Item 1.01 Entry into a Material Definitive Agreement.
Yorkville Financings
On January 26, 2023, NioCorp Developments Ltd. ("NioCorp") entered into
definitive agreements with respect to two previously announced financings with
YA II PN, Ltd., an investment fund managed by Yorkville Advisors Global, LP
(together with YA II PN, Ltd., "Yorkville"). The financings contemplated by the
definitive agreements include (i) up to $16,000,000 aggregate principal amount
of unsecured convertible debentures of NioCorp (the "Convertible Debentures")
convertible into common shares of NioCorp (the "Common Shares") and Common Share
purchase warrants (the "Financing Warrants") entitling the holders thereof to
purchase additional Common Shares (the "Yorkville Convertible Debt Financing");
and (ii) a standby equity purchase facility pursuant to which NioCorp will have
the right, but not the obligation, subject to the conditions set out therein, to
sell Common Shares to Yorkville with a maximum aggregate value of up to
$65,000,000 over a period of up to 36 months (the "Yorkville Equity Facility
Financing" and, together with the Yorkville Convertible Debt Financing, the
"Yorkville Financings").
The Yorkville Financings are expected to become effective on the date of the
closing (the "Closing") of the Company's proposed business combination (the
"Transaction") with GX Acquisition Corp. II ("GXII"), as previously announced on
September 26, 2022. Once completed, the Yorkville Financings could provide
NioCorp with access to up to an additional $80,360,000, before related fees and
expenses payable by NioCorp.
NioCorp intends to use the proceeds from the Yorkville Financings to advance its
efforts to launch construction of the Elk Creek Project and move it to
commercial operation, and to satisfy the fees and expenses incurred in
connection with the Transaction, if required.
Completion of the Yorkville Financings is subject to certain conditions,
including the Closing of the Transaction, the receipt of the approval of the
Toronto Stock Exchange (the "TSX") and the approval of NioCorp's shareholders in
accordance with the rules of the TSX.
Yorkville Convertible Debt Financing
On January 26, 2023, NioCorp entered into a Securities Purchase Agreement (the
"Yorkville Convertible Debt Financing Agreement"), by and between NioCorp and
Yorkville. Pursuant to the Yorkville Convertible Debt Financing Agreement,
Yorkville, and any investor that exercises its contractual right previously
granted by NioCorp to participate in the Yorkville Convertible Debt Financing
(collectively with Yorkville, the "Investors"), will advance an initial total
amount of $9,600,000 to NioCorp in consideration of the issuance by NioCorp to
the Investors of $10,000,000 aggregate principal amount of Convertible
Debentures at the time of Closing (the "First Debenture Closing"), and an
additional total amount of $5,760,000 to NioCorp in consideration of the
issuance by NioCorp to the Investors of $6,000,000 aggregate principal amount of
Convertible Debentures on a date to be determined at the election of NioCorp,
but which may not be prior to the later to occur of (i) the date of filing of
the Convertible Debt Financing Registration Statement (as defined below) and
(ii) the date of Closing (together with the First Debenture Closing, the
"Debenture Closings").
Each Convertible Debenture issued under the Yorkville Convertible Debt Financing
will be an unsecured obligation of NioCorp, will have an 18-month term from the
First Debenture Closing, which may be extended for one six-month period in
certain circumstances at the option of NioCorp, and will incur a simple interest
rate obligation of 5.0% per annum (which will increase to 15.0% per annum upon
the occurrence of an event of default). The outstanding principal amount of,
accrued and unpaid interest, if any, on, and premium, if any, on the Convertible
Debentures must be paid by NioCorp in cash when the same becomes due and payable
under the terms of the Convertible Debentures at their stated maturity, upon
their redemption or otherwise.
