The following tables summarize Solitario’s marketable equity securities and adjustments to fair value:

At March 31, 2024 and December 31, 2023, Solitario owns the following marketable equity securities:

The following table represents changes intables summarize Solitario’s marketable equity securities duringand adjustments to fair value:

During the three months ended March 31, 2024 and 2023, and 2022:

The following table represents the realized and unrealized gain (loss) on marketable equity securities:

Solitario did not sell any marketable equity securities, and the increase in the fair value in its marketable equity securities of $8,000 and $329,000, respectively during the three months ended March 31, 2023. During the three months ended March 31, 2022, Solitario sold 500,000 shares of Vendetta Mining Corp. (“Vendetta”) common stock for proceeds of $26,0002024 and recorded a loss2023 was related to unrealized gain on sale of $81,000 on the date of sale.marketable equity securities.

4. Leases

Solitario accounts for its leases in accordance with ASC 842. Solitario leases one facility, its Wheat Ridge, Colorado office, (the “WR Lease”), that has a term of more than one year. Solitario has no other material operating lease costs. The WR Lease is classified as an operating lease and has a term of seven23 months at March 31, 2023,2024, with no renewal option. At March 31, 20232024 and December 31, 2022,2023, 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 liabilityliabilities in the condensed consolidated balance sheet. The amortization of right of useright-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 months ended March 31, 20232024 and 2022, Solitario recognized $10,000 and $10,000, 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 months ended March 31, 2023, and 2022, cash lease payments of $11,000 and $11,000, respectively, were made on the WR Lease. During the three months ended March 31, 2024 and 2023, respectively, Solitario recognized $9,000 and $10,000, 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 of $1,000 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%7% based upon Solitario’s estimate of its cost of capital. Solitario has $25,000capital to determine the asset and liability upon the extension of remaining cash payments under the WR Lease as of March 31,lease during 2023.

The maturities of Solitario’s lease liability for its WR Lease are as follows at March 31, 2023:2024:

Supplemental cash flow information related to our operating lease was as follows for the three months ended March 31, 2023 and 2022:

5 Other Assets

TheOther assets consisted of the following items comprised other assets:items:

6. Fair Value of Financial Instruments

Solitario accounts for its financial instruments under ASC 820. For certain of Solitario’s financial instruments, including cash and cash equivalents and payables, the carrying amounts approximate fair value due to their short-term maturities. Solitario’s short-term investments in USTS, and marketable equity securities are carried at their estimated fair value based on quoted market prices. During the three months ended March 31, 2024 and 2023, 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 March 31, 2023:2024:

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, 2022:2023:

7. Income Taxes

Solitario accounts for income taxes in accordance with ASC 740.740 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 March 31, 20232024 and December 31, 2022,2023, 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 months ended March 31, 20232024 and 2022,2023, Solitario recorded no deferred tax expense.

8. Commitments and contingencies

Solitario has recorded an asset retirement obligation of $125,000 related to its Lik projectProject in Alaska. See Note 2, “Mineral Properties,” above.

Solitario leases office space under a non-cancelable operating lease for the WR LeaseWheat Ridge, Colorado office which provides for future total minimum rent payments as of 25,000March 31, 2024 of $85,000 through October of 2023.February 2026.

9. Employee Stock Compensation Plans

During the three months ended March 31, 2024 and 2023, Solitario recorded stock-based compensation expense of $59,000 and $67,000, respectively included in general and administrative expense. At March 31, 2024, the total unrecognized stock option compensation cost related to non-vested options is $327,000 and is expected to be recognized over a weighted average period of 17 months.

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, as amended, a total of 5,750,000 shares of Solitario common stock were reserved for awards to directors, officers, employees and consultants. AwardsThe 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. As of March 31, 2024, 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.

As of March 31, 2024 and December 31, 2023, there were 3,728,500 and 3,778,500 options outstanding under the 2013 Plan. Of these, as of March 31, 2024 and December 31, 2023, there were options that are vested and exercisable to acquire 2,513,500 and 2,563,500, respectively, shares of Solitario common stock, with exercise prices between $0.20 and $0.60 per share. As of March 31, 2024, the outstanding stock options under the 2013 Plan have an intrinsic value of $491,000 and a weighted average life of 2.59 years. During the three months ended March 31, 2024, options granted under the 2023 Plan for 50,000 shares were exercised for proceeds of $14,000. No options were exercised from the 2013 Plan during the three months ended March 31, 2023.

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 20132023 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. No awards were granted under the 2023 Plan during the three months ended March 31, 2024.

