SOLITARIO RESOURCES CORP. 10-Q

Item 1. Financial Statements SOLITARIO RESOURCES CORP. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands of U.S. dollars, September 30, December 31, except share amounts) 2024 2023 Assets Current assets: Cash and cash equivalents $ 86 $ 200 Short-term investments 6,398 8,436 Investments in marketable equity securities, at fair value 1,398 1,032 Prepaid expenses and other 102 273 Total current assets 7,984 9,941 Mineral properties 16,701 16,646 Restricted cash – Golden Crest reclamation 100 - Other assets 134 170 Total assets $ 24,919 $ 26,757 Liabilities and Shareholders’ Equity Current liabilities: Accounts payable $ 638 $ 593 Kinross call option 82 - Operating lease liability 42 39 Total current liabilities 762 632 Long-term liabilities: Operating lease liability – long-term 18 50 Asset retirement obligation and reclamation liabilities 145 125 Total long-term liabilities 163 175 Commitments and contingencies (Note 8) Equity: Shareholders’ equity: Preferred stock, $ 0.01 par value, authorized 10,000,000 shares (none issued and outstanding at September 30, 2024 and December 31, 2023) - - Common stock, $ 0.01 par value, authorized 100,000,000 shares ( 81,638,418 and 79,586,358 shares, respectively, issued and outstanding at September 30, 2024 and December 31, 2023) 816 796 Additional paid-in capital 84,588 82,796 Accumulated deficit ( 61,410 ) ( 57,642 ) Total shareholders’ equity 23,994 25,950 Total liabilities and shareholders’ equity $ 24,919 $ 26,757 See Notes to Unaudited Condensed Consolidated Financial Statements 3 Table of Contents SOLITARIO RESOURCES CORP. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands of U.S. dollars, except per share amounts) Three months ended September 30, Nine months ended September 30, 2024 2023 2024 2023 Operating expense: Exploration expense $ 2,067 $ 918 $ 2,908 $ 1,748 Depreciation 8 7 21 19 General and administrative 383 282 1,511 1,073 Total operating expense 2,458 1,207 4,440 2,840 Other income (loss) Interest and dividend income 94 35 295 88 (Loss) gain on derivative instruments ( 22 ) 7 ( 43 ) 30 Gain on sale of marketable equity securities - - 54 - Unrealized gain on short-term investments - 14 - 49 Unrealized gain (loss) on marketable equity securities 110 ( 141 ) 366 ( 39 ) Total other income (loss) 182 ( 85 ) 672 128 Net loss $ ( 2,276 ) $ ( 1,292 ) $ ( 3,768 ) $ ( 2,712 ) Loss per common share: Basic and diluted $ ( 0.03 ) $ ( 0.02 ) $ ( 0.05 ) $ ( 0.04 ) Weighted average shares outstanding: Basic and diluted 81,597 67,752 80,790 67,625 See Notes to Unaudited Condensed Consolidated Financial Statements 4 Table of Contents SOLITARIO RESOURCES CORP. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands of U.S. dollars) Nine months ended September 30, 2024 2023 Operating activities: Net loss $ ( 3,768 ) $ ( 2,712 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 21 19 Amortization of right of use lease asset 31 30 Unrealized (gain) loss on marketable equity securities ( 366 ) 39 Unrealized (gain) loss on short-term investments - ( 49 ) Stock-based compensation expense 540 184 (Gain) on sale of marketable equity securities ( 54 ) - Loss (gain) on derivative instruments 43 ( 30 ) Increase in asset retirement and reclamation liabilities 20 - Changes in operating assets and liabilities: Prepaid expenses and other 171 ( 199 ) Accounts payable and other current liabilities 12 34 Net cash used in operating activities ( 3,350 ) ( 2,684 ) Investing activities: Sale of short-term investments, net 2,038 36 Purchase of mineral property ( 55 ) - Purchase of other assets ( 12 ) ( 12 ) Cash from sale of marketable equity securities 54 - Sale of derivative instruments 39 31 Net cash provided by investing activities 2,064 55 Financing activities: Issuance of common stock – net of issuing costs 1,218 2,422 Issuance of common stock upon exercise of stock options 54 59 Net cash provided by financing activities 1,272 2,481 Net decrease in cash and cash equivalents ( 14 ) ( 148 ) Cash, cash equivalents and restricted cash, beginning of period 200 316 Cash, cash equivalents and restricted cash, end of period $ 186 $ 168 Supplemental Cash Flow information: Acquisition of right to use asset $ - $ 87 See Notes to Unaudited Condensed Consolidated Financial Statements 5 Table of Contents NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Business and Significant Accounting Policies Business and company formation Solitario Resources Corp. (“Solitario,” or the “Company”) is an exploration stage company as defined by rules issued by the United States