What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-11-09 compared with 2021-08-05 · 129 added, 98 removed, 258 unchanged (47% of the section changed)

3 unchanged sentences

(in thousands of U.S.

dollars, except share and per share amounts)

September 30,

except share and per share amounts)

Current assets:

9 unchanged sentences

Paycheck protection loan

Kinross call option

Operating lease liability

6 unchanged sentences

Shareholders’ equity:

Preferred stock, $ 0.01 par value, authorized 10,000,000 shares (none issued and outstanding at June 30, 2021 and December 31, 2020)

Common stock, $ 0.01 par value, authorized 100,000,000 shares ( 58,443,766 and 58,108,366 shares, respectively, issued and outstanding at June 30, 2021 and December 31, 2020)

Preferred stock, $ 0.01 par value, authorized 10,000,000 shares (none issued and outstanding at September 30, 2021 and December 31, 2020)

Common stock, $ 0.01 par value, authorized 100,000,000 shares ( 58,633,766 and 58,108,366 shares, respectively, issued and outstanding at September 30, 2021 and December 31, 2020)

Additional paid-in capital

7 unchanged sentences

Three months ended

Six months ended

Nine months ended

Costs, expenses and other:

1 unchanged sentence

General and administrative

Property abandonment and impairment

Total costs, expenses and other

1 unchanged sentence

Interest income (net)

(Loss) gain on derivative instruments

Gain on sale of marketable equity securities

Loss on derivative instruments

(Loss) gain on sale of marketable equity securities

Unrealized (loss) gain on marketable equity securities

Total other (loss) income

Net (loss) income

(Loss) income per common share:

Loss per common share:

Basic and diluted

Weighted average shares outstanding:

Basic and diluted

See Notes to Unaudited Condensed Consolidated Financial Statements

2 unchanged sentences

(in thousands of U.S.

Six months ended

Nine months ended

September 30,

Operating activities:

3 unchanged sentences

Employee stock option expense

Gain on sale of marketable equity securities

Loss (gain) on sale of marketable equity securities

Property abandonment and impairment

Loss on derivative instruments

21 unchanged sentences

Accrued mineral property acquisition costs included in accounts payable

Accrued common stock acquisition costs included in accounts payable

Acquisition of right to use asset

15 unchanged sentences

Revenues and / or proceeds from the sale or joint venture of properties or assets, although significant when they occur, have not been a consistent annual source of cash and would only occur in the future, if at all, on an infrequent basis.

Solitario currently considers its carried interest in the Florida Canyon project in Peru, its interest in the Lik project in Alaska, and its recently acquired Golden Crest project to be its core mineral property assets.

Solitario currently considers its carried interest in the Florida Canyon project in Peru, its interest in the Lik project in Alaska, and its Golden Crest project in South Dakota to be its core mineral property assets.

Nexa Resources, Ltd.

(“Nexa”), Solitario’s joint venture partner, is expected to continue the exploration and furtherance of the Florida Canyon project and Solitario is monitoring progress at Florida Canyon.

(“Nexa”), Solitario’s joint venture partner, is continuing the exploration and furtherance of the Florida Canyon project and Solitario is monitoring progress at Florida Canyon.

Solitario is working with its 50 % joint venture partner in the Lik deposit, Teck American Incorporated, a wholly-owned subsidiary of Teck Resources Limited (both companies are referred to as “Teck”), to further the exploration and evaluate potential development plans for the Lik project.

Solitario is conducting mineral exploration on its Golden Crest project on its own.

As of June 30, 2021, Solitario has significant balances of cash and short-term investments that Solitario anticipates using, in part, to fund costs and activities intended to further the exploration of the Florida Canyon.

Lik and Golden Crest projects, and to potentially acquire additional mineral property assets.

Solitario anticipates using its cash and short-term investments, in part, to fund costs and activities to further the exploration of the Florida Canyon, Lik and Golden Crest projects, and to potentially acquire additional mineral property assets.

The fluctuations in precious metal and other commodity prices contribute to a challenging environment for mineral exploration and development, which has created opportunities as well as challenges for the potential acquisition of early-stage and advanced mineral exploration projects or other related assets at potentially attractive terms.

The accompanying interim condensed consolidated financial statements of Solitario for the three and six months ended June 30, 2021 are unaudited and are prepared in accordance with accounting principles generally accepted in the United States of America (“generally accepted accounting principles”).

