Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures. We have conducted an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(e). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of the end of the period covered by this report our disclosure controls and procedures are effective in timely alerting them to material information relating to the Company (including our subsidiaries) required to be included in our periodic Securities and Exchange Commission filings.
Management’s Report on Internal Control Over Financial Reporting . Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) promulgated under the Exchange Act as a process designated by, or under the supervision of, our principal executive and principal financial officers and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2023. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – Integrated Framework (2013 Framework). Based on our assessment, our Chief Executive Officer and our Chief Financial Officer both believe that, as of December 31, 2023, our internal control over financial reporting is effective based on those criteria.
This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. As a smaller reporting company, Solitario’s management’s report was not subject to attestation by our independent registered public accounting firm pursuant to rules of the SEC that permit us to provide only management’s report in this annual report.
Item 9B. Other Information
During the quarter ended December 31, 2023, none of Solitario’s directors or officers informed Solitario of the adoption, modification, or termination of a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Item 408(a) of Regulation S-K.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not Applicable
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PART III
Item 10. Directors, Executive Officers and Corporate Governance
The information required under Item 10 is incorporated herein by reference to the information set forth in our definitive proxy statement in connection with the annual meeting of shareholders to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 2023 pursuant to Section 14(a) of the Exchange Act (the "2024 Proxy").
Item 11. Executive Compensation
The information required under Item 11 is incorporated herein by reference to the information set forth in the 2024 Proxy.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Except for the information with respect to our equity compensation plan included below, the information with respect to Item 12 is incorporated herein by reference to the information set forth in the 2024 Proxy .
Shares authorized for issuance under equity compensation plans.
On June 20, 2023, Solitario’s shareholders approved the 2023 Solitario Stock and Incentive Plan (the “2023 Plan”). Under the terms of the 2023 Plan, a total of 5,000,000 shares of Solitario common stock are reserved for awards to directors, officers, employees and consultants. Awards may take the form of stock options, stock appreciation rights, restricted stock and restricted stock units. The terms and conditions of the awards are pursuant to the 2023 Plan and are granted by the Board of Directors or a committee appointed by the Board of Directors. The 2023 Plan has a term of 10 years.
On November 16, 2023, the Board of Directors granted options to acquire 50,000 shares of Solitario common stock under the 2023 Plan. The options have an exercise price of $0.51 per share, a five-year term, vested 25% on the date of grant, vest 25% on each of the next three anniversary dates and have a grant date fair value of $16,000 based upon a Black-Scholes model, with a 72% volatility and a 4.4% risk-free interest rate.
On June 18, 2013, Solitario’s shareholders approved the 2013 Solitario Exploration & Royalty Corp. Omnibus Stock and Incentive Plan (the “2013 Plan”). On June 29, 2017, Solitario shareholders approved an amendment to the 2013 Plan which increased the number of shares of common stock available for issuance under the 2013 Plan from 1,750,000 to 5,750,000. Under the terms of the 2013 Plan, the Board of Directors may grant awards to directors, officers, employees and consultants. Such awards may take the form of stock options, stock appreciation rights, restricted stock, and restricted stock units. The terms and conditions of the awards are pursuant to the 2013 Plan and awards are granted by the Board of Directors or a committee appointed by the Board of Directors. As of December 31, 2023, the 2013 Plan has expired and no additional awards may be granted under the 2013 Plan, although awards made prior to the 2013 Plan’s expiration will remain outstanding in accordance with their terms.
On September 8, 2022, the Board of Directors granted options to acquire 2,360,000 shares of Solitario common stock under the 2013 Plan. The options have an exercise price of $0.60 per share, a five-year term, vested 25% on the date of grant, vest 25% on each of the next three anniversary dates and have a grant date fair value of $876,000 based upon a Black-Scholes model, with a 73% volatility and a 3.4% risk-free interest rate.
