XPL Solitario Resources Corp

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, 2021 and 2020, and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in Solitario’s Annual Report on Form 10-K for the year ended December 31, 2021.  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 metal, zinc and other base metal exploration mineral properties.  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 time evaluate potential strategic transactions for the acquisition of new precious and base metal properties and assets with exploration potential.  

In analyzing our activities, the most significant aspect of our business relates to results of our exploration and potential development activities and those of our joint venture partners on a property-by-property basis.  When our exploration or potential development activities, including drilling, sampling and geologic testing, indicate a project may not be economically feasible or contain sufficient geologic or economic potential we may impair or completely write-off the property.

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, 2022, we consider our carried interest in the Florida Canyon project in Peru, our interest in the Lik project in Alaska, and our Golden Crest project in South Dakota to be our core mineral property assets.  We are conducting exploration activities in Peru and the United States both on our own and through joint ventures operated by our partners in Peru and the United States, respectively.  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 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 venture funding for 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, 2022, 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 project, (ii) fund costs and activities intended to further the exploration at our Florida Canyon project, (iii) fund costs and activities to further our Golden Crest project; (iv) conduct reconnaissance exploration and (v) 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, 2022, we do not expect the effects of COVID-19 or other pandemics to have a material effect on Solitario’s planned activities related to the exploration of its Lik, Florida Canyon and Golden Crest projects.  However, going forward for the remainder of 2022, we will continue to monitor planned activities for 2022 at Golden Crest, Florida Canyon and Lik.  The extent to which COVID-19 or other pandemics impacts our business, including our exploration and other activities and the market for our securities, will depend on future developments, which are highly uncertain and cannot be predicted at this time.  Please see Item 1A, “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2021.

 (b) Results of Operations

Comparison of the quarter ended March 31, 2022 to the quarter ended March 31, 2021.

We had a net loss of $514,000 or $0.01 per basic and diluted share for the three months ended March 31, 2022 compared to a net loss of $528,000 or $0.01 per basic and diluted share for the three months ended March 31, 2021.  As explained in more detail below, the primary reasons for the decrease in the net loss in the three months ended March 31, 2022 compared to the loss in the three months ended March 31, 2021 was the recording of an unrealized gain on marketable equity securities of $213,000 during the three months ended March 31, 2022 compared to an unrealized loss on marketable equity securities of $122,000 during the three months ended March 31, 2021.  Partially offsetting this decrease in the net loss were (i) an increase in exploration expense to $226,000 during the three months ended March 31, 2022 compared to exploration expense of $147,000 during the three months ended March 31, 2021; (ii) an increase in general and administrative costs to $387,000 during the three months ended March 31, 2022 compared to general and administrative costs of $280,000 during the three months ended March 31, 2021; (iii) a reduction in interest income to $27,000 during the three months ended March 31, 2022 compared to interest income of $31,000 during the three months ended March 31, 2021; (iv) a loss on the sale of marketable equity securities of $81,000 during the three months ended March 31, 2022 compared to a gain on the sale of marketable equity securities of $13,000 during the three months ended March 31, 2021; (v) an unrealized loss on short-term investments of $51,000 recorded during the three months ended March 31, 2022 compared to an unrealized loss on short-term investments of $25,000 recorded during the three months ended March 31, 2021 and (vi) other income of $10,000 from the forgiveness and cancellation of the Paycheck Protection Program loan during the three months ended March 31, 2021, with no similar item in the three months ended March 31, 2022.  Each of the major components of these items is discussed in more detail below.