As of March 31, 2023,2024 and December 31, 2022,2023, there were 50,000 options outstanding under the 2023 Plan of which there are options that are vested and exercisable to acquire 5,390,000 and 5,390,000, respectively,12,500, shares of Solitario common stock, with exercise prices between $0.20 and $0.67 per share. During the three months ended March 31, 2023, and 2022, Solitario did not grant any options. During the three months ended March 31, 2023, no options were exercised. During the three months ended March 31, 2022, options for 73,000 shares were exercised with an average exercise price of $0.26$0.51 per share for proceedsshare. As of $19,000.March 31, 2024, the outstanding stock options under the 2023 Plan have an intrinsic value of $4,500 and a weighted average life of 4.9 years.

During the three months ended March 31, 2024, Solitario did not grant any options under the 2023 Plan and 2022, Solitario recorded stock option compensation expense of $67,000 and $13,000, respectively. At March 31,no options were exercised under the 2023 the total unrecognized stock option compensation cost related to non-vested options is $550,000 and is expected to be recognized over a weighted average period of 29 months.Plan.

10. Shareholders’ Equity

Shareholders’ Equity for the three months ended March 31, 2023:2024:

Shareholders’ Equity for the three months ended March 31, 2022:2023:

At the Market Offering Agreement

On February 2, 2021,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 $9.0$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 Solitario did not sell any shares under the ATM program during the three months ended March 31, 2023, Solitario did not sell any shares of common stock under the ATM Agreement. 2024 and 2023.

11. Subsequent Events

During the three months ended March 31, 2022,April 2024, Solitario sold an aggregate of 2,650,7241,651,309 shares of common stock under the ATM Agreement at an averagea price of $0.79$0.68 per share for net proceeds of $2,023,000$1,085,000 after commissions and saleother expenses.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the information contained in the consolidated financial statements of Solitario for the years ended December 31, 20222023 and 2021,2022, and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in Solitario’s 2023 Annual Report on Form 10-K for the year ended December 31, 2022.Report. Solitario's financial condition and results of operations are not necessarily indicative of what may be expected in future periods. Unless otherwise indicated, all references to dollars are to U.S. dollars.

(a) Business Overview and Summary

We are an exploration stage company as defined by rules issued by the SEC, with a focus on the acquisition of precious and base metal properties with exploration potential and the development or purchase of royalty interests. Currently our primary focus is the acquisition and exploration of precious metals, zinc and other base metal exploration mineral properties. However, we continue to evaluate other mineral properties for acquisition, and we hold a portfolio of mineral exploration properties and assets for future sale, joint venture or on which to create a royalty prior to the establishment of proven and probable reserves. Although our mineral properties may be developed in the future by us, through a joint venture or by a third party, we have never developed a mineral property. In addition to focusing on our current mineral exploration properties, we also from time to timetime-to-time evaluate potential strategic transactions for the acquisition of new precious and base metal properties and assets with exploration potential.

Our current geographic focus for the evaluation of potential mineral property assets is in North and South America; however, we have conducted property evaluations for potential acquisition in other parts of the world. At March 31, 2023,2024, we consider our Golden Crest projectProject in South Dakota, our carried interest in the Florida Canyon projectProject in Peru, and our interest in the Lik projectProject in Alaska to be our core mineral property assets. We are conducting exploration activities in South Dakotathe United States on our own at the Golden Crest Project and through joint ventures operated by our partners in Peru at the Florida Canyon projectProject and in Alaska at the Lik project.Project. We also conduct potential acquisition evaluations in other countries located in South and North America.

We have recorded revenue in the past from the sale of mineral properties, however revenues and / or proceeds from the sale or joint venture of properties or assets, although generally significant when they have occurred in the past, have not been a consistent source of annual revenue and would only occur in the future, if at all, on an infrequent basis. We have reduced our exposure to the costs of our exploration activities in the past through the use of joint ventures. Although we anticipate that the use of joint ventures to fund some of our exploration activities will continue for the foreseeable future, we can provide no assurance that these or other sources of capital will be available in sufficient amounts to meet our needs, if at all.

As of March 31, 2023,2024, we have balances of cash and short-term investments that we anticipate using, in part, to (i) fund costs and activities intended to further the exploration of our Lik, Florida Canyon and Golden Crest projects, (ii) conduct reconnaissance exploration and (iii) 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 advanced mineral exploration projects or other related assets at potentially attractive terms.

