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Marketable Equity Securities

9 Months Ended

Sep. 30, 2019

Investments, Debt and Equity Securities [Abstract]

Solitario's investments in marketable equity securities are carried at fair value, which is based upon quoted prices of the securities owned. The cost of marketable equity securities sold is determined by the specific identification method. Changes in market value are recorded in the condensed consolidated statement of operations. During the three and nine months ended September 30, 2019, Solitario recorded an unrealized loss on marketable equity securities of $347,000 and $736,000, respectively. During the three and nine months ended September 30, 2018, Solitario recorded an unrealized loss on marketable equity securities of $74,000 and $737,000, respectively.

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

(in thousands)	September 30, 2019			December 31, 2018
Marketable equity securities at cost	$	1,879		$	1,714
Cumulative unrealized loss on marketable equity securities		(865	)		(129	)
Marketable equity securities at fair value	$	1,014		$	1,585

The following table represents changes, including purchases and sales, in marketable equity securities during the three and nine months ended September 30, 2019 and 2018:

(in thousands)	Three months ended September 30,						Nine months ended September 30,
	2019			2018			2019			2018
Purchase of Vendetta shares	$	165		$	-		$	165		$	-
Gross (loss) recorded in the statement of operations		(347	)		(74	)		(736	)		(737	)
Change in marketable equity securities at fair value	$	(182	)	$	(74	)	$	(571	)	$	(737	)

Vendetta Warrants

On July 31, 2019, Solitario purchased 3,450,000 Vendetta units for total of $233,000. Each Vendetta unit consisted of one share of Vendetta common stock and one Vendetta warrant (the “Vendetta Warrants”). Each Vendetta Warrant entitles the holder to purchase one additional share of Vendetta common stock for a purchase price of Cdn$0.13 per share for a period of three years. The purchase of the units on July 31, 2019 increased Solitario’s holdings of Vendetta common shares to 14,450,000 shares. On the purchase date Solitario recorded marketable equity securities of $165,000 for the Vendetta shares acquired and $68,000 for the Vendetta Warrants based upon an allocation of the purchase price of the Vendetta units, based upon (i) the fair value of the Vendetta common shares received, based upon the quoted market price for Vendetta common shares and (ii) the fair value of Vendetta Warrants based upon a Black Scholes model, using the stock price of Cdn$0.09, volatility of 79%, a term of three years and a discount rate of 1.5%. During the three and nine months ended September 30, 2019, Solitario charged loss on derivative instruments $42,000 for the change in the value of the Vendetta Warrants.

Solitario did not sell any marketable equity securities during the three and nine months ended September 30, 2019 or 2018 and the change in the fair value of marketable equity securities was related to the purchase of the shares of common stock from the Vendetta units and the unrealized loss on marketable equity securities related to their fair values based upon quoted market prices for the marketable equity securities held by Solitario during the periods.