The accompanying interim condensed consolidated financial statements of Solitario for the three and nine months ended September 30, 2021 are unaudited and are prepared in accordance with accounting principles generally accepted in the United States of America (“generally accepted accounting principles”).

They do not include all disclosures required by generally accepted accounting principles for annual financial statements, but in the opinion of management, include all adjustments necessary for a fair presentation.

6 unchanged sentences

Solitario has recommended all of its employees and contractors follow government guidelines for health and safety policies for employees and contractors, including encouraging tele-commuting and working from home where possible.

Solitario has evaluated the effects of the COVID-19 pandemic on its operations and taken pro-active steps to address the impacts on its operations, including reducing certain costs, in response to the economic uncertainty associated with potential risks from the COVID-19 pandemic.

Also, Solitario has evaluated the potential impacts on its ability to access future traditional funding sources on the same or reasonably similar terms as in past periods.

Solitario has evaluated the effects of the COVID-19 pandemic on its operations and since the outbreak of the pandemic has taken pro-active steps to address the impact on its operations, including reducing certain costs, in response to the economic uncertainty associated with potential risks from the COVID-19 pandemic.

Solitario will continue to monitor the effects of the COVID-19 pandemic on its operations, financial condition and liquidity.

However, the extent to which the COVID-19 pandemic ultimately impacts Solitario’s business, including our exploration and other activities and the market for our securities, will depend on future developments, which are highly uncertain and cannot be predicted at this time, and include the duration, severity and scope of the outbreak and the actions taken to contain or treat the coronavirus outbreak.

However, the extent to which the COVID-19 pandemic ultimately impacts Solitario’s business, including our exploration and other activities and the market for our securities, will depend on future developments, which are highly uncertain and cannot be predicted at this time, and include the duration, severity and scope of the outbreak and governmental actions taken to contain or treat the coronavirus outbreak.

Cash equivalents

Cash equivalents include investments in highly liquid money-market securities with original maturities of three months or less when purchased.

As of June 30, 2021, $ 365,000 of Solitario’s cash and cash equivalents are held in brokerage accounts and foreign banks, which are not covered under the Federal Deposit Insurance Corporation (“FDIC”) rules for the United States.

As of September 30, 2021, $ 410,000 of Solitario’s cash and cash equivalents are held in brokerage accounts and foreign banks, which are not covered under the Federal Deposit Insurance Corporation (“FDIC”) rules for the United States.

Short-term investments

As of June 30, 2021, Solitario has $ 4,145,000 of its current assets in United States Treasury Securities (“USTS”) with maturities of 15 days to 13 months .

In addition, at June 30, 2021, Solitario has five bank certificates of deposits (“CDs”) with face values between $ 250,000 and $ 100,000 recorded at their total fair value of $ 1,103,000 .

The CDs have maturities of one month to ten months.

As of September 30, 2021, Solitario has $ 3,283,000 of its current assets in United States Treasury Securities (“USTS”) with maturities of 2 to 12 months.

In addition, at September 30, 2021, Solitario has three bank certificates of deposits (“CDs”) with face values between $ 250,000 and $ 100,000 recorded at their total fair value of $ 601,000 .

The CDs have maturities of 15 days to seven months.

The USTS and CDs are recorded at their fair value, based upon quoted market prices.

2 unchanged sentences

Earnings per share

The calculation of basic earnings (loss) per share is based on the weighted average number of shares of common stock outstanding during the three and six months ended June 30, 2021 and 2020.

Potentially dilutive shares related to outstanding common stock options for 5,513,000 Solitario common shares were excluded from the calculation of diluted loss per share for the three and six months ended June 30, 2021 because their effects were anti-dilutive.

Potentially dilutive shares related to outstanding common stock options for 5,698,000 Solitario common shares were excluded from the calculation of diluted loss per share for the six months ended June 30, 2020 because their effects were anti-dilutive.

Potentially dilutive shares related to stock options for 1,475,000 Solitario common shares, with exercise prices of between $ 0.20 and $ 0.28 per share, were included in the calculation of diluted earnings per share for the three months ended June 30, 2020 to the extent they were exercisable.

The calculation of basic earnings (loss) per share is based on the weighted average number of shares of common stock outstanding during the three and nine months ended September 30, 2021 and 2020.

Potentially dilutive shares related to outstanding common stock options for 5,513,000 Solitario common shares were excluded from the calculation of diluted loss per share for the three and nine months ended September 30, 2021 because their effects were anti-dilutive.

