation to the subject matter of the eligible proceeding, the eligible party did not act honestly and in good faith with a view to the best interests of the registrant or the associated corporation, as the case may be; or |
| (4) | in the case of an eligible proceeding other than a civil proceeding, if the eligible party did not have reasonable grounds for believing that the eligible party’s conduct in respect of which the proceeding was brought was lawful. |
In addition, if an eligible proceeding is brought against an eligible party by or on behalf of the registrant or by or on behalf of an associated corporation, the registrant must not do either of the following:
| (1) | indemnify the eligible party under Section 160(a) of the BCBCA in respect of the proceeding; or |
| (2) | pay the expenses of the eligible party in respect of the proceeding. |
Notwithstanding any of the foregoing, and whether or not payment of expenses or indemnification has been sought, authorized or declined under the BCBCA or the articles of the registrant, on the application of the registrant or an eligible party, the Supreme Court of British Columbia may do one or more of the following:
| (1) | order the registrant to indemnify an eligible party against any liability incurred by the eligible party in respect of an eligible proceeding; |
| (2) | order the registrant to pay some or all of the expenses incurred by an eligible party in respect of an eligible proceeding; |
| (3) | order the enforcement of, or any payment under, an agreement of indemnification entered into by the registrant; |
| (4) | order the registrant to pay some or all of the expenses actually and reasonably incurred by any person in obtaining an order under Section 164 of the BCBCA; or |
| (5) | make any other order the court considers appropriate. |
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| Item 16. | Exhibits. |
INDEX TO EXHIBITS
| (1) | Previously filed as an exhibit to the registrant’s Draft Registration Statement on Form S-1 (Registration No. 377-01354) submitted to the Securities and Exchange Commission on July 26, 2016 and incorporated herein by reference. |
| (2) | Previously filed as an exhibit to the Company’s Current Report on Form 8-K (File No. 000-55710) filed with the Securities and Exchange Commission on May 12, 2021 and incorporated herein by reference. |
| Item 17. | Undertakings. |
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) to include any prospectus required by section 10(a)(3) of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
provided, however, that paragraphs (i), (ii) and (iii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
| - II-3 - |
reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
(i) each prospectus filed by the undersigned pursuant to Rule 424(b)(3) shall be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and
(ii) each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
(iii) each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
(5) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(6) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
| - II-4 - |
Signatures
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement on Form S-3 to be signed on its behalf by the undersigned, thereunto duly authorized, in Denver, Colorado, on June 21, 2021.
| NIOCORP DEVELOPMENTS LTD. | ||
| By: | /s/ Mark A. Smith | |
| Mark A. Smith | ||
| President and Chief Executive Officer (Principal Executive Officer) | ||
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
KNOW ALL PERSONS BY THESE PRESENTS, that each of the directors and officers of the registrant whose signature appears below constitutes and appoints Mark A. Smith and Neal Shah, or either of them, as true and lawful attorneys-in-fact and agents with full power of substitution and re-substitution, for him and in his name, place and stead, in any and all capacities to sign the Registration Statement filed herewith and any or all amendments to said Registration Statement (including post-effective amendments and Registration Statements filed pursuant to Rule 462 and otherwise), and to file the same, with all exhibits thereto, and other documents in connection therewith, the Securities and Exchange Commission granting unto said attorney-in-fact and agents the full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the foregoing, as to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agents or any of them, or his substitute, may lawfully do or cause to be done by virtue hereof.
| /s/ Mark A. Smith | President, Chief Executive Officer (Principal | June 21, 2021 | ||
| Mark A. Smith | Executive Officer and Authorized U.S. Representative) | |||
| and Chairman of the Board of Directors | ||||
| /s/ Neal Shah | Chief Financial Officer (Principal Financial and | June 21, 2021 | ||
| Neal Shah | Accounting Officer) | |||
|
/s/ Michael Morris |
Director | June 21, 2021 | ||
| Michael Morris | ||||
|
/s/ David C. Beling |
Director | June 21, 2021 | ||
| David C. Beling | ||||
|
/s/ Anna Castner Wightman |
Director | June 21, 2021 | ||
| Anna Castner Wightman | ||||
| /s/ Nilsa Guerrero-Mahon | Director | June 21, 2021 | ||
| Nilsa Guerrero-Mahon | ||||
| /s/ Fernanda Fenga | Director | June 21, 2021 | ||
| Fernanda Fenga |
| - II-5 - |
Exhibit 4.4
THE WARRANTS EVIDENCED HEREBY ARE EXERCISABLE AT OR BEFORE 4:30 P.M. (VANCOUVER TIME) ON MAY 10, 2023 AFTER WHICH TIME THE WARRANTS EVIDENCED HEREBY SHALL BE DEEMED TO BE VOID AND OF NO FURTHER FORCE OR EFFECT.
UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE SEPTEMBER 11, 2021.
THE SECURITIES REPRESENTED HEREBY AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”), OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THESE SECURITIES, AGREES FOR THE BENEFIT OF NIOCORP DEVELOPMENTS LTD. (THE “COMPANY”), THAT THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, DIRECTLY OR INDIRECTLY ONLY (A) TO THE COMPANY, (B) IF THE SECURITIES HAVE BEEN REGISTERED IN COMPLIANCE WITH THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS (C) IN COMPLIANCE WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT IN ACCORDANCE WITH RULE 144 THEREUNDER, IF APPLICABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE LAWS AND REGULATIONS GOVERNING THE OFFER AND SALE OF SECURITIES, AND, IN EACH CASE, THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE COMPANY AN OPINION OF COUNSEL OF RECOGNIZED STANDING, OR OTHER EVIDENCE OF EXEMPTION, REASONABLY SATISFACTORY TO THE COMPANY TO SUCH EFFECT. HEDGING TRANSACTIONS INVOLVING THE SECURITIES ARE PROHIBITED EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT. THESE SECURITIES MAY NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON CANADIAN STOCK EXCHANGES.
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”). THIS WARRANT MAY NOT BE EXERCISED UNLESS THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE U.S. SECURITIES ACT AND THE APPLICABLE SECURITIES LEGISLATION OF ANY SUCH STATE OR EXEMPTIONS FROM SUCH REGISTRATION REQUIREMENTS ARE AVAILABLE.
| No. W- | ** |
| WARRANTS |
WARRANT CERTIFICATE
NIOCORP
DEVELOPMENTS LTD.
7000 South Yosemite Street, Suite 115
Centennial, CO 80112
THIS CERTIFIES that, for value received:
(hereinafter referred to as the “Holder”)
is the registered holder of that number of warrants (the “Warrants”) of NioCorp Developments Ltd. (the “Issuer”) set forth above.
THESE WARRANTS ARE TRANSFERABLE.
Transfer of Warrants
The Warrants and all rights hereunder are transferable by the Holder in accordance with applicable laws by surrender of this Warrant Certificate together with a Warrant Transfer Form in the form attached hereto as Schedule “B” at the head office of the Issuer stated above. No transfer of the Warrants shall be made if, in the opinion of counsel to the Issuer, such transfer would result in the violation of any applicable securities laws.
| -2- |
Underlying Securities and Exercise Terms
Subject to adjustment as herein provided, each Warrant entitles the Holder to purchase one common share (a “Warrant Share”) of the Issuer, as constituted on May 10, 2021 (the “Issuance Date”), at a price of $1.43 per Warrant Share until 4:30 p.m. (Vancouver Time) on May 10, 2023 (the “Expiry Date”). The Warrants and Warrant Shares are collectively referred to herein as the “Securities”.
The Issuer covenants that the Warrant Shares, when issued upon the due exercise of the Warrants, will be fully paid and non-assessable securities of the Issuer, and will be free and clear of all liens, charges and encumbrances. The Issuer covenants that, until the expiry of the Warrants, it will have reserved a sufficient number of common shares to provide for the exercise of the rights represented by the Warrants.
Warrants Exercise Procedure
The Warrants may be exercised at any time prior to the Expiry Date of the Warrants by surrendering to the Issuer:
| (a) | this Warrant Certificate; |
| (b) | the Subscription Form attached as Schedule “A” hereto, duly completed and executed; and |
| (c) | a wire transfer, in accordance with the wire transfer instructions to be furnished on request, to the Issuer in the aggregate amount of the exercise price, |
at its head office stated above, or such other office or agency of the Issuer as it may designate by notice in writing delivered to the Holder at the Holder’s address stated above. Upon the due exercise of the Warrants, the Issuer shall issue or cause to be issued the requisite number of Warrant Shares to be issued to the Holder pursuant to said exercise, registered in the name of the Holder or such other person as may be specified in the Subscription Form, and each such person shall be deemed the holder of such Warrant Shares with effect from the date of such exercise. If Warrant Shares are to be issued to a person other than the Holder, the Holder’s signature on the Subscription Form must be guaranteed by a Canadian chartered bank, a Canadian trust company or a member firm of the Exchange. The Issuer will cause the certificates representing such Warrant Shares to be mailed to the Holder at the Holder’s address stated above or such other address(es) as may be specified in the Subscription Form, within five business days of the exercise of the Warrants.