As of March 31, 2023, we do not expect the effects of the COVID-19 pandemic to have a material effect on our planned activities related to the exploration of our Lik, Florida Canyon or Golden Crest projects. However, we continue to monitor planned activities for the full year 2023 at our Florida Canyon, Lik and Golden Crest projects. The extent to which the COVID-19 pandemic impacts our business, and projects, including our exploration and other activities and the market for our securities, may be impacted by public health threats, rising geopolitical tension, general economic uncertainty and market volatility will depend on future developments, which are highly uncertain and cannot be predicted at this time. Please see Item 1A, “Risk Factors,” in our 2023 Annual Report on Form 10-K for the year ended December 31, 2022.Report.

(b) Results of Operations

Comparison of the quarter ended March 31, 20232024 to the quarter ended March 31, 2022.2023.

We had a net loss of $730,000 or $0.01 per basic and diluted share for the three months ended March 31, 2024 compared to a net loss of $380,000 or $0.01 per basic and diluted share for the three months ended March 31, 2023 compared to a net loss of $514,000 or $0.01 per basic and diluted share for the three months ended March 31, 2022.2023.  As explained in more detail below, the primary reasons for the decreaseincrease in the net loss in the three months ended March 31, 20232024 compared to the loss in the three months ended March 31, 20222023 were (i) a reduction in unrealized gain on marketable equity securities to $8,000 during the recording ofthree months ended March 31, 2024 compared to an unrealized gain on marketable equity securities of $329,000 during the three months ended March 31, 2023 compared2023; (ii) an increase in exploration expense to an unrealized loss on marketable equity securities of $213,000$354,000 during the three months ended March 31 2022; (ii)2024 compared to exploration expense of $275,000 during the recording of anthree months ended March 31, 2023; and (iii) no unrealized gain on short-term investments during the three months ended March 31, 2024 compared to a gain on short-term investments of $21,000 during the three months ended March 31, 2023 compared2023.  Partially offsetting this increase in the net loss were (i) a decrease in general and administrative expense to an unrealized loss on short-term investments of $51,000$472,000 during the three months ended March 31, 2022; and (iii) no loss on sale of marketable equity securities during the three months ended March 31, 20232024 compared to a loss on the sale of marketable equity securities of $81,000 during the three months ended March 31, 2022. Partially offsetting this decrease in the net loss were (i) an increase in exploration expense to $275,000 during the three months ended March 31, 2023 compared to exploration expense of $226,000 during the three months ended March 31, 2022; and (ii) an increase in general and administrative costs toexpense of $476,000 during the three months ended March 31, 2023 compared2023; and (ii) an increase in interest and dividend income to general and administrative costs of $387,000$95,000 during the three months ended March 31, 2022.2024 compared to interest and dividend income of $27,000 during the three months ended March 31, 2023.  Each of the major components of these items is discussed in more detail below.

                Our exploration expense increased to $354,000 during the three months ended March 31, 2024 compared to exploration expense of $275,000 during the three months ended March 31, 2023 compared to exploration expense of $226,000 during the three months ended March 31, 2022.2023.  The increase was primarily as a result of an increase in expenses at our Golden Crest projectProject to $335,000 during the three months ended March 31, 2024 compared to exploration expense of $241,000 during the three months ended March 31, 2023 compared to exploration expense of $127,000 during the three months ended March 31, 2022.2023.  These costs were partially offset by a reduction in our reconnaissance exploration expenses to $11,000 during the three months ended March 31, 2024 compared to reconnaissance exploration expenses of $29,000 during the three months ended March 31, 2023 compared to reconnaissance exploration expenses of $95,000 during 2022.2023.  We also incurred exploration expenses of $5,000$8,000 and $4,000,$5,000, respectively, at our Lik projectProject in Alaska during the three months ended March 31, 20232024 and 2022.2023.  Our exploration expenditures are normally lower during the first quarter of our fiscal year as a result of weather limitations.  During the three months ended March 31, 20232024 we had twothree contract geologists at our Golden Crest projectProject along with several part-time employees.  During the three months ended March 31, 20232024 and 2022,2023, our Denver personnel spent a majoritysignificant portion of their time on Golden Crest and various reconnaissance exploration activities described above and related matters.  Our full-year 20232024 total exploration and development budget is approximately $2,000,000,$3,900,000, which reflects a similar level of anticipated activitiespotential drilling program at the Golden Crest project during 2023 compared to 2022,2024 budgeted at $1,700,000 as well as a proposed limited exploration and drilling program at Lik.  Nexa is responsible for all planned 20232024 exploration expenditures at Florida Canyon.  The proposed 20232024 budget does not reflect any costs for drilling the Golden Crest project or any exploration costs for new projects or assets we may acquire during 2023.2024.  Our planned exploration activities in 20232024 may be modified, as necessary for any drilling programs we may undertake at Golden Crest, Lik or other projects we may acquire.  Changes may occur to our planned 20232024 exploration expenditures related to any number of factors including permitting delays, potential acquisition of new properties, joint venture funding, commodity prices and changes in the deployment of our capital. We expect our full-year exploration expenditures for 20232024 to be similar tohigher than the exploration expenditures for full-year 2022.2023.