Potentially dilutive shares related to outstanding common stock options for 5,698,000 Solitario common shares were excluded from the calculation of diluted loss per share for the three and nine months ended September 30, 2020 because their effects were anti-dilutive.

Recently adopted accounting pronouncements

2 unchanged sentences

Under the SEC Modernization Rules, consistent with global standards as embodied by the Committee for Reserves International Reporting Standards (“CRIRSCO”), Solitario will be required to disclose specified information concerning mineral resources that have been identified on one or more of its mineral properties in its annual report for the year ended December 31, 2021.

Consistent with CRIRSCO standards the SEC Modernization Rules have added definitions to recognize “Measured Mineral Resources”, “Indicated Mineral Resources” and “Inferred Mineral Resources.” The adoption of the SEC Modernization Rules is not applicable to 2021 interim financial statements and did not have a material impact on our financial statements or disclosures as of June 30, 2021 or for the three and six months ended June 30, 2021 and 2020.

The Company is currently evaluating the effects adoption of the SEC Modernization Rules will have on its annual report for the year ended December 31, 2021.

Consistent with CRIRSCO standards the SEC Modernization Rules have added definitions to recognize “Measured Mineral Resources”, “Indicated Mineral Resources” and “Inferred Mineral Resources.” The adoption of the SEC Modernization Rules is not applicable to 2021 interim financial statements and did not have a material impact on our financial statements or disclosures as of September 30, 2021 or for the three and nine months ended September 30, 2021 and 2020.

Solitario is currently evaluating the effects adoption of the SEC Modernization Rules will have on its annual report for the year ended December 31, 2021.

Mineral Property

1 unchanged sentence

(in thousands)

September 30,

Lik project (Alaska – US)

6 unchanged sentences

Terms of the Golden Crest Agreement include scheduled payments to the underlying owner of $ 65,000 paid upon signing and an obligation to pay the underlying owner $ 60,000 at the first anniversary date.

Solitario recorded an initial acquisition cost of $ 125,000 during the three months ended June 30, 2021 related to these required payments.

In addition, Solitario has agreed to pay, at its option, the underlying owner annual payments totaling $ 340,000 over a five-year period and annual payments of $ 150,000 thereafter, which will be expensed as paid.

Solitario has agreed to pay the underlying owner an additional success fee of $ 1.00 per ounce in the event Solitario files a 43-101 qualified resource of up to 1.5 million ounces or a maximum of $ 1,500,000 .

Solitario has agreed to escalating work commitments, at Solitario’s option, on the GC Claims totaling $ 3,000,000 during the first five years, with the first year totaling $ 200,000 .

Solitario recorded an initial acquisition cost of $ 125,000 during the nine months ended September 30, 2021 related to these required payments.

In addition, to continue the lease, Solitario has agreed to pay, at its option, the underlying owner annual payments totaling $ 340,000 over a five-year period and annual payments of $ 150,000 thereafter, which will be expensed as paid.

Solitario has agreed to pay the underlying owner an additional success fee of $ 1 .00 per ounce of gold in the event Solitario files a 43-101 qualified resource of up to 1.5 million ounces of gold or a maximum of $1,500,000.

Solitario has agreed to escalating work commitments, at Solitario’s option, on the GC Claims totaling $ 3,000,000 during the first five years of the lease, with the first year totaling $ 200,000 .

The term of the Golden Crest Agreement is for twenty years and is automatically extended as long as Solitario is performing any exploration, development or mining activities on the GC Claims.

1 unchanged sentence

Solitario will have the option, but not the obligation, to reduce the Net Smelter Return royalty to 1 .0% by paying the owner $ 1,000,000 .

In addition, during the three months ended June 30, 2021, Solitario staked additional mineral claims, including some claims included in the area of interest of the GC claims and claims not related to the GC claims (the “SRC Claims”), as part of the Golden Crest project.

In addition, during the nine months ended September 30, 2021, Solitario staked additional mineral claims, including some claims included in the area of interest of the GC Claims and claims not related to the GC Claims (the “SRC Claims”), as part of the Golden Crest project.

Solitario incurred costs for staking, filing fees, legal and other costs totaling $ 393,000 capitalized as initial acquisition costs related to the SRC Claims and the GC Claims.

