NIOCORP DEVELOPMENTS LTD

DESCRIPTION OF BUSINESS

NioCorp Developments Ltd. (“we,” “us,” “our,” “NioCorp,” or the “Company”) was incorporated on February 27, 1987, under the laws of the Province of British Columbia and currently operates inone reportable operating segment consisting of exploration and development of mineral deposits in the United States, specifically, the Company’s niobium/scandium/titanium/rare earth property (the “Elk Creek Project”) located in southeastern Nebraska, as well as early-stage scandium technology and commercialization initiatives. The Company currently earns no operating revenues and will require additional capital in order to advance the Elk Creek Project to construction and commercial operation.

Liquidity

As of September 30, 2026, the Company had cash and cash equivalents of$403,364 and working capital of$394,036. Based on its current liquidity position and planned expenditures, management believes the Company has sufficient resources to meet its obligations as they become due within one year from the issuance date of these condensed consolidated financial statements, which have been prepared on a going concern basis.

The Company will require additional capital to fully develop, construct, and operate the Elk Creek Project. Management expects that future capital requirements will be met through a combination of debt financing, equity financings, and other funding sources.

BASIS OF PRESENTATION

a)

Basis of Presentation and Consolidation

The accompanying interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles of the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”). The interim condensed consolidated financial statements include the consolidated accounts of the Company and its subsidiaries with all significant intercompany transactions eliminated. The accounting policies followed in preparing these interim condensed consolidated financial statements are consistent with those described in Note 3, “Significant Accounting Policies,” to the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2026 (the “Annual Report on Form 10-K”), except as described in Note 2(f). Professional fees, employee-related costs, and other operating expenses for the prior period have been reclassified into general and administrative expenditures to conform to the current period presentation.

In the opinion of management, all adjustments considered necessary (including normal recurring adjustments) for a fair statement of the financial position, results of operations, and cash flows as of September 30, 2026, and for all periods presented, have been included in these interim condensed consolidated financial statements. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to appropriate SEC rules and regulations. These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Annual Report on Form 10-K. The interim results are not necessarily indicative of results for the full year ending June 30, 2027, or future operating periods.

As of September 30, 2026, total cash, cash equivalents, and restricted cash was$405,093, consisting of cash and cash equivalents of$403,364 and restricted cash of$1,729. As of June 30, 2026, total cash, cash equivalents, and restricted cash was $417,106, consisting of cash and cash equivalents of $415,004 and restricted cash of $2,102. Restricted cash primarily consists of funds held in escrow pursuant to an agreement with Johnson County, Nebraska for road improvements adjacent to the Elk Creek Project site.

b)

Recent Accounting Standards

As of September 30, 2026, and through the filing of this report, no accounting guidance applicable to us has been issued and not yet adopted in the current fiscal year that would have a material effect on our unaudited condensed consolidated financial statements and related disclosures. For information about accounting guidance issued in previous years but not yet adopted by us, refer to Note 3 of the Annual Report on Form 10-K.

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board that are adopted by the Company as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards did not or will not have a material impact on the Company’s consolidated financial statements upon adoption.

c)

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the valuation of property and equipment, mineral properties, intangible assets, goodwill, deferred income tax asset valuations, earnout and warrant liabilities, and share-based compensation. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between estimates and the actual results, future results of operations will be affected.

d)

Basic and Diluted Earnings per Share

The Company applies the two-class method to the Vested Shares (as defined in Note 6), which are participating securities, in computing income (loss) per share. The following table sets forth the computation of the Company’s basic and diluted net income (loss) per share attributable to common shareholders:

(1)

For the three months ended September 30, 2026, consists of (i) the assumed exchange of the Vested Shares (as defined in Note 6) for Common Shares (ASC 260-10-55-20), which adds back the$183 allocated to the Vested Shares and removes the$420 net loss attributable to redeemable noncontrolling interest, and (ii) the exclusion of the$2,688 gain from the change in fair value of the November 2024 Private Warrants (as defined in Note 7(b)), which are liability-classified and were dilutive (ASC 260-10-45-45 and 45-46).

