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CONVERTIBLE DEBT

6 Months Ended

Dec. 31, 2020

5.	CONVERTIBLE DEBT

	As of
	December 31, 2020		June 30, 2020
Nordmin convertible note	$	1,325	$	—
Convertible promissory notes		750		800
Convertible security		—		38
Total convertible debt	$	2,075	$	838

Nordmin Convertible Note

On December 18, 2020, the Company issued a convertible note in the principal amount of approximately $1,872 (the “Nordmin Note”) and 500,000 warrants (the “Nordmin Warrants”) to Nordmin Engineering Ltd. (“Nordmin”) pursuant to a convertible note and warrant subscription agreement (the “Nordmin Agreement”) under which Nordmin agreed to subscribe for and purchase the Nordmin Note and Nordmin Warrants for a subscription price of approximately $1,804. This amount was set off against the amount owed to Nordmin by NioCorp for past services.

The Nordmin 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 of the Company (“Common Shares”) at a conversion price of 92% of the five-day volume-weighted average price of the Common Shares on the Toronto Stock Exchange at the time of conversion. The Nordmin Note contains restrictions on how much of the principal amount may be converted in any 30-day period. The Nordmin Note also provides the Company with the option to prepay, in whole or in part, any outstanding principal amount thereunder, upon three days’ notice to Nordmin. In addition, Nordmin is entitled to accelerate the maturity of the Nordmin Note and require the Company to prepay the outstanding principal amount upon the occurrence of an event of default and other designated events described in the Nordmin Note.

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

The Company accounted for this transaction as a debt extinguishment under Accounting Standards Codification 470, Debt. Accordingly, the Company wrote off the value of the existing obligation, calculated the fair value of the Nordmin Note and recorded a loss of $163 on the difference in the consolidated statement of operations. This loss included $63 related to the fair value of the Nordmin Warrants at closing. The fair value of the Nordmin Warrants was estimated based on the Black Scholes pricing model using a risk-free interest rate of 0.32%, an expected dividend yield of 0%, a volatility of 43.16%, and an expected life of 2.0 years.

The Company initially recorded the Nordmin Note at a fair value of $1,740. The remaining initial fair value balance will be accreted up to net face value of the Nordmin Note over the remaining time until maturity using the effective interest method. In addition, transaction costs of $25 were expensed at closing.

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

Based on the Company’s closing Common Share price of C$0.81 as of December 31, 2020, conversion of the remaining Nordmin Note balance would require the issuance of 2,428,888 Common Shares. For each C$0.01 change in the fair value of one Common Share, the total shares the Company would be obligated to issue would change by approximately 30,000 shares.

Convertible Promissory Notes

Effective October 12, 2020, the maturity date for $750 of the Company’s outstanding convertible promissory notes was extended for one year to October 14, 2021. All terms and conditions remained unchanged, except the amended agreement provides that the Company may repay all or any of the amount of outstanding principal and any accrued but unpaid interest, with 14 days’ advance written notice (the “Notice”), as follows:

	●	with respect to the outstanding principal and any accrued but unpaid interest, in cash, using the Bank of Canada daily US$-C$ exchange rate on the date of the Notice; or
	●	with respect to the outstanding principal only, provided that the volume weighted average trading price of the Common Shares is C$0.97 or greater for a period of ten consecutive trading days prior to the date of the Notice, and subject to Toronto Stock Exchange approval, by converting all or any portion of the outstanding principal into Common Shares at a conversion rate of C$0.97 per Common Share, using the Bank of Canada daily US$-C$ exchange rate on the date of the Notice.

$50 of the Company’s convertible promissory notes was not extended under the agreement above and was converted into 67,695 Common Shares on October 14, 2020.

The changes in the derivative liability related to the conversion feature of the company’s convertible promissory notes are as follows:

	Derivative Liability
Balance, June 30, 2020	$	33
Change in fair value of derivative liability		29
Balance, December 31, 2020	$	62

Convertible Security

On July 9, 2020, Lind Asset Management IV, LLC, the holder of the convertible security, converted the remaining balance thereunder of $38 into 64,298 Common Shares.