Subject to certain limitations contained within the Yorkville Convertible Debt
Financing Agreement and the Convertible Debentures, including those as described
below, holders of the Convertible Debentures will be entitled to convert the
principal amount of, and accrued and unpaid interest, if any, on each
Convertible Debenture, in whole or in part, from time to time over their term,
into a number of Common Shares equal to the quotient of the principal amount and
accrued and unpaid interest, if any, being converted divided by the Conversion
Price. The "Conversion Price" means, as of any Conversion Date (as defined
below) or other date of determination, the greater of (i) 90% of the average of
the daily U.S. dollar volume-weighted average price ("VWAP") of the Common
Shares on the principal U.S. market for the Common Shares as reported by
Bloomberg Financial Markets during the five consecutive trading days immediately
preceding the date on which the holder exercises its conversion right in
accordance with the requirements of the Yorkville Convertible Debt Financing
Agreement (the "Conversion Date") or other date of determination, unless NioCorp
consents to conversion at a lower price, and (ii) the five-day VWAP of the
Common Shares on the TSX (or on the principal U.S. market if the majority of the
trading volume and value of the Common Shares occurred on the Nasdaq Capital
Market (the "Nasdaq") during the relevant period) for the five consecutive
trading days immediately prior to the Conversion Date or other date of
determination less the maximum applicable discount allowed by the TSX.
Notwithstanding the foregoing, if at any time it shall be a condition to listing
or continued listing of the Common Shares on the Nasdaq or such other principal
U.S. market for the Common Shares that the Conversion Price be not less than a
minimum price (the "Floor Price"), then NioCorp and the holders will negotiate
in good faith to amend the Convertible Debentures to provide that the Conversion
Price shall not be less than a Floor Price that satisfies such condition. Any
Floor Price will be subject to adjustment to give effect to any stock dividend,
stock split or recapitalization.
The terms of the Convertible Debentures restrict the number of Convertible
Debentures that may be converted during each calendar month by an Investor at a
Conversion Price below a fixed price equal to the quotient of (i) $10.00 divided
by (ii) 11.1829212 (being the number of Common Shares that will be exchanged for
each share of GXII at the Closing), subject to adjustment to give effect to any
stock dividend, stock split or recapitalization. The Convertible Debentures will
be subject to customary anti-dilution adjustments.
Pursuant to the terms of the Convertible Debentures, following certain trigger
events, and until a subsequent cure event, NioCorp will be required to redeem
$1,125,000 aggregate principal amount of Convertible Debentures (the "Triggered
Principal Amount") each month by making cash payments to the Investors, on a pro
rata basis, in an amount equal to the Triggered Principal Amount, plus accrued
and unpaid interest thereon, if any, plus a redemption premium of 7% of the
Triggered Principal Amount. Such monthly prepayments under the terms of the
Convertible Debentures are triggered (i) at the time when NioCorp has issued 95%
of the total amount of Common Shares pursuant to the Yorkville Convertible Debt
Financing that it may issue under applicable TSX and Nasdaq rules or (ii) when
NioCorp has delayed or suspended the effectiveness or use of the Convertible
Debt Financing Registration Statement for more than 20 consecutive calendar
days, and such monthly prepayment obligations will continue until, with respect
to (i) above, shareholder approval is obtained or, with respect to (ii) above,
the Investors may once again resell Common Shares under the Convertible Debt
Financing Registration Statement, respectively.
The Convertible Debentures may also be redeemed at NioCorp's option at any time
and from time to time over their term at a redemption price equal to 110% of the
principal amount being redeemed, plus accrued and unpaid interest, if any.
The Convertible Debentures contain events of default customary for instruments
of their type (with customary grace periods, as applicable) and provide that,
upon the occurrence of an event of default arising from certain events of
bankruptcy or insolvency with respect to NioCorp, all outstanding Convertible
Debentures will become due and payable immediately without further action or
notice. If any other type of event of default occurs and is continuing, then any
holder may declare all of its Convertible Debentures to be due and payable
immediately.
In conjunction with each Debenture Closing, NioCorp will issue to the Investors
Financing Warrants to purchase a number of Common Shares as is equal to the
quotient of the principal amount of Convertible Debentures issued in such
Debenture Closing divided by the "Exercise Price", which is equal to the greater
of: (a) the quotient of $10.00 divided by 11.1829212; or (b) the average of the
daily VWAPs of the Common Shares on the principal U.S. market for the Common
Shares during regular trading hours as reported by Bloomberg Financial Markets
during the five consecutive trading days ending on the trading day immediately
prior to such Debenture Closing, in each case subject to any adjustment to give
effect to any stock dividend, stock split or recapitalization.
