Item 1.01 Entry into a Material Definitive Agreement.
Business Combination Agreement
On September 25, 2022, GX Acquisition Corp. II, a Delaware corporation ("GXII"),
NioCorp Developments Ltd., a company organized under the laws of the Province of
British Columbia ("NioCorp" or the "Company") and Big Red Merger Sub Ltd, a
Delaware corporation and a direct, wholly owned subsidiary of NioCorp ("Merger
Sub"), entered into a business combination agreement (the "Business Combination
Agreement"). As a result of the Transaction (as defined below), GXII will become
a subsidiary of NioCorp.
The terms of the Business Combination Agreement, which contains customary
representations and warranties, covenants, closing conditions and other terms
relating to the Transaction, are summarized below. Capitalized terms used in
this Current Report on Form 8-K but not otherwise defined herein have the
meanings given to them in the Business Combination Agreement.
Structure
Pursuant to the Business Combination Agreement, among other transactions, the
following transactions will occur: (i) Merger Sub will merge with and into GXII,
with GXII surviving the merger (the "First Merger"), (ii) all Class A shares in
GXII (the "GXII Class A Shares") that are held by shareholders who have not
elected to exercise their redemption rights in connection with the Transaction
(the "GXII Public Shareholders") shall be converted into shares of Class A
common stock in GXII (such shares, the "First Merger Class A Shares"), as the
surviving company in the First Merger, (iii) NioCorp will purchase all First
Merger Class A Shares in exchange for common shares, no par value, of NioCorp
("NioCorp Common Shares") (the "Exchange"), (iv) NioCorp will assume the GX
Warrant Agreement and each GX Warrant that was issued and outstanding
immediately prior to the effective time of the Exchange will be converted into a
warrant to acquire NioCorp Common Shares (a "NioCorp Warrant"), (v) all of the
First Merger Class A Shares will be contributed by NioCorp to 0896800 B.C. Ltd.,
a company organized under the laws of the Province of British Columbia and a
direct, wholly owned subsidiary of NioCorp ("Intermediate Holdco"), in exchange
for additional shares of Intermediate Holdco, resulting in GXII becoming a
direct subsidiary of Intermediate Holdco, (vi) Elk Creek Resources Corporation,
a Nebraska corporation and a direct, wholly owned subsidiary of Intermediate
Holdco ("ECRC"), will merge with and into GXII, with GXII surviving the merger
as a direct subsidiary of Intermediate Holdco (the "Second Merger"), and (vii)
following the effective time of the Second Merger, each of NioCorp and GXII, as
the surviving company of the Second Merger, will effectuate a reverse stock
split with the ratio to be mutually agreed by the parties. The transactions
contemplated by the Business Combination Agreement and the Ancillary Agreements
(as defined below) are referred to, collectively, as the "Transaction."
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Consideration
Pursuant to the Business Combination Agreement, upon consummation of the First
Merger, each GXII Class A Share that is held by a GXII Public Shareholder shall
be converted into a First Merger Class A Share. In connection with the Exchange,
NioCorp will exercise its unilateral option to purchase each First Merger Class
A Share in exchange for 11.1829212 NioCorp Common Shares. As a result, each GXII
Public Shareholder (excluding those who elect to exercise their redemption
rights in connection with the Transaction) will ultimately be issued NioCorp
Common Shares.
Pursuant to the Business Combination Agreement, upon consummation of the First
Merger, each Class B share in GXII (other than certain shares that may be
forfeited in accordance with the GXII Support Agreement (as defined below)) will
be converted into one share of Class B common stock in GXII (such shares, the
"First Merger Class B Shares"), as the surviving company in the First Merger.
Upon consummation of the Second Merger, each of the First Merger Class B Shares
will be converted into 11.1829212 Class B common shares of GXII (each, a "Second
Merger Class B Share"), as the surviving company in the Second Merger. Each
Second Merger Class B Share will be exchangeable into NioCorp Common Shares on a
one-for-one basis, subject to certain equitable adjustments, in accordance with
the terms of the Exchange Agreement (further described below).
