NioCorp Developments Ltd. (TSE:NB) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01
| Entry into a Material Definitive Agreement. |
Lind First Tranche Increase
As previously announced, on December 14, 2015, NioCorp
Developments Ltd. (the Company) entered into a definitive
convertible security funding agreement (the Lind Agreement) with
an entity managed by The Lind Partners, a New York-based asset
management firm (collectively with The Lind Partners, Lind). A
first tranche $4.5 million was made in a series of advances
between December 22, 2015 and January 19, 2016, to the issuance
of an initial convertible security with a face value of $5.4
million during the same period (the Initial Convertible
Security). Further to the terms of the Lind Agreement, upon
satisfaction of certain conditions, including but not limited to,
a minimum draw down amount by Lind under the Initial Convertible
Security, a minimum market capitalization for the Company and a
minimum amount of cash on the Companys balance sheet, the Company
had the right to call an additional $1.0 million under the
Initial Convertible Security (a First Tranche Increase).
On February 14, 2017, upon satisfaction of the conditions for the
First Tranche Increase, the Company provided notice to Lind to
demand the advancement of an additional $1.0 million in funding
under the Initial Convertible Security to its right to call. As a
result, upon payment of the additional $1.0 million in funding by
Lind to the Company, the face amount of the Initial Convertible
Security will be increased by $1.2 million ($1.0 million in
additional funding and $200,000 in implied interest amount). In
connection with the Convertible Security Increase, the Company is
obligated to issue Lind common share purchase warrants of the
Company (the Warrants). The Warrants will have a term of 36
months from issuance, and the number of Warrants to be issued
will be equal to $1.0 million divided by the volume-weighted
average price of the Companys common shares on the TSX (the VWAP)
for the five (5) consecutive trading days immediately before the
Convertible Security Increase funding is received, multiplied by
0.5. The exercise price of the Warrants issuable in connection
with the Convertible Security Increase will be equal to 120% of
the Companys five (5) trading day VWAP per share immediately
prior to the date the Convertible Security Increase is received.
Lind is entitled to convert the Initial Convertible Security in
monthly installments over its term at a price per share equal to
85% of NioCorps five-day trailing volume weighted average price
on the TSX (VWAP) prior to the date that notice of conversion is
provided by Lind. The Lind Agreement contains restrictions on how
much of the Initial Convertible Security may be converted in any
particular month. NioCorp has the option to buy back up to 70% of
the Initial Convertible Security in cash at any time for a
nominal premium. Lind is entitled to accelerate its conversion
right to the full amount of the face value of the Initial
Convertible Security or demand repayment thereof in cash upon a
default and other designated events.
Private Placement
On February 14, 2017, the Company announced an initial close (the
Initial Close) of a private placement of
units of the Company. In connection with the Initial Close, the
Company entered into subscription agreements (collectively, the
Subscription Agreements) by and between
the Company and each investor. The Subscription Agreements
contained the terms of the offering of the units of the Company
and typical representations and warranties from the investors to
the Company and from the Company to the investors. Additionally,
in accordance with the terms of the Subscription Agreements we
granted the investors certain registration rights regarding the
common shares of the Company underlying the units and the common
shares issuable upon exercise of the warrant underlying the
units. The terms of the units offering are more fully described
in Item 3.02 below which is hereby incorporated into this Item
1.01 by reference. The terms of the registration rights are more
fully described in Item 3.03 below which is hereby incorporated
into this Item 1.01 by reference.
Warrant Indenture
On February 14, 2017, the Company entered into a Warrant
Indenture with Computershare Trust Company of Canada (the Warrant
Agent) regarding common share purchase warrants of the Company
issued in connection with the Companys closing of its first
tranche of a private placement of units of the Company (the
Warrant Indenture). The common share purchase warrants are
exercisable at C$0.85 per share of the Company until February 14,
2020. The Warrant Indenture contains customary terms and
conditions for the issuance, transfer and exercise of the common
share purchase warrants and the terms for actions by the warrant
holders and the obligations of the Company and the Warrant Agent
in relation to the common share purchase warrants.
The above summary of the material terms of the Warrant Indenture
is qualified in its entirety by the actual terms and conditions
of the Warrant Indenture which is filed as Exhibit 4.1 to this
Current Report on Form 8-K and is hereby incorporated by
reference into this Item 1.01.
| Item 2.03 |
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The disclosure regarding the Lind Agreement and the First Tranche
Increase contained in Item 1.01 of this Current Report on Form
8-K is hereby incorporated by reference into this Item 2.03.
Item3.02 Unregistered Sales of Equity
Securities.