Upon the due exercise of a Warrant, the Warrant shall be deemed tendered for purposes thereof by the Holder without further notice or action by the Holder, and all rights under such Warrant, other than the right to receive certificates representing the Warrant Shares to which the Holder is entitled on such exercise, shall wholly cease and terminate and such Warrant shall be void and of no further effect or value.
Partial Exercise, Exchange and Replacement of Certificates
The Warrants represented by this Warrant Certificate may be exercised in whole or in part from time to time. If the Warrants are exercised in part, the Issuer shall deliver, with the Warrant Shares issued pursuant to such exercise, a new Warrant Certificate representing the balance of the Warrants remaining unexercised.
This Warrant Certificate may be exchanged, upon its surrender to the Issuer and payment of such administration fee, not exceeding $10.00, as the Issuer may require, for new Warrant Certificates of like tenor in denominations which in the aggregate represent the number of Warrants represented hereby. Such new Warrant Certificate will be mailed to the Holder at the Holder’s address stated above within five business days of the surrender of the Warrant Certificate for exchange.
If this Warrant Certificate is lost, stolen, mutilated or destroyed, the Issuer shall on such reasonable terms as it may in its discretion impose, including but not limited to the provision of any indemnity by the Holder satisfactory to the Issuer in its sole discretion, issue and countersign a new Warrant Certificate of like tenor, denomination and date as the Warrant Certificate so lost, stolen, mutilated or destroyed.
| -3- |
All Warrants shall rank pari passu, notwithstanding the actual date of issue thereof.
Holding of Warrants
The Issuer may treat the Holder as the absolute owner of the Warrants represented hereby for all purposes, and the Issuer shall not be affected by any notice or knowledge to the contrary except where the Issuer is required to take notice by statute or by order of a court of competent jurisdiction.
Nothing in this Warrant Certificate or in the holding of a Warrant evidenced hereby shall be construed as conferring upon the Holder any right or interest whatsoever as a shareholder of the Issuer or entitle the Holder to any right or interest in respect of any Securities except as herein expressly provided.
Resale Restrictions and Legending Of Certificates
The Warrants have been, and the Warrant Shares will be, issued pursuant to an exemption (an “Exemption”) from the registration and prospectus requirements of applicable securities laws. To the extent that the Issuer relies on such Exemption, the Securities may be subject to restrictions on resale and transferability contained in applicable securities laws.
In the event that any of the Securities are subject to a hold period, or any other restrictions on resale and transferability, the Issuer may place a legend on the certificates representing the Securities as may be required under applicable securities laws, or as it may otherwise deem necessary or advisable.
Capital Adjustments
If at any time after the date hereof and prior to the expiry of the Warrants, and provided that any Warrants remain unexercised, there shall be:
| (a) | a reclassification of the Issuer’s common shares, a change in the Issuer’s common shares into other shares or securities, a subdivision or consolidation of the Issuer’s common shares into a greater or lesser number of common shares, or any other capital reorganization, or |
| (b) | a consolidation, amalgamation or merger of the Issuer with or into any other corporation other than a consolidation, amalgamation or merger which does not result in any reclassification of the Issuer’s outstanding common shares or a change of the Issuer’s common shares into other shares or securities, |
(any of such events being called a “Capital Reorganization”) any Holders who shall thereafter acquire Warrant Shares pursuant to the Warrants shall, subject to Exchange approval, be entitled to receive, at no additional cost, and shall accept in lieu of the number of Warrant Shares to which such Holder was theretofore entitled to acquire upon such exercise, the aggregate number of shares, other securities or other property which such Holder should have been entitled to receive as a result of such Capital Reorganization if, on the effective date or record date thereof as the case may be, the Holder had been the registered holder of the number of Warrant Shares to which such Holder was theretofore entitled to acquire upon exercise of the Warrants. If determined appropriate by the Issuer acting reasonably, appropriate adjustments shall be made in the application of the provisions set forth herein with respect to the rights and interests of the Holder relative to a Capital Reorganization, to the end that the provisions set forth herein shall correspond as nearly as may be reasonably possible to the effect of the Capital Reorganization in relation to any shares, other securities or other property thereafter deliverable upon the exercise of any Warrants.
In case the Issuer, after the date hereof, shall take any action affecting any securities of the Issuer, other than as previously set out herein, which in the opinion of the directors would materially affect the rights and interests of the Holder hereunder, the number of Warrant Shares or other securities which are issuable on the exercise of the Warrants shall be adjusted in such manner, if any, and at such time as the directors, in their sole discretion, may determine to be equitable in the circumstances, provided that no such adjustment will be made unless all necessary regulatory and stock exchange approvals, if any, have been obtained. In the event of any question arising with respect to any adjustment provided for herein, such question shall be conclusively determined by a firm of chartered accountants
| -4- |
appointed by the Issuer at its sole discretion (who may be the Issuer’s auditors) and any such determination shall be binding upon the Issuer and the Holder.
No adjustment shall be made in respect of any event described herein if the Holder is entitled to participate in such event on the same terms, without amendment, as if the Holder had exercised the Warrants prior to or on the effective date or record date of such event. The adjustments provided for herein are cumulative and such adjustments shall be made successively whenever an event referred to herein shall occur, subject to the limitations provided for herein. No adjustment shall be made in the number or kind of Securities or other securities which may be acquired on the exercise of a Warrant unless it would result in a change of at least one-hundredth of a Warrant Share or other security. Any adjustment which may by reason of this paragraph not be required to be made shall be carried forward and then taken into consideration in any subsequent adjustment.
Despite any adjustments provided for herein or otherwise, the Issuer shall not be required, upon the exercise of any Warrants, to issue fractional Warrant Shares or other securities in satisfaction of its obligations hereunder. Any fractional Warrants shall be rounded down to the nearest whole number and the Holder of such Warrants shall not be entitled to any compensation in respect of any fractional Warrant Share that is not issued.
Miscellaneous Provisions
Except as otherwise provided for herein, any delivery or surrender of documents shall be valid and effective if delivered personally or if sent by registered letter postage prepaid, and any notice shall be valid and effective if made in writing and transmitted as aforementioned or if transmitted by email with confirmed receipt, in each case addressed to:
| (a) | if to the Issuer, |
NIOCORP DEVELOPMENTS LTD.
7000 South Yosemite Street, Suite115
Centennial, CO 80112
Email: jashburn@niocorp.com
| (b) | if to the Holder, at its address appearing in the register of holders of Warrants maintained by the Issuer, |
and such shall be deemed to have been effectively made and received on the date of personal delivery, if delivered; on the fourth business day after the time of mailing or upon actual receipt, whichever is sooner, if sent by registered letter (except the delivery of documents to exercise the Warrants, in which case actual receipt is required); or on the first business day after the time of email transmission, if sent by email. In the case of a disruption in postal services, any delivery or surrender of documents or notice sent by mail shall not be deemed to have been effectively made or received until it is actually delivered. The Issuer and the Holder may from time to time change their address for service hereunder by notice in writing delivered in one of the foregoing manners.
Except as herein provided, any and all of the rights conferred upon the Holder herein may be enforced by the Holder through appropriate legal proceedings. No recourse under or upon any covenant, obligation or agreement herein contained shall be had against any shareholder, officer or director of the Issuer, either directly or through the Issuer, it being expressly agreed and declared that the obligations under the Warrants are solely corporate obligations of the Issuer and no personal liability whatsoever shall attach to or be incurred by the shareholders, officers or directors of the Issuer in respect thereof. This Warrant Certificate shall be binding upon the Issuer and its successors.
This Warrant Certificate shall be governed in accordance with the laws of British Columbia and the laws of Canada applicable therein. The parties hereby attorn to the jurisdiction of the courts of British Columbia in the event of any dispute hereunder. Time shall be of the essence hereof.
Any alteration, amendment or revision to this Warrant Certificate may only be made by a written agreement between the Issuer and the Holder.
| -5- |
For the purposes hereof, “business day” means any day except Saturday, Sunday or a statutory holiday in Vancouver, British Columbia and, if any period expires or any day on which any action is to be taken under this Warrant Certificate falls on a day which is not a business day, it shall be deemed to refer to the next business day.
All amounts of money referred to in this Warrant Certificate are expressed in lawful money of Canada.
If any covenant or provision herein or any portion hereof is determined to be void, unenforceable or prohibited by the law of any province or the local requirements of any provincial or federal government authority, such shall not be deemed to affect or impair the validity of any other covenant or provision herein or a portion thereof, as the case may be, nor the validity of such covenant or provision or a portion thereof, as the case may be, in any other jurisdiction.