Securities and Exchange Commission (“SEC”). Solitario was incorporated in the state of Colorado on November 15, 1984 as a wholly owned subsidiary of Crown Resources Corporation ("Crown"). In July 1994, Solitario became a publicly traded company on the Toronto Stock Exchange through its initial public offering. Solitario has been actively involved in mineral exploration since 1993. Solitario’s primary business is to acquire exploration mineral properties or royalties and/or discover economic deposits on its mineral properties and advance these deposits, either on its own or through joint ventures, up to the development stage. At or prior to development, Solitario would likely attempt to sell its mineral properties, pursue their development either on its own or through a joint venture with a partner that has expertise in mining operations, or create a royalty with a third party that continues to advance the property. Solitario has never developed a property. Solitario is primarily focused on the acquisition and exploration of precious metal, zinc and other base metal exploration mineral properties. In addition to focusing on its mineral exploration properties and the evaluation of mineral properties for acquisition, Solitario from time to time also evaluates potential strategic transactions for the acquisition of new precious and base metal properties and assets with exploration potential or business combinations that Solitario determines to be favorable to Solitario. Solitario has recorded revenue in the past from the sale of mineral properties, including the sale of certain mineral royalties. Revenues and / or proceeds from the sale or joint venture of properties or assets, although potentially 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 zinc project in Peru (the “Florida Canyon Project”), its interest in the Lik zinc project in Alaska (the “Lik Project”), and its Golden Crest project in South Dakota (the “Golden Crest Project”) to be its core mineral property assets. Nexa Resources, Ltd. (“Nexa”), Solitario’s joint venture partner, is continuing the exploration and furtherance of the Florida Canyon Project and Solitario is monitoring progress at the Florida Canyon Project. Solitario is working with its 50% joint venture partner in the Lik Project, 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. During the nine months ended September 30, 2024, Solitario began work on a new early-stage project, the Cat Creek project in Colorado (the “Cat Creek Project”). Solitario is conducting mineral exploration on its Golden Crest Project and the Cat Creek Project on its own. Solitario anticipates using its cash and short-term investments, in part, to fund costs and activities to further the exploration of its core mineral projects, the Florida Canyon Project, Lik Project and Golden Crest Project, as well as its Cat Creek Project, 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 nine months ended September 30, 2024 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. Interim results are not necessarily indicative of results which may be achieved in the future or for the full year ending December 31, 2024. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto which are included in Solitario’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 22, 2024 (the “2023 Annual Report”). The accounting policies set forth in those annual financial statements are the same as the accounting policies utilized in the preparation of these condensed consolidated financial statements, except as modified for appropriate interim financial statement presentation. 6 Table of Contents Recent accounting pronouncements In August 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-05, Business Combinations - Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement, which clarifies the business combination accounting for joint venture formations. The amendments in the ASU seek to reduce diversity in practice that has resulted from a lack of authoritative guidance regarding the accounting for the formation of joint ventures in separate financial statements. The amendments also seek to clarify the initial measurement of joint venture net assets, including businesses contributed to a joint venture. The guidance is applicable to all entities involved in the formation of a joint venture. The amendments are effective for all joint venture formations with a formation date on or after January 1, 2025. Early adoption and retrospective application of the amendments are permitted. Solitario does not anticipate early adoption. Solitario is evaluating the