(2)

For the three months ended September 30, 2026, consists of 3,516,140 Vested Shares assumed exchanged, and 992,817 and 1,689,355 incremental shares from Options and Warrants, respectively, under the treasury stock method. For the three months ended September 30, 2025, all potentially dilutive securities were antidilutive due to the net loss.

The following common shares, no par value, of the Company (“Common Shares”) underlying options to purchase Common Shares (“Options”) and Common Share purchase warrants (“Warrants”) were excluded from the computation of diluted weighted average shares outstanding as their effect would have been antidilutive:

(1)

Amounts represent the number of Options and Warrants outstanding as of the period end that were antidilutive. For the three months ended September 30, 2026,2,265,000 Options and 3,030,004 Warrants were dilutive under the treasury stock method; they are excluded from this table and included in diluted weighted average shares outstanding. For the three months ended September 30, 2025, all Options and Warrants were antidilutive due to the net loss.

(2)

Earnout Shares (as defined in Note 6) are excluded as the vesting terms were not met as of the end of the reporting period.

(3)

Warrants include 15,666,526 NioCorp Assumed Warrants (as defined in Note 7(b)) (September 30, 2025:15,666,526) each of which is exercisable into 1.11829212 Common Shares. The remaining Warrants are each exercisable into one Common Share.

e)

Income Taxes

The Company recorded no income tax expense or benefit for the three months ended September 30, 2026 and 2025, as it maintains a full valuation allowance against its net deferred tax assets due to uncertainty regarding their realization, and changes in the fair value of the Earnout Shares and Warrant liabilities are not taxable or deductible. There have been no material changes to the Company’s unrecognized tax benefits since June 30, 2026.

f)

Deferred Financing Costs

Specific incremental costs directly attributable to a probable future debt financing are deferred and included in other assets. Upon issuance of the related debt, deferred financing costs are reclassified as a reduction of the carrying amount of the debt and amortized to interest expense using the effective interest method. If the related financing is no longer considered probable, previously deferred costs are expensed in the period that determination is made.

PROPERTY AND EQUIPMENT, NET

Construction in progress consists of costs incurred for the development of the Elk Creek Project site, primarily the development of the main access to the underground mine and related infrastructure (the “Portal Project”). The increase in construction in progress of $6,917 during the three months ended September 30, 2026 primarily reflects continued construction of the Portal Project.

INTANGIBLE ASSETS AND GOODWILL

The Company’s intangible asset consists of acquired technology recognized in connection with the December 4, 2025, acquisition of certain manufacturing assets and intellectual property of FEA Materials LLC, as described in Note 4 to the consolidated financial statements included in the Annual Report on Form 10-K, and is amortized on a straight-line basis over its estimated useful life of 10 years.

Amortization expense was $150 and $0 for the three months ended September 30, 2026 and 2025, respectively. The Company expects to recognize amortization expense of approximately $452 through the remainder of fiscal year 2027 and $602 annually for each of fiscal years 2028 through 2031, with the remaining $2,662 recognized thereafter. There wereno changes in the carrying amount of goodwill during the three months ended September 30, 2026, andno impairment of the intangible asset or goodwill was recognized.

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

CLASS B COMMON STOCK OF ECRC

The shares of Class B common stock of Elk Creek Resources Corp. (“ECRC”) include rights under which the holders may exchange such shares into Common Shares. Certain of such shares were vested as of the Closing (as defined below) and are exchangeable at any time, from time to time, until the tenth anniversary of the Closing Date (as defined below) (the “Vested Shares”) and certain of such shares are subject to certain vesting conditions (the “Earnout Shares”).

Earnout Shares

Based upon the Company’s analysis of the criteria contained in ASC 815, the Earnout Shares are classified as a liability and remeasured at fair value each reporting period, with changes recognized in earnings. The Earnout Shares were valued utilizing a Monte Carlo simulation pricing model with the following primary inputs:

The following table sets forth a summary of the changes in the fair value of the Earnout Shares liability for the three-month period ended September 30, 2026:

COMMON SHARES

a)

Stock Options

During the three-month period ended September 30, 2026, the Company granted 930,401 Options with a weighted average exercise price of $4.74 and an average grant-date fair value of $3.07 per Option, as determined using the Black-Scholes option pricing model. The assumptions used in the Black-Scholes models included an average risk-free interest rate of 4.21%, average expected share price volatility of 76.46%, and an average expected life offive years. Of the Options granted,286,416 vested immediately upon issuance. The remaining Options are subject to service-based vesting in substantially equal installments over one- and two-year periods.