1 unchanged sentence

The total planned exploration is approximately $1.24 million of which Solitario will be responsible for 50% or approximately $ 622,000 .

Through September 30, 2021 Solitario has incurred approximately $290,000 in exploration expense at Lik during 2021.

Solitario has recorded a current asset of $ 294,000 for cash advanced to Teck for the 2021 Lik exploration program as of September 30, 2021.

Solitario recorded a mineral property write-down of $17,000 during the three and nine months ended September 30, 2021 related to the Gold Coin project.

Solitario did not record any mineral property write-downs during the three and nine months ended September 30, 2020.

As part of the Royalty Sale to SilverStream in 2019, Solitario received Cdn$ 250,000 in cash and a convertible note from SilverStream in the principal amount of Cdn$ 350,000 (the “SilverStream Note”).

The SilverStream Note, as amended, was due on June 30, 2020, accrued 8 % per annum simple interest, payable on a quarterly basis, and was convertible into common shares of SilverStream, at the discretion of SilverStream, by providing Solitario a notice of conversion.

During the three and six months ended June 30, 2020 Solitario recorded interest income of $ 2,000 and $ 7,000 , respectively, from the SilverStream Note.

During the nine months ended September 30, 2020 Solitario recorded interest income of $ 7,000 from the SilverStream Note.

On May 19, 2020, SilverStream completed an initial public offering, including changing its name to Vox Royalty Corp.

1 unchanged sentence

Solitario recorded its initial investment in the Vox common shares at the initial public offering price, or a total of Cdn$412,000 or $ 294,000 .

Solitario recorded other income of $ 44,000 for the gain on the conversion of the SilverStream Note during the three and six months ended June 30, 2020.

Solitario recorded other income of $ 44,000 for the gain on the conversion of the SilverStream Note during the nine months ended September 30, 2020.

Exploration expense

2 unchanged sentences

Three months ended

Six months ended

September 30,

Nine months ended

September 30,

Geologic and field expenses

10 unchanged sentences

The cost of marketable equity securities sold is determined by the specific identification method.

Changes in market value are recorded in the condensed consolidated statement of operations.

During the three and six months ended June 30, 2021, Solitario recorded an unrealized loss on marketable equity securities of $ 148,000 and $ 270,000 , respectively.

During the three and six months ended June 30, 2020, Solitario recorded an unrealized gain on marketable equity securities of $ 484,000 and $ 251,000 , respectively.

At June 30, 2021 and December 31, 2020 Solitario owns the following marketable equity securities:

June 30, 2021

Changes in fair value are recorded in the condensed consolidated statements of operations.

During the three months ended September 30, 2021, Solitario recorded an unrealized gain on marketable equity securities of $ 50,000 .

During the nine months ended September 30, 2021, Solitario recorded an unrealized loss on marketable equity securities of $ 220,000 .

During the three and nine months ended September 30, 2020, Solitario recorded an unrealized gain on marketable equity securities of $ 333,000 and $ 584,000 , respectively.

At September 30, 2021 and December 31, 2020 Solitario owns the following marketable equity securities:

September 30, 2021

December 31, 2020

5 unchanged sentences

(in thousands)

September 30,

Marketable equity securities at cost

4 unchanged sentences

Three months ended

Six months ended

September 30,

Nine months ended

September 30,

Cost of marketable equity securities sold

Realized gain on marketable equity securities sold

Realized (loss) gain on marketable equity securities sold

Proceeds from the sale of marketable equity securities sold

5 unchanged sentences

Three months ended

Six months ended

September 30,

Nine months ended

September 30,

Unrealized (loss) gain on marketable securities

Realized gain on marketable equity securities sold

Realized (loss) gain on marketable equity securities sold

Net (loss) gain on marketable securities

During the three months ended June 30, 2021, Solitario sold 143,000 shares of TNR Gold Corp.

During the nine months ended September 30, 2021, Solitario sold (i) 430,000 shares of TNR Gold Corp.

common stock for proceeds of $ 26,000 and recorded a gain on sale of $ 19,000 ;

During the six months ended June 30, 2021, Solitario sold (i) 1,010,000 shares of Vendetta Mining Corp.

(ii) 1,510,000 shares of Vendetta Mining Corp.

(“Vendetta) common stock for proceeds of $ 69,000 and recorded a loss on sale of $ 91,000 ;

(ii) 430,000 shares of TNR Gold Corp.

common stock for proceeds of $ 28,000 and recorded a gain on sale of $ 19,000 and (iii) 3,200 shares of Vox for proceeds of $ 9,000 and recorded a gain on sale of $ 2,000 .

