UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(MARK ONE)
FOR THE QUARTERLY PERIOD ENDED
OR
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(STATE OR OTHER JURISDICTION OF | (I.R.S. EMPLOYER | |
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(
(REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE)
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ | Accelerated filer ☐ |
Smaller reporting company | |
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes
At August 12, 2024,
GOLDEN MINERALS COMPANY
FORM 10-Q
QUARTER ENDED JUNE 30, 2024
INDEX
PAGE | ||
3 | ||
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 21 | |
28 | ||
29 | ||
29 | ||
30 | ||
30 | ||
30 | ||
30 | ||
30 | ||
30 | ||
33 | ||
2
PART I. FINANCIAL INFORMATION
Item 1. | Financial Statements |
GOLDEN MINERALS COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Expressed in United States dollars)
(Unaudited)
| June 30, |
| December 31, | |||
2024 | 2023 | |||||
(in thousands, except share data) | ||||||
Assets | ||||||
Current assets | ||||||
Cash and cash equivalents (Note 5) | $ | | $ | | ||
Short-term investments | — | | ||||
Accounts receivable | | | ||||
Value added tax receivable, net (Note 7) |
| |
| | ||
Prepaid expenses and other assets (Note 6) | | | ||||
Current assets held for sale (Note 3) | — | | ||||
Total current assets |
| |
| | ||
Property, plant and equipment, net (Note 8) |
| |
| | ||
Investments | | | ||||
Right-of-use assets | | | ||||
Assets held for sale (Note 3) |
| | | |||
Total assets | $ | | $ | | ||
Liabilities and equity (deficit) | ||||||
Current liabilities | ||||||
Accounts payable and other accrued liabilities (Note 9) | $ | | $ | | ||
Deferred revenue (Note 3) | | — | ||||
Other current liabilities (Note 11) |
| |
| | ||
Total current liabilities |
| |
| | ||
Asset retirement and reclamation liabilities (Note 10) |
| |
| | ||
Other long-term liabilities (Note 11) | |
| | |||
Liabilities held for sale (Note 3) |
| |
| | ||
Total liabilities |
| |
| | ||
Commitments and contingencies (Note 16) | ||||||
Equity (deficit) (Note 14) | ||||||
Common stock, $ |
| |
| | ||
Additional paid-in capital |
| |
| | ||
Accumulated deficit |
| ( |
| ( | ||
Shareholders’ equity (deficit) |
| ( |
| | ||
Total liabilities and equity (deficit) | $ | | $ | | ||
The accompanying notes form an integral part of these interim condensed consolidated financial statements.
3
GOLDEN MINERALS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Expressed in United States dollars)
(Unaudited)
Three Months Ended | Six Months Ended | |||||||||||
June 30, | June 30, | |||||||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 | |||||
(in thousands except per share data) | (in thousands, except per share data) | |||||||||||
Revenue: | ||||||||||||
Sale of metals (Note 15) | $ | — | $ | | $ | — | $ | | ||||
Total revenue | — | | — | | ||||||||
Costs and expenses: | ||||||||||||
Cost of metals sold (exclusive of depreciation shown below) (Note 15) | — | ( | — | ( | ||||||||
Exploration expense |
| ( | ( | ( | ( | |||||||
El Quevar project expense |
| ( | ( | ( | ( | |||||||
Administrative expense |
| ( | ( | ( | ( | |||||||
Stock-based compensation |
| ( | ( | ( | ( | |||||||
Other operating income (expense), net |
| ( | | ( | | |||||||
Depreciation and amortization |
| ( | ( | ( | ( | |||||||
Total costs and expenses |
| ( |
| ( |
| ( |
| ( | ||||
Loss from operations |
| ( |
| ( |
| ( |
| ( | ||||
Other income (expense): | ||||||||||||
Interest and other income (expense), net |
| | ( | | ( | |||||||
Gain (loss) on foreign currency transactions | ( | | ( | | ||||||||
Total other income (expense) | ( | | ( | | ||||||||
Loss from operations before income taxes and discontinued operations |
| ( |
| ( |
| ( | ( | |||||
Income taxes (Note 13) | — | — | — | — | ||||||||
Loss from continuing operations | ( | ( | ( | ( | ||||||||
Loss from discontinued operations, net of taxes (Note 3) | ( | ( | ( | ( | ||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||
Net loss per common share - basic (1) | ||||||||||||
Continuing operations | $ | ( | $ | ( | $ | ( | $ | ( | ||||
Discontinued operations | ( | ( | ( | ( | ||||||||
Net loss per common share - basic (1) | $ | ( | $ | ( | $ | ( | $ | ( | ||||
Weighted-average shares outstanding - basic (2) | | | | | ||||||||
(2)
The accompanying notes form an integral part of these interim condensed consolidated financial statements.