For the three-month period ended September 30, 2026, the Company recognized $1,671 of share-based compensation expense in the Condensed Consolidated Statements of Operations.

b)

Warrants

As of September 30, 2026, the Company had outstanding exercisable Warrants, as follows:

2023 Private Warrants

On March 17, 2023 (the “Closing Date”), the Company closed a series of transactions (the “GXII Transaction”) pursuant to the Business Combination Agreement, dated as of September 25, 2022, by and among the Company, GX Acquisition Corp. II (“GXII”), and Big Red Merger Sub Ltd. In connection with the closing of the GXII Transaction (the “Closing”), the Company assumed GXII’s obligations under the agreement governing the GXII share purchase warrants (the “GXII Warrants”), as amended by an assignment, assumption and amendment agreement (the “NioCorp Assumed Warrant Agreement”), and issued an aggregate of 15,666,626 Warrants, of which 15,666,526 remained outstanding as of September 30, 2026 (the “NioCorp Assumed Warrants”). The Company issued (a)9,999,959 public NioCorp Assumed Warrants (the “2023 Public Warrants”) in respect of the GXII Warrants that were publicly traded prior to the Closing and (b)5,666,667 NioCorp Assumed Warrants (the “2023 Private Warrants”) to GX Sponsor II LLC (the “Sponsor”).

Each 2023 Private Warrant entitles the holder to the right to purchase 1.11829212 Common Shares at an exercise price of $11.50 per 1.11829212 Common Shares (subject to adjustments for stock splits, stock dividends, reorganizations, recapitalizations and the like). No fractional shares will be issued upon exercise of any 2023 Private Warrants, and fractional shares that would otherwise be due to the exercising holder will be rounded down to the nearest whole Common Share. In no event will the Company be required to net cash settle any 2023 Private Warrant.

The 2023 Private Warrants: (i) will be exercisable either for cash or on a cashless basis at the holder’s option and (ii) will not be redeemable by the Company, in either case as long as the 2023 Private Warrants are held by the Sponsor, its members or any of their permitted transferees (as prescribed in the NioCorp Assumed Warrant Agreement). In accordance with the NioCorp Assumed Warrant Agreement, any 2023 Private Warrants that are held by someone other than the Sponsor, its members or any of their permitted transferees are treated as 2023 Public Warrants.

The Company classifies the 2023 Private Warrants as Level 2 instruments under the fair value hierarchy as inputs into our pricing model are based on observable data points. Because the settlement terms of the 2023 Private Warrants vary depending on the holder, the 2023 Private Warrants are not considered indexed to the Company’s own stock and are classified as liabilities under ASC 815. The following observable data points were used in calculating the fair value of the 2023 Private Warrants using a Black-Scholes pricing model:

The change in the 2023 Private Warrants liability is presented below:

November 2024 Warrants

As previously disclosed, on November 13, 2024, the Company closed a non-brokered private placement of 2,199,602 units of the Company (the “November 2024 Units”). Each November 2024 Unit consisted of one Common Share, one Warrant (a “Series A Private Warrant”) to purchase one Common Share, and one-half of one Warrant (each whole such Warrant, a “Series B Private Warrant” and, together with the Series A Private Warrants, the “November 2024 Private Warrants”), with each Series B Private Warrant entitling the holder thereof to purchase one additional Common Share. The Series A Private Warrants have an exercise price of $1.75 perunderlying Common Share, are exercisable immediately, and will expire on

November 13, 2026. The Series B Private Warrants have an exercise price of $2.07 per underlying Common Share and will expire on November 13, 2029. Based upon the Company’s analysis of the criteria contained in ASC 815, the Company determined that the November 2024 Private Warrants met the definition of a derivative liability.