The Financing Warrants will be exercisable, in whole or in part, but not in
increments of less than $50,000 aggregate Exercise Price (unless the remaining
. . .
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information provided in Item 1.01 of this Current Report on Form 8-K is
incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
The information provided in Item 1.01 of this Current Report on Form 8-K is
incorporated herein by reference.
Item 7.01 Unregistered Sales of Equity Securities.
On January 26, 2023, NioCorp issued a press release announcing the Yorkville
Financings. A copy of the press release is attached hereto as Exhibit 99.1 and
incorporated herein by reference. Such exhibit and the information set forth
therein shall not be deemed to be filed for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise
be subject to the liabilities of that section, nor shall it be deemed to be
incorporated by reference in any filing under the Securities Act or the Exchange
Act.
Item 9.01 Exhibits.
(d) Exhibits
Exhibit Description
4.1 Securities Purchase Agreement, dated as of January 26, 2023, by and
between NioCorp Developments Ltd. and each of the investors listed on
the Schedule of Buyers attached thereto
4.2 Form of Convertible Debentures (included in Exhibit 4.1)
4.3 Form of Warrants (included in Exhibit 4.1)
4.4 Registration Rights Agreement, dated as of January 26, 2023, by and
between NioCorp Developments Ltd. and YA II PN, Ltd.
10.1 Standby Equity Purchase Agreement, dated as of January 26, 2023, by
and between YA II PN Ltd. and NioCorp Developments Ltd.
99.1 Press Release, dated January 26, 2023
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
Additional Information about the Proposed Transaction and Where to Find It
In connection with the proposed Transaction, NioCorp has filed a registration
statement on Form S-4 (the "registration statement") with the SEC, which
includes a document that serves as a prospectus and proxy circular of NioCorp
and a proxy statement of GXII, referred to as a "joint proxy
statement/prospectus." The definitive joint proxy statement/prospectus will be
filed with the SEC as part of the registration statement and, in the case of
NioCorp, with the applicable Canadian securities regulatory authorities, and
will be sent to all NioCorp shareholders and GXII stockholders as of the
applicable record date to be established. Each of NioCorp and GXII may also file
other relevant documents regarding the proposed Transaction with the SEC and, in
the case of NioCorp, with the applicable Canadian securities regulatory
authorities. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS AND
SECURITY HOLDERS OF NIOCORP AND GXII ARE URGED TO READ THE REGISTRATION
STATEMENT, THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS AND ALL OTHER
RELEVANT DOCUMENTS FILED OR THAT WILL BE FILED WITH THE SEC AND, IN THE CASE OF
NIOCORP, WITH THE APPLICABLE CANADIAN SECURITIES REGULATORY AUTHORITIES IN
CONNECTION WITH THE PROPOSED TRANSACTION, INCLUDING ANY AMENDMENTS OR
SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.
Investors and security holders will be able to obtain free copies of the
registration statement and the joint proxy statement/prospectus (if and when
available) and all other relevant documents that are filed or that will be filed
with the SEC by NioCorp or GXII through the website maintained by the SEC at
www.sec.gov. Investors and security holders will be able to obtain free copies
of the joint proxy statement/prospectus (if and when available) and all other
relevant documents that are filed or that will be filed with the applicable
Canadian securities regulatory authorities by NioCorp through the website
maintained by the Canadian Securities Administrators at www.sedar.com. The
documents filed by NioCorp and GXII with the SEC and, in the case of NioCorp,
with the applicable Canadian securities regulatory authorities also may be
obtained by contacting NioCorp at 7000 South Yosemite, Suite 115, Centennial CO
80112, or by calling (720) 639-4650; or GXII at 1325 Avenue of the Americas,
28th Floor, New York, NY 10019, or by calling (212) 616-3700.
Participants in the Solicitation
NioCorp, GXII and certain of their respective directors, executive officers and
other members of management and employees may, under SEC rules, be deemed to be
participants in the solicitation of proxies from NioCorp's shareholders and
GXII's stockholders in connection with the proposed Transaction. Information
regarding the executive officers and directors of NioCorp is included in its
management information and proxy circular for its 2021 annual general meeting of
shareholders filed with the SEC and the applicable Canadian securities
regulatory authorities on October 22, 2021. Information regarding the executive
officers and directors of GXII is included in its Annual Report on Form 10-K for
the year ended December 31, 2021, filed with the SEC on March 25, 2022.