This Warrant Certificate and all of its provisions shall enure to the benefit of the Holder and its successors or personal representatives and shall be binding upon the Issuer, its successors and permitted assigns.
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF the Issuer has caused this Warrant Certificate to be signed by its duly authorized officer on the Issuance Date.
NIOCORP DEVELOPMENTS LTD.
| By: | ||
| Authorized Signatory |
[Warrant Certificate]
SCHEDULE “A” TO WARRANT CERTIFICATE
SUBSCRIPTION FORM
| TO: | NIOCORP DEVELOPMENTS LTD. (the “Issuer”) 7000 South Yosemite Street, Suite115 Centennial, CO 80112 |
The Undersigned, being the registered holder of the attached Warrant Certificate of the Issuer, does hereby irrevocably exercise __________________ of the Warrants evidenced thereby in accordance with the terms thereof, and accordingly hereby irrevocably subscribes for the Warrant Shares (as described therein) to be received thereon and irrevocably surrenders the Warrant Certificate to the Issuer for such purpose. The Undersigned hereby irrevocably directs that the Warrant Shares to be received by the Undersigned be registered as follows:
| Name in Full | Address | No. of Warrant Shares |
| 1. | ||
| 2. | ||
| 3. | ||
IF WARRANT SHARES ARE TO BE ISSUED TO A PERSON OR PERSONS OTHER THAN THE UNDERSIGNED REGISTERED HOLDER, THE SIGNATURE OF THE UNDERSIGNED MUST BE MEDALLION GUARANTEED AND IT MUST PAY TO THE ISSUER ALL APPLICABLE TAXES AND OTHER DUTIES.
The Undersigned registered holder hereby represents, warrants and certifies that:
| 1. | the Undersigned is resident in the jurisdiction indicated as its address set forth in this Subscription Form; |
| 2. | the Undersigned acknowledges that the Warrants and Warrant Shares (collectively, the “Securities”) have not been registered under the United States Securities Act of 1933, as amended (the “1933 Act”), or any applicable State securities laws and may not be offered or sold in the United States or to U.S. Persons without registration under the 1933 Act and any applicable State securities laws, unless an exemption from registration is available; |
| 3. | the Undersigned has made reasonable inquiry into the jurisdiction of residence of all persons to whom Warrant Shares are to be issued hereunder, and none of such persons is a person in the United States or a U.S. Person; |
| 4. | the Undersigned does not have any agreement or understanding (written or oral) with any person in the United States or a U.S. Person respecting: |
| (a) | the transfer or assignment of any rights or interest in any of the Securities; |
| (b) | the division of profits, losses, fees, commissions, or any financial stake in connection with any of the Securities; or |
| (c) | the voting of the Warrant Shares to be issued hereunder; and |
| -8- |
| 5. | the Undersigned has no intention to distribute, either directly or indirectly, any of the Securities in the United States or to U.S. Persons. |
DATED the ______ day of ______________, 20_____.
| } } } } } } } } } } } } } |
||
| Signature of Witness [Please Note Instruction 2] |
Signature of registered holder or Signatory thereof | |
| If applicable, print Name and Office of Signatory | ||
| Print Name of Witness | Print Name of registered holder as on certificate | |
| Address of Witness | Street Address | |
| Occupation of Witness | City, Province and Postal Code |
INSTRUCTIONS:
1. The registered holder of a Warrant may exercise its right to purchase Warrant Shares by completing and surrendering this Subscription Form and the ORIGINAL Warrant Certificate representing the Warrant being exercised to the Issuer, together with the aggregate amount of the exercise price for the Warrant Shares as provided for in the Warrant Certificate. Certificates representing the Warrant Shares to be acquired on exercise will be sent by prepaid ordinary mail to the address(es) above within five business days after the receipt of all required documentation.
2. If this Subscription Form indicates that Warrant Shares are to be issued to a person or persons other than the registered holder of the Warrants being exercised: (i) the signature of the registered holder on this Subscription Form must be medallion guaranteed by an authorized officer of a chartered bank, trust company or an investment dealer who is a member of a recognized stock exchange, and (ii) the registered holder must pay to the Issuer all applicable taxes and other duties.
3. If this Subscription Form is signed by a trustee, executor, administrator, custodian, guardian, attorney, officer of a corporation or any other person acting in a fiduciary or representative capacity, this Subscription Form must be accompanied by evidence of authority to sign satisfactory to the Issuer.
| -9- |
SCHEDULE “B” TO WARRANT CERTIFICATE
WARRANT TRANSFER FORM
For value received, the undersigned Transferor hereby sells, transfers and assigns unto:
| (please print name of Transferee) |
| of | ||
| (please print address of Transferee) |
________________________________________________________
Warrants represented by the within certificate.
(please insert number of Warrants to be transferred).
DATED this ______ day of ______________, 20____.
| Signature of Transferor |
NOTICE: THE SIGNATURE TO THIS TRANSFER MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE WARRANT CERTIFICATE, IN EVERY PARTICULAR, WITHOUT ALTERATION, ENLARGEMENT OR ANY CHANGE WHATEVER.
Signature guaranteed by: __________________________________________
NOTICE: THE SIGNATURE OF THE TRANSFEROR SHOULD BE GUARANTEED BY A BANK, FINANCIAL INSTITUTION OR STOCK BROKER WHOSE SIGNATURE IS ACCEPTABLE TO THE ISSUER.
WARRANTS SHALL ONLY BE TRANSFERABLE IN ACCORDANCE WITH APPLICABLE LAWS, AND THE RESALE OF WARRANTS AND COMMON SHARES ISSUABLE UPON EXERCISE OF WARRANTS MAY BE SUBJECT TO RESTRICTIONS UNDER SUCH LAWS.
REPRESENTATIONS OF TRANSFEREE
The undersigned Transferee hereby certifies it is a bona fide resident of the jurisdiction set forth above for its address, and that either (A)(i) at the time of this transfer, it is not a U.S. Person and did not execute this Warrant Transfer Form while within the United States, (ii) it is not taking transfer of any of the Warrants represented by the Transfer Form by or on behalf of any U.S. Person or any person who is within the United States, and (iii) this transfer in all other respects complies with the terms of Regulation S; or (B)(i) it was an original purchaser in the Issuer's private placement of the Units under which the Warrants were issued, (ii) it is an “Accredited Investor” as defined in Rule 501(a) under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), and (iii) the representations and warranties made to the Issuer in connection with the acquisition of the Units remain true and correct on the date of this Warrant Transfer Form; or (C) the undersigned Transferee is delivering a written opinion of U.S. Counsel to the effect that the transfer of the Warrants contemplated hereby has been registered under the U.S. Securities Act, or is exempt from registration thereunder.
| Signature of Transferor | |
| Name (Please Print) | |
| Date |
| -10- |
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Exhibit 4.5
UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE SEPTEMBER 11, 2021.
THE BROKER WARRANTS REPRESENTED HEREBY ARE EXERCISABLE AT ANY TIME AND TIME TO TIME ON OR BEFORE 5:00 P.M. (VANCOUVER TIME) ON MAY 10, 2023 AFTER WHICH TIME THEY SHALL EXPIRE AND BE OF NO FURTHER FORCE OR EFFECT.
NON-TRANSFERABLE BROKER WARRANTS TO PURCHASE COMMON SHARES
OF
NIOCORP DEVELOPMENTS LTD.
(incorporated under the laws of British Columbia)
|
Certificate No.: BW-2021-001 Number of Warrants: 77,961 |
Date: May 10, 2021
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THIS CERTIFIES THAT, for value received, Research Capital Corporation (the “Holder”), being the registered holder of 77,961 non-transferrable broker warrants (the “Broker Warrants”), is entitled, at any time prior to 5:00 p.m. (Vancouver time) on the Expiry Day (as defined below) to subscribe for and purchase the number of common shares (the “Common Shares”) of NioCorp Developments Ltd. (the “Company”) set forth above on the basis of one Common Share at a price of $1.63 (the “Exercise Price”) for each Broker Warrant exercised, subject to adjustment as set out herein, by surrendering to the Company at its principal office, 7000 South Yosemite Street, Suite 115, Centennial, CO 80112, this Broker Warrant certificate (the “Broker Warrant Certificate”), with a completed and executed Subscription Form (as defined herein), and payment in full for the Common Shares being purchased.