4
GOLDEN MINERALS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in United States dollars)
(Unaudited)
Six Months Ended June 30, | ||||||
| 2024 |
| 2023 | |||
(in thousands) | ||||||
Cash flows from operating activities: | ||||||
Net loss | $ | ( | $ | ( | ||
Loss from discontinued operations | | | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
Depreciation and amortization | | | ||||
Loss on trading securities | | | ||||
Loss (gain) on sale of assets | | ( | ||||
Stock-based compensation | | | ||||
Changes in operating assets and liabilities: | ||||||
Accounts receivable | ( | | ||||
Inventories, net | — | | ||||
Value added tax receivable, net | | ( | ||||
Prepaid expenses and other assets | | ( | ||||
Right-of-use assets | | | ||||
Accounts payable and other accrued liabilities | ( | | ||||
Deferred revenue | | — | ||||
Other current liabilities | ( | ( | ||||
Asset retirement and reclamation liabilities | ( | | ||||
Other long-term liabilities | ( | ( | ||||
Net cash used in operating activities - continuing operations | ( | ( | ||||
Net cash used in operating activities - discontinued operations | ( | ( | ||||
Net cash used in operating activities | ( | ( | ||||
Cash flows from investing activities: | ||||||
Proceeds from sale of assets | | | ||||
Acquisitions of property, plant and equipment | ( | — | ||||
Net cash provided by investing activities - continuing operations | | | ||||
Net cash provided by investing activities - discontinued operations | | | ||||
Net cash provided by investing activities | | | ||||
Cash flows from financing activities: | ||||||
Proceeds from issuance of common stock, net of issuance costs | — | | ||||
Common stock shares relinquished to pay taxes | ( | — | ||||
Net cash (used in) provided by financing activities - continuing operations | ( | | ||||
Net cash (used in) provided by financing activities - discontinued operations | — | — | ||||
Net cash (used in) provided by financing activities | ( | | ||||
Net decrease in cash and cash equivalents | ( | ( | ||||
Cash and cash equivalents, beginning of period | | | ||||
Cash and cash equivalents, end of period | $ | | $ | | ||
Supplemental disclosure: | ||||||
Interest paid | $ | | $ | | ||
Income taxes paid | $ | — | $ | — | ||
Supplemental disclosure of non-cash transactions: | ||||||
Deferred equity offering costs amortized | $ | — | $ | | ||
The accompanying notes form an integral part of these interim condensed consolidated financial statements.
5
GOLDEN MINERALS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT)
(Expressed in United States dollars)
(Unaudited)
Additional | ||||||||||||||
Common Stock (1) | Paid-in | Accumulated | Total | |||||||||||
Shares | Amount | Capital | Deficit | Equity (Deficit) | ||||||||||
(in thousands except share data) | ||||||||||||||
Balance, December 31, 2022 | | $ | | $ | | $ | ( | $ | | |||||
Stock compensation accrued (Note 14) | — | — | | — | | |||||||||
Shares issued under the at-the-market offering agreement, net (Note 14) | | | | — | | |||||||||
Net loss | — | — | — | ( | ( | |||||||||
Balance, March 31, 2023 | | $ | | $ | | $ | ( | $ | | |||||
Stock compensation accrued (Note 14) | — | — | | — | | |||||||||
Shares issued under the at-the-market offering agreement, net (Note 14) | | | | — | | |||||||||
Offering and private placement transaction (Note 14) | | | | — | | |||||||||
Net loss | — | — | — | ( | ( | |||||||||
Balance, June 30, 2023 | | $ | | $ | | $ | ( | $ | | |||||
Balance, December 31, 2023 | | $ | | $ | | $ | ( | $ | | |||||
Stock compensation accrued (Note 14) | ( | — | | — | | |||||||||
Warrants exercised (Note 14) | | | ( | — | — | |||||||||
Net loss | — | — | — | ( | ( | |||||||||
Balance, March 31, 2024 | | $ | | $ | | $ | ( | $ | | |||||
Stock compensation accrued (Note 14) | — | — | | — | | |||||||||
KELTIP and RSU shares issued net of shares relinquished to cover withholding taxes (Note 14) | | | ( | — | ( | |||||||||
Net loss | — | — | — | ( | ( | |||||||||
Balance, June 30, 2024 | | $ | | $ | | $ | ( | $ | ( | |||||
(1) Reflects the one-for- reverse stock split that became effective June 9, 2023. Refer to Note 1, Basis of Preparation of Financial Statements and Nature of Operations.