Additional information regarding the persons who may be deemed to be
participants in the solicitation, including information regarding their
interests in the proposed Transaction, are contained in the registration
statement and the joint proxy statement/prospectus. NioCorp's shareholders and
GXII's stockholders and other interested parties may obtain free copies of these
documents free of charge by directing a written request to NioCorp or GXII.
No Offer or Solicitation
This Current Report on Form 8-K and the information contained herein do not
constitute (i) (a) a solicitation of a proxy, consent or authorization with
respect to any securities or in respect of the proposed Transaction or (b) an
offer to sell or the solicitation of an offer to buy any security, commodity or
instrument or related derivative, nor shall there be any sale of securities in
any jurisdiction in which the offer, solicitation or sale would be unlawful
prior to the registration or qualification under the securities laws of any such
jurisdiction or (ii) an offer or commitment to lend, syndicate or arrange a
financing, underwrite or purchase or act as an agent or advisor or in any other
capacity with respect to any transaction, or commit capital, or to participate
in any trading strategies. No offer of securities in the United States or to or
for the account or benefit of U.S. persons (as defined in Regulation S under the
Securities Act) shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act, or an exemption therefrom.
Investors should consult with their counsel as to the applicable requirements
for a purchaser to avail itself of any exemption under the Securities Act. In
Canada, no offering of securities shall be made except by means of a prospectus
in accordance with the requirements of applicable Canadian securities laws or an
exemption therefrom. This Current Report on Form 8-K is not, and under no
circumstances is it to be construed as, a prospectus, offering memorandum, an
advertisement or a public offering in any province or territory of Canada. In
Canada, no prospectus has been filed with any securities commission or similar
regulatory authority in respect of any of the securities referred to herein.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements within the
meaning of the United States Private Securities Litigation Reform Act of 1995
and forward-looking information within the meaning of applicable Canadian
securities laws. Forward-looking statements may include, but are not limited to,
statements about NioCorp's ability to close the Yorkville Financings, including
NioCorp being able to receive all required regulatory and shareholder approvals
for the Yorkville Financings; the time at which the Yorkville Financings are
expected to become effective; the amount of funding that the Yorkville
Financings could provide to NioCorp; the intended use of the proceeds from the
Yorkville Financings; the advance amounts under the Yorkville Convertible Debt
Financing Agreement; the terms of each Convertible Debenture; the interest rate
of the Convertible Debentures; the Conversion Price of the Convertible
Debentures; the number of Convertible Debentures that an Investor may convert;
the number of Financing Warrants that will be issued; the terms of the Financing
Warrants; the number and price of the Common Shares issuable under the Yorkville
Equity Financing Agreement; the payment of the Cash Fee; the parties' ability to
close the proposed Transaction, including NioCorp and GXII being able to receive
all required regulatory, third-party and shareholder approvals for the proposed
Transaction; the anticipated benefits of the proposed Transaction, including the
potential amount of cash that may be available to the combined company upon
consummation of the proposed Transaction and the use of the net proceeds
following the redemptions by GXII public shareholders; NioCorp's expectation
that the Common Shares will be accepted for listing on the Nasdaq following the
Closing of the proposed Transaction; NioCorp's planned exploration activities;
and NioCorp's ability to secure sufficient project financing to complete
construction and commence operation of the Elk Creek Project. Forward-looking
statements are typically identified by words such as "plan," "believe,"
"expect," "anticipate," "intend," "outlook," "estimate," "forecast," "project,"
"continue," "could," "may," "might," "possible," "potential," "predict,"
"should," "would" and other similar words and expressions, but the absence of
these words does not mean that a statement is not forward-looking.