Solitario sold 2,000,000 shares of Vendetta common stock during the six months ended June 30, 2020 for proceeds of $ 76,000 and recorded a gain on sale of $ 25,000 on the date of sale.

Solitario did not sell any marketable equity securities during the three months ended June 30, 2020.

and (iii) 3,200 shares of Vox for proceeds of $ 9,000 and recorded a gain on sale of $ 2,000 .

Solitario sold 2,900,000 shares of Vendetta common stock during the nine months ended September 30, 2020 for proceeds of $ 123,000 and recorded a gain on sale of $ 50,000 on the date of sale.

On May 19, 2020, Solitario received 137,255 shares of Vox upon conversion of the SilverStream Note, discussed above, valued at $ 294,000 .

2 unchanged sentences

Solitario has no other material operating lease costs.

During the six months ended June 30, 2021, Solitario entered into a new lease for the same facility (both the prior lease and new lease are referred to as the “WR Lease”) and recorded a net increase in the related asset and liability of $ 99,000 .

The WR Lease is classified as an operating lease and has a term of 28 months at June 30, 2021, with no renewal option.

At June 30, 2021 and December 31, 2020, the right-of-use office lease asset for the WR Lease is classified as other long-term assets and the related liability as current and long-term operating lease liabilities in the condensed consolidated balance sheet.

During the nine months ended September 30, 2021, Solitario entered into a new lease for the same facility (both the prior lease and new lease are referred to as the “WR Lease”) and recorded a net increase in the related asset and liability of $ 99,000 .

The WR Lease is classified as an operating lease and has a term of 25 months at September 30, 2021, with no renewal option.

At September 30, 2021 and December 31, 2020, the right-of-use office lease asset for the WR Lease is classified as other long-term assets and the related liability as current and long-term operating lease liabilities in the condensed consolidated balance sheet.

The amortization of right of use lease asset expense is recognized on a straight-line basis over the lease term, with variable lease payments recognized in the period those payments are incurred.

During the three and six months ended June 30, 2021, Solitario recognized $ 10,000 and $ 20,000 , respectively, of non-cash amortization of right of use lease asset expense for the WR Lease included in general and administrative expense.

During the three and six months ended June 30, 2020, Solitario recognized $ 10,000 and $ 20,000 , respectively, of non-cash amortization of right of use lease asset expense for the WR Lease included in general and administrative expense.

During the three and six months ended June 30, 2021, cash lease payments of $ 10,000 and $ 17,000 , respectively, were made on the WR Lease.

During the three and six months ended June 30, 2020, cash lease payments of $ 11,000 and $ 21,000 , respectively, were made on the WR Lease.

During the three and nine months ended September 30, 2021, Solitario recognized $ 10,000 and $ 30,000 , respectively, of non-cash amortization of right of use lease asset expense for the WR Lease included in general and administrative expense.

During the three and nine months ended September 30, 2020, Solitario recognized $ 9,000 and $ 29,000 , respectively, of non-cash amortization of right of use lease asset expense for the WR Lease included in general and administrative expense.

During the three and nine months ended September 30, 2021, cash lease payments of $ 11,000 and $ 28,000 , respectively, were made on the WR Lease.

During the three and nine months ended September 30, 2020, cash lease payments of $ 10,000 and $ 31,000 , respectively, were made on the WR Lease.

These cash payments, less imputed interest for each period, reduced the related liability on the WR Lease.

The discount rate within the WR Lease is not determinable and Solitario has applied a discount rate of 5 % based upon Solitario’s estimate of its cost of capital.

The maturities of Solitario’s lease liability for its WR Lease are as follows at June 30, 2021:

The maturities of Solitario’s lease liability for its WR Lease are as follows at September 30, 2021:

Future lease payments (in thousands)

2 unchanged sentences

Present value of lease payments

Supplemental cash flow information related to our operating lease was as follows for the three and six months ended June 30, 2021 and 2020:

Supplemental cash flow information related to our operating lease was as follows for the three and nine months ended September 30, 2021 and 2020:

(in thousands)

Three months ended

Six months ended

September 30,

Nine months ended

September 30,

Cash paid for amounts included in the measurement of lease liabilities

2 unchanged sentences

Leased assets recorded in exchange for new operating lease liabilities

5 Other Assets

The following items comprised other assets:

(in thousands)

September 30,

Furniture and fixtures, net of accumulated depreciation

9 unchanged sentences

On the purchase date Solitario recorded marketable equity securities of $ 165,000 for the Vendetta shares acquired and $ 68,000 for the Vendetta Warrants based upon an allocation of the purchase price of the Vendetta units, determined by (i) the fair value of the Vendetta common shares received based upon the quoted market price for Vendetta common shares and (ii) the fair value of Vendetta Warrants based upon a Black Scholes model.