The Company shall treat the Holder as the absolute owner of this Broker Warrant for all purposes and the Company shall not be affected by any notice or knowledge to the contrary. The Holder shall be entitled to the rights evidenced by this Broker Warrant free from all equities and rights of set-off or counterclaim between the Company and the Holder and all persons may act accordingly and the receipt by the Holder of the Common Shares issuable upon exercise hereof shall be a good discharge to the Company and the Company shall not be bound to inquire into the title of any such Holder.
| 1. | Definitions: In this Broker Warrant Certificate, unless there is something in the subject matter or context inconsistent therewith, the following expressions shall have the following meanings namely: |
| (a) | “Adjustment Period” means the period commencing on the date hereof and ending at the Expiry Time; |
| (b) | “Broker Warrant Certificate” means this Broker Warrant certificate; |
| (c) | “Broker Warrant” means a non-transferable broker warrant exercisable to purchase one Common Share at the Exercise Price until the Expiry Time; |
| (d) | “Business Day” means any day other than a Saturday, Sunday, legal holiday or a day on which banking institutions are closed in Toronto, Ontario or Vancouver, British Columbia; |
| (e) | “Common Share” means the common shares in the capital of the Company. |
| (f) | “Company” means NioCorp Developments Ltd., a company incorporated under the laws of British Columbia and its successors and assigns; |
| (g) | “Current Market Price” of a Common Share at any date means the price per share equal to the volume weighted average price at which the Common Shares have traded on the TSX or, if the Common Shares are not listed on the TSX, on any other stock exchange on which such shares are then listed as may be selected by the directors of the Company, for the five Trading Days ending three Trading Days prior to the relevant date or, if the Common Shares are not listed on any stock exchange, then on the over-the-counter market with the volume weighted average price per Common Share being determined by dividing the aggregate sale price of all Common Shares sold on the said exchange or market, as the case may be, during the said five Trading Days by the aggregate number of Common Shares so sold or, if the Common Shares are not listed or quoted on any stock exchange or over-the-counter market, such price as may be determined by such firm of independent charted accountants as may be selected by the directors of the Company; |
| (h) | “Dividends Paid in the Ordinary Course” means dividends paid in any financial year of the Company, whether in (i) cash; (ii) shares of the Company; (iii) warrants or similar rights to purchase any shares of the Company or property or other assets of the Company provided that the value of such dividends does not in such financial year exceed the greater of: |
| (i) | 150% of the aggregate amount of dividends paid by the Company on the Common Shares in the 12-month period ending immediately prior to the first day of such financial year; and |
| (ii) | 100% of the consolidated net earnings from continuing operations of the Company, before any extraordinary items, for the 12-month period ending immediately prior to the first day of such financial year (such consolidated net earnings from continuing operations to be computed in accordance with generally accepted accounting principles in Canada); |
| (i) | “Exercise Price” means $1.63 per Common Share, subject to adjustment in accordance with Section 10 hereof; |
| (j) | “Expiry Day” means May 10, 2023; |
| (k) | “Expiry Time” means 5:00 p.m. (Vancouver time), on the Expiry Day; |
| (l) | “Holder” shall have the meaning ascribed thereto on the face page hereof; |
| (m) | “person” means an individual, corporation, partnership, unincorporated association, unincorporated syndicate, unincorporated organization, trust, trustee, executor, administrator, or other legal representative; |
| (n) | “Rights Offering” has the meaning set out in Section 10(b)(ii) in this Broker Warrant Certificate; |
| (o) | “Subscription Form” means the subscription form annexed to this Broker Warrant Certificate; |
| (p) | “TSX” means the Toronto Stock Exchange; |
| (q) | “Trading Day” with respect to a stock exchange, market or over-the-counter market means a day on which such stock exchange or over-the-counter market is open for business; |
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| (r) | “United States” means the United States of America, its territories and possessions, any state of the United States, and the District of Columbia; |
| (s) | “U.S. Person” means U.S. person as that term is defined in Regulation S under the U.S. Securities Act; |
| (t) | “U.S. Securities Act” means the United States Securities Act of 1933, as amended; and |
| (u) | “$” means Canadian Dollars. |
| 2. | Expiry Time: At the Expiry Time, all rights under the Broker Warrants evidenced hereby, in respect of which the right of subscription and purchase herein provided for shall not theretofore have been exercised, shall expire and be void and of no further force and effect. |
| 3. | Exercise Procedure: |
| (a) | The Holder may exercise the right to subscribe and purchase the number of Common Shares herein provided, by delivering to the Company prior to the Expiry Time at its principal office this Broker Warrant Certificate, with the Subscription Form duly completed and executed by the Holder or its legal representative or attorney, duly appointed by an instrument in writing in form and manner satisfactory to the Company, together with a certified cheque or bank draft payable to or to the order of the Company in an amount equal to the aggregate Exercise Price in respect of the Broker Warrants so exercised. Any Broker Warrant Certificate so surrendered shall be deemed to be surrendered only upon delivery thereof to the Company at its principal office set forth herein in the manner provided in Section 24 hereof (or to such other address as the Company may notify the Holder). |
| (b) | Upon such delivery and payment as aforesaid, the Company shall cause to be issued to the Holder hereof the Common Shares subscribed for not exceeding those which such Holder is entitled to purchase pursuant to this Broker Warrant Certificate and the Holder hereof shall become a shareholder of the Company in respect of the Common Shares subscribed for with effect from the date of such delivery and payment and shall be entitled to delivery of a certificate evidencing the Common Shares and the Company shall cause such certificates to be mailed to the Holder hereof at the address or addresses specified in such subscription as soon as practicable, and in any event within five (5) Business Days of such delivery and payment. |
| (c) | In the event that any Broker Warrants are exercised before September 11, 2021, the certificate(s) representing the Common Shares issued upon such exercise shall bear the following legend: |
“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE SEPTEMBER 11, 2021.”
provided that, if at any time, in the opinion of counsel to the Company, such legend is no longer necessary or advisable under any such securities laws, or the holder of any such legended certificate, provides the Company with evidence satisfactory in form and substance to the Company (which may include an opinion of counsel satisfactory to the Company) to the effect that such legends are not required, such legended certificate may thereafter be surrendered to the Company in exchange for a certificate which does not bear such legend.
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| (d) | The Broker Warrants shall not be exercised by, or for the account or benefit of, any person in the United States or any “U.S. person” (a “U.S. Person”) as defined in Rule 902(k) of Regulation S under the U.S. Securities Act during any time that no Registration Statement (as defined below) registering the Warrants and the Common Shares issuable upon the exercise of the Broker Warrant evidenced hereby is effective, unless an exemption from the registration requirements of the U.S. Securities Act is available and such holder provides evidence of the availability of such exemption satisfactory to the Company, and the certificate representing the Common Shares issued upon such exercise, if then required pursuant to Rule 144 of the U.S. Securities Act, shall bear the following legend: |
“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”), OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THESE SECURITIES, AGREES FOR THE BENEFIT OF NIOCORP DEVELOPMENTS LTD. (THE “COMPANY”), THAT THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, DIRECTLY OR INDIRECTLY ONLY (A) TO THE COMPANY, (B) IF THE SECURITIES HAVE BEEN REGISTERED IN COMPLIANCE WITH THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS (C) IN COMPLIANCE WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT IN ACCORDANCE WITH RULE 144 THEREUNDER, IF APPLICABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE LAWS AND REGULATIONS GOVERNING THE OFFER AND SALE OF SECURITIES, AND, IN EACH CASE, THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE COMPANY AN OPINION OF COUNSEL OF RECOGNIZED STANDING, OR OTHER EVIDENCE OF EXEMPTION, REASONABLY SATISFACTORY TO THE COMPANY TO SUCH EFFECT. HEDGING TRANSACTIONS INVOLVING THE SECURITIES ARE PROHIBITED EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT. THESE SECURITIES MAY NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON CANADIAN STOCK EXCHANGES.”
provided that, if at any time, in the opinion of counsel to the Company, such legend is no longer necessary or advisable under any such securities laws, or the holder of any such legended certificate, provides the Company with evidence satisfactory in form and substance to the Company (which may include an opinion of counsel satisfactory to the Company) to the effect that such legends are not required, such legended certificate may thereafter be surrendered to the Company in exchange for a certificate which does not bear such legend.
| (e) | Prior to effectiveness of a registration statement (the “Registration Statement”) under the U.S. Securities Act, including any amendments or supplements thereto, registering the Warrants and the Common Shares issuable upon the exercise of the Warrants and at any time the Registration Statement ceases to be effective, prior to the Expiry Time and for so long as the Registration Statement is not effective, the Holder may exercise this Broker Warrant as set forth in Section 3(a). Within three business days of notice from the Holder of the election to exercise while no Registration Statement is effective, the Corporation shall elect, at its sole discretion, to either (a) redeem the Broker Warrants, or (b) permit the cashless exercise of the Broker Warrants. If the Holder exercises the right provided for in |
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this Section 3(e) in respect of a lesser number of Broker Warrants than the aggregate number of Broker Warrants represented by the Broker Warrant Certificate surrendered, the Holder shall be entitled to receive a further Broker Warrant Certificate in respect of the Broker Warrants represented by the Broker Warrant Certificate that have not been part of a cashless exercise or redeemed.