On February 1, 2017, the Company issued 617,971 common shares of
the Company to Lind Asset Management IV, LLC upon conversion of
US$275,000 in principal amount of the Companys outstanding
convertible note issued in December of 2015 at a conversion price
of C$0.76641 per share. The common shares were issued to Section
3(a)(9) of the Securities Act, in connection with the voluntary
conversion of convertible note and based upon representations and
warranties of Lind Asset Management IV, LLC in connection
therewith.
On February 6, 2017, the Company issued 1,698,072 common shares
of the Company to Lind Asset Management IV, LLC upon conversion
of US$750,000 in principal amount of the Companys outstanding
convertible note issued in December of 2015 at a conversion price
of C$0.76426 per share. The common shares were issued to Section
3(a)(9) of the Securities Act, in connection with the voluntary
conversion of convertible note and based upon representations and
warranties of Lind Asset Management IV, LLC in connection
therewith.
On February 14, 2017, the Company issued a notice to Lind Asset
Management IV, LLC regarding the first tranche increase. The
additional $1.2 million in face amount of the Initial Convertible
Security is convertible into common shares of the Company to its
terms. The disclosure regarding the Lind Agreement and the First
Tranche Increase contained in Item 1.01 of this Current Report on
Form 8-K is hereby incorporated by reference into this Item 3.02.
On February 14, 2017, the Company closed the first tranche of its
non-brokered private placement announced January 27, 2017. In
connection therewith, the Company issued 3,860,800 units of the
Company (each a Unit) at a price of C$0.70 per Unit, for
aggregate gross proceeds of C$2,702,560. Each Unit consists of
one common share of the Company and one transferable common share
purchase warrant (a Warrant), with each Warrant entitling the
holder thereof to acquire one additional common share at a price
of C$0.85 until February 14, 2020. The Units were issued on a
private offering basis to investors with whom the Company had a
pre-existing relationship 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), in accordance with 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, to 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, to the representations and covenants of
the investors made to the Company in connection with their
purchase of the Units.
As of February 14, 2017, there were 191,924,972 common shares of
the Company outstanding.
Item 3.03 Material Modification to Rights of Security
Holders.
The disclosure contained in Item 1.01 of this Current Report on
Form 8-K is hereby incorporated by reference into this Item 2.03.
On February 14, 2017, in connection with the closing of the
Companys offering of Units, the Company granted registration
rights to the investors in the Unit offering. Under the
registration rights, the Company has agreed to use its
commercially reasonable efforts to file a registration statement
with the United States Securities and Exchange Commission under
the Securities Act registering the resale by the investors in the
Unit offering of the common shares underlying the Units and the
common shares issuable upon exercise of the Warrants and to bring
such registration statement effective as soon as possible
thereafter. The Company further agreed to use its commercially
reasonable efforts to maintain the registration statement or
post-effective amendment thereto effective until the earlier of
the date (i) all of the registrable securities have been sold to
such registration statement or Rule 144, if available, or (ii)
three years from the effective date. The Companys agreement does
not provide for any penalties or other payments or the issuance
of additional securities should the Company not file or bring a
registration statement effective or fail to maintain the
effectiveness of the registration statement.
The above summary of the material terms of the registration
rights is qualified in its entirety by the actual terms and
conditions of the registration rights contained in the form of
Subscription Agreement which is filed as Exhibit 4.2 to this
Current Report on Form 8-K and is hereby incorporated by
reference into this Item 3.03.
Item 8.01. Other Events.
On February 15, 2017, the Company issued a press release
announcing the closing of the first tranche of its private
offering of Units for gross aggregate proceeds of C$2,702,560. A
copy of the February 15, 2017 press release is filed as Exhibit
99.1 to this Current Report on Form 8-K and is incorporated
herein by reference.
Item 9.01. Exhibits.
| Exhibit | Description | |
| 4.1 | Warrant Indenture | |
| 4.2 | Form of Subscription Agreement | |
| 99.1 | February 15, 2017 Press Release |
About NioCorp Developments Ltd. (TSE:NB)
NioCorp Developments Ltd. is an exploration-stage company. The Company is a mineral exploration/development company engaged in the acquisition, exploration and development of mineral properties. The Company operates through a segment consisting of exploration and development of mineral deposits in North America, specifically, the Elk Creek Niobium/Scandium/Titanium property (the Elk Creek Project) located in Southeastern Nebraska. The Company also holds an interest in a mineral exploration property located in Canada. The Company’s Elk Creek Project is a niobium and scandium exploration project that also contains titanium. The Elk Creek Project is located approximately 75 kilometers southeast of Lincoln, Nebraska, the state capital of Nebraska. The Company has not generated any revenues. Its subsidiaries include 0896800 BC Ltd., Elk Creek Resources Corp. and Silver Mountain Mines Corp. NioCorp Developments Ltd. (TSE:NB) Recent Trading Information
NioCorp Developments Ltd. (TSE:NB) closed its last trading session down -0.080 at 0.790 with 53,377 shares trading hands.