During the three and six months ended June 30, 2021, Solitario charged loss on derivative instruments of $ 37,000 and $ 40,000 , respectively, for the change in the fair value of the Vendetta Warrants based on a Black Scholes model.

During the three and six months ended June 30, 2020, Solitario recorded a gain on derivative instruments of $ 20,000 and $ 13,000 , respectively, for the change in the fair value of the Vendetta Warrants based on a Black Scholes model.

During the three and nine months ended September 30, 2021, Solitario charged loss on derivative instruments of $ 2,000 and $ 42,000 , respectively, for the change in the fair value of the Vendetta Warrants based on a Black Scholes model.

During the three and nine months ended September 30, 2020, Solitario recorded a gain on derivative instruments of $ 36,000 and $ 49,000 , respectively, for the change in the fair value of the Vendetta Warrants based on a Black Scholes model.

Covered call options

1 unchanged sentence

The business purpose of selling covered calls is to provide additional income on a limited portion of shares of Kinross that Solitario may sell in the near term, which is generally defined as less than one year and any changes in the fair value of its covered calls are recognized in the statement of operations in the period of the change.

During the three months ended June 30, 2021, Solitario sold covered calls against its holdings of Kinross for cash proceeds of $ 8,000 and recorded a gain on derivative instruments related to those covered calls of $ 7,000 .

During the three and six months ended June 30, 2020, Solitario sold covered calls against its holdings of Kinross for cash proceeds of $ 43,000 and $ 78,000 , respectively, and repurchased certain of its covered calls prior to expiration for $ 64,000 during the three months ended June 30, 2020.

As of June 30, 2021, Solitario has a remaining liability related to outstanding Kinross call options which expire in August 2021 of $ 1,000 .

During the three months ended June 30, 2020 Solitario recorded a loss on derivative instruments related to its Kinross calls of $ 15,000 and $ 33,000 , respectively.

During the nine months ended September 30, 2021, Solitario sold covered calls against its holdings of Kinross for cash proceeds of $ 8,000 and recorded a gain on derivative instruments related to those covered calls of $ 1,000 and $ 8,000 , respectively, during the three and nine months ended September 30, 2021.

During the three and nine months ended September 30, 2020 Solitario recorded a loss on derivative instruments related to its Kinross calls of $ 106,000 and $ 139,000 , respectively.

On April 20, 2020, Solitario received a loan in the amount of $ 70,000 (the “PPP Loan”) pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) to help fund Company payroll, rent and utilities obligations.

2 unchanged sentences

The Small Business Administration retains the right to review the eligibility requirements of Solitario for PPP Loans.

During the six months ended June 30, 2021, the remaining balance of the PPP Loan of $ 10,000 was forgiven and Solitario recorded $ 10,000 of other income related to the forgiveness of the PPP Loan during the six months ended June 30, 2021.

Solitario has no remaining balance due for the PPP Loan as of June 30, 2021.

During the nine months ended September 30, 2021, the remaining balance of the PPP Loan of $ 10,000 was forgiven and Solitario recorded $ 10,000 of other income related to the forgiveness of the PPP Loan.

Solitario has no remaining balance due for the PPP Loan as of September 30, 2021.

Solitario accounts for its financial instruments under ASC 820 Fair Value Measurement .

During the three months ended June 30, 2021, there were no reclassifications in financial assets or liabilities between Level 1, 2 or 3 categories.

The following is a listing of Solitario’s financial assets and liabilities required to be measured at fair value on a recurring basis and where they are classified within the hierarchy as of June 30, 2021:

During the three months ended September 30, 2021, there were no reclassifications in financial assets or liabilities between Level 1, 2 or 3 categories.

(in thousands)

2 unchanged sentences

Vendetta Warrants

Kinross call options

8 unchanged sentences

A valuation allowance is provided if it is more likely than not that some portion or all of the deferred tax assets will not be realized.

