NIOCORP DEVELOPMENTS LTD Income Taxes Disclosure

 

14.

INCOME TAXES

 

Domestic and foreign components of loss before income taxes for the years ended June 30, 2025 and 2024 are as follows: 

 

		For the year ended June 30,
		2025				2024
Canada		$	(13,089	)		$	(8,319	)
United States			(4,818	)			(3,679	)
United Kingdom			(75	)			(39	)
Total		$	(17,982	)		$	(12,037	)

 

 

The following table is a reconciliation of income taxes at statutory rates:

 The following table is a reconciliation of income taxes at statutory rates:

		For the year ended June 30,
		2025				2024
Loss before income taxes		$	(17,982	)		$	(12,037	)
Income tax benefit at Canadian federal rate			(2,697	)			(1,806	)
Income tax benefit at Canadian provincial rate			(2,158	)			(1,444	)
Warrant liability			1,105				(506	)
Earnout shares liability			557				(1,810	)
Share based compensation			239				747
Foreign rate differential			102				62
Accretion expense			11				1,138
Change in estimates related to prior years			-				160
Stock issuance costs in equity			(1,143	)			(55	)
Convertible note valuation			(137	)			607
Other			143				50
Change in valuation allowance			3,978				2,718
Income tax benefit		$	-			$	139

 

Income tax benefit for the year ended June 30, 2024, was derived solely from our U.S. operations. The Company acquired a federal income tax payable of $443 in connection with the GXII Transaction. As a result of a post-transaction loss at ECRC, a partial release of the valuation allowance attributed to the reduction of the acquired federal income tax payable of $139 was recorded as an income tax benefit in the consolidated statement of operations and comprehensive loss for the year ended June 30, 2024.

 

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The significant components of deferred taxes are as follows:

 

		As of June 30,
		2025				2024
Deferred tax assets
Net operating losses available for future periods		$	16,125			$	14,177
Mineral interests			10,438				9,438
Startup and organizational costs			1,842				1,987
Research and development costs			1,295				1,419
Share issuance/financing costs			1,357				635
Canadian restricted interest and financing carryforward			605				-
Capital losses available for future periods			456				456
Other			41				69
Total deferred tax assets			32,159				28,181
Valuation allowance			(32,159	)			(28,181	)
Net deferred tax assets		$	-			$	-

 

Changes in the valuation allowance are as follows:

 

		For the year ended June 30,
		2025				2024
Valuation allowance, beginning of year		$	(28,181	)		$	(25,463	)
Current year additions			(3,978	)			(2,718	)
Valuation allowance, end of year		$	(32,159	)		$	(28,181	)

 

The Company establishes a valuation allowance against future income tax assets if, based on available information, it is more likely than not that all of the assets will not be realized. The valuation allowance of $32,159 at June 30, 2025, relates mainly to net operating loss carryforwards in Canada and mineral interests due to deferred exploration expenditures in the United States, where the utilization of such attributes is not more likely than not.

 

 

The Company has the following cumulative net operating losses for Canadian and U.S. Federal income tax purposes. Canadian tax loss carryforwards will generally expire between 2028 and 2045. U.S. tax losses incurred through June 30, 2018, totaled $981 and will generally expire between 2031 and 2038. As a result of the Tax Cuts and Jobs Act of 2017, U.S. tax losses incurred for our tax years ending on and after June 30, 2019, totaling $5,645, have no expiration.

 Schedule of cumulative net operating losses

		As of June 30,
Jurisdiction		2025				2024
Canada		$	53,194			$	47,623
United States			6,627				4,905
United Kingdom			112				39
Total		$	59,933			$	52,567

 

In addition, the Company has a Canadian capital loss carryforward of $3,378 as of June 30, 2025, which has no expiration date and can be used to offset future capital gains, and U.S. state net operating loss carryforwards of $8,742 as of June 30, 2025 which generally expire between 2031 and 2045.

 

At June 30, 2025 and 2024, we had no undistributed earnings of foreign subsidiaries that would be subject to income tax upon distribution to Canada from a foreign subsidiary. As such, as of June 30, 2025 and 2024, we did not provide for deferred taxes on any such earnings of our foreign subsidiaries.

 

The Company had no unrecognized tax benefits as of June 30, 2025 or 2024. The Company has not recognized any interest or penalties in the fiscal years presented in these consolidated financial statements. The Company is subject to income tax in the U.S. federal jurisdiction, the United Kingdom, and Canada. Certain years remain subject to examination but there are currently no ongoing exams in any taxing jurisdictions.

 

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S., which includes a broad range of tax reform provisions affecting businesses. The OBBBA includes numerous changes to existing tax law including extending or making permanent certain business and international tax measures initially established under the 2017 Tax Cuts and Jobs Act, which were set to expire. The OBBBA contains several changes to corporate taxation including modifications to capitalization of research and development expenses, modifications to deductions for interest expense, and accelerated depreciation on certain asset additions. As the legislation was signed into law after June 30, 2025, our operating results for the year ended June 30, 2025, do not include any adjustments related to the OBBBA, and the Company does not expect a material impact to our financial statements due to the enactment of the OBBBA.