The accompanying notes form an integral part of these interim condensed consolidated financial statements.
6
GOLDEN MINERALS COMPANY
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States dollars)
(Unaudited)
1. | Basis of Preparation of Financial Statements and Nature of Operations |
Golden Minerals Company (the “Company” “we” “our” or “us”), a Delaware corporation, has prepared these unaudited interim condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). The interim condensed consolidated financial statements do not include all disclosures required by GAAP for annual financial statements, but in the opinion of management, include all adjustments necessary for a fair presentation. Certain prior period amounts may have been reclassified to conform to current classifications. Interim results are not necessarily indicative of results for a full year; accordingly, these interim condensed consolidated financial statements should be read in conjunction with the annual financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on March 19, 2024 (the “2023 Annual Report”).
The Company is a mining company, holding a
We concluded mining operations at the Rodeo Property in June 2023. We commenced mining activities at the Velardeña Properties in December 2023; however, mining operations were shut down in February 2024 because the initial performance of the mine and processing plant did not achieve the expected results. The Company continued to process material at the sulfide plant through the end of March, 2024 at which time the plant was also shut down. The Company previously announced the execution of certain asset purchase and sale agreements with a privately held Mexican company. Pursuant to the terms of the sale agreements, the Company agreed to sell certain mining concessions, equipment, land parcels and other assets in exchange for an aggregate purchase price of $
The Company is considered an exploration stage issuer under the criteria set forth by the SEC under Subpart 1300 of Regulation S-K (“S-K 1300”) as the Company has not yet demonstrated the existence of mineral reserves at any of the Company’s properties. As a result, and in accordance with GAAP for exploration stage companies, all expenditures for exploration and evaluation of the Company’s properties are expensed as incurred. As such, the Company’s financial statements may not be comparable to the financial statements of mining companies that have proven and probable mineral reserves. Such companies would typically capitalize certain development costs including infrastructure development and mining activities to access the ore. The capitalized costs would be amortized on a units-of-production basis as reserves are mined. The amortized costs are typically allocated to inventory and eventually to cost of sales as the inventories are sold. As the Company does not have proven and probable mineral reserves, substantially all expenditures at the Company’s Rodeo Property and the Velardeña Properties for mine construction activity, as well as operating costs associated with the mill facilities, and for items that do not have a readily identifiable market value apart from the mineralized material, have
7
been expensed as incurred. Such costs are charged to cost of metals sold or project expense during the period depending on the nature of the costs. Certain costs may be reflected in inventories prior to the sale of the product. The Company cannot be certain that any deposits at any of its properties will ever be confirmed or converted into S-K 1300 compliant “reserves.”
Reverse Stock Split
On May 26, 2023, the Company’s Board of Directors approved a reverse stock split (the “Reverse Stock Split”) of the Company’s common stock, par value $
Accordingly, all share and per share data (including share and per share information related to share-based compensation and outstanding warrants), number of shares outstanding and other common stock equivalents for the periods presented in the accompanying interim condensed consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect the Reverse Stock Split.