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Equity Compensation Plan Information as of December 31, 2023:
Plan category
Number of securities to be issued upon exercise of outstanding options, warrants and rights
Weighted-average exercise price of outstanding options, warrants and rights
(2013 Plan – US$)
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)
2023 Plan
(a)
(b)
(c)
Equity compensation plans approved by
security holders
50,000
0.51
4,950,000
Equity compensation plans not approved
by security holders
-
N/A
-
Total 2023 Plan
50,000
0.51
4,950,000
2013 Plan
Equity compensation plans approved by
security holders
3,778,500
0.47
-
Equity compensation plans not approved
by security holders
-
N/A
-
Total 2013 Plan
3,778,500
0.47
-
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information with respect to Item 13 is incorporated herein by reference to the information set forth in the 2024 Proxy .
Item 14. Principal Accounting Fees and Services
The information required under Item 14 is incorporated herein by reference to the information set forth in the 2024 Proxy .
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PART IV
Item 15. Exhibits, Financial Statement Schedules
The following documents are filed as a part of this Annual Report on Form 10-K:
1. Financial Statements
The following financial statements contained in Part II, Item 8 are filed as part of this Annual Report on Form 10-K:
Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm (Assure CPA, Spokane, Washington, LLC PCAOB ID 444)
F-2
Report of Independent Registered Public Accounting Firm (Plante Moran, PLLC, Denver, Colorado, PCAOB ID 166)
F-3
Consolidated Balance Sheets as of December 31, 2023 and 2022
F-4
Consolidated Statements of Operations for the years ended December 31, 2023 and 2022
F-5
Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2023 and 2022
F-6
Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022
F-7
Notes to Consolidated Financial Statements
F-8
2. Financial Statement Schedules
Financial statement schedules are omitted because they are not required or are not applicable, or the required information is provided in the consolidated financial statements or notes thereto described in Item 15(1) above.
3. Exhibits
The Exhibits listed in the Index to Exhibits, which appears immediately following the signature page and is incorporated herein by reference, are filed as part of this Annual Report on Form 10-K.
Item 16. Form 10-K Summary
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SOLITARIO RESOURCES CORP.
By:
/s/ James R. Maronick
James R. Maronick
Chief Financial Officer
Date: March 21, 2024
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Christopher E. Herald
Christopher E. Herald,
Chief Executive Officer
Principal Executive Officer and Director
March 21, 2024
/s/ James R. Maronick
James R. Maronick,
Chief Financial Officer
Principal Financial and Accounting Officer
March 21, 2024
/s/ John Labate
John Labate
/s/ Brian Labadie
A majority of the
March 21, 2024
Brian Labadie
Board of Directors
/s/ James Hesketh
James Hesketh
/s/ Gil Atzmon
Gil Atzmon
/s/ Debbie Austin
Debbie Austin
/s/ Joshua D. Crumb
Joshua D. Crumb
Company Name
By: /s/ James R. Maronick
James R. Maronick, Attorney-in-fact
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INDEX TO EXHIBITS
Description
3.1
Amended and Restated Articles of Incorporation of Solitario Exploration & Royalty Corp., as Amended (incorporated by reference to Exhibit 3.1 to Solitario’s Form 10-Q filed on August 10, 2010)
3.1.1
Articles of Amendment to Restated Articles of Incorporation of Solitario Zinc Corp. (incorporated by reference to Exhibit 3.1 to Solitario’s Current Report on Form 8-K filed on July 14, 2017)
3.1.2
Articles of Amendment to Restated Articles of Incorporation of Solitario Resources Corp. (incorporated by reference to Exhibit 3.1 to Solitario’s Current Report on Form 8-K filed on July 19, 2023)
3.2
Amended and Restated By-laws of Solitario Resources Corp., as amended (incorporated by reference to Exhibit 3.1 to Solitario’s Form 8-K filed on April 23, 2021)
4.1
Form of Common Stock Certificate of Solitario Resources Corp. (incorporated by reference to Exhibit 4.1 to Solitario’s Form 10-Q filed on August 9, 2023)
4.2
Description of Common Stock (incorporated by reference to Exhibit 4.2 to Solitario’s Form 10-K filed on March 2, 2020)
10.1#