Pursuant to the Business Combination Agreement, in connection with the First
Merger and the assumption by NioCorp of the GX Warrant Agreement, each GX
Warrant that is issued and outstanding immediately prior to the Exchange Time
shall be converted into one NioCorp Warrant pursuant to the GX Warrant
Agreement. Each NioCorp Warrant shall be exercisable solely for NioCorp Common
Shares, and the number of NioCorp Common Shares subject to each NioCorp Warrant
shall be equal to the number of shares of GXII common stock subject to the
applicable GX Warrant multiplied by 11.1829212, with the applicable exercise
price adjusted accordingly.
Following the effective time of the Second Merger, NioCorp will effectuate a
reverse stock split of the issued NioCorp Common Shares, and GXII will
effectuate a proportionate reverse stock split of the Second Merger Class A
Shares and the Second Merger Class B Shares at a to-be-determined ratio.
GXII units, GXII Class A Shares and public warrants are currently listed on The
Nasdaq Stock Market LLC ("Nasdaq"), under the symbols "GXIIU," "GXII" and
"GXIIW," respectively. The NioCorp Common Shares are traded on the Toronto Stock
Exchange (the "TSX") under the symbol "NB" and on the OTC Markets trading
platform under the symbol "NIOBF." NioCorp currently anticipates that, following
the Transaction, the NioCorp Common Shares will trade on Nasdaq and will
continue to trade on the TSX. In addition, NioCorp anticipates that, following
the Transaction, the NioCorp Warrants will trade on Nasdaq. NioCorp intends to
apply for listing of the NioCorp Common Shares and NioCorp Warrants on Nasdaq.
See "Closing Conditions" below. Neither Nasdaq nor the TSX has conditionally
approved any NioCorp listing application in connection with the Transaction and
there is no assurance that such exchanges will approve the listing applications.
Joint Proxy Statement/Prospectus and Shareholder Meetings
As promptly as practicable after the date of the Business Combination Agreement,
NioCorp will file with the Securities and Exchange Commission (the "SEC") a
registration statement on Form S-4 (the "registration statement"), which will
include (i) a joint proxy statement of GXII and NioCorp to solicit proxies to
obtain the GX Shareholder Approval and the Company Shareholder Approval at the
GX Shareholder Meeting and the Company Shareholder Meeting, respectively, and
(ii) a prospectus of NioCorp under Section 5 of the Securities Act of 1933 (the
"Securities Act") with respect to the NioCorp securities issuable in connection
with the Transaction (as amended or supplemented from time to time, the "joint
proxy statement/prospectus"). The definitive joint proxy statement/prospectus
will be sent to GXII and NioCorp shareholders and will be filed with the SEC
and, in the case of NioCorp, with the applicable Canadian securities regulatory
authorities.
Closing
The closing (the "Closing") will be no later than the second business day
following the satisfaction or waiver of all of the closing conditions (the
"Closing Date"). It is expected that the Closing will occur in the first quarter
of 2023.
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Representations, Warranties and Covenants
The Business Combination Agreement contains customary representations,
warranties and covenants of (i) GXII and (ii) NioCorp and Merger Sub, relating
to, among other things, their respective abilities and authority to enter into
the Business Combination Agreement and their respective capitalization.
Closing Conditions
The consummation of the Transaction is subject to the satisfaction or waiver of
certain customary closing conditions contained in the Business Combination
Agreement, including, among other things, (i) obtaining required approvals of
the Transaction and related matters by the respective shareholders of GXII and
NioCorp, (ii) the effectiveness of the registration statement, (iii) receipt of
approval for listing the NioCorp Common Shares to be issued in connection with
the Transaction on Nasdaq, (iv) receipt of approval for listing the NioCorp
Warrants on Nasdaq, (v) receipt of approval from the TSX with respect to the
issuance and listing of the Common Shares issuable in connection with the
Transaction, (vi) that NioCorp and its subsidiaries (including GXII, as the
surviving company of the Second Merger) will have at least $5,000,001 of net
tangible assets upon the consummation of the Transaction and after payment of
underwriters' fees or commissions, (vii) that, at Closing, NioCorp and its
subsidiaries (including GXII, as the surviving company of the Second Merger)
will have received cash in an amount equal to or greater than $15,000,000, in
connection with the Transaction, subject to certain adjustments, and (viii) the
absence of any injunctions enjoining or prohibiting the consummation of the
Business Combination Agreement.