2. | Liquidity, Capital Resources and Going Concern |
We do not currently have sufficient resources to meet our expected cash needs during the twelve months ended June 30, 2025. At June 30, 2024, we had current assets of approximately $
We will require further sources of capital. In order to satisfy the Company’s projected general, administrative, exploration and other expenses through June 30, 2025, we will need approximately $
We have previously announced the execution of certain asset purchase and sale agreements with a privately held Mexican company. Pursuant to the terms of the sale agreements, we agreed to sell certain mining concessions, equipment, land parcels and other assets in exchange for an aggregate purchase price of $
As of June 30, 2024, we had VAT receivable in Mexico of approximately $
The interim condensed consolidated financial statements have been prepared on a going concern basis under which an entity is considered to be able to realize its assets and satisfy its liabilities in the normal course of business. However, as noted above, our continuing operations will be dependent upon our ability to secure sufficient funding to support future operations. The amounts shown as mineral properties in our interim condensed consolidated financial statements are dependent on our ability to sell certain assets of the Company and receive future equity or other financings
8
to continue to fund general administrative, and exploration activities that would lead to profitable mining and processing activities or to generate proceeds from the disposition of mineral exploration properties.
The ability of the Company to maintain a positive cash balance for a period of twelve months beyond the filing date of this Quarterly Report on Form 10-Q is dependent upon its ability to generate sufficient cash flow from the sale of assets, reduction of expenses, collection of VAT accounts receivable from the Mexican government, collection of the amount due from the Buyer for the oxide plant and water wells, and to raise sufficient funds through equity or other external financings or from other sources. In the absence of additional cash inflows, the Company anticipates that its cash resources will be exhausted in September 2024. If we are unable to obtain additional cash resources, we will be forced to cease operations and liquidate. These material uncertainties cast significant doubt on the Company’s ability to continue as a going concern. Therefore, the Company cannot conclude that substantial doubt does not exist as to the Company’s ability to continue as a going concern for the twelve months following the filing date of this Quarterly Report on Form 10-Q. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets or liabilities, which might be necessary should the Company not continue as a going concern.
3. | Assets Held for Sale and Discontinued Operations |
We classify long-lived assets, or disposal groups comprised of assets and liabilities, as held for sale in the period in which the following six criteria are met, (i) management, having the authority to approve the action, commits to a plan to sell the property; (ii) the property is available for immediate sale in its present condition, subject only to terms that are usual and customary; (iii) an active program to locate a buyer and other actions required to complete the plan to sell have been initiated; (iv) the sale of the property is probable and is expected to be completed within one year; (v) the property is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and (vi) actions necessary to complete the plan of sale indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn, in accordance with Accounting Standard Codification (“ASC”) 360, Property, Plant and Equipment. A business classified as held for sale is recorded at the lower of its carrying amount or estimated fair value less cost to sell. If the carrying amount of the business exceeds its estimated fair value less cost to sell, a loss is recognized. Assets and liabilities related to a business classified as held for sale are segregated in the current and prior balance sheets in the period in which the business is classified as held for sale, resulting in changes to the presentation of certain prior period amounts. The Company ceases depreciation and amortization on long-lived assets (or disposal groups) classified as held for sale and measures them at the lower of carrying value or estimated fair value less cost to sell.
The Company reports the results of operations of a business as discontinued operations if a disposal represents a strategic shift that has (or will have) a major effect on the Company’s operations and financial results when the business is classified as held for sale, in accordance with ASC 360, and ASC 205-20, Presentation of Financial Statements – Discontinued Operations. Under ASC 360, assets may be classified as held for sale even though discontinued operations classification is not met. The results of discontinued operations are reported in Net loss from discontinued operations, net of tax in the accompanying interim Condensed Consolidated Statements of Operations for current and prior periods, including any gain or loss recognized on closing or adjustment of the carrying amount to fair value less cost to sell. All other notes to these interim condensed consolidated financial statements present the results of continuing operations and exclude amounts related to discontinued operations for all periods presented.
In December 2023, the Company restarted operations at the Velardeña Properties. In February 2024, it was determined that the initial performance of both the mine and the processing plant did not achieve the expected results. On February 29, 2024, the Company announced that it elected to discontinue operations at the Velardeña Properties and hold them for sale. Since that date, the Company has primarily focused on shutting down the Velardeña Properties and holding them for short-term sale as evaluations are performed to research options to realize maximum value from the Company’s remaining assets.