                Our exploration expense increased to $226,000 during the three months ended March 31, 2022 compared to exploration expense of $147,000 during the three months ended March 31, 2021.  The increase was primarily as a result of (i) an increase in expenses at our Golden Crest project to $127,000 during the three months ended March 31, 2022 with no similar expenditure during 2021; (ii) a slight increase in exploration costs at our Lik project in Alaska to $4,000 during the three months ended March 31, 2022 compared to $1,000 during the three months ended March 31, 2021; and (iii) an increase reconnaissance exploration expenses to $95,000 during the three months ended March 31, 2022 compared to reconnaissance exploration expenses of $87,000 during the three months ended March 31, 2021.  These increased expenditures were offset by (i) $50,000 related to our Florida Canyon project in Peru, where we substantially completed a 43-101 resource update during the three months ended March 31, 2021 compared to no Florida Canyon project costs during the three months ended March 31, 2022 and (ii) we performed certain initial exploration evaluation expenses of $9,000 during the three months ended March 31, 2021 at our former Gold Coin project in Arizona compared to no Gold Coin costs during the three months ended March 31, 2022 as we dropped the project during 2021;  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, 2022 we had two contract geologists at our Golden Crest project along with two full-time staff and several part-time employees at our Golden Crest project.  Our Denver personnel spent a majority of their time on reconnaissance exploration activities described above and related matters.  Our 2022 total exploration and development budget is approximately $2,350,000, which reflects a significant increase in the anticipated activities at the Golden Crest project as well as a proposed exploration and drilling program at Lik.  The proposed 2022 budget does not reflect any costs for drilling the Golden Crest project or any exploration costs for projects or assets we may acquire during 2022.  Our planned exploration activities in 2022 may be modified, as necessary for any drilling programs we may undertake at Golden Crest or projects we may acquire.  Changes may occur to our planed 2022 exploration expenditures related to any number of factors including COVID-19 adjustments and 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 2022 to be above the exploration expenditures for full-year 2021.

Exploration expense (in thousands) by project for the three months ended March 31, 2022 and 2021 consisted of the following:

General and administrative costs, excluding stock option compensation costs, discussed below, were $374,000 during the three months ended March 31, 2022 compared to $252,000 during the three months ended March 31, 2021.  The major components of these costs were related to (i) salaries and benefit expense of $119,000 during the three months ended March 31, 2022 compared to salary and benefit costs of $58,000 during the three months ended March 31, 2021, primarily due to a bonus of $15,000 paid to our each of our three officers during the three months ended March 31, 2022 with no similar bonus during the three months ended March 31, 2021; (ii) legal and professional expenditures of $132,000 during the three months ended March 31, 2022, compared to $68,000 during the three months ended March 31, 2021, with the increase primarily related to increased costs for accounting services, including work performed on our SK-1300 mineral reserve reports and increased legal fees related to our Golden Crest project during the three months ended March 31, 2022; (iii) office rent and expenses of $20,000 during the three months ended March 31, 2022, compared to $20,000 during the three months ended March 31, 2021; and (iv) travel and shareholder relation costs of $103,000 during the three months ended March 31, 2022 compared to $106,000 during the three months ended March 31, 2021.  We anticipate the full-year general and administrative costs will be higher for 2022 compared to 2021 primarily due to increased activity at both our Golden Crest and Lik projects.  

We recorded $13,000 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, 2022 compared to $28,000 of stock option compensation expense during the three months ended March 31, 2021.  The lower costs in 2022 related to the grant date fair value of certain option grants which became fully vested during 2021 and were no longer being amortized during 2022.  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, 2022 and 2021.  See Note 9, “Employee Stock Compensation Plans,” above, for additional information on our stock option expense.  

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. During the three months ended March 31, 2021, we sold various shares of our of marketable equity securities for proceeds of $78,000 and recorded a gain on sale of marketable equity securities of $13,000.  See Note 3 “Marketable Equity Securities” above to the condensed consolidated financial statements for a discussion of the sale of Marketable Equity Securities.  We may sell additional shares of our holdings of marketable equity securities during the remainder of 2022; however, we do not expect sales of marketable equity securities to be a significant source of cash for the year ended December 31, 2022.

We recorded an unrealized gain on marketable equity securities of $213,000 during the three months ended March 31, 2022 compared to an unrealized loss on marketable equity securities of $122,000 during the three months ended March 31, 2021. The gain during the three months ended March 31, 2022 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 $581,000 at December 31, 2021 to a fair value of $588,000 at March 31, 2022; (ii) 134,055 shares of Vox common stock, which increased from a fair value of $370,000 at December 31, 2021 to a fair value of $383,000 at March 31, 2022; (iii) 8,500,000 shares of Vendetta common stock, which increased from a fair value of $356,000 at December 31, 2021 to a fair value of $442,000 at March 31, 2022; and the transfer of $81,000 of realized loss on the sale of 500,000 shares of Vendetta common stock, discussed above, the combination of which accounted for the bulk of the unrealized loss on marketable equity securities during the quarter ended March 31, 2022. 