2013 Solitario Exploration & Royalty Corp. Omnibus Stock and Incentive Plan (incorporated by reference to Exhibit 10.2 to Solitario’s Form 8-K filed on June 20, 2013)
10.2#
Change in Control Severance Benefits Agreement between Solitario Resources Corporation and Christopher E. Herald, dated as of March 14, 2007 (incorporated by reference to Exhibit 99.1 to Solitario's Form 8-K filed on March 14, 2007)
10.3#
Change in Control Severance Benefits Agreement between Solitario Resources Corporation and James R. Maronick, dated as of March 14, 2007 (incorporated by reference to Exhibit 99.2 to Solitario's Form 8-K filed on March 14, 2007)
10.4#
Change in Control Severance Benefits Agreement between Solitario Resources Corporation and Walter W. Hunt, dated as of March 14, 2007 (incorporated by reference to Exhibit 99.3 to Solitario's Form 8-K filed on March 14, 2007)
10.5
Framework Agreement for the Exploration and Development of Potential Mining Properties, related to Solitario's 100% owned Florida Canyon project in Peru between Minera Florida Canyon S.A., Minera Solitario Peru S.A.C., Solitario Resources Corporation, and Votorantim Metais – Cajamarquilla S.A., dated March 24, 2007 (incorporated by reference to Exhibit 10.2 to Solitario's Form 8-K filed on October 4, 2007)
10.6#
First Amendment to the 2013 Solitario Exploration & Royalty Corp. Omnibus Stock and Incentive Plan (incorporated by reference to Exhibit 10.1 to Solitario’s Form 8-K filed on June 29, 2017)
10.7#
2023 Stock and Incentive Plan (incorporated by reference to Appendix B to Solitaro’s definitive proxy statement on Schedule 14A filed with the SEC on April 28, 2023)
10.8*
Form of Award Agreement for the 2023 Solitario Stock and Incentive Plan
10.9
At The Market Offering Agreement between Solitario Resources Corp. and H.C. Wainwright & Co., LLC, dated February 2, 2021 (incorporated by reference to Solitario’s Form 8-K filed on February 2, 2021)
10.10
Amendment to At the Market Offering Agreement between Solitario Resources Corp. and H.C. Wainwright & Co., LLC, dated December 19, 2023(incorporated by reference to Exhibit 1.2 to Solitario’s Form S-3 Amendment No. 1 filed on December 20, 2023)
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10.11
Purchase Agreement by and between Solitario Recourses Corp. and Newmont Overseas Exploration Ltd. (incorporated by reference to Exhibit 10.1 to Solitario’s Form 8-K filed August 2, 2023)
10.12
Investor Rights Agreement by and between Solitario Resources Corp. and Newmont Overseas Exploration Ltd. dated July 31, 2023 (incorporated by reference to Exhibit 10.2 to Solitario’s Form 8-K filed on August 2, 2023)
10.13*
Mining Lease Between Golden Crest II, LLC and Solitario Resources Corp., dated May 27, 2021
14.1
Code of Ethics for the Chief Executive Officer and Senior Financial Officer (incorporated by reference to Exhibit 99.1 to Solitario's Form 8-K filed on July 18, 2006)
19.1*
Solitario Resources Corp. Confidentiality and Insider Trading Policy
21.1*
Subsidiaries of Solitario Resources Corp.
23.1*
Consent of Plante & Moran, PLLC
23.2*
Consent of Assure CPA, LLC
24.1*
Power of Attorney
31.1*
Certification of Chief Executive Officer pursuant to SEC Rule 13a-14(a)/15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*
Certification of Chief Financial Officer pursuant to SEC Rule 13a-14(a)/15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
96.1
Technical Report Summary for the Florida Canyon Project (incorporated by reference to Exhibit 96.1 to Solitario’s Form 10-K filed on March 30, 2022)
96.2
Technical Report Summary for the Lik Project (incorporated by reference to Exhibit 96.1 to Solitario’s Form 10-K filed on March 30, 2022)
97*
Solitario Resources Corp. Compensation Recoupment Policy, effective October 2, 2023
101*
The following materials from the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 formatted in Inline eXtensible Business Reporting Language (iXBRL): (i) Condensed Consolidated Balance Sheets as of December 31, 2023 and 2022, (ii) Condensed Consolidated Statements of Operations for the years ended December 31, 2023 and 2022, (iii) Condensed Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022; and (iv) Notes to the Condensed Unaudited Consolidated Financial Statements.
* Filed herewith
# Designates a management contract, or a compensatory plan or arrangement.
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