Fortitude Gold Corp - Quarter Report: 2023 March (Form 10-Q)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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For the quarterly period ended March 31, 2023

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For the transition period from                      to                    

Commission File Number: 333-249533

Fortitude Gold Corporation

(Exact name of registrant as specified in its charter)

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2886 Carriage Manor Point

Colorado Springs, CO 80906

(Address of Principal Executive Offices)

(719) 717 9825

(Registrant’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:

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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.   Yes  ⌧    No  ◻

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).   Yes  ⌧    No   ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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.

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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 Exchange Act).   Yes  ☐    No  ⌧

As of May 5, 2023, the registrant had 24,084,542 outstanding shares of common stock.

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PART I – FINANCIAL INFORMATION

ITEM 1. Financial Statements

FORTITUDE GOLD CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. Dollars in thousands, except per share data)

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The accompanying notes are an integral part of these condensed consolidated financial statements.

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FORTITUDE GOLD CORPORATION
Condensed Consolidated Statements of Operations
(U.S. Dollars in thousands, except per share data)
(Unaudited)

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The accompanying notes are an integral part of these condensed consolidated financial statements.

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FORTITUDE GOLD CORPORATION
Condensed Consolidated Statements of Shareholders’ Equity
(U.S. Dollars in thousands)
(Unaudited)

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The accompanying notes are an integral part of these condensed consolidated financial statements.

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FORTITUDE GOLD CORPORATION
Condensed Consolidated Statements of Cash Flows
(U.S. Dollars in thousands)
(Unaudited)

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The accompanying notes are an integral part of these condensed consolidated financial statements.

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FORTITUDE GOLD CORPORATION
Notes to Condensed Consolidated Financial Statements
(Dollars in thousands, unless otherwise stated)
(Unaudited)

1. Basis of Presentation of Financial Statements

These interim Condensed Consolidated Financial Statements (“interim financial statements”) of Fortitude Gold Corporation and its subsidiaries (collectively, the “Company”) are unaudited and have been prepared in accordance with the rules of the Securities and Exchange Commission for interim statements. Certain information and footnote disclosures required by United States Generally Accepted Accounting Principles (“U.S. GAAP”) have been condensed or omitted as permitted by such rules, although the Company believes that the disclosures included are adequate to make the information presented not misleading. The interim financial statements included herein are expressed in United States dollars. In the opinion of management, all adjustments (all of which are of a normal recurring nature) and disclosures necessary for a fair presentation of these interim financial statements have been included. The results reported in these interim financial statements are not necessarily indicative of the results that may be reported for the entire year. These interim financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2022 included in the Company’s annual report on Form 10-K. The year-end balance sheet data were derived from the audited financial statements. Unless otherwise noted, there have been no material changes to the footnotes from those accompanying the audited consolidated financial statements contained in the Company’s annual report on Form 10-K. All intercompany accounts and transactions have been eliminated in consolidation.

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2. Revenue

The following table presents the Company’s net sales:

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3. Inventories

On March 31, 2023 and December 31, 2022, current inventories consisted of the following:

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In addition to the inventories above, as of March 31, 2023 and December 31, 2022, the Company has $1.5 million of low-grade ore stockpile inventory included in other non-current assets.

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4. Income Taxes

The Company accounts for income taxes in accordance with the provisions of ASC 740, “Income Taxes” (“ASC 740”), on a tax jurisdictional basis.  The Company files a consolidated U.S. income tax return and at the federal level its income and losses are taxed at 21%.  In addition, a 5% Net Proceeds of Minerals tax applies to the Company’s operations in Nevada, and such tax is recorded as an income tax.  The Company recorded income and mining tax expense of $1.5 million and $0.4 million for the three months ended March 31, 2023 and 2022, respectively.  In accordance with ASC 740, the interim provision for taxes was calculated by using the annual effective tax rate.  This rate is applied to the year-to-date income before income and mining taxes to determine the income tax expense for the period.

The Company evaluates the evidence available to determine whether a valuation allowance is required on the deferred tax assets. The Company determined that its deferred tax assets were “more likely than not” to be realized as of March 31, 2023 and December 31, 2022, thus no valuation allowance was determined to be necessary.

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As of March 31, 2023, the Company believes that is has no liability for uncertain tax positions.

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5. Prepaid Expenses and Other Current Assets

At March 31, 2023 and December 31, 2022, prepaid expenses and other current assets consisted of the following:

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6. Property, Plant and Mine Development, net

At March 31, 2023 and December 31, 2022, property, plant and mine development consisted of the following:

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For the three months ended March 31, 2023 and 2022, the Company recorded depreciation and amortization expense of $3.5 million and $2.8 million, respectively.