As previously disclosed in an SEC filing on form 8-K, the Company has entered into certain sales agreements to sell the Velardeña and Chicago mines, both oxide and sulfide processing plants and related equipment of the Velardeña Properties. The terms of the sales agreement include completion and final payment of the sale by July 1, 2024. The sales agreements relating to the mines, the sulfide plant and related equipment are complete. The Company received the required payments and titles to the assets have been transferred to the Buyer. The agreement relating to the oxide plant and water wells has not closed, and the Buyer is in default. In accordance with ASC 360, the Company recorded an asset impairment expense of $
9
The following table summarizes the major line items for the Velardeña Properties that are included in Loss from discontinued operations, net of taxes in the interim Condensed Consolidated Statements of Operations:
Three Months Ended | Six Months Ended | ||||||||||
June 30, | June 30, | ||||||||||
2024 |
| 2023 | 2024 |
| 2023 | ||||||
(in thousands) | (in thousands) | ||||||||||
Sale of metals | $ | | $ | — | $ | | $ | — | |||
Cost of metals sold |
| ( |
| — |
| ( |
| — | |||
Velardeña care and maintenance costs |
| — |
| ( |
| — |
| ( | |||
Reclamation expense |
| ( |
| ( |
| ( |
| ( | |||
Asset impairment expense | ( | — | ( | — | |||||||
Other operating income, net | | | | | |||||||
Severance, termination benefits and other operating costs | ( | — | ( | — | |||||||
Depreciation and amortization |
| — |
| ( |
| ( |
| ( | |||
Loss from discontinued operations before income taxes | ( | ( | ( | ( | |||||||
Income taxes | — | | — | — | |||||||
Loss from discontinued operations, net of taxes | $ | ( | $ | ( | $ | ( | $ | ( | |||
The following table summarizes the carrying amounts of major classes of assets and liabilities of discontinued operations for each of the periods presented:
| June 30, |
| December 31, | |||
2024 |
| 2023 | ||||
(in thousands) | ||||||
Assets | ||||||
Inventories, net | $ | — | $ | | ||
Total current assets held for sale | — | | ||||
Property, plant and equipment, net | | | ||||
Total assets held for sale | $ | | $ | | ||
Liabilities | ||||||
Asset retirement and reclamation liabilities | |
| | |||
Total liabilities held for sale | $ | | $ | | ||
4. | New Accounting Pronouncements |
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The new standard requires enhanced disclosures about significant segment expenses and other segment items and interim disclosure of items that were previously required on an annual basis. ASU 2023-07 is to be applied on a retrospective basis and is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. We are currently evaluating the impact of adopting ASU 2023-07 on our consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this update are intended to enhance the transparency and decision usefulness of income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This update is effective for annual periods beginning after December 15, 2024. Early adoption is permitted and should be applied on a prospective basis, however retrospective application is permitted. We are currently evaluating the impact of adopting ASU 2023-09 on our consolidated financial statements.
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5. | Cash and Cash Equivalents |
Cash and Cash Equivalents
The Company has reported $
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.
6. | Prepaid Expenses and Other Assets |
Prepaid expenses and other current assets consist of the following:
| June 30, |
| December 31, | |||
2024 |
| 2023 | ||||
(in thousands) | ||||||
Prepaid insurance | $ | | $ | | ||
Recoupable deposits and other |
| |
| | ||
$ | | $ | | |||
7. | Value Added Tax Receivable, Net |
At June 30, 2024, the Company recorded a net VAT paid in Mexico of $
The Company has also paid VAT in other countries, primarily related to exploration projects, which has been charged to expense as incurred because of the uncertainty of recoverability.
.
8. | Property, Plant and Equipment, Net |
The components of property, plant and equipment are as follows:
June 30, | December 31, | |||||
| 2024 |
| 2023 | |||
(in thousands) | ||||||
Exploration properties | $ | | $ | | ||
Royalty properties |
| |
| | ||
Buildings |
| |
| | ||
Mining equipment and machinery |
| |
| | ||
Other furniture and equipment |
| |
| | ||
| |
| | |||
Less: Accumulated depreciation and amortization |
| ( | ( | |||
$ | | $ | | |||
El Quevar Earn-In Agreement
On April 9, 2020, we entered into an earn-in agreement with Barrick (the “Earn-In Agreement”), pursuant to which Barrick acquired an option to earn a
11
of Argentina. As of December 31, 2021, Barrick had met the $
In March 2024, Barrick notified the Company that it was withdrawing from the Earn-In Agreement. The termination was effective on April 20, 2024 and the El Quevar project reverted back to full control of the Company.