| (f) | In the event Holder exercises this Broker Warrant in accordance with Section 3(e), the Corporation shall, within three business days, either (i) redeem the Broker Warrants, or (ii) permit the cashless exercise of the Broker Warrants, each as provided in this Section 3(f) and the Corporation shall cause either (a) in the case of a redemption, a cheque in the amount of money determined by multiplying the number of Common Shares that would have been issued if the Broker Warrants to be redeemed were exercised on the Determination Date (as defined below) by the excess (if any) of the Current Market Price per Common Share on the date (the “Determination Date”) of execution by the Holder of the Subscription Form, over the exercise price of the Broker Warrant, or (b) in the case of a cashless exercise, a certificate representing the number of Common Shares equal to the quotient obtained by dividing: (A) (i) the Current Market Price per Common Share on the Determination Date minus the Exercise Price; (ii) multiplied by the number of Common Shares which would, but for such cashless exercise, have been issued, by (B) the Current Market Price of the Common Shares on the Determination Date, to be mailed to such Holder at the address specified in Subscription Form, or, if so specified in such Subscription Form, to be made available for pick-up by such Holder at the Company or its transfer agent. |
| 4. | Partial Exercise: The Holder may subscribe for and purchase a number of Common Shares less than the maximum number the Holder is entitled to purchase pursuant to the full exercise of this Broker Warrant Certificate. In the event of any such subscription prior to the Expiry Time, the Holder shall be entitled to receive, without charge, a new Broker Warrant Certificate in respect of the balance of the Common Shares which the Holder was entitled to subscribe for pursuant to this Broker Warrant Certificate and which were then not purchased. |
| 5. | No Fractional Shares: Notwithstanding any adjustments provided for in Section 10 hereof or otherwise, the Company shall not be required upon the exercise of any Broker Warrants to issue fractional Common Shares in satisfaction of its obligations hereunder and, in any such case, the number of Common Shares issuable upon the exercise of any Broker Warrants shall be rounded down to the nearest whole number. The Company shall not be required to make any payment to the Holder who, absent this Section 5 hereof, would otherwise have been entitled to receive a fractional Common Share. |
| 6. | Limitation on Transfer: The Broker Warrants are non-transferable and non-assignable. |
| 7. | Not a Shareholder: Nothing in this Broker Warrant Certificate or in the holding of a Broker Warrant evidenced hereby shall be construed as conferring upon the Holder any right or interest whatsoever as a shareholder of the Company or any other right or interest except as herein expressly provided. |
| 8. | No Obligation to Purchase: Nothing herein contained or done pursuant hereto shall obligate the Holder to subscribe for or the Company to issue any shares except those shares in respect of which the Holder shall have exercised its right to purchase hereunder in the manner provided herein. |
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| 9. | Covenants: |
| (a) | The Company covenants and agrees that so long as any Broker Warrants evidenced hereby remain outstanding, it shall reserve and there shall remain unissued out of its authorized capital a sufficient number of Common Shares to satisfy the right of purchase herein provided for, it will cause the Common Shares subscribed for and purchased in the manner herein provided to be issued and delivered as directed and such Common Shares shall be issued as fully paid and non-assessable Common Shares and free from all taxes, liens and charges with respect to the issue thereof and the holders thereof shall not be liable to the Company or to its creditors in respect thereof. |
| (b) | The Company covenants and agrees that until the Expiry Time, while the Broker Warrants (or remaining portion thereof) shall be outstanding, the Company shall use its best efforts to preserve and maintain its corporate existence, to carry on and conduct its business in a prudent manner in accordance with industry standards and good business practice, to remain listed on the TSX, maintain its status as a “reporting issuer” not in default of the requirements of the applicable securities laws in the Canadian jurisdictions in which the Company is currently a reporting issuer, provided that this covenant shall not prevent the Company from completing any transaction which would result in the Company to cease its corporate existence, cease to be listed on the TSX or cease to be a reporting issuer, respectively, so long as the holders of the Common Shares receive securities of an entity which is listed on a stock exchange in Canada or cash or the holders of the Common Shares have approved the transaction in accordance with the requirements of applicable corporate laws and the policies of the TSX. |
| (c) | The Company shall use its best efforts to ensure the Common Shares are listed and posted for trading on the TSX or such other stock exchange or over-the-counter market as the Common Shares may be listed or quoted (as the case may be) at the time of exercise of the Broker Warrants. In addition, the Company shall make all requisite filings under applicable securities legislation necessary to remain a reporting issuer not in default. |
| (d) | If the issuance of the Common Shares upon the exercise of the Broker Warrants requires any filing or registration with or approval of any securities regulatory authority or other governmental authority or compliance with any other requirement under any law before such Common Shares may be validly issued (other than the filing of a prospectus or similar disclosure document), the Company and the Holder agree to take such actions as may be necessary to secure such filing, registration, approval or compliance, as the case may be. |
| (e) | The Company will do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered, all other acts, deeds and assurances in law as may be reasonably required for the better accomplishing and effecting of the intentions and provisions of this Broker Warrant Certificate. |
| 10. | Adjustments: |
| (a) | Adjustment: The rights of the holder of this Broker Warrant Certificate, including the number of Common Shares issuable upon the exercise of such Broker Warrants evidenced hereunder, will be adjusted from time to time in the events and in the manner provided in, and in accordance with the provisions of, this Section 10. The purpose and intent of the adjustments provided for in this Section is to ensure that the rights and obligations of the Holder are neither diminished nor enhanced as a result of any of the events set forth in paragraphs (b), (c) or (d) of this Section 10. Accordingly, the provisions of this Section 10 shall be interpreted and applied in accordance with such purpose and intent. |
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| (b) | The Exercise Price in effect at any date will be subject to adjustment from time to time as follows: |
| (i) | Share Reorganization: If and whenever at any time during the Adjustment Period, the Company shall (A) subdivide, redivide or change the outstanding Common Shares into a greater number of Common Shares, (B) consolidate, combine or reduce the outstanding Common Shares into a lesser number of Common Shares, or (C) fix a record date for the issue of Common Shares or securities convertible into or exchangeable for Common Shares to all or substantially all of the holders of Common Shares by way of a stock dividend or other distribution other than a Dividend Paid in the Ordinary Course, then, in each such event, the Exercise Price shall, on the record date for such event or, if no record date is fixed, the effective date of such event, be adjusted so that it will equal the rate determined by multiplying the Exercise Price in effect immediately prior to such date by a fraction, of which the numerator shall be the total number of Common Shares outstanding on such date before giving effect to such event, and of which the denominator shall be the total number of Common Shares outstanding on such date after giving effect to such event (including, in the case where securities exchangeable for or convertible into Common Shares are distributed, the number of Common Shares that would have been outstanding had such securities been fully exchanged for or converted into Common Shares on such record date or effective date). Such adjustment shall be made successively whenever any such event shall occur. Any such issue of Common Shares by way of a stock dividend shall be deemed to have been made on the record date for such stock dividend for the purpose of calculating the number of outstanding Common Shares under paragraphs 10(b)(i) and (ii) hereof. |
| (ii) | Rights Offering: If and whenever at any time during the Adjustment Period, the Company shall fix a record date for the issue of rights, options or warrants to all or substantially all of the holders of Common Shares entitling the holders thereof, within a period expiring not more than 45 days after the record date for such issue, to subscribe for or purchase Common Shares (or securities convertible into or exchangeable for Common Shares) at a price per share (or having a conversion or exchange price per share) less than 95% of the Current Market Price on such record date (each such event, a “Rights Offering”), then the Exercise Price shall be adjusted immediately after such record date so that it will equal the rate determined by multiplying the Exercise Price in effect on such record date by a fraction, of which the numerator shall be the total number of Common Shares outstanding on such record date plus the number of Common Shares equal to the number arrived at by dividing the aggregate price of the total number of additional Common Shares so offered for subscription or purchase (or the aggregate conversion or exchange price of the convertible or exchangeable securities so offered) by such Current Market Price, and of which the denominator shall be the total number of Common Shares outstanding on such record date plus the total number of additional Common Shares so offered for subscription or purchase (or into or for which the convertible or exchangeable securities so offered are convertible or exchangeable). Any Common Shares owned by or held for the account of the Company or any subsidiary of the Company shall be deemed not to be outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed, provided that if two or more such record dates referred to in this subsection 10(b)(ii) are fixed within a period of 25 Trading Days, such adjustment will be made successively as if each of such record dates occurred on the earliest of such record dates. To the extent that any such rights, options or |
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warrants are not exercised prior to the expiration thereof, the Exercise Price shall then be readjusted to the Exercise Price which would then be in effect based upon the number of Common Shares (or securities convertible into or exchangeable for Common Shares) actually issued upon the exercise of such rights, options or warrants, as the case may be.