new guidance and has not yet determined the impact of ASU 2023-05 on its condensed consolidated financial statements. In November 2023, the FASB issued ASU 2023-07 which improves disclosures about a public entity’s reportable segments and addresses requests from investors and other allocators of capital for additional, more detailed information about a reportable segment’s expenses. The ASU applies to all public entities that are required to report segment information in accordance with ASC 280 and is effective starting in annual periods beginning after December 15, 2023. The adoption is not expected to have a material impact on the Company's consolidated financial statements or disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, amending income tax disclosure requirements for the effective tax rate reconciliation and income taxes paid. The amendments in ASU 2023-09 are effective for public business entities for fiscal years beginning after December 15, 2024 and are applied prospectively. Early adoption and retrospective application of the amendments are permitted. Solitario does not anticipate early adoption. Solitario does not expect the adoption of ASU No. 2023-09 to have a material impact on its consolidated financial position or results of operations. Risks and Uncertainties Solitario is subject to various risks and uncertainties that are specific to the nature of its business and the exploration of its mineral properties. Solitario also faces various macro-economic risks and uncertainties, such as risks related to health epidemics, pandemics, and other outbreaks or resurgences of communicable diseases, the occurrence of natural disasters, rising geopolitical tension and instability, acts of war or terrorism, global economic uncertainty, inflationary pressures, increased interest rates, and volatility and disruption in national and international financial markets. These risks and uncertainties could significantly disrupt Solitario’s operations and may materially and adversely affect its business and financial condition. Certain of these risks and uncertainties are discussed under the heading “Risk Factors” in Part I, Item 1A of our 2023 Annual Report and under the heading “Forward-Looking Statements” in Item 2(l) of Part I of this report. Financial reporting The condensed consolidated financial statements include the accounts of Solitario and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles and are expressed in US dollars. Cash equivalents Cash equivalents include investments in highly liquid money-market securities with original maturities of three months or less when purchased. As of September 30, 2024, $ 21,000 of Solitario’s cash is held in brokerage accounts and foreign banks, which are not covered under the Federal Deposit Insurance Corporation (“FDIC”) rules for the United States. 7 Table of Contents Money Market Funds Solitario invests in money market funds that seek to maintain a stable net asset value. These funds invest in high-quality, short-term, diversified money market instruments, short-term treasury bills, federal agency securities, certificates of deposits, and commercial paper. Solitario includes its money market funds in short-term investments. Solitario believes the redemption value of these funds is likely to be the fair value, which is represented by the net asset value. Redemption is permitted daily without written notice. Solitario’s money market funds of $ 6,398,000 and $ 7,738,000 , respectively, at September 30, 2024 and December 31, 2023 are included in short-term investments. Restricted Cash Solitario’s restricted cash represents investments in certificates of deposit and are restricted primarily for reclamation funding or surety bonds. Restricted cash and cash equivalents balances are carried at fair value. Non-current restricted cash is reported in a separate line on the condensed consolidated balance sheets and totaled $ 100 ,000 at September 30, 2024. There were no restricted cash amounts at December 31, 2023. Cash, excluding restricted cash, at September 30, 2024 and December 31, 2023 was $ 86,000 and $ 200,000 , respectively. Short-term investments Solitario’s short-term investments at September 30, 2024 consists of its investment of $ 6,398,000 in a money market account held in a brokerage firm. At December 31, 2023 Solitario’s short term investments included a money market account of $ 7,738,000 and United States Treasury Securities (“USTS”) of $ 698,000 with maturities between one and two months. Earnings per share The calculation of basic and diluted 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, 2024 and 2023. Potentially dilutive shares related to outstanding common stock options of 5,348,500 and 3,828,500 , respectively, for the three and nine months ended September 30, 2024 and outstanding common stock options of 5,195,000 and 5,390,000 , respectively, for the three and nine months ended September 30, 2023 were excluded from the calculation of diluted loss per share because the effects were anti-dilutive. 