Exploration expense (in thousands) by project for the three months ended March 31, 20232024 and 20222023 consisted of the following:

General and administrative costs, excluding stock option compensation costs, discussed below, were $413,000 during the three months ended March 31, 2024 compared to $409,000 during the three months ended March 31, 2023 compared to $374,000 during the three months ended March 31, 2022.2023. The major components of these costs were related to (i) salaries and benefit expense of $131,000 during the three months ended March 31, 2024 compared to salary and benefit costs of $158,000 during the three months ended March 31, 2023, primarily due to timing of the year-end bonus between 2022 and 2023 of $60,000 charged in 2023, which was partially offset by an increase in salary amounts during 2024 compared to salary2023; (ii) legal and benefit costsprofessional expenditures of $119,000$71,000 during the three months ended March 31, 2022, primarily due to an increase in salary amounts during 20232024 compared to 2022; (ii) legal and professional expenditures of $81,000 during the three months ended March 31, 2023 compared to legal2023; (iii) office rent and professional expendituresexpenses of $132,000$25,000 during the three months ended March 31, 2022, with the higher amount in 2022 primarily related2024 compared to increased costs for accounting services, including work performed on our SK-1300 mineral reserve reports completed during the three months ended March 31, 2022; (iii) office rent and expenses of $31,000 during the three months ended March 31, 2023 compared to $20,000 during the three months ended March 31, 2022;2023; and (iv) travel and shareholder relation costs of $186,000 during the three months ended March 31, 2024 compared to $139,000 during the three months ended March 31, 2023 compared to $103,000 during the three months ended March 31, 2022.2023. We anticipate the full-year general and administrative costs will be higher for 20232024 compared to 20222023 primarily due to increased activity at both our Golden Crest and Lik projects.Projects.

We recorded $67,000$59,000 of stock option expense for the amortization of unvested grant date fair value with a credit to additional paid-in-capital during the three months ended March 31, 20232024 compared to $13,000$67,000 of stock option compensation expense during the three months ended March 31, 2022.2023. The higher costs during the three months ended March 31, 2023 related to the grant date fair value of 2,360,000 option grants made during 2022 which are being amortized over three years. There were no significant option grants during 2021the 2024 or 2022 which increased2023 periods, and accordingly, the stock option expense in 2022the three months ended March 31, 2024 was reduced compared to the stock option expense in three months ended March 31, 2023. These non-cash charges for the amortization of grant date fair values are related to vesting of stock options outstanding during the three months ended March 31, 20232024 and 2022.2023. See Note 9, “Employee Stock Compensation Plans,” above, for additional information on our stock option expense.

We did not sell anyrecorded an unrealized gain on marketable equity securities of $8,000 during the three months ended March 31, 2023. During the three months ended March 31, 2022, we sold 500,000 shares of Vendetta common stock for proceeds of $26,000 and recorded a loss on sale of marketable equity securities of $81,000. See Note 3 “Marketable Equity Securities” above2024 compared to the condensed consolidated financial statements for a discussion of the sale of Marketable Equity Securities. We may sell shares of our holdings of marketable equity securities during the remainder of 2023; however, we do not expect sales of marketable equity securities to be a significant source of cash for the year ended December 31, 2023.