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7. Other Current Liabilities

At March 31, 2023 and December 31, 2022, other current liabilities consisted of the following:

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8. Asset Retirement Obligation

The following table presents the changes in the Company’s asset retirement obligation for the three months ended March 31, 2023 and year ended December 31, 2022:

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As of March 31, 2023, the Company had a $12.5 million off-balance sheet arrangement for a surety bond. This bond is off-set by a $6.0 million asset retirement obligation for future reclamation at the Company’s Isabella Pearl Mine. As of December 31, 2022, the Company had a $12.5 million off-balance sheet arrangement for a surety bond. This bond was off-set by a $5.9 million asset retirement obligation for future reclamation at the Company’s Isabella Pearl Mine. The Company’s asset retirement obligations were discounted using a credit adjusted risk-free rate of 11%.

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9. Commitments and Contingencies

The Company has a Contract Mining Agreement with a mining contractor relating to mining activities at its Isabella Pearl Mine. Included in this Agreement is an embedded lease for the mining equipment for which the Company has recognized a right-of-use asset and corresponding operating lease liability. Please see Note 10 for more information. In addition to the embedded lease payments, the Company pays the contract miner operational costs in the normal course of business. These costs represent the remaining future contractual payments for the Contract Mining Agreement over its term. The contractual payments are determined by rates within the Contract Mining Agreement, estimated tonnes moved and bank cubic yards for drilling and blasting. As of March 31, 2023, total estimated contractual payments remaining, excluding embedded lease payments, are $2.8 million for the year ended December 31, 2023.

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10. Leases

Operating Leases

Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company recognizes lease expense for these leases as incurred over the lease term. The Company accounts for lease components (e.g., fixed payments including rent, real estate taxes and insurance costs) separately from the non-lease components (e.g., common-area maintenance costs).

The depreciable life of assets is limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. The weighted average remaining lease term for the Company’s operating leases as of March 31, 2023 is 0.75 years.

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The discount rate implicit within the Company’s leases is generally not determinable and therefore the Company determines the discount rate based on its incremental borrowing rate. The incremental borrowing rate for the Company’s leases is determined based on the lease term adjusted for impacts of collateral. The weighted average discount rate used to measure the Company’s operating lease liabilities as of March 31, 2023 was 7.48%.

There are no material residual value guarantees and no restrictions or covenants imposed by the Company’s leases.

The Company has an embedded lease in its Contract Mining Agreement. In November 2022, the Company extended the Contract Mining Agreement for a twelve-month term resulting in the recognition of a $3.8 million right-of-use asset and corresponding $3.8 million operating lease liability. The Company’s lease payments for its mining equipment embedded lease are determined by tonnage hauled. This embedded lease is within a Contract Mining Agreement entered into for the mining activities at the Company’s Isabella Pearl Mine. The payments, amortization of the right-of-use asset, and interest vary immaterially from forecasted amounts due to variable conditions at the mine. During the three months ended March 31, 2023 and 2022, the Company capitalized variable lease costs of $0.9 million and $1.7 million, respectively, to Inventory.

Maturities of operating lease liabilities as of March 31, 2023 are as follows (in thousands)

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Supplemental cash flow information related to the Company’s operating lease is as follows for the three months ended March 31, 2023 and 2022:

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11. Other (Income) Expense, Net

For the three months ended March 31, 2023 and 2022, other (income) expense, net consisted of the following:

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12. Net Income per Common Share

Basic earnings per common share is calculated based on the weighted average number of common shares outstanding for the period. Diluted earnings per common share is calculated based on the assumption that stock options and other dilutive securities outstanding, which have an exercise price less than the average market price of the Company’s common shares during the period, would have been exercised on the later of the beginning of the period or the date granted and that the funds obtained from the exercise were used to purchase common shares at the average market price during the period.

The effect of the Company’s dilutive securities is calculated using the treasury stock method and only those instruments that result in a reduction in net income per common share are included in the calculation. As of March 31, 2023 and 2022, potentially dilutive securities representing 60,000 shares and 100,000 shares, respectively, of common stock were excluded from the computation of diluted earnings per share because their effect would have been antidilutive.

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Basic and diluted net income per common share is calculated as follows:

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13. Fair Value Measurement

Fair value accounting establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

As required by accounting guidance, assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following tables set forth certain of the Company’s assets measured at fair value by level within the fair value hierarchy as of March 31, 2023 and December 31, 2022:

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The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

Cash and cash equivalents consist primarily of cash deposits with an original maturity of 3 months or less and are valued at cost, which approximates fair value.