2. Mineral Properties The following table details Solitario’s investment in Mineral Properties: (in thousands) September 30, December 31, 2024 2023 Exploration Lik (Alaska – US) $ 15,611 $ 15,611 Golden Crest (South Dakota – US) 1,078 1,035 Cat Creek (Colorado – US) 12 - Total exploration mineral properties $ 16,701 $ 16,646 During the nine months ended September 30, 2024, Solitario added a new area to its existing Golden Crest Project, covering approximately 98 claims . The initial cost for staking and recording these claims of $ 43,000 was capitalized as mineral properties. In addition, during the nine months ended September 30, 2024, Solitario acquired a new early-stage exploration project, the Cat Creek Project, and capitalized its initial lease acquisition cost of $ 12,000 . Solitario did not add any new exploration properties or projects during the three months ended September 30, 2024 nor the three and nine months ended September 30, 2023. All exploration costs on our exploration properties, none of which have proven and probable reserves, including any additional costs incurred for subsequent lease payments or exploration activities related to our projects, are expensed as incurred. 8 Table of Contents Exploration expense The following items comprised exploration expense: (in thousands) Three months ended September 30, Nine months ended September 30, 2024 2023 2024 2023 Geologic and field expenses $ 1,977 $ 895 $ 2,628 $ 1,630 Administrative 90 23 280 118 Total exploration costs $ 2,067 $ 918 $ 2,908 $ 1,748 Asset Retirement Obligation and Reclamation liabilities Solitario recorded an asset retirement obligation of $ 125,000 at September 30, 2024 for Solitario’s estimated reclamation cost of the existing disturbance at the Lik Project. This disturbance consists of an exploration camp including certain drill sites and access roads at the camp. The estimate was based upon estimated cash costs for reclamation as determined by Solitario and its joint venture partner Teck and is supported by a permitting bond required by the State of Alaska, for which Solitario has purchased a reclamation bond insurance policy in the event Solitario or Teck, do not complete required reclamation. Solitario has not applied a discount rate to the recorded asset retirement obligation as the estimated time frame for reclamation is not currently known, as completion reclamation is not expected to occur until the end of the related project life, which would follow future development and operations, the start of which cannot be estimated or assured at this time. Additionally, no depreciation will be recorded on the related asset for the asset retirement obligation until the Lik Project goes into operation, which cannot be assured. Solitario is also involved in certain matters concerning its current drilling program remediation at its Golden Crest Project. Generally, the remediation at Golden Crest is carried out concurrently with drilling activities, with only ongoing contouring and reseeding of drill sites upon completion of drilling. At September 30, 2024, Solitario recorded a reclamation liability of $ 20,000 , included in asset retirement and reclamation liabilities related to the Golden Crest Project. 3. Marketable Equity Securities Solitario's investments in marketable equity securities are carried at fair value, which is based upon quoted prices of the securities owned. The cost of marketable equity securities sold is determined by the specific identification method. Changes in fair value are recorded in the condensed consolidated statement of operations. At September 30, 2024 and December 31, 2023 Solitario owned the following marketable equity securities: September 30, 2024 December 31, 2023 Shares Fair value (000’s) Shares Fair value (000’s) Kinross Gold Corp. 100,000 $ 936 100,000 $ 605 Vendetta Mining Corp. 7,750,000 57 7,750,000 118 Vox Royalty Corp. 134,055 405 134,055 276 Highlander Silver Corp. - - 100,000 33 Total $ 1,398 $ 1,032 The following tables summarize Solitario’s marketable equity securities and adjustments to fair value: (in thousands) September 30, 2024 December 31, 2023 