We recorded an unrealized gain on marketable equity securities of $329,000 during the three months ended March 31, 2023 compared to an unrealized gain on marketable equity securities of $213,000 during the three months ended March 31, 2022.2023. The gain during the three months ended March 31, 20232024 was primarily related to an increase in the value of our holdings after the sales of marketable equity securities discussed above in Note 3 “Marketable Equity Securities” to the condensed consolidated financial statements, of (i) 100,000 shares of Kinross Gold Corp. (“Kinross”)common stock, which increased from a fair value of $605,000 at December 31, 2023 to a fair value of $613,000 at March 31, 2024; (ii) 134,055 shares of Vox common stock, which increased from a fair value of $276,000 at December 31, 2023 to a fair value of $280,000 at March 31, 2024; (iii) 7,750,000 shares of Vendetta common stock, which decreased from a fair value of $118,000 at December 31, 2023 to a fair value of $115,000 at March 31, 2024; and (iv) a decrease in the fair value of our holdings of Highlander Silver Corp. from $33,000 at December 31, 2023 to $32,000 at March 31, 2024. The gain during the three months ended March 31, 2023 was primarily related to an increase in the value of our holdings of marketable equity securities discussed above in Note 3 “Marketable Equity Securities” to the condensed consolidated financial statements, of (i) 100,000 shares of Kinross common stock, which increased from a fair value of $409,000 at December 31, 2022 to a fair value of $471,000 at March 31, 2023; (ii) 134,055 shares of Vox common stock, which increased from a fair value of $311,000 at December 31, 2022 to a fair value of $412,000 at March 31, 2023; (iii) 7,750,000 shares of Vendetta common stock, which increased from a fair value of $229,000 at December 31, 2022 to a fair value of $373,000 at March 31, 2023; and (iv) a gain in the fair value of our holdings of Highlander Silver Corp. to $22,000 during the three months ended March 31, 2023, which was recorded at a zero fair value at December 31, 2022.

We recorded interest and dividend income of $27,000$95,000 during the three months ended March 31, 20232024 compared to interest income of $27,000 during the three months ended March 31, 2022. Although there was no change2023. The increase in interest income there was a decreaseis related to an increase in the outstanding balancebalances of our short-term investments as a result of the cash invested from two private placements during 2023 of $7.1 million as well as an increase in interest rates in the three months ended March 31, 2023 compared to 2022, however this was offset by an increase in average interest rates earned during the three months ended March 31, 20232024 compared to the three months ended March 31, 2022.2023. We anticipate our interest income will decrease in 2023be higher during 2024 compared to 2022 as a result of the2023. However, we anticipate we will use of our short-term investments and our cash balances during the remainder of 2024 for ordinary overhead, operational costs, and the exploration, evaluation and or acquisition of mineral properties discussed above. See “Liquidity and Capital Resources” below for further discussion of our cash and cash equivalent balances.

We recorded a non-cash unrealized gain on our short-term investments of $21,000 during the three months ended March 31, 2023, compared to an unrealizedwith no similar gain or loss on our short-term investments of $51,000 during the three months ended March 31, 2022 primarily due2023. This unrealized gain is related to an increasethe changes in the fair value of our investments in USTS as certain individual treasury securities matured and their value increased from prior mark-to-market fair value toward their face value which is paid on maturity.interest rates change. We generally invest in a ladder ofhad no outstanding USTS that mature in 30 days to one year and hold those securities to maturity. The total value of individual securities may increase above or decrease below their face values during the time we hold them as short-term investments as a result of changes in interest rates. However, because we generally hold our investments in USTS and other short-term investments, such as certificates of deposit (“CD’s”), to maturity, these fluctuations tend to mitigate over time as we receive face value upon maturity. These changes in interest rates are related to many factors that are not related to our business and do not affect the yield-to-maturity quoted for our investments in USTS or CD’s at the time we acquire these short term investments, to the extent we hold the investments to maturity.three months ended March 31, 2024.

We regularly perform evaluations of our mineral property assets to assess the recoverability of our investments in these assets. All long-lived assets are reviewed for impairment whenever events or circumstances change which indicate the carrying amount of an asset may not be recoverable utilizing guidelines based upon future net cash flows from the asset as well as our estimates of the geological potential of an early-stage mineral property and its related value for future sale, joint venture or development by us or others. During the three months ended March 31, 20232024 and 2022,2023, we recorded no property impairments.

At March 31, 20232024 and 2022,2023, our net operating loss carry-forwards exceed our built-in gains on marketable equity securities resulting in a net tax asset position for which we provide a valuation allowance for all net deferred tax assets. We recorded no income tax expense or benefit during the three months ended March 31, 20232024 or 2022.2023. As a result of our exploration activities, we anticipate we will not have currently payable income taxes during 2023.2024. In addition to the valuation allowance discussed above, we provide a valuation allowance for our foreign net operating losses, which are primarily related to our exploration activities in Peru. We anticipate we will continue to provide a valuation allowance for these net operating losses until we are in a net tax liability position with regard to those countries where we operate or until it is more likely than not that we will be able to realize those net operating losses in the future.

(c) Liquidity and Capital Resources

Cash

As of March 31, 2023, we had $440,000 in cash. We intend to utilize a portion of this cash and a portion of our short-term investments, discussed below, to fund our ordinary overhead, operational costs, exploration activities and for the potential acquisition of additional mineral properties and other assets over the next several years.