9. | Accounts Payable and Other Accrued Liabilities |
The Company’s accounts payable and other accrued liabilities consist of the following:
June 30, | December 31, | |||||
2024 | 2023 | |||||
(in thousands) | ||||||
Accounts payable and accruals | $ | | $ | | ||
Accrued employee compensation and benefits | | | ||||
Income taxes payable (Note 13) |
| — |
| | ||
$ | | $ | | |||
10. | Asset Retirement and Reclamation Liabilities |
The Company has detailed closure plans for reclamation activity at the Rodeo Property. The Company stopped mining at the Rodeo Property in June 2023 and has up to
Asset retirement and reclamation liabilities consist of the following:
June 30, | December 31, | |||||
| 2024 |
| 2023 | |||
(in thousands) | ||||||
Current asset retirement and reclamation liabilities | $ | | $ | | ||
Non-current asset retirement and reclamation liabilities |
| |
| | ||
$ | | $ | | |||
Current asset retirement and reclamation liabilities is included in Other current liabilities (see Note 11).
The following table presents the changes in the Company’s asset retirement and reclamation liabilities for the three months ended June 30, 2024 and 2023:
Six Months Ended | ||||||
June 30, | ||||||
| 2024 |
| 2023 | |||
(in thousands) | ||||||
Balance at January 1, | $ | | $ | | ||
Changes in estimates, and other |
| ( |
| | ||
Accretion expense |
| |
| | ||
Balance at June 30, | $ | | $ | | ||
12
11. | Other Liabilities |
Other Current Liabilities
The following table sets forth the Company’s other current liabilities:
June 30, | December 31, | |||||
| 2024 | 2023 | ||||
(in thousands) | ||||||
Insurance Premium financing | $ | | $ | | ||
Operating lease liability |
| |
| | ||
Litigation accrual (Note 16) | — | | ||||
Current asset retirement and reclamation liabilities | | | ||||
$ | | $ | | |||
Other Long-Term Liabilities
The following table sets forth the Company’s other long-term liabilities:
June 30, | December 31, | |||||
| 2024 | 2023 | ||||
(in thousands) | ||||||
Operating lease liability | $ | — | $ | | ||
Deposits and other | | | ||||
$ | | $ | | |||
12. | Fair Value Measurements |
Financial assets and liabilities and nonfinancial assets and liabilities are measured at fair value on a recurring basis under a framework of a fair value hierarchy that prioritizes the inputs into valuation techniques used to measure fair value into three broad levels. This hierarchy gives the highest priority to quoted prices (unadjusted) in active markets and the lowest priority to unobservable inputs. Further, financial assets and liabilities should be classified by level in their entirety based upon the lowest level of input that was significant to the fair value measurement. The three levels of the fair value hierarchy per ASC Topic 820 are as follows:
Level 1: Unadjusted quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date.
Level 2: Quoted prices in inactive markets for identical assets or liabilities, quoted prices for similar assets or liabilities in active markets, or other observable inputs either directly related to the asset or liability or derived principally from corroborated observable market data.
Level 3: Unobservable inputs due to the fact that there is little or no market activity. This entails using assumptions in models that estimate what market participants would use in pricing the asset or liability.
13
The following table summarizes the Company’s financial assets and liabilities measured on a recurring basis at fair value by respective level of the fair value hierarchy:
| Level 1 |
| Level 2 |
| Level 3 |
| Total | |||||
(in thousands) | ||||||||||||
At June 30, 2024 |
| |||||||||||
Assets: | ||||||||||||
Cash and cash equivalents | $ | | $ | — | $ | — | $ | | ||||
$ | | $ | — | $ | — | $ | | |||||
At December 31, 2023 | ||||||||||||
Assets: | ||||||||||||
Cash and cash equivalents | $ | | $ | — | $ | — | $ | | ||||
Short-term investments |
| |
| — |
| — |
| | ||||
$ | | $ | — | $ | — | $ | | |||||
The Company’s cash equivalents, comprised principally of U.S. treasury securities, are classified within Level 1 of the fair value hierarchy.
The Company’s short-term investments consist of
At June 30, 2024 and December 31, 2023, the Company did not have any financial assets or liabilities classified within Level 2 or Level 3 of the fair value hierarchy.