Marketable equity securities at cost $ 1,440 $ 1,440 Cumulative unrealized loss on marketable equity securities ( 42 ) ( 408 ) Marketable equity securities at fair value $ 1,398 $ 1,032 9 Table of Contents The following table represents changes in marketable equity securities: (in thousands) Three months ended September 30, Nine months ended September 30, 2024 2023 2024 2023 Cost of marketable equity securities sold $ - $ - $ - $ - Realized gain on marketable equity securities sold - - 54 - Proceeds from the sale of marketable equity securities sold - - ( 54 ) - Net (loss) gain on marketable equity securities 110 ( 141 ) 420 ( 39 ) Change in marketable equity securities at fair value $ 110 $ ( 141 ) $ 366 $ ( 39 ) The following table represents the realized and unrealized (loss) gain on marketable equity securities: (in thousands) Three months ended September 30, Nine months ended September 30, 2024 2023 2024 2023 Unrealized gain (loss) on marketable equity securities $ 110 $ ( 141 ) $ 420 $ ( 39 ) Realized (gain) on marketable equity securities sold - - ( 54 ) - Net gain (loss) on marketable equity securities $ 110 $ ( 141 ) $ 366 $ ( 39 ) During the nine months ended September 30, 2024, Solitario sold 100,000 shares of Highlander Silver Corp. (“Highlander”) common stock for proceeds of $ 54,000 and recorded a gain on sale of $ 54,000 on the date of sale. Solitario did not sell any marketable equity securities during the three months ended September 30, 2024. During the three and nine months ended September 30, 2023, Solitario did not sell any marketable equity securities. 4. Leases Solitario leases one facility, its Wheat Ridge, Colorado office, that has a term of more than one year. Solitario has no other material operating lease costs. During the nine months ended September 30, 2023, Solitario entered into an extension of the lease as 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 $ 87,000 . The WR Lease is classified as an operating lease and has a term of 17 months at September 30, 2024, with no renewal option. At September 30, 2024 and December 31, 2023, 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 over the lease term, with variable lease payments recognized in the period those payments are incurred. During the three and nine months ended September 30, 2024, cash lease payments of $ 11,000 and $ 33,000 , respectively, were made on the WR Lease. During the three and nine months ended September 30, 2023, cash lease payments of $ 11,000 and $ 33,000 , respectively, were made on the WR Lease. During the three and nine months ended September 30, 2024, Solitario recognized $ 10,000 and $ 31,000 , 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, 2023, 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. These cash payments, less imputed interest for each period, reduced the related liability on the WR Lease. Upon the extension of the WR Lease during 2023, the discount rate within the WR Lease was not determinable and Solitario applied a discount rate of 7 % based upon Solitario’s estimate of its cost of capital to determine the asset and liability. 10 Table of Contents The maturities of Solitario’s lease liability for its WR Lease are as follows at September 30, 2024: Future lease payments (in thousands) Remaining payments 2024 $ 11 2025 45 2026 7 Total lease payments 63 Less amount of payments representing interest ( 3 ) Present value of lease payments $ 60 5 Other Assets The following items comprised other assets: (in thousands) September 30, December 31, 2024 2023 Furniture and fixtures, net of accumulated depreciation $ 74 $ 83 Office lease asset 56 83 Other assets 4 4 Total other $ 134 $ 170 6. Derivative Instruments Covered call options From time-to-time Solitario has sold covered call options against its holdings of shares of common stock of Kinross Gold Corporation (“Kinross”) included in marketable equity securities. 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. At September 30, 2024, Solitario has recorded a liability related to covered calls outstanding on its holdings of Kinross of $ 82,000 . During the nine months ended September 30, 2024 and 2023, Solitario sold covered calls against its holdings of Kinross for cash proceeds of $ 39,000 and $ 31,000 , respectively. During the three and nine months ended September 30, 2024, Solitario recorded a loss on derivative instruments related to those covered calls of $ 22,000 and $ 43,000 , respectively. During the three and nine months ended September 30, 2023, Solitario recorded a gain on derivative instruments related to those covered calls of $ 7,000 and $ 30,000 , respectively. 