Short-term Investments

As of March 31, 2023,2024, we had $3,163,000have $7,659,000 in cash and short-term investmentsinvestments. Our short-term investment is comprised of $7,518,000 invested in USTSa money market account with maturities of 30 days to eleven months. The USTS are recorded at their fair value, based upon quoted market prices.a brokerage firm. We anticipate we will roll over that portion of our short-term investments not used for exploration expenditures, operating costs or mineral property acquisitions as they become due during the remainder of 2023.2024. We intend to utilize a portion of our cash and short-term investments in our exploration activities and the potential acquisition of mineral assets over the next several years.

Investment in Marketable Equity Securities

Our marketable equity securities are carried at fair value, which is based upon market quotes of the underlying securities. At March 31, 2023,2024, we owned (i)own 7,750,000 shares of Vendetta common stock, with a fair value of $373,000; (ii) 100,000 shares of Kinross common stock, with a fair value of $471,000; (iii) 134,055 shares of Vox common stock with a fair value of $412,000 and (iv) 200,000 shares of Highlander Silver Corp. with acommon stock. At March 31, 2024, the Vendetta shares are recorded at their fair value of $22,000. All of our marketable equity securities$115,000, the Kinross shares are carriedrecorded at their fair values based upon quoted market prices.value of $613,000; the Vox shares are recorded at their fair value of $280,000 and the Highlander Silver Corp. shares are recorded at their fair value of $32,000. We did not sell any of our marketable equity securities during the three months ended March 31, 2024 or 2023. During the three months ended March 31, 2022, we sold certain portions of our marketable equity securities for proceeds of $26,000 and realized a loss on sale of marketable equity securities of $81,000. We anticipate we may sell some portion of our holdings of marketable equity securities during the remainder of 20232024 depending uponon cash needs and market conditions.

Working Capital

We had working capital of 4,694,000$8,657,000 at March 31, 20232024 compared to working capital of 4,991,000$9,309,000 as of December 31, 2022.2023. Our working capital at March 31, 20232024 consists primarily of our cash and cash equivalents, our investment in USTS,short-term investments, discussed above, our investment in marketable equity securities of $1,278,000,$1,040,000, and other current assets of $26,000,$205,000, less our accounts payable of $188,000$207,000 and other current liabilities of $25,000.$40,000. As of March 31, 2023, we believe2024, our cash balances along with our short-term investments and marketable equity securities are adequate to fund our expected expenditures over the next year.

The nature of the mineral exploration business requires significant sources of capital to fund exploration, development and operation of mining projects. We will need additional capital if we decide to develop or operate any of our current exploration projects or any projects or assets we may acquire. We anticipate we would finance any such development through the use of our cash reserves, short-term investments, joint ventures, issuance of debt or equity, or the sale of our interests in other exploration projects or assets.

Stock-Based Compensation Plans

As of March 31, 2024 and December 31, 2023, there were options outstanding from the 2013 Plan to acquire 3,728,500 and 3,778,500 shares, respectively, of Solitario common stock. The outstanding options have exercise prices between $0.60 per share and $0.20 per share. During the three months ended March 31, 2024, options for 50,000 shares were exercised with an exercise price of $0.28 per share for proceeds of $14,000. No options were exercised during the three months ended March 31, 2023. We do not anticipate the exercise of options to be a significant source of cash flow during the remainder of 2024.

Stock-Based Compensation Plans

As of March 31, 2023, and December 31, 2022 there were options outstanding to acquire 5,390,000 and 5,390,000, respectively, shares of Solitario common stock. The outstanding options have exercise prices between $0.20 per share and $0.67 per share. There were no options exercised during the three months ended March 31, 2023. During the three months ended March 31, 2022, options for 73,000 shares were exercised with an average exercise price of $0.26 per share for proceeds of $19,000. Options for 1,561,500 shares of Solitario Common Stock, with an exercise price of $0.31 per share, expire in October 2023. Unless the quoted market price of a share of our common stock exceeds $0.31 per share prior to the exercise date of these shares, we do not anticipate the exercise of options will be a significant source of cash flow during the remainder of 2023.

At the Market Offering Agreement

On February 2, 2021, SolitarioDecember 19, 2023, we entered into thean amendment to our ATM Agreement that was originally entered into in 2021 with Wainwright, under which Solitariowe may, from time to time, issue and sell shares of Solitario’sour 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$10.0 million. SolitarioThe 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. We did not sell any shares under the ATM agreementprogram during the three months ended March 31, 2024 and 2023. During the three months endedSubsequent to March 31, 2022, Solitario2024, we sold an aggregate1,651,309 shares of 2,650,724 shares ofour common stock under the ATM Agreement at an average price of $0.79 per shareprogram for net proceeds after commissions and expenses of approximately $2,023,000.$1,085,000.