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14. Stock-Based Compensation

The Fortitude Gold Corporation 2020 Equity Incentive Plan (the “Incentive Plan”) allows for the issuance of up to 5 million shares of common stock in the form of incentive and non-qualified stock options, stock appreciation rights, restricted stock units (“RSUs”), stock grants, and stock units. The Company utilizes this Incentive Plan to attract, retain and incentivize staff.

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During the three months ended March 31, 2022, the Company issued options to purchase 30,000 shares of its common stock to employees. The options vest over a period of three years.  The Company used the Black-Scholes option valuation model to value the options with the following weighted average assumptions: stock price of $7.06, expected term of 3.5 years, risk free rate of 2.06%, expected volatility of 75.87%, and an assumed dividend rate of 7.25%.  No options were issued during the three months ended March 31, 2023.

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 During the three months ended March 31, 2023, stock options to purchase an aggregate of 60,000 of the Company’s common stock were exercised at a weighted average exercise price of $1.00 per share. During the three months ended March 31, 2022, stock options to purchase an aggregate of 63,334 of the Company’s common stock were exercised at a weighted average exercise price of $1.00 per share.

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Stock-based compensation is included in general and administrative expenses in the accompanying Condensed Consolidated Statements of Operations. For the three months ended March 31, 2023 and 2022, the Company recorded $0.05 million of stock-based compensation.  

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15. Shareholders’ Equity

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During the three months ended March 31, 2023 and 2022, the Company declared and paid dividends of $2.9 million or $0.12 per share.

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See Note 14 for information concerning shares and options granted pursuant to the Company's Equity Incentive Plan.

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16. Subsequent Event

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On May 8, 2023, the Company declared a special shareholder dividend of $0.04 per share to be paid on May 31, 2023.

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

We are a Colorado corporation and our subsidiaries are GRC Nevada Inc. (“GRCN”), Walker Lane Minerals Corp. (“WLMC”), County Line Holdings Inc. (“CLH”), County Line Minerals Corp. (“CLMC”), and Golden Mile Minerals Corp. (“GMMC”).  WLMC, CLH, CLMC and GMMC are wholly-owned subsidiaries of GRCN. We are a mining company which pursues gold and silver projects that are expected to have both low operating costs and high returns on capital. We are presently focused on mineral production from our Isabella Pearl Mine in Nevada. The ore mined at Isabella Pearl is processed on site at our processing facilities and sold to a refiner as doré, which contains precious metals of gold and silver. We also continue exploration and evaluation work on our portfolio of other precious metal properties in Nevada and continue to evaluate other properties for possible acquisition.

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In February 2021, we began trading on the OTC Market “pink sheets” operated by the OTC Markets Group under the ticker symbol "FRTT". Subsequently the symbol was changed to “FTCO”. Our common stock was subsequently up listed to the OTCQB on March 5, 2021.

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The following discussion summarizes our results of operations for the three ended March 31, 2023 and 2022. It also analyzes our financial condition at March 31, 2023. This discussion should be read in conjunction with the management’s discussion and analysis and the audited consolidated financial statements and footnotes for the year ended December 31, 2022 contained in our annual report on Form 10-K for the year ended December 31, 2022.

The discussion also presents certain financial measures that are not prepared in accordance with U.S. Generally Accepted Accounting Principles (“Non-GAAP”) but which are important to management in its evaluation of our operating results and are used by management to compare our performance with what we perceive to be peer group mining companies and are relied on as part of management’s decision-making process. Management believes these measures may also be important to investors in evaluating our performance. For a detailed description of each of the non-GAAP financial measures, please see the discussion below under Non-GAAP Measures.

See Forward-Looking Statements at the end of this Item 2 for important information regarding statements contained herein.

First Quarter 2023 Financial Results and Highlights

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Operating Data: The following tables summarize certain information about our operations at our Isabella Pearl Mine for the periods indicated:

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During the three months ended March 31, 2023 and 2022, we produced 11,487 and 9,875 ounces of gold, respectively. The higher production is primarily due to higher-grade ore mined and lower utilization of the low-grade stockpile for blending of ore on the pad. Cash cost after by-product credit decreased due to lower mining costs due to less waste mining.

Consolidated Results of Operations – Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022

Sales, net. For the three months ended March 31, 2023, consolidated sales, net were $21.5 million as compared to $15.4 million for the same period in 2022. The increase is attributable to a 38% increase in sales volumes due to increased production, as well as a 1% increase is average sales price.