We recorded interest income of $27,000 during the three months ended March 31, 2022 compared to interest income of $31,000 during the three months ended March 31, 2021.  This reduction was primarily due to a decrease in the interest earned on our short-term investments in USTS as a result of a decrease in the total amount of outstanding short-term investments during the bulk of the time during the three months ended March 31, 2022 compared to the three months ended March 31, 2021.  We did add $1,578,000, net, to our USTS holdings near the end of the three months ended March 31, 2022, which did not result in any significant interest income during 2022.  We anticipate our interest income will decrease in 2022 compared to 2021 as a result of the use of our short-term investments and our cash balances 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 loss on our short-term investments of $51,000 during the three months ended March 31, 2022 compared to an unrealized loss on our short-term investments of $25,000 during the three months ended March 31, 2021 primarily due to an increase in market interest rates on USTS, which reduces the quoted fair value of our existing USTS and to a lesser degree our CD’s.  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.  

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, 2022 and 2021, we recorded no property impairments.  

At March 31, 2022 and 2021, 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, 2022 or 2021.  As a result of our exploration activities, we anticipate we will not have currently payable income taxes during 2022.  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, 2022, we had $345,000 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, 2022, we had $6,614,000 in short-term investments.  As of March 31, 2022, we had $6,015,000 of our current assets in USTS with maturities of 15 days to 19 months.  In addition, as of March 31, 2022 we had three CD’s with face values between $100,000 and $250,000, recorded at their total fair value of $599,000.  The USTS and CD’s are recorded at their fair value, based upon quoted market prices.  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 2022.  

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, 2022, we owned (i) 8,500,000 shares of Vendetta common stock with a fair value of $442,000; (ii) 100,000 shares of Kinross common stock with a fair value of $588,000; and (iii) 134,055 shares of Vox common stock with a fair value of $383,000.  All of our marketable equity securities are carried at their fair values based upon quoted market prices.  During the three months ended March 31, 2022 and 2021 we sold certain portions of our marketable equity securities for proceeds of $26,000 and $78,000, respectively and realized a (loss) gain on sale of marketable equity securities of ($81,000) and $13,000, respectively.  We anticipate we may sell some of our marketable equity securities during the remainder of 2022 depending upon cash needs and market conditions.  

Working Capital

We had working capital of $8,422,000 at March 31, 2022 compared to working capital of $6,883,000 as of December 31, 2021.  Our working capital at March 31, 2022 consists primarily of our cash and cash equivalents, our investment in USTS and CD’s, our investment in marketable equity securities of $1,413,000, and other current assets of $317,000, less our accounts payable of $230,000 and other current liabilities of $37,000.  As of March 31, 2022, we believe 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 other exploration projects or assets.

Stock-Based Compensation Plans

As of March 31, 2022, and December 31, 2021 there were options outstanding to acquire 5,440,000 and 5,513,000, respectively, shares of Solitario common stock.  The outstanding options have exercise prices between $0.20 per share and $0.77 per share.  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.  During the three months ended March 31, 2021, options for 120,350 shares were exercised with an average exercise price of $0.56 per share for proceeds of $67,000.  Options for 2,360,000 shares of Solitario Common Stock, with an exercise price of $0.77 per share, expire in August 2022.  Unless the quoted market price of a share of our common stock exceeds $0.77 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 2022.

At the Market Offering Agreement

On February 2, 2021, Solitario entered into the ATM Agreement with Wainwright, under which Solitario may, from time to time, issue and sell shares of Solitario’s common stock through Wainwright as sales manager in an at-the-market offering under a prospectus supplement for aggregate sales proceeds of up to $9.0 million.  During the three months ended March 31, 2022, Solitario sold an aggregate of 2,650,724 shares of common stock under the ATM Agreement at an average price of $0.79 per share for net proceeds after commissions and expenses of approximately $2,023,000.  During the three months ended March 31, 2021, Solitario sold an aggregate of 150,400 shares of common stock under the ATM Agreement at an average price of $1.21 per share of common stock for net proceeds after commissions and expenses of approximately $177,000.  During the three months ended March 31, 2021, Solitario recorded $79,000 as a charge to additional paid-in-capital for one-time expenses related to entering into the ATM Agreement.  