(d) Cash Flows

Net cash used in operations during the three months ended March 31, 20232024 increased to $685,000$991,000 compared to $597,000$685,000 of net cash used in operations for the three months ended March 31, 20222023 primarily as a result of (i) an increase in exploration expense during the three months ended March 31, 2024 to $354,000 compared to $275,000 during the three months ended March 31, 2023 compared to exploration expense of $226,000 during the three months ended March 31, 2022;2023; and (ii) an increasea decrease in non-stock option general and administrative expense to $409,000 during the three months ended March 31, 2023 compared to $374,000 during the three months ended March 31, 2022, as discussed above, and (iii) a use of cash of $50,000 for the reduction of accounts payable and othercurrent liabilities during the three months ended March 31, 20232024 of $396,000 compared to a use of cash from a decrease in accounts payable and othercurrent liabilities of $20,000$50,000 during the three months ended March 31, 2021. Partially offsetting this increased use2023. There were additional accruals at the end of cash was a decreaseDecember 2023, including the 2023 bonus, and certain Golden Crest exploration expense accruals which were paid in prepaid expenses and other assets of $21,000 during the three months ended March 31, 2023,2024, which accounted for the large use of funds in 2024 compared to 2023. Partially offsetting this use of cash was an increase (use of cash) in prepaid expenses and other assets of $14,000the cash received for interest during the three months ended March 31, 2022.2024 period to $95,000 compared to cash received for interest and dividends from interest income of $27,000 during the comparable 2023 period. Based upon projected expenditures in our 20232024 budget, we anticipate continued use of funds from operations through the remainder of 2023,2024, primarily for exploration related to our Golden Crest and Lik projectsProjects and reconnaissance exploration. See “Results of Operations” discussed above for further explanation of some of these variances.

During the three months ended March 31, 2023, we received $809,000 in cash2024, $918,000 was provided from the net salesales of our short-term investments compared to the use of $1,578,000$809,000 in cash for net purchasesprovided from the sale of short-term investments during the three months ended March 31, 2022. The remaining change in investing activities related to proceeds2023. There were no other significant provisions or use of $26,000 fromcash during the sale ofthree months ended March 31, 2024 or 2023. We did not sell any marketable equity securities during the three months ended March 31 2022 and the purchase2024 or 2023. We may sell a portion of mineral properties of $10,000our marketable equity securities during the three months ended March 31, 2022 with no similar investment activitiesremainder of 2024; however, we do not anticipate the sale of marketable equity securities will be a significant source of cash during the three months ended March 31,remainder of 2023. We will continue to liquidate a portion of our short-term investments as needed to fund our operations and our potential mineral property acquisitions during the remainder of 2023.2024. Any potential mineral property acquisition or strategic corporate investment during the remainder of 20232024, discussed above, could involve a significant change in our cash provided or used for investing activities, depending on the structure of any potential transaction.

During the three months ended March 31, 2023, we did not sell any of our common stock. During the three months ended March 31, 2022,2024 we received net cash of $2,023,000 from the issuance of common stock under the ATM Program. In addition, during the three months ended March 31, 2022 we received $19,000$14,000 from the issuance of common stock from the exercise of stock options, discussed above in Note 9, “Employee Stock Compensation Plans”Plans,” to the condensed consolidated financial statements. No options were exercised during the three months ending March 31, 2023.

(e) Mineral Resources

CAUTIONARY NOTE REGARDING DISCLOSURE OF MINERAL PROPERTIES

Mineral Reserves and Resources

We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “1934 Act”), and applicable Canadian securities laws, which haveand as a result we report our mineral resources according to two different reporting standards. U.S. reporting requirements, are governed by Item 1300 of Regulation S-K (“S-K 1300”), as issued by the SEC. Canadian reporting requirements for disclosure of mineral properties are governed by National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”), as adopted from the definitions provided by the Canadian Institute of Mining, Metallurgy and Petroleum. Both sets of reporting standards have similar goals in terms of conveying an appropriate level of confidence in the disclosures being reported, but the standards generally embody slightly different approaches and definitions.

In our public filings in the U.S. and Canada and in certain other announcements not filed with the SEC, we disclose measured, indicated and inferred resources, each as defined in S-K 1300. The estimation of measured resources and indicated resources involve greater uncertainty as to their existence and economic feasibility than the estimation of proven and probable reserves, and therefore investors are cautioned not to assume that all or any part of measured or indicated resources will ever be converted into S-K 1300-compliant reserves. The estimation of inferred resources involves far greater uncertainty as to their existence and economic viability than the estimation of other categories of resources, and therefore it cannot be assumed that all or any part of inferred resources will ever be upgraded to a higher category. Therefore, investors are cautioned not to assume that all or any part of inferred resources exist, or that they can be mined legally or economically.