7. Fair Value Solitario accounts for its financial instruments under ASC 820 Fair Value Measurement . During the nine months ended September 30, 2024, 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 September 30, 2024: (in thousands) Level 1 Level 2 Level 3 Total Assets Short-term investments $ 6,398 $ - $ - $ 6,398 Marketable equity securities $ 1,398 $ - $ - $ 1,398 Liabilities Kinross call options $ 82 $ - $ - $ 82 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 December 31, 2023: (in thousands) Level 1 Level 2 Level 3 Total Assets Short-term investments $ 8,436 $ - $ - $ 8,436 Marketable equity securities $ 1,032 $ - $ - $ 1,032 11 Table of Contents 8. Commitments and Contingencies Solitario has recorded an asset retirement and reclamation liability obligation of $ 145,000 related to its Lik and Golden Crest projects. 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 September 30, 2024 of $ 63,000 through February 2026. 9. Income Taxes Solitario accounts for income taxes in accordance with ASC 740 Income Taxes . Under ASC 740, income taxes are provided for the tax effects of transactions reported in the condensed consolidated financial statements and consist of taxes currently due plus deferred taxes related to certain income and expenses recognized in different periods for financial and income tax reporting purposes. Deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes are also recognized for operating losses and tax credits that are available to offset future taxable income and income taxes, respectively. 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 September 30, 2024 and December 31, 2023, 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 nine months ended September 30, 2024 and 2023, Solitario recorded no deferred tax expense. 10. Employee Stock Compensation Plans 2013 Plan On June 18, 2013, Solitario’s shareholders approved the 2013 Solitario Exploration & Royalty Corp. Omnibus Stock and Incentive Plan, as amended (the “2013 Plan”), which expired in April 2023. Under the terms of the 2013 Plan, a total of 5,750,000 shares of Solitario common stock were reserved for awards to directors, officers, employees and consultants. Awards granted under the 2013 Plan permitted the Board of Directors of the Company (the “Board of Directors”) or a committee appointed by the Board of Directors to grant awards in the form of stock options, stock appreciation rights, restricted stock, and restricted stock units. From the date of its expiration 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. The outstanding awards under the 2013 Plan are detailed below. As of September 30, 2024 and December 31, 2023, there were granted options outstanding under the 2013 Plan to acquire 3,173,500 and 3,778,500 shares, respectively, of Solitario common stock. Of these, as of September 30, 2024 and December 31, 2023, there were options that are vested and exercisable to acquire 2,171,000 and 2,563,500 , respectively, shares of Solitario common stock, with exercise prices between $ 0.20 and $ 0.69 per share. As of September 30, 2024, the outstanding stock options under the 2013 Plan have an intrinsic value of $ 718,000 and a weighted average life of 2.09 years. During the three and nine months ended September 30, 2024, options previously granted under the 2013 Plan for 200,000 and 250,000 shares were exercised with exercise prices between $ 0.20 per share and $ 0.28 per share, for proceeds of $ 40,000 and $ 54,000 , respectively, which had intrinsic values of $ 132,000 and $ 144,000 , respectively, on the dates of exercise. During the three and nine months ended September 30, 2023, options for 145,000 and 195,000 shares, respectively, were exercised with exercise prices between $ 0.28 and $ 0.31 per share for proceeds of $ 45,000 and $ 59,000 , respectively, which had intrinsic values of $ 37,000 and $ 52,000 , respectively, on the date of exercise. 