At both June 30, 2021 and December 31, 2020, a valuation allowance has been recorded, which fully offsets Solitario’s net deferred tax assets, because it is more likely than not that the Company will not realize some portion or all of its deferred tax assets.

At both September 30, 2021 and December 31, 2020, a valuation allowance has been recorded, which fully offsets Solitario’s net deferred tax assets, because it is more likely than not that the Company will not realize some portion or all of its deferred tax assets.

The Company continually assesses both positive and negative evidence to determine whether it is more likely than not that the deferred tax assets can be realized prior to their expiration.

During the three and six months ended June 30, 2021 and 2020, Solitario recorded no deferred tax expense.

During the three and nine months ended September 30, 2021 and 2020, Solitario recorded no deferred tax expense.

Commitments and contingencies

1 unchanged sentence

See Note 2, “Mineral Properties,” above.

Solitario leases office space under a non-cancelable operating lease for the Wheat Ridge, Colorado office which provides for future total minimum rent payments as of June 30, 2021 of $ 96,000 through October of 2023.

Solitario leases office space under a non-cancelable operating lease for the Wheat Ridge, Colorado office which provides for future total minimum rent payments as of September 30, 2021 of $ 86,000 through October of 2023.

Employee Stock Compensation Plans

4 unchanged sentences

The terms and conditions of the awards are pursuant to the 2013 Plan and are granted by the Board of Directors of the Company (the “Board of Directors”) or a committee appointed by the Board of Directors.

As of June 30, 2021, and December 31, 2020, there were options outstanding that are exercisable to acquire 5,513,000 and 5,558,000 shares, respectively, of Solitario common stock, with exercise prices between $ 0.20 and $0.77 per share.

All of the options have a five-year term and vest 25 % on the date of grant and 25% on each of the next three anniversary dates.

As of September 30, 2021, and December 31, 2020, there were options outstanding that are exercisable to acquire 5,513,000 and 5,558,000 shares, respectively, of Solitario common stock, with exercise prices between $ 0.20 and $ 0.77 per share.

All of the options have a five-year term from the date of grant, and vest 25 % on the date of grant and 25% on each of the next three anniversary dates.

Solitario amortizes grant date fair value on a straight-line basis over the vesting period.

During the three and six months ended June 30, 2021, Solitario granted 140,000 options with an average exercise price of $ 0.68 per share, a five-year term and a grant date fair value of $ 58,000 based upon a Black-Scholes model, with a 76 % volatility and a 0.9 % risk-free interest rate.

During the six months ended June 30, 2020, Solitario granted 1,325,000 options with an exercise price of $ 0.20 per share, a five-year term and a grant date fair value of $ 145,000 based upon a Black-Scholes model, with a 66 % volatility and a 0.4 % risk-free interest rate.

During the three and six months ended June 30, 2021, options for 64,750 and 185,000 shares, respectively, were exercised with an average exercise price of $ 0.25 and $ 0.45 per share, respectively, for proceeds of $ 16,000 and $ 83,000 , respectively.

There were no exercises of options under the 2013 Plan during the three and six months ended June 30, 2020.

During the three and six months ended June 30, 2021, Solitario recorded stock option compensation expense of $ 44,000 and $ 72,000 , respectively.

During the three and six months ended June 30, 2020, Solitario recorded stock option compensation expense of $ 130,000 and $ 215,000 , respectively.

At June 30, 2021, the total unrecognized stock option compensation cost related to non-vested options was $ 132,000 and is expected to be recognized over a weighted average period of 22 months.

During the nine months ended September 30, 2021, Solitario granted 140,000 options with an average exercise price of $ 0.68 per share, each having a five-year term and a grant date fair value total of $ 58,000 based upon a Black-Scholes model, with a 76 % volatility and a 0.9 % risk-free interest rate.

During the nine months ended September 30, 2020, Solitario granted 1,325,000 options each with an exercise price of $ 0.20 per share, a five-year term and a grant date fair value of $ 145,000 based upon a Black-Scholes model, with a 66 % volatility and a 0.4 % risk-free interest rate.

During the nine months ended September 30, 2021, options for 185,000 shares were exercised with an average exercise price of $ 0.45 per share, respectively, for proceeds of $ 83,000 .

There were no exercises of options under the 2013 Plan during the three months ended September 30, 2021.