| (iii) | Distribution: If and whenever at any time during the Adjustment Period, the Company shall fix a record date for the making of a distribution to all or substantially all of the holders of Common Shares of (A) shares of any class other than Common Shares whether of the Company or any other corporation, (B) rights, options or warrants to acquire Common Shares or securities exchangeable for or convertible into Common Shares or property or other assets of the Company (other than a Rights Offering as described in Section 10(b)(ii)), (C) evidences of indebtedness, or (D) cash, securities or other property or assets then, in each such case, provided that such distribution does not constitute a Dividend Paid in the Ordinary Course or fall under clauses (i) or (ii) of this Section 10 above, the Exercise Price will be adjusted immediately after such record date so that it will equal the rate determined by multiplying the Exercise Price in effect on such record date by a fraction, of which the numerator shall be the total number of Common Shares outstanding on such record date multiplied by the Current Market Price on the earlier of such record date and the date on which the Company announces its intention to make such distribution, less the aggregate fair market value (as determined by the directors, acting reasonably, at the time such distribution is authorized, and subject to TSX acceptance) of such shares or rights, options or warrants or evidences of indebtedness or cash, securities or other property or assets so distributed, and of which the denominator shall be the total number of Common Shares outstanding on such record date multiplied by such Current Market Price. Any Common Shares owned by or held for the account of the Company or any subsidiary of the Company shall be deemed not to be outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed, provided that if two or more such record dates or record dates referred to in this subsection 10(b)(iii) are fixed within a period of 25 Trading Days, such adjustment will be made successively as if each of such record dates occurred on the earliest of such record dates. To the extent that any such rights, options or warrants so distributed are not exercised prior to the expiration thereof, the Exercise Price shall then be readjusted to the Exercise Price which would then be in effect based upon such rights, options or warrants or evidences of indebtedness or cash, securities or other property or assets actually distributed or based upon the number or amount of securities or the property or assets actually issued or distributed upon the exercise of such rights, options or warrants, as the case may be. |
| (c) | Reclassifications: If and whenever at any time during the Adjustment Period, there is (A) any reclassification of or amendment to the outstanding Common Shares, any change of the Common Shares into other shares or any other reorganization of the Company (other than as described in subsection 10(b) hereof), (B) any consolidation, amalgamation, arrangement, merger or other form of business combination of the Company with or into any other corporation resulting in any reclassification of the outstanding Common Shares, any change of the Common Shares into other shares or any other reorganization of the Company, or (C) any sale, lease, exchange or transfer of the undertaking or assets of the Company as an entirety or substantially as an entirety to another corporation or entity, then, in each such event, the Holder of the Broker Warrants evidenced hereby which are thereafter exercised shall be entitled to receive, and shall accept, in lieu of the number of |
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Common Shares to which such Holder was theretofore entitled upon such exercise, the kind and number or amount of shares or other securities or property which such Holder would have been entitled to receive as a result of such event if, on the effective date thereof, such Holder had been the registered holder of the number of Common Shares to which such Holder was theretofore entitled upon such exercise. If necessary as a result of any such event, appropriate adjustments will be made in the application of the provisions set forth in this subsection with respect to the rights and interests thereafter of the Holder of this Broker Warrant Certificate to the end that the provisions set forth in this subsection will thereafter correspondingly be made applicable, as nearly as may reasonably be, in relation to any shares or other securities or property thereafter deliverable upon the exercise of the Broker Warrants. Any such adjustments will be made by and set forth in an instrument supplemental hereto approved by the directors, acting reasonably, and shall for all purposes be conclusively deemed to be an appropriate adjustment. No reclassification in accordance with this subsection 10(c) shall be completed unless all necessary steps shall have been taken so that the Holders of the Broker Warrants shall thereafter be entitled to receive the number of Common Shares or other securities or property of the Company or of the continuing, successor or purchasing person, as the case may be, under the reclassification, subject to adjustment thereafter in accordance with provisions the same, as nearly as may be possible, as those contained in this Section 10.
| (d) | If at any time during the Adjustment Period any adjustment or readjustment in the Exercise Price shall occur pursuant to the provisions of subsection 10(b) or 10(c) of this Broker Warrant Certificate, then the number of Common Shares purchasable upon the subsequent exercise of the Broker Warrants shall be simultaneously adjusted or readjusted, as the case may be, by multiplying the number of Common Shares purchasable upon the exercise of the Broker Warrants immediately prior to such adjustment or readjustment by a fraction which shall be the reciprocal of the fraction used in the adjustment or readjustment of the Exercise Price. |
| 11. | Rules Regarding Calculation of Adjustment of Exercise Price: |
| (a) | The adjustments provided for in Section 10 are cumulative and will, in the case of adjustments to the Exercise Price, be computed to the nearest whole Common Share and will be made successively whenever an event referred to therein occurs, subject to the following subsections of this Section 11. |
| (b) | No adjustment in the Exercise Price is required to be made unless such adjustment would result in a change of at least 1% in the prevailing Exercise Price and no adjustment in the Exercise Price is required unless such adjustment would result in a change of at least one one-hundredth of a Common Share; provided, however, that any adjustments which, except for the provisions of this subsection, would otherwise have been required to be made, will be carried forward and taken into account in any subsequent adjustments. |
| (c) | No adjustment in the Exercise Price will be made in respect of any event described in Section 10, other than the events referred to in subsection 10(c), if the Holder is entitled to participate in such event on the same terms, mutatis mutandis, as if the Holder had exercised this Broker Warrant prior to or on the effective date or record date of such event. Any participation by the Holder in a distribution, dividend, or other event referred to in Section 10 is subject to the approval of the TSX. |
| (d) | No adjustment in the Exercise Price will be made under Section 10 in respect of the issue from time to time of Common Shares issuable from time to time as Dividends Paid in the Ordinary Course to holders of Common Shares who exercise an option or election to |
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receive substantially equivalent dividends in Common Shares in lieu of receiving a cash dividend.
| (e) | If at any time a question or dispute arises with respect to adjustments provided for in Section 10, such question or dispute will be conclusively determined by such firm of independent chartered accountants as may be selected by action of the directors of the Company and any such determination, subject to regulatory approval and absent manifest error, will be binding upon the Company and the Holder. The Company will provide such chartered accountant with access to all necessary records of the Company. |
| (f) | In case the Company after the date of issuance of this Broker Warrant Certificate takes any action affecting the Common Shares, other than any action described in Section 10, which in the reasonable opinion of the board of directors of the Company would materially affect the rights of the Holder, the Exercise Price will be adjusted in such manner, if any, and at such time, by action of the directors of the Company in their sole discretion, acting reasonably and in good faith, as such directors deem equitable, but subject in all cases to any necessary regulatory approval. Failure of the taking of action by the directors of the Company so as to provide for an adjustment on or prior to the effective date of any action by the Company affecting the Common Shares will be conclusive evidence that the board of directors of the Company has determined that it is equitable to make no adjustment in the circumstances. |
| (g) | If the Company sets a record date to determine the holders of the Common Shares for the purpose of entitling them to receive any dividend or distribution or sets a record date to take any other action and, thereafter and before the distribution to such shareholders of any such dividend or distribution or the taking of any other action, decides not to implement its plan to pay or deliver such dividend or distribution or take such other action, then no adjustment in the Exercise Price will be required by reason of the setting of such record date. |
| (h) | In the absence of a resolution of the directors of the Company fixing a record date for any event which would require any adjustment to the Broker Warrants, the Company will be deemed to have fixed as the record date therefor the date on which the event is effected. |
| (i) | As a condition precedent to the taking of any action which would require any adjustment to the Common Shares issuable under the Broker Warrants, including the Exercise Price, the Company shall take any corporate action which may be necessary in order that the Company or any successor to the Company or successor to the undertaking or assets of the Company have unissued and reserved in its authorized capital and may validly and legally issue as fully paid and non-assessable all the shares or other securities which the Holder is entitled to receive on the full exercise thereof in accordance with the provisions hereof. |
| (j) | The Company will from time to time, immediately after the occurrence of any event which requires an adjustment or readjustment as provided in Section 10, forthwith give notice to the Holder specifying the event requiring such adjustment or readjustment and the results thereof, including the resulting Exercise Price. |
| (k) | The Company covenants to and in favour of the Holder that so long as any Broker Warrants evidenced hereby remain outstanding, it will give notice to the Holder of the effective date or of its intention to fix a record date for any event referred to in Section 10 whether or not such action would give rise to an adjustment in the Exercise Price or the number and type of securities issuable upon the exercise of the Broker Warrants, and, in each case, such notice shall specify the particulars of such event and the record date and the effective date |
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for such event; provided that the Company shall only be required to specify in such notice such particulars of such event as have been fixed and determined on the date on which such notice is given. Such notice shall be given not less than 14 days in each case prior to such applicable record date or effective date.