 (d) Cash Flows  

Net cash used in operations during the three months ended March 31, 2022 increased to $597,000 compared to $382,000 of net cash used in operations for the three months ended March 31, 2021 primarily as a result of (i) an increase in exploration expense to $226,000 during the three months ended March 31, 2022 compared to exploration expense of $147,000 during the three months ended March 31, 2021 (ii) an increase in non-stock option general and administrative expense to $374,000 during the three months ended March 31, 2022 compared to $252,000 during the three months ended March 31, 2021, discussed above (iii) a use of cash of $20,000 for the reduction of accounts payable and other liabilities during the three months ended March 31, 2022 compared to a use of cash from a decrease in accounts payable and other liabilities of $26,000 during the three months ended March 31, 2021; (iv) a decrease in interest income during the three months ended March 31, 2022 to $27,000 compared to interest income of $31,000 during the three months ended March 31, 2021; and (v) a use of cash of $14,000 for an increase in prepaid and other current assets during the three months ended March 31, 2022 compared to a provision of cash from a decrease in prepaid expenses and other current assets of $2,000 during the three months ended March 31, 2021.  Based upon projected expenditures in our 2022 budget, we anticipate continued use of funds from operations through the remainder of 2022, primarily for exploration related to our Golden Crest and Lik projects and reconnaissance exploration.  See “Results of Operations” discussed above for further explanation of some of these variances.

During the three months ended March 31, 2022, we used $1,562,000 in cash from investing activities compared to $1,016,000 of cash provided from investing activities during the three months ended March 31, 2021.  The primary use of the cash during the three months ended March 31, 2022 was for the net purchase of $1,578,000 in short-term investments from the proceeds of our sales of our common stock under our ATM program compared to the net sale of $938,000 of short-term investments during the three months ended March 31, 2021.  In addition, during the three months ended March 31, 2022 and 2021 we sold marketable equity securities for proceeds of $26,000 and $78,000, respectively as discussed above in Note 3, “Marketable Equity Securities” to the condensed consolidated financial statements.  We may sell additional marketable equity securities during the remainder of 2022, as discussed above, however, we do not anticipate the sale of marketable equity securities will be a significant source of cash during the remainder of 2022.  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 2022.  Any potential mineral property acquisition or strategic corporate investment during the remainder of 2022 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, 2022, and 2021 we received net cash of $2,023,000 and $98,000, respectively, from the issuance of common stock under the ATM Program.  In addition, during the three months ended March 31, 2022 and 2021 we received $19,000 and $67,000, respectively, from the issuance of common stock from the exercise of stock options, discussed above in Note 9, “Employee Stock Compensation Plans” to the condensed consolidated financial statements.  

(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, and as a result we report our mineral resources according to two different 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, 2022, and December 31, 2021 we have 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, 2022.  As of March 31, 2022, there have been no changes to our exploration activities, environmental compliance or other contractual obligations from those disclosed in our Management’s Discussion and Analysis included in our Annual Report on Form 10-K for the year ended December 31, 2021.

(h) Discontinued Projects

We did not record any mineral property write-downs during the three months ended March 31, 2022 and 2021.       

(i) Significant Accounting Policies and Critical Accounting Estimates

See Note 1 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2021 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, 2022.

(j) Related Party Transactions

As of March 31, 2022, and for the three months ended March 31, 2022, we have no related party transactions or balances.  

(k) Recent Accounting Pronouncements

See Note 1, “Business and Summary of Significant Accounting Policies,” to the unaudited condensed consolidated financial statements under Recent Accounting Pronouncements” above for a discussion of our significant accounting policies.

(k) Forward 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 Exchange 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 under the heading "Risk Factors" included in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2021. 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.