The forward-looking statements are based on the current expectations of the
management of NioCorp, and are inherently subject to uncertainties and changes
in circumstances and their potential effects and speak only as of the date of
such statement. There can be no assurance that future developments will be those
that have been anticipated. Forward-looking statements reflect material
expectations and assumptions, including, without limitation, expectations and
assumptions relating to: the future price of metals; the stability of the
financial and capital markets; NioCorp and GXII being able to receive all
required regulatory, third-party and shareholder approvals for the proposed
Transaction; the amount of redemptions by GXII public shareholders; NioCorp
being able to receive all required regulatory and shareholder approvals for the
Yorkville Financings; and other current estimates and assumptions regarding the
proposed Transaction and its benefits. Such expectations and assumptions are
inherently subject to uncertainties and contingencies regarding future events
and, as such, are subject to change. Forward-looking statements involve a number
of risks, uncertainties or other factors that may cause actual results or
performance to be materially different from those expressed or implied by these
forward-looking statements. These risks and uncertainties include, but are not
limited to, those discussed and identified in public filings made by NioCorp and
GXII with the SEC and, in the case of NioCorp, with the applicable Canadian
securities regulatory authorities and the following: the amount of any
redemptions by existing holders of GXII Class A shares being greater than
expected, which may reduce the cash in trust available to NioCorp upon the
consummation of the Transaction; the occurrence of any event, change or other
circumstances that could give rise to the termination of the Business
Combination Agreement and/or payment of the termination fees; the outcome of any
legal proceedings that may be instituted against NioCorp or GXII following
announcement of the Business Combination Agreement and the transactions
contemplated therein; the inability to complete the proposed Transaction due to,
among other things, the failure to obtain NioCorp shareholder approval or GXII
shareholder approval; the inability to complete the Yorkville Financings due to,
among other things, the failure to obtain shareholder approval or regulatory
approval; the risk that the consummation of the proposed transactions disrupts
NioCorp's current plans; the ability to recognize the anticipated benefits of
the proposed transactions; unexpected costs related to the proposed
transactions; the risks that the consummation of the proposed transactions is
substantially delayed or does not occur, including prior to the date on which
GXII is required to liquidate under the terms of its charter documents;
NioCorp's ability to operate as a going concern; NioCorp's requirement of
significant additional capital; NioCorp's limited operating history; NioCorp's
history of losses; cost increases for NioCorp's exploration and, if warranted,
development projects; a disruption in, or failure of, NioCorp's information
technology systems, including those related to cybersecurity; equipment and
supply shortages; current and future offtake agreements, joint ventures, and
partnerships; NioCorp's ability to attract qualified management; the effects of
the COVID-19 pandemic or other global health crises on NioCorp's business plans,
financial condition and liquidity; estimates of mineral resources and reserves;
mineral exploration and production activities; feasibility study results;
changes in demand for and price of commodities (such as fuel and electricity)
and currencies; changes or disruptions in the securities markets; legislative,
political or economic developments; the need to obtain permits and comply with
laws and regulations and other regulatory requirements; the possibility that
actual results of work may differ from projections/expectations or may not
realize the perceived potential of NioCorp's projects; risks of accidents,
equipment breakdowns, and labor disputes or other unanticipated difficulties or
interruptions; the possibility of cost overruns or unanticipated expenses in
development programs; operating or technical difficulties in connection with
exploration, mining, or development activities; the speculative nature of
mineral exploration and development, including the risks of diminishing
quantities of grades of reserves and resources; claims on the title to NioCorp's
properties; potential future litigation; and NioCorp's lack of insurance
covering all of NioCorp's operations.
Should one or more of these risks or uncertainties materialize or should any of
the assumptions made by the management of NioCorp prove incorrect, actual
results may vary in material respects from those projected in these
forward-looking statements.
All subsequent written and oral forward-looking statements concerning the
proposed Business Combination and Yorkville Financings or other matters
addressed in this Current Report on Form 8-K and attributable to NioCorp or any
person acting on their behalf are expressly qualified in their entirety by the
cautionary statements contained or referred to in this Current Report on Form
8-K. Except to the extent required by applicable law or regulation, NioCorp
undertakes no obligation to update these forward-looking statements to reflect
events or circumstances after the date of this Current Report on Form 8-K to
reflect the occurrence of unanticipated events.
© Edgar Online, source Glimpses