| (l) | In any case that an adjustment pursuant to Section 10 shall become effective immediately after a record date for or an effective date of an event referred to herein, the Company may defer, until the occurrence and consummation of such event, issuing to the Holder of this Broker Warrant Certificate, if exercised after such record date or effective date and before the occurrence and consummation of such event, the additional Common Shares or other securities or property issuable upon such exercise by reason of the adjustment required by such event, provided, however, that the Company will deliver to the Holder an appropriate instrument evidencing the Holder’s right to receive such additional Common Shares or other securities or property upon the occurrence and consummation of such event and the right to receive any dividend or other distribution in respect of such additional Common Shares or other securities or property declared in favour of the holders of record of Common Shares or of such other securities or property on or after the Exercise Date or such later date as the Holder would, but for the provisions of this subsection, have become the holder of record of such additional Common Shares or of such other securities or property. |
| (m) | On the happening of each and every such event set out in Section 10, the applicable provisions of this Broker Warrant Certificate, including the Exercise Price, shall, ipso facto, be deemed to be amended accordingly and the Company shall take all necessary action so as to comply with such provisions as so amended. |
| 12. | Consolidation and Amalgamation |
| (a) | In the event that the Company enters into any transaction whereby all or substantially all of its undertaking, property and assets would become the property of any other corporation (herein called a “successor corporation”) whether by way of reorganization, reconstruction, consolidation, amalgamation, merger, transfer, sale, disposition or otherwise, the Company will ensure that contemporaneously with the consummation of such transaction the Company and the successor corporation shall have executed such instruments and done such things as the Company, acting reasonably, considers necessary or advisable to establish that upon the consummation of such transaction: |
| i. | the successor corporation will have assumed all the covenants and obligations of the Company under this Broker Warrant Certificate, and |
| ii. | the Broker Warrants and the terms set forth in this Broker Warrant Certificate will be a valid and binding obligation of the successor corporation entitling the Holder, as against the successor corporation, to all the rights of the Holder under this Broker Warrant Certificate. |
| (b) | Whenever the conditions of subsection 12(a) shall have been duly observed and performed the successor corporation shall possess, and from time to time may exercise, each and every right and power of the Company under the Broker Warrants in the name of the Company or otherwise and any act or proceeding by any provision hereof required to be done or performed by any director or officer of the Company may be done and performed with like force and effect by the like directors or officers of the successor corporation. |
| 11 |
| 13. | Representation and Warranty: The Company hereby represents and warrants with and to the Holder that the Company is duly authorized and has all corporate and lawful power and authority to create and issue the Broker Warrants evidenced hereby and the Common Shares issuable upon the exercise hereof and perform its obligations hereunder and that this Broker Warrant Certificate represents a valid, legal and binding obligation of the Company enforceable in accordance with its terms. |
| 14. | If Share Transfer Books Closed: The Company shall not be required to deliver certificates for Common Shares while the share transfer books of the Company are properly closed, prior to any meeting of shareholders or for the payment of dividends or for any other purpose and in the event of the surrender of any Broker Warrant in accordance with the provisions hereof and the making of any subscription and payment for the Common Shares called for thereby during any such period delivery of certificates for Common Shares may be postponed for a period not exceeding three (3) Business Days after the date of the re-opening of said share transfer books provided that any such postponement of delivery of certificates shall be without prejudice to the right of the Holder, if the Holder has surrendered the same and made payment during such period, to receive such certificates for the Common Shares called for after the share transfer books shall have been re-opened. |
| 15. | Protection of Shareholders, Officers and Directors: Subject as herein provided, all or any of the rights conferred upon the Holder may be enforced by the Holder by appropriate legal proceedings. No recourse under or upon any obligation, covenant or agreement herein contained or in any of the Broker Warrants represented hereby shall be taken against any shareholder, officer or director of the Company, either directly or through the Company, it being expressly agreed and declared that the obligations under the Broker Warrants evidenced hereby, are solely corporate obligations of the Company and that no personal liability whatever shall attach to or be incurred by the shareholders, officers, or directors of the Company or any of them in respect thereof, any and all rights and claims against every such shareholder, officer or director being hereby expressly waived as a condition of and as a consideration for the issue of the Broker Warrants evidenced hereby. |
| 16. | Replacement Certificate: Upon receipt of evidence satisfactory to the Company of loss, theft, destruction or mutilation of this Broker Warrant Certificate and, if requested by the Company, upon delivery of a bond of indemnity satisfactory to the Company (or, in the case of mutilation, upon surrender of this Broker Warrant Certificate), the Company will issue to the Holder a replacement certificate containing the same terms and conditions as this Broker Warrant Certificate. |
| 17. | Governing Law: This Broker Warrant Certificate shall be governed by, and construed in accordance with, the laws of the Province of British Columbia and the laws of Canada applicable therein but the references to such laws shall not, by conflict of laws, rules or otherwise, require the application of the law of any jurisdiction other than the Province of British Columbia. |
| 18. | Severability: If any one or more of the provisions or parts thereof contained in this Broker Warrant Certificate should be or become invalid, illegal or unenforceable in any respect in any jurisdiction, the remaining provisions or parts thereof contained herein shall be and shall be conclusively deemed to be, as to such jurisdiction, severable therefrom. |
| 19. | Amendments: Subject to the approval of the TSX, the provisions of these Broker Warrants may from time to time be amended, modified or waived, if such amendment, modification or waiver is in writing and consented to in writing by the Company and the Holder. |
| 20. | Headings: The headings of the articles, sections, subsections and clauses of this Broker Warrant Certificate have been inserted for convenience and reference only and do not define, limit, alter or enlarge the meaning of any provision of this Broker Warrant Certificate. |
| 12 |
| 21. | Numbering of Articles, etc.: Unless otherwise stated, a reference herein to a numbered or lettered article, section, subsection, clause, subclause or schedule refers to the article, section, subsection, clause, subclause or schedule bearing that number or letter in this Broker Warrant Certificate. |
| 22. | Gender: Whenever used in this Broker Warrant Certificate, words importing the singular number only shall include the plural, and vice versa, and words importing the masculine gender shall include the feminine gender. |
| 23. | Day not a Business Day: In the event that any day on or before which any action is required to be taken hereunder is not a Business Day, then such action shall be required to be taken on or before the requisite time on the next succeeding day that is a Business Day. |
| 24. | Binding Effect: This Broker Warrant Certificate and all of its provisions shall enure to the benefit of the Holder, its successors, assigns and legal personal representatives and shall be binding upon the Company and its successors. |
| 25. | Notice: Notice must be given by facsimile (in the case of notice to the Company), prepaid same day courier, or hand delivery, and addressed as follows: |
| (a) | If to the Holder at the latest address of the Holder as recorded on the books of the Company; and |
| (b) | If to the Company at: |
7000 South Yosemite Street
Suite 115
Centennial, CO 80112
| Attention: | Neal Shah, Chief Financial Officer |
| Email: | nshah@niocorp.com |
Unless herein otherwise expressly provided, a notice to be given hereunder will be deemed to be validly given on the: (i) same day if notice is sent during regular business hours in the recipient’s jurisdiction, or (ii) the next Business Day if notice is sent outside of regular business hours in the recipient’s jurisdiction or on a day that is not a Business Day.
| 26. | Time of Essence: Time shall be of the essence hereof. |
[Signature page follows.]
| 13 |
IN WITNESS WHEREOF the Company has caused this Broker Warrant Certificate to be signed by its duly authorized officer as of this _10th ___ day of May 2021.
| NIOCORP DEVELOPMENTS LTD. | ||
| Per: | ||
| Authorized Signing Officer | ||
Broker Warrant Certificate
SUBSCRIPTION FORM
Capitalized terms used herein have the meanings ascribed thereto in the Broker Warrant Certificate (the “Broker Warrant Certificate”) to which this Subscription Form is attached.
The undersigned holder of the attached Broker Warrant Certificate hereby subscribes for _______________ common shares (the “Common Shares”) of NioCorp Developments Ltd. (the “Company”) pursuant to the terms of the Broker Warrant Certificate at the Exercise Price on the terms specified in the Broker Warrant Certificate and contemporaneously with the execution and delivery hereof makes payment therefor on the terms specified in the Broker Warrant Certificate. If any Broker Warrants represented by this Broker Warrant Certificate are not being exercised, a new Broker Warrant Certificate representing the unexercised Broker Warrants will be issued and delivered with the certificate representing the Common Shares.
At any time when there is no effective registration statement under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), registering the Common Shares issuable upon exercise of the Broker Warrants to which this Subscription Form relates, the undersigned must comply with the procedures set forth in the paragraph immediately below.