Registration Rights Agreement and Lock-Up
Pursuant to the Business Combination Agreement, in connection with the Closing,
GXII, GX Sponsor II LLC, in its capacity as a shareholder of GXII (the
"Sponsor"), the directors and officers of GXII (the "GXII Holders"), the
directors and officers of NioCorp (the "NioCorp Holders" and, together with the
. . .
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
The disclosure contained in Item 1.01 of this Current Report on Form 8-K is
hereby incorporated by reference into this Item 5.02.
Additional Information about the Proposed Transaction and Where to Find It
In connection with the proposed Transaction, NioCorp intends to file a
registration statement on Form S-4 (the "registration statement") with the SEC,
which will include 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.
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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, will be contained in the registration
statement and the joint proxy statement/prospectus (if and when available).
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.
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Forward-Looking Statements
This Current Report on Form 8-K and the information incorporated by reference
herein contain 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
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 its common shares will be accepted for listing on the
Nasdaq Stock Market following the closing of the proposed Transaction; the
execution of definitive agreements relating to the convertible debenture
transaction and the stand by equity purchase facility contemplated by the term
sheets with Yorkville Advisors Global, LP ("Yorkville"); the financial and
business performance of NioCorp; NioCorp's anticipated results and developments
in the operations of NioCorp in future periods; NioCorp's planned exploration
activities; the adequacy of NioCorp's financial resources; NioCorp's ability to
secure sufficient project financing to complete construction and commence
operation of the Elk Creek Project; NioCorp's expectation and ability to produce
niobium, scandium, and titanium at the Elk Creek Project; the outcome of current
recovery process improvement testing, and NioCorp's expectation that such
process improvements could lead to greater efficiencies and cost savings in the
Elk Creek Project; the Elk Creek Project's ability to produce multiple critical
metals; the Elk Creek Project's projected ore production and mining operations
over its expected mine life; the completion of the demonstration plant and
technical and economic analyses on the potential addition of magnetic rare earth
oxides to NioCorp's planned product suite; the exercise of options to purchase
additional land parcels; the execution of contracts with engineering,
procurement and construction companies; NioCorp's ongoing evaluation of the
impact of inflation, supply chain issues and geopolitical unrest on the Elk
Creek Project's economic model; the impact of health epidemics, including the
COVID-19 pandemic, on NioCorp's business and the actions NioCorp may take in
response thereto; and the creation of full time and contract construction jobs
over the construction period of the Elk Creek Project. In addition, any
statements that refer to projections (including Averaged EBITDA, Averaged EBITDA
Margin and After-Tax Cumulative Net Free Cash Flow), forecasts or other
characterizations of future events or circumstances, including any underlying
assumptions, are forward-looking statements. 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 GXII, as applicable, and are inherently subject to
uncertainties and changes in circumstances and their potential effects and speak
. . .
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit Description
2.1** Business Combination Agreement, dated as of September 25, 2022, by and
among GX Acquisition Corp. II, NioCorp Developments Ltd. and Big Red
Merger Sub Ltd
10.1 GXII Support Agreement, dated as of September 25, 2022, by and among
GX Acquisition Corp. II, NioCorp Developments Ltd., GX Sponsor II LLC,
in its capacity as a shareholder of GX Acquisition Corp. II, and certain
other shareholders of GX Acquisition Corp. II
10.2 Company Support Agreement, dated as of September 25, 2022, by and
among GX Acquisition Corp. II, NioCorp Developments Ltd. and certain
shareholders of NioCorp Developments Ltd.
10.3# Employment Agreement, dated as of September 25, 2022, by and between
Elk Creek Resources Corporation and Neal Shah
10.4# Employment Agreement, dated as of September 25, 2022, by and between
Elk Creek Resources Corporation and Scott Honan
10.5# Employment Agreement, dated as of September 25, 2022, by and between
Elk Creek Resources Corporation and Jim Sims
10.6# Form of Restrictive Covenant Agreement
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
# Management compensation plan, arrangement or agreement.
** Certain exhibits to this agreement have been omitted pursuant to Instruction 4
to Item 1.01 of Form 8-K.
A copy of any omitted exhibit will be furnished to the Securities and Exchange
Commission upon request.
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