13. | Income Taxes |
The Company accounts for income taxes in accordance with the provisions of ASC Topic 740, Income Taxes (“ASC 740”), on a tax jurisdictional basis. In accordance with ASC 740, the interim provision for taxes was calculated by using the estimated annual effective tax rate applied to the year-to-date income or losses on a jurisdictional basis. Although the Company has generated ordinary losses on a year-to-date basis, the Company has projected taxable income by year end in certain tax jurisdictions, for which an annual effective tax rate has been calculated. For both the three and six months ended June 30, 2024, the Company recorded
In accordance with ASC 740, the Company presents deferred tax assets net of its deferred tax liabilities on a tax jurisdictional basis on its interim Condensed Consolidated Balance Sheets. As of June 30, 2024 and December 31, 2023, the Company had
The Company, a Delaware corporation, and its subsidiaries file tax returns in the United States and in various foreign jurisdictions. The tax rules and regulations in these countries are highly complex and subject to interpretation. The Company’s income tax returns are subject to examination by the relevant taxing authorities and in connection with such examinations, disputes can arise with the taxing authorities over the interpretation or application of certain tax rules within the country involved. In accordance with ASC 740, the Company identifies and evaluates uncertain tax positions, and recognizes the impact of uncertain tax positions for which there is less than a more-likely-than-not probability of the position being upheld upon review by the relevant taxing authority. Such positions are deemed to be “unrecognized tax benefits,” which require additional disclosure and recognition of a liability within the financial statements. The Company had
14. | Equity |
On May 26, 2023, the Company’s Board of Directors approved a reverse stock split of the common stock, par value $
14
stock split for all prior periods presented. For additional information related to the reverse stock split, see Note 1, Basis of Preparation of Financial Statements and Nature of Operations.
On May 9, 2024, the Company’s shareholders approved an increase to the Company’s authorized shares from
June 2023 Offering and Private Placement Transaction
On June 26, 2023, the Company entered into a Securities Purchase Agreement with certain institutional investors providing for the issuance and sale by the Company in a registered direct offering (the “June 2023 Offering”) of an aggregate of
November 2023 Public Offering
On November 6, 2023, the Company entered into a Securities Purchase Agreement with certain institutional investors providing for the issuance and sale by the Company in a public offering (the “November 2023 Offering”) of (i) an aggregate of
At-the-Market Offering Agreement
During the six months ended June 30, 2024, the Company did
There were
As of June 30, 2024 the ATM Program was no longer in effect as the 2020 Registration Statement filed on Form S-3 filed with SEC on October 1, 2020 expired on October 1, 2023.
15
Equity Incentive Plans
Restricted Stock Grants
The following table summarizes the status and activity of the Company’s restricted stock grants at June 30, 2024 and 2023, and the changes during the six months then ended:
Six Months Ended June 30, | ||||||||||
2024 | 2023 | |||||||||
|
| Weighted |
|
| Weighted | |||||
Average | Average | |||||||||
Grant Date | Grant Date | |||||||||
Number of | Fair Value | Number of | Fair Value | |||||||
Restricted Stock Grants | Shares | Per Share | Shares | Per Share | ||||||
Outstanding at beginning of period | | $ | | | $ | | ||||
Granted during the period |
| — |
| — |
| — |
| — | ||
Restrictions lifted during the period |
| ( |
| |
| ( |
| | ||
Forfeited during the period |
| ( |
| |
| — |
| — | ||
Outstanding at end of period | | $ | | | $ | | ||||
Restricted Stock Units
The following table summarizes the status and activity of the Company’s restricted stock units at June 30, 2024 and 2023, and the changes during the six months then ended:
Six Months Ended June 30, | ||||||||||
2024 | 2023 | |||||||||
|
| Weighted |
|
| Weighted | |||||
Average | Average | |||||||||
Grant Date | Grant Date | |||||||||
Number of | Fair Value | Number of | Fair Value | |||||||
Restricted Stock Units | Shares | Per Share | Shares | Per Share | ||||||
Outstanding at beginning of period | | $ | | | $ | | ||||
Granted during the period |
| |
| |
| — |
| — | ||
Shares issued during the period |
| ( |
| |
| — |
| — | ||
Forfeited during the period |
| — |
| — |
| — |
| — | ||
Outstanding at e | ||||||||||