The undersigned hereby certifies that the undersigned (i) is not (and is not exercising the Broker Warrants for the account or benefit of) a person in the “United States or a “U.S. Person”, (ii) did not execute or deliver this Subscription Form in the United States and (iii) has in all other aspects complied with the terms of Regulation S under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any successor rule or regulation of the United States Securities and Exchange Commission in effect. Alternatively, the undersigned is tendering with this Subscription Form a written opinion of counsel or other evidence, in form and substance satisfactory to the Company, to the effect that the securities to be delivered upon exercise of the Broker Warrants are exempt from registration under the U.S. Securities Act and all applicable state securities laws. The term “U.S. Person” is as defined in Regulation S under the U.S. Securities Act and includes, but is not limited to, any natural person resident in the United States and any partnership or corporation organized or incorporated under the laws of the United States. “United States” means the United States of America, its territories and possessions, any state of the United States and the District of Columbia.
The undersigned hereby directs that the Common Shares be issued as follows:
NAME(S) IN FULL |
ADDRESS(ES) |
NUMBER OF COMMON SHARES |
DATED this day of , 20 .
| NAME: | ||
| Signature of Authorized Representative: | ||
| Print Name: |
Exhibit 5.1
 |
Blake, Cassels & Graydon LLP Barristers & Solicitors Patent & Trade-mark Agents 595 Burrard Street, P.O. Box 49314 Suite 2600, Three Bentall Centre Vancouver BC V7X 1L3 Canada Tel: 604-631-3300 Fax: 604-631-3309
|
June 21, 2021
NioCorp Developments Ltd.
7000 South Yosemite Street, Suite115
Centennial, CO
80112
RE: Registration Statement on Form S-3
Dear Sirs/Mesdames:
We have acted as Canadian counsel to NioCorp Developments Ltd., a corporation incorporated under the laws of British Columbia (the “Company”), in connection with the Company’s filing with the Securities and Exchange Commission (the “Commission”) on the date hereof of the above captioned registration statement on Form S-3 (the “Registration Statement”) pursuant to the Securities Act of 1933, as amended (the “Act”) relating to the resale or other distribution from time to time by Lind Asset Management III, LLC, Research Capital Corporation and certain selling security holders therein described (collectively, the “Selling Shareholders”) of up to the following common shares in the capital of the Company (“Common Shares”):
| (i) | 4,321,157 issued and outstanding Common Shares (the “Private Placement Shares”) acquired by Selling Shareholders in connection with the Company’s May 2021 non-brokered private placement (the “Private Placement”) of units of the Company; |
| (ii) | 4,321,157 Common Shares (the “Private Placement Warrant Shares”) issuable upon exercise of Common Share purchase warrants, exercisable at a price per Common Share of C$1.63, expiring May 10, 2023 (the “Private Placement Warrants”), which were issued to Selling Shareholders in connection with the closing of the Private Placement; and |
| (iii) | 77,961 Common Shares (the “Compensation Warrant Shares”) issuable upon exercise of Common Share purchase warrants, exercisable at a price per Common Share of C$1.63, expiring May 10, 2023, (the “Compensation Warrants”) issued to certain Selling Shareholders for services rendered to the Company in connection with the Private Placement. |
In connection with the preparation of the Registration Statement and this opinion, we have examined, considered and relied upon originals or copies certified to our satisfaction of each of the following documents (collectively, the “Documents”):
| (a) | the Company’s Articles and Notice of Articles; |
| (b) | a certificate of good standing dated June 18, 2021 issued by the British Columbia Registrar of Companies pursuant to the Business Corporations Act (British Columbia) relating to the Company; |
| (c) | records of corporate proceedings of the Company approving the issuance of the Common Shares; |
| (d) | the form of certificate representing the Compensation Warrants; |
| (e) | the form of certificate representing the Private Placement Warrants; |
| TORONTO | CALGARY | VANCOUVER | MONTRÉAL | OTTAWA | NEW YORK | LONDON | BAHRAIN | BEIJING | |
| Blake, Cassels & Graydon LLP | blakes.com | ||||||||
Page 2
| (f) | such other documents, statutes, regulations, public and corporate records as we have deemed appropriate to give this opinion. |
We have relied upon the factual matters contained in the representations and other factual statements of the Company made in the Documents and upon certificates of public officials and the officers of the Company.
In such examination, we have assumed without any independent investigation: (a) the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as duplicates or certified or conformed copies, and the authenticity of the originals of all such latter documents; and (b) that each of the parties (other than the Company) executing any of the Documents has duly and validly executed and delivered each of the Documents to which such party is a signatory, and the obligations of each party (other than the Company) set forth therein are legal, valid and binding and are enforceable in accordance with all stated terms. We have not, however, undertaken any independent investigation as to any factual matter set forth in any of the foregoing and as to questions of fact in respect of the opinions hereinafter expressed, we have relied solely upon the Documents.
On the basis of and subject to the foregoing and the other assumptions and qualifications set forth herein, we are of the opinion that:
| (a) | the Private Placement Shares are validly issued, fully paid and non-assessable; |
| (b) | the Private Placement Warrant Shares issuable upon exercise of the Private Placement Warrants will be, when issued and paid for in accordance with the terms of the Private Placement Warrants, validly issued, fully paid and non-assessable; and |
| (c) | the Compensation Warrant Shares issuable upon exercise of the Compensation Warrants will be, when issued and paid for in accordance with the terms of the Compensation Warrants, validly issued, fully paid and non-assessable. |
This opinion is limited to the matters stated herein, and no opinions may be implied or inferred beyond the matters expressly stated herein. The opinions expressed herein are as of the date hereof, and we assume no obligation to update or supplement such opinions to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur.
We do not express any opinion with respect to the laws of any jurisdiction other than British Columbia and the laws of Canada specifically applicable.
We hereby consent to the filing of this opinion letter as an exhibit to the Registration Statement and to the reference to Blake, Cassels & Graydon LLP under the caption “Legal Matters” in the prospectus filed as part of the Registration Statement. In giving this consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act, or the rules and regulations of the Commission promulgated thereunder.
Very truly yours,
/s/ Blake, Cassels & Graydon LLP
| TORONTO | CALGARY | VANCOUVER | MONTRÉAL | OTTAWA | NEW YORK | LONDON | BAHRAIN | BEIJING | |
| Blake, Cassels & Graydon LLP | blakes.com | ||||||||
Exhibit 23.2
Consent of Independent Registered Public Accounting Firm
NioCorp Developments Ltd.
Centennial, Colorado
We hereby consent to the incorporation by reference in the Prospectus constituting a part of this Registration Statement of our report dated September 16, 2020, relating to the consolidated financial statements of NioCorp Developments Ltd. appearing in the Company’s Annual Report on Form 10-K for the year ended June 30, 2020. Our report contains an explanatory paragraph regarding the Company’s ability to continue as a going concern.
We also consent to the reference to us under the caption “Experts” in the Prospectus.
/s/ BDO USA, LLP
Spokane, Washington
June 21, 2021
Exhibit 23.3
CONSENT OF QUALIFIED PERSON
The undersigned, Glen Kuntz, hereby states as follows:
I, Glen Kuntz, assisted with the preparation of the “Mineral Resource Estimate” with an effective date of February 19, 2019 (the “Mineral Resource Summary”), portions of which are extracted or summarized (the “Summary Material”) in NioCorp Developments Ltd.’s (the “Company”) Annual Report on Form 10-K for the fiscal year ended June 30, 2020.
I hereby consent to the incorporation by reference of the Mineral Resource Summary and the Summary Material into the Company’s Registration Statement on Form S-3 to which this consent is filed as an exhibit and the reference to my name and the name of Nordmin Engineering Ltd. under the caption “Experts” in the prospectus forming part of such Registration Statement on Form S-3.
| Date: June 21, 2021 | By: | /s/ Glen Kuntz | |
| Name: Glen Kuntz, P. Geo Title: Consulting Specialist – Geology/Mining, Nordmin Engineering Ltd. | |||
Exhibit 23.4
CONSENT OF QUALIFIED PERSON
The undersigned, Jean-Francois St-Onge, hereby states as follows:
I, Jean-Francois St-Onge, assisted with the preparation of the “Mineral Reserve Estimate” with an effective date of February 19, 2019 (the “Mineral Reserve Summary”), portions of which are extracted or summarized (the “Summary Material”) in NioCorp Developments Ltd.’s (the “Company”) Annual Report on Form 10-K for the fiscal year ended June 30, 2020.
I hereby consent to the incorporation by reference of the Mineral Reserve Summary and the Summary Material into the Company’s Registration Statement on Form S-3 to which this consent is filed as an exhibit and the reference to my name and the name of the Optimize Group Inc. under the caption “Experts” in the prospectus forming part of such Registration Statement on Form S-3.
| Date: June 21, 2021 | By: | /s/ Jean-Francois St-Onge | |
|
Name: Jean-Francois St-Onge, P.Eng Title: Associate Consulting Specialist – Optimize Group Inc. | |||