(f) Off-balance sheet arrangements

As of March 31, 2023,2024 and December 31, 2022,2023, we havehad no off-balance sheet obligations.

(g) Development Activities, Exploration Activities, Environmental Compliance and Contractual Obligations

We are not involved in any development activities, nor do we have any contractual obligations related to any potential development activities as of March 31, 2023.2024. As of March 31, 2023,2024, there have been no material changes to our contractual obligations for exploration activities, environmental compliance or other contractual obligations from those disclosed in our Management’s Discussion and Analysis included in our 2023 Annual Report on Form 10-K for the year ended December 31, 2022.Report.

(h) Discontinued Projects

We did not record any mineral property write-downs during the three months ended March 31, 20232024 and 2022.2023.

(i) Significant Accounting Policies and Critical Accounting Estimates

See Note 1 to the Consolidatedconsolidated Financial Statements included in our 2023 Annual Report on Form 10-K for the year ended December 31, 2022 for a discussion of our significant accounting policies.

Solitario’s valuation of mineral properties is a critical accounting estimate. We review and evaluate our mineral properties for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Significant negative industry or economic trends, adverse social or political developments, geologic results, geo-technical difficulties, or other disruptions to our business are a few examples of events that we monitor, as they could indicate that the carrying value of the mineral properties may not be recoverable. In such cases, a recoverability test may be necessary to determine if an impairment charge is required. There has been no change to our assumptions, estimates or calculations during the three months ended March 31, 2023.2024.

(j) Related Party Transactions

As of March 31, 2023,2024, and for the three months ended March 31, 2023,2024, we have no related party transactions or balances.

(k) Recent Accounting Pronouncements

See Note 1, “Business and Summary of Significant Accounting Policies,”No recent accounting pronouncements are applicable to the unaudited condensed consolidated financial statements under Recent Accounting Pronouncements” above for a discussion of our significant accounting policies.Solitario at this time.

(l) Forward LookingForward-Looking Statements

This Form 10-Q contains forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange1934 Act of 1934, as amended (the “1934 Act”), with respect to our financial condition, results of operations, business prospects, plans, objectives, goals, strategies, future events, capital expenditures, and exploration and development efforts. Words such as “anticipates,” “expects,” “intends,” “forecasts,” “plans,” “believes,” “seeks,” “estimates,” “may,” “will,” and similar expressions identify forward-looking statements. These forward-looking statements are based on our current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements described herein and the risk factors included under the heading "Risk Factors" included in Item 1A of Part I of our 2023 Annual Report on Form 10-K for the year ended December 31, 2022.to which there have been no material changes. These forward-looking statements appear in a number of places in this report and include statements with respect to, among other things:

Although we have attempted to identify important factors that could cause actual results to differ materially from those described in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that these statements will prove to be accurate as actual results and future events could differ materially from those anticipated in the statements. Except as required by law, we assume no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Smaller Reporting Companies are not required to provide the information required by this item.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

As required by Rule 13a-15 under the 1934 Act, as of March 31, 2023,2024, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. This evaluation was carried out by the Company’s managment under the supervision and with the participation of our Chief Executive Officer (our principal executive officer) and our Chief Financial Officer (our principal financial officer). Based upon and as of the date of that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, 2023.2024.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the 1934 Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the 1934 Act is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

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 March 31, 2024, our internal control over financial reporting is effective based on those criteria.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) promulgated under the 1934 Act) during the quarter ended March 31, 20232024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

NoneNone..

Item 1A. Risk Factors

As of March 31, 2023,2024, there were no material changes to the Risk Factors associated with the Companyour business disclosed in Part I, Item 1A of our 2023 Annual Report on Form 10-K for the year ended December 31, 2022.Report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

NoneThere were no unregistered sales of equity securities effected during the quarter ended March 31, 2024.

Item 3. Defaults upon Senior Securities

None

Item 4. Mine Safety Disclosures

None

Item 5. Other Information

NoneDuring the quarter ended March 31, 2024, none of the Company’s directors or officers adopted, modified, or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Item 408(a) of Regulation S-K.

Item 6. Exhibits

The Exhibits to this report are listed in the Exhibit Index.

SIGNATURES

Pursuant to the requirements 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 ZINC CORP.

EXHIBIT INDEX