The Company classifies the November 2024 Private Warrants as Level 2 instruments under the fair value hierarchy as inputs into our pricing model are based on observable data points. The following observable data points were used in calculating the fair value of the November 2024 Private Warrants using a Black-Scholes pricing model:

The change in the fair value of the November 2024 Private Warrants is shown below:

Exploration Expenditures

ECRC is party to a Project Sub-Agreement with Advanced Technology International, under the authority of the U.S. Department of War (“DoW”), as described in Note 11 to the consolidated financial statements included in the Annual Report on Form 10-K (the “DoW Agreement”). During the three months ended September 30, 2026 and 2025, the Company recognized reimbursements under the DoW Agreement of $1,024 and $0, respectively. Of the amount recognized during the three months ended September 30, 2026, $424 reduced exploration expenditures and $600 reduced general and administrative expenditures related to scandium alloy research and development costs. From the effective date of the DoW Agreement through September 30, 2026, the Company has recognized total reimbursements of $2,987, of which $2,387 reduced exploration expenditures and $600 reduced general and administrative expenditures. As of September 30, 2026, the Company’s deferred reimbursements balance was $5,952.

Leases

The Company incurred lease costs as follows:

The maturities of lease liabilities are as follows as of September 30, 2026:

On July 1, 2026, the Company, through its subsidiary NioCorp Advanced Metals and Alloys, LLC, entered into a new operating lease for office, laboratory, and warehouse space, with an initial lease term of 35 months, expiring on May 31, 2029. Upon the commencement date, the Company recognized an initial right-of-use asset of $317 and a corresponding initial lease liability of $317 on the Condensed Consolidated Balance Sheets. The lease liability was measured using an estimated incremental borrowing rate of 7.44% per annum. Additionally, a security deposit of $21 was paid and is recorded within other non-current assets. Total undiscounted lease payments for this lease over the remaining lease term are $322.

Fair Value Measurements

The following tables present the Company’s financial assets and liabilities measured at fair value on a recurring basis in accordance with the three-tier hierarchy under ASC 820 as of September 30, 2026 and June 30, 2026.

SEGMENT INFORMATION

The Company hasone operating and reportable segment in the United States. The United States segment includes the exploration, development, and site management of the Elk Creek Project, as well as early-stage scandium technology and commercialization initiatives. The segment holds substantially all of the Company’s assets and does not presently generate revenues from operations. Through this segment, the Company seeks to position the Elk Creek Project as a development opportunity in the strategic minerals sector. The Company’s chief operating decision maker is the Chief Executive Officer (“CODM”).

Financial information and annual operating plans and forecasts are prepared and reviewed by the CODM at a consolidated level. The CODM assesses performance for the single operating segment and decides how to better allocate resources based on total operating expenses, net income (loss), changes in cash and cash equivalents, and cash and cash equivalent balances, which are presented in the Company’s condensed consolidated financial statements. The CODM’s objective in making resource allocation decisions is to optimize the Company’s ability to develop and operate the Elk Creek Project. In addition, the CODM reviews the segment’s assets based on total assets reported on the Condensed Consolidated Balance Sheets, and the accounting policies of our single operating segment are the same as those described in the Summary of Significant Accounting Policies in our Annual Report on Form 10-K. The financial information provided to the CODM does not contain disaggregated expenses outside of what is already disclosed in the statements of operations. For additional reportable single operating segment level financial information, see the condensed consolidated financial statements.

SUBSEQUENT EVENT

On October 13, 2026, ECRC entered into a binding offtake agreement (the “Traxys Agreement”) with Traxys North America LLC (“Traxys”). Under the Traxys Agreement, and subject to certain exclusions, Traxys will purchase, on a take-or-pay basis, 50% of the Elk Creek Project’s planned ferroniobium production over the first 15 years of production. The Traxys Agreement supersedes and replaces the Company’s prior ferroniobium and scandium offtake arrangements with Traxys. The Company’s existing offtake agreement with ThyssenKrupp Metallurgical Products GmbH, covering the remaining 50% of planned ferroniobium production over the first 10 years of production, is unchanged. The Traxys Agreement also grants Traxys the exclusive right, but not the obligation, to purchase the Company’s planned products other than ferroniobium, including scandium, titanium and rare earth products, and appoints Traxys as the Company’s exclusive global marketing and sales partner.

The Traxys Agreement had no impact on the Company’s condensed consolidated financial statements as of and for the three months ended September 30, 2026.