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Mine gross profit. For the three months ended March 31, 2023, we recorded $12.3 million mine gross profit compared to $6.8 million mine gross profit for the same period in 2022. The increase is primarily attributable to higher sales and lower cash cost after by-product credit per ounce sold, as discussed above.

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General and administrative. For the three months ended March 31, 2023, general and administrative expenses of $1.1 million did not materially change from the same period in 2022.

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Exploration expenses. For the three months ending March 31, 2023, property exploration expenses totaled $3.7 million as compared to $2.5 million for the same period of 2022. The increase was largely due to increased geotechnical and metallurgical studies at the County Line property and the completion of the monitoring well at the Golden Mile property.

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 Other (income) expense, net. For the three months ending March 31, 2023, other income totaled $0.3 million as compared to other expense of $0.02 million for the same period of 2022. The change is due to an increase in interest income in 2023.

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Income and mining tax expense. For the three months ended March 31, 2023, income and mining tax expense was $1.5 million as compared to $0.4 million for the same period in 2022. The increase is the result of our higher income before income and mining taxes and increased Nevada net proceeds of minerals tax due to higher metal sales.  See Note 4 to the Condensed Consolidated Financial Statements.

Net income. For the three months ended March 31, 2023 we recorded net income of $6.4 million as compared to $2.6 million in the corresponding period for 2022. The increase is due to the changes in our consolidated results of operations, as discussed above. 

Non-GAAP Measures

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Throughout this report, we have provided information prepared or calculated according to U.S. GAAP and have referenced some non-GAAP performance measures which we believe will assist with understanding the performance of our business. These measures are based on precious metal gold equivalent ounces sold and include cash cost before by-product credits per ounce, total cash cost after by-product credits per ounce, and total all-in sustaining cost per ounce (“AISC”). Because the non-GAAP performance measures do not have any standardized meaning prescribed by U.S. GAAP, they may not be comparable to similar measures presented by other companies. Accordingly, these measures should not be considered in isolation, or as a substitute for measures of performance prepared in accordance with U.S. GAAP. These non-GAAP measures are not necessarily indicative of operating profit or cash flow from operations as determined under GAAP.

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Revenue generated from the sale of silver is considered a by-product of our gold production for the purpose of our total cash cost after by-product credits for our Isabella Pearl Mine. We periodically review our revenues to ensure that our reporting of primary products and by-products is appropriate. Because we consider silver to be a by-product of our gold production, the value of silver continues to be applied as a reduction to total cash costs in our calculation of total cash cost after by-product credits per precious metal gold equivalent ounce sold. Likewise, we believe the identification of silver as by-product credits is appropriate because of its lower individual economic value compared to gold and since gold is the primary product we produce.

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Total cash cost, after by-product credits, is a measure developed by the Gold Institute to provide a uniform standard for comparison purposes. AISC is calculated based on the current guidance from the World Gold Council.

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Total cash cost before by-product credits includes all direct and indirect production costs related to our production of metals (including mining, crushing and conveying and other plant facility costs, royalties, and site general and administrative costs) plus treatment and refining costs.

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Total cash cost after by-product credits includes total cash cost before by-product credits less by-product credits, or revenues earned from silver.

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AISC includes total cash cost after by-product credits plus other costs related to sustaining production, including sustaining allocated general and administrative expenses and sustaining capital expenditures. We determined sustaining capital expenditures as those capital expenditures that are necessary to maintain current production and execute the current mine plan.

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Cash cost before by-product credits per ounce, total cash cost after by-product credits per ounce and AISC are calculated by dividing the relevant costs, as determined using the cost elements noted above, by gold ounces sold for the periods presented.

Reconciliations to U.S. GAAP

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The following table provides a reconciliation of total cash cost after by-product credits to total mine cost of sales (a U.S. GAAP measure) as presented in the Consolidated Statements of Operations (in thousands):

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The following table presents the non-GAAP measures of total cash cost and AISC (in thousands, except ounces sold and cost per gold ounce sold):

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The following tables summarize our by-product revenue and by-product credit gold ounce sold (in thousands):

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Liquidity and Capital Resources

As of March 31, 2023, we had a cash position of $52.3 million compared to $45.1 million at December 31, 2022. The increase is primarily due to increased cash from operations.

As of March 31, 2023, we had working capital of $90.1 million compared to $84.1 million at December 31, 2022. Our working capital balance fluctuates as we use cash to fund our operations, financing and investing activities, including exploration, mine development and income taxes. With our working capital balance as of March 31, 2023, we believe that our liquidity and capital resources are adequate to fund our operations, exploration, capital, and corporate activities for the next twelve months.

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Net cash provided by operating activities for the three months ended March 31, 2023 was $11.3 million, compared to $4.1 million for three months ended March 31, 2022. The increase is primarily due to higher net income and changes in inventory.

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Net cash used in investing activities for the three months ended March 31, 2023 was $1.2 million compared to $4.9 million during the same period in 2022. The decrease is primarily due to less capital expenditures.

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Net cash used in financing activities for the three months ended March 31, 2023 of $2.9 million did not materially change compared to $2.8 million for the same period in 2022.

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Development and Exploration Activities

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Isabella Pearl Mine: During the first quarter, our open-pit, heap leach operations at the Isabella Pearl Mine continued.  The revised S-K 1300 Technical Report Summary for the Isabella Pearl Mine was released in late February 2023. Exploration activities during the quarter included 42 reverse circulation (“RC”) drill holes totaling 6,040 meters.  These holes were drilled in the Scarlet and Twin Hills areas that are to the northwest of the Isabella Pearl mine. The focus of these exploration drilling programs was on identifying areas with oxide extractable gold. Also, our geologists continued reviewing and interpreting data from other areas of interest along the Isabella Pearl mineralized trend, such as the Wildhorse and Nevada Juneau targets.

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County Line property: Environmental Assessment (“EA”) permit preparation continued with the goal to submit the EA to regulatory authorities during the second quarter of 2023. Building on the momentum of 2022, an S-K 1300 Technical Report Summary that included a maiden resource was published for the County Line property in February 2023. Based on this initial model, studies were undertaken for pit optimization.  Several drilling programs commenced during the first quarter that included the completion of 47 RC exploration holes totaling 6,736 meters, six geotechnical core holes totaling 752 meters, and six large diameter core drilling for metallurgical studies that totaled 115 meters. A hydrogeological desktop study was also completed on the County Line pit in March to locate an optimal location for a water monitoring well and a production well.

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Golden Mile property: Environmental Assessment permit preparation continued with the goal to submit the EA to regulatory authorities by mid-2023. Focus during the quarter included the development of a more in depth understanding of the mineralized body with an updated geologic model of both vertical and horizontal mineralized structures. Studies included the commencement of a spectral analytical program on the chips from the RC drill holes. Interpretation of the data collected from this spectral study commenced in March. Also, an additional water monitoring well was drilled and installed and phase one open pit optimization continued.  

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East Camp Douglas property: Desktop evaluations focused on assessing the gold-bearing silicified volcanic rocks of the lithocap target area. The next phase of RC drill hole planning was completed, and a drilling Notice of Intent that allows drilling to commence, was approved in April 2023 by the Bureau of Land Management.

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Ripper property: Compilation and interpretation of the 2022 field work and geochemical results from the Ripper property were finalized in the first quarter of 2023. A drilling application with the Bureau of Land Management was completed in the quarter ended March 31, 2023, and environmental studies are currently underway.

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Accounting Developments

Recently issued accounting pronouncements have been evaluated and do not presently impact our financial statements and supplemental data.

Forward-Looking Statements

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This report contains or incorporates by reference “forward-looking statements,” as that term is used in federal securities laws, about our financial condition, results of operations and business. These statements include, among others:

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These statements may be made expressly in this document or may be incorporated by reference from other documents that we will file with the SEC. You can find many of these statements by looking for words such as “believes,” “expects,” “targets,” “anticipates,” “estimates,” or similar expressions used in this report or incorporated by reference in this report.

These forward-looking statements are subject to numerous assumptions, risks and uncertainties that may cause our actual results to be materially different from any future results expressed or implied in those statements. Because the statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied. We caution you not to put undue reliance on these statements, which speak only as of the date of this report. Further, the information contained in this document or incorporated herein by reference is a statement of our present intention and is based on present facts and assumptions, which may change at any time and without notice, based on changes in such facts or assumptions.

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Risk Factors Impacting Forward-Looking Statements

The important factors that could prevent us from achieving our stated goals and objectives include, but are not limited to, those set forth in other reports we have filed with the SEC, including our Form 10-K for the year ended December 31, 2022, and the following:

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

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

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Item 4. Controls and Procedures

Disclosure Controls and Procedures 

As required by Rule 15d-15 under the 1934 Act, as of March 31, 2023, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. This evaluation was carried out 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.

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.

Changes in Internal Control Over Financial Reporting

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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, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Part II – OTHER INFORMATION

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Item 1. Legal Proceedings

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None.

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Item 1A. Risk Factors

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

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

None.

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Item 4. Mine Safety Disclosures

The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95 to this Quarterly Report.

Item 5. Other Information

None.

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Item 6. Exhibits

The following exhibits are filed or furnished herewith.

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