12 Table of Contents 2023 Plan 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 from the date of its adoption. As of September 30, 2024 and December 31, 2023, there were options for 2,175,000 and 50,000 shares, respectively, of Solitario common stock outstanding under the 2023 Plan of which there are options that are vested and exercisable to acquire 543,750 and 12,500 , shares, respectively, of Solitario common stock with exercise prices between $ 0.51 and $ 0.85 per share. As of September 30, 2024, the outstanding stock options under the 2023 Plan have an intrinsic value of $ 10,000 and a weighted average life of 4.67 years. During the nine months ended September 30, 2024, under the 2023 Plan Solitario granted options with a five-year life to purchase an aggregate of 2,125,000 shares of Solitario common stock, with an exercise price of $ 0.85 per share, a five-year term, which vest 25% on the date of grant and 25% on each anniversary date for the next three years and have a grant date fair value of $ 1,120,000 based upon a five-year life, volatility of 71.5 % and risk-free interest rate of 4.3 %. During the three months ended September 30, 2024 and during the three and nine months ended September 30, 2023, Solitario did not grant any options under the 2023 Plan. Stock-based compensation expense During the three and nine months ended September 30, 2024, Solitario recorded stock-based compensation expense of $ 125,000 and $ 540,000 , respectively, included in general and administrative expense. During the three and nine months ended September 30, 2023, Solitario recorded stock-based compensation expense of $ 58,000 and $ 184,000 , respectively, included in general and administrative expense. At September 30, 2024, the total unrecognized stock-based compensation expense related to non-vested options was $ 966,000 and is expected to be recognized over a period of 27 months. 11. Shareholders’ Equity Shareholders’ Equity for the nine months ended September 30, 2024: (in thousands, except Share amounts) Common Common Additional Total Stock Stock Paid-in Accumulated Shareholders’ Shares Amount Capital Deficit Equity Balance at December 31, 2023 79,586,358 $ 796 $ 82,796 $ ( 57,642 ) $ 25,950 Stock-based compensation expense - - 59 - 59 Issuance of shares- option exercises 50,000 - 14 - 14 Net loss - - - ( 730 ) ( 730 ) Balance at March 31, 2024 79,636,358 $ 796 $ 82,869 $ ( 58,372 ) $ 25,293 Stock-based compensation expense - - 356 - 356 Issuance of shares for cash - ATM 1,802,060 18 1,200 - 1,218 Net loss - - - ( 762 ) ( 762 ) Balance at June 30, 2024 81,438,418 $ 814 $ 84,425 $ ( 59,134 ) $ 26,105 Stock-based compensation expense - - 125 - 125 Issuance of shares- option exercises 200,000 2 38 - 40 Net loss - - - ( 2,276 ) ( 2,276 ) Balance at September 30, 2024 81,638,418 $ 816 $ 84,588 $ ( 61,410 ) $ 23,994 13 Table of Contents Shareholders’ Equity for the nine months ended September 30, 2023: (in thousands, except Share amounts) Common Common Additional Total Stock Stock Paid-in Accumulated Shareholders’ Shares Amount Capital Deficit Equity Balance at December 31, 2022 64,801,373 $ 648 $ 74,886 $ ( 53,888 ) $ 21,646 Stock-based compensation expense - - 67 - 67 Net loss - - - ( 380 ) ( 380 ) Balance at March 31, 2023 64,801,373 $ 648 $ 74,953 $ ( 54,268 ) $ 21,333 Stock-based compensation expense - - 59 - 59 Issuance of shares - option exercises 50,000 1 13 - 14 Net loss - - - ( 1,040 ) ( 1,040 ) Balance at June 30, 2023 64,851,373 $ 649 $ 75,025 $ ( 55,308 ) $ 20,366 Stock-based compensation expense - - 58 - 58 Issuance of shares - option exercises 145,000 1 44 - 45 Private placement 4,166,667 42 2,380 2,422 Net loss - - - ( 1,292 ) ( 1,292 ) Balance at September 30, 2023 69,163,040 $ 692 $ 77,507 $ ( 56,600 ) $ 21,599 At the Market Offering Agreement On December 19, 2023, Solitario entered into an amendment to its at-the-market offering agreement that was originally entered into in 2021 (the “ATM Agreement”) with H. C. 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 $ 10.0 million (the “ATM Program”). 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 nine months ended September 30, 2024, Solitario sold an aggregate of 1,802,060 shares of common stock under the ATM Agreement at an average price of $ 0.70 per share for net proceeds of $ 1,218,000 , after commissions and sale expenses. During the three months ended September 30, 2024, and during the three and nine months ended September 30, 2023, Solitario did not sell any shares under the ATM Program. Private Placement On July 31, 2023, Solitario entered into a Stock Purchase Agreement (the “SPA”) with Newmont Overseas Exploration Ltd. (“Newmont”), for the purchase and sale of 4,166,667 shares of Solitario common stock (the “Shares”), at a price of $ 0.60 per share for net proceeds of $ 2,422,000 after certain legal and regulatory offering costs of $ 78,000 . In connection with the sale of the Shares Solitario and Newmont entered into an Investor Rights Agreement, which granted Newmont certain additional rights, including a preemptive right, certain anti-dilution protections and certain other rights related to Solitario’s Golden Crest mineral property assets. 14 Table of Contents