There were no exercises of options under the 2013 Plan during the three and nine months ended September 30, 2020.

During the three and nine months ended September 30, 2021, Solitario recorded stock option compensation expense of $ 32,000 and $ 104,000 , respectively.

During the three and nine months ended September 30, 2020, Solitario recorded stock option compensation expense of $ 72,000 and $ 287,000 , respectively.

At September 30, 2021, the total unrecognized stock option compensation cost related to non-vested options was $ 100,000 and is expected to be recognized over a weighted average period of 22 months.

Shareholders’ Equity

Shareholders’ Equity for the six months ended June 30, 2021:

(in thousands, except Share amounts)

Shareholders’ Equity for the three months ended September 30, 2021:

(in thousands, except

Share amounts)

Shareholders’

Balance at June 30, 2021

Stock option expense

Issuance of shares – ATM, net

Balance at September 30, 2021

Shareholders’ Equity for the three months ended September 30, 2020:

(in thousands, except

Share amounts)

Shareholders’

Balance at June 30, 2020

Stock option expense

Purchase of shares for cancellation

Balance at September 30, 2020

Shareholders’ Equity for the nine months ended September 30, 2021:

(in thousands, except

Share amounts)

Shareholders’

Balance at December 31, 2020

2 unchanged sentences

Issuance of shares - option exercises

Balance at June 30, 2021

Shareholders’ Equity for the six months ended June 30, 2021:

(in thousands, except Share amounts)

Balance at September 30, 2021

Shareholders’ Equity for the nine months ended September 30, 2020:

(in thousands, except

Share amounts)

Shareholders’

2 unchanged sentences

Purchase of shares for cancellation

Balance at June 30, 2020

Balance at September 30, 2020

At the Market Offering Agreement

1 unchanged sentence

Wainwright & Co., LLC (“Wainwright”), under which Solitario may, from time to time, issue and sell shares of Solitario’s common stock through Wainwright as sales manager in an at-the-market offering under a prospectus supplement for aggregate sales proceeds of up to $ 9 .0 million (the “ATM Program”).

The common stock will be distributed at the market prices prevailing at the time of sale.

The common stock is distributed at the market prices prevailing at the time of sale.

As a result, prices of the common stock sold under the ATM Program may vary as between purchasers and during the period of distribution.

The ATM Agreement provides that Wainwright is entitled to compensation for its services at a commission rate of 3 .0% of the gross sales price per share of common stock sold.

During the six months ended June 30, 2021, Solitario recorded $ 144,000 as a charge to additional paid-in-capital for one-time expenses related to entering into the ATM Agreement.

During the six months ended June 30, 2021, Solitario sold an aggregate of 150,400 shares of common stock under the ATM Program at an average price of $ 1.21 per share for net proceeds of $ 177,000 after commissions and sale expenses.

During the nine months ended September 30, 2021, Solitario recorded $ 144,000 as a charge to additional paid-in-capital for one-time expenses related to entering into the ATM Agreement.

During the three and nine months ended September 30, 2021, Solitario sold an aggregate of 190,00 and 340,400 shares of common stock, respectively, under the ATM Program at an average price of $ 0.55 and $ 0.82 per share, respectively, for net proceeds of $ 104,000 and $ 137,000 , respectively, after commissions, sale and one-time expenses, discussed above.

Share Repurchase Program

1 unchanged sentence

During 2020, the Board of Directors extended the expiration date of the share repurchase program through December 31, 2021.

Solitario did not purchase any shares under the share repurchase plan during the three and six months ended June 30, 2021.

During the three and six months ended June 30, 2020, Solitario purchased 4,400 and 21,100 shares of Solitario common stock, respectively, for an aggregate purchase price of $ 1,000 and $ 4,000 , respectively.

As of June 30, 2021, Solitario has purchased a total of 994,000 shares for an aggregate purchase price of $ 467,000 under the share repurchase program since its inception.

Solitario did not purchase any shares under the share repurchase plan during the three and nine months ended September 30, 2021.

During the three and nine months ended September 30, 2020, Solitario purchased 3,600 and 24,700 shares of Solitario common stock, respectively, for an aggregate purchase price of $ 1,000 and $ 5,000 , respectively.

As of September 30, 2021, Solitario has purchased a total of 994,000 shares for an aggregate purchase price of $ 467,000 under the share repurchase program since its inception.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements