The accompanying notes are an integral part of these condensed consolidated interim financial statements.
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
September 30, 2022, and 2021
(Unaudited)
Note 1-Summary of Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated interim financial statements ("interim financial statements") of Dakota Gold Corp. ("we", "us", "our", the "Company", "Dakota Gold") have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") and the rules of the Securities and Exchange Commission ("SEC") for interim statements, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's Annual Report on Form 10-K, for the year ended March 31, 2022, as filed with the SEC on June 28, 2022. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year ended March 31, 2022, as reported in the Company's Annual Report on Form 10-K, have been omitted. The year-end balance sheet data was derived from the audited financial statements.
DTRC Merger Transaction
On September 10, 2021, the Company and Dakota Territory Resource Corp. ("DTRC") entered into an Amended and Restated Agreement and Plan of Merger (the "merger agreement") providing for the acquisition of the non-controlling interest of DTRC where the Company would acquire the remaining shares (not previously owned) of DTRC for an equal number of shares of the Company and DTRC would merge into a subsidiary of the Company (the "DTRC Merger" or the "DTRC Transaction"). The DTRC Merger was approved by the stockholders of DTRC at a Special Meeting of Stockholders and closed with an effective date of March 31, 2022.
Pursuant to the merger agreement, the DTRC stockholders received one share of Dakota Gold common stock for each share of DTRC's common stock owned at the time of the closing. After the closing, the former stockholders of DTRC and the Company owned approximately 49% and 51%, respectively, of the combined entity.
Basis of Consolidation
These consolidated financial statements include the accounts of the Company and its subsidiaries at the end of the reporting periods as follows:
|
Incorporation
|
Percentage owned
|
|
2022
|
2021
|
DTRC LLC
|
USA
|
100%
|
63%
|
JR Resources (Canada) Services Corp.
|
Canada
|
100%
|
100%
|
Dakota Gold Holdings LLC
|
USA
|
100%
|
N/A
|
Dakota Gold (Canada) Services Corp.
|
Canada
|
100%
|
N/A
|
All significant intercompany accounts and transactions between the Company and its subsidiaries have been eliminated upon consolidation.
9
Note 2 - Mineral Rights and Properties
On September 26, 2012, the Company was re-organized with North Homestake Mining Company and acquired the Blind Gold Property located in the Homestake District of South Dakota. In 2018 and 2019, DTRC acquired additional acreage associated with DTRC's City Creek Property and the Tinton Gold Property. In 2020 and 2021, DTRC increased the size of the DTRC's Blind Gold Property, the Tinton Property, the Poorman Anticline Property, the Ragged Top Gold Project, the West Corridor Property, the City Creek Property and added the South Lead/Whistler Gulch Property through a combination of acquisitions and claim staking.
On October 26, 2020, the Company completed the purchase of the Maitland Gold Property from Homestake Mining Company of California ("HMCC"), a wholly owned subsidiary of Barrick Gold Corporation ("Barrick"). At closing, DTRC paid Barrick $3.5 million in cash and issued 750,000 shares of DTRC's common stock valued at $1.76 per share, for total consideration of $4.82 million. Additionally, Barrick retained a 2.5% net smelter return ("NSR") royalty on the property. The 2,112 mineral-acre Maitland acquisition is an important component of the Company's exploration and development strategy for the structural corridor that extends from the Homestake Gold Mine to the Company's Blind Gold Property at the northern end of the Homestake District.
On September 7, 2021, the Company entered into an option agreement to acquire surface rights and certain facilities in the Homestake District, South Dakota from HMCC. The agreement provides for exclusive access to three extensive historic data sets which chronicle its 145-year exploration and mining history throughout South Dakota. Under the terms of the agreement, DTRC has a three-year option to acquire 4,261 acres of surface rights with attendant facilities and data held by HMCC. In consideration for the option, DTRC made a cash payment of $1.3 million and issued 1 million shares of DTRC common stock valued at $4,850,000 to Barrick and is making annual option payments of $300,000 during the option period. DTRC may exercise the option on or before September 7, 2024, by assuming all of the liabilities and bonds currently held by HMCC in the Homestake District. In addition, on exercise of the option, the Company will issue Barrick 3 million shares of common stock and grant a 2.5% NSR to Barrick with respect to any gold that may be recovered only from the Grizzly Gulch property.
On October 14, 2021, the Company entered into an option agreement to acquire Barrick's interest in the Richmond Hill Property in the Homestake District, South Dakota from LAC Minerals (USA) LLC and HMCC. Under the terms of the agreement, the Company has an option to acquire 2,126 acres of surface and mineral rights with attendant facilities. The Company issued 400,000 DTRC shares of common stock valued at $1,816,000 to Barrick and will make annual option payments of $100,000 during the option period. The option period was originally through September 7, 2024, but in September 2022, the Company amended the option agreement to extend the period during which the Company may exercise the option. As amended, the Company may exercise the option on or before March 7, 2026, by assuming all the liabilities and bonds associated with the Richmond Hill Property. The Company issued 180,000 shares of common stock in consideration for the amendment to the option term. In addition, on exercise of the option, the Company will issue Barrick an additional 400,000 shares of common stock and grant a 1% NSR to Barrick with respect to any gold that may be recovered from the Richmond Hill Property.
On September 8, 2022, the Company and its wholly-owned subsidiary DTRC LLC, entered into a first amendment (the "amended option agreement") to the option agreement for purchase and sale of real property dated October 14, 2021 to acquire LAC Minerals (USA) LLC ("LAC") and HMCC's Richmond Hill Property in the Homestake District, South Dakota. The extension gives the Company further optionality in its exploration at the Richmond Hill Property. Other terms and obligation within the original option agreement will remain unchanged.
In total, the Company currently holds eleven brownfield project areas in the district comprised of 1,931 unpatented mining claims (33,475 unpatented acres), the Homestake Option Area (4,261 patented acres), Barrick's interest in the Richmond Hill Option Area (2,615 patented acres) and additional lands and mineral rights throughout the district (5,859 patented acres) for a combination of surface and mineral lease rights covering a total of 46,210 acres. The Company has not established that any of its projects or properties contain proven or probable mineral reserves under Regulation S-K Subpart 1300 ("S-K 1300").
During the six-month period ending September 30, 2022 the company acquired additional mineral properties totaling $1,529,316, which consisted of payments of $ 854,316 in cash and the issuance of 180,000 shares of common stock with a value of $675,000. As of September 30, 2022 and March 31, 2022, the carrying cost of the Company's mineral properties totaled $78,492,274 and $76,962,958, respectively. As of September 30, 2022, the Company is in the exploration stage and has not commenced amortization of its properties. The Company will capitalize certain costs to its projects when the costs can be specifically attributable to a project, or when it is reasonable to allocate those costs. General regional exploration costs are not allocated to specific properties.
10
Note 3 - Property and Equipment
As of September 30, 2022 and March 31, 2022, the Company's property and equipment consists of the following:
|
Estimated Useful Life (Years) |
|
September 30, 2022 |
|
|
March 31, 2022 |
|
|
|
|
|
|
|
|
|
Land |
|
$ |
70,000 |
|
$ |
70,000 |
|
Building |
39 |
|
739,122 |
|
|
699,975 |
|
Furniture and equipment |
3 to 5 |
|
749,660 |
|
|
626,133 |
|
|
|
|
1,558,782 |
|
|
1,396,108 |
|
Less accumulated depreciation |
|
|
(268,746 |
) |
|
(167,096 |
) |
|
|
$ |
1,290,036 |
|
$ |
1,229,012 |
|
Depreciation expense for the three and six months ended September 30, 2022 was $53,622 and $101,650, respectively (three and six months ended September 30, 2021 - $30,600 and $58,261, respectively).
Note 4 - Accounts Payable and Accrued Liabilities
As of September 30, 2022 and March 31, 2022, the Company's accounts payable and accrued liabilities consists of the following:
|
|
September 30, 2022 |
|
|
March 31, 2022 |
|
|
|
|
|
|
|
|
Trade payables |
$ |
1,402,849 |
|
$ |
2,051,569 |
|
Accrued liabilities |
|
606,215 |
|
|
467,965 |
|
Other |
|
24,904 |
|
|
17,620 |
|
|
$ |
2,033,968 |
|
$ |
2,537,154 |
|
Note 5 - Stockholders' Equity
Common Stock
The holders of common stock are entitled to one vote per share with respect to all matters required by law to be submitted to stockholders. The holders of common stock have the sole right to vote. The common stock does not have any cumulative voting, pre-emptive, subscription or conversion rights. Election of directors requires the affirmative vote of a plurality of common stock represented at a meeting, and other general stockholder action (other than an amendment to our Articles of Incorporation) requires the affirmative vote of the majority of shares represented at a meeting in which a quorum is represented. The outstanding shares of common stock are validly issued, fully paid and non-assessable.
In connection with the domestication process on May 22, 2020, the Company changed its share capital structure from unlimited authorized shares of common stock without par value to 144,302,330 authorized shares of common stock, with a par value of $0.001 per share.
Share Issuances during the six months ended September 30, 2022
During the six months ended September 30, 2022, the Company issued (i) 37,500 shares of common stock pursuant to an exercise of stock options for proceeds of $12,000, (ii) 306,749 shares of common stock valued at $1,500,000 (included in additional paid-in capital as at March 31, 2022) and 180,000 shares of common stock valued at $675,000, in connection with the amendment to the Richmond Hill Option agreement (Note 2), (iii) 3,607 shares of common stock pursuant to an exercise of warrants for proceeds of $7,503 and (iv) 800,000 shares of common stock (see "RSU" below) to employees of the Company for the settlement of RSUs which vested on June 4, 2022. An additional 350,000 RSUs vested on the same date, but the related shares of common stock have not been issued as at November 8, 2022.
11
Note 5 -Stockholders' Equity, continued
Share Issuances during the six months ended September 30, 2021
During the six months ended September 30, 2021, the Company issued 505,050 units at a weighted average price of $1.39 per unit for proceeds of $700,000 through various private placements. Each unit consists of one share of the Company's common stock (505,050 total shares of common stock) and one-half warrant (252,525 total warrants). Each whole warrant entitles the holder thereof to purchase, upon exercise, one share of the Company's common stock for $2.08 per share for a period expiring on March 15, 2026. In connection with the private placements, the Company incurred aggregate expenses of $381,428.
DTRC Share Issuances during the six months ended September 30, 2021
On June 23, 2021, DTRC issued 2,311,000 shares of common stock at a price of $4.50 per share of common stock, for gross proceeds of $10,399,500 in connection with the initial tranche of a non-brokered private placement ("Private Placement"). On July 21, 2021, DTRC issued 8,734,611 shares of common stock at a price of $4.50 per share, for gross proceeds of $39,305,750 in connection with the second tranche of the non-brokered Private Placement. On August 2, 2021, DTRC entered into a series of substantially similar subscription agreements, pursuant to which DTRC issued and sold to certain investors, in the final tranche of the Private Placement, an aggregate of 120,550 shares of common stock at a price of $4.50 per share, for gross proceeds of $542,475. In aggregate, DTRC issued a total of 11,166,161 shares of common stock for total gross proceeds of $50,247,725. Robert Quartermain, a director and Co-Chair of the Company, purchased 50,000 shares in the Private Placement. DTRC paid a total of $732,099 in stock issuance costs related to the Private Placement.
During the six months ended September 30, 2021, DTRC also issued (i) 1,432,600 shares of DTRC common stock valued at $6,964,463 for investment in mineral properties, (ii) 144,612 shares of DTRC common stock valued at $703,646 for a settlement of debt, (iii) 1,450,000 shares of DTRC common stock valued at $7,177,500 as bonus shares to directors, employees and consultants to DTRC and (iv) 37,500 shares of common stock for cash consideration of $37,500. For the six months ended September 30, 2021, the share-based compensation expense for the bonus shares was allocated $1,361,250 to exploration costs and $5,816,250 to general and administrative expenses.
12
Note 5 -Stockholders' Equity, continued
Of the 1,450,000 shares of common stock issued as bonus shares, 400,000 shares vested on June 4, 2021 and the remaining 1,050,000 vested on June 4, 2022. The share-based compensation expense for the bonus shares were allocated as $1,237,500 to exploration costs and $5,940,000 to general and administrative expenses based upon the primary activities of the grantees.
Stock Options Issued
Pursuant to the DTRC Merger on March 31, 2022, the Company cancelled DTRCs outstanding stock options and replaced them with options of Dakota Gold Corp. ("DGC") under the "2022 Stock Incentive Plan" with the same terms and provisions. The 2022 Stock Incentive Plan had a total of 6,250,000 units available to award to the Company's directors, executive officers and consultants. A unit can be a common stock purchase option, an RSU or a Performance Stock Unit ("PSU"). As of September 30, 2022, a total of 5,145,453 units relating to the 2022 Stock Incentive Plan remained available for future grants.
Outstanding stock options under the 2022 Stock Incentive Plan have a term of five years. Outstanding stock options granted to third-party service providers generally vest over a period of up to two years.
During the six months ended September 30, 2022, the Company issued a total of 571,447 stock options with an exercise price of $3.01, exercisable for up to five years. The Company recognized stock-based compensation related to issuance of stock options totaling $1,430,152 during the six months ended September 30, 2022, of which $333,964 was allocated to exploration expenses and $1,096,188 was allocated to administrative expenses, based upon the primary activities of the grantees.
During the six months ended September 30, 2022, the Company estimated the fair value of each stock option granted to have a weighted average grant date fair value of $1.43 per share using a Black Scholes valuation model. The weighted-average assumptions used to calculate the grant date fair value were as follows: risk-free interest rate of 3.15%, estimated volatility of 65%, dividend yield of 0%, and expected life of 3.35 years.
During the six months ended September 30, 2021, DTRC granted a total of 2,271,250 stock options with a weighted average exercise price of $4.79, exercisable for up to five years. DTRC recognized stock-based compensation related to the vesting of stock options totaling $2,710,715 for the six months ended September 30, 2021, of which $699,887 was allocated to exploration costs and $2,010,828 was allocated to administrative expenses, based upon the primary activities of the grantees.
During the six months ended September 30, 2021, DTRC estimated the fair value of each stock option granted to have a weighted average grant date fair value of $3.39 per share using a Black Scholes valuation model. The weighted- average assumptions used to calculate the grant date fair value were as follows: risk-free interest rate ranging from 0.39% - 1.02%, estimated volatility of between 83% and 96%, dividend yield of 0%, and expected life ranging from 4.08 to 5.0 years.
Estimated volatility is calculated based on average volatility of the Company's peer group because the Company does not have sufficient historical data and will continue to use peer group volatility information until historical volatility of the Company is available to measure expected volatility for future grants. Peers are companies at similar stages of mine development and operating jurisdictions who have granted options with similar terms recently.
The stock-based compensation expense is recognized as the fair value determined at the initial grant date using Black-Scholes which is amortized over the vesting period.
13
Note 5 -Stockholders' Equity, continued
A summary of the Company's stock option activity and related information for the period ended September 30, 2022 is as follows:
|
|
Number |
|
|
Weighted Average Exercise Price |
|
|
Weighted Average Remaining Contractual Life (In Years) |
|
|
Aggregate Intrinsic Value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding as of March 31, 2022 |
|
3,349,375 |
|
$ |
4.06 |
|
|
4.12 |
|
$ |
1,141,438 |
|
Options granted |
|
571,447 |
|
|
3.01 |
|
|
|
|
|
|
|
Options exercised |
|
(37,500 |
) |
|
0.32 |
|
|
|
|
|
|
|
Outstanding as of September 30, 2022 |
|
3,883,322 |
|
$ |
3.94 |
|
|
3.83 |
|
$ |
937,420 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options exercisable as of September 30, 2022 |
|
2,360,000 |
|
$ |
3.84 |
|
|
3.59 |
|
$ |
914,563 |
|
As of September 30, 2022, the unrecognized compensation cost related to unvested options was $1,811,466, which will be expensed through June 2025. Allocations are based upon the primary activities of the grantees.
Warrants
As of September 30, 2022, there were 7,612,111 warrants outstanding, all with an exercise price of $2.08 and expiring on March 15, 2026. During the three-month period ended September 30, 2022, 3,607 shares of common stock were issued pursuant to an exercise of warrants for proceeds of $7,503.
RSUS and PSUs
The Company has an RSU plan that provides for the issuance of RSUs and PSUs in amounts as approved by the Company's board of directors.
During the quarter ended September 30, 2022, the Company issued PSUs to certain members of management and other select employees. RSUs and PSUs generally vest in one-third increments over a three-year period, and compensation cost is recognized over the respective service periods based on the grant date fair value.
Each RSU represents the right to receive one share of the Company's common stock.
Each PSU award entitles the participant to receive a variable number of shares of the Company's common stock at the end of a specified period. The total number of shares that would vest under the PSUs will be determined at the end of each of the next three-year performance periods based on the Company's performance against the index for the relevant performance periods. The total number of shares that may be earned for PSUs is based on performance over the performance period and ranges from 0% to 200% of the target number of shares.
The fair value of RSUs is measured at the grant-date price of the Company's shares. The fair value of PSUs is measured at the grant-date fair value.
The compensation expense related to the RSUs and PSUs has been recognized in the consolidated financial statements since the grant date and the fair value determined at the initial grant date will continue to be amortized over the vesting period.
14
Note 5 -Stockholders' Equity, continued
The Company recognized compensation expense related to the vesting of RSUs and PSUs totaling $112,544 for the three and six months ended September 30, 2022, of which $27,289 was allocated to exploration expenses and $85,255 allocated to administrative expenses. As of September 30, 2022, there was $1,489,933 of total unrecognized compensation cost related to unvested RSUs and PSUs. Allocations are based upon the primary activities of the grantees. The fair value of RSUs is measured at the grant-date price of the Company's shares. The fair value of PSUs is measured at the grant-date fair value.
A summary of RSU and PSU awards outstanding and activity during the three and six months ended September 30, 2022 are as follows:
|
|
Number of RSU Awards |
|
|
Weighted- average grant date fair value per award |
|
|
Number of PSU Awards |
|
|
Weighted- average grant date fair value per award |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at March 31, 2022 |
|
1,150,000 |
|
$ |
4.95 |
|
|
- |
|
$ |
- |
|
Vested |
|
(1,150,000 |
) |
|
4.95 |
|
|
- |
|
|
- |
|
Outstanding at June 30, 2022 |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
Granted |
|
420,260 |
|
|
3.01 |
|
|
112,840 |
|
|
2.99 |
|
Outstanding at September 30, 2022 |
|
420,260 |
|
$ |
3.01 |
|
|
112,840 |
|
$ |
2.99 |
|
During the three months ended June 30, 2022, the Company recognized stock-based compensation related to the vesting of RSUs totaling $1,068,173, of which $164,629 was allocated to exploration costs and $903,544 allocated to administrative expenses, for the RSUs that were granted in June 2021 and that vested on June 4, 2022. As of June 30, 2022, there was no unrecognized compensation cost related to unvested RSUs granted in June 2021, therefore there was no stock-based compensation related to these RSUs for the three months ended September 30, 2022.
Bonus Shares of Common Stock Issued by DTRC during the six months ended September 30, 2021
During the six months ended September 30, 2021, DTRC issued 1,450,000 shares of common stock valued at $7,177,500 as bonus shares to directors, employees and consultants of DTRC, with the stock-based compensation expense for the bonus shares being allocated as $1,237,500 to exploration costs and $5,940,000 to general and administrative expenses.
Note 6 - Commitments and Contingencies
The Company may become party to various legal actions that arise in the ordinary course of its business. The Company is also subject to audit by tax and other authorities for varying periods in various federal, state and local jurisdictions, and disputes may arise during the course of these audits. It is impossible to determine the ultimate liabilities that the Company may incur resulting from any of these lawsuits, claims, proceedings, audits, commitments, contingencies and related matters or the timing of these liabilities, if any. If these matters were to ultimately be resolved unfavorably, it is possible that such an outcome could have a material adverse effect upon the Company's consolidated financial position, results of operations, or liquidity. The Company does not, however, anticipate such an outcome and it believes the ultimate resolution of these matters will not have a material adverse effect on the Company's consolidated financial position, results of operations, or liquidity.
15
Note 7 - Income Taxes
The following table sets forth a reconciliation of the statutory federal income tax for the six months ended September 30, 2022 and 2021:
|
|
Six months ended September 30, 2022 |
|
|
Six months ended September 30, 2021 |
|
|
|
|
|
|
|
|
Income tax expense (benefit) computed at federal statutory rates |
$ |
(2,970,364 |
) |
$ |
(3,821,110 |
) |
Non-deductible expenses |
|
- |
|
|
14,397 |
|
Change in valuation allowance |
|
953,413 |
|
|
3,456,753 |
|
Other |
|
257,040 |
|
|
- |
|
Deferred tax benefit |
$ |
(1,759,911 |
) |
$ |
(349,960 |
) |
The effective tax rate for the three and six months ended September 30, 2022 was 7.6% and 12.4%, respectively. The effective tax rate is less than the expected statutory rate as the Company does not expect to realize a benefit from a portion of the losses incurred.
Management has established a valuation allowance on certain deferred tax assets because the underlying the deferred tax benefit may not be realized.
The tax effects of the temporary differences between reportable financial statement income and taxable income are recognized as deferred tax assets or liabilities. Significant components of the deferred tax assets and the related valuation allowance are set out below:
|
|
September 30, 2022 |
|
|
March 31, 2022 |
|
Deferred tax assets: |
|
|
|
|
|
|
Net operating losses |
$ |
6,552,604 |
|
$ |
5,228,304 |
|
Net capital losses |
|
36,685 |
|
|
36,685 |
|
Stock-based compensation |
|
2,332,232 |
|
|
2,607,150 |
|
Deferred exploration costs |
|
2,981,504 |
|
|
1,317,562 |
|
Total |
|
11,903,025 |
|
|
9,189,701 |
|
Less: valuation allowance |
|
(2,763,862 |
) |
|
(1,810,449 |
) |
Total deferred tax assets |
|
9,139,163 |
|
|
7,379,252 |
|
|
|
|
|
|
|
|
Deferred tax liability: |
|
|
|
|
|
|
Property and equipment |
|
(47,383 |
) |
|
(47,383 |
) |
Mineral properties |
|
(11,044,892 |
) |
|
(11,044,892 |
) |
Total deferred tax liabilities |
|
(11,092,275 |
) |
|
(11,092,275 |
) |
|
|
|
|
|
|
|
Total deferred taxes |
$ |
(1,953,112 |
) |
$ |
(3,713,023 |
) |
Of a total of approximately $39 million of net operating loss carry forward (including approximately $9 million of DTRC's unrecognized deferred tax asset), the net operating loss carry forward of approximately $9.7 million will begin to expire in 2027, as they were incurred prior to 2018. As a result of the merger, DTRC's net operating losses prior to the merger date may be, by law, partially or entirely unavailable to offset future taxable income.
We follow the provisions of ASC 740 relating to uncertain tax provisions and have commenced analyzing filing positions in all of the federal and state jurisdictions where we are required to file income tax returns, as well as all open tax years in these jurisdictions. There are no unrecognized tax benefits as of September 30 or March 31, 2022. We file income tax returns in the United States federally and in one state jurisdiction. The Company has not been subjected to tax examinations for any year and the statute of limitations has not expired. The Company's tax returns remain open for examination by the applicable authorities, generally 3 years for federal and 4 years for state.
16
Note 8 - Subsequent Event(s)
On October 21, 2022, the Company entered into an Equity Distribution Agreement with BMO Capital Markets Corp. and Canaccord Genuity LLC (collectively, the "Sales Agents"), to establish an at-the-market equity program (the "ATM Program"). Under the ATM Program, the Company may offer and sell shares of common stock having aggregate proceeds of up to $50,000,000, from time to time, through any of the Sales Agents. Following establishment of the ATM program, the Company has issued 1,000,000 shares from the ATM program at an average price of $3.10 for gross proceeds of $3.1 million.
17
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of the Company's financial condition and results of operations together with the Company's financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q. This Quarterly Report on Form 10-Q may also contain statistical data and estimates the Company obtained from industry publications and reports generated by third parties. Although the Company believes that the publications and reports are reliable, it has not independently verified their data.